Current Price – $12.75
Tender Price – $13.22
Upside – 3.7% (or $45 for odd-lots)
Expiration Date – November 26th, 2018
Potentially no proration for odd lot holders.
This is recurring tender offer by the fund. A number of these have already been posted on the site (here and here). Shares are trading at 5% discount to NAV and is offering to buy 10% of the outstanding at 2% discount to NAV.
Tender participants are exposed to NAV risks, however monthly fluctuations are quite small due to underlying portfolio being mostly comprised of mid term US government bonds. Nevertheless buying closer to tender expiration might make more sense.
Re odd-lots, filling says “that the Fund may accept all Shares tendered by stockholders who own, beneficially or of record, an aggregate of not more than 99 Shares and who tender all of their Shares”. Same wording was include in previous tenders and odd-lot provision was honored. As this is tiny opportunity from odd-lot perspective (only $45), I would expect the same to happen this year (still beware of BLBD fiasco).
Company does not report how oversubscribed the previous tenders have been, but judging by the change in outstanding shares these have at the very least full 10% participated. Still, EGF share price does not seem to be effected much by the announcement or expiration of these tenders and therefore it might be possible to tender larger amounts than odd-lots and then liquidate non-accepted position at break-even. If anyone has tried this with previous EGF tenders and knows proration factors, please share.