Nuveen Investments Making Steady Progress with ARPS Refinancing

CHICAGO--(BUSINESS WIRE)--Nuveen Investments:

• New VRDP Offerings
• TOB Strategy Continues
• Revised Timing of ARPS Refinancing for 4 Taxable CEFs
• Conference Call Set for August 13

Nuveen Investments, a leading global provider of investment services to institutions and high-net-worth investors, today provided an overview of its progress in refinancing auction-rate preferred shares (ARPS) issued by its closed-end funds (CEFs). The firm highlighted the recent launch of Variable Rate Demand Preferred (VRDP) shares to replace ARPS of four different municipal bond CEFs, and noted that tender option bonds (TOBs) continue to serve as an important refinancing tool for municipal funds. The company also revised the expected timing for refinancing ARPS of four taxable closed-end funds and scheduled a conference call on ARPS for Wednesday, August 13 at 9:30 a.m., Central Time.

“We continue to advance our goals to lower the relative cost of leverage over time for our funds and provide liquidity at par for preferred shareholders,” said Bill Adams, Executive Vice President, Nuveen Investments. “While we are pleased to be making steady progress, we share the sense of urgency felt by many investors and recognize that much work remains to be done. One of the most encouraging developments to date has been the successful issuance of the first Variable Rate Demand Preferred Shares. As we announced early on, we believe this new security will be a critical element for being able to address the industry’s ARPS refinancing challenge.”

Nuveen Investments sponsors 120 closed-end funds, of which 100 have outstanding auction-rate securities. As of today, $1.7 billion of ARPS, or approximately 40% of the $4.3 billion originally outstanding FundPreferred shares issued by Nuveen’s taxable CEFs, have been redeemed. Four more Nuveen taxable CEFs expect to redeem an additional aggregate amount of $920 million of ARPS as discussed below. As also discussed below, $1.5 billion of ARPS, or approximately 14% of the $11.1 billion originally outstanding MuniPreferred shares issued by Nuveen’s municipal CEFs, have been or are in the process of being redeemed, in part with proceeds from the successful issuance of VRDP. Nuveen has also arranged for a liquidity facility to support the issuance of additional VRDP to refinance an additional $1.25 billion of ARPS.

New VRDP Offerings

Marking a key step forward, four Nuveen municipal CEFs recently announced the completion of private offerings of VRDP shares. The four funds are Nuveen Dividend Advantage Municipal Fund 2 (AMEX: NXZ), Nuveen Insured Premium Income Municipal Fund 2 (NYSE: NPX), Nuveen Insured California Tax Free Advantage Municipal Fund (AMEX: NKX) and Nuveen Insured New York Dividend Advantage Municipal Fund (AMEX: NKO). A total of more than $500 million of VRDP shares were sold by the funds. The proceeds, along with each fund’s proceeds from the creation of TOBs, will enable each fund to redeem all of its outstanding ARPS, totaling $596.9 million.

“The initial launch of the VRDP initiative is a very significant milestone in ARPS refinancing as we forge ahead on behalf of investors,” Adams said. “We look forward to building on this progress by expanding it to more municipal funds, and potentially using VRDP to refinance ARPS issued by taxable funds.”

The new VRDP shares include a liquidity feature that allows holders of VRDP to have their shares purchased by a liquidity provider in the event that VRDP holders’ sell orders have not been matched with purchase orders in a remarketing. VRDP dividends will be set weekly at a rate established by a remarketing agent. In these four offerings the VRDP shares were offered only to qualified institutional buyers, such as money market funds, pursuant to Rule 144A under the Securities Act of 1933.

TOB Strategy Continues

Nuveen municipal funds have used tender option bonds to refinance a total of approximately $1 billion of ARPS. With the approval of the funds’ Board, the first series of TOB partial redemptions for 13 funds in the amount of nearly $600 million was announced in June and completed in July. The second series of TOB partial redemptions for an additional 23 funds and approximately $350 million was announced last week, with the actual redemptions to be completed by early September.

“Although under current market conditions the amount of TOBs our funds can create are in many cases quite limited, TOBs can still play an important role in our plans to manage fund leverage costs and provide liquidity to ARPs shareholders,” Adams said.

