By Angela McDaniels
Tacoma, Wash., April 7 - Nuveen California Dividend Advantage Municipal Fund 3's series 2014 MuniFund term preferred shares carry a dividend rate of 2.35%, according to a 497 filing with the Securities and Exchange Commission.
Nuveen priced $27 million of the preferreds at par of $10.00 and announced them in a press release on Wednesday. The fund had initially planned to issue up to $74.29 million of the preferreds.
The preferreds are callable at 101% of par beginning May 1, 2012. The premium will decline to 0.5% on Nov. 1, 2012 and to zero on May 1, 2013.
If not called early, the preferreds must be redeemed at par on May 1, 2014.
Morgan Stanley & Co. Inc. is the lead bookrunner. Merrill Lynch, Citigroup Global Markets Inc., UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunners. Nuveen Investments LLC is a co-manager.
The issue is expected to settle on Monday.
Proceeds will be used to refinance and redeem all of the fund's outstanding municipal auction-rate cumulative preferred shares and to maintain the fund's leveraged capital structure.
The fund has applied to list the preferred stock on the New York Stock Exchange under the symbol "NZH PRA."
Nuveen California is a fund managed by Chicago-based Nuveen Investments.
| Issuer: | Nuveen California Dividend Advantage Municipal Fund 3
|
| Issue: | Series 2014 MuniFund term preferred shares
|
| Amount: | $27 million
|
| Shares: | 2.7 million
|
| Dividends: | 2.35%, payable monthly
|
| Price: | Par of $10.00
|
| Redemption: | Mandatory on May 1, 2014; optional at 101 beginning May 1, 2012, premium declines to 0.5% on Nov. 1, 2012 and to zero on May 1, 2013
|
| Bookrunners: | Morgan Stanley & Co. Inc. (lead); Merrill Lynch, Citigroup Global Markets Inc., UBS Securities LLC and Wells Fargo Securities LLC (joint bookrunners)
|
| Co-manager: | Nuveen Investments LLC
|
| Pricing date: | April 6
|
| Settlement date: | April 11
|
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