Eaton Vance Management announced today policy changes for the following closed-end funds:
Eaton Vance Insured Municipal Bond Fund (AMEX: EIM);
Eaton Vance Insured California Municipal Bond Fund (AMEX: EVM);
Eaton Vance Insured New York Municipal Bond Fund (AMEX: ENX);
Eaton Vance Insured Municipal Bond Fund II (AMEX: EIV);
Eaton Vance Insured California Municipal Bond Fund II (AMEX: EIA);
Eaton Vance Insured Florida Plus Municipal Bond Fund (AMEX: EIF);
Eaton Vance Insured Massachusetts Municipal Bond Fund (AMEX: MAB);
Eaton Vance Insured Michigan Municipal Bond Fund (AMEX: MIW);
Eaton Vance Insured New Jersey Municipal Bond Fund (AMEX: EMJ);
Eaton Vance Insured New York Municipal Bond Fund II (AMEX: NYH);
Eaton Vance Insured Ohio Municipal Bond Fund (AMEX: EIO); and
Eaton Vance Insured Pennsylvania Municipal Bond Fund (AMEX: EIP) (together, the “Funds”).
During normal market conditions, at least 80% of each Fund’s net assets is invested in municipal obligations, the interest on which is exempt from federal income tax, including alternative minimum tax, and applicable state taxes, and that are insured as to principal and interest payments. Effective today, such insurance will be from insurers having a claims-paying ability rated at least Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's Ratings Group ("S&P") or Fitch Ratings ("Fitch") (any such rating, being of investment grade quality), provided that at least 50% of such net assets is invested in obligations insured by insurers having a claims-paying ability rated at least A by Moody’s, S&P or Fitch. Previously, such insurance was required to be provided by insurers having a claims-paying ability rated Aaa by Moody's or AAA by S&P or Fitch.
In connection with the foregoing policy change, each Fund has eliminated a requirement that at least 80% of net assets will normally be invested in obligations rated Aaa by Moody’s or AAA by S&P or Fitch or, if unrated, determined to be of comparable quality by the adviser. Each Fund also may now invest up to 20% of its net assets in unrated obligations deemed by the investment adviser to be of investment grade quality and obligations that are uninsured. Previously, EIA was permitted to invest up to 20% of net assets in securities rated at least A by Moody’s, S&P or Fitch.
In addition to the policy changes described above, as of April 12, 2008 EIM, EVM and ENX are authorized to invest in residual interests of trusts that hold municipal securities (commonly referred to as “inverse floaters”). These trusts also issue floating rate notes to third parties that may be senior to the inverse floaters. The Funds will receive interest payments on inverse floaters that bear an inverse relationship to the interest rate paid on the floating rate notes. Inverse floaters involve leverage risk and will involve greater risk than an investment in a fixed rate bond. Because changes in the interest rate paid to the floating rate note holders inversely affects the interest paid on the inverse floater, the value and income of an inverse floater are generally more volatile than that of a fixed rate bond. Inverse floaters have varying degrees of liquidity, and the market for these securities is relatively volatile. These securities tend to underperform the market for fixed rate bonds in a rising long-term interest rate environment, but tend to outperform the market for fixed rate bonds when long-term interest rates decline. While inverse floaters expose a Fund to leverage risk, they do not constitute borrowings for purposes of a Fund’s restrictions on borrowings. The other Funds also have authority to invest in inverse floaters.
Eaton Vance Management, the Funds’ investment adviser, is a subsidiary of Eaton Vance Corp., which is listed on the New York Stock Exchange under the symbol EV. Eaton Vance and its affiliates had $152.9 billion in assets under management on January 31, 2008.
Contacts:
Investor Contact: (800) 262-1122
