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By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

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2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

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Rating Action:

Moody's affirms the ratings of eight BlackRock closed-end funds

26 Apr 2018

NOTE: On June 12, 2019, the press release was corrected as follows: In the RATINGS RATIONALE section, added the heading ‘Factors That Would Lead to an Upgrade or Downgrade of the Ratings’ and the following language: “The Aa1 ratings assigned to outstanding VMTPs could be downgraded if there is 1) a sustained decline in the fund’s net asset value; 2) deterioration in the credit quality of the fund’s investment portfolio; and 3) compression in the coverage of the fund’s fixed charges. The ratings on the outstanding VMTPs are not likely to be upgraded from their current rating level. ” Revised release follows.

New York, April 26, 2018 -- Moody's Investors Service, ("Moody's") has affirmed the Aa1 ratings for the outstanding Variable Rate Municipal Term Preferred Shares (VMTPS) and Variable Rate Demand Preferred Shares (VRDPS) issued by the following BlackRock closed-end funds:

Issuer: BlackRock Muni Bond Trust (BBK)

Variable Rate Muni Term Preferred Shares (VMTP Shares), $79.9 million, Affirmed Aa1

Issuer: BlackRock Municipal Income Trust (BFK)

Variable Rate Muni Term Preferred Shares (VMTP Shares), $270.8 million, Affirmed Aa1

Issuer: BlackRock Municipal Income Trust II (BLE)

Variable Rate Muni Term Preferred Shares (VMTP Shares), $151.3 million, Affirmed Aa1

Issuer: BlackRock Strategic Municipal Trust (BSD)

Variable Rate Muni Term Preferred Shares (VMTP Shares), $42.9 million, Affirmed Aa1

Issuer: BlackRock Muniholdings Fund, Inc. (MHD)

Variable Rate Muni Term Preferred Shares (VMTP Shares), $83.7 million, Affirmed Aa1

Issuer: BlackRock MuniHoldings Fund II, Inc. (MUH)

Variable Rate Muni Term Preferred Shares (VMTP Shares), $55 million, Affirmed Aa1

Issuer: BlackRock MuniVest Fund, Inc. (MVF)

Variable Rate Muni Term Preferred Shares (VMTP Shares), $243.8 million, Affirmed Aa1

Issuer: BlackRock MuniYield Fund, Inc. (MYD)

Variable Rate Demand Preferred Shares (VRDP), $251.4 million, Affirmed Aa1

RATINGS RATIONALE

The rating affirmations reflect the funds' strong capacity to service its leverage costs from recurring investment income and healthy risk-adjusted asset coverage of the preferred shares' liquidation preference. While the credit quality of the funds' investment portfolios have weakened driven by a modest increase in allocation to lower investment grade quality securities, the portfolios' overall credit profiles remain strong.

Adjusted Leverage

The risk-adjusted asset coverage (RAAC) ratios of each of the funds is consistent with a Aaa rating. The RAAC ratio discounts portfolio assets based on the historical price volatility of a CEF's municipal debt securities and compares that value to the CEF's debt and preferred obligations.

Moody's also assesses the risk that a CEF will breach the regulatory coverage requirement imposed by the Investment Company Act of 1940 which is based on the historical volatility of the fund and its capital structure. Each fund also achieves a Aaa score for this factor.

Portfolio Profile

The funds have strong asset profiles. As nationally diversified municipal CEFs, they primarily hold investment-grade securities across various general obligation, tax obligation, revenue bonds, pre-refunded bonds and other security types. The high credit quality of the funds' portfolios is somewhat offset by the lower liquidity and limited price transparency of the municipal market. Although the funds have recently raised allocations to higher yielding, lower rated assets, the average ratings of their portfolios' weighted average credit profiles remains in the single A rating range.

Fixed Charge Coverage

The CEFs each demonstrate excellent fixed charge coverage despite the recent spike in the SIFMA Municipal Swap Index which is the reference rate (in addition to a spread) used to determine the dividends on the preferred shares. Each of the funds have strong coverage of periodic payments associated with financing activities out of recurring investment income after deducting basic operating expenses. On average, the one- and five-year coverage ratios for each of the funds was in excess of 5 times net investment income, consistent with a Aaa score.

Relative Priority of Claim

In addition to assessing the key rating factors described above, Moody's considers the priority of claim of a fund's specific security types and any other qualitative factors relevant to the fund's credit profile. A one-notch downward adjustment from the rating suggested by the key factors is applied to the preferred securities associated with these ratings to reflect the weaker position of investors holding preferred stock relative to those holding senior unsecured debt obligations.

Factors That Would Lead to an Upgrade or Downgrade of the Ratings

The Aa1 ratings assigned to outstanding VMTPs could be downgraded if there is 1) a sustained decline in the fund’s net asset value; 2) deterioration in the credit quality of the fund’s investment portfolio; and 3) compression in the coverage of the fund’s fixed charges. The ratings on the outstanding VMTPs are not likely to be upgraded from their current rating level.

BlackRock Advisors, LLC, is the investment adviser for the funds. BlackRock had approximately $6.288 trillion of assets under management as of December 31, 2017 and offers 64 municipal closed-end funds.

The principal methodology used in these ratings was "Securities Issued by U.S. Closed-End Funds" published in March 2015. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Rokhaya Cisse
Analyst
Financial Institutions Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Marc R. Pinto, CFA
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

No Related Data.
© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

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To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

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Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $5,000,000. MCO and Moody’s Investors Service also maintain policies and procedures to address the independence of Moody’s Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY550,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​
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