(The following statement was released by the rating agency)
Oct 11 - Today, U.S. municipal leveraged closed-end funds (CEFs) have access to capitalacross the long, intermediate, and short-term maturities; which diversifies funding andmoderates rollover risk in the sector according to a new report published by Fitch Ratings.
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About $5.2 billion (or 16%) of total leverage in the sector remains in perpetual ARPS (downfrom $30.2 billion at end-2007), but $10.2 billion (or 32%) currently consists of newer issuedterm securities that mature in one to five years, with the remaining $16.4 billion (or 52%)funded with maturities of one year or less. This stand in contrast to the taxable CEF sectorwhere newer term securities have not yet proliferated and 74% of total leverage rolls inmaturities of one year or less, according to a related report published earlier by Fitch.
Access to longer-term funding for municipal CEFs was made possible by the successfulproliferation of new term-preferred securities, namely MTPs, VMTPs, and VRDPs issued to redeemfrozen ARPS. Furthermore, a number of municipal CEFs have recently termed out their shorter-termVRDP shares by placing them privately with investors for an initial term of three years, furthermoderating rollover risk.
The full report, 'Municipal Closed-End Funds Diversify Funding and Moderate Rollover Risk',is available at '.'
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