sc13da706290024_11272009.htm

0000921895-09-002850.txt : 20091204 0000921895-09-002850.hdr.sgml : 20091204 20091203201206 ACCESSION NUMBER: 0000921895-09-002850 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20091204 DATE AS OF CHANGE: 20091203 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MBIA CAPITAL/CLAYMORE MAN DUR INV GRD MUNI FUND CENTRAL INDEX KEY: 0001235511 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-81192 FILM NUMBER: 091221716 BUSINESS ADDRESS: STREET 1: 2455 CORPORATE WEST DRIVE CITY: LISLE STATE: IL ZIP: 60532 BUSINESS PHONE: 630-505-3700 MAIL ADDRESS: STREET 1: 2455 CORPORATE WEST DRIVE CITY: LISLE STATE: IL ZIP: 60532 FORMER COMPANY: FORMER CONFORMED NAME: MBIA CAPITAL CLAYMORE MAN DUR INV GRD MUNI FUND DATE OF NAME CHANGE: 20030814 FORMER COMPANY: FORMER CONFORMED NAME: MBIA CAPITAL CLAYMORE MANAGED DURATION NATIONAL MUNICIPAL TR DATE OF NAME CHANGE: 20030523 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WESTERN INVESTMENT LLC CENTRAL INDEX KEY: 0001286207 IRS NUMBER: 870623442 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 7050 S. UNION PARK CENTER, SUITE 590 CITY: MIDVALE STATE: UT ZIP: 84047 BUSINESS PHONE: 801-568-1400 MAIL ADDRESS: STREET 1: 7050 S. UNION PARK CENTER, SUITE 590 CITY: MIDVALE STATE: UT ZIP: 84047 SC 13D/A 1 sc13da706290024_11272009.htm AMENDMENT NO. 7 TO THE SCHEDULE 13D sc13da706290024_11272009.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 7)1

MBIA Capital /

Claymore Managed Duration Investment Grade Municipal Fund

(Name of Issuer)

Common Stock, $.001 par value

(Title of Class of Securities)

55266X100

(CUSIP Number)

STEVEN WOLOSKY, ESQ.

OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

November 27, 2009

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

_______________

1 The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP NO. 55266X100

1	NAME OF REPORTING PERSON WESTERN INVESTMENT LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO, WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 748,332
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 748,332
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 748,332
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.4%
14	TYPE OF REPORTING PERSON OO

CUSIP NO. 55266X100

1	NAME OF REPORTING PERSON ARTHUR D. LIPSON
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 748,332
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 748,332
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 748,332
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.4%
14	TYPE OF REPORTING PERSON IN

CUSIP NO. 55266X100

1	NAME OF REPORTING PERSON WESTERN INVESTMENT HEDGED PARTNERS L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 236,861
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 236,861
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 236,861
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.98%
14	TYPE OF REPORTING PERSON PN

CUSIP NO. 55266X100

1	NAME OF REPORTING PERSON WESTERN INVESTMENT ACTIVISM PARTNERS LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 37,241
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 37,241
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 37,241
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) LESS THAN 1%
14	TYPE OF REPORTING PERSON OO

CUSIP NO. 55266X100

1	NAME OF REPORTING PERSON WESTERN INVESTMENT TOTAL RETURN PARTNERS L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 236,596
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 236,596
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 236,596
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.98%
14	TYPE OF REPORTING PERSON PN

CUSIP NO. 55266X100

1	NAME OF REPORTING PERSON WESTERN INVESTMENT TOTAL RETURN FUND LTD.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION CAYMAN ISLANDS
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 236,623
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 236,623
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 236,623
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.98%
14	TYPE OF REPORTING PERSON CO

CUSIP NO. 55266X100

1	NAME OF REPORTING PERSON BENCHMARK PLUS INSTITUTIONAL PARTNERS, L.L.C.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 236,291
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 236,291
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 236,291
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.98%
14	TYPE OF REPORTING PERSON OO

CUSIP NO. 55266X100

1	NAME OF REPORTING PERSON BENCHMARK PLUS PARTNERS, L.L.C.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 64,478
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 64,478
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 64,478
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) LESS THAN 1%
14	TYPE OF REPORTING PERSON OO

CUSIP NO. 55266X100

1	NAME OF REPORTING PERSON BENCHMARK PLUS MANAGEMENT, L.L.C.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 300,769
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 300,769
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 300,769
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.8%
14	TYPE OF REPORTING PERSON OO

CUSIP NO. 55266X100

1	NAME OF REPORTING PERSON ROBERT FERGUSON
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 300,769
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 300,769
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 300,769
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.8%
14	TYPE OF REPORTING PERSON IN

CUSIP NO. 55266X100

1	NAME OF REPORTING PERSON SCOTT FRANZBLAU
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 300,769
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 300,769
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 300,769
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.8%
14	TYPE OF REPORTING PERSON IN

CUSIP NO. 55266X100

The following constitutes Amendment No. 7 the Schedule 13D filed by the undersigned (“Amendment No. 7”). This Amendment No. 7 amends the Schedule 13D as specifically set forth.

