BNY Mellon Municipal Income, Inc.
BNY Mellon Municipal Income, Inc.
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ANNUAL REPORT September 30, 2024 |
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BNY Mellon Municipal Income, Inc. Protecting Your Privacy Our
Pledge to You THE FUND IS COMMITTED TO YOUR PRIVACY. On this page, you will
find the fund’s policies and practices for collecting, disclosing, and safeguarding “nonpublic personal
information,” which may include financial or other customer information. These policies apply to individuals
who purchase fund shares for personal, family, or household purposes, or have done so in the past. This
notification replaces all previous statements of the fund’s consumer privacy policy, and may be amended
at any time. We’ll keep you informed of changes as required by law. YOUR
ACCOUNT IS PROVIDED IN A SECURE ENVIRONMENT. The fund maintains physical, electronic and procedural safeguards
that comply with federal regulations to guard nonpublic personal information. The fund’s agents and
service providers have limited access to customer information based on their role in servicing your account. THE FUND COLLECTS INFORMATION IN ORDER TO SERVICE AND ADMINISTER YOUR ACCOUNT.
The
fund collects a variety of nonpublic personal information, which may include: • Information we receive from you, such as your name, address,
and social security number. • Information
about your transactions with us, such as the purchase or sale of fund shares. • Information we receive from agents and service providers,
such as proxy voting information. THE FUND DOES NOT SHARE NONPUBLIC PERSONAL
INFORMATION WITH ANYONE, EXCEPT AS PERMITTED BY LAW. Thank you for this opportunity
to serve you. |
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The views expressed
in this report reflect those of the portfolio manager(s) only through the end of the period covered and
do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in
the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time
based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility
to update such views. These views may not be relied on as investment advice and, because investment decisions
for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an
indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
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Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
T H E F U N D
F O R M O R E I N F O R M AT I O N
Back Cover
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DISCUSSION
OF FUND PERFORMANCE (Unaudited)
How did the Fund perform last year?
For the 12-month period ended September
30, 2024, BNY Mellon Municipal Income, Inc. (the “fund”) produced a total return of 18.63% on a net-asset-value
basis and 32.73% on a market basis.1 Over the same period, the fund provided
tax-exempt income dividends of $.196 per share, which reflects a distribution rate of 2.68%.2
In comparison, the Bloomberg U.S. Municipal Bond Index (the “Index”), the fund’s benchmark, posted
a total return of 10.37% for the same period.3
What affected the Fund’s
performance?
· Early
in the period, the market was hampered by higher inflation and a tight monetary policy. The market rebounded
later in the period supported by anticipation that Fed rate-hiking was nearing an end and then additionally
by the Fed rate cut in September.
· Security
selections added most to performance, especially in the education, special tax and water & sewer
sectors. Longer relative duration and curve positioning also contributed positively as rates declined.
· Though
an overweight to revenue bonds was broadly positive, overweight allocations to pre-refunded bonds and
to tobacco bonds hampered fund performance.
1
Total return includes reinvestment of dividends and any capital
gains paid, based upon net asset value per share or market price per share, as applicable. Past performance
is no guarantee of future results. Market price per share, net asset value per share and investment return
fluctuate.
2 Distribution
rate per share is based upon dividends per share paid from net investment income during the period, divided
by the market price per share at the end of the period, adjusted for any capital gain distributions.
3 Source:
Lipper Inc. — The Bloomberg U.S. Municipal Bond Index covers the U.S. dollar denominated long term
tax exempt bond market. Unlike a fund, the Index is not subject to fees and other expenses. Investors
can not invest directly in any index.
2
FUND
PERFORMANCE (Unaudited)
Years Ended 9/30
* Source:
Lipper Inc.
Past performance is not predictive of future performance.
The above graph compares a hypothetical investment of $10,000 made in BNY Mellon
Municipal Income, Inc. on 10/1/2014 to a hypothetical investment of $10,000 made in the Index on that
date. All figures for the fund are based on market price. All dividends and capital gain distributions
are reinvested.
The fund invests primarily in municipal securities and its
performance shown in the line graph takes into account fees and expenses. The Index covers the U.S. dollar-denominated
long-term tax-exempt bond market. Unlike a fund, the Index is not subject to fees and other expenses.
Investors cannot invest directly in any index. Further information relating to fund performance, including
expense reimbursements, if applicable, is contained in the Financial Highlights within this report and
elsewhere in this report.
3
FUND
PERFORMANCE (Unaudited) (continued)
| | | |
Average Annual Total Returns as of 9/30/2024 |
| 1
Year | 5 Years | 10 Years |
BNY Mellon Municipal
Income, Inc. Market Price | 32.73% | -.85% | 2.70% |
BNY Mellon Municipal Income, Inc. Net Asset Value | 18.63% | .57% | 2.79% |
Bloomberg
U.S. Municipal Bond Index | 10.37% | 1.39% | 2.52% |
The performance data quoted
represents past performance, which is no guarantee of future results. Share price and investment return
fluctuate and an investor’s shares may be worth more or less than original cost upon sale of the shares.
Current performance may be lower or higher than the performance quoted. Go to www.bny.com/investments
for the fund’s most recent month-end returns.
The fund’s performance shown in the graph
and table does not reflect the deduction of taxes that a shareholder would pay on fund distributions
or the sale of fund shares.
4
DISTRIBUTION
INFORMATION (Unaudited)
The following information regarding the
fund’s distributions is current as of September 30, 2024, the fund’s fiscal year end. The fund’s
returns during the period were sufficient to meet fund distributions.
The
fund’s distribution policy is intended to provide shareholders with stable, but not guaranteed, cash
flow, independent of the amount or timing of income earned or capital gains realized by the fund. The
fund intends to distribute all or substantially all of its net investment income through its regular
monthly distribution and to distribute realized capital gains at least annually. In addition, in any
monthly period, in order to try to maintain a level distribution amount, the fund may pay out more or
less than its net investment income during the period. As a result, distributions sources may include
net investment income, realized gains and return of capital. You should not draw any conclusions about
the fund’s investment performance from the amount of the distribution or from the terms of the level
distribution program. A return of capital is a non-taxable distribution of a portion of a fund’s capital.
A return of capital distribution does not necessarily reflect a fund’s investment performance and should
not be confused with “yield” or “income.”
The amounts and sources
of distributions reported below are for financial reporting purposes and are not being provided for tax
reporting purposes. The actual amounts and character of the distributions for tax reporting purposes
will be reported to shareholders on Form 1099-DIV, which will be sent to shareholders shortly after
calendar year-end. Because distribution source estimates are updated throughout the current fiscal
year based on the fund’s performance, those estimates may differ from both the tax information reported
to you in your fund’s 1099 statement, as well as the ultimate economic sources of distributions over
the life of your investment. The figures in the table below provide the sources of distributions and
may include amounts attributed to realized gains and/or returns of capital.
| | | | | | | |
Distributions |
| Current Month Percentage of Distributions | Fiscal
Year Ended Per Share Amounts |
| Net Investment Income | Realized Gains | Return of Capital | Total
Distributions | Net
Investment Income | Realized
Gains | Return of Capital |
BNY Mellon Municipal Income, Inc. | 100.00% | .00% | .00% | $.20 | $.20 | $.00 | $.00 |
5
SELECTED
INFORMATION
September
30, 2024 (Unaudited)
| | | | | | | | | | | | | | |
Market Price per share September 30, 2024 | | $7.31 | | |
Shares
Outstanding September 30, 2024 | | 20,757,267 | | |
NYSE
MKT Ticker Symbol | | DMF | | |
MARKET PRICE (NYSE MKT) |
| | | Fiscal Year Ended September
30, 2024 | | |
| Quarter | | Quarter | | Quarter | | Quarter |
| Ended | | Ended | | Ended | | Ended |
| December 31, 2023 | | March
31, 2024 | | June 30, 2024 | | September 30, 2024 |
High | $6.55 | | $6.83 | | $7.20 | | $7.49 |
Low | 5.40 | | 6.47 | | 6.58 | | 7.16 |
Close | 6.50 | | 6.83 | | 7.19 | | 7.31 |
PERCENTAGE
GAIN (LOSS) based on change in Market Price† |
October
24, 1988 (commencement of operations) through
September 30, 2024 | 568.08% |
October
1, 2014 through September 30, 2024 | 30.47 |
October
1, 2019 through September 30, 2024 | (4.20) |
October
1, 2023 through September 30, 2024 | 32.73 |
January
1, 2024 through September 30, 2024 | 14.92 |
April
1, 2024 through September 30, 2024 | 8.63 |
July
1, 2024 through September 30, 2024 | 2.47 |
| | | | |
NET
ASSET VALUE PER SHARE | |
October 24, 1988 (commencement of operations) | $9.26 |
September 30, 2023 | 6.82 |
December
31, 2023 | | | 7.70 |
March
31, 2024 | 7.64 |
June
30, 2024 | 7.66 |
September
30, 2024 | 7.86 |
PERCENTAGE
GAIN (LOSS) based on change in Net Asset Value† | |
October
24, 1988 (commencement of operations) through
September 30, 2024 | 675.63% |
October
1, 2014 through September 30, 2024 | 31.70 |
October
1, 2019 through September 30, 2024 | 2.88 |
October
1, 2023 through September 30, 2024 | 18.63 |
January
1, 2024 through September 30, 2024 | 4.29 |
April
1, 2024 through September 30, 2024 | 4.27 |
July
1, 2024 through September 30, 2024 | 3.40 |
† Total return includes reinvestment of dividends and any capital
gains paid. | |
6
STATEMENT
OF INVESTMENTS
September 30, 2024
| | | | | | | | | |
|
Description | Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% | | | |
Alabama - 3.4% | | | | | |
Black
Belt Energy Gas District, Revenue Bonds, Refunding (Gas Project) Ser. D1 | | 5.50 | | 2/1/2029 | | 2,320,000 | a | 2,511,156 | |
Jefferson County, Revenue Bonds, Refunding | | 5.25 | | 10/1/2049 | | 1,000,000 | | 1,089,775 | |
Jefferson County, Revenue Bonds, Refunding | | 5.50 | | 10/1/2053 | | 1,800,000 | | 1,983,406 | |
| 5,584,337 | |
Alaska
- 1.3% | | | | | |
Northern Tobacco Securitization Corp., Revenue Bonds, Refunding,
Ser. A | | 4.00 | | 6/1/2050 | | 2,345,000 | | 2,184,380 | |
Arizona
- 5.6% | | | | | |
Arizona Industrial Development Authority, Revenue Bonds (Sustainable
Bond) (Equitable School Revolving Fund Obligated Group) Ser. A | | 4.00 | | 11/1/2050 | | 1,200,000 | | 1,162,513 | |
Arizona Industrial Development Authority, Revenue Bonds (Sustainable
Bond) (Equitable School Revolving Fund Obligated Group) Ser. A | | 4.00 | | 11/1/2045 | | 1,355,000 | | 1,342,182 | |
Glendale Industrial Development Authority, Revenue Bonds,
Refunding (Sun Health Services Obligated Group) Ser. A | | 5.00 | | 11/15/2054 | | 1,500,000 | | 1,496,781 | |
La Paz County Industrial Development Authority, Revenue Bonds
(Harmony Public Schools) Ser. A | | 5.00 | | 2/15/2046 | | 1,500,000 | b | 1,505,339 | |
7
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Arizona
- 5.6% (continued) | | | | | |
La Paz County Industrial
Development Authority, Revenue Bonds (Harmony Public Schools) Ser. A | | 5.00 | | 2/15/2036 | | 1,100,000 | b | 1,112,091 | |
Salt Verde Financial Corp., Revenue Bonds | | 5.00 | | 12/1/2037 | | 2,190,000 | | 2,450,820 | |
| 9,069,726 | |
California
- 8.0% | | | | | |
Golden State Tobacco Securitization Corp., Revenue Bonds,
Refunding (Tobacco Settlement Asset) Ser. B | | 5.00 | | 6/1/2051 | | 2,000,000 | | 2,110,689 | |
San Diego County Regional Airport Authority, Revenue Bonds,
Ser. B | | 5.00 | | 7/1/2051 | | 3,750,000 | | 3,956,086 | |
Tender Option Bond
Trust Receipts (Series 2022-XF3024), (San Francisco City & County, Revenue Bonds, Refunding, Ser.
A) Recourse, Underlying Coupon Rate 5.00% | | 9.21 | | 5/1/2044 | | 3,360,000 | b,c,d | 3,486,216 | |
Tender Option Bond Trust Receipts (Series 2023-XM1114), (Long
Beach Finance Authority, Revenue Bonds) Non-recourse, Underlying Coupon Rate 4.00% | | 4.84 | | 8/1/2053 | | 3,600,000 | b,c,d | 3,578,513 | |
| 13,131,504 | |
Colorado
- 5.8% | | | | | |
Colorado Health Facilities Authority, Revenue Bonds, Refunding
(Covenant Living Communities & Services Obligated Group) Ser. A | | 4.00 | | 12/1/2050 | | 2,000,000 | | 1,833,200 | |
Colorado High Performance Transportation Enterprise, Revenue
Bonds (C-470 Express Lanes System) | | 5.00 | | 12/31/2056 | | 3,000,000 | | 3,001,656 | |
8
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Colorado
- 5.8% (continued) | | | | | |
Tender Option Bond
Trust Receipts (Series 2020-XM0829), (Colorado Health Facilities Authority, Revenue Bonds, Refunding
(CommonSpirit Health Obligated Group) Ser. A1) Recourse, Underlying Coupon Rate 4.00% | | 8.13 | | 8/1/2044 | | 1,645,000 | b,c,d | 1,926,255 | |
Tender Option Bond Trust Receipts (Series 2023-XM1124), (Colorado
Health Facilities Authority, Revenue Bonds (Adventist Health System/Sunbelt Obligated Group) Ser. A)
Recourse, Underlying Coupon Rate 4.00% | | 5.23 | | 11/15/2048 | | 2,770,000 | b,c,d | 2,711,083 | |
| 9,472,194 | |
Delaware
- .6% | | | | | |
Delaware Economic Development Authority, Revenue Bonds (ACTS
Retirement-Life Communities Obligated Group) Ser. B | | 5.25 | | 11/15/2053 | | 1,000,000 | | 1,047,320 | |
Florida - 11.0% | | | | | |
Atlantic
Beach, Revenue Bonds (Fleet Landing Project) Ser. A | | 5.00 | | 11/15/2053 | | 1,670,000 | | 1,699,128 | |
Collier County Industrial Development Authority, Revenue
Bonds (NCH Healthcare System Project) (Insured; Assured Guaranty Municipal Corp.) Ser. A | | 5.00 | | 10/1/2054 | | 1,480,000 | | 1,600,456 | |
Florida Housing Finance
Corp., Revenue Bonds (Insured; GNMA, FNMA, FHLMC) Ser. 1 | | 4.40 | | 7/1/2044 | | 1,090,000 | | 1,100,791 | |
Greater Orlando Aviation Authority, Revenue Bonds, Ser. A | | 4.00 | | 10/1/2049 | | 1,380,000 | | 1,343,843 | |
9
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Florida
- 11.0% (continued) | | | | | |
Hillsborough County
Port District, Revenue Bonds (Tampa Port Authority Project) Ser. B | | 5.00 | | 6/1/2046 | | 1,450,000 | | 1,491,160 | |
Palm Beach County Health Facilities Authority, Revenue Bonds,
Refunding (Lifespace Communities Obligated Group) Ser. C | | 7.63 | | 5/15/2058 | | 1,000,000 | | 1,145,660 | |
Tender Option Bond Trust Receipts (Series 2023-XM1122), (Miami-Dade
FL County Water & Sewer System, Revenue Bonds, Refunding, Ser. B) Recourse, Underlying Coupon Rate
4.00% | | 4.83 | | 10/1/2049 | | 9,750,000 | b,c,d | 9,564,850 | |
| 17,945,888 | |
Georgia - 5.9% | | | | | |
Georgia
Municipal Electric Authority, Revenue Bonds (Plant Vogtle Units 3&4 Project) Ser. A | | 5.00 | | 7/1/2052 | | 1,250,000 | | 1,323,817 | |
Main Street Natural
Gas, Revenue Bonds, Ser. A | | 5.00 | | 9/1/2031 | | 1,550,000 | a | 1,695,326 | |
Tender Option Bond Trust Receipts (Series 2020-XM0825), (Brookhaven
Development Authority, Revenue Bonds (Children's Healthcare of Atlanta) Ser. A) Recourse, Underlying
Coupon Rate 4.00% | | 6.52 | | 7/1/2044 | | 2,660,000 | b,c,d | 2,870,759 | |
Tender Option Bond Trust Receipts (Series 2023-XF3183), (Municipal
Electric Authority of Georgia, Revenue Bonds (Plant Vogtle Units 3 & 4 Project) Ser. A) Recourse,
Underlying Coupon Rate 5.00% | | 8.87 | | 1/1/2059 | | 1,270,000 | b,c,d | 1,293,717 | |
10
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Georgia
- 5.9% (continued) | | | | | |
The Atlanta Development
Authority, Revenue Bonds, Ser. A1 | | 5.25 | | 7/1/2040 | | 1,500,000 | | 1,518,711 | |
The Burke County Development Authority, Revenue Bonds, Refunding
(Oglethorpe Power Corp.) Ser. D | | 4.13 | | 11/1/2045 | | 1,000,000 | | 970,863 | |
| 9,673,193 | |
Hawaii
- .8% | | | | | |
Hawaii Airports System, Revenue Bonds, Ser. A | | 5.00 | | 7/1/2047 | | 1,250,000 | | 1,325,720 | |
Illinois
- 13.0% | | | | | |
Chicago II, GO, Refunding, Ser. A | | 6.00 | | 1/1/2038 | | 2,000,000 | | 2,091,129 | |
Chicago II, GO, Ser. A | | 5.00 | | 1/1/2044 | | 1,000,000 | | 1,030,672 | |
Chicago II Wastewater Transmission, Revenue Bonds, Refunding,
Ser. C | | 5.00 | | 1/1/2039 | | 1,100,000 | | 1,103,299 | |
Chicago Midway International
Airport, Revenue Bonds, Refunding, Ser. C | | 5.00 | | 1/1/2040 | | 1,000,000 | | 1,073,257 | |
Chicago O'Hare International Airport, Revenue Bonds, Ser.
A | | 5.50 | | 1/1/2055 | | 1,500,000 | | 1,636,005 | |
Chicago Park District, GO,
Refunding, Ser. A | | 5.00 | | 1/1/2045 | | 1,000,000 | | 1,076,274 | |
Illinois, GO, Refunding,
Ser. A | | 5.00 | | 10/1/2029 | | 1,000,000 | | 1,080,227 | |
Illinois, GO, Ser.
A | | 5.00 | | 5/1/2038 | | 1,250,000 | | 1,302,971 | |
Illinois, GO, Ser.
D | | 5.00 | | 11/1/2028 | | 1,000,000 | | 1,062,555 | |
Illinois Finance Authority, Revenue
Bonds, Refunding (Rosalind Franklin University of Medicine & Science) | | 5.00 | | 8/1/2047 | | 1,350,000 | | 1,366,988 | |
Metropolitan Pier & Exposition Authority, Revenue Bonds
(McCormick Place Expansion Project) | | 5.00 | | 6/15/2057 | | 2,500,000 | | 2,552,210 | |
11
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Illinois
- 13.0% (continued) | | | | | |
Metropolitan Pier &
Exposition Authority, Revenue Bonds (McCormick Place Expansion Project) (Insured; National Public Finance
Guarantee Corp.) Ser. A | | 0.00 | | 12/15/2036 | | 2,500,000 | e | 1,591,083 | |
Sales Tax Securitization Corp., Revenue Bonds, Refunding,
Ser. A | | 4.00 | | 1/1/2039 | | 1,500,000 | | 1,518,060 | |
Tender Option Bond
Trust Receipts (Series 2023-XF1623), (Regional Transportation Authority Illinois, Revenue Bonds, Ser.
