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NexPoint to swap common shares for $108 million in cash, preferreds
By Taylor Fox
New York, Jan. 5 – NexPoint Strategic Opportunities Fund completed its tender offer to exchange up to 15 million shares of its common stock for consideration consisting of 20% cash and 80% newly issued 5.5% series A cumulative preferred shares, according to a news release.
NexPoint expects to purchase 9,011,832 common shares at a price of $12 per share for a total purchase price of $108 million.
The price per share reflects the clearing auction price indicated by tendering shareholders under the exchange offer, which followed a modified Dutch auction procedure.
The preferreds have a liquidation preference of $25.00 per share.
Dividends and distributions on the preferreds will be payable quarterly on March 31, June 30, Sept. 30 and Dec. 31 of each year, beginning with the first payment on March 31, 2021.
The purpose of the exchange offer is to provide shareholders with an opportunity to exchange common shares at a premium to the current market price, while increasing the NAV per common share for shareholders who choose not to participate, or not fully participate, in the exchange offer, the company had said.
Payment for the shares will be made, and the series A preferred shares will be issued, on Jan. 7.
Egan-Jones Ratings Co. assigned an investment-grade corporate rating of BBB- to the series A preferred shares and a rating of BBB to the company.
American Stock Transfer & Trust Company, LLC is the depositary.
NexPoint Strategic Opportunities is a closed-end fund managed by NexPoint Advisors, LP that is in the process of converting to a diversified real estate investment fund. The company is based in Dallas.
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