UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-22777
Eaton Vance Municipal Income 2028 Term Trust
(Exact Name of Registrant as Specified in Charter)
One Post Office Square, Boston, Massachusetts 02109
(Address of Principal Executive Offices)
Deidre E. Walsh
One Post Office Square, Boston, Massachusetts 02109
(Name and Address of Agent for Services)
(617) 482-8260
(Registrant’s Telephone Number)
January 31
Date of Fiscal Year End
July 31, 2024
Date of Reporting Period
Item 1. Reports to Stockholders
(a)
% Average Annual Total Returns1,2 | Inception Date | Six Months | One Year | Five Years | Ten Years |
Fund at NAV | 03/28/2013 | 1.77% | 4.40% | 1.55% | 4.38% |
Fund at Market Price | — | 7.44 | 10.19 | 1.53 | 5.48 |
| |||||
Bloomberg 5 Year Municipal Bond Index | — | 0.54% | 2.99% | 0.87% | 1.65% |
% Premium/Discount to NAV3 | |
As of period end | (1.28)% |
Distributions 4 | |
Total Distributions per share for the period | $0.47 |
Distribution Rate at NAV | 4.99% |
Taxable-Equivalent Distribution Rate at NAV | 8.43 |
Distribution Rate at Market Price | 5.05 |
Taxable-Equivalent Distribution Rate at Market Price | 8.54 |
% Total Leverage5 | |
Residual Interest Bond (RIB) Financing | 6.69% |
Credit Quality (% of total investments)1,2 |
1 | For purposes of the Fund’s rating restrictions, ratings are based on Moody’s Investors Service, Inc. (“Moody’s”), S&P Global Ratings (“S&P”) or Fitch Ratings (“Fitch”), as applicable. If securities are rated differently by the ratings agencies, the highest rating is applied. Ratings, which are subject to change, apply to the creditworthiness of the issuers of the underlying securities and not to the Fund or its shares. Credit ratings measure the quality of a bond based on the issuer’s creditworthiness, with ratings ranging from AAA, being the highest, to D, being the lowest based on S&P’s measures. Ratings of BBB or higher by S&P or Fitch (Baa or higher by Moody’s) are considered to be investment-grade quality. Credit ratings are based largely on the ratings agency’s analysis at the time of rating. The rating assigned to any particular security is not necessarily a reflection of the issuer’s current financial condition and does not necessarily reflect its assessment of the volatility of a security’s market value or of the liquidity of an investment in the security. Holdings designated as “Not Rated” (if any) are not rated by the national ratings agencies stated above. |
2 | The chart includes the municipal bonds held by a trust that issues residual interest bonds, consistent with the Portfolio of Investments. |
Abbreviations: | |
AGM | – Assured Guaranty Municipal Corp. |
AMBAC | – AMBAC Financial Group, Inc. |
AMT | – Interest earned from these securities may be considered a tax preference item for purposes of the Federal Alternative Minimum Tax. |
LOC | – Letter of Credit |
NPFG | – National Public Finance Guarantee Corp. |
PSF | – Permanent School Fund |
SPA | – Standby Bond Purchase Agreement |
July 31, 2024 | |
Assets | |
Investments, at value (identified cost $209,690,843) | $ 214,455,406 |
Interest receivable | 1,817,064 |
Receivable for investments sold | 6,078,434 |
Trustees' deferred compensation plan | 35,633 |
Total assets | $222,386,537 |
Liabilities | |
Payable for floating rate notes issued | $ 14,670,026 |
Payable for when-issued securities | 1,797,231 |
Due to custodian | 795,624 |
Payable to affiliates: | |
Investment adviser and administration fee | 115,214 |
Trustees' deferred compensation plan | 35,633 |
Interest expense and fees payable | 118,527 |
Accrued expenses | 107,054 |
Total liabilities | $ 17,639,309 |
Net Assets | $204,747,228 |
Sources of Net Assets | |
Common shares, $0.01 par value, unlimited number of shares authorized | $ 108,858 |
Additional paid-in capital | 206,890,636 |
Accumulated loss | (2,252,266) |
Net Assets | $204,747,228 |
Common Shares Issued and Outstanding | 10,885,802 |
Net Asset Value Per Common Share | |
Net assets ÷ common shares issued and outstanding | $ 18.81 |
Six Months Ended | |
July 31, 2024 | |
Investment Income | |
Interest income | $ 5,033,064 |
Total investment income | $5,033,064 |
Expenses | |
Investment adviser and administration fee | $ 685,088 |
Trustees’ fees and expenses | 7,217 |
Custodian fee | 25,311 |
Transfer and dividend disbursing agent fees | 8,518 |
Legal and accounting services | 38,608 |
Printing and postage | 31,903 |
Interest expense and fees | 481,487 |
Miscellaneous | 23,811 |
Total expenses | $1,301,943 |
