PREM14C 1 delmuniproxystmt.htm

SCHEDULE 14C

(RULE 14C-101)

INFORMATION REQUIRED IN INFORMATION STATEMENT

SCHEDULE 14C INFORMATION

INFORMATION STATEMENT PURSUANT TO SECTION 14(c)

OF THE SECURITIES EXCHANGE ACT OF 1934

(AMENDMENT NO. _______)

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[X]	Preliminary information statement	[ ]	Confidential, for use of the Commission only (as permitted by Rule 14c-5(d) (2)).

[ ]	Definitive information statement

DELAWARE INVESTMENTS^® COLORADO MUNICIPAL INCOME FUND, INC.

DELAWARE INVESTMENTS MINNESOTA MUNICIPAL INCOME FUND II, INC.

DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND

(Name of Registrant as Specified in Its Charter)

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DELAWARE INVESTMENTS^® COLORADO MUNICIPAL INCOME FUND, INC.

DELAWARE INVESTMENTS MINNESOTA MUNICIPAL INCOME FUND II, INC.

DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND

100 Independence, 610 Market Street

Philadelphia, Pennsylvania 19106-2354

866-437-0252

IMPORTANT SHAREHOLDER INFORMATION

This Joint Proxy Statement (Proxy Statement) contains information that holders of preferred shares of beneficial interest designated as Muni-MultiMode Preferred Shares, Series 2049 (MMP Shares) of Delaware Investments Colorado Municipal Income Fund, Inc. (VCF) and Delaware Investments Minnesota Municipal Income Fund II, Inc. (VMM and collectively with VCF, the Acquired Funds, and each, an Acquired Fund), and Delaware Investments National Municipal Income Fund (VFL or the Acquiring Fund, and together, with the Acquired Funds, the Funds) should know before voting on the proposals that are described herein.

This Proxy Statement is being provided to you in conjunction with the joint annual meeting of shareholders of the Funds (the Meeting), which will be held virtually on Oct. 11, 2021 at 4:00 p.m. Eastern Time. The Proxy Statement discusses the following proposals (the Proposals) to be voted on by holders of MMP Shares (MMP Shareholders) at the Meeting:

For MMP Shareholders of VCF: To vote on the approval of an Agreement and Plan of Acquisition that provides for (i) the acquisition by the Acquiring Fund of substantially all of the property, assets and goodwill of VCF in exchange solely for (a) full and fractional shares of common stock, par value $0.01 per share, of the Acquiring Fund; and (b) MMP Shares, liquidation preference $100,000 per share, of the Acquiring Fund; (ii) the pro rata distribution of such shares of the Acquiring Fund to the shareholders of VCF according to their respective interests in liquidation of VCF, and (iii) the dissolution of VCF as soon as is practicable after the closing;

For MMP Shareholders of VMM: To vote on the approval of an Agreement and Plan of Acquisition that provides for (i) the acquisition by the Acquiring Fund of substantially all of the property, assets and goodwill of VMM in exchange solely for (a) full and fractional shares of common stock, par value of $0.01 per share, of the Acquiring Fund; and (b) MMP Shares, liquidation preference $100,000 per share, of the Acquiring Fund; (ii) the pro rata distribution of such shares of the Acquiring Fund to the shareholders of VMM according to their respective interests in liquidation of VMM and (iii) the dissolution of VMM as soon as is practicable after the closing;

For MMP Shareholders of VFL:

(a)

To vote on the approval of an Agreement and Plan of Acquisition among VCF, the Acquiring Fund, and Delaware Management Company (DMC or the Manager), that provides for: (i) the acquisition by the Acquiring Fund of substantially all of the property, assets and goodwill of VCF in exchange solely for: (1) full and fractional shares of common stock, par value $0.01 per share, of the Acquiring Fund; and (2) MMP Shares, liquidation preference $100,000 per share, of the Acquiring Fund; (ii) the pro rata distribution of such shares of the Acquiring Fund to the shareholders of VCF according to their respective interests in liquidation of VCF; and (iii) the dissolution of VCF as soon as is practicable after the closing;

(b)

To vote on the approval of an Agreement and Plan of Acquisition among VMM, the Acquiring Fund, and DMC, that provides for: (i) the acquisition by the Acquiring Fund of substantially all of the property, assets and goodwill of VMM in exchange solely for: (1) full and fractional shares of common stock, par value $0.01 per share, of the Acquiring Fund; and (2) MMP Shares, liquidation preference $100,000 per share, of the Acquiring Fund; (ii) the pro rata distribution of such shares of the Acquiring Fund to the shareholders of VMM according to their respective interests in liquidation of VMM; and (iii) the dissolution of VCF as soon as is practicable after the closing;

For MMP Shareholders of the Funds: To elect a Board of Trustees or Directors for each Fund consisting of Jerome D. Abernathy, Thomas L. Bennett, H. Jeffrey Dobbs, John A. Fry, Joseph Harroz, Jr., Sandra A.J. Lawrence, Shawn K. Lytle, Frances A. Sevilla-Sacasa, Thomas K. Whitford, Christianna Wood, and Janet L. Yeomans by MMP Shareholders and common shareholders voting together as a single class; and to elect Ann D. Borowiec and Joseph W. Chow to the Board of Trustees or Directors for each Fund solely by MMP Shareholders, voting as a class; and

To transact any other business that properly comes before the Meeting and any adjournments of the Meeting.

MMP Shareholders of the Acquired Funds are entitled to assert dissenters’ rights of appraisal under Minnesota law. In order to do so, MMP Shareholders must strictly follow the procedures set forth in Minnesota Statutes, Sections 302A.471 and 302A.473, copies of which are attached to the Proxy Statement as Exhibit B. For more information, see the discussion under the caption “Voting Information – Dissenters’ Rights of Appraisal” in the Proxy Statement.

The Proxy Statement discusses the Proposals, including the proposed reorganizations described above in Proposals 1, 2, and 3 (each, a Reorganization and together, the Reorganizations), and provides you with information that you should consider before you vote. The investment objectives, strategies, and risks of the Acquired Funds are similar, but also differ in certain material respects from the Acquiring Fund, including that each Acquired Fund has a state-specific rather than national investment mandate. After the Reorganizations, shareholders of Delaware Investments Colorado Municipal Income Fund, Inc. and Delaware Investments Minnesota Municipal Income Fund II, Inc. who are residents of Colorado or Minnesota, respectively, may lose the benefit of the exempt-interest dividends paid by such Fund being excluded from the individual income tax in Colorado or Minnesota, respectively. The enclosed Proxy Statement provides important information regarding such differences, as well as similarities, that shareholders should consider in determining whether an investment in the Acquiring Fund is appropriate for them. The Boards of Directors of the Acquired Funds and the Board of Trustees of the Acquiring Fund (together, the Boards) unanimously approved the Reorganizations and concluded that each Reorganization is in the best interests of each Acquired Fund, the Acquiring Fund, and their shareholders. In addition, the Boards all unanimously recommend that you vote for each of the nominees listed in Proposal 4.

The Boards have fixed the close of business on Aug. 12, 2021, as the record date (Record Date) for the determination of shareholders entitled to notice of and to vote at the Meeting and at any adjournment or postponement thereof. Shareholders will be entitled to one vote for each share held (and a proportionate fractional vote for each fractional share).

These materials also include a proxy card, which is, in essence, a ballot. We urge you to review carefully the Proposals in the Proxy Statement. Then, fill out the proxy card and return it to us so that we know how you would like to vote. When shareholders return their proxy cards promptly, additional costs of having to conduct additional solicitation or mailings may be avoided. If you have any questions or would like to quickly vote your shares, call AST Fund Solutions, our proxy solicitor, toll free at 877-864-5051.

If you complete, sign and return a proxy card, we’ll vote your proxy exactly as you tell us. If you simply sign and return your proxy card without indicating how your shares are to be voted, we’ll vote your proxy FOR the Reorganizations of each of the Acquired Funds (Proposals 1/2/3) and FOR all of the Board nominees (Proposal 4), in accordance with the recommendation of the Boards.

The enclosed Proxy Statement is only being delivered to each Fund’s MMP Shareholders. Holders of the common shares of beneficial interest or shares of common stock (Common Shares) of the Funds, whose voting instructions are being separately solicited, will also vote on certain matters at the Meeting. Each Fund is delivering a separate prospectus/proxy statement to its Common shareholders with respect to the Proposals described above.

DELAWARE INVESTMENTS^® COLORADO MUNICIPAL INCOME FUND, INC.

DELAWARE INVESTMENTS MINNESOTA MUNICIPAL INCOME FUND II, INC.

DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND

100 Independence, 610 Market Street

Philadelphia, Pennsylvania 19106-2354

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To be held virtually on Oct. 11, 2021

Notice is hereby given to the holders of preferred shares of beneficial interest designated as Muni-MultiMode Preferred Shares, Series 2049 (MMP Shares) of Delaware Investments Colorado Municipal Income Fund, Inc. (VCF) and Delaware Investments Minnesota Municipal Income Fund II, Inc. (VMM and collectively with VCF, the Acquired Funds, and each, an Acquired Fund), and Delaware Investments National Municipal Income Fund (VFL or the Acquiring Fund, and together, with the Acquired Funds, the Funds), that the Acquired Funds and Acquiring Fund will hold a joint annual meeting of shareholders (the Meeting) virtually on Oct. 11, 2021 at 4:00 p.m. Eastern time. The Meeting is being called to consider the following proposals (the Proposals) to be voted on by holders of MMP Shares (MMP Shareholders):

For MMP Shareholders of VFL:

(a)

(b)

together as a single class; and to elect Ann D. Borowiec and Joseph W. Chow to the Board of Trustees or Directors for each Fund solely by MMP Shareholders, voting as a class; and

To transact any other business that properly comes before the Meeting and any adjournments of the Meeting.

A copy of the form of the Plan, which more completely sets forth the terms of the proposed reorganizations described above in Proposals 1, 2, and 3 (each, a Reorganization and together, the Reorganizations), is attached as Exhibit A to the Proxy Statement.

