Highland Opportunities and Income Fund (HFRO) Announces Commencement of Tender and Exchange Offer
Highland Opportunities and Income Fund (HFRO) has launched a tender and exchange offer for common shares, exchanging up to $100 million worth for newly issued Series B Preferred Shares. The exchange price is set at $10.00 per Share, offering a premium to current market price. The offer runs from February 3, 2025, to March 4, 2025.
The Series B Preferred Shares received a BBB+ Investment Grade rating from Egan-Jones and will be listed on NYSE with a 5.375% coupon and $25.00 liquidation preference. This initiative is part of HFRO's strategy to address the share price's discount to NAV and enhance shareholder value, alongside other measures including a share repurchase program and enhanced transparency efforts.
If tender requests exceed the $100 million limit, shares will be purchased on a pro rata basis. The Fund will not issue fractional Series B Preferred Shares.
Highland Opportunities and Income Fund (HFRO) ha lanciato un'offerta di acquisto e scambio per azioni ordinarie, scambiando fino a 100 milioni di dollari in valore per nuove azioni privilegiate di Serie B. Il prezzo di scambio è fissato a 10,00 $ per azione, offrendo un premio rispetto al prezzo di mercato attuale. L'offerta è valida dal 3 febbraio 2025 al 4 marzo 2025.
Le azioni privilegiate di Serie B hanno ricevuto un rating di investimento BBB+ da Egan-Jones e saranno quotate alla NYSE con un coupon del 5,375% e una preferenza di liquidazione di 25,00 $. Questa iniziativa è parte della strategia di HFRO per affrontare lo sconto del prezzo delle azioni rispetto al NAV e migliorare il valore per gli azionisti, insieme ad altre misure, tra cui un programma di riacquisto di azioni e sforzi per una maggiore trasparenza.
Se le richieste di acquisto superano il limite di 100 milioni di dollari, le azioni saranno acquistate su base pro rata. Il Fondo non emetterà azioni privilegiate di Serie B frazionarie.
Highland Opportunities and Income Fund (HFRO) ha lanzado una oferta de compra e intercambio de acciones comunes, intercambiando hasta 100 millones de dólares en valor por nuevas acciones preferentes de Serie B. El precio de intercambio se establece en 10,00 $ por acción, ofreciendo una prima sobre el precio de mercado actual. La oferta va del 3 de febrero de 2025 al 4 de marzo de 2025.
Las acciones preferentes de Serie B recibieron una calificación de grado de inversión BBB+ de Egan-Jones y se listaràn en NYSE con un cupón del 5,375% y una preferencia de liquidación de 25,00 $. Esta iniciativa es parte de la estrategia de HFRO para abordar el descuento del precio de las acciones con respecto al NAV y mejorar el valor para los accionistas, junto con otras medidas que incluyen un programa de recompra de acciones y esfuerzos de mayor transparencia.
Si las solicitudes de compra exceden el límite de 100 millones de dólares, las acciones se adquirirán de manera prorrata. El Fondo no emitirá acciones preferentes de Serie B fraccionarias.
하이랜드 기회 및 소득 기금 (HFRO)는 보통주에 대한 입찰 및 교환 제안을 시작하여 최대 1억 달러 상당의 신주 시리즈 B 우선주로 교환합니다. 교환 가격은 주당 10.00 달러로 설정되어 있으며, 현재 시장 가격에 프리미엄을 제공합니다. 이 제안은 2025년 2월 3일부터 2025년 3월 4일까지 유효합니다.
시리즈 B 우선주는 Egan-Jones로부터 BBB+ 투자 적격 등급을 받았으며, NYSE에 상장되어 5.375%의 이자율과 25.00 달러의 청산 우선권이 있습니다. 이 이니셔티브는 NAV에 대한 주가의 할인 문제를 해결하고 주주 가치를 향상시키기 위한 HFRO의 전략의 일환으로, 주식 매입 프로그램 및 투명성 강화 노력을 포함한 기타 조치와 함께 이루어집니다.
입찰 요청이 1억 달러 한도를 초과할 경우, 주식은 비례로 구매됩니다. 기금은 시리즈 B 우선주를 분할하여 발행하지 않습니다.
Highland Opportunities and Income Fund (HFRO) a lancé une offre de rachat et d'échange pour des actions ordinaires, échangeant jusqu'à 100 millions de dollars de valeur contre de nouvelles actions préférentielles de série B. Le prix d'échange est fixé à 10,00 $ par action, offrant une prime par rapport au prix du marché actuel. L'offre est valable du 3 février 2025 au 4 mars 2025.
