Mfs High Yield Municipal Trust SC TO-I, filed Oct 6, 2023
Mfs High Yield Municipal Trust (CMU)
SC TO-I
2023-10-06
View Original
Added on
October 25, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)
MFS High Yield Municipal Trust
(Name of Subject Company (Issuer))
MFS High Yield Municipal Trust
(Name of Filing Person (Issuer))
(Name of Filing Person (Issuer))
Common Shares, Without Par
(Title of Class of Securities)
(Title of Class of Securities)
59318E102
(CUSIP Number of Class of Securities)
(CUSIP Number of Class of Securities)
Christopher R. Bohane
Massachusetts Financial Services Company
111 Huntington Avenue
Boston, MA 02199
Telephone: (617) 954-5000
Massachusetts Financial Services Company
111 Huntington Avenue
Boston, MA 02199
Telephone: (617) 954-5000
(Name, address and telephone number of person authorized to receive notices and communications on behalf of filing persons)
With a Copy to:
David C. Sullivan
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199-3600
Telephone: (617) 951-7000
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199-3600
Telephone: (617) 951-7000
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Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
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Check the appropriate boxes below to designate any transactions to which the statement relates:
☐ third party tender offer subject
to Rule 14d-1.
☒ issuer tender offer subject to
Rule 13e-4.
☐ going-private transaction subject
to Rule 13e-3.
☐ amendment to Schedule 13D under
Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results of the tender offer. ☐
If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:
☐ Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)
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EXPLANATORY NOTE
This filing supplements the Schedule TO filed on August 25, 2023 regarding the communications made for the commencement of a tender offer (the “Offer”) on October 6, 2023 by MFS High Yield Municipal
Trust, a closed-end management investment company (the “Fund”), to purchase for cash up to 10% or 2,832,531 shares of the Fund’s outstanding common shares (the “Shares”) upon the terms and subject to the conditions of the Offer.
This Amendment No. 1 to Schedule TO is intended to satisfy the requirements pursuant to Rule 13e-4(c)(3) of the Exchange Act.
Forward-Looking Statements
This document contains statements regarding plans and expectations for the future that constitute forward-looking statements within The Private Securities Litigation Reform Act of 1995. All statements
other than statements of historical fact are forward-looking and can be identified by the use of words such as “may,” “will,” “expect,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. Such forward-looking statements are
based on the Fund’s current plans and expectations, are not guarantees of future results or performance, and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking
statements. All forward-looking statements are as of the date of this release only; the Fund undertakes no obligation to update or review any forward-looking statements. You are urged to carefully consider all such factors.
Additional Information and Where to Find It
The Offer referenced in this communication commenced on October 6, 2023. This announcement is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell
Shares in the Fund, nor is it a solicitation of any proxy. This announcement is not a substitute for any materials that the Fund will file with the SEC.
The Fund filed a tender offer statement on Schedule TO, together with other related tender offer documents, including a letter of transmittal, in connection with the Offer. These documents contain
important information about the Fund and the Offer. You are urged to read these documents carefully and in their entirety before making any decision regarding tendering your Shares. These documents are available to the Fund’s shareholders at no
expense to them and will also be available for free at the SEC’s website at www.sec.gov.
This Schedule TO is not a prospectus, circular, or representation intended for use in the purchase or sale of Shares in the Fund. Shares of the Fund are not FDIC-insured and are not deposits or other
obligations of, or guaranteed by, any bank. Shares of the Fund involve investment risk, including possible loss of principal. For more complete information about the Fund, including risks, charges, and expenses, please see the Fund’s annual and
semi-annual shareholder reports. The Fund’s filings with the SEC are also available to the public from commercial document-retrieval services and at the website maintained by the SEC at www.sec.gov.
The Fund is a closed-end fund. Common shares of the Fund are only available for purchase/sale on the New York Stock Exchange at the current market price. Common shares may trade at a discount to net asset value.
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Items 1 through 9.
This Tender Offer Statement on Schedule TO is filed by MFS High Yield Municipal Trust, a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a closed-end
management investment company (the “Fund”). This Schedule TO relates to the Fund’s offer to purchase for cash up to 10% or 2,832,531 shares of its outstanding common shares, without par value (the “Common Shares”), upon the terms and subject to the
conditions set forth in the Fund’s Offer to Purchase dated October 6, 2023 (the “Offer to Purchase”) and the related Letter of Transmittal (the “Letter of Transmittal” which, together with the Offer to Purchase constitute the “Offer”), copies of
which are attached hereto as Exhibits (a)(1)(i) and (a)(1)(ii), respectively. The price to be paid for the Common Shares is an amount per share, net to the seller in cash, equal to 98% of the net asset value per share as of the Expiration Date (as
defined in the Offer), plus any unpaid dividends accrued through November 6, 2023, or such later date to which the Offer is extended. There are no material conditions to the availability of consideration for purposes of this Offer, except as set
forth in the Offer to Purchase. The information set forth in the Offer to Purchase and the related Letter of Transmittal is incorporated herein by reference with respect to Items 1 through 9 of this Schedule TO.
Item 10.
Not Applicable
Item 11.
(a)(1) The information set forth in the Offer to Purchase under “Interests of the Trustees and Officers; Transactions and Arrangements Concerning the Shares” is incorporated herein by reference.
(a)(2) The information set forth in the Offer to Purchase under “Legal Matters; Regulatory Approvals” is incorporated herein by reference.
(a)(3) Not applicable.
(a)(4) Not applicable.
(a)(5) None.
(c) Not applicable.
Items 12. EXHIBITS
Item 12 of the Schedule TO is hereby amended and supplemented to add the following exhibits:
Exhibit No. Document
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(a)(1)(i)
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(a)(1)(ii)
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(a)(1)(iii)
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(a)(1)(iv)
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(a)(1)(v)
(a)(2)
(a)(3)
(a)(4)
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None.
Not Applicable.
Not Applicable.
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(a)(5)(iii)
(d)
(g)
(h)
(s)
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None.
None.
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Item 13.
Not applicable.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
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MFS High Yield Municipal Trust
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By: /s/ Christopher R. Bohane
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Name: Christopher R. Bohane
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Title: Assistant Secretary and Assistant Clerk
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Exhibit (a)(1)(i)
OFFER BY
MFS® HIGH YIELD MUNICIPAL TRUST
TO PURCHASE FOR CASH UP TO
10% OF ITS OUTSTANDING COMMON SHARES OF BENEFICIAL INTEREST AT 98% OF NET ASSET VALUE PER SHARE
10% OF ITS OUTSTANDING COMMON SHARES OF BENEFICIAL INTEREST AT 98% OF NET ASSET VALUE PER SHARE
THE TRUST’S OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME
ON NOVEMBER 6, 2023, UNLESS THE OFFER IS EXTENDED
WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME
ON NOVEMBER 6, 2023, UNLESS THE OFFER IS EXTENDED
On August 23, 2023, the Board of Trustees (the “Board”) of MFS® High Yield Municipal Trust, a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a closed-end management
investment company (the “Fund”), approved a tender offer for the outstanding common shares of beneficial interest of the Fund (the “Common Shares” or “Shares”). The Fund is commencing a tender offer to purchase up to 10% of its issued and
outstanding Common Shares upon the terms and subject to the conditions set forth in the enclosed Offer to Purchase and the related Letter of Transmittal (which together constitute the “Offer”). If more than 10% of the Fund’s Common Shares are
tendered and not withdrawn, any purchases will be made on a pro rata basis. The Offer is for cash at a price per Share equal to 98% of the net asset value (“NAV”) of the Shares, as of the close of ordinary trading on the New York Stock Exchange
(“NYSE”) on or before the Offer expires. The Offer period and withdrawal rights will expire at 5:00 p.m. Eastern Standard Time on November 6, 2023, unless extended, upon the terms and subject to the conditions of the Offer. The Offer is designed to
provide shareholders of the Fund with the opportunity to redeem some or all of their Shares at a price close to NAV should they wish to do so.
None of the Fund, the Board nor Massachusetts Financial Services Company, the investment adviser for the Fund (“MFS”), makes any recommendation to any holder of Common Shares (“Shareholders”) as to whether to tender
any or all of such Shareholder’s Shares in the Offer. No person has been authorized to give any information or to make any representations in connection with the Offer other than those contained in this Offer to Purchase and in the related Letter of
Transmittal, and if given or made, such information or representations may not be relied upon as having been authorized by the Board or the officers of the Fund or MFS.
You may direct questions and requests for assistance to Georgeson LLC, the information agent (“Information Agent”) for the Offer, at its address and telephone number set forth on the back cover of this Offer to
Purchase. Shareholders may obtain additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Withdrawal or any other tender materials from the Information Agent and may also contact their brokers, dealers, banks, trust
companies or other nominees for copies of these documents. If you do not wish to tender your Common Shares, you need not take any action.
If, after carefully evaluating all of the information set forth in the Offer to Purchase, Letter of Transmittal and accompanying tender materials, you wish to tender Shares pursuant to the Offer, please follow the
instructions contained in the Offer to Purchase and Letter of Transmittal or, if your Shares are held of record in the name of a broker, dealer, commercial bank, trust company or other nominee, contact that firm to effect the tender for you.
Shareholders are urged to consult their own investment and tax advisers and make their own decisions whether to tender any Shares and, if so, how many Shares to tender.
THIS OFFER TO PURCHASE AND THE FUND’S RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY BEFORE YOU MAKE A DECISION WITH RESPECT TO THE OFFER.
October 6, 2023
TABLE OF CONTENTS
| SUMMARY TERM SHEET |
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| INTRODUCTION | 6 |
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| THE OFFER | 8 |
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| 1 | TERMS OF THE OFFER; EXPIRATION DATE | 8 |
| 2. | EXTENSION OF TENDER PERIOD, TERMINATION; AMENDMENT | 8 |
| 3. | PROCEDURES FOR TENDERING COMMON SHARES | 9 |
| 4. | WITHDRAWAL RIGHTS | 12 |
| 5. | ACCEPTANCE FOR PAYMENT AND PAYMENT | 12 |
| 6. | CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES | 13 |
| 7. | PRICE RANGE OF COMMON SHARES; DIVIDENDS | 16 |
| 8. | SOURCE AND AMOUNT OF FUNDS; EFFECT OF THE OFFER | 17 |
| 9. | PURPOSE OF THE OFFER | 18 |
| 10. | INFORMATION CONCERNING THE FUND | 19 |
| 11. | INTERESTS OF THE TRUSTEES AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES | 20 |
| 12. | LEGAL MATTERS; REGULATORY APPROVALS | 21 |
| 13. | CONDITIONS OF THE OFFER | 21 |
| 14. | FEES AND EXPENSES | 22 |
| 15. | MISCELLANEOUS | 22 |
| 16. | CONTACTING THE DEPOSITARY AND THE INFORMATION AGENT | 23 |
SUMMARY TERM SHEET
| SECURITIES SOUGHT: |
Up to 10% of the outstanding Common Shares of the Fund
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| PRICE OFFERED PER SHARE: |
98% of the net asset value (“NAV”) of the Common Shares
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| SCHEDULED EXPIRATION DATE: |
5:00 p.m. Eastern Standard Time on November 6, 2023 (“Expiration Date”)
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| PURCHASER: |
MFS® High Yield Municipal Trust
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This Summary Term Sheet highlights certain information in this Offer to Purchase for a Shareholder (as defined herein). To understand the Offer (as defined herein) fully and for a more complete description of the
terms of the Offer, please read carefully the entire Offer to Purchase and the related Letter of Transmittal (which together constitute the “Offer”) in their entirety because the information in this summary term sheet is not complete and additional
important information is contained in the Offer.
What and how many securities is MFS® High Yield Municipal Trust (the “Fund”) offering to purchase?
The Board of the Fund has authorized the Fund to conduct a cash tender offer to purchase up to 10% (the “Offer Amount”) of its outstanding common shares of beneficial interest (“Common Shares” or the “Shares”). If the
number of Shares properly tendered and not withdrawn prior to the Expiration Date is less than or equal to the Offer Amount, the Fund will, upon the terms and subject to the conditions of the Offer, purchase all Shares tendered. If more Shares than
the Offer Amount are properly tendered and not withdrawn prior to the Expiration Date, the Fund will purchase the Offer Amount on a pro rata basis. Shareholders cannot be assured that all of their tendered Shares will be repurchased. For more
information see Section 1, “Terms of the Offer; Expiration Date.”
How much and in what form will the Fund pay me for my Shares?
The Fund will pay cash for Shares purchased pursuant to the Offer. The purchase price will equal 98% of the NAV per Share as of the close of ordinary trading on the NYSE on the Expiration Date (or if the Offer is
extended, on the date to which the Offer is extended), upon the terms and subject to the conditions set forth in Offer.
The Shares are traded on the NYSE under the ticker symbol “CMU.” As of August 31, 2023, the closing price as of the close of the regular trading session of the NYSE was $3.34 per Share. The Fund normally calculates
the NAV of its Shares daily at the close of regular trading on the NYSE and, as such, the NAV can change every business day. During the pendency of the Offer, current NAV quotations can be obtained from www.mfs.com or from Georgeson LLC, the
information agent for the Offer (“Information Agent”) at (866) 541-3547. For more information see Section 1, “Terms of the Offer; Expiration Date” and Section 5, “Acceptance for Payment and Payment.”
When does the Offer expire? Can the Fund extend the Offer, and if so, when will the Fund announce the extension?
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The Offer expires at 5:00 p.m. Eastern Standard Time on November 6, 2023, unless the Fund extends the Offer. The later of that date and the latest time or date to which the Offer is extended is hereinafter
called the “Expiration Date.”
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The Fund may extend the Offer period at any time. If it does, the Fund will determine the purchase price as of the close of ordinary trading on the NYSE on the new Expiration Date.
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If the Offer period is extended, the Fund will make a public announcement of the extension no later than 9:30 a.m. Eastern Standard Time on the next business day following the previously scheduled Expiration
Date.
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If you hold your Common Shares directly, you have until the Expiration Date to tender your Common Shares pursuant to the Offer. If you want to tender your Shares, but your certificates for the Shares are not
immediately available or cannot be delivered to the Depositary, you cannot comply with the procedure for book-entry transfer or you cannot deliver the other required documents to the Depositary by the Expiration Date, you will not be able to tender
your Shares. This can occur, for example, if you purchased Shares at, or within one or two days of, the Expiration Date, not allowing sufficient time for such purchase transaction to settle. There are no guaranteed delivery procedures available
under the terms of the Offer as an alternative delivery mechanism. You should consult your nominee holder (e.g., broker, dealer, commercial bank, trust company or other nominee) (“Nominee Holder”) to determine if there is an earlier deadline by
which you must inform such Nominee Holder of any decision to tender your Common Shares and provide to such Nominee Holder any other required materials. For more information see Section 1, “Terms of the Offer; Expiration Date” and Section 2,
“Extension of Tender Period; Termination; Amendment.”
Will I have to pay any fees or commissions on Shares I tender?
No fees or commissions will be payable to the Fund in connection with the Offer. However, brokers, dealers, or other persons may charge Shareholders a fee for soliciting tenders for Shares pursuant to the Offer.
Shareholders may be obligated to pay transfer taxes on the purchase of Shares by the Fund and other transaction costs. Please contact the Depositary for more details. For more information see Section 1, “Terms of the Offer; Expiration Date,”
Section 5, “Acceptance for Payment and Payment” and Section 14, “Fees and Expenses.”
Does the Fund have the financial resources to pay me for my Shares?
Yes. Although permitted to do so, the Fund does not expect to borrow money to finance the purchase of any tendered shares. For more information see Section 8, “Source and Amount of Funds; Effect of the Offer.”
How do I tender my Shares?
If your Shares are registered in the name of a Nominee Holder, you should contact that firm if you wish to tender your Shares.
All other Shareholders wishing to participate in the Offer must, prior to the Expiration Date, complete and execute a Letter of Transmittal, together with any required signature guarantees, and any other documents
required by the Letter of Transmittal. You must send these materials to the Depositary at its address set forth on the last page of this Offer to Purchase. If you hold certificates for Shares, you must send the certificates to the Depositary at its
address set forth on the last page of this Offer to Purchase. If your Shares are held in book-entry form, you must comply with the book-entry delivery procedure set forth in Section 3.C of this Offer to Purchase. In all these cases, the Depositary
must receive these materials prior to the Expiration Date.
The Fund’s transfer agent holds Shares in uncertificated form for certain Shareholders pursuant to the Fund’s dividend reinvestment and cash purchase plan. When a Shareholder tenders share certificates, the Depositary
will accept any of the Shareholder’s uncertificated Shares for tender first, and accept the balance of tendered Shares from the Shareholder’s certificated Shares. For more information see Section 3, “Procedures for Tendering Common Shares.”
Until what time can I withdraw tendered Shares?
You may withdraw your tendered Shares at any time prior to the Expiration Date and if the Fund has not agreed to accept your Shares for payment after the expiration of 40 days from the commencement of the Offer, you
can withdraw them at anytime after that until the Fund accepts your Shares for payment.
Withdrawals of tenders of Common Shares may not be rescinded, and any Common Shares validly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered by following one of the procedures described in Section 3 of this Offer to Purchase at any time before the Expiration Date. For more information see Section 4, “Withdrawal Rights.”
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How do I withdraw tendered Shares?
If you desire to withdraw tendered Shares, you should either:
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Give proper written notice to the Depositary; or
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If your Shares are held of record in the name of a Nominee Holder, contact that firm to withdraw your tendered Shares.
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For more information see Section 4, “Withdrawal Rights.”
What are the tax consequences of tendering Common Shares?
The receipt of cash for Common Shares pursuant to the Offer by a U.S. shareholder other than a Shareholder exempt from tax or investing through a tax-advantaged arrangement generally will be a taxable transaction for
U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local, foreign and other tax laws. For U.S. federal income tax purposes, the sale of your Common Shares for cash generally will be treated either as (1) a
sale or exchange of the Common Shares, or (2) a distribution with respect to the Common Shares that is treated in whole or in part as a taxable dividend. Each Shareholder should consult its tax adviser as to the tax consequences of tendering its
Common Shares in the Offer. For more information see Section 6, “Certain Material U.S. Federal Income Tax Consequences.”
What is the purpose of the Offer?
On August 23, 2023, the Board approved an issuer tender offer that is described in the Offer. The Offer has the potential to reduce, at least temporarily, the discount from NAV at which the Shares currently trade.
There can be no assurance that this Offer will have the effect of narrowing the discount or that any reduction in the discount will be sustained following the Expiration Date. The market price of the Shares will also be determined by, among other
things, the relative demand for and supply of the Shares in the market, the Fund’s investment performance, the Fund’s dividends and yield, and investor perception of the Fund’s overall attractiveness as an investment as compared with other investment
alternatives.
Bulldog Investors, LLP, d/b/a Bulldog Investors, (“Bulldog”) is a holder of the Fund’s Common Shares. On July 10, 2023, Bulldog, on behalf of its Special Opportunities Fund, provided notice of its intention to submit
a shareholder proposal for consideration at the Fund’s annual meeting of shareholders, requesting that the Fund’s shareholders vote (i) to elect two individuals nominated by Bulldog as Trustees of the Fund and (ii) to approve a non-binding proposal
that the Board of the Fund consider authorizing a liquidity event that would allow shareholders to monetize a significant percentage of their shares at or close to the Fund’s NAV (the “Bulldog Proposal”). MFS and Bulldog engaged in discussions
regarding the Bulldog Proposal and the Fund and Bulldog entered into a Tender Offer and Standstill Agreement (the “Standstill Agreement”) pursuant to which Bulldog agreed to immediately withdraw the Bulldog Proposal and refrain from taking certain
other actions relating to the Fund until the day after the date of completion of the Fund’s 2025 annual meeting of shareholders (or special meeting held in lieu thereof), including any adjournments or postponements thereof. See Section 11 “Interests
of the Trustees and Officers; Transactions and Arrangements Concerning the Shares” for additional information.
The Standstill Agreement provides: (i) that the Fund will conduct a cash tender offer (“Tender Offer”) for up to 10% of the Fund’s outstanding Common Shares at a price equal to 98% of the NAV per
share as of the close of regular trading on the NYSE on or before December 31, 2023, subject to certain conditions; (ii) the Fund shall purchase Shares tendered and not withdrawn during the Tender Offer on a prorated basis up to 10% of the Shares if
greater than such amount of Shares are properly tendered and not properly withdrawn; and (iii) the Board shall approve, and recommend that shareholders of the Fund approve at the Fund’s 2025 annual shareholder meeting, a proposal concerning a
liquidity event for the Fund, unless the average trading discount of the Shares is equal to or less than 7.50% for the entirety of any consecutive 30 calendar day period occurring between the Expiration Date and July 15, 2025, at which point such
proposal for the liquidity event shall not be required.
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MFS recommended, and the Board agreed, that it is in the best interests of the Fund to conduct the Offer upon the terms specified in this Offer to Purchase and the Letter of Transmittal. Among other things, the Board
considered that this Offer (i) will provide Shareholders with partial liquidity at close to NAV, (ii) will likely result in a temporary reduction in the Fund’s trading discount, and (iii) because the Offer would be conducted at a 2% discount to NAV,
the Offer would result in immediate accretion to the NAV of the shares of remaining Shareholders. The Board also considered that the Offer may have certain negative consequences for the Fund, including (i) a decrease in net assets and an associated
increase in the Fund’s per share total expense ratio, (ii) potential disruptions in portfolio management, (iii) expenses associated with conducting the Offer, (iv) potential tax consequences to the Fund and the Shareholders and (v) the likelihood
that any reduction in the Fund’s trading discount resulting from the Offer will be temporary. The Board also considered that the Standstill Agreement with Bulldog avoided a possible proxy contest with Bulldog and associated expenses for the Fund,
and potential outcomes which could have eliminated the Fund’s status and benefits as a closed-end fund.
Please bear in mind that neither the Fund, its Board, nor MFS has made any recommendation as to whether or not you should tender your Shares. Shareholders are urged to consult their own investment and tax advisers and
make their own decisions whether to tender any Shares and, if so, how many Shares to tender. For more information see Section 9, “Purpose of the Offer.”
What are the most significant conditions of the Offer?
The Fund will not accept Shares tendered for payment under any one of the following circumstances that, in the view of the Board, would make it inadvisable to proceed with the Offer, purchase or payment. The following
is only a summary of the conditions. For a complete list of the conditions of the Offer, please see Section 13, “Conditions of the Offer.”
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The purchase of Shares in the Offer would result in the delisting of the Shares from the NYSE.
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The purchase of Shares in the Offer would cause the Fund to fail to qualify and to be treated as a regulated investment company under the Internal Revenue Service Code of 1986.
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The purchase of Shares in the Offer would result in a failure to comply with the applicable asset coverage or leverage ratio requirements applicable to the Remarketable Variable Rate MuniFund Term Preferred
Shares of the Fund that are issued and outstanding.
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In the Board’s reasonable judgment, there is a material legal action or proceeding instituted or threatened challenging the Offer or otherwise potentially materially adversely affecting the Fund.
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There is a suspension of or limitation on prices for trading securities generally on the NYSE, NASDAQ, or other national securities exchange(s).
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Declaration of a banking moratorium by federal or state authorities or any suspension of payment by banks in the United States or New York State.
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New limitation affecting the Fund or the issuers of its portfolio securities imposed by federal or state authorities on the extension of credit by lending institutions.
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The Board determines that the purchase of Shares might be a breach of its fiduciary duty owed to the Fund or its shareholders.
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If I decide not to tender, how will the Offer affect my Shares?
If you do not tender your Shares (or if you own Shares following completion of the Offer), your percentage ownership interest in the Fund will increase after the completion of the Offer and you
will be subject to any increased risks associated with the reduction in the Fund’s total assets due to the payment for the tendered Shares. These risks may include greater volatility due to a decreased asset base and proportionately higher expenses,
as well
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as the possibility of receiving additional taxable capital gains on the distributions from the sale of portfolio securities to pay for tendered Shares. The reduced assets of the Fund as a result of the Offer may
result in less investment flexibility for the Fund, depending on the number of Shares repurchased which may have an adverse effect on the Fund’s investment performance. For more information see Section 8, “Source and Amount of Funds; Effect of the
Offer” and Section 14, “Fees and Expenses.”
What actions do I need to take if I do not wish to tender my Shares?
None.
Whom do I contact if I have questions about the Offer?
If you own Shares through a broker or other Nominee Holder, you can call your broker or other Nominee Holder. You can also contact Georgeson LLC, the Information Agent, at (866) 541-3547, Monday
through Friday, 9 a.m. to 5 p.m., Eastern Standard Time.
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To the holders of Common Shares (“Shareholders”) of MFS® High Yield Municipal Trust (the “Fund”):
INTRODUCTION
The Fund is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, (“1940 Act”) as a closed-end management investment company, which is offering to purchase up to 10% (the
“Offer Amount”) of its outstanding common shares of beneficial interest (“Common Shares” or “Shares”) at a price equal to 98% of the net asset value (“NAV”) of the Shares as of the close of ordinary trading on the NYSE on November 6, 2023 when the
Offer expires. The Offer period and withdrawal rights will expire at 5:00 p.m. Eastern Standard Time on November 6, 2023, unless extended, upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of
Transmittal (which together, constitute the “Offer”). The later of 5:00 p.m. Eastern Standard Time on November 6, 2023 or the latest time and date to which the Offer is extended is hereinafter called the “Expiration Date.”
This Offer is open to Shareholders and none of the Fund, its Board of Trustees (“Board”), or Massachusetts Financial Services Company, the investment adviser for the Fund (“MFS”), makes any
recommendation to any Shareholder as to whether to tender any or all of such Shareholder’s Shares. Shareholders are urged to evaluate carefully all information in the Offer, consult their own investment and tax advisers, and make their own decisions
whether to tender Shares and, if so, how many Shares to tender.
The Offer is not conditioned upon the tender of any minimum number of Shares. If the number of Shares properly tendered and not withdrawn prior to the Expiration Date is less than or equal to the Offer Amount, the
Fund will, upon the terms and subject to the conditions of the Offer, purchase all Shares tendered. If more Shares than the Offer Amount are properly tendered and not withdrawn prior to the Expiration Date, the Fund will, upon the terms and subject
to the conditions of the Offer, purchase the Offer Amount on a pro rata basis. See Section 1, “Terms of the Offer; Expiration Date.”
If, after carefully evaluating all of the information set forth in the Offer, you wish to tender Shares pursuant to the Offer, please either follow the instructions contained in the Offer to Purchase and Letter of
Transmittal or, if your Shares are held of record in the name of a Nominee Holder, contact such firm to effect the tender for you.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION AND YOU SHOULD READ THEM CAREFULLY AND IN THEIR ENTIRETY BEFORE YOU MAKE ANY DECISION WITH RESPECT TO THE OFFER.
If you do not wish to tender your Common Shares, you need not take any action.
6
THIS OFFER IS BEING MADE TO ALL SHAREHOLDERS
OF THE FUND AND IS NOT CONDITIONED UPON ANY
MINIMUM NUMBER OF SHARES BEING TENDERED.
OF THE FUND AND IS NOT CONDITIONED UPON ANY
MINIMUM NUMBER OF SHARES BEING TENDERED.
THIS OFFER IS SUBJECT TO CERTAIN CONDITIONS.
SEE SECTION 13, “CONDITIONS OF THE OFFER.”
SEE SECTION 13, “CONDITIONS OF THE OFFER.”
IMPORTANT
Neither the Fund, its Board, or MFS makes any recommendation to any Shareholder as to whether to tender any or all of such Shareholder’s Shares. Shareholders are urged to evaluate carefully all
information in the offer, consult their own investment and tax advisers, and make their own decisions whether to tender Shares and, if so, how many Shares to tender.
No person has been authorized to make any recommendation on behalf of the Fund as to whether Shareholders should tender Shares pursuant to the Offer. No person has been authorized to give any
information or to make any representations in connection with the Offer other than those contained herein or in the Letter of Transmittal. If given or made, such recommendation and such information and representations must not be relied upon as
having been authorized by the Fund. The Fund has been advised that neither the Fund’s Trustees, its officers or its investment adviser intend to tender any Shares pursuant to the Offer.
Questions and requests for assistance and requests for additional copies of this Offer to Purchase and Letter of Transmittal should be directed to the Information Agent at the telephone number set forth below.
|
The Information Agent for the Offer is:
Georgeson
1290 Avenue of the Americas, 9th Floor
New York, NY 10104 (866) 541-3547 (Toll Free)
|
The Depositary for the Offer is:
|
By First Class, Registered or Certified Mail:
Computershare Trust Company, N.A.
c/o Voluntary Corporate Actions; COY: CMU
PO Box 43011
Providence, RI 02940-3011
|
By Express or Overnight Delivery:
Computershare Trust Company, N.A.
c/o Voluntary Corporate Actions; COY: CMU
150 Royall Street, Suite V
Canton, MA 02021
|
7
THE OFFER
1. TERMS OF THE OFFER;
EXPIRATION DATE
Upon the terms and subject to the conditions set forth in this Offer to Purchase, the Fund will accept for payment and purchase for cash for up to 10% of its outstanding Common Shares at a price equal to 98% of the NAV
validly tendered prior to 5:00 p.m. Eastern Standard Time on November 6, 2023, or such later date to which the Offer is extended, and not withdrawn as permitted by Section 4, “Withdrawal Rights.” The Fund reserves the right to extend the Offer to a
later Expiration Date. The Offer period may be extended by the Fund issuing a press release or making some other public announcement no later than 9:30 a.m. Eastern Standard Time on the next business day after the Offer otherwise would have
expired. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer, subject to the right of any such tendering Shareholder to withdraw his or her Shares.
If the Fund makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Fund will extend the Offer to the extent required under the
Securities Exchange Act of 1934, as amended, (the “Exchange Act”).
The Offer is being made to all Shareholders of the Fund and is not conditioned upon any minimum number of Shares being tendered. If the number of Shares properly tendered and not withdrawn prior to the Expiration Date
is less than or equal to 10% of the Fund’s outstanding Shares, the Fund will, upon the terms and subject to the conditions of the Offer, purchase all Shares so tendered. If more Shares than the Offer Amount are properly tendered and not withdrawn
prior to the Expiration Date, the Fund will purchase the Offer Amount on a pro rata basis. It is anticipated that the Shares acquired by the Fund pursuant to the Offer will be retired. Under no circumstances will interest be paid on the Offer
price for tendered Common Shares, regardless of any extension of or amendment to the Offer or any delay in paying for such Common Shares.
When considering whether to tender Common Shares, Shareholders should be aware that the payment received pursuant to the Offer will be less than the amount that the Shareholders would be entitled to receive upon
redemption of such Common Shares under the terms of the Common Shares or upon a liquidation of the Fund.
Shares will be purchased at 98% of the NAV of the Shares to help defray certain costs of the tender, including the processing of tender forms, effecting payment, postage and handling. The Fund will not charge a
separate service fee in conjunction with the Offer. If your Shares are held through a financial intermediary, the financial intermediary may charge you a service or other fee for participation in the Offer. Tendering Shareholders will not be
obligated to pay transfer taxes on the purchase of Shares by the Fund, except in the circumstances set forth in Section 5, “Acceptance for Payment and Payment.”
Subject to the terms and conditions of the Offer, the Fund will pay the consideration offered or return the tendered Shares promptly after the termination or withdrawal of the Offer. If payment of the purchase price
is to be made to, or Common Shares not tendered or not purchased are to be returned in, the name of any person other than the registered holder(s), or if a transfer tax is imposed for any reason other than the sale or transfer of Common Shares to the
Fund pursuant to the Offer, then the amount of any share transfer taxes (whether imposed on the registered holder(s), such other persons or otherwise) will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes,
or exemption therefrom, is submitted.
As of August 31, 2023, there were 28,325,314 Shares outstanding and there were approximately 589 holders of record of these Common Shares. As of the date of this Offer to Purchase, the Fund has been advised that none
of its Trustees, officers nor investment adviser intend to tender any Shares pursuant to the Offer.
2. EXTENSION OF TENDER PERIOD,
TERMINATION; AMENDMENT
The Fund expressly reserves the right, in its sole discretion, at any time or from time to time, to extend the period of time during which the Offer is open by giving notice of such extension to
the Information Agent and making a public announcement thereof. In the event that the Fund so elects to extend the tender period, the NAV for the
8
Shares tendered will be computed as of the close of ordinary trading on the NYSE on the new Expiration Date. During any such extension, all Common Shares previously tendered and not purchased or withdrawn will remain
subject to the Offer. The Fund also reserves the right, at any time and from time to time up to and including the Expiration Date, to (a) terminate the Offer and not purchase or pay for any Common Shares or, subject to applicable law, postpone
payment for Common Shares, in each case upon the occurrence of any of the conditions specified in Section 13, “Conditions of the Offer”; and (b) amend the Offer in any respect by making a public announcement thereof. Such public announcement will be
issued no later than 9:30 a.m. Eastern Standard Time on the next business day after the previously scheduled Expiration Date. Without limiting the manner in which the Fund may choose to make a public announcement of extension, termination or
amendment, except as provided by applicable law (including Rule 13e-4(d)(2), Rule 13e-4(e)(3), and Rule 14e-l(d) under the Exchange Act), the Fund shall have no obligation to publish, advertise or otherwise communicate any such public announcement.
If the Fund materially changes the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Fund will extend the Offer to the extent required by Rules
13e-4(d)(2) and 13e-4(e)(3) under the Exchange Act. These rules require a minimum period during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer (other than a change in price
or a change in percentage of securities sought) will depend on the facts and circumstances, including the relative materiality of such terms or information. If (i) the Fund increases or decreases the price to be paid for Common Shares, or the Fund
increases or decreases the number of Common Shares being sought and (ii) the Expiration Date is less than ten business days away, then the Expiration Date will be extended at least ten business days from the date of the notice.
3. PROCEDURES FOR TENDERING
COMMON SHARES
A. Proper Tender of Shares.
Shareholders that are registered in the name of a nominee holder, such as a broker, dealer, commercial bank, trust company or other nominee (“Nominee Holder”) should contact such firm if they desire to tender their
Shares.
For Shares to be properly tendered pursuant to the Offer, the following must occur prior to 5:00 p.m. Eastern Standard Time on the Expiration Date:
| (a) |
A properly completed and duly executed Letter of Transmittal, together with any required signature guarantees, (or an Agent’s Message in the case of a book-entry transfer, as described in Section 3.C), and any other documents required by
the Letter of Transmittal must be received by the Depositary at its address set forth on the last page of this Offer to Purchase; and
|
| (b) |
Either the certificates for the Shares must be received by the Depositary at its address set forth on the last page of this Offer to Purchase, or the tendering Shareholder must comply with the book-entry delivery procedure set forth in
Section 3.C.
|
If you want to tender your Shares, but your certificates for the Shares are not immediately available or cannot be delivered to the Depositary, you cannot comply with the procedure for book-entry transfer or you cannot
deliver the other required documents to the Depositary by the Expiration Date, you will not be able to tender your Shares. This can occur, for example, if you purchased Shares at, or within one or two days of, the Expiration Date, not allowing
sufficient time for such purchase transaction to settle. There are no guaranteed delivery procedures available under the terms of the Offer as an alternative delivery mechanism. If the Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, agents, attorneys- in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and must submit proper evidence
satisfactory to the Fund of their authority to so act.
Letters of Transmittal and certificates representing Shares, if any, should be sent to the Depositary; they should not be sent or delivered to the Fund.
9
The Fund’s transfer agent holds Shares in uncertificated form for certain Shareholders pursuant to the Fund’s dividend reinvestment and cash purchase plan. When a Shareholder tenders certificated Shares, the
Depositary will accept any of the Shareholder’s uncertificated Shares for tender first, and accept the balance of tendered Shares from the Shareholder’s certificated Shares, and any remaining Shares will be issued in book-entry and will be
electronically held in your account in lieu of a certificate.
Section 14(e) of the Exchange Act, and Rule 14e-4 promulgated thereunder make it unlawful for any person, acting alone or in concert with others, to tender shares in a partial tender offer for such person’s own account
unless at the time of tender, and at the time the shares are accepted for payment, the person tendering has a net long position equal to or greater than the amount tendered in (i) shares, and will deliver or cause to be delivered such shares for the
purpose of tender to the person making the offer within the period specified in the offer, or (ii) an equivalent security and, upon acceptance of his or her tender, will acquire shares by conversion, exchange, or exercise of such equivalent security
to the extent required by the terms of the Offer, and will deliver or cause to be delivered the shares so acquired for the purpose of tender to the offeror prior to or on the expiration date. Section 14(e) and Rule 14e-4 provide a similar
restriction applicable to the tender or guarantee of a tender on behalf of another person.
The acceptance of Shares by the Fund for payment will constitute a binding agreement between the tendering Shareholder and the Fund upon the terms and subject to the conditions of the Offer, including the tendering
Shareholder’s representation that (i) such Shareholder has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Exchange Act and (ii) the tender of such Shares complies with Rule 14e-4.
By submitting the Letter of Transmittal, a tendering Shareholder shall, subject to and effective upon acceptance for payment of the Shares tendered, be deemed in consideration of such acceptance to sell, assign and
transfer to, or upon the order of, the Fund all right, title and interest in and to all the Shares that are being tendered (and any and all dividends, distributions, other Shares or other securities or rights declared or issuable in respect of such
Shares after the Expiration Date) and irrevocably constitute and appoint the Fund the true and lawful agent and attorney-in-fact of the tendering Shareholder with respect to such Shares (and any such dividends, distributions, other Shares or
securities or rights), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver certificates for such Shares (and any such other dividends, distributions, other Shares or
securities or rights) or transfer ownership of such Shares (and any such other dividends, distributions, other Shares or securities or rights), together, in either such case, with all accompanying evidences of transfer and authenticity to or upon the
order of the Fund, upon receipt by the Depositary of the purchase price, (b) present such Shares (and any such other dividends, distributions, other Shares or securities or rights) for transfer on the books of the Fund, and (c) receive all benefits
and otherwise exercise all rights of beneficial ownership of such Shares (and any such other dividends, distributions, other Shares or securities or rights), all in accordance with the terms of the Offer. Upon such acceptance for payment, all prior
powers of attorney given by the tendering Shareholder with respect to such Shares (and any such dividends, distributions, other Shares or securities or rights) will, without further action, be revoked and no subsequent powers of attorney may be given
by the tendering Shareholder with respect to the tendered Shares (and, if given, will be null and void).
By submitting a Letter of Transmittal, and in accordance with the terms and conditions of the Offer, a tendering Shareholder shall be deemed to represent and warrant that: (a) the tendering Shareholder has full power
and authority to tender, sell, assign and transfer the tendered Shares (and any and all dividends, distributions, other Shares or other securities or rights declared or issuable in respect of such Shares after the Expiration Date); (b) when and to
the extent the Fund accepts the Shares for purchase, the Fund will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, proxies, encumbrances or other obligations relating to their sale or
transfer, and not subject to any adverse claim; (c) on request, the tendering Shareholder will execute and deliver any additional documents deemed by the Depositary or the Fund to be necessary or desirable to complete the sale, assignment and
transfer of the tendered Shares (and any and all dividends, distributions, other Shares or securities or rights declared or issuable in respect of such Shares after the Expiration Date); and (d) the tendering Shareholder has read and agreed to all of
the terms of the Offer, including this Offer to Purchase and the Letter of Transmittal.
B. Signature Guarantees and
Method of Delivery.
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Signatures on the Letter of Transmittal are required to be guaranteed if any tendered stock certificates are registered in a name other than that of the tendering Shareholder or if a check for cash is to be issued in a
name other than that of the registered owner of such Shares. In those instances, all signatures on the Letter of Transmittal must be guaranteed by an eligible guarantor acceptable to the Depositary (an “Eligible Guarantor”). An Eligible Guarantor
includes a bank, broker, dealer, credit union, savings association or other entity that is a member in good standing of the Securities Transfer Agents Medallion Program, or a bank, broker, dealer, credit union, savings association or other entity
that is an “Eligible Guarantor Institution” as such term is defined in Rule 17Ad-15 under the Exchange Act. If Shares are tendered for the account of an institution that qualifies as an Eligible Guarantor, signatures on the Letter of Transmittal are
not required to be guaranteed. If the Letter of Transmittal is signed by a person or persons authorized to sign on behalf of the registered owner(s), then the Letter of Transmittal must be accompanied by documents evidencing such authority to sign
to the satisfaction of the Fund.
THE METHOD OF DELIVERY OF ANY DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES, IS AT THE ELECTION AND RISK OF THE PARTY TENDERING SHARES. IF DOCUMENTS ARE SENT BY MAIL, IT IS RECOMMENDED THAT THEY BE
SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
C. Book-Entry Delivery Procedure.
The Depositary will establish accounts with respect to the Shares at The Depository Trust Company (“DTC”) for purposes of the Offer. Any financial institution that is a participant in DTC’s systems may make delivery
of tendered Shares by (i) causing DTC to transfer such Shares into the Depositary’s account in accordance with DTC’s procedure for such transfer; and (ii) causing a confirmation of receipt of such delivery to be received by the Depositary. DTC may
charge the account of such financial institution for tendering Shares on behalf of Shareholders. Notwithstanding that delivery of Shares may be properly effected in accordance with this book-entry delivery procedure, the Letter of Transmittal, with
signature guarantee, if required, or, in lieu of the Letter of Transmittal, an Agent’s Message (as defined below) in connection with a book-entry transfer, must be transmitted to and received by the Depositary at the appropriate address set forth on
the last page of this Offer to Purchase before 5:00 p.m. Eastern Standard Time on the Expiration Date.
