NEW YORK--(BUSINESS WIRE)--AllianzGI Convertible & Income 2024 Target Term Fund (the “Fund”) announced today that the underwriters of its initial public offering of common shares, which was completed on June 30, 2017, have partially exercised their over-allotment option to purchase an additional 1,746,796 common shares of the Fund. The closing of the exercise of the overallotment option occurred Friday, August 4, 2017. The gross proceeds of $17,467,960 from the partial exercise of the over-allotment option brings the total amount raised in the Fund’s initial public offering to $182,467,960 (before deduction of the sales load and offering expenses). The Fund’s common shares are listed on the New York Stock Exchange under the symbol “CBH.”
The Fund is a diversified, limited-term, registered closed-end investment company. The Fund's investment objectives are to provide a high level of income and to return at least $9.835 per common share (the original net asset value per common share before deducting offering costs of $0.02 per share) (the “Original NAV”) to shareholders on or about its currently scheduled termination date of September 1, 2024. Pursuant to its limited term feature, the Fund intends, on or about September 1, 2024, to cease its investment operations, liquidate its portfolio (to the extent possible), retire or redeem any outstanding leverage facilities and distribute all its liquidated assets to its then record shareholders, unless the limited term is extended by the Fund’s Board of Trustees (for up to six months) and absent Trustee and shareholder approval to amend the limited term. The objective to return the Fund’s Original NAV is not an express or implied guarantee obligation of the Fund, Allianz Global Investors U.S. LLC (“AllianzGI U.S.”), the investment manager of the Fund or any other entity, and an investor may receive less than the Original NAV upon termination of the Fund. There can be no assurance that the Fund will meet its stated objectives.
The Board of Trustees of the Fund also announced today that it has declared the Fund’s initial monthly distribution of $0.046 per common share. At the Fund's initial offering price of $10.00 per share, this monthly distribution rate represents an annualized distribution yield of approximately 5.52%. The Board previously announced the declaration of this distribution in a press release dated August 2, 2017. The distribution will be payable on September 1, 2017 to shareholders of record on August 22, 2017 with an ex-dividend date of August 18, 2017. Based on projections through the payable date, it is expected that this distribution will be comprised of net investment income.
Going forward, it is anticipated that the Fund will declare monthly distributions on the first business day of each month with a payment date on the first business day of the following month. Although it does not currently intend to do so, as portfolio and market conditions change, the distribution rate and the Fund's policy to declare distributions monthly could be changed by the Board of Trustees.
AllianzGI U.S., an indirect, wholly-owned subsidiary of Allianz Asset Management of America, L.P., serves as the Funds' investment manager and is a member of Munich-based Allianz Group.
The Fund’s daily New York Stock Exchange closing market prices, net asset values per share, as well as other information, including updated portfolio statistics and performance will be available at us.allianzgi.com/closedendfunds or by calling the Fund’s shareholder servicing agent at (800) 254-5197.
About Allianz Global Investors
Allianz Global Investors is a diversified active investment manager with a strong parent company and a culture of risk management. With 25 offices worldwide, we provide global investment and research capabilities with consultative local delivery. We have more than $524 billion in AUM for individuals, families and institutions worldwide and employ over 600 investment professionals.
At Allianz Global Investors, we follow a two-word philosophy: Understand. Act. It describes how we look at the world and how we behave. We aim to stand out as the investment partner our clients trust by listening closely to understand their challenges, then acting decisively to provide them with solutions that meet their needs.
Data as of March 31, 2017 (excluding AUM of entities held for sale); investment professionals as of December 31, 2016
The Fund is a newly organized, diversified, limited-term, registered, closed-end management investment company with no operating history. Shares of closed-end investment companies, such as the Fund, usually trade on a national stock exchange, and these shares frequently trade at a significant discount from their NAV, which may increase risk of loss for investors.
Because of the risks associated with investing in high-yield securities and other risks associated with the Fund’s principal investment strategies, including, without limitation, the risk that the Fund may not return the Original NAV upon termination, limited-term risk and risks associated with the use of leverage, an investment in the Fund involves a high degree of risk and should be considered speculative. Investors should consider their investment goals, time horizons and risk tolerance before investing in the Fund. An investment in the Fund is not appropriate for all investors, and the Fund is not intended to be a complete investment program. Investors should consider the Fund’s investment objective, risks, fees and expenses carefully before investing, which are disclosed in the Fund’s prospectus.
Because the assets of the Fund will be liquidated in connection with its termination, the Fund may be required to sell portfolio securities when it otherwise would not, including at times when market conditions are not favorable, or at a time when a particular security is in default or bankruptcy, or otherwise in severe distress, which may cause the Fund to lose money. In seeking to return the Original NAV on or about its termination date, the Fund intends to utilize various portfolio and cash flow management techniques, including setting aside a limited portion of its net investment income, possibly retaining all or a portion of its gains and limiting the longest expected maturity of any holding, other than floating-rate senior secured loans, to no later than March 1, 2025. As a result, the average maturity of the Fund’s holdings is generally expected to shorten as the Fund approaches its termination date, which may reduce interest rate risk over time, but may also reduce returns and net income amounts available for distribution to common shareholders.
Convertible securities generally offer lower interest or dividend yields than non-convertible debt securities of similar quality. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. Investments in debt securities typically decline in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in lower rated and unrated securities present a greater risk of loss to principal and interest than higher rated securities. Instruments of below investment grade quality are regarded as having predominantly speculative characteristics with respect to capacity to pay interest and to repay principal, and are commonly referred to as “high yield” securities or “junk bonds.” Secured loans provide lenders with an interest in underlying collateral that is intended to reduce the risk of loss in bankruptcy or bankruptcy-like scenarios. However, there can be no assurance the liquidation of such collateral would satisfy an issuer’s obligation to the Fund in the event of issuer default or that such collateral could be readily liquidated under such circumstances.
The prospectus, which contains this and other information about the Fund, should be read carefully before investing. There can be no assurance that the Fund will achieve its investment objectives or be able to structure its investment portfolio as anticipated. This document is not an offer to sell securities and is not a solicitation of an offer to buy securities, nor will there be any sales of securities in any jurisdiction where the offer or sale is not permitted.
This material may include statements that constitute "forward-looking statements" under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates and information about possible or future results related to the Fund, market or regulatory developments. The views expressed herein are for informational purposes only and are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. Such risks and uncertainties include, without limitation, the adverse effect from a decline in the securities markets or a decline in the Fund’s performance, a general downturn in the economy, competition from other companies, changes in government policy or regulation, inability to attract or retain key employees, inability to implement its operating strategy and/or acquisition strategy, and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations. The views expressed herein are subject to change at any time based upon economic, market, or other conditions and the Fund undertakes no obligation to update the views expressed herein. While we have gathered this information from sources believed to be reliable, the Fund cannot guarantee the accuracy of the information provided. The views expressed herein do not constitute recommendations to buy, sell or hold any security. The views expressed herein (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Fund's trading intent. Information included herein is not an indication of the Fund's future portfolio composition or the extent to which the Fund may utilize leverage.
The actual composition and character of the distribution described above and future distributions of the Fund may be materially different from the composition or character of such distributions that existed at the time of this press release. Factors that may affect Fund distributions include the varied nature of the Fund's investments and the performance of those investments, and that the ultimate characterization of the Fund's distributions cannot finally be determined until the end of the Fund's fiscal year, resulting in the possibility of a return of capital if the Fund makes total distributions during a fiscal year in an amount that exceeds the Fund's net investment income and net realized capital gains for the fiscal year. As a result of the foregoing and other factors, no assurance can be given as to the actual composition or character of Fund distributions at the time of this press release by the Fund, AllianzGI U.S., nor any of their affiliates, trustees, directors, members, officers or employees.