File No. __________
As filed with the SEC on October 6, 2017
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. __
Post-Effective Amendment No. __
(Check appropriate box or boxes)
FEDERATED PREMIER MUNICIPAL INCOME FUND
(Exact Name of Registrant as Specified in Charter)
1-800-341-7400
(Area Code and Telephone Number)
4000 Ericsson Drive
Warrendale, PA 15086-7561
(Address of Principal Executive Offices)
Peter J. Germain, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
Copies to:
Thomas Early, Esquire
Goodwin Procter LLP
601 S. Figueroa St.
41st Floor
Los Angeles, CA 90017
Approximate Date of Proposed Public Offering: As soon as
practicable after this Registration Statement becomes effective
under the Securities Act of 1933, as amended.
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
Title of Securities Being Registered | Amount Being Registered (1) | Proposed Maximum Offering Price per Unit (1) | Proposed Maximum Aggregate Offering Price (1) | Amount of Registration Fee |
Common shares of beneficial interest, $0.01 par value per share | 5,325,812 | $15.13 (2) | $80,579,535 | $10,032.15 |
Preferred shares of beneficial interest (Auction Market Preferred Shares), $0.01 par value per share | 596 | $25,000.00 (3) | $14,900,000 | $1,855.05 |
(1) | Estimated solely for the purpose of calculating the registration fee, pursuant to Rule 457(o) under the Securities Act of 1933, as amended. |
(2) | Net asset value per common share on September 29, 2017. |
(3) | Represents the liquidation preference of an Auction Market Preferred Share after the Reorganization. |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that the Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such dates as the Commission, acting pursuant to said Section 8(a), may determine.
1. | (For Shareholders of FPT only): To approve or disapprove a proposed Agreement and Plan of Reorganization and Termination (the “Plan”) pursuant to which FMN would acquire all, or substantially all, of the assets of FPT in exchange for shares of FMN to be distributed pro rata by FPT to its shareholders, in complete liquidation and dissolution of FPT (the “Reorganization”). |
2. | (For Shareholders of FMN only): To approve or disapprove a proposed issuance of additional common shares of FMN in connection with the Reorganization pursuant to the Plan (the “Share Issuance”). |
3. | (For Shareholders of FPT and FMN separately): To consider the election of J. Christopher Donahue, P. Jerome Richey and John T. Collins as Class II Trustees of each Fund. |
4. | (For preferred Shareholders of FPT and FMN separately): To consider the election of Peter E. Madden and John S. Walsh as Trustees of each Fund. |
5. | To transact such other business as may properly come before the joint annual meeting or any adjournment thereof. |
Reorganizing Fund | Reorganizing Fund Share Classes | Surviving Fund | Surviving Fund Share Classes |
Federated Premier Intermediate Municipal Income Fund | Common Shares | Federated Premier Municipal Income Fund | Common Shares |
Auction Market Preferred Shares | Auction Market Preferred Shares | ||
Variable Rate Municipal Term Preferred Shares | Variable Rate Municipal Term Preferred Shares |
• | Online–Use the web address on the ballot; |
• | Telephone–Call the toll-free telephone number on the ballot; |
• | Mail–Complete and return the ballot in the enclosed postage paid envelope; or |
• | Vote in person at the November 14, 2017, joint annual shareholder meeting. |
1. | Sign and return the proxy card without indicating a preference, your vote will be cast “for” each of the proposals. |
2. | Do not respond at all, we may contact you by telephone to ask you to cast your vote. |
1. | (For Shareholders of FPT only): To approve or disapprove a proposed Agreement and Plan of Reorganization and Termination (the “Plan”) pursuant to which FMN would acquire all, or substantially all, of the assets of FPT in exchange for shares of FMN to be distributed pro rata by FPT to its shareholders, in complete liquidation and dissolution of FPT (the “Reorganization”). |
2. | (For Shareholders of FMN only): To approve or disapprove a proposed issuance of additional common shares of FMN in connection with the Reorganization pursuant to the Plan (the “Share Issuance”). |
3. | (For Shareholders of FPT and FMN separately): To consider the election of J. Christopher Donahue, P. Jerome Richey and John T. Collins as Class II Trustees of each Fund. |
4. | (For preferred Shareholders of FPT and FMN separately): To consider the election of Peter E. Madden and John S. Walsh as Trustees of each Fund. |
5. | To transact such other business as may properly come before the joint annual meeting or any adjournment thereof. |
Common Shares | AMPS | VMTPS | |
Federated Premier Municipal Income Fund | 6,189,879 | 726 | 1,421 |
Federated Premier Intermediate Municipal Income Fund | 6,982,324 | 596 | 1,847 |
1. | Statement of Additional Information, dated October 11, 2017, relating to this Prospectus/Proxy Statement (File No. 811-21235, 333-_______) (the “Statement of Additional Information”); |
2. | Annual Report to Shareholders of FPT for the fiscal year ended November 30, 2016, and the Semi-annual Report to Shareholder of FPT for the fiscal period ended May 31, 2017 (File No. 811-21249); and |
3. | Annual Report to Shareholders of FMN for the fiscal year ended November 30, 2016, and the Semi-annual Report to Shareholder of FMN for the fiscal period ended May 31, 2017 (File No. 811-21235). |
PROPOSAL #1 - TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION AND TERMINATION (COMMON AND PREFERRED SHAREHOLDERS OF FPT ONLY) | 2 |
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PROPOSAL #3 – ELECTION OF J. CHRISTOPHER DONAHUE, P. JEROME RICHEY, AND JOHN T. COLLINS AS CLASS II TRUSTEES OF EACH FUND (COMMON AND PREFERRED SHAREHOLDERS OF FPT AND FMN SEPARATELY) | 46 |
PROPOSAL #4 – ELECTION OF PETER E. MADDEN AND JOHN S. WALSH AS TRUSTEES OF EACH FUND (PREFERRED SHAREHOLDERS of FPT AND FMN SEPARATELY) | 47 |
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Characteristic | FPT | FMN
|
Weighted Average Effective Maturity | 5.2 years | 5.9 years |
Weighted Average Stated Maturity | 10.1 years | 16.4 years |
Weighted Average Effective Duration | 5.4 years | 6.5 years |
Weighted Average Modified Duration | 4.4 years | 4.6 years |
FPT (Reorganizing Fund) | FMN (Acquiring Fund) |
The Fund's investment objective is to provide current income exempt from federal income tax, including AMT. | Same |
The Fund will invest primarily in securities that, in the opinion of counsel to the issuer, or on the basis of another authority believed by the Adviser to be reliable, pay interest exempt from federal income tax, including AMT. The Fund normally invests substantially all (at least 90%) of its total assets in tax-exempt securities. The Fund will invest at least 80% of its total assets in investment grade tax-exempt securities. Investment grade tax-exempt securities are those rated within the four highest categories by a NRSRO. | Same |
The Fund may invest up to 20% of its total assets in tax-exempt securities of below investment grade quality (but not lower than B). Tax-exempt securities of below investment grade quality are regarded as having predominately speculative characteristics with respect to the issuer's capacity to pay interest and repay principal and are commonly referred to as “junk bonds.” | Same |
Under normal circumstances, the Fund will maintain a dollar-weighted average effective portfolio maturity of three to ten years and a dollar-weighted average duration of three to eight years. | Under normal circumstances, the Fund will maintain a dollar-weighted average stated portfolio maturity of ten to thirty years and a dollar-weighted average duration of thirteen years or less. |
The Fund may use derivative contracts for risk management purposes. The Fund may leverage the portfolio by investing up to 10% of its total assets in inverse floaters and by investing in derivative contracts. The Fund's use of derivative contracts will be limited by the 1940 Act. | Same |
FPT (Reorganizing Fund) | FMN (Acquiring Fund) |
Market Discount Risk: Shares of closed-end management investment companies frequently trade at a discount from their NAV. | Same |
Interest Rate Risk: Prices of fixed-income securities (including tax-exempt securities) rise and fall in response to changes in interest rates. Generally, when interest rates rise, prices of fixed-income
securities fall. However, market factors, such as the demand for particular fixed-income securities, may cause the price of certain fixed-income securities to fall while the prices of other securities rise or remain
unchanged. The longer the duration of a fixed-income security, the more susceptible it is to interest rate risk. Recent and potential future changes in monetary policy made by central banks and/or their governments are likely to affect the level of interest rates. Duration measures the price sensitivity of a fixed-income security given a change in interest rates. The impact of interest rate changes on the value of floating rate investments is typically reduced by periodic interest rate resets. Variable and floating rate loans and securities generally are less sensitive to interest rate changes, but may decline in value if their interest rates do not rise as much or as quickly as interest rates in general. Conversely, variable and floating rate securities generally will not increase in value as much as fixed rate debt instruments if interest rates decline. Certain of the Fund's investments may also be valued, in part, by reference to the relative relationship between interest rates on tax-exempt securities and taxable securities. With respect to the Fund's investments described in the preceding sentence, the value of such Fund investments may be negatively affected (or positively affected) when the market for tax-exempt securities underperforms (or outperforms) the market for taxable securities. | Same |
FPT (Reorganizing Fund) | FMN (Acquiring Fund) |
Credit Risk: It is possible that interest or principal on securities will not be paid when due. Noninvestment-grade securities generally have a higher default risk than investment-grade securities.
Such non-payment or default may reduce the value of the Fund's portfolio holdings, its share price and its performance. Many fixed-income securities (including tax-exempt securities) receive credit ratings from NRSROs such as Fitch, Moody's and S&P that assign ratings to securities by assessing the likelihood of an issuer and/or guarantor default. Higher credit ratings correspond to lower perceived credit risk and lower credit ratings correspond to higher perceived credit risk. Credit ratings may be upgraded or downgraded from time to time as an NRSRO's assessment of the financial condition of a party obligated to make payments with respect to such securities and credit risk changes. The impact of any credit rating downgrade can be uncertain. Credit rating downgrades may lead to increased interest rates and volatility in financial markets, which in turn could negatively affect the value of the Fund's portfolio holdings, its share price and its investment performance. Credit ratings are not a guarantee of quality. Credit ratings may lag behind the current financial conditions of the issuer and/or guarantor and do not provide assurance against default or other loss of money. Credit ratings do not protect against a decline in the value of a security. If a security has not received a rating, the Fund must rely entirely upon the Adviser's credit assessment. Fixed-income securities generally compensate for greater credit risk by paying interest at a higher rate. The difference between the yield of a security and the yield of a U.S. Treasury security or other appropriate benchmark with a comparable maturity (the “spread”) measures the additional interest paid for risk. Spreads may increase generally in response to adverse economic or market conditions. A security's spread may also increase if the security's rating is lowered, or the security is perceived to have an increased credit risk. An increase in the spread will cause the price of the security to decline. | Same |
FPT (Reorganizing Fund) | FMN (Acquiring Fund) |
Leverage Risk: The use of leverage through the issuance of Preferred Shares creates an opportunity for increased income that may be distributed as Common Share dividends, but also creates special risks
for Common Shareholders. Two major types of risks created by leverage include: the likelihood of greater volatility of NAV and market price of Common Shares, because changes in the value of the Fund's tax-exempt
security portfolio (including securities bought with the proceeds of the Preferred Shares offering) are borne entirely by Common Shareholders; and the possibility either that Common Share income will fall if the
Preferred Share dividend rate rises, or that Common Share income will fluctuate because the Preferred Share dividend rate varies. Dividends on Preferred Shares generally are based on shorter-term tax-exempt security yields (which will be reset periodically) and that the Fund will invest the proceeds of the Preferred Shares offering in long-term, typically fixed rate, tax-exempt securities. So long as the Fund's tax-exempt security portfolio provides a higher yield, net of Fund expenses, than the Preferred Share dividend rate, as reset periodically, the leverage may cause Common Shareholders to receive higher dividends than if the Fund were not leveraged. However, the Fund's leveraging strategy may not be successful. For example, if short-term rates rise, the Preferred Share dividend rate could exceed the yield on long-term tax-exempt securities held by the Fund that were acquired during periods of generally lower interest rates, reducing dividends to Common Shareholders. In addition, if interest rates rise, the value of the Fund's holdings in long-term tax-exempt securities likely will fall, resulting in a decline in the NAV of Common Shares. Investment by the Fund in inverse floaters and derivative contracts may increase the Fund's leverage and, during periods of rising interest rates, may adversely affect the Fund's income, dividends and total returns to Common Shareholders. Preferred Shares are expected to pay cumulative dividends, which may tend to increase leverage risk. Because the fees received by the Adviser are based on the Managed Assets of the Fund (including assets represented by Preferred Shares and any leverage created thereby), the Adviser has a financial incentive for the Fund to issue Preferred Shares, which may create a conflict of interest between the Adviser and Common Shareholders. | Same (As discussed above in Proposal 1, FPT's current leverage level is slightly higher than FMN's leverage level. Post-Reorganization, FMN's leverage is expected to rise modestly.) |
Risks Associated with Non-Investment Grade Securities: Securities that are rated below investment grade or unrated securities of comparable quality (i.e., noninvestment-grade securities), also known as junk bonds, generally entail greater economic, credit and liquidity risks than investment-grade securities. For example, their prices are more volatile, economic downturns and financial setbacks may affect their prices more negatively, and their trading market may be more limited. | Same |
Derivative Contracts and Hybrid Instruments Risk: Derivative contracts and hybrid instruments involve risks different from, or possibly greater than, risks associated with investing directly in securities and other traditional investments. Specific risk issues related to the use of such contracts and instruments include valuation and tax issues, increased potential for losses and/or costs to the Fund, and a potential reduction in gains to the Fund. Each of these issues is described in greater detail in this Prospectus/Proxy Statement and/or the SAI. Derivative contracts and hybrid instruments may also involve other risks, such as interest rate risk and credit risk. | Same |
FPT (Reorganizing Fund) | FMN (Acquiring Fund) |
Tax Exempt Securities Risk: The securities in which the Fund invests may include those issued by state or local governments, other political subdivisions or authorities, or directly or indirectly supported by taxes,
assessments, tolls, fees or other revenue collected by or otherwise derived from or through such issuers. The amount of public information available about tax-exempt securities is generally less than for corporate
equities or bonds. The secondary market for tax-exempt securities also tends to be less well-developed and less liquid than many other securities markets, which may limit the Fund's ability to sell its tax-exempt
securities at attractive prices. Special factors, such as legislative changes, and state and local economic and business developments, may adversely affect the yield and/or value of the Fund's investments in
tax-exempt securities. Other factors include the general conditions of the tax-exempt securities market, the size of the particular offering, the maturity of the obligation and the rating of the issue. Like other
issuers, there is no guarantee that the issuers of such securities will have sufficient revenues to satisfy their obligations (such as, for example, the payment of interest or principal when due). Legal, economic,
political or other developments may raise impairments (such as, for example, limitations under applicable law on the issuer's authority to raise taxes, prolonged budgetary processes, declining real estate values,
increasing pension liabilities or declining tax revenues which may occur due to shifting demographics or other factors) to such issuer's budgetary flexibility, liquidity and ability to satisfy its obligations. Such
impairments may cause a downgrade in the credit ratings of such an issuer, or the securities issued or supported by it, and may cause such an issuer to defer payment of certain obligations, reduce or eliminate
