As filed with the Securities and Exchange Commission on February 10, 2015
File No. 333-196106
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
¨ Pre-Effective Amendment No.
x Post-Effective Amendment No. 1
NUVEEN INVESTMENT QUALITY MUNICIPAL FUND, INC.
(Exact Name of Registrant as Specified in Charter)
333 West Wacker Drive
Chicago, Illinois 60606
(Address of Principal Executive Offices, Zip Code)
Registrants Telephone Number, including Area Code (800) 257-8787
Kevin J. McCarthy
Vice President and Secretary
Nuveen Investments
333 West Wacker Drive
Chicago, Illinois 60606
(Name and Address of Agent for Service)
Copy to:
Deborah Bielicke Eades Vedder Price P.C. 222 North LaSalle Street Chicago, Illinois 60601 |
Eric F. Fess Chapman and Cutler LLP 111 West Monroe Street Chicago, Illinois 60603 |
EXPLANATORY NOTE
The Joint Proxy Statement/Prospectus and Statement of Additional Information, each in the form filed on July 1, 2014 pursuant to Rule 497 of the General Rules and Regulations under the Securities Act of 1933, as amended (File No. 333-196106), are incorporated herein by reference.
This amendment is being filed for the sole purpose of adding the executed tax opinion of each of Vedder Price P.C. and K&L Gates LLP, as Exhibit 12(a) and Exhibit 12(b), respectively, to Part C of the Registration Statement, in each case, supporting the tax matters discussed in the Joint Proxy Statement/Prospectus.
PART C
OTHER INFORMATION
Item 15. Indemnification
Article EIGHTH of the Registrants Articles of Incorporation provides as follows: To the maximum extent permitted by the Minnesota Business Corporation Act, as from time to time amended, the Corporation shall indemnify its currently acting and its former directors, officers, employees and agents, and those persons who, at the request of the Corporation, serve or have served another corporation, partnership, joint venture, trust or other enterprise in one or more such capacities. The indemnification provided for herein shall not be deemed exclusive of any other rights to which those seeking indemnification may otherwise be entitled.
Expenses (including attorneys fees) incurred in defending a civil or criminal action, suit or proceeding (including costs connected with the preparation of a settlement) may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding, if authorized by the Board of Directors in the specific case, upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay that amount of the advance which exceeds the amount which it is ultimately determined that he is entitled to receive from the Corporation by reason of indemnification as authorized herein; provided, however, that prior to making any such advance at least one of the following conditions shall have been met: (1) the indemnitee shall provide a security for his undertaking, (2) the Corporation shall be insured against losses arising by reason of any lawful advances, or (3) a majority of a quorum of the disinterested, non-party directors of the Corporation, or an independent legal counsel in a written opinion, shall determine, based on a review of readily available facts, that there is reason to believe that the indemnitee ultimately will be found entitled to indemnification.
Nothing in these Articles of Incorporation or in the By-Laws shall be deemed to protect or provide indemnification to any director or officer of the Corporation against any liability to the Corporation or to its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office (disabling conduct), and the Corporation shall not indemnify any of its officers or directors against any liability to the Corporation or to its security holders unless a determination shall have been made in the manner provided hereafter that such liability has not arisen from such officers or directors disabling conduct. A determination that an officer or director is entitled to indemnification shall have been properly made if it is based upon (1) a final decision on the merits by a court or other body before whom the proceeding was brought that the indemnitee was not liable by reason of disabling conduct, or (2) in the absence of such a decision, a reasonable determination, based upon a review of the facts, that the indemnitee was not liable by reason of disabling conduct, by (a) the vote of a majority of a quorum of directors who are neither interested persons of the Corporation as defined in the Investment Company Act of 1940 nor parties to the proceeding, or (b) an independent legal counsel in a written opinion.
The directors and officers of the Registrant are covered by the Mutual Fund Professional Liability policy in the aggregate amount of $70,000,000 against liability and expenses of claims of wrongful acts arising out of their position with the Registrant and other Nuveen funds, except for matters that involve willful acts, bad faith, gross negligence and willful disregard of duty (i.e., where the insured did not act in good faith for a purpose he or she reasonably believed to be in the best interest of the Registrant or where he or she had reasonable cause to believe this conduct was unlawful). The policy has a $2,000,000 deductible for operational failures (after the deductible is satisfied, the insurer would cover 90% of any operational failure claims and the Fund would be liable for 10% of any such claims) and $1,000,000 deductible for all other claims.
