Fitch Places ST Rtgs of 4 Nuveen Muni Funds on Rtg Watch Negative Following Barclays Watch Negative

NEW YORK--(BUSINESS WIRE)--

Fitch Ratings has placed on Rating Watch Negative the 'F1+' short-term ratings assigned to variable rate demand preferred shares (VRDPs) issued by four municipal bond closed-end funds managed by Nuveen Fund Advisors, Inc. (NFA). The 'AAA' long-term ratings assigned to the VRDPs are unaffected by this action. The affected funds are:

Nuveen Premier Municipal Income Fund, Inc. NPF

--$127,700,000 of VRDPs, series 1, due May 2041, with a liquidation preference of $100,000 per share, rated 'AAA' / 'F1+' Rating Watch Negative;

Nuveen Premium Income Municipal Fund 2, Inc. NPM

--$489,500,000 of VRDPs, series 1, due May 2041, with a liquidation preference of $100,000 per share, rated 'AAA' / 'F1+', Rating Watch Negative;

Nuveen Investment Quality Municipal Fund, Inc. NQM

--$211,800,000 of VRDPs, series 1, due May 2041, with a liquidation preference of $100,000 per share, rated 'AAA' / 'F1+', Rating Watch Negative;

Nuveen Select Quality Municipal Fund, Inc. NQS

--$252,500,000 of VRDPs, series 1, due May 2041, with a liquidation preference of $100,000 per share, rated 'AAA' / 'F1+', Rating Watch Negative.

KEY RATING DRIVERS

The short-term ratings assigned to the VRDPs are placed on Rating Watch Negative following Fitch's placement on Rating Watch Negative of the short-term rating of the liquidity provider, Barclays Bank PLC (Barclays; rated 'AA-/F1+', Rating Watch Negative). The VRDPs have a put feature pursuant to an unconditional purchase agreement provided by Barclays Bank PLC, and as such, the short-term ratings assigned to the VRDPs are directly linked to the short-term creditworthiness of the liquidity provider. Fitch would expect to resolve the Rating Watch Negative on the VRDPs concurrent with the resolution of the Rating Watch Negative status of Barclays.

The long-term ratings assigned to the VRDPs are unchanged at 'AAA', given that the long-term ratings assigned to the shares reflect the sufficiency of the asset coverage and the associated structural protections which require deleveraging in the event of asset coverage declines.

FUND PROFILES

The funds are diversified, closed-end management investment companies regulated by the Investment Company Act of 1940. The funds seek to provide current income exempt from regular federal income tax and to enhance portfolio value relative to the municipal bond market by investing in tax-exempt municipal securities that the investment adviser believes are underrated or undervalued or that represent municipal market sectors that are undervalued. Under normal circumstances, the funds expect to invest at least 80% in assets that are rated at least 'BBB' by Fitch or equivalent.

THE ADVISOR

NFA is investment advisor to the funds, responsible for the funds' overall investment strategy and its implementation. Nuveen Asset Management, LLC is a wholly owned subsidiary of NFA and oversees the day-to-day operations of the fund. NFA is a wholly owned subsidiary of Nuveen Investments. Founded in 1898, Nuveen Investments and its affiliates had approximately $210 billion of assets under management as of June 30, 2011.

RATINGS SENSITIVITY

The ratings assigned to the VRDP shares may be sensitive to material changes in the leverage composition, portfolio credit quality or market risk of the fund. A material adverse deviation from Fitch guidelines for any key rating driver could cause ratings to be lowered by Fitch.

Certain terms of the Minimum VRDP Shares Asset Coverage Test and Effective Leverage Ratio are set in the liquidity and fee agreements, which are renewed on a periodic basis. Changes to these terms that weaken the tests may have negative rating implications.

The short-term ratings assigned to the VRDP shares may also be sensitive to changes in the financial condition of the liquidity provider. A downgrade of the liquidity provider to 'F1' would result in a downgrade of the short-term ratings of the VRDP shares to 'F1' and a downgrade of the liquidity provider to 'F2' would result in a downgrade of the short-term ratings of the VRDP shares to 'F2', absent other mitigants. A downgrade below 'F2', on the other hand, would not necessarily result in a downgrade of the short-term rating of the VRDPs, given the acceleration features in the transaction that would result in a mandatory tender of the VRDPs for purchase by the liquidity provider.

For additional information about Fitch rating guidelines applicable to debt and preferred stock issued by closed-end fund, please review the criteria referenced below, which can be found on Fitch's web site at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

The sources of information used to assess this rating were the public domain and Nuveen Investments.

Applicable Criteria and Related Research:

--'Fitch Lowers UK Support Rating Floors; Downgrades Lloyds, RBS to 'A' (Oct. 13, 2011);

--'Fitch Rates the VRDP Shares of 4 Nuveen Muni Funds 'AAA/F1+' (May 6, 2011);

--'Rating Closed-End Fund Debt and Preferred Stock' (Aug. 16, 2011);

--'Global Rating Criteria for Asset-Backed Commercial Paper' (Nov. 30, 2010).

Applicable Criteria and Related Research:

Rating Closed-End Fund Debt and Preferred Stock

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648840

Global Rating Criteria for Asset-Backed Commercial Paper

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=577965

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