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Nuveen Taxable Municipal Income Fund – ‘N-14 8C’ on 3/20/18

On:  Tuesday, 3/20/18, at 5:27pm ET   ·   Private-to-Public:  Document/Exhibit ¶  –  Release Delayed   ·   Accession #:  1193125-18-89340   ·   File #:  333-223801

Previous ‘N-14 8C’:  None   ·   Next & Latest:  ‘N-14 8C/A’ on 5/4/18   ·   4 References:   By:  Nuveen Preferred & Income Opportunities Fund – ‘N-2ASR’ on 3/19/24 By:  Nuveen Taxable Municipal Income Fund – ‘N-2’ on 1/19/24 By:  Nuveen Taxable Municipal Income Fund – ‘N-2/A’ on 1/19/21 By:  Nuveen Taxable Municipal Income Fund – ‘N-2’ on 8/31/20 

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/20/18  Nuveen Taxable Muni Income Fund   N-14 8C¶              17:6.1M                                   Donnelley … Solutions/FA

Document/Exhibit                   Description                      Pages   Size 

 1: N-14 8C     Nuveen Build America Bond Fund                      HTML   2.97M 
17: COVER     ¶ Comment-Response or Cover Letter to the SEC         HTML      8K 
13: EX-99.13.A  Transfer Agency and Service Agreement, Dated June   HTML    128K 
                15, 2017                                                         
14: EX-99.13.B  First Amendment to Transfer Agency and Service      HTML     63K 
                Agreement                                                        
15: EX-99.14    Consent of Independent Auditor                      HTML      9K 
16: EX-99.16    Powers of Attorney                                  HTML     32K 
 2: EX-99.6.A   Investment Management Agreement, Dated October 1,   HTML     33K 
                2014                                                             
 3: EX-99.6.B   Renewal of Investment Management Agreement, Dated   HTML     26K 
                July 28, 2015                                                    
 4: EX-99.6.C   Renewal of Investment Management Agreement, Dated   HTML     76K 
                July 27, 2016                                                    
 5: EX-99.6.D   Renewal of Investment Management Agreement, Dated   HTML     25K 
                July 24, 2017                                                    
 6: EX-99.6.E   Investment Sub-Advisory Agreement, Dated October    HTML     40K 
                1, 2014                                                          
 7: EX-99.6.F   Notice of Continuance of Investment Sub-Advisory    HTML     39K 
                Agreement, Dated July 28, 2015                                   
 8: EX-99.6.G   Notice of Continuance of Investment Sub-Advisory    HTML     37K 
                Agreement, Dated July 28, 2016                                   
 9: EX-99.6.H   Notice of Continuance of Investment Sub-Advisory    HTML     36K 
                Agreement, Dated July 24, 2017                                   
10: EX-99.8     Nuveen Open-End and Closed-End Funds Deferred       HTML     82K 
                Compensation Plan                                                
11: EX-99.9.A   Amended and Restated Master Custodian Agreement     HTML    388K 
12: EX-99.9.B   Appendix A to Custodian Agreement                   HTML     29K 

As filed with the Securities and Exchange Commission on March 20, 2018

File No. 333-                

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-14

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

☐ Pre-Effective Amendment No.         

☐ Post-Effective Amendment No.         

NUVEEN BUILD AMERICA BOND FUND

(Exact Name of Registrant as Specified in Charter)

333 West Wacker Drive

Chicago, Illinois 60606

(Address of Principal Executive Offices: Number, Street, City, State, Zip Code)

(800) 257-8787

(Area Code and Telephone Number)

Gifford R. Zimmerman

Vice President and Secretary

Nuveen Investments

333 West Wacker Drive

Chicago, Illinois 60606

(Name and Address of Agent for Service)

Copies to:

Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this Registration Statement.

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

IMPORTANT NOTICE TO SHAREHOLDERS

OF NUVEEN BUILD AMERICA BOND OPPORTUNITY FUND (NBD)

AND

NUVEEN BUILD AMERICA BOND FUND (NBB)

(EACH, A “FUND” AND COLLECTIVELY, THE “FUNDS”)

[•], 2018

Although we recommend that you read the complete Joint Proxy Statement/Prospectus, for your convenience, we have provided a brief overview of the issues to be voted on.

Information Regarding the Proposals

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[•], 2018

NUVEEN BUILD AMERICA BOND OPPORTUNITY FUND (NBD)

AND

NUVEEN BUILD AMERICA BOND FUND (NBB)

(EACH, A “FUND” AND COLLECTIVELY, THE “FUNDS”)

NOTICE OF 2018 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON [•], 2018

To the Shareholders:

Notice is hereby given that the 2018 Annual Meeting of Shareholders (the “Annual Meeting”) of Nuveen Build America Bond Opportunity Fund (the “Target Fund”) and Nuveen Build America Bond Fund (the “Acquiring Fund”) will be held at the offices of Nuveen, 333 West Wacker Drive, Chicago, Illinois 60606, on [•], [•], 2018, at [•] [•].m. Central time, for the following purposes:

Shareholders of the Target Fund are being solicited to vote on the election of four (4) Board Members at the Annual Meeting so that the Fund may continue to be governed by its current Board Members, and avoid vacancies on the Board, in the event the Merger is not consummated in a timely manner.

Only shareholders of record of each Fund as of the close of business on [•], 2018 are entitled to notice of and to vote at the Annual Meeting and any and all adjournments or postponements thereof.

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All shareholders are cordially invited to attend the Annual Meeting. In order to avoid delay and additional expense for the Fund and to assure that your shares are represented, please vote as promptly as possible, regardless of whether you plan to attend the Annual Meeting. You may vote by mail, by telephone or over the Internet. To vote by mail, please mark, sign, date and mail the enclosed proxy card. No postage is required if mailed in the United States. To vote by telephone, please call the toll-free number located on your proxy card and follow the recorded instructions, using your proxy card as a guide. To vote over the Internet, go to the Internet address provided on your proxy card and follow the instructions, using your proxy card as a guide.

If you intend to attend the Annual Meeting in person and you are a record holder of a Fund’s shares, in order to gain admission you must show photographic identification, such as your driver’s license. If you intend to attend the Annual Meeting in person and you hold your shares through a bank, broker or other custodian, in order to gain admission you must show photographic identification, such as your driver’s license, and satisfactory proof of ownership of shares of a Fund, such as your voting instruction form (or a copy thereof) or broker’s statement indicating ownership as of a recent date. If you hold your shares in a brokerage account or through a bank or other nominee, you will not be able to vote in person at the Annual Meeting unless you have previously requested and obtained a “legal proxy” from your broker, bank or other nominee and present it at the Annual Meeting.

Gifford R. Zimmerman

Vice President and Secretary

The Nuveen Funds

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The information contained in this Joint Proxy Statement/Prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This Joint Proxy Statement/Prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities, in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION

DATED MARCH 20, 2018

NUVEEN FUNDS

333 WEST WACKER DRIVE

CHICAGO, ILLINOIS 60606

(800) 257-8787

JOINT PROXY STATEMENT/PROSPECTUS

NUVEEN BUILD AMERICA BOND OPPORTUNITY FUND (NBD)

AND

NUVEEN BUILD AMERICA BOND FUND (NBB)

(EACH, A “FUND” AND COLLECTIVELY, THE “FUNDS”)

[•], 2018

This Joint Proxy Statement/Prospectus is being furnished to shareholders of Nuveen Build America Bond Opportunity Fund (the “Target Fund” or a “Fund”) and shareholders of Nuveen Build America Bond Fund (the “Acquiring Fund” or a “Fund”), each, a diversified, closed-end management investment company, in connection with the solicitation of proxies by each Fund’s Board of Trustees (each, a “Board” and each trustee, a “Board Member”) for use at each Fund’s 2018 Annual Meeting of Shareholders to be held at the offices of Nuveen, LLC (“Nuveen”), 333 West Wacker Drive, Chicago, Illinois 60606, on [•], [•], 2018, at [•] [•].m. Central time, and at any and all adjournments or postponements thereof (each, an “Annual Meeting” and collectively, the “Annual Meetings”), to consider the proposals listed below, as applicable, and discussed in greater detail elsewhere in this Joint Proxy Statement/Prospectus. The Funds are organized as Massachusetts business trusts. The enclosed proxy card and this Joint Proxy Statement/Prospectus are first being sent to shareholders of the Funds on or about [•], 2018. For each Fund, shareholders of record as of the close of business on [•], 2018 are entitled to notice of and to vote at the Fund’s Annual Meeting and any and all adjournments or postponements thereof.

This Joint Proxy Statement/Prospectus explains concisely what you should know before voting on the proposals described in this Joint Proxy Statement/Prospectus or investing in the Acquiring Fund. Please read it carefully and keep it for future reference.

The securities offered by this Joint Proxy Statement/Prospectus have not been approved or disapproved by the Securities and Exchange Commission (“SEC”), nor has the SEC passed upon the accuracy or adequacy of this Joint Proxy Statement/Prospectus. Any representation to the contrary is a criminal offense.

On the matters coming before each Fund’s Annual Meeting as to which a choice has been specified by shareholders on the accompanying proxy card, the shares will be voted accordingly where such proxy card is properly executed, timely received and not properly revoked (pursuant to the instructions below). If a proxy is returned and no choice is specified, the shares will be voted FOR the proposal(s). Shareholders of a Fund who execute proxies or provide voting instructions by telephone or by Internet may revoke them at any time before a vote is taken on a proposal by filing with that Fund a written notice of revocation, by delivering a duly executed proxy bearing a later date or by attending the Fund’s Annual Meeting and voting in person. A prior proxy can also be revoked by voting again through the toll-free number or the Internet address listed in the proxy card. However, merely attending an Annual Meeting will not revoke any previously submitted proxy.

The Board of each Fund has determined that the use of this Joint Proxy Statement/Prospectus for the Annual Meetings is in the best interests of each Fund in light of the similar matters being considered and voted on by shareholders.

The proposed Merger (as defined below) and fundamental policy proposals are part of an initiative to offer long-term shareholders of Nuveen’s two Build America Bond closed-end funds the opportunity to maintain their investment exposure to scarce BABs with above-market purchase yields relative to current taxable municipal bond yields, while deferring potentially sizeable taxable capital gains. As part of this initiative, the Board of the Acquiring Fund also has approved: (i) the adoption of certain changes to the Acquiring Fund’s non-fundamental investment policies to implement a broader taxable municipal bond investment mandate that over time is intended to promote increased diversification of credit and total return opportunities by investing at least 80% of its managed assets in taxable municipal securities; (ii) the removal of the Acquiring Fund’s Contingent Term Provision (as defined below), which will have the effect of converting the Acquiring Fund from a term structure to a perpetual structure; (iii) a tender offer of up to 20% of the shares of the Acquiring Fund (including shares held by Target Fund shareholders as shareholders of the combined fund upon the closing of the Merger) following the elimination of the Contingent Term Provision; and (iv) changing the name of the Acquiring Fund to “Nuveen Taxable Municipal Income Fund.”

Certain matters are subject to shareholder approval. The matters on which shareholders will vote are summarized below.

Shareholders of the Target Fund are being solicited to vote on the election of four (4) Board Members at the Annual Meeting so that the Target Fund may continue to be governed by its current Board Members, and avoid vacancies on the Board, in the event the Merger is not consummated in a timely manner.

A quorum of shareholders is required to take action at each Annual Meeting. A majority (more than 50%) of the shares entitled to vote at each Annual Meeting, represented in person or by proxy, will constitute a quorum of shareholders at that Annual Meeting. Votes cast in person or by proxy at each Annual Meeting will be tabulated by the inspectors of election appointed for that Annual Meeting. “Broker non-votes” are shares held by a broker or nominee for which the broker or nominee returns a valid proxy but are not voted because instructions have not been received from beneficial owners or persons entitled to vote and the broker or nominee does not have discretionary authority to

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vote such shares. For purposes of voting on a proposal, abstentions and broker non-votes will be counted as present for purposes of determining whether a quorum is present. The effects of abstentions and broker non-votes on the various proposals presented in this Joint Proxy Statement/Prospectus are set forth below. Abstentions and broker-non votes will have no effect on the outcome of any vote on the adjournment or postponement of an Annual Meeting.

With respect to each proposal, the voting requirements and effect of abstentions and broker non-votes pursuant to each Fund’s Declaration of Trust, by-laws and applicable law are as follows:

Under the terms of the Agreement and Plan of Merger, the closing of the Merger is subject to the satisfaction or waiver of the following closing conditions, among others: (1) the requisite approval by the shareholders of each Fund of the applicable proposal with respect to the Merger in this Joint Proxy Statement/Prospectus, (2) shareholders of the Acquiring Fund approving the elimination of the Acquiring Fund’s Contingent Term Provision, (3) each Fund’s receipt of an opinion substantially to the effect that the merger of the Target Fund with and into a wholly-owned Subsidiary of the Acquiring

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Fund will qualify as a reorganization under the Code (see “—Material Federal Income Tax Consequences of the Merger”), (4) the absence of legal proceedings challenging the Merger, and (5) the Funds’ receipt of certain customary certificates and legal opinions.

Broker-dealer firms holding shares of a Fund in “street name” for the benefit of their customers and clients will request the instructions of such customers and clients on how to vote their shares before the Fund’s Annual Meeting. The Funds understand that, under the rules of the New York Stock Exchange (the “NYSE”), such broker-dealer firms may, for certain “routine” matters, grant discretionary authority to the proxies designated by each Board to vote without instructions from their customers and clients if no instructions have been received prior to the date specified in the broker-dealer firm’s request for voting instructions. Proposal No. 4 is a “routine” matter, and beneficial owners who do not provide proxy instructions or who do not return a proxy card may have their shares voted by broker-dealer firms on Proposal No. 4 in the discretion of such broker-dealer firms. Proposal Nos. 1, 2 and 3 are “non-routine” matters for which, under the rules of the NYSE, uninstructed shares may not be voted by broker-dealers.

Broker-dealers who are not members of the NYSE may be subject to other rules, which may or may not permit them to vote your shares without instruction. We urge you to provide instructions to your broker or nominee so that your votes may be counted.

For both the Target Fund and the Acquiring Fund, those persons who were shareholders of record as of the close of business on [•], 2018 will be entitled to one vote for each common share held and a proportionate fractional vote for each fractional common share held.

As of [•], 2018, the shares of the Funds issued and outstanding are as follows:

The following documents have been filed with the SEC and are incorporated into this Joint Proxy Statement/Prospectus by reference:

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No other parts of the Funds’ Annual or Semi-Annual Reports are incorporated by reference herein.

Copies of the foregoing may be obtained without charge by calling (800) 257-8787 or writing the Funds at 333 West Wacker Drive, Chicago, Illinois 60606. If you wish to request a copy of the Merger SAI, please ask for the “Merger SAI.” In addition, each Fund will furnish, without charge, a copy of its most recent Annual Report or Semi-Annual Report to a shareholder upon request. Any such request should be directed to the applicable Fund by calling (800) 257-8787 or by writing the applicable Fund at 333 West Wacker Drive, Chicago, Illinois 60606.

