Weekly CEF Roundup: NBB/NBD Lose Term Provision

by: Stanford Chemist

13 and 15 CEF sectors out of 31 positive on price and NAV, respectively.

NBB and NBD lose term structure.

AEF tender offer expires, and non-tendered shares experience big loss.

The Weekly CEF Roundup will be put to summarize recent price movements in closed-end fund (CEF) sectors in the last week, as well as to highlight recently concluded or upcoming corporate actions on CEFs, such as tender offers. Most of the information has been sourced from CEFInsight or the Closed-End Fund Center. I will also link to some articles from Seeking Alpha that I have found for useful reading over the past week. The searchable tag for this feature is "cildoc". Data are taken from the close of Friday June 22, 2018.

Weekly performance roundup

13 out of 31 sectors were positive on price (up from 6 last week) and the average price return was -0.25% (up from -0.60%). MLPs led the way with +1.30% return, followed by high yield at +1.03% and New Jersey munis at +0.81%. On the downside were international sectors, led by Asia equity (-2.28%), other non-US equity (-1.90%), and emerging market equity (-1.79%).

(Source: Stanford Chemist, CEFConnect)

15 out of 31 sectors were positive on NAV (up from 7 last week), while the average NAV return was -0.13 (up from -0.57%). The gainers and losers in NAV were similar to the price gainers and losers, with the exception of utilities which gained +1.42% in NAV but returned only -0.26% in share price.

(Source: Stanford Chemist, CEFConnect)

The sector with the highest premium is multi-sector income (2.45%), while the sector with the highest discount is New Jersey munis (-14.04 %). The average sector discount is -6.57% (down from -6.46% last week).

(Source: Stanford Chemist, CEFConnect)

High yield showed the largest premium/discount increase (+0.82%), while utilities showed the largest premium/discount decline (-1.61%). The average change in premium/discount was -0.11% (down from -0.03% last week).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest average 1-year z-score is covered call equity (+1.23) while the sector with the lowest z-score is emerging market equity (-1.38). The average z-score is -0.37 (down from -0.31 last week).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest yield is MLPs (10.08%), followed by global growth & income (9.48%), emerging market income (9.38%), global equity dividend (8.97%) and multi-sector income (8.57%). Discounts and z-scores for the sectors are included for comparison. The average sector yield is 6.84% (up from 6.81% last week).

(Source: Stanford Chemist, CEFConnect)

Individual CEFs that have undergone a significant decrease in premium/discount value over the past week, coupled optionally with an increasing NAV trend, a negative z-score, and/or are trading at a discount, are potential buy candidates.


P/D decrease




Price change

NAV change







































































(Source: Stanford Chemist, CEFConnect)

Conversely, individual CEFs that have undergone a significant increase in premium/discount value in the past week, coupled optionally with a decreasing NAV trend, a positive z-score, and/or are trading at a premium, are potential sell candidates.


P/D increase




Price change

NAV change







































































(Source: Stanford Chemist, CEFConnect)

Recent corporate actions

These are from the last month and are quoted from Closed-End Fund Center, Morningstar, or CEFInsight (email alerts); any new news in the past week has a bolded date:

June 20, 2018 | Aberdeen Emerging Markets Equity Income Fund, Inc. (the "Fund") announced today the preliminary results of its cash tender for up to 28,470,130 shares of its common stock, representing approximately 32% of the Fund's outstanding shares. The offer expired at 11:59 p.m. New York City time on Tuesday, June 19, 2018. Based on current information, approximately 61,362,593 shares of common stock or 68.97% of the Fund's outstanding stock were tendered through the expiration date. This total includes shares tendered pursuant to notices of guaranteed delivery. This number is subject to adjustment and should not be regarded as final. Because the number of shares tendered exceeded 28,470,130, the number of shares that will be purchased by the Fund will be pro-rated based on the number of shares properly tendered by each shareholder. No more than a total of 28,470,130 properly tendered shares will be accepted for payment at a price per share equal to 99% of the Fund's net asset value per share ("NAV") as of the close of regular trading on the NYSE American on June 20, 2018. The final number of shares validly tendered and accepted pursuant to the tender offer will be announced at a later date.

