DEFC14A: Saba Capital Launches Proxy Fight to Shake Up Eaton Vance New York Municipal Bond Fund Board

Saba Capital is soliciting proxies to elect its two nominees to the Eaton Vance New York Municipal Bond Fund's board, aiming to address the fund's persistent trading discount.

Summary

• Saba Capital Management is seeking to elect two nominees, Jason Chen and Jassen Trenkow, to the board of trustees of the Eaton Vance New York Municipal Bond Fund at the upcoming annual meeting.
• Saba believes the fund's board needs fresh perspectives to address its significant discount to net asset value.
• The proxy statement is being furnished to shareholders around July 2, 2024.
• Saba is soliciting proxies for the election of its nominees to serve as Class I trustees, with terms expiring at the 2027 annual meeting.
• As of July 1, 2024, the Participants may be deemed to beneficially own 3,066,889 Common Shares, representing 17.07% of the outstanding Common Shares.
• Saba intends to deliver the proxy statement to holders of at least the percentage of the fund's voting shares required to elect the nominees.
• InvestorCom has been retained to provide solicitation and advisory services for a fee not to exceed $20,000.
• The estimated cost of the proxy solicitation is approximately $80,000, which will be borne by Saba.
• According to the fund's bylaws, in a contested election of trustees, the qualified nominees receiving the affirmative vote of a majority of the shares outstanding and entitled to vote with respect to such matter at a meeting of the shareholders shall be elected.

Sentiment

Score: 7

Explanation: The document is assertive and confident in its approach to improving the fund's performance. While it highlights a problem (the discount to NAV), it presents a clear plan of action and expresses optimism about the potential for positive change.

Positives

• Saba Capital, as a significant shareholder, is actively seeking to improve the fund's performance and address its trading discount.
• The nominees bring fresh perspectives and extensive experience in the financial industry.
• Saba is willing to bear the costs of the proxy solicitation, demonstrating its commitment to improving the fund.
• Shareholders have the right to change their vote by using the GOLD proxy card.

Negatives

• There is no assurance that the nominees will be elected, as they constitute a minority of the board.
• Even if elected, there is no guarantee that the nominees will be able to implement changes without the support of other board members.
• The fund's board and management may oppose Saba's efforts, leading to a contested and potentially costly proxy fight.

Risks

• The proxy solicitation may be unsuccessful, and Saba's nominees may not be elected to the board.
• Even if elected, the nominees may not be able to significantly influence the fund's strategy or performance.
• The fund's management may resist Saba's efforts, leading to further conflict and potential disruption.
• The outcome of the proxy fight is uncertain and could have a negative impact on the fund's share price.

Future Outlook

Saba intends to supplement the proxy statement with the date, time, and location of the Annual Meeting once publicly disclosed by the Fund, as well as the record date and the number of Common Shares outstanding as of the record date.

Management Comments

• We believe that the board of trustees of the Fund (the Board) needs fresh ideas and perspectives to address the Funds trading discount; we have therefore nominated a slate of highly qualified and independent Nominees for election to the Board, whose election will send a strong message that the Funds shareholders are not satisfied with the Funds management and their inability to address the Funds significant discount to net asset value.
• We are convinced that NOW is the time to take action to close the Funds discount and we urge shareholders to elect the Nominees, who we believe, if elected, would serve the best interests of all shareholders.

Industry Context

Activist investors like Saba Capital often target closed-end funds trading at a discount to their net asset value, seeking to unlock shareholder value through various strategies, including board representation, fund restructuring, or liquidation.

Comparison to Industry Standards

• Proxy fights are a common tactic used by activist investors to influence the direction of investment funds.
• Saba's approach is similar to other activist campaigns, such as those led by Elliott Management or Carl Icahn, where the goal is to improve fund performance and shareholder returns.
• The success of Saba's campaign will depend on its ability to convince shareholders that its nominees are better suited to address the fund's challenges than the current board.

Stakeholder Impact

• Shareholders could benefit from a reduction in the fund's discount to net asset value.
• The fund's management and board could face increased scrutiny and pressure to improve performance.
• The outcome of the proxy fight could impact the fund's investment strategy and overall direction.

Next Steps

• Shareholders need to vote on the GOLD proxy card to support Saba's nominees.
• Saba will supplement the proxy statement with additional information once the Fund discloses the date, time, and location of the Annual Meeting and the record date.
• Saba will solicit proxies from individuals, brokers, banks, and other institutional holders.

Key Dates

Keywords

proxy solicitation, Eaton Vance New York Municipal Bond Fund, Saba Capital, board of trustees, nominees, discount to NAV, shareholder value, annual meeting, proxy fight, investment management