MIAMI BEACH, Fla., Sept. 30, 2021 (GLOBE NEWSWIRE) -- The Herzfeld Caribbean Basin Fund, Inc. (NASDAQ: CUBA) (the “Fund”) today announced that the Fund has made the following distribution pursuant to the Fund’s managed distribution plan (the “Plan”):
|Declaration Date||Ex-Date||Record Date||Payment Date||Per Share|
The distribution for stockholders has been paid in cash or shares of the Fund’s common stock at the election of stockholders. The total amount of cash distributed to all stockholders was limited to 20% of the total distribution to be paid, excluding any cash paid for fractional shares. The remainder of the distribution (approximately 80%) was paid in the form of shares of the Fund’s common stock. The exact distribution of cash and stock to any given stockholder was dependent upon his/her election as well as elections of other stockholders, subject to the pro-rata limitation.
The price used to calculate the number of shares to be issued in lieu of cash is $5.6778, which was determined using the volume weighted average price per share of the Fund on September 17th, 20th and 21st. The total amount of cash and shares distributed under the Plan was as follows:
|Total Cash||Total Shares|
Stockholders who elected to receive the distribution solely in shares of common stock and stockholders who did not make an election will receive approximately 0.0466 shares of common stock for each share of common stock they owned on the record date of August 30, 2021. Holders of approximately 42.3% of the Company’s common stock elected to receive only stock or did not make an election.
Stockholders electing to receive the distribution in all cash will receive cash in the amount of $0.0918 per common share, or approximately 34.67% of the $0.26475 distribution, and $0.17295 shares of common stock, or approximately 65.33% of the total distribution for each share of common stock they owned on the record date of August 30, 2021. Cash in lieu of fractional shares will be issued, if applicable. Total outstanding shares of the Company’s common stock following the distribution will be approximately 6,044,310.00.
The primary purpose of the Plan is to provide stockholders with a constant, but not guaranteed, fixed minimum rate of distribution each quarter (currently set at the annual rate of 15% of the Fund’s net asset value as determined on June 30, 2021 and payable in quarterly installments). The Fund cannot predict what effect, if any, the Plan will have on the market price of its shares or whether such market price will reflect a greater or lesser discount to net asset value as compared to prior to the adoption of the Plan.
Under the Plan, the Fund will distribute all available investment income to its stockholders, consistent with its investment objective and as required by the Internal Revenue Code of 1986, as amended (the “Code”). The amount distributed per share is subject to change at the discretion of the Fund’s Board of Directors (“Board”). If sufficient investment income is not available on a quarterly basis, the Fund will distribute long-term capital gains and/or return capital to its stockholders in order to maintain its managed distribution level. The Fund is currently not relying on any exemptive relief from Section 19(b) of the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund may make additional distributions from time to time, including additional capital gain distributions at the end of the taxable year, if required to meet requirements imposed by the Code and/or the 1940 Act. Please note that for shareholders enrolled in the Fund’s Dividend Distribution Reinvestment Plan, the distribution will be reinvested in additional shares of the Fund as described in the Plan.
The Fund expects that distributions under the Plan will exceed investment income and available capital gains and thus expects that distributions under the Plan will likely include returns of capital for the foreseeable future. A return of capital may occur, for example, when some or all of a stockholder’s investment is paid back to the stockholder. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with ‘yield’ or ‘income.’ Any such returns of capital will decrease the Fund’s total assets and, therefore, could have the effect of increasing the Fund’s expense ratio. In addition, in order to maintain the level of distributions called for under its Plan, the Fund may have to sell portfolio securities at a less than opportune time.
