Item 1. Reports to Stockholders.
BNY Mellon Municipal Bond Infrastructure Fund, Inc.
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ANNUAL REPORT February 28, 2023 |
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BNY Mellon Municipal Bond Infrastructure
Fund, Inc. Protecting
Your Privacy Our Pledge to You THE FUND IS COMMITTED TO YOUR PRIVACY.
On this page, you will find the fund’s policies and practices for collecting, disclosing, and safeguarding
“nonpublic personal information,” which may include financial or other customer information. These
policies apply to individuals who purchase fund shares for personal, family, or household purposes, or
have done so in the past. This notification replaces all previous statements of the fund’s consumer
privacy policy, and may be amended at any time. We’ll keep you informed of changes as required by law. YOUR ACCOUNT IS PROVIDED IN A SECURE ENVIRONMENT. The fund maintains
physical, electronic and procedural safeguards that comply with federal regulations to guard nonpublic
personal information. The fund’s agents and service providers have limited access to customer information
based on their role in servicing your account. THE FUND COLLECTS INFORMATION
IN ORDER TO SERVICE AND ADMINISTER YOUR ACCOUNT. The fund collects a variety of nonpublic
personal information, which may include: • Information
we receive from you, such as your name, address, and social security number. • Information about your transactions with us, such as the purchase
or sale of fund shares. • Information
we receive from agents and service providers, such as proxy voting information. THE
FUND DOES NOT SHARE NONPUBLIC PERSONAL INFORMATION WITH ANYONE, EXCEPT AS PERMITTED BY LAW. Thank
you for this opportunity to serve you. |
|
The views expressed in this report reflect
those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent
the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser,
Inc. organization. Any such views are subject to change at any time based upon market or other conditions
and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views
may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon
Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent
on behalf of any fund in the BNY Mellon Family of Funds. |
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Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
FOR MORE INFORMATION
Back Cover
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DISCUSSION
OF FUND PERFORMANCE (Unaudited)
For the period from March 1, 2022, through February 28, 2023, as provided by Daniel
Rabasco, Jeffrey Burger and Thomas Casey, portfolio managers of Insight North America LLC, the fund’s
sub-adviser
Market
and Fund Performance Overview
For the 12-month period ended February 28, 2023, BNY Mellon Municipal Bond Infrastructure
Fund, Inc. (the “fund”) achieved a total return of −11.25% on a net-asset-value basis and -12.41%
on a market price basis.1 Over the same period, the fund provided aggregate income
dividends of $.58 per share, which reflects a distribution rate of 5.32%.2
In comparison, the Bloomberg U.S. Municipal Bond Index (the “Index”), the fund’s benchmark, posted
a total return of −5.10% for the same period.3
Municipal
bonds lost ground as investors took notice of rising inflation and the ongoing interest-rate hikes by
the Federal Reserve (the “Fed”). The fund continued to produce competitive levels of current income
through an emphasis on longer-term and lower-rated municipal bonds.
The Fund’s Investment Approach
The
fund seeks to provide as high a level of current income exempt from regular federal income tax as is
consistent with the preservation of capital. The fund’s portfolio is composed principally of investments
that finance the development, support or improvement of America’s infrastructure.
Under normal circumstances,
the fund pursues its investment objective by investing at least 80% of its Managed Assets4
in municipal bonds issued to finance infrastructure sectors and projects in the United States. Also,
under normal circumstances, the fund will invest at least 50% of its Managed Assets in municipal bonds
that, at the time of investment, are rated investment grade, meaning that up to 50% of Managed Assets
can be invested in below-investment-grade municipal bonds. Projects in which the fund may invest include
(but are not limited to) those in the transportation, energy and utilities, social infrastructure, and
water and environmental sectors. We focus on identifying undervalued sectors and securities and minimize
the use of interest-rate forecasting. We select municipal bonds using fundamental credit analysis to
estimate the relative value and attractiveness of various sectors and securities and to exploit pricing
inefficiencies.
The fund employs leverage by issuing preferred stock and participating
in tender-option bond programs. The use of leverage can magnify gain-and-loss potential depending on
market conditions.
Volatility and Fund Outflows Give Way to Market Stability
During
the reporting period, the municipal bond market continued to experience volatility driven by economic
uncertainty, rising inflation and geopolitical risk. While employment remains strong, the outcome of
the Fed tightening policy is uncertain, with investors fearing that an economic slowdown is a possibility.
Inflation measures stayed near multi-decade highs during the reporting period.
The Fed initiated increases in the federal funds rate, raising it by 25 basis points (bps) in March
2
2022 and 50 bps in May 2022. In June, July, September and November rates were
again raised by 75 bps each time. This was followed by increases of 50 bps and 25 bps in December 2022
and February 2023, respectively, bringing the federal funds target rate to between 4.50% and 4.75%.
Fears that the economy could slow were realized when the first-quarter GDP figures
were released in April 2022 showing the economy declined somewhat. A still-strong labor market, however,
suggested that the economy could rebound. Second-quarter data, however, showed that the economy shrank
again, making for two consecutive quarters of decline, a rough indicator of recession. The economy rebounded
in the third and fourth quarter, however, posting gains of 3.2% and 2.7%, respectively.
For
much of the period, the persistence of higher-than-expected inflation, combined with measures from the
Fed to combat it, led to significant outflows from municipal bond mutual funds. The need for fund managers
to meet redemptions only added to the downward momentum.
While headwinds prevailed
over most of the period, credit fundamentals in the municipal market remained strong. In addition, turmoil
resulted in more attractive valuations in many segments of the market, creating the potential for outperformance
in the future.
In fact, late in the reporting period, attractive values,
the prospect of a decline in inflation and an end to the Fed’s tightening began to attract investors
back into the market, and municipal bonds rebounded strongly. In addition, the normal seasonal decline
in supply, combined with the seasonal reinvestment of maturing bonds, provided some support. But while
flows into municipal bond mutual funds were healthy early in the reporting period, modest outflows occurred
in February 2023.
Duration and Select Revenue Bonds Hindered Results
The
fund’s performance was driven mainly by duration and asset allocation decisions. Specifically, the
longer duration, the fund’s use of leverage and holdings of longer bonds were particularly detrimental
as interest rates rose. In the revenue bond sector, positions in the hospital and continuing care retirement
center segments were especially detrimental.
On a more positive note, the fund’s
performance was aided by its positioning in some segments. State general obligation bonds contributed
positively to returns, especially those issued by Illinois and Puerto Rico. Among revenue bonds, positions
in airports, appropriated debt, tobacco and transportation were leading contributors. The fund did not
make use of derivatives during the period.
Positioned for Income and a Market Recovery
We
remain constructive about the market’s prospects in the coming months. We believe favorable technical
factors will provide support as supply is expected to remain modest, and demand from reinvestment should
continue to be strong. In addition, outflows from municipal bond mutual funds should moderate as investors
get more clarity on the
3
DISCUSSION
OF FUND PERFORMANCE (Unaudited) (continued)
outlook for inflation and interest-rate hikes. Credit quality could be challenged
in the event of an economic slowdown, but reserves are generally healthy and should help maintain fundamentals.
While volatility rose, and yield spreads widened during the period, we anticipate less turmoil and some
narrowing of spreads in the coming year.
To boost the income potential, the fund
swapped out certain low-yielding bonds for comparable but higher-yielding bonds. The fund is focused
on BBB and A rated bonds and those in the tobacco, transportation, appropriated debt and health care
segments. We continue to see value at the long end of the municipal bond yield curve, and the fund will
remain positioned in longer bonds and maintain leverage at the current level in order to generate income.
March 15, 2023
1 Total return includes reinvestment of dividends and any capital
gains paid, based upon net asset value per share or market price per share, as applicable. Past performance
is no guarantee of future results. Market price per share, net asset value per share and investment return
fluctuate. Income may be subject to state and local taxes, and some income may be subject to the federal
alternative minimum tax for certain investors. Capital gains, if any, are fully taxable.
2 Distribution
rate per share is based upon dividends per share paid from net investment income during the period, divided
by the market price per share at the end of the period, adjusted for any capital gain distributions.
3 Source:
Lipper, Inc. ---The Bloomberg U.S. Municipal Bond Index covers the U.S. dollar-denominated long-term
tax-exempt bond market. Unlike a fund, the Index is not subject to fees and other expenses. Investors
cannot invest directly in any index.
4 “Managed Assets” of the fund means the fund’s total
assets, including any assets attributable to effective leverage, minus certain defined accrued liabilities.
Bonds are subject generally to interest-rate, credit, liquidity and market risks,
to varying degrees. Generally, all other factors being equal, prices of investment grade bonds are inversely
related to interest-rate changes, and rate increases can cause price declines.
High
yield bonds are subject to increased credit and liquidity risk and are considered speculative in terms
of the issuer’s perceived ability to pay interest on a timely basis and to repay principal upon maturity.
Unlike investment-grade bonds, prices of high yield bonds may fluctuate unpredictably and not necessarily
inversely with changes in interest rates.
The use of leverage may magnify the fund’s
gains or losses. For derivatives with a leveraging component, adverse changes in the value or level of
the underlying asset can result in a loss that is much greater than the original investment in the derivative.
Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19
have contributed to increased volatility in global markets and affected certain companies, industries
and market sectors more dramatically than others. To the extent the fund may overweight its investments
in certain companies, industries or market sectors, such positions will increase the fund’s exposure
to risk of loss from adverse developments affecting those companies, industries or sectors.
4
FUND
PERFORMANCE (Unaudited)
Comparison of change in value of a $10,000 investment in BNY Mellon Municipal
Bond Infrastructure Fund, Inc. with a hypothetical investment of $10,000 in the Bloomberg U.S. Municipal
Bond Index (the “Index”).
† Source:
Lipper Inc.
Past performance is
not predictive of future performance.
The above graph compares a hypothetical
investment of $10,000 made in BNY Mellon Municipal Bond Infrastructure Fund, Inc. on 04/26/2013 to a
hypothetical investment of $10,000 made in the Index on that date. All figures for the fund are based
on market price. All dividends and capital gain distributions are reinvested.
The
fund invests primarily in municipal securities and its performance shown in the line graph takes into
account fees and expenses. The Index covers the U.S. dollar-denominated long-term tax-exempt bond market.
Unlike a fund, the Index is not subject to fees and other expenses. Investors cannot invest directly
in any index. Further information relating to fund performance, including expense reimbursements, if
applicable, is contained in the Financial Highlights within this report.
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Average
Annual Total Returns as of 2/28/2023 | |
| | Inception Date | 1 Year | 5 Years | From
Inception | |
BNY Mellon Municipal
Bond Infrastructure Fund, Inc. -Market Price | 4/26/2013 | -12.41% | 2.52% | 2.03% | |
BNY Mellon Municipal Bond Infrastructure Fund, Inc. -Net Asset
Value | 4/26/2013 | -11.25% | 1.23% | 3.20% | |
Bloomberg
U.S. Municipal Bond Index | | -5.10% | 1.66% | 2.09% | |
The performance
data quoted represents past performance, which is no guarantee of future results. Share price and investment
return fluctuate and an investor’s shares may be worth more or less than original cost upon sale of
the shares. Current performance may be lower or higher than the performance quoted. Go to www.im.bnymellon.com
for the fund’s most recent month-end returns.
The fund’s performance shown in the graph
and table does not reflect the deduction of taxes that a shareholder would pay on fund distributions
or the sale of fund shares.
5
FUND
PERFORMANCE (Unaudited) (continued)
DISTRIBUTION INFORMATION
The following information regarding the
fund’s distributions is current as of February 28, 2023, the fund’s fiscal year end. The fund’s
returns during the period were sufficient to meet fund distributions.
The
fund’s distribution policy is intended to provide shareholders with stable, but not guaranteed, cash
flow, independent of the amount or timing of income earned or capital gains realized by the fund. The
fund intends to distribute all or substantially all of its net investment income through its regular
monthly distribution and to distribute realized capital gains at least annually. In addition, in any
monthly period, in order to try to maintain a level distribution amount, the fund may pay out more or
less than its net investment income during the period. As a result, distributions sources may include
net investment income, realized gains and return of capital. You should not draw any conclusions about
the fund’s investment performance from the amount of the distribution or from the terms of the level
distribution program. A return of capital is a non-taxable distribution of a portion of a fund’s capital.
A return of capital distribution does not necessarily reflect a fund’s investment performance and should
not be confused with “yield” or “income.”
The amounts and sources
of distributions reported below are for financial reporting purposes and are not being provided for tax
reporting purposes. The actual amounts and character of the distributions for tax reporting purposes
will be reported to shareholders on Form 1099-DIV, which will be sent to shareholders shortly after calendar
year-end. Because distribution source estimates are updated throughout the current fiscal year based
on the fund’s performance, those estimates may differ from both the tax information reported to you
in your fund’s 1099 statement, as well as the ultimate economic sources of distributions over the life
of your investment. The figures in the table below provide the sources of distributions and may include
amounts attributed to realized gains and/or returns of capital.
| | | | | | | |
Distributions | |
| Current Month Percentage
of Distributions | Fiscal Year Ended Per Share Amounts |
| Net Investment Income | Realized Gains | Return of Capital | Total
Distributions | Net
Investment Income | Realized
Gains | Return of Capital |
BNY Mellon Municipal Bond Infrastructure Fund, Inc. | 100.00% | .00% | .00% | $.58 | $.58 | $.00 | $.00 |
6
SELECTED
INFORMATION
February
28, 2023 (Unaudited)
| | | | | | | |
Market Price per share
February 28, 2023 | $10.97 | |
Shares Outstanding February 28, 2023 | 18,405,973 | |
New
York Stock Exchange Ticker Symbol | DMB | |
MARKET
PRICE ($) (NEW YORK STOCK EXCHANGE) |
Fiscal Year Ended February 28, 2023 |
| Quarter Ended May 31,
2022 | Quarter Ended August
31, 2022 | Quarter Ended November
30, 2022 | Quarter Ended February
28, 2023 |
High | 13.43 | 14.65 | 13.83 | 11.56 |
Low | 11.00 | 11.97 | 9.83 | 10.36 |
Close | 11.88 | 13.53 | 11.27 | 10.97 |
PERCENTAGE
GAIN (LOSS) based on change in Market Price† |
April
26, 2013 (commencement of operations) through February 28, 2023 | 21.85% |
March
1, 2018 through February 28, 2023 | 13.25 |
March
1, 2022 through February 28, 2023 | (12.41) |
June
1, 2022 through February 28, 2023 | (4.18) |
September
1, 2022 through February 28, 2023 | (16.92) |
December
1, 2022 through February 28, 2023 | (1.60) |
| |
NET ASSET VALUE PER SHARE | |
April
26, 2013 (commencement of operations) | $14.295 |
February
28, 2022 | 13.86 |
May
31, 2022 | 12.83 |
August
31, 2022 | 12.25 |
November
30, 2022 | 11.81 |
February
28, 2023 | 11.70 |
PERCENTAGE
GAIN (LOSS) based on change in Net Asset Value† | |
April
26, 2013 (commencement of operations) through February 28, 2023 | 36.34% |
March
1, 2018 through February 28, 2023 | 6.32 |
March
1, 2022 through February 28, 2023 | (11.25) |
June
1, 2022 through February 28, 2023 | (5.39) |
September
1, 2022 through February 28, 2023 | (2.16) |
December
1, 2022 through February 28, 2023 | 0.13 |
†
With dividends reinvested. | |
7
STATEMENT
OF INVESTMENTS
February 28, 2023
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term Municipal Investments - 151.0% | | | | | |
Alabama - 3.2% | | | | | |
Alabama Special Care Facilities Financing Authority, Revenue
Bonds (Methodist Home for the Aging Obligated Group) | | 5.75 | | 6/1/2045 | | 2,500,000 | | 2,177,703 | |
Alabama Special Care Facilities Financing Authority, Revenue
Bonds (Methodist Home for the Aging Obligated Group) | | 6.00 | | 6/1/2050 | | 1,350,000 | | 1,188,033 | |
Black Belt Energy Gas District, Revenue Bonds, Refunding, Ser.
D1 | | 4.00 | | 6/1/2027 | | 1,000,000 | a | 999,795 | |
Jefferson County, Revenue Bonds, Refunding, Ser. F | | 7.90 | | 10/1/2050 | | 2,500,000 | b | 2,564,361 | |
| 6,929,892 | |
Arizona - 7.8% | | | | | |
Arizona Industrial Development Authority, Revenue Bonds (Equitable
School Revolving Fund Obligated Group) | | 4.25 | | 11/1/2052 | | 3,425,000 | | 3,047,198 | |
Arizona Industrial Development Authority, Revenue Bonds (Legacy
Cares Project) Ser. A | | 7.75 | | 7/1/2050 | | 3,200,000 | c,d | 2,080,000 | |
Maricopa County Industrial Development Authority, Revenue Bonds
(Benjamin Franklin Charter School Obligated Group) | | 6.00 | | 7/1/2052 | | 2,000,000 | c | 2,051,047 | |
Maricopa County Industrial Development Authority, Revenue Bonds,
Refunding (Legacy Traditional Schools Project) | | 5.00 | | 7/1/2049 | | 1,025,000 | c | 927,701 | |
Phoenix Civic Improvement Corp., Revenue Bonds | | 4.00 | | 7/1/2044 | | 1,905,000 | | 1,805,054 | |
Salt Verde Financial
Corp., Revenue Bonds | | 5.00 | | 12/1/2037 | | 5,000,000 | | 5,106,767 | |
The Phoenix Industrial
Development Authority, Revenue Bonds, Refunding (BASIS Schools Projects) Ser. A | | 5.00 | | 7/1/2046 | | 2,000,000 | c | 1,830,049 | |
| 16,847,816 | |
California - 13.7% | | | | | |
California County Tobacco
Securitization Agency, Revenue Bonds, Refunding, Ser. A | | 4.00 | | 6/1/2049 | | 1,000,000 | | 882,626 | |
California Housing Finance Agency, Revenue Bonds, Ser. 2021-1 | | 3.50 | | 11/20/2035 | | 1,457,793 | | 1,372,944 | |
8
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term Municipal Investments - 151.0% (continued) | | | | | |
California - 13.7% (continued) | | | | | |
California Municipal Finance Authority, Revenue Bonds, Refunding
(HumanGood California Obligated Group) Ser. A | | 5.00 | | 10/1/2044 | | 1,000,000 | | 1,021,279 | |
California Statewide Communities Development Authority, Revenue
Bonds (California Baptist University) Ser. A | | 6.38 | | 11/1/2043 | | 2,035,000 | c | 2,057,259 | |
California Statewide Communities Development Authority, Revenue
Bonds, Refunding (California Baptist University) Ser. A | | 5.00 | | 11/1/2041 | | 1,875,000 | c | 1,839,184 | |
Golden State Tobacco Securitization Corp., Revenue Bonds, Refunding,
Ser. B | | 5.00 | | 6/1/2051 | | 1,000,000 | | 1,041,633 | |
Long Beach Bond Finance
Authority, Revenue Bonds, Ser. A | | 5.50 | | 11/15/2037 | | 5,000,000 | | 5,441,344 | |
Orange County Community Facilities District, Special Tax Bonds,
Ser. A | | 5.00 | | 8/15/2052 | | 1,000,000 | | 1,005,663 | |
Riverside County Transportation
Commission, Revenue Bonds, Ser. A | | 5.75 | | 6/1/2023 | | 1,650,000 | e | 1,660,869 | |
San Diego County Regional Airport Authority, Revenue Bonds,
Ser. B | | 5.00 | | 7/1/2051 | | 3,500,000 | | 3,578,533 | |
Tender Option Bond
Trust Receipts (Series 2022-XF3024), (San Franscisco City & County, Revenue Bonds, Refunding, Ser.
A) Recourse, Underlying Coupon Rate (%) 5.00 | | 10.85 | | 5/1/2044 | | 4,500,000 | c,f,g | 4,621,591 | |
University of California Regents Medical Center, Revenue Bonds,
Refunding, Ser. J | | 5.00 | | 5/15/2023 | | 5,000,000 | e | 5,018,462 | |
| 29,541,387 | |
Colorado - 9.2% | | | | | |
Colorado Health Facilities
Authority, Revenue Bonds (CommonSpirit Health Obligated Group) | | 5.25 | | 11/1/2052 | | 1,000,000 | | 1,030,190 | |
Colorado Health Facilities Authority, Revenue Bonds, Refunding
(Covenant Living Communities & Services Obligated Group) Ser. A | | 4.00 | | 12/1/2050 | | 3,000,000 | | 2,411,628 | |
Colorado Health Facilities Authority, Revenue Bonds, Refunding
(Intermountain Healthcare Obligated Group) Ser. A | | 4.00 | | 5/15/2052 | | 1,255,000 | | 1,152,742 | |
Colorado Health Facilities Authority, Revenue Bonds, Ser. A | | 5.00 | | 1/1/2024 | | 2,500,000 | e | 2,534,490 | |
9
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term Municipal Investments - 151.0% (continued) | | | | | |
Colorado - 9.2% (continued) | | | | | |
Denver City & County Airport System, Revenue Bonds, Refunding,
Ser. A | | 5.50 | | 11/15/2053 | | 1,000,000 | | 1,078,762 | |
Denver City & County
Airport System, Revenue Bonds, Ser. A | | 5.25 | | 11/15/2043 | | 5,000,000 | | 5,024,490 | |
Dominion Water & Sanitation District, Revenue Bonds, Refunding | | 5.88 | | 12/1/2052 | | 2,000,000 | | 1,932,247 | |
Hess Ranch Metropolitan
District No. 6, GO, Ser. A1 | | 5.00 | | 12/1/2049 | | 1,500,000 | | 1,304,700 | |
Rampart Range Metropolitan
District No. 5, Revenue Bonds | | 4.00 | | 12/1/2051 | | 1,000,000 | | 691,196 | |
Tender Option Bond
Trust Receipts (Series 2020-XM0829), (Colorado Health Facilities Authority, Revenue Bonds, Refunding
(CommonSpirit Health Obligated Group, Ser. A1)) Recourse, Underlying Coupon Rate (%) 4.00 | | 9.73 | | 8/1/2044 | | 2,455,000 | c,f,g | 2,663,106 | |
| 19,823,551 | |
Connecticut - 1.7% | | | | | |
Connecticut Health
& Educational Facilities Authority, Revenue Bonds (The Hartford University) Ser. P | | 5.38 | | 7/1/2052 | | 1,250,000 | | 1,207,170 | |
Connecticut Health & Educational Facilities Authority,
Revenue Bonds, Refunding (Fairfield University) Ser. T | | 4.00 | | 7/1/2055 | | 1,500,000 | | 1,302,279 | |
University of Connecticut, Revenue Bonds, Ser. A | | 5.00 | | 5/1/2041 | | 1,000,000 | | 1,094,736 | |
| 3,604,185 | |
District of Columbia
- .8% | | | | | |
District of Columbia, Revenue Bonds, Refunding (KIPP Charter School) | | 6.00 | | 7/1/2023 | | 1,700,000 | e | 1,715,038 | |
Florida - 5.2% | | | | | |
Alachua
County Health Facilities Authority, Revenue Bonds (Shands Teaching Hospital & Clinics Obligated Group) | | 4.00 | | 12/1/2049 | | 1,750,000 | | 1,535,253 | |
Davie, Revenue Bonds
(Nova Southeastern University Project) Ser. A | | 5.63 | | 4/1/2023 | | 2,555,000 | e | 2,560,051 | |
Florida Higher Educational Facilities Financial Authority,
Revenue Bonds (Ringling College Project) | | 5.00 | | 3/1/2049 | | 2,000,000 | | 1,970,915 | |
10
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term Municipal Investments - 151.0% (continued) | | | | | |
Florida - 5.2% (continued) | | | | | |
Pinellas County Industrial Development Authority, Revenue Bonds
(Foundation for Global Understanding) | | 5.00 | | 7/1/2039 | | 1,000,000 | | 966,979 | |
Seminole County Industrial Development Authority, Revenue Bonds,
Refunding (Legacy Pointe at UCF Project) | | 5.75 | | 11/15/2054 | | 500,000 | | 419,086 | |
Tender Option Bond Trust Receipts (Series 2020-XF2877), (Greater
Orlando Aviation Authority, Revenue Bonds, Ser. A) Recourse, Underlying Coupon Rate (%) 4.00 | | 6.83 | | 10/1/2049 | | 2,480,000 | c,f,g | 2,248,447 | |
Tender Option Bond Trust Receipts (Series 2022-XF1385), (Fort
Myers FL Utility, Revenue Bonds, Refunding, Ser. A) Non-recourse, Underlying Coupon Rate (%) 4.00 | | 7.33 | | 10/1/2044 | | 1,640,000 | c,f,g | 1,568,829 | |
| 11,269,560 | |
Georgia - 4.5% | | | | | |
Fulton County Development Authority, Revenue Bonds, Ser. A | | 5.00 | | 4/1/2042 | | 1,250,000 | | 1,280,086 | |
Georgia Municipal Electric
Authority, Revenue Bonds (Plant Vogtle Units 3&4 Project) Ser. A | | 5.00 | | 7/1/2052 | | 2,500,000 | | 2,549,527 | |
Tender Option Bond Trust Receipts (Series 2019-XF2847), (Municipal
Electric Authority of Georgia, Revenue Bonds (Plant Vogtle Unis 3&4 Project, Ser. A)) Recourse, Underlying
Coupon Rate (%) 5.00 | | 10.50 | | 1/1/2056 | | 2,060,000 | c,f,g | 2,083,983 | |
Tender Option Bond Trust Receipts (Series 2020-XM0825), (Brookhaven
Development Authority, Revenue Bonds (Children's Healthcare of Atlanta, Ser. A)) Recourse, Underlying
Coupon Rate (%) 4.00 | | 8.17 | | 7/1/2044 | | 3,600,000 | c,f,g | 3,706,988 | |
| 9,620,584 | |
Illinois - 16.3% | | | | | |
Chicago Board of Education,
GO, Refunding, Ser. A | | 5.00 | | 12/1/2035 | | 1,500,000 | | 1,516,067 | |
Chicago II, GO, Refunding,
Ser. A | | 6.00 | | 1/1/2038 | | 2,500,000 | | 2,624,141 | |
Chicago II, GO, Ser.
A | | 5.00 | | 1/1/2044 | | 2,000,000 | | 1,949,336 | |
Chicago O'Hare International
Airport, Revenue Bonds (Customer Facility Charge) | | 5.75 | | 1/1/2043 | | 3,750,000 | | 3,801,880 | |
11
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term Municipal Investments - 151.0% (continued) | | | | | |
Illinois - 16.3% (continued) | | | | | |
Chicago O'Hare International Airport, Revenue Bonds, Refunding,
Ser. A | | 5.00 | | 1/1/2048 | | 2,500,000 | | 2,545,717 | |
Chicago Transit Authority,
Revenue Bonds, Refunding, Ser. A | | 5.00 | | 12/1/2057 | | 2,000,000 | | 2,045,537 | |
Chicago Transit Authority, Revenue Bonds, Refunding, Ser. A | | 5.00 | | 12/1/2045 | | 1,000,000 | | 1,031,229 | |
Illinois, GO, Ser.
D | | 5.00 | | 11/1/2028 | | 2,600,000 | | 2,723,462 | |
Illinois, GO, Ser.
D | | 5.00 | | 11/1/2027 | | 3,500,000 | | 3,668,455 | |
Illinois Finance Authority,
Revenue Bonds (Plymouth Place Obligated Group) Ser. A | | 6.63 | | 5/15/2052 | | 1,000,000 | | 1,021,022 | |
Metropolitan Pier & Exposition Authority, Revenue Bonds
(McCormick Place Project) (Insured; National Public Finance Guarantee Corp.) Ser. A | | 0.00 | | 12/15/2036 | | 1,400,000 | h | 737,038 | |
Metropolitan Pier & Exposition Authority, Revenue Bonds,
Refunding (McCormick Place Expansion Project) | | 5.00 | | 6/15/2050 | | 1,750,000 | | 1,709,114 | |
Tender Option Bond Trust Receipts (Series 2017-XM0492), (Illinois
Finance Authority, Revenue Bonds, Refunding (The University of Chicago)) Non-recourse, Underlying Coupon
Rate (%) 5.00 | | 13.28 | | 10/1/2040 | | 7,000,000 | c,f,g | 7,185,078 | |
University of Illinois, Revenue Bonds (Auxiliary Facilities
System) Ser. A | | 5.00 | | 4/1/2044 | | 2,500,000 | | 2,473,986 | |
| 35,032,062 | |
Indiana - 5.4% | | | | | |
Indiana
Finance Authority, Revenue Bonds (BHI Senior Living Obligated Group) Ser. A | | 6.00 | | 11/15/2023 | | 3,500,000 | e | 3,558,884 | |
Indiana Finance Authority, Revenue Bonds (Green Bond) | | 7.00 | | 3/1/2039 | | 2,025,000 | c | 1,528,071 | |
Indiana Finance Authority, Revenue Bonds (Ohio River Bridges
East End Crossing Project) Ser. A | | 5.00 | | 7/1/2023 | | 5,000,000 | e | 5,025,813 | |
Indiana Finance Authority, Revenue Bonds (Parkview Health System
Obligated Group) Ser. A | | 5.00 | | 11/1/2043 | | 1,500,000 | | 1,533,752 | |
| 11,646,520 | |
Iowa - .6% | | | | | |
Iowa
Finance Authority, Revenue Bonds, Refunding (Iowa Fertilizer Co. Project) | | 5.00 | | 12/1/2050 | | 1,250,000 | | 1,222,374 | |
12
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term Municipal Investments - 151.0% (continued) | | | | | |
Kansas - .1% | | | | | |
Kansas Development Finance Authority, Revenue Bonds, Ser. B | | 4.00 | | 11/15/2025 | | 150,000 | | 140,758 | |
Kentucky
- .7% | | | | | |
Christian County, Revenue Bonds, Refunding (Jennie Stuart Medical Center Obligated
Group) | | 5.50 | | 2/1/2044 | | 1,000,000 | | 1,016,316 | |
Henderson, Revenue
Bonds (Pratt Paper Project) Ser. A | | 4.70 | | 1/1/2052 | | 600,000 | c | 566,512 | |
| 1,582,828 | |
Louisiana - .9% | | | | | |
Louisiana Public Facilities
Authority, Revenue Bonds (Impala Warehousing Project) | | 6.50 | | 7/1/2036 | | 1,000,000 | c | 1,004,302 | |
Louisiana Public Facilities Authority, Revenue Bonds, Refunding,
Ser. A | | 4.00 | | 4/1/2050 | | 885,000 | | 814,294 | |
Louisiana Public Facilities
Authority, Revenue Bonds, Refunding, Ser. A | | 4.00 | | 4/1/2030 | | 115,000 | e | 123,553 | |
| 1,942,149 | |
Maryland - .6% | | | | | |
Maryland Economic Development Corp., Revenue Bonds (Green Bond)
(Purple Line Transit Partners) Ser. B | | 5.25 | | 6/30/2052 | | 1,200,000 | | 1,204,827 | |
Massachusetts - 2.8% | | | | | |
Massachusetts Development
Finance Agency, Revenue Bonds, Refunding (NewBridge Charles Obligated Group) | | 5.00 | | 10/1/2057 | | 1,000,000 | c | 931,713 | |
Massachusetts Development Finance Agency, Revenue Bonds, Refunding
(Suffolk University Project) | | 5.00 | | 7/1/2034 | | 1,550,000 | | 1,645,436 | |
Massachusetts Development
Finance Agency, Revenue Bonds, Refunding, Ser. A | | 5.00 | | 7/1/2029 | | 900,000 | | 934,758 | |
Massachusetts Educational Financing Authority, Revenue Bonds,
Ser. B | | 5.00 | | 7/1/2030 | | 1,000,000 | | 1,077,990 | |
Massachusetts Port
Authority, Revenue Bonds, Refunding (Bosfuel Project) Ser. A | | 4.00 | | 7/1/2044 | | 1,500,000 | | 1,372,576 | |
| 5,962,473 | |
Michigan
- 5.0% | | | | | |
Detroit, GO, Ser. A | | 5.00 | | 4/1/2050 | | 1,000,000 | | 924,323 | |
Michigan Building Authority, Revenue Bonds, Refunding | | 4.00 | | 10/15/2049 | | 2,500,000 | | 2,367,799 | |
13
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term Municipal Investments - 151.0% (continued) | | | | | |
Michigan - 5.0% (continued) | | | | | |
Michigan Finance Authority, Revenue Bonds, Refunding (Insured;
National Public Finance Guarantee Corp.) Ser. D6 | | 5.00 | | 7/1/2036 | | 2,250,000 | | 2,282,889 | |
Michigan Housing Development Authority, Revenue Bonds, Ser.
A | | 3.35 | | 12/1/2034 | | 2,500,000 | | 2,371,213 | |
Michigan Tobacco Settlement
Finance Authority, Revenue Bonds, Refunding, Ser. C | | 0.00 | | 6/1/2058 | | 41,200,000 | h | 1,633,629 | |
Wayne County Airport Authority, Revenue Bonds (Detroit Metropolitan
Wayne County Airport) (Insured; Build America Mutual) Ser. B | | 5.00 | | 12/1/2039 | | 1,250,000 | | 1,277,100 | |
| 10,856,953 | |
Minnesota
- .9% | | | | | |
Duluth Economic Development Authority, Revenue Bonds, Refunding (Essentia Health
Obligated Group) Ser. A | | 5.00 | | 2/15/2058 | | 2,000,000 | | 2,020,134 | |
Missouri
- 2.6% | | | | | |
Kansas City Industrial Development Authority, Revenue Bonds (Kansas City International
Airport Terminal) Ser. A | | 5.00 | | 3/1/2044 | | 1,000,000 | | 1,020,196 | |
St. Louis County Industrial
Development Authority, Revenue Bonds (Friendship Village St. Louis Obligated Group) Ser. A | | 5.13 | | 9/1/2049 | | 1,000,000 | | 882,208 | |
St. Louis County Industrial
Development Authority, Revenue Bonds, Refunding (Friendship Village St. Louis Obligated Group) | | 5.00 | | 9/1/2042 | | 1,000,000 | | 905,142 | |
The Missouri Health
& Educational Facilities Authority, Revenue Bonds (Mercy Health) | | 4.00 | | 6/1/2053 | | 1,000,000 | | 901,138 | |
The Missouri Health & Educational Facilities Authority,
Revenue Bonds, Refunding (St. Louis College of Pharmacy Project) | | 5.50 | | 5/1/2043 | | 2,000,000 | | 2,007,169 | |
| 5,715,853 | |
Multi-State
- .6% | | | | | |
Federal Home Loan Mortgage Corp. Multifamily Variable Rate Certificates, Revenue
Bonds, Ser. M048 | | 3.15 | | 1/15/2036 | | 1,415,000 | c | 1,254,682 | |
14
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term Municipal Investments - 151.0% (continued) | | | | | |
Nevada - 1.4% | | | | | |
Clark County School District, GO (Insured; Assured Guaranty
Municipal Corp.) Ser. A | | 4.25 | | 6/15/2041 | | 2,155,000 | | 2,151,363 | |
Reno, Revenue Bonds,
Refunding (Insured; Assured Guaranty Municipal Corp.) | | 4.00 | | 6/1/2058 | | 1,000,000 | | 868,934 | |
| 3,020,297 | |
New
Hampshire - 1.1% | | | | | |
New Hampshire Business Finance Authority, Revenue Bonds, Refunding
(Springpoint Senior Living Obligated Group) | | 4.00 | | 1/1/2051 | | 3,000,000 | | 2,316,488 | |
New Jersey - 6.3% | | | | | |
New Jersey Economic
Development Authority, Revenue Bonds | | 5.38 | | 1/1/2043 | | 2,500,000 | | 2,513,213 | |
New Jersey Economic Development Authority, Revenue Bonds (Continental
Airlines Project) | | 5.13 | | 9/15/2023 | | 685,000 | | 684,743 | |
New Jersey Economic
Development Authority, Revenue Bonds, Refunding, Ser. XX | | 5.25 | | 6/15/2027 | | 1,155,000 | | 1,202,273 | |
New Jersey Economic Development Authority, Revenue Bonds, Refunding,
Ser. XX | | 5.25 | | 6/15/2025 | | 1,345,000 | e | 1,406,379 | |
New Jersey Economic Development Authority, Revenue Bonds, Ser.
WW | | 5.25 | | 6/15/2025 | | 110,000 | e | 114,772 | |
New Jersey Economic Development Authority, Revenue Bonds, Ser.
WW | | 5.25 | | 6/15/2025 | | 1,890,000 | e | 1,976,249 | |
New Jersey Health Care Facilities Financing Authority, Revenue
Bonds (RWJ Barnabas Health Obligated Group) | | 4.00 | | 7/1/2051 | | 1,250,000 | | 1,139,280 | |
New Jersey Transportation Trust Fund Authority, Revenue Bonds | | 5.00 | | 6/15/2046 | | 1,000,000 | | 1,024,449 | |
New Jersey Transportation
Trust Fund Authority, Revenue Bonds | | 5.50 | | 6/15/2050 | | 1,600,000 | | 1,719,309 | |
New Jersey Turnpike Authority, Revenue Bonds, Ser. A | | 4.00 | | 1/1/2048 | | 1,800,000 | | 1,700,368 | |
| 13,481,035 | |
New York - 15.0% | | | | | |
New
York Liberty Development Corp., Revenue Bonds, Refunding (Class 1-3 World Trade Center Project) | | 5.00 | | 11/15/2044 | | 3,500,000 | c | 3,369,639 | |
15
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term Municipal Investments - 151.0% (continued) | | | | | |
New York - 15.0% (continued) | | | | | |
New York State Dormitory Authority, Revenue Bonds (St. John's
University) Ser. A | | 5.00 | | 7/1/2044 | | 2,000,000 | | 2,003,202 | |
New York Transportation
Development Corp., Revenue Bonds (JFK International Air Terminal) | | 5.00 | | 12/1/2040 | | 1,200,000 | | 1,230,134 | |
New York Transportation Development Corp., Revenue Bonds (JFK
International Air Terminal) | | 5.00 | | 12/1/2037 | | 2,000,000 | | 2,077,164 | |
Niagara Area Development
Corp., Revenue Bonds, Refunding (Covanta Project) Ser. A | | 4.75 | | 11/1/2042 | | 2,000,000 | c | 1,736,369 | |
Tender Option Bond Trust Receipts (Series 2017-XF2419), (Metropolitan
Transportation Authority, Revenue Bonds) Non-recourse, Underlying Coupon Rate (%) 5.00 | | 10.26 | | 11/15/2038 | | 15,000,000 | c,f,g | 14,957,095 | |
Tender Option Bond Trust Receipts (Series 2022-XM1004), (Metropolitan
Transportation Authority, Revenue Bonds, Refunding (Green Bond) (Insured; Assured Guaranty Municipal
Corp., Ser. C)) Non-recourse, Underlying Coupon Rate (%) 4.00 | | 6.21 | | 11/15/2047 | | 3,300,000 | c,f,g | 3,071,937 | |
Triborough Bridge & Tunnel Authority, Revenue Bonds, Refunding,
Ser. A1 | | 5.00 | | 5/15/2051 | | 2,410,000 | | 2,573,359 | |
TSASC, Revenue Bonds,
Refunding, Ser. B | | 5.00 | | 6/1/2045 | | 585,000 | | 542,719 | |
Westchester County
Local Development Corp., Revenue Bonds, Refunding (Purchase Senior Learning Community Obligated Group) | | 5.00 | | 7/1/2046 | | 1,000,000 | c | 777,275 | |
| 32,338,893 | |
North Carolina - 1.1% | | | | | |
North Carolina Medical
Care Commission, Revenue Bonds, Refunding (Lutheran Services for the Aging Obligated Group) | | 4.00 | | 3/1/2051 | | 2,000,000 | | 1,396,423 | |
North Carolina Turnpike
Authority, Revenue Bonds (Insured; Assured Guaranty Municipal Corp.) | | 4.00 | | 1/1/2055 | | 1,000,000 | | 903,101 | |
| 2,299,524 | |
16
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term Municipal Investments - 151.0% (continued) | | | | | |
Ohio - 7.4% | | | | | |
Buckeye Tobacco Settlement Financing Authority, Revenue Bonds,
Refunding, Ser. B2 | | 5.00 | | 6/1/2055 | | 7,700,000 | | 7,002,686 | |
Cuyahoga County, Revenue
Bonds, Refunding (The MetroHealth System) | | 5.25 | | 2/15/2047 | | 2,500,000 | | 2,537,541 | |
Muskingum County, Revenue Bonds (Genesis HealthCare System
Project) | | 5.00 | | 2/15/2044 | | 7,000,000 | | 6,297,278 | |
| 15,837,505 | |
Oklahoma - .7% | | | | | |
Tulsa
County Industrial Authority, Revenue Bonds, Refunding (Montereau Project) | | 5.25 | | 11/15/2045 | | 1,500,000 | | 1,461,066 | |
Pennsylvania - 7.0% | | | | | |
Allentown Neighborhood
Improvement Zone Development Authority, Revenue Bonds (City Center Project) | | 5.00 | | 5/1/2042 | | 1,000,000 | c | 971,356 | |
Allentown School District, GO, Refunding (Insured; Build America
Mutual) Ser. B | | 5.00 | | 2/1/2032 | | 1,455,000 | | 1,616,015 | |
Clairton Municipal
Authority, Revenue Bonds, Refunding, Ser. B | | 5.00 | | 12/1/2042 | | 1,500,000 | | 1,500,699 | |
Clairton Municipal Authority, Revenue Bonds, Refunding, Ser.
B | | 5.00 | | 12/1/2037 | | 4,000,000 | | 4,002,399 | |
Montgomery County Industrial
Development Authority, Revenue Bonds (ACTS Retirement-Life Communities Obligated Group) Ser. C | | 5.00 | | 11/15/2045 | | 1,000,000 | | 951,708 | |
Pennsylvania Economic
Development Financing Authority, Revenue Bonds | | 6.00 | | 6/30/2061 | | 2,000,000 | | 2,176,559 | |
Pennsylvania Higher Educational Facilities Authority, Revenue
Bonds, Refunding (Thomas Jefferson University Obligated Group) Ser. A | | 5.00 | | 9/1/2045 | | 3,000,000 | | 3,022,773 | |
Pennsylvania Turnpike Commission, Revenue Bonds, Ser. B | | 4.00 | | 12/1/2051 | | 1,000,000 | | 913,602 | |
| 15,155,111 | |
Rhode Island - 2.0% | | | | | |
Providence
Public Building Authority, Revenue Bonds (Insured; Assured Guaranty Municipal Corp.) Ser. A | | 5.00 | | 9/15/2037 | | 4,000,000 | | 4,322,841 | |
17
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term Municipal Investments - 151.0% (continued) | | | | | |
South Carolina - 3.6% | | | | | |
South Carolina Jobs-Economic Development Authority, Revenue
Bonds, Refunding (Lutheran Homes of South Carolina Obligated Group) | | 5.13 | | 5/1/2048 | | 1,750,000 | | 1,413,194 | |
South Carolina Public Service Authority, Revenue Bonds, Refunding
(Santee Cooper) | | 5.13 | | 12/1/2043 | | 5,000,000 | | 5,016,378 | |
South Carolina Public
Service Authority, Revenue Bonds, Refunding, Ser. A | | 4.00 | | 12/1/2055 | | 1,500,000 | | 1,294,374 | |
| 7,723,946 | |
South
Dakota - 1.3% | | | | | |
Tender Option Bond Trust Receipts (Series 2022-XF1409), (South Dakota Heath & Educational Facilities Authority,
Revenue Bonds, Refunding (Avera Health Obligated Group)) Non-recourse, Underlying Coupon Rate (%) 5.00 | | 14.22 | | 7/1/2046 | | 2,680,000 | c,f,g | 2,714,163 | |
Texas - 10.9% | | | | | |
Clifton
Higher Education Finance Corp., Revenue Bonds (IDEA Public Schools) | | 6.00 | | 8/15/2043 | | 1,500,000 | | 1,513,781 | |
Clifton Higher Education Finance Corp., Revenue Bonds (International
Leadership of Texas) Ser. A | | 5.75 | | 8/15/2045 | | 2,500,000 | | 2,456,629 | |
Clifton Higher Education
Finance Corp., Revenue Bonds (International Leadership of Texas) Ser. D | | 6.13 | | 8/15/2048 | | 3,500,000 | | 3,519,983 | |
Dallas Fort Worth International Airport, Revenue Bonds, Refunding,
Ser. B | | 5.00 | | 11/1/2040 | | 1,500,000 | | 1,647,515 | |
Grand Parkway Transportation
Corp., Revenue Bonds, Refunding | | 4.00 | | 10/1/2045 | | 1,165,000 | | 1,081,721 | |
Lamar Consolidated
Independent School District, GO | | 4.00 | | 2/15/2053 | | 1,000,000 | | 937,213 | |
Mission Economic Development
Corp., Revenue Bonds, Refunding (Natgasoline Project) | | 4.63 | | 10/1/2031 | | 1,500,000 | c | 1,466,195 | |
18
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term Municipal Investments - 151.0% (continued) | | | | | |
Texas - 10.9% (continued) | | | | | |
Tender Option Bond Trust Receipts (Series 2016-XM0374), (Tarrant
County Cultural Education Facilities Finance Corporation, Revenue Bonds (Baylor Health Care System Project))
Non-recourse, Underlying Coupon Rate (%) 5.00 | | 13.27 | | 11/15/2038 | | 7,410,000 | c,f,g | 7,436,236 | |
Texas Private Activity Bond Surface Transportation Corp., Revenue
Bonds (Segment 3C Project) | | 5.00 | | 6/30/2058 | | 3,500,000 | | 3,442,707 | |
| 23,501,980 | |
U.S. Related - .8% | | | | | |
Puerto
Rico, GO, Ser. A | | 0.00 | | 7/1/2024 | | 54,647 | h | 51,291 | |
Puerto Rico, GO, Ser. A | | 0.00 | | 7/1/2033 | | 211,359 | h | 120,426 | |
Puerto Rico, GO, Ser. A1 | | 4.00 | | 7/1/2037 | | 126,704 | | 108,359 | |
Puerto Rico, GO, Ser. A1 | | 4.00 | | 7/1/2035 | | 147,628 | | 129,308 | |
Puerto Rico, GO, Ser. A1 | | 4.00 | | 7/1/2046 | | 179,157 | | 142,663 | |
Puerto Rico, GO, Ser. A1 | | 4.00 | | 7/1/2041 | | 172,269 | | 142,306 | |
Puerto Rico, GO, Ser. A1 | | 4.00 | | 7/1/2033 | | 164,238 | | 147,168 | |
Puerto Rico, GO, Ser. A1 | | 5.25 | | 7/1/2023 | | 91,712 | | 91,978 | |
Puerto Rico, GO, Ser. A1 | | 5.38 | | 7/1/2025 | | 182,915 | | 185,719 | |
Puerto Rico, GO, Ser. A1 | | 5.63 | | 7/1/2029 | | 178,318 | | 186,057 | |
Puerto Rico, GO, Ser. A1 | | 5.63 | | 7/1/2027 | | 181,259 | | 187,245 | |
Puerto Rico, GO, Ser. A1 | | 5.75 | | 7/1/2031 | | 173,199 | | 182,309 | |
| 1,674,829 | |
Utah
- 1.2% | | | | | |
Salt Lake City, Revenue Bonds, Ser. A | | 5.00 | | 7/1/2042 | | 1,205,000 | | 1,226,073 | |
Utah Charter School Finance Authority, Revenue Bonds, Refunding
(Summit Academy) Ser. A | | 5.00 | | 4/15/2039 | | 1,400,000 | | 1,452,650 | |
| 2,678,723 | |
Virginia - 1.5% | | | | | |
Norfolk
Redevelopment & Housing Authority, Revenue Bonds (Fort Norfolk Retirement Community Obligated Group)
Ser. A | | 5.00 | | 1/1/2049 | | 1,000,000 | | 793,451 | |
Virginia Small Business
Financing Authority, Revenue Bonds, Refunding | | 5.00 | | 12/31/2057 | | 1,500,000 | | 1,502,344 | |
Virginia Small Business Financing Authority, Revenue Bonds,
Refunding (95 Express Lanes) | | 4.00 | | 1/1/2048 | | 1,000,000 | | 837,701 | |
| 3,133,496 | |
19
STATEMENT
OF INVESTMENTS (continued)
| | | | | | | | | |
|
Description
| Coupon Rate
(%) | | Maturity Date | | Principal Amount
($) | | Value
($) | |
Long-Term Municipal Investments - 151.0% (continued) | | | | | |
Washington - 2.6% | | | | | |
Port of Seattle, Revenue Bonds | | 4.00 | | 4/1/2044 | | 1,000,000 | | 908,951 | |
Washington Health Care Facilities Authority, Revenue Bonds,
Refunding (Providence Health & Services) Ser. A | | 5.00 | | 10/1/2042 | | 5,000,000 | | 4,801,368 | |
| 5,710,319 | |
Wisconsin
- 4.5% | | | | | |
Public Finance Authority, Revenue Bonds (EMU Campus Living) (Insured; Build America
Mutual) Ser. A1 | | 5.50 | | 7/1/2052 | | 1,200,000 | | 1,293,947 | |
Public Finance Authority,
Revenue Bonds (EMU Campus Living) (Insured; Build America Mutual) Ser. A1 | | 5.63 | | 7/1/2055 | | 1,315,000 | | 1,427,787 | |
Public Finance Authority, Revenue Bonds, Refunding, Ser. B | | 5.00 | | 7/1/2042 | | 5,000,000 | | 4,897,178 | |
Public Finance Authority,
Revenue Bonds, Ser. A | | 5.00 | | 10/1/2052 | | 1,000,000 | | 1,033,494 | |
Wisconsin Health &
Educational Facilities Authority, Revenue Bonds (Bellin Memorial Hospital Obligated Group) | | 5.50 | | 12/1/2052 | | 1,000,000 | | 1,078,622 | |
| 9,731,028 | |
Total Investments (cost $338,065,345) | | 151.0% | 325,034,870 | |
Liabilities, Less Cash and Receivables | | (16.2%) | (34,749,318) | |
RVMTPS, at liquidation
value | | (34.8%) | (75,000,000) | |
Net Assets Applicable
to Common Shareholders | | 100.0% | 215,285,552 | |
a These securities have a put feature; the date shown represents
the put date and the bond holder can take a specific action to retain the bond after the put date.
b Zero
coupon until a specified date at which time the stated coupon rate becomes effective until maturity.
c Security
exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may
be resold in transactions exempt from registration, normally to qualified institutional buyers. At February
28, 2023, these securities were valued at $76,648,807 or 35.6% of net assets.
d Non-income producing—security in default.
e These securities are prerefunded; the date shown represents
the prerefunded date. Bonds which are prerefunded are collateralized by U.S. Government securities which
are held in escrow and are used to pay principal and interest on the municipal issue and to retire the
bonds in full at the earliest refunding date.
f The Variable Rate shall be determined by the Remarketing Agent
in its sole discretion based on prevailing market conditions and may, but need not, be established by
reference to one or more financial indices.
g Collateral for floating rate borrowings. The coupon rate given
represents the current interest rate for the inverse floating rate security.
h Security issued with a zero coupon. Income is recognized through
the accretion of discount.
20
| |
Portfolio Summary (Unaudited) † | Value
(%) |
Medical | 22.2 |
Education | 19.3 |
General | 18.6 |
Airport | 14.7 |
Transportation | 14.2 |
Prerefunded | 11.9 |
Development | 9.7 |
Nursing Homes | 9.4 |
General Obligation | 6.3 |
Tobacco Settlement | 5.2 |
Power | 5.1 |
Water | 3.9 |
School District | 2.9 |
Utilities | 2.5 |
Housing | 1.3 |
Multifamily Housing | 1.2 |
Single Family Housing | 1.1 |
Student Loan | .5 |
Special
Tax | .5 |
Facilities | .5 |
| 151.0 |
† Based on net assets.
See notes to financial statements.
21
| | | |
|
Summary
of Abbreviations (Unaudited) |
|
ABAG | Association
of Bay Area Governments | AGC | ACE Guaranty Corporation |
AGIC | Asset Guaranty Insurance Company | AMBAC | American Municipal Bond Assurance Corporation |
BAN | Bond Anticipation Notes | BSBY | Bloomberg
Short-Term Bank Yield Index |
CIFG | CDC
Ixis Financial Guaranty | COP | Certificate of Participation |
CP | Commercial Paper | DRIVERS | Derivative
Inverse Tax-Exempt Receipts |
EFFR | Effective
Federal Funds Rate | FGIC | Financial Guaranty Insurance Company |
FHA | Federal Housing Administration | FHLB | Federal Home Loan Bank |
FHLMC | Federal Home Loan Mortgage Corporation | FNMA | Federal National Mortgage Association |
GAN | Grant Anticipation Notes | GIC | Guaranteed
Investment Contract |
GNMA | Government National Mortgage Association | GO | General Obligation |
IDC | Industrial
Development Corporation | LIBOR | London Interbank Offered Rate |
LOC | Letter of Credit | LR | Lease
Revenue |
NAN | Note Anticipation Notes | MFHR | Multi-Family
Housing Revenue |
MFMR | Multi-Family Mortgage Revenue | MUNIPSA | Securities Industry and Financial Markets
Association Municipal Swap Index Yield |
OBFR | Overnight
Bank Funding Rate | PILOT | Payment in Lieu of Taxes |
PRIME | Prime Lending Rate | PUTTERS | Puttable
Tax-Exempt Receipts |
RAC | Revenue Anticipation Certificates | RAN | Revenue Anticipation Notes |
RIB | Residual Interest Bonds | SFHR | Single
Family Housing Revenue |
SFMR | Single
Family Mortgage Revenue | SOFR | Secured Overnight Financing Rate |
TAN | Tax Anticipation Notes | TRAN | Tax
and Revenue Anticipation Notes |
U.S.
T-BILL | U.S.
Treasury Bill Money Market Yield | XLCA | XL
Capital Assurance |
RVMTPS | Remarketable Variable Rate MuniFund Term
Preferred Shares | VMTPS | Remarketable Variable Rate Muni Term Preferred
Shares |
See notes to financial
statements.
22
STATEMENT
OF ASSETS AND LIABILITIES
February 28, 2023
| | | | | | |
| | | | | | |
| | | Cost | | Value | |
Assets ($): | | | | |
Investments in securities—See Statement of Investments | 338,065,345 | | 325,034,870 | |
Cash | | | | | 1,575,561 | |
Interest
receivable | | 4,069,232 | |
Prepaid expenses | | | | | 106,450 | |
| | | | |
330,786,113 | |
Liabilities ($): | | | | |
Due to BNY Mellon Investment Adviser, Inc.
and affiliates—Note 2(b) | | 176,700 | |
Payable for inverse floater notes issued—Note
3 | | 38,130,000 | |
Payable for investment securities
purchased | | 946,490 | |
Dividends payable to Common Shareholders | | 736,263 | |
Interest
and expense payable related to inverse floater notes issued—Note 3 | | 362,173 | |
Directors’
fees and expenses payable | | 36,829 | |
Other accrued expenses | | | | | 112,106 | |
| | | | |
40,500,561 | |
RVMTPS, $.001 par value per share (750 shares
issued and outstanding at $100,000 per share liquidation value)—Note 1 | |
75,000,000 | |
Net Assets Applicable to Common Shareholders
($) | | | 215,285,552 | |
Composition
of Net Assets ($): | | | | |
Common Stock, par value, $.001 per share (18,405,973
shares issued and outstanding) | | | | | 18,406 | |
Paid-in
capital | | | | | 262,501,288 | |
Total
distributable earnings (loss) | | | | | (47,234,142) | |
Net Assets Applicable
to Common Shareholders ($) | | |
215,285,552 | |
| | | | |
Shares
Outstanding | | |
(250 million shares authorized) | 18,405,973 | |
Net Asset Value Per Share of
Common Stock ($) | | 11.70 | |
| | | | |
See notes to financial statements. | | | | |
23
STATEMENT
OF OPERATIONS
Year
Ended February 28, 2023
| | | | | | |
| | | | | | |
| | | | | | |
Investment
Income ($): | | | | |
Interest Income | | | 15,536,674 | |
Expenses: | | | | |
Management
fee—Note 2(a) | | | 2,246,411 | |
RVMTPS
interest expense and fees—Note 1(g) and Note 3 | | | 2,269,552 | |
Interest and expense related
to inverse floater notes issued—Note 3 | | | 997,973 | |
Professional
fees | | | 95,217 | |
Directors’
fees and expenses—Note 2(c) | | | 79,360 | |
Shareholders’
reports | | | 36,582 | |
Registration
fees | | | 21,808 | |
Shareholder
servicing costs | | | 13,438 | |
Chief
Compliance Officer fees—Note 2(b) | | | 9,805 | |
Tender and paying agent fees—Note 2(b) | | | 7,950 | |
Custodian
fees—Note 2(b) | | | 6,954 | |
Miscellaneous | | | 76,674 | |
Total
Expenses | | |
5,861,724 | |
Less—reduction in fees due
to earnings credits—Note 2(b) | | | (1,337) | |
Net
Expenses | | | 5,860,387 | |
Net Investment Income | | | 9,676,287 | |
Realized
and Unrealized Gain (Loss) on Investments—Note 3 ($): | | |
Net realized gain (loss) on
investments | (4,905,702) | |
Net change in unrealized appreciation
(depreciation) on investments |
(33,909,712) | |
Net Realized and Unrealized Gain (Loss) on
Investments | | | (38,815,414) | |
Net
(Decrease) in Net Assets Applicable to Common Shareholders Resulting from Operations | | (29,139,127) | |
| | | | | | |
See notes to financial statements. | | | | | |
24
STATEMENT
OF CASH FLOWS
Year
Ended February 28, 2023
| | | | | | |
| | | | | |
| | | | | | |
Cash Flows from Operating Activities ($): | | | | | |
Purchases of portfolio securities | |
(89,555,678) | | | |
Proceeds
from sales of portfolio securities |
93,980,808 | | | |
Interest
income received | | 15,544,906 | | | |
Interest and expense related to inverse floater
notes issued | | (731,298) | | | |
RVMTPS interest expense and fees paid | | (2,269,552) | | | |
Expenses paid to BNY Mellon Investment
Adviser, Inc. and affiliates | | (2,293,357) | | | |
Operating expenses paid | | (151,677) | | | |
Net Cash Provided (or Used) in Operating Activities | | | | 14,524,152 | |
Cash
Flows from Financing Activities ($): | | | | | |
Dividends paid to Common Shareholders | | (10,900,610) | | | |
Decrease in payable for inverse floater notes
issued | | (10,510,000) | | | |
Net
Cash Provided (or Used) in Financing Activities | | (21,410,610) | |
Net Increase (Decrease) in Cash | | (6,886,458) | |
Cash
at beginning of period | | 8,462,019 | |
Cash
at End of Period | |
1,575,561 | |
Reconciliation
of Net Increase (Decrease) in Net Assets Applicable to | | | |
| Common Shareholders Resulting from Operations to | | | |
| Net Cash Provided (or Used) in Operating Activities ($): | | | |
Net
(Decrease) in Net Assets Resulting From Operations | | (29,139,127) | |
Adjustments to Reconcile Net Increase (Decrease) in Net Assets | | | |
| Applicable to Common Shareholders Resulting from | | | |
| Operations to Net Cash Provided (or Used) in Operating Activities
($): | | | |
Decrease in investments in securities at cost | | 10,156,892 | |
Decrease
in interest receivable | | 8,232 | |
Decrease in prepaid expenses | | 146,872
| |
Decrease in Due to BNY Mellon Investment
Adviser, Inc. and affiliates | | (23,574) | |
Decrease in payable for investment securities purchased | | (826,060) | |
Increase
in interest and expense payable related to inverse floater notes issued | | 266,675 | |
Increase
in Directors' fees and expenses payable | | 17,840
| |
Increase in other accrued expenses | | 6,690 | |
Net
change in unrealized (appreciation) depreciation on investments | | 33,909,712 | |
Net Cash Provided (or
Used) in Operating Activities | |
14,524,152 | |
Supplemental Disclosure Cash Flow Information ($): | | | |
Non-cash financing activities: | | | |
Reinvestment of dividends | | 85,319 | |
| | | | | | |
See notes to financial statements. | | | | | |
25
STATEMENT
OF CHANGES IN NET ASSETS
| | | | | | | | | |
| | | | Year
Ended February 28, |
| | | | 2023 | | 2022 | |
Operations ($): | | | | | | | | |
Net investment income | | | 9,676,287 | | | | 11,588,662 | |
Net
realized gain (loss) on investments | | (4,905,702) | | | | 861,100 | |
Net
change in unrealized appreciation (depreciation) on investments | | (33,909,712) | | | | (10,748,926) | |
Net Increase
(Decrease) in Net Assets Applicable to Common Shareholders Resulting from
Operations | (29,139,127) | | | | 1,700,836 | |
Distributions
($): | |
Distributions to Common Shareholders | | |
(10,747,044) | | | |
(11,699,254) | |
Capital
Stock Transactions ($): | |
Distributions reinvested | | | 85,319 | | | | 143,733 | |
Increase
(Decrease) in Net Assets from Capital Stock Transactions | 85,319 | | | | 143,733 | |
Total
Increase (Decrease) in Net Assets Applicable to Common Shareholders | (39,800,852) | | | | (9,854,685) | |
Net Assets
Applicable to Common Shareholders ($): | |
Beginning
of Period | | | 255,086,404 | | | | 264,941,089 | |
End
of Period | | | 215,285,552 | | | | 255,086,404 | |
Capital
Share Transactions (Common Shares): | |
Shares issued for distributions
reinvested | | | 6,978 | | | | 9,752 | |
Net
Increase (Decrease) in Shares Outstanding |
6,978 | | | | 9,752 | |
| | | | | | | | | |
See notes to financial statements. | | | | | | | | |
26
FINANCIAL
HIGHLIGHTS
The
following table describes the performance for the fiscal periods indicated. Market price total return
is calculated assuming an initial investment made at the market price at the beginning of the period,
reinvestment of all dividends and distributions at market price during the period, and sale at the market
price on the last day of the period. These figures have been derived from the fund’s financial statements
and with respect to common stock, market price data for the fund’s common shares.
| | | | | | | | |
| | | | |
| | | Year Ended February 28/29, | |
| | | 2023 | 2022 | 2021 | 2020 | 2019 | |
Per Share Data ($): | | | | | | | | |
Net asset value, beginning of period | | | 13.86 | 14.41 | 15.06 | 13.75 | 13.96 | |
Investment Operations: | | | | | | | | |
Net investment incomea | | | .53 | .63 | .66 | .64 | .66 | |
Net realized and unrealized gain
(loss) on investments | | | (2.11) | (.54) | (.67) | 1.31 | (.23) | |
Total from Investment Operations | | | (1.58) | .09 | (.01) | 1.95 | .43 | |
Distributions to Common
Shareholders: | | | | | | | | |
Dividends
from net investment income | | | (.58) | (.64) | (.64) | (.64) | (.64) | |
Net asset value, end of period | | | 11.70 | 13.86 | 14.41 | 15.06 | 13.75 | |
Market value, end of period | | | 10.97 | 13.17 | 13.95 | 14.18 | 12.67 | |
Market Price Total Return
(%) | | | (12.41) | (1.33) | 3.15 | 17.12 | 8.49 | |
Ratios/Supplemental Data
(%): | | | | | | | | |
Ratio of total expenses to
average net assets | | | 2.60 | 1.68 | 1.87 | 2.12 | 2.19 | |
Ratio of net expenses to
average net assets | | | 2.60 | 1.68 | 1.87 | 2.12 | 2.19 | |
Ratio of interest and expense related to
inverse floater notes issued, RVMTPS and VMTPS interest expense and fees
to average net assets | | | 1.45 | .55 | .69 | 1.05 | 1.07 | |
Ratio of net investment income to
average net assets | | | 4.29 | 4.32 | 4.72 | 4.43 | 4.76 | |
Portfolio Turnover Rate | | | 24.75 | 11.33 | 17.56 | 22.94 | 21.46 | |
Asset coverage of RVMTPS
and VMTPS, end of period | | | 387 | 440 | 453 | 469 | 437 | |
Net Assets, Applicable to
Common Shareholders, end of period ($ x 1,000) | | | 215,286 | 255,086 | 264,941 | 276,836 | 252,668 | |
RVMTPS and VMTPS outstanding, end
of period ($ x 1,000) | | | 75,000 | 75,000 | 75,000 | 75,000 | 75,000 | |
Floating
Rate Notes outstanding ($ x 1,000) | | | 38,130 | 48,640 | 59,890 | 59,845 | 42,055 | |
a Based on average common shares outstanding.
See notes to financial statements.
27
NOTES
TO FINANCIAL STATEMENTS
NOTE
1—Significant Accounting Policies:
BNY Mellon Municipal Bond Infrastructure
Fund, Inc. (the “fund”), which is registered under the Investment Company Act of 1940, as amended
(the “Act”), is a diversified closed-end management investment company. The fund’s investment
objective is to seek to provide as high a level of current income exempt from regular federal income
tax as is consistent with the preservation of capital. BNY Mellon Investment Adviser, Inc. (the “Adviser”),
a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the
fund’s investment adviser. Insight North America LLC (the “Sub-Adviser”), a wholly-owned subsidiary
of BNY Mellon and an affiliate of the Adviser, serves as the fund’s sub-adviser. The fund’s common
stock (“Common Stock”) trades on the New York Stock Exchange (the “NYSE”) under the ticker symbol
DMB.
The fund has outstanding 750 shares of Remarketable Variable Rate MuniFund Term
Preferred Shares (“RVMTPS”). The fund is subject to certain restrictions relating to the RVMTPS.
Failure to comply with these restrictions could preclude the fund from declaring any distributions to
shareholders of Common Stock (“Common Shareholders”) or repurchasing shares of Common Stock and/or
could trigger the mandatory redemption of RVMTPS at their liquidation value (i.e., $100,000 per share).
Thus, redemptions of RVMTPS may be deemed to be outside of the control of the fund.
The
RVMTPS have a mandatory redemption date of October 16, 2049, and are subject to mandatory tender upon
each 42 month anniversary of October 16, 2020 or upon the end of a Special Terms Period (as defined in
the fund’s articles supplementary) (each an Early Term Redemption Date (as defined in the fund’s
articles supplementary)), subject to the option of the holders to retain the RVMTPS. RVMTPS that are
neither retained by the holder nor successfully remarketed by the Early Term Redemption Date will be
redeemed by the fund. The fund is subject to a Tender and Paying Agent Agreement with BNY Mellon, with
respect to the RVMTPS.
The holders of RVMTPS, voting as a separate class, have the
right to elect at least two directors. The holders of RVMTPS will vote as a separate class on certain
other matters, as required by law. The fund’s Board of Directors (the “Board”) has designated Nathan
Leventhal and Benaree Pratt Wiley as directors to be elected by the holders of RVMTPS.
Dividends on RVMTPS
are normally declared daily and paid monthly. The Dividend Rate on the RVMTPS is, except as otherwise
provided, equal to the rate per annum that results from the sum of (1) the
Index Rate plus (2)
28
the Applicable Spread as determined for the RVMTPS on the Rate Determination Date
immediately preceding such Subsequent Rate Period plus (3) the Failed Remarketing Spread (all defined
terms as defined in the fund’s articles supplementary).
The Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference
of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to
be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange
Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC
registrants. The fund is an investment company and applies the accounting and reporting guidance of the
FASB ASC Topic 946 Financial Services-Investment Companies. The fund’s financial statements are prepared
in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results
could differ from those estimates.
The fund enters into contracts
that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is
unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a)
Portfolio valuation: The fair value of a financial instrument is the amount that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes
the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority
to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements)
and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally,
GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly
and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced
disclosures around valuation inputs and techniques used during annual and interim periods.
Various
inputs are used in determining the value of the fund’s investments relating to fair value measurements.
These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted
prices in active markets for identical investments.
29
NOTES
TO FINANCIAL STATEMENTS (continued)
Level 2—other significant observable inputs (including quoted prices
for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level
3—significant
unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication
of the risk associated with investing in those securities.
Changes in valuation
techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation
techniques used to value the fund’s investments are as follows:
The Board has designated
the Adviser as the fund’s valuation designee, effective September 8, 2022, to make all fair value determinations
with respect to the fund’s portfolio investments, subject to the Board’s oversight and pursuant to
Rule 2a-5 under the Act.
Investments in municipal securities are valued each business
day by an independent pricing service (the “Service”) approved by the Board. Investments for which
quoted bid prices are readily available and are representative of the bid side of the market in the judgment
of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from
dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation
of the market for such securities). Municipal investments (which constitute a majority of the portfolio
securities) are carried at fair value as determined by the Service, based on methods which include consideration
of the following: yields or prices of municipal securities of comparable quality, coupon, maturity and
type; indications as to values from dealers; and general market conditions. The Service is engaged under
the general oversight of the Board. All of the preceding securities are generally categorized within
Level 2 of the fair value hierarchy.
When market quotations or official closing
prices are not readily available, or are determined not to accurately reflect fair value, such as when
the value of a security has been significantly affected by events after the close of the exchange or
market on which the security is principally traded, but before the fund calculates its net asset value,
the fund may value these investments at fair value as determined in accordance with the procedures approved
by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical
data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence
the market in which the securities are purchased and sold, and public trading in similar securities of
the issuer or comparable issuers.
30
These securities are either categorized within Level 2 or 3 of the fair value
hierarchy depending on the relevant inputs used.
For securities where observable inputs
are limited, assumptions about market activity and risk are used and such securities are generally categorized
within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of February
28, 2023 in valuing the fund’s investments:
| | | | | | |
| Level 1-Unadjusted Quoted
Prices | Level
2- Other Significant Observable Inputs | | Level 3-Significant Unobservable
Inputs | Total | |
Assets ($) | | |
Investments
in Securities:† | | |
Municipal Securities | - | 325,034,870 | | - | 325,034,870 | |
Liabilities ($) | | |
Other Financial Instruments: | | |
Inverse
Floater Notes†† | - | (38,130,000) | | - | (38,130,000) | |
RVMTPS†† | - | (75,000,000) | | - | (75,000,000) | |
† See
Statement of Investments for additional detailed categorizations, if any.
†† Certain of the fund’s liabilities are held at carrying amount,
which approximates fair value for financial reporting purposes.
(b) Securities transactions
and investment income: Securities transactions are recorded on a trade date basis. Realized gains and
losses from securities transactions are recorded on the identified cost basis. Interest income, adjusted
for accretion of discount and amortization of premium on investments, is earned from settlement date
and recognized on the accrual basis. Securities purchased or sold on a when-issued or delayed delivery
basis may be settled a month or more after the trade date.
(c) Market Risk: The value of the securities
in which the fund invests may be affected by political, regulatory, economic and social developments,
and developments that impact specific economic sectors, industries or segments of the market. The value
of a security may also decline due to general market conditions that are not specifically related to
a particular company or industry, such as real or perceived adverse economic conditions, changes in the
general outlook for corporate earnings, changes in interest or currency rates, changes to inflation,
adverse changes to credit markets or adverse investor sentiment generally.
Additional
Information section within this report provides more details about the fund principal risk factors.
31
NOTES
TO FINANCIAL STATEMENTS (continued)
(d)
Dividends and distributions to Common Shareholders: Dividends and distributions are recorded
on the ex-dividend date. Dividends from net investment income are normally declared and paid monthly.
Dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund
may make distributions on a more frequent basis to comply with the distribution requirements of the Internal
Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can
be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income
and capital gain distributions are determined in accordance with income tax regulations, which may differ
from GAAP.
Common Shareholders will have their distributions reinvested
in additional shares of the fund, unless such Common Shareholders elect to receive cash, at the lower
of the market price or net asset value per share (but not less than 95% of the market price). If market
price is equal to or exceeds net asset value, shares will be issued at net asset value. If net asset
value exceeds market price, Computershare Inc., the transfer agent for the fund’s Common Stock, will
buy fund shares in the open market and reinvest those shares accordingly.
On
February 2, 2023, the Board declared a cash dividend of $.040 per share from net investment income, payable
on March 1, 2023, to Common Shareholders of record as of the close of business on February 17, 2023.
The ex-dividend date was February 16, 2023.
(e) Dividends and distributions to shareholders of RVMTPS:
Dividends on RVMTPS are normally declared daily and paid monthly. The Dividend Rate on the RVMTPS is,
except as otherwise provided, equal to the rate per annum that results from the sum of (1) the Index
Rate plus (2) the Applicable Spread as determined for the RVMTPS on the Rate Determination Date immediately
preceding such Subsequent Rate Period plus (3) the Failed Remarketing Spread. The Applicable Rate of
the RVMTPS was equal to the sum of 1.20% per annum plus the Securities Industry and Financial Markets
Association Municipal Swap Index rate of 3.42% on February 28, 2023. The dividend rate as of February
28, 2023 for the RVMTPS was 4.62% (all defined terms as defined in the fund’s articles supplementary).
(f)
Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment
company, which can distribute tax-exempt dividends, by complying with the applicable provisions of the
Code, and to make distributions of income and net realized capital gain sufficient to relieve it from
substantially all federal income and excise taxes.
32
As of and during the period ended February 28, 2023, the fund did not have any
liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related
to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended
February 28, 2023, the fund did not incur any interest or penalties.
Each tax year in the
four-year period ended February 28, 2023 remains subject to examination by the Internal Revenue Service
and state taxing authorities.
At February 28, 2023, the components of accumulated earnings
on a tax basis were as follows: undistributed tax-exempt income of $1,422,941, accumulated capital losses
of $35,350,204 and unrealized depreciation of $12,570,616.
The fund is permitted
to carry forward capital losses for an unlimited period. Furthermore, capital loss carryovers retain
their character as either short-term or long-term capital losses.
The accumulated capital loss carryover
is available for federal income tax purposes to be applied against future net realized
capital gains, if any, realized subsequent to February 28, 2023. The fund has $33,596,732 of short-term
capital losses and $1,753,472 of long-term capital losses which can be carried forward for an unlimited
period.
The tax character of distributions paid to shareholders during
the fiscal years ended February 28, 2023 and February 28, 2022 were as follows: tax-exempt income of
$10,747,044 and $11,678,686, and ordinary income of $0 and $20,568, respectively.
(g) RVMTPS: The
fund’s RVMTPS aggregate liquidation preference is shown as a liability, if any, since they have stated
mandatory redemption date of October 16, 2049. Dividends paid to RVMTPS are treated as interest expense
and recorded on the accrual basis. Costs directly related to the issuance of the RVMTPS are considered
debt issuance costs which have been fully amortized into the expense over the life of the RVMTPS.
(h)
New accounting pronouncements: In 2020, the FASB issued Accounting Standards Update No.
2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial
Reporting, which provides optional guidance to ease the potential burden in accounting for (or recognizing
the effects of) reference rate reform on financial reporting.
The
objective of the guidance in Topic 848 is to provide temporary relief during the transition period. The
FASB included a sunset provision within Topic 848 based on expectations of when the LIBOR would cease
being
33
NOTES
TO FINANCIAL STATEMENTS (continued)
published. At the time that Update 2020-04 was issued, the UK Financial Conduct
Authority (FCA) had established its intent that it would no longer be necessary to persuade, or compel,
banks to submit to LIBOR after December 31, 2021. As a result, the sunset provision was set for December
31, 2022—12 months after the expected cessation date of all currencies and tenors of LIBOR.
In March 2021, the FCA announced that the intended cessation date of the overnight
1-, 3-, 6-, and 12-month tenors of USD LIBOR would be June 30, 2023, which is beyond the current sunset
date of Topic 848.
Because the current relief in Topic 848 may not cover a period
of time during which a significant number of modifications may take place, the amendments in this Update
defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024 (“FASB Sunset Date”),
after which entities will no longer be permitted to apply the relief in Topic 848.
Management
had evaluated the impact of Topic 848 on the fund’s investments, derivatives, debt and other contracts
that will undergo reference rate-related modifications as a result of the Reference Rate Reform. Management
has no concerns in adopting Topic 848 by FASB Sunset Date. Management will continue to work with other
financial institutions and counterparties to modify contracts as required by applicable regulation and
within the regulatory deadlines. As of February 28, 2023, management believes these accounting standards
have no impact on the fund and does not have any concerns of adopting the regulations by FASB Sunset
Date.
NOTE
2—Management Fee, Sub-Advisory Fee and Other Transactions with Affiliates:
(a) Pursuant to a management
agreement (the “Agreement”) with the Adviser, the management fee is computed at the annual rate of
.65% of the value of the fund’s daily total assets, including any assets attributable to effective
leverage, minus certain defined accrued liabilities (the “Managed Assets”) and is payable monthly.
Pursuant to a sub-investment advisory agreement between the Adviser and the Sub-Adviser,
the Adviser pays the Sub-Adviser a monthly fee at the annual rate of .27% of the value of the fund’s
average daily Managed Assets.
(b) The fund has an arrangement with The Bank
of New York Mellon (the “Custodian”), a subsidiary of BNY Mellon and an affiliate of the Adviser,
whereby the fund will receive interest income or be charged overdraft fees when cash balances are maintained.
For financial reporting purposes, the
34
fund includes this interest income and overdraft fees, if any, as interest income
in the Statement of Operations.
The fund compensates the Custodian under a custody agreement,
for providing custodial services for the fund. These fees are determined based on net assets and transaction
activity. During the period ended February 28, 2023, the fund was charged
$6,954 pursuant to the custody agreement. These fees were partially offset by the Custodian
from an earnings credit of $1,337.
The fund compensates BNY Mellon under a Tender and Paying
Agent Agreement for providing certain transfer agency and payment services with respect to the RVMTPS.
During the period ended February 28, 2023, the fund was charged $7,950 for the services
provided by the Tender and Paying Agent.
During the period ended February 28, 2023,
the fund was charged $9,805 for services performed by the fund’s Chief Compliance Officer and his staff.
These fees are included in Chief Compliance Officer fees in the Statement of Operations.
The
components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets
and Liabilities consist of: management fee of $166,118, Custodian fees of $4,400, Tender and Paying Agent
fees of $4,638 and Chief Compliance Officer fees of $1,544.
(c) Each board member also
serves as a board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees
and attendance fees are allocated to each fund based on net assets.
NOTE 3—Securities Transactions:
The aggregate amount of purchases and sales (including paydowns) of investment
securities, excluding short-term securities, during the period ended February 28, 2023, amounted to $79,479,364
and $73,309,207, respectively.
Inverse Floater Securities: The fund participates
in secondary inverse floater structures in which fixed-rate, tax-exempt municipal bonds are transferred
to a trust (the “Inverse Floater Trust”). The Inverse Floater Trust typically issues two variable
rate securities that are collateralized by the cash flows of the fixed-rate, tax-exempt municipal bonds.
One of these variable rate securities pays interest based on a short-term floating rate set by a remarketing
agent at predetermined intervals (“Trust Certificates”). A residual interest tax-exempt security
is also created by the Inverse Floater Trust, which is transferred to the fund, and is paid interest
based on the remaining cash flows of the Inverse Floater Trust, after payment of
35
NOTES
TO FINANCIAL STATEMENTS (continued)
interest on the other securities and various expenses of the Inverse Floater Trust.
An Inverse Floater Trust may be collapsed without the consent of the fund due to certain termination
events such as bankruptcy, default or other credit event.
The fund accounts for
the transfer of bonds to the Inverse Floater Trust as secured borrowings, with the securities transferred
remaining in the fund’s investments, and the Trust Certificates reflected as fund liabilities in the
Statement of Assets and Liabilities.
The fund may invest in inverse floater
securities on either a non-recourse or recourse basis. These securities are typically supported by a
liquidity facility provided by a bank or other financial institution (the “Liquidity Provider”) that
allows the holders of the Trust Certificates to tender their certificates in exchange for payment from
the Liquidity Provider of par plus accrued interest on any business day prior to a termination event.
When the fund invests in inverse floater securities on a non-recourse basis, the Liquidity Provider is
required to make a payment under the liquidity facility due to a termination event to the holders of
the Trust Certificates. When this occurs, the Liquidity Provider typically liquidates all or a portion
of the municipal securities held in the Inverse Floater Trust. A liquidation shortfall occurs if the
Trust Certificates exceed the proceeds of the sale of the bonds in the Inverse Floater Trust (“Liquidation
Shortfall”). When a fund invests in inverse floater securities on a recourse basis, the fund typically
enters into a reimbursement agreement with the Liquidity Provider where the fund is required to repay
the Liquidity Provider the amount of any Liquidation Shortfall. As a result, a fund investing in a recourse
inverse floater security bears the risk of loss with respect to any Liquidation Shortfall.
The
average amount of borrowings outstanding under the inverse floater structure during the period ended
February 28, 2023 was approximately $45,473,753, with a related weighted average annualized interest
rate of 2.19%.
RVMTPS: During the period ended February 28, 2023, total fees pursuant
to RVMTPS amounted to $2,269,552 inclusive of $2,121,431 of interest expense and $148,121 of amortized
deferred cost fees. These fees are included in RVMTPS interest expense and fees in the Statement of Operations.
The average amount of borrowings outstanding for the RVMTPS during the period
ended February 28, 2023 was approximately $75,000,000, with a related weighted average annualized interest
rate of 2.83%.
36
At
February 28, 2023, the cost of investments for federal income
tax purposes was $299,475,486; accordingly, accumulated net unrealized depreciation on investments was
$12,570,616, consisting of $4,587,660 gross unrealized appreciation and $17,158,276 gross unrealized
depreciation.
37
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Shareholders and the Board of Directors of BNY Mellon Municipal Bond Infrastructure Fund, Inc.
Opinion on the Financial Statements
We have audited the
accompanying statement of assets and liabilities of BNY Mellon Municipal Bond Infrastructure Fund, Inc.
(the “Fund”), including the statement of investments, as of February 28, 2023, and the related statements
of operations and cash flows for the year then ended, the statements of changes in net assets for each
of the two years in the period then ended, the financial highlights for each of the five years in the
period then ended and the related notes (collectively referred to as the “financial statements”).
In our opinion, the financial statements present fairly, in all material respects, the financial position
of the Fund at February 28, 2023, the results of its operations and its cash flows for the year then
ended, the changes in its net assets for each of the two years in the period then ended and its financial
highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted
accounting principles.
Basis for Opinion
These financial statements
are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the
Fund’s financial statements based on our audits. We are a public accounting firm registered with the
Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent
with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we
engaged to perform, an audit of the Fund’s internal control over financial reporting. As part of our
audits, we are required to obtain an understanding of internal control over financial reporting, but
not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over
financial reporting. Accordingly, we express no such opinion.
Our audits included
performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned as of February 28, 2023, by correspondence with
the custodian, brokers and others; when replies were not received from brokers and others, we performed
other auditing procedures. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
We have served as the
auditor of one or more investment companies in the BNY Mellon Family of Funds since at least 1957, but
we are unable to determine the specific year.
New York, New York
April 19, 2023
38
ADDITIONAL
INFORMATION (Unaudited)
Dividend
Reinvestment Plan
The fund’s Dividend Reinvestment Plan (the “Plan”) is
commonly referred to as an “opt-out” plan. Each Common Shareholder who participates in the Plan will
have all distributions of dividends and capital gains automatically reinvested in additional Common Shares
by Computershare Inc. as agent (the “Plan Agent”). Common Shareholders who elect not to participate
in the Plan will receive all distributions in cash, which will be paid by check and mailed directly to
the shareholder of record (or if the shares are held in street or other nominee name, then to the nominee)
by the Plan Agent, as dividend disbursing agent. Common Shareholders whose shares are held in the name
of a broker or nominee should contact the broker or nominee to determine whether and how they may participate
in the Plan. The Plan Agent serves as agent for the Common Shareholders in administering the Plan. After
the fund declares a dividend or makes a capital gain distribution, the Plan Agent will, as agent for
the shareholders, either (i) receive the cash payment and use it to buy Common Shares in the open market,
on the NYSE or elsewhere, for the participants’ accounts or (ii) distribute newly issued Common Shares
of the fund on behalf of the participants. The Plan Agent will receive cash from the fund with which
to buy Common Shares in the open market if, on the distribution payment date, the net asset value per
share exceeds the market price per Common Share plus estimated brokerage commissions on that date. The
Plan Agent will receive the dividend or distribution in newly issued Common Shares of the fund if, on
the payment date, the market price per share plus estimated brokerage commissions equals or exceeds the
net asset value per share of the fund on that date. The number of shares to be issued will be computed
at a per share rate equal to the greater of (i) the net asset value or (ii) 95% of the closing market
price per Common Share on the payment date.
Participants in the Plan may withdraw
from the Plan at any time upon written notice to the Plan Agent. Such withdrawal will be effective immediately
if received not less than ten days prior to a distribution record date; otherwise, it will be effective
for all subsequent distributions. When a participant withdraws from the Plan or the Plan is terminated,
such participant will receive whole Common Shares in his or her account under the Plan and will receive
a cash payment for any fraction of a Common Share credited to such account. If any participant elects
to have the Plan Agent sell all or part of his or her Common Shares and remit the proceeds, the Plan
Agent is authorized to deduct a $15.00 fee plus $0.10 per share in brokerage commissions.
In
the case of shareholders, such as banks, brokers or nominees, which hold Common Shares for others who
are the beneficial owners, the Plan Agent will administer the Plan on the basis of the number of Common
Shares certified from time to time by the record shareholders as representing the total amount registered
in the record shareholder’s name and held for the account of beneficial owners who are participants
in the Plan.
The Plan Agent’s fees for the handling of reinvestment of
dividends and other distributions will be paid by the fund. Each participant will pay a pro rata share
of
39
ADDITIONAL
INFORMATION (Unaudited) (continued)
brokerage commissions incurred with respect to the Plan Agent’s open market
purchases in connection with the reinvestment of distributions. There are no other charges to participants
for reinvesting dividends or capital gain distributions. Purchases and/or sales are usually made through
a broker affiliated with the Plan Agent.
Experience under the Plan may indicate
that changes are desirable. Accordingly, the fund reserves the right to amend or terminate the Plan as
applied to any distribution paid subsequent to written notice of the change sent to all shareholders
of the fund at least 90 days before the record date for the dividend or distribution. The Plan also may
be amended or terminated by the Plan Agent by at least 90 days’ written notice to all shareholders
of the fund. All correspondence concerning the Plan should be directed to the Plan Agent by calling 1-855-866-0953,
or writing P.O. Box 534434, Pittsburgh, Pennsylvania 15253-4442.
The automatic reinvestment
of dividends and other distributions will not relieve participants of any income tax that may be payable
or required to be withheld on such dividends or distributions. See “Tax Matters.”
Level Distribution Policy
The fund’s dividend policy is to distribute substantially all of its net investment
income to its shareholders on a monthly basis. In order to provide shareholders with a more consistent
yield to the current trading price of shares of Common Stock of the fund, the fund may at times pay out
more or less than the entire amount of net investment income earned in any particular month and may at
times in any month pay out any accumulated but undistributed income in addition to net investment income
earned in that month. As a result, the dividends paid by the fund for any particular month may be more
or less than the amount of net investment income earned by the fund during such month. The fund’s current
accumulated but undistributed net investment income, if any, is disclosed within Note 1(f) of this report,
which comprises part of the Financial Information included in this report.
Investment Objective and
Principal Investment Strategies
Investment Objective. The fund’s investment
objective is to seek to provide as high a level of current income exempt from regular federal income
tax as is consistent with the preservation of capital. The fund’s investment objective is fundamental
and may not be changed without the affirmative vote of the holders of a majority (as defined in the Act)
of the fund’s outstanding voting securities. There is no assurance the fund will achieve its investment
objective.
Principal Investment Strategies. The
fund seeks to achieve its investment objective by investing in municipal bonds that the Sub-Adviser has
identified as financing the development, support or improvement of infrastructure in the United States,
its territories and possessions (such as Puerto Rico and Guam). Under normal circumstances, the fund
will invest at least 80% of its Managed Assets in municipal bonds issued to finance infrastructure sectors
and projects in the United States. Infrastructure sectors and projects include transportation (e.g.,
roads, tunnels and
40
bridges, airports, seaports, railways and mass transit systems), energy and utilities
(e.g., natural gas transmission and distribution, power plants, water treatment and distribution centers,
wastewater treatment facilities, oil and gas pipelines), social infrastructure (e.g., schools, healthcare
facilities, public facilities, convention centers), water and environment (e.g., drinking water, wastewater,
solid waste, flood control, coastal management), and other similar public sectors and projects that support
or facilitate the development or improvement of economic, health, and cultural and social standards in
the United States.
The fund may not change its investment policy to invest at
least 80% of its Managed Assets in municipal bonds without the approval of the holders of a “majority
of the outstanding” Common Stock and preferred stock (if any) voting together as a single class, and
of the holders of a “majority of the outstanding” preferred stock (if any) voting as a separate class.
Upon 60 days’ prior written notice to Common Shareholders (and holders of preferred stock, if any),
however, the fund may change its investment policy to permit it to invest less than 80% of its Managed
Assets in municipal bonds issued to finance infrastructure sectors and projects in the United States.
When used with respect to the fund as a whole or particular shares of the fund, a “majority of the
outstanding” shares means (i) 67% or more of the shares present at a meeting, if the holders of more
than 50% of the shares are present or represented by proxy or (ii) more than 50% of the shares, whichever
is less.
The fund will invest 25% or more of its Managed Assets in infrastructure sectors
or projects and, from time to time, the fund may have 25% or more of its Managed Assets invested in any
one of the infrastructure sectors or invested across similar projects described herein. The Sub-Adviser
retains broad discretion to allocate the fund’s investments across various infrastructure sectors and
projects.
In addition, under normal circumstances, the fund:
· will invest at least 50% of its Managed Assets in municipal
bonds that, at the time of investment, are rated investment grade (i.e., BBB- or Baa3 or higher) by at
least one of the NRSROs (as defined below) that rate such securities, or, if unrated, determined to be
of comparable quality by the Sub-Adviser;
· may
invest up to 50% of its Managed Assets in municipal bonds that are rated below investment grade or are
the unrated equivalent as determined by the Sub-Adviser at the time of investment. Municipal bonds of
below investment grade quality are regarded as having predominately speculative characteristics with
respect to an obligor’s capacity to pay interest and repay principal (commonly referred to as “high
yield” or “junk” bonds);
· will
not invest more than 10% of its Managed Assets in municipal bonds that are rated below B-/B3 by an NRSRO
or are the unrated equivalent as determined by the Sub-Adviser at the time of investment. The fund may
invest in municipal bonds that, at the time of investment, are distressed, but will not
41
ADDITIONAL
INFORMATION (Unaudited) (continued)
invest in municipal bonds that, at the time of investment,
are in default or involved in bankruptcy or insolvency proceedings;
· may invest up to 30% of its Managed Assets in municipal bonds
the income from which is subject to the federal alternative minimum tax applicable to individuals; and
· will
invest no more than 25% of its Managed Assets in securities and other instruments that, at the time of
investment, are illiquid.
“NRSRO” means (a) each of Fitch Ratings,
Inc., Moody’s Investors Service, Inc. and S&P Global Ratings, so long as such entity is a nationally
recognized statistical rating organization within the meaning of Section 3(a)(62) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and (b) any other nationally recognized statistical
rating organization within the meaning of Section 3(a)(62) of the Exchange Act that is not an “affiliated
person” (as defined in Section 2(a)(3) of the Act) of the fund.
The fund seeks to maintain
a levered effective duration of up to 14 years, which takes into account the effects of the fund’s
use of effective leverage and optional call provisions of the municipal bonds in the fund’s portfolio.
In the event that the fund does not engage in leverage to a material degree, the fund will seek to maintain
an effective duration of up to 10 years, accounting for the effect of optional call provisions of the
municipal bonds in the fund’s portfolio.
The fund also may invest in certain derivative
instruments in pursuit of its investment objective. Such instruments include financial futures contracts,
swap contracts (including interest rate and credit default swaps) and options, including options on financial
futures and options on swap contracts. The Sub-Adviser may use derivative instruments as a substitute
for investing directly in an underlying asset, to increase returns, to manage credit or interest rate
risk, or as part of a hedging strategy. These types of strategies may generate taxable income.
The fund may employ leverage to enhance its potential for achieving its investment
objective. The fund may employ leverage by issuing preferred stock, such as the RVMTP shares, or debt
securities, or by borrowing funds from banks or other financial institutions, including through the use
of municipal tender option bond programs (i.e., “structural leverage”). The fund, subject to the
restrictions imposed by the fund’s organizational documents and the terms of the RVMTP shares, also
may employ leverage by using certain portfolio techniques that have the economic effect of leverage,
such as through the use of derivative instruments or reverse repurchase agreements, or by engaging in
when-issued, delayed delivery or forward commitment transactions (i.e., “portfolio leverage”). The
fund generally expects to employ effective leverage through a combination of preferred stock and residual
interest municipal tender option bonds.
“Effective leverage” is the combination
of the amount of any structural leverage and any portfolio leverage used by the fund. The fund anticipates
that its effective leverage, including the allocation between structural and portfolio leverage, will
vary from time to
42
time, based upon changes in market conditions and variations in the value of its
portfolio holdings. Under current market conditions, the fund intends to utilize effective leverage in
an amount up to 35% of its Managed Assets. However, the fund reserves the right to utilize effective
leverage in an amount up to 45% of its Managed Assets. The fund’s organizational documents and the
terms of the RVMTP shares, however, may impose requirements on the fund with respect to its asset coverage
or portfolio composition that would be more stringent than those imposed on the fund by the Act and might
limit the ability of the fund to utilize effective leverage in a manner and in the amounts permitted
by its investment policies.
The fund also may borrow for temporary, emergency or other
purposes as permitted by the Act. The use of leverage involves increased risk, including increased variability
of the fund’s net income, distributions and net asset value in relation to market changes. The fund’s
leverage strategy may not work as planned or achieve its goal.
Principal Risk Factors
An
investment in the fund involves special risk considerations, which are described below. The fund is a
diversified, closed-end management investment company designed primarily as a long-term investment and
not as a vehicle for short-term trading purposes. An investment in the fund’s Common Stock may be speculative
and it involves a high degree of risk. The fund should not constitute a complete investment program.
Due to the uncertainty in all investments, there can be no assurance that the fund will achieve its investment
objective. Different risks may be more significant at different times depending on market conditions.
Your Common Stock at any point in time may be worth less than your original investment.
Municipal Bonds Risk.
Investing in municipal bonds involves certain risks. The amount of public information available about
municipal bonds is generally less than that for corporate equities or bonds. Special factors, such as
legislative changes and state and local economic and business developments, may adversely affect the
yield and/or value of the fund’s investments in municipal bonds. The yields on and market prices of
municipal bonds are dependent on a variety of factors.
Changes in economic,
business or political conditions relating to a particular municipality or state in which the fund invests
may have an effect on the fund’s net asset value. The secondary market for certain municipal bonds,
particularly below investment grade municipal bonds, tends to be less well-developed or liquid than many
other securities markets, which may adversely affect the fund’s ability to sell its portfolio securities
at attractive prices. The ability of issuers of municipal bonds to make timely payments of interest and
repayments of principal may be diminished during general economic downturns and as governmental cost
burdens are reallocated among federal, state and local governments. In addition, laws enacted in the
future by Congress or state legislatures or referenda could extend the time for payment of principal
and/or interest, or impose other constraints on enforcement of such obligations, or on the ability of
municipal issuers to levy taxes. Issuers of municipal bonds might seek protection under the bankruptcy
laws. In the event of bankruptcy of such an issuer, the fund could
43
ADDITIONAL
INFORMATION (Unaudited) (continued)
experience delays in collecting principal and interest and the fund may not be
able to collect all principal and interest to which it is entitled. To enforce its rights in the event
of a default in the payment of interest or repayment of principal, or both, the fund may take possession
of, and manage, the assets securing the issuer’s obligations on such securities, which may increase
the fund’s operating expenses. Any income derived from the fund’s ownership or operation of such
assets may not be tax-exempt. The fund may be more sensitive to adverse economic, business or political
developments if it invests a substantial portion of its assets in the securities of similar infrastructure
projects, industrial development bonds, or in particular types of municipal bonds (such as revenue bonds,
general obligation bonds or private activity bonds). Such developments may adversely affect a specific
industry or local political and economic conditions, and thus may lead to declines in the securities’
creditworthiness and value.
The fund may invest in municipal leases and certificates of
participation in such leases that involve special risks because the issuers of those securities may not
be obligated to appropriate money annually to make payments. Leases and installment purchase or conditional
sale contracts have evolved as a means for governmental issuers to acquire property and equipment without
meeting the constitutional and statutory requirements for the issuance of debt.
Below Investment Grade
Municipal Bonds Risk. Because the fund may invest a significant portion of its portfolio in below
investment grade municipal bonds, its portfolio is subject to heightened credit risk. Below investment
grade municipal bonds (commonly referred to as “high yield” or “junk” bonds) involve substantial
risk of loss and are considered predominantly speculative with respect to the issuer’s or obligor’s
ability to pay interest and repay principal and are susceptible to default or decline in market value
due to adverse economic and business developments. The market values for high yield municipal bonds tend
to be very volatile, and those bonds are less liquid than investment grade municipal bonds.
Because there is no established retail secondary market for many of these bonds,
it may be anticipated that such bonds could be sold only to a limited number of dealers or institutional
investors. To the extent a secondary trading market for these bonds does exist, it generally is not as
liquid as the secondary market for higher-rated municipal bonds. The lack of a liquid secondary market
may have an adverse impact on market price and yield and the fund’s ability to dispose of particular
issues in response to a specific economic event such as a deterioration in the creditworthiness of the
issuer. The lack of a liquid secondary market for certain bonds also may make it more difficult for the
fund to obtain accurate market quotations for purposes of valuing the fund’s portfolio and calculating
its net asset value. In such cases, the Sub-Adviser’s judgment may play a greater role in valuation
because less reliable, objective data may be available.
For these reasons,
an investment in the fund is subject to the following specific risks: (i) increased price sensitivity
to a deteriorating economic environment; (ii) greater risk of loss due to default or declining credit
quality; (iii) adverse issuer or obligor specific events are more likely to render the issuer or obligor
unable to make interest and/or principal payments; and (iv) if a negative perception of the high yield
market develops,
44
the price and liquidity of high yield bonds may be depressed, which may last for
a significant period of time. Adverse changes in economic conditions are more likely to lead to a weakened
capacity of a high yield issuer to make principal and interest payments than of an investment grade issuer.
Distressed municipal bonds are speculative and involve substantial risks in addition
to the risks of investing in below investment grade municipal bonds. The fund will generally not receive
interest payments on the distressed municipal bonds it holds and may incur costs to protect its investment.
In addition, distressed municipal bonds involve the substantial risk that principal will not be repaid.
It may be more difficult to value such bonds and the spread between the bid and asked prices of such
securities may be greater than expected. Distressed municipal bonds and any bonds or other securities
received in an exchange for such distressed municipal bonds may be subject to restrictions on resale.
Infrastructure
Investments Risk. Infrastructure sectors and projects may be subject to a variety of factors that
may adversely affect their development, including: (i) high amounts of leverage and high interest costs
in connection with capital construction and improvement programs; (ii) difficulty in raising capital
in adequate amounts on reasonable terms in periods of high inflation and unsettled capital markets; (iii)
inexperience with and potential losses resulting from the deregulation of a particular industry or sector;
(iv) costs associated with compliance with and changes in environmental and other regulations; (v) regulation
by various government authorities, including government regulation of rates charged to customers; (vi)
the imposition of special tariffs and changes in tax laws, regulatory policies and accounting standards;
(vii) susceptibility to terrorist attacks; (viii) surplus capacity; (ix) increased competition; (x) technological
innovations that may render existing plants, equipment or products obsolete; and (xi) general changes
in market sentiment towards infrastructure assets.
Credit Risk. Credit risk is the
risk that one or more municipal bonds in the fund’s portfolio will decline in price, or the issuer
or obligor thereof will fail to pay interest or repay principal when due, because the issuer or obligor
experiences a decline or there is a perception of a decline in its financial status. Below investment
grade municipal bonds involve greater credit risk than investment grade municipal bonds.
The two principal classifications of municipal bonds are “general obligations”
and “revenue obligations.” General obligations are secured by the issuer’s pledge of its credit
and taxing power for the payment of principal and interest. Revenue obligations are payable from the
revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds
of a special excise or other specific revenue source but not from the general taxing power. Sizable investments
in these obligations could involve an increased risk to the fund should any of the related facilities
experience financial difficulties.
Interest Rate Risk. Prices of municipal obligations and other
fixed-income securities tend to move inversely with changes in interest rates. Typically, a rise in rates
will adversely affect fixed-income securities and, accordingly, will cause the value of the fund’s
45
ADDITIONAL
INFORMATION (Unaudited) (continued)
investments in these securities to decline. Interest rates in the United States
have been rising and are expected to continue to increase in the near future. A wide variety of market
factors can cause interest rates to rise, including central bank monetary policy, rising inflation and
changes in general economic conditions. During periods of very low interest rates, which occur from time
to time due to market forces or actions of governments and/or their central banks, including the Board
of Governors of the Federal Reserve System in the U.S., the fund may be subject to a greater risk of
principal decline from rising interest rates. When interest rates fall, the values of already-issued
fixed-income securities generally rise. However, when interest rates fall, the fund’s investments in
new securities may be at lower yields and may reduce the fund’s income. The magnitude of these fluctuations
in the market price of fixed-income securities is generally greater for securities with longer effective
maturities and durations because such instruments do not mature, reset interest rates or become callable
for longer periods of time. The change in the value of a fixed-income security or portfolio can be approximated
by multiplying its duration by a change in interest rates. For example, the market price of a fixed-income
security with a duration of three years would be expected to decline 3% if interest rates rose 1%. Conversely,
the market price of the same security would be expected to increase 3% if interest rates fell 1%. Changing
interest rates, including rates that fall below zero, may have unpredictable effects on markets, may
result in heightened market volatility and may detract from fund performance.
Because
the values of lower-rated and comparable unrated municipal bonds are affected both by credit risk and
interest rate risk, the price movements of such lower grade municipal bonds in response to changes in
interest rates typically have not been highly correlated to the fluctuations of the prices of investment
grade municipal bonds in response to changes in market interest rates.
The
fund’s use of leverage may increase its interest rate risk. The fund may use certain strategies to
seek to reduce the interest rate sensitivity of the fund’s portfolio and decrease its exposure to interest
rate risk. However, there is no assurance that the fund will do so or that such strategies will be successful.
Call
Risk.
Some municipal bonds give the issuer the option to “call,” or prepay, the securities before their
maturity date. If interest rates fall, it is possible that issuers of callable bonds with high interest
coupons will call their bonds. If a call were exercised by the issuer of a bond held by the fund during
a period of declining interest rates, the fund is likely to replace such called bond with a lower yielding
bond. If that were to happen, it could decrease the fund’s distributions and possibly could affect
the market price of the Common Stock. Similar risks exist when the fund invests the proceeds from matured,
traded or prepaid bonds at market interest rates that are below the fund’s current earnings rate. A
decline in income could affect the market price or overall return of the Common Stock. During periods
of market illiquidity or rising interest rates, prices of “callable” issues are subject to increased
price fluctuation.
Liquidity Risk. The secondary market for certain municipal bonds tends to
be less well developed or liquid than many other securities markets, which may adversely affect the fund’s
ability to sell such municipal bonds at attractive prices. When there is little or no
46
active trading market for specific types of securities, it
can become more difficult to sell the securities at or near their perceived value. In such a market,
the value of such securities and the fund’s net asset value may fall dramatically, even during periods
of declining interest rates. Trading opportunities are more limited for municipal bonds that have not
received any credit ratings, have received ratings below investment grade or are not widely held. There
are fewer dealers in the market for high yield municipal bonds than investment grade municipal bonds.
The prices quoted by different dealers may vary significantly, and the spread between the bid and ask
price is generally much larger than for higher quality instruments. Under adverse market or economic
conditions, the secondary market for high yield municipal bonds could contract further, independent of
any specific adverse changes in the condition of a particular issuer, and these instruments may become
illiquid.
Floating
Rate Securities Risk. The fund may invest in floating rate securities. The interest rate on a floating
rate security is a variable rate which is tied to another interest rate, such as a money-market index
or U.S. Treasury bill rate. The interest rate on a floating rate security resets periodically, typically
every six months. Because of the interest rate reset feature, floating rate securities provide the fund
with a certain degree of protection against rises in interest rates, although the fund will participate
in any declines in interest rates as well.
The fund also may invest in inverse floating
rate securities. The interest rate on an inverse floating rate security resets in the opposite direction
from the market rate of interest to which the security is indexed or inversely to a multiple of the applicable
index. An inverse floating rate security may exhibit greater price volatility than a fixed rate obligation
of similar credit quality. Investing in these types of securities involves the use of effective leverage,
which may magnify the fund’s gains or losses.
Residual Interest Bonds Risk. An investment in a
residual interest bond sold as part of a municipal tender option bond program typically will involve
greater risk than an investment in a fixed rate municipal bond. Distributions on residual interest bonds,
similar to other types of inverse floating rate securities, will bear an inverse relationship to short-term
municipal bond interest rates. Distributions on residual interest bonds paid to the fund will be reduced
or, in the extreme, eliminated as short-term municipal interest rates rise and will increase when short-term
municipal interest rates fall. The greater the amount of short-term floating rate notes sold relative
to the residual interest bond, the more volatile the distributions on the residual interest bond will
be. The value of a residual interest bond also is generally more volatile than that of a fixed rate municipal
bond. In addition, the market for these residual interest bonds may not be liquid, which increases the
volatility of these bonds and means that the fund may not be able to sell them when it desires to do
so. Investing in residual interest bonds involves the use of economic leverage which may magnify the
fund’s gains or losses. If the fund invests in highly leveraged residual interest bonds, the fund may
lose money in excess of the amount of its investment, up to an amount equal to the value of the municipal
bonds underlying the residual interest bonds owned by the fund.
47
ADDITIONAL
INFORMATION (Unaudited) (continued)
Insurance
Risk.
The fund may purchase municipal bonds that are secured by insurance, bank credit agreements or escrow
accounts. The credit quality of the companies that provide such credit enhancements will affect the value
of those bonds. Certain significant providers of insurance for municipal bonds recently have incurred
significant losses as a result of exposure to sub-prime mortgages and other lower credit quality investments
that have experienced recent defaults or otherwise suffered extreme credit deterioration. As a result,
such losses have reduced the insurers’ capital and called into question their ability to perform their
obligations under such insurance if they are called upon to do so in the future. While an insured municipal
bond will typically be deemed to have the rating of its insurer, if the insurer of a municipal bond suffers
a downgrade in its credit rating or the market discounts the value of the insurance provided by the insurer,
the rating of the underlying municipal bond will be more relevant and the value of the municipal bond
would more closely, if not entirely, reflect such rating. In such a case, the value of insurance associated
with a municipal bond would decline and may not add any value. The insurance feature of a municipal bond
does not guarantee the full payment of principal and interest through the life of an insured obligation,
the market value of the insured obligation or the net asset value of the Common Stock represented by
such insured obligation.
When-Issued, Delayed Delivery and Forward Commitment Transactions
Risk. When purchasing a security on a forward commitment basis, the fund assumes the
rights and risks of ownership of the security, including the risk of price and yield fluctuations. Because
the fund is not required to pay for these securities until the delivery date, these risks are in addition
to the risks associated with the fund’s other investments. Securities purchased on a forward commitment,
when-issued or delayed-delivery basis are subject to changes in value (generally appreciating when interest
rates decline and depreciating when interest rates rise) based upon the public’s perception of the
creditworthiness of the issuer and changes, real or anticipated, in the level of interest rates. Securities
purchased on a forward commitment, when-issued or delayed-delivery basis may expose the fund to risks
because they may experience such fluctuations prior to their actual delivery.
Leverage Risk.
The fund expects to employ primarily structural leverage through a combination of preferred stock (e.g.,
the RVMTP shares) and by investing in residual interest bonds that will constitute borrowings for purposes
of the Act. The fund is authorized to utilize structural leverage through other forms of borrowings or
the issuance of debt securities. The fund also may employ portfolio leverage by using certain portfolio
techniques that have the economic effect of leverage, such as through the use of derivative instruments
or reverse repurchase agreements, or by engaging in when-issued, delayed delivery or forward commitment
transactions. There is no assurance that the fund’s leveraging strategies will be successful.
Derivatives
Transactions Risk. Derivatives can be volatile and involve various types and degrees of risk, depending
upon the characteristics of the particular derivative and the portfolio as a whole. Derivatives may entail
investment exposures that are greater than their cost would suggest, meaning that a small investment
in derivatives could have a large potential impact on the fund’s performance. If the fund invests in
derivatives at
48
inopportune times or judges market conditions incorrectly, such investments may
lower the fund’s return or result in a loss. The fund also could experience losses if its derivatives
were poorly correlated with the underlying instruments or the fund’s other investments, or if the fund
were unable to liquidate its position because of an illiquid secondary market. The market for many derivatives
is, or suddenly can become, illiquid. Although the fund intends to purchase or sell futures contracts
or options only if there is an active market for such contracts or options, no assurance can be given
that a liquid market will exist for any particular contract or option at any particular time. Changes
in liquidity may result in significant, rapid and unpredictable changes in the prices for derivatives.
Additionally, some derivatives the fund may use may involve economic leverage, which may increase the
volatility of these instruments as they may increase or decrease in value more quickly than the underlying
security, index, futures contract, or other economic variable.
Derivatives may be
purchased on established exchanges or through privately negotiated transactions referred to as over-the-counter
derivatives. Exchange-traded derivatives, such as futures contracts and certain options, generally are
guaranteed by the clearing agency that is the issuer or counterparty to such derivatives. This guarantee
usually is supported by a daily variation margin system operated by the clearing agency in order to reduce
overall credit risk. As a result, unless the clearing agency defaults, there is relatively little counterparty
credit risk associated with derivatives purchased on an exchange. In contrast, no clearing agency guarantees
over-the-counter derivatives, including some options and most swap agreements (e.g., credit default swaps),
and, therefore, there is a risk the counterparty will default. Accordingly, the Sub-Adviser will consider
the creditworthiness of counterparties to over-the-counter derivatives in the same manner as it would
review the credit quality of a security to be purchased by the fund. Over-the-counter derivatives are
less liquid than exchange-traded derivatives since the other party to the transaction may be the only
investor with sufficient understanding of the derivative to be interested in bidding for it. In addition,
mandatory margin requirements have been imposed on over-the-counter derivative instruments, which will
add to the costs of such transactions.
Some derivatives may involve leverage
(e.g., an instrument linked to the value of a securities index may return income calculated as a multiple
of the price movement of the underlying index). This economic leverage will increase the volatility of
these instruments as they may increase or decrease in value more quickly than the underlying security,
index, futures contract, currency or other economic variable.
The SEC adopted Rule
18f-4 under the Act which regulates the use of derivatives for certain funds registered under the Act.
The fund is required to limit its derivatives exposure so that the total notional value of derivatives
does not exceed 10% of the fund's net assets, and is subject to certain reporting requirements.
Market
Risk. The value of the securities in which the fund invests may be affected by political,
regulatory, economic and social developments, and developments that impact specific economic sectors,
industries or segments of the market. In addition, turbulence in financial markets and reduced liquidity
in equity, credit and/or fixed income markets
49
ADDITIONAL
INFORMATION (Unaudited) (continued)
may negatively affect many issuers, which could adversely
affect the fund. Global economies and financial markets are becoming increasingly interconnected, and
conditions and events in one country, region or financial market may adversely impact issuers in a different
country, region or financial market. These risks may be magnified if certain events or developments adversely
interrupt the global supply chain; in these and other circumstances, such risks might affect companies
worldwide. Recent examples include pandemic risks related to COVID-19 and aggressive measures taken worldwide
in response by governments, including closing borders, restricting international and domestic travel,
and the imposition of prolonged quarantines of large populations, and by businesses, including changes
to operations and reducing staff. The effects of COVID-19 have contributed to increased volatility in
global markets and will likely affect certain countries, companies, industries and market sectors more
dramatically than others. The COVID-19 pandemic has had, and any other outbreak of an infectious disease
or other serious public health concern could have, a significant negative impact on economic and market
conditions and could trigger a prolonged period of global economic slowdown. To the extent the fund may
overweight its investments in certain companies, industries or market sectors, such positions will increase
the fund’s exposure to risk of loss from adverse developments affecting those companies, industries
or sectors.
Risk of Market Price Discount from Net Asset Value. Shares of closed-end
funds, such as the fund, frequently trade at a discount from their net asset value. This characteristic
is a risk separate and distinct from the risk that net asset value could decrease as a result of investment
activities. The fund cannot predict whether its Common Stock will trade at, above or below net asset
value.
Management Risk. The fund is subject to management risk because the Sub-Adviser
actively manages the fund. The Sub-Adviser will apply investment techniques and risk analyses in making
investment decisions for the fund, but there can be no guarantee that these will produce the desired
results.
Cybersecurity Risk. The fund and its service providers are susceptible to operational
and information security risks due to cybersecurity incidents. In general, cybersecurity incidents can
result from deliberate attacks or unintentional events. Cybersecurity attacks include, but are not limited
to, gaining unauthorized access to digital systems (e.g., through “hacking” or malicious software
coding) for purposes of misappropriating assets or sensitive information, corrupting data or causing
operational disruption. Cyber attacks also may be carried out in a manner that does not require gaining
unauthorized access, such as causing denial-of-service attacks on websites (i.e., efforts to make services
unavailable to intended users). Cybersecurity incidents affecting the Adviser or other service providers,
as well as financial intermediaries, have the ability to cause disruptions and impact business operations,
potentially resulting in financial losses, including by interference with the fund’s ability to calculate
its net asset value; impediments to trading for the fund’s portfolio; the inability of Common Shareholders
to transact business with the fund; violations of applicable privacy, data security or other laws; regulatory
fines and penalties; reputational damage; reimbursement or other
50
compensation or remediation costs; legal fees; or additional compliance costs.
Similar adverse consequences could result from cybersecurity incidents affecting issuers of securities
in which the fund invests, counterparties with which the fund engages in transactions, governmental and
other regulatory authorities, exchange and other financial market operators, banks, brokers, dealers,
insurance companies and other financial institutions and other parties. While information risk management
systems and business continuity plans have been developed which are designed to reduce the risks associated
with cybersecurity, there are inherent limitations in any cybersecurity risk management systems or business
continuity plans, including the possibility that certain risks have not been identified.
Given
the risks described above, an investment in Common Stock may not be appropriate for all investors. You
should carefully consider your ability to assume these risks before making an investment in the fund.
Recent
Changes & Supplemental Information
During the period ended February 28, 2023,
there were: (i) no material changes in the fund’s investment objectives or policies that have not been
approved by shareholders, (ii) no changes in the fund’s charter or by-laws that would delay or prevent
a change of control of the fund that have not been approved by shareholders, (iii) no material changes
to the principal risk factors associated with investment in the fund, and (iv) no change in the persons
primarily responsible for the day-to-day management of the fund’s portfolio.
51
IMPORTANT
TAX INFORMATION (Unaudited)
In accordance with federal tax law, the fund hereby reports all the dividends
paid from net investment income during its fiscal year ended February 28, 2023 as “exempt-interest
dividends” (not generally subject to regular Federal income tax). Where required by federal tax law
rules, shareholders will receive notification of their portion of the fund’s taxable ordinary dividends
(if any), capital gains distributions (if any) and tax-exempt dividends paid for the 2023 calendar year
on Form 1099-DIV, which will be mailed in early 2024.
52
BOARD
MEMBERS INFORMATION (Unaudited)
Independent
Board Members
Joseph
S. DiMartino (79)
Chairman of the Board (2013)
Current
term expires in 2023
Principal Occupation During Past 5 Years:
· Director or Trustee of funds in the BNY Mellon Family of Funds
and certain other entities (as described in the fund’s Statement of Additional Information) (1995-Present)
Other Public Company Board Memberships During Past 5 Years:
· CBIZ, Inc., a public company providing professional business
services, products and solutions, Director (1997-Present)
No. of Portfolios for
which Board Member Serves: 88
———————
Francine J. Bovich (71)
Board Member (2015)
Current term expires in 2024
Principal Occupation
During Past 5 Years:
· The
Bradley Trusts, private trust funds, Trustee (2011-Present)
Other
Public Company Board Memberships During Past 5 Years:
· Annaly Capital Management, Inc., a real estate investment
trust, Director (2014-Present)
No. of Portfolios for which Board Member
Serves: 49
———————
J.
Charles Cardona (67)
Board Member (2014)
Current
term expires in 2025
Principal Occupation During Past 5 Years:
· BNY Mellon ETF Trust, Chairman and
Trustee
(2020-Present)
· BNY
Mellon Liquidity Funds, Director (2004-Present) and Chairman (2019-2021)
No.
of Portfolios for which Board Member Serves: 37
———————
53
BOARD
MEMBERS INFORMATION (Unaudited) (continued)
Andrew J. Donohue (72)
Board Member (2019)
Current term expires in 2023
Principal Occupation
During Past 5 Years:
· Attorney,
Solo Law Practice (2019-Present)
· Shearman
& Sterling LLP, a law firm, Of Counsel (2017-2019)
· Chief of Staff to the Chair of the SEC (2015-2017)
Other Public Company Board Memberships During Past 5 Years:
· Oppenheimer Funds (58 funds), Director
(2017-2019)
No. of Portfolios for which Board Member Serves: 42
———————
Isabel P. Dunst (76)
Board Member (2014)
Current term expires in 2023
Principal Occupation
During Past 5 Years:
· Hogan
Lovells LLP, a law firm, Retired (2019-Present); Senior Counsel (2018-2019); Of Counsel (2015-2018)
· Hebrew
Union College Jewish Institute of Religion, Member of the Board of Governors (2015-Present)
· Bend
the ARC, a civil rights organization, Board Member (2016-Present)
No. of Portfolios for
which Board Member Serves: 22
———————
Nathan Leventhal (80)
Board Member (2013)
Current term expires in 2025
Principal Occupation
During Past 5 Years:
· Lincoln
Center for the Performing Arts, President Emeritus (2001-Present)
· Palm Beach Opera, President (2016-Present)
Other Public Company Board Memberships During Past 5 Years:
· Movado Group, Inc., a public company that designs, sources,
markets and distributes watches Director (2003-2020)
No. of Portfolios for
which Board Member Serves: 29
———————
54
Robin A. Melvin (59)
Board Member (2014)
Current term expires in 2025
Principal Occupation
During Past 5 Years:
· Westover
School, a private girls' boarding school in Middlebury, Connecticut, Trustee
(2019-Present)
· Mentor
Illinois, a non-profit organization dedicated to increasing the quantity and quality of mentoring services
in Illinois, Co-Chair (2014-2020); Board Member, Mentor Illinois (2013-2020)
· JDRF,
a non-profit juvenile diabetes research foundation, Board Member (June 2021-June 2022)
Other Public Company Board Memberships During Past 5 Years:
· HPS Corporate Lending Fund, a closed-end management investment
company regulated as a business development company, Trustee (August 2021-Present)
No.
of Portfolios for which Board Member Serves: 68
———————
Roslyn M. Watson (73)
Board Member (2014)
Current term expires in 2024
Principal Occupation
During Past 5 Years:
· Watson
Ventures, Inc., a real estate investment company. Principal (1993-Present)
Other Public Company Board Memberships During Past 5 Years:
· American Express Bank, FSB, Director
(1993-2018)
No. of Portfolios for which Board Member Serves: 42
———————
Benaree Pratt Wiley (76)
Board Member (2013)
Current term expires in 2023
Principal Occupation
During Past 5 Years:
· The
Wiley Group, a firm specializing in strategy and business development, Principal
(2005-Present)
Other Public Company Board Memberships During Past 5 Years:
· CBIZ,
Inc., a public company providing professional business services, products and solutions, Director
(2008-Present)
· Blue
Cross Blue Shield of Massachusetts, Director (2004-2020)
No. of Portfolios for
which Board Member Serves: 59
———————
55
BOARD
MEMBERS INFORMATION (Unaudited) (continued)
Tamara Belinfanti (47)
Advisory Board Member (2021)
Principal Occupation During Past 5 Years:
· New York Law School, Lester Martin Professor of Law
(2009-Present)
No.
of Portfolios for which Advisory Board Member Serves: 22
———————
Gordon J. Davis (81)
Advisory Board Member (2021)
Principal Occupation During Past 5 Years:
· Venable LLP, a law firm, Partner (2012-Present)
Other Public Company Board Memberships During Past 5 Years:
· BNY Mellon Family of Funds (53 funds), Board Member
(1995-August 2021)
No. of Portfolios for which Advisory Board Member Serves: 39
———————
The address of the Board Members and Officers is c/o BNY Mellon Investment Adviser,
Inc., 240 Greenwich Street, New York, New York 10286.
56
OFFICERS
OF THE FUND (Unaudited)
DAVID
DIPETRILLO, President since January 2021.
Vice President and Director
of the Adviser since February 2021; Head of North America Product, BNY Mellon Investment Management since
January 2018; and Director of Product Strategy, BNY Mellon Investment Management from January 2016 to
December 2017. He is an officer of 53 investment companies (comprised of 103 portfolios) managed by the
Adviser or an affiliate of the Adviser. He is 45 years old and has been an employee of BNY Mellon since
2005.
JAMES
WINDELS, Treasurer since December 2012.
Director of the Adviser
since February 2023; Vice President of the Adviser since September 2020; and Director–BNY Mellon Fund
Administration. He is an officer of 54 investment companies (comprised of 123 portfolios) managed by
the Adviser or an affiliate of the Adviser. He is 64 years old and has been an employee of the Adviser
since April 1985.
PETER M. SULLIVAN, Chief Legal Officer since July 2021 and Vice President and
Assistant Secretary since March 2019.
Chief Legal Officer of the Adviser and
Associate General Counsel of BNY Mellon since July 2021; Senior Managing Counsel of BNY Mellon from
December 2020 to July 2021; and Managing Counsel of BNY Mellon from March 2009 to December 2020. He is
an officer of 54 investment companies (comprised of 123 portfolios) managed by the Adviser or an affiliate
of the Adviser. He is 54 years old and has been an employee of BNY Mellon since April 2004.
JAMES
BITETTO, Vice President since August 2005 and Secretary since February 2018.
Senior
Managing Counsel of BNY Mellon since December 2019; Managing Counsel of BNY Mellon from April 2014 to
December 2019; and Secretary of the Adviser. He is an officer of 54 investment companies (comprised of
123 portfolios) managed by the Adviser or an affiliate of the Adviser. He is 56 years old and has been
an employee of the Adviser since December 1996.
DEIRDRE CUNNANE, Vice President and Assistant
Secretary since March 2019.
Managing Counsel of BNY Mellon since December
2021, Counsel of BNY Mellon from August 2018 to December 2021; and Senior Regulatory Specialist at BNY
Mellon Investment Management Services from February 2016 to August 2018. She is an officer of 54 investment
companies (comprised of 123 portfolios) managed by the Adviser or an affiliate of the Adviser. She is
32 years old and has been an employee of the Adviser since August 2018.
SARAH S. KELLEHER, Vice
President and Assistant Secretary since April 2014.
Vice
President of BNY Mellon ETF Investment Adviser; LLC since February 2020; Senior Managing Counsel of BNY
Mellon since September 2021; Managing Counsel of BNY Mellon from December 2017 to September 2021; and
Senior Counsel of BNY Mellon from March 2013 to December 2017. She is an officer of 54 investment companies
(comprised of 123 portfolios) managed by the Adviser or an affiliate of the Adviser. She is 47 years
old and has been an employee of the Adviser since March 2013.
JEFF PRUSNOFSKY, Vice President and Assistant
Secretary since December 2012.
Senior Managing Counsel of BNY Mellon.
He is an officer of 54 investment companies (comprised of 123 portfolios) managed by the Adviser or an
affiliate of the Adviser. He is 57 years old and has been an employee of the Adviser since October 1990.
AMANDA
QUINN, Vice President and Assistant Secretary since March 2020.
Counsel
of BNY Mellon since June 2019; Regulatory Administration Manager at BNY Mellon Investment Management
Services from September 2018 to May 2019; and Senior Regulatory Specialist at BNY Mellon Investment Management
Services from April 2015 to August 2018. She is an officer of 54 investment companies (comprised of 123
portfolios) managed by the Adviser or an affiliate of the Adviser. She is 37 years old and has been
an employee of the Adviser since June 2019.
57
OFFICERS
OF THE FUND (Unaudited) (continued)
NATALYA ZELENSKY, Vice President and Assistant Secretary since March 2017.
Chief Compliance Officer since August 2021 and Vice President since February 2020
of BNY Mellon ETF Investment Adviser, LLC; Chief Compliance Officer since August 2021 and Vice President
and Assistant Secretary since February 2020 of BNY Mellon ETF Trust; Managing Counsel of BNY Mellon from
December 2019 to August 2021; Counsel of BNY Mellon from May 2016 to December 2019; and Assistant Secretary
of the Adviser from April 2018 to August 2021. She is an officer of 54 investment companies (comprised
of 123 portfolios) managed by the Adviser or an affiliate of the Adviser. She is 37 years old and has
been an employee of BNY Mellon since May 2016.
DANIEL
GOLDSTEIN, Vice President since March 2022.
Vice President and Head of Product Development of North America Product, BNY Mellon
Investment Management since January 2018; Co-Head of Product Management, Development & Oversight
of North America Product, BNY Mellon Investment Management from January 2010 to January 2018; and Senior
Vice President, Development & Oversight of North America Product, BNY Mellon Investment Management
since 2010. He is an officer of 53 investment companies (comprised of 103 portfolios) managed by the
Adviser or an affiliate of the Adviser. He is 53 years old and has been an employee of the Distributor
since 1991.
JOSEPH MARTELLA, Vice President since
March 2022.
Vice President of the Adviser since December
2022, Head of Product Management of North America Product, BNY Mellon Investment Management since January
2018; Director of Product Research and Analytics of North America Product, BNY Mellon Investment Management
from January 2010 to January 2018; and Senior Vice President of North America Product, BNY Mellon Investment
Management since 2010. He is an officer of 53 investment companies (comprised of 103 portfolios) managed
by the Adviser or an affiliate of the Adviser. He is 46 years old and has been an employee of the Distributor
since 1999.
GAVIN
C. REILLY, Assistant Treasurer since December 2012.
Tax
Manager–BNY Mellon Fund Administration. He is an officer of 54 investment companies (comprised of 123
portfolios) managed by the Adviser or an affiliate of the Adviser. He is 54 years old and has been an
employee of the Adviser since April 1991.
ROBERT SALVIOLO, Assistant Treasurer since December 2012.
Senior Accounting Manager–BNY Mellon Fund Administration. He is an officer of
54 investment companies (comprised of 123 portfolios) managed by the Adviser or an affiliate of the Adviser.
He is 55 years old and has been an employee of the Adviser since June 1989.
ROBERT SVAGNA, Assistant
Treasurer since December 2002.
Senior Accounting Manager–BNY Mellon
Fund Administration. He is an officer of 54 investment companies (comprised of 123 portfolios) managed
by the Adviser or an affiliate of the Adviser. He is 55 years old and has been an employee of the Adviser
since November 1990.
JOSEPH W. CONNOLLY, Chief Compliance Officer since December 2012.
Chief
Compliance Officer of the BNY Mellon Family of Funds and BNY Mellon Funds Trust since 2004; and Chief
Compliance Officer of the Adviser from 2004 until June 2021. He is the Chief Compliance Officer of 53
investment companies (comprised of 108 portfolios) managed by the Adviser. He is 65 years old.
58
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60
OFFICERS
AND DIRECTORS
BNY Mellon Municipal Bond Infrastructure Fund, Inc.
240 Greenwich Street
New
York, NY 10286
| | | |
Directors | | Officers (continued) | |
Joseph S. DiMartino,
Chairman | | Assistant
Treasurers (continued) | |
Francine J. Bovich | | Robert Salviolo | |
J. Charles Cardona | | Robert Svagna | |
Andrew J. Donohue | | Chief Compliance Officer | |
Isabel P. Dunst | | Joseph W. Connolly | |
Nathan Leventhal† | | Portfolio Managers | |
Robin A. Melvin | | Jeffrey Burger | |
Roslyn M. Watson | | Thomas C. Casey | |
Benaree Pratt Wiley† | | Daniel A. Rabasco | |
Gordon J. Davis†† | | | |
Tamara
Belinfanti†† | | Adviser | |
† Elected
by holders of RVMTPS | | BNY
Mellon Investment Adviser, Inc. | |
††
Advisory Board Member | | Sub-Adviser | |
Officers | | Insight North America LLC | |
President | | Custodian | |
David DiPetrillo | | The Bank of New York Mellon | |
Chief Legal Officer | | Counsel | |
Peter M. Sullivan | | Proskauer Rose LLP | |
Vice President and Secretary | | Transfer Agent, | |
James Bitetto | | Dividend Disbursing Agent | |
Vice Presidents and Assistant Secretaries | | and Registrar | |
Deirdre Cunnane | | Computershare Inc. | |
Sarah S. Kelleher | | (Common Stock) | |
Jeff Prusnofsky | | The Bank of New York Mellon | |
Amanda Quinn | | (RVMTP Shares) | |
Natalya Zelensky | | Stock Exchange Listing | |
Treasurer | | NYSE Symbol: DMB | |
James Windels | | Initial SEC Effective Date | |
Vice Presidents | | 4/26/13 | |
Daniel Goldstein | | | |
Joseph Martella | | | |
Assistant
Treasurers | | | |
Gavin C. Reilly | | | |
| | | |
The fund’s net asset
value per share appears in the following publications: Barron’s, Closed-End Bond Funds section under
the heading “Municipal Bond Funds” every Monday; The Wall Street Journal, Mutual
Funds section under the heading “Closed-End Funds” every Monday. |
Notice is hereby given in accordance with Section 23(c) of
the Act that the fund may purchase shares of its common stock in the open market when it
can do so at prices below the then current net asset value per share. |
BNY
Mellon Municipal Bond Infrastructure Fund, Inc.
240 Greenwich Street
New
York, NY 10286
Adviser
BNY
Mellon Investment Adviser, Inc.
240 Greenwich Street
New
York, NY 10286
Sub-Adviser
Insight
North America LLC
200 Park Avenue, 7th Floor
New York, NY 10166
Custodian
The
Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer
Agent &
Registrar (Common Stock)
Computershare Inc.
480
Washington Boulevard
Jersey City, NJ 07310
Dividend Disbursing Agent (Common Stock)
Computershare
Inc.
P.O. Box 30170
College Station, TX 77842
For more information about the fund, visit
https://im.bnymellon.com/us/en/products/closed-end-funds.jsp. Here you will find the fund’s most recently
available quarterly fact sheets and other information about the fund. The information posted on the fund’s
website is subject to change without notice.
The fund files its complete schedule of
portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT.
The fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov.
A
description of the policies and procedures that the fund uses to determine how to vote proxies relating
to portfolio securities and information regarding how the fund voted these proxies for the most recent
12-month period ended June 30 is available at www.im.bnymellon.com
and
on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-373-9387.
The
fund posts regularly certain information at https://public.dreyfus.com/insightsideas/
research-articles/splash/DMB.html,
including certain asset coverage and leverage ratios (within 5 business days of the last day of each
month) and a fact sheet containing certain statistical information (within 15 business days of the last
day of each month).
| |
0805AR0223
| |
| Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
SUMMARY OF THE FUND'S PROXY VOTING POLICY
AND PROCEDURES
The Fund's Board of Directors has adopted the
following procedures with respect to proxy voting by the Fund.
Delegation of Proxy Voting Responsibility
and Adoption of Proxy Voting Procedures
The Board has delegated the authority to vote
proxies of companies held in the Fund's portfolio to Insight North America, LLC ("INA"), the Fund's sub-investment adviser,
as described below. BNY Mellon Investment Adviser, Inc. ("BNYM Investment Adviser") serves as the Fund's investment adviser.
In addition, the Board has adopted INA's proxy
voting procedures pursuant to which proxies of companies held in the Fund's portfolio will be voted.
Proxy Voting Operations
The Fund has engaged ISS as its proxy voting
agent to administer the ministerial, non-discretionary elements of proxy voting and reporting. Each fund in the BNY Mellon Family of Funds
bears an equal share of ISS's fees in connection with the proxy voting and related services that ISS provides in respect of the funds.
Voting Shares of Certain Registered Investment
Companies
Under certain circumstances, when the Fund
owns shares of another registered investment company (an "Acquired Fund"), the Fund may be required by the 1940 Act or the rules
thereunder, or exemptive relief from the 1940 Act and/or the rules thereunder, to vote such Acquired Fund shares in a certain manner,
such as voting the Acquired Fund shares in the same proportion as the vote of all other shareholders of such Acquired Fund.
Policies and Procedures; Oversight
The Fund's Chief Compliance Officer is responsible
for confirming that INA has adopted and implemented written policies and procedures that are reasonably designed to ensure that the Fund's
proxies are voted in the best interest of the Fund. In addition, the adequacy of such policies and procedures are reviewed at least annually,
and proxy voting for the Fund is monitored to ensure compliance with INA's procedures, such as by sampling votes cast for the Fund, including
routine proposals as well as those that require more analysis, to determine whether they complied with INA's Proxy Voting Procedures.
Review of Proxy Voting
BNYM Investment Adviser reports annually to
the Board on the Fund's proxy voting, including information regarding: (1) proxy voting proposals that were voted; (2) proxy voting proposals
that were voted against the management company's recommended vote, but in accordance with the applicable proxy voting guidelines; and
(3) proxy voting proposals that were not voted, including the reasons the proxy voting proposals were not voted.
Availability of Fund Proxy Voting Records
Pursuant to Rule 30b1-4 under the 1940 Act,
the Fund is required to file its complete proxy voting record with the SEC on Form N-PX not later than August 31st of each
year for the most recent twelve-month period ended June 30th. In addition, this information is available, by August 31st
of each year, at http://www.im.bnymellon.com. The Fund has delegated the responsibility for gathering this information, filing Form N-PX
and posting voting information to the website to BNYM Investment Adviser, with the assistance of ISS.
SUMMARY OF INA'S PROXY VOTING POLICY AND
PROCEDURES
I. Introduction
INA has adopted this Proxy Voting Policy ("Policy") for
the purpose of establishing formal policies and procedures for performing and documenting its fiduciary duty with respect to the voting
of client proxies. INA serves as investment adviser and sub-adviser to institutional separate accounts, private funds, and registered
investment companies (collectively, "Clients").
Pursuant to this Policy, INA shall vote proxies on behalf of Clients
for whom INA has been given and agreed to accept voting authority. The fundamental guideline followed by INA in voting proxies is to ensure
that the manner in which shares are voted is in the best interests of Clients and the values of their investments. Any general or specific
proxy voting guidelines provided by a Client or its designated agent in writing will supersede the specific guidelines in this Policy.
Additionally, the DOL views the fiduciary act of managing ERISA
plan assets to include the voting of proxies. Proxy voting decisions must be made solely in the best interests of the pension plan's participants
and beneficiaries. The DOL has interpreted this requirement as prohibiting a fiduciary from subordinating the retirement income interests
of participants and beneficiaries to unrelated objectives. The guidelines in this Policy have been formulated to ensure decision-making
consistent with these fiduciary responsibilities.
Note: this Proxy Voting Policy will be reviewed at least annually.
II. Client Disclosure
and Recordkeeping
| 1. | In addition to this Policy, Clients may obtain information on how INA voted their proxies. |
| 2. | Additionally, INA will maintain proxy voting records for its advisory clients, consistent with the Advisers
Act. |
| 3. | For Clients that are registered investment companies, INA will disclose this Policy to the shareholders
of such funds and make filings with the SEC with regard to the specific proxy votes that INA cast as shareholders of portfolio securities
in accordance with the rules and regulations under the 1940 Act. |
| 4. | Certain Clients may participate in securities lending programs. If INA is aware that a material event
will occur affecting securities on loan, INA will be obligated to call such loan in time to vote the proxies; however, with respect to
other voting matters involving securities on loan, INA would generally not vote with respect to such securities. |
III. General Policy
Regarding Proxy Voting
Implicit in the initial decision to retain or invest in the security
of a corporation is approval of its existing corporate ownership structure, its management, and its operations. Accordingly, proxy proposals
that would change the existing status of a corporation will be reviewed carefully and supported only when it seems clear that the proposed
changes are likely to benefit the corporation and its shareholders. Notwithstanding this favorable predisposition, management will be
assessed on an ongoing basis both in terms of its business capability and its dedication to the shareholders to ensure that, our continued
confidence remains warranted. If it is determined that management is acting on its own behalf instead of for the well-being of the corporation,
INA will vote to support shareholder proposals, unless other mitigating circumstances are present. Additionally, situations may arise
that involve an actual or perceived conflict of interest. For example, INA may manage assets of a pension plan of a company whose management
is soliciting proxies, or an employee may have a close relative who serves as a director or executive of a company that is
soliciting proxies. In all cases, the manner in which INA votes
proxies must be based on Clients' best interests and not the product of the conflict.
In furtherance of INA's goal to vote proxies in the best interests
of clients, INA follows procedures designed to identify and address material conflicts that may arise between INA's interests and those
of its Clients before voting proxies for Client securities.
INA's detailed policies and procedures with respect to conflicts
of interest and specific proxy voting guidelines can be found in Sections V. and VI. of this Policy, below.
IV. Procedures
for Identifying Conflicts of Interest
INA will monitor the potential for conflicts of interest with respect
to proxy voting recommendations or directions both as a result of personal relationships, significant Client relationships (those accounting
for greater than 15% of annual revenues), or special circumstances that may arise during the conduct of INA's or its affiliates' business.
| 1. | The CCO or her designee will determine whether a conflict of interest is material. A conflict of interest
will be considered material to the extent that it is determined that such conflict has the potential to influence INA's decision-making.
Further, a conflict of interest shall be deemed material in the event the issuer that is the subject of the proxy or any executive officer
of that issuer has a Client relationship with INA or its affiliates, of the type described above. All other materiality determinations
will be based on an assessment of the particular facts and circumstances. The CCO or her designee shall maintain a written record of all
materiality determinations in addition to the method used to resolve a material conflict of interest. |
| 2. | If it is determined that a conflict of interest is not material, INA will vote proxies in accordance
with the specific voting policy detailed in Section V, below. |
| 3. | If it is determined that a conflict of interest is material, one or more methods may be used to resolve
the conflict, including: |
·
disclosing the conflict to the client and obtaining its consent before voting;
·
suggesting to the client that it engage another party to make a recommendation;
·
engaging a third party to recommend a vote with respect to the proxy based on application of the
policies set forth herein; or
·
utilizing such other method as is deemed appropriate under the circumstances given the nature of
the conflict.
V. Specific
Proxy Voting Guidelines
This Policy and its attendant recommendations attempt to generalize
a complex subject. It should be clearly understood that specific fact situations, including differing voting practices in jurisdictions
outside the United States, might warrant departure from these guidelines. In such instances, the relevant facts will be considered, and
if a vote contrary to these guidelines is indicated it will be cast and the reasons therefore recorded in writing.
1. Routine Matters
Routine proxy proposals, amendments, or resolutions are typically
proposed by management and meet the following criteria:
| a. | They do not measurably change the structure, management control, or operation of the corporation. |
| b. | They are consistent with industry standards as well as the corporate laws of the state of incorporation. |
Voting Recommendation
INA will normally support the following routine proposals:
| a. | To increase authorized common shares. |
| b. | To increase authorized preferred shares as long as there are not disproportionate voting rights per
preferred share. |
| c. | To elect or re-elect directors. |
| d. | To appoint or elect auditors. |
| e. | To approve indemnification of directors and limitation of directors' liability. |
| f. | To establish compensation levels. |
| g. | To establish employee stock purchase or ownership plans. |
| h. | To set time and location of annual meeting. |
2. Non-Routine Proposals
Proposals in this category involve issues of social conscience.
They are typically proposed by shareholders who believe that the corporation's internally adopted policies are ill advised or misguided.
If INA has determined that management is generally socially responsible, we typically vote against the following shareholder proposals:
| 1) | To enforce restrictive energy policies. |
| 2) | To place arbitrary restrictions on military contracting. |
| 3) | To bar or place arbitrary restrictions on trade with other countries. |
| 4) | To restrict the marketing of controversial products. |
| 5) | To limit corporate political activities. |
| 6) | To bar or restrict charitable contributions. |
| 7) | To enforce a general policy regarding human rights based on arbitrary parameters. |
| 8) | To enforce a general policy regarding employment practices based on arbitrary parameters. |
| 9) | To enforce a general policy regarding animal rights based on arbitrary parameters. |
| 10) | To place arbitrary restrictions on environmental practices. |
| b. | Financial/Corporate Issues |
Proposals in this category are usually offered by management and
seek to change a corporation's legal, business or financial structure. INA will generally vote in favor of the following management proposals
provided the position of current shareholders is preserved or enhanced:
| 1) | To change the state of incorporation. |
| 2) | To approve mergers, acquisitions or dissolution. |
| 3) | To institute indenture changes. |
| 4) | To change capitalization. |
Proposals in this category are made regularly both by management
and shareholders. They can be generalized as involving issues that transfer or realign board or shareholder voting power. INA typically
would oppose any proposal aimed solely at thwarting potential takeover offers by requiring, for example, super-majority approval. At the
same time, we believe stability and continuity promote profitability. The guidelines in this area seek to find a middle road, and they
are no more than guidelines. Individual proposals may have to be carefully assessed in the context of their particular circumstances.
INA will generally vote in favor of the following management proposals:
| 1) | To require majority approval of shareholders in acquisitions of a controlling share in the corporation. |
| 2) | To institute staggered board of directors. |
| 3) | To require shareholder approval of not more than 66-2/3% for a proposed amendment to the corporation's
by-laws. |
| 4) | To eliminate cumulative voting. |
| 5) | To adopt anti-greenmail charter or by-law amendments or to otherwise restrict a company's ability to
make greenmail payments. |
| 6) | To create a dividend reinvestment program. |
| 7) | To eliminate preemptive rights. |
| 8) | To eliminate any other plan or procedure designed primarily to discourage a takeover or other similar
action (commonly known as a "poison pill"). |
INA will generally vote against the following management proposals:
| 1) | To require greater than 66-2/3% shareholder approval for a proposed amendment to the corporation's by-laws
("super-majority provisions"). |
| 2) | To require an arbitrary fair price be offered to all shareholders that is derived from a fixed formula
("fair price amendments"). |
| 3) | To authorize a new class of common stock or preferred stock which may have more votes per share than
the existing common stock. |
| 4) | To prohibit replacement of existing members of the board of directors. |
| 5) | To eliminate shareholder action by written consent without a shareholder meeting. |
| 6) | To allow only the board of directors to call a shareholder meeting or to propose amendments to the articles
of incorporation. |
| 7) | To implement any other action or procedure designed primarily to discourage a takeover or other similar
action (commonly known as a "poison pill"). |
| 8) | To limit the ability of shareholders to nominate directors. |
INA will generally vote in favor of the following shareholder proposals:
| 1) | To rescind share purchases rights or require that they be submitted for shareholder approval, but only
if the vote required for approval is not more than 66-2/3%. |
| 2) | To opt out of state anti-takeover laws deemed to be detrimental to the shareholder. |
| 3) | To change the state of incorporation for companies operating under the umbrella of anti- shareholder
state corporation laws if another state is chosen with favorable laws in this and other areas. |
| 4) | To eliminate any other plan or procedure designed primarily to discourage a takeover or other similar
action. |
| 5) | To permit shareholders to participate in formulating management's proxy and the opportunity to discuss
and evaluate management's director nominees, and/or to nominate shareholder nominees to the board |
| 6) | To require that the board's audit, compensation, and/or nominating committees be comprised exclusively
of independent directors. |
| 7) | To adopt anti-greenmail charter or by-law amendments or otherwise restrict a company's ability to make
greenmail payments. |
| 8) | To create a dividend reinvestment program. |
| 9) | To recommend that votes to "abstain" not be considered votes "cast" at an annual
meeting or special meeting, unless required by state, law. |
| 10) | To require that "golden parachutes" be submitted for shareholder ratification. |
INA will generally vote against the following shareholder proposals:
| 1) | To restore preemptive rights. |
| 2) | To restore cumulative voting. |
| 3) | To require annual election of directors or to specify tenure. |
| 4) | To eliminate a staggered board of directors. |
| 5) | To require confidential voting. |
| 6) | To require directors to own a minimum amount of company stock in order to qualify as a director or to
remain on the .board. |
| 7) | To dock director pay for failing to attend board meetings. |
VI. Voting Process
The CCO is responsible for voting proxies on behalf of Clients for
whom INA has been given and agreed to accept voting authority, and will generally vote proxies in accordance with these guidelines. In
circumstances in which the subject matter of the vote is not covered by these guidelines, or) or INA believes it may be necessary, in
the best interests of shareholders, to vote contrary to our general guidelines, the CCO will discuss the matter with the CEO and General
Counsel of INA, who will be responsible for making the definitive determination as to how the proxy matter will be voted.
Any questions regarding this Policy may be directed to the CCO of
INA.
VII. Trust Indentures
From time to time, INA is asked to consent to an amendment to or
grant a waiver under a trust indenture or other governing document of a specific financial instrument held by Clients. Such consents or
waivers may cover corporate actions such as tenders, exchanges, registration rights, restructurings and other transactions relating to
fixed income holdings of client accounts.
INA will generally treat such requests for consents not as proxies
subject to these proxy voting policies and procedures, but as investment matters to be dealt with by the investment professional covering
such instruments, provided that such consents: (i) do not relate to the election of a board of directors or appointment of auditors for
a public company, (ii) would not otherwise materially affect the structure, management or control of a public company, and (iii) relate
to a company in which Clients hold only interests in bank loans or debt securities and are consistent with customary standards and practices
for such instruments. Determinations on voting consents or waivers to these matters are generally driven by INA's view of whether the
proposed action will result in an economic benefit for the affected Client(s).
VIII. Recordkeeping
INA shall maintain the following records relating to proxy voting:
| 1. | a copy of these policies and procedures; |
| 2. | a copy of each proxy solicitation (including proxy statements) and related materials with regard to
each recommendation; |
| 3. | documentation relating to the identification and resolution of conflicts of interest; and |
| 4. | any documents created by INA that were material to a proxy voting recommendation or that memorialized
the basis for that recommendation. |
Such records shall be maintained and preserved
in an easily accessible place for a period of not less than six years from the time the last entry was made on such record, the first
two years in INA's office.
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a)(1) The following information is as of February
28, 2023:
Jeffrey Burger, Thomas Casey and Daniel Rabasco
of Insight North America LLC ("INA"), an affiliate of BNYM Investment Adviser, are primarily responsible for the day-to-day
management of the registrant’s portfolio.
(a)(2) Information about the other accounts
managed by the fund’s primary portfolio managers is provided below.
Primary
Portfolio Manager |
Registered Investment Companies |
Total Assets Managed |
Other Pooled Investment Vehicles |
Total Assets Managed |
Other Accounts |
Total Assets Managed |
Jeffrey Burger |
9 |
$3.2B |
None |
N/A |
409 |
$2.1B |
Thomas Casey |
7 |
$3.5B |
None |
N/A |
526 |
$2.5B |
Daniel Rabasco |
10 |
$5.2B |
None |
N/A |
60 |
$2.3B |
None of the funds or accounts are subject to
a performance-based advisory fee.
Portfolio managers may manage multiple accounts
for a diverse client base, including mutual funds, separate accounts (assets managed on behalf of institutions such as pension funds,
insurance companies and foundations), bank common trust accounts and wrap fee programs (“Other Accounts”).
Potential conflicts of interest may arise because
of BNYM Investment Adviser's, INA's or a portfolio manager's management of the Fund and Other Accounts. For example, conflicts of interest
may arise with both the aggregation and allocation of securities transactions and allocation of limited investment opportunities, as BNYM
Investment Adviser or INA may be perceived as causing accounts it manages to participate in an offering to increase BNYM Investment Adviser's
or INA's overall allocation of securities in that offering, or to increase BNYM Investment Adviser's or INA's ability to participate in
future offerings by the same underwriter or issuer. Allocations of bunched trades, particularly trade orders that were only partially
filled due to limited availability and allocation of investment opportunities generally, could raise a potential conflict of interest,
as BNYM Investment Adviser or INA may have an incentive to allocate securities that are expected to increase in value to preferred accounts.
Initial public offerings, in particular, are frequently of very limited availability. Additionally, portfolio managers may be perceived
to have a conflict of interest if there are a large number of Other Accounts, in addition to the Fund, that they are managing on behalf
of BNYM Investment Adviser or INA. BNYM Investment Adviser and INA periodically reviews each portfolio manager's overall responsibilities
to ensure that he or she is able to allocate the necessary time and resources to effectively manage the Fund. In addition, BNYM Investment
Adviser and INA could be viewed as having a conflict of interest to the extent that BNYM Investment Adviser, INA or their affiliates and/or
portfolios managers have a materially larger investment in Other Accounts than their investment in the Fund.
Other Accounts may have investment objectives,
strategies and risks that differ from those of the Fund. For these or other reasons, the portfolio manager may purchase different securities
for the Fund and the Other Accounts, and the performance of securities purchased for the Fund may vary from the performance of securities
purchased for Other Accounts. The portfolio manager may place transactions on behalf of Other Accounts that are directly or indirectly
contrary to investment decisions made for the Fund, which could have the potential to adversely impact the Fund, depending on market conditions.
A potential conflict of interest may be perceived
to arise if transactions in one account closely follow related transactions in another account, such as when a purchase increases the
value of securities previously purchased by the other account, or when a sale in one account lowers the sale price received in a sale
by a second account.
BNY Mellon and its affiliates, including BNYM
Investment Adviser, INA and others involved in the management, investment activities or business operations of the Fund, are engaged in
businesses and have interests other than that of managing the Fund. These activities and interesting include potential multiple advisory,
transactional, financial and other interesting in securities, instruments and companies that may be
directly or indirectly purchased or sold by
the Fund of the Fund's service providers, which may cause conflicts that could disadvantaged the Fund.
BNYM Investment Adviser's goal is to provide
high quality investment services to all of its clients, while meeting BNYM Investment Adviser's fiduciary obligation to treat all clients
fairly. BNYM Investment Adviser has adopted and implemented policies and procedures, including brokerage and trade allocation policies
and procedures, that it believes address the conflicts associated with managing multiple accounts for multiple clients. In addition, BNYM
Investment Adviser monitors a variety of areas, including compliance with Fund guidelines, the allocation of IPOs, and compliance with
the firm's Code of Ethics. Furthermore, senior investment and business personnel at BNYM Investment Adviser periodically review the performance
of BNYM Investment Adviser's portfolio managers.
(a)(3) Portfolio Manager Compensation. The
portfolio managers' compensation is comprised primarily of a market-based salary and an incentive compensation plan (annual and long-term).
Funding for INA's Incentive Plan is through
a pre-determined fixed percentage of overall company profitability. Therefore, all bonus awards are based initially on INA's overall performance
as opposed to the performance of a single product or group. All investment professionals are eligible to receive incentive awards. Cash
awards are payable in the February month end pay of the following year. Most of the awards granted have some portion deferred for three
years in the form of deferred cash, INA equity, interests in investment vehicles (consisting of investments in a range of INA products),
or a combination of the above. Individual awards for portfolio managers are discretionary, based on both individual and multi-sector product
risk adjusted performance relative to both benchmarks and peer comparisons over one year, three year and five-year periods. Also considered
in determining individual awards are team participation and general contributions to INA. Individual objectives and goals are also established
at the beginning of each calendar year and are taken into account. Portfolio managers whose compensation exceeds certain levels may elect
to defer portions of their base salaries and/or incentive compensation pursuant to INA's Elective Deferred Compensation Plan.
(a)(4) The dollar range of Fund shares beneficially
owned by the primary portfolio manager is as follows as of the end of the Fund's fiscal year:
Primary Portfolio Manager |
Fund |
Dollar Range of Fund Shares Beneficially Owned |
Jeffrey Burger |
BNY Mellon Municipal Bond Infrastructure Fund, Inc. |
None |
Thomas Casey |
BNY Mellon Municipal Bond Infrastructure Fund, Inc. |
None |
Daniel Rabasco |
BNY Mellon Municipal Bond Infrastructure Fund, Inc. |
None |
(b) Not applicable.
| Item 9. | Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers. |
None.
| Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no material changes to
the procedures applicable to Item 10.