Saba Capital Reaches Agreement With The New America High Income Fund
Saba Capital Management has entered into a standstill agreement with The New America High Income Fund (NYSE: HYB). As part of this agreement, the Fund will reorganize with and into the T. Rowe Price High Yield Fund (Nasdaq: PRHYX), pending stockholder approval.
The reorganization aims to eliminate the Fund's trading discount and reduce management fees for stockholders. Additionally, Saba will withdraw its notice to nominate individuals for election at the Fund’s 2024 Annual Meeting of Stockholders.
Paul Kazarian, Partner and Portfolio Manager of Saba, expressed satisfaction with the agreement, noting the potential benefits for stockholders.
Saba Capital Management ha stipulato un accordo di stallo con The New America High Income Fund (NYSE: HYB). Come parte di questo accordo, il Fondo si riorganizzerà con e all'interno del T. Rowe Price High Yield Fund (Nasdaq: PRHYX), in attesa dell'approvazione degli azionisti.
La riorganizzazione mira a eliminare lo sconto di trading del Fondo e a ridurre le commissioni di gestione per gli azionisti. Inoltre, Saba ritirerà la sua comunicazione per nominare individui da candidare all'Assemblea Annuale degli Azionisti del Fondo del 2024.
Paul Kazarian, Partner e Portfolio Manager di Saba, ha espresso soddisfazione per l'accordo, evidenziando i potenziali benefici per gli azionisti.
Saba Capital Management ha entrado en un acuerdo de estancamiento con The New America High Income Fund (NYSE: HYB). Como parte de este acuerdo, el Fondo se reorganizará con y dentro del T. Rowe Price High Yield Fund (Nasdaq: PRHYX), pendiente de la aprobación de los accionistas.
La reorganización tiene como objetivo eliminar el descuento comercial del Fondo y reducir las tarifas de gestión para los accionistas. Además, Saba retirará su aviso para nominar individuos para la elección en la Reunión Anual de Accionistas del Fondo de 2024.
Paul Kazarian, Socio y Gerente de Cartera de Saba, expresó su satisfacción con el acuerdo, destacando los beneficios potenciales para los accionistas.
Saba Capital Management는 The New America High Income Fund (NYSE: HYB)와 정지 계약을 체결했습니다. 이 계약의 일환으로, 펀드는 T. Rowe Price High Yield Fund (Nasdaq: PRHYX)와 통합될 예정이며, 주주 승인 대기 중입니다.
이번 재편성은 펀드의 거래 할인 삭제 및 주주에 대한 관리 수수료 감소를 목표로 하고 있습니다. 또한, Saba는 2024년 펀드 연례 주주 총회에서 선출할 개인을 지명하겠다는 통지를 철회할 것입니다.
Saba의 파트너이자 포트폴리오 매니저인 Paul Kazarian은 이번 계약에 대한 만족감을 표명하며, 주주에게 잠재적인 이점을 강조하였습니다.
Saba Capital Management a conclu un accord de gel avec The New America High Income Fund (NYSE: HYB). Dans le cadre de cet accord, le Fonds sera réorganisé avec et dans le T. Rowe Price High Yield Fund (Nasdaq: PRHYX), sous réserve de l'approbation des actionnaires.
La réorganisation vise à éliminer la décote de négociation du Fonds et à réduire les frais de gestion pour les actionnaires. De plus, Saba retirera son avis de nomination d'individus pour l'élection lors de l'Assemblée Annuelle des Actionnaires du Fonds de 2024.
Paul Kazarian, partenaire et gestionnaire de portefeuille chez Saba, a exprimé sa satisfaction concernant l'accord, soulignant les avantages potentiels pour les actionnaires.
Saba Capital Management hat eine Stillhaltevereinbarung mit The New America High Income Fund (NYSE: HYB) getroffen. Im Rahmen dieser Vereinbarung wird der Fonds mit dem T. Rowe Price High Yield Fund (Nasdaq: PRHYX) reorganisiert, abhängig von der Genehmigung der Aktionäre.
