Company: VMO
Filing Date: 2025-05-02
Form Type: N-CSR
Source: 0001193125-25-111525
Chunk: 42

Company: Invesco Municipal Opportunity Trust
Filing Date: 2025-05-02
Form: N-CSR
Chunk 42
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 the financial capability of participating tobacco companies. Accordingly, payments made by tobacco manufacturers could be reduced if there is a significant decrease in tobacco consumption, which could be a result of, among other things, increased regulation or restrictions on cigarette sales or smoking, anti-smoking campaigns, tax increases, price increases or increased competition from other nicotine delivery devices. A market share loss by the MSA companies to non-MSAparticipating tobacco manufacturers or issues affecting a tobacco manufacturer, such as bankruptcy, could also cause a reduction or delay in bond payments, which could affect the Trust’s net asset value. Because tobacco settlement revenue bonds are backed by payments from the tobacco manufacturers, and generally not by the credit of the state or local government issuing the bonds, their creditworthiness depends on the ability of tobacco manufacturers to meet their obligations. The MSA and tobacco manufacturers have been and continue to be subject to various legal claims and an adverse outcome could affect the payment streams associated with the MSA or cause delays or reductions in bond payments. ∎ “Subject to Appropriation” (STA) Tobacco Bonds Risk.STA Tobacco Bonds rely on both the revenue from the MSA and a state appropriation pledge. “Government appropriation” or “subject to appropriation” bonds (or “appropriation debt”) are typically payable from two distinct sources: (i) a dedicated revenue source (in the case of tobacco bonds, the MSA funds), and (ii) the issuer’s general funds. Appropriation debt differs from a state’s general obligation debt in that general obligation debt is backed by the state’s full faith, credit and taxing power, while appropriation debt requires the state to pass a specific periodic appropriation to pay interest and/or principal on the bonds, which is usually made annually. While STA Tobacco Bonds offer an enhanced credit support feature, that feature is generally not an unconditional guarantee of payment by a state and states generally do not pledge the full faith, credit or taxing power of the state. Investing in U.S. Territories, Commonwealths and Possessions Risk.The Trust also invests in obligations of the governments of U.S. territories, commonwealths and possessions such as Puerto Rico, the U.S. Virgin Islands, Guam and the Northern Mariana Islands to the extent such obligations are exempt from regular federal individual and state income taxes. Accordingly, the Trust may be adversely affected by local political, economic, social and environmental conditions and developments, including natural disasters, within these U.S. territories, commonwealths and possessions affecting the issuers of such obligations. Certain of the municipalities in