DEFA14A: BlackRock Funds Receive Key Support from ISS and Glass Lewis in Proxy Fight Against Saba Capital

BlackRock is urging shareholders to vote for its board nominees after receiving recommendations from ISS and Glass Lewis against Saba Capital's proposals to terminate BlackRock as investment advisor for several funds.

Summary

• BlackRock announced that Institutional Shareholder Services (ISS) and Glass Lewis have recommended shareholders vote for BlackRock's board nominees at several funds, and against Saba Capital's proposals to terminate BlackRock as investment advisor.
• ISS recommended voting for all board nominees of BNY and MPA, and for Arthur Steinmetz at MHN and MYN.
• Glass Lewis recommended voting for all board nominees at BFZ, BNY, and MYN, and against the proposal to terminate BlackRock as investment advisor of BFZ.
• Both ISS and Glass Lewis rejected Saba Capital's nominees.
• BlackRock is urging shareholders to vote using the WHITE proxy card and disregard any gold proxy cards from Saba.
• 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.
• Annual meetings for BFZ, BNY, and MYN will be held on June 17, 2024, and for MHN, MPA, and BSTZ on June 18, 2024.

Sentiment

Score: 7

Explanation: The sentiment is positive due to the support from ISS and Glass Lewis, indicating confidence in BlackRock's management. However, the ongoing challenge from Saba Capital introduces some uncertainty.

Positives

• ISS and Glass Lewis support BlackRock's board nominees.
• ISS and Glass Lewis reject Saba Capital's proposals to terminate BlackRock as investment advisor for several funds.
• BlackRock has implemented enhancements to its closed-end fund complex, providing $2.9 billion in liquidity.
• 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 overall performance picture nonetheless supports the view that the departure from past underperformance may be sustainable.

Negatives

• Saba Capital is attempting to replace BlackRock as investment advisor for several funds.
• ISS fails to appreciate the differences between the corporate governance practices of closed-end funds and those of operating companies.

Risks

• Changes and volatility in political, economic or industry conditions could impact the funds.
• The relative and absolute investment performance of the funds could fluctuate.
• Increased competition could affect the funds.
• Unfavorable resolution of legal proceedings could impact the funds.
• Technological changes could pose a risk.
• Legislative and regulatory actions could affect the funds.
• Terrorist activities, international hostilities, health epidemics, and natural disasters could adversely affect the funds.
• Problems at other financial institutions could impact the funds.

Future Outlook

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

Management Comments

• We welcome Glass Lewis full support for the qualified Board nominees of BFZ, BNY and MYN, and for BlackRock as investment adviser to BFZ, as well as ISS support for many of the funds Board nominees and rejection of the termination proposals at BFZ and BSTZ, said R. Glenn Hubbard, Chair of the Boards of BlackRock Closed-End Funds.
• Sabas campaign has never been about governance, performance or investment mandates.

Industry Context

This announcement reflects the ongoing trend of activist investors challenging established fund managers and seeking to influence fund strategies and governance.

Comparison to Industry Standards

• The unaffected one-, threeand five-year TSRs [total shareholder returns] of the Fund are better than the TSRs of most or all of the funds in the Peer Group.
• Distributions have been on par with peers, the NAV discount has been narrower, and fees have been more competitive elements of performance speak for themselves in an absolute sense.
• The funds TSR, NAV discount, distributions, and expenses are all in alignment with peers.

Stakeholder Impact

• Shareholders are encouraged to vote on the board nominees and proposals.
• The outcome of the vote will impact the management and strategy of the funds.

Next Steps

• Shareholders are urged to vote using the WHITE proxy card.
• Annual meetings will be held on June 17 and June 18, 2024.

Key Dates

Keywords

BlackRock, Saba Capital, proxy fight, board nominees, investment advisor, closed-end funds, ISS, Glass Lewis, BFZ, BNY, MYN, MPA, MHN, BSTZ