DALLAS, July 1, 2022 /PRNewswire/ — Highland Income Fund (NYSE: HFRO) (“HFRO” or the “Fund”) today announced its regular monthly distribution on its common stock of $0.0770 per share. The distribution will be payable on July 29, 2022 to shareholders of record at the close of business July 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 classes of securities and instruments: (i) floating rate loans and other securities deemed to be floating rate investments; (ii) investments in securities or other instruments directly or indirectly backed by real estate (including real estate investment trusts (“REITs”), preferred stocks, securities convertible into equity and mezzanine debt ); and (iii) other instruments, including but not limited to secured and unsecured fixed rate loans and corporate bonds, distressed securities, mezzanine securities, structured products (including , but not limited to, mortgage-backed securities, loan-backed bonds and asset-backed securities), convertible and preferred securities, equities (public and private) and futures and options. The investment objective of the Fund is to provide a high level of current income consistent with the preservation of capital in a registered fund format. The Fund declares and pays distributions of investment income monthly.
About 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 adviser. He advises a range of registered funds, including open-end mutual funds, closed-end funds and an exchange-traded fund. For more information, visit www.highlandfunds.com.
Investors should carefully consider the investment objectives, risks, charges and expenses of Highland Income Fund before investing. This and other information can be found in the Fund’s prospectus, which can be obtained by calling 1-800-357-9167 or visiting www.highlandfunds.com. Please read the prospectus carefully before investing.
Effective shortly after close of business on November 3, 2017Highland Floating Rate Fund transitioned from an open-end fund to a closed-end fund and began trading on the NYSE under the symbol HFRO on November 6, 2017. The performance data presented above for periods prior to November 3, 2017 mirrors that of Class Z Shares of the Fund when it was an open-end fund, HFRZX. The Closed-End Fund pursues the same investment objective and strategy as before its conversion. The expense ratio is that of the Class Z shares of the Fund prior to its conversion.
The distribution may include a return of capital. Please refer to Distribution Source Notice 19(a)-1 on the Highland Funds website for Section 19 Notices which provide estimated amounts and sources of fund distributions, which shall not be used for tax reporting purposes.
No assurance can be given that the Fund will achieve its investment objectives.
Shares of closed-end investment companies often trade at a price below net asset value. The price of shares in the Fund is determined by a number of factors, many of which are beyond the control of the Fund. Accordingly, the Fund cannot predict whether its shares will trade at, below, or above net asset value. Past performance does not guarantee future results.
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 such sale might be affected.
Credit risk. The Fund may invest all or substantially all of its assets in Senior Loans or other securities rated below investment grade and in unrated Senior Loans deemed by Highland to be of comparable quality. Securities rated below investment grade are commonly referred to as “high yield” or “junk” securities. They are considered essentially speculative with respect to the issuing company’s continued ability to meet principal and interest payments. Failure to pay the scheduled interest and/or principal would result in a reduction in the income of the Fund, a reduction in the value of the senior loan in default and a potential reduction in the net asset value of the Fund. Investments in High Yield Senior Loans and other securities may cause the net asset value to fluctuate more than if the Fund had not made such investments.
Senior Loan Risk. The London Interbank Offered Rate (“LIBOR”) is the average rate offered for various maturities of short-term loans between major international banks that are members of the British Bankers Association. LIBOR is the most commonly used benchmark interest rate index for making adjustments to floating rate loans. It is used in the global banking and financial sectors to determine interest rates for a variety of financial instruments (such as debt securities and derivatives) and loan 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 UK financial regulator, has announced its desire to phase out the use of LIBOR by the end of 2021. Although the period from the FCA’s announcement to the end of 2021 should generally be sufficient for market participants move to using another benchmark for new securities and transactions, there remains uncertainty regarding the future use of LIBOR and the specific replacement rate(s). As such, the potential effect of a transition away from LIBOR on the Trust or the financial instruments utilized by the Trust cannot yet be determined. The transition process may involve, among other things, increased volatility or illiquidity in the markets for instruments that currently rely on LIBOR. The transition may also result in a change in (i) the value of certain instruments held by the Trust, (ii) the cost of temporary borrowings for the Trust, or (iii) the effectiveness of related Trust transactions such as hedges , depending on the case. . When LIBOR is removed, the LIBOR replacement rate may be lower than market expectations, which could negatively impact the value of preferred securities and floating-rate or fixed-to-floating coupon debt securities. Such effects of the transition away from LIBOR, as well as other unforeseen effects, could result in losses to the Trust. Since the usefulness of LIBOR as a benchmark may deteriorate during the transition period, these effects could occur before the end of 2021.
Risk related to the real estate sector: Issuers primarily engaged in the real estate industry, including real estate investment trusts, may be subject to risks similar to the risks associated with direct ownership of real estate, including: (i) changes in general economic conditions and the market; (ii) changes in the value of real estate; (iii) risks related to local economic conditions, overbuilding and increased competition; (iv) increase in property taxes and operating expenses; (v) changes in zoning laws; (vi) accident and conviction losses; (vii) changes in rental income, neighborhood values or attractiveness of properties to tenants; (viii) availability of financing; and (ix) changes in interest rates and indebtedness.
Risk of illiquidity of investments. Investments made by the Fund may be illiquid and accordingly the Fund may not be able to sell such investments at prices which reflect the Investment Adviser’s assessment of their worth or the amount originally paid for such investments by the bottom.
Ongoing monitoring risk. On behalf of multiple lenders, the Agent will generally be required to administer and service the Senior Loans and, in the case of Senior Secured Loans, to service or monitor the Collateral. Financial difficulties of Agents may pose a risk to the Fund.
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Highland SOURCE Income Fund