BNY Mellon High Yield Strategies Fund Permitted to Invest Up to 20% of Total Assets in Floating Rate Loans
15 Août 2024 - 10:05PM
Business Wire
On Thursday, August 8, 2024, the Board of Trustees of BNY
Mellon High Yield Strategies Fund (NYSE: DHF) approved a
proposal, effective August 15, 2024, to permit BNY Mellon High
Yield Strategies Fund (the “Fund”) to invest up to 20% of the
Fund’s total assets in floating rate loans.
The Fund's investments in floating rate loans will be generally
focused on senior secured loans but also may include second lien
loans, senior unsecured loans, subordinated loans, and fixed rate
loans with respect to which the Fund has entered into derivative
instruments (principally swap agreements and options on swap
agreements) to effectively convert the fixed rate interest payments
into floating rate interest payments. The Fund also may purchase
participations and assignments in, and commitments to purchase,
floating rate loans. Investments in floating rate loans and other
floating rate securities generally will focus on U.S. issuers, but
the Fund may invest in foreign issuers, typically those located in
foreign countries that are members of the Organisation for Economic
Co-operation and Development.
Unlike publicly traded common stocks which trade on national
exchanges, there is no central market or exchange for loans to
trade. Loans trade in an over-the-counter market, and confirmation
and settlement, which are effected through standardized procedures
and documentation, may take significantly longer than seven days to
complete. The secondary market for floating rate loans also may be
subject to irregular trading activity and wide bid/ask spreads. The
lack of an active trading market for certain floating rate loans
may impair the ability of the Fund to realize full value in the
event of the need to sell a floating rate loan and may make it
difficult to value such loans. There may be less readily available,
reliable information about certain floating rate loans than is the
case for many other types of securities, and the Fund's portfolio
managers may be required to rely primarily on their own evaluation
of a borrower's credit quality rather than on any available
independent sources. The value of collateral, if any, securing a
floating rate loan can decline, and may be insufficient to meet the
issuer's obligations in the event of non-payment of scheduled
interest or principal or may be difficult to readily liquidate. In
the event of the bankruptcy of a borrower, the Fund could
experience delays or limitations imposed by bankruptcy or other
insolvency laws with respect to its ability to realize the benefits
of the collateral securing a loan. The floating rate loans in which
the Fund may invest typically will be below investment grade
quality and, like other below investment grade securities, are
inherently speculative. As a result, the risks associated with such
floating rate loans are similar to the risks of below investment
grade securities, although senior loans are typically senior and
secured in contrast to other below investment grade securities,
which are often subordinated and unsecured. Floating rate loans may
not be considered to be "securities" for purposes of the anti-fraud
protections of the federal securities laws, including those with
respect to the use of material non-public information, so that
purchasers, such as the Fund, may not have the benefit of these
protections.
Holders of securities that are subordinated or "junior" to more
senior securities of an issuer are entitled to payment after
holders of more senior securities of the issuer. Subordinated
securities are more likely to suffer a credit loss than
non-subordinated securities of the same issuer, any loss incurred
by the subordinated securities is likely to be proportionately
greater, and any recovery of interest or principal may take more
time. As a result, even a perceived decline in creditworthiness of
the issuer is likely to have a greater impact on the market value
of these securities. Subordinated loans generally are subject to
similar risks as those associated with investments in senior loans,
except that such loans are subordinated in payment and/or lower in
lien priority to first lien holders. Consequently, subordinated
loans generally have greater price volatility than senior loans and
may be less liquid. The risks associated with subordinated
unsecured loans, which are not backed by a security interest in any
specific collateral, are higher than those for comparable loans
that are secured by specific collateral.
A participation interest gives the Fund an undivided interest in
a loan in the proportion that the Fund's participation interest
bears to the total principal amount of the loan, but does not
establish any direct relationship between the Fund and the
borrower. If a floating rate loan is acquired through a
participation, the Fund generally will have no right to enforce
compliance by the borrower with the terms of the loan agreement
against the borrower, and the Fund may not directly benefit from
the collateral supporting the debt obligation in which it has
purchased the participation. As a result, the Fund will be exposed
to the credit risk of both the borrower and the institution selling
the participation. The Fund also may invest in a loan through an
assignment of all or a portion of such loan from a third party. If
a floating rate loan is acquired through an assignment, the Fund
may not be able to unilaterally enforce all rights and remedies
under the loan and with regard to any associated collateral.
Because there may be a lack of centralized information and
trading for certain loans in which the Fund may invest, reliable
market value quotations may not be readily available for such loans
and their valuation may require more research than for securities
with a more developed secondary market. Moreover, the valuation of
such loans may be affected by uncertainties in the conditions of
the financial market, unreliable reference data, lack of
transparency and inconsistency of valuation models and
processes.
This press release is published solely for informational
purposes and is not to be construed as specific tax, legal or
investment advice. Nor is this document intended as a solicitation
or an offer to buy or sell securities or related financial
instruments. The release should not be regarded by recipients as a
substitute for exercise of their own judgment. Statements made in
this release are based on current market conditions. Different
market conditions and assumptions could have materially different
results. Neither BNY Investment Adviser, Inc. “BNY Investment
Adviser”), the Fund nor any of their affiliates, directors,
employees or agents accept any liability for any loss or damage
arising out of the use of all or any part of this release.
Certain statements contained in this release may be
forward-looking in nature. Such statements represent current
beliefs, based on information available at the time the statements
are made, with regard to matters addressed. Actual future
occurrences may differ significantly from those anticipated in any
forward-looking statements due to numerous factors. These include,
but are not limited to, those noted above, and other additional
risks and uncertainties. The Fund, BNY Investment Adviser and any
of their affiliates, directors, employees or agents undertake no
responsibility to update publicly or revise any forward- looking
statements.
Important Information
BNY Mellon Investment Adviser, Inc., the investment adviser for
the Fund, is part of BNY Investments. BNY Investments is one of the
world’s largest asset managers, with $2.0 trillion in assets under
management as of June 30, 2024. Through a client-first approach,
BNY Investments brings investors specialist expertise through its
seven investment firms offering solutions across every major asset
class and backed by the breadth and scale of BNY. Additional
information on BNY Investments is available on www.bnymellonim.com.
Follow us on LinkedIn for the latest company news and activity.
BNY Investments is a division of BNY, which has $49.5
trillion in assets under custody and/or administration as of June
30, 2024. Established in 1784, BNY is America's oldest bank. Today,
BNY powers capital markets around the world through comprehensive
solutions that help clients manage and service their financial
assets throughout the investment life cycle. BNY is the corporate
brand of The Bank of New York Mellon Corporation (NYSE: BK).
Additional information is available on www.bnymellon.com. Follow us
on LinkedIn or visit our newsroom for the latest company news.
Closed-end funds are traded on the secondary market through one
of the stock exchanges. The Fund's investment returns and principal
values 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 net asset value
of the fund’s portfolio. There is no assurance that the Fund will
achieve its investment objective.
This release is for informational purposes only and should not
be considered as investment advice or a recommendation of any
particular security.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240815684500/en/
For Press Inquiries: BNY Mellon Investment Adviser, Inc. Sue
Watt (212) 815-3757
For Other Inquiries: BNY Mellon Securities Corporation The
National Marketing Desk 240 Greenwich Street New York, New York
10286 1-800-334-6899
BNY Mellon High Yield St... (NYSE:DHF)
Graphique Historique de l'Action
De Sept 2024 à Oct 2024
BNY Mellon High Yield St... (NYSE:DHF)
Graphique Historique de l'Action
De Oct 2023 à Oct 2024