The term “Agent’s Message” means a message from DTC transmitted to, and received by, the Depositary forming a part of a timely confirmation of a book-entry transfer (a “Book-Entry Confirmation”), which states that DTC
has received an express acknowledgment from the DTC participant (“DTC Participant”) tendering the Shares that are the subject of the Book-Entry Confirmation that (i) the DTC Participant has received and agrees to be bound by the terms of the Letter
of Transmittal; and (ii) the Fund may enforce such agreement against the DTC Participant.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC’S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY FOR PURPOSES OF THIS OFFER.
D. Determination of Validity.
All questions as to the validity, form, eligibility (including time of receipt) and acceptance of Shares tendered will be determined by the Fund, in its sole discretion, which determination shall be final and binding.
The Fund reserves the absolute right to reject any and all tenders not in appropriate form or the payment for which would, in the opinion of the Fund’s counsel, be unlawful. The Fund’s interpretations of the terms and conditions of the Offer will be
final and binding. Neither the Fund, MFS, the Depositary nor any other person shall be obligated to give notice of any defects or irregularities in tenders, nor shall any of them incur any liability for failure to give such notice.
E. U.S. Federal Income Tax
Withholding.
Payments made to tendering Shareholders pursuant to the Offer may be subject to withholding pursuant to the Internal Revenue Code of 1986, as amended, (the “Code”) and the U.S. Treasury regulations thereunder. For an additional discussion of such withholding as well as a discussion of certain other U.S. federal income tax
11
consequences to tendering and non-tendering Shareholders, see Section 6, “Certain Material U.S. Federal Income Tax Consequences.”
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares made pursuant to the Offer will be irrevocable. You have the right to withdraw tendered Shares at any time prior to 5:00 p.m. Eastern Standard Time on
the Expiration Date. If you desire to withdraw Shares tendered on your behalf by a Nominee Holder, you may withdraw by contacting that firm and instructing them to withdraw such Shares. Upon terms and subject to the conditions of the Offer, the
Fund expects to accept for payment properly tendered Shares promptly after the Expiration Date. If the Fund has not agreed to accept your Shares for payment after the expiration of 40 days from the commencement of the Offer, you can withdraw them at
anytime after that until the Fund accepts your Shares for payment.
To be effective written notice of withdrawal must be timely received by the Depositary at the address set forth on the last page of this Offer to Purchase. Any notice of withdrawal must specify the name of the person
who tendered the Shares to be withdrawn, the number of Shares to be withdrawn, and the names in which the Shares to be withdrawn are registered. Shareholders should contact the Information Agent for instructions if they wish to submit a notice of
withdrawal.
If certificates have been delivered to the Depositary, the name of the registered holder and the serial numbers of the particular certificates evidencing the Shares withdrawn must also be furnished to the Depositary
and the signature on the notice of withdrawal must be guaranteed by an Eligible Guarantor. If Shares have been delivered pursuant to the book-entry delivery procedure (set forth in Section 3, “Procedures for Tendering Common Shares”), any notice of
withdrawal must specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn Shares (which must be the same name, number, and book-entry transfer facility from which the Shares were tendered), and
must comply with the procedures of DTC.
All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Fund in its sole discretion, whose determination shall be final and binding.
Neither the Fund, MFS, the Depositary nor any other person shall be obligated to give notice of any defects or irregularities in tenders, nor shall any of them incur any liability for failure to give such notice.
Shares properly withdrawn shall not thereafter be deemed to be tendered for purposes of the Offer. However, withdrawn Shares may be retendered by following the procedures described in Section 3, “Procedures for Tendering Common Shares,” prior to
5:00 p.m. Eastern Standard Time on the Expiration Date.
The method of delivery of any documents related to a withdrawal is at the risk of the withdrawing Shareholder. Any documents related to a withdrawal will be deemed delivered only when actually received by the
Depositary. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.
5. ACCEPTANCE FOR PAYMENT AND
PAYMENT
Upon the terms and subject to the conditions of the Offer, the Fund will accept for payment, and will pay cash for, Common Shares validly tendered on or before the Expiration Date, and not properly withdrawn in
accordance with Section 4, promptly after the Expiration Date of the Fund’s Offer. The Fund expressly reserves the right, in its sole discretion, to delay the acceptance for payment of, or payment for, Common Shares, in order to comply, in whole or
in part, with any applicable law.
Payment for Shares accepted for payment pursuant to the Offer will be made by the Depositary out of funds made available to it by the Fund. The Depositary will act as agent for the Fund for the
purpose of effecting payment to the tendering Shareholders. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) Share certificates evidencing such
Shares or a Book- Entry Confirmation of the delivery of such Shares, (ii) a properly completed and duly executed Letter of Transmittal or, in the case of a book-entry transfer, an Agent’s Message in lieu of the Letter of Transmittal, and (iii) any
other
12
documents required by the Letter of Transmittal. Accordingly, payment may not be made to all tendering Shareholders at the same time and will depend upon when Share certificates are received by the Depositary or
when Book-Entry Confirmations of tendered Shares are received in the Depositary’s account at DTC.
If any tendered Shares are not accepted for payment or are not paid because of an invalid tender, if certificates are submitted for more Shares than are tendered, or if a Shareholder withdraws tendered Shares, (i)
the shares will be issued in book-entry form and will be electronically held in your account for such unpurchased Shares, as soon as practicable following the expiration, termination or withdrawal of the Offer, (ii) Shares delivered pursuant to the
book-entry delivery procedures will be credited to the account from which they were delivered, and (iii) uncertificated Shares held by the Fund’s transfer agent pursuant to the Fund’s dividend reinvestment and cash purchase plan will be returned to
the dividend reinvestment and cash purchase plan account maintained by the transfer agent.
The Fund will pay all transfer taxes, if any, payable on the transfer to it of Shares purchased pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if unpurchased Shares were
registered in the name of, any person other than the tendering holder, or if any tendered certificates are registered or the Shares tendered are held in the name of any person other than the person signing the Letter of Transmittal, the amount of
any transfer taxes (whether imposed on the registered holder or such other person) payable on account of such transfer will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted. In addition, if certain events occur, the Fund may not be obligated to purchase Shares pursuant to the Offer. See Section 13, “Conditions of the Offer.”
A tendering U.S. Shareholder or other payee who fails to fully complete and sign an IRS Form W-9 may be subject to U.S. federal income backup withholding on the gross proceeds paid to such Shareholder or other payee
pursuant to the Offer. Non-U.S. Shareholders (as defined in Section 6, “Certain Material U.S. Federal Income Tax Consequences” below) should provide the Depositary with an appropriate completed IRS Form W-8BEN or Form W-8BEN-E in order to avoid
backup withholding. A copy of IRS Form W-9, W-8BEN or W-8BEN-E will be provided upon request from the Depositary. See Section 3, “Procedures for Tendering Common Shares” and Section 6, “Certain Material U.S. Federal Income Tax Consequences.”
6. CERTAIN MATERIAL U.S.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a general summary of the U.S. federal income tax consequences of the purchase of Common Shares by the Fund from Shareholders pursuant to the Offer. This summary is based on U.S. federal
income tax law as of the date the Offer begins, including the Code , applicable U.S. Treasury regulations, Internal Revenue Service (“IRS”) rulings, judicial authority and current administrative rulings and practice, all of which are subject to
change, possibly with retroactive effect. There can be no assurance that the IRS would not assert, or that a court would not sustain, a position contrary to any of those set forth below, and the Fund has not obtained, nor does the Fund intend to
obtain, a ruling from the IRS or an opinion of counsel with respect to any of the consequences described below. Shareholders should also consult their own tax advisers regarding their particular situation and the potential tax consequences to them
of a purchase of their Common Shares by the Fund pursuant to the Offer, including potential state, local and foreign taxation, as well as any applicable transfer taxes.
As used herein, the term “U.S. Shareholder” refers to a Shareholder who is (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized in or under the laws of
the United States or any State thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income tax regardless of the source of such income, and (iv) a trust if (x) a court within the United States is able
to exercise primary supervision over the administration of the trust and one or more U.S. persons (as defined in the Code) have the authority to control all substantial decisions of the trust or (y) the trust has a valid election in effect under
applicable U.S. Treasury regulations to be treated as a U.S. person. The term “Non-U.S. Shareholder” refers to a Shareholder who is not a U.S. Shareholder.
Sale or Exchange of Shares. A Shareholder (other than a tax-exempt Shareholder) whose
Common Shares are repurchased pursuant to the Offer generally will be treated as having sold the Common Shares and will recognize gain or loss for U.S. federal income tax purposes, so long as either (a) such Shareholder tenders, and the Fund
repurchases, all of such Shareholder’s Shares (i.e., the Shareholder reduces its percentage ownership of the Fund to
13
0%) or meets certain numerical safe harbors with respect to percentage voting interest and reduction in ownership of the Fund following the completion of the Offer, or (b) the tender otherwise is treated as being
“not essentially equivalent to a dividend” under the relevant rules of the Code. For these purposes, a Shareholder’s ownership of the Fund is determined after applying the ownership attribution rules under Section 318 of the Code. Such gain
or loss will equal the difference between the price paid by the Fund for the Common Shares pursuant to the Offer and the Shareholder’s adjusted tax basis in the Common Shares sold. A Shareholder’s holding period for Common Shares repurchased
pursuant to the Offer will terminate as of the Expiration Date. A tendering Shareholder’s gain or loss will generally be capital gain or loss if the Common Shares sold are held by the Shareholder at the time of sale as capital assets and will
be treated as long-term capital gain if the Common Shares have been held for more than one year or as short-term if the Common Shares have been held for one year or less. To the extent that a portion of any such gain is treated as interest,
that portion will be taxed to the Shareholder as ordinary income. It is expected that, if a Shareholder is treated as having sold Common Shares pursuant to the Offer and realizes a gain upon such sale, and if one or more payments are received
after the close of the taxable year of the Shareholder in which the Expiration Date occurs, unless the Shareholder elects otherwise, the gain will be accounted for under the installment sale rules for U.S. federal income tax purposes and the
Shareholder will generally recognize any such gain as and when proceeds are received, likely allocating tax basis according to the presumed percentage of the total payment received in each installment.
The maximum U.S. federal income tax rate applicable to short-term capital gains recognized by a non-corporate Shareholder is currently the same as the applicable ordinary income rate. In addition, the Code
generally imposes a 3.8% Medicare contribution tax on certain individuals, estates and trusts on the lesser of (A) their (undistributed, in the case of estates and trusts) net investment income or (B) if any, the excess of their income over
certain threshold amounts. For these purposes, “net investment income” (as defined in the Code) generally includes, among other things, (i) distributions paid by the Fund of net investment income and capital gains, and (ii) any net gain from
the sale, exchange or other taxable disposition of Shares of the Fund.
In the event that a tendering Shareholder’s ownership of the Fund is not reduced to the extent required under the tests described above, such Shareholder will be deemed to receive a distribution from the Fund
under Section 301 of the Code with respect to the Shares held (or deemed held under Section 318 of the Code) by the Shareholder after the tender (a “Section 301 distribution”). Such distribution, which will equal the price paid by the Fund to
such Shareholder for the Common Shares sold, will be taxable as a dividend to the extent of the Fund’s current and accumulated earnings and profits allocable to such distribution. Any such dividend will constitute an ordinary income dividend,
an exempt-interest dividend or a capital gain dividend. An ordinary income dividend is generally taxable at ordinary income tax rates, and a dividend properly reported as a capital gain dividend is generally taxable at long-term capital gain
rates. The excess will be treated as a return of capital reducing the Shareholder’s tax basis in the Shares held (or deemed held under Section 318 of the Code) after the Offer, and thereafter as capital gain. In the case of a tendering
Shareholder that is a corporation treated as receiving a Section 301 distribution from the Fund in connection with the transaction, special basis adjustments might also apply with respect to any Shares of such Shareholder not repurchased in
connection with the Offer. No portion of any amount a Shareholder receives from the Fund in connection with the Offer that is treated as an ordinary income dividend is expected to qualify for the corporate dividends-received deduction (for
corporate Shareholders) or as “qualified dividend income” (as defined in the Code) (for certain non-corporate Shareholders).
Provided that no tendering Shareholder is treated as receiving a Section 301 distribution as a result of the Offer, Shareholders whose percentage ownership of the Fund increases as a result of the Offer will not
be treated as realizing constructive distributions by virtue of that increase. In the event that any tendering Shareholder is deemed to receive a Section 301 distribution as a result of the Offer, it is possible that shareholders whose
percentage ownership of the Fund increases as a result of the Offer, including Shareholders who do not tender any Shares pursuant to the Offer, will be deemed to receive a constructive distribution under Section 305(c) of the Code in an amount
determined by the increase in their percentage ownership of the Fund as a result of the Offer. Such constructive distribution will be treated as a dividend to the extent of current or accumulated earnings and profits allocable to it, treated
as provided in the immediately preceding paragraph. Such dividend treatment will not apply, however, if the tender is treated as an “isolated redemption” within the meaning of the U.S. Treasury regulations.
Under the “wash sale” rules under the Code, provided the tender of Common Shares pursuant to the Offer is treated as a sale or exchange (and not a distribution as described above), loss
recognized on Common Shares sold pursuant
14
to the Offer will ordinarily be disallowed to the extent the Shareholder acquires other Shares of the Fund (whether through automatic reinvestment of dividends or otherwise) or substantially identical stock or
securities within 30 days before or after the date the tendered Common Shares are purchased pursuant to the Offer and, in that event, the basis and holding period of the Shares acquired will be adjusted to reflect the disallowed loss. Any
loss realized by a Shareholder on the sale of a Common Share held by the Shareholder for six months or less will be treated for U.S. federal income tax purposes as a long-term capital loss to the extent of any distributions or deemed
distributions of long-term capital gains received by the Shareholder with respect to such Share. A Shareholder’s ability to use capital losses may be limited under the Code.
Non-U.S. Shareholders. Provided the sale of Common Shares pursuant to the Offer is respected as a sale or exchange for U.S. federal income tax purposes, any gain
realized by a Non-U.S. Shareholder upon the tender of Common Shares pursuant to the Offer will generally not be subject to any U.S. tax withholding and, provided such gain is not (i) effectively connected with a trade or business carried on
in the United States by such Non-U.S. Shareholder or (ii) realized by a Non-U.S. Shareholder who is an individual that was present in the United States for 183 days or more in the taxable year of the sale or exchange and certain other
conditions are met, will not be subject to any U.S. federal income tax. If, instead, all or a portion of the proceeds received by a tendering Non-U.S. Shareholder is treated for U.S. federal income tax purposes as a Section 301 distribution
by the Fund that is treated in whole or in part as a dividend, or if a Non-U.S. Shareholder is otherwise treated as receiving a deemed distribution that is a dividend by reason of the Shareholder’s increase in its percentage ownership of the
Fund resulting from other Shareholders’ sale of Common Shares pursuant to the Offer, absent a statutory exemption, the dividend received or deemed received by the Non-U.S. Shareholder will be subject to a U.S. withholding tax at the rate of
30% (or such lower rate as may be applicable under a tax treaty).
If any gain or dividend income realized in connection with the tender of Common Shares by a Non-U.S. Shareholder is effectively connected with a trade or business carried on in the United States by the Non-U.S.
Shareholder, such gain or dividend will be taxed at the rates applicable to U.S. Shareholders. In addition, if the Non-U.S. Shareholder is a non-U.S. corporation, it may be subject to 30% (or such lower rate as may be applicable under a tax
treaty) branch profits tax on such effectively connected income. If any gain or dividend is realized by a Non-U.S. Shareholder described in (ii) in the preceding paragraph, the Non-U.S. Shareholder will be subject to U.S. federal income tax
at a rate of 30% (or at a reduced rate under an applicable income tax treaty) on such gain, which gain may be offset by certain U.S.-source capital losses (even though a Non-U.S. Holder is not considered a resident of the United States),
provided that the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.
In order to qualify for any exemptions from withholding described above or for lower withholding tax rates under income tax treaties, or to establish an exemption from backup withholding, a Non-U.S. Shareholder
must comply with special certification and filing requirements relating to its non-U.S. status (including, in general, by furnishing an IRS Form W-8BEN or W-8BEN-E). Non-U.S. Shareholders are urged to consult their tax advisors regarding the
application of U.S. federal income tax rules, including withholding, to their tender of Shares.
Backup Withholding. The Fund generally is required to withhold and remit to the U.S. Treasury a percentage of the taxable distributions and redemption proceeds paid to
any individual Shareholder who fails to properly furnish the Fund with a correct taxpayer identification number, has under-reported dividend or interest income or fails to certify to the Fund that he or she is not subject to such withholding.
Shareholders should provide the Fund with a completed IRS Form W-9, W-8BEN, W-8BEN-E, as applicable, or other appropriate form in order to avoid backup withholding on the distributions they receive from the
Fund regardless of how they are taxed with respect to their tendered Common Shares. Backup withholding is not an additional tax and any amount withheld may be credited against a Shareholder’s U.S. federal income tax liability, provided the
appropriate information is timely furnished to the IRS.
Other Tax Consequences. The Fund’s purchase of Common Shares in the Offer may
directly result in, or contribute to a subsequent, limitation on the Fund’s ability to use capital loss carryforwards to offset future gains. Therefore, in certain circumstances, Shareholders who remain Shareholders following completion of
the Offer may pay taxes sooner, or pay more taxes, than they would have had the Offer not occurred.
15
Any sales of securities by the Fund to raise cash to meet repurchase requests could result in increased taxable distributions to Shareholders, including distributions taxable as ordinary income. See
“Recognition of Capital Gains” below.
Under U.S. Treasury regulations directed at tax shelter activity, if a Shareholder recognizes a loss of $2 million or more in any single taxable year or $4 million in any combination of taxable years in the
case of an individual Shareholder or $10 million or more in any single taxable year or $20 million in any combination of taxable years in the case of a corporate Shareholder, such Shareholder must file a disclosure statement with the IRS on
Form 8886. Direct holders of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, Shareholders of a regulated investment company (“RIC”) are not excepted. Future guidance may extend
the current exception from this reporting requirement to Shareholders of most or all RICs. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer’s treatment of the loss is
proper. Shareholders should consult their own tax advisers concerning any possible disclosure obligation with respect to their investment in Shares.
FATCA Withholding. Sections 1471-1474 of the Code and the U.S. Treasury and IRS guidance issued thereunder (collectively, “FATCA”) generally require the Fund to obtain
information sufficient to identify the status of each of its Shareholders under FATCA or under an applicable intergovernmental agreement (an “IGA”) between the United States and a foreign government. If a Shareholder fails to provide the
requested information or otherwise fails to comply with FATCA or an IGA, the Fund may be required to withhold under FATCA with respect to that Shareholder at a rate of 30% on ordinary dividends it pays. The IRS and the U.S. Treasury
Department have issued proposed regulations providing that these withholding rules will not be applicable to the gross proceeds of share redemptions or capital gain dividends a Fund pays. If a payment by the Fund is subject to FATCA
withholding, the Fund is required to withhold without reference to any other withholding exemption.
As the Fund may not be able to determine whether a payment made pursuant to the Offer will properly be characterized as an “exchange” or a “dividend” for U.S. tax purposes at the time of such payment, any
payment to a tendering Shareholder that is a foreign financial institution (“FFI”) or non-financial foreign entity (“NFFE”) may be subject to a 30% withholding tax unless (a) in the case of an FFI, the FFI reports certain direct and indirect
ownership of foreign financial accounts held by U.S. persons with the FFI and (b) in the case of an NFFE, the NFFE (i) reports information relating to its “substantial U.S. owners” (within the meaning of FATCA), if any, or (ii) certifies that
it has no “substantial U.S. owners.”
Certain Non-U.S. Shareholders may fall into certain exempt, excepted or deemed-compliant categories as established by U.S. Treasury regulations, IGAs, and other guidance regarding FATCA. In order to qualify
for any such exception, a Non-U. S. Shareholder generally must provide the Fund with the applicable IRS Form W-8 (W-8BEN-E, W-8ECI, W-8EXP or W-8IMY) properly certifying the Shareholder’s status under FATCA.
Shareholders are urged to consult their own tax advisers regarding the application of U.S. federal income tax withholding, including eligibility for a withholding tax reduction or exemption,
and the applicable refund procedure, if any.
