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 | 811-05652 | |||||
BNY Mellon Municipal Income, Inc. | ||||||
(Exact name of Registrant as specified in charter) | ||||||
c/o BNY Mellon Investment Adviser, Inc. 240 Greenwich Street New York, New York 10286 | ||||||
(Address of principal executive offices) (Zip code) | ||||||
Bennett A. MacDougall, Esq. 240 Greenwich Street New York, New York 10286 | ||||||
(Name and address of agent for service) | ||||||
Registrant's telephone number, including area code: | (212) 922-6400 | |||||
Date of fiscal year end:
| 09/30 | |||||
Date of reporting period: | 03/31/2021
| |||||
FORM N-CSR
Item 1. | Reports to Stockholders. |
BNY Mellon Municipal Income, Inc.
SEMIANNUAL REPORT March 31, 2021 |
BNY Mellon Municipal Income, Inc. Protecting Your Privacy THE FUND IS COMMITTED TO YOUR PRIVACY. On this page, you will find the fund’s policies and practices for collecting, disclosing, and safeguarding “nonpublic personal information,” which may include financial or other customer information. These policies apply to individuals who purchase fund shares for personal, family, or household purposes, or have done so in the past. This notification replaces all previous statements of the fund’s consumer privacy policy, and may be amended at any time. We’ll keep you informed of changes as required by law. YOUR ACCOUNT IS PROVIDED IN A SECURE ENVIRONMENT. The fund maintains physical, electronic and procedural safeguards that comply with federal regulations to guard nonpublic personal information. The fund’s agents and service providers have limited access to customer information based on their role in servicing your account. THE FUND COLLECTS INFORMATION IN ORDER TO SERVICE AND ADMINISTER YOUR ACCOUNT. The fund collects a variety of nonpublic personal information, which may include: • Information we receive from you, such as your name, address, and social security number. • Information about your transactions with us, such as the purchase or sale of fund shares. • Information we receive from agents and service providers, such as proxy voting information. THE FUND DOES NOT SHARE NONPUBLIC PERSONAL INFORMATION WITH ANYONE, EXCEPT AS PERMITTED BY LAW. Thank you for this opportunity to serve you. |
The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
FOR MORE INFORMATION
Back Cover
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from October 1, 2020 through March 31, 2021, as provided by Daniel Rabasco and Jeffrey Burger, Primary Portfolio Managers
Market and Fund Performance Overview
For the six-month period ended March 31, 2021, BNY Mellon Municipal Income, Inc. produced a total return of 4.82% on a net-asset-value basis and 3.87% on a market price basis.1 Over the same period, the fund provided aggregate income dividends of $0.21 per share, which reflects an annualized distribution rate of 4.80%.2
Municipal bonds rose during the reporting period as the market recovered from the market turmoil that resulted from the COVID-19 pandemic. The pandemic resulted in a flight to safety that hurt municipal market performance earlier in the year, but the market rallied as lockdowns were eased, and the economy continued to rebound.
The Fund’s Investment Approach
The fund seeks to maximize current income exempt from federal income tax to the extent consistent with the preservation of capital. Under normal market conditions, the fund invests at least 80% of the value of its net assets in municipal obligations and invests in municipal obligations which, at the time of purchase, are rated investment grade or the unrated equivalent as determined by BNY Mellon Investment Adviser, Inc. in the case of bonds, and rated in the two highest rating categories or the unrated equivalent as determined by BNY Mellon Investment Adviser, Inc. in the case of short-term obligations having, or deemed to have, maturities of less than one year.
To this end, we have constructed a portfolio based on identifying income opportunities through analysis of each bond’s structure, including paying close attention to each bond’s yield, maturity and early redemption features. Over time, many of the fund’s relatively higher-yielding bonds mature or are redeemed by their issuers, and we generally attempt to replace those bonds with investments consistent with the fund’s investment policies, albeit with yields that reflect the then-current interest-rate environment. When making new investments, we focus on identifying undervalued sectors and securities, and we minimize the use of interest-rate forecasting. We use fundamental analysis to estimate the relative value and attractiveness of various sectors and securities and to exploit pricing inefficiencies in the municipal bond market.
Lifted Lockdowns and Economic Recovery Further Aid Market
The municipal bond market experienced extraordinary volatility early in 2020 as the COVID-19 virus spread, and government shutdowns caused the economy to slow dramatically. Support from the Federal Reserve (the “Fed”), an easing of government-mandated lockdowns and strong inflows to municipal bond funds toward the end of 2020 bolstered the market.
Approval of multiple COVID-19 vaccines and passage of a federal stimulus package also contributed further to demand. Although the stimulus package did not include direct relief for states and municipalities, the market took a favorable view of funding for hospitals and mass transit, among other segments, as well as for consumers and small businesses.
The results of the November 2020 election also provided support. A Democrat-controlled Congress made federal relief for state and local governments more likely. It also made income tax hikes more likely, adding to the appeal of tax-exempt municipal securities. The prospect of an increase in the corporate tax rate made municipal bonds more appealing to institutional buyers as well, and relatively high interest rates also attracted foreign investors.
2
Investors were also encouraged by the fiscal health of municipal issuers, which turned out to be much stronger than expected. Tax revenues remained robust because real estate and income tax collections failed to decline as much as predicted. Progressive tax regimes proved advantageous because higher-earning, white-collar workers were largely unaffected by the pandemic. In addition, federal support to households, school systems, the transportation system and other segments bolstered the economy and prevented sales taxes from declining as much as originally feared.
Revenue bonds generally outperformed general obligation bonds late in the period as hard-hit market segments such as transportation and hospitals recovered when investors became more confident that the end of the pandemic was likely. Yield spreads of municipal bonds over Treasury bonds compressed late in the reporting period. This was due to both a rise in long-term Treasury yields and to a decline in long-term municipal bond yields. Although the municipal bond market experienced some turmoil late in the period as the prospects of a stronger economy and an increase in inflation have grown, most of the volatility occurred among longer maturities.
Despite an increase in volatility, the municipal bond market has benefited from strong fundamentals due in part to a $350 billion relief package from the federal government. In addition, inflows to municipal bond mutual funds in 2021 have been the strongest on record.
Asset Allocation and Security Selection Enhanced Results
The fund’s performance was helped by its overweight position in revenue bonds and an underweight position in general obligation bonds. Security selection was also favorable as positions in Chicago general obligation bonds performed well. In addition, positions in the health care, education, special tax and transportation sectors also contributed positively to returns. The fund did not employ derivatives during the reporting period.
On a less positive note, the fund’s performance was hampered by its curve positioning and longer duration since longer-term bonds underperformed. Security selection in certain higher-quality sectors also hindered returns. Positions in the water and sewer, housing and power sectors in particular were detrimental.
A Positive Stance
The economic fundamentals, as well as supply and demand factors, bode well for the municipal bond market. Issuers have weathered the pandemic in a better fashion than anticipated, with tax receipts exceeding expectations. In addition, federal relief programs, both directly to municipal issuers and indirectly to businesses and consumers, have kept state and local budgets relatively healthy.
Municipal issuers should also benefit from the likely passage of a federal infrastructure spending package. Upgrades to the nation’s infrastructure will have a positive impact on municipalities and will boost state and local economies through job creation and improved delivery of goods and services.
Demand for municipal bonds is likely to remain strong, given the likelihood of higher corporate and personal income tax rates. We also anticipate that supply of tax-exempt municipals will remain manageable since much issuance is occurring in the taxable market.
The possibility of inflation remains a risk, but we anticipate that long-term interest rates will rise only gradually. We expect to keep the fund’s duration relatively long to generate attractive incremental yield and longer-term municipal bonds will continue to benefit from strong demand relative to comparable Treasuries. We will continue to look for opportunities to add lower
3
DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)
investment grade rated bonds whose fundamentals should be supported by stronger economic activity.
April 15, 2021
1 Total return includes reinvestment of dividends and any capital gains paid, based upon net asset value per share or market price per share, as applicable. Past performance is no guarantee of future results. Market price per share, net asset value per share and investment return fluctuate. Income may be subject to state and local taxes, and some income may be subject to the federal alternative minimum tax (AMT) for certain investors. Capital gains, if any, are fully taxable.
2 Distribution rate per share is based upon dividends per share paid from net investment income during the period, divided by the market price per share at the end of the period, adjusted for any capital gain distributions.
Bonds are subject generally to interest-rate, credit, liquidity and market risks, to varying degrees. Generally, all other factors being equal, bond prices are inversely related to interest-rate changes, and rate increases can cause price declines. High yield bonds are subject to increased credit risk and are considered speculative in terms of the issuer’s perceived ability to continue making interest payments on a timely basis and to repay principal upon maturity. The use of leverage may magnify the fund’s gains or losses. For derivatives with a leveraging component, adverse changes in the value or level of the underlying asset can result in a loss that is much greater than the original investment in the derivative.
Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
4
STATEMENT OF INVESTMENTS
March 31, 2021 (Unaudited)
Description | Coupon | Maturity | Principal | Value ($) | |||||
Long-Term Municipal Investments - 149.3% | |||||||||
Alabama - 4.9% | |||||||||
Jefferson County, Revenue Bonds, Refunding, Ser. F | 7.75 | 10/1/2046 | 4,000,000 | a | 4,065,811 | ||||
The Lower Alabama Gas District, Revenue Bonds, Ser. A | 5.00 | 9/1/2046 | 2,500,000 | 3,559,254 | |||||
University of Alabama at Birmingham, Revenue Bonds, Ser. B | 4.00 | 10/1/2036 | 1,500,000 | 1,754,314 | |||||
9,379,379 | |||||||||
Arizona - 5.3% | |||||||||
Arizona Industrial Development Authority, Revenue Bonds (Equitable School Revolving Fund Obligated Group) Ser. A | 4.00 | 11/1/2050 | 1,355,000 | 1,537,586 | |||||
Arizona Industrial Development Authority, Revenue Bonds (Phoenix Children's Hospital Obligated Group) | 4.00 | 2/1/2050 | 1,000,000 | 1,139,630 | |||||
Glendale Industrial Development Authority, Revenue Bonds, Refunding (Sun Health Services Obligated Group) Ser. A | 5.00 | 11/15/2054 | 1,500,000 | 1,723,487 | |||||
La Paz County Industrial Development Authority, Revenue Bonds (Harmony Public Schools) Ser. A | 5.00 | 2/15/2046 | 1,500,000 | b | 1,661,946 | ||||
La Paz County Industrial Development Authority, Revenue Bonds (Harmony Public Schools) Ser. A | 5.00 | 2/15/2036 | 1,000,000 | b | 1,125,242 | ||||
Salt Verde Financial Corp., Revenue Bonds | 5.00 | 12/1/2037 | 2,190,000 | 3,043,407 | |||||
10,231,298 | |||||||||
California - 8.0% | |||||||||
California County Tobacco Securitization Agency, Revenue Bonds, Refunding, Ser. A | 4.00 | 6/1/2039 | 565,000 | 670,487 | |||||
Tender Option Bond Trust Receipts (Series 2016-XM0387), (Los Angeles Department of Airports, Revenue Bonds (Los Angeles International Airport)) Non-recourse, Underlying Coupon Rate (%) 5.00 | 15.38 | 5/15/2038 | 4,000,000 | b,c,d | 4,341,614 |
5
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Coupon | Maturity | Principal | Value ($) | |||||
Long-Term Municipal Investments - 149.3% (continued) | |||||||||
California - 8.0% (continued) | |||||||||
Tender Option Bond Trust Receipts (Series 2016-XM0390), (The Regents of the University of California, Revenue Bonds, Refunding) Non-recourse, Underlying Coupon Rate (%) 5.00 | 15.44 | 5/15/2036 | 3,740,000 | b,c,d | 4,091,582 | ||||
Tender Option Bond Trust Receipts (Series 2020-XF2876), (San Francisco California City & County Airport Commission, Revenue Bonds, Refunding, Ser. E) Recourse, Underlying Coupon Rate (%) 5.00 | 17.37 | 5/1/2050 | 3,250,000 | b,c,d | 3,884,769 | ||||
Tobacco Securitization Authority of Northern California, Revenue Bonds, Refunding (San Diego County Tobacco Asset Securitization) | 5.00 | 6/1/2048 | 2,000,000 | 2,447,936 | |||||
15,436,388 | |||||||||
Colorado - 7.8% | |||||||||
Colorado Educational & Cultural Facilities Authority, Revenue Bonds, Refunding (Johnson & Wales University) Ser. B | 5.00 | 4/1/2031 | 1,680,000 | 1,804,249 | |||||
Colorado Health Facilities Authority, Revenue Bonds, Refunding (Covenant Living Communities & Services Obligated Group) Ser. A | 4.00 | 12/1/2050 | 2,000,000 | 2,206,828 | |||||
Colorado High Performance Transportation Enterprise, Revenue Bonds | 5.00 | 12/31/2056 | 1,500,000 | 1,690,017 | |||||
Tender Option Bond Trust Receipts (Series 2016-XM0385), (Board of Governors of the Colorado State University, Revenue Bonds) Non-recourse, Underlying Coupon Rate (%) 5.00 | 15.41 | 3/1/2038 | 2,540,000 | b,c,d | 2,648,778 | ||||
Tender Option Bond Trust Receipts (Series 2016-XM0433), (Colorado Springs, Revenue Bonds) Recourse, Underlying Coupon Rate (%) 5.00 | 17.73 | 11/15/2043 | 3,997,093 | b,c,d | 4,413,519 |
6
Description | Coupon | Maturity | Principal | Value ($) | |||||
Long-Term Municipal Investments - 149.3% (continued) | |||||||||
Colorado - 7.8% (continued) | |||||||||
Tender Option Bond Trust Receipts (Series 2020-XM0829), (Colorado Health Facilities Authority, Revenue Bonds, Refunding (CommonSpirit Health Obligated Group, Ser. A1)) Recourse, Underlying Coupon Rate (%) 4.00 | 16.81 | 8/1/2044 | 1,645,000 | b,c,d | 2,180,306 | ||||
14,943,697 | |||||||||
Connecticut - 2.2% | |||||||||
Connecticut, Special Tax Bonds, Ser. A | 5.00 | 5/1/2040 | 1,000,000 | 1,256,331 | |||||
Connecticut Health & Educational Facilities Authority, Revenue Bonds, Refunding (Trinity Health Obligated Group) | 5.00 | 12/1/2045 | 2,500,000 | 2,967,196 | |||||
4,223,527 | |||||||||
District of Columbia - 3.9% | |||||||||
Tender Option Bond Trust Receipts (Series 2016-XM0437), (District of Columbia, Revenue Bonds) Recourse, Underlying Coupon Rate (%) 5.00 | 17.74 | 12/1/2035 | 6,997,490 | b,c,d | 7,509,899 | ||||
Florida - 8.1% | |||||||||
Atlantic Beach, Revenue Bonds (Fleet Landing Project) Ser. A | 5.00 | 11/15/2048 | 1,500,000 | 1,668,166 | |||||
Davie, Revenue Bonds (Nova Southeastern University Project) Ser. A | 5.63 | 4/1/2023 | 1,000,000 | e | 1,107,629 | ||||
Florida Higher Educational Facilities Financial Authority, Revenue Bonds (Ringling College Project) | 5.00 | 3/1/2049 | 1,500,000 | 1,716,222 | |||||
Halifax Hospital Medical Center, Revenue Bonds, Refunding | 4.00 | 6/1/2041 | 1,000,000 | 1,052,692 | |||||
Mid-Bay Bridge Authority, Revenue Bonds, Ser. A | 7.25 | 10/1/2021 | 1,250,000 | e | 1,293,609 | ||||
Palm Beach County Health Facilities Authority, Revenue Bonds (Lifespace Communities Obligated Group) Ser. B | 4.00 | 5/15/2053 | 1,000,000 | 1,077,730 | |||||
Tampa, Revenue Bonds (H. Lee Moffitt Cancer Center & Research Institute Obligated Group) Ser. B | 5.00 | 7/1/2050 | 1,500,000 | 1,844,963 | |||||
Tender Option Bond Trust Receipts (Series 2019-XF0813), (Fort Myers Florida Utility, Revenue Bonds) Non-recourse, Underlying Coupon Rate (%) 4.00 | 12.11 | 10/1/2049 | 1,015,000 | b,c,d | 1,156,277 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Coupon | Maturity | Principal | Value ($) | |||||
Long-Term Municipal Investments - 149.3% (continued) | |||||||||
Florida - 8.1% (continued) | |||||||||
Tender Option Bond Trust Receipts (Series 2019-XM0782), (Palm Beach County Florida Health Facilities Authority, Revenue Bonds, Refunding (Baptist Health South Florida Obligated Group)) Recourse, Underlying Coupon Rate (%) 4.00 | 13.84 | 8/15/2049 | 2,770,000 | b,c,d | 3,139,106 | ||||
Tender Option Bond Trust Receipts (Series 2020-XF2877), (Greater Orlando Aviation Authority, Revenue Bonds, Ser. A) Recourse, Underlying Coupon Rate (%) 4.00 | 13.76 | 10/1/2049 | 1,380,000 | b,c,d | 1,545,630 | ||||
15,602,024 | |||||||||
Georgia - 4.5% | |||||||||
Gainesville & Hall County Development Authority, Revenue Bonds, Refunding (Riverside Military Academy) | 5.00 | 3/1/2037 | 1,000,000 | 990,220 | |||||
Tender Option Bond Trust Receipts (Series 2019-XF2847), (Municipal Electric Authority of Georgia, Revenue Bonds (Plant Vogtle Unis 3&4 Project, Ser. A)) Recourse, Underlying Coupon Rate (%) 5.00 | 17.60 | 1/1/2056 | 1,270,000 | b,c,d | 1,496,998 | ||||
