AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 24, 1994
SECURITIES ACT FILE NO. 33-50155
INVESTMENT COMPANY ACT FILE NO. 811-7081
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934)
MUNIBOND INCOME FUND, INC.
(Name of Issuer)
MUNIBOND INCOME FUND, INC.
(Name of Person(s) Filing Statement)
SHARES OF COMMON STOCK, PAR VALUE $.10 PER SHARE
(Title of Class of Securities)
ARTHUR ZEIKEL
MUNIBOND INCOME FUND, INC.
800 SCUDDERS MILL ROAD
PLAINSBORO, NEW JERSEY 08536
(609) 282-2800
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Person(s) Filing Statement)
COPIES TO:
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FRANK P. BRUNO, ESQ. PHILIP L. KIRSTEIN, ESQ.
BROWN & WOOD FUND ASSET MANAGEMENT, L.P.
ONE WORLD TRADE CENTER BOX 9011
NEW YORK, NEW YORK 10048-0557 PRINCETON, N.J. 08543-9011
JUNE 24, 1994
(Date Tender Offer First Published,
Sent or Given to Security Holders)
</TABLE>
CALCULATION OF FILING FEE
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Transaction Valuation: $42,752,000(a) Amount of Filing
Fee: $8,550.40(b)
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(a) Calculated as the aggregate maximum purchase price to be paid for 3,200,000
shares in the offer, based upon the net asset value per share ($13.36) at
June 21, 1994.
(b) Calculated as 1/50th of 1% of the Transaction Valuation.
/ /
Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and
identify the filing with which the offsetting fee was previously paid. Identify
the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid: ________________________________________________________
Form or Registration No.: ______________________________________________________
Filing Party: __________________________________________________________________
Date of Filing: ________________________________________________________________
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<PAGE>
ITEM 1.SECURITY AND ISSUER.
(a) The issuer is MuniBond Income Fund, Inc. (the "Fund"). The address of
its principal executive office is 800 Scudders Mill Road, Plainsboro, New Jersey
08536.
(b) This statement relates to an offer by the Fund to purchase 3,200,000
shares of its common stock, par value $0.10 per share (the "Shares") for cash at
a price equal to the net asset value per Share ("NAV") determined as of the
close of the regular trading session of the New York Stock Exchange on the day
the offer terminates, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated June 24, 1994 (the "Offer to Purchase") and the
related Letter of Transmittal (which together constitute the "Offer"). A copy of
the Offer to Purchase and the Letter of Transmittal are filed as Exhibit
(a)(1)(ii) and (a)(2)(i) to this statement, respectively.
Reference is hereby made to the Cover Page, Section 1--"Price; Number of
Shares" and Section 10--"Interest of Certain Related Persons" of the Offer to
Purchase, which are incorporated herein by reference.
(c) The principal market in which the Shares are traded is the New York
Stock Exchange. Reference is hereby made to the Cover Page and Section 8--"Price
Range of Shares; Dividends" of the Offer to Purchase, which are incorporated
herein by reference.
(d) Not applicable.
ITEM 2.SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is hereby made to Section 5--"Source and Amount of Funds"
of the Offer to Purchase, which is incorporated herein by reference.
ITEM 3.PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
Reference is hereby made to Section 2--"Purpose of the Offer; Plans or
Proposals of the Fund," Section 5--"Source and Amount of Funds," Section
8--"Price Range of Shares; Dividends," and Section 11--"Certain Effects of the
Offer" of the Offer to Purchase, which are incorporated herein by reference. In
addition, the Fund regularly purchases and sells assets in the ordinary course
of its business. Aside from the foregoing, the Fund does not have any plans or
proposals that relate to or would result in (a) the acquisition by any person of
additional securities of the Fund, or the disposition of securities of the Fund;
(b) an extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Fund; (c) a sale or transfer of a material amount of
assets of the Fund; (d) any change in the present Board of Directors or
management of the Fund including, but not limited to, any plans or proposals to
change the number or the term of Directors, to fill any existing vacancy on the
Board or to change any material term of the employment contract of any executive
officer; (e) any material change in the present dividend rate or policy, or
indebtedness or capitalization of the Fund; (f) any other material change in the
Fund's corporate structure or business, including any plans or proposals to make
any changes in the Fund's investment policy for which a vote would be required
by Section 13 of the Investment Company Act of 1940; (g) changes in the Fund's
charter, bylaws or instruments corresponding thereto or other actions which may
impede the acquisition of control of the Fund by any person; (h) causing a class
of equity security of the Fund to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association; (i) a class of equity
security of the Fund becoming eligible for termination of registration pursuant
to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); or (j) the suspension of the Fund's obligation to file reports
pursuant to Section 15(d) of the Exchange Act.
ITEM 4.INTEREST IN SECURITIES OF THE ISSUER.
Reference is hereby made to Section 10--"Interest of Certain Related
Persons" of the Offer to Purchase, which is incorporated herein by reference.
<PAGE>
ITEM 5.CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE ISSUER'S SECURITIES.
Reference is hereby made to Section 2--"Purpose of the Offer; Plans or
Proposals of the Fund," Section 4--"Payment for Shares," and Section
6--"Procedures for Tendering Shares" of the Offer to Purchase, which are
incorporated herein by reference.
Except as set forth therein, neither the Fund nor any executive officer or
Director of the Fund, nor any person controlling the Fund or any executive
officer or Director of any corporation ultimately in control of the Fund is a
party to any contract, arrangement, understanding or relationship with any other
person relating, directly or indirectly, to the Offer with respect to any
securities of the Fund (including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any such securities, joint ventures, loan or option arrangements, puts or
calls, guaranties of loans, guaranties against loss, or the giving or
withholding of proxies, consents or authorizations).
ITEM 6.PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
No persons have been employed or retained or are to be compensated by or on
behalf of the Fund to make solicitations or recommendations in connection with
the Offer.
ITEM 7.FINANCIAL INFORMATION.
(a)(1) The Fund's unaudited financial statements for the period October 29,
1993 (commencement of operations) to May 31, 1994 are filed as Exhibit (g)(1) to
this statement and are incorporated herein by reference. For a summary of
selected financial information for the period October 29, 1993 (commencement of
operations) to May 31, 1994, see Section 9--"Selected Financial Information" of
the Offer to Purchase, which is incorporated herein by reference.
(2) The Fund is not required to file quarterly reports under the Exchange
Act.
(3) Certain ratios applicable to the Fund for the period October 29, 1993
(commencement of operations) to May 31, 1994 are contained in the Fund's
unaudited financial statements, which are filed as Exhibit (g)(1) to this
statement and are incorporated herein by reference. Certain ratios for the
period October 29, 1993 (commencement of operations) to May 31, 1994 are also
set forth in Section 9--"Selected Financial Information" of the Offer to
Purchase, which is incorporated herein by reference.
(4) The Fund's NAV as of May 31, 1994 is set forth in its unaudited
financial statements for the period October 29, 1993 (commencement of
operations) to May 31, 1994, which are filed as Exhibit (g)(1) to this statement
and are incorporated herein by reference. Such information is also set forth in
Section 9--"Selected Financial Information" of the Offer to Purchase, which is
incorporated herein by reference.
(b) It is not possible for the Fund to predict the number of Shares that
will be tendered pursuant to the Offer; accordingly, it is not possible for the
Fund to provide pro forma information disclosing the effect of the tender offer.
ITEM 8.ADDITIONAL INFORMATION.
(a)-(d) Not applicable.
(e) The Offer to Purchase, which is filed as Exhibit (a)(1)(ii), is
incorporated herein by reference in its entirety.
<PAGE>
ITEM 9.MATERIAL TO BE FILED AS EXHIBITS:
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(a)(1)(i) Advertisement printed in The Wall Street Journal.
(a)(1)(ii) Offer to Purchase.
(a)(2)(i) Form of Letter of Transmittal.
(a)(2)(ii) Form of Notice of Guaranteed Delivery.
(a)(3)(i) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
(a)(3)(ii) Form of Letter to Clients of Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
(a)(3)(iii) Form of Letter to Stockholders who have requested information.
(a)(4) Text of Press Release dated June 24, 1994.
(b) Not applicable.
(c) Depositary Agreement between MuniBond Income Fund, Inc. and The Bank of New York dated as of June 24, 1994.
(d)-(f) Not applicable.
(g)(1) Unaudited financial statements of MuniBond Income Fund, Inc. for the Period October 29, 1993 (commencement
of operations) to May 31, 1994.
</TABLE>
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
MuniBond Income Fund, Inc.
/s/ Arthur Zeikel
---------------------------------------
Arthur Zeikel
President
Date: June 23, 1994
<PAGE>
EXHIBIT INDEX
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(a)(1)(i) Advertisement printed in The Wall Street Journal.
(a)(1)(ii) Offer to Purchase.
(a)(2)(i) Form of Letter of Transmittal.
(a)(2)(ii) Form of Notice of Guaranteed Delivery.
(a)(3)(i) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
(a)(3)(ii) Form of Letter to Clients of Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
(a)(3)(iii) Form of Letter to Stockholders who have requested information.
(a)(4) Text of Press Release dated June 24, 1994.
(b) Not applicable.
(c) Depositary Agreement between MuniBond Income Fund, Inc. and The Bank of New York dated as of June 24, 1994.
(d)-(f) Not applicable.
(g)(1) Unaudited financial statements of MuniBond Income Fund, Inc. for the Period October 29, 1993 (commencement
of operations) to May 31, 1994.
</TABLE>
EXHIBIT(a)(1)(i)
<PAGE>
This announcement is not an offer to purchase or a solicitation of an offer to
sell Shares. The Offer is made
only by the Offer to Purchase dated June 24, 1994, and the related Letter of
Transmittal. The Offer is not
being made to, nor will tenders be accepted from or on behalf of, holders of
Shares in any jurisdiction
in which making or accepting the Offer would violate that jurisdiction's laws.
MUNIBOND INCOME FUND, INC.
NOTICE OF OFFER TO PURCHASE FOR CASH 3,200,000 OF ITS
ISSUED AND OUTSTANDING SHARES AT NET ASSET VALUE PER SHARE
The expiration date and the withdrawal deadline is 5:00 P.M.,
New York City time, on Monday, July 25, 1994, unless extended.
MuniBond Income Fund, Inc. (the "Fund") is offering to purchase 3,200,000 of
its issued and outstanding shares of common stock par value $.10 per share (the
"Shares") at a price equal to their net asset value ("NAV") as of the close of
the New York Stock Exchange on the Expiration Date, July 25, 1994, unless
extended upon the terms and conditions set forth in the Offer to Purchase dated
June 24, 1994 (the "Offer"). The NAV on June 21, 1994, was $13.36 per Share. The
purpose of the Offer is to fulfill an undertaking made by the Fund in connection
with its initial public offering. The Offer is not conditioned upon the tender
of any minimum number of Shares.
Each Stockholder tendering Shares will be required to submit a check in the
amount of $25.00 payable to The Bank of New York (the "Depositary") which will
help defray the costs associated with effecting the Offer.
If more than 3,200,000 Shares are duly tendered prior to the expiration of
the Offer, the Fund will, assuming no changes in the factors originally
considered by the Board of Directors when it determined to make the Offer,
extend the Offer period if necessary, and increase the number of Shares that the
Fund is offering to purchase to an amount which it believes will be sufficient
to accommodate the excess Shares tendered, as well as any Shares tendered during
the extended Offer period. In no event will the Fund purchase Shares tendered on
a pro rata basis.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
5:00 P.M., New York City time, on Monday, July 25, 1994, unless the offer is
extended, and, if not yet accepted for payment by the Fund, Shares may also be
withdrawn after August 22, 1994.
The information required to be disclosed by paragraph (d)(1) of Rule 13e-4
under the Securities Exchange Act of 1934, as amended, is contained in the Offer
to Purchase and is incorporated herein by reference.
The Offer to Purchase and the related Letter of Transmittal contain important
information that should be read carefully before any decision is made with
respect to the Offer.
Questions and requests for assistance, for current NAV quotations or for
copies of the Offer to Purchase, Letter of Transmittal, and any other tender
offer documents, may be directed to the Depositary at the address and telephone
number below between the hours of 9:00 A.M. and 5:00 P.M., New York City time,
Monday through Friday, except holidays. Copies will be furnished promptly at no
expense to Stockholders. Stockholders who do not own Shares directly should
effect a tender through their broker, dealer, or nominee. For example,
Stockholders who purchased Shares through Merrill Lynch, Pierce, Fenner & Smith
Incorporated should effect tenders through their Financial Consultant.
Depositary:
THE BANK OF NEW YORK
Tender and Exchange Department
P.O. Box 11248, Church Street Station
New York, New York 10286-1248
1-800-507-9357
(C) Copyright 1992, Merrill Lynch, Pierce, Fenner & Smith Inc. Member
SIPC. JUNE 24, 1994
EXHIBIT(a)(1)(ii)
<PAGE>
MUNIBOND INCOME FUND, INC.
OFFER TO PURCHASE FOR CASH 3,200,000
OF ITS ISSUED AND OUTSTANDING SHARES
AT NET ASSET VALUE PER SHARE
THE EXPIRATION DATE AND THE WITHDRAWAL DEADLINE IS 5:00 P.M.,
NEW YORK CITY TIME, ON JULY 25, 1994, UNLESS EXTENDED.
To the Stockholders of MuniBond Income Fund, Inc.:
MuniBond Income Fund, Inc. (the "Fund"), a non-diversified, closed-end
management investment company, is offering to purchase 3,200,000 shares of its
issued and outstanding common stock, par value $0.10 per share (the "Shares").
The sole purpose of the offer is to fulfill an undertaking made in connection
with the initial public offering of the Shares, to consider whether to commence
an offer during the period May 1, 1994 through July 31, 1994 to purchase Shares
from all beneficial holders at a price per Share equal to net asset value per
Share ("NAV"). See Section 2 of this Offer to Purchase. This offer is being made
for cash at a price equal to NAV determined as of the close of the regular
trading session of the New York Stock Exchange on the day the offer expires,
upon the terms and subject to the conditions set forth in this Offer to Purchase
and the related Letter of Transmittal (which together constitute the "Offer").
If more than 3,200,000 Shares are duly tendered prior to the expiration of
the Offer, in order to comply with the initial undertaking, the Fund will,
assuming no changes in the factors originally considered by the Board of
Directors when it determined to make the Offer, extend the Offer period, if
necessary, and increase the number of Shares that the Fund is offering to
purchase to an amount which it believes will be sufficient to accommodate the
excess Shares tendered as well as any Shares tendered during the extended Offer
period. IN NO EVENT WILL THE FUND PURCHASE SHARES TENDERED ON A PRO RATA BASIS.
The Offer will expire at 5:00 P.M., New York City time, on July 25, 1994,
unless extended. The Shares are currently traded on the New York Stock Exchange
under the symbol "MBD". The NAV as of the close of business on June 21, 1994 was
$13.36 per Share. Information regarding the undertaking pursuant to which the
Offer is being made is set forth in Section 2. During the pendency of the Offer,
current NAV quotations can be obtained from The Bank of New York (the
"Depositary") by calling (800) 507-9357 between the hours of 9:00 A.M. and 5:00
P.M., New York City Time, Monday through Friday, except holidays.
The Offer is being made to all stockholders of the Fund ("Stockholders")
and is not conditioned upon any minimum number of Shares being tendered.
THIS OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE SECTION 3.
IMPORTANT
Stockholders who desire to tender their Shares should either (1) complete
and sign the Letter of Transmittal (or a photocopy thereof bearing original
signature(s) and any required signature guarantees) and mail or deliver it along
with such Shares (in proper certificated or uncertificated form), a check in the
amount of $25.00 payable to The Bank of New York and any other documents
required by the Letter of Transmittal to the Depositary or (2) request their
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction on their behalf. Stockholders who desire to tender Shares registered
in the name of a broker, dealer, commercial bank, trust company or other nominee
must contact such firm to effect a tender on their behalf.
