BlackRock Closed-End Funds See Overwhelming Demand in Share Buyback Offers
BlackRock's closed-end funds (CEFs) have announced the expiration and preliminary results of their tender offers, revealing a strong appetite for liquidity among investors. The three funds, BlackRock MuniVest Fund (MVF), BlackRock ESG Capital Allocation Term Trust (ECAT), and BlackRock Innovation and Growth Term Trust (BIGZ), each offered to repurchase up to 2.5% of their outstanding common shares.
The offers, which commenced on 22 July 2024 and concluded on 21 August 2024, were significantly oversubscribed, indicating a high level of investor interest in these funds. For instance, MVF received tenders for over 16 times the number of shares it had offered for repurchase.
The significant oversubscription is expected to lead to prorated share repurchases, meaning that individual investors may not be able to sell all the shares they had initially intended. The purchase price for the tendered shares will be set at 98% of each fund's net asset value (NAV) as of the close of trading on the New York Stock Exchange on 22 August 2024.
The final results of the tender offers, including the pro-ration factors, are expected to be announced on or around 22 August 2024.
Analysts have suggested several possible interpretations of the strong investor response to the tender offers. Some believe the high demand could indicate strong market appetite for these assets, potentially reflecting investor confidence in BlackRock's management or a perceived undervaluation of the funds. Others suggest that the oversubscription might reflect broader market concerns about fixed-income assets or CEF discounts, especially in the case of the MuniVest Fund. The high tender rate for BIGZ could be a sign of investor scepticism about growth prospects in the current economic climate.
Regardless of the underlying reasons, the results of these tender offers highlight the desire for liquidity within the CEF market. This could prompt BlackRock to reassess its CEF strategies, potentially leading to more frequent tender offers or other liquidity-enhancing measures to address shareholder demands.
Investors are encouraged to review the offer to purchase and related documents filed with the US Securities and Exchange Commission (SEC) for further information. Copies of these documents are available on the SEC's website at <a rel="nofollow noopener" target="_blank" href="https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.sec.gov&esheet=54112321&newsitemid=20240821043688&lan=en-US&anchor=www.sec.gov&index=1&md5=255ef71d2753799080757d709b0f6f7b" shape="rect">www.sec.gov</a> or by contacting the respective fund.
This press release is for informational purposes only and does not constitute a recommendation, an offer to purchase or a solicitation of an offer to sell any common shares of the Funds.