The Funds are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the 1940 Act, and in accordance therewith file reports and other information with the SEC. Reports, proxy statements, registration statements and other information filed by the Funds, including the Registration Statement on Form N-14 relating to the common shares of the Acquiring Fund of which this Joint Proxy Statement/Prospectus is a part, may be inspected without charge and copied (for a duplication fee at prescribed rates) at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549 or at the SEC’s New York Regional Office (Brookfield Place, 200 Vesey Street, Suite 400, New York, New York 10281) or Chicago Regional Office (175 West Jackson Boulevard, Suite 900, Chicago, Illinois 60604). You may call the SEC at (202) 551-8090 for information about the operation of the public reference room. You may obtain copies of this information, with payment of a duplication fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Branch, Office of Consumer Affairs and Information Services, Securities and Exchange Commission, Washington, D.C. 20549. You may also access reports and other information about the Funds on the EDGAR database on the SEC’s Internet site at http://www.sec.gov.

The common shares of the Target Fund and the Acquiring Fund are listed on the NYSE. Upon the closing of the Merger, it is expected that the common shares of the Acquiring Fund will continue to be listed on the NYSE. Reports, proxy statements and other information concerning the Funds can be inspected at the offices of the NYSE, 11 Wall Street, New York, New York 10005.

This Joint Proxy Statement/Prospectus serves as a prospectus of the Acquiring Fund in connection with the issuance of the Acquiring Fund common shares in connection with the Merger. In this connection, no person has been authorized to give any information or make any representation not contained in this Joint Proxy Statement/Prospectus and, if so given or made, such information or representation must not be relied upon as having been authorized. This Joint Proxy Statement/Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction in which, or to any person to whom, it is unlawful to make such offer or solicitation.

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JOINT PROXY STATEMENT/PROSPECTUS

[•], 2018

NUVEEN BUILD AMERICA BOND OPPORTUNITY FUND (NBD) AND

NUVEEN BUILD AMERICA BOND FUND (NBB)

TABLE OF CONTENTS

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PROPOSAL NO. 1—MERGER OF THE TARGET FUND WITH AND INTO A WHOLLY-OWNED SUBSIDIARY OF THE ACQUIRING FUND

(SHAREHOLDERS OF THE TARGET FUND ONLY)

The following is a summary of certain information contained elsewhere in this Joint Proxy Statement/Prospectus with respect to the proposed combination of the Target Fund and the Acquiring Fund, to be effected by the merger (the “Merger”) of the Target Fund with and into NTMIF Merger Sub, LLC (the “Merger Sub”), a Massachusetts limited liability company and wholly-owned subsidiary of the Acquiring Fund, with shares of the Target Fund being converted into newly issued commons shares of the Acquiring Fund (with cash being distributed in lieu of fractional common shares). More complete information is contained elsewhere in this Joint Proxy Statement/Prospectus and in the Merger SAI and the appendices hereto and thereto. Shareholders should read the entire Joint Proxy Statement/Prospectus carefully.

Background and Reasons for the Merger

The Board of each Fund has determined that the Merger is in the best interests of the Target Fund and Acquiring Fund, respectively. Each Fund’s Board considered the Merger as part of an ongoing initiative to rationalize the product offerings of Nuveen funds and eliminate overlapping products. The Merger will eliminate overlapping products by combining two funds that have the same investment adviser, sub-adviser and portfolio managers, the same investment objectives and substantially identical investment policies, risks and, at present, portfolio compositions. As more fully described below, the Merger is intended to benefit shareholders in a number of ways, including continued exposure to each Fund’s portfolio of scarce BABs with above-market purchase yields relative to current taxable municipal bond yields and avoidance of potentially sizeable taxable capital gain distributions that may result if the Funds are terminated in accordance with their current policies. The proposed elimination of the term structure of the Acquiring Fund, combined with an expanded investment mandate, would allow the portfolio managers to retain less liquid, higher yielding securities as well as pursue attractive investment opportunities across the taxable municipal bond market without regard to liquidity at the termination date. Over time, Nuveen Fund Advisors believes such flexibility should enhance common share net earnings and distribution potential.

Based on information provided by Nuveen Fund Advisors, LLC (“Nuveen Fund Advisors” or the “Adviser”), the investment adviser to each Fund, the Merger is intended to benefit Fund shareholders in a number of ways, including, among other things:

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In order for the Merger to occur, all closing conditions must be satisfied or waived. The closing of the Merger is conditioned on, among other things, each Fund obtaining the requisite shareholder approval of the Merger proposals (Proposal Nos. 1 and 2) and Acquiring Fund shareholders approving the elimination of the Acquiring Fund’s Contingent Term Provision (Proposal No. 3). Because the closing of the Merger is contingent upon each of the Target Fund and the Acquiring Fund obtaining such shareholder approvals and satisfying (or obtaining the waiver of) other closing conditions, it is possible that the Merger will not occur, even if Target Fund shareholders entitled to vote on the Merger proposal approve such proposal and the Target Fund satisfies all of its closing conditions, if the Acquiring Fund does not obtain the requisite shareholder approvals or satisfy (or obtain the waiver of) its closing conditions. If the Merger is not consummated, each Fund’s Board may take such actions as it deems in the best interests of its Fund, including continuing to operate the Fund as a stand-alone fund through its termination date or seeking shareholder approval to eliminate its Contingent Term Provision at a subsequent meeting, as applicable. For a fuller discussion of the Target Fund Board’s considerations regarding the approval of the Merger, see “C. Information About the Merger—Reasons for the Merger—Considerations of the Funds’ Boards.”

The Board has authorized the Acquiring Fund to conduct a tender offer following the elimination of the Acquiring Fund’s Contingent Term Provision pursuant to which the Fund will offer to purchase up to 20% of its then outstanding common shares at a price per share, without interest, equal to the net asset value per share of its common shares as determined as of the close of regular trading on the NYSE on the expiration date of the tender offer, less a repurchase fee attributable to the direct costs of the tender offer. The tender offer has been authorized only if the Acquiring Fund’s Contingent Term Provision is eliminated. For more information regarding the tender offer, see “C. Information About the Merger—Post-Merger Tender Offer.”

Material Federal Income Tax Consequences of the Merger

As a condition to closing, each Fund will receive an opinion of Vedder Price P.C., subject to certain representations, assumptions and conditions, substantially to the effect that the proposed Merger will qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, the Target Fund is not expected to recognize gain or loss for federal income tax purposes as a direct result of the Merger. It is also expected that shareholders of the Target Fund whose Target Fund common shares are converted into Acquiring Fund common shares pursuant to the Merger will recognize no gain or loss for federal income tax purposes as a result of such conversion except to the extent that a Target Fund shareholder receives cash in lieu of a fractional Acquiring Fund common share. Prior to the closing of the Merger, the Target Fund expects to declare a distribution of all of its net investment income and net capital gains, if any. All or a portion of such distribution may be taxable to the Target Fund’s shareholders for federal income tax purposes. To the extent that portfolio securities of the Target Fund are sold prior to the closing of the Merger, the Target Fund may recognize gains or losses, which may increase or decrease the net capital gains or net investment income to be distributed by the Target Fund. However, since the Target Fund’s current portfolio composition is substantially identical to that of the Acquiring Fund, it is not currently expected that any significant portfolio sales will occur solely in connection with the Merger. See “C. Information About the Merger—Material Federal Income Tax Consequences of the Merger.”

In addition, to pay for common shares purchased in the Acquiring Fund’s tender offer following the elimination of its Contingent Term Provision, the Acquiring Fund will be required to sell a portion of its portfolio investments. The Acquiring Fund currently has significant capital loss carryforwards. If, at the time of such sale, the Acquiring Fund’s portfolio investments have appreciated in value and the realized gains from such sale were to exceed the amount of the Acquiring Fund’s

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available capital loss carryforwards, the sale would result in realization of capital gains or investment income that may then need to be distributed to Acquiring Fund shareholders. In such event, which Nuveen Fund Advisors believes to be unlikely, this may result in U.S. federal income tax liability for persons who remain Acquiring Fund shareholders following the completion of the tender offer. See “C. Information About the Merger—Post-Merger Tender Offer.”

Comparison of the Target Fund and the Acquiring Fund

General. The Target Fund and the Acquiring Fund are diversified, closed-end management investment companies. Set forth below is certain comparative information about the organization, capitalization and operation of each Fund.

Each Fund’s common shares are listed for trading on the NYSE, where such shares may be purchased and sold through broker-dealers at prevailing market prices, which may be greater than (premium) or less than (discount) net asset value. As closed-end investment companies, the common shares of the Funds are not redeemable.

The Funds also have similar dividend policies with respect to the payment of dividends on their common shares. See “C. Information About the Merger—Description of Common Shares to Be Issued by the Acquiring Fund; Comparison to Target Fund—Distributions.”

Investment Objectives and Policies. The Funds have the same investment objectives and substantially identical investment policies and risks. Each Fund’s primary investment objective is to provide current income through investments in taxable municipal securities. As a secondary objective, each Fund seeks to enhance portfolio value and total return. Each Fund currently seeks to achieve its investment objectives by investing primarily in a diversified portfolio of taxable municipal securities known as “Build America Bonds” (or “BABs”). Each Fund also currently has a Contingent Term Provision (as defined below).

The Board of the Acquiring Fund has approved the following changes to the policies of the Acquiring Fund: (1) subject to shareholder approval, eliminating the Contingent Term Provision; (2) changing the name of the Fund to “Nuveen Taxable Municipal Income Fund”; and (3) changing the Fund’s policy of investing at least 80% of its Managed Assets in BABs to a policy of investing at least 80% of its Managed Assets in taxable municipal bonds. If the Merger is consummated, these changes will take effect as of the closing date or as soon as practicable thereafter. Otherwise, these changes will take effect upon completion of the shareholder meeting, including any adjournments thereof.

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Each Fund is diversified for purposes of the 1940 Act. Consequently, as to 75% of its assets, a Fund may not invest more than 5% of its total assets in the securities of any single issuer (and in not more than 10% of the outstanding voting securities of an issuer), except that this limitation does not apply to cash, securities of the U.S. Government, its agencies and instrumentalities, and securities of other investment companies.

The following summary compares the current principal investment policies and strategies of the Acquiring Fund to the (i) current principal investment policies and strategies of the Target Fund and (ii) principal investment policies and strategies of the Acquiring Fund following the adoption of certain non-fundamental investment policies. “Managed Assets” includes the net assets of a Fund as well as assets of a Fund that are attributable to leverage.

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During temporary defensive periods or in order to keep cash fully invested, the Funds may deviate from their investment policies and objectives. During such periods, a Fund may invest up to 100% of its Managed Assets in short-term investments, including high quality, short-term securities that may be either tax-exempt or taxable, or may invest in short-, intermediate-, or long-term U.S. Treasury Bonds. There can be no assurance that such strategies will be successful.

Except for each Fund’s investment objectives and Contingent Term Provision, which are fundamental policies of the Fund, each of the foregoing investment policies, including each Fund’s

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investment policy of investing at least 80% of its Managed Assets in certain securities, is a non-fundamental investment policy that can be changed by the Fund’s Board without a shareholder vote. However, each Fund’s investment policy to invest at least 80% of its Managed Assets in certain securities may be changed by the Board only following the provision of 60 days’ prior notice to shareholders. The Funds can only change their fundamental investment restrictions with the approval of the holders of a “majority of the outstanding voting securities” of a Fund as is defined in the 1940 Act. When used with respect to particular shares of a Fund, a “majority of the outstanding voting securities” means the vote of (i) 67% or more of a Fund’s shares present at a meeting, if the holders of more than 50% of the Fund’s shares are present or represented by proxy; or (ii) more than 50% of the Fund’s outstanding common shares, whichever is less.

The Funds have the same fundamental and non-fundamental investment restrictions. See “Investment Restrictions” in the Merger SAI.

Credit Quality. A comparison of the credit quality (as a percentage of total investment exposure, which includes the leveraged effect of the Funds’ banks borrowings and investments in inverse floating rate securities of tender option bond trusts) of the portfolios of the Target Fund and the Acquiring Fund, as of September 30, 2017, is set forth in the table below.

Portfolio Turnover. Each of the Funds may engage in portfolio trading when considered appropriate, but short-term trading is not used as a primary means of achieving a Fund’s investment objective. Although the Funds cannot accurately predict their annual portfolio turnover rates, the annual portfolio turnover rate of each Fund is generally not expected to exceed 25% under normal circumstances. However, there are no limits on the Funds’ rates of portfolio turnover, and investments may be sold without regard to length of time held when, in Nuveen Asset Management’s opinion, investment considerations warrant such action.

For the fiscal year ended March 31, 2017, the portfolio turnover rate of the Target Fund and the Acquiring Fund was 17% and 11%, respectively.

Leverage. Each Fund may use leverage (“regulatory leverage”) to the extent permitted by the 1940 Act. Regulatory leverage consists of “senior securities” as defined under the 1940 Act, which

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include (1) borrowings, including loans from financial institutions; (2) issuances of debt securities; and (3) issuances of preferred shares ((1),(2), and (3) are hereinafter collectively referred to as regulatory leverage). Each Fund may also use other forms of leverage including, but not limited to, reverse repurchase agreements and portfolio investments that have the economic effect of leverage, including, but not limited to, investments in inverse floating rate securities of tender option bond trusts. The use of leverage creates special risks for common shareholders. See “B. Risk Factors—General Risks of Investing in the Funds—Leverage Risk.”

As of [•], each Fund employs leverage through reverse repurchase agreements and investments in inverse floating rate securities of tender option bond trusts.

Certain important ratios related to each Fund’s use of leverage as of each Fund’s last three fiscal year ends are set forth below:

The timing, amount and terms of any leverage are determined by a Fund’s Board, and may vary with prevailing market or economic conditions. Changes in the timing, amount or terms of leverage may impact the fees and expenses of the Funds.

Board Members and Officers. The Funds have the same Board Members and officers. The management of each Fund, including general oversight of the duties performed by the Fund’s investment adviser under an investment management agreement between the investment adviser and such Fund (each, an “Investment Management Agreement”), is the responsibility of its Board. Effective January 1, 2018, each Fund has eleven (11) Board Members, one (1) of whom is an “interested person,” as defined in the 1940 Act, and ten (10) of whom are not interested persons. The names and business addresses of the Board Members and officers of the Funds and their principal occupations and other affiliations during the past five years are set forth under “Proposal No. 4—The Election of Board Members.”

Pursuant to each Fund’s by-laws, each Fund’s Board is divided into three classes (Class I, Class II and Class III) with staggered multi-year terms, such that only the members of one of the three classes stand for election each year. The staggered board structure could delay for up to two years the election of a majority of the Board of each Fund. This board structure will remain in place following the closing of the Merger.