7. PRICE RANGE OF
COMMON SHARES; DIVIDENDS
The Common Shares are traded on the NYSE. During each completed fiscal quarter for the 24-month period beginning September 30, 2021, the highest and lowest market price per Share, and period-end market price
per Share (as of the close of ordinary trading on the NYSE on the last day of such periods) were as follows:
|
Fiscal Quarter Ended
|
Market Price ($)
|
|||
|
High
|
Low
|
Close
|
||
|
June 30, 2021
|
$ 4.81
|
$ 4.46
|
$ 4.75
|
|
|
September 30, 2021
|
$ 4.87
|
$ 4.59
|
$ 4.59
|
|
|
December 31, 2021
|
$ 4.63
|
$ 4.43
|
$ 4.52
|
|
|
March 31, 2022
|
$ 4.54
|
$ 3.79
|
$ 3.87
|
|
|
June 30, 2022
|
$ 3.87
|
$ 3.18
|
$ 3.36
|
|
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|
September 30, 2022
|
$ 3.63
|
$ 2.99
|
$ 3.01
|
|
|
December 31, 2022
|
$ 3.27
|
$ 2.89
|
$ 3.13
|
|
|
March 31, 2023
|
$ 3.39
|
$ 3.09
|
$ 3.21
|
|
|
June 30, 2023
|
$ 3.26
|
$ 3.10
|
$ 3.22
|
The Fund commenced operations on March 18, 1987 as an NYSE-listed company. The Fund intends to declare and pay a dividend to common shareholders at least monthly and a distribution to preferred shareholders
monthly. Any capital gains are distributed at least annually.
8. SOURCE AND AMOUNT
OF FUNDS; EFFECT OF THE OFFER
The actual cost to the Fund of purchasing Common Shares from the Offer cannot be determined at this time because the number of Shares to be purchased will depend on the number tendered, and the price will be
98% of the NAV of the Shares on the Expiration Date. If the NAV on that date were the same as the NAV per share on August 31, 2023, and if 10% of the outstanding Shares are purchased pursuant to the Offer, the estimated cost to the Fund,
not including fees and expenses incurred in connection with the Offer, would be approximately $10,049,000.
The monies to be used by the Fund to purchase Shares pursuant to the Offer will be first obtained from any cash on hand and then from proceeds of sales of securities in the Fund’s investment portfolio.
Although permitted to do so, the Fund does not expect to borrow money to finance the purchase of any tendered Shares. There are no material conditions to the availability of the monies to be used by the Fund to purchase Shares pursuant to
the Offer except as set forth herein.
The Offer may have certain adverse consequences for tendering and non-tendering Shareholders.
Effect on NAV and Consideration Received by Tendering Shareholders. To pay the aggregate purchase price of Shares accepted for payment pursuant to the Offer, the Fund
anticipates that funds will be first derived from any cash on hand and then from the proceeds from the sale of portfolio securities held by the Fund. If the Fund is required to sell a substantial amount of portfolio securities to raise
cash to finance the Offer, the over-supply of portfolio securities for sale could cause market prices of the Fund’s portfolio securities, and hence the NAV of the Shares, to decline. If such a decline occurs, the Fund cannot predict what
its magnitude might be or whether such a decline would be temporary or continue to or beyond the Expiration Date. Because the price per Share to be paid in the Offer will be dependent upon the NAV as determined as of the close of ordinary
trading on the NYSE on the Expiration Date, if such a decline continued to the Expiration Date, the consideration received by tendering Shareholders would be less than it otherwise might be. In addition, a sale of portfolio securities will
cause increased transaction expenses, and the Fund may receive proceeds from the sale of portfolio securities that are less than the valuations of such securities by the Fund. Accordingly, because of the Offer, the NAV of the Fund may
decline more than it otherwise might, thereby reducing the amount of proceeds received by tendering Shareholders, and also reducing the NAV for non-tendering Shareholders. However, because the Offer price is for 98% of the NAV of the
Shares, the purchase of Shares tendered in and of itself would be somewhat accretive to the NAV of Shares outstanding following completion of the Offer.
The Fund may well sell portfolio securities during the pendency of the Offer to raise cash for the purchase of Shares. Thus, it is likely that during the pendency of the Offer, and possibly for a short time
thereafter, the Fund will hold a greater than normal percentage of its net assets in cash and cash equivalents. This larger cash position may interfere with the Fund’s ability to meet its investment objective. The Fund is required by law
to pay for tendered Shares it accepts for payment promptly after the Expiration Date of this Offer. Because the Fund will not know the number of Shares tendered, or the NAV on which the tender price is based, the Fund will not know until
the Expiration Date the amount of cash required to pay for such Shares. If on or prior to the Expiration Date, the Fund does not have, or believes it is unlikely to have, sufficient cash to pay for all Shares tendered, it may extend the
Offer to allow additional time to sell portfolio securities and raise sufficient cash.
Recognition of Capital Gains. As noted, the Fund will be required to sell
portfolio securities in order to raise cash to meet purchase requests pursuant to the Offer. The actual tax effect of such sales will depend on the difference between the price at which such portfolio securities are sold and the tax
basis of the Fund in such securities. Any
17
capital gains recognized in any such sales on a net basis, after reduction by any available capital losses, including capital loss carryforwards, will be distributed to Shareholders as capital gain dividends (to
the extent of net realized long-term capital gains over net realized short-term capital losses) or ordinary dividends (to the extent of net realized short-term capital gains over net realized long-term capital losses) during or with respect to
the year of sale, and such distributions will be taxable to Shareholders. Any such sales (1) could require Shareholders that hold Shares at the time of a declaration of distributions to pay taxes on greater distributions of capital gains
recognized by the Fund than they otherwise would have absent such sales; and (2) could require the Fund to sell additional portfolio securities in order to raise cash to make such additional distributions, thereby, requiring the Fund, in turn,
to realize and recognize additional capital gains.
It is impossible to predict the amount of unrealized gains or losses in the Fund’s portfolio securities at the time that the Fund is required to sell such portfolio securities, and hence the amount of capital
gains or losses that would be realized and recognized. As of August 31, 2023, the Fund had net unrealized losses of approximately $14,310,000, net realized losses for the current fiscal year to date of $2,954,000, and capital loss
carryforwards of $5,523,000 from its most recent tax year-end of November 30, 2022.
Tax Consequences of Repurchases to Shareholders. The Fund’s purchase of Shares tendered pursuant to the Offer will have tax consequences for tendering Shareholders and
may also have tax consequences for non-tendering Shareholders. See Section 6, “Certain Material U.S. Federal Income Tax Consequences.”
Effect on Remaining Shareholders, Higher Expense Ratio and Less Investment Flexibility. The purchase of Shares by the Fund pursuant to the Offer will have the effect of
increasing the proportionate interest in the Fund held by non-tendering Shareholders. All Shareholders remaining after the Offer will be subject to any increased risks associated with the reduction in the Fund’s aggregate assets resulting
from payment for the tendered Shares, such as greater volatility due to decreased diversification, potentially greater exposure to leverage, and proportionately higher expenses. The reduced net assets of the Fund as a result of the Offer may
result in less investment flexibility for the Fund, depending on the number of Shares repurchased, and may have an adverse effect on the Fund’s investment performance.
Possible Proration. If greater than 10% of the Fund’s Shares are tendered pursuant to the Offer, the Fund would, upon the terms and subject to the conditions of the
Offer, purchase Shares tendered on a pro rata basis. Accordingly, Shareholders cannot be assured that all of their tendered Shares will be repurchased.
THE OFFER MAY HAVE CERTAIN ADVERSE CONSEQUENCES FOR TENDERING AND NON-TENDERING SHAREHOLDERS.
9. PURPOSE OF THE OFFER
The Board has authorized the Offer because it has the potential to reduce, at least temporarily, the discount from NAV at which the Shares currently trade. There can be no assurance, however, that this Offer
will have the effect of narrowing the discount or that any reduction in the discount will be sustained following the expiration of the Offer. It is anticipated that any Shares acquired by the Fund pursuant to the Offer will be retired..
Bulldog Investors, LLP, d/b/a Bulldog Investors, (“Bulldog”) is a holder of the Fund’s Common Shares. On July 10, 2023, Bulldog, on behalf of its Special Opportunities Fund, provided
notice to the Fund of its intention to submit a shareholder proposal for consideration at the Fund’s 2023 annual meeting of shareholders, requesting that the Fund’s shareholders vote (i) to elect Bulldog nominees as Trustees of the Fund and
(ii) to approve a non-binding proposal that the Board of the Fund consider authorizing a liquidity event that will allow shareholders to monetize a significant percentage of their shares at or close to the Fund’s NAV (the “Bulldog Proposal”).
MFS and Bulldog engaged in discussions regarding the Bulldog Proposal and the Fund and Bulldog entered into a Tender Offer and Standstill Agreement (the “Standstill Agreement”) pursuant to which Bulldog has agreed that it will not formally
submit its shareholder proposals for consideration at the Fund’s 2023 annual meeting and Bulldog agreed to refrain from taking certain other actions relating to the Fund (set forth in Section 11 “Interests of the Trustees and Officers;
Transactions and Arrangements Concerning the Shares”) until the day after the date of completion of the Fund’s 2025 annual meeting of shareholders (or special meeting held in lieu thereof), including any adjournments or postponements thereof.
18
The Standstill Agreement provides: (i) that the Fund will conduct a cash tender offer for up to 10% of the Fund’s outstanding Common Shares at a price equal to 98% of the NAV per share as of the close of regular
trading on the NYSE on or before December 31, 2023, subject to certain conditions; (ii) the Fund shall purchase Shares tendered and not withdrawn during the Offer on a pro-rated basis up to 10% of the Shares if greater than such amount of
Shares are properly tendered and not properly withdrawn. The consideration to be paid by the Fund for Shares under the Offer shall consist solely of cash; and (iii) the Board shall approve, and recommend that shareholders of the Fund approve at
the Fund’s 2025 annual shareholder meeting, a proposal concerning a liquidity event for the Fund, unless the average trading discount of the Shares is equal to or less than 7.50% for the entirety of any consecutive 30 calendar day period
occurring between the Expiration Date and July 15, 2025, at which point such proposal for the liquidity event shall not be required.
MFS recommended, and the Board agreed, that it is in the best interests of the Fund to conduct the Offer upon the terms specified in this Offer to Purchase and the Letter of Transmittal. Among other things, the
Board considered that this Offer (i) will provide Shareholders with partial liquidity at close to NAV, (ii) will likely result in a temporary reduction in the Fund’s trading discount, and (iii) because the Offer would be conducted at a 2%
discount to NAV, the Offer would result in immediate accretion to the NAV of the shares of remaining Shareholders. The Board also considered that the Offer may also have certain negative consequences for the Fund, including (i) a decrease in
net assets and associated increase in the Fund’s per share total expense ratio, (ii) potential disruptions in portfolio management, (iii) expenses associated with conducting the Offer, (iv) potential tax consequences to the Fund and
Shareholders and (v) the likelihood that any reduction in the Fund’s trading discount resulting from the Offer will be temporary. The Trustees also considered that the Standstill Agreement with Bulldog avoided a possible proxy contest with
Bulldog and associated expenses for the Fund, and potential outcomes which could have eliminated the Fund’s status and benefits as a closed-end fund.
Neither the Board nor MFS believes that the outcomes Bulldog desires would be in the best interests of long-term Shareholders because, among other reasons, the Fund, as a closed-end fund, offers Shareholders
distinct benefits that are not available in open-end funds. The Offer would allow Bulldog a substantial opportunity to achieve its objective of liquidating a portion of its shares near to NAV and would eliminate this challenge to the
closed-end structure of the Fund, thereby affording the remaining Shareholders the opportunity for continuity of investment in a closed-end fund. In addition to providing all Shareholders with an opportunity to tender their shares at 98% of
NAV, the Offer may result in a reduction of the discount at which the Shares trade, a benefit to the remaining Shareholders of the Fund.
None of the Fund, its Board, or MFS makes any recommendation to any Shareholder as to whether to tender any or all of such Shareholder’s Shares. Shareholders are urged to evaluate carefully
all information in the Offer, consult their own investment and tax advisers, and make their own decisions whether to tender Shares and, if so, how many Shares to tender.
10. INFORMATION
CONCERNING THE FUND
The Fund is a closed-end management investment company organized as a Massachusetts business trust, whose principal executive offices are located at 111 Huntington Avenue, Boston, MA, 02199, telephone: (617)
954-5000.
Available Information about the Fund. The Fund is subject to the informational requirements of the 1940 Act, and in accordance therewith files annual reports, proxy
statement and other information with the Securities and Exchange Commission (“SEC”) relating to its business, financial condition and other matters. As a closed-end investment company, the Fund differs from an open-end investment company
(i.e., a mutual fund) in that it does not redeem its Shares at the election of a Shareholder and does not continuously offer its Shares for sale to the public. The Fund is listed on the NYSE. The Fund’s investment objective is to seek high
current income exempt from U.S. federal income tax, but may also consider capital appreciation. The Fund invests, under normal market conditions, at least 80% of its net assets, including assets attributable to preferred shares and borrowing
for investment purposes, in tax-exempt bonds and tax-exempt notes.
The Fund is required to disclose in such proxy statements certain information, as of particular dates, concerning the Fund’s Trustees and officers, their remuneration, the principal holders
of the Fund’s securities and any material interest of such persons in transactions with the Fund. The Fund has also filed an Issuer Tender Offer Statement on
19
Schedule TO with the SEC. Such reports, proxy statements and other information may be inspected at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Such
reports and other information are also available on the SEC’s web site (http://www.sec.gov).
Agreements Involving the Fund. MFS acts as the investment manager for the Fund pursuant to an investment management agreement.
The Fund also is a party to certain other service agreements. The Fund has an administrative services agreement with MFS that provides that MFS shall provide the Fund with administrative personnel and services.
Computershare Trust Company, N.A. serves as the Fund’s transfer agent, registrar and dividend disbursing agent. Computershare Trust Company, N.A. serves as the Fund’s Depositary for the Offer. Georgeson LLC serves as the Fund’s Information
Agent for the Offer. State Street Bank and Trust Company serves as the custodian for the Fund. The amounts paid by the Fund under these service agreements are or will be disclosed in the Fund’s financial statements, which can be found in the
Fund’s annual and semi-annual reports.
|
11.
|
INTERESTS OF THE TRUSTEES AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES
|
The business address of the Trustees and officers of the Fund is 111 Huntington Avenue, Boston, MA, 02199. As of the date of this Offer to Purchase, the Trustees, officers and associates (as such term is used in
Rule 12b-2 under the Exchange Act) do not beneficially own any Shares. To the best of the Fund’s knowledge, none of the Fund’s Trustees, officers, or associates currently intends to tender Shares pursuant to the Offer.
Based on the Fund’s records and upon information provided to the Fund by its Trustees and officers, and associates (as such term is used in Rule 12b-2 under the Exchange Act), as of August 31, 2023, neither the
Fund nor, to the best of the Fund’s knowledge, any of the Trustees or officers of the Fund, nor any associates (as such term is used in Rule 12b-2 under the Exchange Act) of the Fund, has effected any transactions in the Common Shares during
the sixty day period prior to the date hereof.
Except as set forth below and otherwise in this Offer to Purchase, to the best of the Fund’s knowledge, the Fund knows of no agreement, arrangement or understanding, contingent or otherwise or whether or not
legally enforceable, between (a) the Fund, any of the Fund’s officers or Trustees, any person controlling the Fund or any officer, trustee or director of any corporation or other person ultimately in control of the Fund and (b) any person with
respect to any securities of the Fund (including, but not limited to, any agreement, arrangement or understanding concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls,
guarantees of loans, guarantees against loss, or the giving or withholding of proxies, consents or authorizations). On August 23, 2023, the Fund entered into the Standstill Agreement with Bulldog. Pursuant to the Standstill Agreement, the
Board agreed (i) to conduct the Offer and (ii) to approve, and recommend that shareholders of the Fund approve at the Fund’s 2025 annual shareholder meeting, a proposal concerning a liquidity event for the Fund, unless the average trading
discount of the Shares is equal to or less than 7.50% for the entirety of any consecutive 30 calendar day period occurring between the Expiration Date and July 15, 2025, at which point such proposal for the liquidity event shall not be
required. Subject to the satisfaction of certain conditions and the Offer, Bulldog agreed to the following:
| (a) |
Bulldog shall immediately withdraw the Bulldog Proposal and shall not submit any additional proposal or nominees for Trustees in connection with the Fund’s 2023 annual shareholder meeting or any adjournments or postponements thereof.
|
| (b) |
Bulldog shall, from the time of the public announcement through the earlier of the day after the date of completion of the Fund’s 2025 annual meeting of shareholders or a date as the
parties may agree in writing, (i) refrain from directly or indirectly making, supporting or encouraging any shareholder proposals (including proposing any nominees for election) concerning the Fund;
(ii) vote in accordance with the recommendations of the Board of Trustees of the Fund on nominees for election as Trustees of the Fund; (iii) vote in
accordance with the recommendations of the Board of Trustees on any other matters affecting the Fund provided that Bulldog reasonably determines that voting in accordance with such recommendations does not violate any legal requirements; (iv) refrain from directly or indirectly soliciting
|
20
|
or encouraging others to vote against the recommendations of the Board of Trustees on any matters affecting the Fund; (vii) refrain from granting a proxy with respect to Shares of the Fund other
than to officers of, or other persons named as proxies by, the Fund; (viii) refrain from executing any written consent with respect to the Shares of the Fund other than as may be solicited by the
Fund; (ix) refrain from joining or participating in a group concerning the Fund; (x) refrain from seeking the removal of any member of the Board of Trustees
of the Fund; (xi) refrain from seeking control or influence over the management or policies of the Fund; and (xii) refrain from publicly disclosing any
intention, plan, proposal or arrangement or other matter inconsistent with its obligations.
|
Additionally, pursuant to the Standstill Agreement, from the time of the Expiration Date until earlier of the day after the date of completion of the Fund’s 2025 annual meeting of shareholders or a date as the
parties may agree in writing, the Fund, MFS and Bulldog agreed to refrain from directly or indirectly disparaging or impugning the integrity or reputation of the other party, its members, directors, officers, employees or affiliates, or any member
of the Board with respect to any matters affecting the Fund. A copy of the Standstill Agreement with Bulldog is included as an exhibit to the Fund’s Schedule TO for this Offer.
12. LEGAL MATTERS;
REGULATORY APPROVALS
Except as described in this Offer to Purchase, the Fund is not aware of any license or regulatory permit that appears to be material to its business that might be adversely affected by the acquisition of Common
Shares as contemplated by the Offer or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of Common
Shares as contemplated by the Offer. Should any such approval or other action be required, the Fund currently contemplates that it will seek approval or such other action. The Fund cannot predict whether it may determine that it is required to
delay the acceptance for payment of, or payment for, Common Shares tendered in response to the Offer pending the outcome of any such matters. There can be no assurance that any approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that the failure to obtain any approval or other action might not result in adverse consequences to the Fund’s business. The Fund’s obligation to accept for payment and pay for Shares under the Offer is
subject to various conditions described in Section 13, “Conditions of the Offer.”
13. CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, it is the announced policy of the Board, which may be changed by the Trustees, and a condition to the Offer that the Fund cannot accept tenders or effect repurchases
during any period if: (1) such transactions, if consummated, would (a) result in delisting of the Fund’s Shares from the NYSE (the NYSE Listed Company Manual provides that the NYSE would promptly initiate suspension and delisting procedures with
respect to closed-end funds if the total market value of publicly held shares and net assets of the entity over 60 consecutive calendar days are each below $5,000,000); (b) cause the Fund to fail to qualify and to be treated as a RIC under the Code
(which would subject the Fund to tax on its taxable income at corporate rates, and cause all distributions from earnings and profits, including any distributions of net tax-exempt income and net long-term capital gains, to be taxable to
stockholders as ordinary income); or (c) result in a failure to comply with the applicable asset coverage or leverage ratio requirements applicable to the Remarketable Variable Rate MuniFund Term Preferred Shares of the Fund that are issued and
outstanding; (2) there is any (a) in the Board’ reasonable judgment, material legal action or proceeding instituted or threatened challenging such transactions or otherwise materially adversely affecting the Fund; (b) suspension of or limitation on
prices for trading securities generally on the NYSE or other national securities exchange(s), or the National Association of Securities Dealers Automated Quotation System (“NASDAQ”) National Market System; (c) declaration of a banking moratorium by
federal or state authorities or any suspension of payment by banks in the United States or New York State or (d) a new limitation affecting the Fund or the issuers of its portfolio securities imposed by federal or state authorities on the extension
of credit by lending institutions; or (3) the Board of Trustees determines in good faith, upon written advice of counsel, that effecting any such transaction would constitute a breach of their fiduciary duty owed to the Fund or its Shareholders.
The Fund reserves the right, at any time during the pendency of the Offer, to terminate, extend or amend the Offer in any respect. In the event any of the foregoing conditions are modified or
waived in whole or in part at any time, the
21
Fund will promptly make a public announcement of such waiver and may, depending on the materiality of the modification or waiver, extend the Offer period as provided in Section 2, “Extension of Tender Period;
Termination; Amendment” of this Offer to Purchase.