Stockholders who desire to retain their Shares need not take any action.
<PAGE>
NEITHER THE FUND NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF SUCH
STOCKHOLDER'S SHARES. THE FUND HAS BEEN INFORMED THAT NO DIRECTOR OR OFFICER OF
THE FUND INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
FUND OR FUND ASSET MANAGEMENT, L.P. AS TO WHETHER STOCKHOLDERS SHOULD TENDER
SHARES PURSUANT TO THE OFFER. ANY SUCH RECOMMENDATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE FUND OR FUND ASSET MANAGEMENT, L.P. STOCKHOLDERS
ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN
INVESTMENT AND TAX ADVISERS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER
SHARES, AND IF SO, HOW MANY SHARES TO TENDER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND.
Questions and requests for assistance may be directed to your Merrill Lynch
Financial Consultant or to the Depositary at the appropriate address and at the
telephone number set forth below. Requests for additional copies of this Offer
to Purchase and the Letter of Transmittal may be directed to the Depositary.
Stockholders who do not own Shares directly or through Merrill Lynch, Pierce,
Fenner & Smith Incorporated may also obtain such information and copies from
their broker, dealer, commercial bank, trust company or other nominee and are
required to tender their Shares through such firm.
June 24, 1994
MuniBond Income Fund, Inc.
800 Scudders Mill Road
Plainsboro, NJ 08536
Depositary telephone number: (800) 507-9357
Depositary Addresses:
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By Mail: By Overnight Courier: By Hand in New York:
The Bank of New York The Bank of New York The Bank of New York
Tender and Exchange Department Tender and Exchange Department Tender and Exchange Department
P.O. Box 11248 101 Barclay Street 101 Barclay Street
Church Street Station Receive & Deliver Window--Street Level Receive & Deliver Window--Street Level
New York, New York 10286-1248 New York, New York 10286 New York, New York 10286
</TABLE>
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<PAGE>
TABLE OF CONTENTS
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SECTION PAGE
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1. Price; Number of Shares.................................................................................. 4
2. Purpose of the Offer; Plans or Proposals of the Fund..................................................... 4
3. Certain Conditions of the Offer.......................................................................... 4
4. Payment for Shares....................................................................................... 5
5. Source and Amount of Funds............................................................................... 6
6. Procedures for Tendering Shares.......................................................................... 6
A. Procedures for Stockholders........................................................................... 6
B. Determination of Validity............................................................................. 8
C. Federal Income Tax Withholding........................................................................ 8
7. Withdrawal Rights........................................................................................ 8
8. Price Range of Shares; Dividends......................................................................... 9
9. Selected Financial Information........................................................................... 9
10. Interest of Certain Related Persons...................................................................... 10
11. Certain Effects of the Offer............................................................................. 10
12. Certain Information about the Fund....................................................................... 11
13. Additional Information................................................................................... 11
14. Certain Federal Income Tax Consequences.................................................................. 11
15. Extension of Tender Period; Termination; Amendments...................................................... 12
16. Miscellaneous............................................................................................ 13
</TABLE>
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<PAGE>
1. PRICE, NUMBER OF SHARES. Upon the terms and subject to the
conditions of the Offer, the Fund will accept for payment and purchase up to
3,200,000 of its issued and outstanding Shares that are properly tendered prior
to 5:00 P.M., New York City time, on July 25, 1994 (and not withdrawn in
accordance with Section 7). The Fund reserves the right to extend, terminate or
amend the Offer. See Sections 3 and 15. The Fund will not be obligated to
purchase Shares pursuant to the Offer under certain circumstances. See Section
3. The later of July 25, 1994 or the latest date to which the Offer is extended
is hereinafter called the "Expiration Date." The purchase price of the Shares
will be their NAV as of the close of the regular trading session of the New York
Stock Exchange on the Expiration Date. The Fund will not pay interest on the
purchase price under any circumstances. The NAV on June 21, 1994 was $13.36 per
Share. Current NAV quotations may be obtained from The Bank of New York (the
"Depositary") by calling (800) 507-9357 between the hours of 9:00 A.M. and 5:00
P.M., New York City time, Monday through Friday, except holidays.
If more than 3,200,000 Shares are duly tendered prior to the expiration of
the Offer, in order to comply with the initial undertaking, the Fund will,
assuming no changes in the factors originally considered by the Board of
Directors when it determined to make the Offer, extend the Offer period, if
necessary, and increase the number of Shares that the Fund is offering to
purchase to an amount which it believes will be sufficient to accommodate the
excess Shares tendered as well as any Shares tendered during the extended Offer
period. IN NO EVENT WILL THE FUND PURCHASE SHARES TENDERED ON A PRO RATA BASIS.
The Offer is being made to all Stockholders of the Fund and is not
conditioned upon any minimum number of Shares being tendered.
On June 21, 1994 there were 6,654,055 Shares issued and outstanding and
there were approximately 55 holders of record of Shares. Certain of these
holders of record were brokers, dealers, commercial banks, trust companies and
other institutions that held Shares in nominee name on behalf of multiple
beneficial owners.
2. PURPOSE OF THE OFFER; PLANS OR PROPOSALS OF THE FUND. The
purpose of the Offer is to fulfill an undertaking made in connection with the
initial public offering of the Shares, as set forth in the Fund's prospectus
dated October 22, 1993. In such prospectus, the Fund stated (a) that it would
consider whether to commence an offer during the period May 1, 1994 through July
31, 1994 to purchase its Shares from all holders at a price per Share equal to
the NAV determined at the close of business on the date the Offer terminated if
the "Market Discount" of the Shares exceeds an average of three percent over
three consecutive Fridays to be determined; (b) that, if the Market Discount
with respect to such period does not exceed an average of three percent, the
Fund will consider whether to commence an offer during the period November 1,
1994 through January 31, 1995; and (c) that, if the Board of Directors of the
Fund determined not to purchase Shares pursuant to such tender offer for any
reason, the Fund would commence one or more additional offers to purchase its
Shares at such time as no such reason was applicable (a "Subsequent Offer"). The
Fund intends to fulfill the undertakings made in connection with the initial
public offering of the Shares.
3. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other
provision of the Offer, the Fund will not be required to accept for payment,
purchase or pay for any Shares tendered, and may terminate or amend the Offer or
may postpone the acceptance for payment of, purchase of or payment for, Shares
tendered, if in the sole judgment of the Board of Directors (1) such acceptance,
purchase or payment would (a) result in the delisting of the Shares from the New
York Stock Exchange (such Exchange having indicated that it would consider
delisting if the aggregate market value of the outstanding publicly held Shares
is less than $5 million, the number of publicly held Shares falls below 600,000,
or the number of holders of 100 Shares or more (taking into account the number
of beneficial holders of Shares held in the name of New York Stock Exchange
member organizations in addition to holders of record) falls below 1,200) or (b)
impair the Fund's status as a regulated investment company under the Internal
Revenue Code of 1986, as amended (the "Code"); (2) the Fund would not be able to
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<PAGE>
liquidate portfolio securities in a manner which is orderly and consistent with
the Fund's investment objectives and policies in order to purchase Shares
tendered pursuant to the Offer or any Subsequent Offer; or (3) there is, in the
Board's judgment, any (a) legal action or proceeding instituted or threatened
challenging the Offer or any Subsequent Offer or otherwise materially adversely
affecting the Fund, (b) suspension of or limitation on prices for trading
securities generally on the New York Stock Exchange, (c) declaration of a
banking moratorium by Federal or state authorities, or any suspension of payment
by banks in the United States or the State of New York, which is material to the
Fund, (d) limitation imposed by Federal or state authorities on the extension of
credit by lending institutions, (e) commencement of war, armed hostilities or
other international or national calamity directly or indirectly involving the
United States, which is material to the Fund, or (f) other events or conditions
that would have a material adverse effect on the Fund or its Stockholders if
Shares tendered pursuant to the Offer or any Subsequent Offer were accepted,
purchased or paid for. The Fund specifically reserves the right of the Board of
Directors to modify the foregoing conditions.
The foregoing conditions are for the Fund's sole benefit and may be
asserted by the Fund regardless of the circumstances giving rise to any such
condition (including any action or inaction of the Fund), and any such condition
may be waived by the Fund, in whole or in part, at any time and from time to
time in its sole discretion. The Fund's failure at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right; the waiver
of any such right with respect to particular facts and circumstances shall not
be deemed a waiver with respect to any other facts or circumstances; and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time. Any determination by the Fund concerning the events
described in this Section 3 shall be final and shall be binding.
The Fund reserves the right, at any time during the pendency of the Offer,
to terminate, extend, or amend the Offer in any respect. See Section 15.
4. PAYMENT FOR SHARES. For purposes of the Offer, the Fund will be
deemed to have accepted for payment and purchased Shares that are tendered and
not withdrawn when, as and if it gives oral or written notice to The Bank of New
York (the "Depositary") of its acceptance of such Shares for payment pursuant to
the Offer. Pursuant to a rule under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Fund is obligated to pay for or return
tendered Shares promptly after the termination, expiration or withdrawal of the
Offer. Upon the terms and subject to the conditions of the Offer, the Fund will
pay for Shares properly tendered as soon as practicable after the Expiration
Date, consistent with liquidating portfolio securities in a manner that is
orderly and in accordance with the Fund's investment objectives and policies.
Payment for Shares purchased pursuant to the Offer will be made by
depositing the aggregate purchase price therefor with the Depositary, which
under terms of a depositary agreement with the Fund will act as agent for
tendering Stockholders for the purpose of receiving payment from the Fund and
transmitting payment to the tendering Stockholders. In all cases, payment for
Shares purchased pursuant to the Offer will be made only after timely receipt by
the Depositary, as required pursuant to the Offer, of (a) a properly completed
and duly executed Letter of Transmittal (or a photocopy thereof bearing original
signature(s) and any required signature guarantees), (b) such Shares (in proper
certificated or uncertificated form), (c) a check in the amount of $25.00
payable to The Bank of New York, and (d) any other documents required by the
Letter of Transmittal. Certificates for Shares not purchased, or for Shares not
tendered but included in certificates forwarded to the Depositary, will be
returned promptly following the termination, expiration or withdrawal of the
Offer, without expense to the tendering Stockholder.
The Fund will pay any transfer taxes payable on the transfer to it of
Shares purchased pursuant to the Offer. If however, payment of the purchase
price is to be made to, or (in the circumstances permitted by the Offer) if
unpurchased Shares are to be registered in the name of, any person other than
the registered owner, the amount of any transfer taxes (whether imposed on the
registered owner or such
-5-
<PAGE>
other person) payable on account of the transfer to such person will be deducted
from the purchase price unless satisfactory evidence of the payment of such
taxes, or exemption therefrom, is submitted. The Fund will not pay any interest
on the purchase price under any circumstances. The Fund will not be obligated to
purchase Shares pursuant to the Offer under certain conditions. See Section 3.
Any tendering Stockholder or other payee who has not previously submitted a
completed and signed Substitute Form W-9 and who fails to complete fully and
sign the Substitute Form W-9 in the Letter of Transmittal may be subject to
required federal income tax withholding of 31% of the gross proceeds paid to
such Stockholder or other payee pursuant to the Offer. Certain withholdings may
also apply to foreign Stockholders. See Section 6.
5. SOURCE AND AMOUNT OF FUNDS. On June 21, 1994 the net assets of
the Fund aggregated approximately $88.9 million. The total cost to the Fund of
purchasing 3,200,000 of its issued and outstanding Shares pursuant to the Offer
would be approximately $42.8 million (using the NAV as of June 21, 1994).
To pay the aggregate purchase price of Shares accepted for payment pursuant
to the Offer, the Fund anticipates that funds will first be derived from any
cash on hand and then from the proceeds from the sale of portfolio securities
held by the Fund. The selection of which portfolio securities to sell will be
made by the Fund's investment adviser, Fund Asset Management, L.P. (the
"Investment Adviser"), taking into account investment merit, relative liquidity
and applicable investment restrictions and legal requirements. In accordance
with its stated investment policies, the Fund has concentrated its investments
in municipal obligations. Under some circumstances it may be necessary to raise
cash by liquidating portfolio securities in a manner that could tend to reduce
the market value of such securities and, thus, reduce both the NAV of the Shares
and the proceeds from the sale of such securities. The necessity to raise cash
by liquidating portfolio securities may also lead to the premature disposition
of portfolio investments and additional transaction costs. Depending upon the
timing of such sales, any such decline in NAV may adversely affect any tendering
Stockholders whose Shares are accepted for purchase by the Fund, as well as
those Stockholders who do not sell Shares pursuant to the Offer. Stockholders
who retain their Shares may be subject to certain other effects of the Offer.
See Section 11.
Because the Fund may sell portfolio securities to raise cash for the
purchase of Shares during the pendency of the Offer, and possibly for a short
time thereafter, the Fund may hold a greater than normal percentage of its
assets in cash and cash equivalents, which would tend to decrease the Fund's net
income. Because the number of Shares tendered, if any, will not be determined
until on or shortly after the Expiration Date, the amount of cash required to
pay for such Shares will not be known until on or shortly after the Expiration
Date.
6. PROCEDURES FOR TENDERING SHARES.
A. PROCEDURES FOR STOCKHOLDERS. For Shares to be properly tendered
pursuant to the Offer, a properly completed and duly executed Letter of
Transmittal (or a photocopy thereof bearing original signature(s) and any
required signature guarantees), any Shares (in proper certificated or
uncertificated form), the $25.00 check payable to The Bank of New York, and any
other documents required by the Letter of Transmittal must be received by the
Depositary at the appropriate address set forth on page 2 of this Offer to
Purchase before 5:00 P.M., New York City time, on July 25, 1994, or such later
time and date to which the Offer is extended. Letters of Transmittal and
certificates representing tendered Shares should NOT be sent or delivered to the
Fund. Stockholders who desire to tender Shares registered in the name of a
broker, dealer, commercial bank, trust company or other nominee should contact
such firm to effect a tender on their behalf.
NEITHER THE FUND NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF SUCH
-6-
<PAGE>
STOCKHOLDER'S SHARES. STOCKHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL
INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISERS AND MAKE
THEIR OWN DECISIONS WHETHER TO TENDER SHARES, AND IF SO, HOW MANY SHARES TO
TENDER.
Except as otherwise provided below, signatures on the Letter of Transmittal
must be guaranteed by a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc. or by
a commercial bank or trust company having an office, branch, agency or
correspondent in the United States (each of the foregoing being referred to as
an "Eligible Institution"), unless the Shares tendered hereby are tendered (i)
by the registered holder(s) of such Shares who has not provided "Special
Delivery Instructions" (as detailed in the Letter of Transmittal) or (ii) for
the account of an Eligible Institution. See Instruction 5 of the Letter of
Transmittal. If the Share Certificates are registered in the name of a person
other than the signer of the Letter of Transmittal, or if payment is to be made
to, or Share Certificates for unpurchased Shares are to be issued or returned
to, a person other than the registered holder, then the tendered certificates
must be endorsed or accompanied by appropriate stock powers, signed exactly as
the name or names of the registered holder or holders appear on the
certificates, with the signatures on the certificates or stock powers guaranteed
by an Eligible Institution. See Instruction 5 of the Letter of Transmittal.
The Fund's transfer agent holds Shares in uncertificated form for certain
Stockholders pursuant to the Fund's dividend reinvestment plan. Stockholders may
tender such uncertificated Shares by completing the appropriate section in the
Letter of Transmittal.
The Depositary has established an account with The Depository Trust Company
("DTC") for purposes of the Offer. Any financial institution that is a
participant in DTC's system may make delivery of tendered Shares by causing DTC
to transfer such Shares into the Depositary's account in accordance with DTC's
procedure for such transfer. Although delivery of Shares may be effected through
transfer into the Depositary's account at DTC, the Letter of Transmittal (or a
photocopy thereof, bearing original signature(s) and any required signature
guarantees), the $25.00 check payable to The Bank of New York, and any other
required documents must, in any case, be transmitted to and received by the
Depositary prior to 5:00 P.M., New York City time, on July 25, 1994, or such
later time and date to which the Offer is extended, at the appropriate address
set forth on page 2 of this Offer to Purchase. Delivery of documents to DTC in
accordance with DTC's procedures does not constitute delivery to the Depositary.
