Eaton Vance High Income 2021 Target Term Trust Announces Wind-Up Period, Investment Policy Changes and Name Change
BOSTON, Dec. 21, 2020 /PRNewswire/ -- Eaton Vance High Income 2021 Target Term Trust (NYSE: EHT) (Trust) announced today that, effective January 4, 2021, the Trust will enter into wind-up in anticipation of its termination on July 1, 2021. The Trust is a "target term" fund that, on the Trust's designated termination date, will cease investment operations, liquidate its portfolio and distribute the net proceeds to shareholders, unless the term is extended for a period of up to six months by a vote of the Trust's Board of Trustees.
The Trust has as its investment objective to provide a high level of current income and to return the Trust's original $9.85 net asset value per share to shareholders at termination. The Trust's objective is not a guarantee, and there can be no assurance it will be attained. Under normal circumstances, the Trust invests at least 80% of its managed assets in corporate debt obligations, including obligations that, at the time of investment, are rated below investment grade (i.e., those rated BB+/Ba1 or lower) or are unrated but deemed equivalent by the Trust's investment adviser, Eaton Vance Management.
During the wind-up period, the Trust may deviate from its normal investment policies, and may invest up to 100% of its managed assets in high quality, short-term securities. High quality, short-term securities include securities rated investment grade (BBB-/Baa3 or higher, or unrated but deemed equivalent by the Trust's investment adviser) with a final or remaining maturity of 397 days or less. From January 4, 2021 through the remainder of its term, the Trust will invest at least 80% of its managed assets in (i) corporate debt obligations, including high yield obligations; and (ii) short-term investment grade securities that have a final or remaining maturity of 397 days or less, so long as the maturity of any security in the Trust is no later than January 1, 2022. These expanded investment parameters are intended to provide the Trust additional flexibility to reinvest the proceeds of matured or called portfolio securities, or securities sold by the Trust's portfolio managers, in higher quality, short-term securities. As the Trust gets closer to its termination date, the Trust will begin to transition its remaining below investment grade portfolio holdings to high quality, short-term securities to enhance the Trust's ability to efficiently liquidate its portfolio at termination. In August 2020, the Trust retired its leverage in anticipation of termination. In connection with the investment policy changes, effective January 4, 2021, the Trust's name will change to Eaton Vance 2021 Target Term Trust. The Trust will continue to be listed on the New York Stock Exchange under the ticker symbol "EHT".
As described in the Trust's prospectus, as the Trust approaches its termination date, the elimination of financial leverage, the general shortening of the time-to-maturity of the Trust's portfolio securities and the repositioning of the Trust's portfolio into higher-quality securities will tend to reduce interest rate risk and credit risk and improve portfolio liquidity, but also tend to reduce amounts of income available to pay as dividends to common shareholders.
The Trust's investment adviser is Eaton Vance Management, a subsidiary of Eaton Vance Corp. (NYSE: EV). Eaton Vance provides advanced investment strategies and wealth solutions to forward-thinking investors around the world. Through principal investment affiliates Eaton Vance Management, Parametric, Atlanta Capital, Hexavest and Calvert, the Company offers a diversity of investment approaches, encompassing bottom-up and top-down fundamental active management, responsible investing, systematic investing and customized implementation of client-specified portfolio exposures. As of October 31, 2020, Eaton Vance had consolidated assets under management of $515.7 billion. For more information, visit eatonvance.com.
The information contained herein is provided for informational purposes only and does not constitute a solicitation of an offer to buy or sell Trust shares. Shares of the Trust are available for purchase and sale only through secondary market trading on an exchange or alternative trading venue.
Shares of closed-end funds often trade at a discount from their net asset value. The market price of Trust shares may vary from net asset value based on factors affecting the supply and demand for shares, such as Trust distribution rates relative to similar investments, investors' expectations for future distribution changes, the clarity of the Trust's investment strategy and future return expectations, and investors' confidence in the underlying markets in which the Trust invests. Trust shares are subject to investment risk, including possible loss of principal invested. The Trust is not a complete investment program and investors may lose money investing in the Trust. An investment in the Trust may not be appropriate for all investors. Before investing, an investor should consider carefully the Trust's investment objective, risks, charges and expenses.
Statements in this press release that are not historical facts are forward-looking statements as defined by the U.S. securities laws. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to uncertainties and other factors which are, in some cases, beyond the Trust's control and could cause actual results to differ materially from those set forth in the forward-looking statements.
SOURCE Eaton Vance Management
