Western Asset Munici (NYSE:MPT)
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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.