Terms

Series

5.250% Series A Perpetual Preferred Shares

Liquidation Preference

$25.00

Coupon Rate

5.25%

Rate Type

Fixed

Annual Dividend

$1.31

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

June 30, 2026

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: Credit Facility Borrowings, Any Future Senior Indebtedness; Pari Passu With: Any Other Future Series Of Preferred Shares; Senior To: Common Shares

Regulatory (Basel III) Call

Yes

Tax Classification

Ordinary

Shares Offered

1,600,000

Prospectus Summary

Aberdeen Income Credit Strategies Fund is issuing 1,600,000 shares of 5.250% Series A Perpetual Preferred Shares with a $25.00 liquidation preference. The dividend rate is fixed at 5.250% per annum (equivalent to $1.3125 annually or $0.328125 quarterly), paid on March 31, June 30, September 30, and December 31. The Preferred Shares are perpetual securities with no stated maturity date and are fully cumulative, meaning unpaid dividends accumulate and must be paid in full before any common dividends are declared. The Preferred Shares rank senior to the Fund's Common Shares with respect to dividends and liquidation, but are subordinate to all of the Fund's debt obligations, including its existing Credit Facility and any future senior indebtedness. The Fund may issue additional series of preferred shares in the future with equal or pari passu ranking. Critically, the Preferred Shares are subject to mandatory redemption if the Fund fails to maintain asset coverage of at least 200% with respect to all outstanding preferred shares—a regulatory requirement under the 1940 Act. If this coverage ratio falls below 200%, the Fund has a 30-day cure period and must thereafter redeem a sufficient number of shares to restore coverage to at least 200% (or up to 285% at the Fund's discretion) within 90 days. The effective annual yield at par is 5.250%. Distributions will generally be taxed as ordinary income to shareholders; while the Fund may allocate some distributions as capital gains, most will not qualify for preferential qualified dividend income (QDI) rates. Dividends are paid quarterly by Computershare Trust Company as dividend paying agent; the record date is set by the Board between 10 and 20 calendar days before each payment date. A dividend stopper provision restricts dividend payments if the Fund violates asset coverage tests or experiences a default under its Credit Facility—payments may be blocked entirely if senior debt covenants are breached or if the Fund cannot maintain the required 200% asset coverage ratio with respect to senior borrowings.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

Payments of dividends and other distributions on Preferred Shares may be limited or blocked by the terms of the Fund's senior indebtedness (including the Credit Facility) if certain asset coverage requirements are not met or if an event of default occurs under the credit agreement.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 66 (Strong)