ALLIANCEBERNSTEIN NATIONAL MUNICIPAL INCOME FUND, INC. ANNOUNCES PLAN FOR FULL REDEMPTION OF 2019 VARIABLE RATE MUNIFUND TERM PREFERRED SHARES AND ISSUANCE OF NEW VARIABLE RATE DEMAND PREFERRED SHARES AS SUBSTITUTE LEVERAGE

Rhea-AI Summary

On May 13, 2024, AllianceBernstein National Municipal Income Fund (NYSE: AFB) announced a plan to redeem its 2019 Variable Rate MuniFund Term Preferred Shares (2019 VMTPS) and issue new Variable Rate Demand Preferred Shares (2024 VRDPS). The private offering aims to raise up to $100 million, targeted at qualified institutional buyers. The proceeds will be used along with funds from tender option bond trusts to cover the redemption of the 2019 VMTPS at $25,000 per share plus unpaid dividends, totaling $143.85 million. The redemption and issuance are conditional on successful placement and intended to occur around June 6, 2024. The initiative aims to replace existing leverage and is considered by the Fund's management to be in the best interest of shareholders.

Positive

• The Fund plans to raise up to $100 million through a private offering of 2024 VRDPS.
• The proceeds will be used to redeem the 2019 VMTPS, potentially improving leverage management.
• The Fund believes the action is in the best interest of stockholders, aiming to enhance financial stability.

Negative

• The redemption of the 2019 VMTPS is contingent upon the successful placement of the 2024 VRDPS.
• Total redemption cost of $143.85 million plus unpaid dividends could impact liquidity if the issuance does not go as planned.

News Market Reaction

-0.28%

1 alert

-0.28% News Effect

On the day this news was published, AFB declined 0.28%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

NEW YORK, May 13, 2024 /PRNewswire/ -- AllianceBernstein National Municipal Income Fund, Inc. (the "Fund"; NYSE: AFB), a registered closed-end investment company, announced today that it intends to commence a private offering of up to $100 million of Variable Rate Demand Preferred Shares ("2024 VRDPS"). The 2024 VRDPS will be offered only to qualified institutional buyers, such as money market funds, as defined pursuant to Rule 144A under the Securities Act of 1933.

Proceeds from the offering are expected to be used, in conjunction with proceeds from the creation of tender option bond ("TOB") trusts by the Fund, to redeem all of the Fund's currently outstanding 2019 Variable Rate MuniFund Term Preferred Shares ("2019 VMTPS") at a redemption price of $25,000 per share, plus accumulated but unpaid dividends. The aggregate amount to be paid by the Fund in connection with the redemption of the 2019 VMTPS is $143.85 million, plus accumulated but unpaid dividends.

The redemption of the 2019 VMTPS are subject to certain notice and other requirements and conditioned upon the successful issuance and placement of new preferred shares of the Fund. The Fund intends to redeem the 2019 VMTPS on or about June 6, 2024.

The 2024 VRDPS, if successfully placed, will allow the Fund to replace a substantial portion of the leverage currently obtained through the 2019 VMTPS with the new preferred shares. AllianceBernstein L.P., the Fund's investment adviser, and the Board of Directors of the Fund believe the full redemption of the 2019 VMTPS and proposed issuance of 2024 VRDPS is in the best interests of the Fund and its stockholders.

This press release is neither an offer to sell nor a solicitation of an offer to buy any of these securities.

View original content:https://www.prnewswire.com/news-releases/alliancebernstein-national-municipal-income-fund-inc-announces-plan-for-full-redemption-of-2019-variable-rate-munifund-term-preferred-shares-and-issuance-of-new-variable-rate-demand-preferred-shares-as-substitute-leverage-302143925.html

SOURCE AllianceBernstein National Municipal Income Fund, Inc.

FAQ

What is the purpose of AllianceBernstein National Municipal Income Fund's (AFB) new VRDPS offering?

The new VRDPS offering aims to raise up to $100 million to redeem the 2019 VMTPS and improve leverage management.

When will AllianceBernstein National Municipal Income Fund (AFB) redeem the 2019 VMTPS?

The Fund intends to redeem the 2019 VMTPS on or about June 6, 2024, contingent on the successful issuance of the 2024 VRDPS.

Who are the targeted buyers for the new 2024 VRDPS issued by AllianceBernstein National Municipal Income Fund (AFB)?

The targeted buyers for the new 2024 VRDPS are qualified institutional buyers, such as money market funds.

How much will AllianceBernstein National Municipal Income Fund (AFB) pay for the redemption of the 2019 VMTPS?

The Fund will pay $25,000 per share plus accumulated but unpaid dividends for the redemption of the 2019 VMTPS, totaling $143.85 million.

What conditions must be met for AllianceBernstein National Municipal Income Fund (AFB) to proceed with the redemption of the 2019 VMTPS?

The redemption is conditional upon the successful issuance and placement of the new 2024 VRDPS.