Neuberger Berman High Yield Strategies Stock Price, News & Analysis

Neuberger High Yield Strategies Fund Inc. (NYSE American: NHS) is a diversified, closed-end management investment company in the finance and insurance sector. Classified within securities and commodity exchanges, the Fund focuses on the high yield debt securities market and uses leverage in pursuing its investment objective, as described in available disclosures.

The Fund may invest in a variety of direct debt instruments, including bank loans, notes and other interests in amounts owed to financial institutions by borrowers such as companies and governments. Corporate loans in which the Fund may invest consist of direct obligations of borrowers. The Fund may participate in these loans at origination as a co-lender or may acquire exposure in the secondary market by purchasing participations in, assignments of or novations of corporate loans.

Investment approach and use of leverage

According to the Fund’s description, it employs leverage as part of its strategy in the high yield debt securities market. In the past, the Fund has used Mandatory Redeemable Preferred Shares and Floating Rate Senior Notes as sources of leverage and has adjusted the total amount of leverage in connection with changes in its asset level. For example, following an oversubscribed tender offer for up to 25% of its outstanding common shares, the Fund announced a reduction in the total amount of leverage it employed by redeeming a portion of its preferred shares and prepaying a portion of its notes.

The Fund’s leverage decisions have been framed in terms of maintaining what its management and Board of Directors considered an appropriate level of leverage relative to its asset base. These actions illustrate how changes in the Fund’s capital structure can affect the scale of leverage used in its investment strategy.

Portfolio focus on high yield debt

The Fund’s stated focus is on the high yield debt securities market. Its ability to invest across bank loans, notes and other direct debt instruments owed by corporate and governmental borrowers provides exposure to different parts of the credit spectrum within high yield. By investing in direct obligations and in interests acquired through participations, assignments or novations, the Fund can access both primary and secondary loan markets.

Because the Fund is structured as a closed-end management investment company, its shares trade on the NYSE American exchange under the symbol NHS. The Fund’s structure allows it to maintain a relatively stable pool of capital while its portfolio is managed in line with its high yield debt focus and leverage policy, as described in its public materials.

Level distribution policy and sources of distributions

Recent announcements describe a level distribution policy under which the Fund anticipates making regular monthly distributions of a stated amount per share of common stock, subject to market conditions and further action by the Fund. The Fund has emphasized that its ability to maintain any particular distribution rate depends on several factors, including the amount and stability of income received from its investments, the cost of leverage and the level of other Fund fees and expenses. The Fund notes that there is no assurance it will always be able to pay a distribution of any particular amount or that a distribution will consist only of net investment income.

In order to maintain a stable distribution amount, the Fund has stated that distributions may consist of net investment income, net realized capital gains and return of capital. In compliance with Section 19 of the Investment Company Act of 1940, as amended, the Fund indicates that a notice would be provided for any distribution that does not consist solely of net investment income. Such a notice would be for informational purposes and not for tax reporting purposes, and would disclose, among other things, estimated portions of the distribution, if any, consisting of net investment income, capital gains and return of capital. The final determination of the source and tax characteristics of all distributions for a given year is made after the end of that year.

Relationship with Neuberger Berman

The Fund is associated with Neuberger Berman, which is described in its own disclosures as an employee-owned, private, independent investment manager founded in 1939. Neuberger Berman reports that it manages portfolios in areas such as equities, fixed income, private equity, real estate and hedge funds for global institutions, advisors and individuals. The firm states that its investment philosophy is founded on active management, fundamental research and engaged ownership.

Neuberger Berman has also reported recognition in surveys of workplaces in money management conducted by Pensions & Investments, noting repeated high rankings among firms with more than 1,000 employees. These details provide context on the broader investment organization associated with the Fund’s management.

Capital actions and shareholder liquidity events

In addition to its ongoing distribution activity, the Fund has undertaken corporate actions affecting its capital structure and shareholder base. One example is the tender offer in which the Fund offered to purchase up to 25% of its outstanding common shares for cash at a price equal to 96% of its net asset value per share determined on a specified date. The tender offer was described as oversubscribed, and the Fund reported that it would purchase the maximum percentage of outstanding shares on a pro-rata basis, with appropriate adjustment to avoid fractional shares, based on the number of shares properly tendered.

The Fund has communicated that stockholders with questions regarding such tender offers could contact the information agent identified in the relevant announcements. These tender offer communications also included standard statements that forward-looking comments involve risks and uncertainties, referencing potential adverse effects from declines in securities markets or Fund performance, general economic downturns, competition from other closed-end investment companies, changes in government policy or regulation, and other factors.

Risk considerations as described by the Fund

In its public releases, the Fund has included statements that forward-looking comments involve risks and uncertainties. The cited risks include, among other things, the adverse effect from a decline in the securities markets or a decline in the Fund's performance, a general downturn in the economy, competition from other closed-end investment companies, changes in government policy or regulation, inability of the Fund's investment adviser to attract or retain key employees, inability of the Fund to implement its investment strategy, inability of the Fund to manage rapid expansion and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations.

These disclosures provide insight into the types of factors the Fund identifies as potentially affecting its operations, performance and ability to maintain policies such as its distribution level.

How NHS fits within the finance and insurance sector

Within the broader finance and insurance sector and the category of securities and commodity exchanges, Neuberger High Yield Strategies Fund Inc. represents a closed-end fund focused on high yield debt securities and related instruments. Its use of leverage, level distribution policy and periodic capital actions such as tender offers are key structural features described in its public communications.

Investors researching NHS can review these characteristics to understand how the Fund approaches high yield debt investing, how it has used leverage, and how it has managed shareholder distributions and capital structure over time, based on the information the Fund has made publicly available.