MMP Shareholders of record as of the close of business on Aug. 12, 2021 are entitled to notice of, and to vote at, the Meeting and any adjournment of the Meeting (Record Date). Holders of the common shares of beneficial interest or shares of common stock (Common Shares) of the Funds, whose voting instructions are being separately solicited, will also vote on certain matters at the Meeting.

Due to the public health impact of the coronavirus pandemic (COVID-19), and to support the health and well-being of our shareholders, the Meeting will be held in a virtual-only format via a web-based portal. To participate in and/or vote at the Meeting, MMP Shareholders of the Funds must submit the necessary credentials and enter the control number found on their proxy card or provided to them by AST Fund Solutions, LLC (AST) as described further below. MMP Shareholders may vote during the Meeting by following the instructions available on the Meeting website during the Meeting. MMP Shareholders will not be able to attend the Meeting in person.

If, as of August 12, 2021, you were a holder of MMP Shares of a Fund and wish to participate in and vote at the Meeting, you should email your full name and address to AST at attendameeting@astfinancial.com. You will then be provided with credentials to participate in the Meeting. You will be able to vote by entering the control number found on the enclosed proxy card. All requests to participate in and/or vote at the Meeting must be received by AST no later than 3:00 p.m. Eastern Time on October 8, 2021.

Please contact AST at attendameeting@astfinancial.com with any questions regarding access to the Meeting, and an AST representative will contact you to answer your questions. Whether or not you plan to participate in the Meeting, we urge you to vote and submit your vote in advance of the Meeting.

Each Fund’s Board unanimously recommends that you cast your vote for the above proposals and for all the Trustee/Director nominees as described in the Proxy Statement.

Whether or not you plan to attend the Meeting, your vote is needed. Attendance at the Meeting will be limited to shareholders of the Acquired Funds and the Acquiring Fund as of the close of business on Aug. 12, 2021. You are entitled to receive notice of, and to vote at, the Meeting and any adjournment of the Meeting, even if you no longer hold shares of a Fund. Your vote is important no matter how many shares you own.

Voting is quick and easy. Everything you need is enclosed. You may vote by completing and returning your proxy card in the enclosed postage-paid return envelope, by calling the toll-free telephone number listed on the enclosed proxy card, or by visiting the Internet website listed on the enclosed proxy card. You may receive more than one set of proxy materials if you hold shares in more than one account. Please be sure to vote each proxy card you receive. If we do not hear from you, our proxy solicitor, AST, may contact you. This will ensure that your vote is counted even if you cannot or do not wish to attend the Meeting. If you have any questions about the Proposals or how to vote, you may call AST at 877-864-5051 and a representative will assist you.

By Order of the Boards of Directors/Trustees

Shawn K. Lytle

President

[ ], 2021

Important Notice Regarding the Availability of Proxy Materials for the Meeting: the Notice of Annual Meeting of Shareholders and Proxy Statement are available at [ ].

PROXY STATEMENT

TABLE OF CONTENTS

THE PROPOSALS	4
What am I being asked to vote upon?	4
How can I participate in the Meeting?	4
What are the Boards’ recommendation regarding the Proposals?	5
What will happen if shareholders approve the Proposals?	6
Will MMP Shares issued in connection with the Reorganizations be the same as my current MMP Shares?	6
PROPOSALS 1, 2, AND 3: THE REORGANIZATIONS	7
What is the anticipated timing of the Reorganizations?	7
What are the benefits of the Reorganizations to shareholders?	7
What are the costs of the Reorganizations?	7
What happens if a Reorganization is not approved?	7
How will shareholder voting be handled?	7
COMPARISON OF INVESTMENT OBJECTIVES, STRATEGIES, RISKS, AND INVESTMENT RESTRICTIONS	8
How do the investment objectives, principal strategies, principal risks, and fundamental investment restrictions of the Acquired Funds compare against those of the Acquiring Fund?	8
Portfolio Turnover	25
INFORMATION ABOUT THE FUNDS	26
What are the fees and expenses of each Fund and what are the anticipated fees and expenses after the Reorganization(s)?	26
What are the general tax consequences of the Reorganizations?	27
Who manages the Funds?	28
Information about the Preferred Shares of the Funds	29
Where can I find more financial information about the Funds?	32
What are other key features of the Funds?	32
REASONS FOR THE REORGANIZATIONS	35
INFORMATION ABOUT THE REORGANIZATIONS AND THE PLAN	37
How will the Reorganization be carried out?	37
What are the tax consequences of each Reorganization?	37
What should I know about shares of the Acquired Funds and Acquiring Fund?	40
Do the Directors and Officers own shares of the Funds?	41
Who are the control persons and owners of record or beneficially 5% or more of any class of a Fund’s outstanding equity securities?	41
COMPARISON OF ORGANIZATION, STRUCTURE AND GOVERNANCE OF THE FUNDS	42
Comparison of State Law and Material Charter Document Provisions	42
PROPOSAL 4: TO ELECT A BOARD OF DIRECTORS	46
VOTING INFORMATION	61
How many votes are necessary to approve the Proposals?	61
How do I ensure my vote is accurately recorded?	62
May I revoke my proxy?	62
What other matters will be voted upon at the Meeting?	62
Who is entitled to vote?	62
How will proxies be solicited?	63
Are there dissenters’ rights?	64
MORE INFORMATION ABOUT THE FUNDS	66
EXHIBITS TO PROXY STATEMENT	68
EXHIBIT A	A-1
EXHIBIT B	B-1
EXHIBIT C	C-1
EXHIBIT D	D-1

DELAWARE INVESTMENTS^® COLORADO MUNICIPAL INCOME FUND, INC.

DELAWARE INVESTMENTS MINNESOTA MUNICIPAL INCOME FUND II, INC.

DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND

100 Independence, 610 Market Street

Philadelphia, Pennsylvania 19106-2354

866-437-0252

JOINT PROXY STATEMENT

Dated [ ], 2021

Acquisition of the Assets and Liabilities of:

DELAWARE INVESTMENTS COLORADO MUNICIPAL INCOME FUND, INC.

By:

DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND

Acquisition of the Assets and Liabilities of:

DELAWARE INVESTMENTS MINNESOTA MUNICIPAL INCOME FUND II, INC.

By:

DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND

Election of Directors/Trustees:

DELAWARE INVESTMENTS COLORADO MUNICIPAL INCOME FUND, INC.

DELAWARE INVESTMENTS MINNESOTA MUNICIPAL INCOME FUND II, INC.

DELAWARE INVESTMENTS NATIONAL MUNICIPAL INCOME FUND

This Joint Proxy Statement (Proxy Statement) solicits proxies of holders of preferred shares of beneficial interest designated as Muni-MultiMode Preferred Shares, Series 2049 (MMP Shares) to be voted by holders of MMP Shares (MMP Shareholders) at the joint annual meeting of shareholders of Delaware Investments Colorado Municipal Income Fund, Inc. (VCF) and Delaware Investments Minnesota Municipal Income Fund II, Inc. (VMM and collectively with VCF, the Acquired Funds, and each, an Acquired Fund), and Delaware Investments National Municipal Income Fund (VFL or the Acquiring Fund, and together, with the Acquired Funds, the Funds), and at any adjournments or postponements thereof (the Meeting). The Meeting is being called to consider the following proposals (the Proposals):

For MMP Shareholders of VCF: To vote on the approval of an Agreement and Plan of Acquisition (Plan) that provides for (i) the acquisition by the Acquiring Fund of substantially all of the property, assets and goodwill of VCF in exchange solely for (a) full and fractional shares of common stock, par value $0.01 per share, of the Acquiring Fund; and (b) MMP Shares, liquidation preference $100,000 per share, of the Acquiring Fund; (ii) the pro rata distribution of such shares of the Acquiring Fund to the shareholders of VCF according to their respective interests in liquidation of VCF, and (iii) the dissolution of VCF as soon as is practicable after the closing;

For MMP Shareholders of VMM: To vote on the approval of a Plan that provides for (i) the acquisition by the Acquiring Fund of substantially all of the property, assets and goodwill of VMM in exchange solely for (a) full and fractional shares of common stock, par value of $0.01 per share, of the Acquiring Fund; and (b) MMP Shares, liquidation preference $100,000 per share, of the Acquiring Fund; (ii) the pro rata distribution of such shares of the Acquiring Fund to the shareholders of VMM according to their respective interests in liquidation of VMM and (iii) the dissolution of VMM as soon as is practicable after the closing;

For MMP Shareholders of VFL:

(a)

To vote on the approval of a Plan among VCF, the Acquiring Fund, and Delaware Management Company (DMC or the Manager), that provides for: (i) the acquisition by the Acquiring Fund of substantially all of the property, assets and goodwill of VCF in exchange solely for: (1) full and fractional shares of common stock, par value $0.01 per share, of the Acquiring Fund; and (2) MMP Shares, liquidation preference $100,000 per share, of the Acquiring Fund; (ii) the pro rata distribution of such shares of the Acquiring Fund to the shareholders of VCF according to their respective interests in liquidation of VCF; and (iii) the dissolution of VCF as soon as is practicable after the closing;

(b)

To vote on the approval of a Plan among VMM, the Acquiring Fund, and DMC, that provides for: (i) the acquisition by the Acquiring Fund of substantially all of the property, assets and goodwill of VMM in exchange solely for: (1) full and fractional shares of common stock, par value $0.01 per share, of the Acquiring Fund; and (2) MMP Shares, liquidation preference $100,000 per share, of the Acquiring Fund; (ii) the pro rata distribution of such shares of the Acquiring Fund to the shareholders of VMM according to their respective interests in liquidation of VMM; and (iii) the dissolution of VCF as soon as is practicable after the closing;

To transact any other business that properly comes before the Meeting and any adjournments of the Meeting.

