Saba Capital Reaches Agreement With Invesco Dynamic Credit Opportunities Fund

Rhea-AI Summary

Saba Capital Management has reached an agreement with Invesco Dynamic Credit Opportunities Fund (NYSE: VTA) to initiate a cash tender offer for up to 20% of the Fund's outstanding shares at 98.5% of its net asset value. This move is designed to allow shareholders to tender shares close to their NAV. Additionally, pending shareholder approval, the Fund plans to reorganize into a new interval fund that will offer quarterly repurchases of 10% of its outstanding shares at NAV through March and June 2022. Saba has also agreed to certain standstill covenants.

Positive

• Shareholders can tender shares at 98.5% of NAV, providing liquidity.
• Reorganization into an interval fund may enhance investment opportunities.

Negative

• The cash tender offer limits to only 20% of outstanding shares, potentially restricting liquidity for other shareholders.
• Future repurchase offers are contingent on certain conditions, introducing uncertainty.

Saba Capital Management, L.P. and certain associated parties (collectively “Saba”) today announced that it has reached an agreement with Invesco Dynamic Credit Opportunities Fund (NYSE: VTA) (the “Fund”).

Under the terms of the agreement, Invesco Dynamic Credit Opportunities Fund will commence a cash tender offer for up to 20% of the Fund’s outstanding shares of common stock at a price per share equal to 98.5% of the Fund’s net asset value (“NAV”) per share (the “Tender Offer”). The Fund will repurchase shares tendered and accepted in the Tender Offer in exchange for cash.

Subsequent to the Tender Offer and with shareholder approval, the Fund will reorganize into a new shell interval fund (the “New Interval Fund”) created to acquire the assets and liabilities of the Fund. The New Interval Fund will conduct quarterly repurchase offers for 10% of the New Interval Fund’s then outstanding shares at NAV for each of the quarters ended March 2022 and June 2022, subject to certain contingencies described in the agreement. In addition, Saba has agreed to certain standstill covenants.

“Saba is pleased to have reached this agreement through constructive engagement with the Fund’s board and Invesco Advisers,” said Paul Kazarian, Portfolio Manager at Saba. “We believe shareholders will benefit from the Tender Offer contemplated by the agreement, as it enables shareholders to tender their shares at a price close to the Fund’s net asset value, in addition to the reorganization into an interval fund.”

About Saba Capital

Saba Capital Management, L.P. is a registered investment adviser founded in 2009. Saba is a spin-out of a proprietary investing group founded by Boaz Weinstein at Deutsche Bank in 1998. Saba manages $3.3 billion across four core strategies: Credit Relative Value, Tail Hedge, SPACs and Closed-End Funds. Saba’s investors are predominantly institutions and include public and corporate pension plans, endowments and foundations, family offices, banks and insurers, bank private wealth platforms, fund of funds and certain high net worth individuals.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210507005550/en/

FAQ

What is the cash tender offer for Invesco Dynamic Credit Opportunities Fund (VTA)?

The offer allows for the repurchase of up to 20% of the Fund's shares at 98.5% of its net asset value.

When will the new interval fund for VTA be established?

The reorganization into the new interval fund is pending shareholder approval after the tender offer.

What is the benefit of the tender offer for VTA shareholders?

Shareholders can sell their shares close to the net asset value, enhancing liquidity.

How often will the new interval fund conduct repurchase offers?

The new interval fund will conduct quarterly repurchase offers for 10% of its outstanding shares at NAV.