DALLAS, July 29, 2019 /PRNewswire/ -- The Highland Income
Fund (NYSE: HFRO) ("HFRO" or the "Fund") announced today the
pricing of an offering of 5.4 million 5.375% Series A Cumulative
Preferred shares (NYSE: HFRO.PR.A) with an aggregate liquidation
value of $135 million. Additionally,
Highland Capital Management Fund Advisors, L.P., the Fund's
adviser, granted the underwriters a 30-day option to purchase up to
an additional $20.25 million to cover
any overallotments. The offering is expected to close on
Thursday, August 1, 2019, subject to
customary closing conditions.
The Fund expects to use the net proceeds from the offering to
purchase portfolio securities in accordance with its investment
objectives and policies. It may also pay down a portion of the
existing borrowings from the Fund's $350
million credit facility.
The Series A Preferred shares are perpetual, non-callable for
five years, and have a liquidation preference of $25 per share. Distributions are scheduled
quarterly, with payments beginning on September 30, 2019. Series A Preferred shares are
expected to commence trading on the New York Stock Exchange
("NYSE") within 30 days of the date of issuance. Moody's Investors
Service has assigned an A1 rating to the preferred shares.
The offering was led by Morgan Stanley & Co. LLC, with
additional participation from Jefferies LLC.
A registration statement relating to these securities was
filed with the Securities and Exchange Commission and is effective.
This press release is not an offering, which can only be made by a
prospectus. Investors should consider the Fund's investment
objective, risks, charges, and expenses carefully before investing.
The Fund's prospectus supplement relating to the Series A Preferred
and the Fund's base prospectus contain this and additional
information about the Fund and the Series A Preferred, and should
be read carefully before investing.
About the Highland Income Fund
The Highland Income Fund is a closed-end fund managed by
Highland Capital Management Fund Advisors, L.P. that seeks to
provide a high level of current income, consistent with the
preservation of capital in a registered fund format. The Fund
declares and pays dividends of investment income monthly. For more
information visit www.highlandfunds.com/income-fund/.
About Highland Capital Management Fund Advisors, L.P.
Highland Capital Management Fund Advisors, L.P.is an affiliated
adviser of Highland Capital Management, L.P. (together with its
affiliates "Highland"), a multibillion-dollar global alternative
investment manager. A pioneer in the leveraged loan market, the
firm has evolved over 25 years, building on its credit expertise
and value-based approach to expand into other asset classes. Today,
Highland operates a diverse investment platform, serving both
institutional and retail investors worldwide. In addition to high
yield credit, Highland's investment capabilities include public
equities, real estate, private equity and special situations,
structured credit, and sector- and region-specific verticals built
around specialized teams. For more information
visit www.highlandfunds.com.
Investors should consider the investment objectives,
risks, charges and expenses of the Highland Income Fund carefully
before investing. This and other information can be found in the
Fund's prospectus, which may be obtained by calling 1-800-357-9167
or visiting www.highlandfunds.com. Please read the prospectus
carefully before you invest.
Effective May 20, 2019, the
Fund changed its name to Highland Income Fund and expanded its
investment strategy by removing the Fund's policy of, under normal
market circumstances, investing at least 80% of its net assets in
floating-rate loans and other securities deemed to be floating-rate
instruments. See the March 20, 2019
press release for further details regarding the Fund's name change
and expanded investment strategy: "Highland Floating
Rate Opportunities Fund Announces Name Change to Highland Income
Fund"
No assurance can be given that the Fund will achieve its
investment objectives.
Shares of closed-end investment companies frequently trade at
a discount to net asset value. The price of the Fund's shares is
determined by a number of factors, several of which are beyond the
control of the Fund. Therefore, the Fund cannot predict whether its
shares will trade at, below or above net asset value. Past
performance does not guarantee future results.
Closed-End Fund Risk. The Fund is a
closed-end investment company designed primarily for long-term
investors and not as a trading vehicle. No assurance can be given
that a shareholder will be able to sell his or her shares on the
NYSE when he or she chooses to do so, and no assurance can be given
as to the price at which any such sale may be effected.
Credit Risk. The Fund may invest all or
substantially all of its assets in Senior Loans or other securities
that are rated below investment grade and unrated Senior Loans
deemed by Highland to be of comparable quality. Securities rated
below investment grade are commonly referred to as "high yield
securities" or "junk securities." They are regarded as
predominantly speculative with respect to the issuing company's
continuing ability to meet principal and interest payments.
Non-payment of scheduled interest and/or principal would result in
a reduction of income to the Fund, a reduction in the value of the
Senior Loan experiencing non-payment and a potential decrease in
the NAV of the Fund. Investments in high yield Senior Loans and
other securities may result in greater NAV fluctuation than if the
Fund did not make such investments.
Senior Loans Risk. The risks associated
with senior loans are similar to the risks of below investment
grade securities in that they are considered speculative. In
addition, as with any debt instrument, senior loans are also
generally subject to the risk of price declines and to increases in
prevailing interest rates. Senior loans are also subject to the
risk as interest rates rise, the cost of borrowing increases, which
may also increase the risk and rate of default. In addition, the
interest rates of floating rate loans typically only adjust to
changes in short-term interest rates; long term interest rates can
vary dramatically from short term interest rates. Therefore, senior
loans may not mitigate price declines in a rising long-term
interest rate environment.
Real Estate Industry Risk: Issuers principally
engaged in real estate industry, including real estate investment
trusts, may be subject to risks similar to the risks associated
with the direct ownership of real estate, including:
(i) changes in general economic and market conditions;
(ii) changes in the value of real estate properties;
(iii) risks related to local economic conditions, overbuilding
and increased competition; (iv) increases in property taxes
and operating expenses; (v) changes in zoning laws;
(vi) casualty and condemnation losses; (vii) variations
in rental income, neighborhood values or the appeal of property to
tenants; (viii) the availability of financing and
(ix) changes in interest rates and leverage.
Illiquidity of Investments Risk. The
investments made by the Fund may be illiquid, and consequently the
Fund may not be able to sell such investments at prices that
reflect the Investment Adviser's assessment of their value or the
amount originally paid for such investments by the Fund.
Ongoing Monitoring Risk. On behalf of the
several Lenders, the Agent generally will be required to administer
and manage the Senior Loans and, with respect to collateralized
Senior Loans, to service or monitor the
collateral. Financial difficulties of Agents can pose a
risk to the Fund.
Media Contact
Lucy Bannon
lbannon@highlandcapital.com
1-972-419-6272
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SOURCE Highland Capital Management Fund Advisors, L.P.