Tender Option Bond Trust Receipts (Series 2020-XM0825), (Brookhaven Development Authority, Revenue Bonds (Children's Healthcare of Atlanta, Ser. A)) Recourse, Underlying Coupon Rate (%) 4.00 | 15.28 | 7/1/2044 | 2,660,000 | b,c,d | 3,298,886 | ||||
The Atlanta Development Authority, Revenue Bonds, Ser. A1 | 5.25 | 7/1/2040 | 1,500,000 | 1,729,762 | |||||
The Burke County Development Authority, Revenue Bonds, Refunding (Oglethorpe Power Corp.) Ser. D | 4.13 | 11/1/2045 | 1,000,000 | 1,110,287 | |||||
8,626,153 | |||||||||
Illinois - 20.6% | |||||||||
Chicago Board of Education, Revenue Bonds | 5.00 | 4/1/2046 | 1,725,000 | 1,956,296 | |||||
Chicago II, GO, Refunding, Ser. A | 6.00 | 1/1/2038 | 2,000,000 | 2,407,564 | |||||
Chicago II, GO, Ser. A | 5.00 | 1/1/2044 | 1,000,000 | 1,163,022 | |||||
Chicago II Wastewater Transmission, Revenue Bonds, Refunding, Ser. C | 5.00 | 1/1/2039 | 1,100,000 | 1,258,446 |
8
Description | Coupon | Maturity | Principal | Value ($) | |||||
Long-Term Municipal Investments - 149.3% (continued) | |||||||||
Illinois - 20.6% (continued) | |||||||||
Chicago II Waterworks, Revenue Bonds (2nd Lien Project) | 5.00 | 11/1/2028 | 1,000,000 | 1,142,133 | |||||
Chicago O'Hare International Airport, Revenue Bonds, Refunding, Ser. A | 5.00 | 1/1/2048 | 2,000,000 | 2,362,986 | |||||
Chicago Transit Authority, Revenue Bonds, Refunding, Ser. A | 5.00 | 12/1/2045 | 1,000,000 | 1,219,913 | |||||
Illinois, GO, Refunding, Ser. A | 5.00 | 10/1/2029 | 1,000,000 | 1,204,690 | |||||
Illinois, GO, Ser. A | 5.00 | 5/1/2038 | 1,250,000 | 1,445,261 | |||||
Illinois, GO, Ser. D | 5.00 | 11/1/2028 | 1,000,000 | 1,180,508 | |||||
Illinois Finance Authority, Revenue Bonds, Refunding (Rosalind Franklin University) | 5.00 | 8/1/2047 | 1,350,000 | 1,531,832 | |||||
Illinois Toll Highway Authority, Revenue Bonds, Ser. A | 4.00 | 1/1/2044 | 1,000,000 | 1,139,663 | |||||
Metropolitan Pier & Exposition Authority, Revenue Bonds (McCormick Place Expansion Project) | 5.00 | 6/15/2057 | 2,500,000 | 2,924,963 | |||||
Metropolitan Pier & Exposition Authority, Revenue Bonds (McCormick Place Project) (Insured; National Public Finance Guarantee Corp.) Ser. A | 0.00 | 12/15/2036 | 2,500,000 | f | 1,602,423 | ||||
Metropolitan Pier & Exposition Authority, Revenue Bonds, Refunding (McCormick Place Project) Ser. B | 5.00 | 12/15/2028 | 1,500,000 | 1,565,722 | |||||
Railsplitter Tobacco Settlement Authority, Revenue Bonds | 6.00 | 6/1/2021 | 2,000,000 | e | 2,018,346 | ||||
Sales Tax Securitization Corp., Revenue Bonds, Refunding, Ser. A | 4.00 | 1/1/2039 | 1,500,000 | 1,706,334 | |||||
Tender Option Bond Trust Receipts (Series 2016-XM0378), (Greater Chicago Metropolitan Water Reclamation District, GO) Non-recourse, Underlying Coupon Rate (%) 5.00 | 15.26 | 12/1/2032 | 2,500,000 | b,c,d | 2,577,746 | ||||
Tender Option Bond Trust Receipts (Series 2017-XM0492), (Illinois Finance Authority, Revenue Bonds, Refunding (The University of Chicago)) Non-recourse, Underlying Coupon Rate (%) 5.00 | 15.41 | 10/1/2040 | 7,000,000 | b,c,d | 8,208,222 | ||||
University of Illinois, Revenue Bonds, Refunding (Auxiliary Facilities System) Ser. A | 5.13 | 4/1/2036 | 1,000,000 | 1,002,732 | |||||
39,618,802 |
9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Coupon | Maturity | Principal | Value ($) | |||||
Long-Term Municipal Investments - 149.3% (continued) | |||||||||
Indiana - .6% | |||||||||
Indiana Finance Authority, Revenue Bonds (Parkview Health System Obligated Group) Ser. A | 5.00 | 11/1/2043 | 1,000,000 | 1,208,568 | |||||
Kentucky - .6% | |||||||||
Kentucky Economic Development Finance Authority, Revenue Bonds, Refunding (Louisville Arena Project) (Insured; Assured Guaranty Municipal Corp.) Ser. A | 5.00 | 12/1/2045 | 1,000,000 | 1,209,897 | |||||
Louisiana - 4.4% | |||||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, Revenue Bonds, Refunding (Westlake Chemical Project) | 3.50 | 11/1/2032 | 1,000,000 | 1,102,960 | |||||
Tender Option Bond Trust Receipts (Series 2018-XF2584), (Louisiana Public Facilities Authority, Revenue Bonds (Franciscan Missionaries of Our Lady Health System Project)) Non-recourse, Underlying Coupon Rate (%) 5.00 | 17.30 | 7/1/2047 | 6,320,000 | b,c,d | 7,339,293 | ||||
8,442,253 | |||||||||
Maine - .7% | |||||||||
Maine Health & Higher Educational Facilities Authority, Revenue Bonds (Maine General Medical Center Obligated Group) | 7.50 | 7/1/2021 | 1,250,000 | e | 1,272,055 | ||||
Maryland - 2.5% | |||||||||
Maryland Health & Higher Educational Facilities Authority, Revenue Bonds (Adventist Healthcare Obligated Group) Ser. A | 5.50 | 1/1/2046 | 1,500,000 | 1,758,622 | |||||
Maryland Health & Higher Educational Facilities Authority, Revenue Bonds, Refunding (Stevenson University Project) | 4.00 | 6/1/2046 | 750,000 | 830,179 | |||||
Tender Option Bond Trust Receipts (Series 2016-XM0391), (Mayor & City Council of Baltimore, Revenue Bonds, Refunding (Water Projects)) Non-recourse, Underlying Coupon Rate (%) 5.00 | 15.38 | 7/1/2042 | 2,000,000 | b,c,d | 2,252,652 | ||||
4,841,453 |
10
Description | Coupon | Maturity | Principal | Value ($) | |||||
Long-Term Municipal Investments - 149.3% (continued) | |||||||||
Massachusetts - 6.0% | |||||||||
Massachusetts Development Finance Agency, Revenue Bonds, Refunding (Atrius Health Obligated Group) Ser. A | 4.00 | 6/1/2049 | 1,500,000 | 1,668,961 | |||||
Massachusetts Development Finance Agency, Revenue Bonds, Refunding (Umass Memorial Health Care Obligated Group) Ser. I | 5.00 | 7/1/2046 | 1,835,000 | 2,163,958 | |||||
Massachusetts Development Finance Agency, Revenue Bonds, Refunding, Ser. A | 5.00 | 7/1/2026 | 950,000 | 1,146,521 | |||||
Massachusetts Educational Financing Authority, Revenue Bonds, Refunding, Ser. K | 5.25 | 7/1/2029 | 880,000 | 922,899 | |||||
Massachusetts Port Authority, Revenue Bonds, Refunding (Bosfuel Project) Ser. A | 4.00 | 7/1/2044 | 1,500,000 | 1,660,822 | |||||
Tender Option Bond Trust Receipts (Series 2016-XM0386), (University of Massachusetts Building Authority, Revenue Bonds, Refunding) Non-recourse, Underlying Coupon Rate (%) 5.00 | 15.39 | 5/1/2043 | 3,695,009 | b,c,d | 4,051,547 | ||||
11,614,708 | |||||||||
Michigan - 4.7% | |||||||||
Detroit Water Supply System, Revenue Bonds, Ser. A | 5.00 | 7/1/2021 | 3,000,000 | e | 3,035,246 | ||||
Detroit Water Supply System, Revenue Bonds, Ser. A | 5.00 | 7/1/2021 | 1,500,000 | e | 1,517,623 | ||||
Michigan Finance Authority, Revenue Bonds, Refunding (Insured; National Public Finance Guarantee Corp.) Ser. D6 | 5.00 | 7/1/2036 | 500,000 | 566,542 | |||||
Pontiac School District, GO | 4.00 | 5/1/2050 | 1,000,000 | 1,160,722 | |||||
Tender Option Bond Trust Receipts (Series 2019-XF2837), (Michigan State Finance Authority, Revenue Bonds (Henry Ford Health System)) Recourse, Underlying Coupon Rate (%) 4.00 | 13.67 | 11/15/2050 | 2,440,000 | b,c,d | 2,734,907 | ||||
