NexPoint Strategic Opportunities Fund Announces Rights Offering
DALLAS, April 20, 2018 /PRNewswire/ — NexPoint Strategic Opportunities Fund (NYSE: NHF) (the “Fund”), formerly known as NexPoint Credit Strategies Fund, today announced the commencement of a non-transferable rights offering to purchase additional shares of common stock of the Fund (the “Offering”).
The Fund is issuing non-transferable rights (“Rights”) to its common shareholders of record as of May 9, 2018 (the “Record Date” and such shareholders, “Record Date Shareholders”). Record Date Shareholders will receive one Right for each common share held on the Record Date. The Rights will entitle the Record Date Shareholders to purchase one new share of common stock for every three Rights held (1 for 3). The Rights will be mailed to Record Date Shareholders approximately two business days after the Record Date.
Record Date Shareholders who fully exercise their Rights will be entitled to subscribe for additional common shares of the Fund that remain unsubscribed as a result of any unexercised Rights by Record Date Shareholders. In addition, the Fund in its sole discretion may elect to issue additional common shares in an amount up to 25% of the common shares issued in the primary subscription.
The subscription price per common share will be determined based upon a formula equal to the lesser of (1) 95% of the reported net asset value on May 29, 2018 (the “Expiration Date”), or (2) 95% of the average of the last reported sales price of the Fund’s common shares on the New York Stock Exchange (“NYSE”) on May 29, 2018 (the “Expiration Date”) and on each of the four trading days preceding the Expiration Date.
Important Upcoming Dates:
May 9, 2018
May 10, 2018 to May 29, 2018
May 29, 2018
The Fund completed a successful rights offering in May 2017 with the same terms. In the 2017 offering, shareholders subscribed for approximately $269 million worth of shares of the Fund, or 233% of the original offering size. Over-subscription requests exceeded the over-subscription shares available; therefore, the over-subscription shares were allocated pro-rata among those record date shareholders who over-subscribed based on the number of common shares of the Fund owned by such shareholders on the record date. We encourage you to consider participating fully in the upcoming rights offering by exercising your rights to buy one new share for every three shares owned on the record date and by oversubscribing for additional unsubscribed rights. Please refer to the Fund’s prospectus available at www.nexpointadvisors.com for more information on how to participate.
About NexPoint Strategic Opportunities Fund
NexPoint Strategic Opportunities Fund is a closed-end fund managed by NexPoint Advisors, L.P. The Fund’s investment objectives are to provide both current income and capital appreciation. The Fund seeks to achieve this by investing primarily in the following categories of securities and instruments of corporations and other business entities: (i) secured and unsecured floating and fixed rate loans; (ii) bonds and other debt obligations; (iii) debt obligations of stressed, distressed and bankrupt issuers; (iv) structured products, including but not limited to, mortgage-backed and other asset-backed securities and collateralized debt obligations; (v) equities; (vi) other investment companies, including business development companies; and (vii) real estate investment trusts. The Fund may also invest in derivative instruments that have economic characteristics similar to instruments in investment categories (i) – (vii)and has the ability to hedge risk. The Fund’s investment adviser attempts to deliver consistent returns in excess of the Dow Jones Credit Suisse Hedge Fund and the HFRX Global Hedge Fund indices in a transparent, registered fund format consistent with monthly dividends. No assurance can be given that the Fund will achieve its investment objectives.
Shares of closed-end investment companies frequently 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 control of the Fund. Therefore, the Fund cannot predict whether its shares will trade at, below or above net asset value. Past performance does not guarantee future results.
Before exercising your Rights and investing in the Fund’s common shares, you should read the discussion of the material risks of investing in the Fund in the prospectus for the Offering. Certain of these risks are summarized below:
Interest Rate Risk. Interest rate risk is the risk that debt securities, and the Fund’s net assets, may decline in value because of changes in interest rates. Generally, fixed rate debt securities will decrease in value when interest rates rise and increase in value when interest rates decline.
Leverage Risk. The Fund uses leverage through borrowings from notes and a credit facility, and may also use leverage through the issuances of preferred shares. The use of leverage magnifies both the favorable and unfavorable effects of price movements in the investments made by the Fund. Insofar as the Fund employs leverage in its investment operations, the Fund will be subject to substantial risks of loss.
Closed-End Fund Risk. The Fund is a closed-end investment company designed primarily for long-term investors and not as a trading vehicle. No assurance can be given that a shareholder will be able to sell his or her shares on the NYSE when he or she chooses to do so, and no assurance can be given as to the price at which any such sale may be effected.
Industry Concentration Risk. The Fund must invest at least 25% of the value of its total assets at the time of purchase in securities of issuers conducting their principal business activities in the real estate industry. The Fund may be subject to greater market fluctuations than a fund that does not concentrate its investments in a particular industry. Financial, economic, business, and other developments affecting issuers in the real estate industry will have a greater effect on the Fund, and if securities of the real estate industry fall out of favor, the Fund could underperform, or its NAV may be more volatile than, funds that have greater industry diversification.
High-Yield Securities Investments Risk. Investments rated below investment grade are commonly referred to as high-yield, high risk or “junk debt.” They are regarded as predominantly speculative with respect to the issuing company’s continuing ability to meet principal and/ or interest payments. Non-payment of scheduled interest and/or principal would result in a reduction of income to the Fund, a reduction in the value of the asset experiencing non-payment and a potential decrease in NAV of the Fund.
Illiquidity of Investments Risk. The investments made by the Fund may be illiquid, and consequently 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 for such investments by the Fund.
You should read the prospectus for the Offering, which contains important information about the Fund, including additional risk disclosure, before deciding whether to invest, and retain for future reference. The statement of additional information for the Offering has been filed with the U.S. Securities and Exchange Commission. You may request a free copy of the statement of additional information, request the Fund’s most recent annual and semiannual reports or make shareholder inquiries by calling 866-351-4440 or by writing to the Fund at 200 Crescent Court, Suite 700, Dallas, Texas 75201. You may also write AST Fund Solutions, NHF’s information agent for the rights offering, at 55 Challenger Road, Suite 201, Ridgefield Park, NJ 07660 or call (877) 283-0323.
Exercising your Rights and investing in the Fund’s common shares involves a high degree of risk and may be considered speculative. Before exercising your Rights and investing in the Fund’s common shares, you should read the discussion of the material risks of investing in the Fund in the prospectus for the Offering, including the risks of leverage and of investing in below investment grade/high yield securities, in “Principal Risks of the Trust.” Certain of these risks are summarized in “Prospectus Summary—Principal Risks of the Trust.” Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. Please read the prospectus, located at www.nexpointadvisors.com, carefully before you invest.