AllianceBernstein National Municipal Income Fund, Inc., Alliance New York Municipal Income Fund, Inc., and Alliance California M
May 19 2008 - 4:16PM
PR Newswire (US)
NEW YORK, May 19 /PRNewswire-FirstCall/ -- AllianceBernstein
National Municipal Income Fund, Inc. ("ANMIF"; NYSE: AFB), Alliance
New York Municipal Income Fund, Inc. ("ANYMIF"; NYSE: AYN) and
Alliance California Municipal Income Fund, Inc. ("ACMIF"; NYSE:
AKP), each a registered closed-end investment company (the
"Funds"), announced today that they intend to use alternative
financing to redeem approximately $39,600,000, $4,200,000 and
$4,200,000, respectively, of their outstanding Auction Preferred
Shares ("Preferred Shares") at a redemption price of $25,000 per
share, plus accumulated but unpaid dividends. Each of ANMIF, ANYMIF
and ACMIF plans to redeem, respectively, approximately 13.9%, 9.3%
and 5.2% of their outstanding Preferred Shares. The partial
redemptions will be made on a pro rata basis. The Funds intend to
finance the partial redemptions through the use of tender option
bond ("TOBs") transactions in which a Fund sells a highly rated
municipal bond, which is deposited into a trust, usually sponsored
by a broker-dealer, in exchange for cash and a residual interest
security, referred to as an "inverse floater", issued by the trust.
The trust also issues securities, referred to as "floaters", that
pay an interest rate that is reset each week based on an index of
high-grade short-term seven-day demand notes. The floaters are
bought by third parties, including tax-exempt money market funds.
The floaters can be tendered by these holders to a liquidity
provider, which will be a major financial institution, at par,
unless certain events occur. The Fund continues to earn all of the
interest from the transferred bond less the amount of interest paid
to the floater holders and costs and ongoing fees of the
transaction. The Fund will use the cash received from the sale of
bonds in the TOB transactions as new financing to redeem a portion
of the Preferred Shares. The Funds currently expect that the TOB
transactions will reduce their costs of leverage. The redemption of
the Preferred Shares is subject to certain notice and other
requirements and the condition that the financing of the redemption
price of the Preferred Shares through the use of TOB transactions
be completed. The Funds intend to redeem the Preferred Shares on a
redemption date that is two days before the next dividend payment
date for each series of the Preferred Shares according to the
following schedule: FUND REDEMPTION DATE ANMIF -- Series M June 13,
2008 -- Series T June 9, 2008 -- Series W June 10, 2008 -- Series
TH June 11, 2008 ANYMIF -- Series M June 13, 2008 -- Series T June
9, 2008 ACMIF -- Series M June 13, 2008 -- Series T June 9, 2008
Because of constraints in the availability of bonds suitable for
TOBs and other considerations, the Funds are redeeming only a part
of their Preferred Shares at this time. The Funds intend to pursue
TOB transactions opportunistically and are not required to redeem
any Preferred Shares. The Funds will continue to rely on the
Preferred Shares for a portion of their leverage exposure and may
pursue other liquidity solutions for the Preferred Shares.
DATASOURCE: AllianceBernstein L.P. CONTACT: Shareholder Contact:
1-800-219-4218 Web site: http://www.alliancebernstein.com/
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