UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act File Number 811-22551
MAINSTAY MACKAY DEFINEDTERM MUNICIPAL OPPORTUNITIES FUND
(Exact name of Registrant as specified in charter)
51 Madison Avenue, New York, NY 10010
(Address of principal executive offices) (Zip code)
J. Kevin Gao, Esq.
30 Hudson Street
Jersey City, New Jersey 07302
(Name and address of agent for service)
Registrant’s telephone number, including area code: (212) 576-7000
Date of fiscal year end: May 31
Date of reporting period: November 30, 2021
FORM N-CSR
Item 1. | Reports to Stockholders. |
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Not FDIC/NCUA Insured | Not a Deposit | May Lose Value | No Bank Guarantee | Not Insured by Any Government Agency |
President
Average Annual Total Returns for the Period-Ended November 30, 2021 | ||||
Six Months1 | One Year | Five Years | Since Inception 6/26/12 | |
Net Asset Value (“NAV”)2 | 1.18 % | 6.26% | 7.26% | 7.01% |
Market Price2 | (4.95) | 3.90 | 8.45 | 6.76 |
Bloomberg Municipal Bond Index3 | 0.56 | 1.97 | 4.38 | 3.54 |
Morningstar Muni National Long Category Average4 | 5.43 | 1.15 | 5.04 | 5.97 |
1. | Not annualized. |
2. | Total returns assume dividends and capital gains distributions are reinvested. For periods of less than one year, total return is not annualized. |
3. | The Bloomberg Municipal Bond Index is considered representative of the broad market for investment-grade, tax-exempt bonds with a maturity of at least one year. Bonds subject to the alternative minimum tax or with floating or zero coupons are excluded. An investment cannot be made directly in an index. |
4. | The Morningstar Muni National Long Category Average is representative of funds that invest in bonds issued by various state and local governments to fund public projects. The income from these bonds is generally free from federal taxes. These portfolios have durations of more than 7 years. Results are based on average total returns of similar funds with all dividends and capital gain distributions reinvested. |
NYSE Symbol | MMD | Premium/Discount 1 | 1.14% |
CUSIP | 56064K100 | Total Net Assets (millions) | $584.2 |
Inception Date | 6/26/12 | Total Managed Assets (millions)2 | $908.2 |
Market Price | $21.24 | Leverage 3 | 35.68% |
NAV | $21.00 | Percent of AMT Bonds4 | 3.14% |
1. | Premium/Discount is the percentage (%) difference between the market price and the NAV. When the market price exceeds the NAV, the Fund is trading at a premium. When the market price is less than the NAV, the Fund is trading at a discount. |
2. | “Managed Assets” is defined as the Fund’s total assets, minus the sum of its accrued liabilities (other than Fund liabilities incurred for the purpose of creating effective leverage (i.e. tender option bonds) or Fund liabilities related to liquidation preference of any Preferred shares issued). |
3. | Leverage is based on the use of proceeds received from tender option bond transactions, issuance of Preferred shares, funds borrowed from banks or other institutions or derivative transactions, expressed as a percentage of Managed Assets. |
4. | Alternative Minimum Tax (“AMT”) is a separate tax computation under the Internal Revenue Code that, in effect, eliminates many deductions and credits and creates a tax liability for an individual who would otherwise pay little or no tax, expressed as a percentage of Managed Assets. |
Illinois | 14.1% |
Puerto Rico 1 | 12.7 |
California | 12.6 |
New York | 9.4 |
Michigan | 6.6 |
Missouri | 4.6 |
Florida | 4.6 |
New Jersey | 4.0 |
Nevada | 4.0 |
Colorado | 3.9 |
Washington | 3.4 |
Pennsylvania | 3.3 |
U.S. Virgin Islands | 3.0 |
Nebraska | 2.3 |
Indiana | 2.0% |
Guam | 1.7 |
South Carolina | 1.2 |
Wisconsin | 0.8 |
Ohio | 0.7 |
Texas | 0.6 |
Virginia | 0.6 |
New Hampshire | 0.5 |
District of Columbia | 0.3 |
Minnesota | 0.2 |
Arizona | 0.2 |
Other Assets, Less Liabilities | 2.7 |
100.0% |
† | As a percentage of Managed Assets. |
1. | As of November 30, 2021, 87.5% of the Puerto Rico municipal securities held by the Fund were insured and all bonds continue to pay full principal and interest. |
6 | MainStay MacKay DefinedTerm Municipal Opportunities Fund |
1. | Chicago Board of Education, 5.50%-7.00%, due 4/1/34–12/1/46 (a) |
2. | Kansas City Industrial Development Authority, 4.00%, due 3/1/45–3/1/50 (a) |
3. | Los Angeles Department of Water & Power System, 5.00%, due 7/1/47 |
4. | Great Lakes Water Authority Sewage Disposal System, 5.00%, due 7/1/34 (a) |
5. | Puerto Rico Sales Tax Financing Corp., 4.55%-5.00%, due 7/1/40–7/1/58 |
6. | Orange County Convention Center, 4.00%, due 10/1/33 |
7. | Virgin Islands Public Finance Authority, 4.50%-6.625%, due 10/1/24–10/1/32 (a) |
8. | Commonwealth of Puerto Rico, 4.50%-6.00%, due 7/1/23–7/1/37 (a) |
