Weekly Closed-End Fund Roundup: NBB/NBD And EMO/CBA Mergers Complete

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Includes: ACP, ASA, ASG, BCV, BME, CBA, CEN, CIF, CMU, DDF, DEX, EAD, ECF, EDF, EFF, EFL, EFR, EFT, EIM, EMO, EOD, ERC, ERH, EVF, FCO, FTF, GAB, GAM, GGO, GGT, GIM, GLO, GLQ, GLU, GLV, GRF, HQH, HQL, IQI, JEMD, JTD, KYN, MCR, MFM, MFV, MGF, MIN, MMT, NBB, NBD, NBH, NCV, NDP, NXJ, PCN, PEO, PFO, PTY, RIV, STK, SWZ, TEI, USA, VBF
by: Stanford Chemist
Summary

0 CEF sectors out of 31 positive on price and 5 out of 31 sectors positive on NAV.

Energy and MLPs were the worst performing CEF sectors.

Two CEF mergers complete this week.

The Weekly Closed-End Fund Roundup will be put out at the start of each week 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. Data are taken from the close of November 23, 2018.

Weekly performance roundup

0 out of 31 sectors were positive on price (down from 6 last week) and the average price return was -1.71% (up from -1.53%). MLPs struggled for the second week in a row, falling -4.82%. Energy/resources and general equity both fell -3.81% and global equity dropped by -3.01%.

(Source: Stanford Chemist, CEFConnect)

5 out of 31 sectors were positive on NAV (down from 6 last week), while the average NAV return was -1.27% (down from -0.93%).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest premium is multisector income (-2.12%), while the sector with the highest discount is New Jersey munis (-15.26%). The average sector discount is -9.32% (up from -8.82% last week).

(Source: Stanford Chemist, CEFConnect)

U.S. health/biotech showed the largest premium/discount increase (+1.58%), while U.S. energy/resources showed the largest premium/discount decline (-1.80%). The average change in premium/discount was -0.40% (up from -0.59% last week).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest average 1-year z-score is U.S. health/biotech (+0.24) while the sector with the lowest z-score is senior loan (-2.10). The average z-score is -1.10 (down from -1.02 last week).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest yield is MLPs (11.84%), global growth & income (10.71%), global equity dividend (10.25%), emerging market income (10.12%) and other non-U.S. equity (9.58%)s. Discounts and z-scores for the sectors are included for comparison. The average sector yield is 7.69% (up from 7.59% 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.

Ticker

P/D decrease

Yield

P/D

z-score

Price change

NAV change

(PCN)

-8.41%

8.98%

5.03%

-2.2

-8.19%

-0.83%

(FCO)

-7.05%

10.58%

0.63%

1.0

-7.13%

-0.63%

(PTY)

-6.64%

10.45%

4.85%

-2.1

-6.75%

-0.84%

(PEO)

-5.96%

7.28%

-22.89%

-3.1

-9.05%

-2.02%

(ACP)

-5.22%

12.31%

-10.44%

-2.7

-7.90%

-2.54%

(NCV)

-4.67%

13.22%

5.17%

-1.3

-5.60%

-1.41%

(SWZ)

-4.35%

13.65%

-12.44%

-0.9

-1.76%

3.11%

(CEN)

-4.28%

15.99%

-4.40%

-1.7

-5.56%

-1.33%

(PFO)

-4.27%

7.02%

5.82%

1.5

-5.13%

-1.30%

(EDF)

-4.26%

18.17%

12.81%

0.3

-5.26%

-1.68%

(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.

