MainStay MacKay DefinedTerm Municipal Opportunities Fund
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 811-22551
MAINSTAY MACKAY DEFINEDTERM MUNICIPAL OPPORTUNITIES FUND
(Exact name of Registrant as specified in charter)
51 Madison Avenue, New York, NY 10010
(Address of principal executive offices) (Zip code)
J. Kevin Gao, Esq.
30 Hudson
Street
Jersey City, New Jersey 07302
(Name and address of agent for service)
Registrant’s telephone number, including area code: (212) 576-7000
Date of fiscal year end: May 31
Date of reporting period:
November 30, 2023
FORM N-CSR
| Item 1. |
Reports to Stockholders. |
MainStay MacKay DefinedTerm Municipal Opportunities Fund
Message from the President and Semiannual Report
Unaudited | November 30, 2023 | NYSE
Symbol MMD
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| Not
FDIC/NCUA Insured |
Not
a Deposit |
May
Lose Value |
No
Bank Guarantee |
Not
Insured by Any Government Agency |
This page intentionally left blank
Message from the President
Shifting interest rates and inflationary expectations produced high levels of
market volatility, seen in the changing yields and prices for various sectors of the bond market during the six-month reporting period ended November 30, 2023. While long-term Treasury securities lost ground, shorter-term U.S. government securities
generally posted gains, as did most municipal and corporate bonds.
For much of the reporting period, the federal funds rate set
by U.S. Federal Reserve (the “Fed”) stood at 5.25%–5.50%, the highest level since 2008. Inflation hovered between 3.0% and 3.7%, down substantially from the June 2022 peak of 9.1%, but still well above the Fed target of 2.0%.
Although economic growth remained surprisingly robust, supported by high levels of employment and consumer spending, few if any further rate increases were expected. In fact, by the end of the reporting period, the market began pricing in rate cuts
for 2024. In response, the yield on the 10-year U.S. Treasury bond, which rose from June through September, dipped from a high of over 4.9% in mid-October 2023 to 4.3% as of November 30, 2023, but stayed above the 4.0% level. While short-term yields
also declined, the yield curve remained inverted, meaning that short-term yields continued to exceed long-term yields, with the two-year Treasury yield ending the reporting period at 4.7%.
The municipal market generally responded to Treasury yield
trends. Municipal bond prices rose modestly during the first two months of the reporting period, and then declined into negative territory as yields rose from August through mid-October 2023. In late October, bond prices began rising as
yields fell, with prices continuing to gain ground in November, posting their strongest monthly performance for more than four decades. Municipal bonds also benefited late in the reporting period from apparently
favorable supply and demand dynamics. Longer-term, more
interest-rate-sensitive issues outperformed, as did lower-credit-rated instruments. Top-performing sectors included hospitals and housing, while on a geographic basis, Puerto Rico credits led returns.
Despite increasing expectations for Fed rate cuts in 2024,
statements from the central bank continue to insist that the path forward remains uncertain, with future actions dependent on emergent economic data. Whether the Fed can reach its inflation target without driving the economy into recession remains
to be seen. Nevertheless, a generally more favorable fixed-income outlook is likely to stand the municipal sector in good stead. MainStay MacKay DefinedTerm Municipal Opportunities Fund remains dedicated to identifying relative value across the
municipal bond market through its opportunistic, actively managed investment approach, seeking attractive, generally tax-exempt monthly distributions and total return. The management team’s deep experience and relationships within the
municipal bond industry exemplifies the multi-boutique investment philosophy that sets New York Life Investments apart.
Thank you for trusting us to help meet your investment
needs.
Sincerely,
Kirk C. Lehneis
President
The opinions expressed are as of the date of this report and
are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment. Past performance is no guarantee of future
results.
Not part of the Semiannual Report
Certain material in this report may include statements that
constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates and information about possible or future results or events related to the Fund, market
or regulatory developments. The views expressed herein are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the
views expressed herein. The views expressed herein are subject to change at any time based upon economic, market, or other conditions and the Fund undertakes no obligation to update the views expressed herein.
Fund Performance
and Statistics (Unaudited)
Performance data quoted represents past performance of Common shares of the
Fund. Past performance is no guarantee of future results. Because of market volatility and other factors, current performance may be lower or higher than the figures shown. Investment return and principal value will fluctuate. For performance information current to the most recent month-end, please visit newyorklifeinvestments.com/mmd.
The performance table and graph do not reflect the deduction
of taxes that a shareholder would pay on distributions or the sale of Fund shares.
| Average
Annual Total Returns for the Period-Ended November 30, 2023* |
| |
Six
Months1 |
One
Year |
Five
Years |
Ten
Years |
| Net
Asset Value (“NAV”)2 |
1.15
% |
4.25
% |
1.79%
|
5.66%
|
| Market
Price2 |
(4.88)
|
(1.54)
|
0.87
|
6.21
|
| Bloomberg
Municipal Bond Index3 |
2.29
|
4.28
|
2.03
|
2.77
|
| Morningstar
Muni National Long Category Average4 |
2.16
|
4.02
|
1.36
|
3.78
|
| *
|
Returns
for indices reflect no deductions for fees, expenses or taxes, except for foreign withholding taxes where applicable. Results assume reinvestment of all dividends and capital gains. An investment cannot be made directly in an index. |
| 1.
|
Not
annualized. |
| 2.
|
Total
returns assume dividends and capital gains distributions are reinvested. |
| 3.
|
The
Bloomberg Municipal Bond Index is considered representative of the broad market for investment-grade, tax-exempt bonds with a maturity of at least one year. Bonds subject to the alternative minimum tax or with floating or zero coupons are excluded.
|
| 4.
|
The
Morningstar Muni National Long Category Average is representative of funds that invest in bonds issued by various state and local governments to fund public projects. The income from these bonds is generally free from federal taxes. These funds
have durations of more than 7 years. Results are based on average total returns of similar funds with all dividends and capital gain distributions reinvested. |
Fund Statistics as of November 30,
2023 (Unaudited)
| NYSE
Symbol |
MMD
|
Premium/Discount
1 |
(5.91)%
|
| CUSIP
|
56064K100
|
Total
Net Assets (millions) |
$468.0
|
| Inception
Date |
6/26/2012
|
Total
Managed Assets (millions)2 |
$661.2
|
| Market
Price |
$15.77
|
Leverage
3 |
28.81%
|
| NAV
|
$16.76
|
Percent
of AMT Bonds4 |
20.69%
|
| 1.
|
Premium/Discount
is the percentage (%) difference between the market price and the NAV. When the market price exceeds the NAV, the Fund is trading at a premium. When the market price is less than the NAV, the Fund is trading at a discount. |
| 2.
|
“Managed
Assets” is defined as the Fund’s total assets, minus the sum of its accrued liabilities (other than Fund liabilities incurred for the purpose of creating effective leverage (i.e. tender option bonds) or Fund liabilities related to
liquidation preference of any Preferred shares issued). |
| 3.
|
Leverage
is based on the use of proceeds received from tender option bond transactions, issuance of Preferred shares, funds borrowed from banks or other institutions or derivative transactions, expressed as a percentage of Managed Assets. |
| 4.
|
Alternative
Minimum Tax (“AMT”) is a separate tax computation under the Internal Revenue Code that, in effect, eliminates many deductions and credits and creates a tax liability for an individual who would otherwise pay little or no tax, expressed
as a percentage of Managed Assets. |
Portfolio Composition as of November 30, 2023†(Unaudited)
| Illinois
|
17.3%
|
| New
York |
14.7
|
| California
|
10.4
|
| Puerto
Rico1 |
8.2
|
| Florida
|
6.8
|
| Texas
|
6.7
|
| Pennsylvania
|
5.6
|
| Utah
|
3.6
|
| New
Jersey |
3.4
|
| Nevada
|
3.1
|
| U.S.
Virgin Islands |
2.4
|
| Massachusetts
|
2.4
|
| Virginia
|
2.3
|
| South
Carolina |
2.1
|
| Michigan
|
2.0
|
| Washington
|
1.1%
|
| Kentucky
|
0.9
|
| Wisconsin
|
0.9
|
| West
Virginia |
0.7
|
| New
Hampshire |
0.7
|
| Colorado
|
0.7
|
| Georgia
|
0.5
|
| District
of Columbia |
0.4
|
| Nebraska
|
0.4
|
| Arizona
|
0.2
|
| North
Carolina |
0.1
|
| Other
Assets, Less Liabilities |
2.4
|
| |
100.0%
|
| †
|
As a
percentage of Managed Assets. |
| 1.
|
As
of November 30, 2023, 54.5% of the Puerto Rico municipal securities held by the Fund were insured and all bonds continue to pay full principal and interest. |
See Portfolio of Investments beginning on page 10
for specific holdings within these categories. The Fund's holdings are subject to change.
| 6
|
MainStay MacKay DefinedTerm
Municipal Opportunities Fund |
Top Ten Holdings and/or Issuers Held as of November 30, 2023 (excluding short-term investments)# (Unaudited)
| 1.
|
Chicago
O'Hare International Airport, 5.25%, due 1/1/45 (a) |
| 2.
|
Metropolitan
Transportation Authority, 5.00%-5.25%, due 11/15/45–11/15/56 |
| 3.
|
Pennsylvania
Economic Development Financing Authority, 5.75%-6.00%, due 7/1/53–12/31/62 (a) |
| 4.
|
Orange
County Convention Center, 4.00%, due 10/1/33 |
| 5.
|
City
of Chicago, 5.00%-6.00%, due 1/1/27–1/1/49 |
| 6.
|
Puerto Rico
Sales Tax Financing Corp., 4.55%-5.00%, due 7/1/40–7/1/58 |
| 7.
|
City
of Salt Lake, 5.00%, due 7/1/47 |
| 8.
|
Chicago
Board of Education, 5.75%-7.00%, due 4/1/34–12/1/46 |
| 9.
|
Triborough
Bridge & Tunnel Authority, 5.00%-5.50%, due 5/15/47–5/15/63 |
| 10.
|
Los
Angeles Water and Power Department, 5.00%, due 7/1/48 |
| #
|
Some of
these holdings have been transferred to a Tender Option Bond (“TOB”) Issuer in exchange for TOB Residuals and cash. |
| (a)
|
Municipal
security may feature credit enhancements, such as bond insurance. |
Credit Quality as of November 30, 2023^ (Unaudited)
^ As a
percentage of total investments.
Ratings apply
to the underlying portfolio of bonds held by the Fund and are rated by an independent rating agency, such as Standard & Poor’s (“S&P”), Moody’s Investors Service, Inc. and/or Fitch Ratings, Inc. If the ratings
provided by the ratings agencies differ, the higher rating will be utilized. If only one rating is provided, the available rating will be utilized. Securities that are unrated by the rating agencies are reflected as such in the breakdown. Unrated
securities do not necessarily indicate low quality. S&P rates borrowers on a scale from AAA to D. AAA through BBB- represent investment grade, while BB+ through D represent non-investment grade.
Portfolio
Management Discussion and Analysis (Unaudited)
Questions answered by portfolio managers John Loffredo,
CFA, Robert DiMella, CFA, Michael Petty, David Dowden, Scott Sprauer, John Lawlor and Michael Denlinger, CFA, of MacKay Shields LLC, the Fund’s Subadvisor.
How did MainStay MacKay DefinedTerm Municipal Opportunities Fund perform
relative to its benchmark and peer group during the six months ended November 30, 2023?
For the six months ended November 30, 2023, MainStay MacKay
DefinedTerm Municipal Opportunities Fund returned 1.15% based on net asset value applicable to Common shares and −4.88% based on market price. At net asset value and at market price, the Fund underperformed the 2.29% return of its benchmark,
the Bloomberg Municipal Bond Index (the “Index”). At net asset value and at market price, the Fund underperformed, the 2.16% return of the Morningstar Muni National Long Category Average.1
What factors affected the Fund’s relative
performance during the reporting period?
During the
reporting period, the Fund underperformed the Index, in part due to security selection. Across the credit spectrum, underweight allocation to, and security selection among,
AA-rated2 credits detracted from relative returns. From a geographic perspective, overweight allocation to, and security selection among, Puerto Rico bonds made positive
contributions to relative returns, while underweight allocation to credits from Texas offset some of those gains. (Contributions take weightings and total returns into account.) In addition, security selection among bonds on the short end of the
yield curve3 weighed on a relative basis. Finally, the Fund’s overweight exposure to bonds with coupons of 6% detracted from relative returns.