appropriations and/or default on its obligations. Tax-exempt issuers can and have defaulted on obligations, been downgraded or commenced insolvency proceedings. Financial difficulties of such issuers may continue or get worse. Like other issuers and securities, the likelihood that the credit risk associated with such issuers and such securities will increase is greater during times of economic stress and financial instability. As a result, in such situations, there would be heightened risk that there could be an interruption in payments to holders of tax-exempt securities in some cases. There also could be a reduction in the market value of the tax-exempt securities held by the Fund, which could adversely affect the Fund's net asset value or the distributions paid by the Fund. To the extent that the Fund invests a larger portion of its assets in the tax-exempt securities of a particular state or U.S. territory or possession, there is greater risk that political, regulatory, economic or other developments within that state or U.S. territory or possession may impact on the Fund's investment performance. | Same |
Reinvestment Risk: Income from the Fund's tax-exempt security portfolio will decline if and when the Fund invests the proceeds from matured, traded or called tax-exempt securities at market interest rates that are below the portfolio's current earnings rate. A decline in income could affect the market price or overall return of Common Shares. | Same |
FPT (Reorganizing Fund) | FMN (Acquiring Fund) |
Tax Risk: In order to pay interest that is exempt from federal regular income tax, tax-exempt securities must meet certain legal requirements. Failure to meet such requirements may cause the
interest received and distributed by the Fund to shareholders to be taxable. Changes or proposed changes in federal, state or local tax laws may cause the prices of tax-exempt securities to fall and/or may affect the tax-exempt status of the securities in which the Fund invests. The federal income tax treatment of payments in respect of certain derivative contracts is unclear. Additionally, the Fund may not be able to close out certain derivative contracts when it wants to. The Fund also may invest in market discount bonds, enter into credit default swap arrangements and other derivative transactions, and engage in other permissible activities that will likely cause the Fund to realize a limited amount of ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes). Consequently, for each of these reasons, the Fund may receive payments, and make distributions, that are treated as ordinary income for federal income tax purposes. Income from the Fund also may be subject to AMT. | Same |
Sector Risk: The Fund may invest 25% or more of its total assets in tax-exempt securities of issuers in the same economic sector, such as hospitals or life care facilities and transportation-related issuers. In addition, a substantial part of the Fund's portfolio may be comprised of securities credit enhanced by banks, insurance companies or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these sectors and entities. | Same |
Anti-Takeover Provisions: The Fund's Agreement and Declaration of Trust includes provisions that could limit the ability of other entities or persons to acquire control of the Fund or convert the Fund to open-end status. These provisions could deprive Common Shareholders of opportunities to sell their Common Shares at a premium over the then current market price of Common Shares or at NAV. In addition, Preferred Shareholders will have voting rights that could deprive Common Shareholders of such opportunities | Same |
Inflation Risk: Inflation risk is the risk that the value of assets or income from the Fund's investments will be worth less in the future as inflation decreases the present value of payments at future dates. | Same |
Technology Risk: The Adviser uses various technologies in managing the Fund, consistent with its investment objective and strategy described in this Prospectus/Proxy Statement. For example, proprietary and third-party data and systems are utilized to support decision making for the Fund. Data imprecision, software or other technology malfunctions, programming inaccuracies and similar circumstances may impair the performance of these systems, which may negatively affect Fund performance. The shares offered by this Prospectus/Proxy Statement are not deposits or obligations of any bank, are not endorsed or guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. | Same |
Call Risk: The tax-exempt securities in which the Fund may invest can be principal investment strategies for the Fund and may be subject to call risk. Call risk is the possibility that an issuer may redeem a fixed-income security (including a tax-exempt security) before maturity (a “call”) at a price below or above its current market price. An increase in the likelihood of a call may reduce the security's price. If a fixed-income security is called, the Fund may have to reinvest the proceeds in other fixed-income securities with lower interest rates, higher credit risks or other less favorable characteristics. | Same |
FPT (Reorganizing Fund) | FMN (Acquiring Fund) |
Investment Policy (Fundamental) The Fund will invest its assets so that at least 80% of the income that it distributes will be exempt from federal income tax, including AMT. | Investment Policy (Fundamental) Same |
Concentration (Fundamental)1 The Fund will not make investments that will result in the concentration of its investments in the securities of issuers primarily engaged in the same industry, but may invest more than 25% of its total assets in securities of issuers in the same economic sector. | Concentration (Fundamental)1 Same |
Diversification of Investments (Fundamental) With respect to securities comprising 75% of the value of its total assets, the Fund will not purchase the securities of any one issuer (other than cash, cash items, securities issued or guaranteed by the government of the United States or its agencies or instrumentalities and repurchase agreements collateralized by such U.S. government securities, and securities of other investment companies) if as a result more than 5% of the value of its total assets would be invested in the securities of that issuer, or it would own more than 10% of the outstanding voting securities of that issuer. | Diversification of Investments (Fundamental) Same |
Underwriting (Fundamental) The Fund will not underwrite any issue of securities, except as it may be deemed to be an underwriter under the Securities Act of 1933 in connection with the sale of securities in accordance with its investment objective, policy and limitations. | Underwriting( Fundamental) Same |
Investing in Real Estate (Fundamental) The Fund will not buy or sell real estate, although it may invest in tax-exempt securities secured by real estate or interests in real estate. | Investing in Real Estate (Fundamental) Same |
Investing in Commodities (Fundamental) The Fund may not purchase or sell physical commodities, provided that the Fund may purchase securities of companies that deal in commodities. For purposes of this restriction, investments in transactions involving futures contracts and options, swap transactions and other financial contracts that settle by payment of cash are not deemed to be investments in commodities. | Investing in Commodities (Fundamental) Same |
Lending (Fundamental) The Fund will not make loans, but may acquire publicly or non-publicly issued tax-exempt securities as permitted by its investment objective, policy and limitations. | Lending (Fundamental) Same |
Borrowing Money and Issuing Senior Securities (Fundamental) The Fund may borrow money, directly or indirectly, and issue senior securities to the maximum extent permitted under the 1940 Act. | Borrowing Money and Issuing Senior Securities (Fundamental) Same |
FPT (Reorganizing Fund) | FMN (Acquiring Fund) |
Purchases on Margin (Fundamental) The Fund will not purchase securities on margin (but the Fund may obtain such short-term credits as may be necessary for the clearance of purchases and sales of securities). The purchase of investment assets with the proceeds of a permitted borrowing or securities offering will not be deemed to be the purchase of securities on margin. | Purchases on Margin (Fundamental) Same |
1 | For purposes of applying the concentration limitation, securities of the U.S. government, its agencies or instrumentalities and securities backed by the credit of a governmental entity are not considered to represent industries. However, obligations backed only by the assets and revenues of non-governmental issuers may for this purpose be deemed to be issued by such non-governmental issuers. Thus, the 25% limitation would apply to such obligations. For the purpose of applying the concentration limitation, a non-governmental issuer is deemed the sole issuer of a security when its assets and revenues are separate from other governmental entities and its securities are backed only by its assets and revenues. Similarly, in the case of a non-governmental issuer, such as an industrial corporation or a privately owned or operated hospital, if the security is backed only by the assets and revenues of the non-governmental issuer, then such non-governmental issuer would be deemed to be the sole issuer. Where a security is also backed by the enforceable obligation of a superior or unrelated governmental or other entity other than a bond insurer, it will also be included in the computation of securities owned that are issued by such governmental or other entity. Where a security is guaranteed by a governmental entity or some other facility, such as a bank guarantee or of credit, such a guarantee or letter of credit would be considered a separate security and would be treated as an issue of such government, other entity or bank. |
FPT (Reorganizing Fund) | FMN (Acquiring Fund) |
Short Sales (Non-Fundamental) The Fund will not make any short sale of securities except in conformity with applicable laws, rules and regulations and unless after giving effect to such sale, the market value of all securities sold short does not exceed 25% of the value of the Fund's total assets and the Fund's aggregate short sales of a particular class of securities does not exceed 25% of the then outstanding securities of that class. | Short Sales (Non-Fundamental) Same |
Investing in Other Investment Companies (Non-Fundamental) The Fund may purchase securities of open-end or closed-end investment companies in compliance with the 1940 Act or any exemptive relief obtained thereunder. | Investing in Other Investment Companies (Non-Fundamental) Same |
Exercise of Control (Non-Fundamental) The Fund will not purchase securities of companies for the purpose of exercising control. | Exercise of Control (Non-Fundamental) Same |
FPT | FMN | Pro Forma Combined Fund |
Not Applicable | Not Applicable | Not Applicable |
Annual Expenses (as a percentage of net assets attributable to Common Shares) | FPT | FMN | Pro Forma Combined Fund |
Management Fee1 | 0.89% | 0.87% | 0.91%2 |
Dividends and Distributions on Preferred Shares3 | 0.96% | 0.85% | 0.98% |
Other Expenses | 0.41% | 0.43% | 0.30% |
Total Annual Expenses (before fee waivers and/or expense reimbursement) | 2.26% | 2.15% | 2.19% |
Fee Waivers and/or Expense Reimbursements4 | (0.31)% | (0.31)% | (0.22)% |
Total Annual Expenses After Fee Waivers and/or Expense Reimbursements | 1.95% | 1.84% | 1.97% |
1 | Each Fund's investment management agreement with the Adviser provides for an annual management fee, payable daily, at the annual rate of 0.55% of the Fund's managed assets, which include assets purchased with the proceeds of Preferred Share offerings. The fee in the table above reflects the management fee as a percentage of just the assets attributable to Common Shareholders. |
2 | This assumes that FPT's Tender Offer was fully subscribed. If the Tender Offer was fully subscribed and the Reorganization is consummated, the combined Fund's leverage ratio will be slightly higher than either of FPT's or FMN's leverage ratios as of May 31, 2017. As a result, FMN's management fees as a percentage of assets attributable to Common Shareholders will increase after the Reorganization. |
3 | Dividends and Distributions on Preferred Shares include dividends and distributions paid on outstanding VMTPS and AMPS as well as any commission costs and related fees on such payments. |
4 | The Adviser and its affiliates have agreed to waive fees so that the total annual expenses (excluding any dividends and distributions on Preferred Shares, commission costs on Preferred Shares dividend payments, and interest and trust expenses on inverse floater trusts) paid by each Fund before leverage will not exceed 0.99% (the “Fee Limit”), for at least one year from the date of this Prospectus/Proxy Statement (the “Termination Date”). While the Adviser and its affiliates currently do not anticipate seeking to terminate or increase these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Fund's Board of Trustees.As each Fund has issued Preferred Shares, its total annual expenses including the cost of leverage will exceed 0.99%. |
1 Year | 3 Years | 5 Years | 10 Years | |
FPT1 | $23 | $71 | $121 | $260 |
FMN1 | $22 | $67 | $115 | $248 |
FMN - Pro Forma Combined1 | $22 | $69 | $117 | $252 |
1 | Transactions in Common Shares may be subject to broker fees because the shares are traded on a national stock exchange. The table refers only to expenses charged to Shareholders by the Funds. Accordingly, the costs to investors of investing in shares may be higher than indicated. |
Best quarter (% and time period) | Worst quarter (% and time period) |
14.35% (June 30, 2009) | -15.75% (September 30, 2008) |
Best quarter (% and time period) | Worst quarter (% and time period) |
31.06% (March 31, 2009) | -22.34% (September 30, 2008) |
Average Annual Total Return on Market Value | One Year | Five Years | Ten Years |
FPT NAV | -0.81% | 4.15% | 4.86% |
FPT Market Price | -1.46% | 3.56% | 4.97% |
S&P Municipal Bond Intermediate Index | 0.16% | 2.91% | 4.43% |
FMN NAV | -0.66% | 6.68% | 6.21% |
FMN Market Price | -1.07% | 4.59% | 5.75% |
S&P Municipal Bond Index | 0.77% | 3.55% | 4.20% |
• | The Board regularly evaluates the difference between its Fund's market price per Common Share and its NAV per Common Share and considered whether measures to address any trading discount would be in the best interests of the Fund. FPT's Board has previously taken steps to enhance Shareholder value by approving a tender offer for FPT's AMPS, refinancing FPT's leverage and approving the Tender Offer in connection with the Reorganization proposal. The Tender Offer will provide a liquidity opportunity and a potential alternative to the Reorganization if desired as Common Shareholders could exit at least a portion of their position in FPT prior to the Reorganization at a price close to NAV. |
• | Alternatives to the Reorganization (and the Tender Offer) to enhance Shareholder value and the advantages of the Reorganization (and the Tender Offer) as compared to these other available options. |
• | The investment goals of FPT and FMN are identical and that the investment strategies, policies and limitations of FPT and FMN are substantially similar in most respects. Each Fund invests substantially all (at least 90%) of its total assets in tax-exempt securities, albeit the primary difference between FPT's and FMN's investment strategies is that FPT, under normal circumstances, maintains a dollar-weighted average effective portfolio maturity of three to ten years and a dollar-weighted average duration of three to eight years, while FMN maintains a dollar weighted average stated portfolio maturity of ten to thirty years and a dollar weighted average duration of thirteen years or less. Each Fund normally invests at least 80% of its total assets in investment grade tax-exempt securities. Each Fund also may invest up to 20% of its total assets in tax-exempt securities of below investment grade quality. See “Summary—Comparison of Investment Objectives, Policies, and Risks.” |
• | FMN Shareholders would likely benefit from a more conservative effective duration and broader yield curve diversification than is currently the case at a higher yield level that could not be recreated at today's market yields (given that FPT's assets would be acquired at historical amortized cost). The Adviser believes that a conservative effective duration and yield curve exposure is desirable from a total return and risk management perspective given the expected rise in market yields in the foreseeable future. It was noted that FMN's current Shareholders may experience a somewhat lower yield, which the Adviser would carefully seek to manage in order to remain competitive in relation to other long-term municipal funds in its peer group category following the Reorganization. |
• | The Reorganization may benefit Shareholders of each Fund through the potential for a narrower discount. Historically, FMN's share price has traded much closer to NAV per Common Share than has been the case for FPT. The Boards considered that FMN's narrower discount may be due, in part, to much greater market acceptance of the long-term, leveraged municipal fund structure relative to the intermediate structure. After the Reorganization, FPT Shareholders would experience a higher yield than they currently have. Reorganizing FPT into FMN and continuing to manage the combined fund using FMN's current long-term strategy may benefit each Fund's Shareholders through a narrower discount. |
• | As a larger fund following the Reorganization, the Acquiring Fund is likely to benefit from greater trading volume and better Common Share trading liquidity for Shareholders, transaction cost advantages resulting from the ability to transact in larger blocks, fixed costs spread across a larger asset base, and greater flexibility to use tender option bonds (a somewhat lower cost leverage vehicle) as a potential leverage alternative. |
• | The size of FPT's Tender Offer will affect FMN's leverage levels post-Reorganization. Post-Reorganization, FMN's leverage is expected to rise modestly. |
• | The likelihood that the Reorganization will help FPT avoid potentially significant expenses associated with being the subject of activist efforts, including proxy fights and contested solicitations. |