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The members of each Fund’s Board have adopted a unitary board structure whereby they oversee all funds in the Nuveen fund complex. In adopting a unitary board structure, the Board Members seek to provide effective governance through establishing a board, the overall composition of which will, as a body, possess the appropriate skills, independence and experience to oversee the Nuveen funds’ business. The Board believes it is more efficient to have a single board review and oversee common policies and procedures, which increases the Board’s knowledge and expertise with respect to the many aspects of fund operations that are complex-wide in nature. The unitary structure also enhances each Fund’s Board’s influence and oversight over the Adviser and other service providers.

All individuals who serve as officers of the Acquiring Fund also serve as officers of the Target Fund. Information regarding the officers of the Funds is set forth under “Proposal No. 4—The Election of Board Members—Fund Officers”.

Investment Adviser. Nuveen Fund Advisors, the Funds’ investment adviser, offers advisory and investment management services to a broad range of investment company clients. Nuveen Fund Advisors has overall responsibility for management of the Funds, oversees the management of the Funds’ portfolios, manages the Funds’ business affairs and provides certain clerical, bookkeeping and other administrative services. Nuveen Fund Advisors is located at 333 West Wacker Drive, Chicago, Illinois 60606.

Nuveen Fund Advisors, a registered investment adviser, is a subsidiary of Nuveen, LLC (“Nuveen”), the investment management arm of Teachers Insurance and Annuity Association of America (“TIAA”). TIAA is a life insurance company founded in 1918 by the Carnegie Foundation for the Advancement of Teaching and is the companion organization of College Retirement Equities Fund. As of December 31, 2017, Nuveen managed approximately $970 billion in assets, of which approximately $139 billion was managed by Nuveen Fund Advisors.

Unless earlier terminated as described below, each Fund’s Investment Management Agreement with Nuveen Fund Advisors will remain in effect until August 1, 2018. Each Investment Management Agreement continues in effect from year to year so long as such continuation is approved at least annually by: (1) the Board or the vote of a majority of the outstanding voting securities of the Fund; and (2) a majority of the Board Members who are not interested persons of any party to the Investment Management Agreement, cast in person at a meeting called for the purpose of voting on such approval. Each Investment Management Agreement may be terminated at any time, without penalty, by either the Fund or Nuveen Fund Advisors upon 60 days’ written notice and is automatically terminated in the event of its assignment, as defined in the 1940 Act.

Pursuant to each Investment Management Agreement, each Fund has agreed to pay an annual management fee for the overall advisory and administrative services and general office facilities provided by Nuveen Fund Advisors. Each Fund’s management fee consists of two components—a complex-level fee, based on the aggregate amount of all eligible fund assets managed by Nuveen Fund Advisors, and a specific fund-level fee, based only on the amount of assets within such Fund. This pricing structure enables the Funds’ shareholders to benefit from growth in assets within each individual Fund as well as from growth of complex-wide assets managed by Nuveen Fund Advisors.

For the fiscal year ended March 31, 2017, the effective management fee rate of the Target Fund and Acquiring Fund, expressed as a percentage of average total daily managed assets (including assets attributable to leverage), was 0.6057% and 0.5873%, respectively.

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The annual fund-level fee rate for each Fund, payable monthly, is calculated according to the following schedule:

Fund-Level Fee Schedule for each Fund

The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. Each Fund pays all of its other costs and expenses of its operations, including compensation of its Board Members (other than those affiliated with the Adviser), custodian, transfer agency and dividend disbursing expenses, legal fees, expenses of independent auditors, expenses of repurchasing shares, expenses of issuing any preferred shares, expenses of preparing, printing and distributing shareholder reports, notices, proxy statements and reports to governmental agencies, listing fees and taxes, if any.

Each Fund also pays a complex-level fee to Nuveen Fund Advisors, which is payable monthly and is in addition to the fund-level fee. The complex-level fee is based on the aggregate daily amount of eligible assets for all Nuveen sponsored funds in the United States, as stated in the table below. As of September 30, 2017, the complex-level fee rate for each Fund was 0.1599%.

The annual complex-level fee for each Fund, payable monthly, is calculated by multiplying the current complex-wide fee rate determined according to the following schedule:

Complex-Level Fee Rates

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Sub-Adviser. Nuveen Fund Advisors has selected its wholly owned subsidiary, Nuveen Asset Management, LLC (“Nuveen Asset Management” or the “Sub-Adviser”), located at 333 West Wacker Drive, Chicago, Illinois 60606, to serve as the sub-adviser to each of the Funds pursuant to a sub-advisory agreement between Nuveen Fund Advisors and Nuveen Asset Management (each, a “Sub-Advisory Agreement”). Nuveen Asset Management, a registered investment adviser, oversees day-to-day operations and manages the investment of the Funds’ assets on a discretionary basis, subject to the supervision of Nuveen Fund Advisors. Pursuant to each Sub-Advisory Agreement, Nuveen Asset Management is compensated for the services it provides to the Funds with a portion of the management fee Nuveen Fund Advisors receives from each Fund. Nuveen Fund Advisors and Nuveen Asset Management retain the right to reallocate investment advisory responsibilities and fees between themselves in the future.

For the services provided pursuant to each Fund’s Sub-Advisory Agreement, Nuveen Fund Advisors pays Nuveen Asset Management a portfolio management fee, payable monthly, equal to 53.8462% of the management fee (net of applicable breakpoints, waivers and reimbursements) paid by the Fund to Nuveen Fund Advisors.

A discussion of the basis for the Board’s most recent approval of each Fund’s current Investment Management Agreement and Sub-Advisory Agreement are included in the Fund’s Semi-Annual Report for the reporting period ended September 30, 2017.

Portfolio Management. As each Fund’s sub-adviser, Nuveen Asset Management is responsible for the investment of each Fund’s Managed Assets. Daniel J. Close, CFA and John Miller, CFA have served as portfolio managers of the Funds since their respective inceptions and will continue to be responsible for the day-to-day management of the Acquiring Fund’s investment portfolio following the consummation of the Merger.

Daniel J. Close, CFA, is a Senior Vice President of Nuveen Asset Management. Mr. Close is the lead portfolio manager for the firm’s taxable municipal strategies. He manages several state-specific municipal bond strategies, including Georgia, Kentucky, Michigan, North Carolina, Ohio and Tennessee, and related institutional portfolios. He joined Nuveen Investments in 2000 as a member of Nuveen’s product management and development team. He then served as a research analyst for Nuveen’s municipal investing team, covering corporate-backed, energy, transportation and utility credits. He received his BS in Business from Miami University and his MBA from Northwestern University’s Kellogg School of Management. Mr. Close has earned the Chartered Financial Analyst designation.

John Miller, CFA, is Co-Head of Fixed Income and Managing Director of Nuveen Asset Management (NAM). He supervises NAM’s municipal fixed-income investment activities. He also has direct responsibility for managing high-yield municipal funds and certain institutional accounts. He joined Nuveen Investments in 1996 as a municipal credit analyst and moved into portfolio management in 2000. Mr. Miller became a managing director and head of Nuveen Asset Management’s portfolio managers in 2006, and he became its Co-Head of Fixed Income in 2011. Mr. Miller earned his BA in economics and political science from Duke University, an MA in economics from Northwestern University, and an MBA with honors in finance from the University of Chicago.

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The Merger SAI provides additional information about the portfolio managers’ compensation, other accounts managed and ownership of securities in the Funds, as applicable.

Comparative Risk Information

Because the Funds have the same investment objective and substantially identical investment policies and, at present, portfolio compositions, the principal risks of an investment in each Fund are substantially identical. In addition, substantially identical principal risks will apply to an investment in the Acquiring Fund following the elimination of the Acquiring Fund’s Contingent Term Provision and the adoption by the Acquiring Fund of the expanded investment mandate. An investment in each Fund is subject to various risks associated with investing primarily in a portfolio of municipal securities and employing leverage, which include:

In addition, should a BAB’s issuer fail to continue to meet the applicable requirements imposed on such bonds, it is possible that such issuer may not receive federal cash subsidy payments, impairing the issuer’s ability to make scheduled interest payments. The BABs outstanding as of December 31, 2010 will continue to be eligible for the federal interest rate subsidy, which continues for the life of the BABs; however, there is no assurance that the federal subsidy will be continued at the original levels. For example, the federal government originally subsidized 35% of the issuer’s interest cost but has since reduced the subsidy in accordance with a yearly rate reduction schedule due to sequestration (the subsidy for 2018 is 28.4%).

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The principal risks of investing in the Funds are described in more detail below. See “B. Risk Factors” on page 17 for additional information regarding risks.

Comparative Expense Information

The purpose of the Comparative Fee Table is to assist you in understanding the various costs and expenses of investing in common shares of the Funds. The information in the table reflects the fees and expenses for each Fund’s six-month semi-annual period ended September 30, 2017 (annualized) and the pro forma expenses for the six-month semi-annual period ended September 30, 2017 (annualized), for the Acquiring Fund following the Merger.

In the Comparative Fee Table, generally accepted accounting principles (“GAAP”) require Interest Expense on Borrowings to include the leverage expense of inverse floating rate securities of self-deposited tender option bond (TOB) trusts (self-deposited inverse floaters) but do not require the inclusion of leverage expense of inverse floating rate securities of externally deposited TOB trusts. Because the Target Fund holds a lower percentage of self-deposited inverse floaters than the Acquiring Fund, its leverage expenses under GAAP are lower in the Comparative Fee Table. However, the Funds have historically held similar amounts of overall TOB leverage and the total leverage costs of the Acquiring Fund and Target Fund are substantially the same after taking all TOBs into account. The Board considered that the pro forma expense ratio of the Target Fund was estimated to decline following the Merger after taking into account these costs.

The figures in the Example are not necessarily indicative of past or future expenses, and actual expenses may be greater or less than those shown. The Funds’ actual rates of return may be greater or less than the hypothetical 5% annual return shown in the Example.

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Comparative Fee Table⁽¹⁾

Example: The following examples illustrate the expenses that a shareholder would pay on a $1,000 investment that is held for the time periods provided in the table. The examples assume that all dividends and other distributions are reinvested and that Total Annual Expenses remain the same. The examples also assume a 5% annual return. The examples should not be considered a representation of future expenses, and your actual expenses may be higher or lower. However, based on the assumptions discussed above, your costs would be:

Comparative Performance Information

Comparative total return performance for the Funds for the periods ended September 30, 2017 (annualized):

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Average Annual Total Return on Net Asset Value is the combination of changes in share net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending net asset value. The actual reinvestment price for the last dividend declared in the period may often be based on the Fund’s market price (and not its net asset value), and therefore may be different from the price used in the calculation. Average Annual Total Return on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over several days, and in some instances it may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Past performance information is not necessarily indicative of future results.

An investment in the Acquiring Fund may not be appropriate for all investors. The Acquiring Fund is not intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no assurance that the Acquiring Fund will achieve its investment objective. Investors should consider their long-term investment goals and financial needs when making an investment decision with respect to the Acquiring Fund. An investment in the Acquiring Fund is intended to be a long-term investment, and you should not view the Acquiring Fund as a trading vehicle. Your shares at any point in time may be worth less than your original investment, even after taking into account the reinvestment of Acquiring Fund dividends and distributions, if applicable.

Because the Funds have the same investment objective and substantially identical investment policies and, at present, portfolio compositions, investments in the Funds are subject to similar risks. In addition, substantially identical risks will apply to an investment in the Acquiring Fund following the elimination of the Acquiring Fund’s Contingent Term Provision and the adoption by the Acquiring Fund of the expanded investment mandate. The risks associated with an investment in each Fund are discussed below. The risks and special considerations listed below should be considered by shareholders of each Fund in their evaluation of the Merger.

General Risks of Investing in the Funds

Investment and Market Risk. An investment in the shares of a Fund is subject to investment risk, including the possible loss of the entire principal amount that you invest. Your investment in shares represents an indirect investment in the municipal securities owned by the Fund. Your shares at any point in time may be worth less than your original investment, even after taking into account the reinvestment of dividends and distributions, if applicable. In addition, the ability of municipalities to collect revenue and service their obligations could be materially and adversely affected by an economic downturn or prolonged recession. Because certain states, including California, New York, Illinois, Texas and Ohio, were heavy issuers of BABs, the Funds may have a greater exposure to the economic or other factors affecting such states than a more diversified national municipal bond fund. Investors bear a risk of loss to the extent that the price at which they sell their shares is lower than at the time of purchase. The shares of each Fund are designed primarily for long-term investors, and you should not view either Fund as a vehicle for trading purposes.

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Market Discount to Net Asset Value. The market price of shares of closed-end investment companies may fluctuate and during certain periods may trade at prices lower than net asset value. Because the market price of a Fund’s shares will be determined by factors such as relative supply of and demand for the shares in the market, general market and economic conditions and other factors beyond the control of the Fund, the Fund cannot predict whether its shares will trade at, above or below net asset value. This characteristic is a risk separate and distinct from the risk that a Fund’s net asset value could decrease as a result of investment activities.

Credit and Below-Investment-Grade Risk. Credit risk is the risk that one or more municipal securities in a Fund’s portfolio will decline in price, or the issuer thereof will fail to pay interest or principal when due, because the issuer of the security experiences a decline in its financial status. In general, lower-rated municipal securities carry a greater degree of risk that the issuer will lose its ability to make interest and principal payments, which could have a negative impact on a Fund’s net asset value or dividends. Credit risk is increased when a portfolio security is downgraded or the perceived creditworthiness of the issuer deteriorates. If a downgrade occurs, the Adviser and/or the Sub-Adviser will consider what action, including the sale of the security, is in the best interests of a Fund and its shareholders. Municipal securities of below-investment-grade quality, commonly referred to as “junk bonds,” are regarded as having predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal when due, and they are more susceptible to default or decline in market value due to adverse economic and business developments than investment-grade municipal securities. Also, to the extent that the rating assigned to a municipal security in a Fund’s portfolio is downgraded by any NRSRO, the market price and liquidity of such security may be adversely affected. The market values for municipal securities of below-investment-grade quality tend to be volatile, and these securities are less liquid than investment-grade municipal securities. For these reasons, an investment in a Fund, compared with a portfolio consisting predominantly or solely of investment-grade securities, may experience the following:

Adverse changes in economic conditions are more likely to lead to a weakened capacity of a below-investment-grade issuer to make principal payments and interest payments compared to an investment-grade issuer. The principal amount of below-investment-grade securities outstanding has proliferated in the past decade as an increasing number of issuers have used below-investment-grade securities for financing. An economic downturn may severely affect the ability of highly leveraged issuers to service their debt obligations or to repay their obligations upon maturity. In the event of an economic downturn, with decreased tax and other revenue streams of municipal issuers, or in the event interest rates rise sharply, increasing the interest cost on variable rate instruments and negatively impacting economic activity, the number of defaults by below-investment-grade municipal issuers would likely increase. Similarly, prolonged downturns in profitability in specific industries could

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adversely affect private activity bonds. The market values of lower-quality debt securities tend to reflect individual developments of the issuer to a greater extent than do higher-quality securities, which react primarily to fluctuations in the general level of interest rates. Factors having an adverse impact on the market value of lower-quality securities may have an adverse impact on a Fund’s net asset value and the market value of its common shares. In addition, a Fund may incur additional expenses to the extent it is required to seek recovery upon a default in payment of principal or interest on its portfolio holdings. In certain circumstances, a Fund may be required to foreclose on an issuer’s assets and take possession of its property or operations. In such circumstances, a Fund would incur additional costs in disposing of such assets and potential liabilities from operating any business acquired.