B) Non-Recourse, Underlying Coupon Rate 4.00% | | 4.46 | | 6/1/2048 | | 1,125,000 | b,c,d | 1,089,120 | |
Tender Option Bond Trust Receipts (Series 2024-XF3244), (Chicago
O'Hare International Airport, Revenue Bonds, Refunding) Recourse, Underlying Coupon Rate 5.50% | | 10.83 | | 1/1/2059 | | 1,450,000 | b,c,d | 1,603,364 | |
| 21,177,214 | |
Indiana - .7% | | | | | |
Indianapolis
Local Public Improvement Bond Bank, Revenue Bonds (Insured; Build America Mutual) Ser. F1 | | 5.25 | | 3/1/2067 | | 1,000,000 | | 1,080,866 | |
Iowa
- 1.1% | | | | | |
Iowa Finance Authority, Revenue Bonds, Refunding (Iowa Fertilizer
Co. Project) | | 5.00 | | 12/1/2032 | | 1,500,000 | f | 1,758,385 | |
Kentucky
- 2.1% | | | | | |
Kentucky Public Energy Authority, Revenue Bonds, Ser. A | | 5.00 | | 7/1/2030 | | 1,000,000 | a | 1,076,230 | |
Kentucky Public Energy Authority, Revenue Bonds, Ser. A1 | | 4.00 | | 8/1/2030 | | 2,320,000 | a | 2,382,883 | |
| 3,459,113 | |
12
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Louisiana
- 5.4% | | | | | |
Louisiana Public Facilities Authority, Revenue Bonds (Calcasieu
Bridge Partners) | | 5.75 | | 9/1/2064 | | 1,165,000 | | 1,296,685 | |
New Orleans Aviation
Board, Revenue Bonds (General Airport-N Terminal Project) Ser. A | | 5.00 | | 1/1/2048 | | 1,000,000 | | 1,020,943 | |
Tender Option Bond Trust Receipts (Series 2018-XF2584), (Louisiana
Public Facilities Authority, Revenue Bonds (Franciscan Missionaries of Our Lady Health System Project))
Non-recourse, Underlying Coupon Rate 5.00% | | 8.78 | | 7/1/2047 | | 6,320,000 | b,c,d | 6,468,795 | |
| 8,786,423 | |
Maryland
- 1.9% | | | | | |
Maryland Economic Development Corp., Revenue Bonds (College
Park Leonardtown Project) (Insured; Assured Guaranty Municipal Corp.) | | 5.25 | | 7/1/2064 | | 500,000 | | 538,382 | |
Maryland Economic Development Corp., Revenue Bonds (Sustainable
Bond) (Purple Line Transit Partners) Ser. B | | 5.25 | | 6/30/2055 | | 1,000,000 | | 1,048,295 | |
Maryland Health & Higher Educational Facilities Authority, Revenue
Bonds (Adventist Healthcare Obligated Group) Ser. A | | 5.50 | | 1/1/2046 | | 1,500,000 | | 1,527,951 | |
| 3,114,628 | |
13
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Massachusetts
- 1.7% | | | | | |
Massachusetts Development Finance Agency, Revenue Bonds,
Refunding (UMass Memorial Health Care Obligated Group) | | 5.00 | | 7/1/2046 | | 1,835,000 | | 1,854,926 | |
Massachusetts Development Finance Agency, Revenue Bonds,
Ser. T | | 4.00 | | 3/1/2054 | | 1,000,000 | | 979,376 | |
| 2,834,302 | |
Michigan
- 3.6% | | | | | |
Detroit Downtown Development Authority, Tax Allocation Bonds,
Refunding (Catalyst Development Project) | | 5.00 | | 7/1/2048 | | 1,250,000 | | 1,332,928 | |
Michigan Finance Authority, Revenue Bonds (Sustainable Bond)
(Henry Ford) | | 4.13 | | 2/29/2044 | | 650,000 | | 646,498 | |
Michigan Finance Authority, Revenue
Bonds, Refunding (Beaumont-Spectrum) | | 4.00 | | 4/15/2042 | | 1,000,000 | | 1,008,609 | |
Michigan Finance Authority, Revenue Bonds, Refunding, Ser.
A | | 4.00 | | 12/1/2049 | | 2,000,000 | | 1,919,752 | |
Pontiac School District, GO
(Insured; Qualified School Board Loan Fund) | | 4.00 | | 5/1/2045 | | 1,000,000 | | 1,000,388 | |
| 5,908,175 | |
Minnesota
- 1.3% | | | | | |
Duluth Economic Development Authority, Revenue Bonds, Refunding
(Essentia Health Obligated Group) Ser. A | | 5.00 | | 2/15/2058 | | 1,000,000 | | 1,018,767 | |
Minnesota Agricultural & Economic Development Board, Revenue
Bonds (HealthPartners Obligated Group) | | 5.25 | | 1/1/2054 | | 1,000,000 | | 1,103,274 | |
| 2,122,041 | |
14
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Missouri
- 3.1% | | | | | |
Tender Option Bond Trust Receipts (Series 2023-XM1116), (Jackson
County Missouri Special Obligation, Revenue Bonds, Refunding, Ser. A) Non-Recourse, Underlying Coupon
Rate 4.25% | | 3.23 | | 12/1/2053 | | 3,000,000 | b,c,d | 2,963,159 | |
The Missouri Health & Educational Facilities Authority, Revenue
Bonds (Lutheran Senior Services Projects) Ser. A | | 5.00 | | 2/1/2042 | | 2,000,000 | | 2,064,880 | |
| 5,028,039 | |
Nebraska
- 1.4% | | | | | |
Douglas County Hospital Authority No. 2, Revenue Bonds (Children's
Hospital Obligated Group) | | 5.00 | | 11/15/2036 | | 1,000,000 | | 1,044,767 | |
Omaha Public Power
District, Revenue Bonds, Ser. A | | 4.00 | | 2/1/2051 | | 1,250,000 | | 1,219,026 | |
| 2,263,793 | |
Nevada
- 2.3% | | | | | |
Clark County School District, GO (Insured; Assured Guaranty
Municipal Corp.) Ser. A | | 4.25 | | 6/15/2041 | | 1,340,000 | | 1,397,036 | |
Reno, Revenue Bonds,
Refunding (Insured; Assured Guaranty Municipal Corp.) | | 4.00 | | 6/1/2058 | | 1,250,000 | | 1,180,683 | |
Reno, Revenue Bonds, Refunding (Insured; Assured Guaranty
Municipal Corp.) | | 4.13 | | 6/1/2058 | | 1,250,000 | | 1,225,719 | |
| 3,803,438 | |
15
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
New Hampshire
- 1.3% | | | | | |
New Hampshire Business Finance Authority, Revenue Bonds (University
of Nevada Reno Project) (Insured; Build America Mutual) Ser. A | | 5.25 | | 6/1/2051 | | 1,000,000 | | 1,096,882 | |
New Hampshire Business Finance Authority, Revenue Bonds,
Refunding (Springpoint Senior Living Obligated Group) | | 4.00 | | 1/1/2041 | | 1,000,000 | | 941,645 | |
| 2,038,527 | |
New
Jersey - 6.3% | | | | | |
New Jersey Health Care Facilities Financing Authority, Revenue
Bonds (RWJ Barnabas Health Obligated Group) | | 4.00 | | 7/1/2051 | | 855,000 | | 847,049 | |
New Jersey Transportation Trust Fund Authority, Revenue Bonds | | 5.00 | | 6/15/2044 | | 1,250,000 | | 1,370,928 | |
New Jersey Transportation
Trust Fund Authority, Revenue Bonds | | 5.25 | | 6/15/2043 | | 2,000,000 | | 2,137,511 | |
New Jersey Transportation Trust Fund Authority, Revenue Bonds,
Ser. AA | | 5.25 | | 6/15/2033 | | 1,000,000 | | 1,014,790 | |
South Jersey Port Corp., Revenue
Bonds, Ser. B | | 5.00 | | 1/1/2048 | | 1,000,000 | | 1,022,927 | |
Tobacco Settlement
Financing Corp., Revenue Bonds, Refunding, Ser. A | | 5.00 | | 6/1/2046 | | 3,860,000 | | 3,965,031 | |
| 10,358,236 | |
New
Mexico - .6% | | | | | |
New Mexico Mortgage Finance Authority, Revenue Bonds (Insured;
GNMA, FNMA, FHLMC) Ser. E | | 4.70 | | 9/1/2054 | | 1,000,000 | | 1,019,219 | |
New
York - 8.2% | | | | | |
New York Convention Center Development Corp., Revenue Bonds
(Hotel Unit Fee) (Insured; Assured Guaranty Municipal Corp.) Ser. B | | 0.00 | | 11/15/2052 | | 6,400,000 | e | 1,800,073 | |
16
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
New York
- 8.2% (continued) | | | | | |
New York State Housing
Finance Agency, Revenue Bonds (Sustainable Bond) Ser. B1 | | 4.70 | | 11/1/2059 | | 1,000,000 | | 1,014,394 | |
New York Transportation Development Corp., Revenue Bonds
(JFK International Airport Terminal) | | 5.00 | | 12/1/2040 | | 1,000,000 | | 1,058,165 | |
New York Transportation Development Corp., Revenue Bonds
(LaGuardia Airport Terminal B Redevelopment Project) Ser. A | | 5.00 | | 7/1/2046 | | 1,500,000 | | 1,500,022 | |
New York Transportation Development Corp., Revenue Bonds
(Sustainable Bond) (JFK International Airport Terminal One Project) (Insured; Assured Guaranty Municipal
Corp.) | | 5.13 | | 6/30/2060 | | 1,000,000 | | 1,045,214 | |
Tender Option Bond
Trust Receipts (Series 2022-XM1004), (Metropolitan Transportation Authority, Revenue Bonds, Refunding
(Sustainable Bond) (Insured; Assured Guaranty Municipal Corp.) Ser. C) Non-Recourse, Underlying Coupon
Rate 4.00% | | 4.31 | | 11/15/2047 | | 2,000,000 | b,c,d | 1,971,239 | |
Tender Option Bond Trust Receipts (Series 2024-XM1174), (New
York State Transportation Development Corp., Revenue Bonds (Sustainable Bond) (JFK International Airport
Terminal one Project) (Insured; Assured Guaranty Municipal Corp.)) Recourse, Underlying Coupon Rate 5.25% | | 9.85 | | 6/30/2060 | | 1,360,000 | b,c,d | 1,451,867 | |
17
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
New York
- 8.2% (continued) | | | | | |
Tender Option Bond
Trust Receipts (Series 2024-XM1181), (Triborough New York Bridge & Tunnel Authority, Revenue Bonds,
Ser. A1) Non-Recourse, Underlying Coupon Rate 4.13% | | 4.13 | | 5/15/2064 | | 1,500,000 | b,c,d | 1,471,370 | |
Triborough Bridge & Tunnel Authority, Revenue Bonds,
Ser. C1A | | 4.00 | | 5/15/2046 | | 2,000,000 | | 2,006,915 | |
| 13,319,259 | |
North
Carolina - 1.3% | | | | | |
North Carolina Medical Care Commission, Revenue Bonds (Carolina
Meadows Obligated Group) | | 5.25 | | 12/1/2054 | | 2,000,000 | | 2,170,477 | |
Ohio
- 3.7% | | | | | |
Cuyahoga County, Revenue Bonds, Refunding (The MetroHealth
System) | | 5.00 | | 2/15/2057 | | 1,155,000 | | 1,167,187 | |
Cuyahoga County, Revenue
Bonds, Refunding (The MetroHealth System) | | 5.00 | | 2/15/2052 | | 1,000,000 | | 1,012,161 | |
Port of Greater Cincinnati Development Authority, Revenue
Bonds, Refunding (Duke Energy Co.) (Insured; Assured Guaranty Municipal Corp.) Ser. B | | 4.38 | | 12/1/2058 | | 750,000 | | 757,715 | |
Tender Option Bond Trust Receipts (Series 2024-XF1711), (University
of Cincinnati Ohio Receipt, Revenue Bonds, Ser. A) Non-Recourse, Underlying Coupon Rate 5.00% | | 9.31 | | 6/1/2049 | | 2,800,000 | b,c,d | 3,056,500 | |
| 5,993,563 | |
18
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Oklahoma
- 2.2% | | | | | |
Tender Option Bond Trust Receipts (Series 2024-XM1163), (Oklahoma
City Water Utilities Trust, Revenue Bonds, Refunding) Non-Recourse, Underlying Coupon Rate 5.25% | | 10.17 | | 7/1/2064 | | 3,200,000 | b,c,d | 3,549,913 | |
Oregon
- .5% | | | | | |
Salem Hospital Facility Authority, Revenue Bonds, Refunding
(Capital Manor Project) | | 4.00 | | 5/15/2057 | | 1,000,000 | | 821,882 | |
Pennsylvania
- 8.4% | | | | | |
Allentown School District, GO, Refunding (Insured; Build
America Mutual) Ser. B | | 5.00 | | 2/1/2033 | | 1,255,000 | | 1,340,142 | |
Clairton Municipal
Authority, Revenue Bonds, Refunding, Ser. B | | 4.38 | | 12/1/2042 | | 1,000,000 | | 1,022,077 | |
Montgomery County Industrial Development Authority, Revenue
Bonds, Refunding (ACTS Retirement-Life Communities Obligated Group) | | 5.00 | | 11/15/2036 | | 1,000,000 | | 1,027,494 | |
Pennsylvania Economic Development Financing Authority, Revenue
Bonds (The Penndot Major Bridges) | | 6.00 | | 6/30/2061 | | 1,000,000 | | 1,130,962 | |
Pennsylvania Turnpike Commission, Revenue Bonds, Ser. A | | 4.00 | | 12/1/2050 | | 1,000,000 | | 971,473 | |
Pennsylvania Turnpike
Commission, Revenue Bonds, Ser. A1 | | 5.00 | | 12/1/2046 | | 1,000,000 | | 1,019,329 | |
Tender Option Bond Trust Receipts (Series 2022-XF1525), (Pennsylvania
Economic Development Financing Authority UPMC, Revenue Bonds, Ser. A) Recourse, Underlying Coupon Rate
4.00% | | 4.23 | | 5/15/2053 | | 1,700,000 | b,c,d | 1,628,878 | |
19
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Pennsylvania
- 8.4% (continued) | | | | | |
Tender Option Bond
Trust Receipts (Series 2023-XM1133), (Philadelphia Water & Wastewater, Revenue Bonds, Refunding
(Insured; Assured Guaranty Municipal Corp.) Ser. B) Non-Recourse, Underlying Coupon Rate 5.50% | | 10.93 | | 9/1/2053 | | 2,400,000 | b,c,d | 2,740,456 | |
Tender Option Bond Trust Receipts (Series 2024-XF1750), (Philadelphia
Gas Works, Revenue Bonds, Refunding (Insured; Assured Guaranty Corp.) Ser. A) Non-Recourse, Underlying
Coupon Rate 5.25% | | 9.97 | | 8/1/2054 | | 1,400,000 | b,c,d | 1,549,432 | |
The Philadelphia School District, GO (Insured; State Aid
Withholding) Ser. A | | 4.00 | | 9/1/2037 | | 1,250,000 | | 1,281,131 | |
| 13,711,374 | |
Rhode
Island - 3.1% | | | | | |
Rhode Island Health & Educational Building Corp., Revenue
Bonds (Lifespan Obligated Group) | | 5.25 | | 5/15/2054 | | 1,000,000 | | 1,081,249 | |
Tender Option Bond Trust Receipts (Series 2023-XM1117), (Rhode
Island Infrastructure Bank State Revolving Fund, Revenue Bonds, Ser. A) Non-recourse, Underlying Coupon
Rate 4.25% | | 3.81 | | 10/1/2053 | | 4,000,000 | b,c,d | 4,048,161 | |
| 5,129,410 | |
South Carolina - 7.1% | | | | | |
South
Carolina Jobs-Economic Development Authority, Revenue Bonds, Refunding (Bon Secours Mercy Health) | | 4.00 | | 12/1/2044 | | 1,000,000 | | 999,827 | |
20
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
South
Carolina - 7.1% (continued) | | | | | |
South
Carolina Public Service Authority, Revenue Bonds, Refunding (Santee Cooper) Ser. A | | 4.00 | | 12/1/2055 | | 1,000,000 | | 949,780 | |
Tender Option Bond Trust Receipts (Series 2024-XM1175), (South
Carolina Public Service Authority,Revenue Bonds, Refunding (Insured; Assured Guaranty Municipal Corp.)
Ser. B) Non-Recourse, Underlying Coupon Rate 5.00% | | 7.57 | | 12/1/2054 | | 4,800,000 | b,c,d | 5,176,670 | |
Tobacco Settlement Revenue Management Authority, Revenue
Bonds, Ser. B | | 6.38 | | 5/15/2030 | | 3,750,000 | | 4,382,416 | |
| 11,508,693 | |
South
Dakota - 1.3% | | | | | |
Tender Option Bond Trust Receipts (Series 2022-XF1409), (South
Dakota Heath & Educational Facilities Authority, Revenue Bonds,
Refunding (Avera Health Obligated Group)) Non-Recourse, Underlying Coupon Rate 5.00% | | 9.32 | | 7/1/2046 | | 2,000,000 | b,c,d | 2,038,914 | |
Texas
- 14.7% | | | | | |
Clifton Higher Education Finance Corp., Revenue Bonds (IDEA
Public Schools) Ser. A | | 4.00 | | 8/15/2051 | | 1,100,000 | | 1,027,726 | |
Clifton Higher Education
Finance Corp., Revenue Bonds (Uplift Education) Ser. A | | 4.25 | | 12/1/2034 | | 1,000,000 | | 1,000,114 | |
21
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Texas
- 14.7% (continued) | | | | | |
Clifton Higher Education
Finance Corp., Revenue Bonds, Refunding (International Leadership of Texas) (Insured; Permanent School
Fund Guarantee Program) Ser. A | | 4.25 | | 8/15/2053 | | 1,000,000 | | 1,023,119 | |
Dallas Independent
School District, GO, Refunding (Insured; Permanent School Fund Guarantee Program) | | 4.00 | | 2/15/2054 | | 1,000,000 | | 983,504 | |
Harris County-Houston Sports Authority, Revenue Bonds, Refunding
(Insured; Assured Guaranty Municipal Corp.) Ser. A | | 0.00 | | 11/15/2052 | | 4,000,000 | e | 1,035,326 | |
Houston Airport System, Revenue Bonds, Refunding (Insured;
Assured Guaranty Municipal Corp.) Ser. A | | 4.50 | | 7/1/2053 | | 1,000,000 | | 1,017,117 | |
Houston Airport System, Revenue Bonds, Refunding, Ser. A | | 4.00 | | 7/1/2047 | | 1,560,000 | | 1,512,380 | |
Lamar Consolidated
Independent School District, GO | | 4.00 | | 2/15/2053 | | 1,000,000 | | 970,248 | |
Midland Independent School District, GO (Insured; Permanent
School Fund Guarantee Program) | | 5.00 | | 2/15/2050 | | 1,000,000 | | 1,045,725 | |
New Hope Cultural Education
Facilities Finance Corp., Revenue Bonds, Refunding (Westminster Project) | | 4.00 | | 11/1/2055 | | 1,650,000 | | 1,507,438 | |
North Texas Tollway Authority, Revenue Bonds, Refunding,
Ser. A | | 4.00 | | 1/2/2038 | | 1,000,000 | | 1,015,982 | |
San Antonio Education
Facilities Corp., Revenue Bonds, Refunding (University of the Incarnate Word) | | 4.00 | | 4/1/2046 | | 1,675,000 | | 1,452,895 | |
22
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Texas
- 14.7% (continued) | | | | | |
Tender Option Bond
Trust Receipts (Series 2023-XM1125), (Medina Valley Independent School District, GO (Insured; Permanent
School Fund Guarantee Program)) Non-recourse, Underlying Coupon Rate 4.00% | | 3.18 | | 2/15/2053 | | 3,000,000 | b,c,d | 2,925,230 | |
Tender Option Bond Trust Receipts (Series 2024-XM1164), (Texas
University System, Revenue Bonds, Refunding) Non-Recourse, Underlying Coupon Rate 5.25% | | 3.18 | | 3/15/2054 | | 2,800,000 | b,c,d | 3,096,122 | |
Texas Municipal Gas Acquisition & Supply Corp. IV, Revenue
Bonds, Ser. B | | 5.50 | | 1/1/2034 | | 1,000,000 | a | 1,137,968 | |
Texas Private Activity Bond Surface Transportation Corp., Revenue
Bonds (Blueridge Transportation Group) | | 5.00 | | 12/31/2055 | | 1,000,000 | | 1,000,200 | |
Texas Private Activity Bond Surface Transportation Corp., Revenue
Bonds (Blueridge Transportation Group) | | 5.00 | | 12/31/2050 | | 1,200,000 | | 1,200,240 | |
Waxahachie Independent School District, GO (Insured; Permanent
School Fund Guarantee Program) | | 4.25 | | 2/15/2053 | | 1,000,000 | | 1,007,615 | |
| 23,958,949 | |
Utah
- 1.6% | | | | | |
Salt Lake City, Revenue Bonds, Ser. A | | 5.00 | | 7/1/2048 | | 1,000,000 | | 1,026,926 | |
Utah Infrastructure Agency, Revenue Bonds, Refunding, Ser.
A | | 5.00 | | 10/15/2037 | | 1,500,000 | | 1,540,801 | |
| 2,567,727 | |
23
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Virginia
- 3.0% | | | | | |
Tender Option Bond Trust Receipts (Series 2024-XM1176), (Virginia
State Housing Development Authority, Revenue Bonds, Ser. A) Recourse, Underlying Coupon Rate 4.80% | | 8.50 | | 9/1/2059 | | 1,800,000 | b,c,d | 1,848,060 | |
Virginia Small Business Financing Authority, Revenue Bonds
(Transform 66 P3 Project) | | 5.00 | | 12/31/2052 | | 2,000,000 | | 2,032,670 | |
Williamsburg Economic
Development Authority, Revenue Bonds (William & Mary Project) (Insured; Assured Guaranty Municipal
Corp.) Ser. A | | 4.13 | | 7/1/2058 | | 1,000,000 | | 1,002,244 | |
| 4,882,974 | |
Washington
- 1.3% | | | | | |
Tender Option Bond Trust Receipts (Series 2024--XF1730), (Port
of Seattle Washington, Revenue Bonds, Refunding, Ser. B) Non-Recourse, Underlying Coupon Rate 5.25% | | 9.98 | | 7/1/2049 | | 1,000,000 | b,c,d | 1,083,811 | |
Washington Housing Finance Commission, Revenue Bonds, Refunding
(Seattle Academy of Arts & Sciences) | | 6.38 | | 7/1/2063 | | 1,000,000 | b | 1,111,069 | |
| 2,194,880 | |
Wisconsin
- 3.2% | | | | | |
Public Finance Authority, Revenue Bonds (EMU Campus Living)
(Insured; Build America Mutual) Ser. A1 | | 5.50 | | 7/1/2052 | | 1,000,000 | | 1,095,432 | |
Public Finance Authority, Revenue Bonds (EMU Campus Living)
(Insured; Build America Mutual) Ser. A1 | | 5.63 | | 7/1/2055 | | 1,000,000 | | 1,104,254 | |
24
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term
Municipal Investments - 147.8% (continued) | | | |
Wisconsin
- 3.2% (continued) | | | | | |
Public Finance Authority, Revenue
Bonds, Ser. 1 | | 5.75 | | 7/1/2062 | | 1,717,549 | | 1,835,021 | |
Wisconsin Health &
Educational Facilities Authority, Revenue Bonds (Bellin Memorial Hospital Obligated Group) | | 5.50 | | 12/1/2052 | | 1,000,000 | | 1,120,179 | |
| 5,154,886 | |
Total Investments (cost $232,095,105) | | 147.8% | 241,189,562 | |
Liabilities, Less Cash and Receivables | | (47.8%) | (78,008,018) | |
Net Assets Applicable
to Common Stockholders | | 100.0% | 163,181,544 | |
a These securities have a put feature; the date shown represents
the put date and the bond holder can take a specific action to retain the bond after the put date.
b Security
exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may
be resold in transactions exempt from registration, normally to qualified institutional buyers. At September
30, 2024, these securities were valued at $78,920,953 or 48.36% of net assets.
c The Variable Rate is determined by the Remarketing Agent in
its sole discretion based on prevailing market conditions and may, but need not, be established by reference
to one or more financial indices.
d Collateral for floating rate borrowings. The coupon rate given
represents the current interest rate for the inverse floating rate security.
e Security issued with a zero coupon. Income is recognized through
the accretion of discount.
f These
securities are prerefunded; the date shown represents the prerefunded date. Bonds which are prerefunded
are collateralized by U.S. Government securities which are held in escrow and are used to pay principal
and interest on the municipal issue and to retire the bonds in full at the earliest refunding date.
See notes to financial statements.
25
| | | |
|
Summary
of Abbreviations (Unaudited) |
|
ABAG | Association
of Bay Area Governments | AGC | ACE Guaranty Corporation |
AGIC | Asset Guaranty Insurance Company | AMBAC | American Municipal Bond Assurance Corporation |
BAN | Bond Anticipation Notes | BSBY | Bloomberg
Short-Term Bank Yield Index |
CIFG | CDC
Ixis Financial Guaranty | COP | Certificate of Participation |
CP | Commercial Paper | DRIVERS | Derivative
Inverse Tax-Exempt Receipts |
EFFR | Effective
Federal Funds Rate | FGIC | Financial Guaranty Insurance Company |
FHA | Federal Housing Administration | FHLB | Federal Home Loan Bank |
FHLMC | Federal Home Loan Mortgage Corporation | FNMA | Federal National Mortgage Association |
GAN | Grant Anticipation Notes | GIC | Guaranteed
Investment Contract |
GNMA | Government National Mortgage Association | GO | General Obligation |
IDC | Industrial
Development Corporation | LOC | Letter of Credit |
LR | Lease
Revenue | NAN | Note Anticipation Notes |
MFHR | Multi-Family Housing Revenue | MFMR | Multi-Family Mortgage Revenue |
MUNIPSA | Securities Industry and Financial Markets
Association Municipal Swap Index Yield | OBFR | Overnight
Bank Funding Rate |
PILOT | Payment in Lieu of Taxes | PRIME | Prime
Lending Rate |
PUTTERS | Puttable Tax-Exempt Receipts | RAC | Revenue Anticipation Certificates |
RAN | Revenue Anticipation Notes | RIB | Residual Interest Bonds |
SFHR | Single Family Housing Revenue | SFMR | Single Family Mortgage Revenue |
SOFR | Secured Overnight Financing Rate | TAN | Tax Anticipation Notes |
TRAN | Tax and Revenue Anticipation Notes | TSFR | Term Secured Overnight
Financing Rate |
USBMMY | U.S. Treasury Bill Money Market Yield | U.S. T-BILL | U.S. Treasury Bill |
XLCA | XL Capital Assurance | VMTP Shares | Variable Rate MuniFund Term Preferred Shares |
| | | |
See notes to financial statements.
26
STATEMENT
OF ASSETS AND LIABILITIES
September 30, 2024
| | | | | | |
| | | | | | |
| | | Cost | | Value | |
Assets ($): | | | | |
Investments in securities—See Statement
of Investments | 232,095,105
| | 241,189,562 | |
Cash | | | | | 787,261 | |
Interest
receivable | | 3,108,429 | |
Prepaid expenses | | | | | 7,877 | |
| | | | |
245,093,129 | |
Liabilities ($): | | | | |
Due to BNY Mellon Investment Adviser, Inc.
and affiliates—Note 2(b) | | 116,808 | |
Payable for inverse floater notes issued—Note
3 | | 50,750,000 | |
VMTP
Shares at liquidation value—Note 1 ($30,225,000 face amount,
respectively, report net of unamortized VMTP Shares deferred offering cost
of $168,836)—Note 1(g) | | 30,056,164 | |
Interest
and expense payable related to inverse floater notes issued—Note 3 | | 560,476 | |
Dividends
payable to Common Stockholders | | 394,390 | |
Directors’ fees and expenses payable | | 1,100 | |
Other
accrued expenses | | | | | 32,647 | |
| | | | |
81,911,585 | |
Net Assets Applicable to Common Stockholders
($) | | | 163,181,544 | |
Composition
of Net Assets ($): | | | | |
Common Stock, par value, $.001 per share (20,757,267
shares issued and outstanding) | | | | | 20,757 | |
Paid-in
capital | | | | | 179,014,708 | |
Total distributable earnings
(loss) | | | | | (15,853,921) | |
Net
Assets Applicable to Common Stockholders ($) | | | 163,181,544 | |
| | | | |
Shares Outstanding | | |
(110 million shares authorized) | 20,757,267 | |
Net
Asset Value Per Share of Common Stock ($) | | 7.86 | |
| | | | |
See notes to financial statements. | | | | |
27
STATEMENT
OF OPERATIONS
Year
Ended September 30, 2024
| | | | | | |
| | | | | | |
| | | | | | |
Investment
Income ($): | | | | |
Interest Income | | | 10,156,817 | |
Expenses: | | | | |
Management
fee—Note 2(a) | | | 1,304,394 | |
Interest
and expense related to inverse floater notes issued—Note 3 | | | 1,714,487 | |
VMTP
Shares interest expense and amortization of offering costs—Note1(g) | | | 1,430,413 | |
Professional
fees | | | 284,717 | |
Shareholders’
reports | | | 166,006 | |
Directors’
fees and expenses—Note 2(c) | | | 142,965 | |
Shareholder
servicing costs | | | 22,151 | |
Registration
fees | | | 13,333 | |
Chief
Compliance Officer fees—Note 2(b) | | | 12,410 | |
Redemption and Paying Agent fees—Note 2(b) | | | 10,000 | |
Custodian
fees—Note 2(b) | | | 4,768 | |
Miscellaneous | | | 37,441 | |
Total
Expenses | | |
5,143,085 | |
Less—reduction
in fees due to earnings credits—Note 2(b) | | | (4,768) | |
Net
Expenses | | | 5,138,317 | |
Net Investment Income | | | 5,018,500 | |
Realized
and Unrealized Gain (Loss) on Investments—Note 3 ($): | | |
Net realized gain (loss) on
investments | (4,361,212) | |
Net
change in unrealized appreciation (depreciation) on investments | 24,938,491 | |
Net Realized and Unrealized Gain (Loss) on
Investments | 20,577,279
| |
Net Increase in Net Assets Applicable to
Common Stockholders Resulting from Operations | 25,595,779 | |
| | | | | | |
See notes to financial statements. | | | | | |
28
STATEMENT
OF CASH FLOWS
Year
Ended September 30, 2024
| | | | | | |
| | | | | |
| | | | | | |
Cash Flows from Operating Activities ($): | | | | | |
Purchases of portfolio securities | |
(83,786,259) | | | |
Proceeds
from sales of portfolio securities |
79,687,795 | | | |
Interest
income received | | 10,115,339 | | | |
Interest and expense related to inverse
floater notes issued | | (1,740,655) | | | |
VMTP
Shares interest expense and amortization of offering costs paid | | (1,335,913) | | | |
Expenses paid to BNY Mellon Investment
Adviser, Inc. and affiliates | | (1,324,716) | | | |
Operating expenses paid | | (715,896) | | | |
Net Cash Provided (or Used) in Operating Activities | | 899,695 | |
Cash
Flows from Financing Activities ($): | | | | | |
Dividends paid to Common Stockholders | | (3,985,261) | | | |
Increase in payable for inverse floater notes
issued | | 3,622,907 | | | |
Net
Cash Provided (or Used) in Financing Activities | | (362,354) | |
Net Increase (Decrease) in Cash | | 537,341 | |
Cash
at beginning of period | | 249,920 | |
Cash
at End of Period | |
787,261 | |
Reconciliation
of Net Increase (Decrease) in Net Assets Applicable to Common Stockholders
Resulting from Operations to Net Cash Provided (or Used) in Operating Activities
($): | | | |
Net
Increase in Net Assets Resulting From Operations | | 25,595,779 | | | |
Adjustments
to Reconcile Net Increase (Decrease) in Net Assets Applicable to Common Stockholders
Resulting from Operations to Net Cash
Provided (or Used) in Operating Activities ($): | | | |
Decrease in investments in securities at
cost | | 257,608 | | | |
Increase in interest receivable | | (41,478) | | | |
Decrease in receivable for investment securities
sold | | 955,547 | | | |
Decrease in unamortized VMTP Shares offering
costs | | 94,500 | | | |
Increase in prepaid expenses | | (7,877) | | | |
Increase in Due to BNY Mellon Investment
Adviser, Inc. and affiliates | |
2,088 | | | |
Decrease in payable for investment securities purchased | | (950,407) | | | |
Decrease in interest and expense payable
related to inverse floater notes issued | |
(26,168) | | | |
Increase in Directors' fees and expenses payable | |
1,100 | | | |
Decrease in other accrued expenses | | (42,506) | | | |
Net change in unrealized (appreciation) depreciation
on investments | | (24,938,491) | | | |
Net
Cash Provided (or Used) in Operating Activities | | 899,695 | |
See notes to financial statements. | | | | | |
29
STATEMENT
OF CHANGES IN NET ASSETS
| | | | | | | | | |
| | | Year Ended September
30, |
| | | | 2024 | | 2023 | |
Operations ($): | | | | | | | | |
Net investment income | | | 5,018,500 | | | | 5,804,713 | |
Net
realized gain (loss) on investments | | (4,361,212) | | | | (5,432,377) | |
Net
change in unrealized appreciation
(depreciation) on investments | | 24,938,491
| | | | 3,026,877 | |
Dividends
to Preferred Stockholders | | | - | | | | (1,275,815) | |
Net Increase
(Decrease) in Net Assets Applicable to Common Stockholders
Resulting from Operations | 25,595,779 | | | | 2,123,398 | |
Distributions
($): | |
Distributions to stockholders | | | (4,068,424) | | | | (4,421,298) | |
Distributions
to Common Stockholders |
(4,068,424) | | | |
(4,421,298) | |
Capital Stock Transactions ($): | | | | | | |
Net proceeds from VMTP Shares sold | - | | | | 30,225,000 | |
Cost
of Auction Preferred Stock shares redeemed | - | | | | (30,225,000) | |
Increase
(Decrease) in Net Assets from Capital Stock Transactions | - | | | | - | |
Total Increase (Decrease) in Net Assets
Applicable to Common Stockholders | 21,527,355
| | | |
(2,297,900) | |
Net Assets
Applicable to Common Stockholders ($): | |
Beginning
of Period | | | 141,654,189 | | | | 143,952,089 | |
End
of Period | | | 163,181,544 | | | | 141,654,189 | |
| | | | | | | | | |
See notes to financial statements. | | | | | | | | |
30
FINANCIAL
HIGHLIGHTS
The following table describes the performance
for the fiscal periods indicated. Market price total return is calculated assuming an initial investment
made at the market price at the beginning of the period, reinvestment of all dividends and distributions
at market price during the period, and sale at the market price on the last day of the period.
| | | | | | | | | | | |
| | | | | |
| Year Ended September 30, |
| | 2024 | 2023a | 2022b | 2021c | 2020d |
Per Share
Data ($): | | | | | | |
Net asset value, beginning of period | | 6.82 | 6.94 | 9.29 | 9.05 | 9.36 |
Investment Operations: | | | | | | |
Net investment incomee | | .24 | .28 | .36 | .41 | .43 |
Net
realized and unrealized gain (loss) on investments | | 1.00 | (.13) | (2.35) | .25 | (.30) |
Dividends
to Preferred Stockholders from net investment income | | - | (.06) | (.02) | (.00)f | (.02) |
Total
from Investment Operations | | 1.24 | (.09) | (2.01) | .66 | .11 |
Distributions
to Common Stockholders: | | | | | | |
Dividends
from net investment income | | (.20) | (.21) | (.34) | (.42) | (.42) |
Net asset value, end
of period | | 7.86 | 6.82 | 6.94 | 9.29 | 9.05 |
Market value, end of
period | | 7.31 | 5.67 | 6.01 | 9.63 | 8.63 |
Market
Price Total Return (%) | | 32.73 | (2.41) | (34.69) | 16.90 | (3.13) |
31
FINANCIAL
HIGHLIGHTS (continued)
| | | | | | | | | | |
| | | | | |
| Year Ended September 30, |
| 2024 | 2023a | 2022b | 2021c | 2020d |
Ratios/Supplemental
Data (%): | | | | | | |
Ratio
of total expenses to average net assets | | 3.29g | 2.48 | 1.48 | 1.25 | 1.68 |
Ratio
of net expenses to average net assets | | 3.29g | 2.48 | 1.48 | 1.25 | 1.67 |
Ratio
of interest and expense related to inverse floater notes issued,
VMTP Shares interest expense to
average net assets | | 2.01g | 1.40 | .42 | .25 | .67 |
Ratio
of net investment income to average net assets | | 3.21g | 3.82 | 4.30 | 4.37 | 4.78 |
Portfolio
Turnover Rate | | 34.88 | 25.17 | 31.87 | 11.33 | 26.85 |
Asset Coverage of VMTP
Shares and Preferred Stock, end of period | | 640 | 569 | 576 | 738 | 721 |
Net Assets applicable to Common
Stockholders, end of period ($ x 1,000) | | 163,182 | 141,654 | 143,952 | 192,790 | 187,703 |
VMTP Shares and Preferred
Stock Outstanding, end of period ($ x 1,000) | | 30,225 | 30,225 | 30,225 | 30,225 | 30,225 |
Floating
Rate Notes Outstanding, end of period ($ x 1,000) | | 50,750 | 47,127 | 57,245 | 67,430 | 71,180 |
a The
ratios based on total average net assets including dividends to Preferred Stockholders are as follows:
total expense ratio of 2.13%, a net expense ratio of 2.13%, an interest expense related to floating rate
notes issued ratio of 1.20% and a net investment income of 3.29%.
b The ratios based on total average net assets including dividends
to Preferred Stockholders are as follows: total expense ratio of 1.26%, a net expense ratio of 1.26%,
an interest expense related to floating rate notes issued ratio of .36% and a net investment income of
3.66%.
c The
ratios based on total average net assets including dividends to Preferred Stockholders are as follows:
total expense ratio of 1.08%, a net expense ratio of 1.08%, an interest expense related to floating rate
notes issued ratio of .22% and a net investment income of 3.78%.
d The ratios based on total average net assets including dividends
to Preferred Stockholders are as follows: total expense ratio of 1.44%, a net expense ratio of 1.44%,
an interest expense related to floating rate notes issued ratio of .58% and a net investment income of
4.12%.
e Based
on average common shares outstanding.
f Amount represents less than $.01 per share.
g Amount inclusive of VMTP Shares amortization of offering cost.
See notes to financial statements.
32
NOTES
TO FINANCIAL STATEMENTS
NOTE 1—Significant Accounting Policies:
BNY
Mellon Municipal Income, Inc. (the “fund”), which is registered under the Investment Company Act
of 1940, as amended (the “Act”), is a diversified closed-end management investment company. The
fund’s investment objective is to maximize current income exempt from federal income tax to the extent
consistent with the preservation of capital. BNY Mellon Investment Adviser, Inc. (the “Adviser”),
a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY”), serves as the fund’s
investment adviser. Insight North America LLC (the “Sub-Adviser”), an indirect wholly-owned subsidiary
of BNY and an affiliate of the Adviser, serves as the fund’s sub-adviser. The fund’s Common Stock
trades on the NYSE American under the ticker symbol DMF.
The fund has outstanding
1,209 shares of Variable Rate MuniFund Term Preferred Shares (“VMTP Shares”). The fund is subject
to certain restrictions relating to the VMTP Shares. Failure to comply with these restrictions could
preclude the fund from declaring any distributions to shareholders of the fund’s Common Stock (“Common
Stockholders”) or repurchasing shares of Common Stock and/or could trigger the mandatory redemption
of VMTP Shares at their liquidation value (i.e., $25,000 per share). Thus, redemptions of VMTP Shares
may be deemed to be outside of the control of the fund.
The VMTP Shares have
a mandatory redemption date of July 14, 2053, and are subject to an initial early redemption date of
July 13, 2026, subject to the option of the shareholders to retain the VMTP Shares. VMTP Shares that
are neither retained by the shareholder nor successfully remarketed by the early redemption date will
be redeemed by the fund.
The shareholders of VMTP Shares, voting as a separate class,
have the right to elect at least two directors. The shareholders of VMTP Shares will vote as a separate
class on certain other matters, as required by law. The fund’s Board of Directors (the “Board”)
has designated Nathan Leventhal and Benaree Pratt Wiley as directors to be elected by the holders of
VMTP Shares.
Dividends on VMTP Shares are normally declared daily and paid
monthly. The Dividend Rate on the VMTP Shares is, except as otherwise provided, equal to the rate per
annum that results from the sum of (1) the Index Rate plus (2) the Applicable Spread as determined for
the VMTP Shares on the Rate Determination Date immediately preceding such Subsequent Rate Period plus
(3) the Failed Remarketing Spread (all defined terms as defined in the fund’s articles supplementary).
33
NOTES
TO FINANCIAL STATEMENTS (continued)
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles
(“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive
releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also
sources of authoritative GAAP for SEC registrants. The fund is an investment company and applies the
accounting and reporting guidance of the FASB ASC Topic 946 Financial Services-Investment Companies.
The fund’s financial statements are prepared in accordance with GAAP, which may require the use of
management estimates and assumptions. Actual results could differ from those estimates.
The fund
enters
into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these
arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a)
Portfolio valuation: The fair value of a financial instrument is the amount that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes
the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority
to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements)
and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally,
GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly
and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced
disclosures around valuation inputs and techniques used during annual and interim periods.
Various
inputs are used in determining the value of the fund’s investments relating to fair value measurements.
These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted
prices in active markets for identical investments.
Level 2—other significant
observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds,
credit risk, etc.).
Level 3—significant unobservable inputs (including
the fund’s own assumptions in determining the fair value of investments).
34
The inputs or methodology used for valuing securities are not necessarily an indication
of the risk associated with investing in those securities.
Changes in valuation
techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation
techniques used to value the fund’s investments are as follows:
The Board has designated
the Adviser as the fund’s valuation designee to make all fair value determinations with respect to
the fund’s portfolio investments, subject to the Board’s oversight and pursuant to Rule 2a-5 under
the Act.
Investments in municipal securities are valued each business day by an independent
pricing service (the “Service”) approved by the Board. Investments for which quoted bid prices are
readily available and are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such
securities) and asked prices (as calculated by the Service based upon its evaluation of the market for
such securities). Municipal investments (which constitute a majority of the portfolio securities) are
carried at fair value as determined by the Service, based on methods which include consideration of the
following: yields or prices of municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. The Service is engaged under the
general oversight of the Board. All of the preceding securities are generally categorized within Level
2 of the fair value hierarchy.
When market quotations or official closing prices are not
readily available, or are determined not to accurately reflect fair value, such as when the value of
a security has been significantly affected by events after the close of the exchange or market on which
the security is principally traded, but before the fund calculates its net asset value, the fund may
value these investments at fair value as determined in accordance with the procedures approved by the
Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical
data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence
the market in which the securities are purchased and sold, and public trading in similar securities of
the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the
fair value hierarchy depending on the relevant inputs used.
For securities where
observable inputs are limited, assumptions about market activity and risk are used and such securities
are generally categorized within Level 3 of the fair value hierarchy.
35
NOTES
TO FINANCIAL STATEMENTS (continued)
The
following is a summary of the inputs used as of September 30, 2024 in
valuing the fund’s investments:
| | | | | | |
| Level 1-Unadjusted Quoted Prices | Level
2- Other Significant Observable Inputs | | Level 3-Significant Unobservable
Inputs | Total | |
Assets ($) | | |
Investments in Securities:† | | |
Municipal
Securities | - | 241,189,562 | | - | 241,189,562 | |
Liabilities
($) | | |
Other Financial Instruments: | | |
Inverse Floater Notes†† | - | (50,750,000) | | - | (50,750,000) | |
VMTP
Shares†† | - | (30,225,000) | | - | (30,225,000) | |
† See Statement of Investments for additional detailed categorizations,
if any.
