The Herzfeld Caribbean Basin Fund, Inc. (NASDAQ: CUBA) (the “Fund”)
today announced its quarterly distribution pursuant to the Fund’s
managed distribution policy (the “MDP”).
Quarterly Distribution:
The Fund today declared the following distribution pursuant to
the MDP:
DeclarationDate |
Ex-Date |
Record Date |
Payment Date |
Per Share |
09/08/2020 |
09/17/2020 |
09/18/2020 |
09/30/2020 |
$0.15525 |
The primary purpose of the MDP 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 March 31, 2020 and payable in
quarterly installments). The Fund cannot predict what effect, if
any, the MDP 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 MDP. The
quarterly distribution for the Fund’s first fiscal quarter
constitutes the fifth consecutive quarterly distribution under the
MDP.
The $0.15525 per share amount announced today
reflects a distribution of 4.05% based upon the market price per
share of the Fund and 3.06% based upon the net asset value per
share of the Fund, each as of August 31, 2020. 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
MDP.
Details regarding the Managed Distribution
Policy:
Under the MDP, 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 stockholders enrolled in the Fund’s Dividend Reinvestment
Plan (“DRIP”), the distribution will be reinvested in additional
shares of the Fund as described in the DRIP.
The Fund expects that distributions under the
MDP will exceed investment income and available capital gains and
thus expects that distributions under the MDP 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 MDP, 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 quarterly 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 theCurrent Distribution |
Total CumulativeDistributions for theFiscal Year to Date |
% Breakdown of theTotal CumulativeDistributions for theFiscal Year
to Date |
Net InvestmentIncome |
$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 |
$0.15525 |
100% |
$0.15525 |
100% |
Total (per commonshare) |
$0.15525 |
100% |
$0.15525 |
100% |
Average annual total return (in relation to NAV) for the 5-year
period ending on August 31, 2020 |
-0.17% |
Annualized current distribution rate expressed as a percentage of
NAV as of August 31, 2020 |
12.22% |
Annualized current distribution rate expressed as a percentage of
PRICE as of August 31, 2020 |
16.21% |
Cumulative total return (in relation to NAV) for the fiscal year
through August 31, 2020 |
6.95% |
Cumulative fiscal year distributions as a percentage of NAV as of
August 31, 2020 |
0.00% |
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 MDP.
The amount distributed per share is
subject to change at the discretion of the Board. The MDP
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 MDP, suspend the MDP, or terminate the MDP 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 MDP could have an
adverse effect on the market price of the Fund's shares.
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
Thomas J. Herzfeld Advisors, Inc. (“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 Officer
Thomas J. Herzfeld Advisors, Inc.
1-305-777-1660
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