If an Acquired Fund’s shareholders vote to approve the Plan and Acquiring Fund shareholders approve Proposal 3, substantially all of the assets of the Acquired Fund will be reorganized into shares of the Acquiring Fund (each, a Reorganization and together, the Reorganizations).

The Meeting will be held virtually on Oct. 11, 2021 at 4:00 p.m. Eastern time. The Boards of Directors/Trustees of the Funds (together, the Boards and the Directors or Trustees, as applicable, referred to collectively as the Directors) approved the Reorganizations and concluded that each Reorganization is in the best interests of each Fund and its shareholders. The Boards are soliciting these proxies. The Boards also all unanimously recommend that you vote for each of the nominees listed in Proposal 4. This Proxy Statement will first be sent to shareholders on or about [ ], 2021.

The enclosed Proxy Statement is only being delivered to the Funds’ MMP Shareholders. Holders of the common shares of beneficial interest or shares of common stock (Common Shares) of each Fund, whose voting instructions are being separately solicited, will also vote on certain matters at the Meeting. The Funds are delivering a separate prospectus/proxy statement to its holders of Common Shares (Common Shareholders) with respect to the Proposals described above.

Each Fund is a diversified closed-end management investment company. DMC, a series of Macquarie Investment Management Business Trust (a Delaware statutory trust) serves as the investment manager for the Funds.

The Funds’ Common shares trade on the New York Stock Exchange (NYSE) American, the successor to the American Stock Exchange, formerly known as NYSE Market.

This Proxy Statement sets forth the information that you should know about the Proposals. You should retain this Proxy Statement for future reference.

You can request a free copy of any of the Funds’ Annual Reports or Semiannual Reports by contacting your financial intermediary or by calling 866 437-0252. Additional information about the Funds can also be viewed online or downloaded from the EDGAR database without charge on the SEC’s internet site at www.sec.gov.

The MMP Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and, unless so registered, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. See the Confidential Information Memorandum accompanying this Proxy Statement as Exhibit E (the Memorandum) for additional information. No person has been authorized to give any information or make any representations not contained herein and, if so given or made, such information or representation must not be relied upon as having been authorized.

THE PROPOSALS

At a meeting held on Aug. 11, 2021, the Boards, including a majority of the Directors who are not “interested persons” (as defined by the Investment Company Act of 1940 (the 1940 Act)) (the Independent Directors), on behalf of each of the Funds, considered the Proposals to reorganize each Acquired Fund with and into the Acquiring Fund, and approved the Plan. The Boards, including a majority of the Independent Directors, also voted to recommend that shareholders vote to elect a Board of Directors for each Fund.

What am I being asked to vote upon?

Proposals 1 and 2: Acquired Fund shareholders are being asked to vote to approve the Plan between their Acquired Fund(s) and the Acquiring Fund. The Plan provides that: (i) all of the property, assets, and goodwill (Assets) of each Acquired Fund will be acquired by the Acquiring Fund, in exchange for shares of the Acquiring Fund. According to the Plan, each Acquired Fund will be liquidated and dissolved following the Reorganizations. Each Reorganization constitutes a separate reorganization, and neither Reorganization is contingent upon the approval of the other.

Proposal 3: Acquiring Fund shareholders are being asked to vote to approve each such Reorganization, which involves the issuance of new Common Shares and MMP Shares by the Acquiring Fund.

If a Reorganization is approved, MMP Shares of the Acquired Fund will be exchanged on a one-for-one basis for newly issued Acquiring Fund MMP Shares with substantially identical terms, including equal aggregate liquidation preferences; and Common Shares of an Acquired Fund will be exchanged for newly issued Acquiring Fund Common Shares of equal aggregate net asset value. [MMP Shareholders are not expected to bear any costs of the Reorganizations.]

Proposal 4: Each Fund’s MMP Shareholders and Common Shareholders together are being asked to vote to elect a Board consisting of Jerome D. Abernathy, Thomas L. Bennett, H. Jeffrey Dobbs, John A. Fry, Joseph Harroz, Jr., Sandra A.J. Lawrence, Shawn K. Lytle, Frances A. Sevilla-Sacasa, Thomas K. Whitford, Christianna Wood, and Janet L. Yeomans. MMP Shareholders of each Fund exclusively are entitled to elect two of their respective Directors and are being asked to vote to elect Ann D. Borowiec and Joseph W. Chow. Shareholders of each Acquired Fund are being solicited to vote to elect a Board of Directors so that the Acquired Funds may continue to be governed by its current Board Members, and avoid vacancies on the Board, in the event a Reorganization is not approved by shareholders or consummated in a timely manner.

How can I participate in the Meeting?

Due to the coronavirus outbreak (COVID-19) and to support the health and well-being of our shareholders, employees, and community, the Meeting will be conducted exclusively online this year. You may attend the Meeting online by visiting [ ]. To participate in the Meeting, you will need to follow the instructions included herein. The password for the Meeting is [ ]. The Meeting will begin promptly at 4:00 p.m. Eastern Time. We encourage you to access the Meeting prior to the start time leaving ample time for the check in.

To participate in and/or vote at the Meeting, MMP Shareholders of the Fund must submit the necessary credentials and enter the control number found on their proxy card or provided to them by AST Fund Solutions, LLC (AST) as described further below. MMP Shareholders may vote during the Meeting by following the instructions available on the Meeting website during the Meeting. MMP Shareholders will not be able to attend the Meeting in person.

If, as of August 12, 2021, you were a holder of record of Fund shares (i.e., you held Fund shares in your own name directly with the Fund) and wish to participate in and vote at the Meeting, you should email your full name and address to AST at attendameeting@astfinancial.com. You will then be provided with credentials to participate in the Meeting. You will be able to vote by entering the control number found on the enclosed proxy card. All requests to participate in and/or vote at the Meeting must be received by AST no later than 3:00 p.m. Eastern Time on October 8. 2021.

If, as of August 12, 2021, you held Fund shares through an intermediary (such as a broker-dealer) and wish to participate in and vote at the Meeting, you will need to obtain a legal proxy from your intermediary reflecting the Fund’s name, the number of Fund shares held and your name and email address. You may forward an email from your intermediary containing the legal proxy or attach an image of the legal proxy to an email and send it to AST at attendameeting@astfinancial.com with “Legal Proxy” in the subject line. You will then be provided with credentials to participate in the Meeting, as well as a unique control number to vote your shares. If you would like to participate in, but NOT vote at, the Meeting, please send an email to AST at attendameeting@astfinancial.com with proof of ownership of Fund shares. A statement, letter or the Vote Instruction Form from your intermediary will be sufficient proof of ownership. You will then be provided credentials to participate in the Meeting. All requests to participate in and/or vote at the Meeting must be received by AST no later than 3:00 p.m. Eastern Time on October 8, 2021.

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, WE ASK THAT YOU PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. PLEASE SEE THE PROXY CARD FOR ADDITIONAL VOTING INSTRUCTIONS.

What are the Boards’ recommendation regarding the Proposals?

For the reasons set forth below under “Reasons for the Reorganizations”, the Boards have unanimously determined that each Reorganization is in the best interests of each Acquired Fund and the Acquiring Fund. The Boards recommend that Acquired Fund and Acquiring Fund shareholders vote FOR the Reorganizations. The Boards have concluded that the interests of the existing shares of each Acquired Fund and the existing shares of the Acquiring Fund will not be diluted as a result of the Reorganizations. The Boards found that each Acquired Fund and the Acquiring Fund have significant overlap in investment objectives, strategies, and risks, identical portfolio managers and service providers, and comparable fees and expenses. The Boards recognized that the Acquired Funds have state-specific mandates and considered potential benefits to Acquired Fund Shareholders of being shareholders of the Acquiring Fund with its national investment focus, including the potential for greater investment opportunities particularly in light of fewer new bond issuances in recent years by the states of Minnesota and Colorado. The Boards also recognized that the Acquired Funds were larger than the Acquiring Fund. In addition, the Boards found that the increase in the Acquiring Fund’s assets will result in increased operational efficiencies and may enable the Acquiring Fund to realize a greater trading volume and offer greater liquidity, which may assist in reducing the Acquiring Fund’s discount to net asset value.

After consideration of various factors related to each individual nominee’s candidacy, the Nominating Committee and the Board of each Fund determined to recommend that each Director should continue to serve as Director of each Fund and recommend that shareholders vote FOR the election of each Director.

What will happen if shareholders approve the Proposals?

If a Reorganization is approved by shareholders of an Acquired Fund and Acquiring Fund shareholders approve the related issuance of additional Common shares and MMP Shares, the Reorganizations will result in your Acquired Fund MMP Shares being exchanged for Acquiring Fund MMP Shares. This exchange will occur on a date agreed upon by the parties to the Plan (hereafter, the Closing Date), which is currently anticipated to occur on or around [ ], 2021. Neither Reorganization is contingent on the other. However, Proposal 3 is contingent on Proposals 1 and 2 individually, and vice versa. If a Reorganization is approved and you own Acquired Fund MMP Shares, you will, after the Reorganization, own MMP Shares of the Acquiring Fund with an aggregate liquidation preference equal to, and other terms that are substantially identical to, the Acquired Fund MMP Shares you held immediately before the Reorganization. The Statement of Preferences of each Fund’s MMP Shares are substantially similar. If you are an MMP Shareholder of the Acquiring Fund, your MMP Shares will not be changed by the Reorganization.

It is expected that neither the Funds nor their shareholders will recognize any gain or loss for federal income tax purposes as a result of the Reorganizations. After the Reorganizations, shareholders of VCF and VMM who are residents of Colorado or Minnesota, respectively, may lose the benefit of the exempt-interest dividends paid by such Fund being excluded from the individual income tax in Colorado or Minnesota, respectively, to the extent that the Acquiring Fund invests in securities the interest from which is not exempt from Colorado or Minnesota state income tax, respectively, or to the extent that the Acquiring Fund is no longer eligible to pass through to investors the tax-exempt nature of its income for state tax purposes. Information regarding the state specific breakdown of Fund investments is provided in the tax center on Macquarie’s website (https://www.delawarefunds.com/account/tax-information/fund-tax-data/tax-free-funds-income-by-state-percentages) for shareholders to determine, what, if any portion of the Acquiring Fund is tax-exempt for state income tax purposes. Shareholders should consult their own tax advisor regarding the effect, if any, of the Reorganizations in light of their individual circumstances. For more information about the federal tax consequences of the Reorganizations, see the section below entitled “What are the tax consequences of each Reorganization?”

