First Trust Advisors L.P. (“FTA”) announced today that the Board
of Trustees of First Trust Strategic High Income Fund II (NYSE:
FHY), a closed-end fund managed by FTA, and First Trust High Income
Long/Short Fund (NYSE: FSD), another closed-end fund managed by
FTA, approved the merger of FHY into FSD. FSD will be the surviving
fund.
Under the terms of the proposed transaction, which is expected
to be tax-free, the assets of FHY would be transferred to, and the
liabilities of FHY would be assumed by, FSD, and shareholders of
FHY would receive shares of FSD with a value equal to the aggregate
net asset value of the FHY shares held by them. It is currently
expected that the transaction will be consummated later this year,
subject to requisite shareholder approval and satisfaction of
applicable regulatory requirements and approvals and customary
closing conditions. There is no assurance when or whether such
approvals, or any other approvals required for the transaction,
will be obtained. More information on the proposed transaction will
be contained in proxy materials that will be filed in the coming
weeks. Upon completion of the proposed transaction, the investment
objectives and strategies of FSD will remain unchanged.
FHY is a diversified, closed-end management investment company
that seeks to provide a high level of current income. As a
secondary objective, the Fund seeks to provide capital growth. The
Fund seeks to achieve its investment objectives by investing in a
diversified portfolio of below-investment grade and investment
grade debt securities, and equity securities that the investment
sub-advisor believes offer attractive yield and/or capital
appreciation potential. The Fund may invest up to 100% of its
managed assets in below-investment grade debt securities (commonly
referred to as “high-yield” or “junk” bonds).
FSD is a diversified, closed-end management investment company
that seeks to provide current income. The Fund has a secondary
objective of capital appreciation. The Fund seeks to achieve its
investment objectives by investing, under normal market conditions,
a majority of its assets in a diversified portfolio of U.S. and
foreign (including emerging markets) high yield corporate
fixed-income securities of varying maturities that are rated
below-investment grade at the time of purchase.
First Trust Advisors L.P., the Funds’ investment advisor, along
with its affiliate, First Trust Portfolios L.P., are privately-held
companies which provide a variety of investment services, including
asset management and financial advisory services, with collective
assets under management or supervision of approximately $124
billion as of January 31, 2018 through unit investment trusts,
exchange-traded funds, closed-end funds, mutual funds and separate
managed accounts.
Brookfield Investment Management Inc. (“Brookfield”) serves as
FHY’s investment sub-advisor. Brookfield is a wholly-owned
subsidiary of Brookfield Asset Management, a global alternative
asset manager with over $265 billion in assets under management as
of September 30, 2017. Brookfield Asset Management has over a
100-year history of owning and operating assets with a focus on
property, renewable power, infrastructure and private equity.
Brookfield Asset Management’s public market activities are
conducted by Brookfield, a registered investment advisor, with over
$16 billion of assets under management as of September 30,
2017.
MacKay Shields LLC (“MacKay”) serves as FSD’s investment
sub-advisor. MacKay is an indirect wholly-owned subsidiary of New
York Life Insurance Company and a wholly-owned subsidiary of New
York Life Investment Management Holdings LLC. MacKay is a
multi-product, fixed income investment management firm with
approximately $97.2 billion in assets under management as of
November 30, 2017. MacKay manages fixed income strategies for
high-net worth individuals, institutional clients and mutual funds,
including unconstrained bond, global high yield, high yield, high
yield active core, municipal high yield, short duration high yield,
low volatility high yield, municipal short term, core investment
grade, municipal investment grade, core plus, core plus
opportunities, convertibles, emerging markets credit, and bank
loans.
Additional Information about the Proposed Merger and Where to
Find It
This press release is not intended to, and shall not, constitute
an offer to purchase or sell shares of FHY or FSD; nor is this
press release intended to solicit a proxy from any shareholder. The
solicitation of the purchase or sale of securities or of proxies to
effect the transaction may only be made by a final, effective
Registration Statement, which includes a definitive Proxy
Statement/Prospectus, after the Registration Statement is declared
effective by the SEC.
This press release references a Registration Statement, which
includes a Proxy Statement/Prospectus, to be filed by FSD and FHY.
This Registration Statement has yet to be filed with the SEC. After
the Registration Statement is filed with the SEC, it may be amended
or withdrawn and the Proxy Statement/Prospectus will not be
distributed to shareholders of FHY unless and until the
Registration Statement is declared effective by the SEC.
FHY, FSD, FTA, FTP and their respective trustees, officers and
employees, and other persons may be deemed to be participants in
the solicitation of proxies with respect to the proposed merger.
Investors and shareholders may obtain more detailed information
regarding the direct and indirect interests of FHY’s, FSD’s, FTA’s
and FTP’s respective directors, trustees, officers and employees by
reading the Proxy Statement/Prospectus regarding the proposed
merger when it is filed with the SEC.
Investors and security holders of FHY are urged to read the
Proxy Statement/Prospectus and other documents filed with the SEC
carefully in their entirety when they become available because they
will contain important information about the proposed merger.
Investors should consider the investment objectives, risks,
charges and expenses of FHY and FSD carefully. The Proxy
Statement/Prospectus will contain information with respect to the
investment objectives, risks, charges and expenses of the funds and
other important information about FHY and FSD. The Proxy
Statement/Prospectus will constitute neither an offer to sell
securities, nor will it constitute a solicitation of an offer to
buy securities, in any state where such offer or sale is not
permitted.
Investors may obtain free copies of the Registration Statement
and Proxy Statement/Prospectus and other documents (when they
become available) filed with the SEC at the SEC’s web site at
www.sec.gov. In addition, free copies of the Proxy
Statement/Prospectus and other documents filed with the SEC may
also be obtained after the Registration Statement becomes effective
by calling FTA toll-free at (800) 621-1675.
The information presented is not intended to constitute an
investment recommendation for, or advice to, any specific person.
By providing this information, First Trust is not undertaking to
give advice in any fiduciary capacity within the meaning of ERISA
and the Internal Revenue Code. First Trust has no knowledge of and
has not been provided any information regarding any investor.
Financial advisors must determine whether particular investments
are appropriate for their clients. First Trust believes the
financial advisor is a fiduciary, is capable of evaluating
investment risks independently and is responsible for exercising
independent judgment with respect to its retirement plan
clients.
The Funds’ daily closing New York Stock Exchange prices and net
asset values per share as well as other information can be found at
www.ftportfolios.com or by calling 1-800-988-5891.
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 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, FHY and FSD undertake no responsibility to
update publicly or revise any forward-looking statements.
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version on businesswire.com: http://www.businesswire.com/news/home/20180306006057/en/
First Trust Advisors L.P.Jeff Margolin – (630) 915-6784Jim Dykas
– (630) 517-7665
First Trust Strategic High Income Fund II First Trust Strategic High Income Fund II of Beneficial Interest (NYSE:FHY)
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