abrdn Income Credit Strategies Fund Announces Closing Date for Acquisition of Assets From First Trust High Income Long/Short Fund and Announces Distribution Payment Details
The abrdn Income Credit Strategies Fund (NYSE:ACP) has announced the closing date for its acquisition of assets from the First Trust High Income Long/Short Fund (NYSE:FSD). The reorganization, approved by FSD shareholders, will finalize on July 19, 2024, assuming all customary conditions are met. This reorganization will result in the cessation of FSD shares trading on the NYSE after the market closes on July 19, 2024. FSD shareholders will receive ACP shares equivalent to the net asset value of their FSD holdings.
Post-reorganization, ACP's combined net assets are projected to be approximately $765.3 million. The merger aims to provide shareholders with benefits such as economies of scale, increased liquidity, and marketability. Additionally, ACP announced a distribution payment of $0.10 per share, payable on July 31, 2024, to shareholders of record as of July 19, 2024.
- Expected combined net assets of $765.3 million post-reorganization
- Potential economies of scale and larger fund size
- Increase in liquidity and marketability of the combined fund
- Distribution payment of $0.10 per share on July 31, 2024
- Shares of FSD will cease trading on the NYSE, potentially affecting liquidity for FSD investors
- Reorganization contingent on the satisfaction of customary closing conditions
Insights
The announcement of the acquisition of assets from First Trust High Income Long/Short Fund (FSD) by abrdn Income Credit Strategies Fund (ACP) is significant for several reasons. First, the increased scale of the combined fund, with net assets expected to reach approximately
Additionally, the reorganization is expected to enhance liquidity and marketability of the fund. This could make it easier for investors to buy and sell shares without significantly affecting the price. Enhanced liquidity can also be attractive to larger institutional investors, who often prefer funds where they can enter and exit positions without causing price volatility.
One important aspect to consider is the cease of trading of FSD shares as of market close on July 19, 2024. Investors holding FSD shares will be issued new shares of ACP based on the net asset value of the shares they hold. It's important for investors to be aware of this transition period and the implications it might have on their investment strategy.
For retail investors, the announced distribution of
From a market research perspective, the reorganization and the subsequent increase in the size of ACP could influence the competitive landscape of closed-end funds in the income and credit strategies space. A larger fund with enhanced liquidity and marketability can attract more investors, possibly leading to tighter spreads between the fund's market price and its net asset value. This could improve the overall valuation of ACP shares.
Furthermore, the combined fund's larger asset base may enhance its bargaining power when negotiating terms with counterparties or when seeking investment opportunities. This could provide ACP with better access to favorable credit investments, translating into potential higher yields for shareholders.
However, it's important to monitor how the integration of the two funds will be managed. Effective integration is important to realizing the anticipated benefits, such as economies of scale and enhanced liquidity. Any operational hiccups could temporarily impact the fund's performance and investor sentiment.
Lastly, the announcement of the distribution payment offers some immediate cash flow to investors, which can be appealing in the current economic environment where income-generating investments are in demand. Nevertheless, investors should remain cautious and not equate distribution announcements with long-term performance guarantees.
PHILADELPHIA, PA / ACCESSWIRE / July 9, 2024 / The Board of Trustees of abrdn Income Credit Strategies Fund (NYSE:ACP) ("ACP" or the "Acquiring Fund") previously announced that shareholders of First Trust High Income Long/Short Fund (NYSE:FSD) ("FSD" or the "Acquired Fund"), advised by First Trust Advisors L.P., have approved the proposed reorganization into ACP ("Reorganization") and today announces that the Reorganization is expected to close at the close of business on July 19, 2024, subject to the satisfaction of customary closing conditions.
To facilitate the Reorganization, it is expected that all shares of FSD will cease trading on the New York Stock Exchange as of market close on Friday, July 19, 2024, and FSD shareholders will be issued new newly issued common shares of ACP with a value equal to the aggregate net asset value of the shares of FSD held by them. The Reorganization will occur based on the relative net asset values of the common shares of FSD. As of July 8, 2024, the combined net assets of ACP following the Reorganization will be approximately
The Reorganization is expected to benefit each fund's shareholders in several important ways, including providing greater opportunities to realize economies of scale by combining the funds' assets resulting in a larger fund. Additionally, the Reorganization is expected to help ensure the viability of the resulting combined fund by increasing scale, liquidity, and marketability of the fund.
Additionally, ACP also announced that the Fund will pay a distribution of US
At the end of each calendar year, a Form 1099-DIV will be sent to shareholders, which will state the amount and composition of ACP's distributions and provide information with respect to their appropriate tax treatment for the prior calendar year.
You should not draw any conclusions about ACP's investment performance from the amount of the distributions.
Important Information
In the United States, abrdn is the marketing name for the following affiliated, registered investment advisers: abrdn Inc., abrdn Investments Limited, abrdn Asia Limited, and abrdn ETFs Advisors LLC.
The information in this press release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Closed-end funds are traded on the secondary market through one of the stock exchanges. The Acquiring 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 Acquiring Fund will achieve its investment objective. Past performance does not guarantee future results.
If you wish to receive this information electronically, please contact Investor.Relations@abrdn.com
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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
When is the closing date for ACP's acquisition of assets from FSD?
What happens to FSD shares after the reorganization?
What are the benefits of the reorganization for ACP shareholders?
What is the expected net asset value of ACP after the reorganization?
When will ACP pay the announced distribution?