9. | New York Transportation Development Corp., 4.00%-5.00%, due 8/1/31–7/1/36 (a) |
10. | Golden State Tobacco Securitization Corp., 5.30%, due 6/1/37 |
# | Some of these holdings have been transferred to a Tender Option Bond (“TOB”) Issuer in exchange for TOB Residuals and cash. |
(a) | Municipal security may feature credit enhancements, such as bond insurance. |
1. | See page 5 for more information on benchmark and peer group returns. |
2. | An obligation rated ‘AAA’ has the highest rating assigned by Standard & Poor’s (“S&P”), and in the opinion of S&P, the obligor’s capacity to meet its financial commitment on the obligation is extremely strong. An obligation rated ‘AA’ by S&P is deemed by S&P to differ from the highest-rated obligations only to a small degree. In the opinion of S&P, the obligor's capacity to meet its financial commitment on the obligation is very strong. When applied to Fund holdings, ratings are based solely on the creditworthiness of the bonds in the portfolio and are not meant to represent the security or safety of the Fund. |
3. | The terms “spread” and “yield spread” may refer to the difference in yield between a security or type of security and comparable U.S. Treasury issues. The terms may also refer to the difference in yield between two specific securities or types of securities at a given time. |
4. | Duration is a measure of the price sensitivity of a fixed-income investment to changes in interest rates. Duration is expressed as a number of years and is considered a more accurate sensitivity gauge than average maturity. |
5. | Modified duration is inversely related to the approximate percentage change in price for a given change in yield. Duration to worst is the duration of a bond computed using the bond’s nearest call date or maturity, whichever comes first. This measure ignores future cash flow fluctuations due to embedded optionality. |
6. | An obligation rated ‘BBB’ by S&P is deemed by S&P to exhibit adequate protection parameters. In the opinion of S&P, however, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. When applied to Fund holdings, ratings are based solely on the creditworthiness of the bonds in the portfolio and are not meant to represent the security or safety of the Fund. |
8 | MainStay MacKay DefinedTerm Municipal Opportunities Fund |
7. | An obligation rated ‘BB’ by S&P is deemed by S&P to be less vulnerable to nonpayment than other speculative issues. In the opinion of S&P, however, the obligor faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation. When applied to Fund holdings, ratings are based solely on the creditworthiness of the bonds in the portfolio and are not meant to represent the security or safety of the Fund. |
Principal Amount | Value | |
Municipal Bonds 151.2% | ||
Arizona 0.3% (0.2% of Managed Assets) | ||
Industrial Development Authority of the City of Phoenix (The), Espiritu Community Development Corp., Revenue Bonds | ||
Series A | ||
6.25%, due 7/1/36 | $ 1,805,000 | $ 1,807,409 |
California 19.6% (12.6% of Managed Assets) | ||
California Municipal Finance Authority, LINXS APM Project, Revenue Bonds, Senior Lien | ||
Series A | ||
5.00%, due 12/31/36 (a) | 5,000,000 | 5,980,649 |
California Municipal Finance Authority, United Airlines, Inc. Project, Revenue Bonds | ||
4.00%, due 7/15/29 (a) | 2,405,000 | 2,749,811 |
City of Sacramento CA, Water, Revenue Bonds | ||
5.00%, due 9/1/42 (b) | 19,500,000 | 21,062,375 |
Golden State Tobacco Securitization Corp., Asset-Backed, Revenue Bonds | ||
Series A-2 | ||
5.30%, due 6/1/37 (c) | 25,225,000 | 25,783,199 |
Los Angeles Department of Water & Power System, Revenue Bonds | ||
Series A | ||
5.00%, due 7/1/47 (b) | 28,900,000 | 34,489,394 |
University of California, Regents Medical Center, Revenue Bonds | ||
Series J | ||
5.00%, due 5/15/43 (b) | 23,260,000 | 24,701,868 |
114,767,296 | ||
Colorado 6.0% (3.9% of Managed Assets) | ||
City & County of Denver CO, Revenue Bonds | ||
Series A | ||
4.00%, due 8/1/51 (b) | 21,690,000 | 25,722,530 |
Copper Ridge Metropolitan District, Revenue Bonds | ||
5.00%, due 12/1/39 | 3,950,000 | 4,233,404 |
Dominion Water & Sanitation District, Revenue Bonds | ||
6.00%, due 12/1/46 | 3,383,000 | 3,461,839 |
Principal Amount | Value | |
Colorado | ||
Sterling Ranch Community Authority Board, Sterling Ranch Metropolitan District No. 3, Revenue Bonds | ||
Series A, Insured: MUN GOVT GTD | ||
5.00%, due 12/1/30 | $ 1,750,000 | $ 1,844,161 |
35,261,934 | ||
District of Columbia 0.5% (0.3% of Managed Assets) | ||
Metropolitan Washington Airports Authority, Dulles Toll Road, Revenue Bonds, Second Lien | ||
Series C, Insured: AGC | ||
6.50%, due 10/1/41 (c) | 2,400,000 | 3,048,444 |
Florida 7.2% (4.6% of Managed Assets) | ||
JEA Electric System, Revenue Bonds | ||
Series C | ||