Insofar as indemnification for liability arising under the Securities Act of 1933, as amended (the Securities Act), may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, 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 a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of
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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 Securities Act and will be governed by the final adjudication of such issue.
Item 16. Exhibits.
(1)(a) | Articles of Incorporation of Registrant dated January 19, 1990.(1) | |
(1)(b) | Articles of Amendment to Articles of Incorporation dated April 12, 1990.(1) | |
(2)(a) | By-Laws of the Registrant (Amended and Restated as of February 20, 2006).(2) | |
(3) | Not applicable. | |
(4) | Form of Agreement and Plan of Reorganization is filed as Appendix A to Part A of the Registration Statement.(3) | |
(5) | Not applicable. | |
(6)(a) | Investment Management Agreement, dated November 13, 2007.(2) | |
(6)(b) | Renewal of Investment Management Agreement, dated July 31, 2008.(3) | |
(6)(c) | Renewal of Investment Management Agreement, dated May 28, 2009.(3) | |
(6)(d) | Renewal of Investment Management Agreement, dated May 26, 2010.(3) | |
(6)(e) | Renewal of Investment Management Agreement, dated May 25, 2011.(3) | |
(6)(f) | Renewal of Investment Management Agreement, dated May 23, 2012.(3) | |
(6)(g) | Renewal of Investment Management Agreement, dated July 29, 2013.(3) | |
(6)(h) | Investment Sub-Advisory Agreement, dated December 31, 2010.(2) | |
(7) | Not applicable. | |
(8) | Not applicable. | |
(9)(a) | Amended and Restated Master Custodian Agreement between the Nuveen Funds and State Street Bank and Trust Company, dated February 25, 2005.(2) | |
(9)(b) | Form of Appendix A to Custodian Agreement.(3) | |
(10) | Not applicable. | |
(11) | Opinion and Consent of Counsel.(3) | |
(12)(a) | Opinion and Consent of Vedder Price P.C. supporting the tax matters and consequences to shareholders discussed in the Joint Proxy Statement/Prospectus is filed herewith. | |
(12)(b) | Opinion and Consent of K&L Gates LLP supporting the tax matters discussed in the Joint Proxy Statement/Prospectus is filed herewith. |
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(13)(a) | Transfer Agency and Service Agreement dated October 7, 2002 between the Registrant and State Street Bank and Trust Company.(2) | |
(13)(b) | Form of Amendment and Schedule A to Transfer Agency and Service Agreement.(3) | |
(14) | Consents of Independent Auditor.(3) | |
(15) | Not applicable. | |
(16) | Powers of Attorney.(1) | |
(17) | Form of Proxy.(3) |
(1) | Filed on May 20, 2014 with Registrants Registration Statement on Form N-14 (File No. 333-196106) and incorporated by reference herein. |
(2) | Filed on October 29, 2012 with Registrants Registration Statement on Form N-2 (File No. 333-184632) and incorporated by reference herein. |
(3) | Filed on June 24, 2014 with Pre-Effective Amendment No. 1 to Registrants Registration Statement on Form N-14 (File No. 333-196106) and incorporated by reference herein. |
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, 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, 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.
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SIGNATURES
As required by the Securities Act of 1933, the Registrant has duly caused this post-effective amendment no. 1 to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago and the State of Illinois, on the 10th day of February, 2015.
