BlackRock Advisors, LLC today announced that 44 of its
tax-exempt closed-end funds (the “Funds”) received a private letter
ruling (“PLR”) from the Internal Revenue Service. The PLR received
by the Funds concludes that Variable Rate Demand Preferred Shares
(“VRDP”) issued by a Fund, as applicable, would be treated as
equity for federal income tax purposes, making it possible for the
Funds to designate dividends paid to holders of VRDP as tax-exempt
income.
The Funds announcing receipt of a PLR today, taken together with
the eleven remaining tax-exempt funds for which the arrangement of
VRDP liquidity facilities was announced on January 3, 2011,
represent all BlackRock tax-exempt closed-end funds with auction
rate preferred shares (“ARPS”) outstanding. To the extent that any
Fund announcing receipt of a PLR today issues VRDP, it is
anticipated that the proceeds of the offering will be used to
redeem all of its outstanding ARPS.
There is no guarantee that all, or a portion, of the Funds will
issue VRDP in reliance on the PLR. Should a Fund seek to issue
VRDP, the timing of the Fund’s issuance may vary and is subject to
various factors, including, but not limited to, approval by the
Fund’s Board of Directors/Trustees, the availability of liquidity
providers, the willingness of tax-exempt money market funds to
invest in VRDP, the ability to obtain necessary ratings for the
VRDP and other market conditions.
BlackRock and the Boards of Directors/Trustees of the BlackRock
Closed-End Funds (the “Boards”) continue to actively explore
potential alternative forms of leverage in order to provide
liquidity to ARPS shareholders, including, among other things,
additional VRDP issuance, other alternative preferred stock
structures and the expanded use of additional forms of leverage
such as tender option bonds, as appropriate. The Boards and
BlackRock will determine, based on the facts and circumstances
applicable to each BlackRock fund with ARPS outstanding, whether
such alternative forms of leverage would be appropriate and in the
best interest of the respective fund as a whole and its
shareholders.
BlackRock will continue to keep market participants and
shareholders informed of its closed-end funds’ progress to redeem
ARPS via press releases and on BlackRock’s website at www.blackrock.com.
About BlackRock
BlackRock is a leader in investment management, risk management
and advisory services for institutional and retail clients
worldwide. At December 31, 2010, BlackRock’s AUM was $3.561
trillion. BlackRock offers products that span the risk spectrum to
meet clients’ needs, including active, enhanced and index
strategies across markets and asset classes. Products are offered
in a variety of structures including separate accounts, mutual
funds, iShares® (exchange traded funds), and other pooled
investment vehicles. BlackRock also offers risk management,
advisory and enterprise investment system services to a broad base
of institutional investors through BlackRock Solutions®.
Headquartered in New York City, as of December 31, 2010, the firm
has approximately 9,100 employees in 25 countries and a major
presence in key global markets, including North and South America,
Europe, Asia, Australia and the Middle East and Africa. For
additional information, please visit the firm’s website at
www.blackrock.com.
Forward-Looking Statements
This press release, and other statements that BlackRock may
make, may contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act, with respect to
BlackRock’s future financial or business performance, strategies or
expectations. Forward-looking statements are typically identified
by words or phrases such as “trend,” “potential,” “opportunity,”
“pipeline,” “believe,” “comfortable,” “expect,” “anticipate,”
“current,” “intention,” “estimate,” “position,” “assume,”
“outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,”
“achieve,” and similar expressions, or future or conditional verbs
such as “will,” “would,” “should,” “could,” “may” or similar
expressions.
BlackRock cautions that forward-looking statements are subject
to numerous assumptions, risks and uncertainties, which change over
time. Forward-looking statements speak only as of the date they are
made, and BlackRock assumes no duty to and does not undertake to
update forward-looking statements. Actual results could differ
materially from those anticipated in forward-looking statements and
future results could differ materially from historical
performance.
With respect to the Funds, the following factors, among others,
could cause actual events to differ materially from forward-looking
statements or historical performance: (1) changes and volatility in
political, economic or industry conditions, the interest rate
environment, foreign exchange rates or financial and capital
markets, which could result in changes in demand for the Funds or
in the Fund’s net asset value; (2) the relative and absolute
investment performance of the Funds and their investments; (3) the
impact of increased competition; (4) the unfavorable resolution of
any legal proceedings; (5) the extent and timing of any
distributions or share repurchases; (6) the impact, extent and
timing of technological changes; (7) the impact of legislative and
regulatory actions and reforms, including the recently approved
Dodd-Frank Wall Street Reform and Consumer Protection Act, and
regulatory, supervisory or enforcement actions of government
agencies relating to the Funds or BlackRock, as applicable; (8)
terrorist activities, international hostilities and natural
disasters, which may adversely affect the general economy, domestic
and local financial and capital markets, specific industries or
BlackRock; (9) BlackRock’s ability to attract and retain highly
talented professionals; (10) BlackRock’s success in maintaining
secondary market support for the Funds; (11) the impact of
BlackRock electing to provide support to its products from time to
time; (12) the impact of problems at other financial institutions
or the failure or negative performance of products at other
financial institutions; and (13) the ability of BlackRock to
integrate the operations of Barclays Global Investors.
The Annual and Semi-Annual Reports and other regulatory filings
of the Funds with the Securities and Exchange Commission (“SEC”)
are accessible on the SEC's website at www.sec.gov and on
BlackRock’s website at www.blackrock.com, and may discuss
these or other factors that affect the Funds. The information
contained on our website is not a part of this press release.
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