5.00%, due 10/1/37 (b) | 12,980,000 | 13,435,733 |
Orange County Convention Center, Revenue Bonds | ||
Series B | ||
4.00%, due 10/1/33 (b) | 25,000,000 | 28,407,775 |
41,843,508 | ||
Guam 2.7% (1.7% of Managed Assets) | ||
Antonio B Won Pat International Airport Authority, Revenue Bonds | ||
Series C, Insured: AGM | ||
6.00%, due 10/1/34 (a) | 2,440,000 | 3,759,166 |
Guam Government Waterworks Authority, Water and Wastewater System, Revenue Bonds | ||
5.50%, due 7/1/43 | 7,550,000 | 8,153,104 |
Territory of Guam, Business Privilege Tax, Revenue Bonds | ||
Series B-1 | ||
5.00%, due 1/1/42 | 3,860,000 | 3,874,824 |
15,787,094 | ||
Illinois 21.9% (14.1% of Managed Assets) | ||
Chicago Board of Education, Unlimited General Obligation | ||
Series A, Insured: AGM | ||
5.50%, due 12/1/39 (b) | 20,000,000 | 20,054,310 |
Series A | ||
7.00%, due 12/1/44 | 2,880,000 | 3,478,620 |
Chicago Board of Education, Dedicated Capital Improvement, Revenue Bonds | ||
5.75%, due 4/1/34 | 8,000,000 | 9,724,766 |
10 | MainStay MacKay DefinedTerm Municipal Opportunities Fund |
Principal Amount | Value | |
Illinois (continued) | ||
Chicago Board of Education, Dedicated Capital Improvement, Unlimited General Obligation (d) | ||
Series A | ||
7.00%, due 12/1/46 | $ 4,000,000 | $ 5,171,761 |
Series B | ||
7.00%, due 12/1/42 | 3,500,000 | 4,549,937 |
Chicago O'Hare International Airport, Customer Facility Charge, Revenue Bonds, Senior Lien | ||
Insured: AGM | ||
5.75%, due 1/1/38 | 5,000,000 | 5,281,137 |
City of Chicago IL, Unlimited General Obligation | ||
Series A | ||
5.25%, due 1/1/27 | 3,000,000 | 3,446,240 |
Series A | ||
5.50%, due 1/1/49 | 5,000,000 | 6,226,706 |
Series A | ||
6.00%, due 1/1/38 | 7,180,000 | 8,905,572 |
Series C | ||
5.00%, due 1/1/25 | 1,435,000 | 1,439,855 |
Series E | ||
5.50%, due 1/1/42 | 2,000,000 | 2,289,742 |
City of Chicago IL, Wastewater Transmission, Revenue Bonds, Second Lien | ||
Series C | ||
5.00%, due 1/1/32 | 7,120,000 | 8,051,697 |
Metropolitan Pier & Exposition Authority, McCormick Place Expansion Project, Revenue Bonds | ||
Series A | ||
5.00%, due 6/15/57 | 4,665,000 | 5,445,763 |
Series B-1, Insured: AGM | ||
(zero coupon), due 6/15/44 | 10,000,000 | 5,530,923 |
Sales Tax Securitization Corp., Revenue Bonds | ||
Series C, Insured: BAM | ||
5.25%, due 1/1/48 (b) | 11,000,000 | 13,662,456 |
State of Illinois, Unlimited General Obligation | ||
5.25%, due 7/1/31 (b) | 20,000,000 | 21,362,195 |
5.50%, due 5/1/30 | 2,500,000 | 3,266,919 |
127,888,599 |
Principal Amount | Value | |
Indiana 3.0% (2.0% of Managed Assets) | ||
Indianapolis Local Public Improvement Bond Bank, Revenue Bonds | ||
Series A, Insured: AGM | ||
4.00%, due 6/1/39 (b) | $ 14,880,000 | $ 17,727,800 |
Michigan 10.3% (6.6% of Managed Assets) | ||
City of Detroit MI, Great Lakes Water Authority Sewage Disposal System, Revenue Bonds, Senior Lien | ||
Series A | ||
5.25%, due 7/1/39 | 5,000,000 | 5,148,612 |
Great Lakes Water Authority Sewage Disposal System, Revenue Bonds, Senior Lien | ||
Series B, Insured: AGM | ||
5.00%, due 7/1/34 (b) | 24,940,000 | 29,636,373 |
Michigan Finance Authority, Trinity Health Group, Revenue Bonds | ||
Series 2016MI | ||
5.25%, due 12/1/41 (b) | 21,630,000 | 25,535,114 |
60,320,099 | ||
Minnesota 0.3% (0.2% of Managed Assets) | ||
City of Blaine MN, Crest View Senior Community Project, Revenue Bonds | ||
Series A | ||
5.75%, due 7/1/35 | 1,925,000 | 1,858,114 |
Missouri 7.2% (4.6% of Managed Assets) | ||
Kansas City Industrial Development Authority, Kansas City International Airport Terminal, Revenue Bonds | ||
Series A | ||
4.00%, due 3/1/45 (b) | 31,510,000 | 36,188,536 |
Series A, Insured: AGM | ||
4.00%, due 3/1/50 (a) | 5,000,000 | 5,728,061 |
41,916,597 | ||
Nebraska 3.5% (2.3% of Managed Assets) | ||
Central Plains Energy Project, Nebraska Gas Project No. 3, Revenue Bonds | ||
5.25%, due 9/1/37 (b) | 20,000,000 | 20,683,398 |
Nevada 6.2% (4.0% of Managed Assets) | ||
Clark County School District, Tax Building, Limited General Obligation | ||
Series A, Insured: BAM | ||
5.00%, due 6/15/34 (b) | 9,680,000 | 11,989,217 |
Principal Amount | Value | |
Nevada (continued) | ||
Las Vegas Convention & Visitors Authority, Convention Center Expansion, Revenue Bonds | ||
Series B | ||
5.00%, due 7/1/43 (b) | $ 20,000,000 | $ 23,950,582 |
35,939,799 | ||
New Hampshire 0.8% (0.5% of Managed Assets) | ||
Manchester Housing and Redevelopment Authority, Inc., Meals & Rooms Tax, Revenue Bonds | ||
Series B, Insured: ACA | ||
(zero coupon), due 1/1/24 | 4,740,000 | 4,392,789 |
New Jersey 6.2% (4.0% of Managed Assets) | ||
New Jersey Economic Development Authority, Continental Airlines, Inc. Project, Revenue Bonds | ||
5.25%, due 9/15/29 | 5,000,000 | 5,187,655 |
New Jersey Economic Development Authority, New Jersey Transit Transportation Project, Revenue Bonds | ||