Item 3.

Source and Amount of Funds or Other Consideration.

Item 3 is hereby amended and restated to read as follows:

The aggregate purchase price of the 748,332 Shares beneficially owned by WILLC is approximately $8,548,932. The Shares beneficially owned by WILLC consist of 1,011 Shares, 1,000 of which were acquired with WILLC’s working capital and 11 of which were acquired through the Issuer’s dividend repurchase plan, 236,861 Shares that were acquired with WIHP’s working capital, 37,241 Shares that were acquired with WIAP’s working capital, 236,596 Shares that were acquired with WITRP’s working capital and 236,623 Shares that were acquired with WITRL’s working capital.

The aggregate purchase price of the 300,769 Shares beneficially owned by BPM is approximately $3,517,037. The Shares beneficially owned by BPM consist of 236,291 Shares that were acquired with BPIP’s working capital and 64,478 Shares that were acquired with BPP’s working capital.

Item 4.

Purpose of Transaction.

Item 4 is hereby amended to add the following:

On November 27, 2009 the Issuer entered into an agreement (the “Agreement”) with the Reporting Persons pursuant to which the Issuer agreed to commence a tender offer to expire on or before March 1, 2010, for up to 15% of the Issuer’s then outstanding Shares, at a price equal to at least 98% of the net asset value (“NAV”) of the Shares (the “Initial Tender Offer”) as of the close of business on the expiration date of the Initial Tender Offer.

The Issuer also agreed to commence a tender offer for up to 5% of the Issuer’s then outstanding Shares, at a price equal to at least 98% of NAV (the “First Conditional Tender Offer”) as of the close of business on the expiration date of the First Conditional Tender Offer, if during the period from March 1, 2010 through May 30, 2010 (the “First Conditional Tender Offer Test Period”) the Shares trade at a market price representing an average daily discount to NAV of more than 5%. If required, the First Conditional Tender Offer will commence as soon as reasonably practicable following the expiration of the First Conditional Tender Offer Test Period.

The Issuer further agreed to commence a tender offer for up to 5% of the Issuer’s then outstanding Shares, at a price equal to at least 98% of NAV (the “Second Conditional Tender Offer”) as of the close of business on the expiration date of the Second Conditional Tender Offer, if the Shares trade at a market price representing an average daily discount to NAV of more than 5% during the period commencing on the 6th business day following the expiration of the First Conditional Tender Offer through August 31, 2010 (the “Second Conditional Tender Offer Test Period”). If required, the Second Conditional Tender Offer will commence as soon as reasonably practicable following the expiration of the Second Conditional Tender Offer Test Period.

The Issuer further agreed to commence a tender offer for up to 5% of the Issuer’s then outstanding Shares, at a price equal to at least 98% of NAV (the “Third Conditional Tender Offer”) as of the close of business on the expiration date of the Third Conditional Tender Offer, if the Shares trade at a market price representing an average daily discount to NAV of more than 5% during the period commencing on the 6th business day following the expiration of the Second Conditional Tender Offer through November 30, 2010 (the “Third Conditional Tender Offer Test Period”). If required, the Third Conditional Tender Offer will commence as soon as reasonably practicable following the expiration of the Third Conditional Tender Offer Test Period.

CUSIP NO. 55266X100

The Reporting Persons agreed to, among other things, (i) withdraw WILLC’s proposal to declassify the Issuer’s Board of Trustees (the “Shareholder Proposal”) from consideration at the Issuer’s meeting of shareholders to be held on January 29, 2010 (the “Annual Meeting”) and (ii) vote all Shares beneficially owned as of the close of business on November 27, 2009 in favor of the MZF Trustee Slate (as defined in the Agreement), against any proposal made in opposition to, or in competition or inconsistent with, the MZF Trustee Slate and cooperate with the Issuer in the approval of the MZF Trustee Slate and the rejection of the Shareholder Proposal.

The Reporting Persons also agreed that through December 31, 2010, they will not, among other things, (i) effect, seek, offer, engage in, propose or participate in any “solicitation” of “proxies” (as such terms are defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) with respect to the Issuer, (ii) propose any matter for submission to a vote of stockholders of the Issuer, (iii) grant any other proxy with respect to securities of the Issuer, except as contemplated in the Agreement, (iv) form, join or participate in a “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any securities of the Issuer, except as contemplated by the Agreement and (v) seek (a) to call a meeting of stockholders of the Issuer, (b) representation on the Board, (c) the removal of any member of the Board or (d) to control or influence the management or policies of the Issuer.

The foregoing description of the Agreement is qualified in its entirety by reference to the Agreement, which is attached as exhibit 99.2 hereto and is incorporated herein by reference.

Item 5.

Interest in Securities of the Issuer.