Ticker

P/D increase

Yield

P/D

z-score

Price change

NAV change

(ECF)

4.49%

5.64%

-8.80%

1.1

2.44%

-2.60%

(STK)

4.34%

9.81%

2.39%

0.0

0.59%

-3.66%

(GAM)

4.33%

3.19%

-17.16%

-2.5

-3.73%

-8.76%

(BME)

4.31%

6.05%

6.87%

1.4

2.14%

-1.98%

(JTD)

3.65%

8.62%

-3.24%

0.2

0.91%

-2.90%

(BCV)

3.38%

31.03%

-10.67%

1.5

1.50%

-2.34%

(NDP)

3.25%

18.94%

4.05%

0.8

-7.88%

-10.75%

(GGO)

3.20%

4.71%

-2.91%

0.4

0.59%

-2.72%

(KYN)

3.05%

12.40%

-1.38%

0.0

-1.63%

-4.67%

(VBF)

2.77%

4.73%

-6.17%

0.3

2.88%

-0.16%

(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:

November 19, 2018 | Nuveen Closed-End Fund Merger Complete. The merger of the Nuveen Build America Bond Opportunity Fund (NYSE: NBD) into the Nuveen Build America Bond Fund (NYSE: NBB) was completed prior to the open of the New York Stock Exchange on November 19, 2018. As previously announced, the newly merged fund has been renamed Nuveen Taxable Municipal Income Fund and will continue to trade under the ticker NBB. In addition, NBB has eliminated its contingent term provision and has changed its principal investment policy from a policy of investing at least 80 percent of its assets in Build America Bonds to a policy of investing at least 80 percent of its assets in taxable municipal securities. In the merger, NBB acquired substantially all of the assets and liabilities of NBD in a tax-free transaction and common shares of NBD were converted to newly-issued common shares of NBB in an amount equal to the aggregate net assets of NBD. The transaction was based upon the funds’ closing net assets on November 16, 2018. The exchange ratio at which common shares of NBD were converted to common shares of NBB is listed below:

Fund Exchange Ratio
Nuveen Build America Bond Opportunity Fund (NBD) 1.07322841

November 19, 2018 | ClearBridge Energy Midstream Opportunity Fund Inc. Announces Completion of Merger and Share Conversion Price and Reaffirms Name and Policy Change. ClearBridge Energy Midstream Opportunity Fund Inc. (NYSE: EMO or the “Fund”)) (formerly known as “ClearBridge Energy MLP Opportunity Fund Inc.”) today announced the completion of the merger of ClearBridge American Energy MLP Fund Inc. (NYSE: CBA) with and into EMO. Effective after the close of business on Friday, November 16, 2018, CBA stockholders became EMO stockholders. The conversion ratio was calculated at 0.691518 common shares of EMO for each CBA common share. EMO did not issue any fractional common shares to CBA stockholders. In lieu thereof, EMO purchased all fractional shares at the then current NAV and remitted the cash proceeds to former CBA stockholders in proportion to their fractional shares.

In addition, EMO issued and delivered to CBA for distribution to holders of CBA mandatory redeemable preferred stock (“MRPS”) the same number of newly issued shares of Series D, E, F and G MRPS as that number of shares of CBA’s Series A, B, C and D MRPS issued and outstanding immediately before the date of the merger, with a liquidation preference and other terms identical to the terms of CBA’s Series A, B, C and D MRPS. EMO also reaffirmed that, effective after the close of business on November 16, 2018, it had changed its name from “ClearBridge Energy MLP Opportunity Fund Inc.” to “ClearBridge Energy Midstream Opportunity Fund Inc.” and, relatedly, amended its 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.

November 2, 2018 | RiverNorth Opportunities Fund, Inc. Announces Results of Rights Offering. RiverNorth Opportunities Fund Inc. (RIV) (the “Fund”) is pleased to announce the results of its transferable rights offering (the "Offering"), in which 1,790,000 shares of common stock will be issued pursuant to subscriptions by rights holders through the Offering at a subscription price of $16.93 per share. The Offering, which expired on November 1, 2018 (the “Expiration Date”), was oversubscribed and the over-subscription requests exceeded the over-subscription shares available. Accordingly, the shares issued as part of the over-subscription privilege of the Offering will be allocated pro-rata among record date stockholders who submitted over-subscription requests based on the number of rights originally issued to them by the Fund. The subscription price of $16.93 per share was established by the Fund’s Board of Directors pursuant to the terms of the Offering based upon a formula equal to 95% of the reported net asset value per share on the Expiration Date. The new shares of common stock will be issued on or about November 9, 2018. Gross proceeds received by the Fund, before any expenses of the Offering, are expected to total approximately $30.3 million.

