60 Heritage Drive, Pleasantville, NY 10570
(914) 747-5262 // Fax (914) 747-5258
I AM SEEKING YOUR VOTE AS A LAST RESORT.
Like you, I am a shareholder of Blackrock North American
Government Income Trust ("BNA"). On behalf of my clients and
myself, I hold more than 500,000 shares of BNA and I have been a
shareholder for more than five years.
As you may know, BNA has traded at a discount to its net asset
value ("NAV") for many years. Two years ago, shareholders
recommended a self-tender offer at net asset value but the board
said, "No." Last year, shareholders approved a proposal to
open-end BNA by a wide margin. Again, the board refused to act.
Obviously, shareholders need to elect directors that will not
ignore their wishes. Since I publicly indicated a few months
ago that I would submit another proposal to open-end BNA and
seek to elect directors who would abide by the outcome, BNA's
discount has narrowed. You can vote on the enclosed proxy card
for the open-ending proposal and to elect three directors who
will not ignore your vote.
On March 29, 2001, BNA's stock price was $9.87 while the NAV was
$10.91. If BNA had been open-ended your shares would have been
worth about $1.04 per share (or 10.5%) more than they actually
were. Open-ending will permanently eliminate the discount so
that you will be able to redeem your shares at NAV at any time.
In its September 4, 2000 issue, Forbes called open-ending "the
best thing that can happen" to a discounted closed-end fund.
Even though open-ending means a higher stock price for every
shareholder of BNA, management opposes it. Why? A Dow Jones
news story a few years back revealed what I think is the reason:
"It gives shareholders a way to get out at a profit, and so
threatens the company`s management fees." Of course, our
management will not admit that. Instead, they have to convince
you that you are better off with a stock worth $9.87 than one
worth $10.91. But don't take my word for it. Before you decide
how to vote, please read the following excerpt from a 1999
Forbes article entitled "Preservation of Fees."
WILLIAM M. STERNFELD got hosed. In 1991, as he was nearing
retirement, the Los Angeles attorney took his broker's advice
and put a chunk of savings into what he thought was a
conservative investment: the $503 million (starting assets)
closed-end North American Government Income Fund run by
Blackrock Financial Management. Blackrock, 80% owned by PNC
Bank, is among the largest money managers in the country,
currently with $142 billion in assets and $35 billion in retail
funds.
Not quite eight years later, Sternfeld is retired and the fund
has been a flop. Its annual payout has been cut from $1.20 a
share to 84 cents.(Footnote:Early this year, the annual dividend
was reduced again - this time to 75 cents.). The shares
Sternfeld bought for $15 have fallen to $11.50 in net asset
value and $10 in market value.
Why the 13% market discount from net asset value? New investors
are simply not willing to pay full asset value for a clunker
fund. This is a beautiful illustration of what "closed-end"
means in its worst sense. If Sternfeld wants out he has to offer
his shares at a fire-sale price.
The fund hasn't been a loser for everyone.
Besides this stinker, Blackrock runs 20 other closed-end funds
with relatively high costs. Blackrock rakes in $62 million a
year in fees on its captive customers.
Who's protecting the investor? A star-spangled board of
directors collects no less than $160,000 per person in annual
fees from its work on the closed-ends. Among the anointed:
former Vice President Walter Mondale; former Federal Reserve
Board Governor Andrew Brimmer; Richard Cavanagh, head of the
Conference Board and former executive dean of Harvard's Kennedy
School; and Frank Fabozzi, editor of the Journal of Portfolio
Management. So long as they go along with their employer's
tactics, they don't have to work too hard. The 21 funds all have
their directors' meetings on the same day of the quarter. As for
annual shareholder meetings, none of the outside directors
bothered to attend either of the last two.
Say this for the illustrious crowd: They knew where not to put
their own money. Not one of the outside directors owns more than
100 shares in the dog that snared Sternfeld.
Is there any recourse for a shareholder, other than to sell
shares at a loss? There is. If enough holders band together,
they can sometimes force the operator of a closed-end to open-
end the fund, which means the operator agrees to redeem any
unhappy holder at full net asset value. A lesser move in the
same vein is to persuade the operator to occasionally buy back
shares. This has the effect of narrowing the discount. It also
takes capital away from a bad portfolio manager.