Item 5(a) is hereby amended and restated to read as follows:

(a) The aggregate percentage of Shares reported owned by each person named herein is based upon 7,935,591 Shares outstanding, which is the total number of Shares outstanding as of July 31, 2009, as reported in the Issuer’s Certified Shareholder Report of Registered Investment Companies on Form N-CSR, filed with the Securities and Exchange Commission on October 6, 2009.

As of the close of business on December 2, 2009, WIHP, WIAP, WITRP and WITRL beneficially owned 236,861, 37,241, 236,596 and 236,623 Shares, respectively, representing approximately 2.98%, less than 1%, approximately 2.98% and approximately 2.98%, respectively, of the Shares outstanding. As the managing member of WIAP, the general partner of each of WIHP and WITRP and the investment manager of WITRL, WILLC may be deemed to beneficially own the 747,321 Shares owned in the aggregate by WIHP, WIAP, WITRP and WITRL, constituting approximately 9.4% of the Shares outstanding, in addition to the 1,011 Shares it holds directly. As the managing member of WILLC, Mr. Lipson may be deemed to beneficially own the 748,332 Shares beneficially owned by WILLC, constituting approximately 9.4% of the Shares outstanding. As members of a group for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, the Western Entities may be deemed to beneficially own the 300,769 Shares owned by the other Reporting Persons. The Western Entities disclaim beneficial ownership of such Shares.

As of the close of business on December 2, 2009, BPIP and BPP beneficially owned 236,291 and 64,478 Shares, respectively, representing approximately 2.98% and less than 1%, respectively, of the Shares outstanding. As the managing member of each of BPIP and BPP, BPM may be deemed to beneficially own the 300,769 Shares owned in the aggregate by BPIP and BPP, constituting approximately 3.8% of the Shares outstanding. As managing members of BPM, Messrs. Franzblau and Ferguson may each be deemed to beneficially own the 300,769 Shares beneficially owned by BPM, constituting approximately 3.8% of the Shares outstanding. As members of a group for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, the Benchmark Entities may be deemed to beneficially own the 748,332 Shares owned by the other Reporting Persons. The Benchmark Entities disclaim beneficial ownership of such Shares.

CUSIP NO. 55266X100

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer..

Item 6 is hereby amended to add the following:

On December 3, 2009, WILLC, BPIP, BPP and BPM entered into an agreement (the “Agreement”) whereby WILLC agreed to cease providing recommendations to BPIP and BPP with respect to purchases and sales of securities of the Issuer. In addition, pursuant to the terms of the Agreement, BPIP, BPP, BPM, Mr. Ferguson and Mr. Franzblau are no longer members of a “group” with respect to the securities of the Issuer with the other Reporting Persons and will cease to be Reporting Persons immediately after the filing of this Amendment No. 7 to the Schedule 13D.

On December 3, 2009, WILLC, WIHP, WIAP, WITRP, WITRL and Mr. Lipson entered into a Joint Filing Agreement (the “Joint Filing Agreement”) in which the parties agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer to the extent required by applicable law. The Joint Filing Agreement is attached as an exhibit hereto and is incorporated herein by reference.

Item 7.

Material to be Filed as Exhibits.

Item 7 is hereby amended to include the following exhibits:

99.1	Joint Filing Agreement by and among Western Investment LLC, Western Investment Hedged Partners L.P., Western Investment Activism Partners LLC, Western Investment Total Return Partners L.P., Western Investment Total Return Fund Ltd. and Arthur D. Lipson, dated December 3, 2009.

99.2

Agreement, dated November 27, 2009, by and among Arthur D. Lipson, Robert Ferguson, Scott Franzblau, Western Investment LLC, Western Investment Hedged Partners L.P., Western Investment Activism Partners LLC, Western Investment Total Return Partners L.P., Western Investment Total Return Fund Ltd., Benchmark Plus Institutional Partners L.L.C., Benchmark Plus Partners L.L.C. and Benchmark Plus Management, L.L.C., and MBIA Capital /Claymore Managed Duration Investment Grade Municipal Fund.

CUSIP NO. 55266X100

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: December 3, 2009	WESTERN INVESTMENT LLC

	By:	/s/ Arthur D. Lipson
		Name:	Arthur D. Lipson
		Title:	Managing Member

WESTERN INVESTMENT HEDGED PARTNERS L.P.

By:	Western Investment LLC
	General Partner

By:	/s/ Arthur D. Lipson
	Name:	Arthur D. Lipson
	Title:	Managing Member

WESTERN INVESTMENT ACTIVISM PARTNERS LLC

By:	Western Investment LLC
	Managing Member

By:	/s/ Arthur D. Lipson
	Name:	Arthur D. Lipson
	Title:	Managing Member

WESTERN INVESTMENT TOTAL RETURN PARTNERS L.P.

By:	Western Investment LLC
	General Partner

By:	/s/ Arthur D. Lipson
	Name:	Arthur D. Lipson
	Title:	Managing Member

WESTERN INVESTMENT TOTAL RETURN FUND LTD.