How was the Fund’s leverage strategy implemented
during the reporting period?
During the reporting
period, the Fund's leverage decreased to 28.81%. This decrease was primarily due to repositioning of the portfolio and market volatility impacting the Fund's market value. The Fund continued to exit positions in names that no longer
represented spread tightening4 opportunities. In addition, the Fund has focused its reinvestments on more liquid bonds and structures with potential spread tightening characteristics.
What was the Fund’s duration5 strategy during the reporting period?
We do not make interest rate forecasts or duration bets.
Rather, we aim to take a duration-neutral posture in the Fund relative to the Index. As of the end of the reporting period, the Fund's modified duration to worst6 was 5.93 years
compared to 5.93 years for the Index.
During the
reporting period, which sectors were the strongest positive contributors to the Fund’s relative performance and which sectors were particularly weak?
During the reporting period, overweight allocation to the
special tax sector contributed positively to the Fund’s return relative to the Index, as did security selection within the tobacco sector. Conversely, an overweight allocation to the electric sector detracted most significantly. In addition,
underweight allocations to the IDR/PCR and hospital sectors further weighed on a relative basis.
How did the Fund’s market segments change during
the reporting period?
During the reporting period, there
were no material changes to the weightings in the Fund. At the margin, we increased the Fund’s exposure to the leasing and local general obligation sectors during the reporting period. In addition, we increased the Fund’s credit exposure
to A-rated7 bonds. Furthermore, we increased the Fund’s state exposure to Virginia. Conversely, we decreased the Fund’s exposure to the industrial development
revenue and electric sectors, as well as credit exposure to BBB-rated8 bonds and state exposure to Guam.
| 1.
|
See "Investment and Performance
Comparison" for more information on Fund returns. |
| 2.
|
An obligation rated
‘AA’ by Standard & Poor’s (“S&P’) is deemed by S&P to differ from the highest-rated obligations only to a small degree. In the opinion of S&P, the obligor's capacity to meet its financial commitment on
the obligation is very strong. When applied to Fund holdings, ratings are based solely on the creditworthiness of the bonds in the portfolio and are not meant to represent the security or safety of the Fund. |
| 3.
|
The yield curve is a line that
plots the yields of various securities of similar quality—typically U.S. Treasury issues—across a range of maturities. The U.S. Treasury yield curve serves as a benchmark for other debt and is used in economic forecasting.
|
| 4.
|
The terms “spread”
and “yield spread” may refer to the difference in yield between a security or type of security and comparable U.S. Treasury issues. The terms may also refer to the difference in yield between two specific securities or types of
securities at a given time. |
| 5.
|
Duration is a measure of the
price sensitivity of a fixed-income investment to changes in interest rates. Duration is expressed as a number of years and is considered a more accurate sensitivity gauge than average maturity. |
| 6.
|
Modified duration is
inversely related to the approximate percentage change in price for a given change in yield. Duration to worst is the duration of a bond computed using the bond’s nearest call date or maturity, whichever comes first. This measure ignores
future cash flow fluctuations due to embedded optionality. |
| 7.
|
An obligation rated
‘A’ by S&P is deemed by S&P to be somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. In the opinion of S&P, however, the obligor's
capacity to meet its financial commitment on the obligation is still strong. When applied to Fund holdings, ratings are based solely on the creditworthiness of the bonds in the portfolio and are not meant to represent the security or safety of the
Fund. |
| 8.
|
An obligation rated
‘BBB’ by S&P is deemed by S&P to exhibit adequate protection parameters. In the opinion of S&P, however, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to
meet its financial commitment on the obligation. When applied to Fund holdings, ratings are based solely on the creditworthiness of the bonds in the portfolio and are not meant to represent the security or safety of the
Fund. |
| 8
|
MainStay MacKay
DefinedTerm Municipal Opportunities Fund |
How was the
Fund positioned at the end of the reporting period?
As
of November 30, 2023, the Fund remained overweight to the long end of the yield curve, where municipal yields were more attractive. In addition, the Fund held overweight exposure to the special tax and transportation sectors. Across states, the Fund
held overweight exposure to bonds from Illinois and Puerto Rico. From a credit perspective, the Fund held overweight exposure to non-investment-grade bonds, as well as non-rated bonds not held in the Index. As of the same date, the Fund held
underweight exposure to the state general obligation, local general obligation and hospital sectors, as well as AAA-rated9 credits and holdings from the state of
California.
| 9.
|
An obligation rated
‘AAA’ has the highest rating assigned by S&P, and in the opinion of S&P, the obligor’s capacity to meet its financial commitment on the obligation is extremely strong. When applied to Fund holdings, ratings are based solely
on the creditworthiness of the bonds in the portfolio and are not meant to represent the security or safety of the Fund. |
The opinions expressed are those of the portfolio managers as
of the date of this report and are subject to change. There is no guarantee that any forecasts will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.
Portfolio of
Investments November 30, 2023† (Unaudited)
| |
Principal
Amount |
Value
|
| Municipal
Bonds 137.7% |
| Arizona
0.3% (0.2% of Managed Assets) |
| Industrial
Development Authority of the City of Phoenix (The), Espiritu Community Development Corp., Revenue Bonds |
|
|
| Series
A |
|
|
| 6.25%,
due 7/1/36 |
$ 1,655,000
|
$ 1,545,664
|
| California
14.7% (10.4% of Managed Assets) |
| Calexico
Unified School District, Election of 2020, Unlimited General Obligation |
|
|
| Insured:
BAM |
|
|
| 3.00%,
due 8/1/52 |
3,600,000
|
2,575,379
|
| California
Municipal Finance Authority, LAX Integrated Express Solutions LLC, Revenue Bonds, Senior Lien |
|
|
| Series
A |
|
|
| 5.00%,
due 12/31/43 (a) |
5,500,000
|
5,552,332
|
| California
Municipal Finance Authority, United Airlines, Inc. Project, Revenue Bonds |
|
|
| 4.00%,
due 7/15/29 (a) |
2,305,000
|
2,231,940
|
| Los
Angeles Water and Power Department, Water System, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 7/1/48 (b) |
15,000,000
|
15,720,509
|
| Regents
of the University of California Medical Center Pooled, Revenue Bonds |
|
|
| Series
P |
|
|
| 5.00%,
due 5/15/47 |
1,220,000
|
1,326,576
|
| Sacramento
City Unified School District, Election of 2020, Unlimited General Obligation |
|
|
| Series
A, Insured: BAM |
|
|
| 5.50%,
due 8/1/52 |
6,000,000
|
6,557,490
|
| San
Diego County Regional Airport Authority, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 7/1/56 (b) |
5,500,000
|
5,835,884
|
| Series
B |
|
|
| 5.00%,
due 7/1/46 (a) |
3,250,000
|
3,356,489
|
| Series
B |
|
|
| 5.00%,
due 7/1/51 (a) |
2,705,000
|
2,773,213
|
| |
Principal
Amount |
Value
|
| California
|
| San
Francisco City & County Airport Commission, San Francisco International Airport, Revenue Bonds |
|
|
| Series
B |
|
|
| 5.00%,
due 5/1/46 (a)(b) |
$ 9,500,000
|
$ 9,530,631
|
| San
Francisco City & County Airport Commission, San Francisco International Airport, Revenue Bonds, Second Series |
|
|
| Series
C |
|
|
| 5.00%,
due 5/1/33 (a) |
3,000,000
|
3,344,496
|
| Trustees
of the California State University, Systemwide, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.25%,
due 11/1/53 (b) |
8,780,000
|
9,817,513
|
| |
|
68,622,452
|
| Colorado
1.0% (0.7% of Managed Assets) |
| Copper
Ridge Metropolitan District, Revenue Bonds |
|
|
| 5.00%,
due 12/1/39 |
3,950,000
|
3,654,541
|
| Sterling
Ranch Community Authority Board, Metropolitan District No. 2, Revenue Bonds |
|
|
| Series
A |
|
|
| 4.25%,
due 12/1/50 |
1,000,000
|
835,095
|
| |
|
4,489,636
|
| District
of Columbia 0.6% (0.4% of Managed Assets) |
| Metropolitan
Washington Airports Authority, Dulles Toll Road, Revenue Bonds, Second Lien |
|
|
| Series
C, Insured: AGC |
|
|
| 6.50%,
due 10/1/41 (c) |
2,400,000
|
2,632,332
|
| Florida
9.6% (6.8% of Managed Assets) |
| City
of Miami Beach, Unlimited General Obligation |
|
|
| 4.00%,
due 5/1/49 |
10,000,000
|
9,629,435
|
| County
of Broward, Airport System, Revenue Bonds |
|
|
| Series
2017 |
|
|
| 5.00%,
due 10/1/42 (a) |
4,500,000
|
4,596,717
|
| County
of Broward, Convention Center Expansion Project, Revenue Bonds |
|
|
| 4.00%,
due 9/1/51 |
3,500,000
|
3,249,477
|
| Insured:
BAM |
|
|
| 4.00%,
due 9/1/51 |
2,750,000
|
2,553,160
|
The notes to the financial statements are an integral part of, and
should be read in conjunction with, the financial statements.
| 10
|
MainStay MacKay
DefinedTerm Municipal Opportunities Fund |
| |
Principal
Amount |
Value
|
| Florida
(continued) |
| Orange
County Convention Center, Revenue Bonds |
|
|
| Series
B |
|
|
| 4.00%,
due 10/1/33 |
$ 25,000,000
|
$ 25,091,470
|
| |
|
45,120,259
|
| Georgia
0.7% (0.5% of Managed Assets) |
| Municipal
Electric Authority of Georgia, Plant Vogtle Units 3&4 Project, Revenue Bonds |
|
|
| Series
A, Insured: AGM |
|
|
| 5.00%,
due 7/1/55 |
3,200,000
|
3,265,813
|
| Illinois
24.5% (17.3% of Managed Assets) |
| Chicago
Board of Education, Unlimited General Obligation |
|
|
| Series
A |
|
|
| 7.00%,
due 12/1/44 |
2,880,000
|
2,973,685
|
| Chicago
Board of Education, Dedicated Capital Improvement, Revenue Bonds |
|
|
| 5.75%,
due 4/1/34 |
8,000,000
|
8,402,744
|
| Chicago
Board of Education, Dedicated Capital Improvement, Unlimited General Obligation (d) |
|
|
| Series
A |
|
|
| 7.00%,
due 12/1/46 |
4,000,000
|
4,237,710
|
| Series
B |
|
|
| 7.00%,
due 12/1/42 |
3,500,000
|
3,725,375
|
| Chicago
O'Hare International Airport, General Airport, Revenue Bonds, Senior Lien |
|
|
| Series
A, Insured: AGM |
|
|
| 5.25%,
due 1/1/45 (a)(b) |
30,000,000
|
31,683,412
|
| City
of Chicago, Unlimited General Obligation |
|
|
| Series
A |
|
|
| 5.25%,
due 1/1/27 |
3,000,000
|
3,064,699
|
| Series
A |
|
|
| 5.50%,
due 1/1/49 |
5,000,000
|
5,116,809
|
| Series
A |
|
|
| 6.00%,
due 1/1/38 |
7,180,000
|
7,475,906
|
| Series
E |
|
|
| 5.50%,
due 1/1/42 |
2,000,000
|
2,007,459
|
| City
of Chicago, Wastewater Transmission, Revenue Bonds, Second Lien |
|
|
| Series
C |
|
|
| 5.00%,
due 1/1/32 |
7,120,000
|
7,197,298
|
| |
Principal
Amount |
Value
|
| Illinois
|
| Metropolitan
Pier & Exposition Authority, McCormick Place Expansion Project, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 6/15/57 |
$ 4,665,000
|
$ 4,700,739
|
| Series
B-1, Insured: AGM |
|
|
| (zero
coupon), due 6/15/43 |
10,000,000
|
4,055,321
|
| Sales
Tax Securitization Corp., Revenue Bonds |
|
|
| Series
C, Insured: BAM |
|
|
| 5.25%,
due 1/1/48 (b) |
11,000,000
|
11,426,207
|
| State
of Illinois, Unlimited General Obligation |
|
|
| 5.50%,
due 5/1/30 |
2,500,000
|
2,745,360
|
| 5.50%,
due 5/1/39 (b) |
8,380,000
|
9,111,647
|
| Will
County School District No. 114, Manhattan, Unlimited General Obligation |
|
|
| Insured:
BAM |
|
|
| 5.50%,
due 9/1/52 |
6,000,000
|
6,558,625
|
| |
|
114,482,996
|
| Kentucky
1.3% (0.9% of Managed Assets) |
| Kentucky
Development Corp. Industrial Building, Communications Network Authority, Revenue Bonds |
|
|
| 5.00%,
due 9/1/44 (b) |
5,975,000
|
6,242,080
|
| Massachusetts
3.3% (2.4% of Managed Assets) |
| Commonwealth
of Massachusetts, Consolidated Loan, Unlimited General Obligation |
|
|
| Series
C |
|
|
| 5.00%,
due 10/1/52 |
3,500,000
|
3,759,052
|
| Commonwealth
of Massachusetts Transportation Fund, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 6/1/53 (b) |
3,535,000
|
3,798,102
|
| Massachusetts
School Building Authority, Senior Dedicated Sales Tax, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 8/15/45 (b) |
7,500,000
|
7,983,084
|
| |
|
15,540,238
|
| Michigan
2.8% (2.0% of Managed Assets) |
| Michigan
Finance Authority, Bronson Health Care Group Obligated Group, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 5/15/54 |
5,000,000
|
5,057,394
|
The notes to the financial statements are an integral part of, and
should be read in conjunction with, the financial statements.
