DALLAS, March 1,
2023 /PRNewswire/ -- The 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 March 31, 2023, to
shareholders of record at the close of business March 24, 2023.
The Fund is a closed-end fund that seeks to provide a high level
of current income, consistent with the preservation of capital in a
registered fund format. The Fund pursues its investment objective
by investing primarily in the following categories 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 secured by
real estate (including real estate investment trusts ("REITs"),
preferred equity, securities convertible into equity securities 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,
collateralized loan obligations and asset-backed securities),
convertible and preferred securities, equities (public and
private), and futures and options. The Fund declares and pays
distributions of investment income monthly.
About the Highland Income Fund
The Highland Income Fund (NYSE: HFRO) is a closed-end fund
managed by NexPoint Asset Management, L.P. For more information
visit nexpointassetmgmt.com/income-fund/.
About NexPoint Asset Management, L.P.
NexPoint Asset Management, L.P. is an SEC-registered investment
adviser. It is the adviser to a suite of registered funds,
including open-end mutual funds, closed-end funds, and an
exchange-traded fund. For more information visit
nexpointassetmgmt.com.
Investors should consider the investment objectives,
risks, charges, and expenses of the Highland Income Fund carefully
before investing. This and other information can be found in the
Fund's prospectus, which may be obtained by calling 1-800-357-9167
or
visiting nexpointassetmgmt.com.
Please read the prospectus carefully before you
invest.
The distribution may include a return of capital. Please
refer to the 19(a)-1 Source of Distribution Notice on the Highland
Funds website for Section 19 notices that provide estimated amounts
and sources of the fund's distributions, which should not be relied
upon for tax reporting purposes.
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.
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 affected.
Credit Risk. The Fund may invest all or
substantially all of its assets in Senior Loans or other securities
that are rated below investment grade and unrated Senior Loans
deemed by Highland to be of comparable quality. Securities rated
below investment grade are commonly referred to as "high yield
securities" or "junk securities." They are regarded as
predominantly speculative with respect to the issuing company's
continuing ability to meet principal and 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
Senior Loan experiencing non-payment and a potential decrease in
the NAV of the Fund. Investments in high yield Senior Loans and
other securities may result in greater NAV fluctuation than if the
Fund did not make such investments.
Senior Loans Risk. On July 27, 2017, the head of the United Kingdom's Financial Conduct Authority
announced that it will stop encouraging banks to provide the
quotations needed to sustain LIBOR. The ICE Benchmark
Administration Limited, the administrator of LIBOR, ceased
publishing certain LIBOR maturities, including some US LIBOR
maturities, on December 31, 2021, and
is expected to cease publishing the remaining and most liquid US
LIBOR maturities on June 30, 2023. It
is expected that market participants will transition to the use of
alternative reference or benchmark rates prior to the applicable
LIBOR cessation date. Additionally, although regulators have
encouraged the development and adoption of alternative rates, such
as the Secured Overnight Financing Rate ("SOFR"), the future
utilization of LIBOR or of any particular replacement rate remains
uncertain.
Although the transition process away from LIBOR has become
increasingly well-defined in advance of the anticipated
discontinuation dates, the impact on certain debt securities,
derivatives and other financial instruments remains uncertain. It
is expected that market participants will adopt alternative rates
such as SOFR or otherwise amend financial instruments referencing
LIBOR to include fallback provisions and other measures that
contemplate the discontinuation of LIBOR or other similar market
disruption events, but neither the effect of the transition process
nor the viability of such measures is known. Further, uncertainty
and risk remain regarding the willingness and ability of issuers
and lenders to include alternative rates and revised provisions in
new and existing contracts or instruments. To facilitate the
transition of legacy derivatives contracts referencing LIBOR, the
International Swaps and Derivatives Association, Inc. launched a
protocol to incorporate fallback provisions. While the transition
process away from LIBOR has become increasingly well-defined in
advance of the expected LIBOR cessation dates, there are obstacles
to converting certain longer-term securities and transactions to a
new benchmark or benchmarks and the effectiveness of one
alternative reference rate versus multiple alternative reference
rates in new or existing financial instruments and products has not
been determined. Furthermore, the risks associated with the
cessation of LIBOR and transition to replacement rates may be
exacerbated if an orderly transition to alternative reference rates
is not completed in a timely manner. Certain proposed replacement
rates to LIBOR, such as SOFR, which is a broad measure of secured
overnight US Treasury repo rates, are materially different from
LIBOR, and changes in the applicable spread for financial
instruments transitioning away from LIBOR will need to be made to
accommodate the differences. Furthermore, the risks associated with
the expected discontinuation of LIBOR and transition to replacement
rates may be exacerbated if an orderly transition to an alternative
reference rate is not completed in a timely manner. As market
participants transition away from LIBOR, LIBOR's usefulness may
deteriorate, and these effects could be experienced until the
permanent cessation of the majority of U.S. LIBOR rates in 2023.
The transition process may lead to increased volatility and
illiquidity in markets that currently rely on LIBOR to determine
interest rates. LIBOR's deterioration may adversely affect the
liquidity and/or market value of securities that use LIBOR as a
benchmark interest rate.
Alteration of the terms of a debt instrument or a
modification of the terms of other types of contracts to replace
LIBOR or another interbank offered rate ("IBOR") with a new
reference rate could result in a taxable exchange and the
realization of income and gain/loss for U.S. federal income tax
purposes. The Internal Revenue Service ("IRS") has issued final
regulations regarding the tax consequences of the transition from
IBOR to a new reference rate in debt instruments and non-debt
contracts. Under the final regulations, alteration or modification
of the terms of a debt instrument to replace an operative rate that
uses a discontinued IBOR with a qualified rate (as defined in the
final regulations) including true up payments equalizing the fair
market value of contracts before and after such IBOR transition, to
add a qualified rate as a fallback rate to a contract whose
operative rate uses a discontinued IBOR or to replace a fallback
rate that uses a discontinued IBOR with a qualified rate would not
be taxable. The IRS may provide additional guidance, with potential
retroactive effect.
Real Estate Industry Risk: Issuers principally
engaged in real estate industry, including real estate investment
trusts, may be subject to risks similar to the risks associated
with the direct ownership of real estate, including:
(i) changes in general economic and market conditions;
(ii) changes in the value of real estate properties;
(iii) risks related to local economic conditions, overbuilding
and increased competition; (iv) increases in property taxes
and operating expenses; (v) changes in zoning laws;
(vi) casualty and condemnation losses; (vii) variations
in rental income, neighborhood values or the appeal of property to
tenants; (viii) the availability of financing and
(ix) changes in interest rates and leverage.
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.
Ongoing Monitoring Risk. On behalf of the
several Lenders, the Agent generally will be required to administer
and manage the Senior Loans and, with respect to collateralized
Senior Loans, to service or monitor the
collateral. Financial difficulties of Agents can pose a
risk to the Fund.
CONTACTS
Investor Relations
Kristen Thomas
IR@nexpoint.com
Media Relations
Prosek Partners for NexPoint
Pro-nexpoint@prosek.com
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SOURCE Highland Income Fund