By:	Western Investment LLC
	Investment Manager

By:	/s/ Arthur D. Lipson
	Name:	Arthur D. Lipson
	Title:	Managing Member

	/s/ Arthur D. Lipson
	ARTHUR D. LIPSON

CUSIP NO. 55266X100

BENCHMARK PLUS INSTITUTIONAL PARTNERS, L.L.C.

By:	Benchmark Plus Management, L.L.C.
	Managing Member

By:	/s/ Robert Ferguson
	Name:	Robert Ferguson
	Title:	Managing Member

By:	/s/ Scott Franzblau
	Name:	Scott Franzblau
	Title:	Managing Member

BENCHMARK PLUS PARTNERS, L.L.C.

By:	Benchmark Plus Management, L.L.C.
	Managing Member

By:	/s/ Robert Ferguson
	Name:	Robert Ferguson
	Title:	Managing Member

By:	/s/ Scott Franzblau
	Name:	Scott Franzblau
	Title:	Managing Member

BENCHMARK PLUS MANAGEMENT, L.L.C.

By:	/s/ Robert Ferguson
	Name:	Robert Ferguson
	Title:	Managing Member

By:	/s/ Scott Franzblau
	Name:	Scott Franzblau
	Title:	Managing Member

	/s/ Robert Ferguson
	ROBERT FERGUSON

	/s/ Scott Franzblau
	SCOTT FRANZBLAU

EX-99.1 2 ex991to13da706290024_112709.htm JOINT FILING AGREEMENT ex991to13da706290024_112709.htm

Exhibit 99.1

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of a Statement on Schedule 13D dated August 27, 2008 (including amendments thereto) with respect to the Common Stock of MBIA Capital/Claymore Managed Duration Investment Grade Municipal Fund. This Joint Filing Agreement shall be filed as an Exhibit to such Statement.

Dated: December 3, 2009	WESTERN INVESTMENT LLC

	By:	/s/ Arthur D. Lipson
		Name:	Arthur D. Lipson
		Title:	Managing Member

WESTERN INVESTMENT HEDGED PARTNERS L.P.

By:	Western Investment LLC
	General Partner

By:	/s/ Arthur D. Lipson
	Name:	Arthur D. Lipson
	Title:	Managing Member

WESTERN INVESTMENT ACTIVISM PARTNERS LLC

By:	Western Investment LLC
	Managing Member

By:	/s/ Arthur D. Lipson
	Name:	Arthur D. Lipson
	Title:	Managing Member

WESTERN INVESTMENT TOTAL RETURN PARTNERS L.P.

By:	Western Investment LLC
	General Partner

By:	/s/ Arthur D. Lipson
	Name:	Arthur D. Lipson
	Title:	Managing Member

WESTERN INVESTMENT TOTAL RETURN FUND LTD.

By:	Western Investment LLC
	Investment Manager

By:	/s/ Arthur D. Lipson
	Name:	Arthur D. Lipson
	Title:	Managing Member

	/s/ Arthur D. Lipson
	ARTHUR D. LIPSON

EX-99.2 3 ex992to13da706290024_112709.htm AGREEMENT DATED NOVEMBER 27, 2009 ex992to13da706290024_112709.htm

Exhibit 99.2

AGREEMENT

This Agreement is entered into as of November 27, 2009 (including the exhibit hereto, the “Agreement”), by and among Arthur D. Lipson, Robert Ferguson, Scott Franzblau, Western Investment LLC, Western Investment Hedged Partners L.P., Western Investment Activism Partners LLC, Western Investment Total Return Partners L.P., Western Investment Total Return Fund Ltd., Benchmark Plus Institutional Partners L.L.C., Benchmark Plus Partners L.L.C. and Benchmark Plus Management, L.L.C., and all of their respective directors, officers and Affiliates (as defined herein) (collectively, “Western”) and MBIA Capital /Claymore Managed Duration Investment Grade Municipal Fund (“MZF” and together with Western, the “Parties” and individually a “Party”).

WHEREAS, MZF is a closed-end management investment company registered under the Investment Company Act of 1940 Act, as amended (the “1940 Act”);

WHEREAS, Western is the beneficial owner of 1,049,101 common shares of MZF representing approximately 13.2% of the outstanding common shares of MZF;

WHEREAS, MZF has scheduled a regular annual meeting of shareholders to be held on January 29, 2010 (the “Annual Meeting”) at which the current board of trustees of MZF (the “Board of Trustees”) will nominate Ronald E. Toupin, Jr. and Kevin M. Robinson to be elected as Class II Trustees of MZF (the “MZF Trustee Slate”);

WHEREAS, Western has submitted a shareholder proposal to declassify the Board of Trustees for consideration at the Annual Meeting (the “Shareholder Proposal”) and indicated that Western intends to solicit proxies from shareholders of MZF in support of the Shareholder Proposal and in support of the election of Arthur D. Lipson or another candidate as a Class II Trustee of MZF;

