Boards of Directors/Trustees of BlackRock Closed-End Funds Reject Demands
by Business Wire
BlackRock Advisors, LLC today announced that the Board of Directors/ Trustees (collectively, the “Boards”) of each of the closed-end funds (the “Funds”) identified below have determined to reject the demands contained in the demand letters received by each Fund related to the redemption of its auction market preferred shares (“AMPS”).
As previously announced on June 10, 2010 and August 11, 2010, each of the 20 BlackRock closed-end funds listed below received a demand letter from a law firm on behalf of purported common shareholders of each Fund. The demand letters allege that BlackRock Advisors, LLC (each Fund’s investment adviser) and the Funds’ officers and Boards of Directors/Trustees breached their fiduciary duties by redeeming at par certain of the Funds’ AMPS, and demanded that the Boards take action to remedy those alleged breaches.
In response to the demand letters, the Boards established a Demand Review Committee (the “Committee”) of the independent Directors/Trustees to investigate the claims made in the demand letters with the assistance of independent counsel. Based upon its investigation, the Committee recommended that the Boards reject the demands specified in the demand letters. After reviewing the findings of the Committee, the Board for each Fund unanimously adopted the Committee’s recommendation and unanimously voted to reject the demands.
The Funds that received demand letters are as follows:
|BlackRock California Municipal Income Trust||BFZ|
|BlackRock Credit Allocation Income Trust II, Inc.||PSY|
|BlackRock Credit Allocation Income Trust IV||BTZ|
|BlackRock Insured Municipal Income Investment Trust||BAF|
|BlackRock Insured Municipal Income Trust||BYM|
|BlackRock Insured Municipal Term Trust||BMT|
|BlackRock Muni Intermediate Duration Fund, Inc.||MUI|
|BlackRock Municipal Bond Investment Trust||BIE|
|BlackRock Municipal Income Trust||BFK|
|BlackRock MuniHoldings Insured Fund II, Inc.||MUE|
|BlackRock MuniHoldings Insured Investment Fund||MFL|
|BlackRock MuniHoldings New Jersey Insured Fund, Inc.||MUJ|
|BlackRock MuniYield California Insured Fund, Inc.||MCA|
|BlackRock MuniYield Fund, Inc.||MYD|
|BlackRock MuniYield Insured Fund, Inc.||MYI|
|BlackRock MuniYield Michigan Insured Fund, Inc.||MIY|
|BlackRock New Jersey Municipal Income Trust||BNJ|
|BlackRock New York Insured Municipal Income Trust||BSE|
|BlackRock New York Municipal Bond Trust||BQH|
|The BlackRock Strategic Municipal Trust||BSD|
The allegations made by shareholders' counsel in the demand letters were repeated and expanded in complaints filed on July 27, 2010 and August 3, 2010 by the same counsel in Supreme Court, N.Y. County. The Committee reviewed both the complaints and the demand letters, and the conclusion of the Committee and the Boards that the allegations lack merit applies to both.
The Boards and BlackRock are currently exploring potential alternative forms of leverage in order to provide liquidity to AMPS shareholders, including, among other things, the development of a new form of preferred stock that includes a put feature, which would make the security eligible for purchase by money market funds. In addition, the Boards and BlackRock are also exploring the feasibility of the expanded use of additional alternative forms of leverage such as tender option bonds, reverse repurchase agreements and credit facilities, as appropriate. The Boards and BlackRock will determine, based on the facts and circumstances applicable to each BlackRock fund with AMPS outstanding, whether such alternative forms of leverage would be appropriate and in the best interest of the respective fund as a whole and shareholders.
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.
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With respect to each Fund, the following factors, among others, could cause actual events to differ materially from 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 the Fund’s net asset value; (2) the performance of the 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 the 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 the Funds 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 Funds. The information contained on our website is not a part of this press release.