DEFA14A: ISS Rejects Saba's Proposals to Terminate BlackRock as Investment Adviser for Several Closed-End Funds

Institutional Shareholder Services (ISS) recommends shareholders vote against Saba Capital Management's proposals to terminate BlackRock as investment adviser for multiple closed-end funds and supports BlackRock's board nominees.

Summary

• Institutional Shareholder Services (ISS), a leading independent proxy advisory firm, has issued reports recommending shareholders vote against Saba Capital Management's proposals to terminate BlackRock as investment adviser for several closed-end funds.
• ISS supports BlackRock's board nominees at BCAT, BMEZ, BNY, and MPA.
• The recommendations cover funds including BlackRock Capital Allocation Term Trust (BCAT), BlackRock California Municipal Income Trust (BFZ), BlackRock Innovation and Growth Term Trust (BIGZ), BlackRock Health Sciences Term Trust (BMEZ), BlackRock Science and Technology Term Trust (BSTZ), and BlackRock ESG Capital Allocation Term Trust (ECAT).
• ISS also supports board nominee Arthur Steinmetz at both BlackRock MuniHoldings New York Quality Fund, Inc. (MHN) and BlackRock MuniYield New York Quality Fund, Inc. (MYN).
• BlackRock highlights enhancements across its closed-end fund complex, including discount management programs, distribution increases, and fee waivers, providing $2.9 billion in liquidity.

Sentiment

Score: 7

Explanation: The document presents a positive outlook due to ISS's support for BlackRock's management and board nominees, as well as the implemented enhancements. However, the disagreement on certain nominees and the inherent risks associated with forward-looking statements temper the overall sentiment.

Positives

• ISS support validates BlackRock's management of the listed funds.
• ISS recognizes the board's track record of stewardship and commitment to shareholders.
• BlackRock's enhancements, including discount management programs and fee waivers, are viewed positively.
• ISS acknowledges improvements in fund returns and discount narrowing for some funds.

Negatives

• ISS did not support BlackRock's nominees at BIGZ and ECAT.
• The potential lack of independence of Saba's nominees is noted, although BlackRock disagrees with ISS's conclusions on BIGZ and ECAT.

Risks

• Changes and volatility in political, economic, or industry conditions could impact the funds.
• The relative and absolute investment performance of the funds is a risk factor.
• Increased competition could affect the funds.
• Unfavorable resolution of legal proceedings could pose a risk.
• Technological changes could have an impact.
• Legislative and regulatory actions could affect the funds.
• Terrorist activities, international hostilities, health epidemics, and natural disasters could adversely affect the economy and markets.
• BlackRock's ability to attract and retain talent is a risk.
• Problems at other financial institutions could have an impact.

Future Outlook

The press release contains forward-looking statements regarding BlackRock's and the funds' future financial or business performance, strategies, or expectations, which are subject to numerous assumptions, risks, and uncertainties.

Management Comments

• R. Glenn Hubbard, Chair of the Boards of BlackRock Closed-End Funds, stated that the ISS recommendations speak to BlackRock's depth of investment experience and the Boards track record of stewardship.
• Hubbard added that the nominees have demonstrated they are the right stewards to represent all shareholders.

Industry Context

This announcement reflects the ongoing engagement between activist investors like Saba Capital and large asset managers like BlackRock regarding the management and performance of closed-end funds. Proxy advisory firms like ISS play a crucial role in influencing shareholder voting decisions.

Comparison to Industry Standards

• The document references Liberty All-Star Growth Fund, Inc. (ASG) when comparing BIGZ's distribution rate.
• The document mentions that BCAT trades at a narrower discount to NAV than peers.
• ECAT has improved returns, such that TSR since inception is now better than peers, and has narrowed the NAV discount, bringing the measure in line with peers.

Stakeholder Impact

• Shareholders are impacted by the recommendations on how to vote on the proposals and nominees.
• The outcome of the votes will affect the management and direction of the funds, impacting shareholder value.
• BlackRock's reputation and management of the funds are directly affected by the ISS recommendations and shareholder votes.

Next Steps

• Shareholders are encouraged to vote using the WHITE proxy card.
• Shareholders are advised to check BlackRock's website for updated performance information.

Key Dates

Keywords

BlackRock, Saba Capital, ISS, proxy, closed-end funds, investment adviser, board nominees, BCAT, BMEZ, BFZ, BIGZ, BSTZ, ECAT, BNY, MPA, MHN, MYN