11
Portfolio of
Investments November 30, 2023† (Unaudited) (continued)
| |
Principal
Amount |
Value
|
| Michigan
(continued) |
| State
of Michigan, Trunk Line, Revenue Bonds |
|
|
| Series
2023 |
|
|
| 5.50%,
due 11/15/44 (b) |
$ 7,000,000
|
$ 8,009,624
|
| |
|
13,067,018
|
| Nebraska
0.5% (0.4% of Managed Assets) |
| Omaha
Public Power District, Electric System, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 2/1/47 |
2,300,000
|
2,485,088
|
| Nevada
4.3% (3.1% of Managed Assets) |
| County
of Clark, Regional Transportation Commission of Southern Nevada Motor Fuel Tax, Revenue Bonds |
|
|
| 3.00%,
due 7/1/42 |
4,090,000
|
3,332,100
|
| Las
Vegas Convention & Visitors Authority, Convention Center Expansion, Revenue Bonds |
|
|
| Series
B |
|
|
| 5.00%,
due 7/1/43 |
5,000,000
|
5,203,361
|
| Las
Vegas Valley Water District, Water, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 6/1/53 (b) |
11,000,000
|
11,740,383
|
| |
|
20,275,844
|
| New
Hampshire 1.0% (0.7% of Managed Assets) |
| Manchester
Housing and Redevelopment Authority, Inc., Revenue Bonds |
|
|
| Series
B, Insured: BAM |
|
|
| (zero
coupon), due 1/1/24 |
4,740,000
|
4,721,448
|
| New
Jersey 4.7% (3.4% of Managed Assets) |
| New
Jersey Economic Development Authority, Continental Airlines, Inc. Project, Revenue Bonds |
|
|
| 5.25%,
due 9/15/29 |
5,000,000
|
5,002,702
|
| New
Jersey Economic Development Authority, New Jersey Transit Transportation Project, Revenue Bonds |
|
|
| Series
A |
|
|
| 4.00%,
due 11/1/39 |
3,400,000
|
3,406,247
|
| New
Jersey Transportation Trust Fund Authority, Transportation Program, Revenue Bonds |
|
|
| Series
AA |
|
|
| 5.25%,
due 6/15/43 |
4,595,000
|
4,819,690
|
| |
Principal
Amount |
Value
|
| New
Jersey |
| New
Jersey Transportation Trust Fund Authority, Transportation Program, Revenue Bonds (continued) |
|
|
| Series
BB |
|
|
| 4.00%,
due 6/15/44 |
$ 1,000,000
|
$ 952,506
|
| State
of New Jersey, COVID-19 General Obligation Emergency Bonds, Unlimited General Obligation |
|
|
| Series
A |
|
|
| 4.00%,
due 6/1/31 |
2,900,000
|
3,084,381
|
| Tobacco
Settlement Financing Corp., Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 6/1/46 |
300,000
|
301,795
|
| Series
B |
|
|
| 5.00%,
due 6/1/46 |
4,660,000
|
4,672,977
|
| |
|
22,240,298
|
| New
York 20.7% (14.7% of Managed Assets) |
| Metropolitan
Transportation Authority, Revenue Bonds |
|
|
| Series
A-1 |
|
|
| 5.00%,
due 11/15/45 (b) |
22,695,000
|
22,805,317
|
| Series
C-1 |
|
|
| 5.25%,
due 11/15/56 |
7,100,000
|
7,178,859
|
| New
York City Transitional Finance Authority, Future Tax Secured, Revenue Bonds |
|
|
| Series
D-1 |
|
|
| 5.50%,
due 11/1/45 |
7,000,000
|
7,889,948
|
| New
York State Dormitory Authority, State Personal Income Tax, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 3/15/41 (b) |
9,450,000
|
10,338,242
|
| Series
E |
|
|
| 4.00%,
due 3/15/38 |
2,000,000
|
2,025,645
|
| New
York State Housing Finance Agency, Affordable Housing, Revenue Bonds |
|
|
| Series
P |
|
|
| 3.15%,
due 11/1/54 |
2,375,000
|
1,644,661
|
| New
York Transportation Development Corp., LaGuardia Airport Terminal B Redevelopment Project, Revenue Bonds |
|
|
| Series
A, Insured: AGM |
|
|
| 4.00%,
due 7/1/36 (a) |
15,000,000
|
14,978,859
|
The notes to the financial statements are an integral part of, and
should be read in conjunction with, the financial statements.
| 12
|
MainStay MacKay
DefinedTerm Municipal Opportunities Fund |
| |
Principal
Amount |
Value
|
| New
York (continued) |
| Port
Authority of New York & New Jersey, Revenue Bonds |
|
|
| Series
231 |
|
|
| 5.50%,
due 8/1/52 (a)(b) |
$ 10,000,000
|
$ 10,698,265
|
| Riverhead
Industrial Development Agency, Riverhead Charter School Project, Revenue Bonds |
|
|
| Series
A |
|
|
| 7.00%,
due 8/1/43 |
3,395,000
|
3,401,279
|
| Triborough
Bridge & Tunnel Authority, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 11/15/49 (b) |
7,000,000
|
7,402,891
|
| Triborough
Bridge & Tunnel Authority, MTA Bridges and Tunnels, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.50%,
due 5/15/63 |
5,000,000
|
5,527,815
|
| Triborough
Bridge & Tunnel Authority, MTA Bridges and Tunnels, Revenue Bonds, Senior Lien |
|
|
| Series
D-2 |
|
|
| 5.25%,
due 5/15/47 |
2,700,000
|
2,985,404
|
| |
|
96,877,185
|
| North
Carolina 0.2% (0.1% of Managed Assets) |
| Charlotte-Mecklenburg
Hospital Authority (The), Atrium Health, Revenue Bonds |
|
|
| Series
G |
|
|
| 3.25%,
due 1/15/48 (e) |
800,000
|
800,000
|
| Pennsylvania
7.9% (5.6% of Managed Assets) |
| Allentown
Neighborhood Improvement Zone Development Authority, City Center Project, Revenue Bonds |
|
|
| 5.00%,
due 5/1/42 (d) |
1,000,000
|
982,249
|
| Pennsylvania
Economic Development Financing Authority, Capital Region Parking System, Revenue Bonds, Junior Lien |
|
|
| Series
B-1, Insured: County Guaranteed |
|
|
| 6.00%,
due 7/1/53 |
15,080,000
|
15,085,377
|
| Pennsylvania
Economic Development Financing Authority, PennDOT Major Bridges Package One Project (The), Revenue Bonds |
|
|
| Insured:
AGM |
|
|
| 5.75%,
due 12/31/62 (a)(b) |
12,465,000
|
13,598,737
|
| |
Principal
Amount |
Value
|
| Pennsylvania
|
| Southeastern
Pennsylvania Transportation Authority, Asset Improvement Program, Revenue Bonds |
|
|
| 5.25%,
due 6/1/43 (b) |
$ 6,500,000
|
$ 7,170,426
|
| |
|
36,836,789
|
| Puerto
Rico 11.6% (8.2% of Managed Assets) |
| Children's
Trust Fund, Asset-Backed, Revenue Bonds |
|
|
| 5.50%,
due 5/15/39 |
11,180,000
|
11,208,253
|
| Commonwealth
of Puerto Rico, Restructured, Unlimited General Obligation |
|
|
| Series
A-1 |
|
|
| 4.00%,
due 7/1/33 |
8,500,000
|
7,951,552
|
| Puerto
Rico Commonwealth Aqueduct & Sewer Authority, Revenue Bonds, Senior Lien |
|
|
| Series
A |
|
|
| 5.00%,
due 7/1/33 (d) |
2,500,000
|
2,530,022
|
| Puerto
Rico Electric Power Authority, Revenue Bonds (f) |
|
|
| Series
DDD, Insured: AGM |
|
|
| 3.65%,
due 7/1/24 |
2,830,000
|
2,806,232
|
| Series
PP, Insured: NATL-RE |
|
|
| 5.00%,
due 7/1/24 |
1,130,000
|
1,130,195
|
| Series
PP, Insured: NATL-RE |
|
|
| 5.00%,
due 7/1/25 |
165,000
|
165,029
|
| Series
TT, Insured: AGM-CR |
|
|
| 5.00%,
due 7/1/27 |
310,000
|
308,586
|
| Puerto
Rico Municipal Finance Agency, Revenue Bonds |
|
|
| Series
A, Insured: AGM |
|
|
| 5.00%,
due 8/1/27 |
1,860,000
|
1,871,458
|
| Series
A, Insured: AGM |
|
|
| 5.00%,
due 8/1/30 |
1,685,000
|
1,695,380
|
| Puerto
Rico Sales Tax Financing Corp., Revenue Bonds |
|
|
| Series
A-1 |
|
|
| 4.55%,
due 7/1/40 |
2,500,000
|
2,435,439
|
| Series
A-1 |
|
|
| 5.00%,
due 7/1/58 |
22,940,000
|
22,299,511
|
| |
|
54,401,657
|
| South
Carolina 3.0% (2.1% of Managed Assets) |
| South
Carolina Public Service Authority, Santee Cooper, Revenue Bonds |
|
|
| Series
A, Insured: BAM |
|
|
| 4.00%,
due 12/1/52 |
5,000,000
|
4,574,537
|
The notes to the financial statements are an integral part of, and
should be read in conjunction with, the financial statements.
13
Portfolio of
Investments November 30, 2023† (Unaudited) (continued)
| |
Principal
Amount |
Value
|
| South
Carolina (continued) |
South
Carolina Public Service Authority, Santee Cooper, Revenue Bonds
(continued) |
|
|
| Series
E, Insured: AGM |
|
|
| 5.75%,
due 12/1/52 (b) |
$ 8,500,000
|
$ 9,323,919
|
| |
|
13,898,456
|
| Texas
9.5% (6.7% of Managed Assets) |
| City
of Georgetown, Utility System, Revenue Bonds |
|
|
| Insured:
AGM |
|
|
| 5.25%,
due 8/15/52 (b) |
7,500,000
|
7,996,859
|
| City
of Lubbock, Electric Light & Power System, Revenue Bonds |
|
|
| Insured:
AGM-CR |
|
|
| 4.00%,
due 4/15/51 |
10,000,000
|
9,546,005
|
| Denton
Independent School District, Unlimited General Obligation |
|
|
| Insured:
PSF-GTD |
|
|
| 5.00%,
due 8/15/53 |
10,000,000
|
10,856,772
|
| Harris
County-Houston Sports Authority, Revenue Bonds, Senior Lien |
|
|
| Series
A, Insured: AGM, NATL-RE |
|
|
| (zero
coupon), due 11/15/38 |
175,000
|
76,918
|
| Harris
County-Houston Sports Authority, Revenue Bonds, Junior Lien |
|
|
| Series
H, Insured: NATL-RE |
|
|
| (zero
coupon), due 11/15/28 |
50,000
|
40,350
|
| Series
H, Insured: NATL-RE |
|
|
| (zero
coupon), due 11/15/38 |
260,000
|
110,986
|
| Texas
Private Activity Bond Surface Transportation Corp., NTE Mobility Partners LLC, Revenue Bonds, Senior Lien |
|
|
| Series
2023 |
|
|
| 5.50%,
due 12/31/58 (a)(b) |
10,000,000
|
10,567,336
|
| Texas
Water Development Board, State Water Implementation Fund, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 10/15/45 |
5,000,000
|
5,090,241
|
| |
|
44,285,467
|
| U.S.