Fund arbitrager Phillip Goldstein succeeded in getting a
proposition onto the proxy for North American Government Income
recommending a share buyback. The board urged a rejection.
Despite the board's position, more than half of those returning
their proxy voted in favor of the buyback. The shareholder vote,
alas, is not binding. The buyback idea remains "under
discussion."
Don't be surprised by any of this. If the directors had embraced
a buyback resolution, they would be biting the $160,000 hand
that feeds them. Don't forget that Blackrock's fees are figured
on a percentage of assets under management.
If you want directors who are committed to eliminating the
discount and achieving a higher stock price, you must return a
GREEN proxy card. Remember, only the last valid proxy card you
submit is counted and it supersedes any previous ones.
Therefore, once you submit a GREEN proxy card, please do not
sign and submit a later dated WHITE proxy card, as that will
invalidate your vote. If you have any questions, please call me
at (914) 747-5262 or e-mail me at OPLP@att.net.
Yours truly,
Phillip Goldstein
Fellow BNA Shareholder
PROXY STATEMENT OPPOSING THE SOLICITATION BY THE BOARD OF
DIRECTORS OF THE BLACKROCK NORTH AMERICAN GOVERNMENT INCOME
TRUST INC.
ANNUAL MEETING OF SHAREHOLDERS (To be held on May 24, 2001)
My name is Phillip Goldstein. I am sending this proxy
statement and the enclosed GREEN proxy card to holders of record
on February 28, 2001 (the "Record Date") of The BlackRock North
American Government Income Trust Inc. ("BNA"). I am soliciting
a proxy to vote your shares at the 2001 Annual Meeting of
Stockholders of BNA (the "Meeting") and at any and all
adjournments or postponements of the Meeting. Please refer to
BNA's proxy soliciting material for additional information
concerning the Meeting and the matters to be considered by the
shareholders.
This proxy statement and the enclosed GREEN proxy card are
first being sent to shareholders of BNA on or about April 30,
2001.
INTRODUCTION
There are two matters that BNA has scheduled to be voted
upon at the meeting:
1. The election of three persons to serve as directors of BNA;
2. A stockholder proposal requesting that BNA become open-
ended.
In addition, I intend to present the following proposals:
3. The investment advisory agreement shall be terminated;
4. Unless approved by the shareholders, no legal fees shall be
paid by BNA to pursue any lawsuit against a shareholder
that is reasonably calculated to impede a change in control
of BNA;
5. To approve the reimbursement of my out-of-pocket
solicitation expenses.
I am soliciting a proxy to vote your shares FOR the election
of Andrew Dakos, Gerald Hellerman and me as directors of BNA and
FOR Proposals 2, 3, 4 and 5.
How Proxies Will Be Voted
All of the matters scheduled by BNA to be voted on at the
meeting are included on the enclosed GREEN proxy card. If you
return a GREEN proxy card to me or to my agent, your shares will
be voted on each matter as you indicate. If you do not indicate
how your shares are to be voted on a matter, they will be voted
FOR the election of my nominees to the Board, FOR Proposals 2,
3, 4 and 5.
If you return a GREEN proxy card, you will be granting the
persons named as proxies discretionary authority to vote on any
other matters of which they are not now aware that may come
before the meeting. These may include, among other things,
matters relating to the conduct of the meeting.
Voting Requirements
If a quorum is not present at the meeting the persons named
as proxies may propose one or more adjournments of the meeting
to permit further solicitation of proxies, consideration of
matters of which I am not aware at this time, or negotiations
with the incumbent directors. If an adjournment of the meeting
is proposed, the persons named as proxies on the GREEN proxy
card will vote for or against such adjournment in their
discretion. Please refer to BNA's proxy statement for the
quorum requirements and the voting requirements for each
proposal.