Net investment income | $3,731,121 |
Realized and Unrealized Gain (Loss) | |
Net realized gain (loss): | |
Investment transactions | $ (78,112) |
Net realized loss | $ (78,112) |
Change in unrealized appreciation (depreciation): | |
Investments | $ (203,883) |
Net change in unrealized appreciation (depreciation) | $ (203,883) |
Net realized and unrealized loss | $ (281,995) |
Net increase in net assets from operations | $3,449,126 |
Six
Months Ended July 31, 2024 (Unaudited) |
Year
Ended January 31, 2024 | |
Increase (Decrease) in Net Assets | ||
From operations: | ||
Net investment income | $ 3,731,121 | $ 6,967,243 |
Net realized loss | (78,112) | (615,259) |
Net change in unrealized appreciation (depreciation) | (203,883) | (1,288,026) |
Net increase in net assets from operations | $ 3,449,126 | $ 5,063,958 |
Distributions to shareholders | $ (5,107,288)* | $ (7,053,976) |
Tax return of capital to shareholders | $ — | $ (962,794) |
Capital share transactions: | ||
Reinvestment of distributions | $ 15,879 | $ — |
Net increase in net assets from capital share transactions | $ 15,879 | $ — |
Net decrease in net assets | $ (1,642,283) | $ (2,952,812) |
Net Assets | ||
At beginning of period | $ 206,389,511 | $ 209,342,323 |
At end of period | $204,747,228 | $206,389,511 |
* | A portion of the distributions may be deemed a tax return of capital at year-end. See Note 2. |
Six Months Ended | |
July 31, 2024 | |
Cash Flows From Operating Activities | |
Net increase in net assets from operations | $ 3,449,126 |
Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities: | |
Investments purchased | (40,423,990) |
Investments sold | 52,191,375 |
Net amortization/accretion of premium (discount) | (518,984) |
Decrease in interest receivable | 57,256 |
Increase in Trustees’ deferred compensation plan | (2,789) |
Decrease in payable to affiliate for investment adviser and administration fee | (5,181) |
Decrease in interest expense and fees payable | (136,508) |
Increase in payable to affiliate for Trustees' deferred compensation plan | 2,789 |
Decrease in accrued expenses | (26,175) |
Net change in unrealized (appreciation) depreciation from investments | 203,883 |
Net realized loss from investments | 78,112 |
Net cash provided by operating activities | $ 14,868,914 |
Cash Flows From Financing Activities | |
Cash distributions paid | $ (5,091,409) |
Repayment of secured borrowings | (15,350,000) |
Increase in due to custodian | 795,624 |
Net cash used in financing activities | $(19,645,785) |
Net decrease in cash | $ (4,776,871) |
Cash at beginning of period | $ 4,776,871 |
Cash at end of period | $ — |
Supplemental disclosure of cash flow information: | |
Noncash financing activities not included herein consist of: | |
Reinvestment of dividends and distributions | $ 15,879 |
Cash paid for interest and fees on borrowings | 617,995 |
Six
Months Ended July 31, 2024 (Unaudited) |
Year Ended January 31, | |||||
2024 | 2023 | 2022 | 2021 | 2020 | ||
Net asset value — Beginning of period | $ 18.96 | $ 19.23 | $ 20.82 | $ 21.96 | $ 21.88 | $ 20.44 |
Income (Loss) From Operations | ||||||
Net investment income(1) | $ 0.34 | $ 0.64 | $ 0.74 | $ 0.87 | $ 0.88 | $ 0.76 |
Net realized and unrealized gain (loss) | (0.02) | (0.17) | (1.52) | (1.16) | 0.04 | 1.53 |
Total income (loss) from operations | $ 0.32 | $ 0.47 | $ (0.78) | $ (0.29) | $ 0.92 | $ 2.29 |
Less Distributions | ||||||
From net investment income | $ (0.47)* | $ (0.65) | $ (0.81) | $ (0.85) | $ (0.84) | $ (0.85) |
Tax return of capital | — | (0.09) | — | — | — | — |
Total distributions | $ (0.47) | $ (0.74) | $ (0.81) | $ (0.85) | $ (0.84) | $ (0.85) |
Net asset value — End of period | $ 18.81 | $ 18.96 | $ 19.23 | $ 20.82 | $ 21.96 | $ 21.88 |
Market value — End of period | $ 18.57 | $ 17.73 | $ 18.52 | $ 20.51 | $ 22.95 | $ 21.37 |
Total Investment Return on Net Asset Value(2) | 1.77% (3) | 2.80% | (3.66)% | (1.39)% | 4.45% | 11.46% |
Total Investment Return on Market Value(2) | 7.44% (3) | (0.18)% | (5.82)% | (7.03)% | 11.74% | 13.58% |
Ratios/Supplemental Data | ||||||
Net assets, end of period (000’s omitted) | $204,747 | $206,390 | $209,342 | $226,287 | $238,364 | $237,212 |
Ratios (as a percentage of average daily net assets):(4) | ||||||
Expenses excluding interest and fees | 0.81% (5) | 0.92% | 1.04% | 1.03% | 1.04% | 1.04% |
Interest and fee expense(6) | 0.47% (5) | 1.22% | 1.06% | 0.33% | 0.63% | 1.16% |
Total expenses | 1.28% (5) | 2.14% | 2.10% | 1.36% | 1.67% | 2.20% |
