Investment Grade Municipal Income Fund Inc. and Insured Municipal Income Fund Inc....

Investment Grade Municipal Income Fund Inc. and Insured Municipal Income Fund Inc. Announce Board Approval to Implement a Tender Option Bond Program and the Intention to Partially Redeem Auction Preferred Shares

NEW YORK--(Business Wire)--
The Boards of Directors of Investment Grade Municipal Income Fund
Inc. (NYSE: PPM) and Insured Municipal Income Fund Inc. (NYSE: PIF)
(the "Funds"), each a registered closed-end management investment
company, have approved the implementation of a tender option bond
(TOB) program to partially restructure each Fund's leverage, while
currently maintaining the overall amount of leverage for the Fund. It
is intended that the proceeds from the program will be used to finance
a partial redemption of each Fund's auction preferred shares (APS). In
light of the continuing failures of APS auctions that have resulted in
a loss of liquidity for APS holders and the resulting increased cost
of leverage for the Funds, each Board has discussed with the Funds'
investment adviser, UBS Global Asset Management (Americas) Inc. (the
"Investment Adviser"), possible actions and concluded that the
implementation of a TOB program could help partially resolve the
situation in a manner that is in the best interests of the Funds.

In June, the Boards authorized the Investment Adviser to enter
into discussions with one or more investment banks or other firms to
explore the terms on which the Funds could use TOBs as a source of
leverage. Based on the outcome of those discussions and with the
Investment Adviser's recommendation, each Board authorized the TOB
program, which would permit each Fund to invest up to 15% of its total
assets into such a program. The proceeds from the TOB program would be
used to redeem a portion of each Fund's APS in order to provide
partial liquidity to APS holders. It is expected that the TOB program
would provide a lower relative cost of leverage over time (based on a
comparison of the anticipated costs of the TOB program with the
maximum rates payable due to the failed APS auctions) and future
increased flexibility in managing the extent to which a Fund is
leveraged.

A TOB program typically would be structured as follows: a Fund
would transfer high quality municipal bonds from its portfolio to a
special purpose trust or a similar vehicle. The trust would then issue
two tranches of securities--short-term floating rate notes, or
"floaters," and inverse floating rate certificates, or "inverse
floaters." The interest on the floaters and the inverse floaters, as
well as costs incurred by the trust (such as the costs associated with
establishing the trust and providing a facility to assure liquidity to
the holders of the floaters), would normally be paid by the trust from
the interest it receives on the underlying municipal bond.

Floaters would be issued at par and pay tax-free variable rates,
typically reset weekly (either through a remarketing or by some spread
over a reference rate or index), and the holders of the floaters
typically have the option to tender their floaters to the issuing
trust for redemption at par at each reset date. The interest rates
payable on inverse floaters would move in the opposite direction from
the rates payable on the floaters. For the municipal bonds
transferred, a Fund would receive the inverse floaters and an amount
of cash that would be used to redeem a portion of one or more series
of the Fund's APS and be used for investment purposes. By holding the
inverse floaters, a Fund would continue to receive the interest paid
by the underlying municipal bond in excess of the interest paid by the
trust on the floaters and other costs associated with the transaction.

The use of TOBs by a Fund for investment purposes presents certain
risks, including leverage risk, interest rate risk (a rise in
short-term rates could result in an increase of the interest payable
on the floaters and a corresponding decrease in the interest payable
on the inverse floaters held by the Fund), both of which are in many
ways comparable to the risks presented by the current use of APS, as
well as market risk (the risk that participants may not be interested
in purchasing or continuing to hold the floaters issued by the trust).

While each Board has approved the implementation of a TOB program
and intends to authorize the redemption of a portion of each Fund's
APS, it will take time to institute the program. Furthermore, any
future partial redemption of each Fund's APS would occur only after
the Board has approved the specifics of the redemption and a notice
containing details about the redemption has been issued by the Fund.
Such redemption would be effected in accordance with the Fund's
governing documents.

We recognize shareholders' continuing concerns regarding the
ongoing issues relating to the failed APS auctions and the resulting
loss of liquidity for preferred shareholders. While the use of TOBs in
the Funds could provide a partial solution towards restoring
liquidity, each Board and the Investment Adviser will continue to
evaluate other alternatives that may be in the best interest of the
Funds, including the possibility of restructuring remaining APS in a
manner that would make the APS eligible for investment by money market
funds. The implementation of a TOB program is subject to certain
conditions, including market conditions under which TOBs will result
in leverage at a reasonable price and the use of TOBs remaining
appropriate in light of other sources of possible leverage.

FORWARD LOOKING STATEMENTS

Certain statements made above may be forward-looking statements.
Actual future results or occurrences may differ significantly from
those anticipated in any forward-looking statements due to numerous
factors. The Investment Adviser and the Funds, and their affiliates,
undertake no responsibility to update publicly or revise any
forward-looking statements. The inclusion of any statement in this
release does not constitute an admission that the events or
circumstances described in such statement are material.

UBS Global Asset Management
Closed-End Funds Desk, 888-793 8637

Copyright Business Wire 2008