NUVEEN INVESTMENT QUALITY MUNICIPAL FUND, INC. | ||
By: |
/s/ Kevin J. McCarthy | |
Kevin J. McCarthy | ||
Vice President and Secretary |
As required by the Securities Act of 1933, this post-effective amendment no. 1 to Registrants Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature | Capacity |
Date | ||||
/s/ Stephen D. Foy | Vice President and Controller | February 10, 2015 | ||||
Stephen D. Foy | (principal financial and accounting officer) | |||||
/s/ Gifford R. Zimmerman | Chief Administrative Officer | February 10, 2015 | ||||
Gifford R. Zimmerman | (principal executive officer) | |||||
William J. Schneider* | Chairman of the Board and Director | ) | ||||
) | ||||||
William Adams IV* | Director | ) | ||||
) | ||||||
Jack B. Evans* | Director | ) | ||||
) | ||||||
William C. Hunter* | Director | ) | ||||
) | By: /s/ Mark L. Winget | |||||
David J. Kundert* | Director | ) | Mark L. Winget | |||
) | Attorney-in-Fact | |||||
John K. Nelson* | Director | ) | February 10, 2015 | |||
) | ||||||
Thomas S. Schreier, Jr.* | Director | ) | ||||
) | ||||||
Judith M. Stockdale* | Director | ) | ||||
) | ||||||
Carole E. Stone* | Director | ) | ||||
) | ||||||
Virginia L. Stringer* | Director | ) | ||||
) | ||||||
Terence J. Toth* | Director | ) |
* | An original power of attorney authorizing, among others, Mark L. Winget, Kevin J. McCarthy and Gifford R. Zimmerman, to execute this registration statement, and amendments thereto, for each of the directors of the Registrant on whose behalf this registration statement is filed, has been executed and is incorporated by reference herein. |
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EXHIBIT INDEX
Exhibit No. |
Name of Exhibit | |
12(a) | Opinion and Consent of Vedder Price P.C. supporting the tax matters and consequences to shareholders discussed in the Joint Proxy Statement/Prospectus. | |
12(b) | Opinion and Consent of K&L Gates LLP supporting the tax matters discussed in the Joint Proxy Statement/Prospectus. |
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|
222 NORTH LASALLE STREET | |
CHICAGO, ILLINOIS 60601 | ||
T: + 1 (312) 609 7500 | ||
F: + 1 (312) 609 5005 | ||
CHICAGO NEW YORK WASHINGTON, DC | ||
LONDON SAN FRANCISCO LOS ANGELES | ||
October 6, 2014 |
American Municipal Income Portfolio Inc. |
Nuveen Investment Quality Municipal Fund, Inc. | |
800 Nicollet Mall |
333 West Wacker Drive | |
Minneapolis, Minnesota 55402 |
Chicago, Illinois 60606 |
Re: | Merger of American Municipal Income Portfolio Inc. with and into Nuveen |
Investment Quality Municipal Fund, Inc. |
Ladies and Gentlemen:
You have requested our opinion regarding certain U.S. federal income tax consequences of certain transactions undertaken pursuant to the Agreement and Plan of Merger dated as of June 24, 2014 (the Plan), by and among American Municipal Income Portfolio Inc., a Minnesota corporation (the Target Fund), Nuveen Investment Quality Municipal Fund, Inc., a Minnesota corporation (the Acquiring Fund), and, for purposes of Section 9.1 of the Plan only, U.S. Bancorp Asset Management, Inc., the investment adviser to the Target Fund, and Nuveen Fund Advisors, LLC, a sub-adviser to the Target Fund. The Target Fund and the Acquiring Fund are each referred to herein as a Fund and collectively as the Funds.
The Plan contemplates the merger pursuant to applicable state law of the Target Fund with and into the Acquiring Fund with the Acquiring Fund surviving and the conversion of the common stock of the Target Fund into voting shares of common stock, par value $0.01 per share, of the Acquiring Fund (Acquiring Fund Common Shares), and the conversion of the Variable Rate MuniFund Term Preferred Shares (VMTP Shares), Series 2017 of the Target Fund into voting VMTP Shares, par value $0.01 per share and liquidation preference $100,000 per share, of the Acquiring Fund having all the various rights, preferences and privileges set forth in the Statement Establishing and Fixing the Rights and Preferences of VMTP Shares (Acquiring Fund VMTP Shares and together with Acquiring Fund Common Shares, Acquiring Fund Shares) (collectively, the Merger).
In rendering this opinion, we have examined the Plan and have reviewed and relied upon (i) representations made to us by duly authorized officers of the Funds in letters dated October 6, 2014 and (ii) the opinion of K&L Gates LLP dated October 6, 2014 regarding the Acquiring Fund VMTP Shares issued in the Merger being treated as equity for federal income tax purposes (the Equity Opinion). We have also examined such other agreements, documents and
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corporate records that have been made available to us and such other materials as we have deemed relevant for purposes of this opinion. In such review and examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as copies and the authenticity of the originals of such latter documents.
