ING Prime Rate Trust, a closed-end fund (PPR), will redeem a portion of the outstanding auction rate preferred shares (ARPS) in its portfolio, “at par,” ING Investments, LLC, manager of the Trust, announced on September 3.
“The Trust’s Board of Trustees has approved a partial redemption that will be paid primarily by drawing on leverage available under the Trust’s credit facilities. The redemption would provide liquidity at par for the holders of a portion of the Trust’s ARPS,” according to the announcement.
This is the fourth of a planned series of redemptions the Trust had announced in December 2009. The Trust said then that of $225 million of the outstanding ARPS, it planned to redeem up to $100 million of them in a series of four $25 million redemptions. The Trust expects to complete this $25 million redemption by “mid- to late October.”
The release noted that: “The Depository Trust Company (DTC) will determine how partial series redemptions will be allocated among each participant broker-dealer account. Each participant broker-dealer, as nominee for its customers who are beneficial owners of the ARPS (street name shareholders), in turn will determine how redeemed shares are to be allocated among its customers. The procedures used by broker-dealers to allocate redeemed shares among beneficial owners may differ from each other as well as from the procedures used by DTC.”
On August 31, 2010, ING Prime Rate Trust declared a $0.02/share share monthly dividend for August, payable on September 22, 2010 to shareholders of record on September 10, 2010; the 268th consecutive monthly dividend since the Trust’s inception in May 1988.