In connection with the previously announced approval by
shareholders of First Trust Strategic High Income Fund (NYSE: FHI)
and First Trust Strategic High Income Fund III (NYSE: FHO) of the
reorganizations of each of FHI and FHO into First Trust Strategic
High Income Fund II (NYSE: FHY) and the approval by shareholders of
FHY of the issuance of additional common shares of FHY in
connection with the reorganizations, First Trust Advisors L.P.
(“FTA”) announces today that each of FHI and FHO has declared its
final distribution and FHY has declared a special distribution
payable on September 29, 2011 to shareholders of record as of
September 26, 2011. The ex-dividend date is expected to be
September 22, 2011. The distribution information for each Fund
appears below.
First Trust Strategic High Income Fund
(FHI):Distribution per share: $0.123
First Trust Strategic High Income Fund II
(FHY):Distribution per share: $0.075
First Trust Strategic High Income Fund III
(FHO):Distribution per share: $0.098
The distributions will be paid entirely in cash, with no option
for dividend reinvestment. It is anticipated that the distributions
will primarily consist of undistributed net investment income. In
order to comply with distribution requirements under the tax code,
each Fund is distributing all of its net investment income prior to
the consummation of the reorganizations. The final determination of
the source and tax status of all distributions paid in 2011 will be
made after the end of 2011.
Pursuant to the reorganizations, FHY will acquire all of the
assets and liabilities of FHI and FHO in separate tax-free
transactions for common shares of FHY. Each reorganization is
expected to occur based on the relative net asset values of FHY,
FHI and FHO as of September 30, 2011.
As previously announced, the Board of Trustees of FHY has also
approved a 1-for-3 reverse stock split, which is expected to be
completed upon the consummation of the reorganizations. The reverse
stock split will result in every three outstanding shares being
converted into one share, thereby reducing the number of FHY shares
outstanding below the number outstanding prior to the
reorganizations. Once the reverse stock split is complete, each FHY
shareholder’s account will reflect fewer shares with a higher net
asset value and market price per share. It is anticipated that
FHY’s shares will trade on a reverse split-adjusted basis under the
same ticker symbol, FHY, and a new CUSIP number, 337353304,
effective upon the closing of the reorganizations and reverse stock
split. FHY will issue a press release announcing the closing of the
reorganizations and the reverse stock split, which are anticipated
to be effective as of the opening of business of the New York Stock
Exchange on October 3, 2011, subject to all regulatory requirements
and customary closing conditions being satisfied.
FHY has also declared the Fund’s regularly scheduled monthly
common share distribution payable on October 17, 2011 to
shareholders of record as of October 5, 2011. The ex-dividend date
is expected to be October 3, 2011. The monthly distribution
information, on a reverse split-adjusted basis, for the Fund
appears below.
First Trust Strategic High Income Fund II
(FHY):
Distribution per share: $0.12Distribution Rate based on the
September 16, 2011 NAV of $5.30: 9.06%Distribution Rate based on
the September 16, 2011 closing market price of $4.81: 9.98%
Various factors affect the Fund’s level of distributable income,
including the asset mix and average maturity of its portfolio
holdings and its use of leverage and hedging. Principal write-downs
by issuers of the Fund’s residential mortgage and other structured
securities have significantly contributed to the Fund’s historical
return of capital distributions. The tax character of the Fund’s
fiscal year to date distributions, including this distribution,
will depend on the Fund’s investment experience during the
remainder of its fiscal year, including any additional principal
write-downs by the issuers of the Fund’s securities. While it is
uncertain what will transpire over this period, it is likely that
the Fund’s current year distributions will include a return of
capital component. The final determination of the source and tax
status of all 2011 distributions will be made after the end of
2011.
This press release is not intended to, and shall not, constitute
an offer to purchase or sell shares of any of the Funds, including
FHY, the surviving fund in the reorganizations. Investors should
consider the investment objectives, risks, charges and expenses of
the Funds carefully and consider in its entirety the Joint Proxy
Statement/Prospectus relating to the reorganizations which contains
important information regarding the investment objectives and
policies, risks, charges, expenses and other important information
about FHY.
Each Fund is a diversified, closed-end management investment
company that seeks to provide a high level of current income. As a
secondary objective, each Fund seeks to provide capital growth.
Each Fund pursues these investment objectives by investing up to
100% of its managed assets in a diversified portfolio of high
income producing securities that the investment sub-advisor
believes offer attractive yield and capital appreciation
potential.
FTA, the investment advisor for each Fund, along with its
affiliate, First Trust Portfolios L.P., are privately held
companies which provide a variety of investment services, including
asset management, financial advisory services, and competitive
municipal underwritings, with collective assets under management or
supervision of approximately $46 billion as of August 31, 2011
through unit investment trusts, exchange-traded funds, closed end
funds, mutual funds and separate managed accounts and exchange
traded funds.
Brookfield Investment Management Inc., the investment
sub-advisor for each Fund, is a global investment advisor focused
on specialized equity and fixed income securities investments. The
firm is a subsidiary of Brookfield Asset Management Inc., a leading
global asset manager with over $150 billion in assets under
management as of June 30, 2011 and over 100 years of experience in
the property, power and infrastructure industries. Brookfield
Investment Management Inc. is an SEC registered investment advisor,
and with its affiliates had approximately $24 billion in assets
under management as of June 30, 2011. Headquartered in New York,
the firm maintains offices and investment teams in Chicago, Boston,
London, Hong Kong, Sydney and Toronto.
Forward-Looking Statements
Certain statements made in this news release that are not
historical facts are referred to as “forward-looking statements”
under the U.S. federal securities laws. Actual future results or
occurrences may differ significantly from those anticipated in any
forward-looking statements due to numerous factors. Generally, the
words “believe,” “expect,” “intend,” “estimate,” “anticipate,”
“project,” “will” and similar expressions identify forward-looking
statements, which generally are not historical in nature.
Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ from the
historical experience of FTA and the closed-end funds managed by
FTA and its present expectations or projections. You should not
place undue reliance on forward-looking statements, which speak
only as of the date they are made. FTA and the closed-end funds
managed by FTA undertake no responsibility to update publicly or
revise any forward-looking statements.
The Annual and Semi-Annual Reports and other regulatory filings
of the Funds with the SEC are accessible on the SEC’s web site at
www.sec.gov.
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