Western Asset Global High Income Fund Inc. Announces Final Results of Transferable Rights Offering

Rhea-AI Summary

Western Asset Global High Income Fund Inc. (NYSE: EHI) has announced the final results of its transferable rights offering. The offer expired on October 8, 2024, with a final subscription price of $6.60 per share, equal to 90% of the Fund's net asset value per share at the close of trading on that day. The offering will result in the issuance of 7,574,935 new shares of common stock, with expected gross proceeds of approximately $50.0 million.

The new shares are expected to be issued around October 16, 2024. EHI will return any excess payments to subscribing investors. The Fund cautioned that closed-end investment companies often trade at a discount from their net asset value, and that market price is influenced by various factors beyond the Fund's control.

Positive

• Successful completion of transferable rights offering
• Issuance of 7,574,935 new shares of common stock
• Expected gross proceeds of approximately $50.0 million
• Subscription price set at a 10% discount to NAV, potentially attractive to investors

Negative

• Potential dilution of existing shareholders' ownership
• Shares of closed-end funds often trade at a discount to NAV
• Market price of shares subject to factors beyond Fund's control

Insights

Financial Analyst

The rights offering by Western Asset Global High Income Fund Inc. (EHI) has successfully concluded, raising approximately $50 million in gross proceeds. This capital infusion is significant for a fund with a market cap of about $164 million, potentially increasing its assets under management by over 30%. The final subscription price of $6.60 per share, set at 90% of NAV, offered an attractive discount to existing shareholders and new investors alike. This could lead to increased liquidity and potentially enhanced market interest in the fund. However, the issuance of 7,574,935 new shares will result in dilution for non-participating shareholders. The fund's ability to effectively deploy this capital in the high-yield bond market will be important for maintaining or improving its performance and distributions. Investors should monitor how this additional capital impacts the fund's strategy and returns in the coming quarters.

Market Research Analyst

The successful completion of EHI's rights offering demonstrates investor confidence in Western Asset's management and strategy in the global high income space. The 10% discount to NAV likely played a key role in attracting subscriptions, balancing the fund's need for capital with shareholder interests. This offering comes at a time when high-yield bonds are particularly attractive due to elevated interest rates, potentially allowing EHI to capitalize on market opportunities. However, closed-end funds often trade at discounts to NAV and this capital raise may pressure the share price in the short term as the market absorbs the new shares. Long-term, the increased scale could lead to improved expense ratios and potentially more stable distributions. Investors should watch for any changes in the fund's investment strategy or yield following this capital injection, as well as how it impacts the fund's discount/premium to NAV in the secondary market.

NEW YORK--(BUSINESS WIRE)-- Western Asset Global High Income Fund Inc. (NYSE: EHI) (“EHI” or the “Fund”) announced the final results of its transferable rights offering (the “Offer”). The Offer expired at 5:00 PM Eastern Time on October 8, 2024 (the “Expiration Date”) and the Rights no longer trade on the New York Stock Exchange (“NYSE”).

The final subscription price per share was $6.60, which was equal to 90% of the Fund’s net asset value per share of common stock at the close of trading on the NYSE on October 8, 2024. The Offer will result in the issuance of 7,574,935 shares of common stock. The gross proceeds of the Offer are expected to be approximately $50.0 million. The shares of common stock subscribed for are expected to be issued on or about October 16, 2024. The Fund will return to subscribing investors the full amount of any excess payments.

This document does not constitute an offer to sell, or a solicitation of an offer to buy, any of the Fund’s securities in any jurisdiction where the offer or sale is not permitted. This document is not an offering, which can only be made by a prospectus supplement and accompanying prospectus. Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The base prospectus contains this and additional information about the Fund, and the prospectus supplement contains this and additional information about the Offer, and should be read carefully before investing. Shares of closed-end investment companies, such as the Fund, frequently trade at a discount from their net asset value. The market 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 their net asset value.

Inquiries regarding the Offer should be directed to the Information Agent, Georgeson LLC, at 866-856-2826.

A copy of the Fund’s current report to stockholders may be requested by contacting 1-888-777-0102 or by visiting www.franklintempleton.com/investments/options/closed-end-funds. All investments involve risks, including possible loss of principal. The Fund is actively managed, but there is no guarantee that Western Asset’s investment decisions will produce the desired results. For portfolio management discussions, including information regarding the Fund’s investment strategies, please view the most recent Annual or Semi-Annual Report to Stockholders which can be found at franklintempleton.com or sec.gov.

About Western Asset

Western Asset is one of the world’s leading fixed-income managers with 50 years of experience and $360.3 billion in assets under management (AUM) as of September 30, 2024. With a focus on long-term fundamental value investing that employs a top-down and bottom-up approach, the firm has nine offices around the globe and deep experience across the range of fixed income sectors. Founded in 1971, Western Asset has been recognized for delivering superior levels of client service alongside its approach emphasizing team management and intensive proprietary research, supported by robust risk management. To learn more about Western Asset, please visit www.westernasset.com.

Western Asset is an independent specialist investment manager of Franklin Templeton.

About Franklin Templeton

Franklin Resources, Inc. is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,500 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and over $1.6 trillion in assets under management as of September 30, 2024. For more information, please visit franklintempleton.com and follow us on LinkedIn, X and Facebook.

Category: Fund Announcement

Source: Franklin Resources, Inc.

Source: Legg Mason Closed End Funds

View source version on businesswire.com: https://www.businesswire.com/news/home/20241015716772/en/

Investor Contact: Fund Investor Services-1-888-777-0102

Media Contact: Media Contact: Lisa Tibbitts

+1 (904) 942-4451

Lisa.Tibbitts@franklintempleton.com

Source: Franklin Resources, Inc. and Legg Mason Closed End Funds

FAQ

What was the final subscription price per share for EHI's rights offering?

The final subscription price per share for Western Asset Global High Income Fund Inc.'s (EHI) rights offering was $6.60, which was 90% of the Fund's net asset value per share at the close of trading on October 8, 2024.

How many new shares will be issued as a result of EHI's rights offering?

As a result of the rights offering, Western Asset Global High Income Fund Inc. (EHI) will issue 7,574,935 new shares of common stock.

What are the expected gross proceeds from EHI's rights offering?

The expected gross proceeds from Western Asset Global High Income Fund Inc.'s (EHI) rights offering are approximately $50.0 million.

When will the new shares from EHI's rights offering be issued?

The new shares of common stock from Western Asset Global High Income Fund Inc.'s (EHI) rights offering are expected to be issued on or about October 16, 2024.