Series A | ||
4.00%, due 11/1/39 | 3,400,000 | 3,886,478 |
New Jersey Transportation Trust Fund Authority, Transportation Program, Revenue Bonds | ||
Series 2020AA | ||
4.00%, due 6/15/45 (b) | 17,000,000 | 19,335,686 |
Series BB | ||
4.00%, due 6/15/44 | 1,000,000 | 1,121,570 |
New Jersey Turnpike Authority, Revenue Bonds | ||
Series A | ||
4.00%, due 1/1/51 (b) | 5,500,000 | 6,464,210 |
Tobacco Settlement Financing Corp., Revenue Bonds | ||
Series A | ||
5.00%, due 6/1/46 | 300,000 | 352,781 |
36,348,380 | ||
New York 14.5% (9.4% of Managed Assets) | ||
Metropolitan Transportation Authority, Revenue Bonds | ||
Series A-1 | ||
5.00%, due 11/15/45 (b) | 22,695,000 | 25,136,739 |
Principal Amount | Value | |
New York | ||
New York City Transitional Finance Authority Future Tax Secured, Revenue Bonds | ||
4.00%, due 11/1/36 | $ 7,500,000 | $ 9,173,068 |
New York Liberty Development Corp., 3 World Trade Center Project, Revenue Bonds | ||
Class 3 | ||
7.25%, due 11/15/44 (b)(d) | 10,890,000 | 12,006,290 |
New York State Dormitory Authority, Personal Income Tax, Revenue Bonds | ||
Series A | ||
4.00%, due 3/15/40 | 7,000,000 | 8,386,208 |
New York Transportation Development Corp., American Airlines, Inc., Revenue Bonds | ||
5.00%, due 8/1/31 (a) | 5,000,000 | 5,011,524 |
New York Transportation Development Corp., LaGuardia Airport Terminal B Redevelopment Project, Revenue Bonds | ||
Series A, Insured: AGM | ||
4.00%, due 7/1/36 (b) | 20,000,000 | 21,577,337 |
Riverhead Industrial Development Agency, Riverhead Charter School, Revenue Bonds | ||
Series 2013A | ||
7.00%, due 8/1/43 | 3,395,000 | 3,679,689 |
84,970,855 | ||
Ohio 1.2% (0.7% of Managed Assets) | ||
Buckeye Tobacco Settlement Financing Authority, Revenue Bonds, Senior Lien | ||
Series B-2, Class 2 | ||
5.00%, due 6/1/55 | 2,500,000 | 2,870,541 |
Ohio Higher Educational Facility Commission, University Circle, Inc., Revenue Bonds, Senior Lien | ||
5.00%, due 1/15/50 | 3,200,000 | 3,839,048 |
6,709,589 | ||
Pennsylvania 5.2% (3.3% of Managed Assets) | ||
Allentown Neighborhood Improvement Zone Development Authority, City Center Project, Revenue Bonds | ||
5.00%, due 5/1/42 (d) | 1,000,000 | 1,172,499 |
12 | MainStay MacKay DefinedTerm Municipal Opportunities Fund |
Principal Amount | Value | |
Pennsylvania (continued) | ||
Commonwealth Financing Authority, Tobacco Master Settlement Payment, Revenue Bonds | ||
Insured: AGM | ||
4.00%, due 6/1/39 | $ 2,370,000 | $ 2,711,191 |
Pennsylvania Economic Development Financing Authority, Capital Region Parking System, Revenue Bonds | ||
Series B, Insured: County Guaranteed | ||
6.00%, due 7/1/53 (b) | 14,260,000 | 15,439,652 |
Pennsylvania Turnpike Commission, Revenue Bonds | ||
Series A, Insured: AGM | ||
4.00%, due 12/1/49 (b) | 7,470,000 | 8,717,049 |
Philadelphia Authority for Industrial Development, Nueva Esperanza, Inc., Revenue Bonds | ||
8.20%, due 12/1/43 | 2,000,000 | 2,167,008 |
30,207,399 | ||
Puerto Rico 19.8% (12.7% of Managed Assets) | ||
Children's Trust Fund, Asset-Backed, Revenue Bonds | ||
5.50%, due 5/15/39 | 12,965,000 | 13,311,984 |
Commonwealth of Puerto Rico, Public Improvement, Unlimited General Obligation (e) | ||
Insured: AGM | ||
4.50%, due 7/1/23 | 280,000 | 280,700 |
Insured: AGM | ||
5.125%, due 7/1/30 | 1,365,000 | 1,376,944 |
Series A, Insured: AGM | ||
5.00%, due 7/1/35 | 7,840,000 | 7,900,529 |
Series A, Insured: AGC | ||
5.25%, due 7/1/23 | 145,000 | 146,450 |
Series A, Insured: AGM | ||
5.375%, due 7/1/25 | 1,340,000 | 1,355,075 |
Series A, Insured: AGC | ||
5.50%, due 7/1/32 | 255,000 | 258,188 |
Series A, Insured: AGM | ||
6.00%, due 7/1/33 | 875,000 | 890,312 |
Series A, Insured: AGM | ||
6.00%, due 7/1/34 | 755,000 | 768,212 |
Series A-4, Insured: AGM | ||
5.25%, due 7/1/30 | 4,425,000 | 4,469,250 |
Series C, Insured: AGM | ||
5.50%, due 7/1/32 | 1,520,000 | 1,539,000 |
Principal Amount | Value | |
Puerto Rico | ||
Commonwealth of Puerto Rico, Public Improvement, Unlimited General Obligation (e) (continued) | ||
Series C, Insured: AGM | ||
5.75%, due 7/1/37 | $ 5,440,000 | $ 5,521,600 |
Series C-9, Insured: NATL-RE | ||
6.00%, due 7/1/27 | 2,615,000 | 2,644,178 |
Puerto Rico Convention Center District Authority, Hotel Occupancy Tax, Revenue Bonds (e) | ||
Series A, Insured: AGC | ||
4.50%, due 7/1/36 | 13,080,000 | 13,112,700 |
Series A, Insured: AGC | ||
5.00%, due 7/1/27 | 635,000 | 639,762 |
Series A, Insured: AMBAC | ||
5.00%, due 7/1/31 | 340,000 | 347,311 |
Puerto Rico Electric Power Authority, Revenue Bonds (e) | ||
Series DDD, Insured: AGM | ||
3.625%, due 7/1/23 | 755,000 | 755,000 |
Series DDD, Insured: AGM | ||
3.65%, due 7/1/24 | 2,830,000 | 2,830,000 |
Series PP, Insured: NATL-RE | ||
5.00%, due 7/1/24 | 1,130,000 | 1,146,819 |