9,015,040 | |||||||||
Minnesota - 1.4% | |||||||||
Duluth Economic Development Authority, Revenue Bonds, Refunding (Essentia Health Obligated Group) Ser. A | 5.00 | 2/15/2058 | 1,000,000 | 1,169,813 |
11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Coupon | Maturity | Principal | Value ($) | |||||
Long-Term Municipal Investments - 149.3% (continued) | |||||||||
Minnesota - 1.4% (continued) | |||||||||
St. Paul Housing & Redevelopment Authority, Revenue Bonds, Refunding (HealthEast Care System Project) | 5.00 | 11/15/2025 | 1,200,000 | e | 1,441,586 | ||||
2,611,399 | |||||||||
Mississippi - 1.1% | |||||||||
Warren County, Revenue Bonds (International Paper Project) Ser. A | 5.38 | 12/1/2035 | 2,000,000 | 2,056,601 | |||||
Missouri - 1.6% | |||||||||
Kansas City Industrial Development Authority, Revenue Bonds, Ser. A | 5.00 | 3/1/2044 | 750,000 | 895,178 | |||||
Missouri Health & Educational Facilities Authority, Revenue Bonds (Lutheran Senior Services Projects) Ser. A | 5.00 | 2/1/2042 | 2,000,000 | 2,205,855 | |||||
3,101,033 | |||||||||
Multi-State - .8% | |||||||||
Federal Home Loan Mortgage Corp. Multifamily Variable Rate Certificates, Revenue Bonds, Ser. M048 | 3.15 | 1/15/2036 | 1,435,000 | b | 1,570,804 | ||||
Nebraska - .6% | |||||||||
Douglas County Hospital Authority No. 2, Revenue Bonds (Children's Hospital Obligated Group) | 5.00 | 11/15/2036 | 1,000,000 | 1,195,236 | |||||
Nevada - 1.4% | |||||||||
Reno, Revenue Bonds, Refunding (Insured; Assured Guaranty Municipal Corp.) | 4.00 | 6/1/2058 | 1,250,000 | 1,360,855 | |||||
Reno, Revenue Bonds, Refunding (Insured; Assured Guaranty Municipal Corp.) | 4.13 | 6/1/2058 | 1,250,000 | 1,362,561 | |||||
2,723,416 | |||||||||
New Hampshire - .6% | |||||||||
New Hampshire Business Finance Authority, Revenue Bonds, Refunding (Springpoint Senior Living Obligated Group) | 4.00 | 1/1/2051 | 1,000,000 | 1,087,611 | |||||
New Jersey - 7.9% | |||||||||
New Jersey Economic Development Authority, Revenue Bonds, Refunding, Ser. XX | 5.25 | 6/15/2027 | 1,000,000 | 1,169,207 | |||||
New Jersey Economic Development Authority, Revenue Bonds, Ser. WW | 5.25 | 6/15/2040 | 1,180,000 | 1,344,409 |
12
Description | Coupon | Maturity | Principal | Value ($) | |||||
Long-Term Municipal Investments - 149.3% (continued) | |||||||||
New Jersey - 7.9% (continued) | |||||||||
New Jersey Transportation Trust Fund Authority, Revenue Bonds | 5.00 | 6/15/2046 | 1,250,000 | 1,482,646 | |||||
New Jersey Transportation Trust Fund Authority, Revenue Bonds | 5.25 | 6/15/2043 | 2,000,000 | 2,420,461 | |||||
New Jersey Transportation Trust Fund Authority, Revenue Bonds, Ser. AA | 5.25 | 6/15/2033 | 1,000,000 | 1,146,260 | |||||
New Jersey Turnpike Authority, Revenue Bonds, Ser. A | 4.00 | 1/1/2051 | 1,200,000 | 1,381,975 | |||||
South Jersey Port Corp., Revenue Bonds, Ser. B | 5.00 | 1/1/2048 | 1,000,000 | 1,139,053 | |||||
Tobacco Settlement Financing Corp., Revenue Bonds, Refunding, Ser. A | 5.00 | 6/1/2046 | 3,860,000 | 4,524,433 | |||||
Tobacco Settlement Financing Corp., Revenue Bonds, Refunding, Ser. A | 5.25 | 6/1/2046 | 390,000 | 466,348 | |||||
15,074,792 | |||||||||
New York - 9.7% | |||||||||
New York City, GO, Ser. D1 | 4.00 | 3/1/2050 | 1,500,000 | 1,691,720 | |||||
New York City Educational Construction Fund, Revenue Bonds, Ser. A | 6.50 | 4/1/2028 | 1,500,000 | 1,504,538 | |||||
New York Convention Center Development Corp., Revenue Bonds (Insured; Assured Guaranty Municipal Corp.) Ser. B | 0.00 | 11/15/2049 | 5,600,000 | f | 2,448,079 | ||||
New York Transportation Development Corp., Revenue Bonds (LaGuardia Airport Terminal B Redevelopment Project) Ser. A | 5.25 | 1/1/2050 | 1,500,000 | 1,690,609 | |||||
Port Authority of New York & New Jersey, Revenue Bonds, Refunding, Ser. 223rd | 4.00 | 7/15/2046 | 1,250,000 | 1,420,706 | |||||
Tender Option Bond Trust Receipts (Series 2016-XM0436), (New York City Municipal Water Finance Authority, Revenue Bonds, Refunding) Recourse, Underlying Coupon Rate (%) 5.00 | 17.74 | 6/15/2044 | 7,400,000 | b,c,d | 7,633,030 | ||||
Tender Option Bond Trust Receipts (Series 2020-XM0826), (Metropolitan Transportation Authority, Revenue Bonds, Refunding (Green Bond) (Insured; Assured Guaranty Municipal Corp., Ser. C)) Non-recourse, Underlying Coupon Rate (%) 4.00 | 11.90 | 11/15/2046 | 2,070,000 | b,c,d | 2,326,529 | ||||
18,715,211 |
13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Coupon | Maturity | Principal | Value ($) | |||||
Long-Term Municipal Investments - 149.3% (continued) | |||||||||
Ohio - 1.2% | |||||||||
Buckeye Tobacco Settlement Financing Authority, Revenue Bonds, Refunding, Ser. A2 | 4.00 | 6/1/2048 | 1,000,000 | 1,115,975 | |||||
Cuyahoga County, Revenue Bonds, Refunding (The MetroHealth System) | 5.00 | 2/15/2052 | 1,000,000 | 1,138,530 | |||||
2,254,505 | |||||||||
Pennsylvania - 7.5% | |||||||||
Allentown School District, GO, Refunding (Insured; Build America Mutual) Ser. B | 5.00 | 2/1/2032 | 1,255,000 | 1,570,516 | |||||
Clairton Municipal Authority, Revenue Bonds, Refunding, Ser. B | 5.00 | 12/1/2042 | 1,000,000 | 1,050,999 | |||||
Montgomery County Industrial Development Authority, Revenue Bonds, Refunding (ACTS Retirement-Life Communities Obligated Group) | 5.00 | 11/15/2036 | 1,000,000 | 1,158,463 | |||||
Pennsylvania Higher Educational Facilities Authority, Revenue Bonds, Refunding (University of Sciences) | 5.00 | 11/1/2033 | 2,000,000 | 2,266,505 | |||||
Pennsylvania Housing Finance Agency, Revenue Bonds, Refunding, Ser. 114A | 3.35 | 10/1/2026 | 1,500,000 | 1,518,669 | |||||
Pennsylvania Turnpike Commission, Revenue Bonds, Ser. A | 4.00 | 12/1/2050 | 1,000,000 | 1,145,899 | |||||
Pennsylvania Turnpike Commission, Revenue Bonds, Ser. A1 | 5.00 | 12/1/2046 | 1,000,000 | 1,180,000 | |||||
Pennsylvania Turnpike Commission, Revenue Bonds, Ser. B | 5.25 | 12/1/2048 | 1,000,000 | 1,243,381 | |||||
Philadelphia Water & Wastewater, Revenue Bonds, Ser. A | 5.00 | 11/1/2050 | 1,000,000 | 1,268,662 | |||||
Tender Option Bond Trust Receipts (Series 2016-XM0373), (Geisinger Authority, Revenue Bonds (Geisinger Health System)) Non-recourse, Underlying Coupon Rate (%) 5.13 | 15.73 | 6/1/2041 | 2,000,000 | b,c,d | 2,011,666 | ||||
14,414,760 | |||||||||
Rhode Island - .3% | |||||||||
Providence Public Building Authority, Revenue Bonds (Insured; Assured Guaranty Municipal Corp.) Ser. A | 5.00 | 9/15/2037 | 500,000 | 606,662 |
14
Description | Coupon | Maturity | Principal | Value ($) | |||||
Long-Term Municipal Investments - 149.3% (continued) | |||||||||
South Carolina - 6.1% | |||||||||
South Carolina Jobs-Economic Development Authority, Revenue Bonds (Bishop Gadsden Episcopal Retirement Community Obligated Group) | 5.00 | 4/1/2054 | 1,000,000 | 1,101,130 | |||||
Tender Option Bond Trust Receipts (Series 2016-XM0384), (South Carolina Public Service Authority, Revenue Bonds, Refunding (Santee Cooper)) Non-recourse, Underlying Coupon Rate (%) 5.13 | 11.80 | 12/1/2043 | 4,800,000 | b,c,d | 5,317,491 | ||||
