Calamos Closed-End Funds Request Temporary Relief From Regulatory Leverage Requirements
- Calamos Closed-End Funds have successfully refinanced $1.87 billion, or approximately 81%, of the aggregate auction rate preferred securities (ARPS) issued by the funds
- Certain Calamos Closed-End Funds have secured access to additional financing, which would allow for the redemption of a substantial portion of the remaining $434 million in outstanding ARPS, subject to regulatory relief
- The Calamos Closed-End Funds are currently unable to utilize the additional financing for such purpose due to the asset coverage parameters required under the Investment Company Act of 1940
- The funds have formally filed an exemptive application with the SEC seeking temporary exemptive relief in connection with the asset coverage requirements that, if granted by the SEC, would facilitate a prompt redemption of the remaining ARPS
NAPERVILLE, Ill., July 31, 2008-- Four closed-end funds
advised by Calamos Investments (Calamos Convertible Opportunities and Income
Fund (NYSE: CHI), Calamos Convertible and High Income Fund (NYSE: CHY),
Calamos Strategic Total Return Fund (NYSE: CSQ), and Calamos Global Dynamic
Income Fund (NYSE: CHW) (together the "Applicant Funds")) have filed an
exemptive application with the Securities and Exchange Commission ("SEC") for
temporary exemptive relief from the debt coverage requirements to which the
funds are subject under the Investment Company Act of 1940 (the "1940 Act").
If the SEC grants the requested exemption, the Applicant Funds expect to be
able to refinance the balance of auction rate preferred securities of the
funds that remain outstanding. There is no guarantee, however, that the SEC
will grant the requested order.
"Calamos has worked diligently along with others to pursue solutions to
the liquidity crisis that has affected the auction rate market," stated John
P. Calamos, Sr., CEO of Calamos Investments. "While we are pleased with our
progress and continue to examine a variety of structural solutions to this
issue, we believe that seeking regulatory relief offers the potential to
address the remaining balances of our funds' ARPS in an appropriate and
expeditious manner that serves the best interests of all shareholders."
Calamos has worked with various financial institutions to redeem
approximately $1.87 billion, or approximately 81%, of the aggregate
outstanding ARPS of all five Calamos Closed-End Funds (including all of the
outstanding ARPS of Calamos Global Total Return Fund (NYSE: CGO)) with
proceeds from bank lines, commercial paper and the private placement of notes.
Calamos has also secured access to additional amounts of financing, which
would allow certain funds with remaining ARPS to redeem a significant amount
of their $434 million of outstanding ARPS immediately if the requested
exemptive relief is granted.
Due to the leverage constraints imposed by the 1940 Act, such additional
financing has not yet been utilized. The 1940 Act requires asset coverage of
at least 300% for debt-based leverage and at least 200% for equity-based
leverage. The Applicant Funds have asked the SEC to issue an order that would
temporarily lower the debt asset coverage requirement for the Applicant Funds
to a least 200% specifically in order to permit debt financings sufficient to
redeem additional amounts of outstanding ARPS.
Calamos appreciates the patience investors have shown in the current
investment climate and we continue to emphasize that our goal, as always, is
to seek resolutions that are best for the funds and their shareholders.
About Calamos
Calamos Investments offers five closed-end funds: Calamos Convertible
Opportunities and Income Fund (NYSE: CHI), Calamos Convertible and High Income
Fund (NYSE: CHY), Calamos Strategic Total Return Fund (NYSE: CSQ), Calamos
Global Total Return Fund (NYSE: CGO) and Calamos Global Dynamic Income Fund
(NYSE: CHW).
Calamos Investments is a diversified investment firm offering equity,
fixed-income, convertible and alternative investment strategies, among others.
The firm serves institutions and individuals via separately managed accounts
and a family of open-end and closed-end funds, providing a risk-managed
approach to capital appreciation and income-producing strategies. For more
information, visit http://www.calamos.com.
From time to time, information or statements provided by us, including
those within this news release, may contain certain forward-looking statements
relating to future events, future transactions, future financial performance,
future potential costs, expectations, the competitive and regulatory
environment and future market conditions. Forward-looking statements are based
on information available at the time those statements are made and/or
management's good faith belief as of that time with respect to future events,
and are subject to risks and uncertainties that could cause actual performance
or results to differ materially from those expressed in or suggested by the
forward-looking statements. Such risks and uncertainties include, but are not
limited to: catastrophic or unpredictable events, changing costs of leverage,
strategy implementation obstacles, fluctuations in the financial markets and
the competitive conditions in the fund, asset management and broader financial
services sectors and other risks inherent in the financial and trading
markets, including liquidity issues.
SOURCE: Calamos Investments
CONTACT: Ken Fincher, Vice President Calamos Advisors LLC,
+1-630-245-1076, kfincher@calamos.com
http://www.calamos.com