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'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 proposals by Saba Capital Management to terminate BlackRock as the investment adviser for several closed-end funds.
• ISS supports BlackRock's board nominees at BCAT, BMEZ, BNY, and MPA.
• The recommendations are for the annual meetings of shareholders to be held in June 2024.
• ISS also recommends voting for Board nominee Arthur Steinmetz at both BlackRock MuniHoldings New York Quality Fund, Inc. (NYSE: MHN) and BlackRock MuniYield New York Quality Fund, Inc. (NYSE: MYN).
• ISS rejected the nominees put forth by Saba at the majority of the funds.
• 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: 7

Explanation: The document presents a positive outlook as ISS supports BlackRock's management and rejects Saba's proposals, indicating confidence in BlackRock's stewardship. However, the ongoing activist pressure from Saba introduces some uncertainty.

Positives

• ISS support validates BlackRock's management of the funds and the Board's stewardship.
• ISS recognizes improvements in fund returns and discount management.
• BlackRock's enhancements, including discount management programs and fee waivers, benefit shareholders.
• ISS recommendations support BlackRock's nominees at MHN and MYN.

Negatives

• ISS did not support BlackRock's nominees at BIGZ and ECAT.
• Saba Capital Management is actively seeking to replace BlackRock as the investment adviser for several funds.

Risks

• Changes and volatility in political, economic, or industry conditions could impact the funds.
• The unfavorable resolution of any legal proceedings could affect the funds.
• Legislative and regulatory actions could impact the funds.
• Terrorist activities, international hostilities, health epidemics, and natural disasters could adversely affect the economy and markets.

Future Outlook

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

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 they continue to believe that their nominees have demonstrated time and time again that they are the right stewards to represent all shareholders.

Industry Context

This announcement reflects the ongoing activist investor activity in the closed-end fund space, where firms like Saba Capital seek to influence fund management and strategy.

Comparison to Industry Standards

• The document references Liberty All-Star Growth Fund, Inc. (ASG) when comparing BIGZ's distribution rate.
• The document compares the NAV discount of ECAT to its peers.

Stakeholder Impact

• Shareholders are encouraged to vote for BlackRock's nominees, which the company believes are the right stewards to represent all shareholders.
• The outcome of the proxy votes will determine the future management and direction of the funds, impacting shareholder value.

Next Steps

• Shareholders are encouraged to vote using the WHITE proxy card.
• BlackRock will update performance and other data for the funds on a monthly basis on their website.

Key Dates

Keywords

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