The Herzfeld Caribbean Basin Fund, Inc. (NASDAQ: CUBA) (the “Fund”)
today announced that the Fund has made the following distribution
pursuant to the Fund’s Managed Distribution Plan (the “Plan”):
Declaration Date |
Ex-Date |
Record Date |
Payment Date |
Per Share |
12/19/2023 |
12/28/2023 |
12/29/2023 |
01/31/2024 |
$0.135375 |
|
|
|
|
|
The distribution for stockholders has been paid in
cash or shares of the Fund’s common stock at the election of
stockholders. The total amount of cash distributed to all
stockholders was limited to 20% of the total distribution to be
paid, excluding any cash paid for fractional shares. The remainder
of the distribution (approximately 80%) was paid in the form of
shares of the Fund’s common stock. The exact distribution of cash
and stock to any given stockholder was dependent upon his/her
election as well as elections of other stockholders, subject to the
pro-rata limitation.
The price used to calculate the number of shares to
be issued in lieu of cash is $2.6336, which was determined using
the volume weighted average price per share of the Fund on January
16, 17 and 18, 2024. The total amount of cash and shares
distributed under the Plan was as follows:
Total Cash |
Total Shares |
$437,354.93 |
664,103 |
|
|
Stockholders who elected to receive the
distribution solely in shares of common stock and stockholders who
did not make an election will receive approximately 0.0514 shares
of common stock for each share of common stock they owned on the
record date of December 29, 2023. Holders of approximately
20.20% of the Company’s common stock elected to receive only stock
or did not make an election.
Stockholders electing to receive the distribution
in all cash will receive cash in the amount
of $0.03393 per common share, or approximately 25.07% of
the $0.135375 distribution, and $0.10144 shares of common stock, or
approximately 74.93% of the total distribution for each share of
common stock they owned on the record date of December 29, 2023.
Cash in lieu of fractional shares will be issued, if applicable.
Total outstanding shares of the Company’s common stock following
the distribution will be approximately 16,814,776.
The primary purpose of the Plan is to provide
stockholders with a constant, but not guaranteed, fixed minimum
rate of distribution each quarter (currently set at the annual rate
of 15% of the Fund’s net asset value as determined on December 19,
2023 and payable in quarterly installments). The Fund cannot
predict what effect, if any, the Plan will have on the market price
of its shares or whether such market price will reflect a greater
or lesser discount to net asset value as compared to prior to the
adoption of the Plan.
Under the Plan, the Fund will distribute all
available investment income to its stockholders, consistent with
its investment objective and as required by the Internal Revenue
Code of 1986, as amended (the “Code”). The amount
distributed per share is subject to change at the discretion of the
Fund’s Board of Directors (“Board”). If
sufficient investment income is not available on a quarterly basis,
the Fund will distribute long-term capital gains and/or return
capital to its stockholders in order to maintain its managed
distribution level. The Fund is currently not relying on any
exemptive relief from Section 19(b) of the Investment Company Act
of 1940, as amended (the “1940 Act”). The Fund may make additional
distributions from time to time, including additional capital gain
distributions at the end of the taxable year, if required to meet
requirements imposed by the Code and/or the 1940 Act. Please note
that for shareholders enrolled in the Fund’s Dividend Distribution
Reinvestment Plan, the distribution will be reinvested in
additional shares of the Fund as described in the Plan.
The Fund expects that distributions under the Plan
will exceed investment income and available capital gains and thus
expects that distributions under the Plan will likely include
returns of capital for the foreseeable future. A return of capital
may occur, for example, when some or all of a stockholder’s
investment is paid back to the stockholder. A return of capital
distribution does not necessarily reflect the Fund’s investment
performance and should not be confused with ‘yield’ or ‘income.’
Any such returns of capital will decrease the Fund’s total assets
and, therefore, could have the effect of increasing the Fund’s
expense ratio. In addition, in order to maintain the level of
distributions called for under its Plan, the Fund may have to sell
portfolio securities at a less than opportune time.
The following table sets forth the estimated
amounts of the current distribution and the cumulative
distributions paid this fiscal year to date from the following
sources: net investment income, net realized capital gains and
return of capital. All amounts are expressed per common share.
|
Current Distribution |
% Breakdown of the Current Distribution |
Total Cumulative Distributions for the Fiscal Year to Date |
% Breakdown of the Total Cumulative Distributions for the Fiscal
Year to Date |
Net Investment Income |
$0.00 |
0% |
$0.00 |
0% |
Net Realized Short-Term Capital Gains |
$0.00 |
0% |
$0.00 |
0% |
Net Realized Long-Term Capital Gains |
$0.00 |
0% |
$0.00 |
0% |
Return of Capital |
$0.135375 |
100% |
$0.135375 |
100% |
Total (per common share) |
$0.135375 |
100% |
$0.135375 |
100% |
Average annual total return (in relation to NAV) for the 5-year
period ending on December 29, 2023 |
0.08% |
Annualized current distribution rate expressed as a percentage of
NAV as of December 29, 2023 |
15.52% |
Cumulative total return (in relation to NAV) for the fiscal year
through December 29, 2023 |
-27.07 |
Cumulative fiscal year distributions as a percentage of NAV as of
December 29, 2023 |
3.88% |
No conclusions should be drawn about the Fund’s
investment performance from the amount of the Fund’s distributions
or from the terms of the Plan.
