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

Rhea-AI Summary

Western Asset Global High Income Fund Inc. (NYSE: EHI) has completed its transferable rights offering, which expired on October 8, 2024. The offer was oversubscribed and is expected to result in the issuance of 7,574,935 shares of common stock, generating anticipated gross proceeds of approximately $50.0 million. The subscription price per share is $6.60, equal to 90% of the Fund's net asset value per share at the close of trading on the expiration date.

The Fund issued one transferable right for each common share held by stockholders of record as of September 9, 2024. Holders could purchase shares by submitting three rights and the subscription price per share. The new shares are expected to be issued around October 15, 2024, after completing the allocation of oversubscription shares and receiving all shareholder payments.

Positive

• Oversubscribed rights offering indicates strong investor interest
• Expected gross proceeds of approximately $50.0 million to be raised
• Subscription price set at a 10% discount to NAV, potentially attractive to investors

Negative

• Potential dilution for existing shareholders who did not participate in the offering
• Shares of closed-end funds often trade at a discount to NAV, which could affect market price

Insights

Financial Analyst

The completion of Western Asset Global High Income Fund Inc.'s (EHI) transferable rights offering is a significant event for investors. The oversubscribed offer is set to raise approximately $50 million in gross proceeds, indicating strong investor interest. With 7,574,935 new shares to be issued at $6.60 per share, representing a 10% discount to NAV, this could potentially dilute existing shareholders but also provides fresh capital for the fund to invest. The oversubscription suggests confidence in the fund's management and strategy. However, investors should note that closed-end funds often trade at a discount to NAV, which could affect the market price of these new shares. The successful completion of this offering may improve the fund's liquidity and investment flexibility, potentially benefiting long-term performance. It's important for investors to consider how this capital raise aligns with the fund's investment objectives and market conditions in the high-yield sector.

Market Research Analyst

The oversubscription of EHI's rights offering reflects positive sentiment towards high-yield investments in the current market environment. With interest rates at elevated levels, investors are likely seeking higher income opportunities, which this global high income fund provides. The 90% of NAV pricing for new shares is attractive, potentially driving the high demand. This successful capital raise could position EHI more competitively among its peers in the closed-end fund space. However, the increased share count may impact the fund's distribution per share in the short term. Investors should monitor how efficiently the new capital is deployed and its effect on the fund's performance metrics. The market's reaction to this offering could also provide insights into investor appetite for similar products in the fixed income sector, potentially influencing future capital raising activities in the industry.

NEW YORK--(BUSINESS WIRE)-- Western Asset Global High Income Fund Inc. (NYSE: EHI) (“EHI” or the “Fund”) announced today the completion 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 Offer is expected to result in the issuance of 7,574,935 shares of common stock (including notices of guaranteed delivery), resulting in anticipated gross proceeds to the Fund of approximately $50.0 million. The Offer was oversubscribed. The subscription price per share is $6.60, which is 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 shares of common stock subscribed for are expected to be issued on or about October 15, 2024, after completion of the allocation of any oversubscription shares and receipt of all shareholder payments. The Fund will return to subscribing investors the full amount of any excess payments.

Pursuant to the Offer, the Fund issued one transferable right (a “Right”) for each common share of the Fund held by stockholders of record (“Record Date Stockholders”) as of September 9, 2024. Holders of Rights were entitled to purchase shares of common stock by submitting three Rights and the subscription price per share for each share purchased.

The information herein is not complete and is subject to change. 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 $384.1 billion in assets under management (AUM) as of August 31, 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 July 31, 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/20241009829828/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 were the results of EHI's transferable rights offering?

EHI's transferable rights offering was oversubscribed and is expected to result in the issuance of 7,574,935 shares of common stock, generating anticipated gross proceeds of approximately $50.0 million.

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

The subscription price for EHI's rights offering was $6.60 per share, which is equal to 90% of the Fund's net asset value per share at the close of trading on October 8, 2024.

When did EHI's transferable rights offering expire?

EHI's transferable rights offering expired at 5:00 PM Eastern Time on October 8, 2024.

When are the new shares from EHI's rights offering expected to be issued?

The new shares from EHI's rights offering are expected to be issued on or about October 15, 2024, after completing the allocation of oversubscription shares and receiving all shareholder payments.