Virgin Islands 3.3% (2.4% of Managed Assets) |
| Matching
Fund Special Purpose Securitization Corp., United States Virgin Islands Federal Excise Tax, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 10/1/30 |
1,570,000
|
1,578,003
|
| Series
A |
|
|
| 5.00%,
due 10/1/32 |
1,570,000
|
1,576,564
|
| |
Principal
Amount |
Value
|
| U.S.
Virgin Islands |
| Matching
Fund Special Purpose Securitization Corp., United States Virgin Islands Federal Excise Tax, Revenue Bonds (continued) |
|
|
| Series
A |
|
|
| 5.00%,
due 10/1/39 |
$ 4,710,000
|
$ 4,638,786
|
| Virgin
Islands Public Finance Authority, Gross Receipts Taxes Loan, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 10/1/29 (d) |
2,980,000
|
2,754,244
|
| Series
A |
|
|
| 5.00%,
due 10/1/32 |
2,825,000
|
2,523,951
|
| Series
A, Insured: AGM-CR |
|
|
| 5.00%,
due 10/1/32 |
2,500,000
|
2,501,360
|
| |
|
15,572,908
|
| Utah
5.1% (3.6% of Managed Assets) |
| City
of Salt Lake, International Airport, Revenue Bonds |
|
|
| Series
A |
|
|
| 5.00%,
due 7/1/47 (a)(b) |
23,590,000
|
23,887,373
|
| Virginia
3.3% (2.3% of Managed Assets) |
| Hampton
Roads Transportation Accountability Commission, Roads Transportation, Revenue Bonds, Senior Lien |
|
|
| Series
A |
|
|
| 5.25%,
due 7/1/60 (b) |
10,000,000
|
10,642,271
|
| Tobacco
Settlement Financing Corp., Asset-Backed, Revenue Bonds, Senior Lien |
|
|
| Series
B-1 |
|
|
| 5.00%,
due 6/1/47 |
5,000,000
|
4,610,568
|
| |
|
15,252,839
|
| Washington
1.5% (1.1% of Managed Assets) |
| State
of Washington, Various Purpose, Unlimited General Obligation |
|
|
| Series
C |
|
|
| 5.00%,
due 2/1/46 |
6,500,000
|
7,028,012
|
| Washington
State Housing Finance Commission, Single Family Program, Revenue Bonds |
|
|
| Series
N-1 |
|
|
| 4.00%,
due 6/1/49 |
85,000
|
84,571
|
| |
|
7,112,583
|
The notes to the financial statements are an integral part of, and
should be read in conjunction with, the financial statements.
| 14
|
MainStay MacKay
DefinedTerm Municipal Opportunities Fund |
| |
Principal
Amount |
|
Value
|
| West
Virginia 1.0% (0.7% of Managed Assets) |
| West
Virginia Hospital Finance Authority, Vandalia Heath Group, Revenue Bonds |
|
|
|
| Series
B, Insured: AGM |
|
|
|
| 5.375%,
due 9/1/53 |
$ 4,500,000
|
|
$ 4,739,117
|
| Wisconsin
1.3% (0.9% of Managed Assets) |
| Public
Finance Authority, Bancroft NeuroHealth Project, Revenue Bonds |
|
|
|
| Series
A |
|
|
|
| 5.00%,
due 6/1/36 (d) |
500,000
|
|
456,895
|
| Public
Finance Authority, Ultimate Medical Academy Project, Revenue Bonds |
|
|
|
| Series
A |
|
|
|
| 5.00%,
due 10/1/39 (d) |
5,750,000
|
|
5,693,813
|
| |
|
|
6,150,708
|
Total
Investments
(Cost $629,008,288) |
137.7%
|
|
644,546,248
|
| Floating
Rate Note Obligations (g) |
(40.7)
|
|
(190,510,000)
|
| Other
Assets, Less Liabilities |
3.0
|
|
13,934,555
|
| Net
Assets Applicable to Common Shares |
100.0%
|
|
$ 467,970,803
|
| †
|
Percentages indicated
are based on Fund net assets applicable to Common shares. |
| (a)
|
Interest
on these securities was subject to alternative minimum tax. |
| (b)
|
All
or portion of principal amount transferred to a Tender Option Bond (“TOB”) Issuer in exchange for TOB Residuals and cash. |
| (c)
|
Step
coupon—Rate shown was the rate in effect as of November 30, 2023. |
| (d)
|
May be
sold to institutional investors only under Rule 144A or securities offered pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. |
| (e)
|
Variable-rate
demand notes (VRDNs)—Provide the right to sell the security at face value on either that day or within the rate-reset period. VRDNs will normally trade as if the maturity is the earlier put date, even though stated maturity is longer. The
interest rate is reset on the put date at a stipulated daily, weekly, monthly, quarterly, or other specified time interval to reflect current market conditions. These securities do not indicate a reference rate and spread in their description. The
maturity date shown is the final maturity. |
| (f)
|
Bond
insurance is paying principal and interest, since the issuer is in default. |
| (g)
|
Face
value of Floating Rate Notes issued in TOB transactions. |
"Managed Assets" is defined as the Fund’s total assets
minus the sum of its accrued liabilities (other than Fund liabilities incurred for the purpose of creating effective leverage (i.e. tender option bonds) or Fund liabilities related to liquidation preference of any preferred shares issued), which was
$661,172,413 as of November 30, 2023.
| Abbreviation(s):
|
| AGC—Assured
Guaranty Corp. |
| AGM—Assured
Guaranty Municipal Corp. |
| BAM—Build
America Mutual Assurance Co. |
| CR—Custodial
Receipts |
| MTA—Metropolitan
Transportation Authority |
| NATL-RE—National
Public Finance Guarantee Corp. |
| PSF-GTD—Permanent
School Fund Guaranteed |
The following is a summary of the fair valuations
according to the inputs used as of November 30, 2023, for valuing the Fund’s assets:
| Description
|
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1) |
|
Significant
Other
Observable
Inputs
(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3) |
|
Total
|
| Asset
Valuation Inputs |
|
|
|
|
|
|
|
| Investments
in Securities (a) |
|
|
|
|
|
|
|
| Municipal
Bonds |
$ —
|
|
$ 644,546,248
|
|
$ —
|
|
$ 644,546,248
|
| (a)
|
For
a complete listing of investments and their industries, see the Portfolio of Investments. |
The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.
15
Statement of
Assets and Liabilities as of November 30, 2023 (Unaudited)
| Assets
|
Investment
in securities, at value
(identified cost $629,008,288) |
$644,546,248
|
| Cash
|
7,131,536
|
| Receivables:
|
|
| Interest
|
9,861,962
|
| Other
assets |
4,582
|
| Total
assets |
661,544,328
|
| Liabilities
|
| Payable
for Floating Rate Note Obligations |
190,510,000
|
| Payables:
|
|
| Manager
(See Note 3) |
315,440
|
| Custodian
|
15,764
|
| Professional
fees |
15,466
|
| Transfer
agent |
691
|
| Trustees
|
641
|
| Shareholder
communication |
204
|
| Accrued
expenses |
23,709
|
| Interest
expense and fees payable |
2,691,610
|
| Total
liabilities |
193,573,525
|
| Net
assets applicable to Common shares |
$467,970,803
|
| Common
shares outstanding |
27,926,794
|
| Net
asset value per Common share (Net assets applicable to Common shares divided by Common shares outstanding) |
$
16.76 |
| Net
Assets Applicable to Common Shares Consist of |
| Common
shares, $0.001 par value per share, unlimited number of shares authorized |
$
27,927 |
| Additional
paid-in-capital |
531,781,794
|
| |
531,809,721
|
| Total
distributable earnings (loss) |
(63,838,918)
|
| Net
assets applicable to Common shares |
$467,970,803
|
The notes to the financial statements are an integral part
of, and should be read in conjunction with, the financial statements.
| 16
|
MainStay MacKay
DefinedTerm Municipal Opportunities Fund |
Statement of
Operations for the six months ended November 30, 2023 (Unaudited)
| Investment
Income (Loss) |
| Income
|
|
| Interest
|
$12,417,534
|
| Expenses
|
|
| Manager
(See Note 3) |
2,086,653
|
| Interest
expense and fees |
5,046,854
|
| Professional
fees |
78,636
|
| Shareholder
communication |
20,804
|
| Custodian
|
17,284
|
| Transfer
agent |
10,878
|
| Trustees
|
5,970
|
| Miscellaneous
|
39,917
|
| Total
expenses |
7,306,996
|
| Net
investment income (loss) |
5,110,538
|
| Realized
and Unrealized Gain (Loss) |
| Net
realized gain (loss) on investments |
(5,679,307)
|
Net
change in unrealized appreciation (depreciation)
on investments |
5,594,383
|
| Net
realized and unrealized gain (loss) |
(84,924)
|
Net
increase (decrease) in net assets to Common shares
resulting from operations |
$
5,025,614 |
The notes to the financial statements are an integral part
of, and should be read in conjunction with, the financial statements.
17
Statements of
Changes in Net Assets
for the six months ended November 30, 2023 (Unaudited) and the year ended May 31, 2023
| |
Six months
ended
November 30,
2023 |
Year
ended
May 31,
2023 |
| Increase
(Decrease) in Net Assets Applicable to Common Shares |
| Operations:
|
|
|
| Net
investment income (loss) |
$
5,110,538 |
$
14,773,342 |
| Net
realized gain (loss) |
(5,679,307)
|
(21,011,597)
|
| Net
change in unrealized appreciation (depreciation) |
5,594,383
|
(2,124,659)
|
| Net
increase (decrease) in net assets applicable to Common shares resulting from operations |
5,025,614
|
(8,362,914)
|
| Distributions
to Common shareholders |
(11,306,742)
|
(27,458,424)
|
Capital
share transactions
(Common shares): |
|
|
| Net
proceeds issued to shareholders resulting from reinvestment of dividends |
311,212
|
951,370
|
| Net
increase (decrease) in net assets applicable to Common shares |
(5,969,916)
|
(34,869,968)
|
| Net
Assets Applicable to Common Shares |
| Beginning
of period |
473,940,719
|
508,810,687
|
| End
of period |
$467,970,803
|
$473,940,719
|
The notes to the financial statements are an integral part
of, and should be read in conjunction with, the financial statements.
| 18
|
MainStay MacKay
DefinedTerm Municipal Opportunities Fund |
Statement of Cash
Flows
for the six months ended November 30, 2023 (Unaudited)
| Cash
Flows From (Used in) Operating Activities: |
| Net
increase in net assets resulting from operations |
$
5,025,614 |
| Adjustments
to reconcile net increase in net assets resulting from operations to net cash used in operating activities: |
|
| Investments
purchased |
(163,540,549)
|
| Investments
sold |
235,249,997
|
| Amortization
(accretion) of discount and premium, net |
4,295,627
|
| Decrease
in interest receivable |
1,642,946
|
| Decrease
in other assets |
22,681
|
| Decrease
in professional fees payable |
(80,067)
|
| Increase
in custodian payable |
5,656
|
| Decrease
in shareholder communication payable |
(15,485)
|
| Increase
in due to Trustees |
313
|
| Decrease
in due to manager |
(72,155)
|
| Decrease
in due to transfer agent |
(6,465)
|
| Increase
in accrued expenses |
9,450
|
| Decrease
in interest expense and fees payable |
(749,038)
|
| Net
realized loss from investments |
5,679,307
|
| Net
change in unrealized (appreciation) depreciation on unaffiliated investments |
(5,594,383)
|
| Net
cash from operating activities |
81,873,449
|
| Cash
Flows From (Used in) Financing Activities: |
| Net
proceeds resulting from reinvestment of dividends |
418,407
|
| Proceeds
from floating rate note obligations |
87,985,000
|
| Payments
on floating rate note obligations |
(159,585,000)
|
| Cash
distributions paid, net of change in Common share dividend payable |
(11,306,742)
|
| Net
cash used in financing activities |
(82,488,335)
|
| Net
decrease in cash |
(614,886)
|
| Cash
at beginning of period |
7,746,422
|
| Cash
at end of period |
$
7,131,536 |
The notes to the financial statements are an integral part
of, and should be read in conjunction with, the financial statements.