Will MMP Shares issued in connection with the Reorganizations be the same as my current MMP Shares?

Yes. In connection with the Reorganizations, the Acquiring Fund will issue MMP Shares in exchange for Acquired Fund MMP Shares. The terms of the Acquiring Fund MMP Shares will be substantially identical to the terms of the Acquired Fund’s MMP Shares outstanding immediately prior to the Closing Date. Important information regarding the Acquiring Fund MMP Shares to be issued in connection with the Reorganizations is set forth below.

(1)

It is a condition of closing of each Reorganization that each of the Acquired Funds and the Acquiring Fund will have satisfied all of its obligations set forth in certain documents related to its respective MMP Shares immediately prior to the Reorganizations. The Acquiring Fund covenants that it will satisfy all of the obligations of such documents related to the MMP Shares immediately after giving effect to the Reorganization.

(2)

The terms of the Declaration of Trust of the Acquiring Fund are similar to those terms agreed upon by the initial purchaser of MMP Shares of the Fund.

(3)

The terms of the bylaws of the Acquiring Fund are similar to those terms agreed upon by the initial purchaser of MMP Shares of the Fund.

(4)

The terms of the MMP Shares issued by the Acquiring Fund, as set forth in the Statement of Preferences of MMP Shares, are substantially similar to those terms agreed upon by the initial purchaser of MMP Shares of the Fund.

(5)

In each Reorganization, MMP Shares of the Acquired Fund will be exchanged for new MMP Shares of the Acquiring Fund, which, after giving effect to the Reorganizations, will constitute a separate series of MMP Shares of the Acquiring Fund.

(6)

If the necessary shareholder approval is obtained, the Reorganizations will likely be completed on or around December 31, 2021.

A form of the Statement of Preferences of MMP Shares of the Acquiring Fund is attached hereto as Exhibit C. The description of MMP Shares of the Acquiring Fund included herein is subject to and qualified in its entirety by reference to the more detailed description of the MMP Shares set forth in such form of Statement of Preferences.

PROPOSALS 1, 2, AND 3: THE REORGANIZATIONS

What is the anticipated timing of the Reorganizations?

The Meeting is scheduled to occur virtually on Oct. 11, 2021. If the necessary shareholder approval is obtained, the Reorganizations will likely be completed on or around December 31, 2021.

What are the benefits of the Reorganizations to shareholders?

MMP Shareholders are expected to benefit from the larger size of the combined fund due to a larger fund’s ability to invest in a larger pool of securities.

Management also believes that the Reorganizations offer the following benefits to Common Shareholders, among others:

•

Larger Net Asset Level - With a larger asset level, the Acquiring Fund may attract a larger set of investors through its national investment strategy which could potentially reduce its discount and reduce fixed expenses.

•

Greater Liquidity - The Acquiring Fund may have a more liquid trading environment and experience larger trading volume that may assist in leading to a smaller and less persistent discount.

•

Stronger Investment Opportunity - A larger Acquiring Fund will permit greater investment opportunities by allowing portfolio managers to invest in a wider range of bond issuances, particularly in light of fewer new bond issuances in recent years by the states of Minnesota and Colorado.

•

Additional Leverage Flexibility - In line with greater investment opportunities, a larger Acquiring Fund may permit the portfolio managers to explore new or additional forms of leverage that may be better received by potential underwriters and investors for a larger fund with a national bond strategy.

What are the costs of the Reorganizations?

[MMP Shareholders are not expected to bear any costs of the Reorganizations.]

What happens if a Reorganization is not approved?

If the Reorganizations are not approved by an Acquired Fund’s shareholders or do not close for any other reason, such shareholders will remain shareholders of the Acquired Fund, and the Acquired Fund will continue to operate. The Boards then will consider such other actions as it deems necessary or appropriate, including possible liquidation, for the Acquired Fund. Neither Reorganization is contingent on the other.

How will shareholder voting be handled?

Common Shareholders and MMP Shareholders who own shares of a Fund at the close of business on Aug. 12, 2021 (the Record Date) will be entitled to vote at the Meeting, and will be entitled to one vote for each full share and a proportionate fractional vote for each fractional share that they hold. Approval of a Reorganization by an Acquired Fund (Proposals 1 and 2) requires the affirmative vote of the holders of at least a majority of the outstanding Common Shares and outstanding preferred shares then entitled to vote, voting as a single class, and also requires the affirmative vote of the holders of at least a “majority of the Outstanding Preferred Shares,” including the

MMP Shares, outstanding at the time, voting as a separate class. For this purpose, “majority of the Outstanding Preferred Shares” means (i) 67% or more of such shares present at a meeting, if the holders of more than 50% of such shares are present or represented by proxy, or (ii) more than 50% of such shares, whichever is less. Approval of a Reorganization by the Acquiring Fund (Proposal 3) requires the affirmative vote of the holders of at least a majority of the outstanding Common Shares and outstanding Preferred Shares, voting as a single class.

For more details about shareholder voting, see the “Voting Information” section of this Proxy Statement.

THE BOARDS RECOMMEND THAT YOU VOTE TO APPROVE THE PLAN FOR EACH FUND.

COMPARISON OF INVESTMENT OBJECTIVES, STRATEGIES, RISKS, AND INVESTMENT RESTRICTIONS

How do the investment objectives, principal strategies, principal risks, and fundamental investment restrictions of the Acquired Funds compare against those of the Acquiring Fund?

This section will help you compare the investment objectives, principal strategies, principal risks, and fundamental investment restrictions of the Acquired Funds and the Acquiring Fund.

REORGANIZATION OF VCF INTO VFL

Investment Objectives. The Acquired Fund and Acquiring Fund have similar principal investment objectives, as described below. VCF seeks to provide current income from both federal income tax and Colorado state income tax while VFL only seeks to provide current income exempt from federal income tax.

VCF (Acquired Fund)	VFL (Acquiring Fund)
What is the Fund’s investment objective? VCF seeks to provide current income exempt from both regular federal income tax and Colorado state income tax, consistent with the preservation of capital.	What is the Fund’s investment objective? VFL seeks to provide current income exempt from regular federal income tax, consistent with the preservation of capital.

Principal Investment Strategies. The Acquired Fund and Acquiring Fund have similar, but not identical, principal investment strategies, as described below, with the most significant difference being the Acquired Fund’s specific focus on Municipal Obligations from the state of Colorado.

Under normal circumstances, the Acquired Fund will invest substantially all (at least 80%) of its assets in tax-exempt “Colorado Municipal Obligations” and the Acquiring Fund will invest substantially all (at least 80%) of its net assets in “Municipal Obligations.” “Municipal Obligations” are debt obligations issued by states, cities and local authorities, and possessions and certain territories of the United States and their political subdivisions, agencies and instrumentalities, the interest on which, in the opinion of bond counsel or other counsel to the issuer of such securities, is, at the time of issuance, not includable in gross income for federal income tax purposes. “Colorado Municipal Obligations,” are Municipal Obligations issued by or on behalf of the State of Colorado, its agencies, instrumentalities and political subdivisions and which bear interest that, in the opinion of bond counsel or other counsel to the issuer, is exempt from both regular federal income tax and Colorado state income tax. For each Fund, the 80% investment policy is fundamental and may not be changed without the approval of the holders of a majority of the outstanding shares of common stock and preferred shares voting together as a single class, and of the holders of a majority of the outstanding preferred shares voting as a separate class.

Each Fund is classified as diversified under applicable federal law and neither Fund will concentrate its investments in any one industry.

Each Fund may invest up to 20% of the Fund’s assets in securities that generate interest that is subject to federal alternative minimum tax (AMT).

Each Fund may invest without limitation in uninsured, “investment grade” Municipal Obligations. “Investment grade” means that, at the time of investment, a Municipal Obligation has a credit rating of at least Baa by Moody’s, or BBB by Standard & Poor’s Financial Services LLC (S&P), or is unrated but judged by the Manager, to be of comparable quality. Each Fund may invest up to 20% of its net assets in Municipal Obligations that are rated below investment grade or that are unrated but judged by the Manager to be of comparable quality.

Each Fund seeks to have an average maturity of between 20 and 30 years.

VCF (Acquired Fund)

VFL (Acquiring Fund)

What are the Fund’s principal investment strategies?

The Fund seeks to achieve its investment objective by investing under normal circumstances, substantially all (at least 80%) of its assets in tax-exempt “Colorado Municipal Obligations.” “Municipal Obligations” are debt obligations issued by states, cities and local authorities, and possessions and certain territories of the United States and their political subdivisions, agencies and instrumentalities, the interest on which, in the opinion of bond counsel or other counsel to the issuer of such securities, is, at the time of issuance, not includable in gross income for federal income tax purposes. “Colorado Municipal Obligations,” are Municipal Obligations issued by or on behalf of the State of Colorado, its agencies, instrumentalities and political subdivisions and which bear interest that, in the opinion of bond counsel or other counsel to the issuer, is exempt from both regular federal income tax and Colorado state income tax. The Fund may invest up to 20% of the Fund’s total assets in securities that generate interest that is subject to federal alternative minimum tax (AMT).

The Fund may invest without limitation in Colorado Municipal Obligations rated investment grade (i.e., those rated BBB and above or unrated but judged to be of comparable quality by the Fund’s investment adviser). The Fund may also invest up to 20% of its net assets in Colorado Municipal Obligations with an investment rating of Ba/BB or lower, or that are unrated but judged to be of comparable quality by the Fund’s investment adviser. In normal circumstances, the Fund does not intend to invest more than 5% of its assets in instruments other than Municipal Obligations.

