BlackRock Science and Technology Term Trust · NYSE:BSTZ
BlackRock Science and Technology Term Trust — Proxy Contest (May 2024)
17 slides from BlackRock Science and Technology Term Trust's proxy contest presentation, May 28, 2024
Slide 1: ISS Supplement: Contested Funds
ISS Supplement Contested funds: BlackRock California Municipal Income Trust (NYSE: BFZ) BlackRock New York Municipal Income Trust (NYSE: BNY) BlackRock MuniHoldings New York Quality Fund, Inc. (NYSE: MHN) BlackRock MuniYield Pennsylvania Quality Fund (NYSE: MPA) BlackRock MuniYield New York Quality
Slide 2: Saba rejected constructive settlement proposals that would provide all shareholders with substantial liquidity
Saba rejected constructive settlement proposals that would provide all shareholders with substantial liquidity The Boards offered strong concessions to prevent a costly and unnecessary proxy contest in exchange for a standstill, dismissal of pending litigation and other customary terms Introductory
Slide 3: Saba rejected constructive settlement proposals (cont'd)
Saba rejected constructive settlement proposals that would provide all shareholders with substantial liquidity (cont’d) Despite its ongoing campaign attacks on the Funds’ corporate governance, Saba did not ask for a single change to any of the Funds’ corporate governance practices during settlement
Slide 4: BIGZ and ECAT convened their annual meetings three times to reach quorum
BIGZ and ECAT convened their annual meetings three times to reach quorum and Saba failed to submit the proxies of shareholders it had solicited each time The Funds convened their 2023 annual meetings on July 10, adjourned them to July 25, BIGZ and ECAT each convened their and then adjourned them aga
Slide 5: The independent inspector of elections has confirmed what occurred at BIGZ and ECAT in 2023
The independent inspector of elections has confirmed what occurred at BIGZ and ECAT in 2023 First Coast Results, Inc. was the inspector of elections for the shareholder meetings of BIGZ and ECAT in 2023. First Coast is an independent third-party service provider, who has served as independent inspec
Slide 6: Our corporate governance protects all shareholders, who face different risks than operating companies
Our corporate governance protects all shareholders, who face different risks than in operating companies â–ª The Boards believe that it is inappropriate to compare the Funds’ corporate governance practices to those of operating companies because there are important differences to CEFs CEFs are (1) i
Slide 7: How the Funds' governance practices compare to peers and Saba's funds
This is how the Funds’ governance practices compare to their peers and the two funds Saba has taken over Quorum Requirement for Voting Standard for Board Structure Shareholder Meetings Uncontested Elections 10% 6% 2% 10% 20% 33% 50% 50% 65% 90% 94% 80% 100% 90% 100% Contested Saba CEF Market3 Contes
Slide 8: The Funds' quorum requirements track market practice and protect shareholders
The Funds’ quorum requirements track market practice and protect shareholders â–ª Requiring a majority of outstanding shares to establish quorum for 20% the transaction of business is consistent with market practice – 65% of CEFs (excluding those advised by BlackRock) use a 80% majority standard for
Slide 9: Quarterly performance information
Quarterly performance information The Board receives the following performance information for all BlackRock-advised closed-end funds: â–ª Quarterly Performance Summary Report – This report is the primary performance report for all closed-end funds that includes a comprehensive set of current and hi
Slide 10: Discount analysis information
Discount analysis information Each Board receives a Quarterly Closed-End Fund Review Report, with the following discount-related information: â–ª The primary focus is the closed-end fund industry market price trending (discounts) across all asset classes: municipals, fixed-income, equity â–ª Board c
Slide 11: Discount analysis information (cont'd)
Discount analysis information (cont’d) In addition to the quarterly materials that are provided to the Boards, materials are also provided to the Discount Committee as requested and for consideration in the annual contract renewal process Working with the Discount Committee in 2023, BlackRock conduc
Slide 12: Discount Analysis—Exhibits
Discount Analysis—Exhibits
Slide 13: Does good performance lead to narrower discounts?
Exhibit 1 Does good performance lead to narrower discounts? â–ª There appears to be an inverse relationship between 5Y Annualized performance and discount level (i.e., higher returns -> narrower discount) â–ª This relationship holds better for Equity and Taxable Bond Charts below detail the distribu
Slide 14: Do higher distribution yields lead to narrower discounts?
Exhibit 2 Do higher distribution yields lead to narrower discounts? â–ª There appears to be an inverse relationship between distribution yield and discount level (i.e., higher yield -> narrower discount). However, the relationship varies by asset class â–ª The inverse relationship is most prominent
Slide 15: Does fund secondary market liquidity affect discounts?
Exhibit 3 Does fund secondary market liquidity affect discounts? â–ª For Equity funds, there appears to be an inverse relationship between secondary market liquidity and discount levels (i.e., higher liquidity -> narrower discount) â–ª The least frequently traded Equity CEFs have traded at wider dis
Slide 16: Is there any correlation between the category size to median discount?
Exhibit 4 Is there any correlation between the category size to median discount? â–ª There seems to be a negative correlation between the size of the category group and discount level (i.e., larger category group -> wider discount). This relationship holds most of the time Chart below shows the corr
Slide 17: Is there any correlation between category size and discount spread?
Exhibit 5 Is there any correlation between category size and discount spread? â–ª There seems to be a positive correlation between the size of the category and the discount spread of the category (i.e., more funds within a category -> wider discount spread). This relationship holds most of the time
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