DALLAS, May 30, 2018 – NexPoint Strategic Opportunities Fund (NYSE: NHF) (the “Fund”) is pleased to announce the successful completion of its non-transferable rights offering (the “Offer”). Total subscriptions were equal to 177% of the primary offering.
James Dondero, NexPoint President and Fund Portfolio Manager, remarked on the success of the offering: “For the second straight year, we are pleased with the material over subscription and investor support consistent with top percentile performance we have delivered over the past five years1.”
The Offer commenced on May 10, 2018 and expired on May 29, 2018 (the “Expiration Date”). The Offer entitled rights holders to subscribe for up to an aggregate of 7,595,858 of the Fund’s common shares (the “Shares”). Pursuant to the Offer, the Fund issued one non-transferable right (a “Right”) for each common share of the Fund to shareholders of record as of May 9, 2018 (“Record Date Shareholders”). Holders of Rights were entitled to purchase one newly issued Share for every three Rights held. The subscription price for each Share issued pursuant to the Offer was $21.30, which represented 95% of the average of the last reported sales price of the Fund’s common shares on the NYSE on the Expiration Date and on each of the four trading days preceding the Expiration Date.
Preliminary results indicate that the Fund received total subscriptions for Shares totaling approximately $309 million(including over-subscription requests and notices of guaranteed delivery), representing 177% of the 7,595,858 Shares available to be issued pursuant to the primary subscription. Over-subscription requests exceeded the over-subscription shares available and the 1,898,965 additional Shares available pursuant to the exercise of an over-allotment option (the “Secondary Subscription Shares”). The over-subscription shares and Secondary Subscription Shares will be allocated pro-rata among those Record Date Shareholders who over-subscribed based on the number of common shares of the Trust owned by such Shareholders on May 9, 2018, the Record Date.
Confirmation as to the amount of Shares received by each participating Rights holder will be sent by the Subscription Agent on or about June 5, 2018.
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.
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.
Investors should consider the investment objectives, risks, charges and expenses of the NexPoint Strategic Opportunities Fund carefully before investing. Total operating expenses as of the most recent fund annual report are 2.21%. 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.
Performance data represents past performance, which does not guarantee future results. Current performance may be higher or lower than the figures shown. 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.
As of May 29, 2018, the NexPoint Strategic Opportunities Fund had a total return based on market price of 10.71%, 13.37% and 5.96% over the last 1 year, 5 year and 10 year periods. The NexPoint Strategic Opportunities Fund’s percentile ranking based on total return for the 1-year period was 44th percentile among 9 funds in the Morningstar Closed End Fund Tactical Allocation category. The Fund’s percentile ranking based on total return for the 5-year period was 1stpercentile among 7 funds in the Morningstar Closed End Fund Tactical Allocation category. The Fund’s percentile ranking based on total return for the 10-year period was 43rd percentile among 7 funds in the Morningstar Closed End Fund Tactical Allocation category. The Morningstar Ranking compares a Fund’s Morningstar risk and return scores with all the Funds in the same Category, where 1% = Best and 100% = Worst. Past performance does not guarantee future results.
1) Over the five years ending May 29, 2018, the Fund’s price return was in the top percentile of the Morningstar Closed End Fund Tactical Allocation Category, and was in the 3rd percentile out of all closed end funds over the same period. Source: Morningstar