The Fund intends to emphasize investments in Colorado Municipal Obligations with long-term maturities in order to maintain an average portfolio maturity of 20 to 30 years. The average portfolio maturity, however, may be shortened from time to time depending upon market conditions. As a result, the Fund’s portfolio at any given time may include both long- and intermediate-term Colorado Municipal Obligations.

The Fund may invest without limit in state or municipal leases and participation interests therein. Municipal lease obligations held by the Fund will be treated as illiquid unless they are determined to be liquid pursuant to guidelines established by the Fund’s Board.

What are the Fund’s principal investment strategies?

The Fund seeks to achieve its investment objective by investing under normal circumstances, substantially all (at least 80%) of its net assets in “Municipal Obligations.” “Municipal Obligations” are debt obligations issued by or on behalf of a state or territory or its agencies, instrumentalities, municipalities and political subdivisions, the interest payable on which is, in the opinion of bond counsel, excludable from gross income for purposes of federal income taxation (except, in certain instances, the alternative minimum tax, depending upon the shareholder’s tax status). The Fund may invest up to 20% of the Fund’s assets in securities that generate interest that is subject to federal alternative minimum tax (AMT). The Fund may invest without limitation in uninsured, “investment grade” Municipal Obligations. “Investment grade” means that, at the time of investment, a Municipal Obligation has a credit rating of at least Baa by Moody’s, or BBB by Standard & Poor’s Financial Services LLC (S&P), or is unrated but judged by the Manager, to be of comparable quality. The Fund may invest up to 20% of its net assets in Municipal Obligations that are rated below investment grade or that are unrated but judged by the Manager to be of comparable quality.

The Manager analyzes economic and market conditions, seeking to identify the securities or market sectors that the Manager thinks are the best investments for the Fund. The Fund generally invests in debt obligations issued by state and local governments and their political subdivisions, agencies, authorities, and instrumentalities that are exempt from federal income tax. The Fund may also invest in debt obligations issued by or for the District of Columbia, and its political subdivisions, agencies, authorities, and instrumentalities or territories and possessions of the United States that are exempt from federal income tax.

The Fund will generally invest in securities for income rather than seeking capital appreciation through active trading. However, the Fund may sell securities for a variety of reasons, such as to reinvest the proceeds in higher yielding securities, to eliminate investments not consistent with the preservation of capital, to fund tender offers, or to address a weakening credit situation.

The Fund may invest in advanced refunded bonds, escrow secured bonds or defeased bonds.

The Fund may invest up to 20% of its net assets in municipal obligations issued by or on behalf of territories of the United States – such as Guam, the U.S. Virgin Islands or Puerto Rico – that are exempt from Colorado and federal income tax, subject to the Fund’s fundamental investment policy to invest 80% of its assets in Colorado municipal obligations.

The Fund may invest up to 5% of its total assets in Colorado Municipal Obligations whose rates vary inversely with changes in market rates of interest (so-called “inverse floaters”).

Although in normal circumstances the Fund does not intend to invest more than 5% of its assets in instruments other than Municipal Obligations, the Fund may attempt to hedge its investment portfolio against market risk by engaging in various hedging transactions. In particular, the Fund may purchase and sell futures contracts, enter into various interest rate transactions, and may purchase and sell (or write) exchange-listed and over-the-counter put and call options on securities and futures contracts (collectively, “Hedging Transactions”). Hedging Transactions may be used to attempt to protect against possible changes in the market value of the Fund’s portfolio resulting from trends in the debt securities markets, to protect the Fund’s unrealized gains in the value of its portfolio securities, to facilitate the sale of such securities for investment purposes, to establish a position in the securities markets as a temporary substitute for purchasing particular securities, to manage the effective dollar-weighted average duration of the Fund’s portfolio or for other risk management purposes.

The Fund may enter into contracts for the purchase or sale for future delivery (futures contracts) of debt securities, aggregates of debt securities or indices or prices thereof, other financial indices and U.S. Government debt securities to hedge the value of its portfolio securities that might result from a change in interest rates. The Fund will engage in such transactions for bona fide hedging, risk management (including duration management) and other portfolio management purposes, in each case in accordance with the rules and regulations of the Commodity Futures Trading Commission. Although the Fund generally will purchase or sell only those futures contracts and options thereon for which there appears to be a liquid market, there is no assurance that a liquid market on an exchange will exist for any particular futures contract or option thereon at any particular time. It is expected that the initial margin on futures contracts the Fund may purchase or sell may range from approximately 3% to approximately 15% of the value of the securities (or the securities index) underlying the contract. In certain circumstances, however, such as during periods of high volatility, the Fund may be required by an exchange to increase the level of its initial margin payment.

attempt to provide a current tax-exempt income, consistent with preservation of capital. The Fund may focus its investments in certain types of bonds or in a certain segment of the municipal bond market when the supply of bonds in other sectors do not suit its investment needs.

The Fund may invest without limitation in general obligation bonds in the top four quality grades or bonds that are unrated, but which the Manager determines to be of equal quality. The Fund may invest without limitation in revenue bonds in the top four quality grades or bonds that are unrated, but which the Manager determines to be of equal quality.

The Fund may invest without limitation in insured Municipal Obligations. In addition, insurance is available on uninsured bonds and the Fund may purchase such insurance directly. The Manager will generally do so only if it believes that purchasing and insuring a Municipal Obligation provides an investment opportunity at least comparable to owning other available insured Municipal Obligations.

Private activity or private placement bonds are municipal bond issues whose proceeds are used to finance certain nongovernment activities, including some types of industrial revenue bonds such as privately owned sports and convention facilities. The Tax Reform Act of 1986 subjects interest income from these bonds to the federal alternative minimum tax and makes the tax-exempt status of certain bonds dependent on the issuer’s compliance with specific requirements after the bonds are issued. As described above, the Fund may invest up to 20% of its assets in bonds whose income is subject to the federal alternative minimum tax. This means that a portion of the Fund’s distributions could be subject to the federal alternative minimum tax that applies to certain taxpayers.

The Fund may invest without limit in advance refunded bonds.

The Fund may invest without limitation in high-quality, short-term tax-free instruments.

The Fund may invest in privately placed securities, including those that are eligible for resale only among certain institutional buyers without registration, commonly known as “Rule 144A Securities.” Restricted securities that are determined to be illiquid may not exceed the Fund’s 15% limit on investments in illiquid securities.

The Fund may invest without limitation in municipal lease obligations, primarily through certificates of participation rated in the top four quality grades by S&P or another nationally recognized statistical rating agency. As with the Fund’s other investments, the Manager expects that investments in municipal lease obligations will be exempt from regular federal income taxes. The Fund will rely on the opinion of the bond issuer’s counsel for a determination of the bond’s tax-exempt status.

The Fund may invest in zero coupon bonds.

The Fund may enter into interest rate swaps and the purchase or sale of interest rate caps and floors. The Fund expects to enter into these transactions primarily to preserve a return or spread on a particular investment or portion of its portfolio, as a duration management technique or to protect against any increase in the price of securities the Fund anticipates purchasing at a later date. The Fund intends to use these transactions as a hedge and not as a speculative investment. The Fund will not sell interest rate caps or floors based on securities that it does not own. The Fund will not enter into any interest rate swap, cap or floor transaction unless the unsecured senior debt or the claims-paying ability of the other party thereto is rated at least “A” by at least one nationally recognized rating organization at the time of entering into such transaction. There is no limit on the amount of interest rate swap transactions that may be entered into by the Fund. The aggregate purchase price of caps and floors held by the Fund may not exceed 5% of the Fund’s assets. The Fund may sell (i.e., write) caps and floors without limitation, as long as it designates on the Fund’s books liquid assets in an amount sufficient to cover its obligations under the cap or floor.

The Fund may purchase put options (puts) that relate to Municipal Obligations (whether or not it holds such securities in its portfolio) or futures on such securities. The Fund may also sell puts on Municipal Obligations or futures on such securities if the Fund’s continuing obligations on such puts are secured by designated assets on the Fund’s books consisting of cash or liquid debt securities having a value not less than the exercise price. The Fund will not sell puts if, as a result, more than 50% of the Fund’s assets would be required to cover its potential obligation under its hedging and other investment transactions.

In order to reduce fluctuations in net asset value, the Fund may sell or purchase call options (calls) on Municipal Obligations that are traded on U.S. securities exchanges and in the over-the-counter markets and related futures on such securities. The Fund may write call options only if the call option is “covered.” The Fund may write put options only if the put option is “secured.” Although the Fund will enter into over-the-counter options only with dealers that agree to enter into, and which are expected to be capable of entering into, closing transactions with the Fund, there can be no assurance that the Fund will be able to liquidate an over-the-counter option at a favorable price at any time prior to expiration. The Fund will not engage in over-the-counter options transactions if the amount invested by the Fund in over-the-counter options, plus, with respect to over-the-counter options written by the Fund, the amounts required to be treated as illiquid pursuant to SEC staff positions, plus the amount invested by the Fund in illiquid securities, would exceed 20% of the Fund’s total assets.

The Fund also may purchase and write call and put options on securities indices.

Credit quality restrictions for the Fund apply only at the time of purchase. The Fund may continue to hold a security whose quality rating has been lowered or, in the case of an unrated bond, after the Manager has changed its assessment of its credit quality.

The Fund may buy or sell securities on a when-issued or delayed-delivery basis; that is, paying for securities before delivery or taking delivery at a later date. The Fund will designate cash or securities in amounts sufficient to cover its obligations, and will value the designated assets daily.

Where the Manager feels there is a limited supply of appropriate investments, the Fund may invest more than 25% of its total assets in Municipal Obligations relating to similar types of projects or with other similar economic, business, or political characteristics (such as bonds of housing finance agencies or healthcare facilities). In addition, the Fund may invest more than 25% of its assets in industrial development bonds or, in the case of the Fund, pollution control bonds, which may be backed only by the assets and revenues of a nongovernmental issuer. The Fund will not, however, invest more than 25% of its total assets in bonds issued for companies in the same business sector.

