MFS Municipal Income Trust (MFM) permits up to 100% below‑IG municipal debt

Rhea-AI Filing Summary

MFS Municipal Income Trust filed a Supplement No. 1 to its Joint Proxy Statement/Prospectus updating the Fund's investment policy. The Board approved increasing the Fund's allowance to invest in below‑investment‑grade or unrated municipal obligations from up to 20% of net assets to up to 100% of assets. This change is non‑fundamental and becomes effective June 1, 2026. The supplement also aligns the disclosures so that the abrdn National Municipal Income Fund (VFL) and the Fund may each invest up to 100% in below‑investment‑grade municipal debt. The supplement reiterates the Risk Factors section warning that investors could lose some or all of their investment.

Insights

Portfolio Risk Analyst

Broadening credit scope raises credit and liquidity risk; monitor portfolio credit profile.

The Board’s vote to permit up to 100% exposure to below‑investment‑grade or unrated municipal obligations removes the prior 20% limitation and allows full allocation to lower‑rated credits effective June 1, 2026. This materially changes the universe of eligible securities and can increase credit, default and liquidity risk for the Fund’s portfolio.

Key dependencies include the Investment Manager’s credit selection standards and any shifts in duration or leverage; subsequent shareholder disclosures and portfolio holdings as of the Effective Date will show how the allowance is used.

Fund Governance Specialist

Governance action standardizes policy language across funds but raises disclosure needs.

The supplement replaces all references to VFL’s 20% Limitation with the new 100% policy and revises comparative strategy language in the Proxy/Prospectus. The action was approved by the Board and described as non‑fundamental, with an Effective Date of June 1, 2026.

Watch for updated prospectus tables and post‑Effective Date portfolio snapshots that disclose actual holdings and any further amendments to risk disclosures.

Key Figures

Supplement date: April 20, 2026 Effective Date: June 1, 2026 Below‑investment‑grade policy: 20% -> 100% of assets

3 metrics

Supplement date April 20, 2026 Date of Supplement No. 1 to the Proxy/Prospectus

Effective Date June 1, 2026 Date new investment policy becomes effective

Below‑investment‑grade policy 20% -> 100% of assets Change from prior limit to new maximum allocation in municipal obligations

Key Terms

below‑investment‑grade, non‑fundamental investment policy, Proxy/Prospectus, Board of Trustees

4 terms

below‑investment‑grade financial

"“The Fund may invest up to 100% of its assets in Municipal Obligations that are rated below investment grade”"

non‑fundamental investment policy regulatory

"“approved a change in VFL’s non‑fundamental investment policy”"

Proxy/Prospectus regulatory

"“Supplement amends the Fund’s Joint Proxy Statement/Prospectus dated March 11, 2026”"

A proxy/prospectus is a combined legal document sent to shareholders that both asks for their votes on corporate matters and provides detailed information about securities being offered or transactions being proposed. It matters to investors because it functions like a ballot plus a product brochure: it explains what decisions are being made, the financial terms, risks and potential impact on share value, so shareholders can make informed voting and investment choices.

Board of Trustees governance

"“On April 15, 2026, the Board of Trustees (the “Board”) … approved a change”"

A board of trustees is a group of individuals responsible for overseeing and guiding the management of an organization, such as a nonprofit, university, or charity. They act like a steering committee, making important decisions to ensure the organization stays true to its mission and remains financially healthy. For investors, the board’s effectiveness can influence the organization’s stability and long-term success.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Accepted by SEC EDGAR 04/20/2026 - 12:22 PM Learn about SEC filing dates

Filed Pursuant to Rule 424(b)(3)

Registration Statement No. 333-292203

SUPPLEMENT NO. 1 DATED APRIL 20, 2026

(to Joint Proxy Statement/Prospectus dated March 11, 2026)

MFS MUNICIPAL INCOME TRUST

This Supplement No. 1 (this “Supplement”) amends the Fund’s Joint Proxy Statement/Prospectus dated March 11, 2026 (the “Proxy/Prospectus”). This Supplement updates certain information in the Proxy/Prospectus and is not complete without and may not be delivered or utilized except in combination with, the Proxy/Prospectus, including any amendments or supplements thereto. Certain capitalized terms used and not defined herein have the meanings set forth in the Proxy/Prospectus. This Supplement should be read in conjunction with the Proxy/Prospectus and if there is any inconsistency between the information in the Proxy/Prospectus and this Supplement, you should rely on the information in this Supplement.

On April 15, 2026, the Board of Trustees (the “Board”) of abrdn National Municipal Income Fund (“VFL”) approved a change in VFL’s non-fundamental investment policy relating to investments in below-investment grade municipal obligations as set forth below (the “20% Limitation”). This change will be effective on June 1, 2026 (the “Effective Date”).

Current	New
“The Fund may invest up to 20% of its net assets in Municipal Obligations that are rated below investment grade or that are unrated but judged by the Investment Manager to be of comparable quality.”	“The Fund may invest up to 100% of its assets in Municipal Obligations that are rated below investment grade or that are unrated but judged by the Investment Manager to be of comparable quality.”

As of the Effective Date, certain differences between VFL and the Fund described in the Proxy/Prospectus will cease to exist. On the Effective Date, the descriptions of VFL’s 20% Limitation in the Proxy/Prospectus are removed or replaced with the new policy immediately above as the context requires. In addition, the descriptions in the Proxy/Prospectus of the differences between the investment strategies of VFL and the Fund, including in the sections titled “COMPARISON OF THE FUNDS ‒ Comparison of Principal Investment Strategies,” are revised to indicate that both VFL and the Fund may invest up to 100% of their assets in below investment grade quality debt instruments.

Investing in the Fund involves certain risks. You could lose some or all of your investment. See “RISK FACTORS AND SPECIAL CONSIDERATIONS ‒ Comparison of Principal Risks of Investing in the Funds.”

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this Supplement or the accompanying Proxy/Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this Supplement to Proxy/Prospectus is April 20, 2026.