Our opinion is based, in part, on the assumptions that (i) the Merger described herein will occur in accordance with the terms of the Plan (without the waiver or modification of any terms or conditions thereof and without taking into account any amendment thereof that we have not approved) and the facts and representations set forth or referred to in this opinion letter, and that such facts and representations, as well as the facts and representations set forth in the Plan, are accurate as of the date hereof and will be accurate as of the date and time of the Closing (as defined in the Plan) (the Effective Time) and (ii) the Acquiring Fund VMTP Shares issued in the Merger will be treated as equity for federal income tax purposes, which assumption is consistent with the Equity Opinion. You have not requested that we undertake, and we have not undertaken, any independent investigation of the accuracy of the facts, representations and assumptions set forth or referred to herein.
For the purposes indicated above, and based upon the facts, assumptions and representations set forth or referred to herein, it is our opinion, with respect to the Merger, that for U.S. federal income tax purposes:
1. The merger of the Target Fund with and into the Acquiring Fund pursuant to applicable state laws will constitute a reorganization within the meaning of section 368(a)(l) of the Internal Revenue Code of 1986, as amended (the Code), and the Acquiring Fund and the Target Fund will each be a party to a reorganization, within the meaning of section 368(b) of the Code, with respect to the merger.
2. No gain or loss will be recognized by the Acquiring Fund upon the merger of the Target Fund with and into the Acquiring Fund pursuant to applicable state laws. (Section 1032(a) of the Code).
3. No gain or loss will be recognized by the Target Fund upon the merger of the Target Fund with and into the Acquiring Fund pursuant to applicable state laws. (Sections 361(a) and (c) and 357(a) of the Code).
4. No gain or loss will be recognized by the Target Funds shareholders upon the conversion of all their shares of the Target Fund solely into Acquiring Fund Shares in the merger of the Target Fund with and into the Acquiring Fund pursuant to applicable state laws, except with respect to any cash received in lieu of a fractional Acquiring Fund Common Share. (Section 354(a) of the Code).
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5. The aggregate basis of the Acquiring Fund Shares received by each Target Fund shareholder pursuant to the merger (including any fractional Acquiring Fund Common Share to which a Target Fund shareholder would be entitled) will be the same as the aggregate basis of the Target Fund shares that were converted into such Acquiring Fund Shares. (Section 358(a)(1) of the Code).
6. The holding period of the Acquiring Fund Shares received by each Target Fund shareholder (including any fractional Acquiring Fund Common Share to which a shareholder would be entitled) in the merger will include the period during which the shares of the Target Fund that were converted into Acquiring Fund Shares were held by such shareholder, provided such Target Fund shares were held as capital assets at the Effective Time of the merger. (Section 1223(1) of the Code).
7. The basis of the assets of the Target Fund received by the Acquiring Fund in the merger will be the same as the basis of such assets in the hands of the Target Fund immediately before the Effective Time of the merger. (Section 362(b) of the Code).
8. The holding period of the assets of the Target Fund received by the Acquiring Fund in the merger will include the period during which those assets were held by the Target Fund. (Section 1223(2) of the Code).
Notwithstanding anything to the contrary herein, we express no opinion as to (a) the federal income tax consequences of payments to shareholders of the Target Fund who exercise dissenters rights or (b) the effect of the Merger on the Target Fund, the Acquiring Fund or any Target Fund shareholder with respect to any asset (including without limitation any stock held in a passive foreign investment company as defined in section 1297(a) of the Code) as to which any unrealized gain or loss is required to be recognized under federal income tax principles (i) at the end of a taxable year or upon the termination thereof, or (ii) upon the transfer of such asset regardless of whether such transfer would otherwise be a non-taxable transaction under the Code.
FACTS
Our opinion is based upon the facts, representations and assumptions set forth or referred to above and the following facts and assumptions, any alteration of which could adversely affect our conclusions.
American Municipal Income Portfolio Inc.
Nuveen Investment Quality Municipal Fund, Inc.
October 6, 2014
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The Target Fund has been registered and operated, since it commenced operations, as a closed-end management investment company under the Investment Company Act of 1940, as amended (the 1940 Act). The Target Funds common shares are listed and traded on the New York Stock Exchange under the symbol XAA. The Target Fund currently has outstanding VMTP Shares, Series 2017. All the outstanding common shares and VMTP Shares of the Target Fund are treated as equity for federal income tax purposes. The Target Fund is treated as a corporation for federal income tax purposes, has elected to be taxed as a regulated investment company under section 851 of the Code for all its taxable years, including without limitation the taxable year in which the Merger occurs, and has qualified and will continue to qualify for the tax treatment afforded regulated investment companies under the Code for each of its taxable years, including without limitation the taxable year in which the Merger occurs.
