The Herzfeld Caribbean Basin Fund, Inc. Announces Distribution in Stock and Cash
The Herzfeld Caribbean Basin Fund (NASDAQ: CUBA) has announced a distribution of $0.2325 per share, payable on June 30, 2025. The distribution will be paid through a combination of cash (20%) and common stock (80%). Stockholders can elect their preferred form of payment, with elections due by June 16, 2025. The stock portion will be valued based on the volume weighted average price during June 12-16, 2025.
Notably, the Fund is planning a significant strategic shift, with a special stockholder meeting scheduled for June 17, 2025, to vote on converting from its current investment strategy to a CLO Equity Strategy. This change would redirect the Fund's focus to investing in collateralized loan obligations, with a new primary objective of total return and secondary objective of high current income.
The distribution includes 91.25% from long-term capital gains and 8.75% return of capital. The Fund maintains a 15% annual distribution rate policy based on NAV, with the Board recently modifying the policy to allow for flexible distribution timing.
Il Herzfeld Caribbean Basin Fund (NASDAQ: CUBA) ha annunciato una distribuzione di 0,2325 $ per azione, pagabile il 30 giugno 2025. La distribuzione sarà effettuata tramite una combinazione di contanti (20%) e azioni ordinarie (80%). Gli azionisti possono scegliere la modalità di pagamento preferita, con scadenza per le elezioni il 16 giugno 2025. La parte azionaria sarà valutata in base al prezzo medio ponderato per volume nel periodo dal 12 al 16 giugno 2025.
È importante sottolineare che il Fondo sta pianificando un significativo cambiamento strategico, con un'assemblea straordinaria degli azionisti prevista per il 17 giugno 2025, per votare la conversione dalla strategia di investimento attuale a una Strategia CLO Equity. Questo cambiamento indirizzerà il focus del Fondo verso investimenti in obbligazioni garantite da prestiti, con l'obiettivo primario di rendimento totale e secondario di elevato reddito corrente.
La distribuzione comprende il 91,25% da plusvalenze a lungo termine e l'8,75% come restituzione di capitale. Il Fondo mantiene una politica di distribuzione annuale del 15% basata sul NAV, con il Consiglio che ha recentemente modificato la politica per consentire una maggiore flessibilità nel timing delle distribuzioni.
El Herzfeld Caribbean Basin Fund (NASDAQ: CUBA) ha anunciado una distribución de $0.2325 por acción, pagadera el 30 de junio de 2025. La distribución se realizará mediante una combinación de efectivo (20%) y acciones ordinarias (80%). Los accionistas pueden elegir su forma preferida de pago, con fecha límite para las elecciones el 16 de junio de 2025. La parte en acciones se valorará según el precio promedio ponderado por volumen durante el 12 al 16 de junio de 2025.
Es importante destacar que el Fondo está planeando un cambio estratégico significativo, con una junta especial de accionistas programada para el 17 de junio de 2025, para votar sobre la conversión de su estrategia actual de inversión a una Estrategia CLO Equity. Este cambio redirigirá el enfoque del Fondo a invertir en obligaciones de préstamos colateralizados, con un objetivo principal de rendimiento total y un objetivo secundario de altos ingresos corrientes.
La distribución incluye un 91.25% proveniente de ganancias de capital a largo plazo y un 8.75% como devolución de capital. El Fondo mantiene una política de distribución anual del 15% basada en el NAV, con la Junta que recientemente modificó la política para permitir una mayor flexibilidad en el momento de las distribuciones.
Herzfeld Caribbean Basin Fund (NASDAQ: CUBA)는 주당 0.2325달러의 배당금을 2025년 6월 30일에 지급한다고 발표했습니다. 배당금은 현금(20%)과 보통주(80%)의 조합으로 지급됩니다. 주주들은 선호하는 지급 방식을 선택할 수 있으며, 선택 마감일은 2025년 6월 16일입니다. 주식 부분은 2025년 6월 12일부터 16일까지의 거래량 가중 평균 가격을 기준으로 평가됩니다.
특히, 펀드는 2025년 6월 17일에 예정된 특별 주주총회에서 현재 투자 전략을 CLO Equity 전략으로 전환하는 안건에 대해 투표할 예정이며, 이는 펀드의 전략적 전환을 의미합니다. 이 변경으로 펀드는 담보대출채권에 투자하는 데 집중하며, 주요 목표는 총수익, 부차적 목표는 높은 현재 수익이 됩니다.
이번 배당금은 장기 자본 이득 91.25%와 자본 환급 8.75%로 구성되어 있습니다. 펀드는 NAV 기준 연간 15% 배당률 정책을 유지하고 있으며, 이사회는 최근 배당 시기를 유연하게 조정할 수 있도록 정책을 수정하였습니다.