WHEREAS, MZF and Western believe it is in their mutual interests for the Board of Trustees to take action to attempt to reduce the discount to net asset value at which the Fund’s common shares trade and to avoid the continued expense and inconvenience related to the Shareholder Proposal and the contested MZF Trustee Slate;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

Section 1. Support of Management Proxy Solicitation

1.1

Western represents and warrants that Western will (x) withdraw the Stockholder Proposal from consideration at the Annual Meeting; (y) appear at the Annual Meeting (or at any postponement or adjournment thereof) or otherwise cause all shares beneficially owned by Western as of the close of business on November 27, 2009 (the “Record Date”) for the Annual Meeting to be counted as present thereat for purposes of calculating a quorum; (z) vote or cause to be voted at the Annual Meeting all of the shares beneficially owned by Western as of the Record Date for the Annual Meeting (i) in favor of the MZF Trustee Slate and (ii) against any proposal made in opposition to, or in competition or inconsistent with, the MZF Trustee Slate; and (z) and generally cooperate with MZF in the approval of the MZF Trustee Slate and the rejection of the Shareholder Proposal.

Section 2. Tenders by MZF

2.1	On the basis of the representations, warranties and agreements set forth herein and subject to performance by Western of its covenants and other obligations hereunder and the other conditions set forth herein:

(a) MZF hereby covenants and agrees to commence a tender offer (the “Initial Tender Offer”) for up to 15% of the then outstanding common shares of MZF at a price equal to at least 98% of the net asset value of MZF’s common shares as determined as of the close of the regular trading session of the New York Stock Exchange on the date the Initial Tender Offer expires. The Initial Tender Offer shall expire on or before March 1, 2010; provided that the Initial Tender Offer may be extended if required by law.

(b) MZF hereby covenants and agrees to commence a tender offer (the “First Conditional Tender Offer”) for up to 5% of the then outstanding common shares of MZF at a price equal to at least 98% of the net asset value of MZF’s common shares as determined as of the close of regular trading on the New York Stock Exchange on the date the First Conditional Tender Offer expires, if during the period from March 1, 2010 through May 30, 2010 (the “First Conditional Tender Offer Test Period”), the common shares of MZF have traded at a market price (determined as of the close of regular trading on the New York Stock Exchange) that represents an average daily discount from net asset value of more than 5% during the First Conditional Tender Offer Test Period (calculated as described in Section 2.2 below). If required to commence a tender offer pursuant to this section, MZF will commence the First Conditional Tender Offer as soon as reasonably practicable after the expiration of the First Conditional Tender Offer Test Period.

(c) MZF hereby covenants and agrees to commence a tender offer (the “Second Conditional Tender Offer”) for up to 5% of the then outstanding common shares of MZF at a price equal to at least 98% of the net asset value of MZF’s common shares as determined as of the close of regular trading on the New York Stock Exchange on the date the Second Conditional Tender Offer expires, if during the period commencing on the sixth business day following the expiration of the First Conditional Tender Offer through August 31, 2010 (the “Second Conditional Tender Offer Test Period”), the common shares of MZF have traded at a market price (determined as of the close of regular trading on the New York Stock Exchange) that represents an average daily discount from net asset value of more than 5% during the Second Conditional Tender Offer Test Period (calculated as described in Section 2.2 below). If required to commence a tender offer pursuant to this section, MZF will commence the Second Conditional Tender Offer as soon as reasonably practicable after the expiration of the Second Conditional Tender Offer Test Period.

(d) MZF hereby covenants and agrees to commence a tender offer (the “Third Conditional Tender Offer”) for up to 5% of the then outstanding common shares of MZF at a price equal to at least 98% of the net asset value of MZF’s common shares as determined as of the close of regular trading on the New York Stock Exchange on the date the Third Conditional Tender Offer expires, if during the period commencing on the sixth business day following the expiration of the Second Conditional Tender Offer through November 30, 2010 (the “Third Conditional Tender Offer Test Period” and, together with the First Conditional Tender Offer Test Period and the Second Conditional Tender Offer Test Period, the “Test Periods”), the common shares of MZF have traded at a market price (determined as of the close of regular trading on the New York Stock Exchange) that represents an average daily discount from net asset value of more than 5% during the Third Conditional Tender Offer Test Period (calculated as described in Section 2.2 below). If required to commence a tender offer pursuant to this section, MZF will commence the Third Conditional Tender Offer as soon as reasonably practicable after the expiration of the Third Conditional Tender Offer Test Period.

Each such tender offer is referred to as a “Tender” and such tender offers are collectively referred to herein as the “Tenders.” Each Tender shall expire twenty business days following its respective date of commencement; provided that the Tender may be extended if required by law.

