Federated Hermes Premier Municipal Income Fund announces tender offer

Rhea-AI Summary

Federated Hermes Premier Municipal Income Fund (NYSE: FMN) has announced plans for a cash tender offer for up to 32% of its outstanding common shares. The offer, set to commence on September 13, 2024, will allow shareholders to tender shares at 99% of the fund's NAV. This move aims to provide shareholders with a potentially better share price than market rates, while non-participating shareholders may benefit from the accretive impact on NAV. The fund will continue to operate as an exchange-listed closed-end fund, focusing on AMT-free tax-exempt income within a leveraged structure. The tender offer is part of an agreement with Saba Capital Management, L.P., which includes standstill covenants and voting commitments.

Positive

• Potential for shareholders to receive better share price than market rates
• Anticipated accretive impact on NAV for non-participating shareholders
• Commitment to maintain total annual fund operating expenses at no greater than 0.99%
• Agreement with Saba Capital Management, potentially reducing activist pressure

Negative

• Reduction in fund size by up to 32% of outstanding common shares
• Potential for pro-rata allocation if tender offer is oversubscribed, limiting full participation

News Market Reaction

+1.46%

1 alert

+1.46% News Effect

On the day this news was published, FHI gained 1.46%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

PITTSBURGH, Aug. 30, 2024 /PRNewswire/ -- Federated Hermes Premier Municipal Income Fund (NYSE: FMN) today announced that (subject to certain conditions) it will commence a cash tender offer for up to 32% of its outstanding common shares. The tender offer will provide all shareholders the opportunity to tender some or all of their common shares at a price per common share of 99% of the fund's net asset value (NAV) per share as determined on the day the tender offer expires or the preceding business day. The fund anticipates the tender offer will commence Sept. 13, 2024, and end Oct. 11, 2024.

Should the number of common shares properly tendered, and not withdrawn, exceed 32% of the fund's outstanding common shares, the fund will purchase common shares from tendering common shareholders on a pro rata basis (with any adjustments needed to avoid fractional common shares). Accordingly, common shareholders cannot be assured that the fund will purchase all their tendered common shares. Additional terms and conditions of the fund's tender offer will be set forth in its offering materials, which will be distributed to its common shareholders.

Those common shareholders who choose to tender their shares can potentially receive a better share price than they might receive in the market. Common shareholders who choose not to tender their shares will benefit from the anticipated accretive impact on the NAV of the common shares due to the tender price being below NAV. The fund also will continue to operate as an exchange-listed closed-end fund—providing long-term shareholders the ability to pursue AMT-free tax-exempt income within a leveraged structure, with the opportunity for enhanced returns.

Absent an unknown material event occurring, the fund's investment advisor does not anticipate that the tender offer will affect the fund's ability to continue to maintain its total annual fund operating expenses at no greater than 0.99%, consistent with the Expense Limitation note to the fund's audited financial statements included in the fund's Annual Shareholder Report dated Nov. 30, 2023.

The fund's investment advisor recommended the tender offer in connection with entering into an agreement with Saba Capital Management, L.P. ("Saba"). During the effective period of the agreement, Saba has agreed to comply with certain standstill covenants and vote its shares in accordance with the recommendations of the fund's Board of Trustees.

Tender Offer Statement

The fund has not commenced the tender offer described in this press release. This is not a recommendation, an offer to purchase or a solicitation of an offer to sell common shares of the fund and the above statements are not intended to constitute an offer to participate in any tender offer. Information about the tender offer, including its commencement, will be provided by future public announcements. Shareholders will be notified in accordance with the requirements of the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940, as amended, either by publication or mailing or both. The tender offer will be made only by an offer to purchase, a related letter of transmittal, and other documents to be filed with the SEC. Shareholders of the fund should read the offer to purchase and tender offer statement and related exhibits when those documents are filed and become available, as they will contain important information about the tender offer. These and other filed documents will be available to investors for free both at the website of the SEC and from the fund.

Investors can view additional portfolio fund and portfolio information in the Products section of FederatedHermes.com/us.

Federated Hermes, Inc. (NYSE: FHI) is a global leader in active, responsible investment management, with $782.7 billion in assets under management, as of June 30, 2024. We deliver investment solutions that help investors target a broad range of outcomes and provide equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies to more than 10,000 institutions and intermediaries worldwide. Our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes has more than 2,000 employees in London, New York, Boston and offices worldwide. For more information, visit FederatedHermes.com/us.

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Certain statements in this press release, such as those related to expenses, the commencement and expiration of the tender offer, performance, investment objectives and strategies, and investor preferences and demand, constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the fund to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Any forward-looking statement, and any level of business activity and financial results, are inherently subject to significant business, market, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond the fund's or its investment adviser's control. Risks and uncertainties could vary significantly depending on various factors, such as market conditions, investment performance and investor behavior. Other risks and uncertainties include the risk factors discussed in the fund's annual and semi-annual shareholder reports as filed with the Securities and Exchange Commission. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and none of the fund, its investment adviser, or any other person assumes responsibility for the accuracy and completeness, or updating, of such statements in the future.

View original content:https://www.prnewswire.com/news-releases/federated-hermes-premier-municipal-income-fund-announces-tender-offer-302235230.html

SOURCE Federated Premier Municipal Income Fund

FAQ

What is the tender offer price for Federated Hermes Premier Municipal Income Fund (FMN) shares?

The tender offer price is 99% of the fund's net asset value (NAV) per share as determined on the day the tender offer expires or the preceding business day.

When does the tender offer for Federated Hermes Premier Municipal Income Fund (FMN) start and end?

The tender offer is anticipated to commence on September 13, 2024, and end on October 11, 2024.

What percentage of Federated Hermes Premier Municipal Income Fund (FMN) shares will be repurchased in the tender offer?

The fund will repurchase up to 32% of its outstanding common shares through the tender offer.

How does the tender offer affect Federated Hermes Premier Municipal Income Fund's (FMN) expense ratio?

The fund's investment advisor does not anticipate that the tender offer will affect the fund's ability to maintain its total annual fund operating expenses at no greater than 0.99%.