Securities Exchange Act of 1934
BlackRock Advisers LLP and Affiliates Tender Offer Relief for Offers to Purchase Liquidity Enhanced Adjustable Rate Securities ("LEARS")
Dear Mr. Hoffman:
We are responding to your letter dated October 30, 2008 to Michele M. Anderson and Celeste M. Murphy as supplemented by telephone conversations with the staff of the Division of Corporation Finance ("Division") with regard to your request for no-action relief. Our response is attached to the enclosed photocopy of your letter to avoid having to recite or summarize the facts presented in your letter. Unless otherwise noted, capitalized terms in this letter have the same meaning as in your letter.
The Division believes that the offer to purchase LEARS pursuant to the Liquidity Facility may constitute a tender offer subject to Sections 13(e), 14(d) and 14(e) of the Securities Exchange Act of 1934, and Rule 13e-4 and Regulations 14D and 14E. Nevertheless, based upon your opinion that offers to purchase LEARS pursuant to the Liquidity Facility do not constitute a tender offer, as well as the facts and representations made in correspondence and conversations with the staff, the Division, without necessarily concurring with the analysis or conclusions set forth in your letter, will not recommend that the Commission take enforcement action if such offers are conducted without complying with Rule 13e-4 and Regulations 14D and 14E.
In issuing this no-action position, the Division considered the following facts, among others:
at the time of initial issuance and each remarketing, the Funds and the Liquidity Provider will make all offers and sales of LEARS and any related security pursuant to an effective registration statement or in reliance on an available exemption from such requirements under the Securities Act of 1933 ("Securities Act");1
the terms and conditions of the Liquidity Facility are fixed and will apply to each remarketing;
the Liquidity Facility is open to all LEARS holders;
the Liquidity Provider will purchase all LEARS at a price equal to the liquidation preference plus accumulated but unpaid dividends;
an offering memorandum, as described in your letter, will be delivered on every remarketing date;
the offering memorandum will describe the operation of the Liquidity Facility and explain in detail the results of a Non-Clearing Remarketing;
in the event of Non-Clearing Remarketing, the Paying Agent, will issue a notice to LEARS holders;
the Liquidity Provider is required to sell all LEARS that it holds, as a result of being required to purchase LEARS to prevent a Non-Clearing Remarketing, at the next remarketing with no right to hold the LEARS at a particular dividend rate;
LEARS holders other than the Liquidity Provider will have the ability to revoke their notice to participate in a remarketing until one business day prior to the remarketing date;
the Liquidity Provider must sell at the rate set by the remarketing agent pursuant to the terms of the LEARS;
payment for the LEARS will occur promptly;
neither the Liquidity Provider nor the Fund will take any steps to encourage or discourage holders of the securities from triggering a Non-Clearing Remarketing; and
In the event that the Liquidity Agreement will not be renewed, will otherwise be terminated or a new Liquidity Agreement with a replacement Liquidity Provider will be entered into, holders of the LEARS will be notified by the Paying Agent at least two remarketings in advance of such event.
The foregoing no-action relief is based solely on your representations and the facts presented in your letter dated October 30, 2008, as supplemented by telephone conversations with the staff of the Commission. The relief granted is strictly limited to the application of these rules to the offers as described in your letter. You should discontinue the offers pending further consultation with the staff of the Commission if any of the facts or representations set forth in your letter change.
Your attention is directed to the anti-fraud and anti-manipulation provisions of the Exchange Act, particularly Sections 10(b) and 14(e), and Rule 10b-5 thereunder. Responsibility for compliance with these and any other applicable provisions of the federal securities laws must rest with BlackRock, the Liquidity Provider and the remarketing agent. The Division expresses no view with respect to any other questions that the Liquidity Facility may raise, including, but not limited to, the adequacy of disclosure concerning, and the applicability of other federal or state laws to, the purchase of the LEARS and conduct of your remarketing as described in your letter.
This position is based on the facts described and the representations made in your letter. Any different facts or circumstances may require a different conclusion. This response expresses the Division's position on enforcement action only and does not express any legal conclusion on the question presented.
Mauri L. Osheroff
Division of Corporation Finance
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