Revocation of Proxies
You may revoke any proxy at any time prior to its exercise
by (i) delivering a written revocation of your proxy to BNA;
(ii) executing and delivering a later dated proxy to me or to
BNA or to our respective agents; or (iii) voting in person at
the meeting. (Attendance at the meeting will not in and of
itself revoke a proxy.) There is no limit on the number of
times you may revoke your proxy prior to the meeting. Only the
latest dated, properly signed proxy card will be counted.
Information Concerning the Soliciting Shareholder
The shareholder making this solicitation is Phillip
Goldstein, 60 Heritage Drive, Pleasantville, NY 10570. I am an
investment manager who presently manages investment portfolios
having assets in excess of $60 million. Since December 1, 1992,
I have been the president and 50% shareholder of a company that
serves as the general partner of a private investment
partnership. That partnership is a shareholder in BNA. Since
1996, I have taken an active role in urging the management of
certain registered closed-end investment companies to take
various actions that I believe would benefit their shareholders.
As of February 28, 2001, I am deemed to be the beneficial
owner of 584,600 shares of Common Stock of BNA held in brokerage
accounts by my clients and me, representing approximately 1.68%
of BNA's outstanding Common Stock. Exhibit 1 to this proxy
statement contains a schedule showing my purchases and sales of
Common Stock within the past two years.
REASON FOR THE SOLICITATION
At the meeting, you will be able to vote on a proposal
urging that BNA be open-ended. Last year, shareholders voted in
favor of a similar proposal by a margin of 11.1 million shares
to 7.3 million shares. Despite this overwhelming mandate, the
board did not implement the proposal. I believe that the
directors will not act to open-end BNA because they are loyal to
the investment advisor and open-ending would lead to lower fees
for the advisor. Therefore, I am conducting this solicitation
in order to (1) elect directors who are committed to abiding by
the outcome of another stockholder vote on open-ending and (2)
terminate the advisory contract (and hire another advisor that
would be willing to manage BNA as an open-end fund).
CERTAIN CONSIDERATIONS
In deciding whether to give me your proxy, you should
consider the following:
If my nominees are elected, they will constitute a minority
of the Board. Open-ending requires approval by the Board and
the shareholders and no assurance can be given that such
approvals will be obtained. In addition, various costs, which
would be borne indirectly by shareholders, may be associated
with open-ending, including but not limited to those associated
with holding a special meeting of shareholders. I believe that
such costs are far outweighed by the benefits of open-ending.
While nothing in this life is certain, I believe that if BNA
open-ends, it is highly likely that the value of your shares
will be higher than if it remained a closed-end fund trading at
a significant discount to NAV.
I believe that all shareholders of BNA will benefit from
any actions taken to improve shareholder value or to reduce or
eliminate the discount from NAV. However, my clients who hold
shares of BNA pay me fees. These fees are based upon a share of
the profits each client earns and will be greater if the value
of BNA's shares increases.
ELECTION OF DIRECTORS (Proposal 1)
At the meeting, I will nominate the following persons for
election as directors for a term expiring in 2003.
Name, Address, Age
Principal Business Occupation(s)
Phillip Goldstein (Age 56)
60 Heritage Drive
Pleasantville, NY 10570
Since 1992, Mr. Goldstein has managed investments for a limited
number of clients and has served as the portfolio manager and
president of the general partner of Opportunity Partners, a
private investment partnership. He was a director of Clemente
Strategic Value Fund from 1998 to 2000 and was elected a
director of The Mexico Equity and Income Fund in February 2000,
The Italy Fund in May 2000, and Dresdner RCM Global Strategic
Income Fund in November 2000.
Gerald Hellerman (Age 63)
10965 Eight Bells Lane
Columbia, MD 21044.
Managing director of Hellerman Associates, a financial
consulting firm; Trustee of Third Avenue Trust since 1993;
Director of Clemente Strategic Value Fund from 1998-2000.
Andrew Dakos (Age 34)
14 Mill Street
Lodi, NJ 07644.
Private investor. Vice President -- Sales, UVitec Printing Ink,
Inc. since 1997, Sales Manager 1992-1997. Director of Dresdner
RCM Global Strategic Income Fund since November 2000.