Les actions préférentielles de série B ont reçu une notation d'investissement BBB+ de la part d'Egan-Jones et seront cotées sur le NYSE avec un coupon de 5,375 % et une préférence de liquidation de 25,00 $. Cette initiative s'inscrit dans la stratégie d'HFRO pour traiter la décote du prix des actions par rapport à la NAV et améliorer la valeur pour les actionnaires, parallèlement à d'autres mesures telles qu'un programme de rachat d'actions et des efforts pour une meilleure transparence.
Si les demandes d'achat dépassent la limite de 100 millions de dollars, les actions seront achetées sur une base pro-rata. Le Fonds n'émettra pas d'actions préférentielles de série B fractionnaires.
Highland Opportunities and Income Fund (HFRO) hat ein Tender- und Umtauschangebot für Stammaktien gestartet, bei dem bis zu 100 Millionen Dollar in neu ausgegebene Vorzugsaktien der Serie B umgetauscht werden. Der Umtauschpreis ist auf 10,00 $ pro Aktie festgelegt, was einen Aufpreis gegenüber dem aktuellen Marktpreis bietet. Das Angebot läuft vom 3. Februar 2025 bis zum 4. März 2025.
Die Vorzugsaktien der Serie B erhielten von Egan-Jones eine BBB+ Investment-Grade-Bewertung und werden an der NYSE mit einem Coupon von 5,375 % und einer Liquidationspräferenz von 25,00 $ gelistet. Diese Initiative ist Teil der Strategie von HFRO, das Discount des Aktienkurses gegenüber dem NAV zu adressieren und den Aktionärswert zu steigern, zusammen mit anderen Maßnahmen wie einem Aktienrückkaufprogramm und erhöhten Transparenzbemühungen.
Wenn die Tenderanträge den Betrag von 100 Millionen Dollar überschreiten, werden die Aktien anteilig gekauft. Der Fonds wird keine Bruchstücke von Vorzugsaktien der Serie B ausgeben.
- Premium exchange offer at $10.00 per share above market price
- BBB+ Investment Grade rating for new Series B Preferred Shares
- 5.375% coupon rate on Series B Preferred Shares
- Active measures to address NAV discount
- NYSE listing for new preferred shares enhancing liquidity
- exchange capacity of $100 million may lead to pro-rata allocation
- No fractional shares will be issued in the exchange
Insights
The $100 million tender and exchange offer represents a strategic move that could significantly reshape HFRO's capital structure, accounting for approximately 26% of the fund's current market capitalization. This substantial size indicates management's serious commitment to addressing the NAV discount issue.
The exchange price of
Several key implications deserve attention:
- The exchange offer could create positive pressure on the common share price as it effectively removes a significant portion of the float while providing a price floor during the tender period
- The BBB+ investment grade rating suggests strong financial fundamentals and adds credibility to the preferred shares as an investment vehicle
- Non-participating shareholders may benefit from reduced supply of common shares and potential NAV accretion, though they should consider the increased leverage effect from the preferred share issuance
- The pro-rata allocation mechanism ensures fair treatment but may result in partial execution for interested shareholders if the offer is oversubscribed
This initiative, combined with other measures like enhanced transparency and board alignment, represents a comprehensive approach to addressing the persistent NAV discount. The success of this strategy could set a precedent for other closed-end funds facing similar challenges.
The Exchange Offer is part of the ongoing, targeted strategy from the Fund's adviser, NexPoint Asset Management, L.P. (the "Adviser"), and the Board of Trustees (the "Board") to address the Share price's discount to net asset value ("NAV") and attempt to enhance long-term shareholder value. Other initiatives under this strategy include: a Share repurchase program; a commitment to enhanced transparency through quarterly calls and shareholder materials that offer in-depth information on the Fund, portfolio, and top holdings, among other communications; the formation of a dedicated Board committee to continuously assess efforts to reduce the discount; and adjustments to Board compensation to provide further alignment with HFRO shareholders. Building on these and other initiatives, the Adviser and the Board believe the Exchange Offer provides a potential solution aiming to narrow the discount to NAV, while also allowing a significant number of shareholders to tender their Shares at a significant premium to the current market price.
The Exchange Offer will begin on February 3, 2025, and expire at 5 p.m. Eastern Time on March 4, 2025 (the "Expiration Date"), unless the Exchange Offer is extended.
As previously announced, the Fund intends to acquire up to
The Series B Preferred Shares received an Investment Grade (BBB+) rating from Egan-
Terms of the Exchange Offer
Exchange Price per Common Share | |
Maximum Aggregate Purchase Price | |
Coupon of Series B Preferred Shares | 5.375 % |
Liquidation Preference of Series B Preferred Shares | |
Rating | BBB+ |
Commencement Date | February 3, 2025 |
Expiration Date | March 4, 2025 (5 p.m. EST) |
The complete details of the Exchange Offer are provided in the offering documents that are filed with the Securities and Exchange Commission ("SEC").
