Herzfeld Credit Income Fund, Inc. To Conduct a Tender Offer for up to 5% of Outstanding Common Shares

Rhea-AI Summary

Herzfeld Credit Income Fund (NASDAQ:HERZ) has announced plans to initiate a tender offer in September 2025 for up to 5% of its outstanding shares at 97.5% of NAV. This move is part of the Fund's ongoing strategy to address its trading price discount to net asset value (NAV).

The tender offer follows the Fund's Board of Directors' approval to continue the previously announced plan from May 31, 2019, which has been modified and extended to June 30, 2026. Under the modified Self-Tender Policy, the Fund will commence the tender offer by October 31, 2025, provided that the average discount was greater than 10% for the previous fiscal year.

Positive

• Proactive measure to address trading price discount to NAV
• Opportunity for shareholders to sell shares at 97.5% of NAV, potentially above market price
• Demonstrates management's commitment to enhancing shareholder value

Negative

• Limited to only 5% of outstanding shares
• Tender offer price represents a 2.5% discount to NAV
• May not fully address the fund's trading discount issue

Insights

Closed-End Fund Specialist

HERZ announces 5% tender offer at 97.5% of NAV to address persistent trading discount, benefiting shareholders despite limited scope.

Herzfeld Credit Income Fund (HERZ) has announced a tender offer for up to 5% of its outstanding shares at 97.5% of Net Asset Value (NAV), scheduled to commence in September 2025. This tender offer is being implemented as part of the Fund's ongoing strategy to address its persistent trading discount to NAV, which appears to have exceeded 10% for the fiscal year.

This action represents a continuation of the discount management plan originally announced in May 2019 and subsequently extended to June 2026. The tender offer mechanism is a standard tool used by closed-end funds to narrow persistent discounts by effectively buying back shares when the market price fails to reflect the underlying asset value.

For shareholders, this represents a mixed opportunity. On one hand, those who participate will receive a price closer to NAV than currently available in the market (though still at a 2.5% discount to actual NAV). On the other hand, the limited scope of the tender (just 5% of outstanding shares) means it will likely be oversubscribed, resulting in proration of tendered shares.

While this discount management measure demonstrates the board's acknowledgment of the trading discount issue, the relatively small size of the tender and the fact it's triggered only when discounts exceed 10% suggests a cautious approach rather than an aggressive strategy to eliminate the discount entirely. The tender offer may provide temporary support to the share price, but structural discount issues typically require more substantial or recurring capital return programs to resolve permanently.

MIAMI BEACH, Fla., Aug. 25, 2025 (GLOBE NEWSWIRE) -- Thomas J. Herzfeld Advisors, Inc., an SEC-registered investment advisor, today announced its intention to commence a Tender Offer by Herzfeld Credit Income Fund, Inc. (Nasdaq: HERZ) (the “Fund”) beginning in September 2025, in accordance with the Fund’s ongoing plan to address the Fund’s trading price discount to its net asset value (“NAV”). The Fund’s Board of Directors approved a continuation of the plan that was previously announced on May 31, 2019, and subsequently modified and extended to June 30, 2026 by the Fund’s Board of Directors (the “Plan”).

Under the modified Self-Tender Policy component of the Plan, the Fund has undertaken to commence a tender offer by October 31, 2025 for up to 5% of the Fund’s outstanding shares at 97.5% of NAV if the average discount was greater than 10% for the fiscal year just ended.

The formal offer and detailed terms of the tender offer will be announced in the coming days.

Tender Offer Statement

The above statements are not intended to constitute an offer to participate in any tender offer. Shareholders will be notified of the terms of the tender offer in accordance with the requirements of the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940, as amended, either by publication or mailing or both. The tender offer will be made by an offer to purchase, a related letter of transmittal, and other documents to be filed with the SEC. Shareholders of the Fund should read the offer to purchase and tender offer statement and related exhibits when those documents are filed and become available, as they will contain important information about the tender offer. These and other filed documents will be available to investors for free both at the website of the SEC (www.sec.gov) and from the Fund (www.herzfeld.com/herz).

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.

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. There can be no assurance that any Share repurchases will reduce or eliminate the discount of the Fund’s market price to the Fund’s net asset value per share. 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 Thomas J. Herzfeld Advisors, Inc. (“TJHA”) or the Fund may make, 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) shares of the Fund may trade at a discount from Net Asset Value; (2) the Fund is expose to risks associated with equity and equity-linked securities to the extent that adverse equity market conditions could negatively impact the ability of the borrowers to make payment of interest and/or principal with respect to loans underlying the CLOS in which the Fund invests; (3) as a “non-diversified” investment company, the Fund’s investments involve greater risks than would be the case for a similar diversified investment company (5) the Adviser’s judgment about the attractiveness, relative value or potential appreciation of a particular security or investment strategy may prove incorrect; (7) market disruption risks, including certain events that have had a disruptive effect on the securities markets, generally, such as pandemics, terrorist attacks, war and other geopolitical events, hurricanes, droughts, floods and other natural disasters; (8)risk of investment in CLOs and related securities generally (9) dependence on managers of the CLOs in which the Fund invests (10) risks associated with investing in CLOs generally. 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/herz, 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

What is the size of Herzfeld Credit Income Fund's (HERZ) tender offer in 2025?

The Fund will conduct a tender offer for up to 5% of its outstanding shares at 97.5% of NAV.

When will HERZ commence its tender offer?

The tender offer will commence in September 2025, with a deadline of October 31, 2025.

What is the purpose of HERZ's tender offer?

The tender offer aims to address the Fund's trading price discount to its net asset value (NAV) as part of an ongoing plan approved by the Board of Directors.

What price will HERZ pay for shares in the tender offer?

The Fund will purchase shares at 97.5% of NAV if the average discount was greater than 10% for the previous fiscal year.

How long will HERZ's current tender offer plan remain in effect?

The Fund's modified plan has been extended to June 30, 2026 by the Board of Directors.