Highland Opportunities and Income Fund (HFRO) Announces Tender Offer for Common Shares in Exchange for up to $100 Million in Preferred Shares
Highland Opportunities and Income Fund (NYSE:HFRO) announced a tender offer to exchange common shares for up to $100 million in Series B Preferred Shares. The expected exchange price is $10.00 per Share, representing a premium to the current share price of $5.21. The Series B Preferred Shares will be structured similarly to existing 5.375% Series A Preferred Shares, featuring the same coupon rate and a $25.00 liquidation preference. The tender offer, authorized on November 22, 2024, is expected to commence in January 2025 and aims to narrow the discount to NAV while providing shareholders with fixed dividend opportunities.
Highland Opportunities and Income Fund (NYSE:HFRO) ha annunciato un'offerta di acquisto per scambiare azioni ordinarie fino a 100 milioni di dollari in azioni privilegiate di Serie B. Il prezzo di cambio previsto è di 10,00 dollari per azione, rappresentando un premio rispetto al prezzo attuale delle azioni di 5,21 dollari. Le azioni privilegiate di Serie B saranno strutturate in modo simile alle attuali azioni privilegiate di Serie A al 5,375%, presentando lo stesso tasso di interesse e una preferenza di liquidazione di 25,00 dollari. L'offerta di acquisto, autorizzata il 22 novembre 2024, dovrebbe iniziare nel gennaio 2025 e mira a ridurre lo sconto rispetto al NAV, offrendo agli azionisti opportunità di dividendi fissi.
Highland Opportunities and Income Fund (NYSE:HFRO) anunció una oferta de compra para intercambiar acciones comunes por hasta 100 millones de dólares en acciones preferentes de la Serie B. Se espera que el precio de intercambio sea de 10,00 dólares por acción, representando una prima sobre el precio actual de las acciones de 5,21 dólares. Las acciones preferentes de la Serie B estarán estructuradas de manera similar a las existentes acciones preferentes de la Serie A al 5,375%, con la misma tasa de cupón y una preferencia de liquidación de 25,00 dólares. La oferta de compra, autorizada el 22 de noviembre de 2024, se espera que comience en enero de 2025 y tiene como objetivo reducir el descuento respecto al NAV al tiempo que proporciona a los accionistas oportunidades de dividendos fijos.
하이랜드 오퍼튜니티즈 및 수익 기금(NYSE:HFRO)은 보통주를 최대 1억 달러의 B 시리즈 우선주로 교환하는 공개 매수를 발표했습니다. 예상 교환 가격은 주당 10.00달러로, 현재 주가인 5.21달러에 비해 프리미엄을 나타냅니다. B 시리즈 우선주는 기존 5.375% A 시리즈 우선주와 유사하게 구조화되어 있으며, 동일한 쿠폰 금리와 25.00달러의 청산 우선권을 특징으로 합니다. 2024년 11월 22일에 승인된 이 공개 매수는 2025년 1월에 시작될 예정이며, NAV에 대한 할인폭을 줄이고 주주에게 고정 배당 기회를 제공하는 것을 목표로 합니다.
Highland Opportunities and Income Fund (NYSE:HFRO) a annoncé une offre de rachat pour échanger des actions ordinaires jusqu'à 100 millions de dollars en actions privilégiées de série B. Le prix d'échange prévu est de 10,00 dollars par action, représentant une prime par rapport au prix actuel de l'action de 5,21 dollars. Les actions privilégiées de série B seront structurées de manière similaire aux actions privilégiées existantes de série A à 5,375 %, avec le même taux de coupon et une préférence de liquidation de 25,00 dollars. L'offre de rachat, autorisée le 22 novembre 2024, devrait commencer en janvier 2025 et vise à réduire l'escompte par rapport à la NAV tout en offrant aux actionnaires des opportunités de dividendes fixes.
Highland Opportunities and Income Fund (NYSE:HFRO) hat ein Rückkaufangebot angekündigt, um Stammaktien im Wert von bis zu 100 Millionen Dollar gegen Vorzugsaktien der Serie B einzutauschen. Der erwartete Umtauschpreis beträgt 10,00 Dollar pro Aktie und stellt eine Prämie zum aktuellen Aktienkurs von 5,21 Dollar dar. Die Vorzugsaktien der Serie B werden ähnlich wie die bestehenden 5,375% Vorzugsaktien der Serie A strukturiert, mit dem gleichen Kuponzins und einer Liquidationspräferenz von 25,00 Dollar. Das Rückkaufangebot, das am 22. November 2024 genehmigt wurde, soll im Januar 2025 beginnen und zielt darauf ab, den Abschlag auf NAV zu verringern und den Aktionären feste Dividendenmöglichkeiten zu bieten.
