CHICAGO, May 14, 2012 /PRNewswire/ -- DNP Select
Income Fund Inc. (NYSE: DNP) and Duff & Phelps Utility and
Corporate Bond Trust Inc. (NYSE: DUC), two closed-end registered
investment companies (the "funds") advised by Duff & Phelps
Investment Management Co. (the "Adviser"), have provided an update
on their efforts to provide additional liquidity to holders of
preferred shares in light of the persistent failures in the auction
markets.
To date each fund has retired a portion of its preferred shares
with monies borrowed under a credit facility. However, there
are a number of factors that have constrained the funds from
refinancing additional preferred shares with debt. One of
those factors is that the Investment Company Act of 1940 requires a
fund to have 300% asset coverage for its senior indebtedness at the
time of any new borrowings. Another factor is that the funds
cannot incur indebtedness or enter into reverse repurchase
agreements without departing from the guidelines established by the
two rating agencies that rate the preferred shares.
In the proxy statement relating to the May 10, 2012 annual meeting of the funds, the
funds' board of directors recommended that the shareholders of each
fund approve charter amendments that would permit the fund to
negotiate an arrangement with the rating agencies whereby the fund
could accept a lower rating on the preferred shares in exchange for
being allowed to utilize additional debt leverage for the purposes
of retiring preferred shares. The board recommended approval of the
charter amendments in order to give the funds greater flexibility
to provide additional liquidity to preferred shareholders. The
amendments to each fund's charter required for their approval a
favorable aggregate vote of the fund's common and preferred
shareholders, as well as a separate class vote of the fund's
preferred shareholders.
At the joint annual meeting of the funds' shareholders on
May 10, 2012, the proposed amendments
to DUC's charter received the requisite aggregate and class votes
for approval and, accordingly, those amendments are now in
effect. The proposed amendments to DNP's charter received a
favorable aggregate vote of DNP's common and preferred
shareholders, but were defeated in the separate class vote of DNP's
preferred shareholders. Accordingly, those amendments were
not approved, and DNP remains bound by the charter provisions that
prohibit it from departing from the rating agencies' restrictions
on borrowings and the use of reverse repurchase agreements, unless
the rating agencies confirm that a proposed departure would not
adversely affect the then current rating of DNP's preferred
shares.
The results of the votes do not affect the Tender Offers
currently being undertaken by the funds.
DNP Select Income Fund Inc. is a closed-end diversified
investment management company whose primary investment objectives
are current income and long-term growth of income. The fund seeks
to achieve these objectives by investing primarily in a diversified
portfolio of equity and fixed income securities of companies in the
public utilities industries. For more information, visit
www.dnpselectincome.com or call (800) 864-0629.
Duff & Phelps Utility and Corporate Bond Trust Inc. is a
closed-end diversified investment management company whose primary
investment objective is high current income consistent with
investing in securities of investment grade quality with emphasis
on companies in the public utilities industries. For more
information, visit www.ducfund.com or call (800) 338-8214.
Duff & Phelps Investment Management Co. has more than 28
years of experience managing investment portfolios, including
institutional separate accounts and open- and closed-end funds
investing in utilities, infrastructure and real estate investment
trusts (REITs). For more information, visit
www.dpimc.com.
Duff & Phelps is a subsidiary of Virtus Investment Partners
(NASDAQ: VRTS), a multi-boutique asset manager with $38.0 billion under management as of March 31, 2012. Virtus provides investment
management products and services to individuals and institutions
through a multi-manager asset management business, comprising a
number of individual affiliated managers, each with a distinct
investment style, autonomous investment process and individual
brand. Additional information can be found at
www.virtus.com.
SOURCE DNP Select Income Fund Inc.