ABRDN NATIONAL MUNICIPAL INCOME FUND (VFL) ANNOUNCES PROPOSED REORGANIZATION AND SPECIAL SHAREHOLDER MEETING

Rhea-AI Summary

abrdn National Municipal Income Fund (NYSE American: VFL) announced a proposed reorganization into MFS Municipal Income Trust (NYSE: MFM) as the surviving fund, with an intended post-close name change to Aberdeen Municipal Income Fund. Shareholders will be asked to approve adviser appointment, trustee appointments, and issuance of shares.

The move is intended to create a larger, more efficient fund with higher trading volume and a goal of reducing the discount to net asset value; the surviving fund is targeting an annual distribution rate of 6% of net asset value. Record shareholders as of Dec 11, 2025 will be asked to vote at a special meeting tentatively set for Mar 11, 2026, with closing expected in Q2 2026, subject to shareholder approval and SEC registration effectiveness.

Positive

• Creates a larger fund with greater economic scale
• Targeted annual distribution of 6% of NAV
• May reduce discount to net asset value over time
• Potential for increased trading volume and liquidity

Negative

• Reorganization requires shareholder approval to proceed
• Proxy/registration statement has not yet been filed with the SEC
• Proposal includes issuance of shares, which may dilute holders
• Special meeting date is tentative (subject to change)

Key Figures

Target distribution rate 6% of net asset value Proposed annual distribution rate for Surviving Fund

Record date December 11, 2025 VFL common and preferred shareholders entitled to vote

Special meeting date March 11, 2026 Tentative date for VFL shareholder vote on proposal

Market Reality Check

$5.43 Last Close

Volume Volume 117,994 is below 20-day average 145,562 (relative volume 0.81x). normal

Technical Trading above 200-day MA of 5.25 with current price at 5.45, modestly below 52-week high 5.69.

Peers on Argus

MFM showed a small gain of 0.37% while peers were mixed, with EVM down 1.25%, EARN down 1.16%, and MPV up 1.22%, suggesting a stock-specific reaction to the reorganization news rather than a broad sector move.

Common Catalyst A peer (MPV) reported a dividend announcement, while MFM's news concerns a proposed fund reorganization and adviser change, indicating no common sector-wide theme.

Market Pulse Summary

This announcement outlines a proposed reorganization of VFL into MFM to form a larger fund with a targeted 6% NAV-based distribution and governance changes for the Surviving Fund. The transaction depends on shareholder approvals at the March 11, 2026 meeting and SEC effectiveness of a future registration statement. With MFM trading modestly below its 52-week high, investors may track how these milestones influence the fund’s scale and discount to net asset value.

Key Terms

net asset value financial

"may help reduce the discount to net asset value over time."

Net asset value is the total value of an investment fund's assets minus any liabilities, divided by the number of shares or units outstanding. It represents the per-share worth of the fund, similar to how the value of a house is determined by its total worth after debts are subtracted. Investors use it to gauge the true value of their holdings and to compare different investment options.

proxy statement/prospectus regulatory

"Detailed information will be provided in a proxy statement/prospectus to be sent"

A proxy statement or prospectus is a document that companies send to shareholders to provide important information about upcoming decisions or investments, such as voting on company issues or offering new shares to the public. It helps investors understand the details and risks involved, enabling them to make informed choices about their ownership or involvement with the company.

registration statement regulatory

"A registration statement containing a proxy statement/prospectus has yet to be filed"

A registration statement is a formal document that companies file with a government agency to offer new shares of stock to the public. It provides essential information about the company's finances, operations, and risks, helping investors make informed decisions. Think of it as a detailed product description that ensures transparency and trust before buying into a company.

AI-generated analysis. Not financial advice.

PHILADELPHIA, Dec. 11, 2025 /PRNewswire/ -- The Board of Trustees of abrdn National Municipal Income Fund (NYSE American: VFL) have approved the reorganization of VFL into MFS Municipal Income Trust (NYSE: MFM), the "Surviving Fund."

This reorganization is part of a broader proposal that would require shareholders of MFM to:

• Appoint the US Subsidiary of Aberdeen Investments, abrdn Inc., to serve as the investment adviser to the Surviving Fund;
• Appoint the incumbent VFL trustees plus one additional independent trustee to serve as the Surviving Fund's board of trustees; and
• Approve the issuance of shares in connection with the reorganization.