The foregoing conditions are for the sole benefit of the Fund and may be asserted by the Fund regardless of the circumstances (including any action or inaction by the Fund) giving rise to any of these conditions, and
may be waived by the Fund, in whole or in part, at any time and from time to time, on or before the Expiration Date, in its sole discretion. The Fund’s failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any
of these rights, and each of these rights shall be deemed an ongoing right that may be asserted at any time and from time to time. Any determination or judgment by the Fund concerning the events described will be final and binding on all parties.
14. FEES AND EXPENSES
The Fund has retained Georgeson LLC to act as the Information Agent and Computershare Trust Company, N.A. to act as the Depositary in connection with the Offer. The Information Agent may contact Shareholders by
mail, telephone, telex, email, telegraph and personal interviews and may request brokers and other Nominee Holders to forward materials relating to the Offer to beneficial owners. The Information Agent and the Depositary each will receive
reasonable and customary compensation for their respective services, will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection therewith, including certain liabilities under
the federal securities laws.
The Fund will not pay any fees or commissions to any broker, any other Nominee Holder, or any other person (other than the Information Agent and the Depositary) for soliciting tenders of Common Shares pursuant to the
Offer. Brokers and other Nominee Holders will, upon request, be reimbursed by the Fund for reasonable and necessary costs and expenses incurred by them in forwarding materials to their customers. No such broker or other Nominee Holder has been
authorized to act as the agent of the Fund, the Information Agent, or the Depositary for purposes of the Offer.
15. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on behalf of) Shareholders in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws
of such jurisdiction. The Fund is not aware of any jurisdiction in which the making of the Offer or the tender of the Shares is not in compliance with applicable law. However, the Fund reserves the right to exclude holders in any jurisdiction in
which it is asserted that the Offer is not in compliance with any applicable law. So long as the Fund makes a good faith effort to comply with any state law deemed applicable to the Offer, the Fund believes that the exclusions of holders residing
in that jurisdiction is permitted under Rule 13e-4(f)(9) under the Exchange Act.
In accordance with Rule 13e-4 under the Exchange Act, the Fund has filed with the SEC a Tender Offer Statement on Schedule TO that contains additional information with respect to the Offer. The Schedule TO,
including the exhibits and any amendments thereto, may be examined, and copies may be obtained, at the places and in the manner set forth in Section 10, “Information Concerning the Fund.”
The Fund has not authorized any person to make any recommendation on its behalf regarding whether Shareholders should tender or refrain from tendering Shares in the Offer. The Fund has not
authorized any person to provide any information or make any representation in connection with the Offer, other than those contained in this Offer to Purchase or in the related Letter of Transmittal. Shareholders should not rely upon any
recommendation, information or representation that is given or made as having been authorized by the Fund, the Board, the officers of the Fund, its adviser, the Fund’s transfer agent, the Depositary or the Information Agent.
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16. CONTACTING THE
DEPOSITARY AND THE INFORMATION AGENT
The Letter of Transmittal, certificates for the Shares and any other required documents should be sent by each Shareholder of the Fund or his or her broker, dealer, bank, trust company or other nominees to the
Depositary as set forth below.
The Depositary for the Offer is:
By First Class, Registered or Certified Mail:
Computershare Trust Company, N.A.
c/o Voluntary Corporate Actions; COY: CMU
PO Box 43011
Providence, RI 02940-3011
By Express or Overnight Delivery:
Computershare Trust Company, N.A.
c/o Voluntary Corporate Actions; COY: CMU
150 Royall Street, Suite V
Canton, MA 02021
Any questions or requests for assistance or additional copies of the Offer to Purchase, the Letter of Transmittal, and other documents may be directed to the Information Agent at its telephone number below.
Shareholders may also contact their broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Offer.
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The Information Agent for the Offer is:
Georgeson
1290 Avenue of the Americas, 9th Floor
New York, NY 10104 (866) 541-3547 (Toll Free)
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MFS® High Yield Municipal Trust
October 6, 2023
23
Exhibit (a)(1)(ii)
LETTER OF TRANSMITTAL
Regarding Common Shares
MFS® High Yield Municipal Trust
Tendered Pursuant to the Offer to Purchase
Dated October 6, 2023
The Offer to Purchase and withdrawal rights will expire, and this Letter of Transmittal (which together with the Offer to Purchase constitute the “Offer”) must be received
by 5:00 p.m., Eastern Standard Time, on November 6, 2023, unless the Offer is extended.
by 5:00 p.m., Eastern Standard Time, on November 6, 2023, unless the Offer is extended.
Complete this Letter of Transmittal and Return by Mail to:
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By First Class, Registered or Certified Mail:
Computershare Trust Company, N.A.
c/o Voluntary Corporate Actions; COY: CMU
PO Box 43011
Providence, RI 02940-3011
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By Express or Overnight Delivery:
Computershare Trust Company, N.A.
c/o Voluntary Corporate Actions; COY: CMU
150 Royall Street, Suite V
Canton, MA 02021
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DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
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DESCRIPTION OF SHARES TENDERED
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Name(s) and Address(es) of Registered Holder(s) (Please Fill in, if Blank, Exactly as Name(s) Appear(s) on Share Certificate(s))
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Shares Tendered (Attach additional signed list, if necessary)
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[REGISTRATION
ADDRESS LINE 1
ADDRESS LINE 2
ADDRESS LINE 3
ADDRESS LINE 4
CPU ACCOUNT NUMBER]
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Share Certificate
Number(s)
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Total Number of Shares Represented by Share Certificate(s)(1)
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Total Number of Shares Represented by Book entry (Electronic Form) Tendered
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Total Number of Shares Tendered(2)
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Total Shares
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(1) Book-entry stockholders need not complete this column.
(2) Unless a lower number of Shares to be tendered is otherwise
indicated, it will be assumed that all Shares described above are being tendered.
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I HAVE LOST MY CERTIFICATE(S) FOR COMMON SHARES OF MFS® HIGH YIELD MUNICIPAL TRUST AND REQUIRE ASSISTANCE WITH RESPECT TO REPLACING SUCH CERTIFICATE(S). SEE INSTRUCTION 3.
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THE UNDERSIGNED ALSO TENDERS ALL UNCERTIFICATED SHARES HELD IN THE NAME(S) OF THE UNDERSIGNED BY THE FUND’S TRANSFER AGENT PURSUANT TO THE FUND’S DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN, IF ANY.
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THIS BOX SHOULD BE CHECKED IF, IN ADDITION TO SHARES TENDERED HEREBY, SHARES ARE ALSO CONSTRUCTIVELY OWNED BY THE UNDERSIGNED AS DETERMINED UNDER SECTION 318 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“THE CODE”).
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A SEPARATE LETTER OF TRANSMITTAL MUST BE SUBMITTED BY EACH REGISTERED OWNER OF SHARES WHICH ARE CONSIDERED TO BE CONSTRUCTIVELY OWNED BY THE UNDERSIGNED.
This Letter of Transmittal is to be used (a) if you desire to effect the tender transaction yourself, (b) if you intend to request your broker, dealer, commercial bank, trust company or other nominee
to effect the transaction for you and the Shares are not registered in the name of such broker, dealer, commercial bank, trust company or other nominee, and (c) by a broker, dealer, commercial bank, trust company or other nominee effecting the
transaction as a registered owner or on behalf of a registered owner. To accept the Offer in accordance with its terms, a Letter of Transmittal properly completed and bearing original signature(s) and the original of any required signature
guarantee(s), any certificates representing Shares tendered, and any other documents required by this Letter of Transmittal must be received by Computershare Trust Company, N. A. (the “Depositary”) at the address set forth above and must be received
by the Depositary prior to 5:00 p.m. Eastern Standard Time on November 6, 2023, or, if the Offer is extended, the later date to which the Expiration Date has been extended. Delivery of documents to a book-entry transfer facility does not constitute
delivery to the Depositary.
The boxes below are to be checked by Eligible Guarantors only.
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CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE DEPOSITORY TRUST COMPANY (“DTC”) AND COMPLETE THE FOLLOWING:
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Name of Tendering Institution:
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DTC Participant Number:
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Name(s) of Registered Holder(s):
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Window Ticket Number (if any):
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DTC Participant Number
(if delivered by book-entry transfer): |
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Ladies and Gentlemen:
The undersigned hereby tenders to MFS® High Yield Municipal Trust, a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a closed-end management
investment company (the “Fund”), the common shares of the Fund (“Shares”) for purchase by the Fund at a price equal to 98% of the net asset value (“NAV”) per Share as determined as of the close of ordinary trading on the New York Stock Exchange on or
before the Expiration Date (as defined in the Offer to Purchase), and upon the terms and subject to the conditions set forth in the Offer to Purchase dated October 6, 2023, receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which, together with the Offer to Purchase constitute the “Offer”). Each term used in this Letter of Transmittal that is not otherwise defined herein shall have the meaning in the Offer to Purchase, dated October 6, 2023.
THE TENDER OFFER AND THIS LETTER OF TRANSMITTAL ARE SUBJECT TO ALL THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, INCLUDING, BUT NOT LIMITED TO, THE ABSOLUTE RIGHT OF THE FUND TO REJECT
ANY AND ALL TENDERS DETERMINED BY THE FUND, IN ITS SOLE DISCRETION, TO NOT BE IN THE APPROPRIATE FORM.
Subject to, and effective upon, acceptance for payment of, or payment for, Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is
extended or amended, the terms or conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to the Fund all right, title and interest in and to all of the Shares that are being tendered hereby that are being
purchased pursuant to the Offer and hereby irrevocably constitutes and appoints the Fund as attorney-in-fact of the undersigned with respect to such Shares, with full power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest) to (a) present certificates for such Shares, if any, for cancellation and transfer on the Fund’s books and (b) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, subject to
the next paragraph, all in accordance with the terms and subject to the conditions set forth in the Offer. The undersigned hereby warrants that the undersigned has full authority to sell, assign and transfer the Shares tendered hereby and that the
Fund will acquire good, marketable and unencumbered title thereto, free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof, and
not subject to any adverse claim, when and to the extent the same are purchased by it.
The undersigned represents and warrants that (a) upon request, the undersigned will execute and deliver any additional documents that the Fund or the Depositary deems necessary or desirable to
complete the assignment, transfer and purchase of the Shares tendered hereby, and (b) the undersigned has read and agrees to all of the terms and conditions of the Offer.
The undersigned hereby represents and warrants that the undersigned, if a broker, dealer, commercial bank, trust company or other nominee, has obtained the tendering Shareholder’s instructions to
tender pursuant to the terms and conditions of the Offer in accordance with the letter from the Fund to brokers, dealers, commercial banks, trust companies and other nominees.
The names and addresses of the registered owners should be printed as on the registration of the Shares. If the Shares tendered hereby are in certificate form, the certificates representing such
Shares must be returned together with this Letter of Transmittal.
The undersigned recognizes that, under certain circumstances as set forth in the Offer, the Fund may amend, extend or terminate the Offer or may not be required to purchase any of the Shares tendered
hereby. In any such event, the undersigned understands that certificates for the Shares not purchased, if any, will be returned to the undersigned at its registered address unless otherwise indicated under the Special Delivery Instructions below. The
undersigned recognizes that the Fund has no obligation, pursuant to the Special Payment Instructions set forth below, to transfer any Shares from the name of the registered owner thereof if the Fund purchases none of such Shares.
The undersigned understands that acceptance of Shares by the Fund for payment will constitute a binding agreement between the undersigned and the Fund upon the terms and subject to the conditions of
the Offer.
Payment of the purchase price for the Shares tendered by the undersigned will be made by check as described in the Offer to Purchase. For any check issued, the check for the purchase price of the
tendered Shares purchased will be issued to the order of the undersigned and mailed to the address indicated, unless otherwise indicated below in the box entitled Special Payment Instructions or the box entitled Special Delivery Instructions. The
Fund will not pay interest on the purchase price under any circumstances.
All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and all obligations of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
SPECIAL PAYMENT INSTRUCTIONS
To be completed ONLY if any certificate for Shares not purchased and/or the purchase price of Shares accepted for payment is to be issued in the name of someone other than the undersigned. Please refer to Instruction
1 for additional information related to the Guarantee of Signatures.
| Issue |
☐ Check to:
☐ Certificate(s) or book-entry to: |
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Name(s):
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(Please Print)
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Address(es):
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(Include Zip Code)
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(Taxpayer Identification or Social Security Numbers)
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SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if any certificate for Shares not purchased and/or the purchase price of Shares accepted for payment is to be delivered to someone other than the registered owners, or to the registered owners at
an address other than that shown above. Please refer to Instruction 1 for additional information related to the Guarantee of Signatures.
| Issue |
☐ Check to:
☐ Certificate(s) or book-entry to: |
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Name(s):
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(Please Print)
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Address(es):
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(Include Zip Code)
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(Taxpayer Identification or Social Security Numbers)
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IMPORTANT: STOCKHOLDERS SIGN HERE
(Please complete IRS Form W-9 below or appropriate IRS Form W-8)
Signature(s) of Owner(s): Dated:
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock certificate(s) or by person(s) authorized to become registered holder(s) of stock certificate(s) as evidenced by
endorsement or stock powers transmitted herewith. If signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, the full title of the person
should be set forth. See Instruction 6).
Name(s):
(Please Print)
Capacity (full title):
Address:
(Include Zip Code)
Daytime Area Code and Telephone Number:
Taxpayer Identification or Social Security No.:
Complete accompanying IRS Form W-9 or appropriate IRS Form W-8.
GUARANTEE OF SIGNATURE(S)
(Please Print Except for Signature)
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Authorized Signature:
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Name:
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Title:
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Name of Firm:
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Address, including Zip Code:
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Telephone Number, including Area
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Dated: __________, 2023
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INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. No signature
guarantee is required on this Letter of Transmittal if (a) this Letter of Transmittal is signed by the registered holders of Shares tendered hereby (including, for purposes of this document, any participant in the book-entry transfer facility of
The Depository Trust Company (“DTC”) whose name appears on DTC’s security position listing as the owner of Shares), unless such holders have completed either the box entitled “Special Payment Instructions” or the box entitled “Special Delivery
Instructions” included in this Letter of Transmittal, or (b) the Shares are tendered for the account of a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, or by a commercial bank or trust
company having an office, branch or agency in the United States (each an “Eligible Guarantor”). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Guarantor. See Instruction 7.
2. Delivery of Letter of Transmittal and
Certificates. This Letter of Transmittal is to be used (a) if Shares are to be forwarded herewith, (b) if uncertificated Shares held by the Fund’s transfer agent pursuant to the Fund’s dividend reinvestment plan are to be tendered, or (c)
if tenders are to be made by book-entry transfer to the account maintained by the Depositary pursuant to the procedure set forth in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF ANY DOCUMENTS, INCLUDING SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL, AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, AND
ANY PROCESSING FEE IS AT THE OPTION AND SOLE RISK OF THE TENDERING SHAREHOLDER. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Delivery will be deemed made only when actually received by the Depositary. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. Shareholders
have the responsibility to tender their Shares (in proper certificated or uncertificated form), this Letter of Transmittal properly completed and bearing original signatures and the original of any required signature guarantees, and any other
documents required by this Letter of Transmittal to be timely delivered in accordance with the Offer.
The Fund will not accept any alternative, conditional or contingent tenders. All tendering Shareholders, brokers, dealers, commercial banks, trust companies and other nominees, by execution of this
Letter of Transmittal, waive any right to receive any notice of the acceptance of their tender.
3. Lost Certificates. In the event that
any Shareholder of the Fund is unable to deliver to the Depositary certificates representing his or her Shares of the Fund due to the loss or destruction of such certificates, such fact should be indicated on the face of this Letter of Transmittal.
In such case, the Shareholder should also contact the Fund’s transfer agent, Computershare Trust Company, N.A., at 1-800-637-2304 to report the lost securities. The transfer agent will forward additional documentation which such Shareholder must
complete in order to effectively surrender such lost or destroyed certificates (including affidavits of loss and indemnity bonds in lieu thereof). There may be a fee in respect of lost or destroyed MFS® High Yield Municipal Trust certificates, but
surrenders hereunder regarding such lost certificates will be processed only after such documentation has been submitted to and approved by the transfer agent.
4. Inadequate Space. If the space
provided in any of the boxes to be completed is inadequate, the necessary information should be listed on a separate schedule signed by all of the required signatories and attached hereto.
5. Proration. The Fund is offering to
purchase up to 2,832,532 Shares. If Shareholders tender (and do not withdraw) more than 2,832,532 Shares for purchase by the Fund, the Fund will purchase duly tendered Shares from participating Shareholders on a pro
rata basis, disregarding fractions, based upon the number of Shares each Shareholder tenders for purchase and does not timely withdraw, unless the Fund determines not to purchase any Shares. The Fund does not intend to increase the number
of Shares that it is offering to purchase, even if Shareholders tender more than the maximum number of Shares to be purchased by the Fund in the Offer.
6. Stock Transfer Taxes. The Fund will
pay all transfer taxes, if any, payable on the transfer to it of Shares purchased pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if unpurchased Shares were registered in the name of, any person other than the
tendering holder, or if any tendered certificates are registered or the Shares tendered are held in the name of any person other than the person signing this Letter of Transmittal, the amount of any transfer taxes (whether imposed on the registered
holder or such other person) payable on account of such transfer will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted.
7. Signatures on Letter of Transmittal,
Authorizations and Endorsements.
(a) If this Letter of Transmittal is signed by the registered holders of the
Shares tendered hereby, the signatures must correspond with the names as written on the face of the certificates for the Shares tendered without alteration, enlargement or any change whatsoever.
(b) If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
(c) If any of the tendered Shares are registered in different names on several
certificates, it is necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations.
(d) If this Letter of Transmittal or any certificate for Shares tendered or
stock powers relating to Shares tendered are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when
signing, and proper evidence satisfactory to the Fund of their authority so to act must be submitted. Signatures on such instructions must be guaranteed by an Eligible Guarantor.
(e) If this Letter of Transmittal is signed by the registered holders of the
Shares transmitted hereby, no endorsements of certificates or separate stock powers are required unless payment is to be made to, or certificates for Shares not purchased are to be issued in the name of, a person other than the registered
holders. Signatures on such certificates or stock powers must be guaranteed by an Eligible Guarantor.
(f) If this Letter of Transmittal is signed by a person other than the
registered holders of the certificates listed thereon, the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the names of the registered holders appear on the certificates for the Shares
involved. Signatures on such certificates or stock powers must be guaranteed by an Eligible Guarantor.
(g) Attribution under Section 318 of the Internal Revenue Code of 1986 (the
“Code”) can cause Shares of the Fund held by your family members, or held by an entity such as a trust, estate, partnership or corporation in which you have an interest, to be considered as owned by you. The attribution rules under Section 318 of
the Code are complex. Please consult your tax advisor for details.
8. Special Payment and Delivery Instructions.
If certificates for unpurchased Shares and/or payment is to be issued in the name of a person other than the registered owners or if such certificates and/or payment is to be sent to someone other than the registered owners or to the registered
owners at a different address, the captioned boxes “Special Payment Instructions” and/or “Special Delivery Instructions” in this Letter of Transmittal must be completed. Signatures on such instructions must be guaranteed by an Eligible Guarantor.
9. Determinations of Validity. All
questions as to the validity, form, eligibility (including time of receipt) and acceptance of tenders will be determined by the Fund, in its sole discretion, whose determination shall be final and binding. The Fund reserves the absolute right to
reject any or all tenders determined not to be in appropriate form or to refuse to accept for payment, purchase or pay for, any Shares if, in the opinion of the Fund’s counsel, accepting, purchasing or paying for such Shares would be unlawful.
The Fund also reserves the absolute right to waive any of the conditions of the Offer or any defect in any tender, whether generally or with respect to any particular Shares or Shareholders. The Fund’s interpretations of the terms and conditions
of the Offer (including these instructions) shall be final and binding. By tendering Shares to the Fund, you agree to accept all decisions the Fund makes concerning these matters and waive any right you might otherwise have to challenge those
decisions.
NONE OF THE FUND, ITS BOARD OF TRUSTEES, THE FUND’S INVESTMENT ADVISER, THE DEPOSITARY OR ANY OTHER PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF ANY DEFECT OR IRREGULARITY IN ANY TENDER, AND NONE OF THEM
WILL INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTICE.
10. Procedures for Participants in the
Dividend Reinvestment and Cash Purchase Plan. Holders of Shares acquired through the Fund’s dividend reinvestment plan may tender such Shares by completing the appropriate section of this Letter of Transmittal. If a Shareholder tenders
Shares acquired through the dividend reinvestment plan, all such Shares credited to such Shareholder’s account(s) will be tendered, unless the Shareholder otherwise specifies in this Letter of Transmittal. If a Shareholder does not complete the
section of this Letter of Transmittal to tender Shares acquired through the dividend reinvestment plan, no Shares acquired by that Shareholder through the dividend reinvestment plan will be deemed to have been tendered.
