abrdn Income Credit Strategies Fund 5.25% Series A Perpetual Preferred Shares Declares Quarterly Dividend
- None.
- None.
Insights
The declaration of a cash distribution for abrdn Income Credit Strategies Fund's Series A Perpetual Preferred Shares represents a tangible return on investment for shareholders. Given the 5.250% dividend rate and the A2 rating by Moody's, this indicates a stable income-generating asset with a moderate level of credit risk. Investors typically view such announcements positively, as they demonstrate the fund's ability to generate and distribute income.
However, it is essential to assess the sustainability of these distributions. If they are frequently derived from capital gains or return of capital rather than ordinary income, it could suggest the fund is selling assets or returning investor's own money instead of generating income through its operations. This could impact the fund's long-term value and should be monitored closely by investors.
From a taxation perspective, the nature of the distributions is significant. Distributions that are classified as ordinary income are taxed at different rates than those classified as capital gains. The tax treatment affects the after-tax return for investors, which is a crucial consideration for income-focused strategies. The Fund's notice that the actual amounts and sources for tax reporting will depend on the Fund's investment experience and may be subject to changes based on tax regulations underscores the need for investors to stay informed about the tax implications of their investments.
It is also important for investors to note the timeline for receiving the Form 1099-DIV, which will clarify the composition of the distributions for tax purposes. Investors should plan for potential tax obligations associated with the distributions received throughout the 2024 calendar year.
The Series A Perpetual Preferred Shares issuance and subsequent distributions highlight the fund's strategy to attract and retain investors seeking steady income streams. The quarterly distribution frequency is a common practice that aligns with investor expectations for regular income. The market's reception to such announcements can be influenced by current economic conditions, interest rate trends and market liquidity.
Furthermore, the Moody's A2 rating places the fund within an investment-grade category, which may appeal to risk-averse investors. However, shifts in market sentiment or changes in the fund's creditworthiness could influence the trading price of the preferred shares. Monitoring the fund's performance relative to the broader market and its peer group provides context to the fund's competitive position and potential market impact.
PHILADELPHIA, PA / ACCESSWIRE / March 11, 2024 / The Board of Trustees of abrdn Income Credit Strategies Fund (the "Fund"), has declared a cash distribution of
The Series A Preferred Shares trade on the NYSE under the symbol "ACP PRA", are rated "A2" by Moody's Investors Service and have an annual dividend rate of
Distributions may be paid from sources of income other than ordinary income, such as net realized short-term capital gains, net realized long-term capital gains and return of capital. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund's investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. In January 2025, a Form 1099-DIV will be sent to shareholders, which will state the amount and composition of distributions and provide information with respect to their appropriate tax treatment for the 2024 calendar year.
You should not draw any conclusions about the Fund's investment performance from the amount of this distribution.
In the United States, abrdn is the marketing name for the following affiliated, registered investment advisers: abrdn Inc., abrdn Investments Limited, abrdn Asia Limited, abrdn Private Equity (Europe) Limited, and abrdn ETFs Advisors LLC.
Closed-end funds are traded on the secondary market through one of the stock exchanges. The Fund's investment return and principal value will fluctuate so that an investor's shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value (NAV) of the fund's portfolio. There is no assurance that the Fund will achieve its investment objective.
www.abrdn.com/en-us/cefinvestorcenter
For More Information Contact:
abrdn Inc.
Investor Relations
1-800-522-5465
Investor.Relations@abrdn.com
SOURCE: Abrdn Income Credit Strategies Fund
View the original press release on accesswire.com
FAQ
What is the cash distribution per share declared by abrdn Income Credit Strategies Fund for its Series A Preferred Shares?
When is the distribution payable to holders of abrdn Income Credit Strategies Fund's Series A Preferred Shares?
Under what symbol do the Series A Preferred Shares of abrdn Income Credit Strategies Fund trade on the NYSE?
What is the annual dividend rate for abrdn Income Credit Strategies Fund's Series A Preferred Shares?
When were the Series A Preferred Shares issued and at what price?
What sources of income may be used for distributions by abrdn Income Credit Strategies Fund?