June 22, 2018 | The Nuveen Build America Bond Fund (NBB) and Nuveen Build America Bond Opportunity Fund (NBD) announced certain results of their Annual Meeting of Shareholders. NBB announced that shareholders at its Annual Meeting have approved the issuance of additional common shares in connection with the proposed merger of NBD into NBB, the elimination of NBB's fundamental policy related to the its contingent term provision and the election of Board members. NBD announced that its Annual Meeting of Shareholders has been adjourned to solicit additional proxies necessary to obtain shareholder approval for the merger. Consummation of the merger is contingent upon shareholders of NBD approving the merger. Regardless of whether NBD shareholders approve the merger, NBB will conduct a 20 percent tender offer as described in the proxy materials, eliminate its contingent term provision, change its principal investment policy to invest at least 80 percent of its assets in taxable municipal securities, and change its name to Nuveen Taxable Municipal Income Fund. These changes will become effective on, or as soon as practicable thereafter, the closing date of the merger if the merger is consummated, or otherwise upon completion of NBD's Annual Meeting of Shareholders, including any further adjournments thereof.

June 11, 2018 | BlackRock Advisors, LLC today announced that the reorganizations of each of BlackRock New Jersey Municipal Bond Trust (BLJ) and BlackRock New Jersey Municipal Income Trust (BNJ) with and into BlackRock MuniYield New Jersey Fund, Inc. (NYSE:MYJ and, together with BLJ and BNJ, the "Funds") (the "Reorganizations") is effective as of the opening for business of the New York Stock Exchange on Monday, June 11, 2018. In the Reorganizations, common shareholders of BLJ and BNJ received an amount of MYJ common shares equal to the aggregate net asset value of their holdings of BLJ and BNJ common shares as determined at the close of business on June 8, 2018. Fractional shares of MYJ common shares were not issued in the Reorganizations and consequently cash will be distributed for any such fractional shares.

Upcoming corporate actions

These are from the last month and are quoted from Closed-End Fund Center, Morningstar, or CEFInsight (email alerts); any new news in the past week has a bolded date:

June 13, 2018 | First Trust Advisors L.P. ("FTA") announced today that, subject to the satisfaction of certain customary closing conditions, the merger of First Trust Strategic High Income Fund II (FHY), a closed-end fund managed by FTA, with and into First Trust High Income Long/Short Fund (FSD), a closed-end fund managed by FTA, is expected to become effective immediately before the opening of the NYSE on June 25, 2018. As previously announced, the shareholders of FHY have approved the fund's merger with and into FSD at a Special Meeting of Shareholders on June 11, 2018. The merger was approved by the Board of Trustees of each of FHY and FSD on March 6, 2018. Upon the completion of the transaction, which is expected to be tax-free, the assets of FHY will be transferred to, and the liabilities of FHY will be assumed by, FSD. The shareholders of FHY will receive shares of FSD with a value equal to the aggregate net asset value of the FHY shares held by them.

June 7, 2018 | Tortoise MLP Fund, Inc. (the "Company") today announced that its Board of Directors (the "Board") has approved the terms of the issuance of transferable rights ("Rights") to the holders of the Company's common stock (par value $0.001 per share) ("Common Stock"), as of the record date, June 19, 2018 (the "Record Date"). Holders of these Rights are entitled to subscribe for additional shares of Common Stock (the "Offer") at a discount to market price (subject to a sales load). The Rights entitle the holders to purchase one new share of Common Stock for every 3 Rights held (1-for-3); however, any Record Date Stockholder who owns fewer than three shares of Common Stock as of the Record Date will be entitled to subscribe for one share of Common Stock. Fractional shares of Common Stock will not be issued. The subscription price per share of Common Stock (the "Subscription Price") will be determined on the expiration date of the Offer, which is currently expected to be July 18, 2018, unless extended by the Company (the "Expiration Date"), and will be equal to 90% of the average of the last reported sales price of a share of Common Stock of the Company on the New York Stock Exchange (the "NYSE") on the Expiration Date and each of the four (4) immediately preceding trading days (the "Formula Price"). If, however, the Formula Price is less than 90% of the Company's NAV per share of Common Stock at the close of trading on the NYSE on the Expiration Date, the Subscription Price will be 90% of the Company's NAV per share of Common Stock at the close of trading on the NYSE on that day. The estimated Subscription Price has not yet been determined by the Company.