11. Questions and Requests for Assistance and
Additional Copies. Questions, requests for assistance, and requests for additional copies of the Offer to Purchase and this Letter of Transmittal may be directed to Georgeson LLC (the “Information Agent”) by telephoning (866) 541-3547.
Shareholders who do not own Shares directly may also obtain such information and copies from their broker, dealer, commercial bank, trust company or other nominee. Shareholders who do not own Shares directly are required to tender their Shares
through their broker, dealer, commercial bank, trust company or other nominee and should NOT submit this Letter of Transmittal to the Depositary.
12. Restriction on Short Sales.
Section 14(e) of the Securities Exchange Act of 1934, as amended, and Rule 14e-4 promulgated thereunder, make it unlawful for any person, acting alone or in concert with others, to tender Shares in a partial tender offer for such person’s own
account unless at the time of tender, and at the time the Shares are accepted for payment, the person tendering has a “net long position” equal to or greater than the amount tendered in (a) Shares, and will deliver or cause to be delivered such
Shares for the purpose of tender to the person making the Offer within the period specified in the Offer to Purchase, or (b) an equivalent security and, upon acceptance of his or her tender, will acquire Shares by conversion, exchange, or
exercise of such equivalent security to the extent required by the terms of the Offer, and will deliver or cause to be delivered the Shares so acquired for the purpose of tender to the Fund within the period specified in the Offer. Section
14(e) and Rule 14e-4 provide a similar restriction applicable to the tender or guarantee of a tender on behalf of another person.
The acceptance of Shares by the Fund for payment will constitute a binding agreement between the tendering Shareholder and the Fund upon the terms and subject to the conditions of the Offer,
including the tendering Shareholder’s representation that the Shareholder has a “net long position” in the Shares being tendered within the meaning of Rule 14e-4 and that the tender of such Shares complies with Rule 14e-4.
13. Backup Withholding Tax. Under U.S.
federal income tax law, a backup withholding tax may be imposed on the gross proceeds otherwise payable to certain Shareholders pursuant to the Offer. To avoid backup withholding, a tendering Shareholder that is a U.S. person for U.S. federal
income tax purposes (each such Shareholder, a “U.S. Shareholder”) and, if applicable, each other U.S. payee, must provide the applicable withholding agent with a correct taxpayer identification number (“TIN”) and certify that such Shareholder or
payee is not subject to backup withholding by completing the Form W-9 set forth below. In addition, such U.S. person must date and sign the Form W-9 as indicated. In general, if a U.S. Shareholder is an individual, the TIN is the Social Security
number of such individual. If the applicable withholding agent is not provided with the correct TIN, the U.S. Shareholder or payee, as applicable, will be subject to a $50 penalty imposed by the Internal Revenue Service (“IRS”) unless the failure
to provide the correct number is due to reasonable cause and not willful neglect. If a U.S. Shareholder or payee makes a false statement on the Form W-9 without any reasonable basis that results in no backup withholding, such U.S. Shareholder or
payee, as applicable, will be subject to a $500 penalty, and the willful falsification of certifications or affirmations may result in criminal penalties, including fines and/or imprisonment. For further information concerning backup withholding
and instructions for completing the Form W-9 (including how to obtain a TIN if you do not have one and how to complete the Form W-9 if Shares are held in more than one name), consult the “Guidelines for
Certification of Taxpayer Identification Number on Form W-9” below.
Certain U.S. Shareholders (including, among others, corporations) are not subject to these backup withholding and reporting requirements. See the “Guidelines for Certification of
Taxpayer Identification Number on Form W-9” below. Exempt Shareholders or payees that are U.S. persons should furnish their TIN, check the appropriate box on the Form W-9 and sign, date and return the Form W-9 to the applicable
withholding agent in order to confirm exempt status and avoid erroneous backup withholding.
A foreign Shareholder or other payee that is not a U.S. person may qualify as an exempt recipient by providing the applicable withholding agent with a properly completed and signed IRS Form
W-8BEN or W-8BEN-E, as applicable, or other appropriate IRS Form W-8, signed under penalties of perjury, attesting to such Shareholder’s or payee’s foreign status or by otherwise establishing an exemption. An appropriate IRS Form W-8 may be
obtained from the Depositary, the IRS website (www.irs.gov) or the relevant broker, dealer, commercial bank, trust company or other nominee.
Backup withholding is not an additional U.S. federal income tax. Rather, the U.S. federal income tax liability of a person subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be obtained provided that the required information is timely furnished to the IRS.
NOTE: FAILURE TO COMPLETE AND RETURN OR TO PROVIDE TRUTHFUL INFORMATION ON THE FORM W-9 (OR AN APPROPRIATE IRS FORM W-8 OR FORM W-8) MAY RESULT IN PENALTIES AND BACKUP
WITHHOLDING ON ANY AMOUNTS OTHERWISE PAYABLE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON FORM W-9 FOR ADDITIONAL DETAILS.
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Form W-9
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Request for Taxpayer
Identification Number and Certification
▶ Go to www.irs.gov/FormW9 for instructions and the
latest information.
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Give Form to the requester. Do not send to the IRS.
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(Rev. October 2018)
Department of the Treasury
Internal Revenue Service
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Print or type.
See Specific Instructions on page 3.
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1 Name (as shown on your income tax return). Name is required on this line; do not leave this line blank.
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2 Business name/disregarded entity name, if different from above
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3 Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the
following seven boxes.
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4 Exemptions (codes apply only to certain entities, not individuals; see instructions on page 3):
Exempt payee code (if any)
Exemption from FATCA reporting
code (if any)
(Applies to accounts maintained outside the U.S.)
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☐ Individual/sole proprietor or single-member LLC ☐ C Corporation ☐ S Corporation ☐ Partnership ☐ Trust/estate
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☐ Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=Partnership) ▶
Note: Check the appropriate box in the line above for the tax classification of the single-member owner. Do not check LLC if the LLC is classified as a single-member
LLC that is disregarded from the owner unless the owner of the LLC is another LLC that is not disregarded from the owner for U.S. federal tax purposes. Otherwise, a single-member LLC that is
disregarded from the owner should check the appropriate box for the tax classification of its owner.
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☐ Other (see instructions) ▶
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5 Address (number, street, and apt. or suite no.) See instructions.
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Requester’s name and address (optional)
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6 City, state, and ZIP code
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7 List account number(s) here (optional)
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Part I
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Taxpayer Identification Number (TIN)
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Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However,
for a resident alien, sole proprietor, or disregarded entity, see the instructions for Part I, later. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a
TIN, later.
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Social security number
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–
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–
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or
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Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and
Number To Give the Requester for guidelines on whose number to enter.
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Employer identification number
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–
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Part II
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Certification
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Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and
2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal
Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and
3. I am a U.S. citizen or other U.S. person (defined below); and
4. The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct.
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently
subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid,
acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and
dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions for Part II, later.
Sign
Here
Signature of
U.S. person ▶
Date ▶
General Instructions
Section references are to the Internal Revenue Code unless otherwise noted.
Future developments. For the latest information about developments related to Form W-9 and its instructions, such as
legislation enacted after they were published, go to www.irs.gov/FormW9.
Purpose of Form
An individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number
(TIN) which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to report on an information return the amount paid to
you, or other amount reportable on an information return. Examples of information returns include, but are not limited to, the following.
• Form 1099-INT (interest earned or paid)
• Form 1099-DIV (dividends, including those from stocks or mutual funds)
• Form 1099-MISC (various types of income, prizes, awards, or gross proceeds)
• Form 1099-B (stock or mutual fund sales and certain other transactions by brokers)
• Form 1099-S (proceeds from real estate transactions)
• Form 1099-K (merchant card and third party network transactions)
• Form 1098 (home mortgage interest), 1098-E (student loan interest),
1098-T (tuition)
• Form 1099-C (canceled debt)
• Form 1099-A (acquisition or abandonment of secured property) Use Form W-9 only if you are a U.S. person (including a resident
alien), to provide your correct TIN.
If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What is backup
withholding, later.
Cat. No. 10231X Form W-9 (Rev.
10-2018)
Form W-9 (Rev. 10-2018)
Page 2
By signing the filled-out form, you:
1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued),
2. Certify that you are not subject to backup withholding, or
3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your
allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners' share of effectively connected income, and
4. Certify that FATCA code(s) entered on this form (if any) indicating that you are exempt from the FATCA reporting, is correct.
See What is FATCA reporting, later, for further information.
Note: If you are a U.S. person and a requester gives you a form other than Form W-9 to request your TIN, you must use the requester’s form if it is
substantially similar to this Form W-9.
Definition of a U.S. person. For federal tax purposes, you are considered a U.S. person if you are:
• An individual who is a U.S. citizen or U.S. resident alien;
• A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States;
• An estate (other than a foreign estate); or
• A domestic trust (as defined in Regulations section 301.7701-7).
Special rules for partnerships. Partnerships that conduct a trade or business in the United States are generally required to pay a withholding
tax under section 1446 on any foreign partners’ share of effectively connected taxable income from such business. Further, in certain cases where a Form W-9 has not been received, the rules under section 1446 require a partnership to presume that a
partner is a foreign person, and pay the section 1446 withholding tax. Therefore, if you are a U.S. person that is a partner in a partnership conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your
U.S. status and avoid section 1446 withholding on your share of partnership income.
In the cases below, the following person must give Form W-9 to the partnership for purposes of establishing its U.S. status and avoiding withholding
on its allocable share of net income from the partnership conducting a trade or business in the United States.
• In the case of a disregarded entity with a U.S. owner, the U.S. owner of the disregarded entity and not the entity;
• In the case of a grantor trust with a U.S. grantor or other U.S. owner, generally, the U.S. grantor or other U.S. owner of the grantor trust
and not the trust; and
• In the case of a U.S. trust (other than a grantor trust), the U.S. trust
(other than a grantor trust) and not the beneficiaries of the trust.
Foreign person. If you are a foreign person or the U.S. branch of a foreign bank that has elected to be treated as a U.S.
person, do not use Form W-9. Instead, use the appropriate Form W-8 or Form 8233 (see Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities).
Nonresident alien who becomes a resident alien. Generally, only a nonresident alien individual may use the terms of a tax
treaty to reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a “saving clause.” Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of
income even after the payee has otherwise become a U.S. resident alien for tax purposes.
If you are a U.S. resident alien who is relying on an exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax
on certain types of income, you must attach a statement to Form W-9 that specifies the following five items.
1. The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien.
2. The treaty article addressing the income.
3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions.
4. The type and amount of income that qualifies for the exemption from tax.
5. Sufficient facts to justify the exemption from tax under the terms of the treaty article.
Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship
income received by a Chinese student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the
first Protocol to the U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese student who qualifies for this exception
(under paragraph 2 of the first protocol) and is relying on this exception to claim an exemption from tax on his or her scholarship or fellowship income would attach to Form
W-9 a statement that includes the information described above to support that exemption.
If you are a nonresident alien or a foreign entity, give the requester the appropriate completed Form W-8 or Form 8233.
Backup Withholding
What is backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS 24% of such
payments. This is called “backup withholding.” Payments that may be subject to backup withholding include interest, tax-exempt interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, payments made in
settlement of payment card and third party network transactions, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding.
You will not be subject to backup withholding on payments you receive if you give the requester your correct TIN, make the proper certifications, and report all your
taxable interest and dividends on your tax return.
Payments you receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester,
2. You do not certify your TIN when required (see the instructions for
Part II for details),
3. The IRS tells the requester that you furnished an incorrect TIN,
4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable
interest and dividends only), or
5. You do not certify to the requester that you are not subject to backup withholding under 4 above (for reportable interest and dividend accounts opened after 1983
only).
Certain payees and payments are exempt from backup withholding. See Exempt payee code, later, and the separate
Instructions for the Requester of Form W-9 for more information.
Also see Special rules for partnerships, earlier.
What is FATCA Reporting?
The Foreign Account Tax Compliance Act (FATCA) requires a participating foreign financial institution to report all United States account holders that are specified United States
persons. Certain payees are exempt from FATCA reporting. See Exemption from FATCA reporting code, later, and the Instructions for the Requester of Form
W-9 for more information.
Updating Your Information
You must provide updated information to any person to whom you claimed to be an exempt payee if you are no longer an exempt payee and anticipate receiving reportable payments in the
future from this person. For example, you may need to provide updated information if you are a C corporation that elects to be an S corporation, or if you no longer are tax exempt. In addition, you must furnish a new Form W-9 if the name or TIN
changes for the account; for example, if the grantor of a grantor trust dies.
Penalties
Failure to furnish TIN. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure
unless your failure is due to reasonable cause and not to willful neglect.
Civil penalty for false information with respect to withholding. If you make a false statement with no reasonable basis that results in no
backup withholding, you are subject to a $500 penalty.
Form W-9 (Rev. 10-2018)
Page 3
Criminal penalty for falsifying information. Willfully falsifying certifications or affirmations may subject you to
criminal penalties including fines and/or imprisonment.
Misuse of TINs. If the requester discloses or uses TINs in violation of federal law, the requester may be subject to civil and
criminal penalties.
Specific Instructions
Line 1
You must enter one of the following on this line; do not leave this line blank. The name should match the name on your
tax return.
If this Form W-9 is for a joint account (other than an account maintained by a foreign financial institution (FFI)), list first, and then circle,
the name of the person or entity whose number you entered in
Part I of Form W-9. If you are providing Form W-9 to an FFI to document a joint account, each holder of the account that is a U.S. person must provide a Form W-9.
a. Individual. Generally, enter the name shown on your tax return. If you have
changed your last name without informing the Social Security Administration (SSA) of the name change, enter your first name, the last name as shown on your social security card, and your new last name.
Note: ITIN applicant: Enter your individual name as it was entered on your Form W-7 application, line 1a. This should also be
the same as the name you entered on the Form 1040/1040A/1040EZ you filed with your application.
b. Sole proprietor or single-member LLC. Enter your individual name as shown on your 1040/1040A/1040EZ on
line 1. You may enter your business, trade, or “doing business as” (DBA) name on line 2.
c. Partnership, LLC that is not a single-member LLC, C corporation, or S corporation. Enter the entity's name as shown on the
entity's tax return on line 1 and any business, trade, or DBA name on
line 2.
d. Other entities. Enter your name as shown on required U.S. federal tax documents on line 1. This name should match the name
shown on the charter or other legal document creating the entity. You may enter any business, trade, or DBA name on line 2.
e. Disregarded entity. For U.S. federal tax purposes, an entity that is disregarded as an entity separate from its owner is
treated as a “disregarded entity.” See Regulations section 301.7701-2(c)(2)(iii). Enter the owner's name on line 1. The name of the entity entered on line 1 should never be a disregarded entity. The name on line 1 should be the name shown on the
income tax return on which the income should be reported. For example, if a foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes has a single owner that is a U.S. person, the U.S. owner's name is required to be provided
on line 1. If
the direct owner of the entity is also a disregarded entity, enter the first owner that is not disregarded for federal tax purposes. Enter the disregarded entity's name on line 2,
“Business name/disregarded entity name.” If the owner of the disregarded entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a U.S. TIN.
Line 2
If you have a business name, trade name, DBA name, or disregarded entity name, you may enter it on line 2.
Line 3
Check the appropriate box on line 3 for the U.S. federal tax
classification of the person whose name is entered on line 1. Check only one box on line 3.
|
IF the entity/person on line 1 is a(n) . . .
|
THEN check the box for . . .
|
|
• Corporation
|
Corporation
|
|
• Individual
• Sole proprietorship, or
• Single-member limited liability company (LLC) owned by an individual and disregarded for U.S. federal tax purposes.
|
Individual/sole proprietor or single- member LLC
|
|
• LLC treated as a partnership for
U.S. federal tax purposes,
• LLC that has filed Form 8832 or
2553 to be taxed as a corporation, or
• LLC that is disregarded as an entity separate from its owner but the owner is another LLC that is
not disregarded for U.S. federal tax purposes.
|
Limited liability company and enter the appropriate tax classification. (P= Partnership; C= C corporation; or S= S corporation)
|
|
• Partnership
|
Partnership
|
|
• Trust/estate
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Trust/estate
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Line 4, Exemptions
If you are exempt from backup withholding and/or FATCA reporting, enter in the appropriate space on line 4 any code(s) that may apply to you.
Exempt payee code.
• Generally, individuals (including sole proprietors) are not exempt from backup withholding.
• Except as provided below, corporations are exempt from backup withholding for certain payments, including interest and dividends.
• Corporations are not exempt from backup withholding for payments made in settlement of payment card or third party network transactions.
• Corporations are not exempt from backup withholding with respect to attorneys’ fees or gross proceeds paid to attorneys, and corporations that provide medical or health care services
are not exempt with respect to payments reportable on Form 1099-MISC.
The following codes identify payees that are exempt from backup withholding. Enter the appropriate code in the space in line 4.
1—An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section
401(f)(2)
2—The United States or any of its agencies or instrumentalities
3—A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
4—A foreign government or any of its political subdivisions, agencies, or instrumentalities
5—A corporation
6—A dealer in securities or commodities required to register in the United States, the District of Columbia, or a U.S. commonwealth or possession
7—A futures commission merchant registered with the Commodity
Futures Trading Commission
8—A real estate investment trust
9—An entity registered at all times during the tax year under the
Investment Company Act of 1940
10—A common trust fund operated by a bank under section 584(a)
11—A financial institution
12—A middleman known in the investment community as a nominee or custodian
13—A trust exempt from tax under section 664 or described in section
4947
Form W-9 (Rev. 10-2018)
Page 4
The following chart shows types of payments that may be exempt from backup withholding. The chart applies to the exempt payees listed above, 1
through 13.
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IF the payment is for . . .
|
THEN the payment is exempt for . . .
|
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Interest and dividend payments
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All exempt payees except for 7
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Broker transactions
|
Exempt payees 1 through 4 and 6 through 11 and all C corporations. S corporations must not enter an exempt payee code because they are exempt only for sales of noncovered
securities acquired prior to 2012.
|
|
Barter exchange transactions and patronage dividends
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Exempt payees 1 through 4
|
|
Payments over $600 required to be reported and direct sales over
$5,0001
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Generally, exempt payees
1 through 52
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Payments made in settlement of payment card or third party network transactions
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Exempt payees 1 through 4
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1 See Form 1099-MISC, Miscellaneous Income, and its instructions.
2 However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding:
medical and health care payments, attorneys’ fees, gross proceeds paid to an attorney reportable under section 6045(f), and
payments for services paid by a federal executive agency.
Exemption from FATCA reporting code. The following codes identify payees that are exempt from reporting under FATCA. These
codes apply to persons submitting this form for accounts maintained outside of the United States by certain foreign financial institutions. Therefore, if you are only submitting this form for an account you hold in the United States, you may leave
this field blank. Consult with the person requesting this form if you are uncertain if the financial institution is subject to these requirements. A requester may indicate that a code is
not required by providing you with a Form W-9 with “Not Applicable” (or any similar indication) written or printed on the line for a FATCA exemption code.
A—An organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37)
B—The United States or any of its agencies or instrumentalities
C—A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
D—A corporation the stock of which is regularly traded on one or more established securities markets, as described in Regulations section
1.1472-1(c)(1)(i)
E—A corporation that is a member of the same expanded affiliated group as a corporation described in Regulations section 1.1472-1(c)(1)(i)
F—A dealer in securities, commodities, or derivative financial instruments (including notional principal contracts, futures, forwards, and
options) that is registered as such under the laws of the United States or any state
G—A real estate investment trust
H—A regulated investment company as defined in section 851 or an entity registered at all times during the tax year under the Investment Company
Act of 1940
I—A common trust fund as defined in section 584(a) J—A bank as defined in section 581
K—A broker
L—A trust exempt from tax under section 664 or described in section
4947(a)(1)
M—A tax exempt trust under a section 403(b) plan or section 457(g) plan
Note: You may wish to consult with the financial institution requesting this form to determine whether the FATCA code
and/or exempt payee code should be completed.
Line 5
Enter your address (number, street, and apartment or suite number). This is where the requester of this Form W-9 will mail your information returns. If this address differs from the
one the requester already has on file, write NEW at the top. If a new address is provided, there is still a chance the old address will be used until the payor changes your address in their records.
Line 6
Enter your city, state, and ZIP code.
Part I. Taxpayer Identification Number (TIN)
Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible to get an SSN, your TIN is your
IRS individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below.
If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN.
If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN (or EIN, if the owner has one). Do not enter the
disregarded entity’s EIN. If the LLC is classified as a corporation or partnership, enter the entity’s EIN.
Note: See What Name and Number To Give the Requester, later, for further clarification of name and TIN
combinations.
How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security
Card, from your local SSA office or get this form online at www.SSA.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to
apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/Businesses and clicking on
Employer Identification Number (EIN) under Starting a Business. Go to www.irs.gov/Forms to view, download, or print Form
W-7 and/or Form SS-4. Or, you can go to www.irs.gov/OrderForms to place an order and have Form W-7 and/or SS-4 mailed to you within 10 business days.