The secondary market for below-investment-grade securities may not be as liquid as the secondary market for more highly rated securities, a factor that may have an adverse effect on a Fund’s ability to dispose of a particular security. There are fewer dealers in the market for below-investment grade municipal securities than the market for investment-grade municipal securities. The prices quoted by different dealers for below-investment-grade municipal securities may vary significantly, and the spread between the bid and ask price is generally much larger for below-investment-grade municipal securities than for higher-quality instruments. Under adverse market or economic conditions, the secondary market for below-investment-grade securities could contract, independent of any specific adverse changes in the condition of a particular issuer, and these instruments may become illiquid. As a result, a Fund could find it more difficult to sell these securities or may be able to sell the securities only at prices lower than if such securities were widely traded. Prices realized upon the sale of such lower rated or unrated securities, under these circumstances, may be less than the prices used in calculating a Fund’s net asset value.

Issuers of such below-investment-grade securities are typically highly leveraged and may not have available to them more traditional methods of financing. Therefore, the risk associated with acquiring the securities of such issuers generally is greater than is the case with higher rated securities. For example, during an economic downturn or a sustained period of rising interest rates, highly leveraged issuers of below-investment-grade securities may experience financial stress. During such periods, such issuers may not have sufficient revenues to meet their interest payment obligations. The issuer’s ability to service its debt obligations also may be adversely affected by specific developments, the issuer’s inability to meet specific projected forecasts or the unavailability of additional financing. The risk of loss from default by the issuer is significantly greater for the holders of below-investment grade securities because such securities are generally unsecured and are often subordinated to other creditors of the issuer. Prices and yields of below-investment-grade securities will fluctuate over time and, during periods of economic uncertainty, volatility of below-investment-grade securities may adversely affect a Fund’s net asset value. In addition, investments in below-investment-grade zero coupon bonds rather than income-bearing below-investment-grade securities, may be more speculative and may be subject to greater fluctuations in value due to changes in interest rates.

Each Fund may invest in distressed securities, which are securities of obligors that are involved in bankruptcy or insolvency proceedings or are experiencing other financial difficulties at the time of acquisition by the Fund. The issuers of such securities may be in transition, out of favor, financially leveraged or troubled, or potentially troubled, and may be or have recently been involved in major strategic actions, restructurings, bankruptcy, reorganization or liquidation. These characteristics of these obligors can cause their securities to be particularly risky, although they also may offer the potential for high returns. These obligors’ securities may be considered speculative, and the ability of the obligors to pay their debts on schedule could be affected by adverse interest rate movements,

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changes in the general economic climate, economic factors affecting a particular industry or specific developments within the companies. Distressed securities frequently do not produce income while they are outstanding and may require a Fund to bear certain extraordinary expenses in order to protect and recover its investment.

Investments in lower rated or unrated securities may present special tax issues for a Fund, including when the issuers of these securities default on their obligations pertaining thereto, and the federal income tax consequences to the Fund as a holder of such distressed securities may not be clear.

Municipal Securities Market Risk. Investing in the municipal securities market involves certain risks. The municipal securities market is one in which dealer firms make markets in bonds on a principal basis using their proprietary capital, and during periods of market turmoil these firms’ capital may be severely constrained. As a result, under such conditions, some firms may be unwilling to commit their capital to purchase and to serve as a dealer for municipal securities. The amount of public information available about the municipal securities in a Fund’s portfolio is generally less than that for corporate equities or bonds, and a Fund’s investment performance may therefore be more dependent on the analytical abilities of the Adviser and the Sub-Adviser than if the Fund were to invest in stocks or taxable bonds. The secondary market for municipal securities, particularly the below-investment-grade securities in which a Fund may invest, also tends to be less well-developed or liquid than many other securities markets, which may adversely affect the Fund’s ability to sell its municipal securities at attractive prices or at prices approximating those at which the Fund values them from time to time. Municipal securities may contain redemption provisions, which may allow the securities to be called or redeemed prior to their stated maturity, potentially resulting in the distribution of principal and a reduction in subsequent interest distributions.

The ability of municipal issuers to make timely payments of interest and principal may be diminished during general economic downturns and as governmental cost burdens are reallocated among federal, state and local governments. In addition, laws enacted in the future by Congress or state legislatures or by referenda could extend the time for payment of principal and/or interest or impose other constraints on the enforcement of such obligations or on the ability of municipalities to levy taxes. Further, some state and local governments have been and in the future may be subject to direct ballot referenda that could limit their financial flexibility, or their ability to levy taxes or raise tax revenues, which may adversely affect the marketability of notes and bonds issued by those state and local governments. Issuers of municipal securities might seek protection under the bankruptcy laws. In the event of bankruptcy of such an issuer, a Fund could experience delays in collecting principal and interest and the Fund may not, in all circumstances, be able to collect all principal and interest to which it is entitled. To enforce its rights in the event of a default in the payment of interest or repayment of principal, or both, a Fund may take possession of and manage the assets securing the issuer’s obligations on such securities, which may increase the Fund’s operating expenses. Any income derived from a Fund’s ownership or operation of such assets may not be of the type that would allow the Fund to continue to qualify as a regulated investment company for federal income tax purposes.

Revenue bonds issued by state or local agencies to finance the development of low-income, multi-family housing involve special risks in addition to those associated with municipal securities generally, including that the underlying properties may not generate sufficient income to pay expenses and interest costs. These bonds are generally non-recourse against the property owner, may be junior to the rights of others with an interest in the properties, may pay interest the amount of which changes based in part on the financial performance of the property, may be pre-payable without penalty and may be used to finance the construction of housing developments that, until completed and rented, do

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not generate income to pay interest. Additionally, unusually high rates of default on the underlying mortgage loans may reduce revenues available for the payment of principal or interest on such mortgage revenue bonds.

U.S. federal tax law changes that take effect in 2018 may affect the demand for and supply of municipal bonds, which may affect yields and other factors.

Special Risks Related to Certain Municipal Obligations. Municipal leases and certificates of participation involve special risks not normally associated with general obligations or revenue bonds. Leases and installment purchase or conditional sale contracts (which normally provide for title to the leased asset to pass eventually to the governmental issuer) have evolved as a means for governmental issuers to acquire property and equipment without meeting the constitutional and statutory requirements for the issuance of debt. The debt issuance limitations are deemed to be inapplicable because of the inclusion in many leases or contracts of “non-appropriation” clauses that relieve the governmental issuer of any obligation to make future payments under the lease or contract unless money is appropriated for such purpose by the appropriate legislative body on a yearly or other periodic basis. In addition, such leases or contracts may be subject to the temporary abatement of payments in the event that the governmental issuer is prevented from maintaining occupancy of the leased premises or utilizing the leased equipment. Although the obligations may be secured by the leased equipment or facilities, the disposition of the property in the event of non-appropriation or foreclosure might prove difficult, time consuming and costly, and may result in a delay in recovering or the failure to fully recover a Fund’s original investment. In the event of non-appropriation, the issuer would be in default and taking ownership of the assets may be a remedy available to a Fund, although the Fund does not anticipate that such a remedy would normally be pursued. To the extent that a Fund invests in unrated municipal leases or participates in such leases, the credit quality rating and risk of cancellation of such unrated leases will be monitored on an ongoing basis. Certificates of participation, which represent interests in unmanaged pools of municipal leases or installment contracts, involve the same risks as the underlying municipal leases. In addition, a Fund may be dependent upon the municipal authority issuing the certificates of participation to exercise remedies with respect to the underlying securities. Certificates of participation also entail a risk of default or bankruptcy, both of the issuer of the municipal lease and also the municipal agency issuing the certificate of participation.

Build America Bonds Risk. Build America Bonds are taxable municipal obligations issued pursuant to the American Recovery and Reinvestment Act of 2009 that are subject to federal subsidies of up to 35% of the interest payable on the bonds in the form of direct subsidies to the bond issuer or refundable tax credits to the bond holder. Build America Bonds are not guaranteed by the U.S. government or its agencies or instrumentalities. While the federal subsidy continues for the life of the bonds, there is no assurance that the federal subsidy will be continued at original levels. For example, the federal government originally subsidized 35% of the issuer’s interest cost but has since reduced the subsidy in accordance with a yearly rate reduction schedule due to sequestration (the subsidy for 2018 is 28.4%). Further decreases in the level of the subsidy may impair the ability of issuers to make interest payments when due.

Build America Bonds were an alternative form of financing to state and local governments whose primary means for accessing the capital markets had been through issuance of tax free municipal bonds. Pursuant to the terms of the American Recovery and Reinvestment Act of 2009, the issuance of Build America Bonds ceased on December 31, 2010. As a result, the availability of such bonds is limited and there can be no assurance that Build America Bonds will be actively traded. The market for the bonds and/or their liquidity may be negatively affected. Changes to the U.S. federal

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income tax laws that take effect in 2018 may affect the demand for and supply of taxable municipal bonds, including BABs.

Build America Bonds involve similar risks as traditional municipal bonds, including credit and market risk. Because certain states, including California, New York, Illinois, Texas and Ohio, were heavy issuers of BABs, the Funds may have a greater exposure to the economic or other factors affecting such states than a more diversified national municipal bond fund. In addition, should a Build America Bond’s issuer fail to continue to meet the applicable requirements, it is possible that such issuer may not receive federal cash subsidy payments, impairing the issuer’s ability to make scheduled interest payments. Build America Bonds may be subject to greater reinvestment risk, which is the risk that the Fund is unable to invest in bonds with similar yields, as BABs with attractive purchase yields mature or are called.

Tender Option Bond Regulatory Risk. The federal banking regulators, the SEC and the Commodity Futures Trading Commission (“CFTC”) in recent years have adopted rules and regulations that have impacted or may impact tender option bond trusts (referred to herein as “TOB trusts”) and securities issued by such trusts, including most notably the so-called “Volcker Rule,” added to the Bank Holding Company Act of 1956 with the adoption of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The Volcker Rule places certain restrictions on the ability of any “banking entity” to sponsor, acquire interests in and engage in certain activities with a TOB trust. As a result, certain activities to support the remarketing of floating rate certificates undertaken by banking entities, in their role as remarketing agents or liquidity providers to TOB trusts, before the compliance date for the Volcker Rule are no longer permitted under the standard TOB trust structure. To be compliant with the Volcker Rule, the standard TOB trust structure has been modified since the Rule’s adoption (1) to shift certain rights and responsibilities from the remarketing agent and liquidity provider to the owners of the inverse floating rate securities such as a Fund itself, and (2) to change the way in which liquidity is provided to support remarketing of the floating rate securities. Holders of inverse floating rate securities, including a Fund, may delegate many of these responsibilities to a third-party administrator, which would generate additional costs relative to the standard TOB trust structure. The total impact of these modifications remains to be fully seen, but the operational and structural changes associated with these modifications may make early unwinds of TOB trusts in adverse market scenarios more likely, may make the use of TOB trusts more expensive and, overall, may make it more difficult to use TOB trusts to effectively leverage municipal investments to the extent that a Fund may desire. In addition, these modifications have raised or may raise other regulatory issues that may require further refinement to the structure, may impede the future use of TOB trusts as a means of financing leverage, or may increase future costs of TOB-based leverage.

Interest Rate Risk. Generally, when market interest rates rise, bond prices fall, and vice versa. Interest rate risk is the risk that the municipal securities in a Fund’s portfolio will decline in value because of increases in market interest rates. As interest rates decline, issuers of municipal securities may prepay principal earlier than scheduled, forcing a Fund to reinvest in lower yielding securities and potentially reducing the Fund’s income. As interest rates increase, slower-than-expected principal payments may extend the average life of securities, potentially locking-in a below-market interest rate and reducing a Fund’s value. In typical market interest rate environments, the prices of longer-term municipal securities generally fluctuate more than prices of shorter-term municipal securities as interest rates change. Because each Fund primarily invests in longer-term municipal securities, the common share net asset value and market price per share will fluctuate more in response to changes in

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market interest rates than if a Fund invested primarily in shorter-term municipal securities. Because the values of lower-rated and comparable unrated debt securities are affected both by credit risk and interest rate risk, the price movements of such lower grade securities typically have not been highly correlated to the fluctuations of the prices of investment-grade-quality securities in response to changes in market interest rates. A Fund’s use of leverage, as described herein, will tend to increase common share interest rate risk. There may be less governmental intervention in the securities markets in the near future. The negative impact on fixed-income securities if interest rates increase as a result could negatively impact a Fund’s net asset value.

Market Conditions. The 2007–2009 financial crisis in the U.S. and global economies and the ongoing European sovereign debt crisis resulted in an unusually high degree of volatility in the financial markets, both domestic and foreign, and in the net asset values of many investment companies, including to some extent the Funds. A financial crisis of a similar nature in the future may result in fixed-income instruments again experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. The financial condition of federal, state and local governments may be sensitive to market events, which may, in turn, adversely affect the marketability of notes and bonds they issue. In the event of a general economic downturn, declines in real estate prices and general business activity may reduce tax revenues of many state and local governments and could affect the economic viability of projects that are the sole source of revenue to support various municipal securities. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. As a result, it may be unusually difficult to identify both risks and opportunities using past models of the interplay of market forces, or to predict the duration of unfavorable market conditions.

In response to the 2007–2009 financial crisis and its aftermath and the ongoing European sovereign debt crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support the financial markets. Where economic conditions in the United States and elsewhere have been recovering for several years, they are nevertheless perceived in many regards as still fragile. Withdrawal of government support, failure of efforts in response to a future crisis, or investor perception that such efforts are not succeeding could adversely affect the value and liquidity of certain securities. The severity or duration of unfavorable economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations. See “—Municipal Securities Market Risk.”

Inverse Floating Rate Securities Risk. Typically, inverse floating rate securities represent beneficial interests in TOB trusts that hold municipal bonds. See “D. Additional Information About the Investment Policies—Portfolio Investments—Municipal Securities—Inverse Floating Rate Securities.” In general, income on inverse floating rate securities will decrease when interest rates increase and increase when interest rates decrease. Investments in inverse floating rate securities may subject a Fund to the risks of reduced or eliminated interest payments and losses of principal in respect of the underlying municipal bonds.