2.2

MZF will determine the average of MZF’s daily premium or discount to net asset value for each trading day in the applicable Test Period, by computing the simple average of all daily determinations of the differential between net asset value and the market price at which common shares of MZF trade during such Test Period. MZF shall perform such calculations as soon as practicable after the applicable Test Period in good faith and on a consistent basis using MZF’s published daily net asset value calculations and the last sale price on the NYSE for market price on each day the NYSE is open for trading during the applicable Test Period.

2.3

If the average of MZF’s daily discount of market price to net asset value for any applicable Test Period (calculated as described in Section 2.2 above) is less than 5% during any Test Period, MZF will not be required to conduct any subsequent Tenders. At MZF’s option, the Initial Tender Offer may accept odd-lots (below 100 common shares) in full, without proration (“Odd-Lot Tenders”), as permitted by Rule 13e-4 of the Securities Exchange Act of 1934 Act, as amended (the “1934 Act”). Odd-Lot Tenders, however, shall not be permitted in any of the First Conditional Tender Offer, Second Conditional Tender Offer or Third Conditional Tender Offer and the common shares taken up and paid for shall be taken up and paid for as nearly as may be pro rata, disregarding fractions, according to the number of common shares tendered by each security holder during the period such Tender remains open.

2.4

Although the Board of Trustees of MZF has committed to the Tenders under the circumstances set forth above, MZF will not commence a Tender or accept tenders of MZF’s common shares during any period when (a) such transactions, if consummated, would: (i) result in the delisting of MZF’s shares from the New York Stock Exchange or (ii) impair MZF’s status as a regulated investment company under the Internal Revenue Code of 1986, as amended (which would make MZF a taxable entity, causing MZF’s income to be taxed at the fund level in addition to the taxation of shareholders who receive distributions from MZF); (b) there is any (i) legal or regulatory action or proceeding instituted or threatened challenging such transaction, (ii) suspension of or limitation on prices for trading securities generally on the New York Stock Exchange or other national securities exchange(s), or the National Association of Securities Dealers Automated Quotation System ("NASDAQ'') National Market System, (iii) declaration of a banking moratorium by federal or state authorities or any suspension of payment by banks in the United States or New York State or (iv) limitation affecting MZF imposed by federal or state authorities on the extension of credit by lending institutions; or (c) the Board of Trustees of MZF determines in good faith that effecting any such transaction would constitute a breach of its fiduciary duty owed to MZF or its shareholders. MZF will commence any Tender delayed by the pendency of any of the above described events within 30 days of the termination of such delaying event.

Section 3. Additional Agreements

3.1

Western covenants and agrees with MZF that during the period from the date of this Agreement through December 31, 2010 (the “Effective Period”) it will not, and will cause its Affiliates (as defined in Rule 405 of the Securities Act of 1933, as amended (the “1933 Act”)) not to, directly or indirectly, alone or in concert with others, unless specifically requested in writing by the Chairman or President of MZF or by a resolution of a majority of the Board of Trustees of MZF, take any of the actions set forth below:

(a) effect, seek, offer, engage in, propose (whether publicly or otherwise) or cause or participate in, or assist any other person to effect, seek, engage in, offer or propose (whether publicly or otherwise) or participate in (other than as specifically contemplated by this Agreement) any “solicitation” of “proxies” (as such terms are defined in the rules and regulations promulgated under the 1934 Act but without regard to the exclusion set forth in Rule 14a-1(l)(2)(iv) from the definition of “solicitation”), whether or not relating to the election or removal of trustees, with respect to MZF or any action resulting in Western or any of its Affiliates becoming a “participant” in any “election contest” (as such terms are defined in the rules and regulations promulgated under the 1934 Act) with respect to MZF;

(b) propose any matter for submission to a vote of stockholders of MZF;

(d) except as specifically contemplated by this Agreement, form, join or participate in a “group” (within the meaning of Section 13(d)(3) of the 1934 Act) with respect to any securities of MZF or deposit any securities of MZF in a voting trust or subject any securities of MZF to any arrangement or agreement with respect to the voting of such securities or other agreement having similar effect;

(e) seek, alone or in concert with others, (i) to call a meeting of stockholders of MZF, (ii) representation on the Board of Trustees of MZF, (iii) the removal of any member of the Board of Trustees of MZF, or (iv) to control or influence the management or policies of MZF; or

(f) except as specifically contemplated by this Agreement, enter into any discussions, negotiations, arrangements or understandings with any person with respect to any of the foregoing, or advise, assist, encourage or seek to persuade others to take any action with respect to any of the foregoing.

Section 4. Press Release; Public Statements

4.1

Western and MZF agree that within one business day of the date of this Agreement, MZF will issue a press release announcing the determination of the Board of Trustees to commence the Tenders, subject to the other conditions set forth herein, and announcing the other material terms of this Agreement in substantially the form attached as Exhibit A hereto. The Parties acknowledge and agree that this Agreement will be filed as an exhibit to an amendment to Western’s Schedule 13D.

Section 5. Fees, Costs and Expenses

5.1	Each Party hereto will pay, or cause to be paid, its own fees, costs and expenses incident to this Agreement and the transactions contemplated herein.

