Federated Enhanced Treasury Income Fund Announces Extension of Share Repurchase Program and Approval of New Managed Distribution Plan
(PITTSBURGH, Pa., 02/21/2013 04:41 PM) — Federated Enhanced Treasury Income Fund (NYSE: FTT) today announced that its Board of Trustees authorized the extension of the share repurchase program and approved a new managed distribution plan (MDP).
The extension of the share repurchase program begins on March 1, 2013 and will run for another year. The program will allow the fund to buy back up to 5% of its outstanding common shares as of Dec. 31, 2012, or 459,352 shares, in the open market. The amount and timing of share purchases will be subject to market conditions and investment considerations. The fund completed its purchase of all of the 478,446 shares that were authorized to be purchased under the initial share repurchase program that began on March 1, 2012.
Under the new MDP, the fund will make monthly cash distributions approximating 4.0% 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 new MDP will be implemented on March 1, 2013.
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 Board of Trustees and investment adviser analyzed options to enhance shareholder value and potentially reduce the discount between the market price of the fund’s common shares and their net asset value per share (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 will increase the NAV and thereby benefit remaining shareholders. The Board of Trustees will monitor the program and will continue to consider strategic options to enhance shareholder value over the long-term.
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.
Federated Investors, Inc. (NYSE: FII) is one of the largest investment managers in the United States, managing $379.8 billion in assets as of Dec 31, 2012. With 137 funds, as well as a variety of separately managed account options, Federated provides comprehensive investment management worldwide to approximately 4,700 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.