• | The Adviser recommended the Reorganization (and the Tender Offer) to the Board and believed it should enhance Shareholder value. In evaluating the Adviser's recommendation, the Board took into account the fact that the Adviser has entered into an Agreement with FPT's largest Shareholder under which the Shareholder agreed to withdraw its Shareholder proposal and trustee nominations, vote in favor of the Reorganization and revert to passive investing with respect to the Funds for a period of time. The Board evaluated the potential influence the Agreement may have had on the Adviser's recommendation of the Reorganization and considered that, with the support of the Shareholder, FPT may be able to achieve the requisite Shareholder approval for the Reorganization without significant solicitation expenses. |
• | There is no anticipated decline in services to FPT Shareholders as a result of the Reorganization. The range and quality of the services that FPT Shareholders will receive as Shareholders of FMN will be comparable to the range and quality of services that they currently receive as both Funds are managed by the Adviser. |
• | The investment personnel who manage FMN are the same as those who manage FPT. The Adviser and the portfolio managers who currently manage FPT are expected to serve as the portfolio managers to FMN following the completion of the Reorganization. |
• | FPT Shareholders will be merged into a fund with generally stronger performance and the same net operating expenses. While the Adviser currently does not anticipate seeking to terminate or increase its voluntary fee waivers for at least one year from the date of this Prospectus/Proxy Statement, no assurance can be given that the future net operating expenses thereafter will not be more or less. Should the Reorganization result in lower fees and expenses, it is anticipated that the size of the waiver needed to maintain the Acquiring Fund's total expense ratio will decrease after the Reorganization. Due to the Adviser's voluntary fee waivers, the Acquiring Fund's overall net expenses exclusive of those associated with leverage will not increase after the Reorganization. However, because the fee waiver arrangements do not cover the costs of leverage and the Acquiring Fund's level of leverage will increase after the Reorganization, the Acquiring Fund's overall net expenses including leverage costs after the Reorganization will increase. |
• | The Board considered the potential for dilution of the interests of FPT's Shareholders and determined that because the Reorganization provides for the transfer of substantially all of the assets of FPT's to FMN in exchange for FMN shares (and cash, to the extent necessary) having an aggregate NAV equal to the aggregate NAV of FPT's Shares, the Reorganization will not result in economic dilution of the interests of FPT's Shareholders. The Board also considered the terms and conditions of the Reorganization Agreement. |
• | For U.S. federal income tax purposes the Reorganization is intended to be tax-free. The Board also considered that the Funds will receive an opinion from counsel that the transaction should be tax-free (except with respect to any cash received in lieu of fractional shares). |
• | Provided that the Reorganization is tax-free, no gain or loss should be recognized by a Shareholder of FPT who exchanges all of his, her or its FPT Shares solely for the Shares of FMN pursuant to the Reorganization (except with respect to cash received in lieu of any fractional Common Shares). Further, provided that the Reorganization is tax-free, the aggregate tax basis of the Shares received by Shareholders of FPT should be the same as the aggregate tax basis (reduced by any amount of tax basis allocable to a fractional Common Share for which cash is received) of the Shares surrendered in exchange therefor. |
• | The Reorganization as set forth in the Plan should constitute a tax-free reorganization under section 368(a) of the Code, and FPT and FMN each should be a “party to a reorganization” within the meaning of section 368(b) of the Code; |
• | No gain or loss should be recognized by FMN upon its receipt of FPT's assets in exchange for shares of FMN; |
• | No gain or loss should be recognized by FPT upon transfer of its assets to FMN solely in exchange for the shares of FMN or upon the distribution of FMN shares to FPT's Shareholders in exchange for their FPT shares; |
• | No gain or loss should be recognized by Shareholders of FPT upon exchange of their FPT shares for FMN shares (except with respect to any cash in lieu of fractional shares); |
• | The tax basis of the assets of FPT in the hands of FMN should be the same as the tax basis of such assets to FPT immediately prior to the Reorganization; |
• | The aggregate tax basis of FMN shares received by each Shareholder of FPT pursuant to the Reorganization should be the same as the aggregate tax basis of the shares of FPT held by such Shareholder immediately prior to the Reorganization; |
• | The holding period of FMN's shares received by each Shareholder of FPT should include the period during which FPT's shares exchanged therefor were held by such Shareholder, provided the shares of FPT were held as capital assets on the date of the Reorganization; and |
• | The holding period of the assets of FPT in the hands of FMN should include the period during which those assets were held by FPT. |
CATEGORY | SHAREHOLDER RIGHTS - FPT | SHAREHOLDER RIGHTS - FMN |
Preemptive Rights | None | Same |
Preferences | None | Same |
Appraisal Rights | None | Same |
Conversion Rights | None | Same |
Exchange Rights | None | Same |
Annual Meeting | Required | Same |
CATEGORY | SHAREHOLDER RIGHTS - FPT | SHAREHOLDER RIGHTS - FMN |
Right to Call Shareholder Meetings | A special meeting of Shareholders may be called at any time by a majority of the Trustees or the President and shall be called by any Trustee for any proper purpose upon written request of Shareholders of the Trust holding in the aggregate not less than 51% of the outstanding shares of the Trust or class or series of shares having voting rights on the matter, such request specifying the purpose or purposes for which such meeting is to be called. Any shareholder meeting, including a Special Meeting, shall be held within or without the state of Delaware on such day and at such time as the Board of Trustees shall designate. | Same |
Notice of Meeting | Notice must be given by the Secretary of the Trust at least seven days before and no more than one hundred twenty (120) days before the meeting. | Same |
Record Date for Meetings | A date which shall not be more than 120 days nor less than 10 days before the date of any such meeting. | Same |
Quorum for Meetings | Except where a higher quorum is required by applicable law, by the By-Laws or by this Declaration, holders of one-third (33-1/3%) of the shares entitled to vote at a meeting in person or by proxy shall constitute a quorum at such meeting of the Shareholders for purposes of conducting business on such matter. | Same |
Vote Required for Election of Trustees | The qualified nominees receiving the highest number of votes cast by the Shareholders entitled to vote at a meeting at which a quorum is present, up to the number of Trustees to be elected at such meeting, shall be elected. | Same |
Adjournment of Meetings | Any Shareholders' meeting, whether or not a quorum is present, may be adjourned from time to time (and at any time during the course of the meeting) by a majority of the votes cast by those Shareholders present in person or by proxy, or by the chairperson of the meeting. Any adjournment may be with respect to one or more proposals, but not necessarily all proposals, to be voted or acted upon at such meeting and any adjournment will not delay or otherwise affect the effectiveness and validity of a vote or other action taken at a shareholders' meeting prior to adjournment. | Same |
Removal of Trustees by Shareholders | Any of the Trustees may be removed (provided the aggregate number of Trustees after such removal shall not be less than the minimum number required) for cause only, and not without cause, and only by action taken by a majority of the remaining Trustees followed by the holders of at least seventy-five percent (75%) of the shares then entitled to vote in an election of such Trustee. | Same |
Personal Liability of Officers and Trustees | The Trust will indemnify Trustees and others of the Trust against liabilities and expenses that are incurred by virtue of having been a Trustee or Officer. However, Trustees and officers of the Trust will be liable for their willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee or officer, as the case may be, and for nothing else. | Same |
CATEGORY | SHAREHOLDER RIGHTS - FPT | SHAREHOLDER RIGHTS - FMN |
Personal Liability of Shareholders | No Shareholder of the Trust shall be subject in such capacity to any personal liability whatsoever to any other Person in connection with Trust Property or the acts, obligations or affairs of the Trust. As provided in the Delaware Statutory Trust Act, Shareholders shall have the same limitation of personal liability as is extended to shareholders of a private corporation for profit incorporated under the Delaware General Corporation Law. | Same |
Right of Inspection | If information is requested by a Shareholder, the Board, or, in case the Board does not act, the president, any vice president
or the secretary, shall establish reasonable standards governing, without limitation, the information and documents to be furnished and the time and the location, if appropriate, of furnishing such information and
documents. Costs of providing such information and documents shall be borne by the requesting Shareholder. The Trust shall be entitled to reimbursement for its direct, out-of-pocket expenses incurred in declining
unreasonable requests (in whole or in part) for information or documents. The Board, or, in case the Board does not act, the president, any vice president or the secretary, may keep confidential from Shareholders for such period of time as the Board or such officer, as applicable, deems reasonable any information that the Board or such officer, as applicable, reasonably believes to be in the nature of trade secrets or other information that the Board or such officer, as the case may be, in good faith believes would not be in the best interests of the Trust to disclose or that could damage the Trust or its business or that the Trust is required by law or by agreement with a third party to keep confidential. | Same |
Fund | Total Net Assets | Shares Outstanding | Net Asset Value Per Share |
FPT Common Shares | $80,461,834 | 5,585,859 | $14.40 |
FMN Common Shares | $93,535,070 | 6,189,879 | $15.11 |
Adjustments* | — | (260,787) | — |
FMN Pro Forma Combined** | $173,996,904 | 11,514,951 | $15.11 |
FPT AMPS | $14,900,000 | 596 | $25,000 |
FMN AMPS | $18,150,000 | 726 | $25,000 |
FMN Pro Forma Combined | $33,050,000 | 1,322 | $25,000 |
FPT VMTPS | $46,175,000 | 1,847 | $25,000 |
FMN VMTPS | $35,525,000 | 1,421 | $25,000 |
FMN Pro Forma Combined | $81,700,000 | 3,268 | $25,000 |
* | Adjustments necessary to reflect the number of FMN Common Shares to be issued to Common Shareholder of FPT based on the net assets of FPT and FMN's NAV per Common Share. |
** | The pro forma net assets and NAV per Common Share reflect the payment of Reorganization expenses and assume that the Tender Offer was fully subscribed and completed on or prior to May 31, 2017. Assuming the Tender Offer concluded on May 31, 2017 and assuming it was fully subscribed, FPT would have purchased for cash 1,396,465 of its Common Shares at $14.05 per Common Share (which is 98 percent of the net asset value per Common Share determined as of the close of the regular trading session of the NYSE on May 31, 2017) for approximately $19,620,333.25. The actual Tender Offer concluded on August 11, 2017, and was fully subscribed. FPT purchased for cash 1,396,465 of its Common Shares at $14.13 per Common Share, which is 98 percent of the net asset value per Common Share determined as of the close of the regular trading session of the NYSE on August 11, 2017. The total cost, not including fees and expenses incurred in connection with the Tender Offer, was approximately $19,732,050.45 for FPT. |
Administrative Fee | Average Daily Net Assets of the Investment Complex |
0.100% | on assets up to $50 billion |
0.075% | on assets in excess of $50 billion |
• | Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
• | Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. |
• | Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations. |
• | Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
• | For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer's financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded, public trading in similar securities or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions. |
FPT | Market Price | Net Asset Value | Discount/Premium % | |||
Quarter Ended | High | Low | High | Low | High | Low |
2/28/15 | $13.24 | $12.59 | $14.93 | $14.55 | -11.32% | -13.47% |
5/31/15 | $13.07 | $12.41 | $14.62 | $14.23 | -10.60% | -12.79% |
8/31/15 | $13.28 | $12.22 | $14.29 | $14.16 | -7.07% | -13.70% |
11/30/15 | $13.38 | $12.90 | $14.38 | $14.24 | -6.95% | -9.41% |
2/28/16 | $13.87 | $13.11 | $14.80 | $14.52 | -6.28% | -9.71% |
5/31/16 | $14.70 | $13.61 | $14.84 | $14.62 | -0.94% | -6.91% |
8/31/16 | $14.72 | $14.18 | $15.19 | $15.05 | -3.09% | -5.78% |
11/30/16 | $14.29 | $12.65 | $15.03 | $13.89 | -4.92% | -8.93% |
2/28/17 | $13.02 | $12.60 | $13.97 | $13.67 | -6.80% | -7.83% |
5/31/17 | $13.55 | $12.69 | $14.34 | $13.83 | -5.51% | -8.24% |
8/31/17 | $13.92 | $13.42 | $14.33 | $14.36 | -2.86% | -6.55% |
FMN | Market Price | Net Asset Value | Discount/Premium % | |||
Quarter Ended | High | Low | High | Low | High | Low |
2/28/15 | $15.11 | $14.40 | $15.91 | $15.46 | -5.03% | -6.86% |
5/31/15 | $15.01 | $14.60 | $15.58 | $15.56 | -3.66% | -6.17% |
8/31/15 | $14.89 | $13.81 | $15.17 | $15.02 | -1.85% | -8.06% |
11/30/15 | $15.12 | $14.30 | $15.18 | $15.00 | -0.40% | -4.67% |
2/28/16 | $15.28 | $14.63 | $15.65 | $15.36 | -2.36% | -4.75% |
5/31/16 | $16.27 | $15.03 | $15.91 | $15.47 | 2.26% | -2.84% |
8/31/16 | $16.67 | $15.99 | $16.17 | $15.79 | 3.09% | 1.27% |
11/30/16 | $16.48 | $13.92 | $15.91 | $14.63 | 3.58% | -4.85% |
2/28/17 | $14.39 | $13.83 | $14.83 | $14.64 | -2.97% | -5.53% |
5/31/17 | $14.42 | $13.56 | $15.03 | $14.66 | -4.06% | -7.50% |
8/31/17 | $15.07 | $14.33 | $15.11 | $15.15 | -0.26% | -5.41% |
Market Price | Net Asset Value | Discount/Premium % | ||
FPT | $13.69 | $14.42 | (5.06)% | |
FMN | $14.74 | $15.14 | (2.71)% |
(1) | (2) | (3) | (4) |
Title of Class | Shares Authorized | Shares Held by Registrant or for its Account | Shares Outstanding Exclusive of Amount Shown Under (3) |
FPT Common Shares | Unlimited | 15,541 | 6,982,324 |
FPT AMPS | 2,147 | — | 596 |
FPT VMTPS | 1,847 | — | 1,847 |
FMN Common Shares | Unlimited | 17,797 | 6,189,879 |
FMN AMPS | 2,441 | — | 726 |
FMN VMTPS | 1,421 | — | 1,421 |
• | the reference rate, set forth in the Reference Rate Table below, for a rate period equal in length to the then ending rate period; |
• | the reference rate, set forth in the Reference Rate Table below, for a rate period equal in length to the special rate period for which the auction is being held; or |
• | the “AA” Financial Composite Commercial Paper Rate for a minimum rate period of seven rate period days. |
Applicable Percentage Table | |||
Prevailing Ratings | Applicable Percentage | ||
Moody's | Fitch | Applicable Percentage: No Notification | Applicable Percentage: Notification |
“Aa3” or higher | AA- or higher | 110% | 150% |
“A3” to “A1” | A- to A+ | 125% | 160% |
“Baa3” to “Baa1” | BBB- to BBB+ | 150% | 250% |
“Ba3” to “Ba1” | BB- to BB+ | 200% | 275% |
Below “Ba3” | Below BB- | 250% | 300% |
Reference Rate Table | |
Rate Period | Reference Table |
182 days or less | “AA” Financial Composite Commercial Paper Rate |
183 days to 364 days | Treasury Bill Rate |
365 days or more | Treasury Note Rate |
“AA” Financial Composite Commercial Paper Rate Table | ||
Minimum Rate Period | Special Rate Period | “AA” Financial Composite Commercial Paper Rate |
7 days* | 48 days or less | 30-day rate |
49 days to 69 days | 60-day rate | |
70 days to 84 days | Average of 60-day and 90-day rates | |
85 days to 98 days | 90-day rate | |
99 days to 119 days | Average of 90-day and 120-day rates | |
120 days to 140 days | 120-day rate | |
141 days to 161 days | Average of 120-day and 180-day rates | |
162 days to 182 days | 180-day rate |
* | In the case of a minimum rate period for which all outstanding AMPS are subject to submitted hold orders, the “AA” Financial Composite Commercial Paper Rate is the interest equivalent of the seven-day rate. |
• | without consideration being given to the time value of money; |
• | assuming that no holder of AMPS is subject to AMT with respect to dividends received from the Fund; and |
• | assuming that each Retroactive Taxable Allocation and each Gross-up Payment, except to the extent the Gross-up Payment is designated as an exempt-interest dividend, would be taxable in the hands of each holder of AMPS at the maximum marginal regular federal income tax rate applicable to ordinary income or net capital gain, as applicable, for individuals or corporations, whichever is greater, in effect at the time the Gross-up Payment is made. |
• | full cumulative dividends on the AMPS through the most recently ended dividend period have been paid or shall have been declared and sufficient funds for the payment thereof deposited with the auction agent; |
• | the Fund has redeemed the full number of AMPS required to be redeemed by any provision for mandatory redemption contained in the Statement; and |
• | immediately after such transaction, the Discounted Value of the Fund's portfolio would at least equal the Preferred Shares Basic Maintenance Amount in accordance with the guidelines of the NRSROs then rating the AMPS (see “NRSRO Guidelines and Asset Coverage” below). |
