DEFA14A: BlackRock Receives Support from Glass Lewis in Proxy Fight Against Saba Capital

Glass Lewis recommends shareholders vote for BlackRock's board nominees and against Saba Capital's proposals to terminate BlackRock as investment adviser for ten closed-end funds.

Summary

• BlackRock announced that Glass Lewis has recommended shareholders vote for BlackRock's board nominees and against Saba Capital's proposals to terminate BlackRock as investment adviser for ten closed-end funds.
• The recommendations apply to 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 New York Municipal Income Trust (BNY), BlackRock Science and Technology Term Trust (BSTZ), BlackRock ESG Capital Allocation Trust (ECAT), BlackRock MuniHoldings New York Quality Fund, Inc. (MHN), BlackRock MuniYield Pennsylvania Quality Fund (MPA), and BlackRock MuniYield New York Quality Fund, Inc. (MYN).
• Glass Lewis stated that Saba Capital has failed to make a compelling case to support the changes it is seeking.
• Glass Lewis believes that BlackRock's nominees have more relevant and substantive professional credentials than Saba Capital's nominees.
• BlackRock recently announced enhancements across its closed-end fund complex, including discount management programs, distribution increases, and fee waivers, providing $2.9 billion in liquidity.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the support from Glass Lewis and the highlighting of BlackRock's strengths and recent enhancements. The rejection of Saba Capital's proposals is also a positive outcome for BlackRock.

Positives

• Glass Lewis's support validates the strength of BlackRock's board members and portfolio management team.
• BlackRock has a legacy of delivering for all shareholders.
• BlackRock has been able to deliver exceptional distribution rates without paying excessive fees and other expenses.
• The boards recent actions, particularly the distribution rate increase, are more likely to have been the main contributing factor to the recent narrowing of the Funds NAV discount.
• The market return of the Fund (reflecting reinvestment of dividends and/or distributions at actual reinvestment prices) outperformed the benchmark indices over the observed six-month, one-year and five-year periods.

Risks

• Changes and volatility in political, economic, or industry conditions could impact the funds.
• The relative and absolute investment performance of the funds could affect demand.
• Increased competition could pose a risk.
• Unfavorable resolution of legal proceedings could have a negative impact.
• Technological changes could present challenges.
• 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 crucial.
• Problems at other financial institutions could have an impact.

Future Outlook

BlackRock will update performance and certain other data for the funds on a monthly basis on their website.

Management Comments

• We applaud Glass Lewis for backing our incumbent Board nominees and rejecting every Saba proposal to terminate BlackRock as investment manager, said R. Glenn Hubbard, Chair of the Boards of BlackRock Closed-End Funds.
• These recommendations, along with the strong support we received from ISS, highlight the strength of our Board members, the quality of our portfolio management team and our continued legacy of delivering for all shareholders.

Industry Context

This announcement reflects the ongoing activism in the closed-end fund space, where dissident shareholders like Saba Capital seek to influence fund management and strategy. The support from proxy advisors like Glass Lewis is crucial for BlackRock to maintain control and continue its investment strategies.

Comparison to Industry Standards

• BlackRock's closed-end funds are often compared to similar funds managed by firms like Eaton Vance, Nuveen, and Franklin Templeton.
• The distribution rates, expense ratios, and total shareholder returns (TSR) are key metrics used to evaluate the performance of these funds against industry benchmarks.
• The fact that Glass Lewis highlighted that the Fund has been able to deliver exceptional distribution rates without paying excessive fees and other expenses is a positive sign.

Stakeholder Impact

• Shareholders are encouraged to vote for BlackRock's nominees to ensure continued management and investment strategy.
• The outcome of the vote will impact the future direction and performance of the closed-end funds.

Next Steps

• Shareholders are encouraged to vote on the WHITE proxy card.
• BlackRock will continue to update performance data on its website.

Key Dates

Keywords

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