NexPoint Credit Strategies Fund (NYSE: NHF) (“NHF” or the “Fund”) today announced its regular monthly dividend on its common stock. A dividend of $.050 per share will be payable on the last business day of October to shareholders of record at the close of business October 24, 2013. As of September 30, 2013, the Trust had estimated undistributed net investment income of approximately $8.1 million (unaudited).
The Fund is a closed-end fund managed by NexPoint Advisors, L.P. (the “Manager”), an affiliated adviser of Highland Capital Management, L.P. The Fund invests primarily in below investment grade debt and equity and has the ability to hedge risk. The Manager attempts to deliver consistent returns in excess of the Credit Suisse Hedge Fund and the HFRX Global Hedge Fund indices in a transparent, registered fund format with consistent monthly dividends.
In 2013, the Manager has recommended, and the board has approved, three dividend increases totaling 43%. The increases have been driven by increased earnings on portfolio positions and lower costs, particularly a decrease in the cost of its leverage facility. Prior to recommending increases in the dividend to the board, the Manager carefully analyzed each position in the Fund and its long-term earning potential as well as the Fund’s expense run rate. We feel confident the Fund can earn an amount that will sustain the current distribution rate. Below is a pro-forma calculation of the Fund’s anticipated earnings over the next twelve months based on the earnings as of September 30, 2013, and removing any one-time income and expense items:
|Estimated Interest Income (including discount amortization)||$||50.0|
|Estimated Dividend Income||3.5|
|Net Income Available to Common Shareholders||39.3|
|Per Share Net Income||$||.051|
|Current Per Share Dividend||$||.050|