The Acquiring Fund similarly has been registered and operated since it commenced operations as a closed-end management investment company under the 1940 Act. Acquiring Fund Common Shares are listed and traded on the New York Stock Exchange under the symbol NQM. In addition, the Acquiring Fund currently has outstanding Variable Rate Demand Preferred Shares. As part of the Merger, the Acquiring Fund will issue a new series of Acquiring Fund VMTP Shares, Series 2017. The Acquiring Fund Common Shares and Acquiring Fund VMTP Shares to be issued in the Merger will be treated as equity for federal income tax purposes. The Acquiring Fund is treated as a corporation for federal income tax purposes, has elected to be taxed as a regulated investment company under section 851 of the Code for all its taxable years, including without limitation the taxable year in which the Merger occurs, and has qualified and will continue to qualify for the tax treatment afforded regulated investment companies under the Code for each of its taxable years, including without limitation the taxable year in which the Merger occurs.
Upon satisfaction of certain terms and conditions set forth in the Plan on or before the Effective Time, the Target Fund will merge pursuant to applicable state law with and into the Acquiring Fund with the Acquiring Fund surviving and the common stock of the Target Fund will be converted into Acquiring Fund Common Shares and the VMTP Shares of the Target Fund will be converted into Acquiring Fund VMTP Shares. Pursuant to such state law, as of the Effective Time, all of the assets and liabilities of the Target Fund will become the assets and liabilities of the Acquiring Fund and the separate legal existence of the Target Fund shall cease for all purposes.
Each share of common stock of the Target Fund outstanding immediately prior to the Effective Time will be converted into a number of Acquiring Fund Common Shares equal to the quotient of the net asset value per common share of the Target Fund as of the Valuation Time (as defined in the Plan) divided by the net asset value of an Acquiring Fund Common Share as of such time. Each VMTP Share of the Target Fund will be converted into one Acquiring Fund
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VMTP Share. The Acquiring Fund VMTP Shares issued pursuant to the Merger will have the same liquidation preference and value as of the Effective Time as the VMTP Shares of the Target Fund outstanding at the Effective Time and the terms of the Acquiring Fund VMTP Shares received by a holder of Target Fund VMTP Shares will be substantially the same as the terms of the Target Fund VMTP Shares surrendered by such shareholder in the Merger. No fractional Acquiring Fund Common Shares will be issued in connection with the Merger. In lieu thereof, the Acquiring Funds transfer agent, on behalf of the shareholders entitled to receive fractional Acquiring Fund Common Shares, will aggregate all fractional Acquiring Fund Common Shares and sell the resulting whole on the New York Stock Exchange for the account of all shareholders of fractional interests, and each such shareholder will be entitled to a pro rata share of the proceeds from such sale.
As a result of the Merger, every common shareholder of the Target Fund will own Acquiring Fund Common Shares (including for this purpose any fractional shares to which they would be entitled) that will have an aggregate per share net asset value as of the Valuation Time equal to the aggregate per share net asset value of the Target Fund common shares held by such shareholder as of the Valuation Time and each holder of Target Fund VMTP Shares will own Acquiring Fund VMTP Shares with an aggregate liquidation preference and value as of the Effective Time equal to the aggregate liquidation preference and value of the Target Fund VMTP Shares held by such shareholder as of the Effective Time.
Following the Merger, the Acquiring Fund will continue the Target Funds historic business or use a significant portion of the Target Funds historic business assets in its business. At the Effective Time, at least thirty-four percent (34%) of the Target Funds portfolio assets will meet the investment objectives, strategies, policies, risks and restrictions of the Acquiring Fund. The Target Fund will not alter its portfolio in connection with the Merger to meet this thirty-four percent (34%) threshold. Neither the Acquiring Fund nor the Target Fund modified any of its investment objectives, strategies, policies, risks or restrictions in connection with the Merger and the Acquiring Fund has no plan or intention to change any of its investment objectives, strategies, policies, risks and restrictions after the Merger.
