abrdn Income Credit Strategies Fund (ACP) Announces Change to Monthly Distribution Expected to be Maintained for at Least the Next 12 Months
abrdn Income Credit Strategies Fund (ACP) has announced a reduction in its monthly distribution from US 10 cents to US 7.75 cents per share, effective January 10, 2025. This adjustment changes the annualized distribution rate from 18% to 14% based on NAV as of December 9, 2024. The Fund intends to maintain this new distribution level for at least the next 12 months, barring significant market changes.
The Investment Adviser believes this reduced distribution better reflects the Fund's sustainable earnings. The decision considers current earnings, economic outlook, and tightened credit spreads. Despite the reduction, the Board and Investment Adviser remain committed to maintaining a premium income level within their peer group.
Il Fondo abrdn Income Credit Strategies (ACP) ha annunciato una riduzione della sua distribuzione mensile da 10 centesimi statunitensi a 7,75 centesimi per azione, a partire dal 10 gennaio 2025. Questa modifica porta il tasso di distribuzione annualizzato dal 18% al 14% basato sul NAV al 9 dicembre 2024. Il Fondo intende mantenere questo nuovo livello di distribuzione per almeno i prossimi 12 mesi, salvo significative variazioni di mercato.
Il Consulente per gli Investimenti ritiene che questa distribuzione ridotta migliori il riflesso dei guadagni sostenibili del Fondo. La decisione considera i guadagni attuali, le prospettive economiche e l'inasprimento degli spread di credito. Nonostante la riduzione, il Consiglio e il Consulente per gli Investimenti rimangono impegnati a mantenere un livello di reddito premium all'interno del loro gruppo di pari.
El Fondo abrdn Income Credit Strategies (ACP) ha anunciado una reducción en su distribución mensual de 10 centavos estadounidenses a 7,75 centavos por acción, con efecto a partir del 10 de enero de 2025. Este ajuste cambia la tasa de distribución anualizada del 18% al 14% basado en el NAV del 9 de diciembre de 2024. El Fondo tiene la intención de mantener este nuevo nivel de distribución durante al menos los próximos 12 meses, a menos que haya cambios significativos en el mercado.
El Asesor de Inversiones considera que esta distribución reducida refleja mejor las ganancias sostenibles del Fondo. La decisión toma en cuenta las ganancias actuales, las perspectivas económicas y el endurecimiento de los márgenes de crédito. A pesar de la reducción, la Junta y el Asesor de Inversiones siguen comprometidos a mantener un nivel de ingresos premium dentro de su grupo de pares.
abrdn 소득 신용 전략 기금 (ACP)은 2025년 1월 10일부터 주당 미국 10센트에서 7.75센트로 월 배당금을 줄이겠다고 발표했습니다. 이 조정으로 2024년 12월 9일 기준 NAV를 기준으로 연간 배당률이 18%에서 14%로 변경됩니다. 기금은 향후 12개월 동안 이 새로운 배당 수준을 유지할 계획입니다, 단 중요한 시장 변화가 발생하지 않는 한.
투자 고문은 이 감소된 배당금이 기금의 지속 가능한 수익을 더 잘 반영한다고 믿고 있습니다. 이 결정은 현재 수익, 경제 전망 및 긴축된 신용 스프레드를 고려합니다. 배당금이 줄어들었음에도 불구하고 이사회와 투자 고문은 동료 그룹 내에서 프리미엄 소득 수준을 유지할 수 있도록 계속 노력하고 있습니다.
Le Fonds abrdn Income Credit Strategies (ACP) a annoncé une réduction de sa distribution mensuelle de 10 cents US à 7,75 cents par action, effective à partir du 10 janvier 2025. Cet ajustement modifie le taux de distribution annualisé de 18 % à 14 % basé sur la NAV au 9 décembre 2024. Le Fonds entend maintenir ce nouveau niveau de distribution pendant au moins les 12 mois à venir, sauf changements significatifs sur le marché.
Le conseiller en investissement estime que cette distribution réduite reflète mieux les gains durables du Fonds. La décision prend en compte les gains actuels, les perspectives économiques et le resserrement des spreads de crédit. Malgré la réduction, le Conseil et le conseiller en investissement restent engagés à maintenir un niveau de revenu premium au sein de leur groupe de pairs.
