Highland Opportunities and Income Fund (HFRO) Announces Tender Offer for … – PR Newswire
Highland Opportunities and Income Fund (HFRO) recently announced a game-changing move that could offer some serious perks to its shareholders. The Fund is planning to launch an issuer tender offer for its common shares (Shares), with the goal of exchanging them for up to $100 million in Series B Preferred Shares. This could mean some exciting benefits for investors!
The Tender Offer comes with an expected exchange price of $10.00 per Share, offering a substantial premium compared to the current Share price. The Fund’s Board of Trustees gave the green light for this plan on November 22, 2024, and the Tender Offer is set to kick off in January 2025.
The Series B Preferred Shares that will be issued are likely to have a similar structure to the existing 5.375% Series A Cumulative Preferred Shares, which are listed on the New York Stock Exchange (NYSE). This move is part of an overarching strategy by the Fund’s adviser, NexPoint Asset Management, L.P., and the Board. They are looking to tackle the Share price’s discount to net asset value (NAV) through initiatives like the share buyback program and enhanced disclosures.
The expected benefits for shareholders are quite promising. First, the Tender Offer has the potential to narrow the discount to NAV, boosting the NAV per Share for those that remain outstanding after the exchange. Additionally, shareholders will have a chance to swap their Shares at a premium to the current market price, creating an exciting opportunity. And let’s not forget that preferred shareholders will receive a fixed dividend of 5.375%.
While exact details of the offering are still to come, the Fund anticipates the Exchange Price per Common Share to be $10.00, with a total purchase price of $100 million for the Series B Preferred Shares. The terms may shift slightly closer to the formal launch, but rest assured that they will be outlined in the offering documents filed with the Securities and Exchange Commission.
In summary, the Tender Offer from Highland Opportunities and Income Fund could bring a wave of fresh benefits to shareholders, offering a chance to capitalize on premium pricing and fixed dividends. It’s definitely one to watch out for in the coming months!