Tobacco Settlement Management Authority, Revenue Bonds, Ser. B | 6.38 | 5/15/2030 | 3,750,000 | 5,218,441 | |||||
11,637,062 | |||||||||
Tennessee - 1.1% | |||||||||
Tender Option Bond Trust Receipts (Series 2016-XM0388), (Metropolitan Government of Nashville & Davidson County, Revenue Bonds, Refunding) Non-recourse, Underlying Coupon Rate (%) 5.00 | 15.14 | 7/1/2040 | 2,000,000 | b,c,d | 2,190,239 | ||||
Texas - 10.8% | |||||||||
Clifton Higher Education Finance Corp., Revenue Bonds (Uplift Education) Ser. A | 4.25 | 12/1/2034 | 1,000,000 | 1,045,689 | |||||
Harris County-Houston Sports Authority, Revenue Bonds, Refunding (Insured; Assured Guaranty Municipal Corp.) Ser. A | 0.00 | 11/15/2052 | 4,000,000 | f | 971,329 | ||||
Houston Airport System, Revenue Bonds, Refunding, Ser. A | 4.00 | 7/1/2047 | 1,000,000 | 1,119,611 | |||||
Houston Airport System, Revenue Bonds, Refunding, Ser. A | 5.00 | 7/1/2021 | 1,300,000 | e | 1,314,637 | ||||
North Texas Education Finance Corp., Revenue Bonds (Uplift Education) Ser. A | 5.13 | 6/1/2022 | 2,000,000 | e | 2,113,629 | ||||
Tender Option Bond Trust Receipts (Series 2016-XM0377), (San Antonio, Revenue Bonds) Non-recourse, Underlying Coupon Rate (%) 5.00 | 15.41 | 2/1/2043 | 6,300,000 | b,c,d | 6,828,097 | ||||
Texas Private Activity Bond Surface Transportation Corp., Revenue Bonds (Blueridge Transportation Group) | 5.00 | 12/31/2055 | 1,000,000 | 1,116,883 |
15
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Coupon | Maturity | Principal | Value ($) | |||||
Long-Term Municipal Investments - 149.3% (continued) | |||||||||
Texas - 10.8% (continued) | |||||||||
Texas Private Activity Bond Surface Transportation Corp., Revenue Bonds (Blueridge Transportation Group) | 5.00 | 12/31/2050 | 1,200,000 | 1,342,552 | |||||
Texas Private Activity Bond Surface Transportation Corp., Revenue Bonds (Segment 3C Project) | 5.00 | 6/30/2058 | 2,500,000 | 2,988,143 | |||||
Texas Private Activity Bond Surface Transportation Corp., Revenue Bonds, Refunding (LBJ Infrastructure Group) | 4.00 | 12/31/2039 | 1,600,000 | 1,827,296 | |||||
20,667,866 | |||||||||
U.S. Related - 1.3% | |||||||||
Puerto Rico, GO, Refunding (Insured; Assured Guaranty Municipal Corp.) Ser. A | 5.00 | 7/1/2035 | 1,250,000 | 1,292,596 | |||||
Puerto Rico Highway & Transportation Authority, Revenue Bonds, Refunding (Insured; Assured Guaranty Municipal Corp.) Ser. CC | 5.25 | 7/1/2034 | 1,000,000 | 1,239,343 | |||||
2,531,939 | |||||||||
Utah - 1.5% | |||||||||
Utah Charter School Finance Authority, Revenue Bonds, Refunding (Summit Academy) Ser. A | 5.00 | 4/15/2031 | 860,000 | 1,054,261 | |||||
Utah Infrastructure Agency, Revenue Bonds, Refunding, Ser. A | 5.00 | 10/15/2037 | 1,500,000 | 1,768,148 | |||||
2,822,409 | |||||||||
Virginia - 1.2% | |||||||||
Virginia Small Business Financing Authority, Revenue Bonds (Transform 66 P3 Project) | 5.00 | 12/31/2052 | 2,000,000 | 2,322,065 |
16
Description | Coupon | Maturity | Principal | Value ($) | |||||
Long-Term Municipal Investments - 149.3% (continued) | |||||||||
Washington - 8.4% | |||||||||
Port of Seattle, Revenue Bonds | 4.00 | 4/1/2044 | 1,000,000 | 1,104,978 | |||||
Tender Option Bond Trust Receipts (Series 2018-XM0680), (Washington Convention Center Public Facilities District, Revenue Bonds) Non-recourse, Underlying Coupon Rate (%) 5.00 | 8.98 | 7/1/2058 | 13,000,000 | b,c,d | 15,014,694 | ||||
16,119,672 | |||||||||
Total Investments (cost $262,499,211) | 149.3% | 286,878,423 | |||||||
Liabilities, Less Cash and Receivables | (33.6%) | (64,449,913) | |||||||
Preferred Stock, at redemption value | (15.7%) | (30,225,000) | |||||||
Net Assets Applicable to Common Shareholders | 100.0% | 192,203,510 |
a Zero coupon until a specified date at which time the stated coupon rate becomes effective until maturity.
b Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2021, these securities were valued at $112,551,469 or 58.56% of net assets.
c The Variable Rate shall be determined by the Remarketing Agent in its sole discretion based on prevailing market conditions and may, but need not, be established by reference to one or more financial indices.
d Collateral for floating rate borrowings. The coupon rate given represents the current interest rate for the inverse floating rate security.
e These securities are prerefunded; the date shown represents the prerefunded date. Bonds which are prerefunded are collateralized by U.S. Government securities which are held in escrow and are used to pay principal and interest on the municipal issue and to retire the bonds in full at the earliest refunding date.
f Security issued with a zero coupon. Income is recognized through the accretion of discount.
17
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Portfolio Summary (Unaudited) † | Value (%) |
General | 27.4 |
Education | 22.5 |
Medical | 20.4 |
Transportation | 13.5 |
Water | 11.2 |
Airport | 8.6 |
Prerefunded | 7.9 |
Tobacco Settlement | 7.5 |
General Obligation | 6.7 |
Utilities | 6.4 |
Nursing Homes | 6.4 |
Power | 4.1 |
Development | 3.2 |
School District | 1.4 |
Multifamily Housing | .8 |
Single Family Housing | .8 |
Student Loan | .5 |
149.3 |
† Based on net assets.
See notes to financial statements.
18
Summary of Abbreviations (Unaudited) | |||
ABAG | Association of Bay Area Governments | AGC | ACE Guaranty Corporation |
AGIC | Asset Guaranty Insurance Company | AMBAC | American Municipal Bond Assurance Corporation |
BAN | Bond Anticipation Notes | CIFG | CDC Ixis Financial Guaranty |
COP | Certificate of Participation | CP | Commercial Paper |
DRIVERS | Derivative Inverse Tax-Exempt Receipts | FGIC | Financial Guaranty Insurance Company |
FHA | Federal Housing Administration | FHLB | Federal Home Loan Bank |
FHLMC | Federal Home Loan Mortgage Corporation | FNMA | Federal National Mortgage Association |
GAN | Grant Anticipation Notes | GIC | Guaranteed Investment Contract |
GNMA | Government National Mortgage Association | GO | General Obligation |
IDC | Industrial Development Corporation | LIBOR | London Interbank Offered Rate |
LOC | Letter of Credit | LR | Lease Revenue |
NAN | Note Anticipation Notes | MFHR | Multi-Family Housing Revenue |
MFMR | Multi-Family Mortgage Revenue | MUNIPSA | Securities Industry and Financial Markets Association Municipal Swap Index Yield |
OBFR | Overnight Bank Funding Rate | PILOT | Payment in Lieu of Taxes |
PRIME | Prime Lending Rate | PUTTERS | Puttable Tax-Exempt Receipts |
RAC | Revenue Anticipation Certificates | RAN | Revenue Anticipation Notes |
RIB | Residual Interest Bonds | SFHR | Single Family Housing Revenue |
SFMR | Single Family Mortgage Revenue | SOFR | Secured Overnight Financing Rate |
TAN | Tax Anticipation Notes | TRAN | Tax and Revenue Anticipation Notes |
U.S. T-Bill | U.S. Treasury Bill Money Market Yield | XLCA | XL Capital Assurance |
See notes to financial statements.