In the case of certain TOB trusts, neither the holders of the associated floating rate securities nor the TOB trust itself have recourse to the holder of the inverse floating rate securities for losses on the underlying municipal bonds. In that case, the risk of loss to a Fund generally is limited to its investment in such securities. However, in certain circumstances and in the Sub-Adviser’s discretion, a Fund may enter into a recourse arrangement with the liquidity provider to a TOB trust in the form of a

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separate shortfall and forbearance agreement by which a Fund will agree to reimburse the liquidity provider for any amounts paid by it under the liquidity facility. A Fund may enter into such recourse agreements: (1) when the liquidity provider to the TOB trust requires such an agreement because the level of leverage in the trust exceeds the level that the liquidity provider is willing to support absent such an agreement; and/or (2) to seek to prevent the liquidity provider from collapsing the trust in the event that the underlying municipal bond held in the trust has declined in value to the point where it may cease to exceed the face amount of outstanding short-term floaters. Such an agreement would require a Fund to reimburse the liquidity provider, among other amounts, upon termination of the TOB trust for the shortfall of the liquidation value of the bonds held in the trust relative to the amount of principal and unpaid interest due to the holders of floating rate securities. In such instances, a Fund may be at risk of loss that exceeds its investment in the inverse floating rate securities.

Inverse floating rate securities may increase or decrease in value at a greater rate than the underlying municipal bonds, which effectively leverages a Fund’s investment. As a result, the market value of such securities generally will be more volatile than that of otherwise comparable municipal bonds held on an unleveraged basis outside a TOB trust.

Each Fund may invest in inverse floating rate securities issued by TOB trusts in which the liquidity provider has recourse to the Fund (a “recourse TOB trust”) to the extent that the value of the bonds deposited in the TOB trust may fall in value below the principal amount of the short-term floating rate securities issued by that trust. The inverse floating rate securities issued by such recourse TOB trusts may be highly leveraged. The structure and degree to which a Fund’s inverse floating rate securities are highly leveraged will vary based upon a number of factors, including the size of the trust itself and the terms of the underlying municipal bonds. An inverse floating rate security generally is considered highly leveraged if the ratio of (1) the principal amount of the short-term floating rate securities issued by the TOB trust to (2) the principal amount of that TOB trust’s inverse floating rate securities equals or exceeds 3:1. In the event of a significant decline in the value of an underlying municipal bond held in a recourse TOB trust, a Fund may suffer losses in excess of the amount of its investment in the inverse floating securities (typically up to an amount equal to the outstanding face amount of such municipal bonds) as a result of liquidating the trust.

A Fund’s investment in inverse floating rate securities will create effective leverage, used in pursuit of increased common share net income and returns. But such effective leverage could reduce common share income (such as if the interest rate paid on the short-term floating rate securities were to exceed the interest rate being received on the municipal bonds underlying the TOB trust, net of trust expenses, for a meaningful period of time), and could also diminish common share long-term returns (such as if the value of the municipal bonds underlying the TOB trust were to decline in value by more than any positive differential between the income being earned on those underlying bonds, net of trust expenses, relative to the interest being paid to the holders of the short-term floating rate securities issued by that trust).

The amount of fees paid to the Adviser (which in turn pays a portion of its fees to the Sub-Adviser) for investment advisory services will be higher when a Fund uses leverage because the advisory fees are calculated based on the Fund’s managed assets. This may create an incentive for the Adviser and/or the Sub-Adviser to leverage the Fund.

Inverse floating rate securities have varying degrees of liquidity based, among other things, upon the liquidity of the underlying municipal bonds deposited in the TOB trust.

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The leverage attributable to inverse floating rate securities may be “called away” on relatively short notice and therefore may be less permanent than more traditional forms of leverage. In certain circumstances, the likelihood of an increase in the volatility of net asset value and market price of the common shares may be greater for a fund (like the Funds) that relies primarily on inverse floating rate securities to achieve a desired effective leverage ratio. A Fund may be required to sell its inverse floating rate securities at less than favorable prices or to liquidate other Fund portfolio holdings in certain circumstances, including, but not limited to, the following:

There is no assurance that a Fund’s strategy of investing in inverse floating rate securities will be successful.

Leverage Risk. Leverage risk is the risk associated with the use of borrowings, the issuance of preferred shares or the use of inverse floating rate securities to leverage the common shares. There can be no assurance that a Fund’s leveraging strategy will be successful. Through the use of leverage, each Fund seeks to enhance potential common share earnings over time by typically sourcing leverage with costs based upon short-term interest rates and investing at long-term municipal rates which are typically, although not always, higher. Because the long-term municipal securities in which each Fund invests generally pay fixed rates of interest while the Fund’s costs of leverage generally fluctuate with short- to intermediate-term yields, the incremental earnings from leverage will vary over time. However, each Fund may use derivatives, such as interest rate swaps, to fix the effective rate paid on all or a portion of the Fund’s leverage in an effort to lower leverage costs over an extended period. The income benefit from leverage will be reduced (increased) to the extent that the difference narrows (widens) between the net earnings on a Fund’s portfolio securities and its cost of leverage. If short- or intermediate-term rates rise and a Fund’s leverage costs fluctuate, the Fund’s cost of leverage could exceed the fixed rate of return on long-term bonds held by the Fund that were acquired during periods of lower interest rates, reducing returns to common shareholders. This could occur even if short- or intermediate-term and long-term municipal rates rise. Because of the costs of leverage, a Fund may incur losses even if the Fund has positive returns if such returns are not sufficient to cover the costs of leverage. Each Fund’s cost of leverage includes the interest rate paid on its borrowings or dividends on preferred shares, the expenses relating to the issuance of preferred shares and ongoing maintenance of any borrowings and/or the interest attributable to tender option bonds, as well as any other ongoing fees and expenses associated with those borrowings or preferred shares. Each Fund also bears the one-time costs associated with establishing borrowing facilities, issuing preferred shares and refinancing such leverage. Each Fund may seek to refinance its leverage over time, in the ordinary course, as current forms of leverage mature or it is otherwise desirable to refinance. If a Fund is unable to replace existing leverage on comparable terms, its costs of leverage will increase. Accordingly, there is no assurance that the use of leverage may result in a higher yield or return to common shareholders.

Each Fund’s use of leverage also creates incremental common share net asset value risk because the full impact of price changes in the Fund’s investment portfolio, including assets

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attributable to leverage, is borne by common shareholders. This can lead to a greater increase in net asset values in rising markets than if a Fund were not leveraged, but it also can result in a greater decrease in net asset values in declining markets. A Fund’s use of leverage similarly can magnify the impact of changing market conditions on common share market prices.

As of [•], the leverage effects through reverse repurchase agreements and investments in inverse floating rate securities of tender option bond trusts are included in effective leverage ratios. Prior to [•], the Funds employed leverage through borrowings and investments in inverse floating rate securities of tender option bond trusts. Each Fund will pay (and shareholders will bear) any costs and expenses relating to the Fund’s use of leverage, which will result in a reduction in the net asset value of the common shares. A Fund may in the future, based on its assessment of market conditions, increase or decrease its level of leverage or change the types of leverage employed. Such changes may impact net investment income and the market value of common shares. There can be no assurance that the Acquiring Fund will maintain the types or levels of leverage historically used by the Acquiring Fund prior to the Merger or that the Acquiring Fund’s leverage strategy will be successful.

Each Fund may invest in the securities of other investment companies, which may themselves be leveraged and therefore present similar risks to those described above. See “—Other Investment Companies Risk.” In addition, any investment by a Fund in leveraged investment companies would magnify the Fund’s leverage risk.

As noted above, the amount of fees paid to the Adviser (which in turn pays a portion of its fees to the Sub-Adviser) for investment advisory services will be higher when a Fund uses financial leverage because the advisory fees are calculated based on the Fund’s managed assets—this may create an incentive for the Adviser and/or the Sub-Adviser to leverage the Fund.

Reverse Repurchase Agreement Risk. Reverse repurchase agreements involve the sale of securities held by a Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment, and represent borrowings of the Fund. Reverse repurchase agreements involve the risk that the other party to the agreement may fail to return the securities in a timely manner or at all. A Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of investments made with cash collateral, is less than the value of the securities. These events could also trigger adverse tax consequences to the Fund. The use by a Fund of reverse repurchase agreements involves many of the same risks of leverage since the proceeds derived from such reverse repurchase agreements may be invested in additional securities.

Insurance Risk. Each Fund may purchase municipal securities that are secured by insurance, bank credit agreements or escrow accounts. The credit quality of the companies that provide such credit enhancements will affect the value of those securities. During and following the 2007–2009 financial crisis, certain significant providers of insurance for municipal securities incurred significant losses as a result of exposure to sub-prime mortgages and other lower credit quality investments that experienced defaults or otherwise suffered extreme credit deterioration. Such losses reduced the insurers’ capital and called into question their continued ability to perform their obligations under such insurance should they be called upon to do so. While an insured municipal security will typically be deemed to have the rating of its insurer, if the insurer of a municipal security suffers a downgrade in its credit rating or the market discounts the value of the insurance provided by the insurer, the rating of the underlying municipal security will be more relevant and the value of the municipal security would more closely, if not entirely, reflect such rating. In such a case, the value of insurance associated with a

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municipal security would decline and may not add any value. The insurance feature of a municipal security does not guarantee the full payment of principal and interest through the life of an insured obligation, the market value of the insured obligation or the net asset value of the common shares represented by such insured obligation.

Tax Risk. To qualify for the favorable U.S. federal income tax treatment generally accorded to regulated investment companies, among other things, each Fund must derive in each taxable year at least 90% of its gross income from certain prescribed sources and satisfy a diversification test on a quarterly basis. If a Fund fails to satisfy the qualifying income or diversification requirements in any taxable year, the Fund may be eligible for relief provisions if the failures are due to reasonable cause and not willful neglect and if a penalty tax is paid with respect to each failure to satisfy the applicable requirements. Additionally, relief is provided for certain de minimis failures of the diversification requirements where a Fund corrects the failure within a specified period. In order to be eligible for the relief provisions with respect to a failure to meet the diversification requirements, a Fund may be required to dispose of certain assets. If these relief provisions are not available to a Fund and it fails to qualify for treatment as a regulated investment company, all of its taxable income (including its net capital gains) would be subject to federal income tax at regular corporate rates without any deduction for distributions to shareholders, and all distributions from the Fund would be taxable to shareholders as ordinary dividends to the extent of the Fund’s current and accumulated earnings and profits.

Inflation Risk. Inflation is the reduction in the purchasing power of money resulting from the increase in the price of goods and services. Inflation risk is the risk that the inflation-adjusted (or “real”) value of assets or income from investment will be worth less in the future. As inflation increases, the real value of common shares and distributions can decline. In addition, during any period of rising inflation, interest rates on borrowings would likely increase, which would tend to further reduce returns to common shareholders.

Deflation Risk. Deflation risk is the risk that prices throughout the economy decline over time—the opposite of inflation risk. Deflation may have an adverse effect on the creditworthiness of issuers and may make issuer default more likely, which may result in a decline in the value of a Fund’s portfolio.

Limited Term Risk. In the event a Fund terminates pursuant to its Contingent Term Provision, the Fund may be required to sell portfolio securities when it otherwise would not, including at times when interest rate or market conditions are not favorable, which may cause the Fund to lose money on its investments. Further, the process of liquidating a Fund’s Managed Assets could result in a reduction in the Fund’s net investment income and monthly dividend distributions in the last year of the Fund’s operations. In addition, in the event a Fund terminates pursuant to the Contingent Term Provision, the Fund’s investment objectives and policies are not designed to seek to return to investors who purchase common shares their original investment on the anticipated termination date, and such investors may receive more or less than their original investment upon termination. Following the closing of the Merger, the Acquiring Fund will eliminate its Contingent Term Provision.

Derivatives Risk, Including the Risk of Swaps. A Fund’s use of derivatives involves risks different from, and possibly greater than, the risks associated with investing directly in the investments underlying the derivatives, including: the imperfect correlation between the value of such instruments and the underlying assets of the Fund, which creates the possibility that the loss on such instruments may be greater than the gain in the value of the underlying assets in the Fund’s portfolio; the loss of principal; the possible default of the other party to the transaction; and illiquidity of the derivative

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investments. If a Fund enters into certain derivatives transactions, it could lose more than the principal amount invested. Whether a Fund’s use of derivatives is successful will depend on, among other things, if the Adviser and/or the Sub-Adviser correctly forecast market values, interest rates and other applicable factors. If the Adviser and/or the Sub-Adviser incorrectly forecast these and other factors, the investment performance of a Fund will be unfavorably affected.

Each Fund may enter into debt-related derivative instruments including credit default swap contracts and interest rate swaps. Like most derivative instruments, the use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. In addition, the use of swaps requires an understanding by the Adviser and/or the Sub-Adviser of not only the referenced asset, rate or index, but also of the swap itself. The derivatives markets are subject to a changing regulatory environment. It is possible that regulatory or other developments in the derivatives markets could adversely affect a Fund’s ability to successfully use derivative instruments.

Furthermore, derivative investments may be illiquid. Although both OTC and exchange-traded derivatives markets may experience a lack of liquidity, OTC non-standardized derivatives transactions are generally less liquid than exchange-traded instruments. The illiquidity of the derivatives markets may be due to various factors, including congestion, disorderly markets, limitations on deliverable supplies, the participation of speculators, government regulation and intervention, and technical and operational or system failures. In addition, the liquidity of a secondary market in an exchange-traded derivative contract may be adversely affected by “daily price fluctuation limits” established by the exchanges which limit the amount of fluctuation in an exchange-traded contract price during a single trading day. Once the daily limit has been reached in the contract, no trades may be entered into at a price beyond the limit, thus preventing the liquidation of open positions. Prices have in the past moved beyond the daily limit on a number of consecutive trading days. If it is not possible to close an open derivative position entered into by a Fund, the Fund would continue to be required to make cash payments of variation (or mark-to-market) margin in the event of adverse price movements. In such a situation, if a Fund has insufficient cash, it may have to sell portfolio securities to meet variation margin requirements at a time when it may be disadvantageous to do so. The absence of liquidity may also make it more difficult for a Fund to ascertain a market value for such instruments. The inability to close futures or derivatives positions also could have an adverse impact on a Fund’s ability to effectively hedge its portfolio.

