Portfolio Update Call: February 29, 2024 at 2:00 PM CST
Hear from NexPoint’s Scott Johnson, Managing Director and Portfolio Manager, and Kevin Fullmer, Director of Product Strategy, as they discuss portfolio updates and recent performance.
Hear from NexPoint’s Scott Johnson, Managing Director and Portfolio Manager, and Kevin Fullmer, Director of Product Strategy, as they discuss portfolio updates and recent performance.
Fund NAV (As of Mar 27, 2024) | |
---|---|
Symbol | HFRO |
Inception | 01/13/00 |
NAV | $12.90 |
The Highland Opportunities and Income Fund (NYSE: HFRO) (“HFRO” or the “Fund”) announced an update to the regular monthly distribution.
On January 4, 2024, the Fund declared a regular monthly distribution on its common stock of $0.0385 per share, payable on January 31, 2024, to shareholders of record at the close of business January 24, 2024.
The Fund adjusted the monthly distribution rate to align the distribution with the current portfolio and investment objective.
Effective June 15, 2023, the Fund changed its name and investment objective to focus on income and growth. The change was intended to expand the Fund’s universe of opportunistic investments and provide flexibility to seek growth of capital along with income opportunities. The new distribution level better aligns with this investment objective and supports growth-oriented investment opportunities in the portfolio.
Additional considerations in the distribution change include:
Additional information on the current portfolio, the Fund’s 2023 performance, and the recent distribution change will be addressed on the quarterly call with the portfolio management team on Thursday, February 29, 2024. Call details and a registration link will be included in investor communications closer to the call date. Participants will be able to submit questions ahead of time to be addressed on the call.
About the Highland Opportunities and Income Fund
The Highland Opportunities and Income Fund (NYSE: HFRO) is a closed-end fund managed by NexPoint Asset Management, L.P. For more information visit nexpointassetmgmt.com/opportunities-income-fund/.
Effective June 15, 2023, the Fund changed its name to the Highland Opportunities and Income Fund to reflect a new investment objective. Under the modified investment objective, the Fund will pursue growth of capital along with income. For more information visit Highland Income Fund Announces Share Repurchase Program, Changes to Fund Name and Investment Objective – NexPoint Asset Management, L.P.
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.
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Investors should consider the investment objectives, risks, charges, and expenses of the Highland Opportunities and 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 NexPoint Asset Management 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 NexPoint 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.
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.
The Highland Opportunities and Income Fund (NYSE:HFRO) (“HFRO”), a closed-end investment company managed by NexPoint Asset Management, L.P. (the “Adviser”), announced an update in the case against Credit Suisse, AG, Cayman Islands Branch, and Credit Suisse Securities (USA), LLC (“Credit Suisse”).
On February 14, 2023, the Dallas Court of Appeals issued a ruling reducing the judgment to an amount that, including offsets for prior settlement proceeds received by the funds, may result in the two funds recovering zero net dollars on the outstanding judgment. The plaintiff will appeal this to the Texas Supreme Court for interpretation of its prior order.
We do not believe the recent acquisition of Credit Suisse Group AG by UBS Group AG will impact the case against Credit Suisse at this time.
Background on the Case
The case was originally filed in 2013. Following a bench trial and jury trial, the Court issued its original judgment in favor of Claymore in 2015, which was confirmed by an appellate court in 2018. An appeal of that ruling sent the case to the Texas Supreme Court, which heard the case on January 8, 2020.
On April 24, 2020, the Texas Supreme Court issued an order that affirmed in part and reversed in part the 2018 ruling from the court of appeals. In the April 2020 order, the court upheld the $40 million fraud verdict that resulted from the jury trial; however, it did not uphold the contract damages and equitable relief awarded to Claymore by the trial court following the bench trial.
In its opinion, the Texas Supreme Court noted procedural issues related to the calculation of damages among the reasons for reversing part of the appellate court ruling. It remanded the case to the trial court to determine the appropriate damages calculations and enter a new damages award.
On June 28, 2021, the 134th Judicial District Court (the “Court”) issued a judgment against Credit Suisse, awarding $121 million to Claymore Holdings LLC (“Claymore”), the entity formed to pursue the collective claims on behalf of HFRO and NexPoint Diversified Real Estate Trust (NYSE:NXDT) (together the “Funds”). As legal proceedings are ongoing and all recoveries remain contingent, no award amount has been recorded in the Funds’ net asset values at this time.
The case is Claymore Holdings LLC v. Credit Suisse AG, Cayman Islands Branch et al., case number 05-21-00649-CV, in the Court of Appeals for the Fifth District of Texas at Dallas.
DALLAS, March 1, 2024 /PRNewswire/ — The Highland Opportunities and Income Fund (NYSE: HFRO) (“HFRO” or the “Fund”) today announced its regular monthly distribution on its common stock of $0.0385 per share. The distribution will…
DALLAS, Feb. 1, 2024 /PRNewswire/ — The Highland Opportunities and Income Fund (NYSE: HFRO) (“HFRO” or the “Fund”) today announced its regular monthly distribution on its common stock of $0.0385 per share. The distribution will…
DALLAS, Jan. 8, 2024 /PRNewswire/ — The Highland Opportunities and Income Fund (NYSE:HFRO) (“HFRO” or the “Fund”) announced today that the Fund is scheduled to host a conference call on Thursday, February 29,…
DALLAS, Jan. 4, 2024 /PRNewswire/ — The Highland Opportunities and Income Fund (NYSE: HFRO) (“HFRO” or the “Fund”) today announced its regular monthly distribution on its common stock of $0.0385…
DALLAS, Dec. 1, 2023 /PRNewswire/ — The Highland Opportunities and Income Fund (NYSE: HFRO) (“HFRO” or the “Fund”) today announced its regular monthly distribution on its common stock of $0.0770…