May 29, 2018 | ClearBridge American Energy MLP Fund Inc. (CBA) and ClearBridge Energy MLP Opportunity Fund Inc. (EMO) today announced approval by each Fund's Board of Directors of a proposal to merge CBA with and into EMO, subject to approval by the stockholders of each Fund. If the proposed merger is approved by the stockholders of each Fund, (i) common stockholders of CBA would receive common stock of EMO, based on each Fund's respective net asset value per share and (ii) holders of CBA's mandatory redeemable preferred stock (the "CBA MRPS") would receive shares of mandatory redeemable preferred stock of EMO in the same number and with terms identical to their CBA MRPS. In lieu of issuing fractional shares of common stock, EMO will pay cash to each former common stockholder of CBA in an amount equal to the value of the fractional shares of CBA common stock that the investor would otherwise have received in the merger. If approved by stockholders, the merger is anticipated to occur during the fourth quarter of 2018.

Management and the Fund's investment adviser do not anticipate any material portfolio turnover as a result of the proposed merger. The merger is expected to qualify as a tax-free reorganization for federal income tax purposes. EMO Name and Policy Change: EMO also today announced approval by its Board of Directors of a change to its name from "ClearBridge Energy MLP Opportunity Fund Inc." to "ClearBridge Energy Midstream Opportunity Fund Inc." and, relatedly, an amendment of EMO's 80% policy from investing at least 80% of its managed assets in master limited partnerships ("MLPs") in the energy sector to investing at least 80% of its managed assets in energy midstream entities including entities structured as both partnerships and corporations. The name and investment policy change should allow additional investment flexibility by including midstream C corporations in EMO's current 80% policy. Management does not anticipate any material change in the portfolio construction in the near term because of this policy change. EMO will implement the name and investment policy changes concurrently with the merger, although such changes are not required to be approved by stockholders and will be implemented whether or not the merger is approved.

Recent activist or other CEF news

These are from the last month and are quoted from Closed-End Fund Center, Morningstar, or CEFInsight (email alerts); any new news in the past week has a bolded date:

May 24, 2018 | THL Credit Senior Loan Fund (the "Fund") (TSLF) today announced several actions relating to the management and oversight of the Fund. The Fund's Board of Trustees (the "Board") has approved THL Credit Advisors LLC ("THL Credit"), the Fund's current subadviser, to serve as the sole investment adviser to the Fund. The Fund's current advisory agreement with Four Wood Capital Advisors LLC ("FWCA") will terminate on June 21, 2018, along with the Fund's investor support services agreement with FWCA's affiliate, Four Wood Capital Partners LLC ("FWCP"). On June 22, 2018, THL Credit will commence serving as the sole investment adviser to the Fund pursuant to an interim advisory agreement that was approved by the Fund's Board (the "Interim THL Agreement"). The Fund's Board also approved a new, non-interim, advisory agreement between the Fund and THL Credit (the "New THL Agreement"), which will be subject to approval by the Fund's shareholders. Under both the Interim THL Agreement and proposed New THL Agreement, the annual fee rate payable by the Fund has been reduced from 1.05% to 0.80% of the value of the Fund's average daily Managed Assets. THL Credit will provide investor support as part of its advisory relationship and the Fund will no longer bear the annual fee of 0.05% of the average daily Managed Assets of the Fund paid to FWCP for those services. In addition, THL Credit has agreed to limit, indefinitely, certain non-management expenses borne by the Fund to an amount not to exceed 0.25% per year of the Fund's Managed Assets (pro-rated for the period in 2018 during which THL Credit serves as the Fund's sole investment adviser). THL Credit also has agreed to bear up to $500,000 of certain expenses in connection with the transfer of the advisory relationship from FWCA to THL Credit.