October 27, 2018 | Delaware Enhanced Global Dividend and Income Fund Announces Expiration of Tender Offer. Delaware Enhanced Global Dividend and Income Fund (DEX) (the “Fund”), a closed-end management investment company, today announced the preliminary results of its tender offer for up to 3,165,810 shares of its common shares (“Common Shares”), representing up to 20 percent of its issued and outstanding Common Shares, without par value. The offer expired at 11:59 p.m., New York City time, on Friday, October 26, 2018. Based on current information, approximately 6,895,506 shares of common stock, or approximately 43.56% of the Fund’s Common Shares outstanding, were tendered through the expiration date. This total does not include shares tendered pursuant to notices of guaranteed delivery. Because the number of shares exceeded 3,165,810 shares, the relative number of Common Shares that will be purchased from each shareholder will be prorated based on the number of Common Shares properly tendered. The final number of Common Shares validly tendered and accepted pursuant to the tender offer will be announced at a later date. The Fund expects to make cash payments for tendered and accepted Common Shares at a price equal to 98% of the Fund’s net asset value (“NAV”) as of the close of regular trading on the New York Stock Exchange on Monday, October 29, 2018. Payment for Common Shares tendered and accepted is expected to be sent to tendering shareholders within approximately ten business days after the expiration date.

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:

November 8, 2018 | ClearBridge American Energy MLP Fund Inc. and ClearBridge Energy MLP Opportunity Fund Inc. Announce Results of Joint Special Meeting of Stockholders: Proposal to Merge is Approved. ClearBridge American Energy MLP Fund Inc. (NYSE: CBA) and ClearBridge Energy MLP Opportunity Fund Inc. (NYSE: EMO) announced today the results of the votes cast at the Joint Special Meeting of Stockholders held on November 7, 2018. Stockholders of both CBA and EMO voted to approve the merger of CBA with and into EMO in accordance with the Maryland General Corporation Law. The merger is expected to be effective prior to the opening of business on November 19, 2018. Upon completion of the merger, each share of common stock of CBA will convert into an equivalent dollar amount (to the nearest $0.001) of full shares of common stock of EMO, based on the net asset value of each Fund on the business day preceding the merger.

November 1, 2018 | Gabelli Global Utility & Income Trust Announces Rights Offering for Common and Preferred Shares Record Date and Summary of Terms. The Board of Trustees (the “Board”) of The Gabelli Global Utility & Income Trust (NYSE American:GLU) (the “Fund”) has approved a transferable rights offering which would allow the Fund’s record date common shareholders to acquire additional common shares and newly issued Series B Cumulative Puttable and Callable Preferred Shares (the “Series B Preferred”) (the “Offering”).

  • Each shareholder will receive one transferable right (the “Rights”) for each common share held on the record date, November 12, 2018.
  • Three Rights plus $67.50 (the “Subscription Price”) will be required to purchase one additional common share and one Series B Preferred share (the “Primary Subscription”). Rights may not be exercised to purchase only additional common shares or only Series B Preferred shares and shareholders must purchase an equal number of common shares and Series B Preferred shares.
  • Record date shareholders who fully exercise their Primary Subscription Rights will be eligible for an over-subscription privilege entitling these shareholders to subscribe, subject to certain limitations and a pro-rata allotment, for any additional common shares and Series B Preferred not purchased pursuant to the Primary Subscription. Rights acquired in the secondary market may not participate in the over-subscription privilege.
  • The Rights are expected to trade “when issued” on the NYSE American beginning on November 8, 2018, and the Fund’s common shares are expected to trade “Ex-Rights” on the NYSE American beginning on November 9, 2018. The Rights are expected to begin trading for normal settlement on the NYSE American (NYSE American:GLU RT) on or about November 15, 2018.
  • The Offering expires at 5:00 PM Eastern Time on December 14, 2018.