†† Certain
of the fund’s liabilities are held at carrying amount, which approximates fair value for financial
reporting purposes.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded
on the identified cost basis. Interest income, adjusted for accretion of discount and amortization of
premium on investments, is earned from settlement date and recognized on the accrual basis. Securities
purchased or sold on a when-issued or delayed delivery basis may be settled a month or more after the
trade date.
(c) Market Risk: The value of the securities in which the fund invests may
be affected by political, regulatory, economic and social developments, and developments that impact
specific economic sectors, industries or segments of the market. The value of a security may also decline
due to general market conditions that are not specifically related to a particular company or industry,
such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings,
changes in interest or currency rates, changes to inflation, adverse changes to credit markets or adverse
investor sentiment generally.
Additional Information section within
this report provides more details about the fund’s principal risk factors.
(d) Dividends and distributions
to Common Stockholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from
net investment income are normally declared and paid monthly. Dividends from net realized capital gains,
if any, are normally declared and paid
36
annually, but the fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).
To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy
of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance
with income tax regulations, which may differ from GAAP.
Common Stockholders
will have their distributions reinvested in additional shares of the fund, unless such Common Stockholders
elect to receive cash, at the lower of the market price or net asset value per share (but not less than
95% of the market price). If market price is equal to or exceeds net asset value, shares will be issued
at net asset value. If net asset value exceeds market price, Computershare Inc., the transfer agent for
the fund’s Common Stock, will buy fund shares in the open market and reinvest those shares accordingly.
On September 27, 2024, the Board declared a cash dividend of $.019 per share from
net investment income, payable on October 31, 2024 to Common Stockholders of record as of the close of
business on October 15, 2024. The ex-dividend date was October 15, 2024.
(e) Dividends to stockholders
of VMTP Shares: The Dividend Rate on the VMTP Shares is, except as otherwise provided, equal
to the rate per annum that results from the sum of (1) the Index Rate plus (2) the Applicable Spread
as determined for the VMTP Shares on the Rate Determination Date immediately preceding such Subsequent
Rate Period plus (3) the Failed Remarketing Spread. The Applicable Rate of the VMTP Shares was equal
to the sum of .95% per annum plus the Securities Industry and Financial Markets Association Municipal
Swap Index rate of 3.15% on September 30, 2024. The dividend rate as of September 30, 2024 for the VMTP
Shares was 4.10% (all terms as defined in the fund’s articles supplementary).
(f) Federal income taxes:
It is the policy of the fund to continue to qualify as a regulated investment company, which can distribute
tax-exempt dividends, by complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from substantially all federal income
and excise taxes.
As of and during the period ended September 30, 2024, the
fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties,
if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During
the period ended September 30, 2024, the fund did not incur any interest or penalties.
37
NOTES
TO FINANCIAL STATEMENTS (continued)
Each tax year in the four-year period ended September 30, 2024 remains subject
to examination by the Internal Revenue Service and state taxing authorities.
At
September 30, 2024, the components of accumulated earnings on a tax basis were as follows: undistributed
tax-exempt income $1,513,122, accumulated capital losses $26,223,695 and unrealized appreciation $9,251,042.
The fund is permitted to carry forward capital losses for an unlimited period.
Furthermore, capital loss carryovers retain their character as either short-term or long-term capital
losses.
The
accumulated capital loss carryover is available for federal income tax purposes to be applied against
future net realized capital gains, if any, realized
subsequent to September 30, 2024. The fund has $10,322,932 of short-term capital losses and $15,900,763
of long-term capital losses which can be carried forward for an unlimited period.
The
tax character of distributions paid to Common Stockholders during the fiscal years ended September 30,
2024 and September 30, 2023 were as follows: tax-exempt income $4,068,424 and $5,697,113, respectively.
(g)
VMTP Shares: The fund’s VMTP Shares aggregate liquidation preference is shown as a liability
since they have a stated mandatory redemption date of July 14, 2053. Dividends paid on VMTP Shares are
treated as interest expense and recorded on the accrual basis. Costs directly related to the issuance
of the VMTP Shares are considered debt issuance costs which have been deferred and are being amortized
into expense over 36 months from July 12, 2023.
During the period ended
September 30, 2024, total interest expenses and amortized offering costs with respect to VMTP Shares
amounted to $1,430,413 inclusive of $1,335,113 of interest expense and $95,300 amortized deferred cost
fees. These fees are included in VMTP Shares interest expense and amortization of offering costs in the
Statement of Operations.
The average amount of borrowings outstanding for the VMTP
Shares during the period ended September 30, 2024 was approximately $30,225,000, with a related weighted
average annualized interest rate of 4.42%.
38
NOTE
2—Management Fee, Sub-Advisory Fee and Other Transactions with Affiliates:
(a) Pursuant to a management
agreement (the “Agreement”) with the Adviser, the management fee is computed at the annual rate of
..70% of the value of the fund’s average weekly net assets (including net assets representing VMTP Shares
outstanding) and is payable monthly. The Agreement provides that if in any full fiscal year the aggregate
expenses of the fund (excluding taxes, interest on borrowings, brokerage fees and extraordinary expenses)
exceed the expense limitation of any state having jurisdiction over the fund, the fund may deduct from
payments to be made to the Adviser, or the Adviser will bear, the amount of such excess to the extent
required by state law. During the period ended September 30, 2024, there was no expense reimbursement
pursuant to the Agreement.
Pursuant to a sub-investment advisory
agreement between the Adviser and the Sub-Adviser, the Adviser pays the Sub-Adviser a monthly fee at
an annual rate of .336% of the value of the fund’s average weekly net assets (including net assets
representing VMTP Shares outstanding).
(b) The fund
has an arrangement with The Bank of New York Mellon (the “Custodian”), a subsidiary of BNY and an
affiliate of the Adviser, whereby the fund may receive earnings credits when
positive cash balances are maintained, which are used to offset Custodian fees. For financial reporting
purposes, the fund includes custody net earnings credits as an expense offset in the Statement of Operations.
The
fund compensates the Custodian, under a custody agreement, for providing custodial services for the fund.
These fees are determined based on net assets, geographic region and transaction activity. During the
period ended September 30, 2024, the fund was charged $4,768 pursuant to
the custody agreement. These fees were offset by earnings credits of $4,768.
The
fund compensates The Bank of New York Mellon under a Redemption and Paying Agent Agreement for providing
certain transfer agency and payment services with respect to the VMTP Shares. During the period ended
September 30, 2024, the fund was charged $10,000 for the services provided by the Redemption and Paying
Agent (the “Redemption and Paying Agent”).
During the period ended September 30,
2024, the fund was charged $12,410 for services performed by the fund’s Chief Compliance Officer and
his staff. These fees are included in Chief Compliance Officer fees in the Statement of Operations.
39
NOTES
TO FINANCIAL STATEMENTS (continued)
The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates”
in the Statement of Assets and Liabilities consist of: Management fee of $110,674, Custodian fees of
$1,073, the Redemption and Paying Agent fees of $2,500 and Chief Compliance Officer fees of $2,561.
(c)
All but three board members of the fund also serve as board members of other funds in the BNY Mellon
Family of Funds complex. Annual retainer fees and meeting attendance fees for such board members are
allocated to each fund based on net assets.
NOTE 3—Securities Transactions:
The
aggregate amount of purchases and sales (including paydowns) of investment securities, excluding short-term
securities, during the period ended September 30, 2024, amounted to $65,010,453 and $64,108,960, respectively.
Inverse
Floater Securities: The fund participates in secondary inverse floater structures in which fixed-rate,
tax-exempt municipal bonds are transferred to a trust (the “Inverse Floater Trust”). The Inverse
Floater Trust typically issues two variable rate securities that are collateralized by the cash flows
of the fixed-rate, tax-exempt municipal bonds. One of these variable rate securities pays interest based
on a short-term floating rate set by a remarketing agent at predetermined intervals (“Trust Certificates”).
A residual interest tax-exempt security is also created by the Inverse Floater Trust, which is transferred
to the fund, and is paid interest based on the remaining cash flows of the Inverse Floater Trust, after
payment of interest on the other securities and various expenses of the Inverse Floater Trust. An Inverse
Floater Trust may be collapsed without the consent of the fund due to certain termination events such
as bankruptcy, default or other credit event.
The fund accounts for
the transfer of bonds to the Inverse Floater Trust as secured borrowings, with the securities transferred
remaining in the fund’s investments, and the Trust Certificates reflected as fund liabilities in the
Statement of Assets and Liabilities.
The fund may invest in inverse floater
securities on either a non-recourse or recourse basis. These securities are typically supported by a
liquidity facility provided by a bank or other financial institution (the “Liquidity Provider”) that
allows the holders of the Trust Certificates to tender their certificates in exchange for payment from
the Liquidity Provider of par plus accrued interest on any business day prior to a termination event.
When the fund invests in inverse floater securities on a non-recourse basis, the Liquidity Provider is
required to make a payment under the liquidity
40
facility due to a termination event to the holders of the Trust Certificates.
When this occurs, the Liquidity Provider typically liquidates all or a portion of the municipal securities
held in the Inverse Floater Trust. A liquidation shortfall occurs if the Trust Certificates exceed the
proceeds of the sale of the bonds in the Inverse Floater Trust (“Liquidation Shortfall”). When a
fund invests in inverse floater securities on a recourse basis, the fund typically enters into a reimbursement
agreement with the Liquidity Provider where the fund is required to repay the Liquidity Provider the
amount of any Liquidation Shortfall. As a result, a fund investing in a recourse inverse floater security
bears the risk of loss with respect to any Liquidation Shortfall.
The average amount
of borrowings outstanding under the inverse floater structure during the period ended September 30, 2024
was approximately $44,240,802, with a related weighted average annualized interest rate of 3.88%.
At
September 30, 2024, the cost of investments for federal income
tax purposes was $181,188,520; accordingly, accumulated net unrealized appreciation on investments was
$9,251,042, consisting of $10,288,709 gross unrealized appreciation and $1,037,667 gross unrealized depreciation.
41
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of BNY Mellon Municipal Income,
Inc.
Opinion on the Financial Statements
We
have audited the accompanying statement of assets and liabilities of BNY Mellon Municipal Income, Inc.
(the “Fund”), including the statement of investments, as of September 30, 2024, and the related statements
of operations and cash flows for the year then ended, the statements of changes in net assets for each
of the two years in the period then ended, the financial highlights for each of the five years in the
period then ended and the related notes (collectively referred to as the “financial statements”).
In our opinion, the financial statements present fairly, in all material respects, the financial position
of the Fund at September 30, 2024, the results of its operations and its cash flows for the year then
ended, the changes in its net assets for each of the two years in the period then ended and its financial
highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted
accounting principles.
Basis for Opinion
These financial statements
are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the
Fund’s financial statements based on our audits. We are a public accounting firm registered with the
Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent
with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we
engaged to perform, an audit of the Fund’s internal control over financial reporting. As part of our
audits, we are required to obtain an understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial
reporting. Accordingly, we express no such opinion.
Our audits included
performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned as of September 30, 2024, by correspondence
with the custodian, brokers and others; when replies were not received from brokers and others, we performed
other auditing procedures. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
We have served as the
auditor of one or more investment companies in the BNY Mellon Family of Funds since at least 1957, but
we are unable to determine the specific year.
New York, New York
November 22, 2024
42
ADDITIONAL
INFORMATION (Unaudited)
Dividend Reinvestment Plan
Under the fund’s Dividend Reinvestment
Plan (the “Plan”), a Common Stockholder who has fund shares registered in his name will have all
dividends and distributions reinvested automatically by Computershare Trust Company, N.A., as Plan administrator
(the “Administrator”), in additional shares of the fund at the lower of prevailing market price or
net asset value (but not less than 95% of market value at the time of valuation) unless such Common Stockholder
elects to receive cash as provided below. If market price is equal to or exceeds net asset value, shares
will be issued at net asset value. If net asset value exceeds market price or if a cash dividend only
is declared, the Administrator, as agent for the Plan participants, will buy fund shares in the open
market. A Plan participant is not relieved of any income tax that may be payable on such dividends or
distributions.
A Common Stockholder who owns fund shares registered in nominee
name through his broker/dealer (i.e., in “street name”) may not participate in the Plan, but may
elect to have cash dividends and distributions reinvested by his broker/dealer in additional shares of
the fund if such service is provided by the broker/dealer; otherwise such dividends and distributions
will be treated like any other cash dividend or distribution.
A Common Stockholder
who has fund shares registered in his or her name may elect to withdraw from the Plan at any time for
a $5.00 fee and thereby elect to receive cash in lieu of shares of the fund. Changes in elections must
be in writing, sent to The Bank of New York Mellon, c/o Computershare Inc., P.O. Box 30170, College Station,
TX 77842-3170, should include the Stockholder’s name and address as they appear on the Administrator’s
records and will be effective only if received more than ten business days prior to the record date for
any distribution.
The Administrator maintains all Common Stockholder accounts
in the Plan and furnishes written confirmations of all transactions in the account. Shares in the account
of each Plan participant will be held by the Administrator in non-certificated form in the name of the
participant, and each such participant’s proxy will include those shares purchased pursuant to the
Plan.
The fund pays the Administrator’s fee for reinvestment of dividends and distributions.
Plan participants pay a pro rata share of brokerage commissions incurred with respect to the Administrator’s
open market purchases in connection with the reinvestment of dividends or distributions.
43
ADDITIONAL
INFORMATION (Unaudited) (continued)
The fund reserves the right to amend or terminate the Plan as applied to any dividend
or distribution paid subsequent to notice of the change sent to Plan participants at least 90 days before
the record date for such dividend or distribution. The Plan also may be amended or terminated by the
Administrator on at least 90 days’ written notice to Plan participants.
Level Distribution Policy
The fund’s dividend policy is to distribute substantially all of its net investment
income to its Stockholders on a monthly basis. In order to provide Stockholders with a more consistent
yield to the current trading price of shares of Common Stock of the fund, the fund may at times pay out
more or less than the entire amount of net investment income earned in any particular month and may at
times in any month pay out any accumulated but undistributed income in addition to net investment income
earned in that month. As a result, the dividends paid by the fund for any particular month may be more
or less than the amount of net investment income earned by the fund during such month.
Investment Objective and
Principal Investment Strategies
Investment Objective. The fund’s investment
objective is to maximize current income exempt from federal income tax to the extent consistent with
the preservation of capital. The fund’s investment objective may not be changed without the affirmative
vote of the holders of a majority (as defined in the Act) of the fund’s outstanding voting securities.
No assurance can be given that the fund will achieve its investment objective.
Fundamental Investment
Policy. Under normal market conditions, the fund invests at least 80% of its net assets
in municipal obligations, the income from which is exempt from federal personal income tax. As with the
fund’s investment objective, this investment policy may not be changed without the affirmative vote
of the holders of a majority (as defined in the Act) of the fund’s outstanding voting securities.
Municipal obligations are debt obligations issued by states, territories and possessions
of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities,
or multistate agencies or authorities, that provide income exempt from federal income tax. Municipal
obligations are classified as general obligation bonds, revenue bonds and notes. General obligation bonds
are secured by the issuer’s pledge of its faith, credit and taxing power for the payment of principal
and interest. Revenue bonds are payable from the revenue derived from a particular facility or class
of facilities or, in some cases, from the proceeds of a special excise or other specific revenue source,
but not from the general taxing power. Notes are short term instruments which are obligations of the
issuing municipalities or agencies and are sold in anticipation of a bond sale, collection of taxes or
receipt of other revenues.
44
The fund may purchase floating and variable rate obligations, municipal derivatives,
such as custodial receipt programs created by financial intermediaries, tender option bonds, and participations
in municipal obligations.
Non-Fundamental Investment Policies. Under normal market
conditions, the fund ordinarily invests all of its net assets in municipal obligations considered, at
the time of purchase, to be investment grade by Moody’s, S&P or Fitch or the unrated equivalent
as determined by the Sub-Adviser in the case of bonds, and in the two highest rating categories of Moody’s,
S&P or Fitch or the unrated equivalent as determined by the Sub-Adviser in the case of short term
obligations having or deemed to have maturities of less than one year. When the fund invests in unrated
municipal obligations, it may be more dependent on the research capabilities of the Sub-Adviser than
when it invests in rated municipal obligations. The foregoing credit quality policies apply only at the
time a security is purchased and the fund is not required to dispose of a security in the event Moody’s,
S&P or Fitch downgrades its assessment of the credit characteristics of a particular issue. Investment
grade bonds are those rated in the four highest rating categories of Moody’s, S&P or Fitch. The
fund also may invest in Taxable Investments to the extent and of the quality described below.
The fund emphasizes investments in municipal obligations with long term maturities,
but the degree of such emphasis depends upon market conditions existing at the time of investment.
From time to time, the fund may invest more than 25% of the value of its total
assets in industrial development bonds which, although issued by industrial development authorities,
may be backed only by the assets and revenues of the non-governmental users. Interest on certain municipal
obligations (including certain industrial development bonds) which are specific private activity bonds,
while exempt from federal income tax, is a preference item for the purpose of the federal alternative
minimum tax (“AMT”). Where the fund receives such interest, a proportionate share of any exempt-interest
dividend paid by the fund will be treated as a preference item to Common Stockholders. The fund may invest
without limitation in such municipal obligations if the Sub-Adviser determines that their purchase is
consistent with the fund’s investment objective.
Taxable Investments and Other Investment
Techniques. The fund may employ, among others, the investment techniques described below.
Use of certain techniques may give rise to taxable income.
Temporary Investments.
From time to time, (a) on a temporary basis other than for temporary defensive purposes (but not to exceed
20% of the fund’s net assets) or (b) for temporary defensive purposes without
45
ADDITIONAL
INFORMATION (Unaudited) (continued)
limitation, the fund may invest in taxable short term investments (“Taxable
Investments”) consisting of: notes of issuers having, at the time of purchase, a quality rating within
the two highest grades of Moody’s, S&P or Fitch; obligations of the U.S. Government, its agencies
or instrumentalities; commercial paper rated at least P-2 by Moody’s or at least A-2 by S&P or
Fitch; certificates of deposit of U.S. domestic banks, including foreign branches of domestic banks,
with assets of $1 billion or more; bankers’ acceptances; time deposits; and repurchase agreements in
respect of any of the foregoing. Dividends paid by the fund that are attributable to interest earned
from Taxable Investments will be taxable to investors. Under normal market conditions, the fund anticipates
that not more than 5% of its total assets will be invested in any of the foregoing categories of Taxable
Investments.
When-Issued Securities. New issues of municipal obligations usually
are offered on a when-issued basis, which means that delivery and payment for such municipal obligations
normally take place within 35 days after the date of the commitment to purchase. The payment obligation
and the interest rate that will be received on the municipal obligations are fixed at the time the buyer
enters into the commitment. The fund will make commitments to purchase such municipal obligations only
with the intention of actually acquiring the securities, but the fund may sell these securities before
the settlement date if it is deemed advisable, although any gain realized on such sale would be taxable.
The fund will not accrue income with respect to a when-issued security before its stated delivery date.
No additional when-issued commitments will be made if more than 20% of the fund’s net assets would
be so committed.
Stand-By Commitments. The fund may acquire “stand-by commitments” with respect
to municipal obligations held in its portfolio. Under a stand-by commitment the fund obligates a broker,
dealer or bank to repurchase at the fund’s option specified securities at a specified price. In this
respect, stand-by commitments are comparable to put options. The exercise of a stand-by commitment, therefore,
is subject to the ability of the seller to make payment on demand. The fund will acquire stand-by commitments
solely to facilitate portfolio liquidity and does not intend to exercise its rights thereunder for trading
purposes. The fund anticipates that stand-by commitments will be available from brokers, dealers and
banks without the payment of any direct or indirect consideration. The fund may pay for stand-by commitments
if such action is deemed necessary, thus increasing to a degree the cost of the underlying municipal
obligation and similarly decreasing such security’s yield to investors.
Derivatives.
The fund, to a limited extent, may invest in, or enter into, certain types of derivatives, such as futures
and options, for a variety of reasons, including to increase current income, reduce fluctuations in net
46
asset value and protect against a decline in the value of municipal obligations
held by the fund or an increase in the price of municipal obligations the fund proposes to purchase in
the future. Distributions by the fund of any gains realized on the fund’s futures and options transactions
will be taxable.