TOBs are floating rate securities issued by trusts into which a fund has deposited municipal securities. Many Nuveen CEFs currently use TOBs as a portfolio structuring and duration management tool.

Revised Timing of ARPS Refinancing for 4 Taxable CEFs

Economic uncertainties created by the ongoing credit crunch and market volatility have delayed the timing of the anticipated refinancing of ARPS issued by four taxable CEFs: Nuveen Diversified Dividend & Income Fund (NYSE: JDD); Nuveen Quality Preferred Income Fund (NYSE: JTP); Nuveen Quality Preferred Income Fund 2 (NYSE: JPS); and Nuveen Quality Preferred Income Fund 3 (NYSE: JHP). The four funds previously announced that they expected to obtain debt financing to permit the redemption of approximately $1 billion in ARPS. Nuveen currently expects these funds to redeem approximately $920 million of ARPS, using this financing and available cash.

“We expected the ARPS refinancing facility for these funds to be in place by mid-July and the ARPS redemptions to be completed in August,” Adams said. “We are disappointed that the refinancing process has taken longer than anticipated. We now estimate the refinancing facility for these four funds to be in place later this month and the ARPS redemptions to be completed in September. However, the funds’ ability to finalize the refinancing facility is still not certain, and this revised timetable is subject to further change, due to market conditions and other factors, including the completion of final documentation for the debt financing arranged by the funds.”

Recent market and economic conditions also have made it difficult to set a timetable for refinancing the remaining ARPS issued by taxable funds that already have had partial redemptions. “We continue to pursue financing options to address the remaining preferred shares for these funds,” Adams said.

Conference Call Set for August 13

Nuveen Investments will host a conference call at 9:30 a.m. Central Time on August 13, 2008, to discuss this latest update. Nuveen anticipates high call volume and encourages attendees to access the call via the live streaming audio link to facilitate the registration process. Online participants will be able to submit questions. Attendees can access the teleconference on Nuveen’s Web site, www.nuveen.com, or at w.on24.com/r.htm?e=116206&s=1&k=9DE4F771F43D645F790409746971D3E6. Attendees who prefer to participate by phone can access the call by dialing (888) 562-3356 or (212) 729-5043 and referencing conference ID number 59334221.

A replay of the call will be available beginning shortly following the call through August 20, 2008. To access the replay, please visit the closed-end fund section of the company’s website at www.nuveen.com/cef. Those who prefer to listen to the replay by phone can dial (800) 642-1687 or (706) 645-9291, conference ID number 59334221. Call information and updates will be posted on Nuveen’s new auction-rate preferred resource center at www.nuveen.com/arps.

For more information about Nuveen closed-end funds, visit www.nuveen.com/cef. ARPS information and updates are posted on Nuveen’s auction-rate preferred resource center at www.nuveen.com/arps.

Nuveen Investments provides high quality investment services designed to help secure the long-term goals of institutions and high net worth investors as well as the consultants and financial advisors who serve them. Nuveen Investments markets its growing range of specialized investment solutions under the high-quality brands of HydePark, NWQ, Nuveen, Rittenhouse, Santa Barbara, Symphony and Tradewinds. In total, the Company managed $153 billion of assets on March 31, 2008.

FORWARD LOOKING STATEMENTS

Certain statements made in this 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:

• the continued acceptance by the market, and demand for, VRDP in amounts sufficient for the funds to refinance all or a portion of their outstanding ARPS;
• the continuing availability of the additional $1.25 billion of liquidity support for additional VRDP and the need to obtain significant additional capacity from liquidity providers on acceptable terms to facilitate the issuance of additional VRDP;
• the continuing and expanded availability of TOBs to the Nuveen funds to refinance a portion of their ARPS;
• the ability of the taxable CEFs to negotiate final documentation for the debt financing necessary for the funds to redeem a portion of their outstanding ARPS;
• the effects of changes in market and economic conditions;
• other legal and regulatory developments; and
• other additional risks and uncertainties.

Nuveen and the closed-end funds managed by Nuveen and its affiliates undertake no responsibility to update publicly or revise any forward-looking statements.

No VRDP shares or TOBs have been registered under the Securities Act of 1933 (the Securities Act) or any state securities laws. Unless so registered, no VRDP shares or TOBs may be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release is neither an offer to sell nor a solicitation of an offer to buy any of these securities.