19
Financial
Highlights selected per share data and ratios
| |
Six
months
ended
November 30,
2023* |
|
Year
Ended May 31, |
| |
2023
|
|
2022
|
|
2021
|
|
2020
|
|
2019
|
| Net
asset value at beginning of period applicable to Common shares |
$
16.98 |
|
$
18.27 |
|
$
21.26 |
|
$
19.79 |
|
$
20.41 |
|
$
20.11 |
| Net
investment income (loss) |
0.18
|
|
0.53
|
|
0.93
|
|
1.01
|
|
0.99
|
|
1.01
|
| Net
realized and unrealized gain (loss) |
0.01
|
|
(0.83)
|
|
(2.90)
|
|
1.48
|
|
(0.59)
|
|
0.32
|
| Total
from investment operations |
0.19
|
|
(0.30)
|
|
(1.97)
|
|
2.49
|
|
0.40
|
|
1.33
|
| Dividends
and distributions to Common shareholders |
(0.41)
|
|
(0.99)
|
|
(1.02)
|
|
(1.02)
|
|
(1.02)
|
|
(1.03)
|
| Net
asset value at end of period applicable to Common shares |
$
16.76 |
|
$
16.98 |
|
$
18.27 |
|
$
21.26 |
|
$
19.79 |
|
$
20.41 |
| Market
price at end of period applicable to Common shares |
$
15.77 |
|
$
17.00 |
|
$
18.80 |
|
$
22.89 |
|
$
20.94 |
|
$
20.65 |
| Total
investment return on market price (a) |
(4.88)%
|
|
(4.16)%
|
|
(13.62)%
|
|
14.79%
|
|
6.62%
|
|
12.05%
|
| Total
investment return on net asset value (a) |
1.15%
|
|
(1.49)%
|
|
(9.68)%
|
|
12.82%
|
|
1.94%
|
|
6.80%
|
Ratios
(to average net assets of Common shareholders)/
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
| Net
investment income (loss) |
2.21%††
|
|
3.09%
|
|
4.56%
|
|
4.88%
|
|
4.44%
|
|
5.03%
|
| Net
expenses (including interest expense and fees) |
3.16%††
|
|
2.89%
|
|
1.79%
|
|
1.64%
|
|
2.33%
|
|
2.47%
|
| Interest
expense and fees (b) |
2.19%††
|
|
1.84%
|
|
0.76%
|
|
0.61%
|
|
1.31%
|
|
1.45%
|
| Portfolio
Turnover Rate |
24%(c)
|
|
42%(c)
|
|
46%
|
|
20%
|
|
38%(c)
|
|
27%
|
| Net
assets applicable to Common shareholders at end of period (in 000’s) |
$
467,971 |
|
$
473,941 |
|
$
508,811 |
|
$
590,652 |
|
$
547,744 |
|
$
563,098 |
Preferred
shares outstanding at $100,000 liquidation preference,
end of period (in 000’s) (d)(e) |
$
— |
|
$
— |
|
$
— |
|
$
— |
|
$
70,000 |
|
$
70,000 |
| Assets
coverage per Preferred share, end of period (d)(e) |
$
— |
|
$
— |
|
$
— |
|
$
— |
|
$
882,491(f) |
|
$
904,426(f) |
| Average
market value per Preferred share: |
|
|
|
|
|
|
|
|
|
|
|
| Series
A (d) |
$
— |
|
$
— |
|
$
— |
|
$
— |
|
$
100,000 |
|
$
100,000 |
| Series
B (e) |
$
— |
|
$
— |
|
$
— |
|
$
— |
|
$
99,999 |
|
$
100,000 |
| *
|
Unaudited.
|
| ††
|
Annualized.
|
| (a)
|
Total
investment return on market price is calculated assuming a purchase of a Common share at the market price on the first day and a sale on the last day business day of each month. Dividends and distributions are assumed to be reinvested at prices
obtained under the Fund’s dividend reinvestment plan. Total investment return on net asset value reflects the changes in net asset value during each period and assumes the reinvestment of dividends and distributions at net asset value on the
last business day of each month. This percentage may be different from the total investment return on market price, due to differences between the market price and the net asset value. For periods less than one year, total investment return is not
annualized. |
| (b)
|
Interest
expense and fees relate to the costs of tender option bond transactions (See Note 2(G)) and the issuance of fixed rate municipal term preferred shares, where applicable, for the six months ended November 30, 2023 and for years ended May 31, 2023,
2022, 2021, 2020 and 2019, respectively. |
| (c)
|
The
portfolio turnover rate includes variable rate demand notes. |
| (d)
|
Redeemed on
June 15, 2020. |
| (e)
|
Redeemed on
December 15, 2020. |
| (f)
|
Calculated
by subtracting the Fund’s total liabilities (not including the Preferred shares) from the Fund’s total assets, and dividing the result by the number of Preferred shares outstanding. |
The notes to the
financial statements are an integral part of, and should be read in conjunction with, the financial statements.
| 20
|
MainStay MacKay
DefinedTerm Municipal Opportunities Fund |
Notes to Financial
Statements (Unaudited)
Note 1-Organization and Business
MainStay MacKay DefinedTerm Municipal Opportunities Fund (the
“Fund”) was organized as a Delaware statutory trust on April 20, 2011, pursuant to an agreement and declaration of trust, which was most recently amended and restated on June 10, 2022 (“Declaration of Trust’’). The Fund
is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a “diversified”, closed-end management investment company, as those terms are defined in the 1940 Act, as interpreted or modified by
regulatory authorities having jurisdiction, from time to time. The Fund first offered Common shares through an initial public offering on June 26, 2012.
Pursuant to the terms of the Declaration of Trust, the Fund
will commence the process of liquidation and dissolution at the close of business on December 31, 2024 (the “Termination Date”) unless otherwise extended by a majority of the Board of Trustees (the “Board”) (as discussed in
further detail below). During the six-month period preceding the Termination Date or Extended Termination Date (as defined below), the Board may, without shareholder approval unless such approval is required by the 1940 Act, determine to (i) merge
or consolidate the Fund so long as the surviving or resulting entity is an open-end registered investment company that is managed by the same investment adviser which serves as the investment adviser to the Fund at that time or is an affiliate of
such investment adviser; or (ii) convert the Fund from a closed-end fund into an open-end registered investment company. Upon liquidation and termination of the Fund, shareholders will receive an amount equal to the Fund’s net asset value
(“NAV”) at that time, which may be greater or less than the price at which Common shares were issued. The Fund’s investment objectives and policies are not designed to return to investors who purchased Common shares in the initial
offering of such shares their initial investment on the Termination Date and such initial investors may receive more or less than their original investment upon termination.
Prior to the commencement of the six-month period preceding the
Termination Date, a majority of the Board may extend the Termination Date for a period of not more than two years or such shorter time as may be determined (the “Extended Termination Date”), upon a determination that taking such actions
as described in (i) or (ii) above would not, given prevailing market conditions, be in the best interests of the Fund’s shareholders. The Termination Date may be extended one or more times by the Board prior to the first business day of the
sixth month before the next occurring Extended Termination Date.
Pursuant to the June 10, 2022 amendment, if the Fund completes
an Eligible Tender Offer (as defined below), a majority of the Board may, without shareholder approval unless such approval is required by the 1940 Act, eliminate the Termination Date and cause the Fund to have a perpetual existence as a closed-end
fund. An “Eligible Tender Offer” is defined as a tender offer by the Fund to purchase 100% of the then outstanding Common shares of the Fund at a price equal to the NAV per Common share calculated in accordance with the Fund’s
valuation procedures as of the date specified in the tender offer, with the expiration
date of the tender offer being as of a date within twelve months preceding the
Termination Date.
If the payment for properly tendered
Common shares would result in the Fund’s net assets totaling less than $200 million (the “Termination Threshold”), the Eligible Tender Offer shall be canceled, no Common shares will be repurchased pursuant to the Eligible Tender
Offer, and the Fund would dissolve as set forth above. If an Eligible Tender Offer is conducted and the payment for properly tendered Common shares would result in the Fund’s net assets totaling greater than or equal to the Termination
Threshold, all Common shares properly tendered and not withdrawn will be purchased by the Fund pursuant to the terms of the Eligible Tender Offer. The Fund may conduct an Eligible Tender Offer upon the affirmative vote of a majority of the Board -
or by an instrument signed by a majority of the Board - without a vote of the shareholders.
The Fund's primary investment objective is to seek current
income exempt from regular U.S. Federal income taxes (but which may be includable in taxable income for the purpose of the Federal alternative minimum tax). Total return is a secondary objective.
Note 2–Significant Accounting Policies
The Fund is an investment company and accordingly follows the
investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 Financial Services—Investment Companies. The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described
below.
(A) Securities Valuation. Investments are usually valued as of the close of regular trading on the New York Stock Exchange (the "Exchange") (usually 4:00 p.m. Eastern time) on each day the Fund is open for business
("valuation date").
Pursuant to Rule 2a-5 under
the 1940 Act, the Board has designated New York Life Investment Management LLC (“New York Life Investments” or the "Manager") as its Valuation Designee (the "Valuation Designee"). The Valuation Designee is responsible for performing fair
valuations relating to all investments in the Fund’s portfolio for which market quotations are not readily available; periodically assessing and managing material valuation risks; establishing and applying fair value methodologies; testing
fair valuation methodologies; evaluating and overseeing pricing services; ensuring appropriate segregation of valuation and portfolio management functions; providing quarterly, annual and prompt reporting to the Board, as appropriate; identifying
potential conflicts of interest; and maintaining appropriate records. The Valuation Designee has established a valuation committee ("Valuation Committee") to assist in carrying out the Valuation Designee’s responsibilities and establish prices
of securities for which market quotations are not readily available. The Fund’s and the Valuation Designee's policies and procedures ("Valuation Procedures") govern the Valuation Designee’s selection and application of methodologies for
determining and
Notes to Financial
Statements (Unaudited) (continued)
calculating the fair value of Fund investments. The Valuation Designee may
value the Fund's portfolio securities for which market quotations are not readily available and other Fund assets utilizing inputs from pricing services and other third-party sources. The Valuation Committee meets (in person, via electronic mail or
via teleconference) on an ad-hoc basis to determine fair valuations and on a quarterly basis to review fair value events with respect to certain securities for which market quotations are not readily available, including valuation risks and
back-testing results, and to preview reports to the Board.
The Valuation Committee establishes prices of securities for
which market quotations are not readily available based on such methodologies and measurements on a regular basis after considering information that is reasonably available and deemed relevant by the Valuation Committee. The Board shall oversee the
Valuation Designee and review fair valuation materials on a prompt, quarterly and annual basis and approve proposed revisions to the Valuation Procedures.
Investments for which market quotations are not readily
available are valued at fair value as determined in good faith pursuant to the Valuation Procedures. A market quotation is readily available only when that quotation is a quoted price (unadjusted) in active markets for identical investments that the
Fund can access at the measurement date, provided that a quotation will not be readily available if it is not reliable. "Fair value" is defined as the price the Fund would reasonably expect to receive upon selling an asset or liability in an orderly
transaction to an independent buyer in the principal or most advantageous market for the asset or liability. Fair value measurements are determined within a framework that establishes a three-tier hierarchy that maximizes the use of observable
market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. "Inputs" refer broadly to the assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable
or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own
assumptions about the assumptions market participants would use in pricing the asset or liability based on the information available. The inputs or methodology used for valuing assets or liabilities may not be an indication of the risks associated
with investing in those assets or liabilities. The three-tier hierarchy of inputs is summarized below.
| •
|
Level 1—quoted prices
(unadjusted) in active markets for an identical asset or liability |
| •
|
Level 2—other
significant observable inputs (including quoted prices for a similar asset or liability in active markets, interest rates and yield curves, prepayment speeds, credit risk, etc.) |
| •
|
Level
3—significant unobservable inputs (including the Fund's own assumptions about the assumptions that market participants would use in measuring fair value of an asset or liability) |
The level of an asset or liability within the fair value hierarchy is based on
the lowest level of an input, both individually and in the aggregate, that is significant to the fair value measurement. The aggregate value by input level of the Fund’s assets and liabilities as of November 30, 2023, is included at the end of
the Portfolio of Investments.