The SEC adopted Rule 18f-4 under the 1940 Act, which regulates
the use of derivatives transactions for certain funds registered under the 1940 Act. The rule defines
“derivatives transactions” as (i) any swap, security-based swap, futures contract, forward contract,
option, any combination of the foregoing, or any similar instrument (“derivatives instrument”), under
which a fund is or may be required to make any payment or delivery of cash or other assets during the
life of the instrument or at maturity or early termination, whether as margin or settlement payment or
otherwise; (ii) investment in a security on a when-issued or forward-settling basis, or with a non-standard
settlement cycle, unless (a) the fund intends to physically settle the transaction and (b) the transaction
will settle within 35 days of its trade date; (iii) any short sale borrowing; and (iv) any reverse repurchase
agreement or similar financing transactions if a fund relies on Rule 18f-4(d)(1)(ii) and therefore is
required to treat its reverse repurchase agreements and similar financing transactions as derivatives
transactions. Funds that use derivatives, other than “limited” derivatives users, must comply with
one of two value-at-risk based limits on fund leverage and adopt and implement a written derivatives
risk management program administered by a board approved derivatives risk manager. A fund will qualify
as a “limited” derivatives user if its derivative exposure does not exceed 10% of its net assets,
excluding derivatives transactions used to hedge certain currency and interest rate risks. The rule defines
the term “derivatives exposure” to mean the sum of: (1) the gross notional amounts of a fund's derivatives
transactions and (2) in the case of short sale borrowings, the value of any asset sold short. Derivatives
instruments that do not involve future payment obligations—and therefore are not a “derivatives transaction”
under the rule are not included in a fund's derivatives exposure. The fund has been deemed to be a “limited”
derivatives users and the fund has adopted and implemented policies and procedures reasonably designed
to manage the fund’s derivatives risks, including counterparty risk, leverage risk, liquidity risk,
market risk, operational risk, and legal risk.
Inverse Floating Rate Securities. The fund may invest
in residual interest municipal obligations whose interest rates bear an inverse relationship to the interest
rate on another security or the value of an index (“inverse floaters”). An investment in inverse
floaters may involve greater risk than an investment in a fixed-rate bond. Because changes in the interest
rate on the other security or index inversely affect the residual interest paid on the inverse floater,
the value of an inverse floater is generally more volatile
47
ADDITIONAL
INFORMATION (Unaudited) (continued)
than that of a fixed-rate bond. Inverse floaters have interest rate adjustment
formulas which generally reduce or, in the extreme, eliminate the interest paid to the fund when short
term interest rates rise, and increase the interest paid to the fund when short term interest rates fall.
Inverse floaters have varying degrees of liquidity, and the market for these securities is relatively
volatile. These securities tend to underperform the market for fixed-rate bonds in a rising interest
rate environment, but tend to outperform the market for fixed-rate bonds when interest rates decline.
Shifts in long term interest rates may, however, alter this tendency. Although volatile, inverse floaters
typically offer the potential for yields exceeding the yields available on fixed-rate bonds with comparable
credit quality, coupon, call provisions and maturity. These securities usually permit the investor to
convert the floating-rate to a fixed- rate (normally adjusted downward), and this optional conversion
feature may provide a partial hedge against rising rates if exercised at an opportune time.
Use of Leverage.
The fund utilizes leverage to seek to enhance the yield and net asset value of its Common Stock. These
objectives cannot be achieved in all interest rate environments. To leverage, the fund has issued VMTP
Shares and issues floating rate certificate securities, which pay dividends or interest at prevailing
short-term interest rates, and invests the proceeds in long-term municipal bonds. The interest earned
on these investments is paid to Common Stockholders in the form of dividends, and the value of these
portfolio holdings is reflected in the per share net asset value of the fund’s Common Stock. In order
for either of these forms of leverage to benefit Common Stockholders, the yield curve must be positively
sloped: that is, short-term interest rates must be lower than long-term interest rates. At the same time,
a period of generally declining interest rates will benefit Common Stockholders. When either of these
conditions change along with other factors that may have an effect on VMTP Shares dividends or floating
rate certificate securities, then the risk of leveraging will begin to outweigh the benefits.
Principal
Risk Factors
An investment in the fund involves special risk considerations,
which are described below. The fund is a diversified, closed-end management investment company designed
as a long-term investment and not as a vehicle for short-term trading purposes. An investment in the
fund’s Common Stock may be speculative and it involves a high degree of risk. The fund should not constitute
a complete investment program. Due to the uncertainty in all investments, there can be no assurance that
the fund will achieve its investment objective. Different risks may be more significant at different
times depending on market conditions. Your Common Stock at any point in time may be worth less than your
original
48
investment, even after taking into account the reinvestment of fund dividends
and distributions.
Municipal Obligations Risk. The amount of public information available
about municipal obligations is generally less than that for corporate equities or bonds. Special factors,
such as legislative changes and state and local economic and business developments, may adversely affect
the yield and/or value of the fund’s investments in municipal bonds. The yields on and market prices
of municipal bonds are dependent on a variety of factors.
Changes in economic,
business or political conditions relating to a particular municipality or state in which the fund invests
may have an effect on the fund’s net asset value. The secondary market for certain municipal bonds,
particularly below investment grade municipal bonds, tends to be less well-developed or liquid than many
other securities markets, which may adversely affect the fund’s ability to sell its portfolio securities
at attractive prices. The ability of issuers of municipal bonds to make timely payments of interest and
repayments of principal may be diminished during general economic downturns and as governmental cost
burdens are reallocated among federal, state and local governments. In addition, laws enacted in the
future by Congress or state legislatures or referenda could extend the time for payment of principal
and/or interest, or impose other constraints on enforcement of such obligations, or on the ability of
municipal issuers to levy taxes. Issuers of municipal bonds might seek protection under the bankruptcy
laws. In the event of bankruptcy of such an issuer, the fund could experience delays in collecting principal
and interest and the fund may not be able to collect all principal and interest to which it is entitled.
To enforce its rights in the event of a default in the payment of interest or repayment of principal,
or both, the fund may take possession of, and manage, the assets securing the issuer’s obligations
on such securities, which may increase the fund’s operating expenses. Any income derived from the fund’s
ownership or operation of such assets may not be tax-exempt.
Call Risk. Some municipal obligations
give the issuer the option to “call,” or prepay, the securities before their maturity date. If interest
rates fall, it is possible that issuers of callable bonds with high interest coupons will call their
bonds. If a call were exercised by the issuer of a bond held by the fund during a period of declining
interest rates, the fund is likely to replace such called bond with a lower yielding bond. If that were
to happen, it could decrease the fund’s distributions and possibly could affect the market price of
the Common Stock. Similar risks exist when the fund invests the proceeds from matured, traded or prepaid
bonds at market interest rates that are below the fund’s current earnings rate. A decline in income
could affect the market price or overall return of the Common
49
ADDITIONAL
INFORMATION (Unaudited) (continued)
Stock. During periods of market illiquidity or rising interest rates, prices of
“callable” issues are subject to increased price fluctuation.
Credit Risk. Credit risk is the
risk that one or more municipal obligations in the fund’s portfolio will decline in price, or the issuer
or obligor thereof will fail to pay interest or repay principal when due, because the issuer or obligor
experiences a decline or there is a perception of a decline in its financial status. Below investment
grade municipal bonds involve greater credit risk than investment grade municipal bonds. In addition,
sizable investments by the fund in revenue obligations could involve an increased risk to the fund should
any of the related facilities experience financial difficulties.
Interest Rate Risk.
Prices of municipal obligations and other fixed-income securities tend to move inversely with changes
in interest rates. Typically, a rise in rates will adversely affect fixed-income securities and, accordingly,
will cause the value of the fund’s investments in these securities to decline. A wide variety of market
factors can cause interest rates to rise, including central bank monetary policy, rising inflation and
changes in general economic conditions. It is difficult to predict the pace at which central banks or
monetary authorities may increase (or decrease) interest rates or the timing, frequency, or magnitude
of such changes. During periods of very low interest rates, which occur from time to time due to market
forces or actions of governments and/or their central banks, including the Board of Governors of the
Federal Reserve System in the U.S., the fund may be subject to a greater risk of principal decline from
rising interest rates. When interest rates fall, the values of already-issued fixed-income securities
generally rise. However, when interest rates fall, the fund’s investments in new securities may be
at lower yields and may reduce the fund’s income. Changing interest rates may have unpredictable effects
on markets, may result in heightened market volatility and may detract from fund performance. The magnitude
of these fluctuations in the market price of fixed-income securities is generally greater for securities
with longer effective maturities and durations because such instruments do not mature, reset interest
rates or become callable for longer periods of time. The change in the value of a fixed-income security
or portfolio can be approximated by multiplying its duration by a change in interest rates. For example,
the market price of a fixed-income security with a duration of three years would be expected to decline
3% if interest rates rose 1%.
The fund’s use of leverage may increase
its interest rate risk. The fund may use certain strategies to seek to reduce the interest rate sensitivity
of the fund’s portfolio and decrease its exposure to interest rate risk. However, there is no assurance
that the fund will do so or that such strategies will be successful.
50
Tax
Risk. To be tax-exempt, municipal obligations generally must meet certain regulatory
requirements. Although the fund will invest in municipal obligations that pay income that is exempt,
in the opinion of counsel to the issuer (or on the basis of other authority believed by the Adviser to
be reliable), from regular federal income tax, if any such municipal obligation fails to meet these regulatory
requirements, the income received by the fund from its investment in such obligations and distributed
by the fund to Common Stockholders will be taxable. Changes or proposed changes in federal tax laws may
cause the prices of municipal obligations to fall. In addition, the federal income tax treatment of payments
in respect of certain derivatives contracts is unclear. Common Stockholders may receive distributions
that are attributable to derivatives contracts that are treated as ordinary income for federal income
tax purposes.
Liquidity Risk. When there is little or no active trading market for specific
types of securities, it can become more difficult to sell the securities in a timely manner at or near
their perceived value. In such a market, the value of such securities and the fund’s net asset value
per share of Common Stock may fall dramatically, even during periods of declining interest rates. Other
market developments can adversely affect fixed-income securities markets. Regulations and business practices,
for example, have led some financial intermediaries to curtail their capacity to engage in trading (i.e.,
“market making”) activities for certain fixed-income securities, which could have the potential to
decrease liquidity and increase volatility in the fixed-income securities markets. The secondary market
for certain municipal obligations tends to be less well developed or liquid than many other securities
markets, which may adversely affect the fund’s ability to sell such municipal obligations at attractive
prices. Investments that are illiquid or that trade in lower volumes may be more difficult to value.
Liquidity can decline unpredictably in response to overall economic conditions or credit tightening.
Increases in volatility and decreases in liquidity may be caused by a rise in interest rates (or the
expectation of a rise in interest rates).
When-Issued, Delayed Delivery and Forward Commitment Transactions
Risk. When purchasing a security on a forward commitment basis, the fund assumes the
rights and risks of ownership of the security, including the risk of price and yield fluctuations. Because
the fund is not required to pay for these securities until the delivery date, these risks are in addition
to the risks associated with the fund’s other investments. Securities purchased on a forward commitment,
when-issued or delayed-delivery basis are subject to changes in value (generally appreciating when interest
rates decline and depreciating when interest rates rise) based upon the public’s perception of the
creditworthiness of the issuer and changes, real or anticipated, in the level of interest rates. Securities
purchased on a forward commitment,
51
ADDITIONAL
INFORMATION (Unaudited) (continued)
when-issued or delayed-delivery basis may expose the fund to risks because they
may experience such fluctuations prior to their actual delivery.
Derivatives Transactions Risk.
Derivatives can be volatile and involve various types and degrees of risk, depending upon the characteristics
of the particular derivative and the portfolio as a whole. Derivatives may entail investment exposures
that are greater than their cost would suggest, meaning that a small investment in derivatives could
have a large potential impact on the fund’s performance. If the fund invests in derivatives at inopportune
times or judges market conditions incorrectly, such investments may lower the fund’s return or result
in a loss. The fund also could experience losses if its derivatives were poorly correlated with the underlying
instruments or the fund’s other investments, or if the fund were unable to liquidate its position because
of an illiquid secondary market. The market for many derivatives is, or suddenly can become, illiquid.
Although the fund intends to purchase or sell futures contracts or options only if there is an active
market for such contracts or options, no assurance can be given that a liquid market will exist for any
particular contract or option at any particular time. Changes in liquidity may result in significant,
rapid and unpredictable changes in the prices for derivatives. Additionally, some derivatives the fund
may use may involve economic leverage, which may increase the volatility of these instruments as they
may increase or decrease in value more quickly than the underlying security, index, futures contract,
or other economic variable.
Derivatives may be purchased on established
exchanges or through privately negotiated transactions referred to as over-the-counter derivatives. Exchange-traded
derivatives, such as futures contracts and certain options, generally are guaranteed by the clearing
agency that is the issuer or counterparty to such derivatives. This guarantee usually is supported by
a daily variation margin system operated by the clearing agency in order to reduce overall credit risk.
As a result, unless the clearing agency defaults, there is relatively little counterparty credit risk
associated with derivatives purchased on an exchange. In contrast, no clearing agency guarantees over-the-counter
derivatives, including some options and most swap agreements, and, therefore, there is a risk the counterparty
will default. Accordingly, the Sub-Adviser will consider the creditworthiness of counterparties to over-the-counter
derivatives in the same manner as it would review the credit quality of a security to be purchased by
the fund. Over-the-counter derivatives are less liquid than exchange-traded derivatives since the other
party to the transaction may be the only investor with sufficient understanding of the derivative to
be interested in bidding for it. In addition, mandatory margin requirements have been imposed on over-the-counter
derivative instruments, which will add to the costs of such transactions.
52
Options and futures contracts prices can diverge from the prices of their underlying
instruments. Options and futures contracts prices are affected by such factors as current and anticipated
short-term interest rates, changes in volatility of the underlying instrument, and the time remaining
until expiration of the contract, which may not affect the prices of the underlying instruments in the
same way. Imperfect correlation may also result from differing levels of demand in the options and futures
markets and the securities markets, from structural differences in how options and futures and securities
are traded, or from imposition of daily price fluctuation limits or trading halts. If price changes in
the fund’s options or futures positions used for hedging purposes are poorly correlated with the investments
the fund is attempting to hedge, the options or futures positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
Engaging
in futures transactions involves risk of loss to the fund which could adversely affect the fund’s net
asset value. No assurance can be given that a liquid market will exist for any particular contract at
any particular time. Many futures exchanges and boards of trade limit the amount of fluctuation permitted
in futures contract prices during a single trading day. Once the daily limit has been reached in a particular
contract, no trades may be made that day at a price beyond that limit or trading may be suspended for
specified periods during the trading day. Futures contract prices could move to the limit for several
consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures
positions and potentially leading to substantial losses.
Leverage Risk. Leverage is a speculative
technique and there are special risks and costs associated with leveraging. There is no assurance that
the fund’s leveraging strategy will be successful. Leverage involves risks and special considerations
for Common Stockholders, including: the likelihood of greater volatility of net asset value, market price
and dividend rate of Common Stock than a comparable portfolio without leverage; the risk that fluctuations
in the interest or dividend rates that the fund must pay on any leverage will reduce the return to Common
Stockholders; the effect of leverage in a declining market, which is likely to cause a greater decline
in the net asset value of Common Stock than if the fund were not leveraged, which may result in a greater
decline in the market price of Common Stock.
Investment and Market Risk.
An investment in the fund is subject to investment risk, including the possible loss of the entire amount
that you invest. Your investment in Common Stock represents an indirect investment in the credit instruments
and other investments and assets owned by the fund. The value of the fund’s portfolio investments may
move up or down, sometimes rapidly and unpredictably. The value of the
53
ADDITIONAL
INFORMATION (Unaudited) (continued)
instruments in which the fund invests may be affected by political, regulatory,
economic and social developments, and developments that impact specific economic sectors, industries
or segments of the market. In addition, turbulence in financial markets and reduced liquidity in equity,
credit and/or fixed income markets may negatively affect many issuers, which could adversely affect the
fund. Global economies and financial markets are becoming increasingly interconnected, and conditions
and events in one country, region or financial market may adversely impact issuers in a different country,
region or financial market. These risks may be magnified if certain events or developments adversely
interrupt the global supply chain; in these and other circumstances, such risks might affect companies
world-wide.
Risk of Market Price Discount from Net Asset Value. Shares of closed-end
funds frequently trade at a market price that is below their net asset value. This is commonly referred
to as “trading at a discount.” This characteristic of shares of closed-end funds is a risk separate
and distinct from the risk that the fund’s net asset value may decrease.
Whether
Common Stockholders will realize a gain or loss upon the sale of Common Stock will depend upon whether
the market value of Common Stock at the time of sale is above or below the price the Common Stockholder
paid, taking into account transaction costs, for Common Stock and is not directly dependent upon the
fund’s net asset value. Because the market value of Common Stock will be determined by factors such
as the relative demand for and supply of Common Stock in the market, general market conditions and other
factors beyond the control of the fund, the fund cannot predict whether its Common Stock will trade at,
below or above net asset value, or below or above the initial offering price for such Common Stock.
Management
Risk. The fund is subject to management risk because the Sub-Adviser actively manages
the fund. The Sub-Adviser and the fund’s portfolio managers will apply investment techniques and risk
analyses in making investment decisions for the fund, but there can be no guarantee that these will produce
the desired results.
Cybersecurity Risk. The fund and its service providers are susceptible to operational
and information security risks due to cybersecurity incidents. In general, cybersecurity incidents can
result from deliberate attacks or unintentional events. Cybersecurity attacks include, but are not limited
to, gaining unauthorized access to digital systems (e.g., through “hacking”
or malicious software coding) for purposes of misappropriating assets or sensitive information, corrupting
data or causing operational disruption. Cyber attacks also may be carried out in a manner that does not
require gaining unauthorized access, such as causing denial-of-service attacks on websites (i.e.,
efforts to make services unavailable to intended users).
54
Cybersecurity incidents affecting the Adviser or Sub-Adviser or other service
providers, as well as financial intermediaries, have the ability to cause disruptions and impact business
operations, potentially resulting in financial losses, including by interference with the fund’s ability
to calculate its net asset value; impediments to trading for the fund’s portfolio; the inability of
Common Stockholders to transact business with the fund; violations of applicable privacy, data security
or other laws; regulatory fines and penalties; reputational damage; reimbursement or other compensation
or remediation costs; legal fees; or additional compliance costs. Similar adverse consequences could
result from cybersecurity incidents affecting issuers of securities in which the fund invests, counterparties
with which the fund engages in transactions, governmental and other regulatory authorities, exchange
and other financial market operators, banks, brokers, dealers, insurance companies and other financial
institutions and other parties. While information risk management systems and business continuity plans
have been developed which are designed to reduce the risks associated with cybersecurity, there are inherent
limitations in any cybersecurity risk management systems or business continuity plans, including the
possibility that certain risks have not been identified.
Recent Changes
During
the period ended September 30, 2024, there were: (i) no material changes in the fund’s investment objectives
or policies that have not been approved by Stockholders, (ii) no changes in the fund’s charter or by-laws
that would delay or prevent a change of control of the fund that have not been approved by Stockholders,
(iii) no material changes to the principal risk factors associated with investment in the fund, and (iv)
no change in the persons primarily responsible for the day-to-day management of the fund’s portfolio.
55
IMPORTANT
TAX INFORMATION (Unaudited)
In accordance with federal tax law, the
fund hereby reports all the dividends paid from net investment income during its fiscal year ended September
30, 2024 as “exempt-interest dividends” (not generally subject to regular Federal income tax). Where
required by federal tax law rules, shareholders will receive notification of their portion of the fund’s
taxable ordinary dividends (if any), capital gains distributions (if any) and tax-exempt dividends paid
for the 2024 calendar year on Form 1099-DIV, which will be mailed in early 2025.
56
PROXY
RESULTS (Unaudited)
Common Stockholders and holders of VMTP
Shares voted together as a single class on the following proposals presented at the annual meeting of
stockholders held on June 12, 2024.
| | | | |
To elect three Class I Directors† | Shares
for | | Shares
Authority Withheld |
Nominees Proposed by Board of Directors: | | | |
| Tamara Belinfanti | 4,315,955 | | 247,010 |
| Francine J. Bovich | 4,315,955 | | 247,010 |
| Roslyn M. Watson | 4,317,255 | | 245,710 |
Nominees
Proposed by Bulldog Investors, LLP: | | | |
| Phillip Goldstein | 6,798,774 | | 38,286 |
| Andrew Dakos | 6,794,602 | | 42,458 |
| Moritz Sell | 6,797,231 | | 39,829 |
† The term of the Class I Directors expires
in 2027.
| | | |
To
Declassify the Board†† | Shares
for | Shares
Against | Shares Abstain |
Declassification | 6,708,997 | 110,662 | 17,401 |
†† A non-binding proposal.
| | | |
To
Monetize Shares††† | Shares
for | Shares
Against | Shares Abstain |
Monetization | 6,770,704 | 48,070 | 18,286 |
††† A non-binding proposal.
57
INFORMATION ABOUT THE RENEWAL OF THE FUND’S MANAGEMENT AND
SUB-INVESTMENT ADVISORY AGREEMENTS (Unaudited)
At a meeting of the fund’s Board of
Directors held on August 14-15, 2024, the Board considered the renewal of the fund’s Management Agreement,
pursuant to which the Adviser provides the fund with investment advisory and administrative services,
and the Sub-Investment Advisory Agreement (together with the Management Agreement, the “Agreements”),
pursuant to which Insight North America LLC (the “Sub-Adviser”) provides day-to-day management of
the fund’s investments. The Board members, none of whom are “interested persons” (as defined in
the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent
legal counsel and met with counsel in executive session separate from representatives of the Adviser
and the Sub-Adviser. In considering the renewal of the Agreements, the Board considered several factors
that it believed to be relevant, including those discussed below. The Board did not identify any one
factor as dispositive, and each Board member may have attributed different weights to the factors considered.
