BlackRock Announces Investment Policy Changes for Certain Insured Municipal Closed-End Funds
by Business Wire
BlackRock Advisors, LLC today announced that the Board of Directors/Trustees of each of 20 of its insured closed-end funds (the “Funds”) have approved changes to certain investment policies of the Funds.
Historically, under normal market conditions, each Fund has been required to invest at least 80% of its assets in municipal bonds either (i) insured under an insurance policy purchased by the Fund or (ii) insured under an insurance policy obtained by the issuer of the municipal bond or any other party. In September 2008, the Funds adopted an amended investment policy of seeking to limit their purchase of municipal bonds to those bonds insured by insurance providers with claims-paying abilities rated investment grade or in the three highest ratings categories at time of investment (the “Insurance Policy”).
Following the onset of the credit and liquidity crises, the claims-paying ability rating of most of the municipal bond insurance providers has been lowered by the rating agencies. These downgrades have called into question the long-term viability of the municipal bond insurance market, which has the potential to severely limit the ability of BlackRock Advisors, LLC, the Fund's investment advisor ("BlackRock"), to manage the Funds under the Insurance Policy.
As a result, on September 2, 2010, BlackRock recommended, and the Boards approved, the removal of the Insurance Policy. As a result of this investment policy change, the Funds would not be required to dispose of assets currently held within the Funds. The Funds will maintain, and have no current intention to amend, their investment policy of, under normal market conditions, generally investing in municipal obligations rated investment grade or in the three highest ratings categories, as applicable.
Funds Affected by Investment Policy Changes
|BlackRock Insured Municipal Income Investment Trust||BAF|
|BlackRock Insured Municipal Income Trust||BYM|
|BlackRock MuniEnhanced Fund, Inc.||MEN|
|BlackRock MuniHoldings Insured Investment Fund||MFL|
|BlackRock MuniYield Insured Investment Fund||MFT|
|BlackRock MuniYield Quality Fund II, Inc.||MQT|
|BlackRock MuniYield Quality Fund, Inc.||MQY|
|BlackRock MuniHoldings Insured Fund II, Inc.||MUE|
|BlackRock MuniHoldings Insured Fund, Inc.||MUS|
|BlackRock MuniYield Insured Fund, Inc.||MYI|
|BlackRock MuniYield California Insured Fund, Inc.||MCA|
|BlackRock MuniHoldings California Insured Fund, Inc.||MUC|
|BlackRock MuniYield Michigan Insured Fund, Inc.||MIY|
|BlackRock MuniYield Michigan Insured Fund II, Inc.||MYM|
|New Jersey Funds|
|BlackRock MuniYield New Jersey Insured Fund, Inc.||MJI|
|BlackRock MuniHoldings New Jersey Insured Fund, Inc.||MUJ|
|New York Funds|
|BlackRock New York Insured Municipal Income Trust||BSE|
|BlackRock MuniYield New York Insured Fund, Inc.||MYN|
|BlackRock MuniHoldings New York Insured Fund, Inc.||MHN|
|BlackRock MuniYield Pennsylvania Insured Fund||MPA|
As disclosed in its prospectus, each Fund is required to provide shareholders 60 days notice of a change to the Insured Policy. Accordingly, a notice describing the changes discussed above will be mailed to shareholders of record as of September 2, 2010. Following the prescribed 60-day notice period, BlackRock anticipates that it will gradually reposition the Funds’ portfolios over time, and that during such period, each Fund may continue to hold a substantial portion of its assets in insured municipal bonds. At this time, it is uncertain how long the repositioning may take, and the Funds may continue to be subject to risks associated with investing a substantial portion of their assets in preferred securities until the repositioning is complete. No action is required by shareholders of the Funds in connection with this change.
In connection with this change in non-fundamental policy, each of the Funds will undergo a name change to reflect its new portfolio characteristics. The new names of the Funds will be announced at or prior to the expiration of the 60-day notice period. Each Fund will continue to trade on New York Stock Exchange under its current ticker symbol.
BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At June 30, 2010, BlackRock’s AUM was $3.151 trillion. BlackRock offers products that span the risk spectrum to meet clients’ needs, including active, enhanced and index strategies across markets and asset classes. Products are offered in a variety of structures including separate accounts, mutual funds, iShares® (exchange traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®. Headquartered in New York City, as of June 30, 2010, the firm has approximately 8,500 employees in 24 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit the firm’s website at www.blackrock.com
This press release, and other statements that BlackRock may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions.
BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.
With respect to the Funds, the following factors, among others, could cause actual events to differ materially from any forward-looking statements or historical performance: (1) changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in each Fund’s net asset value; (2) the performance of each Fund’s investments; (3) the impact of increased competition; (4) the extent and timing of any distributions or share repurchases; (5) the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to each Fund or BlackRock, as applicable; and (6) BlackRock’s ability to attract and retain highly talented professionals.
The Annual and Semi-Annual Reports and other regulatory filings of each Fund with the Securities and Exchange Commission (“SEC”) are accessible on the SEC's website at www.sec.govand on BlackRock’s website at www.blackrock.com, and may discuss these or other factors that affect the Fund. The information contained on BlackRock’s website is not a part of this press release.