Notwithstanding the foregoing, if certificates for Shares are not
immediately available or time will not permit the Letter of Transmittal and
other required documents to reach the Depositary prior to 5:00 P.M., New York
City time, on July 25, 1994, or such later time and date to which the Offer is
extended, Shares may nevertheless be tendered, provided that all of the
following conditions are satisfied:
(a) such tenders are made by or through an Eligible Institution; and
(b) the Depositary receives, prior to 5:00 P.M., New York City time, on
July 25, 1994, or such later time and date to which the Offer is extended, a
properly completed and duly executed Notice of Guaranteed Delivery in the form
provided by the Fund; and
(c) the certificates for all tendered Shares, or book-entry
confirmation, as the case may be, together with a properly completed and duly
executed Letter of Transmittal (or a photocopy thereof bearing original
signature(s) and any required signature guarantees), the $25.00 check payable to
The Bank of New York, and any other documents required by the Letter of
Transmittal, are received by the Depositary within five New York Stock Exchange
trading days after receipt by the Depositary of such Notice of Guaranteed
Delivery.
The method of delivery of any documents, including certificates for Shares,
is at the election and risk of the party tendering Shares. If documents are sent
by mail, it is recommended that they be sent by registered mail, properly
insured, with return receipt requested. Stockholders have the responsibility to
cause their Shares (in proper certificated or uncertificated form), the Letter
of Transmittal (or a photocopy thereof bearing original signature(s) and any
required signature guarantees), the $25.00
-7-
<PAGE>
check payable to The Bank of New York, and any other documents required by the
Letter of Transmittal to be delivered timely.
B. DETERMINATION OF VALIDITY. All questions as to the validity,
form, eligibility (including time of receipt) and acceptance of tenders will be
determined by the Fund, in its sole discretion, which determination shall be
final and binding. The Fund reserves the absolute right to reject any or all
tenders determined not to be in appropriate form or to refuse to accept for
payment, purchase or pay for, any Shares if, in the opinion of the Fund's
counsel, accepting, purchasing or paying for such Shares would be unlawful. The
Fund also reserves the absolute right to waive any of the conditions of the
Offer or any defect in any tender, whether generally or with respect to any
particular Share(s) or Stockholder(s). The Fund's interpretations of the terms
and conditions of the Offer shall be final and binding.
NEITHER THE FUND, THE INVESTMENT ADVISER, THE DEPOSITARY NOR ANY OTHER
PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF DEFECTS OR IRREGULARITIES
IN TENDERS, NOR SHALL ANY OF THEM INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY
SUCH NOTICE.
C. FEDERAL INCOME TAX WITHHOLDING. To prevent federal income tax
backup withholding equal to 31% of the gross payments made pursuant to the
Offer, each Stockholder who has not previously submitted a Substitute Form W-9
to the Fund or does not otherwise establish an exemption from such withholding
must notify the Depositary of such Stockholder's correct taxpayer identification
number (or certify that such taxpayer is awaiting a taxpayer identification
number) and provide certain other information by completing the Substitute Form
W-9 included in the Letter of Transmittal. Foreign Stockholders who are
individuals and who have not previously submitted a Form W-8 to the Fund must do
so in order to avoid backup withholding.
7. WITHDRAWAL RIGHTS. At any time during the pendency of the Offer
prior to 5:00 P.M., New York City time, on July 25, 1994 or such later time and
date to which the Offer is extended and at any time after 12:00 Midnight, New
York City time, on August 22, 1994, if the Shares have not yet been accepted for
payment by the Fund, Stockholders may withdraw Shares that they have tendered.
To be effective, a written or telegraphic notice of withdrawal must be
timely received by the Depositary at the appropriate address set forth on Page 2
of this Offer to Purchase. Stockholders may also send a facsimile transmission
notice of withdrawal, which must be timely received by the Depositary at (212)
815-6213, and the original notice of withdrawal must be delivered by overnight
courier or by hand the next day. Any notice of withdrawal must specify the name
of the person having tendered the Shares to be withdrawn, and, if certificates
representing such Shares have been delivered or otherwise identified to the
Depositary, the name of the registered owner(s) of such Shares as set forth in
such certificates if different from the name of the person tendering the Shares.
If certificates have been delivered to the Depositary, then, prior to the
release of such certificates, the certificate numbers shown on the particular
certificates evidencing such Shares must also be submitted and the signature on
the notice of withdrawal must be guaranteed by an Eligible Institution.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Fund in its sole discretion,
which determination shall be final and binding. Shares properly withdrawn shall
not thereafter be deemed to be tendered for purposes of the Offer. However,
withdrawn Shares may be retendered by following the procedures described in
Section 6 prior to 5:00 P.M., New York City time, on July 25, 1994, or such
later time and date to which the Offer is extended. Except as otherwise provided
in this Section 7, tenders of Shares made pursuant to the Offer will be
irrevocable.
NEITHER THE FUND, THE INVESTMENT ADVISER, THE DEPOSITARY NOR ANY OTHER
PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF ANY DEFECTS OR
IRREGULARITIES IN ANY NOTICE OF WITHDRAWAL, NOR SHALL ANY OF THEM INCUR ANY
LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTICE OF DEFECTS OR IRREGULARITIES.
-8-
<PAGE>
8. PRICE RANGE OF SHARES, DIVIDENDS. The Shares are traded on the
New York Stock Exchange under the symbol "MBD". The following table sets forth,
for the periods indicated, the high and low NAV per Share, the high and low
sales prices per Share as reported by the New York Stock Exchange Composite
Tape, and the dividends per Share declared during such period.
<TABLE>
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE MARKET PRICE
FISCAL -------------------- ----------------------
YEAR HIGH LOW HIGH LOW DIVIDEND
---------------- --------- --------- ---------- ---------- -----------
October 29, 1993* to November 30, 1993........................ $ 14.18 $ 14.05 $ 14.875 $ 14.75 $ --
December 1, 1993 to February 28, 1994......................... 14.48 14.07 14.875 13.00 .17
March 1, 1994 to May 31, 1994................................. 14.00 12.90 13.625 12.00 .21
</TABLE>
* Commencement of Operations.
Since trading of the Shares commenced on the New York Stock Exchange, the
Shares have traded intermittently at both a premium and a discount to NAV. As of
the close of business on June 21, 1994, the Fund's NAV was $13.36 per Share and
the closing price of the Shares on the New York Stock Exchange on such date was
$12.25. Current NAV quotations can be obtained by contacting the Response Center
in the manner specified in Section 1.
9. SELECTED FINANCIAL INFORMATION. Set forth below is a summary of
selected financial information for the Fund for the period October 29, 1993
(commencement of operations) to May 31, 1994. This information has been
excerpted from the Fund's unaudited financial statements for such period. More
comprehensive financial information is included in such financial statements (a
copy of which has been filed as an exhibit to the Schedule 13E-4 filed with the
Securities and Exchange Commission ("SEC") and may be obtained from the
Depositary) and the summary of selected financial information set forth below is
qualified in its entirety by reference to such document and the financial
information, the notes thereto and related matter contained therein.
-9-
<PAGE>
SUMMARY OF SELECTED FINANCIAL INFORMATION
<TABLE><CAPTION>
FOR THE PERIOD
OCTOBER 29, 1993+
THROUGH
MAY 31, 1994
-------------------
(UNAUDITED)
<S> <C>
INCOME STATEMENT
Interest......................................................................................... $ 2,976,799
Expenses......................................................................................... (15,454)
-------------------
Net investment income............................................................................ 2,961,345
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain on investments..................................................................... 322,512
Net unrealized depreciation on investments....................................................... (6,020,513)
BALANCE SHEET (at end of period)
Total assets..................................................................................... 90,102,466
Total liabilities................................................................................ 1,223,885
-------------------
Total net assets................................................................................. $88,878,581
===================
Net asset value per share........................................................................ $13.36
Shares of common stock outstanding............................................................... 6,654,055
PER SHARE
Net investment income............................................................................ .45
Dividends from net investment income to common................................................... (.38)
Dividends from realized gain on investments to common............................................ --
RATIOS
Operating expenses, net of reimbursement, to average net assets.................................. .03%*
Operating expenses to average net assets......................................................... .80%*
Net investment income to average net assets...................................................... 5.44%*
</TABLE>
- ---------------
+ Commencement of Operations
* Annualized
10. INTEREST OF CERTAIN RELATED PERSONS. Pursuant to an Investment
Advisory Agreement dated as of October 13, 1993 with the Investment Adviser, the
Fund employs the Investment Adviser to manage the investment and reinvestment of
the assets of the Fund. The Investment Adviser is also responsible for overall
management of the business affairs of the Fund. For services provided by the
Investment Adviser under the Investment Advisory Agreement, the Fund pays the
Investment Adviser a fee computed and paid monthly in an amount equal to 0.55%
of the Fund's average weekly total net assets.
Based upon information provided to the Fund, except through the automatic
reinvestment of dividends under the Fund's Dividend Reinvestment Plan, no
transactions in Shares during the past 40 business days have been affected by
any Director or officer of the Fund, any person controlling the Fund, any
executive officer or Director of any corporation ultimately in control of the
Fund or by any associate or subsidiary of any of the foregoing including any
executive officer or Director of any such subsidiary. Based upon information
provided to the Fund, no director, officer or affiliate of the Fund or director
or officer of the Investment Adviser intends to tender Shares pursuant to the
Offer. Certain officers of the Fund are also officers of the Investment Adviser.
11. CERTAIN EFFECTS OF THE OFFER. The purchase of Shares pursuant
to the Offer will have the effect of increasing the proportionate interest in
the Fund of Stockholders who do not tender their
-10-
<PAGE>
Shares. Accordingly, Stockholders who retain their Shares may be subject to any
increased risks that may result from the reduction in the Fund's aggregate
assets resulting from payment for the tendered Shares, such as decreased
diversification and proportionately higher expenses. Under certain
circumstances, the need to raise cash in connection with the purchase of Shares
pursuant to the Offer may have an adverse effect on the Fund's NAV and/or income
per Share. See Section 5. In addition, the purchase of Shares from tendering
Stockholders may have tax consequences to the Fund in certain circumstances. See
Section 14. All Shares purchased by the Fund pursuant to the Offer will be
retired or cancelled.
12. CERTAIN INFORMATION ABOUT THE FUND. The Fund was organized as a
Maryland corporation on August 24, 1993 and is registered as a non-diversified,
closed-end management investment company under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund's investment objective is to provide
stockholders with high current income exempt from Federal income taxes by
investing primarily in a portfolio of medium to lower rated or comparable
unrated municipal obligations the interest on which is exempt from Federal
income taxes in the opinion of bond counsel to the issuer.
The principal offices of the Fund are located at 800 Scudders Mill Road,
Plainsboro, New Jersey 08536.
13. ADDITIONAL INFORMATION. The Fund has filed the Schedule 13E-4
with the SEC; the Schedule 13E-4 includes certain additional information
relating to the Offer, which material may be inspected and copied at prescribed
rates at the SEC's public reference facilities at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; Seven World Trade Center, New York, New
York 10048; and 230 South Dearborn Street, Chicago, Illinois 60604. Copies of
such material may also be obtained by mail at prescribed rates from the Public
Reference Branch of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following
discussion is a general summary of the income tax consequences of a sale of
Shares pursuant to the Offer. You should consult your own tax adviser for a
complete description of the tax consequences to you of a sale of Shares pursuant
to the Offer.
The sale of Shares pursuant to the Offer will be a taxable transaction for
Federal income tax purposes, either as a "sale or exchange," or under certain
circumstances, as a "dividend." Under Section 302(b) of the Code, a sale of
Shares pursuant to the Offer generally will be treated as a "sale or exchange"
if the receipt of cash (a) results in a "complete redemption" of the
Stockholder's interest in the Fund, (b) is "substantially disproportionate" with
respect to the Stockholder, or (c) is "not essentially equivalent to a dividend"
with respect to the Stockholder. A "complete redemption" of a Stockholder's
interest generally requires that the Stockholder dispose of all Shares directly
owned or attributed to him under Section 318 of the Code. A "substantially
disproportionate" distribution generally requires a reduction of more than 20%
in the Stockholder's proportionate interest in the Fund after all shares are
tendered. A distribution "not essentially equivalent to a dividend" requires
that there be a "meaningful reduction" in the Stockholder's interest, which
should be the case if the Stockholder has a minimal interest in the Fund,
exercises no control over Fund affairs and suffers a reduction in his
proportionate interest.
If any of these three tests for "sale or exchange" treatment is met, you
will recognize gain or loss equal to the difference between the amount of cash
received pursuant to the Offer and the adjusted tax basis of the Shares sold.
Such gain or loss will be a capital gain or loss if the Shares sold have been
held by you as a capital asset. In general, capital gain or loss with respect to
the Shares sold will be a long-term capital gain or loss if such Shares have
been held for more than one year.
If none of the Code Section 302 tests is met, you may be treated as having
received, in whole or in part, a dividend, return of capital or capital gain
depending (i) on whether the Fund has sufficient earnings and profits to support
a dividend and (ii) on your tax basis in the Shares. The tax basis in the shares
tendered to the Fund will be transferred to any remaining Shares held by you. In
addition, if the
-11-
<PAGE>
sale of Shares pursuant to the Offer is treated as a "dividend" to a tendering
Stockholder, a Code Section 305(c) constructive dividend may result to a
non-tendering Stockholder whose proportionate interest in the earnings and
assets of the Fund has been increased as a result of such tender.
Accordingly, the differentiation between "dividend" and "sale or exchange"
treatment is important with respect to the amount and character of income
tendering that Stockholders are deemed to receive. In addition, while the
marginal tax rates for dividends and capital gains are the same for corporate
Stockholders, currently under the Code, the top income tax rate for individuals
(39.6%) exceeds the maximum marginal tax rate on long-term capital gains (28%).
The Depositary will be required to withhold 31% of the gross proceeds paid
to a Stockholder or other payee pursuant to the Offer unless either: (a) the
Stockholder has provided the Stockholder's taxpayer identification number/social
security number, and certifies under penalties of perjury: (i) that such number
is correct, and (ii) either that (A) the Stockholder is exempt from backup
withholding, or (B) the Stockholder is not otherwise subject to backup
withholding as a result of a failure to report all interest or dividends, or (C)
the Internal Revenue Service has notified the Stockholder that the Stockholder
is no longer subject to backup withholding; or (b) an exception applies under
applicable law and Treasury regulations. Foreign Stockholders may be required to
provide the Depositary with a completed Form W-8, available from the Depositary
in order to avoid 31% backup withholding.
Unless a reduced rate of withholding or a withholding exemption is
available under an applicable tax treaty, a foreign Stockholder who is a
nonresident alien or a foreign entity may be subject to a 30% United States
withholding tax on the gross proceeds received by such Stockholder, if the
proceeds are treated as a "dividend" under the rules described above. Foreign
Stockholders should consult their tax advisers regarding application of these
withholding rules.
15. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS. The Fund
reserves the right, at any time during the pendency of the Offer to terminate,
extend, or amend the Offer in any respect. Without limiting the manner in which
the Fund may choose to make a public announcement of termination, extension, or
amendment, the Fund shall have no obligation to publish, advertise or otherwise
communicate any such public announcement, except as provided by applicable law
(including Rules 13e-4(d)(2) and 13e-4(e)(2) promulgated under the Exchange Act)
and by the requirements of the New York Stock Exchange (including the listing
agreement with respect to the Shares).
