I'm curious about BlackRock's intent with this fund. I think we can safely assume BABs will never be issued again, so theoretically the fund will basically sit on the limited bonds they managed to snag...forgoing any leverage. However BlackRock gave themselves the ability to invest in other things similar to BABs under their "Contigent Review Provision". From the news:
"The Board of Trustees, in consideration of its evaluation of potential actions with respect to the Trust, has approved an extension of the Contingent Review Provision until on or before December 31, 2013, at which time the Board of Trustees will evaluate potential actions for the Trust."
So what...is BlackRock going to keep kicking this provision deadline back 12 months at a time (which would be ideal), or do they actually have plans to take this fund and invest it in non-BAB securities (which would be bad)?
Either way this quasi-muni blows the socks off any other Gov't backed security.
BAB closed end funds do not own 100% of BAB bonds. The individual bonds in these funds trade on the bond market every day. BBN can buy and sell them to make portfolio adjustments at will. BlackRock has mastered the management of leveraged closed end funds over the years. No need to worry, and since these are taxable munis, they are not threatened by the elimination of tax free status being talked about. Keep an eye on all of your investments, but sit back and enjoy these excellent yields and add more shares on weakness. You can still buy BABS under NAV.