Western Asset Municipal Partners Fund Inc. and Western Asset Municipal Partners Fund II Inc. Announce Changes to Investment Poli
March 02 2007 - 5:00PM
Business Wire
Western Asset Municipal Partners Fund Inc. (NYSE:MNP) and Western
Asset Municipal Partners Fund II Inc. (NYSE:MPT) announced today
changes to the Funds� non-fundamental investment policies,
effective March 5, 2007, as well as approval by each Fund�s Board
of Directors of a merger of the two Funds, subject to approval by
the Funds� stockholders. Under the amended investment policies
approved by the Board of Directors, each Fund may now invest, under
normal market conditions, up to 20% of its assets in tax-exempt
securities rated below �investment grade� at the time of purchase.
In addition, each Fund may now use derivatives as a part of its
investment strategies as well as for hedging and risk management
purposes. Previously, the Funds had been limited to investments in
tax-exempt securities rated �investment grade� at the time of
purchase and to the use of derivative instruments for hedging and
risk management purposes only. The Board of each Fund approved
these changes in order to permit the investment manager greater
flexibility in making investment decisions. Investors should note
that securities rated below investment grade, commonly referred to
as �junk bonds,� are considered speculative and, compared to
investment grade securities, tend to have more volatile prices and
increased price sensitivity to changing interest rates and to
adverse economic and business developments, a greater risk of loss
due to default or declining credit quality, a greater likelihood
that adverse economic or issuer-specific events will make the
issuer unable to make interest and/or principal payments, a greater
susceptibility to negative market sentiments leading to depressed
prices and decreased liquidity. In addition, the use of
derivatives, such as options and futures, which can be illiquid,
may disproportionately increase losses and have a potentially large
impact on Fund performance. The Boards of Directors also approved a
proposal to merge Western Asset Municipal Partners Fund II Inc.
with and into Western Asset Municipal Partners Fund Inc., pending
approval by holders of both Funds� common and preferred shares. If
approved by the stockholders of both Funds, the merger would take
place on or before July 7, 2007. Western Asset Municipal Partners
Fund Inc. and Western Asset Municipal Partners Fund II Inc., each a
diversified closed-end investment management company, are managed
by Legg Mason Partners Fund Advisor, LLC, a wholly owned subsidiary
of Legg Mason, Inc., and are sub-advised by Western Asset
Management Company, an affiliate of the investment manager. For
more information on the Funds, please contact our Investor
Relations Group at 1-888-777-0102 or consult the Funds� web site at
www.leggmason.com/InvestorServices.
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