Le Herzfeld Caribbean Basin Fund (NASDAQ : CUBA) a annoncé une distribution de 0,2325 $ par action, payable le 30 juin 2025. La distribution sera effectuée par une combinaison de liquidités (20 %) et d’actions ordinaires (80 %). Les actionnaires peuvent choisir leur mode de paiement préféré, les choix devant être soumis avant le 16 juin 2025. La partie en actions sera valorisée sur la base du prix moyen pondéré par le volume entre le 12 et le 16 juin 2025.
Il est à noter que le Fonds prévoit un changement stratégique important, avec une assemblée générale extraordinaire des actionnaires prévue le 17 juin 2025, afin de voter sur la conversion de sa stratégie d’investissement actuelle vers une Stratégie CLO Equity. Ce changement réorientera le Fonds vers des investissements dans des obligations sécurisées par des prêts, avec un objectif principal de rendement total et un objectif secondaire de revenu courant élevé.
La distribution comprend 91,25 % de plus-values à long terme et 8,75 % de retour de capital. Le Fonds maintient une politique de distribution annuelle de 15 % basée sur la valeur liquidative (NAV), le Conseil d’administration ayant récemment modifié cette politique pour permettre une plus grande flexibilité dans le calendrier des distributions.
Der Herzfeld Caribbean Basin Fund (NASDAQ: CUBA) hat eine Ausschüttung von 0,2325 $ pro Aktie angekündigt, zahlbar am 30. Juni 2025. Die Ausschüttung erfolgt durch eine Kombination aus Bargeld (20 %) und Stammaktien (80 %). Aktionäre können ihre bevorzugte Zahlungsform wählen, wobei die Wahl bis zum 16. Juni 2025 erfolgen muss. Der Aktienanteil wird auf Basis des volumengewichteten Durchschnittspreises vom 12. bis 16. Juni 2025 bewertet.
Bemerkenswert ist, dass der Fonds eine bedeutende strategische Neuausrichtung plant, mit einer außerordentlichen Hauptversammlung am 17. Juni 2025, bei der über die Umstellung von der aktuellen Anlagestrategie auf eine CLO Equity Strategie abgestimmt wird. Diese Änderung wird den Fokus des Fonds auf Investitionen in besicherte Kreditverpflichtungen verlagern, mit dem primären Ziel der Gesamtrendite und dem sekundären Ziel eines hohen laufenden Einkommens.
Die Ausschüttung umfasst 91,25 % aus langfristigen Kapitalgewinnen und 8,75 % Kapitalrückzahlung. Der Fonds hält an einer jährlichen Ausschüttungsrate von 15 % basierend auf dem NAV fest, wobei der Vorstand die Politik kürzlich geändert hat, um flexiblere Ausschüttungszeitpunkte zu ermöglichen.
- None.
- 8.75% of the current distribution represents return of capital, which reduces Fund's assets
- Significant strategic shift from Caribbean Basin focus to CLO strategy represents substantial investment risk
- Limited cash portion (20%) of the distribution may disappoint shareholders preferring cash
- The stock portion of distribution may lead to dilution for existing shareholders
Insights
CUBA fund announces $0.2325 distribution with major strategy shift to CLO investing, fundamentally changing its risk-return profile.
The Herzfeld Caribbean Basin Fund (CUBA) has announced a significant distribution of
What's far more consequential is the fund's planned strategic pivot. CUBA intends to completely abandon its Caribbean Basin investment approach in favor of a "CLO Equity Strategy" focused on collateralized loan obligation equity and junior debt tranches. This represents a fundamental transformation in the fund's risk profile and income generation approach.
CLO equity tranches typically offer higher yields but with substantially greater risk as they absorb the first losses in a CLO structure. They're essentially the highest-risk/highest-potential return slice of portfolios comprised primarily of below-investment-grade senior secured loans. This dramatic shift from a regional equity fund to a structured credit vehicle fundamentally alters the fund's risk-return characteristics.
The distribution's composition is also telling -
Investors face a consequential decision: receive mostly stock in a fund that's about to fundamentally transform its investment approach, or take limited cash now before this transition occurs. The timing of this distribution relative to the upcoming strategy vote creates a complex decision point for current shareholders.
MIAMI BEACH, Fla., May 09, 2025 (GLOBE NEWSWIRE) -- The Herzfeld Caribbean Basin Fund, Inc. (NASDAQ: CUBA) (the “Fund”) today announced that the Fund will pay a distribution pursuant to the Fund’s managed distribution policy (the “Policy”) using a combination of shares of common stock and cash.