If you are asked to complete Form W-9 but do not have a TIN, apply for a TIN and write “Applied For” in the space for the TIN, sign and date the form, and give it to
the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you are subject to backup withholding on
payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester.
Note: Entering “Applied For” means that you have already applied for a
TIN or that you intend to apply for one soon.
Caution: A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8.
Part II. Certification
To establish to the withholding agent that you are a U.S. person, or resident alien, sign Form W-9. You may be requested to sign by the withholding agent even
if item 1, 4, or 5 below indicates otherwise.
For a joint account, only the person whose TIN is shown in Part I should sign (when required). In the case of a disregarded entity, the person identified on line 1
must sign. Exempt payees, see Exempt payee code, earlier.
Signature requirements. Complete the certification as indicated in items 1 through 5 below.
Form W-9 (Rev. 10-2018)
Page 5
1. Interest, dividend, and barter exchange accounts opened before 1984 and broker accounts considered active
during 1983. You must give your correct TIN, but you do not have to sign the certification.
2. Interest, dividend, broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during
1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing
your correct TIN to the requester, you must cross out item 2 in the certification before signing the form.
3. Real estate transactions. You must sign the certification. You may cross out item 2 of the certification.
4. Other payments. You must give your correct TIN, but you do not have to sign the certification unless you
have been notified that you have previously given an incorrect TIN. “Other payments” include payments made in the course of the requester’s trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care
services (including payments to corporations), payments to a nonemployee for services, payments made in settlement of payment card and third party network transactions, payments to certain fishing boat crew members and fishermen, and gross proceeds
paid to attorneys (including payments to corporations).
5. Mortgage interest paid by you, acquisition or abandonment of secured property, cancellation of debt, qualified tuition program
payments (under section 529), ABLE accounts (under section 529A), IRA, Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, but you do not have to sign the
certification.
What Name and Number To Give the Requester
|
For this type of account:
|
Give name and SSN of:
|
|
1. Individual
2. Two or more individuals (joint account) other than an account maintained by an FFI
3. Two or more U.S. persons
(joint account maintained by an FFI)
4. Custodial account of a minor
(Uniform Gift to Minors Act)
5. a. The usual revocable savings trust
(grantor is also trustee)
b. So-called trust account that is not a legal or valid trust under state law
6. Sole proprietorship or disregarded entity owned by an individual
7. Grantor trust filing under Optional Form 1099 Filing Method 1 (see Regulations section 1.671-4(b)(2)(i) (A))
|
The individual
The actual owner of the account or, if combined funds, the first individual on the account1
Each holder of the account
The minor2
The grantor-trustee1
The actual owner1
The owner3
The grantor*
|
|
For this type of account:
|
Give name and EIN of:
|
|
8. Disregarded entity not owned by an individual
9. A valid trust, estate, or pension trust
10. Corporation or LLC electing corporate status on Form 8832 or Form 2553
11. Association, club, religious, charitable, educational, or other tax- exempt organization
12. Partnership or multi-member LLC
13. A broker or registered nominee
|
The owner
Legal entity4
The corporation
The organization
The partnership
The broker or nominee
|
|
For this type of account:
|
Give name and EIN of:
|
|
14. Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that
receives agricultural program payments
15. Grantor trust filing under the Form
1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulations section 1.671-4(b)(2)(i)(B))
|
The public entity
The trust
|
1 List first and circle the name of the person whose number you furnish.
If only one person on a joint account has an SSN, that person’s number
must be furnished.
2 Circle the minor’s name and furnish the minor’s SSN.
3 You must show your individual name and you may also enter your business or DBA name on the “Business name/disregarded entity”
name line. You may use either your SSN or EIN (if you have one), but the
IRS encourages you to use your SSN.
4 List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself
is not designated in the account title.) Also see Special rules for partnerships, earlier.
*Note: The grantor also must provide a Form W-9 to trustee of trust.
Note: If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed.
Secure Your Tax Records From Identity Theft
Identity theft occurs when someone uses your personal information such as your name, SSN, or other identifying information, without your permission, to commit fraud or other crimes.
An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund.
To reduce your risk:
• Protect your SSN,
• Ensure your employer is protecting your SSN, and
• Be careful when choosing a tax preparer.
If your tax records are affected by identity theft and you receive a notice from the IRS, respond right away to the name and phone number printed on the IRS notice
or letter.
If your tax records are not currently affected by identity theft but you think you are at risk due to a lost or stolen purse or wallet, questionable credit card
activity or credit report, contact the IRS Identity Theft Hotline at 1-800-908-4490 or submit Form 14039.
For more information, see Pub. 5027, Identity Theft Information for Taxpayers.
Victims of identity theft who are experiencing economic harm or a systemic problem, or are seeking help in resolving tax problems that have not been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059.
Protect yourself from suspicious emails or phishing schemes. Phishing is the creation and use of email and websites designed to mimic legitimate business emails
and websites. The most common act is sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.
Form W-9 (Rev. 10-2018)
Page 6
The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email or
ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.
If you receive an unsolicited email claiming to be from the IRS, forward this message to phishing@irs.gov. You
may also report misuse of the IRS name, logo, or other IRS property to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484. You can forward suspicious emails to the Federal Trade Commission at spam@uce.gov or report them at www.ftc.gov/complaint. You can
contact the FTC at www.ftc.gov/idtheft or 877-IDTHEFT (877-438-4338). If you have been the victim of identity theft, see www.IdentityTheft.gov
and Pub. 5027.
Visit www.irs.gov/IdentityTheft to learn more about identity theft and how to reduce your risk.
Privacy Act Notice
Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to
report interest, dividends, or certain other income paid to you; mortgage interest you paid; the acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting
this form uses the information on the form to file information returns with the IRS, reporting the above information. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities,
states, the District of Columbia, and U.S. commonwealths and possessions for use in administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws,
or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or
not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to
the payer. Certain penalties may also apply for providing false or fraudulent information.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE.
-1-
VOLUNTARY CORPORATE ACTION, COY: CMU
Exhibit (a)(1)(iii)
OFFER BY
MFS® HIGH YIELD MUNICIPAL TRUST
TO PURCHASE FOR CASH UP TO 10% OF ITS OUTSTANDING COMMON SHARES OF BENEFICIAL INTEREST AT 98% OF NET ASSET VALUE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON NOVEMBER 6, 2023 (“EXPIRATION
DATE”), UNLESS EXTENDED
THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED, BUT IS SUBJECT TO OTHER CONDITIONS AS
OUTLINED IN THE TRUST’S OFFER TO PURCHASE AND IN THE LETTER OF TRANSMITTAL
October 6, 2023
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We are enclosing herewith the material listed below relating to the offer of MFS® High Yield Municipal Trust, a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended, as a closed-end, investment company (the “Fund”), to purchase up to 10% of its outstanding common shares of beneficial interest, (the “Shares”) upon the terms and subject to the
conditions set forth in its Offer to Purchase dated October 6, 2023 and in the related Letter of Transmittal (which together constitute the “Offer”). The price to be paid for the Shares is an amount per Share, net to the seller in cash, equal to 98%
of the net asset value per Share as determined by the Fund as of the close of ordinary trading on the New York Stock Exchange (“NYSE”) on November 6, 2023, or if the Offer period is extended, as of the close of ordinary trading on the NYSE on the
newly designated expiration date.
We are asking you to contact your clients for whom you hold Shares registered in your name (or in the name of your nominee) or who hold
Shares registered in their own names. Please bring the Offer to their attention as promptly as possible. No fees or commission will be payable to brokers, dealers or other persons for soliciting tenders for Shares pursuant to the Offer. The Fund
will, however, upon request, reimburse you for reasonable and customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. The Fund will pay all transfer taxes on its purchase of Shares,
subject to Section 5, “Acceptance for Payment and Payment” of the Offer to Purchase. However, backup withholding, income tax withholding at the source
or withholding under Sections 1471-1474 of the Internal Revenue Code of 1986, as amended, and the U.S. Treasury and IRS guidance issued thereunder (collectively, “FATCA”) may be required unless either an exemption is proved or the required taxpayer
identification information and certifications are provided. See Section 3, “Procedures for Tendering Common Shares,” of the Offer to Purchase.
For your information and for forwarding to your clients, we are enclosing the following documents:
| 1. |
The Offer to Purchase dated October 6, 2023;
|
| 2. |
The Letter of Transmittal for your use and to be provided to your clients; and
|
| 3. |
Form of letter to clients, which may be sent to your clients for whose accounts you hold Shares registered in your name (or in the name of your nominee).
|
The Offer is not being made to, nor will the Fund accept tenders from, holders of Shares in any State or other jurisdiction in which the
Offer would not be in compliance with the securities or Blue Sky laws of such jurisdiction. If you want to tender your Shares, but your certificates for the Shares are not immediately available or cannot be delivered to the Depositary, you cannot
comply with the procedure for book-entry transfer or you cannot deliver the other required documents to the Depositary by the Expiration Date, you will not be able to tender your Shares. This can occur, for example, if you purchased Shares at, or
within one or two days of, the Expiration Date, not allowing
1
sufficient time for such purchase transaction to settle. There are no guaranteed delivery procedures available under the terms of the
Offer as an alternative delivery mechanism.
As described in the Offer, if more than 10% of the Fund’s outstanding Shares are duly tendered prior to the Expiration Date, the Fund
will repurchase 10% of the Fund’s outstanding Shares on a pro rata basis upon the terms and subject to the conditions of the Offer.
NEITHER THE FUND, ITS BOARD OF TRUSTEES, OR MFS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER
ALL OR ANY SHARES.
Additional copies of the enclosed materials may be obtained from Georgeson LLC, the Information Agent at the appropriate address and
telephone number set forth in the Fund’s Offer to Purchase. Any questions you have with respect to the Offer should be directed to the Information Agent at its address and telephone numbers set forth in the Offer to Purchase.
Nothing contained herein or in the enclosed documents shall constitute you or any other person the agent of MFS® High
Yield Municipal Trust or the Depositary/Information Agent or authorize you or any other person to make any statements or use any material on their behalf with respect to the Offer, other than the material enclosed herewith and the statements
specifically set forth in such material.
2
Exhibit (a)(1)(iv)
OFFER BY
MFS® HIGH YIELD MUNICIPAL TRUST
TO PURCHASE FOR CASH UP TO 10% OF ITS OUTSTANDING COMMON SHARES OF BENEFICIAL INTEREST AT 98% OF NET ASSET VALUE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON NOVEMBER 6, 2023 (“EXPIRATION
DATE”), UNLESS EXTENDED
THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED, BUT IS SUBJECT TO OTHER CONDITIONS AS
SET FORTH IN THE OFFER
October 6, 2023
To Our Clients:
Enclosed for your consideration is the Offer to Purchase, dated October 6, 2023, of MFS® High Yield Municipal Trust, a
Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a closed-end management investment company (the “Fund”), and a related Letter of Transmittal (together, the “Offer”). The Fund is offering to purchase
up to 10% of its outstanding common shares of beneficial interest (the “Shares”), upon the terms and subject to the conditions set forth in the Offer.
A tender of your Shares can be made only
by us as the registered holder and only pursuant to your Instructions. The Offer to Purchase and the Letter of Transmittal are being sent to you for your information only. They cannot be used by you to tender Shares held by us for your
account. We are the registered holder of Shares held for your account.
Your attention is called to the following:
| (1) |
The purchase price to be paid for the Shares is an amount per Share, net to the seller in cash, equal to 98% of the net asset value per Share (the “NAV”) in U.S.
dollars per Share as determined by the Fund as of the close of ordinary trading on the New York Stock Exchange (“NYSE”) on November 6, 2023, or if the Offer period is extended, as of the close of ordinary trading on the NYSE on the newly
designated expiration date. The current NAV of the Fund will be calculated daily and may be obtained by calling Georgeson LLC, the Information Agent, toll free at (866) 541-3547.
|
| (2) |
The Offer is not conditioned upon any minimum number of Shares being tendered.
|
| (3) |
Upon the terms and subject to the conditions of the Offer, the Fund will purchase all Shares validly tendered (and not withdrawn) on or prior to the Expiration Date,
provided that the total number of Shares tendered does not exceed 10% of the Fund’s outstanding Shares. In the event that more than 10% of the Fund’s outstanding Shares are tendered, the Fund will purchase 10% of the Fund’s outstanding
Shares on a pro rata basis.
|
| (4) |
The Fund will pay all transfer taxes on its purchase of Shares, subject to Section 5, “Acceptance for Payment and Payment” of the Offer to Purchase.
|
| (5) |
Your instructions to us should be forwarded in ample time before the Expiration Date to permit us to submit a tender on your behalf.
|
If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing and returning to us the
instruction form set forth below. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified below. Your
instructions to us should be forwarded as promptly as possible
1
in order to permit us to submit a tender on your behalf in accordance with the terms and conditions of the Offer.
The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the
making or acceptance of the Offer would not be in compliance with applicable law.
Neither the Fund, its Board of Trustees, or MFS is making any recommendation to any shareholder whether to tender or
refrain from tendering Shares in the Offer. Each shareholder is urged to read and evaluate the Offer and accompanying materials carefully.
2
INSTRUCTIONS
The undersigned acknowledge(s) receipt of our letter, the enclosed Offer to Purchase dated October 6, 2023, and the Letter of
Transmittal, relating to the Fund’s offer to purchase up to 10% of its outstanding Shares at 98% of the NAV.
The undersigned instructs us to tender to the Fund the number of Shares indicated below (which are held by us for the account of the
undersigned), upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal that we have furnished to the undersigned.
AGGREGATE NUMBER OF SHARES TO BE TENDERED:
☐ All Shares held for the undersigned;
Or
☐ ________ Shares (Enter number of Shares to be tendered).
PLEASE SIGN HERE
Dated: ________, 2023
Name(s):
(please print)
Address:
City State Zip Code
Area Code and Telephone Number:
Employer Identification or Social Security Number:
3
Exhibit (a)(1)(v)
Instructions for Withdrawal
of
Previously Tendered Common Shares of Beneficial Interest
of
MFS® High Yield Municipal Trust
of
Previously Tendered Common Shares of Beneficial Interest
of
MFS® High Yield Municipal Trust
If you tendered to MFS® High Yield Municipal Trust, a Massachusetts business trust registered under the Investment
Company Act of 1940, as amended, as a closed-end management investment company (the “Fund”), in connection with the offer by the Fund to purchase for cash up to 10% of its outstanding common shares of beneficial interest (the “Shares”), upon the
terms and subject to the conditions set forth in the Offer to Purchase dated October 6, 2023 and the related Letter of Transmittal (together, the “Offer”), and you wish to withdraw your tender of all or any of your Shares, please fill out the
attached Notice of Withdrawal. If your Shares are registered in the name of your broker, dealer, commercial bank, trust company or other nominee (“Nominee Holder”), contact that Nominee Holder to withdraw your tendered Shares.
1. Withdrawal. If you have tendered your Shares pursuant to
the Offer, you may withdraw your Shares previously tendered by completing, executing and sending the attached “Notice of Withdrawal” to any one of the addresses set forth on the first page of the Notice of Withdrawal. If your Shares are registered
in the name of your broker or other Nominee Holder, contact that Nominee Holder to withdraw your tendered Shares.
2. Delivery of Notice of Withdrawal. Computershare Trust
Company, N.A. (the “Depositary”) must receive the Notice of Withdrawal prior to 5:00 p.m., Eastern Standard Time, on November 6, 2023 (the “Expiration Date”), or if the Offer period is extended, by the close of ordinary trading on the NYSE on the
newly designated expiration date. The method of delivery of any documents related to a withdrawal is at the option and risk of the withdrawing holder of Shares. Any documents related to a withdrawal will be deemed delivered only when actually
received by the Depositary. In all cases, sufficient time should be allowed to ensure timely delivery. If your Shares are registered in the name of your broker or other Nominee Holder, you may need to allow such Nominee Holder additional time to
withdraw your tendered Shares on or before the Expiration Date. You should consult your broker or other Nominee Holder to determine if there is an earlier deadline by which you must inform such Nominee Holder of any decision to withdraw your
tendered Shares.
3. Procedures and Signature Guarantee. The Notice of
Withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of Shares, if different from that of the person who tendered such Shares. If the
Shares to be withdrawn have been delivered to the Depositary, the name of the registered holder and the serial numbers of the particular certificates evidencing the Shares withdrawn must also be furnished to the Depositary and the signature on the
Notice of Withdrawal must be affixed with a medallion guarantee stamp guaranteed by an Eligible Guarantor (as defined in the Offer to Purchase). If Shares have been delivered pursuant to the book-entry delivery procedure (as set forth in Section 3
of the Offer to Purchase), any Notice of Withdrawal must specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn Shares (which must be the same name, number, and book-entry transfer facility
from which the Shares were tendered), and must comply with the procedures of The Depository Trust Company. If this Notice of Withdrawal is signed by trustees, executors, administrators, guardians, agents, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, should indicate location of signing and must submit proper evidence satisfactory to the Depositary of their authority to so act.
-1-
VOLUNTARY CORPORATE ACTIONS, COY: CMU
NOTICE OF WITHDRAWAL
of Common Shares of Beneficial Interest
of
MFS® High Yield Municipal Trust
Previously Tendered
Pursuant to the Offer to Purchase Dated October 6, 2023
THE WITHDRAWAL DEADLINE IS 5:00 P.M., EASTERN STANDARD TIME,
ON NOVEMBER 6, 2023, UNLESS EXTENDED
ON NOVEMBER 6, 2023, UNLESS EXTENDED
This Notice of Withdrawal is Submitted to:
|
By First Class, Registered or Certified Mail:
|
By Express or Overnight Delivery:
|
|
Computershare Trust Company N.A.
c/o Voluntary Corporate Actions; COY: CMU PO Box 43011 Providence, RI 02940-3011 |
Computershare Trust Company N.A.
c/o Voluntary Corporate Actions; COY: CMU 150 Royall Street, Suite V Canton, MA 02021 |
|
DESCRIPTION OF SHARES WITHDRAWN*
|
|
|
Name(s) and Address(es) of Registered Holder(s) (Please fill in, if blank, exactly as name(s) appear(s) on your Letter of
Transmittal
|
Shares Withdrawn**
(Please check appropriate box below)
|
|
1. All☐
2. Partial☐
Number of Shares Withdrawn:
|
|
|
* Need not be completed by holders of Shares withdrawing by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares held in Direct Registration System, including any Shares held in the Fund’s distribution reinvestment
plan, are being withdrawn.
|
|
This Notice of Withdrawal is to be completed if you tendered common shares of beneficial interest (the “Shares”), of MFS® High Yield
Municipal Trust, a Massachusetts business trust, in connection with its offer to purchase for cash up to 10% of its outstanding Shares and wish to withdraw some or all of the Shares tendered.
Signatures are required on the next page.
-2-
VOLUNTARY CORPORATE ACTIONS, COY: CMU
NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
NOTICE OF WITHDRAWAL CAREFULLY.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
NOTICE OF WITHDRAWAL CAREFULLY.
Signature(s) of Owner(s):
Date: , 2023
Printed Names:
Capacity and Location Signed:
Address:
Guarantee of
Signature(s)
(Required if Shares have been delivered to the Depositary)
[For use by financial institutions only. Place medallion guarantee in space below.]
(Required if Shares have been delivered to the Depositary)
[For use by financial institutions only. Place medallion guarantee in space below.]
-3-
VOLUNTARY CORPORATE ACTIONS, COY: CMU
Exhibit (a)(5)(iii)
For Immediate
Release Media contacts: Dan Flaherty, +1 617.954.4256
For shareholders/advisors: Jeffrey Schwarz, +1 617.954.5872
MFS HIGH YIELD MUNICIPAL TRUST COMMENCES TENDER OFFER
BOSTON (October 6, 2023) – MFS® High Yield Municipal Trust (the “Fund”) (NYSE: CMU) today commenced a cash tender offer for the Fund’s common shares. The Fund is offering to purchase up to 10% of the Fund’s
outstanding common shares (the “Shares”) at a price per Share equal to 98% of the Fund’s net asset value (“NAV”) per Share calculated as of the close of regular trading on the New York Stock Exchange on the date the offer expires. The tender offer will
expire at 5:00 P.M., Eastern Standard Time on November 6, 2023, unless extended. The pricing date will also be November 6, 2023, unless the tender offer is extended. If the number of shares tendered exceeds the maximum amount of the offer, the Fund
will purchase shares from tendering shareholders on a pro rata basis.
The tender offer is being made on the terms and subject to the conditions set forth in the Fund’s tender offer statement on Schedule TO (including an offer to purchase, a related letter of transmittal and other offer documents) that have been filed
with the U.S. Securities and Exchange Commission (the “SEC”). All of these documents contain important information about the tender offer. Shareholders of the Fund are urged to read them carefully before any decision is made with respect to the offer.