Series PP, Insured: NATL-RE | ||
5.00%, due 7/1/25 | 165,000 | 167,456 |
Series TT, Insured: AGM | ||
5.00%, due 7/1/27 | 310,000 | 312,325 |
Puerto Rico Highway & Transportation Authority, Revenue Bonds (e) | ||
Series AA-1, Insured: AGM | ||
4.95%, due 7/1/26 | 5,575,000 | 5,614,025 |
Series D, Insured: AGM | ||
5.00%, due 7/1/32 | 960,000 | 967,200 |
Series N, Insured: AMBAC | ||
5.25%, due 7/1/31 | 3,485,000 | 3,567,726 |
Series N, Insured: AMBAC | ||
5.50%, due 7/1/29 | 1,025,000 | 1,068,510 |
Puerto Rico Municipal Finance Agency, Revenue Bonds | ||
Series A, Insured: AGM | ||
5.00%, due 8/1/22 | 835,000 | 841,262 |
Series A, Insured: AGM | ||
5.00%, due 8/1/27 | 2,770,000 | 2,790,775 |
Series A, Insured: AGM | ||
5.00%, due 8/1/30 | 1,685,000 | 1,697,637 |
Principal Amount | Value | |
Puerto Rico (continued) | ||
Puerto Rico Public Buildings Authority, Government Facilities, Revenue Bonds | ||
Series M-3, Insured: NATL-RE | ||
6.00%, due 7/1/27 (e) | $ 10,000,000 | $ 10,111,579 |
Puerto Rico Sales Tax Financing Corp., Revenue Bonds | ||
Series A-1 | ||
4.55%, due 7/1/40 | 2,500,000 | 2,839,847 |
Series A-1 | ||
4.75%, due 7/1/53 | 7,000,000 | 7,933,234 |
Series A-1 | ||
5.00%, due 7/1/58 | 15,940,000 | 18,300,033 |
115,505,623 | ||
South Carolina 1.8% (1.2% of Managed Assets) | ||
Patriots Energy Group Financing Agency, Gas Supply, Revenue Bonds | ||
Series A | ||
4.00%, due 10/1/48 (b)(f) | 10,000,000 | 10,688,636 |
Texas 0.9% (0.6% of Managed Assets) | ||
Harris County-Houston Sports Authority, Revenue Bonds, Senior Lien | ||
Series A, Insured: AGM, NATL-RE | ||
(zero coupon), due 11/15/38 | 175,000 | 84,067 |
Harris County-Houston Sports Authority, Revenue Bonds, Junior Lien | ||
Series H, Insured: NATL-RE | ||
(zero coupon), due 11/15/28 | 50,000 | 41,570 |
Series H, Insured: NATL-RE | ||
(zero coupon), due 11/15/38 | 260,000 | 123,566 |
Mission Economic Development Corp., Natgasoline LLC, Revenue Bonds, Senior Lien | ||
4.625%, due 10/1/31 (a)(d) | 5,000,000 | 5,259,459 |
5,508,662 | ||
U.S. Virgin Islands 4.7% (3.0% of Managed Assets) | ||
Virgin Islands Public Finance Authority, Gross Receipts Taxes Loan, Revenue Bonds | ||
Series A | ||
5.00%, due 10/1/29 | 2,980,000 | 2,989,023 |
Series A | ||
5.00%, due 10/1/32 | 3,020,000 | 3,020,126 |
Series A, Insured: AGM | ||
5.00%, due 10/1/32 | 2,690,000 | 2,771,019 |
Principal Amount | Value | |
U.S. Virgin Islands | ||
Virgin Islands Public Finance Authority, Matching Fund Loan, Revenue Bonds | ||
Series A, Insured: AGM | ||
5.00%, due 10/1/32 | $ 5,350,000 | $ 5,511,134 |
Virgin Islands Public Finance Authority, Matching Fund Loan - Diageo Project, Revenue Bonds | ||
Series A | ||
6.625%, due 10/1/29 | 2,195,000 | 2,214,390 |
Virgin Islands Public Finance Authority, Matching Fund Loan Note, Revenue Bonds, Senior Lien | ||
Series 2009A-1 | ||
4.50%, due 10/1/24 | 295,000 | 292,974 |
Series A | ||
5.00%, due 10/1/25 | 5,540,000 | 5,554,414 |
Series A-1 | ||
5.00%, due 10/1/24 | 675,000 | 676,756 |
Series B | ||
5.00%, due 10/1/24 | 880,000 | 884,317 |
Series B | ||
5.00%, due 10/1/25 | 2,150,000 | 2,155,594 |
Virgin Islands Public Finance Authority, Matching Fund Loan Note, Revenue Bonds, Sub. Lien | ||
Series B | ||
5.25%, due 10/1/29 | 1,355,000 | 1,343,567 |
27,413,314 | ||
Virginia 0.9% (0.6% of Managed Assets) | ||
Tobacco Settlement Financing Corp., Asset-Backed, Revenue Bonds, Senior Lien | ||
Series B-1 | ||
5.00%, due 6/1/47 | 5,000,000 | 5,032,922 |
Washington 5.2% (3.4% of Managed Assets) | ||
Washington Health Care Facilities Authority, Multicare Health System, Revenue Bonds | ||
Series A | ||
5.00%, due 8/15/44 (b) | 19,665,000 | 20,262,933 |
Washington State Convention Center Public Facilities District, Lodging Tax, Revenue Bonds | ||
Series B | ||
3.00%, due 7/1/58 | 9,705,000 | 10,071,537 |
14 | MainStay MacKay DefinedTerm Municipal Opportunities Fund |
Principal Amount | Value | ||
Washington (continued) | |||
Washington State Housing Finance Commission, Single Family Program, Revenue Bonds | |||
Series 1N | |||
4.00%, due 6/1/49 | $ 145,000 | $ 158,251 | |
30,492,721 | |||
Wisconsin 1.3% (0.8% of Managed Assets) | |||
Public Finance Authority, Bancroft NeuroHealth Project, Revenue Bonds | |||
Series A | |||
5.00%, due 6/1/36 (d) | 500,000 | 552,410 | |
Public Finance Authority, Ultimate Medical Academy Project, Revenue Bonds | |||
Series A | |||
5.00%, due 10/1/39 (d) | 5,750,000 | 6,874,724 | |
7,427,134 | |||
Total Investments (Cost $817,658,177) | 151.2% | 883,548,115 | |
Floating Rate Note Obligations (g) | (55.3) | (323,005,000) | |
Other Assets, Less Liabilities | 4.1 | 23,633,119 | |
Net Assets Applicable to Common Shares | 100.0% | $ 584,176,234 |
† | Percentages indicated are based on Fund net assets applicable to Common shares. |
