ABRDN INCOME CREDIT STRATEGIES FUND ANNOUNCES "AT-THE-MARKET" EQUITY OFFERING PROGRAM

Rhea-AI Summary

abrdn Income Credit Strategies Fund (NYSE: ACP) has announced the implementation of an at-the-market (ATM) equity offering program with an aggregate offering price of up to $75 million. The closed-end fund filed a prospectus supplement with the SEC on August 1, 2025, outlining the program details.

Under the ATM Program, the Fund cannot sell common shares below the current net asset value (NAV). The proceeds from any potential sales are intended for investment purposes. The offering may be conducted through designated agents, underwriters, or dealers, with specific terms to be outlined in the prospectus supplement for each offering.

Positive

• None.

Negative

• Potential dilution of existing shareholders if shares are issued
• No guarantee of successful share sales or specific sales levels

Insights

Closed-End Fund Specialist

ACP's new $75M ATM offering provides investment flexibility but may dilute existing shareholders if executed below NAV.

The abrdn Income Credit Strategies Fund (ACP) has established an at-the-market (ATM) offering program allowing it to raise up to $75 million by selling additional common shares. This financing mechanism provides significant flexibility, allowing the fund to opportunistically tap the market for capital when conditions are favorable. Importantly, the fund has committed to not selling shares below Net Asset Value (NAV), which helps protect existing shareholders from dilution.

The ATM structure is particularly advantageous compared to traditional secondary offerings as it enables the fund to raise capital incrementally rather than all at once, potentially reducing market impact and offering expenses. The announced use of proceeds for "investment purposes" suggests management sees attractive opportunities in the credit markets that align with the fund's high-income objective.

However, investors should note several key considerations. First, while the fund states it won't sell below NAV, closed-end funds frequently trade at discounts to their NAV in the secondary market. Any share issuance, even at NAV, could potentially pressure the market price if demand is insufficient. Second, the $75 million program size is substantial relative to the fund's total assets, indicating management is preparing for potentially significant deployment opportunities. Finally, the lack of specificity around the timing or conditions that would trigger share issuance creates some uncertainty for current shareholders about potential dilution timeframes.

PHILADELPHIA, Aug. 1, 2025 /PRNewswire/ -- abrdn Income Credit Strategies Fund (NYSE: ACP) (the "Fund"), a closed-end fund, has announced that it filed with the U.S. Securities and Exchange Commission ("SEC") on August 1, 2025, a prospectus supplement to its registration statement under which it may offer and sell from time to time, in one or more at-the-market offerings, the Fund's common shares having an aggregate offering price of up to $75 million (the "ATM Program").

The Fund may not sell any common shares at a price below the current net asset value ("NAV") of such common shares, exclusive of any distributing commission or discount. There can be no guarantee that the Fund will engage in any sales or any particular level of sales of common shares, if shares are offered. It is anticipated that any proceeds raised would be used for investment purposes.

An investor should read the Fund's prospectus and prospectus supplement carefully before investing in the Fund. The Fund's shares may be offered directly to one or more purchasers, through agents designated from time to time by the Fund, or to or through underwriters or dealers. The prospectus supplement relating to the offering will identify any agents, underwriters or dealers involved in the sale of Fund shares, and will set forth any applicable purchase price, fee, commission or discount arrangement between us and our agents or underwriters, or among our underwriters, or the basis upon which such amount may be calculated. The Fund's shares may not be sold through agents, underwriters or dealers without delivery of a prospectus supplement describing the method and terms of the particular offering of Fund shares.

Investors may request these documents free of charge from the Fund's website or obtain these documents on the SEC's website at www.sec.gov.

The information in this press release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

 There can be no assurance that the Fund will achieve its investment objectives. The NAV of the Fund will fluctuate with the value of the underlying securities. It is important to note that closed-end funds trade on their market value, not NAV, and closed-end funds often trade at a discount to their NAV. Past performance is not indicative of future performance. An investment in the Fund is subject to certain risks and other considerations.

The Fund is a diversified, closed-end management investment company. The Fund seeks a high level of current income with a secondary objective of capital appreciation. The price of the Fund's common shares is determined by a number of factors, many of which are beyond the control of the Fund.

The Fund is advised by abrdn Investments Limited and sub-advised by abrdn Inc. The Fund's common shares trade on the NYSE under the symbol "ACP."

Aberdeen Investments Global is the trade name of Aberdeen's investments business, herein referred to as "Aberdeen Investments" or "Aberdeen". In the United States, Aberdeen Investments refers to the following affiliated, registered investment advisers: abrdn Inc., abrdn Investments Limited, and abrdn Asia Limited.

Investors should consider the Fund's investment objectives, risks, charges and expenses carefully before investing in the Fund. There is no assurance that the Fund will achieve its investment objective.

Closed-end funds are traded on the secondary market through one of the stock exchanges. The Fund's investment return and principal value will fluctuate so that an investor's shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the NAV of the fund's portfolio.

Closed-End Funds | Aberdeen 

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SOURCE abrdn Income Credit Strategies Fund

FAQ

What is the size of ACP's new ATM offering program?

The abrdn Income Credit Strategies Fund's ATM offering program has an aggregate offering price of up to $75 million.

Can ACP sell shares below its net asset value (NAV) in the ATM program?

No, the Fund is not permitted to sell any common shares at a price below the current NAV, exclusive of any distributing commission or discount.

How will ACP use the proceeds from the ATM offering?

The Fund anticipates using any proceeds raised from the ATM offering for investment purposes.

How will ACP's ATM offering be conducted?

The offering may be conducted directly to purchasers or through agents, underwriters, or dealers designated by the Fund, with specific terms outlined in the prospectus supplement.

What are ACP's investment objectives?

The Fund seeks a high level of current income as its primary objective, with a secondary objective of capital appreciation.