UPDATE: Bank of America Initiates Invesco Trust with Underperform Rating on Dividend Risk

In a report published Monday, Bank of America analyst Elias Lanik initiated coverage on Invesco Trust for Investment Grade NY Munis Fund VTN with an Underperform rating. In the report, Lanik noted, “We rate VTN Underperform due to a dividend that may be at risk for a reduction over the next 12 months. Based on current earnings, VTN is under-earning its dividend by about $0.10 and has roughly $0.17 of UNII. Accounting for 7% of the portfolio of the fund being callable over the next 12 months, we estimate that VTN could burn through most of its UNII over the next 12 month if the dividend is not reduced. The fund is currently trading at a premium of 2.3% which is an appropriate valuation for the fund relative to peers, in our opinion, given an earnings yield of about 5.8%.” Invesco Trust for Investment Grade NY Munis Fund closed on Friday at $16.06.