Upon closing, it is intended that the Surviving Fund's name will change from "MFS Municipal Income Trust" to "Aberdeen Municipal Income Fund."

The goal of this reorganization is to create a larger, more efficient fund with greater economic scale and increased trading volume, which may help reduce the discount to net asset value over time. For VFL shareholders, the transaction offers the opportunity to continue their investment in a significantly larger fund with the potential for a higher annual distribution rate, targeted at 6% of the Surviving Fund's net asset value.

The proposal is subject to certain conditions, including shareholder approval. VFL's common and preferred shareholders of record as of December 11, 2025 will be asked to vote on the proposal at a special meeting, tentatively scheduled for March 11, 2026. If approved and all other conditions are met, the reorganization is expected to close in the second quarter of 2026.

Detailed information will be provided in a proxy statement/prospectus to be sent to VFL's shareholders. A registration statement containing a proxy statement/prospectus has yet to be filed with the U.S. Securities and Exchange Commission (the "SEC"). After the registration statement is filed with the SEC, it may be amended or withdrawn. A proxy statement/prospectus will not be distributed to shareholders of VFL unless and until a registration statement containing the proxy statement/prospectus is declared effective by the SEC.

About Aberdeen Investments
Aberdeen Investments Global is the trade name of Aberdeen's investments business, herein referred to as "Aberdeen Investments" or "Aberdeen". In the United States, Aberdeen Investments refers to the following affiliated, registered investment advisers: abrdn Inc., abrdn Investments Limited, and abrdn Asia Limited.

Aberdeen Investments is one of the world's largest asset management firms with extensive experience in managing closed-end funds dating back to the 1980s. As of September 30, 2025, Aberdeen Investments had approximately $515 billion in assets under management. Moreover, closed-end funds are an important element of Aberdeen Investments' client base in the U.S. and globally, managing 15 U.S. closed-end funds and 13 non-U.S. closed-end funds, totaling $26.1 billion in assets as of September 30, 2025.  

Important Information
MFS is a registered investment adviser. As of November 30, 2025, MFS had approximately $655.2 billion in assets under management.

The information in this press release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

In connection with the proposed combination, the Surviving Fund plans to file with the SEC a combined prospectus/proxy statement. When the prospectus/proxy statement becomes available, shareholders are advised to read it because it will contain important information about the proposed transaction and related matters. The prospectus/proxy statement, when available, will be available for free at the SEC's website www.sec.gov.

Closed-end funds are traded on the secondary market through one of the stock exchanges. A Fund's investment return and principal value will fluctuate so that an investor's shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value (NAV) of the fund's portfolio. There is no assurance that a Fund will achieve its investment objective. Past performance does not guarantee future results.

The value at which a closed-end fund stock trades on a stock exchange is a function of external market factors that are not under the control of the Fund's Board or Investment Advisor. Closed-end Fund shares may therefore trade at a premium or a discount to net asset value at any given time. Shareholders should be aware that a fund trading at a premium to net asset value may not be sustainable, and a fund's discount to net asset value can widen as well as narrow. Shareholders of a fund trading at a premium who participate in that fund's dividend reinvestment plan should note the reinvestment of distributions may occur at a premium to net asset value.  

abrdn National Municipal Income Fund | Aberdeen

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SOURCE abrdn National Municipal Income Fund

FAQ

What are VFL (NYSE American: VFL) shareholders voting on March 11, 2026?

VFL shareholders will vote on adviser appointment, trustee appointments, and issuance of shares for the proposed reorganization into MFM.

When would the VFL reorganization into MFM close if approved?

If approved and conditions met, the reorganization is expected to close in Q2 2026.

How will the proposed reorganization affect VFL distributions?

The surviving fund is targeting an annual distribution rate of 6% of net asset value.

Will VFL change its fund name after the reorganization?

Yes; upon closing the surviving fund intends to change its name to Aberdeen Municipal Income Fund.

Has the SEC declared the proxy statement/prospectus effective for the VFL reorganization?

No; a registration statement has not yet been filed and the proxy/prospectus will not be distributed until declared effective by the SEC.

Who becomes the investment adviser to the surviving fund if the reorganization is approved?

The proposed adviser is the US subsidiary of Aberdeen Investments, abrdn Inc.