Analysis
of Nature, Extent, and Quality of Services Provided to the Fund. The Board considered
information provided to it at the meeting and in previous presentations from representatives of the Adviser
regarding the nature, extent, and quality of the services provided to funds in the BNY Mellon fund complex,
including the fund. Representatives of the Adviser noted that the fund is a closed-end fund without daily
inflows and outflows of capital and provided the fund’s asset size.
The
Board also considered research support available to, and portfolio management capabilities of the fund’s
portfolio management personnel and that the Adviser also provides oversight of day-to-day fund operations,
including fund accounting and administration and assistance in meeting legal and regulatory requirements.
The Board also considered the Adviser’s extensive administrative, accounting and compliance infrastructures,
as well as the Adviser’s supervisory activities over the Sub-Adviser.
Comparative Analysis
of the Fund’s Performance and Management Fee and Expense Ratio. The Board reviewed
reports prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider
of investment company data based on classifications provided by Thomson Reuters Lipper (“Lipper”),
which included information comparing (1) the performance of the fund with the performance of a group
of general and insured municipal debt leveraged closed-end funds selected by Broadridge as comparable
to the fund (the “Performance Group”) and with a broader group of funds consisting of all general
and insured municipal debt leveraged closed-end funds (the “Performance Universe”), all for various
periods ended June 30, 2024 and (2) the fund’s actual and contractual management fees and total expenses
with those of the same group of funds in the Performance Group (the “Expense Group”) and with a broader
group of funds consisting of all general and insured municipal debt leveraged closed-end funds, excluding
outliers (the “Expense Universe”), the information for which was derived in part from fund financial
statements available to Broadridge as of the date of its analysis. The Adviser previously had furnished
the Board with a
58
description of the methodology Broadridge used to select the Performance Group
and Performance Universe and the Expense Group and Expense Universe.
Performance Comparisons. Representatives of
the Adviser stated that the usefulness of performance comparisons may be affected by a number of factors,
including different investment limitations and policies and the extent and manner in which leverage is
employed that may be applicable to the fund and comparison funds and the end date selected. The Board
also considered the fund’s performance in light of overall financial market conditions. The Board discussed
with representatives of the Adviser and the Sub-Adviser the results of the comparisons and considered
that the fund’s total return performance was, on a net asset value basis, above the Performance Group
median for each period, except for the three-, five- and ten-year periods when the fund’s total return
performance was below the Performance Group median, and was below the Performance Universe medians for
each period, except for the one- and two-year periods when the fund’s total return performance was
above the Performance Universe median. The Board also considered that the fund’s total return performance,
on a market price basis, was above the Performance Group median for each period, except for the four-
and ten-year periods when the fund’s total return performance was below the Performance Group median,
and was above the Performance Universe median for all periods, except for the ten-year period when the
fund’s total return performance was below the Performance Universe median. The Board also considered
that the fund’s yield performance, on a net asset value basis, was above the Performance Group median
for five of the ten one-year periods ended June 30th and was above the Performance Universe medians for
six of the ten one-year periods ended June 30th and, on a market price basis, was above the Performance
Group for five of the ten one-year periods ended June 30th and was below the Performance Universe medians
for six of the ten one-year periods ended June 30th. The Adviser also provided a comparison of the fund’s
calendar year total returns to the returns of the fund’s benchmark index, and it was noted that the
fund’s returns were above the returns of the index in seven of the ten calendar years shown.
Management
Fee and Expense Ratio Comparisons. The Board reviewed and considered the contractual management
fee rate payable by the fund to the Adviser in light of the nature, extent and quality of the management
services and the sub-advisory services provided by the Adviser and the Sub-Adviser, respectively. In
addition, the Board reviewed and considered the actual management fee rate paid by the fund over the
fund’s last fiscal year. The Board also reviewed the range of actual and contractual management fees
and total expenses as a percentage of average net assets of the Expense Group and Expense Universe funds
and discussed the results of the comparisons.
The Board considered
that the fund’s contractual management fee was higher than the Expense Group median contractual management
fee, the fund’s actual management fee, based on common assets and leveraged assets together, was higher
than the Expense Group median and higher than the Expense Universe median actual management fees and,
based on common assets alone, was lower than the Expense Group median and
59
INFORMATION ABOUT THE RENEWAL OF THE FUND’S MANAGEMENT AND
SUB-INVESTMENT ADVISORY AGREEMENTS (Unaudited) (continued)
the Expense Universe median actual management fees, and the fund’s total expenses,
based on common assets and leveraged assets together, were higher than the Expense Group median and the
Expense Universe median total expenses and, based on common assets alone, were lower than the Expense
Group median and lower than the Expense Universe median total expenses.
Representatives
of the Adviser noted that there were no funds advised by the Adviser that are in the same Lipper category
as the fund or separate accounts and/or other types of client portfolios advised by the Adviser or the
Sub-Adviser that are considered to have similar investment strategies and policies as the fund.
The Board considered the fee payable to the Sub-Adviser in relation to the fee
payable to the Adviser by the fund and the respective services provided by the Sub-Adviser and the Adviser.
The Board also took into consideration that the Sub-Adviser’s fee is paid by the Adviser, out of its
fee from the fund, and not the fund.
Analysis of Profitability and Economies of Scale.
Representatives of the Adviser reviewed the expenses allocated and profit received by the Adviser and
its affiliates and the resulting profitability percentage for managing the fund and the aggregate profitability
percentage to the Adviser and its affiliates for managing the funds in the BNY Mellon fund complex, and
the method used to determine the expenses and profit. The Board concluded that the profitability results
were not excessive, given the services rendered and service levels provided by the Adviser and its affiliates.
The Board also had been provided with information prepared by an independent consulting firm regarding
the Adviser’s approach to allocating costs to and determining the profitability of individual funds
and the entire BNY Mellon fund complex. The consulting firm also had analyzed where any economies of
scale might emerge in connection with the management of a fund.
The
Board considered, on the advice of its counsel, the profitability analysis (1) as part of its evaluation
of whether the fees under the Agreements, considered in relation to the mix of services provided by the
Adviser and the Sub-Adviser, including the nature, extent and quality of such services, supported the
renewal of the Agreements and (2) in light of the relevant circumstances for the fund and the extent
to which economies of scale would be realized if the fund grows and whether fee levels reflect these
economies of scale for the benefit of fund shareholders. Representatives of the Adviser stated that,
because the fund is a closed-end fund without daily inflows and outflows of capital, there were not significant
economies of scale at this time to be realized by the Adviser in managing the fund’s assets. Representatives
of the Adviser also stated that, as a result of shared and allocated costs among funds in the BNY Mellon
fund complex, the extent of economies of scale could depend substantially on the level of assets in the
complex as a whole, so that increases and decreases in complex-wide assets can affect potential economies
of scale in a manner that is disproportionate to, or even in the opposite direction from, changes in
the fund’s asset level. The Board also considered potential benefits to the Adviser and the Sub-Adviser
from acting as investment adviser and sub-investment adviser, respectively, and took into consideration
that there were no soft dollar arrangements in effect for trading the fund’s investments.
60
At the conclusion of these discussions, the Board agreed that it had been furnished
with sufficient information to make an informed business decision with respect to the renewal of the
Agreements. Based on the discussions and considerations as described above, the Board concluded and determined
as follows.
· The
Board concluded that the nature, extent and quality of the services provided by the Adviser and the Sub-Adviser
are adequate and appropriate.
· The
Board generally was satisfied with the fund’s relative performance.
· The Board concluded that the fees paid to the Adviser and
the Sub-Adviser continued to be appropriate under the circumstances and in light of the factors and the
totality of the services provided as discussed above.
· The Board determined that the economies of scale which may
accrue to the Adviser and its affiliates in connection with the management of the fund had been adequately
considered by the Adviser in connection with the fee rate charged to the fund pursuant to the Management
Agreement and that, to the extent in the future it were determined that material economies of scale had
not been shared with the fund, the Board would seek to have those economies of scale shared with the
fund.
In evaluating the Agreements, the Board considered these conclusions
and determinations and also relied on its previous knowledge, gained through meetings and other interactions
with the Adviser and its affiliates and the Sub-Adviser, of the Adviser and the Sub-Adviser and the services
provided to the fund by the Adviser and the Sub-Adviser. The Board also relied on information received
on a routine and regular basis throughout the year relating to the operations of the fund and the investment
management and other services provided under the Agreements, including information on the investment
performance of the fund in comparison to similar mutual funds and benchmark performance indices; general
market outlook as applicable to the fund; and compliance reports. In addition, the Board’s consideration
of the contractual fee arrangements for the fund had the benefit of a number of years of reviews of the
Agreements for the fund, or substantially similar agreements for other BNY Mellon funds that the Board
oversees, during which lengthy discussions took place between the Board and representatives of the Adviser.
Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the
Board’s conclusions may be based, in part, on its consideration of the fund’s arrangements, or substantially
similar arrangements for other BNY Mellon funds that the Board oversees, in prior years. The Board determined
to renew the Agreements.
61
BOARD
MEMBERS INFORMATION (Unaudited)
Independent
Board Members
Joseph
S. DiMartino (80)
Chairman of the Board (1995)
Current term expires in 2026
Principal
Occupation During Past 5 Years:
· Director
or Trustee of funds in the BNY Mellon Family of Funds and certain other entities (1995-Present)
Other Public Company Board Memberships During Past 5 Years:
· CBIZ, Inc., a public company providing professional business
services, products and solutions, Director (1997-May 2023)
No. of Portfolios for
which Board Member Serves: 80
———————
J.
Charles Cardona (68)
Board Member (2014)
Current term expires in 2025
Principal
Occupation During Past 5 Years:
· BNY
Mellon ETF Trust, Chairman and Trustee (2020-Present)
· BNY Mellon Liquidity Funds, Director
(2004-2024) and Chairman (2019-2021)
No. of Portfolios for which Board Member
Serves: 35
———————
Andrew Dakos
(56)
Board Member (2024)
Current term expires in 2027
Principal
Occupation During Past 5 Years:
· Partner of Bulldog Investors, LLP (2009-Present)
· Partner
of Ryan Heritage, LLP (2019-Present)
· Principal of the former general partner of
several private investment partnerships in the Bulldog Investors group of private funds (2009-Present)
· Principal
of the managing general partner of Bulldog Investors General Partnership
· Swiss Helvetia Fund, Inc., President and Chief
Executive Officer (2019-Present), Chairman (2018-Present) and Director
(2017-Present)
Other Public Company
Board
Memberships
During
Past
5
Years:
· Special
Opportunities Fund, Inc. President and Director (2009-Present)
· Crossroads Liquidating Trust, Trustee
(until 2020)
· High
Income Securities Fund, President and Trustee (2018-Present)
· Brookfield DTLA Fund Office Trust Investor Inc., Director
(2017-Present)
No. of Portfolios for which Board Member Serves: 1
———————
62
Andrew
J. Donohue (74)
Board Member (2019)
Current term expires in 2026
Principal
Occupation During Past 5 Years:
· Attorney,
Solo Law Practice (2019-Present)
· Shearman
& Sterling LLP, a law firm, Of Counsel (2017-2019)
· Chief of Staff to the Chair of the SEC (2015-2017)
Other Public Company Board Memberships During Past 5 Years:
· Oppenheimer Funds (58 funds), Director
(2017-2019)
No. of Portfolios for which Board Member Serves: 40
———————
Isabel
P. Dunst (77)
Board Member (2014)
Current term expires in 2026
Principal
Occupation During Past 5 Years:
· Hogan
Lovells LLP, a law firm, Retired (2019-Present); Senior Counsel (2018-2019); Of Counsel (2015-2018)
· Hebrew
Union College Jewish Institute of Religion, Member of the Board of Governors (2015-Present)
· Bend
the ARC, a civil rights organization, Board Member (2016-December 2021)
No. of Portfolios for
which Board Member Serves: 22
———————
Phillip
Goldstein (79)
Board Member (2024)
Current term expires in 2027
Principal
Occupation During Past 5 Years:
· Partner of Bulldog Investors, LLP (2009-Present)
· Partner
of Ryan Heritage, LLP (2019-Present)
· Principal of the former general partner of
several private investment partnerships in the Bulldog Investors group of private funds (2009-Present)
Other
Public
Company
Board
Memberships
During
Past
5
Years:
· High
Income Securities Fund, Chairman (2018-Presnt)
· Special Opportunities Fund, Inc., Chairman (2009-Present)
· Brookfield
DTLA Fund Office Trust Investor, Inc., Director (2017-Present)
· Swiss Helvetia Fund, Inc. Director
(2018-Present)
· The
Mexico Equity and Income Fund, Inc., Chairman (2000-Present)
· Crossroads Liquidating Trust, Trustee
(until 2020)
· MVC
Capital, Inc., Director (until 2020)
No. of Portfolios for which Board Member
Serves: 1
———————
63
BOARD
MEMBERS INFORMATION (Unaudited) (continued)
Nathan
Leventhal (81)
Board Member (2009)
Current term expires in 2025
Principal
Occupation During Past 5 Years:
· Lincoln
Center for the Performing Arts, President Emeritus (2001-Present)
· Palm Beach Opera, President (2016-2023)
Other Public Company Board Memberships During Past 5 Years:
· Movado Group, Inc., a public company that designs, sources,
markets and distributes watches Director (2003-2020)
No. of Portfolios for
which Board Member Serves: 50
———————
Robin
A. Melvin (60)
Board Member (2014)
Current term expires in 2025
Principal
Occupation During Past 5 Years:
· Westover
School, a private girls' boarding school in Middlebury, Connecticut, Trustee
(2019-June 2023)
· Mentor
Illinois, a non-profit organization dedicated to increasing the quantity and quality of mentoring services
in Illinois, Co-Chair (2014-March 2020); Board Member (2013-March 2020)
· JDRF,
a non-profit juvenile diabetes research foundation, Board Member (June 2021-June 2022)
Other Public Company Board Memberships During Past 5 Years:
· HPS Corporate Lending Fund, a closed-end management investment
company regulated as a business development company, Trustee (August 2021-Present)
· HPS
Corporate Capital Solutions Fund, a close-end management investment company regulated as a business development
company, Trustee, (December 2023-Present)
No. of Portfolios for
which Board Member Serves: 62
———————
Moritz
Sell (56)
Board Member (2024)
Current term expires in 2027
Principal
Occupation During Past 5 Years:
· Edison
Holdings GmbH, Principal
· Markston
International LLC, Senior Advisor (until 2019)
Other Public Company
Board
Memberships
During
Past
5
Years:
· Swiss
Helvetia Fund, Inc. Director (2017-Present)
· High Income Securities Fund, Trustee
(2018-Presnt)
· Aberdeen
Asia Pacific Income Fund, Director (2018-Present)
· Aberdeen Global Income Fund Director
(2018-Present)
· Aberdeen
Australia Equity Fund, Director (2004-Present)
No. of Portfolios for
which Board Member Serves: 1
———————
64
Benaree
Pratt Wiley (78)
Board Member (2009)
Current term expires in 2026
Principal
Occupation During Past 5 Years:
· The
Wiley Group, a firm specializing in strategy and business development, Principal
(2005-Present)
Other Public Company Board Memberships During Past 5 Years:
· CBIZ,
Inc., a public company providing professional business services, products and solutions, Director
(2008-Present)
· Blue
Cross-Blue Shield of Massachusetts, Director (2004-December 2020)
No. of Portfolios for
which Board Member Serves: 52
———————
Tamara
Belinfanti (49)
Advisory Board Member (2021)
Principal Occupation
During Past 5 Years:
· New
York Law School, Lester Martin Professor of Law (2009-Present)
No. of Portfolios for
which Advisory Board Member Serves: 22
———————
Francine
J. Bovich (73)
Advisory Board Member (2015)
Principal Occupation
During Past 5 Years:
· The
Bradley Trusts, private trust funds, Trustee (2011-Present)
Other
Public Company Board Memberships During Past 5 Years:
· Annaly Capital Management, Inc., a real estate investment
trust, Director (2014-Present)
No. of Portfolios for which Board Member
Serves: 68
———————
65
BOARD
MEMBERS INFORMATION (Unaudited) (continued)
Gordon
J. Davis (83)
Advisory Board Member (2021)
Principal Occupation
During Past 5 Years:
· Venable
LLP, a law firm, Partner (2012-Present)
Other Public Company Board Memberships
During Past 5 Years:
· BNY
Mellon Family of Funds (53 funds), Board Member (1995-August 2021)
No. of Portfolios for
which Advisory Board Member Serves: 34
———————
Roslyn
M. Watson (74)
Advisory Board Member (2014)
Principal Occupation
During Past 5 Years:
· Watson
Ventures, Inc., a real estate investment company. Principal (1993-Present)
Other Public Company Board Memberships During Past 5 Years:
· American Express Bank, FSB, Director
(1993-2018)
No. of Portfolios for which Board Member Serves: 40
———————
The address of the Board Members and Officers is c/o BNY Mellon Investment Adviser,
Inc., 240 Greenwich Street, New York, New York 10286.
66
OFFICERS
OF THE FUND (Unaudited)
DAVID DIPETRILLO, President since January 2021.
Vice
President and Director of the Adviser since February 2021; Head of North America Distribution, BNY Investments
since February 2023; and Head of North America Product, BNY Investments from January 2018 to February
2023. He is an officer of 51 investment companies (comprised of 93 portfolios) managed by the Adviser
or an affiliate of the Adviser. He is 46 years old and has been an employee of BNY since 2005.
JAMES
WINDELS, Treasurer since November 2001.
Director of the Adviser
since February 2023; Vice President of the Adviser since September 2020; and Director–BNY Fund Administration.
He is an officer of 52 investment companies (comprised of 110 portfolios) managed by the Adviser or an
affiliate of the Adviser. He is 66 years old and has been an employee of the Adviser since April 1985.
PETER
M. SULLIVAN, Chief Legal Officer since July 2021 and Vice President and Assistant Secretary since March
2019.
Chief Legal Officer of the Adviser and Associate General Counsel
of BNY since July 2021; Senior Managing Counsel of BNY from December 2020 to July 2021; and Managing
Counsel of BNY from March 2009 to December 2020. He is an officer of 52 investment companies (comprised
of 110 portfolios) managed by the Adviser or an affiliate of the Adviser. He is 56 years old and has
been an employee of BNY since April 2004.
SARAH S. KELLEHER, Secretary since April 2024 and Vice President
since April 2014.
Vice President of BNY Mellon ETF Investment
Adviser; LLC since February 2020; Senior Managing Counsel of BNY since September 2021; and Managing Counsel
of BNY from December 2017 to September 2021. She is an officer of 52 investment companies (comprised
of 110 portfolios) managed by the Adviser or an affiliate of the Adviser. She is 48 years old and has
been an employee of BNY since March 2013.
DEIRDRE CUNNANE, Vice President and Assistant Secretary since
March 2019.
Managing Counsel of BNY since December 2021; and Counsel of
BNY from August 2018 to December 2021. She is an officer of 52 investment companies (comprised of 110
portfolios) managed by the Adviser or an affiliate of the Adviser. She is 34 years old and has been an
employee of BNY since August 2013.
LISA M. KING, Vice President and Assistant Secretary since March
2024.
Counsel of BNY since June 2023; and Regulatory Administration
Group Manager at BNY Mellon Asset Servicing from February 2016 to June 2023. She is an officer of 52
investment companies (comprised of 110 portfolios) managed by the Adviser or an affiliate of the Adviser.
She is 56 years old and has been an employee of BNY since February 2016.
JEFF PRUSNOFSKY, Vice President
and Assistant Secretary since August 2005.
Senior Managing Counsel
of BNY. He is an officer of 52 investment companies (comprised of 110 portfolios) managed by the Adviser
or an affiliate of the Adviser. He is 59 years old and has been an employee of the Adviser since October
1990.
AMANDA
QUINN, Vice President and Assistant Secretary since March 2020.
Managing
Counsel of BNY since March 2024 and Counsel of BNY from June 2019 to February 2024. She is an officer
of 52 investment companies (comprised of 110 portfolios) managed by the Adviser or an affiliate of the
Adviser. She is 39 years old and has been an employee of BNY since June 2012.
67
OFFICERS
OF THE FUND (Unaudited) (continued)
DANIEL
GOLDSTEIN, Vice President since March 2022.
Head of Product Development
of North America Distribution, BNY Investments since January 2018; Executive Vice President of North
America Product, BNY Investments since April 2023; and Senior Vice President, Development & Oversight
of North America Product, BNY Investments from 2010 to March 2023. He is an officer of 51 investment
companies (comprised of 93 portfolios) managed by the Adviser or an affiliate of the Adviser. He is 55
years old and has been an employee of BNY Mellon Securities Corporation since 1991.
JOSEPH MARTELLA, Vice President
since March 2022.
Vice President of the Adviser since December
2022; Head of Product Management of North America Distribution, BNY Investments since January 2018; Executive
Vice President of North America Product, BNY Investments since April 2023; and Senior Vice President
of North America Product, BNY Investments from 2010 to March 2023. He is an officer of 51 investment
companies (comprised of 93 portfolios) managed by the Adviser or an affiliate of the Adviser. He is 47
years old and has been an employee of BNY Mellon Securities Corporation since 1999.
ROBERTO G. MAZZEO, Assistant
Treasurer since June 2024.
Financial Reporting Manager - BNY Fund
Administration. He is an officer of 52 investment companies (comprised of 110 portfolios) managed by
the Adviser or an affiliate of the Adviser. He is 44 years old and has been an employee of the Adviser
since October 2006.
GAVIN C. REILLY, Assistant Treasurer since December 2005.