19
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments | 262,499,211 |
| 286,878,423 |
| ||
Cash |
|
|
|
| 1,216,214 |
|
Interest receivable |
| 3,668,076 |
| |||
Prepaid expenses |
|
|
|
| 19,439 |
|
|
|
|
|
| 291,782,152 |
|
Liabilities ($): |
|
|
|
| ||
Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 2(b) |
| 135,904 |
| |||
Payable for floating rate notes issued—Note 3 |
| 68,929,592 |
| |||
Interest and expense payable related to |
| 141,518 |
| |||
Commissions payable—Note 1 |
| 36,312 |
| |||
Dividends payable to Preferred Shareholders |
| 253 |
| |||
Other accrued expenses |
|
|
|
| 110,063 |
|
|
|
|
|
| 69,353,642 |
|
Auction Preferred Stock, Series A and B, par value $.001 per share (1,209 shares issued and outstanding at $25,000 per share liquidation preference)—Note 1 |
| 30,225,000 |
| |||
Net Assets Applicable to Common Shareholders ($) |
|
| 192,203,510 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Common Stock, par value, $.001 per share |
|
|
|
| 20,751 |
|
Paid-in capital |
|
|
|
| 178,953,916 |
|
Total distributable earnings (loss) |
|
|
|
| 13,228,843 |
|
Net Assets Applicable to Common Shareholders ($) |
|
| 192,203,510 |
|
Shares Outstanding |
|
| ||
(110 million shares authorized) | 20,750,798 |
| ||
Net Asset Value Per Share of Common Stock ($) |
| 9.26 |
| |
|
|
|
|
|
See notes to financial statements. |
|
|
|
|
20
STATEMENT OF OPERATIONS
Six Months Ended March 31, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Interest Income |
|
| 5,560,705 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 2(a) |
|
| 774,526 |
| ||
Interest and expense related to floating rate notes issued—Note 3 |
|
| 247,383 |
| ||
Professional fees |
|
| 60,589 |
| ||
Directors’ fees and expenses—Note 2(c) |
|
| 42,123 |
| ||
Commission fees—Note 1 |
|
| 22,947 |
| ||
Shareholders’ reports |
|
| 16,622 |
| ||
Shareholder servicing costs |
|
| 10,164 |
| ||
Registration fees |
|
| 10,000 |
| ||
Chief Compliance Officer fees—Note 2(b) |
|
| 4,585 |
| ||
Custodian fees—Note 2(b) |
|
| 2,237 |
| ||
Miscellaneous |
|
| 19,932 |
| ||
Total Expenses |
|
| 1,211,108 |
| ||
Less—reduction in fees due to earnings credits—Note 2(b) |
|
| (1,322) |
| ||
Net Expenses |
|
| 1,209,786 |
| ||
Investment Income—Net |
|
| 4,350,919 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 3 ($): |
|
| ||||
Net realized gain (loss) on investments | 440,178 |
| ||||
Net change in unrealized appreciation (depreciation) on investments | 4,089,423 |
| ||||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 4,529,601 |
| ||
Dividends to Preferred Shareholders |
|
| (22,056) |
| ||
Net Increase in Net Assets Applicable to Common |
| 8,858,464 |
| |||
|
|
|
|
|
|
|
See notes to financial statements. |
21
STATEMENT OF CASH FLOWS
Six Months Ended March 31, 2021 (Unaudited)
|
|
|
|
|
| |
|
|
|
|
|
|
|
Cash Flows from Operating Activities ($): |
|
|
|
|
| |
Purchases of portfolio securities |
| (10,428,649) |
|
|
| |
Proceeds from sales of portfolio securities | 11,476,988 |
|
|
| ||
Net purchase (sales) of short-term securities | 2,250,000 |
|
|
| ||
Dividends paid to Preferred Shareholders | (22,428) |
|
|
| ||
Interest received |
| 3,316,905 |
|
|
| |
Paid to BNY Mellon Investment Adviser, Inc. |
| (767,653) |
|
|
| |
Operating expenses paid |
| (214,863) |
|
|
| |
Net Cash Provided (or Used) in Operating Activities |
|
|
| 5,610,300 |
| |
Cash Flows from Financing Activities ($): |
|
|
|
|
| |
Dividends paid to shareholders |
| (4,357,668) |
|
|
| |
Interest and expense related to floating |
|
|
|
|
| |
| rate notes issued paid |
| (300,322) |
|
|
|
Net Cash Provided (or Used) in Financing Activities |
| (4,657,990) |
| |||
Net Increase (Decrease) in Cash |
| 952,310 |
| |||
Cash at beginning of period |
| 263,904 |
| |||
Cash at End of Period |
| 1,216,214 |
| |||
Reconciliation of Net Increase (Decrease) in Net Assets Applicable to |
|
|
| |||
| Common Shareholders Resulting from Operations to |
|
|
| ||
| Net Cash Provided (or Used) in Operating Activities ($): |
|
|
| ||
Net Increase in Net Assets Resulting From Operations |
| 8,858,464 |
| |||
Adjustments to Reconcile Net Increase in Net Assets |
|
|
| |||
| Applicable to Common Shareholder resulting from |
|
|
| ||
| Operations to Net Cash Provided (or Used) in Operating Activities ($): |
|
|
| ||
Decrease in investments in securities at cost |
| 2,896,845 |
| |||
Decrease in interest receivable |
| 6,200 |
| |||
Increase in prepaid expenses |
| (10,563) |
| |||
Increase in Due to BNY Mellon Investment Adviser, Inc. and affiliates |
| 6,873 |
| |||
Decrease in payable for floating rate notes issued |
| (2,250,000) |
| |||
Interest and expense related to floating rate notes issued |
| 247,383 |
| |||
Decrease in dividends payable to Preferred Shareholders |
| (372) |
| |||
Decrease in Directors' fees and expenses payable |
| (1,250) |
| |||
Decrease in commissions payable and other accrued expenses |
| (15,173) |
| |||
Net change in unrealized (appreciation) depreciation on investments |
| (4,089,423) |
| |||
Net amortization of premiums on investments |
| (38,684) |
| |||
Net Cash Provided (or Used) in Operating Activities |
| 5,610,300 |
| |||
|
|
|
|
|
|
|
See notes to financial statements. |
22
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 4,350,919 |
|
|
| 9,008,677 |
| |
Net realized gain (loss) on investments |
| 440,178 |
|
|
| (4,542,734) |
| ||
Net change in unrealized appreciation |
| 4,089,423 |
|
|
| (1,739,037) |
| ||
Dividends to Preferred Shareholders |
|
| (22,056) |
|
|
| (464,846) |
| |
Net Increase (Decrease) in Net Assets Applicable | 8,858,464 |
|
|
| 2,262,060 |
| |||
Distributions ($): |
| ||||||||
Distributions to Common Shareholders |
|
| (4,357,668) |
|
|
| (8,714,691) |
| |
Capital Stock Transactions ($): |
| ||||||||
Distributions reinvested |
|
| - |
|
|
| 40,892 |
| |
Increase (Decrease) in Net Assets | - |
|
|
| 40,892 |
| |||
Total Increase (Decrease) in Net Assets | 4,500,796 |
|
|
| (6,411,739) |
| |||
Net Assets Applicable to Common Shareholders ($): |
| ||||||||
Beginning of Period |
|
| 187,702,714 |
|
|
| 194,114,453 |
| |
End of Period |
|
| 192,203,510 |
|
|
| 187,702,714 |
| |
Capital Share Transactions (Common Shares): |
| ||||||||
Shares issued for distributions reinvested |
|
| - |
|
|
| 4,517 |
| |
Net Increase (Decrease) in Shares Outstanding | - |
|
|
| 4,517 |
| |||
|
|
|
|
|
|
|
|
|
|
See notes to financial statements. |
23
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. These figures have been derived from the fund’s financial statements and, with respect to common stock, market price data for the fund’s common shares.
