Highland Opportunities and Income Fund Announces the Regular Monthly Distribution

Rhea-AI Summary

Highland Opportunities and Income Fund (HFRO) announced a regular monthly distribution of $0.0385 per share, payable on January 31, 2024, to shareholders of record at the close of business on January 24, 2024. The Fund has adjusted the distribution rate to align with its current portfolio and investment objective. HFRO is a closed-end fund seeking capital growth and income in a registered fund format, investing in various categories of securities and instruments. For more information, visit www.nexpointassetmgmt.com/opportunities-income-fund.

Financial Analyst

The adjustment of the monthly distribution rate by Highland Opportunities and Income Fund (HFRO) is a strategic move that reflects the Fund's current portfolio and investment objectives. This change is indicative of the Fund's performance and its management's response to the prevailing market conditions. It may influence investor perception, particularly around the Fund's ability to generate consistent income and could potentially impact the Fund's stock price as market participants re-evaluate the dividend yield in comparison to other investment opportunities.

One must consider the broader economic context, including interest rate trends and the health of the real estate market, given HFRO's exposure to real estate-related investments. The adjustment may also hint at internal changes in portfolio composition, such as a shift towards more or less risky assets, or a rebalancing act in response to market volatility or credit risk assessments. Investors should monitor the Fund's performance metrics, such as the net asset value (NAV) and compare them with industry benchmarks to gauge the effectiveness of the Fund's strategy.

Market Research Analyst

HFRO's focus on a variety of investment instruments, including REITs, corporate bonds and structured products, positions it within the broader context of income-focused funds. The Fund's ability to adapt its distribution rate suggests a proactive management approach to aligning investor payouts with actual performance and income generation capabilities. This flexibility can be attractive to investors seeking income stability, especially in a fluctuating interest rate environment.

However, the adjustment also raises questions about the sustainability of distributions, especially if the Fund's underlying assets face valuation pressures or yield compression. Investors should consider the Fund's historical distribution patterns and the current economic landscape to assess the attractiveness of HFRO as an income-generating investment. Additionally, the Fund's exposure to derivatives and floating rate loans could be a double-edged sword, potentially offering both risk mitigation in a rising interest rate environment and increased complexity in the Fund's income generation mechanisms.

Real Estate Investment Analyst

HFRO's investment in securities secured by real estate and other real estate-related instruments like REITs and mezzanine debt is significant for understanding the Fund's risk profile and income potential. The real estate market's performance, including factors such as occupancy rates, rent price trends and property values, can directly impact the returns from these investments. Given the cyclical nature of real estate, the Fund's distribution adjustment may reflect broader market trends or specific sectoral shifts.

Investors should evaluate the Fund's real estate exposure in the context of current market conditions, such as potential interest rate hikes, which could affect borrowing costs and property values. Additionally, the Fund's involvement with REITs could be assessed in terms of dividend payout ratios and regulatory changes that might influence the sector's performance. Understanding these dynamics is crucial for stakeholders to determine the long-term viability of the Fund's income strategy and its resilience to market fluctuations.

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 per share. The distribution will be payable on January 31, 2024, to shareholders of record at the close of business January 24, 2024.

The Fund has adjusted the monthly distribution rate to align the distribution with the Fund's current portfolio and investment objective. Additional information on the distribution can be found on the Fund's website at www.nexpointassetmgmt.com/opportunities-income-fund.

The Fund is a closed-end fund that seeks to provide growth of capital along with income in a registered fund format. The Fund pursues its investment objective by investing directly and indirectly (e.g., through derivatives that are the economic equivalent of direct investments) in the following categories of securities and instruments: (i)  investments in securities or other instruments directly or indirectly secured by real estate, including real estate investment trusts ("REITs"), preferred equity, securities convertible into equity securities and mezzanine debt; (ii) other instruments, including, but not limited to, secured and unsecured fixed-rate loans and corporate bonds, distressed securities, mezzanine securities, structured products (including but not limited to mortgage-backed securities, collateralized loan obligations and asset-backed securities), convertible and preferred securities, equities (public and private), and futures and options; and (iii) floating rate loans and other securities deemed to be floating rate investments. 

The Fund declares and pays distributions monthly.

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.  

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.

CONTACTS

Investor Relations
Kristen Thomas
IR@nexpoint.com

Media Relations
Prosek Partners for NexPoint
Pro-nexpoint@prosek.com

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SOURCE Highland Opportunities and Income Fund

What is the regular monthly distribution announced by Highland Opportunities and Income Fund (HFRO)?

The regular monthly distribution announced by Highland Opportunities and Income Fund (HFRO) is $0.0385 per share.

When will the distribution be payable?

The distribution will be payable on January 31, 2024.

Who are the shareholders eligible to receive the distribution?

Shareholders of record at the close of business on January 24, 2024, are eligible to receive the distribution.

What is the investment objective of Highland Opportunities and Income Fund (HFRO)?

HFRO seeks to provide growth of capital along with income in a registered fund format.

What categories of securities and instruments does Highland Opportunities and Income Fund (HFRO) invest in?

HFRO invests in securities and instruments secured by real estate, including REITs, preferred equity, convertible securities, mezzanine debt, fixed-rate loans, corporate bonds, distressed securities, structured products, equities, futures, and options, among others.