NEW YORK - Saba Capital Income & Opportunities Fund II (NYSE: SABA), a closed-end management investment fund, revealed plans for a 1-for-2 reverse stock split to be effective after the NYSE trading session ends on June 21, 2024. The fund's shares are expected to start trading on a split-adjusted basis from June 24, 2024.
Following the reverse split, every two issued and outstanding common shares of the fund will be converted into one common share. The fund will maintain its NYSE listing under the ticker symbol 'SABA' and will adopt a new CUSIP number, 880198205.
In conjunction with the reverse split, the fund's managed distribution plan will be updated. The fixed monthly distribution per share will be adjusted from $0.029 to $0.058, ensuring that the monthly cash flow to shareholders remains unchanged. This adjustment will take effect with the first distribution declared after the reverse split's effective date.
Shareholders enrolled in the fund's dividend reinvestment plan (DRIP) will receive fractional shares post-split. Those not participating in the DRIP will have their fractional shares sold on the open market by the fund's transfer agent, Equiniti Trust Company, LLC, and will receive a cash payment corresponding to their share of the proceeds.
Shareholders holding shares in book-entry form or through a financial intermediary do not need to take any action. They will receive updated share statements reflecting their new share ownership post-split. Conversely, shareholders with share certificates will be sent a transmittal letter with instructions on exchanging their certificates for new ones. Shareholders must complete this exchange to receive cash payments in lieu of fractional shares and future distributions.
In other recent news, Saba Capital Income & Opportunities Fund II has revealed a new share repurchase program and a reverse stock split. The fund's Board of Trustees has approved the repurchase program, which allows the fund to buy back up to 10% of its common shares each fiscal year. This move is aimed at enhancing shareholder value by potentially increasing the fund's net asset value and reducing its discount to NAV.
Moreover, a reverse stock split of the fund's common shares at a 1-for-2 ratio has been approved and is set to take effect after the market closes in June 2024. This will result in every two shares being converted into one, and the fund's monthly distribution will be adjusted accordingly to maintain the same monthly cash flow to shareholders.
In another development, the Board is set to declassify itself, pending shareholder approval at the next annual meeting. This change, if approved, will lead to the annual election of all trustees, aligning the fund's corporate governance with industry standards. These are among the recent strategic decisions taken by Saba Capital Income & Opportunities Fund II.
InvestingPro Insights
As Saba Capital Income & Opportunities Fund II (NYSE: SABA) prepares for its reverse stock split, investors are keenly observing the company's financial health and future prospects. According to recent data from InvestingPro, Saba Capital's dividend yield stands at a robust 8.92%, reflecting the fund's commitment to providing shareholders with significant income. This aligns with the fund's managed distribution plan and the upcoming adjustment to the fixed monthly distribution per share post-reverse split.
InvestingPro Tips indicate that Saba Capital has maintained dividend payments for 14 consecutive years, underscoring its reliability in returning value to shareholders. Furthermore, the fund is trading near its 52-week low, with a price at 86.2% of the 52-week high, which may present an attractive entry point for investors seeking income-generating assets with lower price volatility, as also noted by InvestingPro.
Additionally, Saba Capital's average daily volume over the past three months is reported at 0.26M USD, providing investors with liquidity. For those looking to delve deeper into Saba Capital's performance and strategic insights, InvestingPro offers a wealth of information, including additional InvestingPro Tips. There are 9 more tips available, which can be accessed through the InvestingPro platform at https://www.investing.com/pro/SABA. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Investors should consider these insights in light of the fund's upcoming reverse stock split and its implications for market perception and shareholder value. With analysts predicting profitability for the year and a history of consistent dividend payments, Saba Capital Income & Opportunities Fund II may continue to be a noteworthy option for income-focused investors.
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