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NEW YORK, January 08, 2025--(BUSINESS WIRE)--Nuveen Floating Rate Income Fund (NYSE: JFR) today announced that its Board of Trustees (the "Board") has approved the terms of the issuance of transferable rights ("Rights") to the holders of the Fund’s common shares (par value $.01 per share) ("Common Shares") as of January 21, 2025 (the "Record Date"). Holders of Rights will be entitled to subscribe for additional Common Shares (the "Offer") at a discount to the market price of the Common Shares.
After considering a number of factors, including potential benefits and costs, the Board and the Fund’s investment adviser, Nuveen Fund Advisors, LLC (the "Adviser"), have determined that the Offer will benefit both the Fund and its shareholders and increase the assets of the Fund available to take advantage of existing investment opportunities, consistent with the Fund’s investment objective of providing shareholders with a high level of current income.
The Adviser believes this is an attractive time to raise additional assets for the Fund based on several factors, including the following potential benefits:
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Opportunities in senior loans: investments in performing loans priced below par offer attractive current valuations and the potential to enhance portfolio yields and fund earnings while improving the potential for investment performance for all shareholders
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Tax-efficiency: potential to invest in new opportunities without the need to sell existing portfolio positions, which may reduce taxable events for shareholders
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Benefit for shareholders: the Offer provides shareholders with an opportunity to buy new Common Shares below market price
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Enhanced liquidity: the Offer creates the potential for increased trading volume and liquidity of Common Shares
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Lower expense ratio: the Offer is expected to spread fixed operating costs across a larger asset base
Certain key terms of the Offer include:
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Holders of Common Shares on the Record Date ("Record Date Shareholders") will receive one Right for each outstanding Common Share owned on the Record Date. The Rights entitle the holders to purchase one new Common Share for every 5 Rights held (1-for-5).
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The subscription price per Common Share (the "Subscription Price") will be determined based upon a formula equal to 95% of the average of the last reported sales price of the Common Shares on the NYSE on the Expiration Date and each of the four (4) preceding trading days (the "Formula Price"). If, however, the Formula Price is less than 90% of the net asset value per Common Share at the close of trading on the NYSE on the Expiration Date, then the Subscription Price will be 90% of the Fund’s net asset value per Common Share at the close of trading on the NYSE on the Expiration Date. The Rights offering will expire at 5:00 p.m., Eastern time, on February 19, 2025 (the "Expiration Date").
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Record Date Shareholders who fully exercise all Rights issued to them can subscribe, subject to certain limitations and allotment, for any additional Common Shares which were not subscribed for by other holders of Rights at the Subscription Price, subject to the right of the Board to eliminate this over-subscription privilege. Investors who are not Record Date Shareholders but who otherwise acquire Rights in the secondary market are not entitled to participate in the over-subscription privilege. If these requests exceed available Common Shares, they will be allocated pro rata among those fully exercising Record Date Shareholders who over-subscribe based on the number of Rights originally issued to them by the Fund.
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Rights are transferable and are expected to be admitted for trading on the NYSE under the symbol "JFR RTWI" initially trading "when-issued" on January 17, 2025. The Rights will begin trading with regular settlement under the symbol "JFR RT" on or about January 23, 2025, and will cease trading at the close on February 18, 2025, one day before the Offer’s Expiration Date. During this time, Record Date Shareholders may also choose to sell their Rights.