NexPoint Capital to suspend monthly payment distribution due to volatile market conditions.
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The board of NexPoint Capital, a publicly registered non-traded business development company, approved the suspension of the company’s monthly payment distribution, beginning in May 2020. This includes both cash distributions and those offered through the company’s distribution reinvestment plan.
The company indicated that the board came to this decision due to “recent volatile market conditions.” In a filing with the SEC, the company stated, “NexPoint Advisors L.P. continues to evaluate the portfolio with the board to determine the timing and amount of future dividend declarations.”
NexPoint Capital is a business development company that specializes in medium-sized businesses in the healthcare sector. NexPoint launched its offering in September 2014 and closed in February 2018. BDCs operate similarly to non-traded REITs and have risks for investors that include volatility, high commissions, and lack of liquidity.
The board also announced a new Net Asset Value of $5.69 per share for the company’s common stock. The stock was previously valued at $5.25 per share on April 29, 2020. The shares were originally sold for $10.00 per share.
A business development company (BDC) is an organization that invests in small- and medium-sized companies as well as distressed companies. A BDC helps small- and medium-sized firms grow in the initial stages of their development. With distressed businesses, the BDC helps the companies regain sound financial footing.
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