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Neuberger Berman Real Estate Securities Income Fund Announces New Rights Offering

Neuberger Berman Real Estate Securities Income Fund Inc. (NYSE American: NRO) has recently revealed its approval for a new rights offering aimed at enhancing its asset base. As of January 23, 2025, record date stockholders will be eligible to participate in this rights offering, allowing existing common stockholders to purchase additional shares at a discounted price relative to the current market.

Understanding the Rights Offering

The rights offering is designed to benefit the Fund and its stockholders by providing additional capital that can be utilized for taking advantage of lucrative investment opportunities. The Fund's investment objective is focused on generating high current income, while capital appreciation stands as a supplementary goal. This move is particularly noteworthy as it reflects the Fund's confidence in market conditions and the potential for growth.

Equipped with the insights from their investment adviser, Neuberger Berman Investment Advisers LLC, the Fund believes that now is an optimal time to augment its assets. The characteristics of this rights offering include enough incentives for current shareholders, ensuring the offer remains enticing. Each Record Date Stockholder will receive one Right for each share of common stock they hold, allowing them to subscribe for one new share of common stock for every three Rights they possess, thereby facilitating a structured expansion of the Fund's investment reach.

Key Benefits of the Offering

Among the anticipated advantages, the major one includes:
1. Fresh Proceeds for Investment: The funds raised will be redirected to capitalizing on favorable investment avenues, which in turn could potentially heighten long-term returns for the Fund.
2. Opportunity for Current Stockholders: Existing common stockholders can acquire shares at a price below the prevailing market rate, or alternatively, they can realize value from the sale of their Rights, ensuring they benefit regardless of how they choose to react to the offering.
3. Reduced Total Expense Ratio: The expected increase in asset base would likely lead to a reduction in the total expense ratio as fixed costs will be distributed over a larger capital pool.
4. Increased Liquidity: There is potential for improved trading volume and liquidity associated with NRO common stock as a result of the offering.

The Fund has also declared regular monthly distributions for January and February 2025, but newly issued shares through the rights offering will not qualify for these distributions as they are allocated post these record dates. However, shares obtained through the rights offering will become eligible for distributions in March 2025.

Rights Offering Parameters

Some essential parameters surrounding this offering include:

• - Eligibility: Stockholders on the record date will each be issued one Right for every outstanding common share. With a 1-for-3 structure, stockholders can buy new shares at a Subscription Price determined at the expiration of the offer, projected to be February 19, 2025.
• - Subscription Price: This will be calculated based on the average closing prices of the previous trading sessions. If the calculated price falls below the Fund's net asset value, a minimum price of 90% of the NAV will be set to ensure fairness in pricing.
• - Transfer and Trade of Rights: The Rights will be transferable and open for trading on the NYSE American under specific symbols, enhancing flexibility for stockholders looking to sell their rights rather than exercise them.

In conclusion, the rights offering represents a strategic initiative by Neuberger Berman aimed at leveraging current market conditions and enhancing investment capabilities while providing existing stockholders with beneficial opportunities. Moving forward, the Fund asserts its focus on maintaining steady distributions and delivering favorable returns for its shareholders. Stakeholders are advised to review the accompanying prospectus thoroughly, which will detail the offering and other essential investment considerations.

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For more details on the rights offering, please refer to Neuberger Berman Investment Advisers LLC or the designated information agents.

Disclaimer: This article is not an offer for securities and is intended for informational purposes only.