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:

November 9, 2018 | Four Closed-End Funds Advised by Wells Fargo Funds Management Renew Share Repurchase Programs. The following four Wells Fargo closed-end funds announced today that they will renew their open-market share repurchase programs:

  • Wells Fargo Global Dividend Opportunity Fund (NYSE: EOD)
  • Wells Fargo Income Opportunities Fund (NYSE American: EAD)
  • Wells Fargo Multi-Sector Income Fund (NYSE American: ERC)
  • Wells Fargo Utilities and High Income Fund (NYSE American: ERH)

The funds’ Board of Trustees has authorized the repurchase of an aggregate of up to 10% of each fund’s outstanding shares in open-market transactions during the period beginning January 1, 2019, and ending December 31, 2019. The Board has again delegated to Wells Fargo Funds Management, LLC, discretion to determine the amount and timing of repurchases of shares of each fund in accordance with the best interests of the fund and subject to applicable legal limitations. The Board will continue to receive periodic reports on repurchase activity as part of its ongoing oversight of the programs, which includes deciding whether to renew or discontinue the programs at the end of their terms.

The Board previously authorized the repurchase during the period from January 1, 2018, through December 31, 2018, of an aggregate of up to 10% of the outstanding shares of each fund. Through October 31, 2018, EOD repurchased 257,150 shares (or 0.57% of outstanding shares), EAD repurchased 1,899,824 shares (or 2.82% of outstanding shares), and ERC repurchased 3,397,183 shares (or 9.72% of outstanding shares). ERH did not repurchase any shares through October 31, 2018.

October 30, 2018 | RiverNorth Launches Opportunistic Municipal Income Fund with MacKay Municipal Managers. RiverNorth Capital Management, LLC (“RiverNorth”), an investment management firm specializing in opportunistic strategies, announced the launch of the RiverNorth Opportunistic Municipal Income Fund, Inc. (the “Fund”), a new municipal bond focused closed-end fund. RiverNorth will act as the investment adviser to the Fund, and MacKay Shields, LLC ("MacKay Shields") will act as subadviser. The Fund was priced at $20.00 per share, and trading on the New York Stock Exchange began on October 26, 2018 under the symbol "RMI.” The Fund’s primary investment objective is current income exempt from regular U.S. federal income taxes (but which may be includable in taxable income for purposes of the Federal alternative minimum tax). The Fund’s secondary investment objective is total return. As the investment adviser, RiverNorth will strategically allocate the Fund’s assets between two principal investment strategies: the Tactical Municipal Closed-End Fund Strategy, managed by RiverNorth, and the Municipal Bond Income Strategy, managed by MacKay Shields. The Fund raised gross proceeds of approximately $119 million in its initial public offering of shares of common stock. Should the underwriters exercise the overallotment option in full, which may or may not occur, the Fund will raise gross proceeds of approximately $136.85 million.

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.