In approving the Merger, the Board of Directors of each Fund (the Boards) determined that the Plan and the transactions contemplated thereunder are in the best interests of its respective Fund and that the interests of the shareholders of its respective Fund will not be diluted as a result of the Merger. In making such determination, the Boards considered the similarities and differences in the Funds investment objectives and principal investment strategies, economies of scale and the potential for lower total expenses.
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CONCLUSION
Based on the foregoing, it is our opinion that the merger under applicable state law of the Target Fund with and into the Acquiring Fund with the Acquiring Fund surviving, in accordance with the terms of the Plan, will qualify as a reorganization under section 368(a)(l) of the Code.
The opinions set forth above (subject to the limitations set forth above) with respect to (i) the nonrecognition of gain or loss by the Target Fund and the Acquiring Fund, (ii) the basis and holding period of the assets received by the Acquiring Fund, (iii) the nonrecognition of gain or loss by the Target Funds shareholders upon the receipt of the Acquiring Fund Shares, except with respect to cash received in lieu of a fractional Acquiring Fund Common Share, and (iv) the basis and holding period of the Acquiring Fund Shares received by the Target Funds shareholders follow as a matter of law from the opinion that the transfers under the Plan will qualify as a reorganization under section 368(a)(l) of the Code.
The opinions expressed in this letter are based on the Code, the Income Tax Regulations promulgated by the Treasury Department thereunder and judicial authority reported as of the date hereof. We have also considered the positions of the Internal Revenue Service (the Service) reflected in published and private rulings. Although we are not aware of any pending changes to these authorities that would alter our opinions, there can be no assurances that future legislative or administrative changes, court decisions or Service interpretations will not significantly modify the statements or opinions expressed herein. We do not undertake to make any continuing analysis of the facts or relevant law following the date of this letter or to notify you of any changes to such facts or law.
Our opinion is limited to those U.S. federal income tax issues specifically considered herein. We do not express any opinion as to any other federal tax issues, or any state, local or foreign tax law issues, arising from or related to the transactions contemplated by the Plan.
Although the discussion herein is based upon our best interpretation of existing sources of law and expresses what we believe a court would properly conclude if presented with these issues, no assurance can be given that such interpretations would be followed if they were to become the subject of judicial or administrative proceedings.
This opinion is furnished to the Funds solely for their benefit in connection with the Merger and is not to be relied upon, quoted, circulated, published, or otherwise referred to for any other purpose, in whole or in part, without our express prior written consent. This opinion may be disclosed to shareholders of the Funds and they may rely on it, it being understood that we are not establishing any attorney-client relationship with any shareholder of either of the Funds. This letter is not to be relied upon for the benefit of any other person.
American Municipal Income Portfolio Inc.
Nuveen Investment Quality Municipal Fund, Inc.
October 6, 2014
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We hereby consent to the filing of a form of this opinion as an exhibit to the Registration Statement on Form N-14 (File No. 333-196106) containing the Joint Proxy Statement/Prospectus dated June 27, 2014 relating to the Merger filed by the Acquiring Fund with the Securities and Exchange Commission (the Registration Statement), to the discussion of this opinion in the Joint Proxy Statement/Prospectus included in the Registration Statement and to the use of our name and to any reference to our firm in the Registration Statement. In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours, |
/s/ Vedder Price P.C. |
VEDDER PRICE P.C. |
|
K&L GATES LLP
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111 T +1 617 261 3100 F +1 617 261 3175 klgates.com |
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October 6, 2014
American Municipal Income Portfolio Inc.
800 Nicollet Mall
Minneapolis, Minnesota 55402
Nuveen Investment Quality Municipal Fund, Inc.
333 West Wacker Drive
Suite 3300
Chicago, Illinois 60606
Re: | Variable Rate MuniFund Term Preferred Shares Issued in the Merger of American Municipal Income Portfolio Inc. with and into Nuveen Investment Quality Municipal Fund, Inc. |
Ladies and Gentlemen:
You have requested our opinion regarding the treatment under the Internal Revenue Code of 1986, as amended (the Code), of certain Variable Rate MuniFund Term Preferred Shares (VMTP Shares) described below. The VMTP Shares will be issued in the merger (Merger) of American Municipal Income Portfolio Inc., a Minnesota corporation (Target Fund), with and into Nuveen Investment Quality Municipal Fund, Inc., a Minnesota corporation (the Acquiring Fund). The Target Fund and the Acquiring Fund are each referred to herein as a Fund.