Derivatives Regulatory Risk. Future regulatory developments could impact a Fund’s ability to invest in certain derivatives. It is possible that government regulation of various types of derivative instruments, including futures, options and swap agreements, may limit or prevent a Fund from using such instruments as a part of its investment strategies, and could ultimately prevent the Fund from being able to achieve its investment objectives. It is impossible to fully predict the effects of past, present or future legislation and regulation in this area, but the effects could be substantial and adverse. There is a likelihood of future regulatory developments altering, perhaps to a material extent, the nature of an investment in a Fund or the ability of the Fund to continue to implement its investment strategies. It is possible that legislative and regulatory activity could limit or restrict the ability of a Fund to use certain instruments as a part of its investment strategies. Limits or restrictions applicable to the counterparties with which a Fund engages in derivatives transactions (for example, the Volcker Rule) could also prevent the Fund from using certain instruments.

The Dodd-Frank Act sets forth a regulatory framework for OTC derivatives, including financial instruments, such as swaps, in which each Fund may invest. The Dodd-Frank Act grants significant

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authority to the SEC and the CFTC to regulate OTC derivatives and market participants and requires clearing and exchange trading of many current OTC derivatives transactions. The implementation of the provisions of the Dodd-Frank Act by the SEC and the CFTC could adversely affect a Fund’s ability to pursue its investment strategies. The Dodd-Frank Act and the rules promulgated thereunder could, among other things, adversely affect the value of the investments held by a Fund, restrict the Fund’s ability to engage in derivatives transactions and/or increase the costs of such derivatives transactions.

Further, in February 2012, the CFTC issued a final rule rescinding and amending certain exemptions from registration requirements under the U.S. Commodity Exchange Act, as amended (the “CEA”), previously available to investment advisers registered with the SEC under the 1940 Act, including the exemption available under CFTC Rule 4.5. In the event that a Fund’s investments in derivative instruments regulated under the CEA, including futures, swaps and options, exceed a certain threshold, the Adviser and/or the Sub-Adviser may be required to register as a “commodity pool operator” and/or a “commodity trading advisor” with the CFTC. In the event the Adviser and/or the Sub-Adviser is required to register with the CFTC, it will become subject to additional recordkeeping and reporting requirements with respect to the Fund, which may increase the Fund’s expenses.

Clearing Broker and Central Clearing Counterparty Risk. The CEA requires swaps and futures clearing brokers registered as “futures commission merchants” to segregate all funds received from customers with respect to any orders for the purchase or sale of U.S. domestic futures contracts and cleared swaps from the brokers’ proprietary assets. Similarly, the CEA requires each futures commission merchant to hold in a separate secure account all funds received from customers with respect to any orders for the purchase or sale of foreign futures contracts and segregate any such funds from the funds received with respect to domestic futures contracts. However, all funds and other property received by a clearing broker from its customers are held by the clearing broker on a commingled basis in an omnibus account and may be freely accessed by the clearing broker, which may also invest any such funds in certain instruments permitted under the applicable regulation. There is a risk that assets deposited by a Fund with any swaps or futures clearing broker as margin for futures contracts or cleared swaps may, in certain circumstances, be used to satisfy losses of other clients of the Fund’s clearing broker. In addition, the assets of a Fund might not be fully protected in the event of the bankruptcy of the Fund’s clearing broker because the Fund would be limited to recovering only a pro rata share of all available funds segregated on behalf of the clearing broker’s combined domestic customer accounts.

Similarly, the CEA requires a clearing organization approved by the CFTC as a derivatives clearing organization to segregate all funds and other property received from a clearing member’s clients in connection with domestic cleared futures and derivative contracts from any funds held at the clearing organization to support the clearing member’s proprietary trading. Nevertheless, all customer funds held at a clearing organization in connection with any futures and derivative contracts are held in a commingled omnibus account and are not identified to the name of the clearing member’s individual customers. With respect to futures and options contracts, a clearing organization may use assets of a non-defaulting customer held in an omnibus account at the clearing organization to satisfy payment obligations of a defaulting customer of the clearing member to the clearing organization. As a result, in the event of a default of the clearing broker’s other clients or the clearing broker’s failure to extend its own funds in connection with any such default, a Fund would not be able to recover the full amount of assets deposited by the clearing broker on behalf of the Fund with the clearing organization.

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Hedging Risk. A Fund’s use of derivatives or other transactions to reduce risk involves costs and will be subject to the Adviser’s and/or the Sub-Adviser’s ability to predict correctly changes in the relationships of such hedge instruments to the Fund’s portfolio holdings or other factors. No assurance can be given that the Adviser’s and/or the Sub-Adviser’s judgment in this respect will be correct, and no assurance can be given that a Fund will enter into hedging or other transactions at times or under circumstances in which it may be advisable to do so. Hedging activities may reduce a Fund’s opportunities for gain by offsetting the positive effects of favorable price movements and may result in net losses.

Other Investment Companies Risk. An investment in the securities of another investment company will expose a Fund to the risks of investing in the securities held in such other investment company’s portfolio. In addition, a Fund’s shareholders will bear their proportionate share of the fees and expenses of such other investment company in addition to the fees and expenses of the Fund. The securities of other investment companies may also be leveraged. As a result, a Fund may be indirectly exposed to leverage through an investment in such securities. Utilization of leverage is a speculative investment technique and involves certain risks. An investment in securities of other investment companies that are leveraged may expose a Fund to higher volatility in the market value of such securities and the possibility that the Fund’s long-term returns on such securities will be diminished.

Counterparty Risk. Changes in the credit quality of the companies that serve as a Fund’s counterparties with respect to derivatives, insured municipal securities or other transactions supported by another party’s credit will affect the value of those instruments. Certain entities that have served as counterparties in the markets for these transactions have incurred or may incur in the future significant financial hardships including bankruptcy and losses as a result of exposure to sub-prime mortgages and other lower-quality credit investments that have experienced recent defaults or otherwise suffered extreme credit deterioration. As a result, such hardships have reduced these entities’ capital and called into question their continued ability to perform their obligations under such transactions. By using such derivatives or other transactions, a Fund assumes the risk that its counterparties could experience similar financial hardships. In the event of the insolvency of a counterparty, a Fund may sustain losses or be unable to liquidate a derivatives position.

Illiquid Securities Risk. Illiquid securities are securities that are not readily marketable and may include restricted securities, which are securities that may not be resold unless they have been registered under the Securities Act of 1933, as amended (the “Securities Act”), or that can be sold in a private transaction pursuant to an available exemption from such registration. Illiquid securities involve the risk that the securities will not be able to be sold at the time desired by a Fund or at prices approximating the value at which the Fund is carrying the securities on its books from time to time.

Market Disruption Risk. Certain events have a disruptive effect on the securities markets, such as terrorist attacks, war and other geopolitical events. The Funds cannot predict the effects of similar events in the future on the U.S. economy. Below-investment-grade securities tend to be more volatile than higher rated securities, meaning that these events and any actions resulting from them may have a greater impact on the prices and volatility of below-investment-grade securities than on higher rated securities.

Municipal Bond Market Liquidity Risk. Inventories of municipal bonds held by brokers and dealers have decreased in recent years, lessening their ability to make a market in these securities. This reduction in market making capacity has the potential to decrease a Fund’s ability to buy or sell bonds,

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and increase bond price volatility and trading costs, particularly during periods of economic or market stress. In addition, recent changes to federal banking regulations may cause certain dealers to reduce their inventories of municipal bonds, which may further decrease a Fund’s ability to buy or sell bonds. As a result, a Fund may be forced to accept a lower price to sell a security, to sell other securities to raise cash, or to give up an investment opportunity, any of which could have a negative effect on performance. If a Fund needed to sell large blocks of bonds, those sales could further reduce the bonds’ prices and hurt performance.

Income Risk. Each Fund’s income is based primarily on the interest it earns from its investments, which can vary widely over the short term and long term. If interest rates drop, a Fund’s income available over time to make dividend payments could drop as well if the Fund purchases securities with lower interest coupons.

Call Risk or Prepayment Risk. During periods of declining interest rates or for other purposes, issuers of callable bonds with higher interest coupons may exercise their option to “call” (or prepay) bonds before their maturity date, forcing a Fund to reinvest in lower yielding securities.

Reinvestment Risk. Reinvestment risk is the risk that the income from a Fund’s portfolio will decline if and when the Fund invests the proceeds from matured, traded or called bonds at market interest rates that are below the current earnings rate of the Fund’s portfolio. A decline in income could affect the ability of a Fund to pay dividends on its common shares, as well as the common shares’ market price or overall returns.

Cybersecurity Risk. Technology, such as the Internet, has become more prevalent in the course of business, and as such, each Fund and its service providers are susceptible to operational and information security risk resulting from cyber incidents. Cyber incidents refer to both intentional attacks and unintentional events including: processing errors, human errors, technical errors including computer glitches and system malfunctions, inadequate or failed internal or external processes, market-wide technical-related disruptions, unauthorized access to digital systems (through “hacking” or malicious software coding), computer viruses, and cyber-attacks which shut down, disable, slow or otherwise disrupt operations, business processes or website access or functionality (including denial of service attacks). Cyber incidents could adversely impact a Fund and cause the Fund to incur financial loss and expense, as well as face exposure to regulatory penalties, reputational damage, and additional compliance costs associated with corrective measures. Cyber incidents may cause a Fund or its service providers to lose proprietary information, suffer data corruption, lose operational capacity or fail to comply with applicable privacy and other laws. Among other potentially harmful effects, cyber incidents also may result in theft, unauthorized monitoring and failures in the physical infrastructure or operating systems that support a Fund and its service providers. In addition, substantial costs may be incurred in order to prevent any cyber incidents in the future. While the Funds’ service providers have established business continuity plans in the event of, and risk management systems to prevent, such cyber incidents, there are inherent limitations in such plans and systems including the possibility that certain risks have not been identified. Furthermore, a Fund cannot control the cybersecurity plans and systems put in place by its service providers or any other third parties whose operations may affect the Fund.

Certain Affiliations. Certain broker-dealers may be considered to be affiliated persons of the Funds, the Adviser, the Sub-Adviser, Nuveen Investments and/or TIAA. Absent an exemption from the SEC or other regulatory relief, each Fund generally is precluded from effecting certain principal transactions with affiliated brokers, and its ability to purchase securities being underwritten by an

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affiliated broker or a syndicate including an affiliated broker, or to utilize affiliated brokers for agency transactions, is subject to restrictions. This could limit a Fund’s ability to engage in securities transactions and take advantage of market opportunities.

Anti-Takeover Provisions. Each Fund’s organizational documents include provisions that could limit the ability of other entities or persons to acquire control of the Fund or convert the Fund to open-end status.

General

Each Fund’s Board has determined that the Merger would be in the best interests of its Fund. As a result of the Merger, the assets of the Funds will be combined, and the shareholders of the Target Fund will become shareholders of the Acquiring Fund. Each Fund’s Board considered the Merger as part of an ongoing initiative to rationalize the product offerings of Nuveen funds and eliminate overlapping products. As noted above, the Merger will eliminate overlapping products by combining two funds that have the same investment adviser, sub-adviser and portfolio managers, the same investment objectives and substantially identical investment policies, risks and, at present, portfolio compositions. As more fully described below, the Merger is intended to benefit shareholders in a number of ways, including continued exposure to each Fund’s portfolio of scarce BABs with above-market purchase yields relative to current taxable municipal bond yields and avoidance of sizeable taxable capital gain distributions in connection with a termination of the Funds. The proposed elimination of the term structure, combined with the expanded investment mandate, would allow the Acquiring Fund’s portfolio managers to retain less liquid, higher yielding securities as well as pursue attractive investment opportunities across the taxable municipal bond market without regard to liquidity at the termination date. Over time, Nuveen Fund Advisors believes such flexibility should enhance common share net earnings and distribution potential.

Based on information provided by the Adviser, the Merger is intended to benefit Fund shareholders in a number of ways, including, among other things:

The closing of the Merger is subject to the satisfaction or waiver of certain closing conditions, which include customary closing conditions. Both the Target Fund’s and Acquiring Fund’s shareholders are voting on items whose approval is necessary for the Merger to go forward. Additionally, the closing of the Merger is contingent on shareholders of the Acquiring Fund approving

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the elimination of the Acquiring Fund’s Contingent Term Provision. (See Proposal No. 3—Approval of Elimination of Fundamental Policy of the Acquiring Fund.) In order for the Merger to occur, the requisite shareholder approval of the Merger proposals (Proposal Nos. 1 and 2) and Proposal No. 3 must be obtained at the applicable Fund’s annual meeting. Because the closing of the Merger is contingent upon each of the Target Fund and the Acquiring Fund obtaining such shareholder approvals and satisfying (or obtaining the waiver of) other closing conditions, it is possible that the Merger will not occur, even if Target Fund shareholders entitled to vote on the Merger proposal approve such proposal and the Target Fund satisfies all of its closing conditions, if the Acquiring Fund does not obtain the requisite shareholder approvals or satisfy (or obtain the waiver of) its closing conditions. If the Merger is not consummated, the Target Fund’s Board may take such actions as it deems in the best interests of the Fund, including continuing to operate the Target Fund as a stand-alone fund through its termination date or seeking shareholder approval to eliminate its Contingent Term Provision at a subsequent meeting. If Proposal No. 3 is approved by shareholders of the Acquiring Fund, the Acquiring Fund’s Contingent Term Provision will be eliminated, regardless of whether or not the Merger is completed.

Terms of the Merger

General. The Agreement and Plan of Merger by and among the Acquiring Fund, the Target Fund and the Merger Sub, in the form attached as Appendix A to this Joint Proxy Statement/Prospectus, sets forth the terms of the Merger and provides for the Target Fund to merge with and into the Merger Sub, a Massachusetts limited liability company and a wholly-owned subsidiary of the Acquiring Fund, with shares of the Target Fund being converted into newly issued common shares, par value $0.01 per share, of the Acquiring Fund (with cash being distributed in lieu of any fractional Acquiring Fund common shares). As soon as practicable following the completion of the Merger, the Merger Sub will distribute its assets to the Acquiring Fund, and the Acquiring Fund will assume the liabilities of the Merger Sub, in complete liquidation and dissolution of the Merger Sub under Massachusetts law. The Merger Sub has been formed for the sole purpose of consummating the Merger and the Merger Sub will not commence operations prior to the closing of the Merger, except as necessary to facilitate the Merger.

As a result of the Merger, the assets of the Target Fund and the Acquiring Fund will be combined, and the shareholders of the Target Fund will become shareholders of the Acquiring Fund, which will continue to operate after the Merger as a registered closed-end management investment company, with the investment objective and policies described in this Joint Proxy Statement/Prospectus.

If the conditions to closing the Merger are satisfied or waived, the Merger is expected to take effect on or about [•], 2018, or such other date as the parties may agree (the “Closing Date”). Following the Merger, the Target Fund will terminate its registration as an investment company under the 1940 Act.

