Bluerock High Income Institutional Credit Fund Announces 14.4% Distribution Rate for Q3 2024
Bluerock High Income Institutional Credit Fund, an income-focused interval fund with a portfolio comprised of pools of diversified collateralized loan obligations, announced a total annualized distribution rate of approximately 14.4% for the third quarter of 2024. This distribution rate is comprised of the fund’s regular 11% annual distribution rate plus a supplemental distribution of 3.4% annualized, payable to shareholders of record.
According to Bluerock, the supplemental distribution is driven by the strong performance of the fund’s underlying holdings and robust active management, which has resulted in significant income generation above the current 11% annualized rate. The supplemental distribution will be accrued daily, consistent with the regular distribution, commencing July 1 through Sept. 30, 2024. Shareholders invested for the entire third quarter will participate in the full regular and supplemental distribution, and investors purchasing intra-quarter will receive a pro-rata share of the distributions, to be paid on Sept. 30.
“We are excited about the high-income fund’s increased 14.4% annualized distribution rate for the upcoming quarter, giving current and new investors the opportunity to enjoy an outsized income generator in their portfolios. The fund has also generated a trailing 12-month total net return of 16%, as of June 24, 2024, without the use of fund-level leverage like many peer funds,” said Jeffrey Schwaber, chief executive officer of Bluerock Capital Markets.
For Q2 2024, the fund is expected to pay its eighth consecutive quarterly regular distribution at a rate of 2.75%, or 11% annualized, which, per The DI Wire, the fund has been paying since Oct. 1, 2023. The amount will be based on the average daily net asset value/share over the quarter. Shareholders invested for the entire quarter will receive a total distribution amount of approximately $0.64 per share. The fund’s 11 total distributions since inception on June 21, 2022, total more than $5.50 per share.
The fund stated that its I Share net performance, as of March 31, 2024, was 14.88% for one year and 9.41% since inception.
Bluerock also reported that the fund has strategically diversified the portfolio year-to-date, investing in more senior positions within the CLO capital structure, effectively reducing potential risk while simultaneously delivering double-digit yield generation, and thus improving the risk-adjusted return profile of the fund.
Bluerock High Income Institutional Credit Fund aims to capitalize on the floating rate nature of senior secured loans to generate meaningful current income in changing interest rate environments and provides a low-correlated investment option to other fixed income securities such as bonds, municipals, and treasuries.
As of March 31, the fund maintained underlying positions in 47 CLOs representing approximately $20 billion in aggregate underlying loan value with exposure to approximately 1,800 underlying senior secured loans across multiple diverse industries. Net assets under management for the fund are approximately $146 million as of June 24, 2024.
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