Deutsche municipal trusts refinance preferreds with new issue due 2018

By Marisa Wong

Madison, Wis., June 1 – Deutsche Municipal Income Trust and Deutsche Strategic Municipal Income Trust announced that they redeemed all of their outstanding floating-rate municipal term preferreds, series 2015, on Monday.

Deutsche Municipal is also planning to redeem all of its outstanding remarketed preferred shares, series B, C and E. The series B and C preferreds will be redeemed on June 12, and the series E preferreds will be redeemed on June 15.

Deutsche Strategic is planning to redeem all of its outstanding auction-rate preferred shares, series T, on June 8.

The existing preferreds are being redeemed at their respective liquidation preferences per share plus dividends to, but excluding, the applicable redemption dates.

Each trust used proceeds or will use proceeds from a new issue of floating-rate municipal term preferreds, series 2018, to fund its respective redemptions.

According to a Monday press release, Deutsche Municipal issued 39,750 shares of 2018 municipal term preferreds with a total liquidation preference of $198.75 million, and Deutsche Strategic issued 2,800 shares of 2018 municipal term preferreds with a total liquidation preference of $70 million.

Following the issuance of the 2018 preferreds and the redemption of the outstanding 2015 preferreds and the other existing preferreds, each fund’s leverage attributable to preferred shares remains unchanged, the release said.

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