Six Months Ended March 31, 2021 | Year Ended September 30, | |||||||||||
| (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | ||||||
Per Share Data ($): | ||||||||||||
Net asset value, beginning of period | 9.05 | 9.36 | 8.90 | 9.35 | 9.84 | 9.54 | ||||||
Investment Operations: | ||||||||||||
Investment income-neta | .21 | .43 | .46 | .50 | .52 | .52 | ||||||
Net realized and unrealized gain | .21 | (.30) | .46 | (.52) | (.49) | .33 | ||||||
Dividends to Preferred Shareholders | (.00)b | (.02) | (.04) | (.04) | (.03) | (.01) | ||||||
Total from Investment Operations | .42 | .11 | .88 | (.06) | - | .84 | ||||||
Distributions to Common Shareholders: | ||||||||||||
Dividends from investment | (.21) | (.42) | (.42) | (.44) | (.49) | (.54) | ||||||
Net asset value resulting from | - | - | - | .05 | - | - | ||||||
Net asset value, end of period | 9.26 | 9.05 | 9.36 | 8.90 | 9.35 | 9.84 | ||||||
Market value, end of period | 8.75 | 8.63 | 9.35 | 7.83 | 9.13 | 9.60 | ||||||
Market Price Total Return (%) | 3.87c | (3.13) | 25.58 | (9.55) | .44 | 7.39 |
24
Six Months Ended | Year Ended September 30, | ||||||||||
(Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | ||||||
Ratios/Supplemental Data (%): | |||||||||||
Ratio of total expenses to average | 1.27e | 1.68 | 1.89 | 1.75 | 1.48 | 1.33 | |||||
Ratio of net expenses to average net | 1.27e | 1.67 | 1.89 | 1.75 | 1.48 | 1.33 | |||||
Ratio of interest and expense related | .26e | .67 | .90 | .60 | .37 | .20 | |||||
Ratio of net investment income | 4.55e | 4.78 | 5.04 | 5.46 | 5.57 | 5.35 | |||||
Ratio of total expenses to | 1.09e | 1.44 | 1.63 | 1.45 | 1.18 | 1.07 | |||||
Ratio of net expense to total average | 1.09e | 1.44 | 1.63 | 1.45 | 1.18 | 1.07 | |||||
Ratio of interest and expense related | .22e | .58 | .78 | .50 | .29 | .16 | |||||
Ratio of net investment income to | 3.93e | 4.12 | 4.34 | 4.52 | 4.43 | 4.29 | |||||
Portfolio Turnover Rate | 4.76c | 26.85 | 31.62 | 17.70 | 12.49 | 11.66 | |||||
Asset Coverage of Preferred Stock, | 736 | 721 | 742 | 711 | 488 | 508 | |||||
Net Assets applicable to | 192,204 | 187,703 | 194,114 | 184,587 | 194,063 | 204,069 | |||||
Preferred Stock Outstanding, | 30,225 | 30,225 | 30,225 | 30,225 | 50,000 | 50,000 | |||||
Floating Rate Notes Outstanding, | 68,930 | 71,180 | 85,492 | 74,682 | 51,742 | 46,492 |
a Based on average common shares outstanding.
b Amount is less than $.01 per share.
c Not annualized.
d Does not reflect the effect of dividends to Preferred Shareholders.
e Annualized.
See notes to financial statements.
25
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
BNY Mellon Municipal Income, Inc. (the “fund”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), is a non-diversified closed-end management investment company. The fund’s investment objective is to maximize current income exempt from federal income tax to the extent consistent with the preservation of capital. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. The fund’s Common Stock trades on the New York Stock Exchange (the “NYSE American”) under the ticker symbol DMF.
On February 10, 2021, BNY Mellon Investment Management announced its intention to realign several of its investment firms. As a result of this realignment, which is scheduled to occur, subject to regulatory requirements, in the third quarter of 2021 (the “Effective Date”), portfolio managers responsible for managing the fund’s investments who are employees of Mellon Investments Corporation (“Mellon”) in a dual employment arrangement with the Adviser, will become employees of Insight North America LLC (“INA”), which, like Mellon, will be an affiliate of the Adviser, and will no longer be employees of Mellon. Consequently, effective as of the Effective Date and subject to the approval of the fund’s Board of Directors (the “Board”), the Adviser will engage INA to serve as the fund’s sub-adviser, pursuant to a sub-investment advisory agreement between the Adviser and INA. As the fund’s sub-adviser, INA will provide the day-to-day management of the fund’s investments, subject to the Adviser’s supervision and approval. It is currently anticipated that the fund’s portfolio managers who are responsible for the day-to-day management of the fund’s investments will continue to manage the fund’s investments as of the Effective Date. It is also currently anticipated that there will be no material changes to the fund’s investment objective, strategies or policies, no reduction in the nature or level of services provided to the fund, and no increase in the management fee payable by the fund as a result of the engagement of INA as the fund’s sub-adviser. The Adviser (and not the fund) will pay INA for its sub-advisory services.
The fund has outstanding 616 Series A shares and 593 Series B shares, Auction Preferred Stock (“APS”), with a liquidation preference of $25,000 per share (plus an amount equal to accumulated but unpaid dividends upon liquidation). APS dividend rates are determined pursuant to periodic auctions or by reference to a market rate. Deutsche Bank Trust Company America, as the Auction Agent, receives a fee from the fund for its services
26
in connection with such auctions. The fund also compensates broker-dealers generally at an annual rate of ..15%-.25% of the purchase price of shares of APS.
The fund is subject to certain restrictions relating to the APS. Failure to comply with these restrictions could preclude the fund from declaring any distributions to shareholders of Common Stock (“Common Shareholders”) or repurchasing shares of Common Stock and/or could trigger the mandatory redemption of APS at liquidation value. Thus, redemptions of APS may be deemed to be outside of the control of the fund.
The holders of APS, voting as a separate class, have the right to elect at least two directors. The holders of APS will vote as a separate class on certain other matters, as required by law. The fund’s Board of Directors (the “Board”) has designated Nathan Leventhal and Benaree Pratt Wiley as directors to be elected by the holders of APS.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund is an investment company and applies the accounting and reporting guidance of the FASB ASC Topic 946 Financial Services-Investment Companies. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
27
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Investments in securities, excluding short-term investment (other than U.S. Treasury Bills) are valued each business day by an independent pricing service (the “Service”) approved by the Board. Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Debt investments (which constitute a majority of the portfolio securities) are carried at fair value as determined by the Service, based on methods which include consideration of the following: yields or prices of municipal securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. All of the preceding securities are generally categorized within Level 2 of the fair value hierarchy.
The Service is engaged under the general oversight of the Board.
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close
28
of the exchange or market on which the security is principally traded, but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of March 31, 2021 in valuing the fund’s investments:
Level 1-Unadjusted Quoted Prices | Level 2- Other Significant Observable Inputs | Level 3-Significant Unobservable Inputs | Total | |||
Assets ($) | ||||||
Investments In Securities:† | ||||||
Municipal Securities | - | 286,878,423 | - | 286,878,423 | ||
Liabilities ($) | ||||||
Other Financial Instruments: | ||||||
Floating Rate Notes†† | - | (68,929,592) | - | (68,929,592) |
† See Statement of Investments for additional detailed categorizations, if any.
†† Certain of the fund’s liabilities are held at carrying amount, which approximates fair value for financial reporting purposes.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Interest income, adjusted for accretion of discount and amortization of premium on investments, is earned from settlement date and recognized on the accrual basis. Securities purchased or sold on a when issued or delayed delivery basis may be settled a month or more after the trade date.
(c) Risk: Certain events particular to the industries in which the fund’s investments conduct their operations, as well as general economic, political and public health conditions, may have a significant negative impact on the investee’s operations and profitability. In addition, turbulence in financial
29
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers, which could adversely affect the fund. Global economies and financial markets are becoming increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies world-wide. Recent examples include pandemic risks related to COVID-19 and aggressive measures taken world-wide in response by governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines of large populations, and by businesses, including changes to operations and reducing staff. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
(d) Dividends and distributions to Common Shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net are normally declared and paid monthly. Dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Common Shareholders will have their distributions reinvested in additional shares of the fund, unless such Common Shareholders elect to receive cash, at the lower of the market price or net asset value per share (but not less than 95% of the market price). If market price is equal to or exceeds net asset value, shares will be issued at net asset value. If net asset value exceeds market price, Computershare Inc., the transfer agent for the fund’s Common Stock, will buy fund shares in the open market and reinvest those shares accordingly.
On March 30, 2021, the Board declared a cash dividend of $.035 per share from investment income-net, payable on April 30, 2021 to Common Shareholders of record as of the close of business on April 15, 2021. The ex-dividend date was April 14, 2021.
30
(e) Dividends and distributions to shareholders of APS: Dividends, which are cumulative, are generally reset every 7 days for each Series of APS pursuant to a process specified in related fund charter documents. Dividend rates as of March 31, 2021, for each Series of APS were as follows: Series A–.095% and Series B–.088%. These rates reflect the “maximum rates” under the governing instruments as a result of “failed auctions” in which sufficient clearing bids are not received. The average dividend rates for the period ended March 31, 2021 for each Series of APS were as follows: Series A–.146% and Series B–.146%.