The Fund may use
third-party vendor evaluations, whose prices may be derived from one or more of the following standard inputs, among others:
| •
Benchmark yields |
•
Reported trades |
| •
Broker/dealer quotes |
•
Issuer spreads |
| •
Two-sided markets |
•
Benchmark securities |
| •
Bids/offers |
•
Reference data (corporate actions or material event notices) |
| •
Industry and economic events |
•
Comparable bonds |
| •
Monthly payment information |
|
An asset or liability for which a market quotation is not
readily available is valued by methods deemed reasonable in good faith by the Valuation Committee, following the Valuation Procedures to represent fair value. Under these procedures, the Valuation Designee generally uses a market-based approach
which may use related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information. The Valuation Designee may also use an income-based valuation approach in which the anticipated future cash
flows of the asset or liability are discounted to calculate fair value. Discounts may also be applied due to the nature and/or duration of any restrictions on the disposition of the asset or liability. Fair value represents a good faith
approximation of the value of a security. Fair value determinations involve the consideration of a number of subjective factors, an analysis of applicable facts and circumstances and the exercise of judgment. As a result, it is possible that the
fair value for a security determined in good faith in accordance with the Valuation Procedures may differ from valuations for the same security determined for other funds using their own valuation procedures. Although the Valuation Procedures are
designed to value a security at the price the Fund may reasonably expect to receive upon the security's sale in an orderly transaction, there can be no assurance that any fair value determination thereunder would, in fact, approximate the amount
that the Fund would actually realize upon the sale of the security or the price at which the security would trade if a reliable market price were readily available. During the six-month period ended November 30, 2023, there were no material changes
to the fair value methodologies.
Securities which may be
valued in this manner include, but are not limited to: (i) a security for which trading has been halted or suspended or otherwise does not have a readily available market quotation on a given day; (ii) a debt security that has recently gone into
default and for which there is not a current market quotation; (iii) a security of an issuer that has entered into a restructuring; (iv) a security that has been delisted from a national exchange; (v) a security subject to trading collars for which
no or limited trading takes place; and (vi) a security whose principal market has been temporarily closed at a time when, under normal
| 22
|
MainStay MacKay
DefinedTerm Municipal Opportunities Fund |
conditions, it would be open. Securities valued in this manner are generally
categorized as Level 2 or 3 in the hierarchy.
Municipal
debt securities are valued at the evaluated mean prices supplied by a pricing agent or broker selected by the Valuation Designee, in consultation with the Subadvisor. The evaluations are market-based measurements processed through a pricing
application and represents the pricing agent's good faith determination as to what a holder may receive in an orderly transaction under market conditions. The rules-based logic utilizes valuation techniques that reflect participants' assumptions and
vary by asset class and per methodology, maximizing the use of relevant observable data including quoted prices for similar assets, benchmark yield curves and market corroborated inputs. The evaluated bid or mean prices are deemed by the Valuation
Designee, in consultation with the Subadvisor, to be representative of market values, at the regular close of trading of the Exchange on each valuation date. Municipal debt securities purchased on a delayed delivery basis are marked to market daily
until settlement at the forward settlement date. Municipal debt securities are generally categorized as Level 2 in the hierarchy.
The information above is not intended to reflect an exhaustive
list of the methodologies that may be used to value portfolio investments. The Valuation Procedures permit the use of a variety of valuation methodologies in connection with valuing portfolio investments. The methodology used for a specific type of
investment may vary based on the market data available or other considerations. The methodologies summarized above may not represent the specific means by which portfolio investments are valued on any particular business day.
(B) Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies
and to distribute all of its taxable income to the shareholders of the Fund within the allowable time limits.
The Manager evaluates the Fund’s tax positions to
determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the
financial statements. Recognition of tax benefits of an uncertain tax position is permitted only to the extent the position is “more likely than not” to be sustained assuming examination by taxing authorities. The Manager analyzed the
Fund's tax positions taken on federal, state and local income tax returns for all open tax years (for up to three tax years) and has concluded that no provisions for federal, state and local income tax are required in the Fund's financial
statements. The Fund's federal, state and local income tax and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state and local
departments of revenue.
(C) Dividends and Distributions to Common
Shareholders. Dividends and distributions are recorded on the ex-dividend date. The Fund intends to declare dividends from net investment income at least monthly and declares and
pays distributions from net realized capital gains, if any, at least annually. Dividends and distributions are determined in accordance with federal income tax regulations and may differ from determinations using GAAP. For information on the
Fund’s dividend reinvestment plan, please see page 28.
(D) Security Transactions and Investment Income. The Fund records security transactions on the trade date. Realized gains and losses on security transactions are determined using the identified cost method. Interest income is accrued as
earned using the effective interest rate method. Discounts and premiums on securities purchased by the Fund, other than temporary cash investments that mature in 60 days or less at the time of purchase, are accreted and amortized, respectively,
using the effective interest rate method.
The Fund
may place a debt security on non-accrual status and reduce related interest income by ceasing current accruals and writing off all or a portion of any interest receivables when the collection of all or a portion of such interest has become doubtful.
A debt security is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
(E) Expenses. Expenses of the Fund are recorded on the date the expenses are incurred. The expenses borne by the Fund, including those of related parties to the Fund, are shown in the Statement of
Operations. Certain expenses of the Fund are allocated in proportion to other funds within the MainStay Group of Funds.
(F) Use of Estimates. In preparing financial statements in conformity with GAAP, the Manager makes estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates and assumptions.
(G) Tender Option Bonds. The Fund may leverage its assets through the use of proceeds received from tender option bond (“TOB”) transactions. In a TOB transaction, a tender option bond trust (a
“TOB Issuer”) is typically established, which forms a special purpose trust into which the Fund, or an agent on behalf of the Fund, transfers municipal bonds or other municipal securities (“Underlying Securities”). A TOB
Issuer typically issues two classes of beneficial interests: short-term floating rate notes (“TOB Floaters”) with a fixed principal amount representing a senior interest in the Underlying Securities, and which are sold to third party
investors, and residual interest municipal tender option bonds (“TOB Residuals”) representing a subordinate interest in the Underlying Securities, and which are generally issued to the Fund. The interest rate on the TOB Floaters resets
periodically, usually weekly, to a prevailing market rate, and holders of the TOB Floaters are granted the option to tender their TOB Floaters back to the TOB Issuer for repurchase at their principal amount plus accrued interest thereon
periodically, usually daily or weekly. The Fund may invest in both TOB Floaters and TOB Residuals. The Fund may not invest more than 5% of its Managed
Notes to Financial
Statements (Unaudited) (continued)
Assets (as defined in Note 3(A)) in any single TOB Issuer. The Fund may invest
in both TOB Floaters and TOB Residuals issued by the same TOB Issuer.
Typically, a fund serves as the sponsor of the TOB issuer
(“Fund-sponsored TOB”). Under this structure, a fund establishes, structures and “sponsors” the TOB Issuer in which it holds TOB Residuals. The Fund uses this or a similar structure for any TOB in which it invests. In
connection with Fund-sponsored TOBs, the fund sponsoring the Fund-sponsored TOB (“Fund Sponsor”) may contract with a third-party to perform some or all of the Fund Sponsor’s duties as sponsor. Regardless of whether the Fund Sponsor
delegates any of its sponsorship duties to a third party, the Fund Sponsor’s expanded role under the Fund-sponsored TOB structure may increase the Fund Sponsor’s operational and regulatory risk. If the third-party is unable to perform
its obligations as an administrative agent, the Fund Sponsor itself would be subject to such obligations or would need to secure a replacement agent. The obligations that the Fund Sponsor may be required to undertake could include reporting and
recordkeeping obligations under the Internal Revenue Code and federal securities laws and contractual obligations with other TOB service providers. The Fund may serve as a Fund Sponsor to a Fund-sponsored TOB. If the Fund serves as a Fund Sponsor,
it would be subject to the obligations discussed above and the risks attendant to such obligations.
Under the Fund-sponsored TOB structure, the TOB Issuer receives
Underlying Securities from the Fund through (or as) the Fund Sponsor and then issues TOB Floaters to third party investors and TOB Residuals to the Fund. The Fund is paid the cash (less transaction expenses, which are borne by the Fund) received by
the TOB Issuer from the sale of TOB Floaters and typically will invest the cash in additional municipal bonds or other investments permitted by its investment policies. TOB Floaters may have first priority on the cash flow from the securities held
by the TOB Issuer and are enhanced with a liquidity support arrangement from a bank or an affiliate of the sponsor (the “liquidity provider”), which allows holders to tender their position back to the TOB Issuer at par (plus accrued
interest). The Fund, in addition to receiving cash from the sale of TOB Floaters, also receives TOB Residuals. TOB Residuals provide the Fund with the right to (1) cause the holders of TOB Floaters to tender their notes to the TOB Issuer at par
(plus accrued interest), and (2) acquire the Underlying Securities from the TOB Issuer. In addition, all voting rights and decisions to be made with respect to any other rights relating to the Underlying Securities deposited in the TOB Issuer are
passed through to the Fund, as the holder of TOB Residuals. Such a transaction, in effect, creates exposure for the Fund to the entire return of the Underlying Securities deposited in the TOB Issuer, with a net cash investment by the Fund that is
less than the value of the Underlying Securities deposited in the TOB Issuer. This multiplies the positive or negative impact of the Underlying Securities’ return within the Fund (thereby creating leverage). Income received from TOB Residuals
will vary inversely with the short-term rate paid to holders of TOB Floaters and in most circumstances, TOB Residuals represent substantially all of the Underlying Securities’ downside investment risk and also benefits disproportionately
from any potential appreciation of the Underlying Securities’ value. The
amount of such increase or decrease is a function, in part, of the amount of TOB Floaters sold by the TOB Issuer of these securities relative to the amount of TOB Residuals that it sells. The greater the amount of TOB Floaters sold relative to TOB
Residuals, the more volatile the income paid on TOB Residuals will be. The price of TOB Residuals will be more volatile than that of the Underlying Securities because the interest rate is dependent on not only the fixed coupon rate of the Underlying
Securities, but also on the short-term interest rate paid on TOB Floaters.
For TOB Floaters, generally, the interest rate earned will be
based upon the market rates for municipal securities with maturities or remarketing provisions that are comparable in duration to the periodic interval of the tender option, which may vary from weekly, to monthly, to extended periods of one year or
multiple years. Since the option feature has a shorter term than the final maturity or first call date of the Underlying Securities deposited in the TOB Issuer, the Fund, if it is the holder of the TOB Floaters, relies upon the terms of the
agreement with the financial institution furnishing the option as well as the credit strength of that institution. As further assurance of liquidity, the terms of the TOB Issuer provide for a liquidation of the Underlying Security deposited in the
TOB Issuer and the application of the proceeds to pay off the TOB Floaters.
The TOB Issuer may be terminated without the consent of the
Fund upon the occurrence of certain events, such as the bankruptcy or default of the issuer of the Underlying Securities deposited in the TOB Issuer, a substantial downgrade in the credit quality of the issuer of the securities deposited in the TOB
Issuer, the inability of the TOB Issuer to obtain liquidity support for the TOB Floaters, a substantial decline in the market value of the Underlying Securities deposited in the TOB Issuer, or the inability of the sponsor to remarket any TOB
Floaters tendered to it by holders of the TOB Floaters. In such an event, the TOB Floaters would be redeemed by the TOB Issuer at par (plus accrued interest) out of the proceeds from a sale of the Underlying Securities deposited in the TOB Issuer.
If this happens, the Fund would be entitled to the assets of the TOB Issuer, if any, that remain after the TOB Floaters have been redeemed at par (plus accrued interest). If there are insufficient proceeds from the sale of these Underlying
Securities to redeem all of the TOB Floaters at par (plus accrued interest), the liquidity provider or holders of the TOB Floaters would bear the losses on those securities and there would be no recourse to the Fund’s assets (unless the Fund
held a recourse TOB Residual).