Except to the extent required by applicable law (including Rule 13e-4(f)(1)
promulgated under the Exchange Act), the Fund will have no obligation to extend
the Offer. In the event that the Fund is obligated or elects to extend the
Offer, the NAV for the Shares tendered will be determined as of the close of the
regular trading session of the New York Stock Exchange on the Expiration Date,
as extended. Between the previously scheduled Expiration Date and the new
Expiration Date, the rights of Stockholders (such as rights to tender and
withdraw Shares) will remain unchanged. No Shares will be accepted for payment
until on or after the Expiration Date, as extended.
-12-
<PAGE>
16. MISCELLANEOUS. The Offer is not being made to, nor will the
Fund accept tenders from, owners of Shares in any jurisdiction in which the
Offer or its acceptance would not comply with the securities or "blue sky" laws
of such jurisdiction. The Fund is not aware of any jurisdiction in which the
making of the Offer or the acceptance of tenders of, purchase of or payment for
Shares would not be in compliance with the laws of such jurisdiction. However,
the Fund receives the right to exclude Stockholders in any jurisdiction in which
it is asserted that the Offer cannot lawfully be made or tendered Shares cannot
lawfully be accepted, purchased or paid for. So long as the Fund makes a
good-faith effort to comply with any state law deemed applicable to the Offer,
the Fund believes that the exclusion of holders residing in such jurisdiction is
permitted under Rule 13e-4(f)(9) promulgated under the Exchange Act. In any
jurisdiction the secrities or "blue sky" laws of which require the Offer to be
made by a licensed broker or dealer, the Offer shall be deemed to be made on the
Fund's behalf by one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
-13-
<PAGE>
June 24, 1994 MuniBond Income Fund, Inc.
800 Scudders Mill Road
Plainsboro, New Jersey 08536
Depositary telephone number: (800) 507-9357
Depositary Addresses:
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand in New York:
The Bank of New York The Bank of New York The Bank of New York
Tender and Exchange Department Tender and Exchange Department Tender and Exchange Department
P.O. Box 11248 101 Barclay Street 101 Barclay Street
Church Street Station Receive & Deliver Window-- Receive & Deliver Window--
New York, New York 10286-1248 Street Level Street Level
New York, New York 10286 New York, NY 10286
</TABLE>
-14-
EXHIBIT (a)(2)(i)
<PAGE>
LETTER OF TRANSMITTAL
TO ACCOMPANY SHARES OF COMMON STOCK, $0.10 PAR VALUE
OF
MUNIBOND INCOME FUND, INC.
TENDERED PURSUANT TO THE OFFER TO PURCHASE DATED JUNE 24, 1994
THE EXPIRATION DATE AND THE WITHDRAWAL DEADLINE IS 5:00 P.M., NEW YORK CITY
TIME,
ON JULY 25, 1994, UNLESS EXTENDED
Depositary Addresses:
<TABLE>
<S> <C>
By Mail: By Express Mail:
- -------------------------------------------- --------------------------------------------
The Bank of New York The Bank of New York
Tender and Exchange Department Tender and Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive & Deliver Window--Street Level
New York, New York 10286-1248 New York, New York 10286
--------------------------------------------
By Hand in New York:
The Bank of New York
Tender and Exchange Department
101 Barclay Street
Receive & Deliver Window--Street Level
New York, NY 10286
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCCOMPANYING
THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used (a) if you desire to effect the
tender transaction yourself, (b) if you intend to request your broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
you and the Shares are not registered in the name of such broker, dealer,
commercial bank, trust company or other nominee, and (c) by a broker, dealer,
commercial bank, trust company or other nominee effecting the transaction as a
registered owner or on behalf of a registered owner. A properly completed and
duly executed Letter of Transmittal (or photocopy thereof bearing original
signature(s) and any required signature guarantees), any certificates
representing Shares tendered, a check payable to The Bank of New York in the
amount of $25.00, and any other documents required by this Letter of Transmittal
should be mailed or delivered to the Depositary at the appropriate address set
forth herein and must be received by the Depositary prior to 5:00 P.M., New York
City time, on July 25, 1994, or such later time and date to which the Offer is
extended, unless the tendering party has satisfied the conditions for guaranteed
delivery described in Section 6 of the Offer to Purchase. Delivery of documents
to a Book-Entry Transfer Facility does not constitute delivery to the
Depositary.
<TABLE><CAPTION>
DESCRIPTION OF SHARES TENDERED
<S> <C> <C>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON SHARE SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
TOTAL NUMBER
SHARE OF SHARES
CERTIFICATE REPRESENTED BY
NUMBER(S)* SHARE CERTIFICATE(S)*
TOTAL SHARES
<CAPTION>
DESCRIPTION OF SHARES TENDERED
<S> <C>
NUMBER OF SHARES
TENDERED**
</TABLE>
*NEED NOT BE COMPLETED BY BOOK-ENTRY STOCKHOLDERS.
**UNLESS OTHERWISE INDICATED, ALL SHARES REPRESENTED BY CERTIFICATES DELIVERED
TO THE DEPOSITARY ARE ASSUMED TO BE TENDERED. SEE INSTRUCTION 4.
<TABLE>
<S> <C> <C>
THE UNDERSIGNED TENDERS ALL UNCERTIFICATED SHARES THAT MAY BE HELD IN THE
NAME(S) OF THE REGISTERED OWNER(S) BY THE FUND'S TRANSFER AGENT PURSUANT TO THE
FUND'S DIVIDEND REINVESTMENT PLAN:
/ / Yes / / No
</TABLE>
<PAGE>
THE BOXES BELOW ARE TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE DEPOSITORY TRUST COMPANY
("DTC") AND COMPLETE THE FOLLOWING:
Name of Tendering
Institution: ___________________________________________________________________
DTC Participant
Number: ________________________________________________________________________
/ / CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
NAME(S) OF REGISTERED
HOLDER(S): ____________________________________________________________________
WINDOW TICKET NUMBER (IF
ANY): _________________________________________________________________________
DATE OF EXECUTION OF NOTICE OF GUARANTEED
DELIVERY: _____________________________________________________________________
NAME OF ELIGIBLE INSTITUTION WHICH GUARANTEED
DELIVERY: ___________________________________________________________________
DTC PARTICIPANT NUMBER (IF DELIVERED BY BOOK-ENTRY
TRANSFER): ___________________________________________________________
NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW
Ladies and Gentlemen:
The person(s) signing this Letter of Transmittal (the "Signor") hereby
tenders to MuniBond Income Fund, Inc. (the "Fund") a non-diversified, closed-end
management investment company organized as a Maryland corporation, the
above-described shares of common stock, par value $0.10 per share (the "Shares")
of the Fund, at a price (the "Purchase Price") equal to the net asset value per
Share ("NAV") determined as of the close of the regular trading session of the
New York Stock Exchange on the Expiration Date (as defined in the Offer to
Purchase) in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated June 24, 1994, receipt of which is hereby acknowledged,
and in this Letter of Transmittal (which Offer to Purchase and Letter of
Transmittal together constitute the "Offer").
Subject to, and effective upon, acceptance for payment of, or payment for,
Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms or conditions of any such extension or amendment), the Signor hereby
sells, assigns and transfers to, or upon the order of, the Fund all right, title
and interest in and to all of the Shares that are being tendered hereby that are
purchased pursuant to the Offer and hereby irrevocably constitutes and appoints
The Bank of New York (the "Depositary") as attorney-in-fact of the Signor with
respect to such Shares, with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), to (a)
present certificate(s) for such Shares, if any, for cancellation and transfer on
the Fund's books and (b) receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares, subject to the next paragraph, all in
accordance with the terms and subject to the conditions set forth in the Offer.
The Signor hereby represents and warrants that: (a) the Signor has full
power and authority to validly tender, sell, assign and transfer the Shares
tendered hereby; (b) when and to the extent the Fund accepts the Shares for
purchase, the Fund will acquire good, marketable and unencumbered title thereto,
free and clear of all security interests, liens, restrictions, charges,
encumbrances, conditional sales agreements or other obligations relating to
their sale or transfer, and not subject to any adverse claim; (c) on request,
the Signor will execute and deliver any additional documents that the Depositary
or the Fund deems necessary or desirable to complete the assignment, transfer
and purchase of the Shares tendered hereby; and (d) the Signor has read and
agrees to all of the terms and conditions of the Offer.
The name(s) and address(es) of the registered owner(s) should be printed as
on the registration of the Shares. If the Shares tendered hereby are in
certificate form, the certificate(s) representing such Shares must be returned
together with this Letter of Transmittal.
The Signor recognizes that, under certain circumstances set forth in the
Offer to Purchase, the Fund may terminate or amend the Offer or may not be
required to purchase any of the Shares tendered hereby. In any such event, the
Signor understands that certificate(s) for the Shares not purchased, if any, and
the full amount of the processing fee paid by the Signor will be returned to the
Signor at the registered address above unless otherwise indicated under the
Special Delivery Instructions above. The Signor recognizes that the Fund has no
obligation, pursuant to the Special Payment Instructions, to transfer any Shares
from the name of the registered owner thereof if the Fund purchases none of such
Shares.
The Signor understands that acceptance of Shares by the Fund for payment
will constitute a binding agreement between the Signor and the Fund upon the
terms and subject to the conditions of the Offer.
The check for the Purchase Price of the tendered Shares purchased will be
issued to the order of the Signor and mailed to the address indicated above,
unless otherwise indicated above in the box titled Special Payment Instructions
or the box titled Special Delivery Instructions. The Fund will not pay interest
on the Purchase Price under any circumstances.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the Signor and all obligations of the Signor hereunder
shall be binding upon the heirs, personal representatives, successors and
assigns of the Signor. Except as stated in the Offer, this tender is
irrevocable.
<PAGE>
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or return any Share
Certificates not tendered or not accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered".
Similarly, unless otherwise indicated under "Special Delivery Instructions",
please mail the check for the purchase price for any Shares purchased and/or
return any Share Certificates not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Shares Tendered". In the event that
both the Special Payment Instructions and the Special Delivery Instructions are
completed, please issue the check for the purchase price and/or return any Share
Certificates not tendered or not accepted for payment in the name of, and
deliver such check and/or return Share Certificates to, the person(s) so
indicated. The undersigned recognizes that the Purchaser has no obligation
pursuant to the Special Payment Instructions to transfer any Shares from the
name of the registered holder thereof if the Purchaser does not accept for
payment any of the Shares tendered hereby.
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered To be completed ONLY if Share Certificates not tendered
or not accepted for payment and/or the check for the purchase or not accepted for payment and/or the check for the purchase
price of Shares accepted for payment are to be issued in the price of Shares accepted for payment are to be sent to some-
name of someone other than the undersigned. one other than the undersigned or to the undersigned at an
address other than that shown above.
Issue: / / Check / / Certificate(s) to: Mail: / / Check / / Certificate(s) to:
Name(s): ______________________________________________ Name(s): ______________________________________________
_______________________________________________________ _________________________________________________________
(Please Type or Print) (Please Type or Print)
Address: ______________________________________________ Address:_________________________________________________
_______________________________________________________ _________________________________________________________
(Include Zip Code) (Include Zip Code)
_______________________________________________________
(Taxpayer Identification or Social Security No.)
(See Substitute Form W-9 on reverse side.)
</TABLE>
<TABLE>
<S> <C>
IMPORTANT:
SIGN HERE AND COMPLETE SUBSTITUTE FORM W-9 ON REVERSE
___________________________________________________________________________________________________________________________________
(Signature(s) of Stockholder(s))
Dated: ____________________________________________________________ , 19 ______
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
the Share Certificates or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, agents, officers of corporations or others
acting in a fiduciary or representative capacity, please provide the following
information. See Instruction 5.)
Name(s):
______________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
(Please Type or Print)
Capacity (Full Title):
___________________________________________________________________________________________________________________
(See Instruction 5)
Address:
______________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
(Include Zip Code)
Area Codes and Telephone Numbers:
_________________________________________________ _________________________________________________
Home Business
Taxpayer Identification or Social Security No.:
____________________________________________________________________________________________
(Complete Substitute Form W-9 on Reverse)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
___________________________________________________________________________________________________________________
Name:
________________________________________________________________________________________________________________________________
(Please Type or Print)
Title:
_________________________________________________________________________________________________________________________________
Name of Firm:
_________________________________________________________________________________________________________________________
Address:
______________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
(Include Zip Code)
(Area Code and Tel. No.)
___________________________________________________ Dated: ___________________________________________________
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below,
signatures on this Letter of Transmittal must be guaranteed by a member firm of
a registered national securities exchange, a member of the National Association
of Securities Dealers, Inc. or by a commercial bank or trust company having an
office, branch, agency or correspondent in the United States (each of the
foregoing being referred to as an "Eligible Institution"), unless the Shares
tendered hereby are tendered (i) by the registered holder(s) of such Shares or
(ii) for the account of an Eligible Institution. See Instruction 5. If the Share
Certificates are registered in the name of a person other than the signer of
this Letter of Transmittal, then the tendered certificates must be endorsed or
accompanied by appropriate stock powers, signed exactly as the name or names of
the registered holder or holders appear on the certificates, with the signatures
on the certificates or stock powers guaranteed by an Eligible Institution as
provided herein. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter
of Transmittal is to be used (a) if Shares are to be forwarded herewith, (b) if
uncertificated Shares held by the Fund's transfer agent pursuant to the Fund's
dividend reinvestment plan are to be tendered, or (c) if tenders are to be made
by book-entry transfer to the account maintained by the Depositary pursuant to
the procedure set forth in Section 6 of the Offer to Purchase.
The method of delivery of Share Certificates, this Letter of Transmittal,
payment of the $25.00 fee payable to The Bank of New York, and all other
required documents, including delivery through any Book-Entry Transfer Facility,
is at the option and sole risk of the tendering Stockholder and the delivery
will be deemed made only when actually received by the Depositary. If delivery
is by mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery. Stockholders have the responsibility to cause their Shares (in proper
certificated or uncertificated form), this Letter of Transmittal (or a photocopy
hereof bearing original signature(s) and any required signature guarantees), the
$25.00 fee, and any other documents required by this Letter of Transmittal to be
timely delivered in accordance with the Offer.
The Fund will not accept any alternative, conditional or contingent
tenders. All tendering Stockholders, brokers, dealers, commercial banks, trust
companies and other nominees, by execution of this Letter of Transmittal (or
photocopy hereof), waive any right to receive any notice of the acceptance of
their tender.
3. INADEQUATE SPACE. If the space provided in any of above boxes is
inadequate, the necessary information should be listed on a separate signed
schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO BOOK-ENTRY STOCKHOLDERS). If
fewer than all the Shares represented by any Share Certificates delivered to the
Depositary are to be tendered, fill in the number of Shares which are to be
tendered in the box entitled "Number of Shares Tendered" as appropriate. In such
case, a new Share Certificate for the untendered Shares will be sent, without
expense, to the person(s) signing this Letter of Transmittal as soon as
practicable after the Expiration Date. All Shares represented by certificate(s)
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, AUTHORIZATIONS AND
ENDORSEMENTS. If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the certificate(s) without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Purchaser of such person's authority so to act must be
submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made, or Share
Certificates not tendered or not purchased are to be issued or returned, to a
person other than the registered holder(s). Signatures on such certificates or
stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person or persons other than
the registered holder(s) of the Shares evidenced by the certificate(s) listed
and transmitted hereby, the certificate(s) must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear on the certificate(s). Signatures on such
certificate(s) or stock powers must be guaranteed by an Eligible Institution,
unless the signature is that of an Eligible Institution.
<PAGE>
6. TRANSFER TAXES. The Fund will pay any transfer taxes payable on
the transfer to it of Shares purchased pursuant to the Offer. If, however, (a)
payment of the Purchase Price is to be made to, or (in the circumstances
permitted by the Offer) unpurchased Shares are to be registered in the name(s)
of, any person(s) other than the registered owner(s), or (b) if any tendered
certificate(s) are registered, or the Shares tendered are otherwise held, in the
name(s) of any person(s) other than the registered owner, the amount of any
transfer taxes (whether imposed on the registered owner(s) or such other
person(s)) payable on account of the transfer to such person(s) will be deducted
from the Purchase Price unless satisfactory evidence of the payment of such
taxes, or exemption therefrom, is submitted.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If certificate(s) for
unpurchased Shares and/or check(s) are to be issued in the name of a person
other than the registered owner(s) or if such certificate(s) and/or check(s) are
to be sent to someone other than the registered owner(s) or to the registered
owner(s) at a different address, the captioned boxes "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal must be completed.
