PITTSBURGH, Feb. 14, 2014 /PRNewswire/ -- Federated Enhanced
Treasury Income Fund (NYSE: FTT) today announced that its Board of
Trustees approved a reduced advisory fee, a new managed
distribution plan (MDP) and the extension of the share repurchase
program. The actions are the latest in a series taken to seek
to enhance long-term shareholder value.
The fund's advisory fee will decrease from 85 basis points to 60
basis points effective March 1,
2014. As announced last month, Dix Hills Partners, LLC will
no longer provide services as sub-adviser to the fund effective
March 1, 2014. Federated
Investment Management Company, the fund's investment adviser, will
make duration-management calls for the fund. The duration calls
will be based on recommendations provided by Federated's duration
committee, which recommends duration targets for nearly all of its
fixed-income products. In addition, as reported on
Jan. 14, 2014, J. Andrew Kirschler has assumed portfolio
management responsibilities for the fund. Kirschler has 18
years of investment experience and he previously served as a senior
bond trader, where he specialized in trading Treasuries.
Under the new MDP, which will replace the existing MDP on
March 1, 2014, the fund will make
monthly cash distributions per share approximating 3.5% of the
fund's net asset value (NAV) on an annualized basis. The fund
may make distributions in excess of those required under the plan
in order to meet its obligations under the Internal Revenue
Code. The distribution will be based on the NAV of the fund
on the last business day of the previous month.
The fund's distributions under the MDP may include net
investment income, net realized long-term capital gains, net
realized short-term capital gains and return of capital. If a
distribution does not consist solely of net investment income, a
notice with the estimated components of the distribution will be
provided to shareholders at the time of payment and posted to the
fund's website at FederatedInvestors.com. Investors should
use the Form 1099-DIV sent after calendar year end, and not the
notice, to prepare tax returns. Investors should not draw any
conclusions about the fund's past or future investment performance
from the amount of this distribution or from the terms of the
fund's MDP.
The fund's share repurchase program has been extended beginning
on March 1, 2014 and will run for one
year. The program will allow the fund to buy back up to 5
percent of its outstanding common shares as of Dec. 31, 2013, or 433,975 shares, in the open
market. The amount and timing of share purchases will be
subject to market conditions and investment considerations.
The fund repurchased 410,957 of the 459,352 shares that were
authorized to be repurchased under the share repurchase program
that began on March 1,
2013.
There is no assurance that the fund will purchase shares at any
specific discount levels or in any specific amounts. The
fund's repurchase activity will be disclosed in its shareholder
report for the relevant fiscal period. There is no assurance
that the market price of the fund's shares, either absolutely or
relative to its NAV, will increase as a result of any share
repurchases or that the share repurchase program will enhance value
over the long-term.
The fund's Board of Trustees and investment adviser continue to
analyze options to enhance shareholder value and potentially reduce
the trading discount between the market price of the fund's common
shares and their NAV. The investment adviser believes the
extension of the share repurchase program will continue to allow
the fund to purchase its shares at a discount to NAV, which has the
potential to increase the NAV and thereby benefit shareholders
remaining in the fund, and may enhance liquidity of the shares in
the open market. The Board of Trustees will monitor the
impact of the fee reduction, MDP and share repurchase program and
continue to consider strategic options to enhance shareholder value
over the long-term.
Federated Investors, Inc. (NYSE: FII) is one of the largest
investment managers in the United
States, managing $376.1
billion in assets as of Dec
31, 2013. With 135 funds, as well as a variety of
separately managed account options, Federated provides
comprehensive investment management worldwide to approximately
6,000 institutions and intermediaries including corporations,
government entities, insurance companies, foundations and
endowments, banks and broker/dealers. For more information,
visit FederatedInvestors.com.
Certain statements made in this press release are
forward-looking statements. Actual future results or occurrences
may differ significantly from those anticipated in any
forward-looking statements due to numerous factors. These
include, but are not limited to: market developments; legal and
regulatory developments; and other additional risks and
uncertainties. As a result, neither the company nor any other
person assumes responsibility for the accuracy and completeness of
such statements in the future.
SOURCE Federated Investors, Inc.