NexPoint Credit Strategies Fund Announces the Regular Monthly Dividend, Change to Regular Monthly Dividend, and Share Repurchase Program

DALLAS, Nov. 2, 2016 /PRNewswire/ — NexPoint Credit Strategies Fund (NYSE: NHF) (“NHF” or the “Fund”) today announced its regular monthly dividend on its common stock of $.20 per share. The dividend will be payable on November 30, 2016 to shareholders of record at the close of business November 23, 2016.

The Fund has elected to lower the monthly dividend from $.24 to $.20 per share due in large part to TXU Energy’s long-awaited emergence from bankruptcy that was finalized on October 4, 2016. The Fund also announced that the Fund will initiate an open-market share repurchase program initially sized at $10 million. The Fund expects to purchase and retire $10 million of NHF common shares in the open-market over the course of the next 6 months beginning in December 2016.

As noted in the Fund’s June 30, 2016 Semi-Annual Report, the Fund held approximately $30 million market value of TXU Energy’s first lien debt which was yielding approximately 15% at the time it was converted into equity in the new TCEH Corp. Due to the equitizing, the Fund expects to receive less gross income on a go-forward basis from this investment. We see this as a positive development for TXU and, therefore, the Fund. Now that TXU has eliminated roughly $33 billion of debt through the restructuring and eliminated ongoing restructuring expenses, we believe the company will be more nimble, more strategic and better positioned for M&A activity. Though it is impossible to predict how the equity will trade, our outlook on the company remains positive.

The Board of Directors of the Fund has approved an open-market share repurchase program pursuant to which the Fund may purchase and retire, over a six-month period beginning in December 2016, up to $10 million of its stock in open-market transactions. The amount and timing of the repurchases will be at the discretion of the Fund’s investment adviser, subject to market conditions and investment considerations. There is no assurance that the Fund will purchase shares at any particular discount levels or in any particular amounts. Any repurchases made under this program would be made on a national securities exchange at the prevailing market price, subject to exchange requirements regarding volume, timing and other limitations under federal securities laws. The share repurchase program seeks to enhance shareholder value by purchasing shares trading at a discount from their net asset value per share.

The decrease in dividend from $.24 to $.20 per share will result in an annualized distribution rate of approximately 11.2% using the October 31st closing price of $21.35. From the chart below, the yield is still meaningfully higher than the distribution rate prior to the spin-off of NexPoint Residential Trust, Inc. (Ticker: “NXRT”), which occurred on April 1, 2015. We believe the NXRT distribution has been successful, with investors in that entity realizing total annual rate of return1 of 26.3% between April 1, 2015 and October 31, 2016.

1November yield assumes the October 31st, 2016 closing price of $21.35

The Fund is a closed-end fund managed by NexPoint Advisors, L.P. (the “Manager”), an affiliated adviser of Highland Capital Management, L.P. The Fund invests primarily in below investment grade debt and equity and has the ability to hedge risk. The Manager attempts to deliver consistent returns in excess of the Dow Jones Credit Suisse Hedge Fund and the HFRX Global Hedge Fund indices in a [more] transparent, registered fund format consistent with monthly dividends.

Total Returns as of 10/31/16

1-year

3-year

5-year

Since Inception

(6/29/06)

NexPoint Credit Strategies Fund (NAV)

5.69%

10.89%

16.52%

3.46%

NexPoint Credit Strategies Fund (Market Price)

7.63%

12.15%

16.12%

1.71%

Total Returns as of 09/30/16

1-year

3-year

5-year

Since Inception

(6/29/06)

NexPoint Credit Strategies Fund (NAV)

5.04%

14.35%

17.21%

3.49%

NexPoint Credit Strategies Fund (Market Price)

11.79%

16.36%

17.40%

2.02%

Total operating expenses as of the most recent fund annual report are 2.23% of which 0.46% is the cost of leverage. Performance data represents past performance, which does not guarantee future results. Investment return and principal value will fluctuate with market conditions, and you may have a gain or loss when you sell your shares. For most recent month-end performance please visitwww.nexpointadvisors.com or call 866-351-4440.

Investors should consider the investment objectives, risks, charges and expenses of the NexPoint Credit Strategies Fund carefully before investing. This and other information can be found in the Fund’s prospectuses, which may be obtained by calling 1-866-351-4440 or visiting www.nexpointadvisors.com. Please read the prospectus carefully before you invest.

Interest Rate Risk. Interest rate risk is the risk that debt securities, and the Fund’s net assets, may decline in value because of changes in interest rates. Generally, fixed rate debt securities will decrease in value when interest rates rise and increase in value when interest rates decline.

Leverage Risk. The Fund uses leverage through borrowings from notes and a credit facility, and may also use leverage through the issuances of preferred shares. The use of leverage magnifies both the favorable and unfavorable effects of price movements in the investments made by the Fund. Insofar as the Fund employs leverage in its investment operations, the Fund will be subject to substantial risks of loss.

Credit Risk. Investments rated below investment grade are commonly referred to as high-yield, high risk or “junk debt.” They are regarded as predominantly speculative with respect to the issuing company’s continuing ability to meet principal and/ or interest payments.

Illiquidity of Investments Risk. The investments made by the Fund may be illiquid, and consequently the Fund may not be able to sell such investments at prices that reflect the Investment Adviser’s assessment of their value or the amount originally paid for such investments by the Fund.

About NexPoint Credit Strategies Fund
NexPoint Credit Strategies Fund is a closed-end fund managed by NexPoint Advisors, L.P. The Fund’s investment objectives are to provide both current income and capital appreciation. The Fund is invested primarily in below investment grade debt and equity securities and has the ability to hedge risk. The Manager attempts to deliver consistent returns in excess of the Dow Jones Credit Suisse Hedge Fund and the HFRX Global Hedge Fund indices in a [more] transparent, registered fund format consistent with monthly dividends. No assurance can be given that the Fund will achieve its investment objectives.

Shares of closed-end investment companies frequently trade at a discount to net asset value. The price of the Fund’s shares is determined by a number of factors, several of which are beyond the control of the Fund. Therefore, the Fund cannot predict whether its shares will trade at, below or above net asset value. Past performance does not guarantee future results.

1Total Return is defined by an investor who received shares of NXRT upon the spin-off, held the shares from April 1, 2016 through October 31, 2016, and received and reinvested all distributions. The total return is an annual performance metric.

Contact:
Lucy Bannon
972-419-6272
lbannon@highlandcapital.com


Highland Capital