NXG NextGen Infrastructure Income Fund Announces At-the-Market Offering Program
DALLAS, Jan. 28, 2025 – NXG NextGen Infrastructure Income Fund (NYSE: NXG) (the “Fund”) has announced the establishment of an “at-the-market” offering program (the “Offer”), enabling the Fund to sell common shares of beneficial interest, par value $0.001 per share (“Common Shares”) through a distribution agreement with Foreside Fund Services, LLC (the “Distributor”).
Understanding the At-the-Market Offering Program
At-the-market offerings (ATMs) are selling methods used by companies to raise capital in the securities market. Rule 415 under the Securities Act of 1933, as amended, defines such offerings as those in which a company, through an agent, sells securities on a continuous basis at market prices, with no fixed offering price or offering period. In this arrangement, the Distributor acts as the selling agent for the Fund, allowing it to sell Common Shares in the market at the prevailing market price.
Impact on the Fund
The Offer is designed to provide the Fund with increased flexibility to raise capital and manage its capital structure. By accessing the capital markets through an ATM, NXG may be able to take advantage of favorable market conditions and respond more effectively to investment opportunities. The proceeds from the sale of Common Shares will be used to fund the Fund’s investment objectives and general and administrative expenses.
Impact on Investors
For investors, the Offer may result in increased liquidity for the Common Shares. As the Fund sells Common Shares in the market, the shares may become more readily available for trading, potentially reducing bid-ask spreads and enhancing market efficiency. However, investors should be aware that the market price of the Common Shares may be influenced by various factors, including the Fund’s financial performance, market conditions, and macroeconomic trends.
Global Implications
The use of at-the-market offerings by investment funds like NXG NextGen Infrastructure Income Fund is not a new phenomenon. Many other funds, both in the U.S. and globally, have employed similar strategies to access capital markets and manage their capital structures more effectively. This trend is expected to continue, as the benefits of ATMs – including increased flexibility and market efficiency – are becoming increasingly apparent.
Conclusion
NXG NextGen Infrastructure Income Fund’s announcement of an at-the-market offering program is a strategic move aimed at enhancing its ability to manage its capital structure and take advantage of market conditions. The Offer may result in increased liquidity for investors, and its use is a trend that is likely to continue among investment funds worldwide. As always, investors should carefully consider their investment objectives, risks, and the Fund’s investment strategies before investing.
- NXG NextGen Infrastructure Income Fund establishes an at-the-market offering program.
- The Offer allows the Fund to sell Common Shares through a distribution agreement with Foreside Fund Services, LLC.
- The proceeds from the sale of Common Shares will be used to fund the Fund’s investment objectives and general and administrative expenses.
- Investors may benefit from increased liquidity due to the Offer.
- The use of at-the-market offerings is a global trend among investment funds.
