DEFC14A: Saba Capital Urges Nuveen Preferred and Income Term Fund Shareholders to Vote Against Term Extension Proposal

Saba Capital is soliciting proxies from Nuveen Preferred and Income Term Fund shareholders to vote against a proposal that would eliminate the fund's scheduled termination date of August 31, 2024.

Summary

• Saba Capital Management is urging shareholders of Nuveen Preferred and Income Term Fund to vote against a proposal to eliminate the fund's term structure, which is currently set to terminate on or before August 31, 2024.
• The Annual Meeting is scheduled to be held virtually on April 12, 2024.
• Saba believes the fund has a poor track record on corporate governance and shareholder rights.
• If the proposal is not approved, the fund will terminate on its scheduled termination date, unless the Board elects to extend the term for up to twelve months.
• If the shareholders approve the Proposal, the Board has authorized the Fund to commence a tender offer for up to 100% of the Funds outstanding Common Shares at NAV.
• Approval of the proposal requires the affirmative vote of a majority of the outstanding Common Shares.

Sentiment

Score: 6

Explanation: The document presents a neutral stance, focusing on the details of the proxy solicitation and the arguments for and against the proposal. The sentiment is slightly negative due to Saba's criticism of the fund's corporate governance.

Positives

• Saba Capital is actively advocating for shareholder interests by opposing the term extension proposal.
• Shareholders have the right to change their vote by using the GOLD proxy card provided by Saba Capital.
• If the shareholders approve the Proposal, the Board has authorized the Fund to commence a tender offer for up to 100% of the Funds outstanding Common Shares at NAV.

Negatives

• Saba believes the fund has a poor track record on corporate governance and shareholder rights.
• Approval of the proposal requires a majority of the outstanding Common Shares, which could be difficult to achieve.

Risks

• If the proposal is approved, the fund will no longer be managed in anticipation of a scheduled termination date.
• If the proposal is not approved, the fund will proceed to terminate on its scheduled termination date, unless the Board elects to extend the term for up to twelve months.
• The completion of the Tender Offer will be subject to the following conditions: (1) the aggregate net assets of the Fund attributable to Common Shares must equal or exceed $70 million as of the expiration date of the Tender Offer, taking into account the amounts that would be paid to shareholders who have properly tendered their shares, (2) shares of the Fund must remain eligible for listing on the NYSE, and (3) the Fund must remain subject to the reporting requirement of the Exchange Act.

Future Outlook

The future of the fund depends on the outcome of the shareholder vote on the proposal to eliminate the term structure. If approved, the fund will continue indefinitely. If not approved, the fund will terminate on or before August 31, 2024, unless the Board elects to extend the term for up to twelve months.

Management Comments

• Saba recommends voting AGAINST the Proposal due to, in our view, the Funds poor track record on corporate governance and shareholder rights.
• We do not believe that the Fund, in light of its corporate governance history, should be extended beyond its originally anticipated term.

Industry Context

Activist investors like Saba Capital often target closed-end funds to unlock value for shareholders, either through term terminations, tender offers, or other corporate actions. This proxy fight is part of a broader trend of increased activism in the closed-end fund space.

Comparison to Industry Standards

• Saba's actions are consistent with other activist campaigns targeting closed-end funds with perceived governance issues or underperformance.
• Other examples include campaigns by Bulldog Investors and Karpus Management against various closed-end funds.

Legal Proceedings

• Saba Capital CEF Opportunities 1, Ltd. et al v. Nuveen Floating Rate Income Fund et al, No. 1:2021cv00327 (S.D.N.Y. 2022).
• Saba Capital CEF Opportunities 1, Ltd. et al v. Nuveen Floating Rate Income Fund et al, Docket No. 22-407 (2d Cir. 2023).

Stakeholder Impact

• Shareholders will be directly impacted by the outcome of the vote, as it will determine the future of the fund.
• If the proposal is approved, the Board has authorized the Fund to commence a tender offer for up to 100% of the Funds outstanding Common Shares at NAV.

Next Steps

• Shareholders need to vote on the proposal by signing and returning the GOLD proxy card.
• Saba will continue to solicit proxies from shareholders.
• The Annual Meeting will be held on April 12, 2024, where the vote will take place.

Key Dates

Keywords

proxy solicitation, Saba Capital, Nuveen Preferred and Income Term Fund, term extension, corporate governance, shareholder rights, Annual Meeting, proxy vote, closed-end fund