To the extent that the
remarketing agent and/or the liquidity provider is a banking entity, the TOB may face heightened liquidity risks due to restrictions applicable to banking entities under the Volcker Rule. The Volcker Rule generally prohibits banking entities from
engaging in proprietary trading or from acquiring or retaining an ownership interest in, or sponsoring, a hedge fund or private equity fund (a “Covered Fund”). TOB Issuers are often structured as a Covered Fund, and therefore, a banking
entity that is a remarketing agent would not be able to repurchase tendered TOB Floaters for its own account upon a failed remarketing. In the event of a failed remarketing, a banking entity serving as liquidity provider may loan the necessary funds
to the TOB Issuer to
| 24
|
MainStay MacKay
DefinedTerm Municipal Opportunities Fund |
purchase the tendered TOB Floaters. The TOB Issuer, not the Fund Sponsor or
the Fund, would be the borrower and the loan from the liquidity provider will be secured by the purchased TOB Floaters now held by the TOB Issuer. However, the Fund Sponsor and the Fund would bear the risk of loss with respect to any liquidity
shortfall to the extent it entered into a reimbursement agreement with the liquidity provider. If a TOB Issuer in which the Fund invests experiences adverse events in connection with a failed remarketing of TOB Floaters or a liquidity shortfall, the
Fund would experience a loss.
For financial reporting
purposes, Underlying Securities that are deposited into a TOB Issuer are treated as investments of the Fund, and are presented in the Fund’s Portfolio of Investments. Outstanding TOB Floaters issued by a TOB Issuer are presented as a liability
at their face value as “Payable for Floating Rate Note Obligations” in the Fund’s Statement of Assets and Liabilities. The face value of the TOB Floaters approximates their fair value of the floating rate notes. Interest income
from the Underlying Securities are recorded by the Fund on an accrual basis. Interest expense incurred on the TOB Floaters and other expenses related to remarketing, administration and trustee services to a TOB Issuer are recognized as a component
of “Interest expense and fees” in the Statement of Operations.
At November 30, 2023, the aggregate value of the Underlying
Securities transferred to the TOB Issuer and the related liability for TOB Floaters were as follows:
Underlying
Securities Transferred
to TOB Issuers |
Liability
for
Floating Rate Note
Obligations |
| $265,330,713
|
$190,510,000
|
During the six-month period ended
November 30, 2023, the Fund's average TOB Floaters outstanding and the daily weighted average interest rate, including fees, were as follows:
Average
Floating Rate Note
Obligations Outstanding |
Daily
Weighted
Average
Interest Rate |
| $242,502,049
|
2.08%
|
(H) Statement of Cash
Flows. The cash amount shown in the Fund’s Statement of Cash Flows is the amount included in the Fund’s Statement of Assets and Liabilities and represents the cash on
hand at its custodian and restricted cash, if any, as of November 30, 2023.
(I) Municipal Bond Risk. The Fund may invest more heavily in municipal bonds from certain cities, states, territories or regions than others, which may increase the Fund’s exposure to losses resulting from
economic, political, regulatory occurrences, or declines in tax revenue impacting these particular cities, states, territories or regions. In addition, many state and municipal governments that issue securities are under significant economic and
financial stress and may not be able to satisfy their obligations, and these events may be made worse due to current economic challenges. The Fund may invest a substantial amount of its assets in municipal bonds whose interest is paid solely from
revenues of
similar projects, such as tobacco settlement bonds. If the Fund concentrates
its investments in this manner, it assumes the legal and economic risks relating to such projects and this may have a significant impact on the Fund’s investment performance.
Certain of the issuers in which the Fund may invest have
recently experienced, or may experience, significant financial difficulties and repeated credit rating downgrades. On May 3, 2017, the Commonwealth of Puerto Rico (the "Commonwealth") began proceedings pursuant to the Puerto Rico Oversight,
Management, and Economic Stability Act (“PROMESA”) to seek bankruptcy-type protections from approximately $74 billion in debt and approximately $48 billion in unfunded pension obligations. In addition, the current economic environment
and the resulting pressure on Puerto Rico’s budget have further contributed to its financial challenges. Following the outbreak of COVID-19, the federal government passed certain relief packages, including the Coronavirus Aid, Relief, and
Economic Security Act and the American Rescue Plan, which included an aggregate of more than $7 billion in disaster relief funds for the U.S. territories, including Puerto Rico. However, there can be no assurances that the federal funds allocated to
the Commonwealth will be sufficient to address the long-term economic challenges that arose from COVID-19.
As of October 31, 2023, Puerto Rico Electric Power Authority
("PREPA") has remained in Title III Bankruptcy for over 6 years. A significant number of net revenue bond creditors, the Oversight Board, and the Commonwealth have been unable to reach a consensual resolution on PREPA’s debt restructuring
following the termination of the previous 2019 PREPA Restructuring Support Agreement by the Commonwealth of Puerto Rico in March of 2022. On December 16, 2022, the Oversight Board filed a proposed plan of adjustment to restructure more than $10
billion of debt and other claims against PREPA. The plan of adjustment, amended in March, proposed to cut PREPA’s unsustainable debt to approximately $5.68 billion.
Bankruptcy litigation has ensued between the Oversight Board
and a group of net revenue bond creditors over the security provisions of PREPA’s $8.3 billion of net revenue bonds resulting in a ruling in March that PREPA’s net revenue bonds are unsecured.
In June of 2023, a claims estimation hearing resulted in a
ruling that PREPA’s now asserted unsecured net revenue bond claim was valued at approximately 2.383 billion, which is only 28.3% of the full pre-petition claim asserted by net revenue bond holders. Due to the lower claims estimation
ruling, at the end of August 2023 the Oversight Board filed a new proposed plan of adjustment to reflect the March lien ruling and June estimation hearing with lower recovery amounts afforded to net revenue bond holders. In conjunction with
the new proposed plan of adjustment, a subset of the original litigating PREPA creditors entered into Planned Support Agreements (”PSAs”) supporting the new proposed plan of adjustment.
However, following the new proposed plan of adjustment, a
significant amount of creditors not previously involved in the PREPA bankruptcy have
Notes to Financial
Statements (Unaudited) (continued)
objected to the revised plan of adjustment, including the MainStay MacKay
Municipal Bond Funds.
Objecting creditors are appealing
several rulings, including the March net revenue bond lien ruling, the June net revenue bond claims estimation ruling, and the November disclosure statement approval ruling that provides for a plan with disparate recoveries for the same
creditors. Objecting creditors believe the PREPA bankruptcy plan of adjustment is un-confirmable and these rulings will be overturned on appeal, but there is no certainty that objecting creditors will be successful in appealing these rulings,
or if overturned, these creditors will receive the relief sought. The proposed PREPA August plan of adjustment provides 3.5% of cash recovery for objecting creditors to the plan as opposed to 12.5% of cash recovery for consenting creditors who
have not previously settled. Bankruptcy plan confirmation hearings are currently scheduled to begin in March of 2024.
The Fund’s vulnerability to potential losses associated
with such developments may be reduced through investing in municipal securities that feature credit enhancements (such as bond insurance). The bond insurance provider pays both principal and interest when due to the bond holder. The magnitude of
Puerto Rico’s debt restructuring or other adverse economic developments could pose significant strains on the ability of municipal securities insurers to meet all future claims. As of November 30, 2023, 54.5% of the Puerto Rico municipal
securities held by the Fund were insured. The Fund’s largest bond insurance provider, Assured Guaranty Municipal Corp., insured certain Puerto Rico municipal securities totaling 1.04% of the Fund’s total investments. Those securities,
whose principal and interest are covered by bond insurance providers, are shown in the Portfolio of Investments.
(J) Indemnifications. Under the Fund’s organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of performance of their duties to the Fund.
Additionally, in the normal course of business, the Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and that may provide general indemnifications. The Fund's maximum exposure
under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. The Manager believes that the risk of loss in connection with these potential indemnification obligations is
remote. However, there can be no assurance that material liabilities related to such obligations will not arise in the future, which could adversely impact the Fund.
Note 3–Fees and Related Party Transactions
(A) Manager and Subadvisor. New York Life Investments, a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life Insurance Company ("New York Life"), serves as the Fund's Manager,
pursuant to an Amended and Restated Management Agreement ("Management Agreement"). The Manager provides offices, conducts clerical, recordkeeping and bookkeeping services and keeps most of the financial and accounting records required to be
maintained by the Fund. Except for the portion of salaries and expenses that are the responsibility
of the Fund, the Manager pays the salaries and expenses of all personnel
affiliated with the Fund and certain operational expenses of the Fund. The Fund reimburses New York Life Investments in an amount equal to the portion of the compensation of the Chief Compliance Officer attributable to the Fund. MacKay Shields LLC
("MacKay Shields" or the "Subadvisor"), a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life, serves as the Subadvisor to the Fund and is responsible for the day-to-day portfolio management of the Fund. Pursuant
to the terms of a Subadvisory Agreement ("Subadvisory Agreement") between New York Life Investments and MacKay Shields, New York Life Investments pays for the services of the Subadvisor.
Under the Management Agreement, the Fund pays the Manager a
monthly fee for the services performed and the facilities furnished at an annual rate of 0.60% of the “Managed Assets”. Managed Assets is defined as the Fund’s total assets, minus the sum of its accrued liabilities (other than Fund
liabilities incurred for the purpose of creating effective leverage (i.e. tender option bonds) or Fund liabilities related to liquidation preference of any Preferred shares issued).
During the six-month period ended November 30, 2023, New York
Life Investments earned fees from the Fund in the amount of $2,086,653 and paid the Subadvisor in the amount of $1,050,076.
JPMorgan Chase Bank, N.A. ("JPMorgan") provides
sub-administration and sub-accounting services to the Fund pursuant to an agreement with New York Life Investments. These services include calculating the daily NAVs of the Fund, maintaining the general ledger and sub-ledger accounts for the
calculation of the Fund's NAVs, and assisting New York Life Investments in conducting various aspects of the Fund's administrative operations. For providing these services to the Fund, JPMorgan is compensated by New York Life
Investments.
Pursuant to an agreement between the Fund
and New York Life Investments, New York Life Investments is responsible for providing or procuring certain regulatory reporting services for the Fund. The Fund will reimburse New York Life Investments for the actual costs incurred by New York Life
Investments in connection with providing or procuring these services for the Fund.
(B) Transfer, Dividend Disbursing and Shareholder Servicing
Agent. Computershare Trust Company, N.A. (“Computershare”), 150 Royall Street, Canton, Massachusetts, 02021, is the Fund’s transfer, dividend disbursing and
shareholder servicing agent pursuant to an agreement between the Fund and Computershare.
| 26
|
MainStay MacKay
DefinedTerm Municipal Opportunities Fund |
Note 4-Federal Income Tax
As of November 30, 2023, the cost and unrealized appreciation
(depreciation) of the Fund’s investment portfolio, including applicable derivative contracts and other financial instruments, as determined on a federal income tax basis, were as follows:
| |
Federal
Tax
Cost |
Gross
Unrealized
Appreciation |
Gross
Unrealized
(Depreciation) |
Net
Unrealized
Appreciation/
(Depreciation) |
| Investments
in Securities |
$446,223,261
|
$11,603,230
|
$(2,520,932)
|
$9,082,298
|
As of May 31, 2023, for federal
income tax purposes, capital loss carryforwards of $66,357,969, as shown in the table below, were available to the extent provided by the regulations to offset future realized gains of the Fund. Accordingly, no capital gains distributions are
expected to be paid to shareholders until net gains have been realized in excess of such amounts.
Capital
Loss
Available Through |
Short-Term
Capital Loss
Amounts (000’s) |
Long-Term
Capital Loss
Amounts (000’s) |
| Unlimited
|
$40,814
|
$25,544
|
During the year ended May 31, 2023
the tax character of distributions paid to Common shareholders (as reflected in the Statements of Changes in Net Assets) was as follows:
| |
2023
|
|
| Distributions
paid from: |
Ordinary
Income |
Exempt
Interest
Dividends |
| Common
shares |
$573,641
|
$26,884,783
|
Note 5–Custodian
JPMorgan is the custodian of cash and securities held by the
Fund. Custodial fees are charged to the Fund based on the Fund's net assets and/or the market value of securities held by the Fund and the number of certain transactions incurred by the Fund.