(a) | as a whole or from time to time in part on the second business day preceding any dividend payment date; provided, however, that (i) the AMPS may not be redeemed in part if after such partial redemption fewer than 300 AMPS would remain outstanding, and (ii) the notice establishing a special rate period may provide that the AMPS shall not be redeemable during the whole or any part of such special rate period, except as provided in clause (b) below, or shall be redeemable during the whole or any part of such special rate period only upon payment of such redemption premium or premiums as shall be specified therein; and |
(b) | as a whole but not in part on the first business day following any dividend period included in a special rate period of more than 364 rate period days if, on the date of determination of the applicable rate for such rate period, such applicable rate equaled or exceeded the Treasury Note Rate (as described in the Statement) for such rate period. |
(a) | authorize, create or issue any class or series of shares ranking prior to or on a parity with the AMPS with respect to the payment of dividends or the distribution of assets upon liquidation, or authorize, create or issue additional AMPS; except that, notwithstanding the foregoing, the Board, without the vote or consent of the holders of the AMPS, may from time to time authorize and create, and the Fund may from time to time issue, additional AMPS, or classes or series of other Preferred Shares ranking on a parity with the AMPS with respect to the payment of dividends and the distribution of assets upon liquidation if the Fund receives written confirmation from Moody's (if Moody's is then rating the AMPS) and Fitch (if Fitch is then rating the AMPS) or any substitute NRSRO (if such NRSRO is then rating the AMPS) that such authorization, creation and issuance would not impair the rating then assigned by such NRSRO to the AMPS and if, in any event, the Fund would, after giving effect thereto, continue to maintain the Investment Company Act Preferred Shares Asset Coverage; or |
(b) | amend, alter or repeal the provisions of the Agreement and Declaration of Trust or the Statement, whether by merger, consolidation or otherwise, so as to adversely affect any preference, right or power of the AMPS or the holders of the AMPS; provided, however, that (i) none of the actions permitted by the exception to (a) above will be deemed to affect such preferences, rights or powers, (ii) a division or split of the AMPS will be deemed to affect such preferences, rights or powers only if the terms thereof adversely affect the holders of the AMPS, and (iii) the authorization, creation and issuance of classes or series of shares ranking junior to the AMPS with respect to the |
payment of dividends and the distribution of assets upon liquidation of the Fund, will be deemed to affect such preferences, rights or powers only if Moody's or Fitch is then rating the AMPS and such issuance would, at the time thereof, cause the Fund not to satisfy the Investment Company Act Preferred Shares Asset Coverage or the Preferred Shares Basic Maintenance Amount; or | |
(c) | file a voluntary application for relief under federal bankruptcy law or any similar application under state law for so long as the Fund is solvent and does not foresee becoming insolvent. |
• | the merger or consolidation of a Fund or any subsidiary of a Fund with or into any Principal Shareholder; |
• | the issuance of any securities of a Fund to any Principal Shareholder for cash (other than pursuant to any automatic dividend reinvestment plan); |
• | the sale, lease or exchange of all or any substantial part of the assets of a Fund to any Principal Shareholder, except assets having an aggregate fair market value of less than $1,000,000, aggregating for the purpose of such computation all assets sold, leased or exchanged in any series of similar transactions within a twelve-month period; or |
• | the sale, lease or exchange to a Fund or any subsidiary of a Fund, in exchange for securities of a Fund, of any assets of any Principal Shareholder, except assets having an aggregate fair make value of less than $1,000,000, aggregating for purposes of such computation all assets sold, leased or exchanged in any series of similar transactions within a twelve-month period. |
Interested Trustee | Class | Expiration of Term if Elected* |
J. Christopher Donahue | Class II | 2020 Annual Meeting |
Independent Trustees | Class | Expiration of Term if Elected* |
P. Jerome Richey | Class II | 2020 Annual Meeting |
John T. Collins | Class II | 2020 Annual Meeting |
* | A Trustee elected at an annual meeting shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. |
Independent Trustees | Expiration of Term if Elected* |
Peter E. Madden** | 2018 Annual Meeting |
John S. Walsh | 2018 Annual Meeting |
* | A Trustee elected at an annual meeting shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. |
** | Pursuant to the Board's retirement policy, Mr. Madden currently plans to retire on December 31, 2017. |
Name Birth Date Positions Held with Funds Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) | Aggregate Compensation From FPT and FMN (past fiscal year) | Total Compensation From Funds and Federated Fund Complex (past fiscal year) | Year of Term Expiration |
J. Christopher Donahue* Birth Date: April 11, 1949 PRESIDENT AND TRUSTEE Began serving: December 2002 | Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Fund Complex; Director or Trustee of the Funds in the Federated Fund Complex; President, Chief Executive
Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management
Corp.; Chairman and Trustee, Federated Equity Management Company of Pennsylvania; Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd.; Chairman, Passport Research Ltd. | $0 | $0 | 2020+ |
John B. Fisher* Birth Date: May 16, 1956 TRUSTEE Began serving: May 2016 | Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Fund Complex; Director or Trustee of certain of the Funds in the Federated Fund Complex; Vice President,
Federated Investors, Inc.; President, Director/Trustee and CEO, Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated
Investment Counseling, Federated Investment Management Company; President of some of the Funds in the Federated Fund Complex and Director, Federated Investors Trust Company Previous Positions: President and Director of the Institutional Sales Division of Federated Securities Corp.; President and Director of Federated Investment Counseling; President and CEO of Passport Research Ltd.; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc. and President, Technology, Federated Services Company. | $0 | $0 | 2018 |
+ | If elected. |
* | Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Investors, Inc. and due to positions they hold with Federated Investors and its subsidiaries. |
• | Desire and availability to serve for a substantial period of time, taking into account the Board's current mandatory retirement age for Independent Trustees of 75 years. |
• | Possesses no conflicts which would interfere with qualifying as Independent Trustee. |
• | Appropriate interpersonal skills to work effectively with other Independent Trustees. |
• | Understanding and appreciation of the important role occupied by independent trustees in the regulatory structure governing RIC. |
• | Diversity of background. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) and Other Directorships Held for Past Five Years, Previous Position(s) and Qualifications | Aggregate Compensation From FPT and FMN (past fiscal year) | Total Compensation From Funds and Federated Fund Complex (past calendar year) | Year of Term Expiration |
John T. Collins Birth Date: January 24, 1947 TRUSTEE Began serving: January 2014 | Principal Occupations: Director or Trustee of the Federated Fund Complex; formerly, Chairman and CEO, The Collins Group, Inc. (a private equity firm) (Retired). Other Directorships Held: Director, Current Chair of the Compensation Committee, KLX Corp. Qualifications: Mr. Collins has served in several business and financial management roles and directorship positions throughout his career. Mr. Collins previously served as Chairman and CEO, The Collins Group, Inc. (a private equity firm). Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins previously served as Director, FleetBoston Financial Corp. and Director, Beth Israel Deaconess Medical Center (Harvard University Affiliate Hospital). | $1,135.76 (FPT) $1,124.14 (FMN) | $275,000 | 2020+ |
G. Thomas Hough Birth Date: February 28,1955 TRUSTEE Began serving: January 2016 | Principal Occupations: Director or Trustee of the Federated Fund Complex; formerly, Vice Chair, Ernst & Young LLP (public accounting firm) (Retired). Other Directorships Held: Director, Chair of the Audit Committee, Governance Committee, Publix Super Markets, Inc.; Director, Member of the Audit Committee and Technology Committee of Equifax, Inc. Qualifications: Mr. Hough served in accounting, business management and directorship positions throughout his career. Mr. Hough most recently held the position of Americas Vice Chair of Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough is an Executive Committee member of the United States Golf Association; he serves on the President's Cabinet and Business School Board of Visitors for the University of Alabama and is on the Business School Board of Visitors for Wake Forest University. | $1,135.76 (FPT) $1,124.14 (FMN) | $275,000 | 2018 |
Maureen Lally-Green Birth Date: July 5, 1949 TRUSTEE Began serving: August 2009 | Principal Occupations: Director or Trustee of the Federated Fund Complex; Dean of the Duquesne University School of Law; Adjunct Professor of Law, Duquesne University School of Law; formerly, Associate General
Secretary and Director, Office of Church Relations, Diocese of Pittsburgh. Other Directorships Held: Director, CONSOL Energy Inc. Qualifications: Judge Lally-Green has served in various legal and business roles and directorship positions throughout her career. Judge Lally-Green previously served as: Associate General Secretary, Diocese of Pittsburgh; a member of the Superior Court of Pennsylvania; and as a Professor of Law, Duquesne University School of Law. Judge Lally-Green also currently holds the positions on either a public or not for profit Board of Directors as follows: Director and Chair, UPMC Mercy Hospital; Regent, St. Vincent Seminary; Director and Vice Chair, Our Campaign for the Church Alive!, Inc.; Director, Saint Vincent College; Member, Pennsylvania State Board of Education (public); and Director and Chair, Cardinal Wuerl North Catholic High School, Inc. Judge Lally-Green has held the positions of: Director, Auberle; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Ireland Institute of Pittsburgh; Director, Saint Thomas More Society; Director, Catholic High Schools of the Diocese of Pittsburgh, Inc.; and Director, Pennsylvania Bar Institute. | $1,135.76 (FPT) $1,124.14 (FMN) | $275,000 | 2019 |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) and Other Directorships Held for Past Five Years, Previous Position(s) and Qualifications | Aggregate Compensation From FPT and FMN (past fiscal year) | Total Compensation From Funds and Federated Fund Complex (past calendar year) | Year of Term Expiration |
Peter E. Madden** Birth Date: March 16, 1942 TRUSTEE Began serving: December 2002 | Principal Occupation: Director or Trustee, and Chair of the Board of Directors or Trustees, of the Federated Fund Complex; Retired. Other Directorships Held: None. Qualifications: Mr. Madden has served in several business management, mutual fund services and directorship positions throughout his career. Mr. Madden previously served as President, Chief Operating Officer and Director, State Street Bank and Trust Company (custodian bank) and State Street Corporation (financial services). He was Director, VISA USA and VISA International; and Chairman and Director, Massachusetts Bankers Association. Mr. Madden served as Director, Depository Trust Corporation; and Director, The Boston Stock Exchange. Mr. Madden also served as a Representative to the Commonwealth of Massachusetts General Court. | $1,383.55 (FPT) $1,369.39 (FMN) | $335,000 | 2018+ |
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 TRUSTEE Began serving: December 2002 | Principal Occupations: Director or Trustee of the Federated Fund Complex; Management Consultant. Other Directorships Held: None. Qualifications: Mr. Mansfield has served as a Marine Corps officer and in several banking, business management, educational roles and directorship positions throughout his long career. He remains active as a Management Consultant. | $1,032.52 (FPT) $1,021.96 (FMN | $250,000 | 2018 |
Thomas M. O'Neill Birth Date: June 14, 1951 TRUSTEE Began serving: August 2006 | Principal Occupations: Director or Trustee, Chair of the Audit Committee of the Federated Fund Complex; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: None. Qualifications: Mr. O'Neill has served in several business, mutual fund and financial management roles and directorship positions throughout his career. Mr. O'Neill serves as Director, Medicines for Humanity and Director, The Golisano Children's Museum of Naples, Florida. Mr. O'Neill previously served as Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); and Director, Midway Pacific (lumber). | $1,239.01 (FPT) $1,226.34 (FMN) | $300,000 | 2019 |
P. Jerome Richey Birth Date: February 23, 1949 TRUSTEE Began serving: January 2014 | Principal Occupations: Director or Trustee of the Federated Fund Complex; Management Consultant; formerly, Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh and Executive Vice President and
Chief Legal Officer, CONSOL Energy Inc. Other Directorships Held: None. Qualifications: Mr. Richey has served in several business and legal management roles and directorship positions throughout his career. Mr. Richey most recently held the positions of Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously served as Chairman of the Board, Epilepsy Foundation of Western Pennsylvania and Chairman of the Board, World Affairs Council of Pittsburgh. Mr. Richey previously served as Chief Legal Officer and Executive Vice President, CONSOL Energy Inc. and Board Member, Ethics Counsel and Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). | $1,032.52 (FPT) $1,021.96 (FMN) | $250,000 | 2020+ |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) and Other Directorships Held for Past Five Years, Previous Position(s) and Qualifications | Aggregate Compensation From FPT and FMN (past fiscal year) | Total Compensation From Funds and Federated Fund Complex (past calendar year) | Year of Term Expiration |
John S. Walsh Birth Date: November 28, 1957 TRUSTEE Began serving: December 2002 | Principal Occupations: Director or Trustee of the Federated Fund Complex; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products,
Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Other Directorships Held: None. Qualifications: Mr. Walsh has served in several business management roles and directorship positions throughout his career. Mr. Walsh previously served as Vice President, Walsh & Kelly, Inc. (paving contractors). | $1,032.52 (FPT) $1,021.96 (FPM | $250,000 | 2018+ |
+ | If elected. |
** | Pursuant to the Board's retirement policy, Mr. Madden currently plans to retire on December 31, 2017. |
Interested Board Member Name | Dollar Range of Shares owned in FPT (as of October 2, 2017) | Dollar Range of Shares owned in FMN (as of October 2, 2017) | Aggregate Dollar Range of Shares Owned in Federated Family of Investment Companies (as of October 2, 2017) |
J. Christopher Donahue | $50,001 - $100,000 | Over $100,000 | Over $100,000 |
John B. Fisher | None | None | Over $100,000 |
Independent Board Member Name | |||
John T. Collins | None | None | Over $100,000 |
G. Thomas Hough | None | None | Over $100,000 |
Maureen Lally-Green | None | None | Over $100,000 |
Peter E. Madden | None | None | Over $100,000 |
Charles F. Mansfield, Jr. | None | None | Over $100,000 |
Thomas M. O'Neill | None | None | Over $100,000 |
P. Jerome Richey | None | None | Over $100,000 |
John S. Walsh | None | None | Over $100,000 |
Name Birth Date Positions Held with Funds Date Service Began | Principal Occupation(s) and Previous Position(s) |
Lori A. Hensler Birth Date: January 6, 1967 TREASURER Began serving: April 2013 | Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Complex; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated
Securities Corp. and Edgewood Services, Inc.; and Assistant Treasurer, Federated Investors Trust Company. Ms. Hensler has received the Certified Public Accountant designation. Previous Positions: Controller of Federated Investors, Inc.; Senior Vice President and Assistant Treasurer, Federated Investors Management Company; Treasurer, Federated Investors Trust Company; Assistant Treasurer, Federated Administrative Services, Federated Administrative Services, Inc., Federated Securities Corp., Edgewood Services, Inc., Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company, Passport Research, Ltd., and Federated MDTA, LLC; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc. |
Richard B. Fisher Birth Date: May 17, 1923 VICE CHAIRMAN Began serving: December 2002 | Principal Occupations: Vice Chairman or Vice President of some of the Funds in the Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp. Previous Positions: President and Director or Trustee of some of the Funds in the Federated Fund Complex; Executive Vice President, Federated Investors, Inc.; Director and Chief Executive Officer, Federated Securities Corp. |
Peter J. Germain Birth Date: September 3, 1959 CHIEF LEGAL OFFICER Began serving: January 2005 | Principal Occupations: Mr. Germain is Chief Legal Officer of the Federated Fund Complex. He is General Counsel and Vice President, Federated Investors, Inc.; President, Federated Administrative Services and
Federated Administrative Services, Inc.; Vice President, Federated Securities Corp.; Secretary, Federated Private Asset Management, Inc.; and Secretary, Retirement Plan Service Company of America. Mr. Germain joined
Federated in 1984 and is a member of the Pennsylvania Bar Association Previous Positions: Deputy General Counsel, Special Counsel, Managing Director of Mutual Fund Services, Federated Investors, Inc.; Senior Vice President, Federated Services Company; and Senior Corporate Counsel, Federated Investors, Inc. |
