HOUSTON, April 27, 2020 (GLOBE NEWSWIRE) -- Kayne Anderson Midstream/Energy Fund, Inc. (NYSE: KMF) (the “Fund”) announced today that is has completed its planned reduction in leverage levels. On April 24, 2020, the Fund utilized a portion of its cash on hand to redeem $70 million of unsecured senior notes (“Notes”) and $35 million of mandatory redeemable preferred shares (“MRP Shares”). These negotiated repurchases were the result of constructive discussions between the Fund and its note holders and preferred investors. As a result of these repurchases, the Fund is currently in compliance with all the applicable 1940 Act leverage tests as well as the covenants on its debt agreements and terms of its preferred stock. The Fund’s previously announced distribution of $0.075 per share will be paid on April 30, 2020.
In response to the market volatility experienced during March and April, the Fund has reduced leverage by approximately $149 million, or 54%, relative to February levels. Management and the Board of Directors are pleased to complete the Fund’s leverage reduction plan and believe the actions taken were done in a way that minimized prepayment penalties and maximized shareholder value. Further, the Fund is appreciative of the support shown over the last two months by its credit facility lenders, note holders, and preferred investors.
As of April 24, 2020, the Fund had $127 million of leverage outstanding, consisting of $87 million of Notes and $40 million of MRP Shares. As of this date, the Fund had $43 million of cash and no borrowings outstanding on its unsecured revolving credit facility. In conjunction with the Fund’s reduction in leverage levels over the last two months, it amended the terms of this facility to reduce the size of its available commitment from $100 million to $75 million.
As of April 24, 2020, the Fund’s asset coverage ratio under the 1940 Act with respect to senior securities representing indebtedness was 414% and the Fund’s asset coverage ratio under the 1940 Act with respect to total leverage was 283%.
For more information on the Fund’s balance sheet as well as a discussion on current market conditions, please see the April 2020 Closed-End Fund Update and podcast posted on 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.
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