May 24, 2018 | Eagle Growth and Income Opportunities Fund (the "Fund") (EGIF) today announced that the Fund's Board of Trustees approved a proposal to reduce the Fund's annual advisory fee rate, effective May 24, 2018, to 0.85% of the average daily value of the Fund's Managed Assets,1 a decrease of 0.20% from the prior advisory fee rate of 1.05%. In addition, Fund's Board of Trustees approved an amended Investor Support Services Agreement which makes permanent a waiver which reduced the fees payable under that agreement, effective May 24, 2018, to 0.05% of the average daily value of the Fund's Managed Assets, a decrease of 0.05% from the prior fee rate of .10%.

Distribution changes announced this month

These are sorted in ascending order of distribution change percentage. Funds with distribution changes announced this month are included. Any distribution declarations made this week are in bold. I've also added monthly/quarterly information as well as yield, coverage (after the boost/cut), discount and 1-year z-score information. I've separated the funds into two sub-categories, cutters and boosters.


Name Ticker Change Previous Current Yield Discount z-score Coverage Announced Ex-date
Templeton Emerging Mkts Income (TEI) -17.1% 0.2574 0.2135 8.09% -9.29% 0.9 33% 6/15/2018 6/27/2018
Nuveen Diversified Div & Inc (JDD) -11.1% 0.27 0.24 8.25% -2.35% -0.4 14% 6/1/2018 6/14/2018
Nuveen MA Quality Muni Income (NMT) -11.0% 0.05 0.0445 4.29% -12.33% -1.9 97% 6/1/2018 6/14/2018
Nuveen Real Estate Income (JRS) -10.9% 0.23 0.205 8.35% -8.99% -3 20% 6/1/2018 6/14/2018
Nuveen Global High Income (JGH) -10.8% 0.12 0.107 8.32% -13.46% -2 104% 6/1/2018 6/14/2018
Nuveen High Income Dec 2018 Ta (JHA) -10.0% 0.03 0.027 3.31% -1.61% -0.8 106% 6/1/2018 6/14/2018
Nuveen Credit Strat. Income (JQC) -9.8% 0.041 0.037 5.55% -11.89% -1.4 91% 6/1/2018 6/14/2018
Nuveen Pref & Inc Securities (JPS) -9.7% 0.062 0.056 7.38% -5.79% -1.1 104% 6/1/2018 6/14/2018
Nuveen AMT-Free Muni Credit In (NVG) -9.7% 0.0725 0.0655 5.39% -9.50% -1.5 99% 6/1/2018 6/14/2018
Nuveen Intermediate Dur Muni (NID) -9.6% 0.047 0.0425 4.13% -9.12% -1.6 104% 6/1/2018 6/14/2018
Nuveen Senior Income (NSL) -9.5% 0.037 0.0335 6.31% -7.28% -1.9 90% 6/1/2018 6/14/2018
Nuveen MN Quality Muni Income (NMS) -8.3% 0.06 0.055 4.93% -8.34% -1.5 98% 6/1/2018 6/14/2018
Nuveen TX Quality Muni Income (NTX) -8.2% 0.0485 0.0445 4.18% -14.48% -2 101% 6/1/2018 6/14/2018
Nuveen AMT-Free Qlty Muni Inc (NEA) -7.8% 0.058 0.0535 4.96% -11.90% -1.2 103% 6/1/2018 6/14/2018
Nuveen Municipal Income (NMI) -7.7% 0.039 0.036 3.83% 1.16% -0.2 101% 6/1/2018 6/14/2018
Nuveen MO Quality Muni Income (NOM) -7.5% 0.0465 0.043 3.94% -2.46% -1.5 103% 6/1/2018 6/14/2018