Stephen Van Meter Birth Date: June 5, 1975 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Began serving: July 2015 | Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Complex; Vice President and Chief Compliance Officer of Federated Investors, Inc. and Chief Compliance Officer of
certain of its subsidiaries. Mr. Van Meter joined Federated in October 2011. He holds FINRA licenses under Series 3, 7, 24 and 66. Previous Positions: Mr. Van Meter previously held the position of Compliance Operating Officer, Federated Investors, Inc. Prior to joining Federated, Mr. Van Meter served at the United States Securities and Exchange Commission in the positions of Senior Counsel, Office of Chief Counsel, Division of Investment Management and Senior Counsel, Division of Enforcement. |
Robert J. Ostrowski Birth Date: April 26, 1963 CHIEF INVESTMENT OFFICER AND SENIOR VICE PRESIDENT Began serving: February 2010 | Principal Occupations: Robert J. Ostrowski joined Federated in 1987 as an Investment Analyst and became a Portfolio Manager in 1990. He was named Chief Investment Officer of Federated's taxable fixed-income products in 2004 and also serves as a Senior Portfolio Manager. Mr. Ostrowski became an Executive Vice President of the Fund's Adviser in 2009 and served as a Senior Vice President of the Fund's Adviser from 1997 to 2009. Mr. Ostrowski has received the Chartered Financial Analyst designation. He received his M.S. in Industrial Administration from Carnegie Mellon University. |
* | Officers do not receive any compensation from the Fund. |
Name | Position(s) | Fund/Class | Shares Owned |
J. Christopher Donahue | President and Trustee | FPT–Common Shares | 6,800 |
J. Christopher Donahue | President and Trustee | FMN–Common Shares | 6,800 |
Richard B. Fisher | Vice Chairman | FMN –Common Shares | 46,616 |
Fund/Class | Name | Shares Owned |
FPT–Common Shares | Cede & Co., New York, NY | 6,965,519 (99.75%) |
FMN–Common Shares | Cede & Co., New York, | 6,169,640 (99.67%) |
Fund/Class | Name | Shares Owned |
FPT–Common Shares | Cede & Co., New York, NY | 6,965,519 (99.75%) |
FMN–Common Shares | Cede & Co., New York, | 6,169,640 (99.67%) |
Fund/Class | Name | Date of Filing | Shares Owned |
FPT – Common Shares | Karpus Investment Management, Pittsford, New York | June 20, 2017 | 1,472,058 (21.08%) |
FPT – Common Shares | First Trust Portfolios, L.P., Wheaton, Illinois First Trust Advisors, L.P., Wheaton, Illinois The Charger Corporation, Wheaton, Illinois | January 28, 2016 | 503,332 (7.21%) |
FPT – VMTPS | Citibank, N.A., New York, NY | June 20, 2014 | 1,847 (100%) |
FPT– AMPS | Bulldog Investors, Brooklyn Capital Management (Phillip Goldstein, Pleasantville, NY and Andrew Dakos, Saddle Brook, NJ) | April 15, 2011 | 524 (31.26%)* |
FPT – AMPS | Bank of America Corporation, Charlotte, NC Bank of America, N.A., Charlotte, NC Blue Ridge Investments, L.L.C., Charlotte, NC | March 12, 2010 | 545 (32.6%)* |
FMN–Common Shares | First Trust Portfolios, L.P., Wheaton, Illinois First Trust Advisors, L.P., Wheaton, Illinois The Charger Corporation, Wheaton, Illinois | July 10, 2017 | 646,367 (10.45%) |
FMN – VMTPS | Citibank, N.A., New York, NY | June 20, 2014 | 1,421 (100%) |
FMN– AMPS | Bank of America Corporation, Charlotte, NC Bank of America, N.A., Charlotte, NC Blue Ridge Investments, L.L.C., Charlotte, NC | January 13, 2012 | 618 (85.15%)* |
* | In November 2011, each Fund announced a tender offer for 100% of its outstanding AMPS at a price of 96% of the $25,000 liquidation preference per share. Each tender offer closed on December 22, 2011, with 64.4% of AMPS then outstanding for FPT and 50.4% of AMPS then outstanding for FMN having been tendered and purchased. These filings precede the tender offer by each Fund and therefore these shareholders may own less than reported. |
Board Committee | Committee Members | Committee Functions |
Executive | J. Christopher Donahue Peter E. Madden John S. Walsh | In between meetings of the full Board, the Executive Committee generally may exercise all the powers of the full Board in the management and direction of the business and conduct of the affairs of the Trust in such manner as the Executive Committee shall deem to be in the best interests of the Trust. However, the Executive Committee cannot elect or remove Board members, increase or decrease the number of Trustees, elect or remove any Officer, declare dividends, issue shares or recommend to shareholders any action requiring shareholder approval. In fiscal 2016, the Executive Committee met on one occasion. |
Audit | John T. Collins G. Thomas Hough Maureen Lally-Green Thomas M. O'Neill | The Board has adopted a written charter for the Audit Committee, a copy of which is available under “Fund Governance” in the
“Products” section of Federated's website at FederatedInvestors.com. The Board has determined that the members of the Audit Committee are “independent,” as defined by the listing standards of
the NYSE. The Board has designated Messrs. Collins and O'Neill as audit committee financial experts. The purposes of the Audit Committee are to oversee the accounting and financial reporting process of the Fund, the Fund's internal control over financial reporting and the quality, integrity and independent audit of the Fund's financial statements. The Committee also oversees or assists the Board with the oversight of compliance with legal requirements relating to those matters, approves the engagement and reviews the qualifications, independence and performance of the Fund's independent registered public accounting firm, acts as a liaison between the independent registered public accounting firm and the Board and reviews the Fund's internal audit function. In fiscal 2016, the Audit Committee met on ten occasions. |
Board Committee | Committee Members | Committee Functions |
Nominating | John T. Collins G. Thomas Hough Maureen Lally-Green Peter E. Madden Charles F. Mansfield, Jr. Thomas M. O'Neill P. Jerome Richey John S. Walsh | The Board has adopted a written charter for the Nominating Committee, a copy of which is available under “Fund Governance” in the
“Products” section of Federated's website at FederatedInvestors.com. The Board has determined that all members of the Nominating Committee are “independent,” as defined by the listing standards
of the NYSE. The Nominating Committee, whose members consist of all Independent Trustees, selects and nominates persons for election to the Fund's Board when vacancies occur. The Committee will consider candidates recommended by shareholders, Independent Trustees, officers or employees of any of the Fund's agents or service providers and counsel to the Fund. Any shareholder who desires to have an individual considered for nomination by the Committee must submit a recommendation in writing to the Secretary of the Fund, at the Fund's address appearing on the back cover of the accompanying SAI. The recommendation should include the name and address of both the shareholder and the candidate and detailed information concerning the candidate's qualifications and experience. In identifying and evaluating candidates for consideration, the Committee shall consider such factors as it deems appropriate. Those factors will ordinarily include: integrity, intelligence, collegiality, judgment, diversity, skill, business and other experience, qualification as an “Independent Trustee,” the existence of material relationships which may create the appearance of a lack of independence, financial or accounting knowledge and experience and dedication and willingness to devote the time and attention necessary to fulfill Board responsibilities. In fiscal 2016, the Nominating Committee met on two occasions. |
Year Ended November 30, 2016 | Year Ended November 30, 2015 | |||||||
Audit Fees | Audit- Related Fees | Tax Fees | All Other Fees1 | Audit Fees | Audit- Related Fees | Tax Fees | All Other Fees1 | |
FPT | $37,900 | $— | $— | $— | $36,400 | $— | $— | $431 |
FMN | $37,900 | $— | $— | $— | $36,400 | $— | $— | $431 |
Federated Investment Management Company (Adviser) and its affiliates that provide ongoing services to a Fund | N/A | $— | $— | $— | N/A | $841 | $— | $— |
1 | These services consisted of attendance at Audit Committee meeting. |
1. | The aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid to the auditor by a Fund, the Adviser, and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to a Fund during the fiscal year in which the services are provided; |
2. | Such services were not recognized by Fund, the Adviser, and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to a Fund at the time of the engagement to be non-audit services; and |
3. | Such services are promptly brought to the attention of the Audit Committee of a Fund and approved prior to the completion of the audit by the Audit Committee or by one or more members of the Audit Committee to whom authority to grant such approvals has been delegated by the Audit Committee. |
2016 | – | 0% |
2015 | – | 0% |
2016 | – | 0% |
2015 | – | 0% |
2016 | – | 0% |
2015 | – | 0% |
Fiscal year ended 2016 | – | $198,979 |
Fiscal year ended 2015 | – | $43,967 |
a) | The Reorganizing Fund is a statutory trust duly organized, validly existing, and in good standing under the laws of the State of Delaware. |
b) | The Reorganizing Fund is registered as a closed-end management investment company under the 1940 Act, the Reorganizing Fund's registration with the Securities and Exchange Commission (the “Commission”) as an investment company under the 1940 Act is in full force and effect. |
c) | The Reorganizing Fund is not in violation of, and the execution, delivery, and performance of this Agreement (subject to shareholder approval) will not result in the violation of, any provision of the Reorganizing Fund's Declaration of Trust or By-Laws or of any material agreement, indenture, instrument, contract, lease, or other undertaking to which the Reorganizing Fund is a party or by which the Reorganizing Fund is bound. |
d) | The Reorganizing Fund has no material contracts or other commitments (other than this Agreement) that will be terminated with liability to it before the Closing Date, except for liabilities, if any, to be discharged as provided in paragraph 1.3 hereof. All contracts of the Reorganizing Fund will be terminated with respect to the Reorganizing Fund as of the Closing Date (including any such contracts with affiliated persons of the Reorganizing Fund). |
e) | Except as otherwise disclosed in writing to and accepted by the Surviving Fund, no litigation, administrative proceeding, or investigation of or before any court or governmental body is presently pending or to its knowledge threatened against the Reorganizing Fund or any of its properties or assets. Any such litigation, if adversely determined, would not materially and adversely affect the Reorganizing Fund's financial condition, the conduct of its business, or the ability of the Reorganizing Fund to carry out the transactions contemplated by this Agreement. The Reorganizing Fund knows of no facts that might form the basis for the institution of such proceedings and is not a party to or subject to the provisions of any order, decree, or judgment of any court or governmental body that materially and adversely affects its business or its ability to consummate the transactions contemplated herein. |
f) | The audited financial statements of the Reorganizing Fund as of November 30, 2016, and for the fiscal year then ended have been prepared in accordance with generally accepted accounting principles, and such statements (copies of which have been furnished to the Surviving Fund) fairly reflect the financial condition of the Reorganizing Fund as of such date, and there are no known contingent liabilities of the Reorganizing Fund as of such date that are not disclosed in such statements. |
g) | The unaudited financial statements of the Reorganizing Fund as of May 31, 2017, and for the six months then ended have been prepared in accordance with generally accepted accounting principles, and such statements (copies of which have been furnished to the Surviving Fund) fairly reflect the financial condition of the Reorganizing Fund as of such date, and there are no known contingent liabilities of the Reorganizing Fund as of such date that are not disclosed in such statements. |
h) | Since the date of the financial statements referred to in sub-paragraph (g) above, there have been no material adverse changes in the Reorganizing Fund's financial condition, assets, liabilities or business (other than changes occurring in the ordinary course of business), or any incurrence by the Reorganizing Fund of indebtedness maturing more than one year from the date such indebtedness was incurred, except as otherwise disclosed to and accepted by the Surviving Fund. For the purposes of this sub-paragraph (h), a decline in the NAV of the Reorganizing Fund shall not constitute a material adverse change. |
i) | As of the date hereof, except as previously disclosed to the Surviving Fund in writing, and except as have been corrected as required by applicable law, and to the best of the Reorganizing Fund's knowledge, there have been no material miscalculations of the NAV of the Reorganizing Fund or the NAV per share of any class or series of applicable Reorganizing Fund Shares during the twelve-month period preceding the date hereof and preceding the Closing Date, and all such calculations have been made in accordance with the applicable provisions of the 1940 Act. |
j) | The minute books and other similar records of the Reorganizing Fund as made available to the Surviving Fund prior to the execution of this Agreement contain a true and complete record of all action taken at all meetings and by all written consents in lieu of meetings of the shareholders of the Reorganizing Fund and of the Reorganizing Fund, the Reorganizing Fund's Board and committees of the Reorganizing Fund's Board. The stock transfer ledgers and other similar records of the Reorganizing Fund as made available to the Surviving Fund prior to the execution of this Agreement, and as existing on the Closing Date, accurately reflect all record transfers prior to the execution of this Agreement, or the Closing Date, as applicable, in the Reorganizing Fund Shares. |
k) | The Reorganizing Fund has maintained, or caused to be maintained on its behalf, all books and records required of a registered investment company in compliance with the requirements of Section 31 of the 1940 Act and rules thereunder. |
l) | All federal and other tax returns and reports of the Reorganizing Fund required by law to be filed (taking into account any permitted extension filings) have been timely filed and are complete and correct in all material respects, and all federal and other taxes (whether or not shown as due on such returns and reports) have been paid, or provision shall have been made for the payment thereof. To the best of the Reorganizing Fund's knowledge, no such return is currently under audit, and no assessment has been asserted or proposed with respect to such returns. |
m) | All issued and outstanding Reorganizing Fund Shares are duly and validly issued and outstanding, fully paid and non-assessable by the Reorganizing Fund. All of the issued and outstanding Reorganizing Fund Shares will, at the time of the closing, be held by the persons and in the amounts set forth in the records of the Reorganizing Fund's transfer agent as provided in paragraph 3.4. The Reorganizing Fund has no outstanding options, warrants, or other rights to subscribe for or purchase any of the Reorganizing Fund Shares, and has no outstanding securities convertible into any of the Reorganizing Fund Shares. |
n) | At the closing, the Reorganizing Fund will have good and marketable title to the Reorganizing Fund's assets to be transferred to the Surviving Fund pursuant to paragraph 1.2, and full right, power, and authority to sell, assign, transfer, and deliver such assets hereunder, free of any lien or other encumbrance, except those liens or encumbrances to which the Surviving Fund has received notice, and, upon delivery and payment for such assets, and the filing of any articles, certificates or other documents under the laws of the State of Delaware, the Surviving Fund will acquire good and marketable title, subject to no restrictions on the full transfer of such assets, other than such restrictions as might arise under the Securities Act of 1933, as amended (the “1933 Act”), and other than as disclosed to and accepted by the Surviving Fund. |
o) | The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the Reorganizing Fund. Subject to approval by the Reorganizing Fund Shareholders, this Agreement constitutes a valid and binding obligation of the Reorganizing Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors' rights and to general equity principles. |
p) | The information to be furnished by the Reorganizing Fund for use in no-action letters, applications for orders, registration statements, proxy materials, and other documents that may be necessary in connection with the transactions contemplated herein shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations. |
q) | From the effective date of the Registration Statement (as defined in paragraph 5.7), through the time of the meeting of the Reorganizing Fund Shareholders and on the Closing Date, any written information furnished by the Reorganizing Fund with respect to the Reorganizing Fund for use in the Proxy Materials (as defined in paragraph 5.7), or any other materials provided in connection with the Reorganization, does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated or necessary to make the statements, in light of the circumstances under which such statements were made, not misleading. |
r) | The Reorganizing Fund has qualified and elected to be treated as a “regulated investment company” under the Code (a “RIC”), as of and since its first taxable year; and qualifies and will continue to qualify as a RIC under the Code for its taxable year ending upon the Closing Date. |