Tax
Manager–BNY Fund Administration. He is an officer of 52 investment companies (comprised of 110 portfolios)
managed by the Adviser or an affiliate of the Adviser. He is 56 years old and has been an employee of
the Adviser since April 1991.
ROBERT SALVIOLO, Assistant Treasurer since May 2007.
Senior
Accounting Manager–BNY Fund Administration. He is an officer of 52 investment companies (comprised
of 110 portfolios) managed by the Adviser or an affiliate of the Adviser. He is 57 years old and has
been an employee of the Adviser since June 1989.
ROBERT SVAGNA, Assistant Treasurer since August 2005.
Senior Accounting Manager–BNY Fund Administration. He is an officer of 52 investment
companies (comprised of 110 portfolios) managed by the Adviser or an affiliate of the Adviser. He is
57 years old and has been an employee of the Adviser since November 1990.
JOSEPH W. CONNOLLY, Chief
Compliance Officer since October 2004.
Chief Compliance Officer
of the BNY Mellon Family of Funds and BNY Mellon Funds Trust since 2004; and Chief Compliance Officer
of the Adviser from 2004 until June 2021. He is the Chief Compliance Officer of 51 investment companies
(comprised of 97 portfolios) managed by the Adviser. He is 67 years old.
68
OFFICERS
AND DIRECTORS
BNY Mellon Municipal Income, Inc.
240 Greenwich Street
New York, NY 10286
| | | |
Directors | | Officers (continued) | |
Joseph S. DiMartino,
Chairman | | Vice
Presidents (continued) | |
Tamara Belinfanti†† | | Joseph Martella | |
Francine
J. Bovich†† | | Assistant Treasurers | |
J. Charles Cardona | | Roberto G. Mazzeo | |
Andrew Dakos | | Gavin C. Reilly | |
Andrew J. Donohue | | Robert Salviolo | |
Isabel P. Dunst | | Robert Svagna | |
Nathan Leventhal† | | Chief Compliance Officer | |
Phillip Goldstein | | Joseph W. Connolly | |
Robin A. Melvin | | Portfolio Managers | |
Moritz
Sell | | Daniel
A. Rabasco | |
Roslyn M. Watson†† | | Jeffrey B. Burger | |
Benaree Pratt Wiley† | | Adviser | |
Gordon J. Davis†† | | BNY Mellon Investment
Adviser, Inc. | |
†
Elected by VMTP Shares Holders | | Sub-Adviser | |
†† Advisory
Board Member | | Insight
North America LLC | |
Officers | | Custodian | |
President | | The Bank of New York
Mellon | |
David DiPetrillo | | Counsel | |
Chief Legal Officer | | Stradley Ronon Stevens
& Young, LLP | |
Peter M. Sullivan | | Transfer Agent, | |
Vice President and Secretary | | Dividend Disbursing Agent | |
Sarah S. Kelleher | and
Registrar | |
Vice
Presidents and Assistant Secretaries | Computershare Inc. | |
Deirdre Cunnane | | (Common Stock) | |
Lisa M. King | | The Bank of New York Mellon | |
Jeff Prusnofsky | | (VMTP Shares) | |
Amanda Quinn | | Stock Exchange Listing | |
Treasurer | | NYSE American Symbol: DMF | |
James Windels | | Initial SEC Effective Date | |
Vice Presidents | | 10/21/88 | |
Daniel Goldstein | | | |
The fund’s net asset
value per share appears in the following publications: Barron’s, Closed-End Bond Funds section under
the heading “Municipal Bond Funds” every Monday; The Wall Street Journal, Mutual Funds section under
the heading “Closed-End Funds” every Monday. |
Notice is hereby given in accordance with Section 23(c) of the Act that the fund
may purchase shares of its common stock in the open market when it can do so at prices below the then
current net asset value per share. |
69
BNY
Mellon Municipal Income, Inc.
240 Greenwich Street
New
York, NY 10286
Adviser
BNY
Mellon Investment Adviser, Inc.
240 Greenwich Street
New
York, NY 10286
Sub-Adviser
Insight
North America LLC
200 Park Avenue, 7th Floor
New York, NY 10166
Custodian
The
Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer
Agent &
Registrar (Common Stock)
Computershare Inc.
480
Washington Boulevard
Jersey City, NJ 07310
Dividend Disbursing Agent (Common Stock)
Computershare
Inc.
P.O. Box 30170
College Station, TX 77842
For more information about
the fund, visit https://bny.com/investments/closed-end-funds. Here you will find the fund’s most recently
available quarterly fact sheets and other information about the fund. The information posted on the fund’s
website is subject to change without notice.
The fund files its complete schedule of portfolio holdings
with the SEC for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms
N-PORT are available on the SEC’s website at www.sec.gov.
A
description of the policies and procedures that the fund uses to determine how to vote proxies relating
to portfolio securities and information regarding how the fund voted these proxies for the most recent
12-month period ended June 30 is available at www.bny.com/investments and on the SEC’s website at www.sec.gov
and without charge, upon request, by calling 1-800-373-9387.
| |
0424AR0924
| |
Item 2. Code
of Ethics.
The Registrant has adopted a code of ethics
that applies to the Registrant's principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions. There have been no amendments
to, or waivers in connection with, the Code of Ethics during the period covered by this Report.
Item 3. Audit
Committee Financial Expert.
The Registrant's Board has determined that
J. Charles Cardona, a member of the Audit Committee of the Board, is an audit committee financial expert
as defined by the Securities and Exchange Commission (the "SEC"). Mr. Cardona is "independent"
as defined by the SEC for purposes of audit committee financial expert determinations.
Item 4. Principal
Accountant Fees and Services.
(a) Audit Fees.
The aggregate fees billed for each of the last two fiscal years (the "Reporting Periods") for professional
services rendered by the Registrant's principal accountant (the "Auditor") for the audit of the Registrant's
annual financial statements or services that are normally provided by the Auditor in connection with
the statutory and regulatory filings or engagements for the Reporting Periods, were $38,168 in 2023 and
$38,931 in 2024.
(b) Audit-Related Fees. The aggregate fees
billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably
related to the performance of the audit of the Registrant's financial statements and are not reported
under paragraph (a) of this Item 4 were $35,212 in 2023 and $12,594 in 2024. These services consisted
of (i) agreed upon procedures related to compliance with Internal Revenue Code section 817(h), (ii) security
counts required by Rule 17f-2 under the Investment Company Act of 1940, as amended, (iii) advisory services
as to the accounting or disclosure treatment of Registrant transactions or events and (iv) advisory services
to the accounting or disclosure treatment of the actual or potential impact to the Registrant of final
or proposed rules, standards or interpretations by the Securities and Exchange Commission, the Financial
Accounting Standards Boards or other regulatory or standard-setting bodies.
The
aggregate fees billed in the Reporting Periods for non-audit assurance and related services by the Auditor
to the Registrant's investment adviser (not including any sub-investment adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment adviser), and any entity
controlling, controlled by or under common control with the investment adviser that provides ongoing
services to the Registrant ("Service Affiliates"), that were reasonably related to the performance of
the annual audit of the Service Affiliate, which required pre-approval by the Audit Committee were $0
in 2023 and $0 in 2024.
(c) Tax Fees. The aggregate fees
billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance,
tax advice, and tax planning ("Tax Services") were $3,342 in 2023 and $3,342 in 2024. These services
consisted of: (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S.
federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative
developments; (iii) tax advice regarding tax qualification matters and/or treatment of various financial
instruments held or proposed to be acquired or held, and (iv) determination of Passive Foreign Investment
Companies. The aggregate fees billed in the Reporting Periods for Tax Services by the Auditor to Service
Affiliates, which required pre-approval by the Audit Committee were $8,158 in 2023 and $8,503 in 2024.
(d) All Other Fees. The aggregate fees
billed in the Reporting Periods for products and services provided by the Auditor, other than the services
reported in paragraphs (a) through (c) of this Item, were $0 in 2023 and $0 in 2024. These services
consisted of a review of the Registrant's anti-money laundering program.
The aggregate fees billed in the Reporting Periods for Non-Audit
Services by the Auditor to Service Affiliates, other than the services reported in paragraphs (b) through
(c) of this Item, which required pre-approval by the Audit Committee, were $0 in 2023 and $0 in 2024.
(e)(1) Audit Committee Pre-Approval Policies and Procedures.
The Registrant's Audit Committee has established policies and procedures (the "Policy") for pre-approval
(within specified fee limits) of the Auditor's engagements for non-audit services to the Registrant and
Service Affiliates without specific case-by-case consideration. The pre-approved services in the Policy
can include pre-approved audit services, pre-approved audit-related services, pre-approved tax services
and pre-approved all other services. Pre-approval considerations include whether the proposed services
are compatible with maintaining the Auditor's independence. Pre-approvals pursuant to the Policy are
considered annually.
(e)(2) Note. None of the services
described in paragraphs (b) through (d) of this Item 4 were approved by the Audit Committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f)
None of the hours expended on the principal accountant's engagement to audit the registrant's financial
statements for the most recent fiscal year were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees.
Non-Audit Fees.
The aggregate non-audit fees billed by the Auditor for services rendered to the Registrant, and rendered
to Service Affiliates, for the Reporting Periods were $1,797,238 in 2023 and $1,591,639 in 2024.
Auditor Independence. The Registrant's Audit Committee has
considered whether the provision of non-audit services that were rendered to Service Affiliates, which
were not pre-approved (not requiring pre-approval), is compatible with maintaining the Auditor's independence.
(i) Not
applicable.
(j) Not
applicable.
Item 5. Audit Committee of Listed Registrants.
The
Registrant is a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Registrant has a separately-designated standing audit committee established
in accordance with Section 3(a)(58)(A) of the Exchange Act and the following persons constitute the Audit
Committee of the Registrant: Joseph S. DiMartino, J. Charles Cardona, Andrew J. Donohue, Isabel P. Dunst,
Nathan Leventhal, Robin A. Melvin and Benaree Pratt Wiley.
The
Fund has determined that each member of the Audit Committee of the Registrant is not an "interested person"
of the Registrant as defined by Section 2(a)(19) of the Investment Company Act of 1940, as amended, and
for purposes of Rule 10A-3(b)(1)(iii) under the Exchange Act, is considered independent.
Item 6. Investments.
Not
applicable.
Item 7. Financial Statements and Financial Highlights for Open-End Management
Investment Companies.
Not applicable.
Item 8. Changes in and Disagreements with Accountants for Open-End Management
Investment Companies.
Not applicable.
Item
9. Proxy
Disclosures for Open-End Management Investment Companies.
Not
applicable.
Item 10. Remuneration
Paid to Directors, Officers, and Others of Open-End Management Investment Companies.
Not
applicable.
Item 11. Statement
Regarding Basis for Approval of Investment Advisory Contract.
Not
applicable.
Item 12. Disclosure of Proxy Voting
Policies and Procedures for Closed-End Management Investment Companies.
SUMMARY OF THE REGISTRANT'S PROXY VOTING POLICY AND PROCEDURES
The
Registrant's Board of Directors (the "Board") has adopted the following procedures with respect to proxy
voting by the Registrant.
Delegation of Proxy Voting Responsibility and Adoption
of Proxy Voting Procedures
The Board has delegated the authority to vote proxies of companies
held in the Registrant's portfolio to Insight North America, LLC ("INA" or the Sub-Adviser"), the Registrant's
sub-investment adviser. BNY Mellon Investment Adviser, Inc. ("BNYM Investment Adviser") serves as the
Registrant's investment adviser.
In addition, the Board has adopted INA's
proxy voting procedures pursuant to which proxies of companies held in the Registrant's portfolio will
be voted.
Proxy Voting Operations
The Registrant has
engaged Institutional Shareholder Services, Inc. ("ISS") as its proxy voting agent to administer the
ministerial, non-discretionary elements of proxy voting and reporting.
Voting
Shares of Certain Registered Investment Companies
Under certain circumstances, when the
Registrant owns shares of another registered investment company (an "Acquired Fund"), the Registrant
may be required by the Investment Company Act of 1940, as amended (the "1940 Act") or the rules thereunder,
or exemptive relief from the 1940 Act and/or the rules thereunder, to vote such Acquired Fund shares
in a certain manner, such as voting the Acquired Fund shares in the same proportion as the vote of all
other shareholders of such Acquired Fund.
Policies and Procedures; Oversight
The Registrant's Chief Compliance Officer is responsible for confirming that the
Sub-Adviser has adopted and implemented written policies and procedures that are reasonably designed
to ensure that the Registrant's proxies are voted in the best interests of the Registrant. In addition,
the adequacy of such policies and procedures are reviewed at least annually, and proxy voting for the
Registrant is monitored to ensure compliance with the Sub-Adviser's procedures, as applicable, such as
by sampling votes cast for the Registrant, including routine proposals as well as those that require
more analysis, to determine whether they complied with the Sub-Adviser's Proxy Voting Procedures.
Review
of Proxy Voting
BNYM Investment Adviser reports annually to the Board on the
Registrant's proxy voting, including information regarding: (1) proxy voting proposals that were voted;
(2) proxy voting proposals that were voted against the management company's recommended vote, but in
accordance with the applicable proxy voting guidelines; and (3) proxy voting proposals that were not
voted, including the reasons the proxy voting proposals were not voted.
Availability
of Voting Records
Pursuant to Rule 30b1-4 under the 1940 Act, the Registrant is required to file
its complete proxy voting record with the SEC on Form N-PX not later than August 31st of each year for
the most recent twelve-month period ended June 30th. The Registrant has delegated the responsibility
for gathering this information, filing Form N-PX and posting voting information to the website to BNYM
Investment Adviser, with the assistance of ISS.
SUMMARY OF INSIGHT'S PROXY
VOTING POLICY AND PROCEDURES
1. Introduction
Insight seeks to actively
exercise its rights and responsibilities in regard to proxy voting on behalf of Clients and is an essential
part of maximizing shareholder value, ensuring good governance and delivering investment performance
aligned with our Clients' long-term economic interests.
The Insight Proxy Voting
Policy ("Policy") sets out the arrangements employed by Insight Investment Management (Global) Limited,
Insight Investment Management (Europe) Limited, Insight North America LLC and Insight Investment International
Limited (collectively "Insight").
2. Policy Statement
Insight
is committed to supporting good governance practices and also voting all our proxies where it is deemed
appropriate and responsible to do so for the relevant asset class. In such cases, Insight's objective
is to vote proxies in the best interests of its Clients.
3. Scope
This
Policy applies to financial instruments with voting rights where Insight has discretionary voting authority.
Alternatively, where a Client retains control over the voting decision, Insight will only lodge votes
in instances where the client agreement hands responsibility to Insight to cast the votes on their behalf.
4.
Proxy Voting Process
Insight's proxy voting activity adheres to best-practice standards
and is a component of Insight's Stewardship and Responsible Investment Policies. In implementing its
Proxy Voting Policy, Insight will take into account a number of factors used to provide a framework for
voting each proxy. These include:
Leadership: Every company should be led by an effective
board whose approach is consistent with creating sustainable long-term growth.
· Strategy: Company leadership should define a clear
purpose and set long term objectives for delivering value to shareholders.
· Culture: The board should promote a diverse and
inclusive culture which strongly aligns to the values of the company. It should seek to monitor culture
and ensure that it is regularly engaging with its workforce.
· Engagement with Shareholders: The board and senior
management should be transparent and engaged with existing shareholders. The board should have a clear
understanding of the views of shareholders. The board should seek to minimize unnecessary dilution of
equity and preserve the rights of existing shareholders.
· Sustainability: The board should aim to take account
of environmental, social and governance risks and opportunities when setting strategy and in their company
monitoring role.
Structure: The board should have clear division of responsibilities.
· The
Chair: The Independent Chair, or Lead Independent Director, of the board should demonstrate
objective judgment and promote transparency and facilitate constructive debate to promote overall effectiveness.
· The
Board: There should be an appropriate balance of executive and non-executive directors.
Non-executive directors should be evaluated for independence. No one individual should have unfettered
decision-making powers. There should be a clear division of responsibilities, between the independent
board members and the executive leadership of the company.
· Resources: The board should ensure it has sufficient
governance policies, influence and resources to function effectively. Non-executive directors should
have sufficient time to fulfil their obligations to the company as directors.
Effectiveness:
The board should seek to build strong institutional knowledge to ensure long term efficient and sustainable
operations.
· Appointment:
There should be a formal appointment process, which ensures that the most qualified individuals are
selected for the board. This process should be irrespective of bias to ensure appropriate diversity
of the board.
· Knowledge:
The board should be comprised of those with the knowledge, skills and experience to effectively discharge
their duties. The board should have sufficient independence to serve as an effective check on company
management and ensure the best outcomes for shareholders.
· Evaluation: The board should be evaluated for effectiveness
on a regular basis. Board member's contributions should be considered individually.
Independence:
The board should present a fair and balanced view of the company's position and prospects.
· Integrity:
The board should ensure that all reports produced accurately reflect the financial position, prospects
and risks relevant to the company. The board should ensure the independence and effectiveness of internal
and external audit functions.
· Audit:
The board should ensure that clear, uncontentious accounts are produced. These should conform to the
relevant best accountancy practices and accurately represent the financial position of the company.
Deviations from standard accounting practices should be clearly documented with a corresponding rationale.
· Risk:
The board should ensure the company has sound risk management and internal control systems. There should
be a regular assessment and communication of the company's emerging and principal risks.
Remuneration:
Levels of remuneration should be sufficient to attract, retain and motivate talent of the quality required
to run the company successfully.
· Goal
Based: The board should base remuneration on goal-based, qualitative, discretionary
cash incentives. Remuneration should consider underlying industry and macroeconomic conditions and not
be structured in a tax oriented manner.
· Transparent:
Remuneration arrangements should be transparent and should avoid complexity.
· Sustainable: Remuneration should not be excessively
share based and should be accurately represented and controlled as an operational cost. The remuneration
of executives should promote long term focus and respect the interests of existing shareholders.
The relevant factors are used by Insight to develop Voting Guidelines enabling
a consistent approach to proxy voting, which are reviewed annually by the Proxy Voting Group ("PVG")
– (see section 6).
Voting activity is most usually performed by the Chair of
the PVG, a senior portfolio manager with no day to day investment discretion. This creates an independent
governance structure for voting, helping to mitigate actual and potential conflicts of interest (see
section 5).
The Chair of the PVG can seek support from portfolio managers, who have active
discretion over the securities, to provide additional input into the voting decision such as company
background. However, the vote will be cast by the Chair of the PVG or their delegate. Insight seeks
to vote on all holdings with associated voting rights in one of three ways: in support of, against, or
in abstention. If the chair is unable to cast a vote, the decision will be cast by the deputy chair.
Insight uses a Voting Agent to assist in the analysis and administration of the vote (see section 4.1).
The rationale for voting for, against, or abstaining is retained on a case-by-case basis as appropriate
and reviewed by the PVG on a regular basis.
4.1 Voting Agent
To
assist Insight professionals with implementing its proxy voting strategy, Insight retains the services
of an independent proxy voting service, namely Minerva ("Voting Agent"). The Voting Agent's responsibilities
include, but are not limited to, monitoring company meeting agendas and items to be voted on, reviewing
each vote against Insight's Voting Guidelines and providing a voting analysis based upon the Voting Guidelines.
The Voting Agent also identifies resolutions that require specific shareholder judgement – often relating
to corporate transactions or shareholder resolutions. This enables Insight to review situations where
the Voting Guidelines require additional consideration or assist in the identification of potential conflicts
of interest impacting the proxy vote decision. The Chair of the PVG will review for contentious resolutions,
and in the event of one will determine if an actual or potential conflict exists in which case the resolution
will be escalated to the PVG voting committee (see section 5.1).
Voting decisions are communicated
by Insight to the Voting Agent and submitted to shareholder meetings through a specific proxy.
On
a monthly basis the Voting Agent provides reports on voting activity to Insight. Voting data is available
to Clients upon request and is posted on its website (see section 7). Insight conducts an annual due
diligence to review the Voting Guidelines and the Voting Agent's related services.
5. Conflicts
of Interest
Effective stewardship requires protecting our Clients against any potential conflicts
of interest and managing them with appropriate governance. To comply with applicable legal and regulatory
requirements, Insight believes managing perceived conflicts is as important as managing actual conflicts.
In
the course of normal business, Insight and its personnel may encounter situations where it faces a conflict
of interest or a conflict of interest could be perceived. A conflict of interest occurs whenever the
interests of Insight or its personnel could diverge from those of a Client or when Insight or its personnel
could have obligations to more than one party whose interests are different to each other or those of
Insight's Clients.
In identifying a potential conflict situation, as a minimum,
consideration will be made as to whether Insight, or a member of staff, is likely to:
· make a financial gain or avoid a financial loss at the expense
of the Client
· present
material differences in the thoughts of two PM's who own the same security
· benefit
if it puts the interest of one Client over the interests of another Client
· gain an interest from a service provided to, or transaction
carried out on behalf of a Client which may not be in, or which may be different from, the Client's interest
· obtain
a higher than usual benefit from a third party in relation to a service provided to the Client
· receive
an inducement in relation to a service provided to the Client, in the form of monies, goods or services
other than standard commission or fee for that service or have a personal interest that could be seen
to conflict with their duties at Insight
· create
a conflict where Insight invests in firms which are Clients or potential Clients of Insight. Insight
might give preferential treatment in its research (including external communication of the same) and/or
investment management to issuers of publicly traded debt or equities which are also clients or closely
related to clients (e.g., sponsors of pension schemes). This includes financial and ESG considerations.
