SABA’s Board of Trustees Approves Share Repurchase Program, Reverse Stock Split, and Declassification of Board of Trustees
Saba Capital Income & Opportunities Fund II (NYSE: SABA) announced the approval of an open market share repurchase program, a reverse stock split, and the declassification of the Board of Trustees. The repurchase program allows the Fund to buy back up to 10% of common shares annually to enhance shareholder value. The reverse stock split is set at a ratio of 1-for-2, and the Board declassification aligns governance with industry standards.
The Fund's investment objective may not be met, leading to uncertain outcomes for investors. Risks associated with investments in debt, equity securities, derivatives, and high yield securities could impact the Fund's performance negatively. Factors such as changes in interest rates, market conditions, and investment in foreign borrowers pose additional risks to the Fund and its shareholders.
Open Market Repurchase Program. The Board has approved a new open market share repurchase program to authorize the Fund to purchase up to
Subject to the
If and when the Fund’s
Reverse Stock Split. The Board has approved a reverse stock split (the “Reverse Split”) of the Fund’s common shares at a ratio of 1-for-2. The Reverse Split is expected to become effective immediately after the close of trading on the NYSE on June 21, 2024 (“Effective Date”), and the Fund’s common shares are expected to begin trading on the NYSE on a reverse split-adjusted basis at the open of trading on June 24, 2024.
As of the Effective Date, every two shares of the Fund’s issued and outstanding common shares will be converted into one common share. The Fund’s common shares will continue to trade on the NYSE under the symbol “SABA.” The Fund also intends to issue fractional shares in connection with the Reverse Split.
The Fund has also adopted an updated managed distribution plan. In connection with the Reverse Split, the Fund’s fixed monthly distribution will be adjusted from
Declassification of Board of Trustees. Subject to shareholder approval at the next annual shareholder meeting, the Board has approved an amendment to the Fund’s Declaration of Trust to declassify the Board so that all trustees are elected on an annual basis. The annual election of all trustees at once will align the Fund’s corporate governance to the best-in-class standard of the industry.
Past Performance is No Assurance of Future Results. Investment return and principal value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. Investors should consider the investment objective, risks and expenses carefully. You can obtain the Fund’s most recent periodic reports and filings by visiting https://www.sec.gov/edgar/browse/?CIK=828803&owner=exclude.
Certain Risk Factors. The Fund’s investment objective is to provide investors with high current income, with a secondary goal of capital appreciation. There can be no assurance that the Fund will meet its investment objective. The Fund seeks to achieve this objective by investing globally in debt and equity securities of public and private companies, which includes, among other things, investments in closed‐end funds, reinsurance, and public and private debt instruments. The Fund also may utilize derivatives including but not limited to total return swaps, credit default swaps, options (including but not limited to index options) and futures, in seeking to enhance returns and/or to reduce portfolio risk. In addition, on an opportunistic basis, the Fund may also invest up to
The value of equity securities of public and private, listed and unlisted companies and equity derivatives generally varies with the performance of the issuer and movements in the equity markets more generally. As a result, the Fund may suffer losses if it invests in equity instruments of issuers whose performance diverges from the Fund’s investment adviser’s expectations or if equity markets generally move in a single direction and the Fund has not hedged against such a general move. The Fund may invest in closed-end funds, which are subject to additional risks and considerations. The performance of reinsurance-related securities and the reinsurance industry itself are tied to the occurrence of various triggering events, including but not limited to weather, natural disasters (hurricanes, earthquakes, etc.), non-natural large catastrophes and other specified events causing physical and/or economic loss. To the extent the Fund invests in reinsurance-related securities for which a triggering event occurs, losses associated with such event could result in losses to the Fund’s investment, and a series of major triggering events affecting a large portion of the reinsurance-related securities held by the Fund could result in substantial losses to the Fund’s investment. The Fund may invest in high yield securities, which are speculative in nature and are subject to additional risk factors such as increased possibility of default, illiquidity of the security, and changes in value based on changes in interest rates. Changes in short-term market interest rates may directly affect the yield on the Fund’s common shares. If such rates fall, the Fund’s yield may also fall. If interest rate spreads on bonds and loans owned by the Fund decline in general, the yield on the bonds and loans will likely fall and the value of such bonds and loans may decrease. When short-term market interest rates rise, because of the lag between changes in such short-term rates and the resetting of the floating rates on bonds and loans in the Fund’s portfolio, the impact of rising rates will be delayed to the extent of such lag. Because of the limited secondary market for certain bonds and loans, the Fund’s ability to sell such securities in a timely fashion and/or at a favorable price may be limited. An increase in the demand for bonds and loans may adversely affect the rate of interest payable on new bonds and loans acquired by the Fund, and it may also increase the price of bonds and loans purchased by the Fund in the secondary market. A decrease in the demand for bonds and loans may adversely affect the price of bonds and loans in the Fund’s portfolio, which would cause the Fund’s NAV to decrease. Investment in foreign borrowers involves special risks, including but not limited to potentially less rigorous accounting requirements, differing legal systems and potential political, social and economic adversity. The Fund may engage in currency exchange transactions to seek to hedge, as closely as practicable, all of the economic impact to the Fund arising from foreign currency fluctuations. Other risks include, but are not limited to, the use of derivatives, the potential lack of diversification in the Fund’s portfolio, and the fact that the Fund’s portfolio may be concentrated in a small group of industries or industry sectors from time to time. Investors should consult the Fund’s filings with the Securities and Exchange Commission as well as the materials on the Fund’s website for a more detailed discussion of these or other risk factors that affect the Fund.
About Saba Capital Income & Opportunities Fund II. Saba Capital Income & Opportunities Fund II is a publicly-traded registered closed-end management investment company. The Fund’s common shares trade on the NYSE under the ticker symbol “SABA.” The Fund is managed by Saba Capital Management, L.P.
Effective on January 1, 2024, Saba Capital Management, L.P. replaced Franklin Templeton Advisers, Inc. as the investment adviser to the Fund (formerly known as the Templeton Global Income Fund). Performance of the Fund prior to January 1, 2024 is not attributable to Saba Capital Management, L.P. The Fund has deployed approximately
Forward-Looking Statements. This press release contains forward-looking statements subject to the inherent uncertainties in predicting future results and conditions. Any statements that are not statements of historical fact (including but not limited to statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered to be forward-looking statements. These statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements. These factors, including but not limited to the “Certain Risk Factors” noted above, are identified from time to time in the Fund’s filings with the Securities and Exchange Commission as well as the materials on the Fund’s website. The Fund undertakes no obligation to update such statements to reflect subsequent events, except as may be required by law.
For further information on Saba Capital Income & Opportunities Fund II, please visit our website at: www.sabacef.com. On or around the end of May 2024, the website will be updated to present portfolio information and other data as of April 30, 2024.
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Source: Saba Capital Income & Opportunities Fund II
FAQ
What was approved by SABA's Board of Trustees?
What is the purpose of the share repurchase program?
What is the ratio of the reverse stock split?
When will the Reverse Split be effective?
What will happen to the Fund's common shares after the Reverse Split?
What is the symbol under which the Fund's shares will continue to trade?
What was adjusted in connection with the Reverse Split?
What does the declassification of the Board of Trustees entail?
