Company: OIA
Filing Date: 2025-02-07
Form Type: N-2/A
Source: 0001104659-25-010545
Chunk: 54

Company: Invesco Municipal Income Opportunities Trust
Filing Date: 2025-02-07
Form: N-2/A
Chunk 54
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 pay no debt service until a specific date, then they incrementally 
 convert to conventional Auction Rate Securities. At each conversion date the issuer has the ability to call and pay down any amount of         
 the CARS. Some bonds may be “callable,” allowing the issuer to redeem them before their maturity date. To protect bondholders,                 
 callable bonds may be issued with provisions that prevent them from being called for a period of time. Typically, that is 5 to 10 years        
 from the issuance date. When interest rates decline, if the call protection on a bond has expired, it is more likely that the issuer may       
 call the bond. If that occurs, the Fund might have to reinvest the proceeds of the called bond in investments that pay a lower rate of         
 return, which could reduce the Fund’s yield.                                                                                                   |

S-6 Inverse Floating Rate Interests Inverse floating rate interests (Inverse Floaters) are issued in connection with municipal tender option bond (TOB) financing transactions to generate leverage for the Fund. Such instruments are created by a special purpose trust (a TOB Trust) that holds long-term fixed rate bonds sold to it by the Fund (the underlying security), and issues two classes of beneficial interests: short-term floating rate interests (Floaters), which are sold to other investors, and Inverse Floaters, which are purchased by the Fund. The Floaters have first priority on the cash flow from the underlying security held by the TOB Trust, have a tender option feature that allows holders to tender the Floaters back to the TOB Trust for their par amount and accrued interest at specified intervals and bear interest at prevailing short-term interest rates. Tendered Floaters are remarketed for sale to other investors for their par amount and accrued interest by a remarketing agent to the TOB Trust and are ultimately supported by a liquidity facility provided by a bank, upon which the TOB Trust can draw funds to pay such amount to holders of Tendered Floaters that cannot be remarketed. The Fund, as holder of the Inverse Floaters, is paid the residual cash flow from the underlying security. Accordingly, the Inverse Floaters provide the Fund with leveraged exposure to the underlying security. When short-term interest rates rise or fall, the interest payable on the Floaters issued by a TOB Trust will, respectively, rise or fall, leaving less or more, respectively, residual interest cash flow from the underlying security available for payment on the Inverse Floaters. Thus, as short-term interest rates