The Fund may borrow money from banks as a temporary measure for extraordinary or emergency purposes but normally does not do so. The Fund will not borrow money in excess of one-third of the value of its assets.

In response to unfavorable market conditions, the Fund may invest in taxable instruments for temporary defensive purposes. These could include obligations of the U.S. government, its agencies and instrumentalities, commercial paper, cash, certificates of deposit of domestic banks, repurchase agreements, reverse repurchase agreements, other cash equivalents, and other debt instruments. These investments may not be consistent with the Fund’s investment objective. To the extent that the Fund holds such investments, it may be unable to achieve its investment objective.

The Fund may also purchase and sell (write) call and put options on financial futures contracts.

The Fund may enter into credit default swap (CDS) contracts to the extent consistent with its investment objective and strategies. The Fund might use CDS contracts to limit or to reduce the risk exposure of the Fund to defaults of the issuer or issuers of its holdings (i.e., to reduce risk when the Fund owns or has exposure to such securities). The Fund also might use CDS contracts to create or vary exposure to securities or markets or as a tax management tool. The Fund will not be permitted to enter into any swap transaction unless, at the time of entering into such transaction, the unsecured long-term debt of the actual counterparty, combined with any credit enhancements, is rated at least BBB- by S&P or Baa3 by Moody’s or is determined to be of equivalent credit quality by the Manager.

The Fund may purchase Municipal Obligations on a “when-issued” basis and may purchase or sell Municipal Obligations on a “forward commitment” basis in order to acquire the security or to hedge against anticipated changes in interest rates and prices.

During temporary defensive periods (e.g., when, in the Manager’s opinion, temporary imbalances of supply and demand or other temporary dislocations in the tax-exempt bond market adversely affect the price at which long- or intermediate-term Colorado Municipal Obligations are available), and in order to keep cash on hand fully invested, the Fund may invest any percentage of its assets in temporary investments. The Fund intends to invest in taxable temporary investments only in the event that suitable tax-exempt temporary investments are not available at reasonable prices and yields. The Fund will invest only in taxable temporary investments which are U.S. Government securities.

Portfolio trading may be undertaken to accomplish the investment objective of the Fund in relation to actual and anticipated movements in interest rates. In addition, a security may be sold and another of comparable quality purchased at approximately the same time to take advantage of what the Manager believes to be a temporary price disparity between the two securities. The Fund may also engage to a limited extent in short-term trading consistent with its investment objective.

The Fund may invest up to 15% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A of the Securities Act, and other securities which may not be readily marketable. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to the Fund’s 15% limit on investments in illiquid securities.

Subject to the foregoing, the Fund will attempt to achieve its investment objective by prudent selection of Colorado Municipal Obligations with a view to holding them for investment. The Fund anticipates that its annual portfolio turnover rate will generally not exceed 100%. However,

the rate of turnover will not be a limiting factor when the Fund deems it desirable to sell or purchase securities. Therefore, depending upon market conditions, the annual portfolio turnover rate of the Fund may exceed 100% in particular years.

The Municipal Obligations market is rapidly evolving; types of Municipal Obligations other than those described above can be expected to be developed and marketed from time to time. Consistent with its investment limitations, the Fund expects to invest in those new types of Municipal Obligations that the Manager believes may assist the Fund in achieving its investment objective. The Fund will notify shareholders to the extent that it intends to invest more than 5% of its net assets in such obligations.

Principal Investment Risks. Investing in any closed-end fund involves the risk that you may lose part or all of the money you invest. Over time, the value of your investment in a Fund will increase and decrease according to changes in the value of the securities in the Fund’s portfolio. An investment in the Fund may not be appropriate for all investors. Each Fund’s principal risks are included below. [Neither Fund has any restrictions on its present or future ability to pay dividends with respect to any class of securities.]

[The principal risks of investing in MMP Shares of the Acquiring Fund are described under the caption “Risk Factors” in the Memorandum accompanying this Proxy Statement as Exhibit E.] The risks associated with an investment in MMP Shares are substantially the same for the Acquired Funds and the Acquiring Fund.

The principal investment risks for the Acquired Fund and Acquiring Fund are similar, except that the Acquired Fund is subject to a greater extent of specific Colorado Municipal Obligations risk. Both Funds are subject to interest rate risk, high yield (junk bond) risk, credit risk, call risk, net asset value risk, market risk, industry and sector risk, geographic concentration risk, leveraging risk, government and regulatory risk, alternative minimum tax risk, liquidity risk, IBOR risk, and active management and selection risk. Even though the Acquired Fund and Acquiring Fund share many of the same types of risks, the degree of such risks may vary. The Acquired Fund is also subject to Colorado municipal obligations risk and derivatives risk and the Acquiring Fund is subject to security risk. Each Fund’s relative risk/return profile cannot be determined by the following risk descriptions and comparison alone. However, the Acquired Fund and Acquiring Fund share a similar risk/return profile.

Risk	Acquired Fund	Acquiring Fund
Fixed income related risks:
Interest rate risk	X	X
High yield (junk bond) risk	X	X
Credit risk	X	X
Call risk	X	X
Colorado Municipal Obligations risk	X

Other risks:
Net asset value discount risk	X	X
Market risk	X	X
Security risk		X
Industry and sector risk	X	X
Geographic concentration risk	X	X
Leveraging risk	X	X
Alternative minimum tax risk	X	X
Derivatives risk	X

Government and regulatory risk	X	X
Liquidity risk	X	X
IBOR risk	X	X
Active management and selection risk	X	X

Fixed Income Related Risks

Interest rate risk. (Acquired Fund and Acquiring Fund) The risk that the prices of bonds and other fixed income securities will increase as interest rates fall and decrease as interest rates rise. Interest rate changes are influenced by a number of factors, such as government policy, monetary policy, inflation expectations, and the supply and demand of bonds. Bonds and other fixed income securities with longer maturities or duration generally are more sensitive to interest rate changes. A fund may be subject to a greater risk of rising interest rates due to the current period of historically low interest rates.

High yield (junk bond) risk. (Acquired Fund and Acquiring Fund) The risk that high yield securities, commonly known as “junk bonds,” are subject to reduced creditworthiness of issuers, increased risk of default, and a more limited and less liquid secondary market. High yield securities may also be subject to greater price volatility and risk of loss of income and principal than are higher-rated securities. High yield bonds are sometimes issued by municipalities that have less financial strength and therefore have less ability to make projected debt payments on the bonds.

Credit risk. (Acquired Fund and Acquiring Fund) The risk that an issuer of a debt security, including a governmental issuer or an entity that insures a bond, may be unable to make interest payments and/or repay principal in a timely manner.

Call risk. (Acquired Fund and Acquiring Fund) The risk that a bond issuer will prepay the bond during periods of low interest rates, forcing a fund to reinvest that money at interest rates that might be lower than rates on the called bond.

Colorado Municipal Obligations risk. (Acquired Fund) The risk that the value of Colorado Municipal Obligations may be adversely affected by new legislation in Colorado, regional or local economic conditions, and differing levels of supply and demand for municipal bonds. A fund holding Colorado Municipal Obligations is susceptible to political, economic or regulatory factors affecting issuers of Colorado Municipal Obligations. There can be no assurance that current or future statewide or regional difficulties, and the resulting impact on State or local governmental finances generally, or other factors, affecting State or local governmental finances, will not adversely affect the market value of Colorado Municipal Obligations held by a fund, the ability of a fund to manage its portfolio consistent with its investment policies or the ability of particular obligors to make timely payments of debt service on (or relating to) those obligations.

Other Risks

Net asset value discount risk. (Acquired Fund and Acquiring Fund) The risk that a closed-end investment company will trade at a discount from its net asset value (NAV).

Market risk. (Acquired Fund and Acquiring Fund) The risk that all or a majority of the securities in a certain market — such as the stock or bond market — will decline in value because of factors such as adverse political or economic conditions, future expectations, investor confidence, or heavy institutional selling.

Security risk. (Acquiring Fund) The risk that the value of an individual stock or bond will decline because of changing expectations for the performance of the individual company issuing the stock or bond (due to situations that could range from decreased sales to events such as a pending merger or actual or threatened bankruptcy).

Industry and sector risk. (Acquired Fund and Acquiring Fund) The risk that the value of securities in a particular industry or sector will decline because of changing expectations for the performance of that industry or sector.

Geographic concentration risk. (Acquired Fund and Acquiring Fund) The risk that heightened sensitivity to regional, state, US territories or possessions (such as the Commonwealth of Puerto Rico, Guam, or the US Virgin Islands), and local political and economic conditions could adversely affect the holdings in and performance of a fund. There is also the risk that there could be an inadequate supply of municipal bonds in a particular state or US territory or possession.

Leveraging risk. (Acquired Fund and Acquiring Fund) The risk that certain fund transactions, such as the use of derivatives instruments or when-issued, delayed delivery or forward commitment transactions, or issuance of preferred shares, may give rise to leverage, causing a fund to be more volatile than if it had not been leveraged, which may result in increased losses to the fund.

Alternative minimum tax risk. (Acquired Fund and Acquiring Fund) If a fund invests in bonds whose income is subject to the alternative minimum tax, that portion of the fund’s distributions would be taxable for shareholders who are subject to this tax.

Derivatives risk. (Acquired Fund) Derivatives contracts, such as futures, options, swaps, and inverse floaters, may involve additional expenses (such as the payment of premiums) and are subject to significant loss if a security, index, reference rate, or other asset or market factor to which a derivatives contract is associated, moves in the opposite direction from what the portfolio manager anticipated. When used for hedging, the change in value of the derivatives instrument may also not correlate specifically with the currency, rate, or other risk being hedged, in which case a fund may not realize the intended benefits. Derivatives contracts are also subject to the risk that the counterparty may fail to perform its obligations under the contract due to, among other reasons, financial difficulties (such as a bankruptcy or reorganization).