Distribution in Stock and Cash:
The Fund has announced a distribution to be paid as follows:
| Declaration Date | Ex-Date | Record Date | Payment Date | Per Share |
| 05/09/2025 | 05/23/2025 | 05/23/2025 | 06/30/2025 | |
The distribution for stockholders will be paid in cash or shares of our common stock at the election of stockholders. The total amount of cash distributed to all stockholders will be limited to
The number of shares of common stock to be issued to stockholders receiving all or a portion of the dividend in shares of common stock will be based on the volume weighted average price per share of common stock on the Nasdaq Capital Market on June 12, 13, and June 16, 2025.
Management believes that the cash and stock distribution will allow the Fund to strengthen its balance sheet and to be in a position to capitalize on potential future investment opportunities.
The schedule above applies to the distribution for stockholders of record on the close of business on the record date.
The details of the distribution will be described in the election form and accompanying materials that will be mailed to stockholders in connection with the distribution not later than promptly following the record date. Election forms must be returned on or before 5:00 p.m. Eastern Time on June 16, 2025 to be effective.
Stockholders who do not return a timely and properly completed election form before the election deadline will be deemed to have made an election to receive
Participants in the Fund’s dividend reinvestment plan will also receive an election form. The investment feature of the dividend reinvestment plan will be suspended for the distribution and will be reinstated after the distribution has been completed.
Stockholders who hold their shares through a bank, broker or nominee, or in “street name” will not receive an election form directly from the Company and should receive information regarding the election process from their bank, broker or nominee. Street name holders should contact their bank, broker or nominee for additional information.
In determining whether to elect to receive distributions in the form of stock or cash, stockholders are reminded that the Fund has filed preliminary proxy materials (“Proxy Materials”) with the U.S. Securities and Exchange Commission in connection with a special meeting of stockholders to be held on June 17, 2025, for its stockholders to consider and vote on proposals necessary to approve the Fund’s conversion from its current investment strategy and redirect the Fund to focus on a “CLO Equity Strategy”. With this change, the Fund’s primary investment objective will change to a total return strategy with a secondary objective of generating high current income for stockholders. In accordance with the change in investment objective, the Fund will focus on investing in equity and junior debt tranches of collateralized loan obligations, or “CLOs”. CLOs are portfolios of collateralized loans consisting primarily of below investment grade U.S. senior secured loans with a large number of distinct underlying borrowers across various industry sectors. In addition, the Proxy Materials describe other changes to be implemented by the Fund, including a) revisions to the terms of the investment management agreement between the Fund and is investment adviser, Thomas J. Herzfeld Advisors, Inc., and b) changes to the fundamental policies applicable to the Fund. Stockholders can obtain the Proxy Materials (when available) free of charge from the SEC's website at www.sec.gov. The definitive Proxy Statement for the Fund also will be posted (when available) on the Fund's website at www.herzfeld.com/cuba. In addition, free copies (when it becomes available) of the definitive Proxy Statement and other documents filed with the SEC may also be obtained by directing a request to the Fund at (800) 854-3863.
Stockholders should consider the matters discussed in the Proxy Materials when determining whether to make the election to receive stock or cash with respect to the distribution.
The Fund expects that distributions under the Policy will exceed investment income and available capital gains and thus expects that distributions under the Policy will likely include returns of capital for the foreseeable future. A return of capital may occur, for example, when some or all of a stockholder’s investment is paid back to the stockholder. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with ‘yield’ or ‘income.’ Furthermore, a return of capital distribution is not a guarantee of future distributions or yield. Any such returns of capital will decrease the Fund’s total assets and, therefore, could have the effect of increasing the Fund’s expense ratio. In addition, in order to maintain the level of distributions called for under its Policy, the Fund may have to sell portfolio securities at a less than opportune time.
The following table sets forth the estimated amounts of the current distribution and the cumulative distributions paid this fiscal year to date from the following sources: net investment income, net realized capital gains and return of capital. All amounts are expressed per common share.
| Current Distribution | % Breakdown of the Current Distribution | Total Cumulative Distributions for the Fiscal Year to Date | % Breakdown of the Total Cumulative Distributions for the Fiscal Year to Date | |
| Net Investment Income | ||||
| Net Realized Short- Term Capital Gains | ||||
| Net Realized Long- Term Capital Gains | ||||
| Return of Capital | ||||
| Total (per common share) | ||||
The primary purpose of the Policy is to provide stockholders with a constant, but not guaranteed, fixed minimum rate of distribution (currently set at the annual rate of
The amount distributed per share is subject to change at the discretion of the Board. The Policy is subject to ongoing review by the Board to determine whether it should be continued, modified or terminated. The Board may amend the terms of the Policy, suspend the Policy, or terminate the Policy at any time without prior notice to the Fund’s stockholders if it deems such actions to be in the best interest of the Fund or its stockholders. The amendment or termination of the Policy could have an adverse effect on the market price of the Fund's shares. On May 9, 2024, the Board approved certain modifications to the Policy and extended the Policy through June 30, 2025.
