Municipal Bonds Boost Performance of Leveraged Closed-End Fund Amid Fed Rate Cuts

Municipal bonds have seen relief, propelling this fund higher. When the Fed cuts its target rate, leveraged closed-end funds can benefit from reduced borrowing costs. CEFs often utilize borrowings, and the fund's performance can be positively affected by lower borrowing costs.

New York, NY – September 12, 2025 – BNY Mellon Municipal Bond Infrastructure Fund Inc. (NYSE: DMB) has declared a monthly distribution of $0.0380 per share, underscoring the fund's commitment to providing a consistent income stream to its shareholders. This announcement comes amidst a backdrop of favorable market conditions, including the recent Federal Reserve (Fed) rate cut, which has benefited leveraged closed-end funds (CEFs) by reducing borrowing costs BNY Mellon Municipal Bond Infrastructure Fund Inc. Declares Monthly Distribution, Offering Timely Income Stream^[1].

The ex-dividend date for this distribution is set for October 17, 2025, with the payment date scheduled for November 3, 2025. Investors must own shares before the market opens on the ex-dividend date to qualify for this distribution. The declaration aligns with DMB's objective of providing a high level of current income, primarily exempt from federal income tax.

The Fed's rate cut has positively impacted DMB's performance by reducing the fund's borrowing costs, a common strategy for CEFs. Lower borrowing costs can enhance the fund's net asset value (NAV) and overall profitability, making it more attractive to income-focused investors. This development is particularly significant in the current economic climate, where municipal bond funds are gaining traction as a stable and tax-efficient investment option.

The announcement of DMB's monthly distribution is likely to draw attention from income-focused investors, potentially influencing short-term trading dynamics for the fund's shares. While the share price is expected to adjust downward by the distribution amount on the ex-dividend date, the fund's consistent payouts highlight its operational health and management effectiveness. This consistency is crucial for maintaining investor confidence, especially in the municipal bond market, which can be influenced by various economic factors.

The impact of DMB's distribution declaration extends beyond its unitholders to the broader municipal bond market. The fund's continued investment in municipal bonds helps maintain liquidity and pricing in the market, indirectly supporting infrastructure companies and governmental entities that issue these bonds. The announcement also signals health and stability within the municipal bond sector, potentially drawing more investor interest to the asset class.

Looking ahead, DMB's strategic focus will remain centered on providing tax-exempt income from municipal bonds that finance infrastructure projects. The fund's performance will be influenced by interest rate movements, the credit quality of municipal issuers, and broader economic conditions affecting infrastructure spending. Potential strategic pivots could involve adjusting portfolio duration in response to interest rate forecasts or reallocating across different sectors of municipal infrastructure based on perceived value and credit quality.

Investors should monitor the fund's NAV performance relative to its market price, as closed-end funds can trade at premiums or discounts, offering additional entry or exit points. The municipal bond market is expected to remain a vital component of the investment landscape, offering stability and predictable income in a volatile financial environment.