The following table sets forth the estimated amounts of the current distribution and the cumulative distributions paid this fiscal year to date from the following sources: net investment income, net realized capital gains and return of capital. All amounts are expressed per common share.
|Current Distribution||% Breakdown of the Current Distribution||Total Cumulative Distributions for the Fiscal Year to Date||% Breakdown of the Total Cumulative Distributions for the Fiscal Year to Date|
|Net Investment Income||$0.00||0%||$0.00||0%|
|Net Realized Short-Term Capital Gains||$0.00||0%||$0.00||0%|
|Net Realized Long-Term Capital Gains||$0.00||0%||$0.00||0%|
|Return of Capital||$0.26475||100%||$0.26475||100%|
|Total (per common share)||$0.26475||100%||$0.26475||100%|
|Average annual total return (in relation to NAV) for the 5-year period ending on August 31, 2021||7.43||%|
|Annualized current distribution rate expressed as a percentage of NAV as of August 31, 2021||15.67||%|
|Cumulative total return (in relation to NAV) for the fiscal year through August 31, 2021||-0.52||%|
|Cumulative fiscal year distributions as a percentage of NAV as of August 31, 2021||0.00||%|
No conclusions should be drawn about the Fund’s investment performance from the amount of the Fund’s distributions or from the terms of the Plan.
The amount distributed per share is subject to change at the discretion of the Board. The Plan is subject to ongoing review by the Board to determine whether it should be continued, modified or terminated. The Board may amend the terms of the Plan, suspend the Plan, or terminate the Plan at any time without prior notice to the Fund’s stockholders if it deems such actions to be in the best interest of the Fund or its stockholders. The amendment or termination of the Plan could have an adverse effect on the market price of the Fund's shares.
With each distribution that does not consist solely of net investment income, the Fund will issue a notice to stockholders and an accompanying press release that will provide detailed information regarding the amount and composition of the distribution and other related information. The amounts and sources of distributions reported in the notice to stockholders are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during its full fiscal year and may be subject to changes based on tax regulations. The Fund will send stockholders a Form 1099-DIV for the respective calendar year that will tell them how to report these distributions for federal income tax purposes. Stockholders should consult their tax advisor for proper tax treatment of the Fund’s distributions.
About Thomas J. Herzfeld Advisors, Inc.
Thomas J. Herzfeld Advisors, Inc., founded in 1984, is an SEC registered investment advisor, specializing in investment analysis and account management in closed-end funds. The Firm also specializes in investment in the Caribbean Basin. The HERZFELD/CUBA division of Thomas J. Herzfeld Advisors, Inc. serves as the investment advisor to The Herzfeld Caribbean Basin Fund, Inc. a publicly traded closed-end fund (NASDAQ: CUBA).
More information about the advisor can be found at www.herzfeld.com.
Past performance is no guarantee of future performance. An investment in the Fund is subject to certain risks, including market risk. In general, shares of closed-end funds often trade at a discount from their net asset value and at the time of sale may be trading on the exchange at a price which is more or less than the original purchase price or the net asset value. An investor should carefully consider the Fund’s investment objective, risks, charges and expenses. Please read the Fund’s disclosure documents before investing.
This press release, and other statements that TJHA or the Fund may make, may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to the Fund’s or TJHA’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions. TJHA and the Fund caution that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and TJHA and the Fund assume no duty to and do not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. With respect to the Fund, the following factors, among others, could cause actual events to differ materially from forward-looking statements or historical performance: (1) changes and volatility in political, economic or industry conditions, particularly with respect to Cuba and other Caribbean Basin countries, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for the Fund or in the Fund’s net asset value; (2) the relative and absolute investment performance of the Fund and its investments; (3) the impact of increased competition; (4) the unfavorable resolution of any legal proceedings; (5) the extent and timing of any distributions or share repurchases; (6) the impact, extent and timing of technological changes; (7) the impact of legislative and regulatory actions and reforms, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, and regulatory, supervisory or enforcement actions of government agencies relating to the Fund or TJHA, as applicable; (8) terrorist activities, international hostilities and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or TJHA or the Fund; (9) TJHA’s and the Fund’s ability to attract and retain highly talented professionals; (10) the impact of TJHA electing to provide support to its products from time to time; (11) the impact of problems at other financial institutions or the failure or negative performance of products at other financial institutions; and (12) the effects of an epidemic, pandemic or public health emergency, including without limitation, COVID-19. Annual and Semi-Annual Reports and other regulatory filings of the Fund with the SEC are accessible on the SEC’s website at www.sec.gov and on TJHA’s website at www.herzfeld.com/cuba, and may discuss these or other factors that affect the Fund. The information contained on TJHA’s website is not a part of this press release.
Contact: Tom Morgan Chief Compliance Officer Thomas J. Herzfeld Advisors, Inc. 1-305-777-1660