With each distribution that does not consist solely of net investment income, the Fund will issue a notice to stockholders and an accompanying press release that will provide detailed information regarding the amount and composition of the distribution and other related information. The amounts and sources of distributions reported in the notice to stockholders are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during its full fiscal year and may be subject to changes based on tax regulations. The Fund will send stockholders a Form 1099-DIV for the respective calendar year that will tell them how to report these distributions for federal income tax purposes. Stockholders should consult their tax advisor for proper tax treatment of the Fund’s distributions.
Under the Policy, the Fund will distribute all available investment income to its stockholders, consistent with its investment objective and as required by the Internal Revenue Code of 1986, as amended (the “Code”). The amount distributed per share is subject to change at the discretion of the Fund’s Board of Directors (“Board”). If sufficient investment income is not available, the Fund will distribute long-term capital gains and/or return capital to its stockholders in order to maintain its managed distribution level. The Fund is currently not relying on any exemptive relief from Section 19(b) of the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund may make additional distributions from time to time, including additional capital gain distributions at the end of the taxable year, if required to meet requirements imposed by the Code and/or the 1940 Act.
Future distributions by the Fund may be made in cash or using a combination of shares of common stock and cash, as shall be determined from time to time by the Board.
About Thomas J. Herzfeld Advisors, Inc.
Thomas J. Herzfeld Advisors, Inc., founded in 1984, is an SEC registered investment advisor, specializing in investment analysis and account management in closed-end funds. The Firm also specializes in investment in the Caribbean Basin. The HERZFELD/CUBA division of Thomas J. Herzfeld Advisors, Inc. serves as the investment advisor to The Herzfeld Caribbean Basin Fund, Inc. a publicly traded closed-end fund (NASDAQ: CUBA).
More information about the advisor can be found at www.herzfeld.com.
Past performance is no guarantee of future performance. An investment in the Fund is subject to certain risks, including market risk. In general, shares of closed-end funds often trade at a discount from their net asset value and at the time of sale may be trading on the exchange at a price which is more or less than the original purchase price or the net asset value. An investor should carefully consider the Fund’s investment objective, risks, charges and expenses. Please read the Fund’s disclosure documents before investing.
Forward-Looking Statements
This press release, and other statements that TJHA or the Fund may make regarding management’s future expectations, beliefs, intentions, goals, strategies, plans or prospects, including statements relating to: management’s beliefs that the cash and stock distribution will allow the Fund to strengthen its balance sheet and to be in a position to capitalize on potential future investment opportunities, when there can be no assurance either will occur; the tax consequences of the distributions to stockholders; and other factors may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to the Fund’s or TJHA’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions. TJHA and the Fund caution that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and TJHA and the Fund assume no duty to and do not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. With respect to the Fund, the following factors, among others, could cause actual events to differ materially from forward-looking statements or historical performance: (1) changes and volatility in political, economic or industry conditions, particularly with respect to Cuba and other Caribbean Basin countries, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for the Fund or in the Fund’s net asset value; (2) the relative and absolute investment performance of the Fund and its investments; (3) the impact of increased competition; (4) the unfavorable resolution of any legal proceedings; (5) the extent and timing of any distributions or share repurchases; (6) the impact, extent and timing of technological changes; (7) the impact of legislative and regulatory actions and reforms, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, and regulatory, supervisory or enforcement actions of government agencies relating to the Fund or TJHA, as applicable; (8) terrorist activities, international hostilities and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or TJHA or the Fund; (9) TJHA’s and the Fund’s ability to attract and retain highly talented professionals; (10) the impact of TJHA electing to provide support to its products from time to time; (11) the impact of problems at other financial institutions or the failure or negative performance of products at other financial institutions; and (12) the effects of an epidemic, pandemic or public health emergency, including without limitation, COVID-19. Annual and Semi-Annual Reports and other regulatory filings of the Fund with the SEC are accessible on the SEC’s website at www.sec.gov and on TJHA’s website at www.herzfeld.com/cuba, and may discuss these or other factors that affect the Fund. The information contained on TJHA’s website is not a part of this press release.
Contact:
Tom Morgan
Chief Compliance Officer
Thomas J. Herzfeld Advisors, Inc.
1-305-777-1660
FAQ
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