The Merger contemplates the merger of the Target Fund with and into the Acquiring Fund, pursuant to which (i) shares of common stock of the Target Fund (Target Fund Common Shares) will be converted into newly issued shares of common stock, par value $0.01 per share, of the Acquiring Fund (Acquiring Fund Common Shares) and (ii) VMTP Shares, Series 2017 of the Target Fund will be converted into newly issued VMTP Shares, Series 2017 of the Acquiring Fund, par value of $0.01 per share and liquidation preference of $100,000 per share (Acquiring Fund VMTP Shares and together with Acquiring Fund Common Shares, the Acquiring Fund Shares). The foregoing will be accomplished pursuant to an Agreement and Plan of Merger, dated as of June 24, 2014 (the Plan), entered into by the Target Fund and the Acquiring Fund and, for purposes of Section 9.1 of the Plan only, U.S. Bancorp Asset Management, Inc. and Nuveen Fund Advisors, LLC.
American Municipal Income Portfolio Inc
Nuveen Investment Quality Municipal Fund, Inc.
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In rendering our opinion, we have examined the Plan and the registration statement containing the Joint Proxy Statement/Prospectus relating to the Merger on Form N-14 (File No. 333-196106) filed by the Acquiring Fund with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the Registration Statement). We have also examined such other agreements, documents and corporate records that have been made available to us and such other materials as we have deemed relevant for purposes of this opinion. In such review and examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as copies and the authenticity of the originals of such latter documents. The opinion herein is subject to and conditioned upon the representations made by the Funds concerning factual matters (but not conclusions of law) in letters dated October 6, 2014. The initial and continuing truth and accuracy of such representations at all relevant times constitutes an integral basis for the opinion expressed herein and our opinion is conditioned upon the initial and continuing truth and accuracy of such representations at all relevant times. Our opinion is based, in part, on the assumption that the Merger described herein will occur in accordance with the terms of the Plan without the waiver or modification of any terms or conditions thereof and without taking into account any amendment thereof that we have not approved and the facts and representations set forth or referred to in this opinion letter, and that such facts and representations, as well as the facts and representations set forth in the Plan and in the Registration Statement, are accurate as of the date hereof and will be accurate on the effective date and at the time of the Merger (the Effective Time).
Facts
Our opinion is based upon the facts, representations and assumptions set forth or referred to above and the following facts and assumptions, any alteration of which could adversely affect our conclusion.
The Target Fund has been registered and operated, since it commenced operations, as a closed-end management investment company under the Investment Company Act of 1940, as amended (the 1940 Act). Target Fund Common Shares are listed and traded on the New York Stock Exchange (the NYSE). Target Fund currently has outstanding VMTP Shares, with a par value of $0.01 per share and a liquidation preference of $100,000 per share. All the outstanding Target Fund Common Shares and VMTP Shares of Target Fund are treated as equity for federal income tax purposes. Target Fund is treated as a corporation for federal income tax purposes, has elected to be taxed as a regulated investment company under section 851 of the Code for all its taxable years, including without limitation the taxable year in which the Merger occurs, and has qualified and will continue to qualify for the tax treatment afforded regulated investment companies under the Code for each of its taxable years, including without limitation the taxable year in which the Merger occurs.
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Nuveen Investment Quality Municipal Fund, Inc.
October 6, 2014
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The Acquiring Fund similarly has been registered and operated, since it commenced operations, as a closed-end management investment company under the 1940 Act. Acquiring Fund Common Shares are listed and traded on the NYSE. In addition to its common shares, the Acquiring Fund currently has outstanding one series of Variable Rate Demand Preferred Shares (VRDP Shares), par value of $0.01 per share and liquidation preference of $100,000 per share, which were issued on a private placement basis to a small number of institutional holders. These VRDP Shares will remain outstanding following the completion of the Merger. As part of the Merger, the Acquiring Fund will issue one new series of Acquiring Fund VMTP Shares. The Acquiring Fund Common Shares to be issued in the Merger will be treated as equity for federal income tax purposes. The Acquiring Fund is treated as a corporation for federal income tax purposes, has elected to be taxed as a regulated investment company under section 851 of the Code for all its taxable years, including without limitation the taxable year in which the Merger occurs, and has qualified and will continue to qualify for the tax treatment afforded regulated investment companies under the Code for each of its taxable years, including without limitation the taxable year in which the Merger occurs.
