Nuveen Intermediate Duration fund raises $187.5 million in IPO

By Toni Weeks

San Luis Obispo, Calif., Feb. 8 - Nuveen Investments said its Nuveen Intermediate Duration Quality Municipal Term Fund raised $187.5 million in its initial public offering, according to a press release. The fund launched on Friday.

The newly organized diversified closed-end management investment company seeks to provide current income exempt from regular federal income tax, with additional total return as a secondary objective. The fund aims to achieve its investment objectives by investing at least 80% of its assets in investment-grade municipal securities that are believed to be underrated or undervalued.

The fund also seeks to reduce the risk of rising interest rates by maintaining a portfolio with an intermediate duration of between three and 10 years, including the effects of leverage. The 10-year fund will liquidate its portfolio and distribute its net assets to shareholders on or before June 30, 2023.

Daniel J. Close of Nuveen Asset Management, the fund's subadviser, will serve as the portfolio manager, according to a 497 filing with the Securities and Exchange Commission.

According to the SEC filing, 12.5 million shares (NYSE: NIQ) are being sold at $15.00 apiece. The underwriters, led by Nuveen Securities, LLC, BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities, LLC, have a greenshoe of about $28.13 million. Settlement is expected Feb. 12, the filing noted.

The sales load will be 4.5%. Management fees are 0.8%, with total annual expenses expected at 1.27%.

Chicago-based Nuveen Fund Advisors, LLC is the investment adviser.

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