Net expenses | 1.28% (5) | 2.14% | 2.10% | 1.36% | 1.67% | 2.20% |
Net investment income | 3.66% (5) | 3.40% | 3.79% | 4.02% | 4.10% | 3.58% |
Portfolio Turnover | 20% (3) | 26% | 16% | 2% | 3% | 1% |
(1) | Computed using average shares outstanding. |
(2) | Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Trust’s dividend reinvestment plan. |
(3) | Not annualized. |
(4) | Total expenses do not reflect amounts reimbursed and/or waived by the adviser and certain of its affiliates, if applicable. Net expenses are net of all reductions and represent the net expenses paid by the Fund. |
(5) | Annualized. |
(6) | Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1G). |
* | A portion of the distributions may be deemed a tax return of capital at year-end. See Note 2. |
vote.
Aggregate cost | $194,481,776 |
Gross unrealized appreciation | $ 5,838,145 |
Gross unrealized depreciation | (534,541) |
Net unrealized appreciation | $ 5,303,604 |
• | Level 1 – quoted prices in active markets for identical investments |
• | 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 a fund's own assumptions in determining the fair value of investments) |
Asset Description | Level 1 | Level 2 | Level 3 | Total |
Corporate Bonds | $ — | $ 2,478,946 | $ — | $ 2,478,946 |
Tax-Exempt Municipal Obligations | — | 200,588,118 | — | 200,588,118 |
Taxable Municipal Obligations | — | 11,388,342 | — | 11,388,342 |
Total Investments | $ — | $214,455,406 | $ — | $214,455,406 |
Officers | |
Kenneth
A. Topping President |
Nicholas
S. Di Lorenzo Secretary |
Deidre
E. Walsh Vice President and Chief Legal Officer |
Laura T.
Donovan Chief Compliance Officer |
James
F. Kirchner Treasurer |
Trustees |
U.S. Customer Privacy Notice | March 2024 |
FACTS | WHAT DOES EATON VANCE DO WITH YOUR PERSONAL INFORMATION? |
Why? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
What? | The
types of personal information we collect and share depend on the product or service you have with us. This information can include:■ Social Security number and income ■ investment experience and risk tolerance ■ checking account information and wire transfer instructions |
How? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Eaton Vance chooses to share; and whether you can limit this sharing. |
Reasons we can share your personal information | Does
Eaton Vance share? |
Can
you limit this sharing? |
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
For our marketing purposes — to offer our products and services to you | Yes | No |
For joint marketing with other financial companies | No | We don’t share |
For our affiliates’ everyday business purposes — information about your transactions and experiences | Yes | No* |
For our affiliates’ everyday business purposes — information about your creditworthiness | Yes | Yes* |
For our affiliates to market to you | Yes | Yes* |
For nonaffiliates to market to you | No | We don’t share |
To
limit our sharing |
Call toll-free 1-800-262-1122 or email: [email protected]Please note:If you are a new customer, we can begin sharing your information 30 days from the date we sent this notice. When you are no longer our customer, we continue to share your information as described in this notice. However, you can contact us at any time to limit our sharing. |
Questions? | Call toll-free 1-800-262-1122 or email: [email protected] |
U.S. Customer Privacy Notice — continued | March 2024 |
Who we are | |
Who is providing this notice? | Eaton Vance Management and our investment management affiliates (“Eaton Vance”) (see Affiliates definition below.) |
What we do | |
How
does Eaton Vance protect my personal information? |
To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information. |
How
does Eaton Vance collect my personal information? |
We
collect your personal information, for example, when you■ open an account or make deposits or withdrawals from your account ■ buy securities from us or make a wire transfer ■ give us your contact informationWe also collect your personal information from others, such as credit bureaus, affiliates, or other companies. |
Why can’t I limit all sharing? | Federal
law gives you the right to limit only■ sharing for affiliates’ everyday business purposes — information about your creditworthiness ■ affiliates from using your information to market to you ■ sharing for nonaffiliates to market to youState laws and individual companies may give you additional rights to limit sharing. (See below for more on your rights under state law.) |
What
