The Nuveen Municipal 2021 Target Term Fund (NYSE: NHA) has entered the wind-up period in anticipation of its termination date. The fund is a “target term” fund that will cease its investment operations and liquidate its portfolio on March 1, 2021 and distribute the net proceeds to shareholders, unless the term is extended for a period of up to six months by a vote of the fund’s Board of Trustees.
The fund’s investment objectives are to provide a high level of current income exempt from federal income tax and to return the fund’s original $9.85 net asset value to shareholders at termination. Recent market conditions may increase the risk associated with achieving the fund's objective to return Original NAV. This objective is not a guarantee and is dependent on a number of factors including the extent of market recovery and the cumulative level of income retained in relation to cumulative realized portfolio gains net of losses. Under normal circumstances, the fund invests at least 80% of its managed assets in municipal securities, the income from which is exempt from regular U.S. federal income tax, and separately, at least 65% of its managed assets in low- to medium-quality municipal securities that, at the time of investment, are rated BBB/Baa or lower or unrated but judged by the managers to be of comparable quality.
During the wind-up period the fund may deviate from its investment objectives and policies, and may invest up to a 100% of its managed assets in high quality, short-term securities, including U.S. Treasuries. High quality, short-term securities for this fund include securities rated investment grade (A-/A3 or higher or unrated but judged by the fund’s managers to be of comparable quality) with a final or remaining maturity of 397 days or less, so long as the maturity of any security in the fund does not occur later than September 1, 2021. These expanded investment parameters currently will provide the fund additional flexibility to reinvest the proceeds of matured or called portfolio securities in higher quality, short-term securities. As the fund gets closer to its termination date, the fund will begin to affirmatively transition its remaining below investment grade portfolio holdings to such high quality, short-term securities to enhance its ability to efficiently liquidate its portfolio at termination.
The fund has also completed the process of redeeming and retiring its leverage in anticipation of its termination date.
As described in the fund’s prospectus, the general shortening of the time-to-maturity of the fund’s portfolio securities as the fund approaches its termination date, the elimination of leverage, and the repositioning of the fund’s portfolio into higher-quality securities as part of the wind-up process, will tend to reduce interest rate risk and credit risk, and improve portfolio liquidity, but will also tend to reduce amounts of income available to pay as dividends to common shareholders.
For more information, please visit Nuveen’s CEF homepage www.nuveen.com/closed-end-funds.
Nuveen, the investment manager of TIAA, offers a comprehensive range of outcome-focused investment solutions designed to secure the long-term financial goals of institutional and individual investors. Nuveen has $1 trillion in assets under management as of 30 June 2020 and operations in 27 countries. Its investment specialists offer deep expertise across a comprehensive range of traditional and alternative investments through a wide array of vehicles and customized strategies. For more information, please visit www.nuveen.com.
The information contained on the Nuveen website is not a part of this announcement.
Nuveen Securities, LLC, member FINRA and SIPC.
Certain statements made herein are forward-looking statements. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements due to numerous factors. These include, but are not limited to:
- market developments;
- legal and regulatory developments;
- the ability to obtain requisite shareholder approval for the proposals described herein;
- the number of shares tendered in response to each fund’s tender offer; and
- other additional risks and uncertainties.
Nuveen and the closed-end funds managed by Nuveen Fund Advisers and Nuveen affiliates undertake no responsibility to update publicly or revise any forward-looking statements.