Government and regulatory risk. (Acquired Fund and Acquiring Fund) The risk that governments or regulatory authorities may take actions that could adversely affect various sectors of the securities markets and affect fund performance. For example, a tax-exempt security may be reclassified by the Internal Revenue Service or a state tax authority as taxable, and/or future legislative, administrative, or court actions could cause interest from a tax-exempt security to become taxable, possibly retroactively.

Liquidity risk. (Acquired Fund and Acquiring Fund) The possibility that investments cannot be readily sold within seven calendar days at approximately the price at which a fund has valued them.

IBOR risk. (Acquired Fund and Acquiring Fund) The risk that potential changes related to the use of the London Interbank Offered Rate (LIBOR) or similar interbank offered rates (IBORs, such as the Euro Overnight Index Average (EONIA)) could have adverse impacts on financial instruments that reference LIBOR or a similar rate. While some instruments may contemplate a scenario where LIBOR or a similar rate is no longer available by providing for an alternative rate setting methodology, not all instruments have such fallback provisions and the effectiveness of replacement rates is uncertain. The abandonment of LIBOR and similar rates could affect the value and liquidity of instruments that reference such rates, especially those that do not have fallback provisions. The use of alternative reference rate products may impact investment strategy performance.

Active management and selection risk. (Acquired Fund and Acquiring Fund) The risk that the securities selected by a fund’s management will underperform the markets, the relevant indices, or the securities selected by other funds with similar investment objectives and investment strategies. The securities and sectors selected may vary from the securities and sectors included in the relevant index.

majority of the outstanding preferred shares, if any, voting as a separate class. Except with respect to each Fund’s borrowing restriction, these fundamental investment restrictions and limitations will apply only at the time of purchase of securities and will not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of an acquisition of securities.

Concentration. Each Fund will not make investments that will result in the concentration (as that term may be defined in the 1940 Act, any rule or order thereunder, or SEC staff interpretation thereof) of its investments in the securities of issuers primarily engaged in the same industry, provided that this restriction does not limit the Fund from investing in obligations issued or guaranteed by the U.S. government, its agencies or instrumentalities, or in tax-exempt securities or certificates of deposit.

Borrowing and Senior Securities. Each Fund may not borrow money or issue senior securities, except as the 1940 Act, any rule or order thereunder, or SEC staff interpretation thereof, may permit.

Underwriting. Each Fund may not underwrite the securities of other issuers, except that the Fund may engage in transactions involving the acquisition, disposition or resale of its portfolio securities, under circumstances where it may be considered to be an underwriter under the Securities Act.

Real Estate. Each Fund may not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments and provided that this restriction does not prevent the Fund from investing in issuers which invest, deal or otherwise engage in transactions in real estate or interests therein, or investing in securities that are secured by real estate or interests therein.

Commodities. Each Fund may not purchase or sell physical commodities, unless acquired as a result of ownership of securities or other instruments and provided that this restriction does not prevent the Fund from engaging in transactions involving futures contracts and options thereon or investing in securities that are secured by physical commodities.

Lending. Each Fund may not make loans, provided that this restriction does not prevent the Fund from purchasing debt obligations, entering into repurchase agreements, loaning its assets to broker/dealers or institutional investors and investing in loans, including assignments and participation interests.

REORGANIZATION OF VMM INTO VFL

Investment Objectives. The Acquired Fund and Acquiring Fund have similar principal investment objectives, as described below. VMM seeks to provide current income from both federal income tax and Minnesota state income tax while VFL only seeks to provide current income exempt from federal income tax

VMM (Acquired Fund)	VFL (Acquiring Fund)
What is the Fund’s investment objective? VMM seeks to provide current income exempt from both regular federal income tax and Minnesota state personal income tax, consistent with the preservation of capital.	What is the Fund’s investment objective? VFL seeks to provide current income exempt from regular federal income tax, consistent with the preservation of capital.

Under normal circumstances, the Acquired Fund will invest substantially all (at least 80%) of its assets in tax-exempt “Minnesota Municipal Obligations” and the Acquiring Fund will invest substantially all (at least 80%) of its net assets in “Municipal Obligations.” “Municipal Obligations” are debt obligations issued by states, cities and local authorities, and possessions and certain territories of the United States and their political subdivisions, agencies and instrumentalities, the interest on which, in the opinion of bond counsel or other counsel to the issuer of such securities, is, at the time of issuance, not includable in gross income for federal income tax purposes. “Minnesota Municipal Obligations” are Municipal Obligations issued by or on behalf of the State of Minnesota, its agencies,

instrumentalities and political subdivisions and which bear interest that, in the opinion of bond counsel or other counsel to the issuer, is exempt from both regular federal income tax and Minnesota state personal income tax. For each Fund, the 80% investment policy is fundamental and may not be changed without the approval of the holders of a majority of the outstanding shares of common stock and preferred shares, voting together as a single class, and of the holders of a majority of the outstanding preferred shares voting as a separate class.

Each Fund is classified as diversified under applicable federal law and neither Fund will concentrate its investments in any one industry.

Each Fund may invest up to 20% of the Fund’s assets in securities that generate interest that is subject to federal alternative minimum tax (AMT).

Each Fund may invest without limitation in uninsured, “investment grade” Municipal Obligations. “Investment grade” means that, at the time of investment, a Municipal Obligation has a credit rating of at least Baa by Moody’s, or BBB by S&P, or is unrated but judged by the Manager, to be of comparable quality. Each Fund may invest up to 20% of its net assets in Municipal Obligations that are rated below investment grade or that are unrated but judged by the Manager to be of comparable quality.

Each Fund seeks to have an average maturity of between 20 and 30 years.

VMM (Acquired Fund)

VFL (Acquiring Fund)

What are the Fund’s principal investment strategies?

The Fund seeks to achieve its investment objective by investing substantially all (in excess of 80%) of its net assets in tax-exempt “Minnesota Municipal Obligations” rated “investment grade” at the time of investment. “Municipal Obligations” are debt obligations issued by states, cities and local authorities, and possessions and certain territories of the United States and their political subdivisions, agencies and instrumentalities, the interest on which, in the opinion of bond counsel or other counsel to the issuer of such securities, is, at the time of issuance, not includable in gross income for federal income tax purposes. “Minnesota Municipal Obligations” are Municipal Obligations issued by or on behalf of the State of Minnesota, its agencies, instrumentalities and political subdivisions and which bear interest that, in the opinion of bond counsel or other counsel to the issuer, is exempt from both regular federal income tax and Minnesota state personal income tax. “Investment grade” means that, at the time of investment, a Minnesota Municipal Obligation has a credit rating of at least Baa by Moody’s, or BBB by Standard & Poor’s Financial Services LLC (S&P). The Fund may invest up to 20% of the Fund’s total assets in securities that generate interest that is subject to federal and Minnesota alternative minimum tax (AMT). In normal circumstances, the Fund does not intend to invest more than 5% of its assets in instruments other than Municipal Obligations.

The Fund intends to emphasize investments in Minnesota Municipal Obligations with long-term maturities in order

What are the Fund’s principal investment strategies?

to maintain an average portfolio maturity of 20 to 30 years. The average portfolio maturity, however, may be shortened from time to time depending upon market conditions. As a result, the Fund’s portfolio at any given time may include both long- and intermediate-term Minnesota Municipal Obligations.

The Fund may also, as a matter of non-fundamental policy: (1) invest up to 20% of its total assets in unrated Minnesota Municipal Obligations determined by the Manager to be of comparable quality to investment grade rated Minnesota Municipal Obligations; (2) invest up to 20% of its net assets in municipal bonds that are rated Ba1/BB+ or lower or that are unrated but judged to be of comparable quality by the Manager; (3) continue to hold Municipal Obligations that have been downgraded by Moody’s or S&P below investment grade after purchase, subject to the Fund’s policy to invest no more than 20% of its net assets in Municipal Obligations rated below investment grade; and (4) purchase Minnesota Municipal Obligations on a “when-issued” basis and purchase or sell Minnesota Municipal Obligations on a “forward commitment” basis in order to acquire the security or to hedge against anticipated changes in interest rates and prices.

The Fund may invest in advanced refunded bonds, escrow secured bonds or defeased bonds.

In addition, the Fund may invest in Municipal Obligations issued by or on behalf of territories of the United States – such as Guam, the U.S. Virgin Islands or Puerto Rico – that are exempt from Minnesota and federal income tax to the extent that not more than 5% of the Fund’s exempt interest dividends are derived from such obligations, subject to the Fund’s fundamental investment policy to invest 80% of its net assets in Minnesota municipal obligations. As a matter of policy, the Fund will seek to derive at least 95% of its exempt-interest dividends from Minnesota Municipal Obligations in order to qualify to pay tax-exempt dividends on income from Minnesota Municipal Obligations.

The Fund may invest up to 5% of its net assets in Minnesota Municipal Obligations whose rates vary inversely with changes in market rates of interest (so-called “inverse floaters”).

The Fund may invest in custodial receipts or certificates that evidence ownership of future interest payments, principal payments or both on certain municipal securities.

and possessions of the United States that are exempt from federal income tax.

The Fund invests its assets in securities with maturities of various lengths, depending on market conditions, but will have a dollar-weighted average effective maturity of between 20 and 30 years. The Manager will adjust the average maturity of the bonds in the Fund’s portfolio to attempt to provide a current tax-exempt income, consistent with preservation of capital. The Fund may focus its investments in certain types of bonds or in a certain segment of the municipal bond market when the supply of bonds in other sectors do not suit its investment needs.

The Fund may invest without limit in advance refunded bonds.

The Fund may invest without limitation in high-quality, short-term tax-free instruments.

aggregates of debt securities or indices of interest rates or prices thereof or other financial indices and on futures contracts (collectively, Hedging Transactions). The Fund intends to engage in Hedging Transactions if it appears advantageous to the Manager to do so in order to pursue the Fund’s investment objective, to seek to hedge against the effects of market conditions and to seek to stabilize the value of its assets.