- Significant premium offered: $10.00 exchange price vs. current $5.21 share price
- Fixed dividend rate of 5.375% for preferred shareholders
- Maximum aggregate purchase price of $100 million shows substantial commitment
- Potential increase in NAV per share for remaining shareholders post-tender offer
- $25.00 liquidation preference per preferred share provides additional security
- Exchange offer may reduce common share liquidity
- Creation of preferred shares adds a senior security layer above common shareholders
Insights
This tender offer represents a significant capital restructuring initiative with several key implications. The
The exchange could effectively reduce the NAV discount by decreasing the common share float while maintaining the fund's asset base. However, the preferred shares'
The Fund's Board of Trustees (the "Board") authorized the Tender Offer on November 22, 2024. The Tender Offer is expected to commence in January 2025.
It is anticipated that the Series B Preferred Shares to be issued will be structured similarly to the existing
The Tender Offer is part of the ongoing, targeted strategy from the Fund's adviser, NexPoint Asset Management, L.P. (the "Adviser"), and the Board to address the Share price's discount to net asset value ("NAV"). This strategy has to date comprised several initiatives, including a share buyback program and a significant commitment to providing enhanced disclosures through shareholder materials, quarterly calls, and other communications from the Adviser that offer insights and timely updates on the Fund and portfolio, as well as in-depth information on top holdings.
Taking into account the impact of these efforts and feedback received from HFRO shareholders, the Tender Offer expands on current initiatives while providing an additional solution that aims to narrow the discount to NAV and provide other benefits to shareholders.
Tender Offer's Potential Benefits to Shareholders
Both the Adviser and the Board believe the Tender Offer is in the best interest of all shareholders for several reasons, including the following:
- It has the potential to narrow the discount to NAV.
The Tender Offer has the potential to narrow the discount to NAV as it is expected to increase the NAV per Share of the Fund for Shares that remain outstanding after the completion of the Tender Offer. - It provides an opportunity to exchange common shares at a premium to the current market price.
The Tender Offer allows a significant number of shareholders to exchange their Shares at a premium to the current market price. With an anticipated Exchange Price per Common Share of$10.00 $5.21 $100 million - It allows shareholders to receive a fixed dividend.
Preferred shareholders will receive a fixed dividend based on the coupon of5.375% .
Terms of the Proposed Tender Offer
The complete details of the offering will be provided in the final offering documents once they are filed; however, based on current conditions, the Fund anticipates the Tender Offer will have the following terms:
Exchange Price per Common Share | |
Maximum Aggregate Purchase Price | |
Coupon of Series B Preferred Shares | 5.375 % |
Liquidation Preference of Series B Preferred Shares |
The final terms are subject to change. The offering documents are expected to be filed with the Securities and Exchange Commission (the "SEC") in January 2025. Once filed, details of the offering and additional information will be distributed to shareholders. Offering documents and other materials will also be available at sec.gov and on the Fund's website at nexpointassetmgmt.com/opportunities-income-fund.
Upcoming Quarterly Investor Call
The Fund issued a press release announcing its next quarterly investor call will be held on December 11, 2024, at 3:00 p.m. CST / 4:00 p.m. EST. The call will include discussion on the Tender Offer as well as the regular review of the portfolio and Fund performance from the past quarter and an overview of top holdings.
Register to attend the call - here.
Registration is also available through the HFRO website. Follow the link to register for the Q3 2024 Investor Call.
Attendees may submit questions ahead of the call. Questions can be submitted through the registration link. A replay will be available on HFRO's website after the call.
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 Tender Offer will be set forth in the Fund's offering materials, which will be filed with the
The Fund has not commenced the tender offer described in this press release. 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 will be made pursuant to an offer to exchange and related materials that HFRO intends to file with the SEC. At the time the Tender Offer is commenced, HFRO intends to file a Tender Offer Statement on Schedule TO containing an offer to exchange, forms of letters of transmittal and other documents relating to the Tender Offer. HFRO intends to distribute these documents to the shareholders of the Fund. These documents will contain important information about the Tender Offer and shareholders of HFRO are urged to read them carefully when they become available. Investors may obtain free copies of the Tender Offer Statement and other documents (when they become available) 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 Tender 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 Tender 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
Prosek Partners for NexPoint
Pro-nexpoint@prosek.com
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SOURCE Highland Opportunities and Income Fund
FAQ
What is the exchange price for HFRO's 2025 tender offer?
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