Die Reorganisation soll das Handelsdisagio des Fonds beseitigen und die Verwaltungskosten für die Aktionäre senken. Darüber hinaus wird Saba seine Mitteilung zur Nominierung von Personen für die Wahl auf der Jahresversammlung der Aktionäre des Fonds 2024 zurückziehen.
Paul Kazarian, Partner und Portfoliomanager von Saba, äußerte seine Zufriedenheit mit der Vereinbarung und wies auf die potenziellen Vorteile für die Aktionäre hin.
- Reorganization with T. Rowe Price High Yield Fund aims to eliminate trading discount.
- Lower management fees for stockholders expected post-reorganization.
- None.
Insights
This agreement between Saba Capital and The New America High Income Fund (HYB) marks a significant development for closed-end fund investors. The proposed reorganization into the T. Rowe Price High Yield Fund (PRHYX) could bring several benefits:
- Elimination of trading discount: Closed-end funds often trade at a discount to their net asset value (NAV). This move to an open-end structure would allow investors to redeem at NAV, potentially unlocking value.
- Lower management fees: The mention of reduced fees is positive for stockholders, potentially improving returns over time.
- Increased liquidity: Open-end funds offer daily liquidity, which could be advantageous for some investors.
However, it's important to note that this reorganization is subject to stockholder approval. The market's reaction to this news will be telling, as it may set a precedent for other activist investors in the closed-end fund space.
The standstill agreement between Saba Capital and The New America High Income Fund is a strategic legal maneuver with several implications:
- Proxy fight avoidance: Saba's withdrawal of its nomination notice suggests a mutually beneficial resolution, avoiding a potentially costly and disruptive proxy contest.
- Regulatory considerations: The reorganization from a closed-end to an open-end fund structure will require careful navigation of Investment Company Act regulations.
- Stockholder rights: The requirement for stockholder approval ensures that investors have a say in this significant structural change, aligning with corporate governance best practices.
This agreement demonstrates how activist investors can effect change through negotiation rather than confrontation, potentially setting a precedent for future fund governance disputes.
This agreement signals a broader trend in the investment fund landscape:
- Activist pressure: Closed-end funds have increasingly become targets for activist investors seeking to narrow persistent NAV discounts.
- Fund structure evolution: The shift from closed-end to open-end structure reflects changing investor preferences for liquidity and transparency.
- Consolidation: Merging with a larger T. Rowe Price fund could provide economies of scale, potentially benefiting investors through lower costs and improved resources.
This move may prompt other closed-end fund boards to proactively address persistent discounts to avoid similar activist pressures. It's worth monitoring how this trend might reshape the $250 billion closed-end fund market in the coming years.
The New America High Income Fund to Pursue Reorganization With and Into the T. Rowe Price High Yield Fund, Subject to Stockholder Approval
Under the terms of the agreement, The New America High Income Fund will, subject to stockholder approval, reorganize with and into the T. Rowe Price High Yield Fund, Inc. (Nasdaq: PRHYX), an open-end management investment company registered under the Investment Company Act of 1940.
The terms of the agreement also provide for Saba withdrawing the notice of its intent to nominate persons for election at the Fund’s 2024 Annual Meeting of Stockholders.
Paul Kazarian, Partner and Portfolio Manager of Saba, commented:
“Saba is pleased to have reached this agreement through constructive engagement with the Fund’s board. We believe stockholders would benefit from the proposed reorganization contemplated by the agreement, as it would eliminate the Fund’s trading discount and lower management fees for stockholders.”
About Saba Capital
Saba Capital Management, L.P. is a global alternative asset management firm that seeks to deliver superior risk-adjusted returns for a diverse group of clients. Founded in 2009 by Boaz Weinstein, Saba is a pioneer of credit relative value strategies and capital structure arbitrage. Saba is headquartered in
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Source: Saba Capital Management, L.P.
FAQ
What is the new agreement between Saba Capital and The New America High Income Fund (HYB)?
How will the reorganization of HYB benefit stockholders?
What will happen to Saba's nominations for the 2024 Annual Meeting of Stockholders?
Which funds are involved in the HYB reorganization?
