BNY Mellon Dreyfus Announces First Closed-End Fund to Focus on Municipal Infrastructure Bond Investing
Dreyfus Municipal Bond Infrastructure Fund Attracts More than $250 Million
NEW YORK, April 29, 2013 – The Dreyfus Corporation, a BNY Mellon company, announced today that it had successfully completed the initial public offering of common shares of Dreyfus Municipal Bond Infrastructure Fund, a new closed-end fund. The offering was conducted by a group of underwriters led by Morgan Stanley & Co. LLC, Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated. The fund issued 16,950,000 shares at an initial price of $15 a share resulting in gross proceeds of $254.25 million, excluding any exercise of the underwriters’ option to purchase additional shares. If the underwriters exercise the option in full, the fund will have raised $292.31 million.
The Fund, which began trading on Friday on the New York Stock Exchange under the symbol “DMB,” seeks to provide investors as high a level of current income exempt from regular federal income tax as is consistent with the preservation of capital. “We are excited about the opportunity to offer the first closed-end fund that focuses on municipal infrastructure bonds,” said Dreyfus President Charlie Cardona. “The U.S. is at a critical juncture in repairing and maintaining a rapidly aging infrastructure, which municipal revenue bonds have historically helped finance.”
The Fund, which is sub-advised by Standish Mellon Asset Management Company LLC, is managed by Christine L. Todd, President of Standish, Jeffrey Burger, Daniel Rabasco and Thomas Casey. Ms. Todd stated, “We believe investing in municipal infrastructure bonds provides investors with an opportunity to seek a high level of federally tax free income while participating in the rebuilding of America’s infrastructure. The closed-end fund structure, in our view, is particularly suited for this type of investing given the importance of active management and liquidity characteristics of many municipal bonds.”
The Fund is a newly organized, non-diversified, closed-end management company with no operating history. Shares of closed-end investment companies, such as the Fund, typically trade on a national stock exchange, and these shares frequently trade at a discount to their net asset value, which may increase investors’ risk of loss.
It is expected that the Fund’s distributions will generally be treated as tax-exempt income for purposes of regular U.S. Federal income tax. A portion of the Fund’s distributions may be (i) subject to U.S. Federal income tax and such distributions will generally be subject to state and local taxes, and (ii) includable in taxable income for purposes of the Federal alternative minimum tax.
Certain Investment Risks. Bond funds are subject generally to interest rate, credit, liquidity, call, and market risks, to varying degrees. High yield bonds involve increased credit and liquidity risk compared with investment grade bonds and are considered speculative in terms of the issuer’s ability to pay interest and repay principal on a timely basis. Municipal infrastructure bond funds also are subject to the special risks related to infrastructure investments, such as capital requirements and the regulatory environment related to infrastructure projects. The Fund also may employ leverage to enhance its potential to achieve its objective, through the issuance of preferred shares or participation in tender option bond programs, or may engage in derivative transactions that have the effect of leveraging the portfolio. Leverage can magnify the potential for gains and losses.
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Notes to Editors:
The Dreyfus Corporation, established in 1951 and headquartered in New York City, is one of the nation's leading asset management and distribution companies, currently managing approximately $294 billion in assets.
Standish Mellon Asset Management Company LLC, with approximately $167 billion of assets under management, provides investment management services across a broad spectrum of fixed income asset classes. These include corporate credit, emerging markets debt (dollar-denominated and local currency), core / core plus, tax–sensitive, short duration, stable value and opportunistic (U.S. and global) strategies. Standish also offers full service capabilities in insurance client strategies and liability driven investing. The firm includes assets managed by Standish personnel acting as dual officers of The Dreyfus Corporation and The Bank of New York Mellon and Alcentra NY, LLC personnel acting as dual officers of Standish.
BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.4 trillion in assets under management. It encompasses BNY Mellon’s affiliated investment management firms, wealth management services and global distribution companies. More information can be found at www.bnymellon.com.
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 36 countries and more than 100 markets. As of March 31, 2013, BNY Mellon had $26.3 trillion in assets under custody and/or administration, and $1.4 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. Additional information is available on www.bnymellon.com, or follow us on Twitter @BNYMellon.
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