8. IRREGULARITIES. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of tenders will be
determined by the Fund, in its sole discretion, which determination shall be
final and binding. The Fund reserves the absolute right to reject any or all
tenders determined not to be in appropriate form or to refuse to accept for
payment, purchase or pay for, any Shares if, in the Opinion of the Fund's
counsel, accepting, purchasing or paying for such Shares would be unlawful. The
Fund also reserves the absolute right to waive any of the conditions of the
Offer or any defect in any tender, whether generally or with respect to any
particular Share(s) or Stockholder(s). The Fund's interpretations of the terms
and conditions of the Offer (including these instructions) shall be final and
binding.
NEITHER THE FUND, FUND ASSET MANAGEMENT, L.P. (THE FUND'S INVESTMENT
ADVISER), THE DEPOSITARY NOR ANY OTHER PERSON IS OR WILL BE OBLIGATED TO GIVE
ANY NOTICE OF DEFECTS IN TENDERS, NOR SHALL ANY OF THEM INCUR ANY LIABILITY FOR
FAILURE TO GIVE ANY SUCH NOTICE.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL
COPIES. Questions and requests for assistance may be directed to the
Depositary at the mailing address provided above or by telephoning (800)
507-9357. Requests for additional copies of the Offer to Purchase and this
Letter of Transmittal may also be directed to the Depositary. Stockholders who
do not own Shares directly may also obtain such information and copies from
their broker, dealer, commercial bank, trust company or other nominee.
Stockholders who do not own Shares directly are required to tender their Shares
through their broker, dealer, commercial bank, trust company or other nominee
and should NOT submit this Letter of Transmittal to the Depositary.
10. BACKUP WITHHOLDING TAX. Each tendering Stockholder who has not
already submitted a completed and signed Substitute Form W-9 to the Fund, or
does not otherwise establish an exemption from withholding, must notify the
Depositary of such Stockholder's correct taxpayer identification number ("TIN")
(or certify that such taxpayer is awaiting a TIN) and provide certain other
information by completing Substitute Form W-9 provided under "Important Tax
Information" below. Failure to provide the information on the form or to check
the box in Part 2 of the form may subject the tendering Stockholder to 31%
federal income tax backup withholding on the payments made to the Stockholder
(or other payee) with respect to Shares purchased pursuant to the Offer. The box
in Part 2 of the form may be checked if the tendering Stockholder has not been
issued a TIN and has applied for a TIN or intends to apply for a TIN in the near
future. If the box in Part 2 is checked and the Depositary is not provided with
a TIN within sixty (60) days, the Depositary will withhold 31% on all such
payments thereafter until a TIN is provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL, OR FACSIMILE HEREOF BEARING ORIGINAL
SIGNATURE(S), PROPERLY COMPLETED AND DULY EXECUTED, TOGETHER WITH ANY REQUIRED
SIGNATURE GUARANTEES, SHARES (IN PROPER CERTIFICATED OR UNCERTIFICATED FORM),
PAYMENT OF THE $25.00 FEE, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY
THE DEPOSITARY, OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. IT MAY NOT BE APPLICABLE TO FOREIGN STOCKHOLDERS. ALL
STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX
CONSEQUENCES TO THEM OF THE OFFER.
<PAGE>
SUBSTITUTE FORM W-9
Under the federal income tax laws, the Depositary may be required to
withhold 31% of the amount of any payment made to certain holders pursuant to
the Offer. In order to avoid such backup withholding, each tendering holder must
provide the Depositary with such holder's correct TIN by completing the
Substitute Form W-9 set forth below. In general, if a holder is an individual,
the TIN is the Social Security number of such individual. If the Depositary is
not provided with the correct TIN, the holder may be subject to a penalty
imposed by the Internal Revenue Service. Certain holders (including, among
others, all corporations) are not subject to these backup withholding and
reporting requirements, but should nonetheless complete a Substitute Form W-9 to
avoid possible erroneous backup withholding. (In order for a foreign individual
to qualify as an exempt recipient, that holder must submit a statement signed
under penalty of perjury attesting as to that status. Forms for such statement
can be obtained from the Depositary.) For further information regarding backup
withholding and instructions for completing the Substitute Form W-9 (including
how to obtain a TIN if you do not have one and how to complete the Substitute
Form W-9 if Shares are held in more than one name), consult the enclosed
Guidelines for Certificate of Taxpayer Identification Number.
CONSEQUENCES OF FAILURE TO FILE SUBSTITUTE FORM W-9
Failure to complete Substitute Form W-9 will not, by itself, cause the
Shares to be deemed invalidly tendered but may require the Depositary to
withhold 31% of the amount of any payments made pursuant to the Offer. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of a person subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, the
holder may claim a refund from the Internal Revenue Service.
</TABLE>
<TABLE><CAPTION>
PAYER'S NAME: THE BANK OF NEW YORK
<S> <C>
PART 1--PLEASE PROVIDE YOUR TIN(SOCIAL PART 2--
SECURITY NUMBER) AND CERTIFY BY SIGNING AND
DATING BELOW:
SUBSTITUTE
FORM W-9
Awaiting TIN / /
Please see below.
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
___________________________________________________________________________________________________________________________________
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER ("TIN")
CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT: (1) THE INFORMATION PROVIDED ON
THIS FORM IS TRUE, CORRECT AND COMPLETE AND (2) I AM NOT SUBJECT TO BACKUP WITHHOLDING
EITHER BECAUSE I AM EXEMPT FROM BACKUP WITHHOLDING OR I HAVE NOT BEEN NOTIFIED BY THE
INTERNAL REVENUE SERVICE (THE "IRS") THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT
OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS OR THE IRS HAS NOTIFIED ME THAT I AM NO
LONGER SUBJECT TO BACKUP WITHHOLDING. (YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN
NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING
INTEREST, OR DIVIDENDS ON YOUR RETURN. HOWEVER, IF AFTER BEING NOTIFIED BY THE IRS THAT
YOU WERE SUBJECT TO BACKUP WITHHOLDING YOU RECEIVED ANOTHER NOTIFICATION FROM THE IRS
THAT YOU ARE NO LONGER SUBJECT TO BACKUP WITHHOLDING, DO NOT CROSS OUT ITEM(2).)
____________________________________________________________________________________________________________
Name:
__________________________________________________________________________________________________
(Please Print)
Address:
________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
(Include Zip Code)
Signature: ___________________________________________ Date:____________________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER" FOR
ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office
or (b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a Taxpayer Identification Number to
the payer, 31% of all reportable payments due to me pursuant to the Offer
will be withheld until I provide a Taxpayer Identification Number to the
payer and that, if I do not provide my Taxpayer Identification Number
within 60 days, such retained amounts shall be remitted to the IRS as
backup withholding.
Signature:
______________________________________________________________________________ Date: ____________________________________
</TABLE>
EXHIBIT (a)(2)(ii)
<PAGE>
NOTICE OF GUARANTEED DELIVERY
REGARDING THE OFFER BY
MUNIBOND INCOME FUND, INC.
TO PURCHASE FOR CASH 3,200,000 OF ITS ISSUED AND OUTSTANDING
SHARES AT NET ASSET VALUE PER SHARE
This form must be used to accept the Offer (as defined below) if a
Stockholder's certificates for Shares are not immediately available or if time
will not permit the Letter of Transmittal and other required documents to reach
the Depositary on or before the Expiration Date. Terms used in this form that
are not otherwise defined herein shall have the meanings specified in the Offer
to Purchase dated June 24, 1994. This form may be delivered by hand, overnight
courier or mail to the Depositary at the appropriate address set forth below AND
MUST BEAR ORIGINAL SIGNATURES (NOT PHOTOCOPIES OR FACSIMILES). Tenders using
this form may be made only by or through a member firm of a registered national
securities exchange, or a commercial bank or trust company having an office,
branch or agency in the United States.
<TABLE>
<S> <C> <C>
DEPOSITARY ADDRESSES:
BY MAIL: BY OVERNIGHT COURIER: BY HAND IN NEW YORK:
- -------------------------------------- -------------------------------------- --------------------------------------
The Bank of New York The Bank of New York The Bank of New York
Tender and Exchange Department Tender and Exchange Department Tender and Exchange Department
P.O. Box 11248 101 Barclay Street 101 Barclay Street
Church Street Station Receive & Deliver Window-- Receive & Deliver Window--
New York, New York 10286-1248 Street Level Street Level
New York, New York 10286 New York, NY 10286
</TABLE>
DEPOSITARY TELEPHONE NUMBER: (800) 507-9357
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS
OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE VALID DELIVERY.
Ladies and Gentlemen:
The undersigned hereby tenders to MuniBond Income Fund, Inc. (the "Fund"),
upon the terms and subject to the conditions set forth in its Offer to Purchase
dated June 24, 1994 and the related Letter of Transmittal (which together
constitute the "Offer"), receipt of which are hereby acknowledged, the number of
Shares specified below and all Shares that may be held in the name(s) of the
registered holder(s) by the Fund's transfer agent pursuant to the dividend
reinvestment plan pursuant to the guaranteed delivery procedures set forth in
Section 6 of the Offer to Purchase.
Number of Shares Tendered: _____________________
<TABLE>
<S> <C>
Certificate Nos. (if available):____________________ Name(s) of Record Holder(s):_________________________
____________________________________________________ _____________________________________________________
____________________________________________________ _____________________________________________________
(Please Print)
If Shares will be tendered by book-entry trans- Address: ____________________________________________
fer to The Depository Trust Company, please _____________________________________________________
check box: / / _____________________________________________________
DTC Participant Number: __________________________
Area Code and Telephone Number: ______________
______________________________________________
</TABLE>
-1-
<PAGE>
The undersigned also tenders all uncertificated Shares that may be held in
the name(s) of the registered holder(s) by the Fund's transfer agent pursuant to
the dividend reinvestment plan:
/ / Yes / / No
(Note: If neither of these boxes is checked, any such uncertificated Shares will
NOT be tendered.)
<TABLE>
<S> <C>
Dated: _______________________________________ , 1994 ___________________________________________
___________________________________________
Signature(s)
</TABLE>
GUARANTEE
The undersigned, a member firm of a registered national securities
exchange, or a commercial bank or trust company having an office, branch or
agency in the United States, hereby guarantees to deliver to the Depositary
certificates representing the Shares tendered hereby, in proper form for
transfer (or to tender Shares pursuant to the procedure for book-entry transfer
into the Depositary's account at The Depository Trust Company if so specified on
the foregoing page), together with a properly completed and duly executed Letter
of Transmittal with any required signature guarantees, payment of the $25.00 fee
payable to The Bank of New York, and any other required documents, within five
New York Stock Exchange trading days after the date of receipt hereof by the
Depositary.
<TABLE>
<S> <C>
Name of
Firm: _____________________________________________________________________________________________________
(Please Print)
Authorized
Signature: _____________________________________________________________________________________________
Name: _______________________________________________________________________________________________________________
(Please Print)
Title: ________________________________________________________________________________________________________________
Address: ____________________________________________________________________________________________________________
________________________________________________________________________________________________________________________
(Include Zip Code)
________________________________________________________________________________________________________________________
Area Code and Telephone
Number: _____________________________________________________________________________
Dated: ____________________________________, 1994
-2-
</TABLE>
EXHIBIT(a)(3)(i)
<PAGE>
FORM OF LETTER TO BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES
REGARDING THE OFFER BY
MUNIBOND INCOME FUND, INC.
TO PURCHASE FOR CASH 3,200,000 OF ITS ISSUED AND OUTSTANDING SHARES
AT NET ASSET VALUE PER SHARE
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Pursuant to your request, we are enclosing herewith the material listed
below relating to the offer by MuniBond Income Fund, Inc. (the "Fund"), to
purchase 3,200,000 shares of its issued and outstanding common stock, par value
$0.10 per share (the "Shares") for cash at a price equal to their net asset
value per Share determined as of the close of the regular trading session of the
New York Stock Exchange on July 25, 1994, or such later date to which the Offer
is extended, upon the terms and subject to the conditions set forth in the Offer
to Purchase dated June 24, 1994 and in the related Letter of Transmittal (which
together constitute the "Offer").
The following documents are enclosed:
(1) OFFER TO PURCHASE DATED JUNE 24, 1994;
(2) LETTER OF TRANSMITTAL TO BE USED TO TENDER SHARES;
(3) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER;
(4) NOTICE OF GUARANTEED DELIVERY; AND
(5) LETTER TO CLIENTS, WHICH MAY BE SENT UPON ANY REQUEST FOR
INFORMATION BY YOUR CLIENTS FOR WHOSE ACCOUNT YOU HOLD SHARES REGISTERED IN
YOUR NAME (OR IN THE NAME OF YOUR NOMINEE) WITH SPACE PROVIDED FOR
OBTAINING SUCH CLIENTS' INSTRUCTIONS WITH REGARD TO THE OFFER.
PLEASE NOTE THE EXPIRATION DATE AND THE WITHDRAWAL DEADLINE IS 5:00 P.M.,
NEW YORK CITY TIME, ON JULY 25, 1994, UNLESS EXTENDED.
No fees or commissions will be payable to brokers, dealers or other persons
for soliciting tenders of Shares pursuant to the Offer. The Fund will pay all
transfer taxes on its purchase of Shares, subject to Instruction 6 of the Letter
of Transmittal. Backup tax withholding at a 31% rate may be required unless an
exemption is proved or unless the required tax identification information is or
has previously been provided. Certain withholdings may also apply with respect
to payments to foreign Stockholders. See Instruction 10 of the Letter of
Transmittal.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) Stockholders residing in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. To the extent that the securities laws of any jurisdiction would
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on the Fund's behalf by one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
Any question you have with respect to the Offer should be directed to The
Bank of New York at (800) 507-9357.
Very truly yours,
MUNIBOND INCOME FUND, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS THE AGENT OF EITHER THE FUND OR THE DEPOSITARY OR
AUTHORIZE YOU OR ANY OTHER PERSON (A) TO MAKE ANY STATEMENTS WITH RESPECT TO
THE OFFER, OTHER THAN THE STATEMENTS SPECIFICALLY SET FORTH IN THE OFFER TO
PURCHASE AND THE LETTER OF TRANSMITTAL, OR (B) TO DISTRIBUTE ANY MATERIAL WITH
RESPECT TO THE OFFER OTHER THAN AS SPECIFICALLY AUTHORIZED HEREIN.
EXHIBIT(a)(3)(ii)
<PAGE>
FORM OF LETTER TO CLIENTS OF BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES
REGARDING THE OFFER BY
MUNIBOND INCOME FUND, INC.
TO PURCHASE FOR CASH 3,200,000 OF ITS ISSUED AND OUTSTANDING SHARES
AT NET ASSET VALUE PER SHARE
To Our Clients:
Pursuant to your request, enclosed for your consideration are the Offer to
Purchase dated June 24, 1994 of MuniBond Income Fund, Inc. (the "Fund") and the
related Letter of Transmittal pursuant to which the Fund is offering to purchase
3,200,000 shares of its issued and outstanding common stock, par value $0.10 per
share (the "Shares") for cash at a price equal to their net asset value per
Share ("NAV") determined as of the close of the regular trading session of the
New York Stock Exchange on July 25, 1994, or such later date to which the Offer
is extended, upon the terms and subject to the conditions set forth in the Offer
to Purchase and in the related Letter of Transmittal (which together constitute
the "Offer"). The sole purpose of the Offer is to fulfill an undertaking made in
connection with the initial public offering of the Shares. The Offer to Purchase
and the Letter of Transmittal are being forwarded to you as the beneficial owner
of Shares held by us for your account but not registered in your name. We are
sending you the Letter of Transmittal for your information only; you cannot use
it to tender Shares we hold for your account. A tender of such Shares can be
made only by us as the holder of record and only pursuant to your instructions.
