DWS municipal funds wrap tender offers for preferreds

By Marisa Wong

Madison, Wis., Nov. 21 - DWS Municipal Income Trust (KTF) and DWS Strategic Municipal Income Trust (KSM) announced the final results of the tender offers for their respective outstanding preferred shares, which expired at 5 p.m. ET on Nov. 16.

KTF accepted for payment a total of 37,773, or 95%, of its outstanding remarketed preferred shares, and KSM accepted a total of 2,419, or 86.14%, of its outstanding auction-rate preferred shares.

The original preferred shares of each fund that were not tendered remain outstanding.

As previously noted, KTF's tender offer was conditioned upon receiving tenders for at least 90% of its outstanding remarketed preferred shares. KSM's offer was conditioned on receiving tenders for at least 70% of its outstanding auction-rate preferreds. Those conditions have been satisfied.

Each tender offer was also conditioned on the completion of refinancing with enough proceeds to fund the offer.

The funds announced on Wednesday that they issued floating-rate municipal term preferred shares in a private offering. KTF issued 37,773 shares of municipal term preferreds totaling $188,865,000, and KSM issued 2,419 shares of municipal term preferreds totaling $60,475,000. Each fund used offering proceeds to pay for the preferreds accepted in its tender offer.

As reported, KTF had offered to purchase its outstanding remarketed preferred shares at a price equal to 96% of the preferreds' per share liquidation preference of $5,000, or $4,800 per remarketed preferred, plus any unpaid dividends accrued through the tender offer expiration date.

KSM offered to purchase its outstanding auction-rate preferred shares at a price equal to 96% of the auction-rate preferreds' per share liquidation preference of $25,000, or $24,000 per auction-rate preferred, plus any unpaid dividends accrued through the tender offer expiration date.

The offers began on Sept. 27 and were originally set to end on Oct. 26. The expiration date was previously extended due to disruptions caused by Hurricane Sandy.

Deutsche Bank Trust Co. Americas (800 735-7777) is the information agent for the offers.

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