s) | No governmental consents, approvals, authorizations or filings are required under the 1933 Act, the Securities Exchange Act of 1934, as amended (the “1934 Act”), the 1940 Act or Delaware law for the execution of this Agreement by the Reorganizing Fund or the performance of the Agreement by the Reorganizing Fund except, in each case, for (i) the effectiveness of the Registration Statement (as defined in paragraph 5.7), and the filing of any articles, certificates or other documents that may be required under Delaware law, (ii) such other consents, approvals, authorizations and filings as have been made or received, and (iii) such consents, approvals, authorizations and filings as may be required subsequent to the Closing Date, it being understood, however, that this Agreement and the transactions contemplated herein must be approved by the shareholders of the Reorganizing Fund as described in paragraph 5.2. |
t) | The Reorganizing Fund has been in compliance and is in compliance in all material respects with the investment policies and restrictions set forth in the Registration Statement (as defined in paragraph 5.7). The value of the net assets of the Reorganizing Fund has been determined and is being determined using portfolio valuation methods that comply in all material respects with the methods described in its registration statement and the requirements of the 1940 Act. There are no legal or governmental actions, investigations, inquiries, or proceedings pending or, to |
the knowledge of the Reorganizing Fund, threatened against the Reorganizing Fund that would question the right, power or capacity of (a) the Reorganizing Fund to conduct its business as conducted now or at any time in the past, or (b) the Reorganizing Fund's ability to enter into this Agreement or the Reorganizing Fund's ability to consummate the transactions contemplated by this Agreement. |
a) | The Surviving Fund is a statutory trust duly organized, validly existing, and in good standing under the laws of the State of Delaware. |
b) | The Surviving Fund is registered as a closed-end management investment company under the 1940 Act, the Surviving Fund's registration with the Commission as an investment company under the 1940 Act is in full force and effect. |
c) | The Surviving Fund is not in violation of, and the execution, delivery and performance of this Agreement will not, result in a violation of, the Surviving Fund's Declaration of Trust or By-Laws or of any material agreement, indenture, instrument, contract, lease, or other undertaking to which the Surviving Fund is a party or by which it is bound. |
d) | Except as otherwise disclosed in writing to the Reorganizing Fund, no litigation, administrative proceeding or investigation of or before any court or governmental body is presently pending or to its knowledge threatened against the Surviving Fund or any of its properties or assets. Any such litigation, if adversely determined, would not materially and adversely affect its financial condition, the conduct of its business or the ability of the Surviving Fund to carry out the transactions contemplated by this Agreement. The Surviving Fund knows of no facts that might form the basis for the institution of such proceedings and it is not a party to or subject to the provisions of any order, decree, or judgment of any court or governmental body that materially and adversely affects its business or its ability to consummate the transaction contemplated herein. |
e) | The audited financial statements of the Surviving Fund as of November 30, 2016, and for the fiscal year then ended have been prepared in accordance with generally accepted accounting principles, and such statements (copies of which have been furnished to the Reorganizing Fund) fairly reflect the financial condition of the Surviving Fund as of such date, and there are no known contingent liabilities of the Surviving Fund as of such date that are not disclosed in such statements. |
f) | The unaudited financial statements of the Surviving Fund as of May 31, 2017, and for the six months then ended have been prepared in accordance with generally accepted accounting principles, and such statements (copies of which have been furnished to the Reorganizing Fund) fairly reflect the financial condition of the Surviving Fund as of such date, and there are no known contingent liabilities of the Surviving Fund as of such date that are not disclosed in such statements. |
g) | Since the date of the financial statements referred to in sub-paragraph (f) above, there have been no material adverse changes in the Surviving Fund's financial condition, assets, liabilities or business (other than changes occurring in the ordinary course of business), or any incurrence by the Surviving Fund of indebtedness maturing more than one year from the date such indebtedness was incurred, except as otherwise disclosed to and accepted by the Reorganizing Fund. For the purposes of this sub-paragraph (g), a decline in the NAV of the Surviving Fund shall not constitute a material adverse change. |
h) | All federal and other tax returns and reports of the Surviving Fund required by law to be filed (taking into account any permitted extensions for filing) have been timely filed and are complete and correct in all material respects, and all federal and other taxes (whether or not shown as due on such returns and reports) have been paid, or provision shall have been made for the payment thereof. To the best of the Surviving Fund's knowledge, no such return is currently under audit, and no assessment has been asserted with respect to such returns. |
i) | All issued and outstanding Surviving Fund Shares are duly and validly issued and outstanding, fully paid and non-assessable by the Surviving Fund. The Surviving Fund has no outstanding options, warrants, or other rights to subscribe for or purchase any Surviving Fund Shares, and there are no outstanding securities convertible into any Surviving Fund Shares. |
k) | The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the Surviving Fund. This Agreement constitutes a valid and binding obligation of the Surviving Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors' rights and to general equity principles. |
l) | Surviving Fund Shares to be issued and delivered to the Reorganizing Fund for the account of the Reorganizing Fund Shareholders pursuant to the terms of this Agreement will, as of the closing, have been duly authorized. When so issued and delivered, such shares will be duly and validly issued Surviving Fund Shares, and will be fully paid and non-assessable. |
m) | The information to be furnished by the Surviving Fund for use in no-action letters, applications for orders, registration statements, proxy materials, and other documents that may be necessary in connection with the transactions contemplated herein shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations. |
n) | From the effective date of the Registration Statement (as defined in paragraph 5.7), through the time of the meeting of the Reorganizing Fund Shareholders and on the Closing Date, any written information furnished by the Surviving Fund with respect to the Surviving Fund for use in the Proxy Materials (as defined in paragraph 5.7), or any other materials provided in connection with the Reorganization, does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated or necessary to make the statements, in light of the circumstances under which such statements were made, not misleading. |
o) | The Surviving Fund has qualified and elected to be treated as a RIC under the Code as of and since its first taxable year; and qualifies and shall continue to qualify as a RIC under the Code for its current taxable year. |
p) | No governmental consents, approvals, authorizations or filings are required under the 1933 Act, the 1934 Act, the 1940 Act or Delaware law for the execution of this Agreement by the Surviving Fund or the performance of the Agreement by the Surviving Fund, except, in each case, for (i) the effectiveness of the Registration Statement, and the filing of any articles, certificates or other documents that may be required under Delaware law, (ii) such other consents, approvals, authorizations and filings as have been made or received, and (iii) such consents, approvals, authorizations and filings as may be required subsequent to the Closing Date. |
q) | The Surviving Fund agrees to use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act and the 1940 Act as it may deem appropriate in order to continue its operations after the Closing Date. |
a) | The transfer of all or substantially all of the Reorganizing Fund's assets to the Surviving Fund solely in exchange for Surviving Fund Shares (followed by the distribution of Surviving Fund Shares to the Reorganizing Fund Shareholders in dissolution and liquidation of the Reorganizing Fund) should constitute a “reorganization” within the meaning of Section 368(a)(1) of the Code, and the Surviving Fund and the Reorganizing Fund should each be a “party to a reorganization” within the meaning of Section 368(b) of the Code. |
b) | No gain or loss should be recognized by the Surviving Fund upon the receipt of the assets of the Reorganizing Fund solely in exchange for Surviving Fund Shares. |
c) | No gain or loss should be recognized by the Reorganizing Fund upon the transfer of the Reorganizing Fund's assets to the Surviving Fund solely in exchange for Surviving Fund Shares or upon the distribution (whether actual or constructive) of Surviving Fund Shares to Reorganizing Fund Shareholders in exchange for their Reorganizing Fund Shares. |
d) | No gain or loss should be recognized by any Reorganizing Fund Shareholder upon the exchange of its Reorganizing Fund Shares for Surviving Fund Shares, except to the extent the Reorganizing Fund Shareholders receive cash in lieu of a fractional Surviving Fund Common Share. |
e) | The aggregate tax basis of the Surviving Fund Shares received by each Reorganizing Fund Shareholder pursuant to the Reorganization (including any fractional Surviving Fund Common Share to which a Reorganizing Fund Shareholder would be entitled) should be the same as the aggregate tax basis of the Reorganizing Fund Shares held by such Reorganizing Fund Shareholder immediately prior to the Reorganization. The holding period of Surviving Fund Shares received by each Reorganizing Fund Shareholder (including any fractional Surviving Fund Common Share to which a Reorganizing Fund Shareholder would be entitled) should include the period during which the Reorganizing Fund Shares exchanged therefor were held by such shareholder, provided the Reorganizing Fund Shares are held as capital assets at the time of the Reorganization. |
f) | The tax basis of the Reorganizing Fund's assets acquired by the Surviving Fund should be the same as the tax basis of such assets to the Reorganizing Fund immediately prior to the Reorganization. The holding period of the assets of the Reorganizing Fund in the hands of the Surviving Fund should include the period during which those assets were held by the Reorganizing Fund. |
By: |
By: |
Six Months Ended (unaudited) 5/31/2017 | Year Ended November 30, | |||||
2016 | 2015 | 2014 | 2013 | 2012 | ||
Net Asset Value, Beginning of Period | $14.55 | $15.26 | $15.37 | $13.95 | $16.08 | $13.86 |
Income From Investment Operations: | ||||||
Net investment income1 | 0.39 | 0.81 | 0.87 | 0.89 | 0.91 | 0.94 |
Net realized and unrealized gain (loss) on investments and futures contracts | 0.54 | (0.66) | (0.10) | 1.43 | (2.13) | 2.16 |
Distributions to auction market preferred shareholders from net investment income2 | (0.00)3 | (0.00)3 | (0.00)3 | (0.00)3 | (0.00)3 | (0.00)3 |
TOTAL FROM INVESTMENT OPERATIONS | 0.93 | 0.15 | 0.77 | 2.32 | (1.22) | 3.10 |
Less Distributions to Common Shareholders: | ||||||
Distributions from net investment income | (0.37) | (0.86) | (0.88) | (0.90) | (0.91) | (1.00) |
Increase From Auction Market Preferred Share Tender and Repurchase | — | — | — | — | — | 0.12 |
Net Asset Value, End of Period | $15.11 | $14.55 | $15.26 | $15.37 | $13.95 | $16.08 |
Market Price, End of Period | $14.28 | $14.07 | $14.85 | $14.47 | $12.47 | $16.95 |
Total Return at Net Asset Value4 | 6.44% | 0.73% | 5.17% | 17.09% | (7.76)% | 23.90% |
Total Return at Market Price5 | 4.14% | 0.17% | 8.98% | 23.38% | (21.58)% | 21.37% |
Ratios to Average Net Assets: | ||||||
Net expenses | 1.68%6 | 1.59% | 1.44% | 1.43% | 1.44% | 1.44% |
Net expenses excluding all interest and trust expenses7 | 0.99%6 | 0.99% | 0.99% | 0.99% | 0.99% | 0.99% |
Net investment income8 | 5.16%6 | 5.45% | 5.71% | 6.02% | 6.07% | 6.19% |
Expense waiver/reimbursement9 | 0.30%6 | 0.29% | 0.31% | 0.36% | 0.28% | 0.46% |
Supplemental Data: | ||||||
Net assets, end of period (000 omitted) | $93,548 | $90,046 | $94,408 | $95,072 | $86,237 | $99,397 |
Portfolio turnover | 7% | 11% | 15% | 19% | 19% | 22% |
Total Amount Outstanding | Asset Coverage Per Share | Minimum Required Asset Coverage Per Share | Involuntary Liquidating Preference Per Share | Average Market Value Per Share10 | |
5/31/2017 | $53,675,000 | $68,571 | $50,054 | $25,027 | $25,000 |
11/30/2016 | $53,675,000 | $66,940 | $50,043 | $25,022 | $25,000 |
11/30/2015 | $53,675,000 | $68,972 | $50,028 | $25,014 | $25,000 |
11/30/2014 | $53,675,000 | $69,281 | $50,029 | $25,014 | $25,000 |
11/30/2013 | $36,575,000 | $83,945 | $50,026 | $25,013 | $25,000 |
11/30/2012 | $36,575,000 | $92,940 | $50,029 | $25,014 | $25,000 |
1 | Per share numbers have been calculated using the average shares method. |
2 | The amounts shown are based on Common Share equivalents. |
3 | Represents less than $0.01. |
4 | Total Return at Net Asset Value is the combination of changes in the Common Share net asset value, reinvested dividend income and reinvested capital gains distributions at net asset value, if any, and does not reflect the sales charge, if applicable. Total returns for periods of less than one year are not annualized. |
5 | Total Return at Market Price is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of the reinvestment. Total returns for periods of less than one year are not annualized. |
6 | Computed on an annualized basis. |
7 | Ratios do not reflect the effect of interest expense on variable rate municipal term preferred shares, dividend payments to preferred shareholders and any associated commission costs, or interest and trust expenses on tender option bond trusts. |
8 | Ratios reflect reductions for dividend payments to preferred shareholders. |
9 | This expense decrease is reflected in both the net expense and net investment income ratios shown above. |
10 | Represents initial public offering price. |
Six Months Ended (unaudited) 5/31/2017 | Year Ended November 30, | |||||
2016 | 2015 | 2014 | 2013 | 2012 | ||
Net Asset Value, Beginning of Period | $13.73 | $14.43 | $14.50 | $13.64 | $15.27 | $13.94 |
Income From Investment Operations: | ||||||
Net investment income1 | 0.28 | 0.62 | 0.72 | 0.67 | 0.71 | 0.74 |
Net realized and unrealized gain (loss) on investments and futures contracts | 0.60 | (0.66) | (0.12) | 0.90 | (1.61) | 1.22 |
Distributions to auction market preferred shareholders from net investment income2 | (0.00)3 | (0.00)3 | (0.00)3 | (0.00)3 | (0.00)3 | (0.00)3 |
TOTAL FROM INVESTMENT OPERATIONS | 0.88 | (0.04) | 0.60 | 1.57 | (0.90) | 1.96 |
Less Distributions to Common Shareholders: | ||||||
Distributions from net investment income | (0.27) | (0.66) | (0.67) | (0.71) | (0.73) | (0.78) |
Increase From Auction Market Preferred Share Tender and Repurchase | — | — | — | — | — | 0.15 |
Net Asset Value, End of Period | $14.34 | $13.73 | $14.43 | $14.50 | $13.64 | $15.27 |
Market Price, End of Period | $13.55 | $12.73 | $13.29 | $12.59 | $12.14 | $16.09 |
Total Return at Net Asset Value4 | 6.48% | (0.52)% | 4.22% | 11.76% | (6.00)% | 15.51% |
Total Return at Market Price5 | 8.65% | 0.41% | 11.08% | 9.59% | (20.33)% | 22.29% |
Ratios to Average Net Assets: | ||||||
Net expenses | 1.82%6 | 1.68% | 1.51% | 1.51% | 1.52% | 1.52% |
Net expenses excluding all interest and trust expenses7 | 0.99%6 | 0.99% | 0.99% | 0.99% | 0.99% | 0.99% |
Net investment income8 | 3.95%6 | 4.57% | 4.99% | 4.74% | 4.92% | 5.04% |
Expense waiver/reimbursement9 | 0.31%6 | 0.30% | 0.32% | 0.34% | 0.27% | 0.42% |
Supplemental Data: | ||||||
Net assets, end of period (000 omitted) | $100,095 | $95,893 | $100,725 | $101,243 | $95,263 | $106,595 |
Portfolio turnover | 11% | 17% | 13% | 19% | 21% | 23% |
Total Amount Outstanding | Asset Coverage Per Share | Minimum Required Asset Coverage Per Share | Involuntary Liquidating Preference Per Share | Average Market Value Per Share10 | |
5/31/2017 | $61,075,000 | $65,972 | $50,058 | $25,029 | $25,000 |
11/30/2016 | $61,075,000 | $64,252 | $50,050 | $25,025 | $25,000 |
11/30/2015 | $61,075,000 | $66,230 | $50,032 | $25,016 | $25,000 |
11/30/2014 | $61,075,000 | $66,442 | $50,033 | $25,016 | $25,000 |
11/30/2013 | $41,900,000 | $81,840 | $50,034 | $25,017 | $25,000 |
11/30/2012 | $41,900,000 | $88,601 | $50,037 | $25,019 | $25,000 |
1 | Per share numbers have been calculated using the average shares method. |
2 | The amounts shown are based on Common Share equivalents. |
3 | Represents less than $0.01. |
4 | Total Return at Net Asset Value is the combination of changes in the Common Share net asset value, reinvested dividend income and reinvested capital gains distributions at net asset value, if any, and does not reflect the sales charge, if applicable. Total returns for periods of less than one year are not annualized. |
5 | Total Return at Market Price is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of the reinvestment. Total returns for periods of less than one year are not annualized. |
6 | Computed on an annualized basis. |
7 | Ratios do not reflect the effect of interest expense on variable rate municipal term preferred shares, dividend payments to preferred shareholders and any associated commission costs, or interest and trust expenses on tender option bond trusts. |
8 | Ratios reflect reductions for dividend payments to preferred shareholders. |
9 | This expense decrease is reflected in both the net expense and net investment income ratios shown above. |
10 | Represents initial public offering price. |