Your attention is called to the following:
1. The purchase price is the NAV determined as of the close of the
regular trading session of the New Your Stock Exchange on July 25, 1994,
unless the Offer is extended.
2. The Offer is for 3,200,000 of its issued and outstanding Shares and
is not conditioned upon any minimum number of Shares being tendered. The
Fund is not required to accept for payment, purchase or pay for any Shares
tendered, and the Fund may terminate or amend the Offer or may postpone the
acceptance for payment of, payment for or purchase of any Shares, as
described in the Offer to Purchase.
3. If more than 3,200,000 Shares are duly tendered prior to the
expiration of the Offer, in order to comply with the initial undertaking,
the Fund will, assuming no changes in the factors originally considered by
the Board of Directors when it determined to make the Offer, extend the
Offer period, if necessary, and increase the number of Shares that the Fund
is offering to purchase to an amount which it believes will be sufficient
to accommodate the excess Shares tendered as well as any Shares tendered
during the extended Offer period. In no event will the Fund purchase Shares
tendered on a pro rata basis.
4. Each Stockholder tendering Shares will be required to submit a
check in the amount of $25.00 payable to The Bank of New York to help
defray the costs associated with effecting the Offer.
5. Tendering Stockholders will not be obligated to pay brokerage
commissions or, subject to Instruction 6 of the Letter of Transmittal,
transfer taxes on the purchase of Shares by the Fund pursuant to the Offer;
however, a broker, dealer or other person may charge a fee for processing
the transactions on behalf of Stockholders.
If you wish to have us tender your Shares, please so instruct us by
completing, executing and returning to us the instruction form on the reverse
side hereof.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO
SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION OF THE OFFER. THE
EXPIRATION DATE AND THE WITHDRAWAL DEADLINE IS 5:00 P.M., NEW YORK CITY TIME, ON
JULY 25, 1994, UNLESS EXTENDED.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) owners of Shares in any jurisdiction in which the Offer or its
acceptance would violate the laws of such jurisdiction. To the extent that the
securities laws of any jurisdiction would require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on the Fund's
behalf by one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
Very truly yours,
MUNIBOND INCOME FUND, INC.
<PAGE>
INSTRUCTIONS REGARDING THE OFFER BY
MUNIBOND INCOME FUND, INC.
TO PURCHASE FOR CASH 3,200,000 OF ITS ISSUED AND OUTSTANDING SHARES
AT NET ASSET VALUE PER SHARE
THIS FORM IS NOT TO BE USED TO TENDER SHARES DIRECTLY TO THE DEPOSITARY. IT
SHOULD BE SENT TO YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE ONLY IF SUCH FIRM IS THE HOLDER OF RECORD OF YOUR SHARES AND WILL BE
EFFECTING THE TENDER ON YOUR BEHALF.
DO NOT COMPLETE THIS FORM IF YOU HAVE DECIDED NOT TO TENDER ANY OF YOUR SHARES.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated June 24, 1994 and the related Letter of Transmittal
(which together constitute the "Offer") in connection with the Offer by MuniBond
Income Fund, Inc. (the "Fund") to purchase 3,200,000 shares of its issued and
outstanding common stock, par value $0.10 per share (the "Shares") at the net
asset value per Share as of the close of the regular trading session of the New
York Stock Exchange on the Expiration Date (as defined in the Offer to
Purchase), on the terms and subject to the conditions of the Offer.
The undersigned hereby instructs you to tender to the Fund the number of
Shares indicated below that are held by you for the account of the undersigned,
upon the terms and subject to the conditions of the Offer.
<TABLE>
<S> <C>
Shares to be tendered:
/ / Tender all Shares held by you
/ / Tender partial Shares held by you
(If partial, complete below)
Shares __________________
Tender all uncertificated Shares that may be held for the account
of the undersigned by the Fund's transfer agent pursuant to the
Fund's dividend reinvestment plan.
Dividend reinvestment
plan Shares to be
tendered (if applicable):
/ / Yes / / No
(Note: If neither of these boxes is checked, any such
uncertificated Shares will NOT be tendered.)
Account Number: __________________________________________
Tax Identification or
Social Security Number:
_______________________________________________________________________________
Name(s) of Beneficial Owner(s):
_______________________________________________________________________________
_______________________________________________________________________________
(Please Print)
Address:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Area Code and Telephone Number:
_____________________________________________________________________________
_________________________________________________________
(Signature of beneficial owner)
_________________________________________________________
(Signature of additional beneficial owner, if any)
Date: ___________________________________________________
</TABLE>
EXHIBIT (a)(3)(iii)
<PAGE>
MUNIBOND INCOME FUND, INC.
800 SCUDDERS MILL ROAD
PLAINSBORO, NEW JERSEY 08536
Dear Stockholder:
As you requested, we are enclosing a copy of the MuniBond Income Fund, Inc.
(the "Fund") Offer to Purchase (the "Offer to Purchase") 3,200,000 Issued and
Outstanding Shares (the "Shares"). The Offer to Purchase is for cash at Net
Asset Value ("NAV") per share as of the expiration date of the Offer. Together
with the Offer to Purchase we are sending you a Form Letter of Transmittal (the
"Letter") for use by holders of record of Shares and guidelines for
certification of taxpayer identification number.
If, after reviewing the information set forth in the Offer to Purchase and
Letter, you wish to tender Shares for purchase by the Fund, please either
contact your Merrill Lynch Financial Consultant or other broker, dealer or
nominee to effect the tender for you or, if you are the record owner of the
Shares, you may follow the instructions contained in the Offer to Purchase and
Letter. EACH STOCKHOLDER TENDERING SHARES WILL BE REQUIRED TO SUBMIT A CHECK IN
THE AMOUNT OF $25.00 PAYABLE TO THE BANK OF NEW YORK TO HELP DEFRAY COSTS
ASSOCIATED WITH EFFECTING THE TENDER OFFER.
Neither the Fund nor its Board of Directors is making any recommendation to
any holder of Shares as to whether to tender Shares. Each stockholder is urged
to consult his or her broker or tax adviser before deciding whether to tender
any Shares.
The Fund's annualized distribution rate for the period May 1, 1994 through
May 31, 1994, based on the amounts actually distributed by the Fund, was 7.10%.
The Fund's NAV on June 21, 1994 was $13.36 per Share. The Fund publishes its NAV
each week in Barron's. It appears in the "Investment Company Institute List"
under the sub-heading "Closed-End Bond Funds" within the listings of mutual
funds and closed-end funds.
Requests for current NAV quotations or for additional copies of the Offer
to Purchase, the Letter and any other tender offer documents and for certain of
the Fund's financial statements, including the Fund's most current financial
statements, may be directed to The Bank of New York (the "Depositary") at (800)
507-9357.
Should you have any other questions on the enclosed material, please do not
hesitate to contact your Merrill Lynch Financial Consultant or other broker or
dealer or call the Depositary at the number set forth above.
Yours truly,
MUNIBOND INCOME FUND, INC.
Exhibit (a)(4)
<PAGE>
MUNIBOND INCOME FUND, INC.
800 SCUDDERS MILL ROAD
PLAINSBORO, NEW JERSEY 08536
CONTACT: MARK B. GOLDFUS FOR IMMEDIATE RELEASE
(609) 282-2023
MUNIBOND INCOME FUND, INC.
ANNOUNCES COMMENCEMENT OF TENDER OFFER
New York, New York - June 24, 1994 -- The Board of Directors
of MuniBond Income Fund, Inc. (the "Fund") announced today that
the Fund has commenced an offer to purchase 3,200,000 shares of
its common stock for cash at a price equal to their net asset
value per share determined as of the close of the regular trading
session of the New York Stock Exchange on the day the offer
expires. The offer will expire at 5:00 P.M. New York City Time,
on July 25, 1994, unless extended. The sole purpose of the offer
is to fulfill an undertaking made in connection with the initial
public offering of the shares, to consider whether to commence an
offer during the period May 1, 1994 through July 31, 1994 to
purchase shares from all beneficial holders.
If more than 3,200,000 shares are duly tendered prior to the
expiration of the offer, in order to comply with the offering
prospectus the Fund will, assuming no changes in the factors
originally considered by the Board of Directors when it
determined to make the offer, extend the offer period, if
necessary, and increase the number of shares that the Fund is
offering to purchase to an amount which it believes will be
sufficient to accommodate the excess shares tendered as well as
any shares tendered during the extended offer period. In no
event will the Fund purchase shares tendered on a pro rata basis.
The offer is being made to all stockholders of the Fund and
is not conditioned upon any minimum number of shares being
tendered. The Board of Directors may determine not to purchase
shares pursuant to the offer for reasons set forth in the tender
offer documents.
Detailed information is contained in the Offer to Purchase
and the related Letter of Transmittal, which may be obtained from
the Depositary, The Bank of New York, Tender and Exchange
Department, 101 Barclay Street, P.O. Box 11248, New York, New
York 10286-1248, or by calling (800) 507-9357.
Exhibit (c)
<PAGE>
DEPOSITARY AGENT AGREEMENT
The Bank of New York
Tender and Exchange Department
101 Barclay Street 12W Floor
New York, NY 10286
Gentlemen:
MuniBond Income Fund, Inc., a Maryland corporation (the
"Offeror") is offering to purchase 3,200,000 shares of its issued
and outstanding common stock, par value $0.01 per share (the
"Shares") for cash at a price equal to their net asset value per
Share ("NAV") determined as of the close of the regular trading
session of the New York Stock Exchange on the day the offer
expires, upon the terms and subject to the conditions set forth
in the Offer to Purchase dated June 24, 1994 and the related
Letter of Transmittal, copies of which are attached hereto as
Exhibits A and B, respectively, and which together, as they may
be supplemented or amended from time to time, constitute the
"Offer".
The Offeror hereby appoints The Bank of New York to act as
Depositary in connection with the Offer. References hereinafter
to "you" shall refer to The Bank of New York.
The Offeror will commence the Offer on June 24, 1994. The
Letter of Transmittal that accompanies the Offer to Purchase is
to be used by the shareholders of the Company to accept the
Offer, and contains instructions with respect to the delivery of
certificates for Shares tendered.
The Offer shall expire at 5:00 P.M., New York City time, on
July 25, 1994 (the "Initial Expiration Date"), or on such
subsequent date or time to which the Offeror may extend the
Offer. The later of the Initial Expiration Date or the latest
time and date to which the Offer may be so extended is
hereinafter referred to as "The Expiration Date".
In carrying out your duties as Depositary, you are to act in
accordance with the following instructions:
1. You will establish and maintain a book entry
account in respect of the Shares at the Depository Trust Company
("DTC"), the Midwest Security Trust Company ("MSTC") and the
Philadelphia Depository Trust Company "PHDTC"), in connection
with the Offer, in accordance with Rule 17AD 14 under the
Securities Exchange Act of 1934, as amended. Any financial
institution that is a participant in the DTC, MSTC or PSDTC
system may make book entry delivery of the Shares by causing DTC,
MSTC or PSDTC to transfer such Shares into the account maintained
<PAGE>
by you, pursuant to this paragraph, in accordance with DTC's,
MSTC's or PSDTC's procedure for such transfer, and you may effect
a withdrawal of Shares through such account by book entry
movement. However, although delivery of Shares may be effected
through book entry transfer at DTC, MSTC, or PSDTC the Letter of
Transmittal (or facsimile thereof) with any required signature
guarantees, a check for $25.00 payable to The Bank of New York
(the "Processing Fee") and any other documents must, in any case,
be received by you in order for Shares to be properly tendered.
The accounts shall be maintained until all Shares tendered
pursuant to the Offer shall have been either accepted for payment
or returned.
2. You are to examine each of the Letters of
Transmittal and certificates for Shares and any other documents
delivered or mailed to you by or for shareholders of the Company
to ascertain whether; (i) the Letters of Transmittal and any such
other documents are duly executed and properly completed in
accordance with instructions set forth therein; (ii) acceptable
form of payment of the $25.00 Processing Fee is received; and
(iii) the Shares have otherwise been properly tendered. In each
case where the Letter of Transmittal or any other document has
been improperly completed or executed or any of the certificates
for Shares are not in proper form for transfer or some other
irregularity in connection with the acceptance of the Offer
exists, you will endeavor to inform the presenters of the need
for fulfillment of all requirements and to take any other action
as may be necessary or advisable to cause such irregularity to be
corrected.
3. With the approval of an authorized officer of the
Offeror (such approval, if given orally, to be confirmed in
writing), or any other party designated by such an officer, you
are authorized to waive any irregularities in connection with any
tender pursuant to the Offer.
4. Tenders of Shares may be made only as set forth in
Section 6 of the Offer to Purchase, and Shares shall be
considered properly tendered to you only when:
(a) certificates for Shares (whether physically
delivered or delivered pursuant to the procedure for book entry
transfer set forth in Section 6 the Offer to Purchase, in which
latter case confirmation of receipt of such tendered Shares must
be received by you) are covered by a properly completed and duly
executed Letter of Transmittal received by you (together with any
other required documents prior to the Expiration Date, or by an
appropriate Notice of Guaranteed Delivery from an Eligible
Institution received by you in accordance with Section 6 of the
Offer to Purchase prior to the expiration date). For the
purposes of these instructions: an "Eligible Institution" shall
2
<PAGE>
be a financial institution that is a member of the Securities
Transfer Agents Medallion Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP") or the New York Stock Exchange, Inc.
Medallion Signature Program ("MSP") (each, an "Eligible
Institution"); and "an appropriate Notice of Guaranteed Delivery"
shall be a Notice of Guaranteed Delivery substantially in the
form attached hereto as Exhibit C, which is either delivered to
you by hand or transmitted to you by facsimile transmission and
mail or otherwise;
(b) certificates for Shares (together with any other
required documents) are received by you, or you have received
confirmation of receipt of such Shares pursuant to the book entry
transfer procedures set forth in the Offer to Purchase, prior to
the Expiration Date or, in the case of an appropriate Notice of
Guaranteed Delivery, along with a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile
thereof), acceptable form of payment of the $25.00 Processing Fee
and any other documents required by the Letter of Transmittal,
within five New York Stock Exchange, Inc. trading days after the
date of such Notice of Guaranteed Delivery; and
(c) the adequacy of the items relating to certificates
for Shares and the related Letter of Transmittal has been
favorably passed upon as above provided.
Notwithstanding the provisions of this paragraph 4,
Shares which the Offeror shall approve as having been properly
tendered shall be considered to be properly tendered.
A tender made on the basis of an appropriate Notice of
Guaranteed Delivery will not be considered to have been properly
made unless stock certificates for all of the Shares covered
thereby be been deposited (either physically or pursuant to
book entry transfer) within the time periods provided in this
paragraph 4 and Section 6 of the Offer to Purchase; and when all
such stock certificates have been so delivered and all other
requirements in this paragraph 4 and the Offer to Purchase have
been complied with, the tender will be deemed effected at the
time of receipt by you of the Letter of Transmittal or
appropriate Notice of Guaranteed Delivery, as the case may be,
provided for in such Section 6 and this paragraph 4.
5. You shall advise the Offeror with respect to any Shares
received subsequent to the Expiration Date and accept its
instructions with respect to disposition of such Shares.
6. You shall accept tenders:
(a) in cases where the Shares are registered in two or
more names only if signed by all named holders.
3
<PAGE>
(b) in cases where the signed person (as indicated on
the Letter of Transmittal) is acting in a fiduciary or a
representative capacity only when proper evidence of his
authority so to act is submitted.
(c) from persons other than the registered stockholder
provided that normal transfer requirements,
including any applicable transfer taxes, are fulfilled.
You shall accept partial tenders of Shares where so
indicated in the Letter of Transmittal and deliver certificates
for Shares to the transfer agent for split up and return and
untendered Shares to the holder as promptly as practicable.