Note 6–Purchases and Sales of Securities (in
000’s)
During the six-month period ended November
30, 2023, purchases and sales of securities, other than short-term securities, were $163,541 and $235,250, respectively.
Note 7–Capital Share Transactions
Transactions in capital shares for the six-month period ended
November 30, 2023 and the year ended May 31, 2023, were as follows:
| Common
Shares |
Shares
|
Amount
|
| Six-month
period ended November 30, 2023: |
|
|
| Common
shares issued to shareholders in reinvestment of distributions (a) |
18,793
|
$311,212
|
| Year
ended May 31, 2023: |
|
|
| Common
shares issued to shareholders in reinvestment of distributions (a) |
54,730
|
$951,370
|
| (a)
|
See
page 28 for information on the Fund’s dividend reinvestment plan. |
Note 8–Other Matters
As of the date of this report, the Fund faces a heightened
level of risk associated with current uncertainty, volatility and state of economies, financial markets, rising interest rates, and labor and health conditions around the world. Events such as war, acts of terrorism, recessions, rapid inflation, the
imposition of international sanctions, earthquakes, hurricanes, epidemics and pandemics and other unforeseen natural or human disasters may have broad adverse social, political and economic effects on the global economy, which could negatively
impact the value of the Fund's investments. Developments that disrupt global economies and financial markets may magnify factors that affect the Fund's performance.
Note 9–Subsequent Events
In connection with the preparation of the financial statements
of the Fund as of and for the six-month period ended November 30, 2023, events and transactions subsequent to November 30, 2023, through the date the financial statements were issued have been evaluated by the Manager for possible adjustment and/or
disclosure. No subsequent events requiring financial statement adjustment or disclosure have been identified, other than the following:
On October 2, 2023, the Fund declared a dividend in the amount
of $0.06 per Common share, payable on December 29, 2023, to shareholders of record on December 15, 2023.
On January 2, 2024, the Fund declared dividends to Common
shareholders for the upcoming quarter as shown in the following schedule:
| Month
|
Ex-Date
|
Record
Date |
Payable
Date |
Amount
|
| January
|
1/12/2024
|
1/16/2024
|
1/31/2024
|
$0.06
|
| February
|
2/15/2024
|
2/16/2024
|
2/29/2024
|
$0.06
|
| March
|
3/14/2024
|
3/15/2024
|
3/28/2024
|
$0.06
|
Dividend
Reinvestment Plan (Unaudited)
Pursuant to the Fund’s Dividend Reinvestment Plan (the
“Plan”) shareholders whose shares are registered in their own name may “opt-in” to the Plan and elect to reinvest all or a portion of their distributions in the Common shares by providing the required enrollment notice to
Computershare Trust Company, N.A., the Plan Administrator (“Plan Administrator”). Shareholders whose shares are held in the name of a broker or other nominee may have distributions reinvested only if such a service is provided by the
broker or the nominee or if the broker or the nominee permits participation in the Plan. Shareholders whose shares are held in the name of a broker or other nominee should contact the broker or nominee for details. A shareholder may terminate
participation in the Plan at any time by notifying the Plan Administrator before the record date of the next distribution through the Internet, by telephone or in writing. All distributions to shareholders who do not participate in the Plan, or have
elected to terminate their participation in the Plan, will be paid by check mailed directly to the record holder by or under the direction of the Plan Administrator when the Fund declares a distribution.
When the Fund declares a dividend or other distribution
(together, a “Dividend”) payable in cash, non-participants in the Plan will receive cash and participants in the Plan (i.e., those holders of Common shares who (“opt-in”) will receive the equivalent in Common shares. The
Common shares will be acquired by the Plan Administrator for the participants’ accounts, depending upon the circumstances described below, either (i) through receipt of additional unissued but authorized Common shares from the Fund
(“Newly Issued Common Shares”) or (ii) by purchase of outstanding Common shares on the open market (“Open-Market Purchases”) on the NYSE or elsewhere. If, on the payment date for any Dividend, the closing market price per
Common share plus estimated per share fees, which include any brokerage commissions the Plan Administrator is required to pay, is equal to or greater than the NAV per Common share, the Plan Administrator will invest the Dividend amount in Newly
Issued Common shares on behalf of the participants. The number of Newly Issued Common Shares to be credited to each participant’s account will be determined by dividing the dollar amount of the Dividend by the NAV per Common share on the
payment date; provided that, if the NAV is less or equal to 95% of the closing market value on the payment date, the dollar amount of the Dividend will be divided by 95% of the closing market price per Common share on the payment date. If, on the
payment date for any Dividend, the NAV per Common share is greater than the closing market value plus estimated per share fees, the Plan Administrator will invest the Dividend amount in Common shares acquired on behalf of the participants in
Open-Market Purchases. In the event of a market discount on the payment date for any Dividend, the Plan Administrator will have until the last business day before the next date on which the Common shares trade on an “ex-dividend” basis
or 30 days after the payment date for such Dividend, whichever is sooner (the “Last Purchase Date”), to invest the Dividend amount in Common shares acquired in Open-Market Purchases. It is contemplated that the Fund will pay monthly
income Dividends. Therefore, the period during which Open-Market Purchases can be made will exist only from the payment date of each Dividend through the date before the next “ex-dividend” date which typically will be approximately ten
days. If, before the Plan Administrator has completed its Open-Market Purchases, the market price per Common share exceeds the NAV per Common shares, the average per Common share purchase price paid by the Plan
Administrator may exceed the NAV of the Common shares, resulting in the
acquisition of fewer Common shares than if the Dividend had been paid in Newly Issued Common Shares on the Dividend payment date. Because of the foregoing difficulty with respect to Open-Market Purchases, the Plan provides that if the Plan
Administrator is unable to invest the full Dividend amount in Open-Market Purchases during the purchase period or if the market discount shifts to a market premium during the purchase period, the Plan Administrator may cease making Open-Market
Purchases and may invest the uninvested portion of the Dividend amount in Newly Issued Common Shares at the NAV per Common share at the close of business on the Last Purchase Date provided that, if the NAV per Common share is less than or equal to
95% of the then current market price per Common share; the dollar amount of the Dividend will be divided by 95% of the market price per Common share on the payment date.
The Plan Administrator maintains all shareholders’
accounts in the Plan and furnishes written confirmation of all transactions in the accounts, including information needed by shareholders for tax records. Common shares in the account of each Plan participant will be held by the Plan Administrator
on behalf of the Plan participant, and each shareholder proxy will include those shares purchased or received pursuant to the Plan. The Plan Administrator will forward all proxy solicitation materials to participants and vote proxies for shares held
under the Plan in accordance with the instructions of the participants.
In the case of shareholders such as banks, brokers or
nominees which hold shares for others who are the beneficial owners, the Plan Administrator will administer the Plan on the basis of the number of Common shares certified from time to time by the record shareholder’s name and held for the
account of beneficial owners who participate in the Plan.
There will be no charges with respect to Common shares issued
directly by the Fund as a result of dividends or capital gains distributions payable either in Common shares or in cash. The Plan Administrator’s fees for the handling of the reinvestment of dividends and distributions will be paid by the
Fund. However, each participant will pay a per share fee incurred (currently $0.05) in connection with Open-Market Purchases. The reinvestment of Dividends will not relieve participants of any Federal, state or local income tax that may be
payable (or required to be withheld) on such dividends. See “U.S. Federal Income Tax Matters.” Participants that request a sale of shares through the Plan Administrator are subject to a $2.50 sales fee and a $0.15 per share sold fee. All
per share fees include any brokerage commission the Plan Administrator is required to pay.
The Fund reserves the right to amend or terminate the Plan.
There is no direct service charge to participants with regard to purchases in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants.
All correspondence or questions concerning the Plan should be
directed to the Plan Administrator, Computershare Trust Company, N.A., by telephone (855) 456-9683, through the internet at www.computershare.com/investor or in writing to P.O. Box 43078, Providence, RI 02940-3078.
| 28
|
MainStay MacKay
DefinedTerm Municipal Opportunities Fund |
Proxy Results
The Annual Meeting of Shareholders was held on September 28,
2023, to elect two Class II Trustees of the Fund by shareholders of record as on July 6, 2023. Listed below are the results of this voting.
| Trustees
|
Votes
For |
Votes
Against |
Abstentions
|
Total
Votes |
| Alan
R. Latshaw |
23,604,786
|
687,072
|
0
|
24,291,858
|
| Karen
Hammond |
23,746,969
|
544,889
|
0
|
24,291,858
|
Proxy Voting Policies and Procedures
and Proxy Voting Record
The Fund is required to file with
the SEC its proxy voting records for the 12-month period ending June 30 on Form N-PX. A description of the policies and procedures that are used to vote proxies relating to portfolio securities of the Fund is available free of charge upon request by
calling 800-624-6782 or visiting the SEC’s website at www.sec.gov. The most recent Form N-PX or proxy voting record is available free of charge upon request by
calling 800-624-6782; visiting newyorklifeinvestments.com; or visiting the SEC’s website at www.sec.gov.
Shareholder Reports and Quarterly Portfolio Disclosure
The Fund is required to file its complete schedule of portfolio
holdings with the SEC 60 days after its first and third fiscal quarter on Form N-PORT. The Fund's holdings report is available free of charge upon request by calling New York Life Investments at 800-624-6782.
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Manager
New York Life Investment Management LLC
New York, New York
Subadvisor
MacKay Shields LLC1
New York, New York
Legal Counsel
Dechert LLP
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
Transfer, Dividend Disbursing and Shareholder Servicing
Agent
Computershare Trust Company, N.A.
P.O. Box 43078
Providence, RI 02940-3078
(855)
456-9683
newyorklifeinvestments.com/mmd
1. An affiliate of New York Life Investment Management
LLC.
“New York Life Investments” is both a
service mark, and the common trade name, of certain investment advisors affiliated with New York Life Insurance Company.
| 5013532MS151-23 |
MSMHI10-01/24
|
(NYLIM) NL265
Not applicable.
| Item 3. |
Audit Committee Financial Expert. |
Not applicable.
| Item 4. |
Principal Accountant Fees and Services. |
Not applicable.
| Item 5. |
Audit Committee of Listed Registrants. |
Not applicable.
The Schedule of Investments is included as part of Item 1 of this report.
| Item 7. |
Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. |
Not applicable.
| Item 8. |
Portfolio Managers of Closed-End Management Investment Companies.
|
Not applicable.
| Item 9. |
Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers. |
Not applicable.
| Item 10. |
Submission of Matters to a Vote of Security Holders. |
Since the Registrant’s last response to this item, there have been no material changes to the procedures by which shareholders may recommend nominees to
the Registrant’s Board of Trustees.
| Item 11. |
Controls and Procedures. |
(a) Based on an evaluation of the Registrant’s Disclosure Controls and Procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940) (the “Disclosure Controls”), as of a date within 90 days prior to the filing date (the “Filing Date”) of this Form
N-CSR (the “Report”), the Registrant’s principal executive officer and principal financial officer have concluded that the Disclosure
Controls are reasonably designed to ensure that information required to be disclosed by the Registrant in the Report is recorded, processed, summarized and reported by the Filing Date, including ensuring that information required to be disclosed in
the Report is accumulated and communicated to the Registrant’s management, including the Registrant’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule
30a-3(d)) under the Investment Company Act of 1940 that occurred 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 12. |
Disclosure of Securities Lending Activities for Closed-End
Management Investment Companies. |
Not applicable.
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.
MAINSTAY MACKAY DEFINEDTERM MUNICIPAL OPPORTUNITIES FUND
|
|
|
| By: |
|
/s/ Kirk C. Lehneis |
|
|
Kirk C. Lehneis |
|
|
President and Principal Executive Officer |
Date: February 2, 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/ Kirk C. Lehneis |
|
|
Kirk C. Lehneis |
|
|
President and Principal Executive Officer |
|
| Date: February 2, 2024 |
|
|
| By: |
|
/s/ Jack R. Benintende |
|
|
Jack R. Benintende |
|
|
Treasurer and Principal Financial |
|
|
and Accounting Officer |
|
| Date: February 2, 2024 |