The aggregate net asset value, as of the Valuation Time (as defined below), of the Acquiring Fund common shares received by each Target Fund shareholder in connection with the Merger will equal the aggregate net asset value of the Target Fund common shares held by such shareholder of the Target Fund as of the Valuation Time. However, no fractional Acquiring Fund common shares will be distributed to the Target Fund’s shareholders in connection with the Merger. The Acquiring Fund’s transfer agent will aggregate all fractional Acquiring Fund common shares that may be due to Target Fund shareholders as of the Closing Date and will sell the resulting whole shares for the account of holders of all such fractional interests at a value that may be higher or lower than net asset value, and each such holder will be entitled to a pro rata share of the proceeds from such sale. With respect to the

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aggregation and sale of fractional shares, the Acquiring Fund’s transfer agent will act directly on behalf of the shareholders entitled to receive fractional shares and will accumulate fractional common shares, sell the shares and distribute the cash proceeds net of brokerage commissions, if any, directly to shareholders entitled to receive the fractional shares (without interest and subject to withholding taxes). For federal income tax purposes, shareholders will be treated as if they received fractional share interests and then sold such interests for cash. The holding period and the aggregate tax basis of the Acquiring Fund shares received by a shareholder, including fractional share interests deemed received by a shareholder, will be the same as the holding period and aggregate tax basis of the Target Fund common shares previously held by the shareholder that were converted into such Acquiring Fund shares, provided the Target Fund shares were held as capital assets at the effective time of the Merger.

Valuation of Shares. Pursuant to the Agreement, the net asset value per share of the Target Fund and the Acquiring Fund shall be computed as of the close of regular trading on the NYSE on the business day immediately prior to the Closing Date (such time and date being hereinafter called the “Valuation Time) using the valuation procedures of the Nuveen closed-end funds or such other valuation procedures as will be mutually agreed upon by the parties (and approved by the Board of the Target Fund and the Board of the Acquiring Fund).

Acquiring Fund Common Shares to be Issued. At the effective time of the closing (the “Effective Time”), each Target Fund common share outstanding immediately prior to the Effective Time shall be converted into a number of Acquiring Fund common shares equal to one multiplied by the quotient of the net asset value per share of the Target Fund divided by the net asset value per share of the Acquiring Fund.

Distributions. Undistributed net investment income represents net earnings from a Fund’s investment portfolio that over time have not been distributed to shareholders. Under the terms of the Agreement, if the Target Fund has undistributed net investment income or undistributed net capital gains, the Target Fund is required to declare a dividend or dividends, which, together with all previous dividends, has the effect of distributing to its shareholders at least all of the undistributed net investment company taxable income and undistributed realized net capital gains (after reduction by any available capital loss carryforwards and excluding any net capital gain on which the Target Fund paid tax under Section 852(b)(3)(A) of the Code) for all taxable periods ending on or before the Closing Date. The Acquiring Fund is not subject to a similar distribution requirement. Consequently, Target Fund shareholders effectively will purchase a pro rata portion of the Acquiring Fund’s remaining undistributed net investment income and undistributed realized net capital gains, if any, which may be more or less than the Target Fund’s undistributed net investment income and undistributed realized net capital gains immediately preceding the distributions described above, if any. As a result, the Acquiring Fund’s existing shareholders will experience a corresponding reduction in their respective portion of undistributed net investment income and undistributed realized net capital gains per share, if any, such that the Acquiring Fund’s undistributed net investment income and undistributed realized net capital gains per share immediately following the Merger is expected to be less than the Acquiring Fund’s undistributed net investment income and undistributed realized net capital gains per share immediately preceding the Merger.

Amendments. Under the terms of the Agreement, the Agreement may be amended, modified or supplemented in such manner as may be mutually agreed upon in writing by the officers of each Fund subject to the prior review of each Fund’s counsel and authorization of each Fund’s Board; provided, however, that following the receipt of shareholder approval of the Agreement at the Target Fund’s Annual Meeting, no such amendment, modification or supplement may have the effect of changing the

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provisions for determining the number of Acquiring Fund common shares to be issued to Target Fund shareholders under the Agreement to the detriment of such shareholders without their further approval.

Conditions. Under the terms of the Agreement, the closing of the Merger is subject to the satisfaction or waiver of the following closing conditions, among others: (1) the requisite approval by the shareholders of each Fund of the applicable proposal with respect to the Merger in this Joint Proxy Statement/Prospectus, (2) shareholders of the Acquiring Fund approving the elimination of the Acquiring Fund’s Contingent Term Provision, (3) each Fund’s receipt of an opinion substantially to the effect that the Merger will qualify as a reorganization under the Code (see “—Material Federal Income Tax Consequences of the Merger”), (4) the absence of legal proceedings challenging the Merger, and (5) the Funds’ receipt of certain customary certificates and legal opinions.

Termination. The Agreement may be terminated by the mutual agreement of the parties and such termination may be effected by each Fund’s Chief Administrative Officer or a Vice President without further action by each Fund’s Board. In addition, either Fund may at its option terminate the Agreement at or before the closing due to: (1) a breach by the other party of any representation, warranty or agreement contained therein to be performed at or before the closing, if not cured within 30 days of the breach and prior to the closing; (2) a condition precedent to the obligations of the terminating party that has not been met and it reasonably appears it will not or cannot be met; or (3) a determination by its Board that the consummation of the transactions contemplated by the Agreement is not in the best interests of the Fund.

Reasons for the Merger—Considerations of the Funds’ Boards

Based on the considerations below, the Board of each Fund, including its independent Board Members, has determined that the Merger would be in the best interests of its respective Fund and that the interests of the existing shareholders of such Fund would not be diluted as a result of the Merger. At a meeting held on February 27, 2018 – March 1, 2018 (the “Meeting”), the Board of each Fund approved the Merger and the Board of the Target Fund recommended that shareholders of the Target Fund approve the Merger.

The Merger is intended to eliminate certain overlapping products and provide certain benefits to shareholders of the Funds, including the continual exposure to Build American Bonds (i.e. BABs) with above-market purchase yields relative to current taxable municipal bond yields and avoidance of potentially sizeable taxable capital gain distributions that may result if the Funds terminated in accordance with their current policies.

At the Meeting and at a prior meeting, the Adviser had made presentations, and the Boards had received a variety of materials relating to the Merger, including the rationale therefor. Prior to approving the Merger, the independent Board Members of each Board reviewed the foregoing information with their independent legal counsel and with management, reviewed with independent legal counsel applicable law and their duties in considering such matters and met with independent legal counsel in private sessions without management present. The Boards considered a number of principal factors in reaching their determinations, including, among other things, the following:

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Compatibility of Investment Objectives, Policies and Related Risks. In comparing the Funds, the Boards recognized that the Funds have the same investment objectives and substantially identical policies and risks. The Boards recognized that each Fund’s primary investment objective was to provide current income through investments in taxable municipal securities and as a secondary objective, to enhance portfolio value and total return. Each Fund further seeks to achieve its investment objectives by investing primarily in a diversified portfolio of BABs. Each Fund also utilized leverage. The Boards considered the portfolio compositions of the Funds and the impact that the Merger would have on their respective Fund’s portfolio, including any shifts in credit ratings, yield and leverage costs. Given the similar portfolio compositions, the Boards recognized that the Adviser anticipated minimal repositioning of the Target Fund’s portfolio in connection with the Merger. The Boards further recognized that because the Funds have the same investment objectives and substantially identical investment policies and portfolio compositions, the principal risks of an investment in each Fund were similar.

In addition to the above, the Boards noted that both Funds were currently term funds. More specifically, because of the uncertainty regarding the continued issuance of BABs at the time of the Funds’ inception as well as the prospects for the taxable municipal bond market more generally, the Funds each adopted a fundamental policy to terminate as of a specified date if there were no new issuances of BABs or other taxable municipal securities with U.S. Treasury subsidized interest payments over a specified time period (i.e., the Contingent Term Provisions). Because BABs stopped being issued, the Funds became term funds with the Target Fund scheduled to terminate on December 31, 2020 and the Acquiring Fund on June 30, 2020. The Boards noted that the BABs were a unique asset class that were relatively scarce and provided above market purchase yields relative to traditional taxable bonds. The Boards further recognized that the Merger coupled with the removal of the Acquiring Fund’s Contingent Term Provision would permit the combined fund to continue perpetually and allow long term shareholders (including former Target Fund shareholders who become shareholders of the combined fund following the Merger) to continue their exposure to BABs with their above-market yields and defer potentially sizable capital gain distributions if the Funds were to terminate. In addition, the Board of the Acquiring Fund also approved a broader taxable municipal investment mandate changing such Fund’s policy of investing at least 80% of its Managed Assets in BABs to a policy of investing at least 80% of its Managed Assets in taxable municipal bonds to take effect after the Merger if consummated or if the Merger is not approved, after the elimination of the Acquiring Fund’s Contingent Term Provision if approved. The Boards noted that the elimination of the Contingent Term Provision on the Acquiring Fund and its adoption of the expanded investment mandate should allow the portfolio managers of the combined fund to retain less liquid, higher yielding securities as well as pursue attractive investment opportunities across the taxable municipal bond market without regard to having the liquidity required at

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a termination date. The revised mandate and the larger asset base of the combined fund should also increase the flexibility for portfolio and leverage management.

However, the independent Board Members of each Board also recognized that the Merger and the elimination of the Acquiring Fund’s Contingent Term Provision would result in shareholders forgoing the opportunity to liquidate their shares in the Funds at their net asset value if the Funds were terminated pursuant to their respective Contingent Term Provision. While some shareholders may want the continued investment exposure to BABs with above-market purchase yields, the Boards considered that other shareholders in their respective Funds who had been attracted to the Funds’ Contingent Term Provisions may want to have the opportunity to receive their net asset value at termination pursuant to such provisions. In weighing these competing interests among shareholders, the independent Board Members of the Acquiring Fund determined to offer a tender offer for 20% of the outstanding common shares of the combined fund following the Merger. If the Merger is approved and the Acquiring Fund’s Contingent Term Provision is eliminated, the tender offer would provide shareholders of the combined fund (including, the former shareholders of the Target Fund who become shareholders of the Acquiring Fund following the Merger) with an opportunity for liquidity at net asset value (less a customary repurchase fee) on a portion of their investment. If the Merger is not approved but the Acquiring Fund’s Contingent Term Provision is eliminated, the Acquiring Fund would still offer the tender offer to its shareholders.

Consistency of Portfolio Management. The Target Fund’s Board noted that each Fund had the same investment adviser, sub-adviser and same portfolio managers who will continue to be responsible for the daily management of the combined fund following the Merger.

Potential for Improved Economies of Scale over Time and Effect on Fees, Total Expenses and Distributions. The Boards considered the fees and expense ratios of each of the Funds, including the estimated expenses of the combined fund following the Merger, the costs of leverage between the Funds and the impact of the Merger on such costs, including after the tender offer. The Boards recognized that the Merger was intended to result in a lower effective management fee rate based on average daily Managed Assets for each Fund and that it was estimated that the operating expenses per common share (i.e., total expenses excluding the costs of leverage) of the combined fund would be lower than those of each Fund prior to the closing of the Merger. Moreover, the Boards considered that following the recoupment of Merger-related expenses, the Merger, expanded investment mandate of the combined fund and expense savings may support higher common share net earnings and potentially higher distribution rates over time.

Potential for Improved Secondary Market Trading with Respect to the Common Shares. While it is not possible to predict trading levels following the Merger, the Boards noted that a potential benefit of the Merger may be improved secondary market trading prices relative to net asset value with respect to common shares as a result of the combined fund’s anticipated greater share volume.

Anticipated Tax-Free Merger; Capital Loss Carryforwards. The Merger will be structured with the intention that it qualifies as a tax-free reorganization for federal income tax purposes, and the Funds will obtain an opinion of counsel substantially to this effect (based on certain factual representations and certain customary assumptions). In addition, the Boards considered the impact of the Merger on any estimated capital loss carryforwards of the Target Fund and applicable limitations of federal income tax law.

Expected Costs of the Merger. The Boards considered the terms and conditions of the Agreement and Plan of Merger, including the estimated costs associated with the Merger and the

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allocation of such costs between the Funds. The Boards noted that the allocation of the costs of the Merger would be based on the relative expected benefits of the Merger during the average holding period of shareholders of each Fund.

Terms of the Merger and Impact on Shareholders. The terms of the Merger were intended to avoid dilution of the interests with respect to net asset value of the existing shareholders of the Funds. In this regard, the Boards considered that each holder of common shares of the Target Fund will receive common shares of the Acquiring Fund (taking into account any fractional shares to which the shareholder would be entitled) equal in net asset value as of the Valuation Time to the aggregate per share net asset value of that shareholder’s Target Fund common shares held as of the Valuation Time. No fractional common shares of the Acquiring Fund, however, will be distributed to Target Fund common shareholders in connection with the Merger and, in lieu of such fractional shares, Target Fund common shareholders will receive cash.

Effect on Shareholder Rights. The Boards considered that each of the Funds is organized as a Massachusetts business trust. In this regard, there will be no change to Target Fund shareholder rights under state statutory law.

Alternatives. The Boards considered alternatives to the Merger, including permitting the Funds to terminate in accordance with their Contingent Term Provisions. As noted above, the Boards recognized that some of their shareholders may want the opportunity to liquidate their shares at net asset value at the respective Fund’s termination. However, the Boards also recognized that other shareholders in the Funds may want the respective Fund to continue in existence to maintain their investment exposure to BABs with their above-market purchase yields and to defer potentially large capital gain distributions that would result in connection with a termination of the Fund. Further, as the current portfolios generate a higher proportion of their total return from income relative to the same portfolios at current yields, the Funds may be still particularly attractive to income-oriented closed-end fund investors. The Board Members of the Funds further weighed pro forma estimates of the costs of losing the incremental return from receiving net asset value at termination compared to the benefits of avoiding lost earnings due to reinvestments in a similar portfolio at the current lower yields. The Board Members recognized that the Adviser believed the incremental income from the BABs above market purchase yields along with the deferral of capital gain distributions over time more than offsets the forgone additional return from receiving net asset value at termination. In consideration of the foregoing, among other things, the Boards approved the Merger and the Board of the Acquiring Fund approved the tender offer. If the Merger and elimination of the Acquiring Fund’s Contingent Term Provision are approved, the tender offer of the combined fund would provide an opportunity for shareholders (including former Target Fund shareholders who become shareholders of the Acquiring Fund following the Merger) to liquidate a portion of their investment in the combined fund at net asset value (less a customary repurchase fee).

Potential Benefits to Nuveen Fund Advisors and Affiliates. The Boards recognized that the elimination of the Acquiring Fund’s Contingent Term Provision makes the Acquiring Fund a perpetual fund. If approved, the Acquiring Fund would become a perpetual fund and therefore, the Adviser would continue to earn a management fee on the Acquiring Fund. Further, if the Merger is completed and the Acquiring Fund is a perpetual fund, the Adviser would continue to earn its management fees on the larger asset base. In response to a request for supplemental information regarding the management fee of the combined fund, the Boards considered that the combined fund’s contractual fee rate was below the median contractual fee rate of its peer group of funds provided by an independent data provider at a prior meeting and the combined fund’s effective management fee rate was also in line

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with the effective management fee rates of certain competitor taxable municipal closed-end funds. In addition to the continuation of management fees for the Adviser, the Boards also considered other benefits including, for example, a reduction in the level of operational expenses incurred for administrative, compliance and portfolio management services as a result of the elimination of the Target Fund as a separate fund in the Nuveen complex.