Cutters

Name Ticker Change Previous Current Yield Discount z-score Coverage Announced Ex-date
ASA Gold and Precious Metals (ASA) -50.0% 0.02 0.01 0.34% -15.96% -0.7 -49% 11/2/2018 11/12/2018
Nuveen NJ Quality Muni Income (NXJ) -29.9% 0.0778 0.0545 5.19% -15.82% -0.8 101% 11/14/2018 11/23/2018
Nuveen Emerg Mkts Debt 2022 Ta (JEMD) -13.8% 0.0435 0.0375 5.88% -10.11% -1.8 117% 11/1/2018 11/14/2018
Ellsworth Growth and Income (ECF) -13.3% 0.15 0.13 5.64% -8.80% 1.1 6% 11/16/2018 11/26/2018
Clough Global Equity (GLQ) -9.1% 0.1282 0.1165 12.02% -10.33% -1.3 1% 11/8/2018 11/19/2018
Liberty All-Star Growth (ASG) -8.3% 0.12 0.11 9.52% -10.12% -2.2 -2% 11/2/2018 11/15/2018
Clough Global Opportunities (GLO) -8.2% 0.0995 0.0913 11.95% -10.54% -1.1 -3% 11/8/2018 11/19/2018
Invesco Quality Muni Income (IQI) -7.5% 0.0574 0.0531 5.75% -12.88% -2.6 95% 11/1/2018 11/12/2018
Liberty All-Star Equity (USA) -5.9% 0.17 0.16 11.37% -8.60% -1 3% 11/2/2018 11/15/2018
Clough Global Div and Inc Fund (GLV) -5.1% 0.112 0.1063 11.61% -11.37% -2.7 16% 11/8/2018 11/19/2018
Franklin Limited Duration Inco (FTF) -4.5% 0.0953 0.091 11.81% -11.65% -2 58% 11/16/2018 11/29/2018
EV Municipal Bond (EIM) -3.8% 0.0446 0.0429 4.69% -14.35% -2.3 117% 11/1/2018 11/21/2018
Wells Fargo Adv Glo Div Opp (EOD) -3.4% 0.15956 0.15413 11.88% -9.90% -1.6 12% 11/9/2018 12/14/2018
MFS Special Value Trust (MFV) -3.1% 0.04731 0.04583 10.08% 1.81% -0.2 29% 11/1/2018 11/13/2018
Templeton Emerging Mkts Income (TEI) -2.5% 0.068 0.0663 8.35% -13.52% -2 107% 11/1/2018 11/14/2018
MFS High Yield Municipal Trust (CMU) -2.4% 0.0205 0.02 5.73% -10.09% -2.3 113% 11/1/2018 11/13/2018
Delaware Enhanced Gbl Div&Inc (DEX) -2.1% 0.0994 0.0973 12.45% -12.50% -3.1 40% 11/5/2018 11/15/2018
MFS Intermediate High Income (CIF) -2.0% 0.02056 0.02015 10.70% -7.76% -2.3 61% 11/1/2018 11/13/2018
MFS Municipal Income (MFM) -1.7% 0.03 0.0295 5.66% -11.35% -1.4 105% 11/1/2018 11/13/2018
MFS Multi-Market Income (MMT) -1.5% 0.04144 0.04082 9.28% -11.56% -1 51% 11/1/2018 11/13/2018
MFS Charter Income (MCR) -1.5% 0.0582 0.05734 9.43% -13.20% -2.3 50% 11/1/2018 11/13/2018
MFS Government Markets Income (MGF) -1.4% 0.02861 0.0282 7.78% -6.25% -0.3 37% 11/1/2018 11/13/2018
MFS Intermediate Income (MIN) -1.1% 0.029 9.0.028236% -8.23% -0.8 27% 11/1/2018 11/13/2018
Wells Fargo Adv Inc Opp (EAD) -0.7% 0.06097 0.06053 9.71% -13.53% -2.1 80% 11/9/2018 12/14/2018
Delaware Inv Div & Inc (DDF) -0.7% 0.0977 0.097 10.45% 4.01% 0.7 26% 11/5/2018 11/15/2018
Wells Fargo Adv Multi-Sec Inc (ERC) -0.7% 0.10489 0.1042 11.06% -12.93% -3.1 66% 11/9/2018 12/14/2018