(a) | Interest on these securities was subject to alternative minimum tax. |
(b) | All or portion of principal amount transferred to a Tender Option Bond (“TOB”) Issuer in exchange for TOB Residuals and cash. |
(c) | Step coupon—Rate shown was the rate in effect as of November 30, 2021. |
(d) | May be sold to institutional investors only under Rule 144A or securities offered pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. |
(e) | Bond insurance is paying principal and interest, since the issuer is in default. |
(f) | Coupon rate may change based on changes of the underlying collateral or prepayments of principal. Rate shown was the rate in effect as of November 30, 2021. |
(g) | Face value of Floating Rate Notes issued in TOB transactions. |
Abbreviation(s): |
ACA—ACA Financial Guaranty Corp. |
AGC—Assured Guaranty Corp. |
AGM—Assured Guaranty Municipal Corp. |
AMBAC—Ambac Assurance Corp. |
BAM—Build America Mutual Assurance Co. |
MUN GOVT GTD—Municipal Government Guaranteed |
NATL-RE—National Public Finance Guarantee Corp. |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||
Asset Valuation Inputs | |||||||
Investments in Securities (a) | |||||||
Municipal Bonds | $ — | $ 883,548,115 | $ — | $ 883,548,115 |
(a) | For a complete listing of investments and their industries, see the Portfolio of Investments. |
Assets | |
Investment in securities, at value (identified cost $817,658,177) | $883,548,115 |
Cash | 11,356,773 |
Receivables: | |
Interest | 13,713,769 |
Common shares sold | 145,677 |
Other assets | 5,805 |
Total assets | 908,770,139 |
Liabilities | |
Payable for Floating Rate Note Obligations | 323,005,000 |
Payables: | |
Manager (See Note 3) | 449,003 |
Shareholder communication | 20,919 |
Professional fees | 18,091 |
Custodian | 4,750 |
Transfer agent | 4,213 |
Trustees | 1,035 |
Accrued expenses | 42,004 |
Interest expense and fees payable | 1,048,890 |
Total liabilities | 324,593,905 |
Net assets applicable to Common shares | $584,176,234 |
Common shares outstanding | 27,824,252 |
Net asset value per Common share (Net assets applicable to Common shares divided by Common shares outstanding) | $ 21.00 |
Net Assets Applicable to Common Shares Consist of | |
Common shares, $0.001 par value per share, unlimited number of shares authorized | $ 27,824 |
Additional paid-in-capital | 529,957,812 |
529,985,636 | |
Total distributable earnings (loss) | 54,190,598 |
Net assets applicable to Common shares | $584,176,234 |
16 | MainStay MacKay DefinedTerm Municipal Opportunities Fund |
Investment Income (Loss) | |
Income | |
Interest | $17,948,470 |
Expenses | |
Manager (See Note 3) | 2,779,992 |
Interest expense and fees | 1,262,953 |
Professional fees | 87,172 |
Insurance | 25,748 |
Shareholder communication | 16,508 |
Custodian | 13,223 |
Transfer agent | 7,868 |
Trustees | 6,586 |
Miscellaneous | 51,563 |
Total expenses | 4,251,613 |
Net investment income (loss) | 13,696,857 |
Realized and Unrealized Gain (Loss) | |
Net realized gain (loss) on investments | 1,770,485 |
Net change in unrealized appreciation (depreciation) on investments | (8,763,942) |
Net realized and unrealized gain (loss) | (6,993,457) |
Net increase (decrease) in net assets to Common shares resulting from operations | $ 6,703,400 |
for the six months ended November 30, 2021 (Unaudited) and the year ended May 31, 2021
Six months ended November 30, 2021 | Year ended May 31, 2021 | |
Increase (Decrease) in Net Assets Applicable to Common Shares | ||
Operations: | ||
Net investment income (loss) | $ 13,696,857 | $ 28,088,294 |
Net realized gain (loss) | 1,770,485 | 11,953,725 |
Net change in unrealized appreciation (depreciation) | (8,763,942) | 29,096,609 |
Net increase (decrease) in net assets applicable to Common shares resulting from operations | 6,703,400 | 69,138,628 |
Distributions to Common shareholders | (14,176,580) | (28,279,253) |
Capital share transactions (Common shares): | ||
Net proceeds issued to shareholders resulting from reinvestment of dividends | 997,654 | 2,048,836 |
Net increase (decrease) in net assets applicable to Common shares | (6,475,526) | 42,908,211 |
Net Assets Applicable to Common Shares | ||
Beginning of period | 590,651,760 | 547,743,549 |
End of period | $584,176,234 | $590,651,760 |
18 | MainStay MacKay DefinedTerm Municipal Opportunities Fund |
for the six months ended November 30, 2021 (Unaudited)
Cash Flows From (Used in) Operating Activities: | |
Net increase in net assets resulting from operations | $ 6,703,400 |
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities: | |
Investments purchased | (41,416,022) |
Investments sold | 57,365,859 |
Amortization (accretion) of discount and premium, net | 1,958,611 |
Increase in interest receivable | (711,499) |
Decrease in other assets | 25,748 |
