Company: OIA
Filing Date: 2025-03-13
Form Type: 424B5
Source: 0001104659-25-023508
Chunk: 60

Company: Invesco Municipal Income Opportunities Trust
Filing Date: 2025-03-13
Form: 424B5
Chunk 60
---
 limitations for illiquid investments and the risks of holding illiquid investments. S-7 Municipal Forward Contracts A municipal forward contract is an agreement by the Fund to purchase a Municipal Security on a when-issued basis with a longer-than-standard settlement period, in some cases with the settlement date taking place up to five years from the date of purchase. Municipal forward contracts typically carry a substantial yield premium to compensate the buyer for the risks associated with a long when-issued period, including shifts in market interest rates that could materially impact the principal value of the bond, deterioration in the credit quality of the issuer, loss of alternative investment options during the when-issued period and failure of the issuer to complete various steps required to issue the bonds. Tobacco Related Bonds The Fund may invest in two types of tobacco related bonds: (i) tobacco settlement revenue bonds, for which payments of interest and principal are made solely from a state’s interest in the Master Settlement Agreement (“MSA”) and (ii) tobacco bonds subject to a state’s appropriation pledge (“STA Tobacco Bonds”), for which payments may come from both the MSA revenue and the applicable state’s appropriation pledge. Tobacco Settlement Revenue Bonds. Tobacco settlement revenue bonds are secured by an issuing state’s proportionate share of periodic payments by tobacco companies made under the MSA, a litigation settlement agreement reached out of court in November 1998 between 46 states and six U.S. jurisdictions and tobacco manufacturers representing a majority of U.S. market share. The MSA provides for annual payments by the manufacturers to the states and other jurisdictions in perpetuity in exchange for releasing all claims against the manufacturers and a pledge of no further litigation. The MSA established a base payment schedule and a formula for adjusting payments each year. Tobacco manufacturers pay into a master escrow trust based on their market share, and each state receives a fixed percentage of the payment as set forth in the MSA. Within some states, certain localities may in turn be allocated a specific portion of the state’s MSA payment pursuant to an arrangement with the state. A number of states and local governments have securitized the future flow of payments under the MSA by selling bonds, some through distinct governmental entities created for such purpose. The bonds are backed by the future revenue flows from the tobacco manufacturers. Annual payments on the bonds, and thus the risk to the Fund, are dependent on the receipt of future settlement payments by the state or its instrumentality. The actual amount of future settlement payments depends on many factors including, but not limited to, annual domestic cigarette