American Strategic Income Portfolio Inc. (NYSE: ASP), American Strategic Income Portfolio Inc. II (NYSE: BSP), American Strategic Income Portfolio Inc. III (NYSE: CSP) and American Select Portfolio Inc. (NYSE: SLA) (each a "Fund" and, collectively, the "Funds") today announced that their Board of Directors has approved proposals to merge the Funds into a newly organized closed-end fund (the “Combined Fund”) managed by Nuveen Fund Advisors, LLC and sub-advised by Nuveen Asset Management, LLC, both current sub-advisors of the Funds. The proposals will be submitted to shareholders of each Fund for a vote at a Special Meeting of Shareholders anticipated to be held during the third quarter of 2014. The Board recommends that shareholders of each Fund vote in favor of the merger for their Fund, which would allow shareholders to maintain their investments in a fund that would have a broader and more flexible investment mandate.
If the mergers are approved, the Nuveen entities will become advisor and sub-advisor to the Combined Fund with responsibility for all investment management, fund administration and marketing functions and the Combined Fund will move to the Nuveen Funds closed-end funds platform. For a period of two years following the closing of the mergers, Nuveen has agreed to waive fees so that the expenses of the Combined Fund, excluding leverage costs, do not exceed two basis points below the lowest of the four Funds' expense ratios, excluding leverage costs, in effect prior to the closing. The Combined Fund will implement Nuveen's real asset income strategy, a strategy that seeks to provide a high level of income and the potential for capital appreciation by investing in real estate and infrastructure related securities (i.e., real assets) across the capital structure. The Combined Fund's broader investment mandate is expected to result in a more liquid portfolio over time with less emphasis on whole loans and mortgage-backed securities. The Combined Fund would be managed by John Wenker, Jay Rosenberg, Jeffrey Schmitz, David Yale and Jason O'Brien.
The Board of the Combined Fund (which is comprised of the same Board members as the Board of each Fund) has authorized the Combined Fund to conduct a series of up to three tender offers contingent upon and following the completion of the mergers (each, a “Tender Offer”). Pursuant to each Tender Offer, the Combined Fund will offer to purchase up to 10% of its then outstanding common shares for cash on a pro rata basis (disregarding fractional shares), at a price per share, without interest, equal to 99% of the net asset value per share of its common shares as determined as of the close of regular trading on the NYSE on the expiration date of the Tender Offer. Payment of the first Tender Offer is expected to occur within three months of the closing of the mergers, with payment of the second and third Tender Offers to occur at six month intervals thereafter. The third Tender Offer, however, is contingent upon the Combined Fund’s average daily trading discount exceeding 10% during the 90 calendar days preceding the last day of the thirteenth month following the closing of the merger.
Completion of the proposed mergers is subject to a number of conditions and other factors, including approval by shareholders of each Fund. It is anticipated that shareholders will also consider the election of Directors at the Annual Meeting of Shareholders. Further announcements regarding the Annual and Special Meetings of Shareholders will be made in the upcoming months.
For more information about the Funds, visit www.firstamericanfunds.com or call 800.677.3863.
Minneapolis-based U.S. Bancorp Asset Management, Inc. serves as investment advisor to the First American Closed-End Funds. A subsidiary of U.S. Bank National Association, U.S. Bancorp Asset Management focuses on providing investment management services to institutional clients, including corporations, public entities and nonprofits. It has combined assets under management of more than $52 billion as of March 31, 2014. First American Closed-End Funds are subadvised by Nuveen Fund Advisors, LLC and Nuveen Asset Management, LLC.
Investment products, including shares of closed-end funds, are not obligations of, or guaranteed by, any bank, including U.S. Bank or any U.S. Bancorp affiliate, nor are they insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other agency. An investment in such products involves investment risk, including possible loss of principal.
Please remember, you could lose money with this investment. Neither safety of principal nor stability of income is guaranteed. Past performance does not guarantee future results.
U.S. Bank National Association is a separate entity and wholly owned subsidiary of U.S. Bancorp, the fifth-largest commercial bank in the United States, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at www.usbank.com.
Contacts:
Investor Services, 800-677-3863
