NEW YORK–(BUSINESS WIRE)–Nuveen has successfully completed the initial public offering of the Nuveen Municipal Credit Opportunities Fund. The new closed-end fund’s primary investment objective is to provide a high level of current income exempt from regular U.S. federal income tax. The fund’s secondary objective is to seek total return. The fund seeks to achieve its investment objectives by investing primarily in high yielding, low- to medium-quality municipal securities.
The fund will begin trading on the New York Stock Exchange (NYSE) today, under the symbol NMCO.
The fund raised $705 million in its common share offering, excluding any exercise of the underwriters’ option to purchase additional shares.
If the underwriters exercise that option in full, the fund will have raised $810 million.
Shares of closed-end investment companies, like the fund, usually trade on a national stock exchange. Similar to stocks, the fund’s share price will fluctuate with market conditions and, at the time of sale, may be worth more or less than the original investment. Shares of closed-end funds often trade at a discount to their net asset value.
For more information, please visit Nuveen’s CEF homepage www.nuveen.com/closed-end-funds.
Nuveen, the investment manager of TIAA, offers a comprehensive range of outcome-focused investment solutions designed to secure the long-term financial goals of institutional and individual investors. Nuveen has more than $1 trillion in assets under management as of 30 June 2019 and operations in 23 countries. Its affiliates offer deep expertise across a comprehensive range of traditional and alternative investments through a wide array of vehicles and customized strategies. For more information, please visit www.nuveen.com.
Nuveen Securities, LLC, member FINRA and SIPC.
Investors should consider the investment objectives and policies, risk considerations, charges and expenses of the fund carefully before investing. For a prospectus which contains this and other information relevant to an investment in the fund, please contact your securities representative or Nuveen Securities, LLC, 333 W. Wacker Drive, Chicago, IL 60606. Investors should read the prospectus carefully before they invest or send money.
This document is not an offer to sell securities and is not soliciting an offer to buy securities in any jurisdiction where the offer or sale is not permitted.
Key Risk Considerations:
Municipal Securities Market Risk. The amount of public information available about the municipal securities in the fund’s portfolio is generally less than that for corporate equities or bonds, and the investment performance of the fund may therefore be more dependent on the analytical abilities of the fund’s sub-adviser than if the fund were a stock fund or taxable bond fund. The secondary market for municipal securities, particularly the below investment grade municipal securities in which the fund may invest, also tends to be less well-developed or liquid than many other securities markets, which may adversely affect the fund’s ability to sell its municipal securities at attractive prices. In addition, the market for below investment grade municipal securities has experienced in the past, and may experience in the future, periods of significant volatility, which could negatively impact the value of the municipal securities in the fund’s portfolio and the market price of the Common Shares.
Issuer Credit Risk. Issuers of municipal securities in which the fund may invest may default on their obligations to pay principal or interest when due. This non-payment would result in a reduction of income to the fund, a reduction in the value of a municipal security experiencing non-payment and, potentially, a decrease in the net asset value of the fund. To the extent that the credit rating assigned to a municipal security in the fund’s portfolio is downgraded, the market price and liquidity of such security may be adversely affected.
Below Investment Grade Risk. Securities of below investment grade quality are regarded as having speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal and may be subject to higher price volatility and default risk than investment grade securities of comparable terms and duration. Issuers of lower grade securities may be highly leveraged and may not have available to them more traditional methods of financing. The prices of these lower grade securities are typically more sensitive to negative developments, such as a decline in the issuer’s revenues or a general economic downturn. The secondary market for lower rated securities may not be as liquid as the secondary market for more highly rated securities, a factor which may have an adverse effect on the fund’s ability to dispose of a particular security. If a below investment grade security goes into default, or its issuer enters bankruptcy, it might be difficult to sell that security in a timely manner at a reasonable price.
Interest Rate Risk. Generally, when market interest rates rise, bond prices fall, and vice versa. Interest rate risk is the risk that the municipal securities in the fund’s portfolio will decline in value because of increases in market interest rates. As interest rates decline, issuers of municipal securities may prepay principal earlier than scheduled, forcing the fund to reinvest in lower-yielding municipal securities and potentially reducing the fund’s income. As interest rates increase, slower than expected principal payments may extend the average life of municipal securities, potentially locking in a below-market interest rate and reducing the fund’s value. In typical market interest rate environments, the prices of longer-term municipal securities generally fluctuate more than prices of shorter-term municipal securities as interest rates change. The Federal Reserve recently raised the federal funds rate several times. Therefore, there is a risk that interest rates will rise, which will likely drive down bond prices.
The information contained on the Nuveen website is not a part of this press release.