BlackRock Municipal Income Fund Announces 2025 Repurchase Schedule and Initial Repurchase Amount Amid Conversion to Unlisted Closed-End Fund

BlackRock Municipal Income Fund, Inc. (MUI) announced a 2025 repurchase schedule for its upcoming conversion to an unlisted continuously-offered closed-end fund. The board approved an initial repurchase amount of 15% of outstanding shares in Q2 2025, with a repurchase price set at 100% of the net asset value on 5/30/2025. The conversion is expected to take place on March 24, 2025, after which the fund will begin transitioning its portfolio to align with its new investment strategies. Shareholders are advised to contact their financial intermediaries regarding the conversion's impact on their accounts.

BlackRock Municipal Income Fund, Inc. (MUI) is set to undergo a significant transformation, converting from an exchange-listed closed-end fund (CEF) to an unlisted continuously-offered closed-end fund (ICOF) [1]. This conversion, which is expected to take place on March 24, 2025, will result in several notable changes for the fund and its shareholders.

Key aspects of the conversion include the approval of a 15% initial repurchase of outstanding shares in Q2 2025, with the repurchase price set at 100% of the net asset value (NAV) on May 30, 2025 [1]. The portfolio realignment process is set to begin on March 3, 2025, as the fund transitions its investment strategies to better align with its new structure [1].

The conversion of MUI to an ICOF represents a significant shift in the investment landscape. One of the most notable implications is the elimination of secondary market trading. Currently, MUI shares trade daily on the New York Stock Exchange (NYSE), potentially at a discount or premium to NAV [1]. However, after the conversion, shareholders will only have quarterly opportunities to sell shares back to the fund at NAV [1]. This elimination of secondary market trading removes both the discount/premium dynamic and intraday liquidity.

Another key implication of the conversion is the potential shift in investment strategies. The portfolio realignment process, which begins on March 3, 2025, signals that BlackRock is likely moving towards less liquid municipal securities that may offer higher yields but wouldn't be appropriate for a daily-traded vehicle [1]. This change could potentially benefit long-term investors who are less concerned with market fluctuations and are willing to accept the added risk associated with less liquid investments.

For shareholders using platforms that won't support the new structure, the conversion effectively represents a forced liquidation before the conversion takes place. However, for remaining investors, the interval structure offers potential advantages, such as the elimination of persistent NAV discounts, reduced selling pressure during market stress, and access to higher-yielding, less liquid municipal securities typically unavailable in traditional closed-end funds [1].

In conclusion, the conversion of BlackRock Municipal Income Fund, Inc. (MUI) from an exchange-listed closed-end fund (CEF) to an unlisted continuously-offered closed-end fund (ICOF) represents a significant structural shift with important implications for current shareholders. The elimination of secondary market trading, potential shift in investment strategies, and the interval structure's potential advantages all contribute to a new era of investing for MUI.

References:
[1] StockTitan. (2023, January 11). BlackRock Municipal Income Fund, Inc. (MUI) Announces 2025 Repurchase Schedule and Conversion to Unlisted Continuously-Offered Closed-End Fund. Retrieved January 18, 2023, from https://www.stocktitan.net/news/MUI/black-rock-municipal-income-fund-inc-mui-announces-2025-repurchase-07c7d9io6c5r.html