Der abrdn Income Credit Strategies Fund (ACP) hat eine Reduzierung seiner monatlichen Ausschüttung von 10 US-Cent auf 7,75 US-Cent pro Aktie bekannt gegeben, die am 10. Januar 2025 in Kraft tritt. Diese Anpassung ändert die annualisierte Ausschüttungsrate von 18% auf 14% basierend auf dem NAV zum 9. Dezember 2024. Der Fonds beabsichtigt, dieses neue Ausschüttungsniveau mindestens für die nächsten 12 Monate beizubehalten, es sei denn, es treten signifikante Marktveränderungen auf.
Der Anlageberater ist der Ansicht, dass diese reduzierte Ausschüttung die nachhaltigen Erträge des Fonds besser widerspiegelt. Die Entscheidung berücksichtigt die aktuellen Erträge, die wirtschaftliche Aus outlook und die gestrafften Kreditspreads. Trotz der Reduzierung bleibt der Vorstand und der Anlageberater verpflichtet, ein Premium-Einkommensniveau innerhalb ihrer Vergleichsgruppe aufrechtzuerhalten.
- Fund commits to maintaining the new distribution level for at least 12 months
- Distribution rate remains premium compared to peer group at 14% annualized
- Monthly distribution reduced by 22.5% (from $0.10 to $0.0775 per share)
- Annualized distribution rate decreased from 18% to 14%
- Tightened credit spreads indicating decreased total return potential
Insights
The 22.5% reduction in monthly distribution from
The decision appears driven by tightening credit spreads in the high-yield market, suggesting reduced opportunities for excess returns above income. While the fund maintains a commitment to premium income generation, this prudent adjustment better aligns with current market conditions and sustainable earning capacity. For investors, while the immediate impact is a lower yield, this more sustainable distribution level reduces the risk of future cuts and potential NAV erosion from overdistribution.
Within the closed-end fund landscape, this distribution reduction signals broader market dynamics affecting high-yield investments. The decision to maintain the new rate for at least 12 months provides stability and transparency for investors. The reduction to
The management's acknowledgment of tightening credit spreads and decreased total return potential reflects realistic market assessment. This proactive adjustment, rather than waiting for potential strain on the fund's resources, demonstrates responsible stewardship. The focus on sustainable distributions over maintaining artificially high yields should support long-term fund health, though near-term trading prices may experience pressure as yield-focused investors adjust positions.
PHILADELPHIA, PA / ACCESSWIRE / December 10, 2024 / abrdn Income Credit Strategies Fund (NYSE:ACP) (the "Fund"), a closed-end fund, announced today that it has reduced its monthly distribution from US 10 cents per share to US 7.75 cents per share, commencing with the distribution payable on January 10, 2025 to shareholders of record as of December 30, 2024 (ex-dividend date December 30, 2024).
This represents a change in the annualized distribution rate from
The Fund's distribution policy is to provide investors with a stable monthly distribution out of current income, supplemented by realized capital gains and, to the extent necessary, paid-in capital, which is a non-taxable return of capital. The Fund's monthly distribution has remained unchanged since September 2020.
The Investment Adviser has advised the Fund's Board of Trustees (the "Board") that it believes that the reduced monthly distribution is more consistent with sustainable earnings of the Fund. The current reduction in distribution takes into account many factors, including, but not limited to, current and expected earnings and abrdn Investments Limited, the Investment Adviser, economic and market outlook.
In approving the decrease to the distribution rate, the Board considered, among other things, the strong long-term past performance of the investment advisor as well as their outlook on the market going forward. The investment advisor is optimistic on both the near term and long-term prospects for returns within the High Yield market, with the combination of an attractive level of income and the advisor's historic ability to generate capital appreciation in a range of market outcomes as the drivers of their outlook. However, as credit spreads have tightened over recent years, the Board believes it to be prudent to lower the distribution rate to reflect a decreased total return potential in excess of income over the near term.
Both the Board and the Investment Advisor remain committed to offering a product with a premium level of income, and that will not change. The pro forma level of distribution is expected to continue to stand out from the competitive set within the peer group while allowing the advisor the flexibility to invest in assets that put the best interests of the investor base as the top priority.
Circular 230 disclosure: To ensure compliance with requirements imposed by the U.S. Treasury, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code of 1986, as amended, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
In the United States, abrdn is the marketing name for the following affiliated, registered investment advisers: abrdn Inc., abrdn Investments Limited, and abrdn Asia Limited.
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 NAV of the Fund's portfolio. There is no assurance that the Fund will achieve its investment objective. Past performance does not guarantee future results.
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For More Information Contact:
abrdn U.S. Closed-End Funds
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
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