Boosters

Name Ticker Change Previous Current Yield Discount z-score Coverage Announced Ex-date
Neuberger Berman Inter Muni (NBH) 0.7% 0.062 0.06244 5.85% -12.20% -1.5 94% 11/16/2018 11/29/2018
EV Senior Floating Rate (EFR) 1.4% 0.07 0.071 6.46% -12.62% -2.4 94% 11/1/2018 11/21/2018
EV Float-Rate 2022 Target Term (EFL) 2.3% 0.043 0.044 5.86% -5.75% -1.1 85% 11/1/2018 11/8/2018
EV Floating Rate Income (EFT) 3.0% 0.067 0.069 6.10% -12.70% -2.7 94% 11/1/2018 11/21/2018
EV Senior Income Trust (EVF) 3.2% 0.031 0.032 6.26% -14.50% -2 92% 11/1/2018 11/8/2018
Eagle Capital Growth (GRF) 3.9% 0.51 0.53 7.40% -16.74% -2.8 2% 11/7/2018 11/21/2018
EV Floating-Rate Inc Plus Fund (EFF) 3.9% 0.076 0.079 6.02% -14.17% -2.1 96% 11/1/2018 11/21/2018
Tekla Life Sciences Investors (HQL) 5.0% 0.4 0.42 9.68% -4.25% -0.7 -3% 11/16/2018 11/27/2018
Templeton Global Income (GIM) 8.0% 0.0287 0.031 6.38% -14.37% -2 97% 11/1/2018 11/14/2018
Tekla Healthcare Investors (HQH) 8.5% 0.47 0.51 9.97% -8.62% -0.3 -2% 11/16/2018 11/27/2018
Gabelli Multimedia (GGT) 9.1% 0.22 0.24 11.81% 3.70% 0.7 -3% 11/16/2018 12/6/2018
Gabelli Equity Trust (GAB) 26.7% 0.15 0.19 12.90% 0.00% 1.2 -1% 11/16/2018 12/6/2018

CEF analysis from around Seeking Alpha...

ADS Analytics presents Weekly Fund Wrap: Thanks For Nothing (Nov. 26)

Alpha Gen Capital presents Why Fundamentals Combined With Anomalous Discounts Create Winners (Nov. 20)

Arbitrage Trader presents Weekly Review: CEFs That Follow The Broad Market (Nov. 21), Weekly Review: High-Yield CEFs - This Fund Is Traded At Almost 16% Discount (Nov. 21), Weekly Review: Municipal Bond CEFs - The Funds Quietly Recover Their Prices (Nov. 21), Weekly Review: Senior Loan CEFs - A Bearish Week For The Sector (Nov. 21), Weekly Review: Real Estate CEFs - Cohen & Steers Total Return Realty Fund With -1.6 Z-Score (Nov. 21), Weekly Review: Preferred Stock CEFs - Are The New Lows Standing Behind The Corner? (Nov. 22), Weekly Review: Master Limited Partnership CEFs - Once Again Lack Of Premiums In The Sector (Nov. 22), Weekly Municipal Bond CEF Trades: An Arbitrage Opportunity In BlackRock Funds (Nov. 22)

Dividend Seeker presents PCN: Pullback Occurred, But Income Production Is Up (Nov. 20), PKO: Staying Patient Paid Off, Now Pull The Trigger (Nov. 23)

Stanford Chemist presents Fire And Ice In Flaherty & Crumrine Preferred Stock CEFs (Nov. 20), 2 Target Term Closed-End Fund Ideas (Nov. 23) and Weekly Closed-End Fund Roundup: Distribution Boosts To Eaton Vance Floating Rate CEFs (Nov. 26)

Macro/market section

Fear & Greed Trader presents S&P 500 Weekly Update: A 'Bottoming' Process For Stocks. I Would Not Be Too Bearish Just Yet (Nov. 24)

Jeff Miller presents Weighing The Week Ahead: Do Plummeting Oil Prices Signal A Weak Economy? (Nov. 24)

Lance Roberts presents Oil Sends A 'Crude Warning' (Nov. 25)

Disclosure: I am/we are long BCV, HQH, PTY. 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.