Fund Merger Sought
November 22, 1999
Salomon Smith Barney of New York has filed a registration statement with the SEC to ask shareholders of its closed-end Greenwich Street Municipal Fund and shareholders of its open-end Smith Barney Managed Municipals Fund to merge the former fund into the latter. If approved, the proxy vote will take place Feb. 11.
Salomon Smith Barney wants to merge the two funds to eliminate the discount at which the Greenwich Street Municipal Fund is trading, the firm said in its registration statement, dated Nov. 8.
The proposed letter that Salomon Smith Barney wants to mail to shareholders regarding this proxy vote notes that the portfolio manager on Greenwich Street Municipal Fund is the same as the portfolio manager on the Smith Barney Managed Municipals Fund and that the investment objectives of the two funds are very similar.
The acquiring fund's investment objective is to maximize current interest income in tax-free municipal bonds, the filing said. The investment objective of the fund being acquired also is to invest in tax-free municipal bonds, the filing said. However, Greenwich Street Municipal Fund seeks to maximize current income, not necessarily interest income, the filing said.
Another difference between the two funds is that the Smith Barney Managed Municipals Fund may invest 20 percent of the fund in investments rated below investment grade whereas all of the funds in the Greenwich Street fund have been invested in investment grade or near-investment grade bonds, the filing said.