7. The Offeror will purchase Shares duly tendered on the
terms and subject to the conditions set forth in the Offer to
Purchase and the Letter of Transmittal. Payment for Shares duly
tendered and purchased pursuant to the Offer will be made by
check on behalf of the Offeror by you at the rate equal to the
NAV as of the expiration date , as defined in the Offer, as soon
as practicable after notice (such notice, if given orally, to be
confirmed in writing) of acceptance of said Shares by the Offeror
and the funds referred to below are received by you; provided,
however, that in all cases, payment for Shares tendered and
purchased pursuant to the Offer will be made only after timely
receipt by you of certificates for such Shares (or timely
confirmation of a book entry transfer of such Shares into your
account at DTC, MSTC or PSDTC), a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) and any
other required documents.
Immediately available funds will be deposited with you
on the day checks are mailed or delivered by you. After such
payment, you shall promptly present certificates for said Shares,
and any applicable transfer taxes (to be furnished by the
Offeror), together with your letter of indemnity and any other
documents reasonably requested by the Offeror including a
certificate by you indicating the number of Shares validly
tendered, for transfer on the books of the Company, all in
accordance with written instructions from the Offeror and
thereafter deliver the newly issued certificates for said shares
to the Offeror.
8. Shares tendered pursuant to the Offer are irrevocable,
except that Shares tendered pursuant to the Offer may be
withdrawn at any time prior to the Expiration Date, and unless
theretofore purchased by the Offeror, may also be withdrawn at
any time on or after August 22, 1994, if not accepted for
purchase. See the Offer to Purchase for further details.
4
<PAGE>
9. The Offeror shall not be required to purchase any
Shares tendered if any of the conditions set forth in the Offer
are not met. Notice of any decision by the Offeror not to
purchase or pay for any Shares tendered shall be given (and
confirmed in writing) by the Offeror to you.
10. If, pursuant to the Offer, the Offeror does not accept
and pay for all or part of the Shares tendered, you shall as soon
as practicable return those certificates for unpurchased Shares
(or effect appropriate book entry transfer), together with any
related required documents and the Letters of Transmittal
relating thereto that are in your possession, to the persons who
deposited them.
11. All certificates for unpurchased Shares and all checks
or drafts for purchased Shares shall be forwarded by (a)
first class mail under a blanket surety bond protecting you and
the Offeror from loss or liability arising out of the non receipt
or non delivery of such checks, drafts and certificates or (b) by
registered mail insured separately for the replacement value of
each of such checks, drafts and certificates.
12. You are not authorized to offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or
other persons or to engage or utilize any person to solicit
tenders.
13. As Depositary hereunder you:
(a) Shall have no duties or obligations other than
those specifically set forth herein or as may be subsequently
agreed to between you and the Offeror;
(b) will be regarded as making no representations and
having no responsibilities as to the validity, sufficiency, value
or genuineness of any of the certificates or the Shares
represented thereby deposited with you pursuant to the Offer, and
will not be required to and will make no representation as to the
validity, value or genuineness of the Offer;
(c) Shall not be obligated to take any legal action
hereunder which might in your judgment involve any expense or
liability, unless you shall have been furnished with reasonable
indemnity;
(d) may reasonably rely on and shall be protected in
acting in reliance upon any certificate, instrument, opinion,
notice, letter, telegram, or other document or security delivered
to you and reasonably believed by you to be genuine and to have
been signed by the proper party or parties.
5
<PAGE>
(e) May act upon any tender, statement, request,
comment, agreement or other instrument whatsoever not only as to
its due execution and validity and effectiveness of its
provisions, but also as to the truth and accuracy of any
information contained therein, which you shall in good faith
believe to be genuine or to have been signed or represented by a
proper person or persons;
(f) May rely on and shall be protected in acting upon
written or oral instructions from any officer of the Offeror.
(g) may consult with counsel satisfactory to you with
respect to any questions relating to your duties and
responsibilities and the opinion of such counsel shall be full
and complete authorization and protection in respect to any
action taken, suffered or omitted by you hereunder in good faith
and in accordance with the opinion of such counsel; and
(h) shall not advise any person tendering Shares
pursuant to the Offer as to the wisdom of making such tender or
as to the market value or decline or appreciation in market value
of any Share.
13. You shall take such action as may from time to time be
requested by the Offeror (and such other action as you may deem
appropriate) to furnish copies of the Offer to Purchase, Letter
of Transmittal and Notice of Guaranteed Delivery in the forms
attached hereto, or in such other forms as may be approved from
time to time by the Offeror to all persons requesting such
documents and to accept and comply with telephone requests for
information relating to the Offer. The Offeror will furnish you
with copies of such documents on your request.
14. You are authorized to cooperate with and to furnish
information to any organization (and its representatives)
designated from time to time by the Offeror in any manner
reasonably requested by it in connection with the Offer and any
tenders thereunder.
15. You shall advise by cable, telex, facsimile
transmission or telephone, and promptly thereafter confirm in
writing to Gerald M. Richard, Treasurer of the Offeror, Mark B.
Goldfus, Secretary (each at the address and telephone or other
number set forth on Schedule 1 hereto) and such other person or
persons as any of them may request, daily (or more frequently if
requested) up to and including the Expiration Date, as to the
number of shares which have been tendered pursuant to the Offer
and the items received by you pursuant to this Agreement,
separately reporting and giving cumulative totals as to items
properly received, items improperly received and items covered by
Notice of Guaranteed Delivery referred to in paragraph (b) of
paragraph 4 hereof. In addition, you will also inform, and
6
<PAGE>
cooperate in making available to, the aforementioned persons upon
oral request made from time to time prior to the Expiration Date
of such other information as they may reasonably request. Such
cooperation shall include, without limitation, the granting by
you to the Offeror, both persons listed in the preceding
sentence, and such person as the Offeror may request, of access
to those persons on your staff who are responsible for receiving
tenders, in order to ensure that immediately prior to the Initial
Expiration Date and each other Expiration Date, if any, the
Offeror shall have received information in sufficient detail to
enable it to decide whether to extend the Offer. You shall
prepare a final list of all persons whose tenders were accepted
the number of shares tendered, the amount accepted and deliver
said list to Mark B. Goldfus, Secretary of the Offeror.
16. Letters of Transmittal and Notices of Guaranteed
Delivery submitted in lieu thereof pursuant to Section 6 of the
Offer to Purchase shall be stamped by you as to the date, and,
after the expiration of the Offer, the time, of receipt thereof
and shall be preserved by you for a period of time at least equal
to the period of time you preserve other records pertaining to
the transfer of securities. You shall dispose of unused Letters
of Transmittal and other surplus materials by returning them to
Mark B. Goldfus, Secretary of the Offeror.
17. You hereby expressly waive any lien, encumbrance or
right of set off whatsoever that you may have with respect to
funds deposited with you for the purchase of Shares and the
payment of stock transfer taxes by reason of amounts, if any,
borrowed by the Offeror or any of its subsidiaries or affiliates
pursuant to any loan or credit agreement with you.
18. For services rendered as Depositary hereunder, you
shall be entitled to such compensation as set forth on Schedule I
attached hereto.
19. You hereby acknowledge receipt of the Offer to Purchase
and the Letter of Transmittal and further acknowledge that you
have examined each of them. Any inconsistency between this
Agreement, on the one hand, and the Offer to Purchase and the
Letter of Transmittal (as they may be amended from time to time),
on the other hand, shall be resolved in favor of the latter two
documents, except with respect of the duties, liabilities and
indemnification of you as Depositary.
20. The Offeror covenants and agrees to indemnify and hold
you harmless against any loss, liability, cost or expense,
including attorneys' fees, (incurred without negligence,
misconduct or bad faith on your part) arising out of or in
connection with any act, omission, delay or refusal made by you
in reasonable reliance upon any signature, endorsement,
assignment, certificate, order, request, notice, instruction or
7
<PAGE>
other instrument or document believed by you to be valid, genuine
and sufficient and in accepting any tender or effecting any
transfer of Shares believed by you in good faith to be
authorized, and in delaying or refusing in good faith to accept
any tenders or effect any transfer of Shares. In no case shall
the Offeror be liable under this indemnity with respect to any
claim against you unless the Offeror shall be notified by you, by
letter or cable or by telex confirmed by letter, of the written
assertion of a claim against you or of any other action commenced
against you, promptly after you shall have received any such
written assertion or shall have been served with a summons in
connection therewith. The Offeror shall be entitled to
participate at its own expense in the defense of any such claim
or other action and, if the Offeror so elects, the Offeror shall
assume the defense of any suit brought to enforce any such claim.
In the event that the Offeror shall assume the defense of any
such suit, the Offeror shall not be liable for the fees and
expenses of any additional counsel thereafter retained by you, so
long as the Offeror shall retain counsel reasonably satisfactory
to you to defend such suit.
21. You shall arrange to comply with all requirements under
the tax laws of the United States, including those relating to
missing Tax Identification Numbers, and shall file any
appropriate reports with the Internal Revenue Service (e.g.,
1099, 1099B, etc.). The Offeror understands that you are
required to deduct 31% on payments to holders who have not
supplied their correct Taxpayer Identification Number or required
certification. Such funds will be turned over to the Internal
Revenue Service.
22. You shall deliver or cause to be delivered in a timely
manner to each governmental authority to which any stock transfer
taxes are payable in respect of the transfer of Purchased Shares
to the Company your check in the amount of all stock transfer
taxes so payable, and the Company shall reimburse you for the
amount of any and all stock transfer taxes payable in respect of
the transfer of Purchased Shares to the Company; provided,
however, that you shall reimburse the Company for amounts
refunded to you in respect of your payment of any such stock
transfer taxes, at such time as such refund is received by you.
23. This Agreement and your appointment as depository
hereunder shall be construed and enforced in accordance with the
laws of the State of New York applicable to agreements made and
to be performed entirely within such state, and shall inure to
the benefit of, and the obligations created hereby shall be
binding upon, the successors and assigns of each of the parties
hereto. This Agreement may not be modified orally.
8
<PAGE>
24. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but
which together shall constitute one and the same agreement.
Please acknowledge receipt of this Agreement and
confirm the arrangements herein provided by signing and returning
the enclosed copy.
MUNIBOND INCOME FUND, INC.
By:
Name:
Title:
Accepted as of the date first above written.
THE BANK OF NEW YORK
By:
Name:
Title:
9
Exhibit (g)(1)
<PAGE>
<TABLE><CAPTION>
MuniBond Income Fund, Inc., May 31, 1994
- -----------------------------------------------------------------------------------------------------------------------------------
S C H E D U L E O F I N V E S T M E N T S (Unaudited) (in Thousands)
State S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <C> <C> <C> <C> <C>
Alabama -- B+ NR $1,000 Brewton, Alabama, Industrial Development Board, PCR, Refunding
1.1% (Container Corporation America Project), 8.00% due 4/01/2009 $ 997
Arizona -- BBB Baa2 4,000 Navajo County, Arizona, Pollution Control Corporation, Revenue
4.0% Refunding Bonds (Arizona Public Service Company), Series A,
5.875% due 8/15/2028 3,530
California -- A-1+ VMIG1 100 California Pollution Control Financing Authority, FCR, Refunding
2.0% (Shell Oil Company Project), Series C, VRDN, 2.90% due
11/01/2000(a) 100
NR NR 1,805 Long Beach, California, Redevelopment Agency, M/F Mortgage Revenue
Bonds (Pacific Court Apartments), Issue 'B', AMT, 6.80%
due 9/01/2013 1,734
Colorado -- BB Baa 5,000 Denver, Colorado, City and County Airport Revenue Bonds, AMT,
6.8% Series C, 6.125% due 11/15/2025 4,107
NR NR 2,000 San Miguel County, Colorado (Mountain Village Metropolitan
District), 7.40% due 12/15/2013 1,946
Florida -- BBB- NR 2,500 Largo, Florida, Sun Coast Health Systems Revenue Refunding
2.6% Bonds, 6.30% due 3/01/2020 2,300
Georgia -- BBB+ NR 4,500 Georgia Tri City Hospital Authority Revenue Bonds (South
4.7% Fulton Medical Center), 6.375% due 7/01/2016 4,153
Illinois -- BBB- Baa 1,000 Chicago, Illinois, Skyway Toll Bridge Revenue Refunding
Bonds, 6.50% due 1/01/2010 967
13.0% AAA NR 2,000 Illinois Development Financing Authority, Environmental
Facilities Revenue Bonds (Citizens Utilities Company
Project), AMT, 5.90% due 11/15/2028 1,882
A-1+ NR 800 Illinois Development Financing Authority, PCR (Illinois
Power Company), VRDN, AMT, Series C, 2.90% due 3/01/2017(a) 800
Illinois Health Facilities Authority Revenue Bonds:
BBB+ NR 1,000 (Community Hospital of Ottawa), 6.85% due 8/15/2024 971
NR Baa1 1,150 (Holy Cross Hospital Project), 6.70% due 3/01/2014 1,128
A- A 2,000 Illinois Health Facilities Authority, Revenue Refunding
Bonds, (Illinois Masonic Medical Center), 5.50% due 10/01/2019 1,677
A+ A1 2,000 Illinois Housing Development Authority, Housing Development
Revenue Bonds, Series A, 6.00% due 7/01/2018 1,854
A+ Aa 2,500 Illinois Housing Development Authority, Residential Mortgage
Revenue Refunding Bonds, AMT, Series A, 5.90% due 2/01/2024 2,220
</TABLE>
<PAGE>
<TABLE><CAPTION>
MuniBond Income Fund, Inc., May 31, 1994
- -----------------------------------------------------------------------------------------------------------------------------------
S C H E D U L E O F I N V E S T M E N T S (Unaudited) (in Thousands)
State S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <C> <C> <C> <C> <C>
Indiana -- NR NR 1,500 Burns Harbor-Indiana, 8.00% due 4/01/2024 1,506
1.7%
Iowa -- BB- NR 1,000 Des Moines County, Iowa, Industrial Development, Revenue
5.5% Refunding Bonds (U.S. Gypsum Company Project), 7.20%
due 11/01/2007 989
A- NR 1,750 Iowa Financing Authority, Hospital Facility, Revenue
Refunding Bonds (Allen Memorial Hospital), Series B,
5.875% due 2/15/2013 1,602
BBB+ NR 2,500 Ottumwa, Iowa, Hospital Facility Revenue Refunding and
Improvement Bonds (Ottumwa Regional Health), 6.00%
due 10/01/2010 2,307
Louisiana -- NR Baa1 4,195 Lafourche Parish, Louisiana, Revenue Bonds (Hospital
6.0% Service District No. 003), 6.00% due 10/01/2012 3,769
BB- NR 1,600 New Orleans, Louisiana, Industrial Development Board,
IDR, Refunding (U.S. Gypsum Company
Project), 7.20% due 10/01/2007 1,582
Massachusetts - Massachusetts State Industrial Finance Agency Revenue Bonds:
- NR NR 2,000 (Bay Cove Human Services Inc.), 8.375% due 4/01/2019 2,005
3.2% BB+ Ba1 1,000 (Vinfen Corporation), 7.10% due 11/15/2018 939
Michigan -- BBB Baa1 4,000 Dickinson County, Michigan, Economic Development
7.4% Corporation, PCR, Refunding (Champion International
Corporation Project), 5.85% due 10/01/2018 3,563
Michigan State Hospital Finance Authority, Revenue
Refunding Bonds:
A- A 2,000 (Detroit Medical Center), Series B, 5.50% due 8/15/2023 1,711
BBB Baa1 1,500 (Pontiac Osteopathic), Series A, 6.00% due 2/01/2024 1,303
Mississippi -- NR P1 1,600 Perry County, Mississippi, PCR, Refunding (Leaf River Forest
1.8% Project), VRDN, 2.95% due 3/01/2002 (a) 1,600
Montana -- BBB+ Baa1 2,300 Forsyth, Montana, PCR, Refunding (The Montana Power Company),
2.4% Series B, 5.90% due 12/01/2023 2,106
New Mexico -- A-1+ VMIG1 1,300 Albuquerque, New Mexico, Hospital Revenue Bonds (Sisters of
3.3% Charity at St. Joseph's Church), VRDN, 2.80% due 5/15/2022(a) 1,300
A-1+ NR 1,000 Eddy County, Nnew Mexico, PCR, Refunding (IMC Fertilizer
Inc. Project), VRDN, 2.65% due 2/01/2033(a) 1,000
A-1+ NR 600 New Mexico, S/F Mortgage Finance Authority, Series A,
VRDN, 3.20% due 7/01/2017(a) 600
</TABLE>
2
<PAGE>
<TABLE><CAPTION>
MuniBond Income Fund, Inc., May 31, 1994
- -----------------------------------------------------------------------------------------------------------------------------------
S C H E D U L E O F I N V E S T M E N T S (Unaudited) (in Thousands)
State S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <C> <C> <C> <C> <C>
New York -- A- Baa1 4,250 New York City, New York, GO, Refunding, Series D,
UT, 5.75% due 8/15/2009 3,993
5.9% NR NR 1,000 New York City, New York, IDA, IDR (Japan Airlines
Company Ltd. Project), AMT, VRDN, 3.35% due
11/01/2015(a) 1,000
A-1+ NR 100 New York State Environmental Facilities Corporation,
Resource Recovery Revenue Bonds (Huntington
Project), AMT, VRDN, 3.05% due 11/01/2014(a) 100
A-1+ VMIG1 200 Port Authority of New York and New Jersey, Special
Obligation Revenue Bonds (Versatile Structure
Obligation), Series 1, VRDN, 3.00% due 6/01/2028(a) 200
Ohio -- 11.6% Ohio State Air Quality Development Authority, PCR, Refunding:
BB Baa3 2,000 (Cleveland Electric Company), AMT, 6.85% due 7/01/2023 1,922
BBB- Baa2 4,500 (Ohio-Edison), Series A, 5.95% due 5/15/2029 3,997
BB Ba2 3,500 Ohio State Water Development Authority, Pollution Control
Facilities, Revenue Bonds (Toledo Edison Project), AMT,
Series A, 7.40% due 11/01/22 3,535
BBB- Baa 1,000 Stark County, Ohio, Hospital Revenue Bonds (Doctors Hospital
Inc.), 6.00% due 4/01/2024 842
Oregon -- 1.1% B+ NR 1,000 Yamhill County, Oregon, PCR, Refunding (Smurfit Newsprint
Corporation Project), 8% due 12/01/2003 1,015
Pennsylvania BBB NR 3,935 Northeastern Pennsylvania Hospital and Educational
-- 3.9% Authority, University Revenue Refunding Bonds (Wilkes
University), 5.625% due 10/01/2018 3,482
South Carolina A- Baa1 1,500 Aiken County, South Carolina, Industrial Revenue Refunding
-- 1.6% Bonds (Beloit Corporation Project), 6.00% due
12/01/2011 1,390
Tennessee NR NR 1,400 Knox Cnty Tenn Health Edl and Hsg Facs Board Hospital
-- 1.7% Facs Rev, Baptist Hlth Sys of East Tenn, 8.60% due
4/15/2016 1,484
Vermont BBB NR 1,000 Swanton Village, Vermont, Electric System Revenue Bonds,
6.70% due 12/01/2023 961
-- 5.5% NR Baa 4,080 Vermont Educational and Health Buildings, Financing
Agency Revenue Refunding Bonds (Norwich University
Project), 6.00% due 9/01/2013 3,879
</TABLE>
3
<PAGE>
<TABLE><CAPTION>
MuniBond Income Fund, Inc., May 31, 1994
- -----------------------------------------------------------------------------------------------------------------------------------
S C H E D U L E O F I N V E S T M E N T S (Unaudited) (in Thousands)
State S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <C> <C> <C> <C> <C>
Wisconsin NR A 1,425 Wisconsin State Health and Educational Facilities 1,398
-- 1.6% Authority, Revenue Bonds (Mercy Hospital of
Janesville), 6.60% due 8/15/2022
Total Investments (Cost -- $93,466) -- 98.4% 87,446
Other Assets Less Liabilities -- 1.6% 1,433
--------
Net Assets -- 100.0% $88,879
========
(a) The interest rate is subject to change periodically based upon the
prevailing market rate. The interest rate shown is the rate in effect
at May 31, 1994.
