OREANDA-NEWS. Fitch Ratings recently provided an in-depth look at how closed-end funds (CEF) are utilizing leverage in a panel titled 'Use of Leverage by U.S. Closed-End Funds.' The panel was presented at the 14th Annual Capital Link Closed-End Funds and Global ETFs Forum on April 23, 2015. The presentation slide deck can now be accessed on Fitch's website at the link provided at the end of this press release.

Fitch reviewed 241 taxable leveraged U.S. CEFs that issued approximately \$54 billion of leverage -- an increase of \$4 billion since the same time last year due to NAV appreciation, leverage upsizing and new fund IPOs. The 178 U.S. municipal CEFs reviewed issued approximately \$34 billion, which is mostly unchanged since last year as fund managers chose not to upsize leverage despite NAV appreciation.

Over the last year, CEF managers issued new debt/preferred security types, attracted new lenders, and fixed their leverage costs by issuing term notes and preferred stock. The private placement market, in particular, has taken on increasing importance over the recent years for taxable funds looking to raise funding, with \$325 million issued across six funds issued so far this year. Issuance has been heavily driven by MLP CEFs. Fitch expects this trend to continue and include sectors other than MLP funds.

In the municipal space, funds have refinanced their remaining publicly traded preferred stock (MTPs) into institutional preferred stock sold to banks, money market funds and bond funds. Municipal funds are also focusing on solutions to tender option bond leverage that is being impacted by Volcker and Risk Retention Rules of the Dodd Frank.

Fitch rates approximately \$31 billion of debt and preferred stock issued across 220 U.S. leveraged CEFs. The agency publishes periodic research and commentary on the sector and market developments. To opt-in to Fitch's complimentary monthly mailing list, register at the following link: