Fitch: TIAA Acquisition to Have No Impact on Nuveen CEFs

The acquisition of Nuveen Investments (Nuveen) by TIAA-CREFF will have a minimal impact on Nuveen's closed-end fund business, according to Fitch Ratings. Credit ratings on Nuveen's closed-end fund preferred securities are expected to remain unaffected.

Each of the Nuveen closed-end funds rated by Fitch is a Registered Investment Company as defined under the Investment Company Act of 1940 and operates as an independent entity, with boards of directors that are separate from that of Nuveen. Since the ratings are based primarily on the structural protections and asset coverage available to preferred shareholders as well as the capabilities of Nuveen as an investment advisor, Fitch does not expect to take any rating actions on the preferred stock issued by the closed-end funds as a result of the acquisition.

As of Aug. 29, 2014, Fitch rated $8.9 billion of preferred stock issued by 44 Nuveen closed-end funds, with $31.0 billion of assets under management.

Nuveen announced Wednesday that it has been acquired by TIAA-CREF for $6.25 billion, inclusive of Nuveen's outstanding debt. The agreement was announced in April. The boards of directors at both TIAA-CREF and Nuveen each have approved the transaction, as have the boards of directors and shareholders of Nuveen's closed-end funds.

Nuveen will operate as a separate and independent subsidiary within TIAA-CREF's asset management business and will maintain its brand and present operating model. The investment teams at both organizations will remain separate with leadership across Nuveen and its investment affiliates remaining intact and with Nuveen management teams retaining their current roles. The closing, in aggregate, creates a diversified financial services organization managing $844 billion of assets based on June 30, 2014 data. As of this date, Nuveen's assets under management were $231 billion.

Additional information is available on www.fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

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