Information and other resources for shareholders regarding the Exchange Offer are available on the Fund's website at nexpointassetmgmt.com/opportunities-income-fund.
Additional Information
The Exchange Offer is being made on the terms and subject to the conditions set forth in the Fund's Exchange Offer Statement and related Letter of Transmittal that are being filed with the Securities and Exchange Commission ("SEC"). Once filed these will be available to view at sec.gov and on the Fund's website at nexpointassetmgmt.com/opportunities-income-fund.
The Fund's website also includes a link to sign up to receive Fund communications via email. (Shareholders can also sign up directly – here.)
For additional questions or assistance, please contact the Company's Information Agent: EQ Fund Solutions, LLC, toll-free at (866) 416-0576. Holders of Common Shares may also contact their brokers, dealers, commercial banks, trust companies or other nominees for assistance concerning the Exchange Offer.
About the Highland Opportunities and Income Fund
The Highland Opportunities and Income Fund (NYSE: HFRO) is a closed-end fund managed by NexPoint Asset Management, L.P. For more information visit nexpointassetmgmt.com/opportunities-income-fund.
About NexPoint Asset Management, L.P.
NexPoint Asset Management, L.P. is an SEC-registered investment adviser. It is the adviser to a suite of registered funds, including open-end mutual funds and closed-end funds. For more information nexpointassetmgmt.com,
Risks and Disclosures
Additional terms and conditions of the Exchange Offer are set forth in the Fund's offering materials, which are being filed with the SEC and are being distributed to the Fund's common shareholders. If the number of common shares tendered for the Fund exceeds the maximum amount of the Exchange Offer, the Fund will purchase shares from tendering shareholders on a pro-rata basis (disregarding fractional common shares and fractional Series B Preferred Shares). Accordingly, there is no assurance that the Fund will purchase all of a shareholder's common shares tendered in the Exchange Offer. The Fund may determine not to accept shares tendered in the Exchange Offer under various circumstances, as are set forth in the offering materials. Further information about the Exchange Offer will be announced in future press releases and are included in the Fund's offering materials.
This press release is not a recommendation, an offer to purchase or a solicitation of an offer to sell any securities of HFRO and the above statements are not intended to constitute an offer to participate in any tender offer. The solicitation and the offer to exchange common shares of HFRO are only being made pursuant to an offer to exchange and related materials that HFRO is filing with the SEC. HFRO is filing an Exchange Offer Statement on Schedule TO containing an offer to exchange, forms of letters of transmittal and other documents relating to the Exchange Offer. HFRO is distributing these documents to the shareholders of the Fund. These documents contain important information about the Exchange Offer and shareholders of HFRO are urged to read them carefully. Investors may obtain free copies of the Exchange Offer Statement and other documents filed with the SEC at the SEC's web site at sec.gov or on the Fund's website at nexpointassetmgmt.com/opportunities-income-fund.
The Fund is relying on Section 3(a)(9) of the Securities Act of 1933 (the "Securities Act") to exempt the Exchange Offer from the registration requirements of the Securities Act. Section 3(a)(9) provides that the registration requirements of the Securities Act will not apply to "any security exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange." The Fund has no contract, arrangement or understanding relating to, and will not, directly or indirectly, pay any commission or other remuneration to any broker, dealer, salesperson, agent or any other person for soliciting tenders in the Exchange Offer.
Investors should consider the investment objectives, risks, charges, and expenses of the Highland Opportunities and Income Fund carefully before investing. This and other information can be found in the Fund's annual report, which may be obtained by calling (800) 357-9167 or on the website at nexpointassetmgmt.com. Please read the annual report carefully before you invest. Any distribution paid by the Fund may include a return of capital. Please refer to the 19(a)-1 Source of Distribution Notice on the NexPoint Asset Management website for Section 19 notices that provide estimated amounts and sources of the Fund's distributions, which should not be relied upon for tax reporting purposes.
CONTACTS
Investor Relations
Kristen Griffith
IR@nexpoint.com
Media Relations
comms@nexpoint.com
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SOURCE Highland Opportunities and Income Fund
FAQ
What is the exchange price per share in HFRO's 2025 tender offer?
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What is the coupon rate for HFRO's new Series B Preferred Shares?
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What credit rating did HFRO's Series B Preferred Shares receive?
What is the liquidation preference for HFRO's Series B Preferred Shares?