Conclusion. Each Board, including its independent Board Members, approved the Merger, concluding that the Merger is in the best interests of its respective Fund and that the interests of existing shareholders of its Fund will not be diluted as a result of the Merger.

Capitalization

The following table sets forth the unaudited capitalization of the Funds as of September 30, 2017 and the pro-forma combined capitalization of the combined fund as if the Merger had occurred on that date. The table reflects pro forma exchange ratios of approximately 1.04399020 shares of the Acquiring Fund issued for each share of the Target Fund. If the Merger is consummated, the actual exchange ratios may vary.

Expenses Associated with the Merger

In evaluating the Merger, management of the Funds estimated the amount of expenses the Funds would incur to be approximately $840,000 which includes additional stock exchange listing

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fees, SEC registration fees, legal and accounting fees, proxy solicitation and distribution costs and other related administrative or operational costs. The expenses of the Merger (whether or not consummated) will be allocated between the Funds ratably based on the relative expected benefits of the Merger during the average holding period of shareholders of each Fund for the trailing 12 months ended September 30, 2017 (21.5 months and 17.0 months for the Target Fund and Acquiring Fund, respectively), including forecasted operating cost savings (i.e., total expenses excluding the costs of leverage) and improved secondary market trading, if any, to each Fund. Merger expenses have been or will be reflected in each Fund’s net asset value at or before the close of trading on the business day immediately prior to the close of the Merger. These estimated expenses are currently expected to be borne by the Target Fund and the Acquiring Fund in the amounts of $235,000 (0.14%) and $605,000 (0.10%) (all percentages are based on average net assets attributable to common shares for the six-month semi-annual period ended September 30, 2017), respectively.

Additional solicitation may be made by letter or telephone by officers or employees of Nuveen or the Adviser, or by dealers and their representatives. The Funds have engaged Computershare Fund Services to assist in the solicitation of proxies at an estimated aggregate cost of $10,500 per Fund plus reasonable expenses, which is included in the foregoing estimate.

Dissenting Shareholders’ Rights of Appraisal

Under the charter documents of each Fund, shareholders do not have dissenters’ rights of appraisal with respect to the Merger.

Material Federal Income Tax Consequences of the Merger

As a condition to each Fund’s obligation to consummate the Merger, each Fund will receive a tax opinion from Vedder Price P.C. (which opinion will be based on certain factual representations and certain customary assumptions) with respect to the Merger substantially to the effect that, on the basis of the existing provisions of the Code, current administrative rules and court decisions, for federal income tax purposes:

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No opinion will be expressed as to (1) the effect of the Merger on the Target Fund, the Acquiring Fund, the Merger Sub or any Target Fund shareholder with respect to any asset (including, without limitation, any stock held in a passive foreign investment company as defined in Section 1297(a) of the Code) as to which any unrealized gain or loss is required to be recognized under federal income tax principles (a) at the end of a taxable year (or on the termination thereof) or (b) upon the transfer of such asset regardless of whether such transfer would otherwise be a non-taxable transaction under the Code, or (2) any other federal tax issues (except those set forth above) or any state, local or non-U.S. tax issues of any kind.

The opinion will be based on certain factual representations and assumptions, including a representation from the Target Fund and the Acquiring Fund that the tender offers described below under “—Post-Merger Tender Offer” are not expected to result in the historic shareholders of the Target Fund disposing of a number of Acquiring Fund common shares received in the Merger such that, after taking into account all such dispositions, such historic shareholders would own Acquiring Fund common shares received in the Merger that have a value, as of the effective time of the Merger, of less than 50% of the value of all of the formerly outstanding shares of the Target Fund as of the effective time. The opinion will rely on such representation and will assume the accuracy of such representation. If such assumption is incorrect, the Merger of the Target Fund with and into the Merger Sub may not qualify as a tax-free reorganization for federal income tax purposes, and the Target Fund and Target Fund shareholders may recognize taxable gain or loss as a result of the Merger.

If a Target Fund shareholder receives cash in lieu of a fractional Acquiring Fund share, the shareholder will be treated as having received the fractional Acquiring Fund share pursuant to the Merger and then as having sold that fractional Acquiring Fund share for cash. As a result, each such Target Fund shareholder generally will recognize gain or loss equal to the difference between the amount of cash received and the basis in the fractional Acquiring Fund share to which the shareholder is entitled. This gain or loss generally will be a capital gain or loss and generally will be long-term capital gain or loss if, as of the effective time of the Merger, the holding period for the shares (including the holding period of Target Fund shares surrendered therefor if such Target Fund shares

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were held as capital assets at the time of the Merger) is more than one year. The deductibility of capital losses is subject to limitations. Any cash received in lieu of a fractional share may be subject to backup withholding taxes.

Prior to the closing of the Merger, the Target Fund will declare a distribution to its shareholders, which, together with all other distributions to shareholders made with respect to the taxable year in which the Merger occurs and all prior taxable years, will have the effect of distributing to shareholders all its net investment income and realized net capital gains (after reduction by any available capital loss carryforwards and excluding any net capital gain on which the Target Fund paid tax under Section 852(b)(3)(A) of the Code), if any, through the Closing Date of the Merger. To the extent distributions are attributable to ordinary taxable income or capital gains, the distribution will be taxable to shareholders for federal income tax purposes. Additional distributions may be made if necessary. All dividends and distributions will be paid in cash unless a shareholder has made an election to reinvest dividends and distributions in additional shares under the Target Fund’s dividend reinvestment plan. Taxable dividends and distributions are subject to federal income tax whether received in cash or additional shares.

After the Merger, the Acquiring Fund’s ability to use the Target Fund’s or the Acquiring Fund’s pre-Merger capital losses may be limited under certain federal income tax rules applicable to reorganizations of this type. Therefore, in certain circumstances, shareholders may pay federal income taxes sooner, or pay more federal income taxes, than they would have had the Merger not occurred. However, the effect of these potential limitations will depend on a number of factors including the amount of the losses, the amount of gains to be offset, the exact timing of the Merger and the amount of unrealized capital gains in the Funds at the time of the Merger. As of September 30, 2017, the Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against capital gains, if any, per the table below.

A Fund is generally able to carry forward net capital losses arising in taxable years beginning after December 22, 2010 indefinitely.

In addition, the shareholders of the Target Fund will receive a proportionate share of any taxable income and gains realized by the Acquiring Fund and not distributed to its shareholders prior to the closing of the Merger when such income and gains are eventually distributed by the Acquiring Fund. Any gain the Acquiring Fund realizes after the Merger, including any built-in gain in the portfolio investments of the Target Fund and Acquiring Fund that was unrealized at the time of the Merger, may result in taxable distributions to shareholders holding shares of the Acquiring Fund (including former Target Fund shareholders who hold shares of the Acquiring Fund following the Merger). As a result, shareholders of the Target Fund and the Acquiring Fund may receive a greater amount of taxable distributions than they would have had the Merger not occurred.

The foregoing is intended to be only a summary of the principal federal income tax consequences of the Merger and should not be considered to be tax advice. There can be no assurance that the Internal Revenue Service will concur on all or any of the issues discussed above. The foregoing description of the federal income tax consequences of the Merger is also made without regard to the particular facts and circumstances of any shareholder. Shareholders are urged to consult their own tax advisers regarding the specific consequences to them of the Merger, including the

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federal, state, local and non-U.S. tax consequences with respect to the foregoing matters and any other considerations that may be applicable to them.

Shareholder Approval

The Merger is required to be approved by the affirmative vote of the holders of a majority (more than 50%) of the Target Fund’s outstanding common shares entitled to vote on the matter. Because the approval of Proposal No. 1 requires that a minimum percentage of the Target Fund’s outstanding common shares be voted in favor of the proposal, abstentions and broker non-votes will have the same effect as a vote against the approval of the Merger. “Broker non-votes” are shares held by a broker or nominee, typically in “street name,” for which the broker or nominee returns a valid proxy but are not voted because (1) instructions have not been received from the beneficial owners or persons entitled to vote and (2) the broker or nominee does not have discretionary authority to vote such shares.

The closing of the Merger is subject to the satisfaction or waiver of certain closing conditions, which include customary closing conditions. Both the Target Fund’s and Acquiring Fund’s shareholders are voting on items whose approval is necessary for the Merger to go forward. Additionally, the closing of the Merger is contingent on shareholders of the Acquiring Fund approving the elimination of the Acquiring Fund’s Contingent Term Provision. (See Proposal No. 3—Approval of Elimination of Fundamental Policy of the Acquiring Fund.) Because the closing of the Merger is contingent upon each of the Target Fund and the Acquiring Fund obtaining the requisite shareholder approvals with respect to the Merger and satisfying (or obtaining the waiver of) other closing conditions, it is possible that the Merger will not occur, even if Target Fund shareholders entitled to vote on the Merger proposal approve such proposal and the Target Fund satisfies all of its closing conditions, if the Acquiring Fund does not obtain the requisite shareholder approvals or satisfy (or obtain the waiver of) its closing conditions. If the Merger is not consummated, the Target Fund’s Board may take such actions as it deems in the best interests of the Fund, including continuing to operate the Target Fund as a stand-alone fund through its termination date or seeking shareholder approval to eliminate its Contingent Term Provision at a subsequent meeting. If Proposal No. 3 is approved by shareholders of the Acquiring Fund, the Acquiring Fund’s Contingent Term Provision will be eliminated, regardless of whether or not the Merger is completed.

Description of Common Shares to Be Issued by the Acquiring Fund; Comparison to Target Fund

General

As a general matter, the common shares of the Target Fund and the Acquiring Fund have equal voting rights and equal rights with respect to the payment of dividends and the distribution of assets upon dissolution, liquidation or winding up of the affairs of their respective Fund and have no preemptive, conversion or exchange rights, except as the Trustees may authorize, or rights to cumulative voting. Holders of whole common shares of each Fund are entitled to one vote per share on any matter on which the shares are entitled to vote, while each fractional share entitles its holder to a proportional fractional vote. Furthermore, the provisions set forth in the Acquiring Fund’s declaration of trust are substantially similar to the provisions of the Target Fund’s declaration of trust, and each contains, among other things, similar super-majority voting provisions (which are described under “Additional Information About the Funds—Certain Provisions in the Funds’ Declarations of Trust and By-Laws”). The full text of each Fund’s declaration of trust is on file with the SEC and may be obtained as described on page v.

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The Acquiring Fund’s declaration of trust authorizes an unlimited number of common shares, par value $0.01 per share. If the Merger is consummated, the Acquiring Fund will issue additional common shares on the Closing Date to the shareholders of the Target Fund based on the relative per share net asset value of the Acquiring Fund and the net asset value of the Target Fund assets that are transferred in connection with the Merger, in each case as of the Valuation Time.

The terms of the Acquiring Fund common shares to be issued pursuant to the Merger will be identical to the terms of the Acquiring Fund common shares that are then outstanding. Acquiring Fund common shares have equal rights with respect to the payment of dividends and the distribution of assets upon dissolution, liquidation or winding up of the affairs of the Acquiring Fund. The Acquiring Fund common shares, when issued, will be fully paid and non-assessable and have no preemptive, conversion or exchange rights or rights to cumulative voting. See also “—Description of Massachusetts Business Trusts.”

Distributions

Each Fund pays monthly distributions to shareholders. Distributions will be reinvested in additional shares under each Fund’s Dividend Reinvestment Plan unless a shareholder elects to receive cash.

Each Fund seeks to pay monthly distributions at a level rate (stated in terms of a fixed cents per common share dividend rate) based on the Fund’s projected performance. Each Fund’s ability to maintain a level common share dividend rate will depend on a number of factors. As portfolio and market conditions change, the rate of dividends on the common shares and a Fund’s distribution policy could change. Over time, each Fund will distribute all of its net investment income. In addition, each Fund intends to distribute, at least annually, the taxable ordinary income, if any, to shareholders.

To permit each Fund to maintain a more stable monthly distribution, the Fund may initially distribute less than the entire amount of net investment income earned in a particular period. Any such undistributed net investment income would be available to supplement future distributions. As a result, the distributions paid by a Fund for any particular monthly period may be more or less than the amount of net investment income actually earned by the Fund during the period.

Undistributed net investment income will be included in a Fund’s net asset value and, correspondingly, distributions from undistributed net investment income will be deducted from the Fund’s net asset value.

As explained more fully below, a Fund may elect to retain rather than distribute all or a portion of any net capital gain (which is the excess of net long-term capital gain over net short-term capital loss) otherwise allocable to common shareholders and pay U.S. federal income tax on the retained gain. As provided under U.S. federal income tax law, common shareholders of record as of the end of a Fund’s taxable year will include their share of the retained net capital gain in their income for the year as a long-term capital gain (regardless of their holding period in the common shares), and will be entitled to an income tax credit or refund for the federal income tax deemed paid on their behalf by the Fund. Each Fund may make total distributions during a given calendar year in an amount that exceeds the Fund’s current and accumulated earnings and profits, in which case the excess would be treated by common shareholders as return of capital for federal income tax purposes to the extent of the common shareholder’s basis in his, her or its shares and thereafter as capital gain. See “Federal Income Tax Matters Associated with Investment in the Acquiring Fund” under “Additional Information About the Funds” below and “Federal Income Tax Matters” in the Merger SAI.

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Each Fund reserves the right to change its distribution policy and the basis for establishing the rate of its monthly distributions at any time and may do so without prior notice to shareholders.

Dividend Reinvestment Plan

Generally, the terms of the dividend reinvestment plan (the “Plan”) for the Target Fund and the Acquiring Fund are identical. Under the Acquiring Fund’s Plan, if your Acquiring Fund shares are registered directly with the Acquiring Fund or if you hold your shares with a brokerage firm that participates in the Acquiring Fund’s Plan, your distributions, including any capital gain distributions, will automatically be reinvested in additional shares under the Plan unless you request otherwise. If you elect not to participate in the Plan, or are not eligible to participate because your brokerage firm does not participate in the Plan, you will receive all distributions in cash paid by check mailed directly to you or your brokerage firm by Computershare Trust Company, N.A. and Computershare Inc. (collectively, “Computershare”), as dividend paying agent (the “Plan Agent”). The tax character of distributions (as consisting of ordinary income or capital gain) will be the same regardless of whether such distributions are reinvested or received in cash. See “Federal Income Tax Matters Associated with Investment in the Acquiring Fund” under “Additional Information About the Funds.”