See Notes to Financial Statements.
To simplify the listings of MuniBond Income AMT Alternative Minimum Tax (subject to)
Fund, Inc.'s portfolio holdings in the Schedule GO General Obligation Bonds
of Investments, we have abbreviated the names IDA Industrial Development Authority
of many of the securities according to the list at right. IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
S/F Single-Family
UT Unlimited Tax
VRDN Variable Rate Demand Notes
</TABLE>
4
<PAGE>
<TABLE><CAPTION>
MuniBond Income Fund, Inc. May 31, 1994
Statement of Assets and Liabilities as of May 31, 1994 (Unaudited)
<S> <C> <C>
Assets: Investments, at value (identified cost - $93,466,011)(Note 1a)
$87,445,499
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,754
Receivables:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . $1,417,392
Securities sold . . . . . . . . . . . . . . . . . . . . . . 967,160
Investment advisor (Note 2) . . . . . . . . . . . . . . . . 118,940 2,503,492
----------
Deferred organization expenses (Note 1e) . . . . . . . . . .
69,721
------
Total assets . . . . . . . . . . . . . . . . . . . . . . . .
90,102,466
-----------
Liabilities: Payables:
Securities purchased . . . . . . . . . . . . . . . . . . . 962,917
Dividends to shareholders (Note 1f) . . . . . . . . . . . . 181,511 1,144,428
----------
Accrued expenses and other liabilities . . . . . . . . . . .
----
79,457
------
Total liabilities . . . . . . . . . . . . . . . . . . . . . .
1,223,885
Net Assets: Net assets . . . . . . . . . . . . . . . . . . . . . . . . . $88,878,581
===========
Capital: Common Stock, par value $.10 per share; 200,000,000 shares
authorized; $ 665,405
6,654,055 shares issued and outstanding . . . . . . . . . . 93,445,808
Paid-in capital in excess of par . . . . . . . . . . . . . . 465,369
Undistributed investment income - net . . . . . . . . . . . . 322,512
Undistributed realized capital gains - net . . . . . . . . . (6,020,513)
------------
Unrealized depreciation on investments - net . . . . . . . .
Total capital-Equivalent to $13.36 net asset value per share of
Common Stock (market price $12.125)(Note 4) . . . . . . . . $88,878,581
===========
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
MuniBond Income Fund, Inc. May 31, 1994
Statement of Operations for the Period October 29, 1993+ to May 31, 1994 (Unaudited)
<S> <C> <C> <C>
Investment Interest and amortization of premium and discount $2,976,799
Income
(Note 1d):
Expenses: Investment advisory fees (Note 2) . . . . . . . $ 298,995
Accounting services (Note 2) . . . . . . . . . 28,463
Professional fees . . . . . . . . . . . . . . . 23,024
Directors' fees and expenses . . . . . . . . . 18,960
Printing and shareholder reports . . . . . . . 13,380
Transfer agent fees (Note 2) . . . . . . . . . 11,839
Listing fees (Note 1e) . . . . . . . . . . . . 8,546
Amortization of organization expenses (Note 1e) 7,528
Custodian fees . . . . . . . . . . . . . . . . 6,496
Other . . . . . . . . . . . . . . . . . . . . 16,158
------
Total expenses before reimbursement . . . . . . 433,389
Reimbursement of expenses (Note 2) . . . . . . (417,935)
--------
Total expenses after reimbursement . . . . . . 15,454
---------
Investment income - net . . . . . . . . . . . 2,961,345
---------
Realized and Unrealized Realized gain on investments - net . . . . . . 322,512
Gain (Loss) on Unrealized depreciation on investments - net . (6,020,513)
Investments - Net -----------
(Notes 1d & 3):
Net Decrease in Net Assets Resulting from Operations $(2,736,656)
============
</TABLE>
+Commencement of Operations.
See Notes to Financial Statements.
6
<PAGE>
<TABLE><CAPTION>
MuniBond Income Fund, Inc. May 31, 1994
Statement of Changes in Net Assets (Unaudited)
For the Period
Oct. 29, 1993+
Increase (Decrease) in Net Assets: to May 31, 1994
---------------
<S> <C> <C>
Operations: Investment income - net . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,961,345
Realized gain on investments - net . . . . . . . . . . . . . . . . . . . . 322,512
Unrealized depreciation on investments - net . . . . . . . . . . . . . . . (6,020,513)
-------------
Net decrease in net assets resulting from operations . . . . . . . . . . . . (2,736,656)
-------------
Dividends & Investment income - net . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,495,976)
Distributions -------------
to Shareholders
(Note 1f): Net decrease in net assets resulting from dividends and distributions to
shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . (2,495,976)
-------------
Common Stock Net proceeds from issuance of Common Shares . . . . . . . . . . . . . . . . . 90,720,000
Transactions Offering and underwriting costs resulting from issuance of Common Shares . . (210,017)
(Note 4): Value of shares issued to Common Shareholders in reinvestment of dividends . 3,501,225
-------------
Net increase in net assets derived from Common Stock transactions . . . . . . 94,011,208
-------------
Net Assets: Total increase in net assets . . . . . . . . . . . . . . . . . . . . . . . . 88,778,576
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,005
-------------
End of period* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $88,878,581
=============
*Undistributed investment income - net . . . . . . . . . . . . . . . . . . . $ 465,369
=============
+Commencement of Operations.
See Notes to Financial Statements.
7
<PAGE>
</TABLE>
<TABLE><CAPTION>
MuniBond Income Fund, Inc. May 31, 1994
Financial Highlights (Unaudited)
The following per share data and ratios have been derived For the Period
from information provided in the financial statements Oct. 29, 1993+
to
May 31, 1994
---------------
Increase (Decrease) in Net Asset Value:
<S> <C> <C>
Per Share Net Asset value, beginning of period . . . . . . . . $ 14.18
Operating -----------
Performance: Investment income - net . . . . . . . . . . . . . .45
-----------
Total from investment operations . . . . . . . . . . (.41)
-----------
Less dividends:
Investment income - net . . . . . . . . . . . . . (.38)
Realized gain on investments - net . . . . . . . . -
-----------
Total dividends . . . . . . . . . . . . . . . . . . . (.38)
Capital charge resulting from issuance of Common (.03)
-----------
Stock . . . . . . . . . . . . . . . . . . . . . . . . $ 13.36
===========
Net asset value, end of period . . . . . . . . . . . $ 12.125
===========
Market price per share, end of period . . . . . . . .
Total Based on net asset value per share . . . . . . . . . (3.07)%++
Investment ===========
Retrun** Based on market value per share . . . . . . . . . . . (16.83)%++
===========
Ratios to Expenses, net of reimbursement . . . . . . . . . . . .03%*
Average ===========
Net Assets: Expenses . . . . . . . . . . . . . . . . . . . . . . .80%*
===========
Investment income - net . . . . . . . . . . . . . . . 5.44%*
===========
Supplemental Net assets, end of period (in thousands) . . . . . . $ 88,879
Data: ===========
Portfolio turnover . . . . . . . . . . . . . . . . . 37.15%
===========
</TABLE>
+ Commencement of Operations.
++ Aggregate total investment return.
* Annualized
**Total investment returns exclude the effects of sales loads.
Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value,
result in substantially different returns.
See Notes to Financial Statements.
8
<PAGE>
MuniBond Income Fund, Inc.
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniBond Income Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end,
management investment company. Prior to commencement of operations on
October 29, 1993, the Fund had no operations other than those relating
to organizational matters and the sale of 7,055 shares of Common Stock
on October 15, 1993 to Fund Asset Management, Inc. ("FAMI") for
$100,005. The Fund determines and makes available for publication the
net asset value of its Common Stock on a weekly basis. The Fund's
Common Stock is listed on the New York Stock Exchange under the symbol
MBD. The following is a summary of significant accounting policies
followed by the Fund.
(a) Valuation of investments - Municipal bonds and other portfolio
securities in which the Fund invests are traded primarily in the over-
the-counter markets and are valued at the last available bid price in
the over-the-counter market or on the basis of yield equivalents as
obtained by the Fund's pricing service from one or more dealers that
make markets in the securities. Financial futures contracts, which
are traded on exchanges, are valued at their last sale price as of the
close of such exchanges. Options on futures contracts on U.S.
Government securities, which are traded on exchanges, are valued at
their last bid price in the case of options purchased and their last
asked price in the case of options written. Short-term investments
with a remaining maturity of sixty days or less are valued at
amortized cost, which approximates market value. Securities and
assets for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the
direction of the Board of Directors of the Fund.
(b) Financial futures contracts - The Fund may purchase or sell
interest rate futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at a
specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to the
contract, the Fund agrees to receive from or pay to the broker an
amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin and
are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was
opened and the value at the time it was closed.
(c) Income taxes - It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income - Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Original issue discounts and market premiums are amortized
into interest income. Realized gains and losses on security
transactions are determined on the identified cost basis.
(e) Deferred organization and offering expenses and prepaid
registration fees - Deferred organization expenses are charged to
expense on a straight-line basis over a five-year period beginning
with the commencement of operations of the Fund. Direct expenses
relating to the public offering of the Fund's shares of Common Stock
were charged to capital at the time of the issuance of the Shares.
(f) Dividends and distributions - Dividends from net investment
income are declared daily and paid monthly. Distributions of capital
gains are recorded on the ex-dividend dates.
(g) Non-income producing investments - Written and purchased options
are non-income producing investments.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
FAM. Effective January 1, 1994, the investment advisory business of
FAM was reorganized from a corporation to a limited partnership.
Both prior to and after the reorganization, ultimate control of FAM
has vested with Merrill Lynch & Co., Inc. ("ML & Co."). The general
partner of FAM is Princeton Services Inc., an indirect wholly-owned
subsidiary of ML &Co. The limited partners are ML & Co. and Merrill
Lynch Investment Management, Inc. ("MLIM"), which is also an indirect,
wholly-owned subsidiary of ML & Co.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee of 0.55% based upon the average
9
<PAGE>
daily value of the Fund's net assets. From October 29, 1993 to May
31, 1994, FAM earned fees of $298,995, all of which was voluntarily
waived. In addition, FAM voluntarily elected to reimburse the Fund
$118,940 in additional expenses.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, MLIM, Merrill Lynch, Pierce, Fenner & Smith
Inc. ("MLPF&S") and/or Merrill Lynch & Co., Inc.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the period October 29, 1993 to May 31, 1994, were $114,400,688 and
$27,015,741, respectively.
Net realized and unrealized gains (losses) as of May 31, 1994 were as
follows:
Realized Unrealized
Gains (Losses) Losses
Long-term investments . . . . . . . . . $(612,507) $(6,020,513)
Short-term investments . . . . . . . . 5,100 -
Futures contracts . . . . . . . . . . . 929,919 -
----------- ------------
Total . . . . . . . . . . . . . . . . . $ 322,512 $(6,020,513)
=========== ============
As of May 31, 1994, net unrealized depreciation for Federal
income tax purposes aggregated $6,020,513, of which $61,098
related to appreciated securities and $6,081,611 related to
depreciated securities. The aggregate cost of investments at May 31,
1994 for Federal income tax purposes was $93,466,012.
4. Capital Stock Transactions:
At May 31, 1994, the Fund had one class of shares of Common Stock, par
value, $.10 per share, of which 200,000,000 shares were authorized.
During the period October 29, 1993 to May 31, 1994, 6,647,000 shares
were sold. At May 31, 1994, total paid-in capital amounted to
$94,111,213.
5. Subsequent Event:
On June 10, 1994, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of $.069938
per share, payable on June 29, 1994 to shareholders of record as of
June 20, 1994.
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