Nuveen MD Quality Muni Income (NMY) -7.4% 0.0475 0.044 4.34% -14.49% -0.9 100% 6/1/2018 6/14/2018
Royce Value Trust (RVT) -7.3% 0.32349 0.3 7.43% -8.97% 0 5% 6/1/2018 6/8/2018
Nuveen Floating Rate Income (JFR) -7.3% 0.062 0.0575 6.54% -8.38% -1.9 91% 6/1/2018 6/14/2018
Nuveen Pref and Inc 2022 Term (JPT) -7.1% 0.1275 0.1185 5.93% 0.42% 0.7 104% 6/1/2018 6/14/2018
Nuveen AMT-Free Muni Value (NUW) -6.7% 0.06 0.056 4.31% -4.59% -1.6 100% 6/1/2018 6/14/2018
Nuveen High Income Dec 2019 Ta (JHD) -6.7% 0.0375 0.035 4.26% -1.84% -0.1 108% 6/1/2018 6/14/2018
India Fund Inc (IFN) -6.6% 0.76 0.71 5.91% -13.44% -1.7 -1% 6/11/2018 6/20/2018
Nuveen Floating Rate Inc Opps (JRO) -6.5% 0.062 0.058 6.68% -8.84% -2.2 87% 6/1/2018 6/14/2018
Nuveen Pref & Income Opps Fund (JPC) -6.2% 0.065 0.061 7.70% -5.93% -1.1 103% 6/1/2018 6/14/2018
Nuveen NJ Quality Muni Income (NXJ) -6.0% 0.058 0.0545 5.03% -15.81% -1.5 101% 6/1/2018 6/14/2018
Nuveen Muni Credit Income (NZF) -5.7% 0.07 0.066 5.52% -8.13% -0.9 99% 6/1/2018 6/14/2018
Nuveen PA Quality Muni Income (NQP) -5.6% 0.0535 0.0505 4.81% -15.08% -1.1 99% 6/1/2018 6/14/2018
Nuveen NJ Municipal Value Fund (NJV) -5.3% 0.0475 0.045 4.13% -13.97% -1.6 101% 6/1/2018 6/14/2018
Nuveen Shrt Duration Cred Opps (JSD) -5.2% 0.106 0.1005 6.92% -2.30% 1.2 89% 6/1/2018 6/14/2018
Nuveen CA Quality Muni Inc (NAC) -5.1% 0.0585 0.0555 4.99% -12.29% -1.2 101% 6/1/2018 6/14/2018
Nuveen Enhanced Muni Value (NEV) -4.6% 0.065 0.062 5.46% -6.84% -0.7 101% 6/1/2018 6/14/2018
Nuveen High Income 2020 Target (JHY) -4.5% 0.044 0.042 5.11% 0.67% -0.1 108% 6/1/2018 6/14/2018
Nuveen Inter Dur Quality Muni (NIQ) -4.3% 0.0345 0.033 3.15% -7.78% -0.8 102% 6/1/2018 6/14/2018
Nuveen Preferred & Income Term (JPI) -4.2% 0.1415 0.1355 7.02% -4.41% -0.1 103% 6/1/2018 6/14/2018
Delaware Enhanced Gbl Div&Inc (DEX) -1.5% 0.1058 0.1042 10.97% -5.39% 1.3 26% 6/5/2018 6/14/2018
MFS Intermediate High Income (CIF) -1.4% 0.02098 0.02068 9.97% -4.23% -2.3 62% 6/1/2018 6/12/2018
EV Floating Rate Income (EFT) -1.4% 0.07 0.069 5.64% -5.84% -0.2 97% 6/1/2018 6/21/2018
MFS Charter Income (MCR) -1.3% 0.0595 0.05873 8.90% -9.59% -1.3 52% 6/1/2018 6/12/2018
MFS Multi-Market Income (MMT) -1.2% 0.04236 0.04185 8.97% -10.26% -1.5 49% 6/1/2018 6/12/2018
MFS Intermediate Income (MIN) -1.1% 0.02991 0.02959 9.25% -7.25% -0.8 26% 6/1/2018 6/12/2018
MFS Government Markets Income (MGF) -1.0% 0.02943 0.02913 7.77% -6.25% -1.2 38% 6/1/2018 6/12/2018
Clough Global Div and Inc Fund (GLV) -0.5% 0.1141 0.1135 10.67% -5.83% 0.4 1% 6/8/2018 6/18/2018
Delaware Inv Div & Inc (DDF) -0.5% 0.0964 0.0959 9.94% 0.43% 3.5 27% 6/5/2018 6/14/2018