Upon satisfaction of certain terms and conditions set forth in the Plan on or before the Effective Time, the Target Fund will merge with and into the Acquiring Fund, pursuant to which:
(i) Each Target Fund Common Share shall, by virtue of the merger and without any action on the part of the holder thereof, be converted into Acquiring Fund Common Shares in an amount equal to one multiplied by the quotient of the net asset value per Target Fund Common Share divided by the net asset value of an Acquiring Fund Common Share. The aggregate net asset value of Acquiring Fund Common Shares received by the holders of Target Fund Common Shares in the merger (including any fractional share interests to which such shareholders would be entitled) will equal, as of the Valuation Time (as defined in the Plan), the aggregate net asset value of the Target Fund Common Shares held by shareholders of the Target Fund as of such time. No fractional Acquiring Fund Common Shares will be distributed to Target Fund shareholders and, in lieu of such fractional shares, shareholders of such Target Fund Common Shares will receive cash.
(ii) Each VMTP Share of the Target Fund issued and outstanding immediately prior to the Effective Time (less any VMTP Shares with respect to which dissenters rights have been properly exercised under Minnesota law) shall, by virtue of the merger and without any action on the part of the holder thereof be converted into the same number of Acquiring Fund VMTP Shares having (a) terms substantially the same as those of the Target Fund VMTP Shares as of
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Nuveen Investment Quality Municipal Fund, Inc.
October 6, 2014
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the Closing Date (as defined in the Plan), (b) equal priority with other outstanding preferred shares of the Acquiring Fund as to the payment of dividends and as to the distribution of assets upon liquidation of the Acquiring Fund, and (c) along with any other outstanding preferred shares of the Acquiring Fund, preference with respect to the payment of dividends and as to the distribution of assets upon liquidation of the affairs of the Acquiring Fund over the Acquiring Fund Common Shares. The Statement Establishing and Fixing the Rights and Preferences of Variable Rate MuniFund Term Preferred Shares of the Acquiring Fund accurately describes the features of the Acquiring Fund VMTP Shares.
Opinion
Based solely on the foregoing, and subject to the qualifications, exceptions, assumptions, and limitations expressed herein, we are of the opinion that (i) the Acquiring Fund VMTP Shares will be treated as equity in the Acquiring Fund for federal income tax purposes and (ii) the distributions made with respect to such Acquiring Fund VMTP Shares will qualify as exempt-interest dividends to the extent they are reported as such by the Acquiring Fund and permitted by section 852(b)(5)(A) of the Code.
This opinion is furnished to the Funds solely for their benefit in connection with the Merger and is not to be relied upon, quoted, circulated, published, or otherwise referred to for any other purpose, in whole or in part, without our express prior written consent. This opinion may be disclosed to shareholders of the Funds and they may rely on it as if they were addressees of this opinion, it being understood that we are not establishing any lawyer-client relationship with any shareholder of the Funds. We understand that Vedder Price P.C. may rely on the conclusion of this opinion as a factual assumption for purposes of issuing certain other opinions in connection with the Merger. This letter is not to be relied upon for the benefit of any other person.
In addition to the assumptions set forth above, this opinion is subject to the following exceptions, limitations, and qualifications:
1. | Our opinion is based upon our interpretation of the current provisions of the Code and current judicial decisions, administrative regulations, and published notices, rulings, and procedures. We have considered the positions of the Internal Revenue Service in published and private rulings. We note that there is no authority directly on point dealing with securities like the Acquiring Fund VMTP Shares. Our opinion only represents our best judgment and is not binding on the Internal Revenue Service or courts and there is no assurance that the Internal Revenue Service will not successfully challenge the conclusions set forth herein. Consequently, no assurance |
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October 6, 2014
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can be given that future legislative, judicial, or administrative changes, on either a prospective or retroactive basis, would not adversely affect the accuracy of the conclusions stated herein. We undertake no obligation to advise you of changes in law which may occur after the date hereof. |
2. | Our opinion is limited to the federal income tax matters addressed herein, and no other opinions are rendered with respect to any other matter, whether federal, state, local or foreign, not specifically set forth in the foregoing opinion. |
We hereby consent to the filing of a form of this opinion as an exhibit to the Registration Statement and to the discussion of this opinion, to the use of our name and to any reference to our firm in the Registration Statement. In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ K&L Gates LLP
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