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Highland Income Fund

LVS asked about closed end fund Highland Income Fund (HFRO) – a fund which tried to convert to a diversified holding company last year–they were unsuccessful. The company has a 5.25% perpetual outstanding (HFRO-A) which is now trading at $20.15 for a current yield of 6.67% – the issue is rated A1.

In 2021 the company ‘deleveraged’ the company so that their current asset coverage ratio is around 624% as of 6/30/2022 (total assets $1.248 billion, liabilities and preferred stock $200 million).

The last time I took a close look at Highland was late in 2020—they are much improved since then—much.

Rather than me walking through the details George Spritzer who frequents our pages here just wrote a Seeking Alpha piece on 10/18/2022 and while I seldom send readers that direction there is no use reinventing the wheel.

George’s article is here.

4 thoughts on “Highland Income Fund”

  1. can look at a cousin of theirs, NXDT-A? I like the common alot and what do you think of the preffered?

    1. George is a clever analyst who is a reasonable person. That said, he often elects to write up firms that are involved one way or another with activist funds. Nothing wrong with that but you need to look at the firms he writes about as stand alones and ask if the event he writes about does not happen is the company a good investment.HFRO has had a good set of total returns and is probably worth more dd. SC

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