DALLAS, Nov. 2, 2016 /PRNewswire/ -- NexPoint Credit
Strategies Fund (NYSE: NHF) ("NHF" or the "Fund") today announced
its regular monthly dividend on its common stock
of $.20 per share.
The dividend will be payable on November 30,
2016 to shareholders of record at the close of business
November 23, 2016.
The Fund has elected to lower the monthly dividend from
$.24 to $.20 per share due in large
part to TXU Energy's long-awaited emergence from bankruptcy that
was finalized on October 4, 2016. The
Fund also announced that the Fund will initiate an open-market
share repurchase program initially sized at $10 million. The Fund expects to purchase and
retire $10 million of NHF common
shares in the open-market over the course of the next 6 months
beginning in December 2016.
As noted in the Fund's June 30,
2016 Semi-Annual Report, the Fund held approximately
$30 million market value of TXU
Energy's first lien debt which was yielding approximately 15% at
the time it was converted into equity in the new TCEH Corp. Due to
the equitizing, the Fund expects to receive less gross income on a
go-forward basis from this investment. We see this as a positive
development for TXU and, therefore, the Fund. Now that TXU has
eliminated roughly $33 billion of
debt through the restructuring and eliminated ongoing restructuring
expenses, we believe the company will be more nimble, more
strategic and better positioned for M&A activity. Though it is
impossible to predict how the equity will trade, our outlook on the
company remains positive.
The Board of Directors of the Fund has approved an open-market
share repurchase program pursuant to which the Fund may purchase
and retire, over a six-month period beginning in December 2016, up to $10
million of its stock in open-market transactions. The amount
and timing of the repurchases will be at the discretion of the
Fund's investment adviser, subject to market conditions and
investment considerations. There is no assurance that the Fund will
purchase shares at any particular discount levels or in any
particular amounts. Any repurchases made under this program would
be made on a national securities exchange at the prevailing market
price, subject to exchange requirements regarding volume, timing
and other limitations under federal securities laws. The share
repurchase program seeks to enhance shareholder value by purchasing
shares trading at a discount from their net asset value per
share.
The decrease in dividend from $.24 to
$.20 per share will result in an annualized distribution
rate of approximately 11.2% using the October 31st closing price of
$21.35. From the chart below, the
yield is still meaningfully higher than the distribution rate prior
to the spin-off of NexPoint Residential Trust, Inc. (Ticker:
"NXRT"), which occurred on April 1,
2015. We believe the NXRT distribution has been successful,
with investors in that entity realizing total annual rate of
return1 of 26.3% between April 1,
2015 and October 31, 2016.
1November yield assumes the October 31st, 2016 closing price of
$21.35
The Fund is a closed-end fund managed by NexPoint Advisors, L.P.
(the "Manager"), an affiliated adviser of Highland Capital
Management, L.P. The Fund invests primarily in below investment
grade debt and equity and has the ability to hedge risk. The
Manager attempts to deliver consistent returns in excess of the Dow
Jones Credit Suisse Hedge Fund and the HFRX Global Hedge Fund
indices in a [more] transparent, registered fund format consistent
with monthly dividends.
Total Returns as
of 10/31/16
|
1-year
|
3-year
|
5-year
|
Since
Inception
(6/29/06)
|
NexPoint Credit
Strategies Fund (NAV)
|
5.69%
|
10.89%
|
16.52%
|
3.46%
|
NexPoint Credit
Strategies Fund (Market Price)
|
7.63%
|
12.15%
|
16.12%
|
1.71%
|
|
|
|
|
|
Total Returns as
of 09/30/16
|
1-year
|
3-year
|
5-year
|
Since
Inception
(6/29/06)
|
NexPoint Credit
Strategies Fund (NAV)
|
5.04%
|
14.35%
|
17.21%
|
3.49%
|
NexPoint Credit
Strategies Fund (Market Price)
|
11.79%
|
16.36%
|
17.40%
|
2.02%
|
|
|
|
|
|
Total operating expenses as of the most recent fund annual
report are 2.23% of which 0.46% is the cost of leverage.
Performance data represents past performance, which does not
guarantee future results. Investment return and principal value
will fluctuate with market conditions, and you may have a gain or
loss when you sell your shares. For most recent
month-end performance please visit
www.nexpointadvisors.com or call
866-351-4440.
Investors should consider the investment objectives,
risks, charges and expenses of the NexPoint Credit Strategies Fund
carefully before investing. This and other information can be found
in the Fund's prospectuses, which may be obtained by calling
1-866-351-4440 or
visiting www.nexpointadvisors.com.
Please read the prospectus carefully before you invest.
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.
Credit 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.
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.
About NexPoint Credit Strategies Fund
NexPoint Credit
Strategies 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 is invested primarily in
below investment grade debt and equity securities and has the
ability to hedge risk. The Manager attempts to deliver consistent
returns in excess of the Dow Jones Credit Suisse Hedge Fund and the
HFRX Global Hedge Fund indices in a [more] 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.
1Total Return is defined by an investor who received
shares of NXRT upon the spin-off, held the shares from April 1, 2016 through October 31, 2016, and received and reinvested all
distributions. The total return is an annual performance
metric.
Contact:
Lucy Bannon
972-419-6272
lbannon@highlandcapital.com
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SOURCE NexPoint Advisors, L.P.