Name Ticker Change Previous Current Yield Discount z-score Coverage Announced Ex-date
WA Inflation-Linked Opps & Inc (WIW) 0.0% 0.036 0.036 3.95% -12.19% -1.3 91% 6/1/2018 6/14/2018
Clough Global Opportunities (GLO) 0.2% 0.0998 0.1 10.72% -7.75% 0.3 -4% 6/8/2018 6/18/2018
Clough Global Equity (GLQ) 1.1% 0.122 0.1234 10.07% -4.04% 2.1 -4% 6/8/2018 6/18/2018
JH Income Securities (JHS) 1.6% 0.1737 0.1765 5.28% -7.67% -1.6 34% 6/1/2018 6/8/2018
EV Float-Rate 2022 Target Term (EFL) 2.4% 0.041 0.042 5.40% -3.81% 0 77% 6/1/2018 6/8/2018
EV Tax-Managed Buy-Write Opps (ETV) 2.6% 0.108 0.1108 8.54% 3.66% 0.3 6% 6/1/2018 6/21/2018
JH Investors Trust (JHI) 2.6% 0.3048 0.3128 7.81% -7.51% -1.3 34% 6/1/2018 6/8/2018
MFS Investment Grade Muni (CXH) 2.6% 0.038 0.039 5.05% -10.88% -1.5 93% 6/1/2018 6/12/2018
TCW Strategic Income (TSI) 5.0% 0.0665 0.0698 4.58% -6.79% -0.3 32% 6/18/2018 6/28/2018

CEF analysis from around Seeking Alpha...

Recommended reads are in bold.

Alpha Gen Capital presents 9.20% Yielder With Expert Management And Upside Potential (KIO) (June 19) and The Best Muni CEF Is The One That Just Raised Its Distribution (MHI) (June 22)

Arbitrage Trader presents Weekly Review: High-Yield CEFs (June 20), Weekly Review: Municipal Bond CEFs (June 20), Weekly Municipal Bond CEF Trades (June 20) and Weekly Review: Master Limited Partnership CEFs (June 20)

History and Finance presents Term CEF Ladder Finale: Recap And Final Thoughts (Jun. 22)

Left Banker presents PIMCO CEFs Will Go Even Higher On Strong Coverage Report (June 18) and Good Value Is Getting Hard To Find In CEFs (June 21)

Nick Ackerman presents CEF ETB: The Undervalued Eaton Vance Option Fund (June 19) and CEFs BlackRock Health Sciences Trust And Tekla Healthcare Opportunities Fund: BME Rockets Itself To A Hold, Buy THQ (June 21)

*Stanford Chemist presents: The Chemist's Quality CEF Report - May 2018 (June 18), ClearBridge Proposes MLP CEF Merger (June 19), Weekly CEF Roundup: More Nuveen Cuts And NTG Rights Offering (June 21) and The Chemist's 'High-High-Low' CEF Report - May 2018 (June 22)

*To subscribers: these link to the public version of the article, which you will already have seen in the members section.

Macro/market section

Fear & Greed Trader S&P 500 Weekly Update: The Anticipated Pause Arrives; This Market Is Offering Plenty Of Opportunities Now (June 21)

Jeff Miller presents Weighing The Week Ahead: Will Incipient Headwinds Derail Economic Growth? (June 24)

Lance Roberts presents Bulls Seem Bulletproof (June 24)

CEF/ETF Income Laboratory members only

Here, we provide exclusive commentary and actionable takeaways on specific funds. In this issue, we explain why AEF's share price collapsed after the tender offer, why NBB/NBD's term provision was eliminated, and present some attractive valued CEFs.

Disclosure: I am/we are long THE PORTFOLIO SECURITIES. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.