#United States #Dallas #Income Fund #preferred shares #Highland Opportunities

Highland Opportunities and Income Fund Concludes Successful Exchange Offer

The Highland Opportunities and Income Fund (NYSE: HFRO) has marked a significant milestone with the completion of its oversubscribed tender and exchange offer. The Fund announced on March 5, 2025, that shareholders successfully exchanged their common shares for newly issued 5.375% Series B Preferred Shares. This initiative not only reflects the Fund's commitment to its investors but is also strategically designed to enhance long-term shareholder value.

Exchange Offer Details

The exchange offer was targeted towards exchanging 10 million common shares for the preferred shares, accumulating an approximate liquidation preference of $100 million. Given the oversubscription, shares were accepted on a pro-rata basis, meaning that all shareholders who participated will receive shares proportional to their tenders. Any common shares not accepted will be returned to the respective shareholders.

This structured exchange demonstrates HFRO's dedication to rectifying the common shares' discount to net asset value (NAV). By allowing shareholders to tender their shares at a premium to the market price, the Fund aims to enhance its overall value proposition.

In detail, participating shareholders will receive preferred shares valued at their liquidation preference of $25 each. The new preferred shares are expected to be listed on the New York Stock Exchange (NYSE) shortly after the exchange concludes. With an Investment Grade (BBB+) rating from Egan-Jones, these shares secure confidence among investors.

Dividend Payments

The newly issued preferred shares come with attractive dividends, which are cumulative from their initial issue date at a rate of 5.375%. This means that throughout the year, dividends will be distributed quarterly on March 31, June 30, September 30, and December 31, starting with the first payment on March 31, 2025. This strategy not only provides more stable income but also aligns with the current investment landscape.

About Highland Opportunities and Income Fund

Managed by NexPoint Asset Management, L.P., the Highland Opportunities and Income Fund focuses on providing investors with value creation through strategic investments. As SEC-registered advisers, NexPoint is adept at navigating the complexities of the market to deliver favorable outcomes for their investors. Their ongoing commitment to enhancing shareholder value positions HFRO as a strong contender in the market.

Future Outlook

As the Fund looks ahead, the successful completion of this transaction is expected to play a critical role in driving HFRO’s strategy to manage common equity while addressing investor concerns regarding current market conditions. Through adept management and shareholder-focused initiatives, the Highland Opportunities and Income Fund aims to reinforce its standing in the financial sector, showcasing reliability and growth potential.

Interested investors are encouraged to keep track of additional updates, including the upcoming distribution announcements and future investor calls for comprehensive insights into the Fund’s performance and strategies.

For further details, visit NexPoint Asset Management.