Highland Income Fund Announces – GuruFocus.com
Dallas, April 1, 2022 /PRNewswire/ — Highland Income Fund (NYSE: HFRO) (“HFRO” or the “Fund”) today announced its regular monthly distribution on its common shares $0.0770per share. The distribution is payable on April 29, 2022 to registered shareholders at close of business April 22, 2022.
The Fund is a closed-end fund managed by Highland Capital Management Fund Advisors, LP (the “Manager”). The Fund will pursue its investment objective by investing primarily in the following categories of securities and instruments: (i) floating rate loans and other securities qualifying as floating rate investments; (ii) investments in securities or other instruments directly or indirectly secured by real estate (including real estate investment trusts (“REITs”), preferred stock, securities convertible into shares and mezzanine debt); and (iii) other instruments, including but not limited to secured and unsecured fixed income and corporate bonds, distressed securities, mezzanine securities, structured products (including but not limited to mortgage-backed securities, secured lending obligations and asset-backed securities). ), convertible and preferred securities, stocks (public and private) and futures and options. The Fund’s investment objective is to achieve high current income consistent with the preservation of capital as a registered fund. The Fund declares and pays monthly distributions of investment income.
About the Highland Income Fund
Highland Income Fund (NYSE: HFRO) is a closed-end fund managed by Highland Capital Management Fund Advisors, LP. For more information, visit www.highlandfunds.com/income-fund/
About Highland Capital Management Fund Advisors, LP
Highland Capital Management Fund Advisors, LP is an SEC-registered investment advisor. It is the adviser to a number of registered funds including mutual funds, closed funds and an exchange traded fund. Visit http://www.highlandfunds.com for more information.
Investors should carefully consider the Highland Income Fund’s investment objective, risks, charges and expenses before investing. This and other information can be found in the fund’s prospectus, which is available by calling 1-800-357-9167 or at www.highlandfunds.com. Please read the prospectus carefully before investing.
Valid shortly after close of business on November 3, 2017Highland Floating Rate Fund was converted from an open-end fund to a closed-end fund and began trading on the NYSE under the symbol HFRO November 6, 2017. The performance data presented above for periods before November 3, 2017 reflects the Fund’s Class Z Shares when it was an open-ended fund, HFRZX. The closed-end fund has the same investment objective and strategy as before its conversion. The expense ratio is that of the Fund’s Class Z Shares prior to their conversion.
The distribution may include a return of capital. Please see the 19(a)-1 Distribution Sources Notice on the Highland Funds website for Section 19 notices setting out estimated amounts and sources of distributions from the Fund which should not be relied upon for tax reporting purposes.
There can be no assurance that the Fund will achieve its investment objectives.
Shares in closed-end investment companies often trade at a discount to net asset value. The price of the Fund’s shares is determined by a number of factors, several of which are beyond the Fund’s control. Therefore, the Fund cannot predict whether its Shares will trade at, below or above the Net Asset Value. Past performance does not guarantee future results.
Risk of closed funds. The Fund is a closed-ended investment company primarily designed for long-term investors and not as a trading vehicle. There can be no assurance that a shareholder will be able to sell his or her shares on the NYSE if he or she so chooses, and no assurance can be given as to the price at which such sale will be effected can be.
credit risk. The Fund may invest all or substantially all of its assets in below investment grade rated debt or other securities and in unrated unrated debt deemed by Highland to be of comparable quality. Below investment grade securities are commonly referred to as “high yield securities” or “junk securities”. They are considered to be largely speculative in terms of the issuing entity’s continued ability to make principal and interest payments. Failure to pay scheduled interest and/or principal would result in a reduction in the Fund’s income, an impairment of the unpaid senior loan and a potential decrease in the Fund’s NAV. Investing in high yield senior loans and other securities may result in greater NAV fluctuations than if the Fund did not make such investments.
Senior Loan Risk. The London Interbank Offered Rate (“LIBOR”) is the average offered rate for various maturities of short-term loans between major international banks that are members of the British Bankers Association. LIBOR is the most common benchmark interest rate index used to adjust adjustable rate loans. It is used throughout the global banking and finance industry to determine interest rates on a variety of financial instruments (such as debt securities and derivatives) and lending agreements. Due to allegations of manipulation in 2012 and reduced activity in the financial markets it measures in July 2017the Financial Conduct Authority (the “FCA”), the United Kingdom Financial Regulator to phase out the use of LIBOR by the end of 2021. While it is widely expected that the period from the FCA announcement to the end of 2021 will provide sufficient time for market participants to switch to using a different benchmark for new securities and transactions, uncertainty remains regarding the future use of LIBOR and the specific replacement rate or the sentences. Therefore, the potential impact of a departure from LIBOR on the Trust or the financial instruments used by the Trust cannot yet be determined. The transition process may involve, among other things, increased volatility or illiquidity in the markets for instruments currently dependent on LIBOR. The transition may also result in a change in (i) the value of certain instruments held by the Trust, (ii) the cost to the Trust of borrowing on a temporary basis, or (iii) the effectiveness of related Trust transactions such as hedging. If LIBOR is phased out, the LIBOR replacement rate may be lower than market expectations, which could adversely affect the value of preferred and debt securities with floating or fixed-to-floating coupons. Such effects of moving away from LIBOR, as well as other unanticipated effects, could result in losses to the Trust. As the usefulness of LIBOR as a benchmark could deteriorate during the transition period, this impact could materialize before the end of 2021.
Real estate industry risk: Issuers principally engaged in the real estate industry, including real estate investment trusts, may be subject to risks similar to those associated with direct ownership of real estate, including: (i) changes in general economic and market conditions; (ii) changes in the value of real estate; (iii) risks related to local economic conditions, urban development and increased competition; (iv) increases in property taxes and operating expenses; (v) changes in zoning laws; (vi) accidental and conviction losses; (vii) fluctuations in rental income, neighborhood values or the attractiveness of properties to tenants; (viii) the availability of financing; and (ix) changes in interest rates and leverage.
Risk of illiquidity of investments. Investments made by the Fund may be illiquid and, as a result, the Fund may not be able to sell such investments at prices that reflect the Investment Adviser’s assessment of their value or the amount originally paid by the Fund for such investments.
Ongoing Surveillance Risk. On behalf of the various lenders, the agent is generally required to administer and administer the senior loans and, in relation to secured senior loans, to service or monitor the collateral. Agent financial difficulties may pose a risk to the Fund.
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SOURCE Highland Income Fund