As of February 28, 2001 Mr. Goldstein beneficially owned
584,600 shares of BNA. Neither Mr. Dakos nor Mr. Hellerman
currently owns any shares. Other than fees that may be payable
by BNA to its directors, none of my nominees have any
arrangement or understanding with any person with respect to any
future employment by BNA or by any affiliate of BNA.
The persons named as proxies on the enclosed GREEN proxy
card intend, in the absence of contrary instructions, to vote
all proxies they are entitled to vote FOR the election of the
above persons, each of whom have consented to stand for election
and to serve if elected. If any nominee is unable to serve, an
event not now anticipated, the proxies will be voted for such
other person, if any, as is designated by the persons named as
proxies.
A RECOMMENDATION THAT BNA BE OPEN-ENDED (Proposal 2)
Forbes magazine recently said that open-ending is "the best
thing that can happen" to a closed-end fund that trades at a
discount. The supporting and opposition statements appear in
management's proxy statement. I strongly recommend that
shareholders vote FOR open-ending. In the absence of contrary
instructions, the proxies will vote FOR this proposal.
THE INVESTMENT ADVISORY AGREEMENT BETWEEN BLACKROCK ADVISORS AND
BNA SHALL BE TERMINATED (Proposal 3)
The long-term performance of our fund has been poor. Since
BNA's inception, the market price of our shares have lost more
than one third of their value. In addition, the annual dividend
has fallen from $1.20 to $0.84 last year. We received another
unpleasant surprise recently when the dividend was further
reduced to $0.75 per year. Poor price performance and a
declining dividend are good reasons to fire BlackRock as the
investment advisor and select another firm to advise BNA. I
also believe BlackRock is the primary impediment to open-ending.
If BNA open-ended, BlackRock would have to compete with other
advisors for assets and fees. Terminating the advisory
agreement and hiring another advisor will remove this
impediment. In the absence of contrary instructions, the
proxies will vote FOR this proposal.
UNLESS APPROVED BY THE STOCKHOLDERS, NO LEGAL FEES SHALL BE
PAID BY BNA TO PURSUE ANY LAWSUIT AGAINST A SHAREHOLDER THAT IS
REASONABLY CALCULATED TO IMPEDE A CHANGE IN CONTROL OF BNA.
(Proposal 4)
I believe shareholders should be able to democratically
determine the destiny of BNA. However, boards of directors have
been known to initiate a lawsuit designed to impede the
shareholders from ousting them. I believe that these sorts of
lawsuits benefit only the incumbent managers and the lawyers who
litigate them. Shareholders should not have to pay for such a
lawsuit unless they specifically approve it. In the absence of
contrary instructions, the proxies will vote FOR this proposal.
REIMBURSEMENT OF MY OUT-OF-POCKET EXPENSES (Proposal 5)
Because I believe this solicitation will, if successful,
benefit all shareholders by allowing them to vote for proposals
to enhance shareholder value and directors who will carry out
their wishes, I am asking to be reimbursed for my out-of-pocket
expenses, i.e., primarily printing and mailing costs. In the
absence of contrary instructions, the proxies will vote FOR this
proposal.
Initially, I will personally bear all of the expenses related
to this proxy solicitation. I estimate that my expenses will be
about $60,000. As of April 27, 2001, my expenses have been
approximately $ 5,000. If I am not reimbursed by BNA, I may
seek reimbursement from one or more of my clients or from the
general partner of the investment partnership that I manage.
THE SOLICITATION
I am making this solicitation personally. Persons affiliated
with or employed by the general partner of the investment
partnership that I manage may assist me in the solicitation of
proxies. They will not receive any special compensation for
their services. Banks, brokerage houses and other custodians,
nominees and fiduciaries will be requested to forward this proxy
statement and the enclosed GREEN proxy card to the beneficial
owners of shares of Common Stock for whom they hold shares of
record. I will reimburse these organizations for their
reasonable out-of-pocket expenses.
I am not and, within the past year, have not been a party to
any contract, arrangement or understanding with any person with
respect to any securities of BNA. In addition, there is no
arrangement or understanding involving me or any affiliate that
relates to future employment by BNA or any future transaction
with BNA.