■ | Equity securities listed on a U.S. securities exchange or traded through the U.S. national market system are valued at their last reported sale price or official closing price in their principal exchange or market. If a price is not readily available, such equity securities are valued based upon the mean of closing bid and asked quotations from one or more dealers. |
■ | Other equity securities traded primarily in the United States are valued based upon the mean of closing bid and asked quotations from one or more dealers. |
■ | Equity securities traded primarily through securities exchanges and regulated market systems outside the United States are valued at their last reported sale price or official closing price in their principal exchange or market. These prices may be adjusted for significant events occurring after the closing of such exchanges or market systems as described below. If a price is not readily available, such equity securities are valued based upon the mean of closing bid and asked quotations from one or more dealers. |
■ | Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by its Board. The methods used by pricing services to determine such price evaluations are described below. If a price evaluation from a pricing service is not readily available, such fixed-income securities are fair valued based upon price evaluations from one or more dealers. |
■ | Futures contracts listed on exchanges are valued at their reported settlement price. Option contracts listed on exchanges are valued based upon the mean of closing bid and asked quotations reported by the exchange or from one or more futures commission merchants. |
■ | OTC derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Board. The methods used by pricing services to determine such price evaluations are described below. If a price evaluation from a pricing service is not readily available, such derivative contracts are fair valued based upon price evaluations from one or more dealers or using a recognized pricing model for the contract. |
■ | Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. The Prospectuses for these mutual funds explain the circumstances under which they will use fair value pricing and the effects of using fair value pricing. |
■ | With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts; |
■ | Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded; and |
■ | Announcements concerning matters such as acquisitions, recapitalizations or litigation developments, or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry. |
Aggregate Brokerage Commissions Paid | ||
Brokerage Commissions For the Fiscal Year Ended | FPT | FMN |
November 30, 2016 | $1,181.25 | $292.50 |
November 30, 2015 | $3,172.50 | $2,531.25 |
November 30, 2014 | $1,822.5 | $1,226.25 |
■ | pursuant to a bid or sell order placed with the auction agent in accordance with the auction procedures; |
■ | to a Broker-Dealer; or |
■ | to such other persons as may be permitted by the Fund; provided, however, that |
■ | a sale, transfer or other disposition of AMPS from a customer of a Broker-Dealer who is listed on the records of that Broker-Dealer as the holder of such shares to that Broker-Dealer or another customer of that Broker-Dealer shall not be deemed to be a sale, transfer or other disposition if such Broker-Dealer remains the existing holder of the shares; and |
■ | in the case of all transfers other than pursuant to auctions, the Broker-Dealer (or other person, if permitted by the Fund) to whom such transfer is made shall advise the auction agent of such transfer. |
Name Birth Date Positions Held with Funds Date Service Began | Principal Occupation(s) and Other Directorships Held for Past Five Years, Previous Position(s) and Qualifications | Aggregate Compensation From FPT and FMN (past fiscal year) | Total Compensation From Funds and Federated Fund Complex (past calendar year) | Year of Term Expiration |
J. Christopher Donahue* Birth Date: April 11, 1949 PRESIDENT AND TRUSTEE Began serving: December 2002 | Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Fund Complex; Director or Trustee of the Funds in the Federated Fund Complex; President, Chief Executive
Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management
Corp.; Chairman and Trustee, Federated Equity Management Company of Pennsylvania; Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd.; Chairman, Passport Research Ltd. | $0 | $0 | 2020+ |
John B. Fisher* Birth Date: May 16, 1956 TRUSTEE Began serving: May 2016 | Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Fund Complex; Director or Trustee of certain of the Funds in the Federated Fund Complex; Vice President,
Federated Investors, Inc.; President, Director/Trustee and CEO, Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated
Investment Counseling, Federated Investment Management Company; President of some of the Funds in the Federated Fund Complex and Director, Federated Investors Trust Company Previous Positions: President and Director of the Institutional Sales Division of Federated Securities Corp.; President and Director of Federated Investment Counseling; President and CEO of Passport Research Ltd.; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc. and President, Technology, Federated Services Company. | $0 | $0 | 2018 |
* | Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Investors, Inc. and due to positions they hold with Federated Investors and its subsidiaries. |
+ | If elected |
■ | Desire and availability to serve for a substantial period of time, taking into account the Board's current mandatory retirement age for Independent Trustees of 75 years. |
■ | Possesses no conflicts which would interfere with qualifying as Independent Trustee. |
■ | Appropriate interpersonal skills to work effectively with other Independent Trustees. |
■ | Understanding and appreciation of the important role occupied by independent trustees in the regulatory structure governing regulated investment companies. |
■ | Diversity of background. |
Name Birth Date Positions Held with Funds Date Service Began | Principal Occupation(s) and Other Directorships Held for Past Five Years, Previous Position(s) and Qualifications | Aggregate Compensation From FPT and FMN (past fiscal year) | Total Compensation From Funds and Federated Fund Complex (past calendar year) | Year of Term Expiration |
John T. Collins Birth Date: January 24, 1947 TRUSTEE Began serving: January 2014 | Principal Occupations: Director or Trustee of the Federated Fund Complex; formerly, Chairman and CEO, The Collins Group, Inc. (a private equity firm) (Retired). Other Directorships Held: Director, Current Chair of the Compensation Committee, KLX Corp. Qualifications: Mr. Collins has served in several business and financial management roles and directorship positions throughout his career. Mr. Collins previously served as Chairman and CEO, The Collins Group, Inc. (a private equity firm). Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins previously served as Director, FleetBoston Financial Corp. and Director, Beth Israel Deaconess Medical Center (Harvard University Affiliate Hospital). | $1,135.76 (FPT) $1,124.14 (FMN) | $275,000 | 2020+ |
G. Thomas Hough Birth Date: February 28,1955 TRUSTEE Began serving: January 2016 | Principal Occupations: Director or Trustee of the Federated Fund Complex; formerly, Vice Chair, Ernst & Young LLP (public accounting firm) (Retired). Other Directorships Held: Director, Chair of the Audit Committee, Governance Committee, Publix Super Markets, Inc.; Director, Member of the Audit Committee and Technology Committee of Equifax, Inc. Qualifications: Mr. Hough served in accounting, business management and directorship positions throughout his career. Mr. Hough most recently held the position of Americas Vice Chair of Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough is an Executive Committee member of the United States Golf Association; he serves on the President's Cabinet and Business School Board of Visitors for the University of Alabama and is on the Business School Board of Visitors for Wake Forest University. | $1,135.76 (FPT) $1,124.14 (FMN) | $275,000 | 2018 |
Maureen Lally-Green Birth Date: July 5, 1949 TRUSTEE Began serving: August 2009 | Principal Occupations: Director or Trustee of the Federated Fund Complex; Dean of the Duquesne University School of Law; Adjunct Professor of Law, Duquesne University School of Law; formerly, Interim Dean of the
Duquesne University School of Law; Associate General Secretary and Director, Office of Church Relations, Diocese of Pittsburgh. Other Directorships Held: Director, CONSOL Energy Inc. Qualifications: Judge Lally-Green has served in various legal and business roles and directorship positions throughout her career. Judge Lally-Green previously served as: Associate General Secretary, Diocese of Pittsburgh; a member of the Superior Court of Pennsylvania; and as a Professor of Law, Duquesne University School of Law. Judge Lally-Green also currently holds the positions on either a public or not for profit Board of Directors as follows: Director and Chair, UPMC Mercy Hospital; Regent, St. Vincent Seminary; Director and Vice Chair, Our Campaign for the Church Alive!, Inc.; Director, Saint Vincent College; Member, Pennsylvania State Board of Education (public); and Director and Chair, Cardinal Wuerl North Catholic High School, Inc. Judge Lally-Green has held the positions of: Director, Auberle; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Ireland Institute of Pittsburgh; Director, Saint Thomas More Society; Director, Catholic High Schools of the Diocese of Pittsburgh, Inc.; and Director, Pennsylvania Bar Institute. | $1,135.76 (FPT) $1,124.14 (FMN) | $275,000 | 2019 |
Name Birth Date Positions Held with Funds Date Service Began | Principal Occupation(s) and Other Directorships Held for Past Five Years, Previous Position(s) and Qualifications | Aggregate Compensation From FPT and FMN (past fiscal year) | Total Compensation From Funds and Federated Fund Complex (past calendar year) | Year of Term Expiration |
Peter E. Madden** Birth Date: March 16, 1942 TRUSTEE Began serving: December 2002 | Principal Occupation: Director or Trustee, and Chair of the Board of Directors or Trustees, of the Federated Fund Complex; Retired. Other Directorships Held: None. Qualifications: Mr. Madden has served in several business management, mutual fund services and directorship positions throughout his career. Mr. Madden previously served as President, Chief Operating Officer and Director, State Street Bank and Trust Company (custodian bank) and State Street Corporation (financial services). He was Director, VISA USA and VISA International; and Chairman and Director, Massachusetts Bankers Association. Mr. Madden served as Director, Depository Trust Corporation; and Director, The Boston Stock Exchange. Mr. Madden also served as a Representative to the Commonwealth of Massachusetts General Court. | $1,383.55 (FPT) $1,369.39 (FMN) | $335,000 | 2018+ |
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 TRUSTEE Began serving: December 2002 | Principal Occupations: Director or Trustee of the Federated Fund Complex; Management Consultant. Other Directorships Held: None. Qualifications: Mr. Mansfield has served as a Marine Corps officer and in several banking, business management, educational roles and directorship positions throughout his long career. He remains active as a Management Consultant. | $1,032.52 (FPT) $1,021.96 (FMN) | $250,000 | 2018 |
Thomas M. O'Neill Birth Date: June 14, 1951 TRUSTEE Began serving: August 2006 | Principal Occupations: Director or Trustee, Chair of the Audit Committee of the Federated Fund Complex; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: None. Qualifications: Mr. O'Neill has served in several business, mutual fund and financial management roles and directorship positions throughout his career. Mr. O'Neill serves as Director, Medicines for Humanity and Director, The Golisano Children's Museum of Naples, Florida. Mr. O'Neill previously served as Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); and Director, Midway Pacific (lumber). | $1,239.01 (FPT) $1,226.34 (FMN) | $300,000 | 2019 |
P. Jerome Richey Birth Date: February 23, 1949 TRUSTEE Began serving: January 2014 | Principal Occupations: Director or Trustee of the Federated Fund Complex; Management Consultant; formerly, Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh and Executive Vice President
and Chief Legal Officer, CONSOL Energy Inc. Other Directorships Held: None. Qualifications: Mr. Richey has served in several business and legal management roles and directorship positions throughout his career. Mr. Richey most recently held the positions of Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously served as Chairman of the Board, Epilepsy Foundation of Western Pennsylvania and Chairman of the Board, World Affairs Council of Pittsburgh. Mr. Richey previously served as Chief Legal Officer and Executive Vice President, CONSOL Energy Inc. and Board Member, Ethics Counsel and Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). | $1,032.52 (FPT) $1,021.96 (FMN) | $250,000 | 2020+ |
Name Birth Date Positions Held with Funds Date Service Began | Principal Occupation(s) and Other Directorships Held for Past Five Years, Previous Position(s) and Qualifications | Aggregate Compensation From FPT and FMN (past fiscal year) | Total Compensation From Funds and Federated Fund Complex (past calendar year) | Year of Term Expiration |
John S. Walsh Birth Date: November 28, 1957 TRUSTEE Began serving: December 2002 | Principal Occupations: Director or Trustee of the Federated Fund Complex; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers
Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Other Directorships Held: None. Qualifications: Mr. Walsh has served in several business management roles and directorship positions throughout his career. Mr. Walsh previously served as Vice President, Walsh & Kelly, Inc. (paving contractors).). | $1,032.52 (FPT) $1,021.96 (FMN) | $250,000 | 2018+ |
** | Pursuant to the Board's retirement policy, Mr. Madden currently plans to retire on December 31, 2017. |
Interested Board Member Name | Dollar Range of Shares owned in FPT (as of October 2, 2017) | Dollar Range of Shares owned in FMN (as of October 2, 2017) | Aggregate Dollar Range of Shares Owned in Federated Family of Investment Companies (as of October 2, 2017) |
J. Christopher Donahue | $50,001 - $100,000 | Over $100,000 | Over $100,000 |
John B. Fisher | None | None | Over $100,000 |
Independent Board Member Name | |||
John T. Collins | None | None | Over $100,000 |
G. Thomas Hough | None | None | Over $100,000 |
Maureen Lally-Green | None | None | Over $100,000 |
Peter E. Madden | None | None | Over $100,000 |
Charles F. Mansfield, Jr. | None | None | Over $100,000 |
Thomas M. O'Neill | None | None | Over $100,000 |
P. Jerome Richey | None | None | Over $100,000 |
John S. Walsh | None | None | Over $100,000 |
Name Birth Date Positions Held with Funds Date Service Began | Principal Occupation(s) and Previous Position(s) |
Lori A. Hensler Birth Date: January 6, 1967 TREASURER Began serving: April 2013 | Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Complex; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated
Securities Corp. and Edgewood Services, Inc.; and Assistant Treasurer, Federated Investors Trust Company. Ms. Hensler has received the Certified Public Accountant designation. Previous Positions: Controller of Federated Investors, Inc.; Senior Vice President and Assistant Treasurer, Federated Investors Management Company; Treasurer, Federated Investors Trust Company; Assistant Treasurer, Federated Administrative Services, Federated Administrative Services, Inc., Federated Securities Corp., Edgewood Services, Inc., Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company, Passport Research, Ltd., and Federated MDTA, LLC; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc. |
Richard B. Fisher Birth Date: May 17, 1923 VICE CHAIRMAN Began serving: December 2002 | Principal Occupations: Vice Chairman or Vice President of some of the Funds in the Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp. Previous Positions: President and Director or Trustee of some of the Funds in the Federated Fund Complex; Executive Vice President, Federated Investors, Inc.; Director and Chief Executive Officer, Federated Securities Corp. |
Peter J. Germain Birth Date: September 3, 1959 CHIEF LEGAL OFFICER Began serving: January 2005 | Principal Occupations: Mr. Germain is Chief Legal Officer of the Federated Fund Complex. He is General Counsel and Vice President, Federated Investors, Inc.; President, Federated Administrative Services and
Federated Administrative Services, Inc.; Vice President, Federated Securities Corp.; Secretary, Federated Private Asset Management, Inc.; and Secretary, Retirement Plan Service Company of America. Mr. Germain joined
Federated in 1984 and is a member of the Pennsylvania Bar Association Previous Positions: Deputy General Counsel, Special Counsel, Managing Director of Mutual Fund Services, Federated Investors, Inc.; Senior Vice President, Federated Services Company; and Senior Corporate Counsel, Federated Investors, Inc. |
Stephen Van Meter Birth Date: June 5, 1975 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Began serving: July 2015 | Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Complex; Vice President and Chief Compliance Officer of Federated Investors, Inc. and Chief Compliance Officer of
certain of its subsidiaries. Mr. Van Meter joined Federated in October 2011. He holds FINRA licenses under Series 3, 7, 24 and 66. Previous Positions: Mr. Van Meter previously held the position of Compliance Operating Officer, Federated Investors, Inc. Prior to joining Federated, Mr. Van Meter served at the United States Securities and Exchange Commission in the positions of Senior Counsel, Office of Chief Counsel, Division of Investment Management and Senior Counsel, Division of Enforcement. |
