BNY Mellon Municipal Fund Plans Reorganization Into Open-End Fund
The Board of Directors of BNY Mellon Municipal Income, Inc. (“the Fund”), a registered closed-end fund, has approved a strategic reorganization of the Fund with and into BNY Mellon AMT-Free Municipal Bond Fund (“the Acquiring Fund”), which is a series of BNY Mellon Municipal Funds, Inc., a registered open-end fund. This move is designed to align with the interests of the Fund’s stockholders and optimize investment outcomes. The proposed reorganization is subject to specific conditions, including approval from the Fund’s stockholders at a special meeting scheduled for June 2, 2025.
Stockholders who hold shares as of April 9, 2025, will be eligible to receive official notice and to participate in the voting process at the special meeting. The decision to proceed with this reorganization follows the results of the Fund’s June 2024 Annual Stockholders Meeting, where stockholders approved a non-binding proposal urging the Board of Directors to explore measures that would enable stockholders to “monetize” their shares of the Fund’s common stock at or near net asset value (NAV).
After a thorough evaluation of various options, the Board of Directors has determined that merging the Fund with the Acquiring Fund is the most effective approach to achieving the objectives expressed by stockholders. The proposed transition from a closed-end fund structure to an open-end fund structure aims to provide enhanced liquidity and greater alignment with stockholder preferences.
Delisting of Common Stock from NYSE
The Fund’s shares of common stock currently trade on the New York Stock Exchange (NYSE) under the ticker symbol “DMF.” If stockholders approve the reorganization, trading of the Fund’s shares on the NYSE will cease, and the shares will be delisted on or about June 18, 2025. The final execution of the reorganization is expected to take place on or about June 20, 2025.
The reorganization will facilitate stockholders’ ability to redeem their shares at NAV through the Acquiring Fund, unlike the current closed-end fund structure, where shares can trade at a premium or discount to NAV. This transition is anticipated to provide a more transparent valuation mechanism and improved accessibility for stockholders.
Comprehensive details regarding the proposed reorganization, including its potential benefits and implications for stockholders, will be outlined in the proxy materials that are set to be filed with the U.S. Securities and Exchange Commission (SEC) in the coming days. Stockholders are strongly encouraged to review these materials carefully.
Notice of Intent to Redeem Preferred Shares
In conjunction with the reorganization, the Fund has also filed a notice of intention with the SEC to redeem all 1,209 issued and outstanding shares of its Variable BNY Mellon Rate MuniFund Term Preferred Shares, designated as “Series 2023-1 Variable Rate MuniFund Term Preferred Shares” (VMTP shares). Each VMTP share has a par value of $0.001 per share and a liquidation preference of $25,000 per share.
The redemption price for the VMTP shares will include the $25,000 liquidation preference per share, in addition to a final accumulated dividend amount owed. The Fund intends to finance this redemption through proceeds generated from the sale of portfolio securities.
Formal notification regarding the redemption will be disseminated to VMTP share holders via The Depository Trust Company (DTC). Below are the key details of the redemption:
| Fund & Common Share Symbol | Series | Share Amount | Preferred Shares CUSIP | Redemption Date |
|---|---|---|---|---|
| BNY Mellon Municipal Income, Inc. (NYSE: DMF) | 2023-1 | 1,209 | 05589T401 | April 2, 2025 |
The Bank of New York Mellon, located at 240 Greenwich Street, New York, New York 10286, will serve as the redemption and paying agent for the VMTP shares.
It is important to note that these VMTP shares have not been registered under the Securities Act of 1933 or any state securities laws. Unless they are duly registered, these shares may not be offered or sold in the United States except in compliance with applicable exemptions from registration requirements.
Termination of Dividend Reinvestment Plan
As part of the Fund’s strategic adjustments, it has decided to terminate its Dividend Reinvestment Plan (DRP), effective June 6, 2025. This decision aligns with the broader structural changes taking place within the Fund as it transitions into the Acquiring Fund.
Stockholders who participate in the DRP should be aware that any distributions made by the Fund after June 6, 2025, will not be eligible for reinvestment under this plan. The final record date for distributions eligible for participation in the DRP is expected to be May 14, 2025.
About BNY Mellon Investment Adviser, Inc.
BNY Mellon Investment Adviser, Inc., the investment adviser responsible for managing both the Fund and the Acquiring Fund, operates as a division of BNY Investments. BNY Investments is recognized as one of the world’s leading asset managers, overseeing approximately $2 trillion in assets under management as of December 31, 2024.
BNY Investments provides tailored investment solutions across multiple asset classes through its network of seven specialized investment firms.
BNY Investments is a part of The Bank of New York Mellon Corporation (NYSE: BK), the oldest bank in America, founded in 1784. The company is a global leader in financial services, overseeing $52 trillion in assets under custody and/or administration as of December 31, 2024. BNY Mellon plays a critical role in powering capital markets and providing end-to-end investment lifecycle solutions for clients worldwide.
Important Information for Investors
Investors should note that closed-end funds, such as the Fund, are generally traded on the secondary market through stock exchanges. The market price of a closed-end fund’s shares may fluctuate due to various factors, including changes in the fund’s NAV, investor sentiment, and market conditions. As a result, shares may trade at a premium or a discount to the fund’s NAV.
There is no assurance that the Fund will achieve its investment objectives, and past performance is not indicative of future results. Additionally, the decision BNY Mellon to reorganize the Fund does not constitute an investment recommendation or advice regarding the purchase or sale of any securities.
Next Steps and Stockholder Participation
Stockholders are encouraged to stay informed about the proposed reorganization and upcoming stockholder meeting by reviewing the definitive prospectus/proxy statement, which will be filed with the SEC. This document will contain essential details regarding the Fund, the Acquiring Fund, and the overall reorganization process.
Stockholders will have the opportunity to review the Board’s considerations in recommending the reorganization, including its potential benefits and any related implications. Additionally, the proxy statement will disclose relevant information about the individuals soliciting proxies and their interests in the transaction.
All stockholders are advised to read the definitive prospectus/proxy statement in its entirety when it becomes available to ensure they are fully informed before BNY Mellon making a voting decision. The reorganization represents a pivotal step in the evolution of the Fund, and stockholders’ participation in the decision-making process is crucial.
For additional inquiries, stockholders can refer to the official SEC filings or contact the Fund’s representatives through the details provided in the proxy materials.
This announcement is for informational purposes only and does not constitute an offer to buy or sell any securities of the Fund, the Acquiring Fund, or any other BNY Mellon-managed funds.