ADDITIONAL PROPOSALS
I know of no business that will be presented for
consideration at the meeting other than that set forth in this
proxy statement and in BNA's proxy statement. If any other
matters are properly presented for consideration at the meeting,
it is the intention of the persons named as proxies in the
enclosed GREEN proxy card to vote in accordance with their own
best judgment on such matters.
DATED: April 27, 2001
EXHIBIT 1: SECURITIES OF BNA PURCHASED OR SOLD
WITHIN THE PAST TWO YEARS BY THE SOLICITING SHAREHOLDER
Except as disclosed in this proxy statement, I have not had
any interest, direct or indirect in BNA. The following table
sets forth certain information with respect to purchases of
shares of Common Stock of BNA within the past two years by me
and by accounts holding shares as to which I am deemed to be the
beneficial owner. (There have been no sales.) Some of the
shares are held in margin accounts, together with other
securities. Therefore, a portion of the purchase price and
market value of the shares may from time to time be represented
by margin borrowings, depending upon the net debit balances, if
any, of the margin accounts, which fluctuate daily.
5/4/99 2600
5/5/99 15500
5/6/99 11400
5/7/99 10000
5/8/99 6000
5/10/99 5000
6/23/99 5000
8/13/99 6500
8/16/99 1000
8/23/99 3100
8/24/99 300
9/8/99 400
9/9/99 4600
9/13/99 3200
8/27/00 4100
8/29/00 5000
9/6/00 200
9/7/00 2500
9/11/00 200
9/12/00 800
9/20/00 30000
9/21/00 15000
9/25/00 3500
9/26/00 9100
9/28/00 1500
11/27/00 3200
11/28/00 1800
12/11/00 7600
12/12/00 5000
1/10/01 25500
1/11/01 3000
1/22/01 10000
1/25/01 5200
1/26/01 9400
1/29/01 400
PROXY CARD
PROXY SOLICITED IN OPPOSITION TO THE BOARD OF DIRECTORS OF THE
BLACKROCK NORTH AMERICAN GOVERNMENT INCOME TRUST INC. BY PHILLIP
GOLDSTEIN
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 24, 2001
The undersigned hereby appoints Andrew Dakos, Rajeev Das and
Phillip Goldstein, and each of them, as proxies, with full power
of substitution, to attend the Annual Meeting of Shareholders of
The BlackRock North American Government Income Trust Inc. to be
held on May 24, 2001 (the "Meeting"), and any adjournment or
postponement thereof, and to vote on all matters that may come
before the Meeting and any such adjournment or postponement the
number of shares that the undersigned would be entitled to vote,
with all the power the undersigned would possess if present in
person, as specified below. The proxies may vote in their
discretion with respect to such other matter or matters as may
come before the Meeting and with respect to all matters incident
to the conduct of the Meeting.
(INSTRUCTIONS:Mark votes by placing an "x" in the appropriate
[].)
1. ELECTION OF PHILLIP GOLDSTEIN, ANDREW DAKOS AND GERALD
HELLERMAN AS DIRECTORS.
FOR all of the nominees listed above [ ] WITHHOLD
AUTHORITY [ ]
(except as indicated to the contrary below)
to vote for all of the nominees listed above
To withhold authority to vote for one or more nominees,
enter the name(s) of the nominee(s) below.
___________________________________________________________
2. A stockholder proposal recommending that BNA be open-ended.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. The investment advisory agreement shall be terminated
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Unless approved by the shareholders, no legal fees shall be
paid by BNA to pursue any lawsuit against a shareholder that
is reasonably calculated to impede a change in control of BNA.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5.To approve the reimbursement of my out-of-pocket solicitation
expenses.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Important - - Please sign and date below. Your shares will be
voted as directed. If no direction is made, this proxy will be
voted FOR the election of the nominees named above in Proposal 1
and FOR Proposals 2, 3, 4, and 5. The undersigned hereby
acknowledges receipt of Phillip Goldstein's proxy statement
dated April 27, 2001 and revokes any proxy previously executed.
SIGNATURE(S)___________________________ Dated: _____________