happens when I limit sharing for an account I hold jointly with someone else? |
Your choices will apply to everyone on your account. |
Definitions | |
Affiliates | Companies related by common ownership or control. They can be financial and nonfinancial companies.■ Our affiliates include registered investment advisers such as Eaton Vance Management, Eaton Vance Advisers International Ltd., Boston Management and Research, Calvert Research and Management, Parametric Portfolio Associates LLC, Atlanta Capital Management Company LLC, Morgan Stanley Investment Management Inc., Morgan Stanley Investment Management Co.; registered broker-dealers such as Morgan Stanley Distributors Inc. and Eaton Vance Distributors, Inc. (together, the “Investment Management Affiliates”); and companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co. (the “Morgan Stanley Affiliates”). |
Nonaffiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies.■ Eaton Vance does not share with nonaffiliates so they can market to you. |
Joint marketing | A formal agreement between nonaffiliated financial companies that together market financial products or services to you.■ Eaton Vance does not jointly market. |
Other important information |
U.S. Customer Privacy Notice — continued | March 2024 |
*PLEASE NOTE: Eaton Vance does not share your creditworthiness information or your transactions and experiences information with the Morgan Stanley Affiliates, nor does Eaton Vance enable the Morgan Stanley Affiliates to market to you. Your opt outs will prevent Eaton Vance from sharing your creditworthiness information with the Investment Management Affiliates and will prevent the Investment Management Affiliates from marketing their products to you.Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Nonaffiliates unless you provide us with your written consent to share such information.California: Except as permitted by law, we will not share personal information we collect about California residents with Nonaffiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us. |
proxyvoting.
(b) Not applicable.
Item 2. Code of Ethics
Not required in this filing.
Item 3. Audit Committee Financial Expert
Not required in this filing.
Item 4. Principal Accountant Fees and Services
Not required in this filing.
Item 5. Audit Committee of Listed Registrants
Not required in this filing.
Item 6. Schedule of Investments
(a) | Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR. |
(b) | Not applicable. |
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies
Not applicable.
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies
Not applicable.
Item 9. Proxy Disclosures for Open-End Management Investment Companies
Not applicable.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies
Not applicable.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract
The information is included in Item 1 of this Form N-CSR.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not required in this filing.
Item 13. Portfolio Managers of Closed-End Management Investment Companies
Not required in this filing.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
No such purchases this period.
Item 15. Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may recommend nominee to the Trust’s Board of Trustees since the Trust last provided disclosure in response to this item.
Item 16. Controls and Procedures
(a) | It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure. |
(b) | There have been no changes in the registrant’s internal controls over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
No activity to report for the registrant’s most recent fiscal year end.
Item 18. Recovery of Erroneously Awarded Compensation
Not applicable.
Item 19. Exhibits
(a)(1) |
Registrant’s Code of Ethics – Not applicable (please see Item 2). | |
(a)(2)(i) |
Principal Financial Officer’s Section 302 certification. | |
(a)(2)(ii) |
Principal Executive Officer’s Section 302 certification. | |
(b) |
Combined Section 906 certification. |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Eaton Vance Municipal Income 2028 Term Trust | ||
By: | /s/ Kenneth A. Topping | |
Kenneth A. Topping | ||
Principal Executive Officer | ||
Date: | September 23, 2024 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ James F. Kirchner | |
James F. Kirchner | ||
Principal Financial Officer | ||
Date: | September 23, 2024 | |
By: | /s/ Kenneth A. Topping | |
Kenneth A. Topping | ||
Principal Executive Officer | ||
Date: | September 23, 2024 |