AllianceBernstein National Municipal Income Fund Completes Redemption of 2018 Variable Rate Preferred Shares

On October 27, 2025, AllianceBernstein National Municipal Income Fund, Inc. (NYSE: AFB), a well-regarded registered closed-end investment company, announced a significant financial development. The Fund has successfully completed the redemption of all its outstanding 2018 Variable Rate MuniFund Term Preferred Shares (2018 VMTPS). This marks a notable transition in the Fund's financing strategy, which could impact investors and stakeholders alike.

Full Redemption Details

The redemption of the 2018 VMTPS was executed at a redemption price of $25,000 per share, in addition to any accumulated but unpaid dividends. This undertaking amounted to a considerable total of approximately $88.275 million, alongside the accumulated dividends. The Fund strategically chose to utilize the proceeds generated from the creation of Tender Option Bond (TOB) trusts in order to facilitate this redemption.

By establishing TOB trusts, the Fund has effectively replaced the leverage previously derived from the 2018 VMTPS. This change in leverage structure indicates an agile response to market conditions and a proactive approach to managing the Fund's capital framework. Notably, the new structure could offer enhanced flexibility, enabling the Fund to navigate through market fluctuations more adeptly.

Why This Matters

The completion of this redemption highlights the importance of adaptive management within the financial services sector. For investors, it signifies AllianceBernstein's commitment to optimizing their investment strategies and ensuring a stable return profile. The shift to using TOB trusts as substitute leverage reflects an innovative financial practice that could set a precedent for other funds exploring similar transitions.

Moreover, the decision to redeem the shares rather than maintain the existing structure underscores the Fund’s dedication to maximizing shareholder value and its capability to manage risk effectively. By constantly evaluating their financial positioning against the backdrop of current market trends, the AllianceBernstein Fund shows its dedication to financial diligence and strategic foresight.

Investor Considerations

Investors observing the shift within AllianceBernstein might contemplate the implications this decision has on the overall investment landscape. With the financial landscape continuously evolving, the use of TOB trusts could represent a growing trend among investment funds seeking to bolster their leverage while managing risks more robustly.

Moreover, potential investors in the Fund may want to analyze how these changes impact the dividend distribution model and the overall financial health of the Fund in the near future. Maintaining an awareness of such strategic adjustments within investment structures can provide critical insights for making well-informed investment decisions.

Conclusion

In conclusion, the full redemption of the 2018 Variable Rate MuniFund Term Preferred Shares, coupled with the creation of Tender Option Bond trusts, signals a pivotal moment for the AllianceBernstein National Municipal Income Fund, Inc. This move not only ensures greater financial flexibility but also marks a step towards more innovative practices within investment management. As this story unfolds, stakeholders are encouraged to remain vigilant regarding the developments within the Fund, as these will likely influence broader financial market trends.

The redemption price mentioned does not include any applicable fees or expenses.