JPI - JPI: Nuveen Making A Smart Move
2024-01-24 22:06:52 ET
Summary
- Nuveen Preferred & Income Term Fund is a term CEF that is set to liquidate in August 2024.
- The fund manager and its Board of Trustees have proposed to make JPI a perpetual CEF, eliminating the term structure.
- Existing shareholders are advised to vote in favor of the conversion to mitigate market risk associated with the liquidation.
- Investors should keep in mind that Invesco fumbled the liquidation of the IHIT term CEF in 2023.
Thesis
The Nuveen Preferred & Income Term Fund ( JPI ) is a fixed income CEF that we covered last year , on the back of the regional banks crisis. At the time we highlighted how the Fed intervention via their Bank Term Funding Program ('BTFP') had prevented a systemic meltdown, with the liquidity backstop for held to maturity bonds an elegant method to allow institutions to pledge non mark-to-market collateral in exchange for liquidity. JPI contains preferred securities from financial institutions, and is up significantly since our aptly titled article 'JPI: The Storm Has Passed For This Bank Preferred Equity CEF':
Rating (Seeking Alpha)