Thomas J. Herzfeld Advisors, Inc. (“TJHA”), an SEC registered
investment advisor, today announced that the Board of Directors of
The Herzfeld Caribbean Basin Fund, Inc. (NASDAQ: CUBA) (the “Fund”)
has revised the Fund’s Managed Distribution Plan (the “Plan”)
announced on May 31, 2019.
The Board has revised the Plan to provide for quarterly
distributions, rather than monthly, at an annual rate (currently
set at 15% of the Fund’s NAV for the fiscal year ending June 30,
2019 payable in quarterly installments), and has determined to
implement the Plan without seeking exemptive relief at this
time. The Fund may apply for exemptive relief at a later date
to the extent determined necessary or appropriate. Based on the
Fund’s NAV on June 30, 2019, the Fund expects to distribute $1.1385
during the current fiscal year ending June 30, 2020 in four
quarterly installments of $.284625, the first of which is expected
to be declared and paid in September 2019.
The primary purpose of the Plan is to provide stockholders with
a constant, but not guaranteed, fixed minimum rate of distribution
each quarter. 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”). 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. Each
quarterly distribution to shareholders is expected to be at the
fixed amount established by the Board. However, 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
Investment Company Act of 1940 (the “1940 Act”). The Fund is
currently not relying on any exemptive relief from Section 19(b) of
the 1940 Act. The Fund expects that distributions under the Plan
will exceed investment income and capital gain and thus expects
that such distributions will likely include return of capital for
the foreseeable future.
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 Fund’s Board of Directors. The Plan will be
subject to ongoing review by the Board of Directors to determine
whether the Managed Distribution Policy should be continued,
modified or terminated. The Board of Directors may amend the terms
of the Plan or suspend 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 Managed Distribution Policy could
have an adverse effect on the market price of the Fund's
shares.
The Fund expects that a portion of the annual distribution will
consist of a return of capital. A return of capital occurs when
some or all of the money that stockholders invested in the Fund is
paid back to them. A return of capital does not 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 make the level
of distributions called for under its Plan, the Fund may have to
sell portfolio securities at a less than opportune time.
Distributions designated as return-of-capital are not taxed as
ordinary income dividends and are referred to as tax-free dividends
or nontaxable distributions. A return-of-capital distribution
reduces the cost basis of an investor’s shares in the Fund.
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; and (11) the impact of problems
at other financial institutions or the failure or negative
performance of products at other financial institutions. 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 Morgan Chief Compliance OfficerThomas J. Herzfeld
Advisors, Inc.1-305-777-1660
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