Current Price –$13.6
Expected pay-off – $14.01 (TBD on the 6 December 2016)
Upside – 3%
Expiration Date – 22 November 2016
Holders of less than 100 shares are not subject to proration
The Fund is making this offer to repurchase up to 10% of its issued and outstanding shares of common stock as of November 22, 2016. The Repurchase Offer is for cash at a price equal to the net asset value of the Fund’s shares, less a repurchase fee of 2% of the value of the shares repurchased,as of the close of regular trading on the New York Stock Exchange on December 6, 2016. Thus exact repurchase price will not be known until the 6th of Dec. NAV at the time of writing is $14.3/share.
The fund invests mostly in long-term (and mid-term) US government bonds and thus NAV is dependent on changing interest rates. If interest rates continue to rise, NAV of the fund might deviate significantly. Better buying opportunities might be available closer to expiration date when NAV determination date is closer – discount to NAV is likely to prevail as has been the case over the last 5 years.
This is a regular tender offer that is carried out once a year and usually heavily oversubscribed. So this one is clearly for odd lots only. For the moment I do not have any position, but might buy closer to expiration date.
More info about the fund, including NAV and market price charts: