In a recent move, abrdn Asia-Pacific Income Fund, Inc. (NYSE: FAX), a Maryland-incorporated investment company, has entered into a Purchase Agreement to issue and sell 4 million Series B Mandatorily Redeemable Preferred Shares (MRP Shares) with a liquidation preference of $25.00 per share. The transaction, which took place on Thursday, is expected to generate $100 million in gross proceeds for the Fund.
The MRP Shares are due on October 3, 2029, and the sale was conducted under an exemption from registration provided by Rule 506(c) under the Securities Act of 1933, as amended. This strategic financial maneuver aims to enhance the Fund's capital structure and provide additional funds for its operations.
In conjunction with this equity sale, the Fund also adopted Articles Supplementary on October 1, 2024, which detail the rights and preferences associated with the MRP Shares. This amendment to the Fund's Articles of Incorporation authorizes the issuance of the 4 million MRP Shares.
The abrdn Asia-Pacific Income Fund specializes in investment opportunities across the Asia-Pacific region and is known for its focus on income-generating assets. The newly acquired capital through the preferred shares sale is anticipated to support the Fund's investment objectives and strategies.
InvestingPro Insights
The recent issuance of preferred shares by abrdn Asia-Pacific Income Fund, Inc. (NYSE: FAX) aligns with the fund's commitment to delivering value to shareholders. According to InvestingPro data, FAX boasts an impressive dividend yield of 11.35%, underscoring its focus on income generation for investors. This high yield is supported by an InvestingPro Tip indicating that FAX "pays a significant dividend to shareholders" and has "maintained dividend payments for 39 consecutive years."
The fund's financial health appears robust, with an InvestingPro Tip noting that "liquid assets exceed short term obligations." This strong liquidity position may have contributed to the fund's ability to issue the new preferred shares. Additionally, FAX has been "profitable over the last twelve months," with a reported gross profit of $71.23 million and a 100% gross profit margin for the same period.
Investors considering FAX might be interested to know that InvestingPro offers 13 additional tips for this stock, providing a more comprehensive analysis of its investment potential. These insights could be particularly valuable given the fund's recent capital raising activity and its consistent dividend history.
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