HOUSTON, March 23, 2020 (GLOBE NEWSWIRE) -- Kayne Anderson Midstream/Energy Fund, Inc. (NYSE: KMF) (the “Fund”) announced today an update on its balance sheet and leverage levels.
The Fund has continued to take steps to increase its cash position. As of March 20, 2020, the Fund had $135 million of cash on its balance sheet, including cash it will receive Tuesday for securities it has recently sold. The Fund plans to prudently use its cash balance to reduce leverage levels over the next month in a way that minimizes prepayment penalties and maximizes shareholder value.
Currently, the Fund has $157 million of unsecured senior notes and $75 million of mandatory redeemable preferred shares outstanding. It is the Fund’s intention to comply with all applicable 1940 Act leverage tests as well as the covenants on its debt agreements and the terms of its preferred stock.
As of March 20th, the Fund’s asset coverage ratio under the 1940 Act with respect to senior securities representing indebtedness (the “’40 Act Debt Test”) was 256% and the Fund’s asset coverage ratio under the 1940 Act with respect to total leverage (the “’40 Act Leverage Test”) was 173%. The Fund is still in the process of determining what portion of its cash balance will be used to redeem debt and what portion will be used to redeem preferred stock. For illustrative purposes, assuming the Fund uses all of its cash to repay outstanding indebtedness, the pro forma coverage ratios are estimated to be 1041% for the ’40 Act Debt Test and 266% for the ’40 Act Leverage Test.
For more information on the Fund’s use of leverage and the asset coverage requirements associated with that leverage, please see the presentation titled “March 2020 Fund Update” posted to www.kaynefunds.com.
Kayne Anderson Midstream/Energy Fund, Inc. is a non-diversified, closed-end management investment company registered under the Investment Company Act of 1940, as amended, whose common stock is traded on the NYSE. KMF’s investment objective is to provide a high level of total return with an emphasis on cash distributions to its stockholders by investing at least 80% of its total assets in securities of companies in the Midstream/Energy Sector, consisting of: (a) Midstream Master Limited Partnerships (“MLPs”), (b) Midstream Companies, (c) Other MLPs and (d) Other Energy Companies. KMF anticipates that the majority of its investments will consist of investments in Midstream MLPs and Midstream Companies. See Glossary of Key Terms in the Fund’s quarterly reports for a description of these investment categories and for the meaning of capitalized terms.
This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of any securities in any jurisdiction in which such offer or sale is not permitted. Nothing contained in this press release is intended to recommend any investment policy or investment strategy or take into account the specific objectives or circumstances of any investor. Please consult with your investment, tax or legal adviser regarding your individual circumstances prior to investing.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains “forward-looking statements” as defined under the U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ from the Fund’s historical experience and its present expectations or projections indicated in any forward-looking statements. These risks include, but are not limited to, changes in economic and political conditions; regulatory and legal changes; MLP industry risk; leverage risk; valuation risk; interest rate risk; tax risk; and other risks discussed in detail in the Fund’s filings with the SEC, available at www.sec.gov. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Fund undertakes no obligation to publicly update or revise any forward-looking statements made herein. There is no assurance that the Fund’s investment objectives will be attained.
Contact:
KA Fund Advisors, LLC
Investor Relations
877-657-3863
cef@kaynecapital.com
www.kaynefunds.com