Section 6. Miscellaneous

6.1

Remedies. Each Party hereto hereby acknowledges and agrees that irreparable harm will occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties will be entitled to seek specific performance hereunder, including, without limitation, an injunction or injunctions to prevent and enjoin breaches of the provisions of this Agreement and to enforce specifically the terms and provision hereof in any state or federal court in the State and County of New York, in addition to any other remedy to which they may be entitled at law or in equity. Any requirements for the securing or posting of any bond with respect to any such remedy are hereby waived. All rights and remedies under this Agreement are cumulative, not exclusive, and will be in addition to all rights and remedies available to any Party at law or in equity.

6.2

Jurisdiction; Venue; Waiver of Jury Trial. The Parties hereto hereby irrevocably and unconditionally consent to and submit to the jurisdiction of the state or federal courts in the State and County of New York for any actions, suits or proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Parties irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement, or the transactions contemplated hereby, in the state or federal courts in the State and County of New York, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. Each of Western and MZF waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement.

6.3

Entire Agreement. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof and may be amended only by an agreement in writing executed by the Parties hereto. This Agreement supersedes all previous negotiations, representations and discussions by the Parties hereto concerning the subject matter hereof, and integrates the whole of all of their agreements and understanding concerning same. No prior oral representations or undertakings concerning the subject matter hereof will operate to amend, supersede, or replace any of the terms or conditions set forth in this Agreement, nor will they be relied upon.

6.4	Section Headings. Descriptive headings are for convenience only and will not control or affect the meaning or construction of any provision of this Agreement.

6.5

Severability. Any provision of this Agreement that is invalid or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining provisions of this Agreement or affecting the validity or enforceability of any provisions of this Agreement in any other jurisdiction. In addition, the Parties agree to use their best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any such term, provision, covenant or restriction that is held invalid, void or unenforceable by a court of competent jurisdiction.

6.6	Governing Law. This Agreement will be governed by and construed and enforced in accordance with the laws of the State of New York.

6.7

Binding Effect; No Assignment. This Agreement will be binding upon and inure to the benefit of and be enforceable by the successors and assigns of the Parties hereto. Nothing in this Agreement, expressed or implied, is intended to confer on any person other than the Parties hereto, or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement. No Party to this Agreement may, directly or indirectly, assign its rights or delegate its obligations hereunder (whether voluntarily, involuntarily, or by operation of law) without the prior written consent of the other Party. Any such attempted assignment will be null and void.

6.8	Amendments; Waivers. No provision of this Agreement may be amended other than by an instrument in writing signed by the Parties hereto, and no provision hereof may be waived other than by an instrument in writing signed by the Party against whom enforcement is sought.

6.9	Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

[signatures appear on next page]

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

MBIA CAPITAL /CLAYMORE MANAGED DURATION INVESTMENT GRADE MUNICIPAL FUND

By:
Name:
Title:

WESTERN INVESTMENT LLC

By:
	Name:	Arthur D. Lipson
	Title:	Managing Member

WESTERN INVESTMENT HEDGED PARTNERS L.P.

By:	Western Investment LLC
	General Partner

By:
	Name:	Arthur D. Lipson
	Title:	Managing Member

WESTERN INVESTMENT ACTIVISM PARTNERS LLC

By:	Western Investment LLC
	Managing Member

By:
	Name:	Arthur D. Lipson
	Title:	Managing Member

WESTERN INVESTMENT TOTAL RETURN PARTNERS L.P.

By:	Western Investment LLC
	General Partner

By:
	Name:	Arthur D. Lipson
	Title:	Managing Member

WESTERN INVESTMENT TOTAL RETURN FUND LTD.

By:	Western Investment LLC
	Investment Manager

By:
	Name:	Arthur D. Lipson
	Title:	Managing Member


	ARTHUR D. LIPSON

	BENCHMARK PLUS INSTITUTIONAL PARTNERS, L.L.C.

	By:	Benchmark Plus Management, L.L.C.
		Managing Member


	By:
		Name:
		Title:

	BENCHMARK PLUS PARTNERS, L.L.C.

	By:	Benchmark Plus Management, L.L.C.
		Managing Member


	By:
		Name:
		Title:

	BENCHMARK PLUS MANAGEMENT, L.L.C.


	By:
		Name:
		Title:


	ROBERT FERGUSON


	SCOTT FRANZBLAU

Exhibit A

NEWS RELEASE	Contact: [ ]
For Immediate Release	(800) [ ]

MBIA CAPITAL /CLAYMORE MANAGED DURATION

INVESTMENT GRADE MUNICIPAL FUND

Announces Tender Offer Program

NEW YORK, NY– November [ ], 2009 – MBIA Capital/Claymore Managed Duration Investment Grade Municipal Fund (the “Fund”) (NYSE:MZF) today announced that it will commence a tender offer for up to 15% of its outstanding common shares at a price equal to at least 98% of the Fund’s net asset value (“NAV”) per share on the date the tender offer expires. The Fund will commence the initial tender offer prior to March 1, 2010 (the “Initial Tender Offer”). In addition, upon the occurrence of certain events as set forth below and certain other terms and conditions, the Fund’s Board of Trustees has also agreed to conduct three additional tender offers as soon as reasonably practicable after June 1, 2010, September 1, 2010 and December 1, 2010 (the “Conditional Tender Offers”).