The Fund may enter into interest rate swaps and the purchase and sale of interest rate caps and floors. The Fund expects to enter into these transactions primarily to preserve a return or spread on a particular investment or portion of its portfolio, to manage the average weighted maturity of the Fund’s portfolio or to protect against any increase in the price of securities the Fund anticipates purchasing. The Fund intends to use these transactions as a hedge and not as a speculative investment. The Fund will not enter into any interest rate transaction unless the unsecured senior debt or the claims-paying ability of the other party to the transaction is rated at least “A” or the equivalent by at least one nationally recognized rating organization at the time of entering into the transaction. The Fund may enter into any amount of interest rate swaps. The Fund may not sell interest rate caps or floors based on securities that it does not own. The aggregate purchase price of caps and floors held by the Fund may not exceed 5% of the Fund’s assets. However, the Fund may sell (i.e., write) caps and floors without limitation, as long as it designates on the Fund’s books liquid assets in an amount sufficient to cover its obligations under the cap or floor.

The Fund may purchase put options (puts) that relate to Municipal Obligations (whether or not it holds such securities in its portfolio) or futures on such securities. The Fund may also write put options, but only on a secured basis, which means that the Fund will designate on its books cash or U.S. government securities in an amount not less than the exercise price of the option at all times during the option period. The Fund may purchase put options to hedge against a decline in the value of its portfolio. By using put options in this way, the Fund will reduce any profit it might otherwise have realized in the underlying security by the amount of the premium paid for the put option and by transaction costs. The Fund may purchase puts that relate to Minnesota Municipal Obligations or futures on Minnesota Municipal Obligations. The Fund may also sell puts on Minnesota

The Fund may invest in zero coupon bonds.

Municipal Obligations or futures on Minnesota Municipal Obligations if the Fund’s continuing obligations on such puts are secured by assets designated on the Fund’s books consisting of cash or liquid debt securities having an aggregate value not less than the exercise price. The Fund will not sell puts if, as a result, more than 50% of the Fund’s assets would be required to cover its potential obligation under its hedging and other investment transactions.

In order to reduce fluctuations in NAV, the Fund may sell or purchase call options (calls) on Municipal Obligations that are traded on U.S. securities exchanges and in the over-the-counter markets and related futures on such securities. The Fund may purchase call options to hedge against an increase in the price of securities that the Fund anticipates purchasing in the future. The Fund may sell or purchase calls on Minnesota Municipal Obligations that are traded on the U.S. securities exchanges and in the over-the-counter markets. The Fund may also sell or purchase calls on futures contracts on those Minnesota Municipal Obligations. The Fund will only write (sell) calls on securities or futures contracts it owns, or will designate on the Fund’s books liquid assets in an amount sufficient to purchase the underlying security or futures contract, adjusted to changes in market prices on a daily basis. The Fund may purchase call options to the extent that premiums paid by the Fund do not aggregate more than 2% of the Fund’s total assets.

The Fund may also purchase and write call and put options on securities indices.

To the extent that over-the-counter options are deemed to be illiquid, they are subject to the Fund’s limitation that a maximum of 15% of its net assets be invested in illiquid securities.

The Fund may invest in a temporary defensive manner when the Manager believes that the Fund will be affected by adverse market conditions. When investing in this manner, the Fund may hold all or a substantial part of its assets in short-term, high quality securities which may be either tax-exempt or taxable. The Fund may invest only in taxable temporary investments that are U.S. Government securities. To the extent that the Fund

extent that the Fund holds such investments, it may be unable to achieve its investment objective.

invests in a temporary defensive manner, the Fund may not be able to achieve its investment objective.

Portfolio trading will be undertaken principally to accomplish the Fund’s objective in relation to actual and anticipated movements in the general level of interest rates. In addition, a security may be sold and another security of comparable quality purchased at approximately the same time to take advantage of what the Manager believes to be a temporary price disparity between the two securities. The Fund may also engage to a limited extent in short-term trading consistent with its investment objective.

The Fund is free to dispose of portfolio securities at any time, subject to complying with the Code and the 1940 Act, when changes in circumstances or conditions make such a move desirable in light of the Fund’s investment objective. The Fund will not attempt to achieve or be limited to a predetermined rate of portfolio turnover. The Fund anticipates that its annual portfolio turnover will not exceed 100%. However, the rate of turnover will not be a limiting factor when the Fund deems it desirable to sell or purchase securities. Therefore, depending on market conditions, the annual portfolio turnover rate of the Fund may exceed 100% in particular years.

Principal Investment Risks. Investing in any closed-end fund involves the risk that you may lose part or all of the money you invest. Over time, the value of your investment in a Fund will increase and decrease according to changes in the value of the securities in the Fund’s portfolio. An investment in the Fund may not be appropriate for all investors. Each Fund’s principal risks, as listed in their Annual Reports, are included below. [Neither Fund has any restrictions on its present or future ability to pay dividends with respect to any class of securities.]

The principal investment risks for the Acquired Fund and Acquiring Fund are similar, except that the Acquired Fund is subject to a greater extent of specific Minnesota Municipal Obligations risk. Both Funds are subject to interest rate risk, high yield (junk bond) risk, credit risk, call risk, net asset value risk, market risk,

industry and sector risk, geographic concentration risk, leveraging risk, government and regulatory risk, alternative minimum tax risk, liquidity risk, IBOR risk, and active management and selection risk. Even though the Acquired Fund and Acquiring Fund share many of the same types of risks, the degree of such risks may vary. The Acquired Fund is also subject to Minnesota municipal obligations risk and derivatives risk and the Acquiring Fund is subject to security risk. Each Fund’s relative risk/return profile cannot be determined by the following risk descriptions and comparison alone. However, the Acquired Fund and Acquiring Fund share a similar risk/return profile.

Risk	Acquired Fund	Acquiring Fund
Fixed income related risks:
Interest rate risk	X	X
High yield (junk bond) risk	X	X
Credit risk	X	X
Call risk	X	X
Minnesota Municipal Obligations risk	X

Other risks:
Net asset value discount risk	X	X
Market risk	X	X
Security risk		X
Industry and sector risk	X	X
Geographic concentration risk	X	X
Leveraging risk	X	X
Alternative minimum tax risk	X	X
Derivatives risk	X
Government and regulatory risk	X	X
Liquidity risk	X	X
IBOR risk	X	X
Active management and selection risk	X	X

Fixed Income Related Risks

Minnesota Municipal Obligations risk. (Acquired Fund) The risk that the value of Minnesota Municipal Obligations may be adversely affected by new legislation in Minnesota, regional or local economic conditions, and differing levels of supply and demand for municipal bonds. A fund holding Minnesota Municipal Obligations is susceptible to political, economic or regulatory factors affecting issuers of Minnesota Municipal Obligations. There can be no assurance that current or future statewide or regional difficulties, and the resulting impact on State or local governmental finances generally, or other factors, affecting State or local governmental finances, will not adversely affect the market value of Minnesota Municipal Obligations held by a fund, the ability of a fund to manage its portfolio consistent with its investment policies or the ability of particular obligors to make timely payments of debt service on (or relating to) those obligations.

Other Risks

Net asset value discount risk. (Acquired Fund and Acquiring Fund) The risk that a closed-end investment company will trade at a discount from its net asset value (NAV).

a state tax authority as taxable, and/or future legislative, administrative, or court actions could cause interest from a tax-exempt security to become taxable, possibly retroactively.

Liquidity risk. (Acquired Fund and Acquiring Fund) The possibility that investments cannot be readily sold within seven calendar days at approximately the price at which a fund has valued them.

Fundamental Investment Restrictions. The Acquired Fund and Acquiring Fund have adopted materially identical fundamental investment restrictions. Each Fund is subject to the following restrictions that are “fundamental,” which means that they may not be changed without the approval of the holders of a majority of the outstanding Common Shares and preferred shares, if any, voting together as a single class, and of the holders of a majority of the outstanding preferred shares, if any, voting as a separate class. Except with respect to each Fund’s borrowing restriction, these fundamental investment restrictions and limitations will apply only at the time of purchase of securities and will not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of an acquisition of securities.

Borrowing and Senior Securities. Each Fund may not borrow money or issue senior securities, except as the 1940 Act, any rule or order thereunder, or SEC staff interpretation thereof, may permit.

Effects of Leverage. Assuming that leverage will represent approximately 30.1% of the Combined Fund’s total managed assets and that the Combined Fund will bear expenses relating to that leverage at an average annual rate of 1.10%, the income generated by the Combined Fund’s portfolio (net of estimated expenses) must exceed 0.33% in order to cover the expenses specifically related to the Combined Fund’s estimated use of leverage. Of course, these numbers are merely estimates used for illustration. Actual leverage expenses will vary frequently and may be significantly higher or lower than the rate estimated above.

The following table is furnished in response to requirements of the SEC. It is designed to illustrate the effect of leverage on Common Share total return, assuming investment portfolio total returns (comprised of income and changes in the value of securities held in the Combined Fund’s portfolio) of (10)%, (5)%, 0%, 5% and 10%. These assumed investment portfolio returns are hypothetical figures and are not necessarily indicative of the investment portfolio returns experienced or expected to be experienced by the Combined Fund. The table further reflects the use of leverage representing [____]% of the Combined Fund’s total managed assets and the Combined Fund’s currently projected annual leverage expenses of [____]%.

Assumed Return on Portfolio (Net of Expenses)	-10%	-5%	0%	5%	10%
Corresponding Return to Common Shareholders	-15.04%	-7.89%	-0.73%	6.42%	13.57%

Common Share total return is composed of two elements: the Common Share dividends paid by the Combined Fund (the amount of which is largely determined by the net investment income of the Combined Fund) and gains or losses on t

SEC Form PREM14C filed by Delaware Investments Colorado Municipal Income Fund, Inc