Decrease in professional fees payable | (83,622) |
Decrease in custodian payable | (8,290) |
Decrease in shareholder communication payable | (10,175) |
Increase in due to trustees | 810 |
Decrease in due to manager | (22,696) |
Decrease in due to transfer agent | (6,673) |
Increase in accrued expenses | 41,491 |
Increase in interest expense and fees payable | 187,324 |
Net realized gain from investments | (1,770,485) |
Net change in unrealized (appreciation) depreciation on unaffiliated investments | 8,763,942 |
Net cash from (used in) operating activities | 31,017,723 |
Cash Flows From (Used in) Financing Activities: | |
Net proceeds resulting from reinvestment of dividends | 1,022,715 |
Payments on floating rate note obligations | (12,920,000) |
Cash distributions paid, net of change in Common share dividend payable | (14,176,580) |
Net cash from (used in) financing activities | (26,073,865) |
Net increase in cash | 4,943,858 |
Cash at beginning of period | 6,412,915 |
Cash at end of period | $ 11,356,773 |
Six months ended November 30, 2021* | Year Ended May 31, | ||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | |||||||
Net asset value at beginning of period applicable to Common shares | $ 21.26 | $ 19.79 | $ 20.41 | $ 20.11 | $ 20.14 | $ 20.61 | |||||
Net investment income (loss) | 0.49 | 1.01 | 0.99 | 1.01 | 1.05 | 1.08 | |||||
Net realized and unrealized gain (loss) | (0.24) | 1.48 | (0.59) | 0.32 | 0.00‡ | (0.46) | |||||
Total from investment operations | 0.25 | 2.49 | 0.40 | 1.33 | 1.05 | 0.62 | |||||
Dividends and distributions to Common shareholders | (0.51) | (1.02) | (1.02) | (1.03) | (1.08) | (1.09) | |||||
Net asset value at end of period applicable to Common shares | $ 21.00 | $ 21.26 | $ 19.79 | $ 20.41 | $ 20.11 | $ 20.14 | |||||
Market price at end of period applicable to Common shares | $ 21.24 | $ 22.89 | $ 20.94 | $ 20.65 | $ 19.41 | $ 19.94 | |||||
Total investment return on market price (a) | (4.95)% | 14.79% | 6.62% | 12.05% | 2.88% | 7.22% | |||||
Total investment return on net asset value (a) | 1.18% | 12.82% | 1.94% | 6.80% | 5.31% | 3.21% | |||||
Ratios (to average net assets of Common shareholders)/ Supplemental Data: | |||||||||||
Net investment income (loss) | 4.64%†† | 4.88% | 4.44% | 5.03% | 5.21% | 5.35% | |||||
Net expenses (including interest expense and fees) | 1.44%†† | 1.64% | 2.33% | 2.47% | 2.11% | 1.83% | |||||
Interest expense and fees (b) | 0.43%†† | 0.61% | 1.31% | 1.45% | 1.10% | 0.85% | |||||
Portfolio Turnover Rate | 4% | 20% | 38%(c) | 27% | 20% | 26% | |||||
Net assets applicable to Common shareholders at end of period (in 000’s) | $ 584,176 | $ 590,652 | $ 547,744 | $ 563,098 | $ 554,332 | $ 555,071 | |||||
Preferred shares outstanding at $100,000 liquidation preference, end of period (in 000’s) (d)(e) | $ — | $ — | $ 70,000 | $ 70,000 | $ 70,000 | $ 70,000 | |||||
Assets coverage per Preferred share, end of period (d)(e) | $ — | $ — | $ 882,491(f) | $ 904,426(f) | $ 891,903(f) | $ 892,958(f) | |||||
Average market value per Preferred share: | |||||||||||
Series A (d) | $ — | $ — | $ 100,000 | $ 100,000 | $ 100,006 | $ 100,012 | |||||
Series B (e) | $ — | $ — | $ 99,999 | $ 100,000 | $ 100,000 | $ 100,000 |
* | Unaudited. |
‡ | Less than one cent per share. |
†† | Annualized. |
(a) | Total investment return on market price is calculated assuming a purchase of a Common share at the market price on the first day and a sale on the last day business day of each month. Dividends and distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total investment return on net asset value reflects the changes in net asset value during each period and assumes the reinvestment of dividends and distributions at net asset value on the last business day of each month. This percentage may be different from the total investment return on market price, due to differences between the market price and the net asset value. For periods less than one year, total investment return is not annualized. |
(b) | Interest expense and fees relate to the costs of tender option bond transactions (See Note 2(G)) and the issuance of fixed rate municipal term preferred shares for the years ended May 31, 2021, 2020, 2019, 2018 and 2017, respectively. |
(c) | The portfolio turnover rate includes variable rate demand notes. |
(d) | Redeemed on June 15, 2020. |
(e) | Redeemed on December 15, 2020. |
(f) | Calculated by subtracting the Fund’s total liabilities (not including the Preferred shares) from the Fund’s total assets, and dividing the result by the number of Preferred shares outstanding. |
20 | MainStay MacKay DefinedTerm Municipal Opportunities Fund |
• | Level 1—quoted prices in active markets for an identical asset or liability |
