abrdn National Municipal Income Fund Proposes Major Reorganization with MFS Municipal Income Trust

Upcoming Reorganization: abrdn National Municipal Income Fund's Transition to MFS Municipal Income Trust

In a significant move that signals an evolution in its operational strategy, the Board of Trustees for the abrdn National Municipal Income Fund (NYSE American: VFL) has officially approved a reorganization that will see the fund transition into the MFS Municipal Income Trust (NYSE MFM). This planned restructuring is designed to enhance the fund's efficiency and bolster its market presence, which in turn could improve returns for shareholders.

Key Aspects of the Reorganization

The reorganization plan aims to appoint the US subsidiary of Aberdeen Investments, abrdn Inc., as the investment adviser for the newly formed Surviving Fund. Alongside these appointments, the existing trustees from VFL will continue in their roles, with an additional independent trustee being brought on board. This restructuring is also contingent upon shareholder approval, which will be sought at a forthcoming special shareholder meeting scheduled for March 11, 2026.

Goals and Expectations

A central aim of this reorganization is to create a larger and more economically viable fund. The transition is expected to increase trading volume and reduce any discrepancies related to net asset value that VFL shareholders may currently experience. For existing VFL shareholders, this transaction will provide an opportunity to continue their investment in a significantly larger fund, which is targeting an annual distribution rate of approximately 6% of the Surviving Fund's net asset value—an enticing prospect in today’s volatile market.

The reorganization is anticipated to close in the second quarter of 2026, provided that all supplementary conditions are satisfied. Detailed information is set to be provided in a proxy statement/prospectus, which will be sent to VFL shareholders ahead of the emergency meeting.

Background on Aberdeen Investments

Aberdeen Investments has established itself as one of the leading global asset management firms, with its history of managing closed-end funds dating back several decades. As of the end of September 2025, the firm managed around $515 billion in assets. Shareholders are encouraged to review the comprehensive details that will soon be made available, as these documents will be crucial for understanding the implications of this proposed transaction.

Important Considerations for Shareholders

It is vital for VFL’s common and preferred shareholders to closely follow the developments surrounding this reorganization. This proposed combination not only requires shareholder votes but also compliance with regulatory filings including the registration statement with the U.S. Securities and Exchange Commission (SEC). Additionally, given the nature of closed-end funds, the values can fluctuate, and past performances won't guarantee future results, hence shareholders must remain vigilant about their investment’s performance post-reorganization.

In summary, the shift towards MFS Municipal Income Trust signifies a strategic move for abrdn National Municipal Income Fund, with the promise of potentially improved investment outcomes for its stakeholders. As the date for the special meeting approaches, stakeholders should prepare to assess their positions and the potential benefits of this significant change in fund structure.