Terms

Series

5.50% Series A Cumulative Preferred Shares

Liquidation Preference

$25.00

Coupon Rate

5.5%

Rate Type

Fixed

Annual Dividend

$1.38

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

December 15, 2023

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Debt Obligations And Borrowings Of The Company; Pari Passu With: Any Future Series Of Preferred Shares Of The Company; Senior To: Common Shares

Regulatory (Basel III) Call

Yes

Tax Classification

Other

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

4,800,000

Prospectus Summary

NexPoint Strategic Opportunities Fund, a Delaware statutory trust and non-diversified closed-end management investment company, is offering up to 4,800,000 shares of its 5.50% Series A Cumulative Preferred Shares with a $25.00 liquidation preference, issued via an exchange offer for existing Common Shares. The shares pay fixed quarterly dividends at 5.50% per annum ($1.375 per share annually, or approximately $0.34375 per quarter), with the first payment due March 31, 2021 and the first optional call date on December 15, 2023 at par. These shares are cumulative, meaning any missed dividends accrue and must be paid in full before any distributions can be made to common shareholders. The Series A Preferred Shares rank senior to Common Shares in both dividend priority and liquidation, and pari passu with any future preferred series the Company may issue. They are junior to all debt obligations and borrowings of the Company. Notably, the Company is a holding company-style closed-end fund in transition from RIC to REIT status, so preferred shareholders are subordinate to all existing lenders. The Company retains a regulatory/tax call right: it may redeem Series A Preferred Shares at any time—before the December 15, 2023 optional call date—if the Board deems redemption necessary to preserve RIC or REIT tax qualification. Additionally, as long as the Company remains registered under the 1940 Act, it may be forced to mandatorily redeem shares if the 200% asset coverage ratio falls below the regulatory minimum. At par, the effective yield is 5.50% annually. Dividends are paid quarterly on March 31, June 30, September 30, and December 31, with the record date set as the fifth business day before each payment date. The tax character of dividends is uncertain given the Company's ongoing conversion from a RIC to a REIT; investors should consult their own tax advisors. A key dividend stopper: if asset coverage falls below 200% under the 1940 Act (while applicable), the Company cannot pay dividends on Common Shares; conversely, if parity preferred dividends are not fully current, Series A Preferred dividends will be paid pro rata rather than in full alongside any parity series.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If the Company fails to maintain 200% asset coverage under the 1940 Act, it may not pay dividends or repurchase Common Shares; also, no full dividends may be paid on Series A Preferred Shares unless all accumulated dividends on parity preferred shares are also paid.

Other Preferreds from NexPoint Strategic Opportunities Fund

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 32 (Weak)