• | Level 2—other significant observable inputs (including quoted prices for a similar asset or liability in active markets, interest rates and yield curves, prepayment speeds, credit risk, etc.) |
• | Level 3—significant unobservable inputs (including the Fund's own assumptions about the assumptions that market participants would use in measuring fair value of an asset or liability) |
• Benchmark yields | • Reported trades |
• Broker/dealer quotes | • Issuer spreads |
• Two-sided markets | • Benchmark securities |
• Bids/offers | • Reference data (corporate actions or material event notices) |
• Industry and economic events | • Comparable bonds |
• Monthly payment information |
22 | MainStay MacKay DefinedTerm Municipal Opportunities Fund |
24 | MainStay MacKay DefinedTerm Municipal Opportunities Fund |
Underlying Securities Transferred to TOB Issuers | Liability for Floating Rate Note Obligations |
$508,238,186 | $323,005,000 |
Average Floating Rate Note Obligations Outstanding | Daily Weighted Average Interest Rate |
$329,006,011 | 0.38% |
Federal Tax Cost | Gross Unrealized Appreciation | Gross Unrealized (Depreciation) | Net Unrealized Appreciation/ (Depreciation) | |
Investments in Securities | $492,970,842 | $80,692,024 | $(13,119,751) | $67,572,273 |
Capital Loss Available Through | Short-Term Capital Loss Amounts (000’s) | Long-Term Capital Loss Amounts (000’s) |
Unlimited | $7,901 | $— |
2021 | |||
Distributions paid from: | Ordinary Income | Exempt Interest Dividends | Long-Term Capital Gain |
Common shares | $23,434 | $28,255,819 | $— |
Prefered shares | 1,278 | 1,538,991 | — |
Total | $24,712 | $29,794,810 | $— |
26 | MainStay MacKay DefinedTerm Municipal Opportunities Fund |
Common Shares | Shares | Amount |
Six-month period ended November 30, 2021: | ||
Common shares issued to shareholders in reinvestment of distributions (a) | 47,053 | $ 997,654 |
Year ended May 31, 2021: | ||
Common shares issued to shareholders in reinvestment of distributions (a) | 98,420 | $2,048,836 |
(a) | See page 28 for information on the Fund’s dividend reinvestment plan. |
Month | Ex-Date | Record Date | Payable Date | Amount |
January | 1/13/22 | 1/14/22 | 1/31/22 | $0.085 |
February | 2/14/22 | 2/15/22 | 2/28/22 | $0.085 |
March | 3/14/22 | 3/15/22 | 3/31/22 | $0.085 |
28 | MainStay MacKay DefinedTerm Municipal Opportunities Fund |
Trustees | Votes FOR | Votes WITHHELD | Abstentions | Total Votes |
David H. Chow | 25,311,017 | 207,278 | 0 | 25,518,295 |
Yie-Hsin Hung | 25,305,720 | 212,575 | 0 | 25,518,295 |
Richard S. Trutanic | 25,057,818 | 460,477 | 0 | 25,518,295 |
Louisville, Kentucky 40233
(855) 456-9683
1722074MS208-21 | MSMHI10-01/22 |
Item 2. | Code of Ethics. |
Not applicable.
Item 3. | Audit Committee Financial Expert. |
Not applicable.
Item 4. | Principal Accountant Fees and Services. |
Not applicable.
Item 5. | Audit Committee of Listed Registrants. |
Not applicable.
Item 6. | Investments. |
The Schedule of Investments is included as part of Item 1 of this report.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable.
Item 10. | Submission of Matters to a Vote of Security Holders. |
Since the registrant’s last response to this item, there have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.
Item 11. | Controls and Procedures. |
(a) Based on an evaluation of the Registrant’s Disclosure Controls and Procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) (the “Disclosure
Controls”), as of a date within 90 days prior to the filing date (the “Filing Date”) of this Form N-CSR (the “Report”), the Registrant’s principal executive officer and principal financial officer have concluded that the Disclosure Controls are reasonably designed to ensure that information required to be disclosed by the Registrant in the Report is recorded, processed, summarized and reported by the Filing Date, including ensuring that information required to be disclosed in the Report is accumulated and communicated to the Registrant’s management, including the Registrant’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d)) under the Investment Company Act of 1940 that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not applicable.
Item 13. | Exhibits. |
(a) |
(b) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
MAINSTAY MACKAY DEFINEDTERM MUNICIPAL OPPORTUNITIES FUND
By: | /s/ Kirk C. Lehneis | |
Kirk C. Lehneis | ||
President and Principal Executive Officer |
Date: February 7, 2022
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ Kirk C. Lehneis | |
Kirk C. Lehneis | ||
President and Principal Executive Officer | ||
Date: February 7, 2022 | ||
By: | /s/ Jack R. Benintende | |
Jack R. Benintende | ||
Treasurer and Principal Financial | ||
and Accounting Officer |
Date: February 7, 2022
EXHIBIT INDEX
(a) Section 302 Certifications are attached.
(b) Section 906 Certifications are attached.