The amount distributed per share is subject
to change at the discretion of the Board. The Plan is
subject to ongoing review by the Board to determine whether it
should be continued, modified or terminated. The Board may amend
the terms of the Plan, suspend the Plan, or terminate the Plan at
any time without prior notice to the Fund’s stockholders if it
deems such actions to be in the best interest of the Fund or its
stockholders. The amendment or termination of the Plan could have
an adverse effect on the market price of the Fund's shares. On
August 10, 2023, the Board indefinitely suspended the Plan until
further notice. On November 22, 2023, the Board reinstated the Plan
and announced its intention to declare a quarterly distribution in
December 2023.
With each distribution that does not consist solely
of net investment income, the Fund will issue a notice to
stockholders and an accompanying press release that will provide
detailed information regarding the amount and composition of the
distribution and other related information. The amounts and sources
of distributions reported in the notice to stockholders are only
estimates and are not being provided for tax reporting purposes.
The actual amounts and sources of the amounts for tax reporting
purposes will depend upon the Fund’s investment experience during
its full fiscal year and may be subject to changes based on tax
regulations. The Fund will send stockholders a Form 1099-DIV for
the respective calendar year that will tell them how to report
these distributions for federal income tax purposes.
Stockholders should consult their tax advisor for proper
tax treatment of the Fund’s distributions.
About Thomas J. Herzfeld Advisors,
Inc.
Thomas J. Herzfeld Advisors, Inc., founded in 1984,
is an SEC registered investment advisor, specializing in investment
analysis and account management in closed-end funds. The Firm also
specializes in investment in the Caribbean Basin. The HERZFELD/CUBA
division of Thomas J. Herzfeld Advisors, Inc. serves as the
investment advisor to The Herzfeld Caribbean Basin Fund, Inc. a
publicly traded closed-end fund (NASDAQ: CUBA).
More information about the advisor can be found at
www.herzfeld.com.
Past performance is no guarantee of future
performance. An investment in the Fund is subject to certain risks,
including market risk. In general, shares of closed-end funds often
trade at a discount from their net asset value and at the time of
sale may be trading on the exchange at a price which is more or
less than the original purchase price or the net asset value. An
investor should carefully consider the Fund’s investment objective,
risks, charges and expenses. Please read the Fund’s disclosure
documents before investing.
Forward-Looking Statements
This press release, and other statements that TJHA
or the Fund may make, may contain forward looking statements within
the meaning of the Private Securities Litigation Reform Act, with
respect to the Fund’s or TJHA’s future financial or business
performance, strategies or expectations. Forward-looking statements
are typically identified by words or phrases such as “trend,”
“potential,” “opportunity,” “pipeline,” “believe,” “comfortable,”
“expect,” “anticipate,” “current,” “intention,” “estimate,”
“position,” “assume,” “outlook,” “continue,” “remain,” “maintain,”
“sustain,” “seek,” “achieve,” and similar expressions, or future or
conditional verbs such as “will,” “would,” “should,” “could,” “may”
or similar expressions. TJHA and the Fund caution that
forward-looking statements are subject to numerous assumptions,
risks and uncertainties, which change over time. Forward-looking
statements speak only as of the date they are made, and TJHA and
the Fund assume no duty to and do not undertake to update
forward-looking statements. Actual results could differ materially
from those anticipated in forward-looking statements and future
results could differ materially from historical performance. With
respect to the Fund, the following factors, among others, could
cause actual events to differ materially from forward-looking
statements or historical performance: (1) changes and volatility in
political, economic or industry conditions, particularly with
respect to Cuba and other Caribbean Basin countries, the interest
rate environment, foreign exchange rates or financial and capital
markets, which could result in changes in demand for the Fund or in
the Fund’s net asset value; (2) the relative and absolute
investment performance of the Fund and its investments; (3) the
impact of increased competition; (4) the unfavorable resolution of
any legal proceedings; (5) the extent and timing of any
distributions or share repurchases; (6) the impact, extent and
timing of technological changes; (7) the impact of legislative and
regulatory actions and reforms, including the Dodd-Frank Wall
Street Reform and Consumer Protection Act, and regulatory,
supervisory or enforcement actions of government agencies relating
to the Fund or TJHA, as applicable; (8) terrorist activities,
international hostilities and natural disasters, which may
adversely affect the general economy, domestic and local financial
and capital markets, specific industries or TJHA or the Fund; (9)
TJHA’s and the Fund’s ability to attract and retain highly talented
professionals; (10) the impact of TJHA electing to provide support
to its products from time to time; (11) the impact of problems at
other financial institutions or the failure or negative performance
of products at other financial institutions; and (12) the effects
of an epidemic, pandemic or public health emergency, including
without limitation, COVID-19. Annual and Semi-Annual Reports and
other regulatory filings of the Fund with the SEC are accessible on
the SEC’s website at www.sec.gov and on TJHA’s website at
www.herzfeld.com/cuba, and may discuss these or other factors that
affect the Fund. The information contained on TJHA’s website is not
a part of this press release.
Contact:Tom MorganChief Compliance OfficerThomas J.
Herzfeld Advisors, Inc.1-305-777-1660
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