The Fund will commence each Conditional Tender Offer for up to 5% of the then outstanding common shares of MZF at a price equal to at least 98% of the NAV of MZF’s common shares as determined as of the close of regular trading session of the New York Stock Exchange on the date such Conditional Tender Offer expires, if during approximately three calendar months prior to such Conditional Tender Offer (each a “Conditional Tender Offer Test Period”), the common shares of MZF have traded on the New York Stock Exchange at an average daily discount from NAV of more than 5% during the applicable Conditional Tender Offer Test Period. If the average of MZF’s daily discount of market price to net asset value for each trading day in the applicable Conditional Tender Offer Test Period is less than 5% during such period, MZF will not conduct any subsequent Conditional Tender Offers. Each Conditional Tender Offer is also subject to certain additional terms and conditions including, for example, that such Conditional Tender Offer would not constitute a breach of Board of Trustee’s fiduciary duty owed to MZF or its shareholders.

The Fund believes that conducting the tender offers at a price equal to at least 98% of NAV will accommodate the interests of shareholders who seek an opportunity to dispose of their shares as well as shareholders who desire to remain shareholders of the Fund.

The tender offers described in this announcement, including the Initial Tender Offer, have not yet commenced. Each of the tender offers will be made, and the shareholders of the Fund will be notified, in accordance with the Securities Exchange Act of 1934, as amended, the Investment Company Act of 1940, as amended, and other applicable rules and regulations. This announcement is not an offer to purchase or a solicitation of an offer to sell shares of the Fund.

The tender offers will be made only by an Offer to Purchase for Cash and the related Letter of Transmittal. As soon as each tender offer commences, the Fund will file a tender offer statement with respect to such tender offer with the Securities and Exchange Commission. Shareholders should read the Offer to Purchase for Cash and the related Letter of Transmittal when it is available because it contains important information. You may obtain a tender offer statement and other filed documents for free at the Securities and Exchange Commission 's web site (www.sec.gov), by calling the Fund at 800-345-7999 or by writing the Fund at Claymore Securities, Inc., 2455 Corporate West Drive, Lisle, Illinois 60532, 800-345-7999.

MBIA Capital Management Corp. is the Fund's Investment Adviser. Based in Armonk, NY, MBIA specializes in the management of fixed-income securities, with $43 billion in fixed-income assets under management as of September 30, 2009. Founded in 1994, MBIA Capital Management Corp. maintains a particular expertise in investment-grade municipal bond investing, and is a wholly-owned subsidiary of MBIA Inc.

Claymore Securities, Inc. is a privately-held financial services company offering unique investment solutions for financial advisors and their valued clients. Claymore entities have provided supervision, management or servicing on approximately $13.3 billion in assets, as of September 30, 2009. Claymore currently offers closed-end funds, unit investment trusts and exchange-traded funds. To learn more about Claymore’s closed-end funds, please visit www.claymore.com/cef. Registered investment products are sold by prospectus only and investors should read the prospectus carefully before investing.

This information does not represent an offer to sell securities of the Fund and it is not soliciting an offer to buy securities of the Fund. There can be no assurance that the Fund will achieve its investment objectives. The net asset value of the Fund will fluctuate with the value of the underlying securities. It is important to note that closed-end funds trade on their market value, not net asset value, and closed-end funds often trade at a discount to their net asset value. Past performance is not indicative of future performance. An investment in the Fund is subject to certain risks and other considerations. Such risks and considerations include, but are not limited to: Liquidity and Market Price of Shares Risk; Market Risk and Selection Risk; Municipal Bond Market Risk; Interest Rate and Credit Risk; Call and Redemption Risk; Private Activity Bonds Risk; Risks of Tobacco-Related Municipal Bonds; Leverage Risk; Inflation Risk; Auction-Market Preferred Shares Risk; Portfolio Strategies Risk; Derivatives Risk; Affiliated Insurers Risk; Anti-Takeover Provisions; and Market Disruption.

Investors should consider the investment objectives and policies, risk considerations, charges and expenses of the Fund carefully before they invest. For this and more information, please contact a securities representative or Claymore Securities, Inc., 2455 Corporate West Drive, Lisle, Illinois 60532, 800-345-7999.

Press & Analyst Inquiries:

William T. Korver

Claymore Securities, Inc.

cefs@claymore.com

630-505-3700

Member FINRA/SIPC 10/09

NOT FDIC-INSURED | NOT BANK-GUARANTEED | MAY LOSE VALUE