Kayne Anderson Energy Infrastructure Fund Announces Completion of Private Placement of $25 Million of Notes
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Insights
The private placement of $25 million of senior unsecured notes by Kayne Anderson Energy Infrastructure Fund represents a strategic financial maneuver aimed at optimizing the company's capital structure. By refinancing existing leverage, the company is likely seeking to lower its cost of capital and extend the maturity of its debt, which could potentially lead to improved financial flexibility and a stronger balance sheet. The fixed rate of 5.79% locked in until 2034 provides predictability in interest payments, which is crucial for cash flow management and long-term financial planning.
Investors should note that the use of proceeds for general corporate purposes is fairly broad, indicating that the company could be positioning itself for future growth initiatives or to bolster its operational capabilities. However, the non-diversified nature of the fund, with a focus on Energy Infrastructure Companies, implies a higher risk profile due to sector concentration. This concentration could lead to volatile performance in line with the energy sector's market dynamics and regulatory environment.
The energy infrastructure sector is a critical component of the broader energy market, with significant implications for national economic performance and investor interest. Kayne Anderson Energy Infrastructure Fund's commitment to investing at least 80% of its total assets in securities of Energy Infrastructure Companies suggests a targeted approach to capitalizing on industry trends such as the transition towards renewable energy and the modernization of existing infrastructure.
Given that the fund operates as a closed-end management investment company, the ability to raise capital through private placements like this one is integral to maintaining liquidity and funding investments. The after-tax total return focus of the fund is also of interest, as it aligns with investor demand for tax-efficient investment vehicles. However, the lack of diversification and the specialized investment mandate may limit the fund's appeal to investors seeking balanced exposure across multiple sectors.
The issuance of the senior unsecured notes is noteworthy for its legal implications, particularly the fact that these notes will not be registered under the Securities Act of 1933. This means they are subject to restrictions on resale, limiting their liquidity and making them more suitable for long-term investors who are less sensitive to short-term market fluctuations. The reliance on an applicable exemption from registration underscores the private nature of the placement, which is typically accessible only to accredited or institutional investors.
Additionally, the company's explicit statement that the press release does not constitute an offer to sell or a solicitation to buy is a standard disclaimer to comply with securities law and prevent the communication from being construed as an unauthorized offering. The cautionary note indicates a conservative legal approach to ensure adherence to applicable regulations and to mitigate the risk of legal repercussions associated with the securities offering.
HOUSTON, Jan. 10, 2024 (GLOBE NEWSWIRE) -- Kayne Anderson Energy Infrastructure Fund, Inc. (the “Company”) (NYSE: KYN) announced today that it completed a private placement of
Net proceeds from the issuance will be used to refinance existing leverage and for general corporate purposes. The table below sets forth the key terms of the Notes issued:
| Series | Amount ($ in millions) | Fixed Rate | Maturity | |
| Series VV Notes | 1/10/2034 | |||
The Notes issued in connection with this private placement will not be registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration.
Kayne Anderson Energy Infrastructure Fund, Inc. (NYSE: KYN) is a non-diversified, closed-end management investment company registered under the Investment Company Act of 1940, as amended, whose common stock is traded on the NYSE. The Company’s investment objective is to provide a high after-tax total return with an emphasis on making cash distributions to stockholders. KYN intends to achieve this objective by investing at least
The Company pays cash distributions to common stockholders at a rate that may be adjusted from time to time. Distribution amounts are not guaranteed and may vary depending on a number of factors, including changes in portfolio holdings and market conditions.
This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of any securities in any jurisdiction in which such offer or sale is not permitted. Nothing contained in this press release is intended to recommend any investment policy or investment strategy or consider any investor’s specific objectives or circumstances. Before investing, please consult with your investment, tax, or legal adviser regarding your individual circumstances.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This communication contains statements reflecting assumptions, expectations, projections, intentions, or beliefs about future events. These and other statements not relating strictly to historical or current facts constitute forward-looking statements as defined under the U.S. federal securities laws. Forward-looking statements involve a variety of risks and uncertainties. These risks include but are not limited to changes in economic and political conditions; regulatory and legal changes; energy industry risk; leverage risk; valuation risk; interest rate risk; tax risk; and other risks discussed in detail in the Company’s filings with the SEC, available at www.kaynefunds.com or www.sec.gov. Actual events could differ materially from these statements or our present expectations or projections. You should not place undue reliance on these forward-looking statements, which speak only as of the date they are made. Kayne Anderson undertakes no obligation to publicly update or revise any forward-looking statements made herein. There is no assurance that the Company’s investment objectives will be attained.
Contact investor relations at 877-657-3863 or cef@kaynecapital.com.
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