Robert J. Ostrowski Birth Date: April 26, 1963 CHIEF INVESTMENT OFFICER AND SENIOR VICE PRESIDENT Began serving: February 2010 | Principal Occupations: Robert J. Ostrowski joined Federated in 1987 as an Investment Analyst and became a Portfolio Manager in 1990. He was named Chief Investment Officer of Federated's taxable fixed-income products in 2004 and also serves as a Senior Portfolio Manager. Mr. Ostrowski became an Executive Vice President of the Fund's Adviser in 2009 and served as a Senior Vice President of the Fund's Adviser from 1997 to 2009. Mr. Ostrowski has received the Chartered Financial Analyst designation. He received his M.S. in Industrial Administration from Carnegie Mellon University. |
* | Officers do not receive any compensation from the Fund. |
Name | Position(s) | Fund/Class | Shares Owned |
J. Christopher Donahue | President and Trustee | FMN–Common Shares | 6,800 |
J. Christopher Donahue | President and Trustee | FPT–Common Shares | 6,800 |
Richard B. Fisher | Vice Chairman | FMN –Common Shares | 46,616 |
Fund/Class | Name | Shares Owned |
FPT–Common Shares | Cede & Co., New York, NY | 6,965,519 (99.75%) |
FMN–Common Shares | Cede & Co., New York, | 6,169,640 (99.67%) |
Fund/Class | Name | Date of Filing | Shares Owned |
FPT – Common Shares | Karpus Investment Management, Pittsford, New York | June 20, 2017 | 1,472,058 (21.08%) |
FPT – Common Shares | First Trust Portfolios, L.P., Wheaton, Illinois First Trust Advisors, L.P., Wheaton, Illinois The Charger Corporation, Wheaton, Illinois | January 28, 2016 | 503,332 (7.21%) |
FPT – VMTPS | Citibank, N.A., New York, NY | June 20, 2014 | 1,847 (100%) |
FPT– AMPS | Bulldog Investors, Brooklyn Capital Management (Phillip Goldstein, Pleasantville, NY and Andrew Dakos, Saddle Brook, NJ) | April 15, 2011 | 524 (31.26%)* |
FPT – AMPS | Bank of America Corporation, Charlotte, NC Bank of America, N.A., Charlotte, NC Blue Ridge Investments, L.L.C., Charlotte, NC | March 12, 2010 | 545 (32.6%)* |
FMN–Common Shares | First Trust Portfolios, L.P., Wheaton, Illinois First Trust Advisors, L.P., Wheaton, Illinois The Charger Corporation, Wheaton, Illinois | July 10, 2017 | 646,367 (10.45%) |
FMN – VMTPS | Citibank, N.A., New York, NY | June 20, 2014 | 1,421 (100%) |
FMN– AMPS | Bank of America Corporation, Charlotte, NC Bank of America, N.A., Charlotte, NC Blue Ridge Investments, L.L.C., Charlotte, NC | January 13, 2012 | 618 (85.15%)* |
* | In November 2011, each Fund announced a tender offer for 100% of its outstanding AMPS at a price of 96% of the $25,000 liquidation preference per share. Each tender offer closed on December 22, 2011 with 64.4% of FPT's then-outstanding AMPS and 50.4% of FMN's then-outstanding AMPS having been tendered and purchased. These filings precede the tender offer by each Fund and, therefore, if these shareholders participated in the tender offer(s), they currently may own fewer shares than are reported in the filings. |
Board Committee | Committee Members | Committee Functions |
Executive | J. Christopher Donahue Peter E. Madden John S. Walsh | In between meetings of the full Board, the Executive Committee generally may exercise all the powers of the full Board in the management and direction of the business and conduct of the affairs of the Trust in such manner as the Executive Committee shall deem to be in the best interests of the Trust. However, the Executive Committee cannot elect or remove Board members, increase or decrease the number of Trustees, elect or remove any Officer, declare dividends, issue shares or recommend to Shareholders any action requiring Shareholder approval. In fiscal 2016, the Executive Committee met on one occasion. |
Audit | John T. Collins G. Thomas Hough Maureen Lally-Green Thomas M. O'Neill | The Board has adopted a written charter for the Audit Committee, a copy of which is available under “Fund Governance” in the
“Products” section of Federated's website at FederatedInvestors.com. The Board has determined that the members of the Audit Committee are “independent,” as defined by the listing standards of
the New York Stock Exchange. The Board has designated Messrs. Collins and O'Neill as audit committee financial experts. The purposes of the Audit Committee are to oversee the accounting and financial reporting process of the Fund, the Fund's internal control over financial reporting and the quality, integrity and independent audit of the Fund's financial statements. The Committee also oversees or assists the Board with the oversight of compliance with legal requirements relating to those matters, approves the engagement and reviews the qualifications, independence and performance of the Fund's independent registered public accounting firm, acts as a liaison between the independent registered public accounting firm and the Board and reviews the Fund's internal audit function. In fiscal 2016, the Audit Committee met on ten occasions. |
Board Committee | Committee Members | Committee Functions |
Nominating | John T. Collins G. Thomas Hough Maureen Lally-Green Peter E. Madden Charles F. Mansfield, Jr. Thomas M. O'Neill P. Jerome Richey John S. Walsh | The Board has adopted a written charter for the Nominating Committee, a copy of which is available under “Fund Governance” in the
“Products” section of Federated's website at FederatedInvestors.com. The Board has determined that all members of the Nominating Committee are “independent,” as defined by the listing standards
of the New York Stock Exchange. The Nominating Committee, whose members consist of all Independent Trustees, selects and nominates persons for election to the Fund's Board when vacancies occur. The Committee will consider candidates recommended by Shareholders, Independent Trustees, officers or employees of any of the Fund's agents or service providers and counsel to the Fund. Any Shareholder who desires to have an individual considered for nomination by the Committee must submit a recommendation in writing to the Secretary of the Fund, at the Fund's address appearing on the back cover of this SAI. The recommendation should include the name and address of both the Shareholder and the candidate and detailed information concerning the candidate's qualifications and experience. In identifying and evaluating candidates for consideration, the Committee shall consider such factors as it deems appropriate. Those factors will ordinarily include: integrity, intelligence, collegiality, judgment, diversity, skill, business and other experience, qualification as an “Independent Trustee,” the existence of material relationships which may create the appearance of a lack of independence, financial or accounting knowledge and experience and dedication and willingness to devote the time and attention necessary to fulfill Board responsibilities. In fiscal 2016, the Nominating Committee met on two occasions. |
Types of Accounts Managed by Lee Cunningham | Total Number of Additional Accounts Managed/Total Assets* by Lee Cunningham | Total Number of Additional Accounts Managed/Total Assets* by R.J. Gallo |
Registered Investment Companies | 3/$841.7million | 4/$1.8 billion |
Other Pooled Investment Vehicles | 0/$0 | 0/$0 |
Other Accounts | 0/$0 | 0/$0 |
* | None of the Accounts has an advisory fee that is based on the performance of the account. |
Types of Accounts Managed by Lee Cunningham | Total Number of Additional Accounts Managed/Total Assets* by Lee Cunningham | Total Number of Additional Accounts Managed/Total Assets* by R.J. Gallo |
Registered Investment Companies | 3/$848.1 million | 4/$1.8 billion |
Other Pooled Investment Vehicles | 0/$0 | 0/$0 |
Other Accounts | 0/$0 | 0/$0 |
* | None of the Accounts has an advisory fee that is based on the performance of the account. |
Administrative Fee | Average Daily Net Assets of the Investment Complex |
0.100% | on assets up to $50 billion |
0.075% | on assets in excess of $50 billion |
For the Year Ended November 30 | 2016 | 2015 | 2014 |
FPT Advisory Fee Paid | $903,765 | $890,103 | $823,167 |
FPT Advisory Fee Waived | $(299,462) | $(323,079) | $(340,128) |
FMN Advisory Fee Paid | $829,687 | $816,435 | $746,541 |
FMN Advisory Fee Waived | $(272,127) | $(294,252) | $(332,669) |
■ | A due diligence team made up of employees of the Adviser and/or its affiliates will meet with the proxy voting service on an annual basis and determine through a review of their policies and procedures and through inquiry that the proxy voting service has established a system of internal controls that provide reasonable assurance that their voting recommendations are not influenced by the business relationships they have with the subjects of their research. |
■ | Whenever the standard voting guidelines call for voting a proposal in accordance with the proxy voting service recommendation and the proxy voting service has disclosed that they have a conflict of interest with respect to that issuer, the PVOT will take the following steps: (a) the PVOT will obtain a copy of the research report and recommendations published by another proxy voting service for that issuer; (b) the Head of the PVOT, or his designee, will review both the engaged proxy voting service research report and the research report of the other proxy voting service and determine what vote will be cast. The PVOT will report all proxies voted in this manner to the Proxy Committee on a quarterly basis. Alternatively, the PVOT may seek direction from the Committee on how the proposal shall be voted. |
■ | Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Fund's Board of Trustees (the “Trustees”). |
■ | Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. |
■ | Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations. |
■ | Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer's financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded, public trading in similar securities or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions. |
PART C. OTHER INFORMATION.
Item 15. Indemnification
Indemnification is provided to Officers and Trustees of the Registrant pursuant to Article V of Registrant's Declaration of Trust. The Investment Management Agreement between the Registrant and Federated Investment Management Company (“Adviser”) provides that, in the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of the obligations or duties under the Investment Management Agreement on the part of Adviser, Adviser shall not be liable to the Registrant or to any shareholder for any act or omission in the course of or connected in any way with rendering services or for any losses that may be sustained in the purchase, holding, or sale of any security. Registrant’s Trustees and Officers are covered by an Investment Trust Errors and Omissions Policy. The Purchase Agreement between the Registrant, the Adviser and the Underwriters named therein provides for indemnification of the Underwriters by the Registrant and the Adviser and of the Registrant and the Adviser and their officers and trustees for certain liabilities and also provides for contribution under certain circumstances. The Indemnification Agreement between the Registrant and the Adviser provides for indemnification of the Registrant and its officers and trustees for certain liabilities.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to Trustees, Officers, and controlling persons of the Registrant by the Registrant pursuant to the Declaration of Trust or otherwise, the Registrant is aware that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, is unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by Trustees), Officers, or controlling persons of the Registrant in connection with the successful defense of any act, suit, or proceeding) is asserted by such Trustees, Officers, or controlling persons in connection with the shares being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issues.
Insofar as indemnification for liabilities may be permitted pursuant to Section 17 of the Investment Company Act of 1940 for Trustees, Officers, or controlling persons of the Registrant by the Registrant pursuant to the Declaration of Trust or otherwise, the Registrant is aware of the position of the Securities and Exchange Commission as set forth in Investment Company Act Release No. IC-11330. Therefore, the Registrant undertakes that in addition to complying with the applicable provisions of the Declaration of Trust or otherwise, in the absence of a final decision on the merits by a court or other body before which the proceeding was brought, that an indemnification payment will not be made unless in the absence of such a decision, a reasonable determination based upon factual review has been made (i) by a majority vote of a quorum of non-party Trustees who are not interested persons of the Registrant or (ii) by independent legal counsel in a written opinion that the indemnitee was not liable for an act of willful misfeasance, bad faith, gross negligence, or reckless disregard of duties. The Registrant further undertakes that advancement of expenses incurred in the defense of a proceeding (upon undertaking for repayment unless it is ultimately determined that indemnification is appropriate) against an Officer, Trustee, or controlling person of the Registrant will not be made absent the fulfillment of at least one of the following conditions: (i) the indemnitee provides security for his undertaking; (ii) the Registrant is insured against losses arising by reason of any lawful advances; or (iii) a majority of a quorum of disinterested non-party Trustees or independent legal counsel in a written opinion makes a factual determination that there is reason to believe the indemnitee will be entitled to indemnification.
Item 16. Exhibits
Exhibit Number | DESCRIPTION |
(1) | |||
1.1 | Copy of Amended and Restated Declaration of Trust of the Registrant; | (1) | |
1.2 | Amendment No. 1 to Amended and Restated Declaration of Trust; | + | |
1.3 | Copy of Statement of Preferences (AMPS) of the Registrant; | (2) |
(2) | |||
2.1 | Copy of Amended and Restated By-Laws of the Registrant; | (1) | |
2.2 | Amendment Nos. 1-5 to Amended and Restated By-Laws; | + |
(3) | Not applicable |
(4) | Form of Agreement and Plan of Reorganization and Termination is filed herein as Annex A to the Prospectus/Proxy Statement | + |
(5) | |||
5.1 | Form of Stock Certificate of the Registrant; | (1) | |
5.2 | Form of Preferred Shares (AMPS) certificate of the Registrant; | (2) |
(6) | Conformed copy of Investment Management Agreement of the Registrant; | (1) |
(7) | Conformed copy of Master Agreement Among Underwriters; | (1) |
(8) | Not applicable |
(9) | Conformed copy of Custody Agreement of the Registrant; | + |
(10) | Not applicable |
(11) | Conformed copy of Opinion and Consent of Counsel Regarding the Legality of Shares being Issued; | + |
(12) | Form of Opinion regarding Tax Consequences of the Reorganization | + |
(13) | |||
13.1 | Conformed copy of Amended and Restated Agreement for Fund Accounting Services, Administrative Services, Transfer Agency Services and Custody Services Procurement; | (1) | |
13.2 | Conformed copy of Indemnification Agreement (Common Shares) between the Registrant and the Adviser; | (2) | |
13.3 | Conformed copy of Indemnification Agreement (Preferred Shares) between the Registrant and the Adviser; | + | |
13.4 | Conformed copy of Transfer Agency Agreement of the Registrant; | + | |
13.5 | Conformed copy of Auction Agency Agreement; | + | |
13.6 | Form of DTC Letter of Representations | (2) | |
13.7 | Conformed copy of Broker/Dealer Agreement (MLPF&S); | + | |
13.8 | Conformed copy of Broker/Dealer Agreement (Oppenheimer); | + | |
13.9 | Form of Broker/Dealer Agreement (UBS); | + | |
13.10 | Conformed copy of Amended and Restated Agreement for Administrative Services; | + | |
13.11 | Conformed copy of Fund Accounting Agreement; | + | |
13.12 | Conformed copy of Services Agreement; | + | |
(14) | Conformed copy of Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm; | + |
(15) | Not Applicable |
(16) | |||
16.1 | Conformed copy of Unanimous Consent of Trustees; | + | |
16.2 | Conformed copy of Power of Attorney of the Registrant; | + |
(17) | |||
17.1 | Form of Ballot (Common Shares); | + | |
17.2 | Form of Ballot (Preferred Shares); | + |
+ | Exhibit is being filed electronically with registration statement |
ALL EXHIBITS ARE INCORPORATED BY REFERENCE TO AN AMENDMENT OF THE REGISTRANT FILED ON FORM N-2 (FILE NOS. 333-100605 and 811-21235) | ||
1. | Pre-Effective Amendment No. 3 filed December 17, 2002. | |
2. | Pre-Effective Amendment No. 3 (Preferred Shares – 333-102033) filed February 12, 2003. | |
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a part of this Registration Statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a part of an amendment to the Registration Statement and will not be used until the amendment is effective, and that, in determining any liability under the Securities Act of 1933, each post-effective amendment shall be deemed to be a new Registration Statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them.
(3) The undersigned Registrant agrees to file by Post-Effective Amendment the opinion of counsel regarding the tax consequences of the proposed reorganization required by Item (16)(12) of Form N-14 and consistent with staff legal bulletin 19 within a reasonable time after receipt of such opinion in connection with the closing of the proposed reorganization.
SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant, FEDERATED PREMIER MUNICIPAL INCOME FUND, has duly caused this Registration Statement on Form N-14 to be signed on its behalf by the undersigned, duly authorized, in the City of Pittsburgh and Commonwealth of Pennsylvania, on the 6th day of October, 2017. |
FEDERATED PREMIER MUNICIPAL INCOME FUND |
BY:/s/ George F. Magera George F. Magera, Assistant Secretary |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form N-14 has been signed below by the following person in the capacity and on the date indicated: |
NAME | TITLE | DATE |
BY:/s/ George F. Magera Assistant Secretary |
Attorney In Fact For the Persons Listed Below | October 6, 2017 |
J. Christopher Donahue *
|
President and Trustee (Principal Executive Officer) | |
John B. Fisher* | Trustee | |
Lori A. Hensler* | Treasurer (Principal Financial Officer/Principal Accounting Officer) | |
John T. Collins* | Trustee | |
G. Thomas Hough* | Trustee | |
Maureen Lally-Green* | Trustee | |
Peter E. Madden* | Trustee | |
Charles F. Mansfield, Jr.* | Trustee | |
Thomas O’Neill* | Trustee | |
P. Jerome Richey* | Trustee | |
John S. Walsh* | Trustee | |
*By Power of Attorney |