· create
a conflict between investment teams with fixed income holdings in publicly listed firms or material differences
in the thoughts of two PM's who own the same security
5.1 Escalation of Contentious
Voting Issue
When a contentious voting issue is identified, the PVG Chairman or delegate will
review, evaluate and determine whether an actual material conflict of interest exists, and if so, will
escalate the matter to the PVG voting committee. Depending upon the nature of the material conflict
of interest, Insight may elect to take one or more of the following measures:
· removing certain Insight personnel from the proxy voting process
· walling
off personnel with knowledge of the material conflict to ensure that such personnel do not influence
the relevant proxy vote and
· voting
in accordance with the applicable Voting Guidelines, if any, if the application of the Voting Guidelines
would objectively result in the casting of a proxy vote in a predetermined manner
An
unconflicted contentious resolution will be voted by the Chair or their delegate. Where a conflict is
deemed to exist the vote, widened to the PVG voting committee, will be determined by majority vote.
The
resolution of all contentious voting issues will be documented in order to demonstrate that Insight acted
in the best interests of its Clients. Any voting decision not resolved by the PVG will be escalated
to the Insight Chief Investment Officer ("CIO") or their delegate for additional input.
6. Proxy
Voting Group
The PVG is responsible for overseeing the implementation of voting decisions where
Insight has voting authority on behalf of Clients. The PVG meets at least quarterly, or more frequently
as required. In ensuring that votes casted are in the best interest of Clients, the PVG will oversee
the following proxy voting activities:
· Casting
votes on behalf of Clients
· Voting
Policy: Oversee and set the Proxy Voting Policy
· Voting
Guidelines: Oversee and set the Voting Guidelines which are reviewed and approved on an
annual basis
· Stewardship
Code & Engagement Policy: Review for consistency with Proxy Voting Policy and Voting
Guidelines
· Conflicts
of Interest: Manage conflicts when making voting instructions in line with Insight's Conflict
of Interest Policy
· Resolution
Assessment: Review upcoming votes that cannot be made using Voting Guidelines and make
voting decisions
· Voting
Agent: Appoint and monitor third-party proxy agencies, including the services they
perform for Insight in implementing its voting strategy and
· Reporting: Ensure voting activity aligns with local
regulations and standards
The PVG is chaired by a Senior Portfolio
Manager (who has no direct day to day investment discretion) and attended by portfolio management personal,
the Senior Stewardship Analyst (Deputy Chair), Corporate Risk, Compliance, and Operations personal.
The PVG is accountable to and provides quarterly updates to the Investment Management Group ("IMG").
7.
Disclosure and Recording Keeping
In certain foreign jurisdictions, the voting
of proxies can result in additional restrictions that have an economic impact to the security, such as
"share-blocking." If Insight votes on the proxy share- blocking may prevent Insight from selling the
shares of the security for a period of time. In determining whether to vote proxies subject to such
restrictions Insight, in consultation with the PVG, considers whether the vote, either in itself or together
with the votes of other shareholders, is expected to affect the value of the security that outweighs
the cost of voting. If Insight votes on a proxy and during the "share-blocking period" Insight would
like to sell the affected security Insight, in consultation with the PVG, will attempt to recall the
shares (as allowable within the market time-frame and practices).
Insight publishes its
voting activity in full on its website. This can be found at www.insightinvestment.com/ri.
8. Proxy
Voting Policy Review
Insight will review its Proxy Voting arrangements regularly
through the PVG. Insight reviews this Policy at least annually or whenever a material change occurs
and will notify Clients of any material change that affects our ability to vote in line with the best
interests of its Clients.
A material change shall be a significant event that could
impact Insight's ability to vote proxies such as a change in voting agent.
Item
13. Portfolio Managers for Closed-End Management
Investment Companies.
(a)(1)
The following information is as of September 30, 2024:
Jeffrey Burger and Daniel Rabasco of INA, an affiliate of BNYM Investment Adviser,
are primarily responsible for the day-to-day management of the Registrant's portfolio.
Mr. Burger, a senior portfolio manager for tax sensitive strategies
at INA, has served as a primary portfolio manager since November 2014. He has been employed by INA or
a predecessor company of INA since July 2009.
Mr. Rabasco, the
head of municipal bonds strategies at INA, has served as a primary portfolio manager since July 2016.
He has been employed by INA or a predecessor company of INA since 1998.
(a)(2) Information about the other accounts managed by the
Registrant's primary portfolio managers is provided below.
| | | | | | |
Primary Portfolio
Manager | Registered Investment
Companies | Total Assets Managed | Other
Pooled Investment Vehicles | Total Assets Managed | Other Accounts | Total
Assets Managed |
Jeffrey Burger | 10 | $3.4B | None | N/A | 453 | $1.8B |
Daniel Rabasco | 13 | $6.5B | None | N/A | 60 | $2.4B |
None
of the funds or accounts are subject to a performance-based advisory fee.
Portfolio
managers may manage multiple accounts for a diverse client base, including mutual funds, separate accounts
(assets managed on behalf of private clients or institutions such as pension funds, insurance companies
and foundations), private funds, bank collective trust funds or common trust accounts and wrap fee programs
that invest in securities in which the Registrant may invest or that may pursue a strategy similar to
the Registrant's component strategies ("Other Accounts").
Potential
conflicts of interest may arise because of BNYM Investment Adviser's, INA's or a portfolio manager's
management of the Registrant and Other Accounts. For example, conflicts of interest may arise with both
the aggregation and allocation of securities transactions and allocation of limited investment opportunities,
as BNYM Investment Adviser or INA may be perceived as causing accounts it manages to participate in an
offering to increase BNYM Investment Adviser's or INA's overall allocation of securities in that offering,
or to increase BNYM Investment Adviser's or INA's ability to participate in future offerings by the same
underwriter or issuer. Allocations of bunched trades, particularly trade orders that were only partially
filled due to limited availability, and allocation of investment opportunities generally, could raise
a potential conflict of interest, as BNYM Investment Adviser or INA may have an incentive to allocate
securities that are expected to increase in value to preferred accounts. Initial public offerings, in
particular, are frequently of very limited availability. A potential conflict of interest may be perceived
to arise if transactions in one account closely follow related transactions in a different account, such
as when the Registrant purchase increases the value of securities previously purchased by the Other Account
or when a sale in one account lowers the sale price received in a sale by a second account. Conflicts
of interest may also exist with respect to portfolio managers who also manage performance-based fee accounts,
which could give the portfolio managers an incentive to favor such Other Accounts over the Registrant
such as deciding which securities to allocate to the Registrant versus the performance-based fee account.
Additionally, portfolio managers may be perceived to have a conflict of interest if there are a large
number of Other Accounts, in addition to the Registrant, that they are managing on behalf of BNYM Adviser
or INA. BNYM Investment Adviser and INA periodically review each portfolio manager's overall responsibilities
to ensure that he or she is able to allocate the necessary time and resources to effectively manage the
Registrant. In addition, BNYM Investment Adviser and INA could be viewed as having a conflict of interest
to the extent that BNYM Investment Adviser, INA or its affiliates and/or portfolio managers have a materially
larger investment in Other Accounts than their investment in the Registrant.
Other
Accounts may have investment objectives, strategies and risks that differ from those of the Registrant.
In addition, the Registrant, as a registered investment company, may be subject to different regulations
than certain of the Other Accounts and, consequently, may not be permitted to engage in all the investment
techniques or transactions, or to engage in such techniques or transactions to the same degree, as the
Other Accounts. For these or other reasons, the portfolio managers may purchase different securities
for the Registrant and the Other Accounts, and the performance of securities purchased for the Registrant
may vary from the performance of securities purchased for Other Accounts. The portfolio managers may
place transactions on behalf of Other Accounts that are directly or indirectly contrary to investment
decisions made for the Registrant, which could have the potential to adversely impact the Registrant,
depending on market conditions. In addition, if
the Registrant's investment in an issuer is at a different
level of the issuer's capital structure than an investment in the issuer by Other Accounts, in the event
of credit deterioration of the issuer, there may be a conflict of interest between the Registrant's and
such Other Accounts' investments in the issuer. If an Adviser sells securities short, it may be seen
as harmful to the performance of the Registrant investing "long" in the same or similar securities whose
market values fall as a result of short-selling activities.
BNY
and its affiliates, including BNYM Investment Adviser, INA and others involved in the management, sales,
investment activities, business operations or distribution of the Registrant, are engaged in businesses
and have interests other than that of managing the Registrant. These activities and interests include
potential multiple advisory, transactional, financial and other interests in securities, instruments
and companies that may be directly or indirectly purchased or sold by the Registrant or the Registrant's
service providers, which may cause conflicts that could disadvantage the Registrant.
(a)(3)
Portfolio Manager Compensation. The portfolio managers' compensation is comprised primarily of a market-based
salary and an incentive compensation plan (annual and long-term).
INA
has a flexible and progressive remuneration policy which allows it to attract and retain what it believes
to be the best available talent in the industry. INA's approach to remuneration is designed to ensure
that top performance is recognized with top quartile industry pay. This includes matching each individual
with a suitable peer group that reflects competitors at every level and specialism within the industry.
The components of remuneration are base salary and variable pay which is made up of two elements: discretionary
annual cash amount and a deferral into the INA Long Term Incentive Plan. Cash and deferred pay play
a significant role in total compensation. The overall value of these payments is based on company performance
while individual payments are made with the dual aims of ensuring that key individuals are incentivized
and rewarded for their contribution and that their total remuneration is competitive. INA also has a
competitive benefits package (including eligibility for company pension and private medical plans) broadly
aligned with the firm's parent company, BNY.
Discretionary pay is allocated
following a detailed annual evaluation and performance appraisal against individual objectives, based
on key performance indicators such as mandate performance (including effective management of risk and
generation of relative returns where appropriate), contribution to team-based investment decisions, team
management and professional development. Account is also taken of non-investment related issues such
as business wins, client feedback, product and service development and internal relationship building,
as well as experience, tenure and status within the team. For investment teams, including portfolio
managers, performance is typically assessed over a multi-year framework including fund performance over
one-, three- and five-years performance cycles. This is also supported by the INA Long Term Incentive
Plan, which typically vests over three years.
The application of the
above policy and principles are reviewed at least twice each year by the INA Remuneration Committee,
where compensation proposals in respect of the relevant performance year are considered and approved.
(a)(4) The dollar range of Registrant shares beneficially owned by the primary
portfolio manager is as follows as of the end of the Registrant's fiscal year:
| | |
Primary Portfolio
Managers | Registrant | Dollar
Range of Registrant Shares Beneficially Owned |
Jeffrey
Burger | BNY
Mellon Municipal Income, Inc | None |
Daniel Rabasco | BNY
Mellon Municipal Income, Inc | None |
(b) Not applicable.
Item 14. Purchases
of Equity Securities By Closed-End Management Investment Companies and Affiliated Purchasers.
None.
Item
15. Submission of Matters to a Vote of Security
Holders.
There
have been no material changes to the procedures applicable to Item 15.
Item
16. Controls and Procedures.
(a) The Registrant's principal executive and principal financial
officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures
as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls
and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant
on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that
information required to be disclosed by the Registrant in the reports that it files or submits on Form
N-CSR is accumulated and communicated to the Registrant's management, including its principal executive
and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There
were no changes to the Registrant's internal control over financial reporting that occurred during the
period covered by this report that have materially affected, or are reasonably likely to materially affect,
the Registrant's internal control over financial reporting.
Item 17. Disclosure
of Securities Lending Activities for Closed-End Management Investment Companies.
The fund did not participate
in a securities lending program during this period.
Item 18. Recovery
of Erroneously Awarded Compensation.
Not
applicable.
Item 19. Exhibits.
(a)(1) Code of ethics referred to in Item 2.
(a)(2) Certifications of principal executive and principal financial officers as required
by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b)
Certification of principal
executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company
Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report
to be signed on its behalf by the undersigned, thereunto duly authorized.
BNY
Mellon Municipal Income, Inc.
By: /s/ David J. DiPetrillo
David J. DiPetrillo
President (Principal Executive Officer)
Date: November 19, 2024
Pursuant to the requirements
of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed
below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: /s/ David J. DiPetrillo
David J. DiPetrillo
President (Principal Executive Officer)
Date: November 19, 2024
By: /s/
James Windels
James Windels
Treasurer (Principal Financial Officer)
Date: November 19, 2024
EXHIBIT INDEX
(a)(1) Code of ethics referred to in Item 2.
(a)(2)
Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under
the Investment Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal financial
officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)
THE
BNY MELLON FAMILY OF FUNDS
BNY MELLON FUNDS TRUST
Principal Executive Officer and Senior Financial Officer
Code
of Ethics
I. Covered Officers/Purpose
of the Code
This code of ethics (the "Code"), adopted by the funds in the BNY Mellon Family
of Funds and BNY Mellon Funds Trust (each, a "Fund"), applies to each Fund's Principal Executive Officer,
Principal Financial Officer, Principal Accounting Officer or Controller, or other persons performing
similar functions, each of whom is listed on Exhibit A (the "Covered Officers"),
for the purpose of promoting:
· honest
and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between
personal and professional relationships;
· full,
fair, accurate, timely and understandable disclosure in reports and documents that the Fund files with,
or submits to, the Securities and Exchange Commission (the "SEC") and in other public communications
made by the Fund;
· compliance
with applicable laws and governmental rules and regulations;
· the prompt internal reporting of violations of the Code to
an appropriate person or persons identified in the Code; and
· accountability for adherence to the Code.
Each
Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations
that may give rise to actual as well as apparent conflicts of interest.
II. Covered Officers Should Handle Ethically Actual and Apparent
Conflicts of Interest
Overview. A "conflict of interest" occurs when a Covered Officer's private
interest interferes with the interests of, or his service to, the Fund. For example, a conflict of interest
would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a
result of his position with the Fund.
Certain conflicts of interest arise out
of the relationships between Covered Officers and the Fund and already are subject to conflict of interest
provisions in the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the
Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"). For example, Covered Officers
may not individually engage in certain transactions (such as the purchase or sale of securities or other
property) with the Fund because of their status as "affiliated persons" of the Fund. The compliance
programs and procedures of the Fund and the Fund's investment adviser (the "Adviser") are designed to
prevent, or identify and correct, violations of these provisions. The Code does not, and is not intended
to, repeat or replace these programs and procedures, and the circumstances they cover fall outside of
the parameters of the Code.
Although typically not presenting an opportunity for improper
personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Fund
and the Adviser of which the Covered Officers are also officers or employees. As a result, the Code
recognizes that the Covered Officers, in the ordinary course of their duties (whether formally for the
Fund or for the Adviser, or for both), will be involved in establishing policies and implementing decisions
that will have different effects on the Adviser and the Fund. The participation of the Covered Officers
in such activities is inherent in the contractual relationship between the Fund and the Adviser and is
consistent with the performance by the Covered Officers of their duties as officers of the Fund and,
if addressed in conformity with the provisions of the Investment Company Act and the Investment Advisers
Act, will be deemed to have been handled ethically. In addition, it is
recognized by the Fund's Board that the Covered Officers also may be officers
or employees of one or more other investment companies covered by this or other codes of ethics.
Other conflicts of interest are covered by the Code, even if such conflicts of
interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act.
Covered Officers should keep in mind that the Code cannot enumerate every possible scenario. The overarching
principle of the Code is that the personal interest of a Covered Officer should not be placed improperly
before the interest of the Fund.
Each Covered Officer must:
· not use his personal influence or personal relationships improperly
to influence investment decisions or financial reporting by the Fund whereby the Covered Officer would
benefit personally to the detriment of the Fund;
· not cause the Fund to take action, or fail to take action,
for the individual personal benefit of the Covered Officer rather than the benefit of the Fund; and
· not
retaliate against any employee or Covered Officer for reports of potential violations that are made in
good faith.
III. Disclosure
and Compliance
· Each
Covered Officer should familiarize himself with the disclosure requirements generally applicable to the
Fund within his area of responsibility;
· each
Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Fund
to others, whether within or outside the Fund, including to the Fund's Board members and auditors, and
to governmental regulators and self-regulatory organizations;
· each Covered Officer should, to the extent appropriate within
his area of responsibility, consult with other officers and employees of the Fund and the Adviser with
the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents
the Fund files with, or submits to, the SEC and in other public communications made by the Fund; and
· it
is the responsibility of each Covered Officer to promote compliance with the standards and restrictions
imposed by applicable laws, rules and regulations.
IV. Reporting and Accountability
Each
Covered Officer must:
· upon
adoption of the Code (or thereafter, as applicable, upon becoming a Covered Officer), affirm in writing
to the Board that he has received, read, and understands the Code;
· annually thereafter affirm to the Board that he has complied
with the requirements of the Code; and
· notify
the Adviser's General Counsel (the "General Counsel") promptly if he knows of any violation of the Code.
Failure to do so is itself a violation of the Code.
The General Counsel
is responsible for applying the Code to specific situations in which questions are presented under it
and has the authority to interpret the Code in any particular situation. However, waivers sought by
any Covered Officer will be considered by the Fund's Board.
The Fund will follow
these procedures in investigating and enforcing the Code:
· the General Counsel will take all appropriate action to investigate
any potential violations reported to him;
· if,
after such investigation, the General Counsel believes that no violation has occurred, the General Counsel
is not required to take any further action;
· any matter that the General Counsel believes is a violation
will be reported to the Board;
· if
the Board concurs that a violation has occurred, it will consider appropriate action, which may include:
review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate
personnel of the Adviser or its board; or dismissal of the Covered Officer;
· the Board will be responsible for granting waivers, as appropriate;
and
· any
waivers of or amendments to the Code, to the extent required, will be disclosed as provided by SEC rules.
V. Other Policies and Procedures
The Code shall be the sole code of ethics adopted by the Fund for purposes of
Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment
companies thereunder. The Fund's, its principal underwriter's and the Adviser's codes of ethics under
Rule 17j-1 under the Investment Company Act and the Adviser's additional policies and procedures, including
its Code of Conduct, are separate requirements applying to the Covered Officers and others, and are not
part of the Code.
VI. Amendments
Except as to Exhibit A, the Code may not be amended except in written form, which
is specifically approved or ratified by a majority vote of the Fund's Board, including a majority of
independent Board members.
VII. Confidentiality
All
reports and records prepared or maintained pursuant to the Code will be considered confidential and shall
be maintained and protected accordingly. Except as otherwise required by law or the Code, such matters
shall not be disclosed to anyone other than the appropriate Funds and their counsel, the appropriate
Boards (or Committees) and their counsel and the Adviser.
VIII. Internal Use
The Code is intended
solely for the internal use by the Fund and does not constitute an admission, by or on behalf of the
Fund, as to any fact, circumstance, or legal conclusion.
Dated as of: January
14, 2021
Exhibit A
Persons Covered by the Code of Ethics
| | |
David
J. DiPetrillo | President | (Principal Executive Officer, BNY Mellon Family of Funds) |
| | |
Patrick
T. Crowe | President | (Principal
Executive Officer, BNY Mellon Funds Trust) |
| | |
James M. Windels | Treasurer | (Principal Financial and Accounting Officer) |
[EX-99.CERT]—Exhibit (a)(2)
SECTION
302 CERTIFICATION
I, David J. DiPetrillo, certify that:
1.
I have reviewed this report on Form N-CSR of BNY Mellon Municipal Income, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations, changes in net
assets, and cash flows (if the financial statements are required to include a statement of cash flows)
of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940)
and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company
Act of 1940) for the registrant and have:
(a) Designed such
disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Designed such
internal control over financial reporting, or caused such internal control over financial reporting to
be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
(c) Evaluated the
effectiveness of the registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90
days prior to the filing date of this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal control over financial reporting that
occurred during the period covered by this report that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the registrant's ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.
By: /s/
David J. DiPetrillo
David
J. DiPetrillo
President
(Principal Executive Officer)
Date: November 19, 2024
SECTION 302 CERTIFICATION
I, James Windels, certify that:
1.
I have reviewed this report on Form N-CSR of BNY Mellon Municipal Income, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations, changes in net
assets, and cash flows (if the financial statements are required to include a statement of cash flows)
of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940)
and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company
Act of 1940) for the registrant and have:
(a) Designed such
disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Designed such
internal control over financial reporting, or caused such internal control over financial reporting to
be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
(c) Evaluated the
effectiveness of the registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90
days prior to the filing date of this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal control over financial reporting that
occurred during the period covered by this report that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the registrant's ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.
By: /s/
James Windels
James
Windels
Treasurer
(Principal Financial Officer)
Date: November 19, 2024
[EX-99.906CERT]
Exhibit (b)
SECTION
906 CERTIFICATIONS
In connection with this report on Form
N-CSR for the Registrant as furnished to the Securities and Exchange Commission on the date hereof (the
"Report"), the undersigned hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
(1) the
Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as applicable; and
(2) the information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the Registrant.
By: /s/
David J. DiPetrillo
David J. DiPetrillo
President (Principal Executive Officer)
Date: November
19, 2024
By: /s/
James Windels
James
Windels
Treasurer
(Principal Financial Officer)
Date: November 19, 2024
This certificate is furnished
pursuant to the requirements of Form N-CSR and shall not be deemed "filed" for purposes of Section 18
of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall
not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934.
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