(f) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, which can distribute tax-exempt dividends, by complying with the applicable provisions of the Code, and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended March 31, 2021, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended March 31, 2021, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended September 30, 2020 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The fund is permitted to carry forward capital losses for an unlimited period. Furthermore, capital loss carryovers retain their character as either short-term or long-term capital losses.
The fund has an unused capital loss carryover of $11,990,696 available for federal income tax purposes to be applied against future net realized capital gains, if any, realized subsequent to September 30, 2020. The fund has $6,323,893 of short-term capital losses and $5,666,803 of long-term capital losses which can be carried forward for an unlimited period.
The tax character of distributions paid to shareholders during the fiscal year ended September 30, 2020 was as follows: tax-exempt income $9,177,734 and ordinary income $1,803, respectively. The tax character of current year distributions will be determined at the end of the current fiscal year.
(g) New accounting pronouncements: In March 2020, the FASB issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), and in January 2021, the FASB issued
31
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Accounting Standards Update 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”), which provides optional, temporary relief with respect to the financial reporting of contracts subject to certain types of modifications due to the planned discontinuation of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates as of the end of 2021. The temporary relief provided by ASU 2020-04 and ASU 2021-01 is effective for certain reference rate-related contract modifications that occur during the period from March 12, 2020 through December 31, 2022. Management is evaluating the impact of ASU 2020-04 and ASU 2021-01 on the fund’s investments, derivatives, debt and other contracts that will undergo reference rate-related modifications as a result of the reference rate reform. Management is also currently actively working with other financial institutions and counterparties to modify contracts as required by applicable regulation and within the regulatory deadlines.
NOTE 2—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement (the “Agreement”) with the Adviser, the management fee is computed at the annual rate of .70% of the value of the fund’s average weekly net assets, inclusive of the outstanding APS, and is payable monthly. The Agreement provides that if in any full fiscal year the aggregate expenses of the fund (excluding taxes, interest on borrowings, brokerage fees and extraordinary expenses) exceed the expense limitation of any state having jurisdiction over the fund, the fund may deduct from payments to be made to the Adviser, or the Adviser will bear, the amount of such excess to the extent required by state law. During the period ended March 31, 2021, there was no expense reimbursement pursuant to the Agreement.
(b) The fund compensates The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets and transaction activity. During the period ended March 31, 2021, the fund was charged $2,237 pursuant to the custody agreement. These fees were partially offset by earnings credits of $1,322.
The fund has an arrangement with the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset custody fees. For financial reporting purposes, the fund includes net earnings credits, if any, as an expense offset in the Statement of Operations.
During the period ended March 31, 2021, the fund was charged $4,585 for services performed by the Chief Compliance Officer and his staff. These
32
fees are included in Chief Compliance Officer fees in the Statement of Operations.
The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fees of $132,006, custodian fees of $1,539 and Chief Compliance Officer fees of $2,359.
(c) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 3—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended March 31, 2021, amounted to $10,395,970 and $10,949,774, respectively.
Inverse Floater Securities: The fund participates in secondary inverse floater structures in which fixed-rate, tax-exempt municipal bonds are transferred to a trust (the “Inverse Floater Trust”). The Inverse Floater Trust typically issues two variable rate securities that are collateralized by the cash flows of the fixed-rate, tax-exempt municipal bonds. One of these variable rate securities pays interest based on a short-term floating rate set by a remarketing agent at predetermined intervals (“Trust Certificates”). A residual interest tax-exempt security is also created by the Inverse Floater Trust, which is transferred to the fund, and is paid interest based on the remaining cash flows of the Inverse Floater Trust, after payment of interest on the other securities and various expenses of the Inverse Floater Trust. An Inverse Floater Trust may be collapsed without the consent of the fund due to certain termination events such as bankruptcy, default or other credit event.
The fund accounts for the transfer of bonds to the Inverse Floater Trust as secured borrowings, with the securities transferred remaining in the fund’s investments, and the Trust Certificates reflected as fund liabilities in the Statement of Assets and Liabilities.
The fund may invest in inverse floater securities on either a non-recourse or recourse basis. These securities are typically supported by a liquidity facility provided by a bank or other financial institution (the “Liquidity Provider”) that allows the holders of the Trust Certificates to tender their certificates in exchange for payment from the Liquidity Provider of par plus accrued interest on any business day prior to a termination event. When the fund invests in inverse floater securities on a non-recourse basis, the Liquidity Provider is required to make a payment under the liquidity
33
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
facility due to a termination event to the holders of the Trust Certificates. When this occurs, the Liquidity Provider typically liquidates all or a portion of the municipal securities held in the Inverse Floater Trust. A liquidation shortfall occurs if the Trust Certificates exceed the proceeds of the sale of the bonds in the Inverse Floater Trust (“Liquidation Shortfall”). When a fund invests in inverse floater securities on a recourse basis, the fund typically enters into a reimbursement agreement with the Liquidity Provider where the fund is required to repay the Liquidity Provider the amount of any Liquidation Shortfall. As a result, a fund investing in a recourse inverse floater security bears the risk of loss with respect to any Liquidation Shortfall.
The average amount of borrowings outstanding under the inverse floater structure during the period ended March 31, 2021 was approximately $70,079,317, with a related weighted average annualized interest rate of .71%.
At March 31, 2021, accumulated net unrealized appreciation on investments was $24,379,212, consisting of $24,799,257 gross unrealized appreciation and $420,045 gross unrealized depreciation.
At March 31, 2021, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
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35
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36
OFFICERS AND DIRECTORS
BNY Mellon Municipal Income, Inc.
240 Greenwich Street
New York, NY 10286
Officers (continued) | |||
Joseph S. DiMartino, Chairman | Assistant Treasurers (continued) | ||
Francine J. Bovich | Robert Salviolo | ||
J. Charles Cardona | Robert Svagna | ||
Gordon J. Davis† | Chief Compliance Officer | ||
Andrew J. Donohue | Joseph W. Connolly | ||
Isabel P. Dunst | |||
Nathan Leventhal†† | Portfolio Managers | ||
Robin A. Melvin | Daniel A. Rabasco | ||
Roslyn M. Watson | Jeffrey B. Burger | ||
Benaree Pratt Wiley†† | |||
† Interested Board Member | |||
†† Elected by APS Holders | Adviser | ||
Officers | BNY Mellon Investment Adviser, Inc. | ||
President | Custodian | ||
David DiPetrillo | The Bank of New York Mellon | ||
Chief Legal Officer | Counsel | ||
Bennett A. MacDougall | Proskauer Rose LLP | ||
Vice President and Secretary | Transfer Agent, | ||
James Bitetto | Dividend Disbursing Agent | ||
Vice Presidents and Assistant Secretaries | and Registrar | ||
Deirdre Cunnane | Computershare Inc. | ||
Sarah S. Kelleher | (Common Stock) | ||
Jeff Prusnofsky | Deutsche Bank Trust Company America | ||
Peter M. Sullivan | (Auction Preferred Stock) | ||
Amanda Quinn | Stock Exchange Listing | ||
Natalya Zelensky | NYSE American Symbol: DMF | ||
Initial SEC Effective Date | |||
Treasurer | 10/21/88 | ||
James Windels | Auction Agent | ||
Assistant Treasurers | Deutsche Bank Trust Company America | ||
Gavin C. Reilly | (Auction Preferred Stock) | ||
The fund’s net asset value per share appears in the following publications: Barron’s, Closed-End Bond Funds section under the | |||
Notice is hereby given in accordance with Section 23(c) of the Act that the fund may purchase shares of its common stock in the |
37
BNY Mellon Municipal Income, Inc.
240 Greenwich Street
New York, NY 10286
Adviser
BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Registrar (Common Stock)
Computershare Inc.
480 Washington Boulevard
Jersey City, NJ 07310
Dividend Disbursing Agent (Common Stock)
Computershare Inc.
B.O. Box 30170
College Station, TX 77842
Ticker Symbol: | DMF |
For more information about the fund, visit https://im.bnymellon.com/us/en/products/closed-end-funds.jsp. Here you will find the fund’s most recently available quarterly fact sheets and other information about the fund. The information posted on the fund’s website is subject to change without notice.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.im.bnymellon.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-373-9387.
|
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. |
(a) Not applicable.
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 Companies and Affiliated Purchasers. |
Not applicable.
Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no material changes to the procedures applicable to Item 10.
Item 11. | Controls and Procedures. |
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes to the Registrant's internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are 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)(1) Not applicable.
(a)(3) Not applicable.
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.
BNY Mellon Municipal Income, Inc.
By: /s/ David DiPetrillo
David DiPetrillo
President (Principal Executive Officer)
Date: May 26, 2021
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/ David DiPetrillo
David DiPetrillo
President (Principal Executive Officer)
Date: May 26, 2021
By: /s/ James Windels
James Windels
Treasurer (Principal Financial Officer)
Date: May 26, 2021
EXHIBIT INDEX
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)