PHILADELPHIA, May 18 /PRNewswire-FirstCall/ -- On May 17, 2007, the Board of Directors of Delaware Investments Colorado Insured Municipal Income Fund, Inc. and the Board of Trustees of Delaware Investments Florida Insured Municipal Income Fund (each, a "Fund") today each announced its decision to approve a proposal providing for fundamental investment strategy changes to each Fund. These changes will become effective upon approval by shareholders as discussed in more detail below.
Delaware Investments Colorado Insured Municipal Income Fund, Inc.
The Board of Delaware Investments Colorado Insured Municipal Income Fund, Inc. (the "CO Fund") approved the following changes to be submitted to shareholders for approval: (1) eliminating the fundamental requirement that the CO Fund invest primarily in insured securities, rendering the CO Fund an "un-insured" product; and (2) eliminating the fundamental requirement that the CO Fund only invest in AAA-rated Colorado municipal securities (or the equivalent) and permitting the CO Fund, as a non-fundamental investment policy, to invest without limitation in uninsured, investment grade Colorado municipal securities (including those rated below AAA). The Board also approved the adoption of a non-fundamental investment policy to permit the CO Fund to invest up to 20% of its net assets in non-investment grade Colorado municipal securities, which will become effective only upon shareholder approval of the changes to the fundamental investment policies. If the proposed changes are approved by shareholders, the CO Fund will be renamed the Delaware Investments Colorado Municipal Income Fund, Inc., consistent with its new, uninsured investment strategy.
If these changes are approved by the CO Fund's shareholders, the investment objective of the CO Fund, which is non-fundamental, will continue to be to provide current income exempt from regular federal income tax and Colorado state income tax, consistent with the preservation of capital. Under normal circumstances, the CO Fund will invest at least 80% of its net assets in investment grade quality Colorado municipal bonds. The CO Fund will be able to invest up to 20% of its net assets in municipal obligations issued by or on behalf of territories of the United States - such as Guam, the U.S. Virgin Islands or Puerto Rico - that are exempt from Colorado and federal income tax, subject to the CO Fund's fundamental investment policy to invest 80% of its net assets in Colorado municipal obligations. Additionally, the CO Fund will be able to invest up to 20% of its net assets in municipal bonds with an investment rating of Ba/BB or lower, or that are unrated but judged to be of comparable quality by the CO Fund's investment adviser. Investment in municipal bonds of below investment grade quality involves special risks as compared with investment in higher grade municipal bonds. These risks include greater sensitivity to economic downturns in Colorado or in the United States generally. Securities rated below investment grade are commonly known as "junk bonds." Such securities are regarded as predominantly speculative with respect to the issuer's ability to pay interest and repay principal owed.
Delaware Investments Florida Insured Municipal Income Fund
The Board of Delaware Investments Florida Insured Municipal Income Fund (the "FL Fund") approved the following changes to be submitted to shareholders for approval: (1) changing the FL Fund's fundamental investment policies to permit the FL Fund to pursue a national (i.e., non-single state) investment strategy; (2) eliminating the fundamental requirement that the FL Fund invest primarily in insured securities, thereby rendering the FL Fund an "un-insured" product; and (3) eliminating the fundamental requirement that the FL Fund only invest in AAA-rated Florida municipal securities (or the equivalent). The Board also approved the adoption of non-fundamental investment policies to permit the FL Fund (1) to invest without limitation in un-insured, investment grade municipal securities of states other than Florida (including those rated below AAA) and (2) to invest up to 20% of its net assets in non-investment grade municipal securities. These non-fundamental policies will become effective only upon shareholder approval of the changes to the fundamental investment policies. If the proposed changes are approved by shareholders, the FL Fund will be renamed the Delaware Investments National Municipal Income Fund, consistent with its new, national investment strategy.
If these changes are approved by the FL Fund's shareholders, the FL Fund's investment objective, which is non-fundamental, will be changed to provide current income exempt from regular federal income tax, consistent with the preservation of capital. As a fundamental policy, under normal circumstances the FL Fund will invest at least 80% of its net assets in securities the income from which is exempt from federal income taxes. The FL Fund will be able to invest up to 20% of its net assets in municipal bonds with an investment rating of Ba/BB or lower, or that are unrated but judged to be of comparable quality by the FL Fund's investment adviser. Investment in municipal bonds of below investment grade quality involves special risks as compared with investment in higher grade municipal bonds. These risks include greater sensitivity to general economic downturns. Securities rated below investment grade are commonly known as "junk bonds." Such securities are regarded as predominantly speculative with respect to the issuer's ability to pay interest and repay principal owed.
It is anticipated that the FL Fund will transition its portfolio over time to include municipal bonds from other states and territories. During that transition period, the FL Fund may have significant investments in Florida municipal bonds. This could make the FL Fund more sensitive to economic conditions in Florida than other more geographically diversified national municipal income funds.
Both Funds
Each Fund's Board plans to submit the proposed investment strategy changes to each Fund's shareholders at the Funds' annual meeting, scheduled to occur in August 2007. Any solicitation of proxies by each Fund in connection with this shareholder meeting will be made only pursuant to proxy materials filed under the federal securities laws. It is anticipated that these proxy materials will be distributed to each Fund's shareholders in July 2007. There can be no assurance that the shareholders of each Fund will vote in favor of the proposals.
Each Fund is a closed-end fund managed by Delaware Management Company. Delaware Management Company is a series of Delaware Management Business Trust, a wholly owned subsidiary of Lincoln National Corporation.
In connection with the proposed investment strategy changes, each Fund intends to file relevant materials with the U.S. Securities and Exchange Commission (the "SEC"), including a combined proxy statement for each Fund. Because those documents will contain important information, each Fund's shareholders are urged to read them carefully when they become available. When filed with the SEC, those documents will be available free of charge at the SEC's website, http://www.sec.gov/. Each Fund's shareholders will also be able to obtain copies of these documents, when available, by calling Delaware Investments toll-free at 800 523-1918. The foregoing is not an offer to sell, nor a solicitation of an offer to buy, shares of any fund, nor is it a solicitation of any proxy.
About Delaware Investments:
Delaware Investments, an affiliate of Lincoln Financial Group, is a Philadelphia-based diversified asset management firm with more than $150 billion in assets under management as of March 31, 2007. Through a broad range of managed accounts and portfolios, mutual funds, retirement accounts, subadvised funds, education savings plans and other investment products, Delaware Investments provides investment services to individual investors and to institutional investors such as private and public pension funds, foundations, and endowment funds. Delaware Investments is the marketing name for Delaware Management Holdings, Inc. and its subsidiaries. For more information on Delaware Investments, visit the company at http://www.delawareinvestments.com/. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. For more information on Lincoln Financial Group, visit http://www.lfg.com/.