Shareholders of the Fund can obtain a free copy of each of these documents at the SEC’s website at www.sec.gov or from the Fund by calling Georgeson LLC, the Fund’s information agent for the tender offer, at 1-866-541-3547. This press release is not a
recommendation, an offer to purchase, or a solicitation of an offer to sell shares of the Fund and is not a prospectus, circular or representation intended for use in the purchase or sale of Fund shares.
About the Fund
The Fund is a closed-end investment company product advised by MFS Investment Management. Closed end funds, unlike open-end funds, are not continuously offered. Except pursuant to a Tender Offer, common shares of the Fund are only available for
purchase/sale on the NYSE at the current market price. Shares may trade at a discount to NAV. Shares of the Fund are not FDIC-insured and are not deposits or other obligations of, or guaranteed by, any bank. Shares of the Fund involve investment risk,
including possible loss of principal. For more complete information about the Fund, including risks, charges, and expenses, please see the Fund's annual and semi-annual shareholder reports or contact your financial adviser.
About MFS Investment Management
In 1924, MFS launched the first U.S. open-end mutual fund, opening the door to the markets for millions of everyday investors. Today, as a full-service global investment manager serving financial advisors, intermediaries, and institutional clients,
MFS still serves a single purpose: to create long-term value for clients by allocating capital responsibly. That takes our powerful investment approach combining collective expertise, thoughtful risk management and long-term discipline. Supported by
our culture of shared values and collaboration, our teams of diverse thinkers actively debate ideas and assess material risks to uncover what we believe are the best investment opportunities in the market. As of September 30, 2023, MFS manages $555.9
billion in assets on behalf of individual and institutional investors worldwide. Please visit mfs.com for more information.
MFS Investment Management 111 Huntington Ave., Boston, MA 02199
# # #
Exhibit (d)
TENDER OFFER AND STANDSTILL AGREEMENT
This Tender Offer and Standstill Agreement (the “Agreement”) is made and entered into effective as of the 23th day of August 2023, by and among MFS High Yield
Municipal Trust (“CMU” or the “Fund”) and Massachusetts Financial Services Company (“MFS” and, together with CMU, the “Fund Parties”), each having its principal place of business at 111 Huntington Avenue, Boston, MA 02199, and Bulldog Investors, LLP,
d/b/a Bulldog Investors, having its principal place of business at 250 Pehle Avenue, Saddle Brook, NJ 07663, and its employees and “affiliated persons” (as that term is defined in the Investment Company Act of 1940) (collectively “Bulldog”) (the Fund
Parties and Bulldog are each referred to as a “Party” and, collectively, the “Parties”), on behalf of Special Opportunities Fund and any other clients of Bulldog which have an interest in the Fund (or may have an interest in the Fund for the duration
of this Agreement) and for which Bulldog has discretionary authority to act on their behalf.
WHEREAS, MFS is a registered investment adviser that acts as investment adviser to the Fund;
WHEREAS, on July 10, 2023, Bulldog, on behalf of Special Opportunities Fund, provided notice to the Fund of its intention to submit shareholder proposals (the “Bulldog Proposals”)
for consideration at the Fund’s annual meeting of shareholders to be held in 2023, requesting that the Fund’s shareholders vote (i) to elect Bulldog nominees, Messrs. Paul Poole and Jake Pampinella, as Trustees of the Fund and (ii) to approve a
non-binding proposal that the Board of Trustees of the Fund consider authorizing a liquidity event that will allow shareholders to monetize a significant percentage of their shares at or close to the Fund’s net asset value (“NAV”);
WHEREAS, MFS and Bulldog have engaged in discussions regarding the Bulldog Proposals and possible alternatives (the “Discussions”) and entered into a separate
letter agreement dated August 2, 2023, as amended on August 10, 2023 (the “Confidentiality Letter Agreement”), regarding confidentiality obligations with respect to the Discussions (and MFS has discussed the results of the Discussions with the Fund’s
Board of Trustees); and
WHEREAS, the Parties wish to resolve matters concerning the Bulldog Proposals pursuant to the terms hereof;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
1. Tender Offers. Subject to the satisfaction of Section 2 below, the Fund Parties agree:
(a) The Fund shall conduct a cash tender offer (the “Tender Offer”) pursuant to the requirements of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the "Exchange Act"), for up to 10% of the Fund’s then outstanding common shares (the “Shares”) at a price equal to 98% of the NAV of the Shares as of the close of ordinary
trading on the New York Stock Exchange (“NYSE”) on the date the Tender Offer expires. The Tender Offer will be subject only to the conditions set forth herein and in Appendix A hereto, which do not include conditions as to any particular
number of Shares being tendered or the discount to NAV at which the Fund’s Shares have traded. The Fund will use its best efforts to complete the Tender Offer as soon as practicable but no later than before December 31, 2023.
(b) The Fund shall purchase up to 10% of the Shares tendered and not withdrawn during the Tender Offer on a prorated basis if more than 10% of the Shares are properly tendered and
not properly withdrawn. The consideration to be paid by the Fund for Shares under the Tender Offer shall consist solely of cash.
(c) The Board of Trustees of the Fund shall approve, and recommend that shareholders of the Fund approve at the Fund’s 2025 annual shareholder meeting, a proposal concerning a
liquidity event for the Fund (the “Liquidity Event”), unless the Average Trading Discount (as defined below) of the Shares is equal to or less than 7.50% for the entirety of a Trigger Period (as defined below), at which point such proposal for the
Liquidity Event shall not be required. For avoidance of doubt, if the Average Trading Discount of the Shares is equal to or less than 7.50% for the entirety of a Trigger Period, this Section 1(c) will not require any further action by the Fund’s
Board of Trustees, the Fund or MFS.
“Trigger Period” means any consecutive 30 calendar day period occurring between the date that the Tender Offer is completed and July 15, 2025. Each Trigger Period shall commence
as of 12:01 a.m. EST on the first calendar day and shall end as of 11:59 p.m. EST on the 30th calendar day of such period.
“Average Trading Discount” means the simple average of the trading discounts (and premiums, as the case may be) of the Shares on each day the NYSE is open for trading (each a “Business Day”) during a
Trigger Period, with the trading discount (or premium) on each Business Day equal to the percentage difference between the NAV of the Shares and the trading price of the Shares as of the close of regular trading on the NYSE on such Business Day (the
“closing price”), with a trading price below NAV expressed as a positive percentage (i.e., percentage discount) and a trading price above NAV as a negative percentage (i.e.,
percentage premium).1 The Trust shall perform such calculations as soon as practicable after each Business Day during a Trigger Period in good faith and on a consistent basis using the Fund’s published daily NAV calculations and the
closing price of the Shares as published by Bloomberg.
1 For example, if the closing price of the Shares is $6 and the NAV $8 on a Business Day, and the closing price of the Shares is $11 and the NAV $10 on the next Business Day, the Average Trading Discount for those two Business Days
would be 7.5%, which is the simple average of a 25% discount on the first Business Day and a 10% premium (-10%) on the second Business Day.
For the avoidance of doubt, nothing precludes the Board from taking action regarding the Fund prior to the 2025 annual shareholder meeting in accordance with its fiduciary duty to the Fund.
2. Bulldog Obligations. Upon public announcement by the Fund of its intention to conduct the Tender Offer (the “Announcement”), a copy of which is attached hereto as Appendix B:
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a)
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Bulldog shall immediately withdraw the Bulldog Proposals and shall not submit any additional proposal or nominees for Trustees in connection with the Fund’s 2023 annual
shareholder meeting or any adjournments or postponements thereof.
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b)
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Bulldog shall, from the time of the Announcement through the Release Date (as defined below):
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(i) refrain from directly or indirectly making, supporting or encouraging any shareholder proposals (including proposing
any nominees for election) concerning the Fund; (ii) vote in accordance with the recommendations of the Board of Trustees of the Fund on nominees for election as Trustees of the Fund; (iii) vote in accordance with the recommendations of the Board of Trustees on any other matters affecting the Fund provided that Bulldog reasonably determines that voting in accordance with such recommendations does not violate any
legal requirements; (iv) refrain from directly or indirectly soliciting or encouraging others to vote against the recommendations of the Board of Trustees on any matters affecting the Fund; (vii) refrain from granting a proxy with respect to Shares of the Fund other than to officers of, or other persons named as proxies by, the Fund; (viii) refrain from
executing any written consent with respect to the Shares of the Fund other than as may be solicited by the Fund; (ix) refrain from joining or participating in a group concerning the Fund; (x) refrain from seeking the removal of any member of the Board of Trustees of the Fund; (xi) refrain from seeking control or influence over the management or policies of
the Fund; and (xii) refrain from publicly disclosing any intention, plan, proposal or arrangement or other matter inconsistent with its obligations under this subparagraph 2(b). Notwithstanding anything to
the contrary in this Section 2(b), any investment company that is advised by Bulldog or its affiliates shall vote its shares of the Fund to the extent it would be required by one of the methods prescribed in Section 12(d)(1) of the Investment Company
Act 1940.
For the purposes of this Agreement and subject to the foregoing, the “Release Date” will be the earliest of the following: (a) the day after the date of
completion of the Fund’s 2025 annual meeting of shareholders (or special meeting held in lieu thereof), including any adjournments or postponements thereof, or (b) such other date as the parties may agree in writing.
3. No Disparagement. From the time of the Announcement until the Release Date, each Party hereto shall refrain from directly or indirectly disparaging or impugning the integrity or reputation of the other
Party, its partners, members, directors, officers, employees or affiliates, or any members of the Board of Trustees of the Fund with respect any matters affecting the Fund. The foregoing shall not apply to any compelled testimony or production of
information, either by legal process, subpoena, or as part of a response to a request for information from any governmental authority with jurisdiction over the party from whom information is sought.
4. Confidentiality. Subject to the second sentence of this Section 4, MFS and Bulldog hereby agree to and do hereby extend the term of the Confidentiality Letter Agreement until the Announcement. For the
avoidance of doubt, the Parties acknowledge that Bulldog will be required to file a copy of this Agreement on an amendment to Schedule 13D (to be filed with the SEC no later than two business days from the date of this Agreement), and the Fund will
be required to file a copy of this Agreement with its Form TO filings in connection with the Tender Offer.
5. No Assignment. This Agreement shall be binding upon the Parties and their respective legal successors and permitted assigns. No Party may assign this Agreement without the prior written consent of the
other Party and any such attempted assignment shall be void.
6. Applicable Law and Jurisdiction. The validity of this Agreement, the construction and enforcement of its terms, and the interpretations of the rights and duties of the parties shall be governed by the
laws of the State of New York, without regard to conflicts of law rules. The parties hereto agree that the proper forum for any legal controversy arising in connection with this Agreement shall be a state or federal court in New York, New York,
and the parties hereby consent to the exclusive jurisdiction of such court for such purposes. To the fullest extent permitted by applicable law, each of the parties hereto hereby irrevocably waives any and all right to trial by jury in any suit,
action or proceeding arising under this Agreement.
8. Injunctive Relief. Each Party acknowledges that a breach of its obligations under this Agreement may result in irreparable harm to the other Party for which monetary damages will not be sufficient.
Each Party hereto agrees that, in the event of a breach or threatened breach by the other Party of its obligations under this Agreement, the non-breaching Party shall be entitled, in addition to its other rights and remedies hereunder or at law, to
seek injunctive or other equitable relief, including specific performance, as applicable, and such further relief as may be proper from a court of competent jurisdiction.
9. Modification. No modification, amendment, supplement to or waiver of this Agreement of any of its provisions or Appendices shall be binding upon the Parties hereto unless made in writing and duly signed
by all Parties.
10. Invalidity.
In the event that any one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal, or unenforceable, the remaining provisions of this Agreement shall be unimpaired, and the invalid, illegal or unenforceable
provision shall be replaced by a mutually acceptable provision, which being valid, legal and enforceable, comes closest to the economic effect and intent of the Parties underlying
the invalid, illegal or unenforceable provision.
11. No Waiver. A waiver of a breach or default under this Agreement shall not be a waiver of any other or subsequent breach or default. The failure or delay in enforcing compliance with any term or condition
of this Agreement shall not constitute a waiver of such term or condition unless such term or condition is expressly waived in writing.
12. Counterparts. This Agreement may be executed in counterparts, either manually or by electronic or digital signature (including by facsimile or electronic mail transmission in pdf format) and each counterpart shall have the
effect of an original.
13. Term and Termination. This Agreement shall remain in effect until the earliest of the following: (a) the day after the date of completion of the Fund’s 2025 annual meeting of shareholders (or special meeting held in lieu
thereof), including any adjournments or postponements thereof, or (b) such other date as the parties may agree in writing.
13. Entire Agreement. This Agreement and any other written agreement entered into by the Parties on or after the date of this Agreement shall constitute the entire Agreement among the Parties and shall
supersede all previous agreements, promises, proposals, representations, understandings and negotiations, whether written or oral, among the Parties respecting the subject matter hereof.
14. Massachusetts Business Trust Matters. A copy of the Agreement and Declaration of Trust of the Fund is on file with the Secretary of State of The Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed on behalf of the Trustees of the Fund as Trustees and not in their individual capacity and that the obligations of the Fund under this instrument are not binding upon any of the Trustees, officers or shareholders of
the Fund in their individual capacity, but are binding only upon the assets and property of the Fund.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement of the day, month, and year first above written.
| BULLDOG INVESTORS, LLP |
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
|
By:__ PHILLIP GOLDSTEIN____ By:___Heidi Hardin___________________
Name:__Phillip Goldstein_______ Name:__Heidi W. Hardin______________
Title:________Partner__________ Title: Executive Vice President,_________
General Counsel and Secretary_____
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MFS HIGH YIELD MUNICIPAL TRUST
By:_____DAVID L. DILORENZO
Name:___David L. DiLorenzo
Title:_____President
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APPENDIX A
TENDER OFFER CONDITIONS:
It is a condition of the Tender Offer that the Fund cannot accept tenders or effect repurchases, unless otherwise determined by the Fund’s Board of Trustees, if: (1) such transactions, if
consummated, would (a) result in delisting of the Fund’s Shares from the NYSE (the NYSE Listed Company Manual provides, among other things, that the NYSE would promptly initiate suspension and delisting procedures with respect to a closed-end fund
if the total market value of publicly held shares and net assets of the fund over sixty consecutive trading days are each below $5,000,000); (b) cause the Fund to fail to qualify and to be treated as a regulated investment company under the
Internal Revenue Code of 1986 (which would subject the Fund to tax on its taxable income at corporate rates, and cause all distributions from earnings and profits, including any distributions of net tax-exempt income and net long-term capital
gains, to be taxable to stockholders as ordinary income); or (c) result in a failure to comply with the applicable asset coverage or leverage ratio requirements applicable to the Remarketable Variable Rate MuniFund Term Preferred Shares of the Fund
that are issued and outstanding; (2) there is any (a) in the Board of Trustees’ reasonable judgment, material legal action or proceeding instituted or threatened challenging such transactions or otherwise materially adversely affecting the Fund;
(b) suspension of or limitation on prices for trading securities generally on the NYSE or other national securities exchange(s), or the National Association of Securities Dealers Automated Quotation System (“NASDAQ”) National Market System; (c)
declaration of a banking moratorium by Federal or state authorities or any suspension of payment by banks in the United States or New York State or (d) a new limitation affecting the Fund or the issuers of its portfolio securities imposed by
Federal or state authorities on the extension of credit by lending institutions; or (3) the Board of Trustees determines in good faith, upon written advice of counsel, that effecting any such transaction would constitute a breach of their fiduciary
duty owed to the Fund or its shareholders. For the avoidance of doubt, Bulldog’s obligations under the Agreement shall terminate if the Tender Offer is not completed for any reason set forth in this Appendix A.
APPENDIX B
For Immediate Release
Media contacts: Dan Flaherty, +1 617.954.4256
For shareholders/advisors: Jeffrey Schwarz, +1 617.954.5872
MFS HIGH YIELD MUNICIPAL TRUST ANNOUNCES TENDER OFFER
BOSTON (August 25, 2023) – MFS Investment Management® (MFS®) announced today that the Board of Trustees (the "Board") of MFS High Yield
Municipal Trust (the "Fund") (NYSE: CMU), a closed-end management investment company, authorized the Fund to conduct a cash tender offer (the "Tender Offer") for up to 10% of the Fund’s outstanding common shares (the “Shares”) at a price per Share
equal to 98% of the Fund’s net asset value (“NAV”) per Share as of the close of regular trading on the New York Stock Exchange (“NYSE”) on the date the Tender Offer expires. The Fund expects to commence the Tender Offer on or before October 6, 2023.
As of July 31, 2023, the Fund had 28,325,314 shares of common stock outstanding, 700 shares of preferred stock outstanding, and total net assets of $105.4 million (not including preferred shares).
The Board approved the recommendation of MFS, the Fund's investment adviser, to authorize the Tender Offer as part of an agreement with a large shareholder of the Fund, who had provided notice of its intention to propose
two nominees of its own choosing for election as trustees to the Board and to ask shareholders to approve a non-binding proposal asking the Board to authorize a liquidity event for the Shares at the Fund’s 2023 annual meeting of shareholders. As
part of this agreement, the large shareholder has withdrawn its proposals from consideration at the Fund’s 2023 annual meeting of shareholders and has undertaken certain obligations until the Fund’s 2025 annual meeting of shareholders. In addition,
pursuant to the agreement, the Board has agreed to propose that shareholders of the Fund approve a proposal for a liquidity event at the Fund’s 2025 annual meeting of shareholders, unless the average trading discount of the Shares is equal to or less
than 7.50% for the entirety of any consecutive 30 calendar day period between the expiration date of the Tender Offer and July 15, 2025.
Additional terms and conditions of the Tender Offer will be set forth in the Fund's offering materials filed with the U.S. Securities and Exchange Commission (the “SEC”). If the number of Shares tendered exceeds the
maximum amount of the Tender Offer, the Fund will purchase shares from tendering shareholders on a pro-rata basis. Accordingly, there is no assurance that the Fund will purchase all of a shareholder's tendered common shares. The Fund may determine
not to accept shares tendered in the Tender Offer under various circumstances, as will be set forth in the offering materials.
Further information about the Tender Offer will be announced by future press releases and the Fund’s offering materials. This announcement is for informational purposes only and is not a recommendation, an offer to
purchase, or a solicitation of an offer to sell shares of the Fund and is not a prospectus, circular or representation intended for use in the purchase or sale of Fund
shares. The Fund has not yet commenced the Tender Offer described in this release. A Tender Offer will be made only by an offer to purchase, a related letter of transmittal, and other documents that will be filed with
the SEC as exhibits to a tender offer statement on Schedule TO and will be available free of charge at the SEC's website at www.sec.gov. Shareholders should read the applicable offer to purchase and tender offer statement on Schedule TO and
related exhibits if and when those documents are filed and become available, as they will contain important information about the particular Tender Offer. The Fund will also make available, without charge, the offer to purchase and the letter of
transmittal for the Tender Offer that is conducted.
Cautionary Statement Regarding Forward-Looking Statements
This press release may contain statements regarding plans and expectations for the future that constitute forward-looking statements within The Private Securities Litigation Reform Act of 1995. All statements other than
statements of historical fact are forward-looking and can be identified by the use of words such as "may," "will," "expect," "anticipate," "estimate," "believe," "continue," or other similar words. Such forward-looking statements are based on the
Fund's current plans and expectations, are not guarantees of future results or performance, and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. All
forward-looking statements are as of the date of this release only; the Fund undertakes no obligation to update or review any forward-looking statements. You are urged to carefully consider all such factors.
About the Fund
The Fund is a closed-end investment company product advised by MFS Investment Management. Closed end funds, unlike open end funds, are not continuously offered. Except pursuant to a Tender Offer, common shares of the
Fund are only available for purchase/sale on the NYSE at the current market price. Shares may trade at a discount to NAV. Shares of the Fund are not FDIC-insured and are not deposits or other obligations of, or guaranteed by, any bank. Shares of
the Fund involve investment risk, including possible loss of principal. For more complete information about the Fund, including risks, charges, and expenses, please see the Fund's annual and semi-annual shareholder reports or contact your
financial adviser.
About MFS Investment Management
In 1924, MFS launched the first U.S. open end mutual fund, opening the door to the markets for millions of everyday investors. Today, as a full-service global investment manager serving financial advisors,
intermediaries, and institutional clients, MFS still serves a single purpose: to create long-term value for clients by allocating capital responsibly. That takes our powerful investment approach combining collective expertise, thoughtful risk
management and long-term discipline. Supported by our culture of shared values and collaboration, our teams of diverse thinkers actively debate ideas and assess material risks to uncover what we believe are the best investment opportunities in the
market. As of July 31, 2023, MFS manages $598.6 billion in assets on behalf of individual and institutional investors worldwide. Please visit mfs.com for more information.
MFS Investment Management
111 Huntington Ave., Boston, MA 02199
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