Kayne Anderson Energy Infrastructure Fund Completes Private Placement of $70 Million of Notes and $30 Million of Mandatory Redeemable Preferred Shares

Rhea-AI Summary

Kayne Anderson Energy Infrastructure Fund, Inc. (NYSE: KYN) has successfully completed a private placement of $70 million in senior unsecured notes and $30 million in mandatory redeemable preferred shares (MRP Shares). The net proceeds will be used to refinance existing leverage and for general corporate purposes.

The placement includes:

• $30 million in Series YY Notes at 5.19% interest, maturing September 2031
• $40 million in Series ZZ Notes at 5.45% interest, maturing September 2036
• $30 million in Series X MRP Shares at 5.49% dividend rate, with mandatory redemption in September 2029

KYN is a closed-end management investment company focused on providing high after-tax total returns and cash distributions to stockholders, primarily investing in Energy Infrastructure Companies.

Positive

• Successful private placement of $100 million in total financing
• Diversified financing structure with both notes and preferred shares
• Long-term maturities ranging from 5 to 12 years
• Competitive fixed interest rates between 5.19% and 5.49%

Negative

• Increased debt and leverage on the company's balance sheet
• Potential dilution for existing shareholders due to new preferred shares

Insights

Financial Analyst

Kayne Anderson Energy Infrastructure Fund's $100 million private placement is a significant move that strengthens its financial position. The mix of $70 million in notes and $30 million in mandatory redeemable preferred shares provides a balanced approach to leverage. With fixed interest rates ranging from 5.19% to 5.49%, the fund has secured relatively favorable terms in the current rate environment.

The extended maturity dates (2029-2036) offer long-term stability, allowing KYN to potentially benefit from energy infrastructure growth over the next decade. This refinancing strategy may improve the fund's financial flexibility and could positively impact its ability to make distributions to stockholders. However, investors should monitor how effectively the fund deploys this capital to generate returns that outpace the cost of this new debt.

Energy Sector Analyst

This financial move by Kayne Anderson Energy Infrastructure Fund reflects confidence in the long-term prospects of the energy infrastructure sector. By securing $100 million in new capital, KYN is positioning itself to potentially capitalize on opportunities in the evolving energy landscape. The fund's commitment to investing at least 80% of its assets in Energy Infrastructure Companies aligns with the ongoing transition and modernization of energy systems.

Investors should consider how this capital might be deployed in areas like renewable energy infrastructure, natural gas networks, or modernized oil transportation systems. The fund's ability to identify and invest in high-potential projects within this sector will be important for generating the "high after-tax total return" it aims to provide stockholders. This placement could signal upcoming strategic investments or acquisitions in the energy infrastructure space.

HOUSTON, Sept. 18, 2024 (GLOBE NEWSWIRE) -- Kayne Anderson Energy Infrastructure Fund, Inc. (the “Company”) (NYSE: KYN) announced today that it completed a private placement of $70 million of senior unsecured notes (“Notes”) and $30 million of mandatory redeemable preferred shares (“MRP Shares”).

Net proceeds will be used to refinance existing leverage and for general corporate purposes. The table below sets forth the key terms of the Notes and MRP Shares issued.

Notes / MRP Shares	Series	Amount ($ in millions)		Fixed Interest / Dividend Rate	Maturity / Mandatory Redemption Date
Notes	Series YY	$30		5.19%	September 2031
Notes	Series ZZ	$40		5.45%	September 2036
MRP Shares	Series X	$30		5.49%	September 2029
TOTAL		$100

The Notes and MRP Shares 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 80% of its total assets in securities of Energy Infrastructure Companies. See Glossary of Key Terms in the Company’s most recent quarterly report for a description of these investment categories and the meaning of capitalized terms.

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@kayneanderson.com.

FAQ

What is the total amount of financing Kayne Anderson Energy Infrastructure Fund (KYN) raised in its recent private placement?

Kayne Anderson Energy Infrastructure Fund (KYN) raised a total of $100 million in its recent private placement, consisting of $70 million in senior unsecured notes and $30 million in mandatory redeemable preferred shares.

What are the interest rates and maturities for the new notes issued by KYN in September 2024?

KYN issued two series of notes: Series YY with $30 million at 5.19% interest maturing in September 2031, and Series ZZ with $40 million at 5.45% interest maturing in September 2036.

What is the dividend rate and mandatory redemption date for KYN's new Series X MRP Shares?

The Series X Mandatory Redeemable Preferred (MRP) Shares issued by KYN have a 5.49% dividend rate and a mandatory redemption date in September 2029.

How does Kayne Anderson Energy Infrastructure Fund (KYN) plan to use the proceeds from its September 2024 private placement?

KYN plans to use the net proceeds from the private placement to refinance existing leverage and for general corporate purposes.