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Western Asset High Income Fund II Inc. Authorizes Rights Issue

Western Asset High Income Fund II Inc. (NYSE: HIX) (CUSIP: 95766J 110) (“HIX” or the “Fund”) announced today that its board of directors has approved a transferable rights offering (the ” Offer “). The offer to acquire additional common shares will be made only by means of a prospectus supplement and the accompanying prospectus, and such announcement does not constitute an offer to sell, or a solicitation of an offer to buy, of Fund securities.

Legg Mason Partners Fund Advisor, LLC and Western Asset Management Company, LLC (“Western Asset”), each an indirect wholly-owned subsidiary of Franklin Resources Inc. and the Fund’s investment advisor and sub-advisor, respectively, believe that the offer could benefit the Fund and its shareholders in several ways. Among other benefits, the increase in the Fund’s assets will provide additional capital to be used in pursuit of the Fund’s investment objective of maximizing current income, with a secondary objective of capital appreciation to the extent consistent with the primary objective of the Fund. An increase in Fund assets may also have a positive impact on the Fund’s expense ratio, as fixed costs will be spread over a larger asset base. In addition, the additional common shares issued may increase the liquidity of the common shares on the New York Stock Exchange (“NYSE”), where the common shares are traded.

A summary of the terms of the Offer is set out below:

  • Each shareholder will receive one transferable right (the “Right”) for each Common Share held on April 8, 2022 (the “Record Date”).

  • Three Rights plus the final subscription price per common share (the “Subscription Price”) will be required to purchase one additional common share (the “Principal Subscription”); however, shareholders who held less than three ordinary shares on the record date will be entitled to subscribe for one ordinary share. No fractional shares will be issued.

  • The Subscription Price will be determined based on a formula equal to 92.5% of the average of the last reported sale price per Common Share of the Fund on the NYSE on the Expiry Date (as defined below) and each of the previous four trading days. (the “Formula Price”). However, if the price of the formula is less than 90% of the net asset value per common share at the close of trading on the NYSE on the expiry date, the subscription price will be 90% of the net asset value of the Fund per common stock at the close of trading on the NYSE that day. The estimated subscription price has not yet been determined.

  • Shareholders on the record date who fully exercise their rights in the primary subscription will be eligible for an over-subscription privilege entitling such shareholders to subscribe for any additional ordinary shares not purchased under the primary subscription, subject to certain limitations, awards and the right of the board of directors to eliminate the oversubscription privilege. Holders of rights acquired on the secondary market cannot benefit from the oversubscription privilege.

  • The rights are expected to trade “when issued” on the NYSE beginning April 6, 2022, and the common shares of the Fund are expected to trade “ex-rights” on the New York Stock Exchange beginning April 7, 2022. Rights are expected to begin trading for normal settlement on the NYSE (NYSE: HIX RT) on or about April 8, 2022.

  • Offer expires at 5:00 p.m. Eastern Time on May 6, 2022, unless extended (the “Expiration Date”).

  • The final terms of the Offer will be set forth by means of a prospectus supplement and the accompanying prospectus. The final terms of the Offer may differ from those set out above.

The Fund expects to mail subscription certificates evidencing the Rights and a copy of the prospectus supplement and prospectus accompanying the offering to shareholders on the record date on or about April 8, 2022. Financial advisers may send notices to shareholders shortly thereafter. Inquiries regarding the Offer should be directed to the Information Agent, Georgeson LLC at 866-856-2826.

The Fund has declared a monthly distribution payable on May 2, 2022 with a record date of April 22, 2022. Any common shares issued after April 22, 2022 pursuant to the offering will not be record date shares. for the Fund’s monthly inventory. distribution to be paid on May 2, 2022 and will not be entitled to receive such distribution.

The offering will be made pursuant to the effective registration statement of the Fund filed with the Securities and Exchange Commission (the “SEC”), which was declared effective by the SEC on March 23, 2022. The registration statement permits the Fund to sell from time to time, in one or more offerings, the common shares of the Fund and the subscription rights to purchase the common shares of the Fund. The Offering will only be made by means of a prospectus supplement and the accompanying prospectus.

The information contained in this document is not complete and is subject to change. This document does not constitute an offer to sell or a solicitation of an offer to buy securities of the Fund in any jurisdiction where the offer or sale is not authorized. This document is not an offer, which can only be made by a prospectus supplement and the accompanying prospectus. Investors should carefully consider the Fund’s investment objectives, risks, charges and expenses before investing. The base prospectus will contain this information and additional information about the Fund, and the prospectus supplement will contain this information and additional information about the Offering, and should be read carefully before investing. Shares of closed-end investment companies, such as the Fund, frequently trade at a price below their net asset value. The market price of the shares of the Fund is determined by a number of factors, many of which are beyond the control of the Fund. Accordingly, the Fund cannot predict whether its shares will trade at, below or above their net asset value.

A copy of the Fund’s current report to shareholders can be requested by contacting 1-888-777-0102 or visiting franklintempleton.com. All investments involve risk, including possible loss of capital. The Fund is actively managed, but there can be no assurance that Western Asset’s investment decisions will produce the desired results. For discussions of portfolio management, including information on the Fund’s investment strategies, please see the most recent annual or semi-annual report to shareholders, available at franklintempleton.com or sec.gov.

About Western Asset

Western Asset is one of the world’s leading fixed income managers with 50 years of experience and $492.4 billion in assets under management (AUM) as of December 31, 2021. With a focus on A long-term fundamental value investment that employs a top-down and bottom-up approach, the firm has nine offices around the world and deep experience across all fixed income industries. Founded in 1971, Western Asset has been recognized for delivering superior levels of client service alongside its approach emphasizing team management and intensive proprietary research, backed by strong risk management. To learn more about Western Asset, please visit www.westernasset.com. Western Asset is a specialty investment manager independent of Franklin Templeton.

About Franklin Templeton

Franklin Resources, Inc. is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in more than 155 countries. Franklin Templeton’s mission is to help clients achieve better results through expertise in investment management, wealth management and technology solutions. Through its specialist investment managers, the firm offers boutique specialization on a global scale, bringing extensive capabilities in equities, fixed income, multi-asset solutions and alternatives. With offices in more than 30 countries and approximately 1,300 investment professionals, the California-based firm has 75 years of investment experience and over $1.58 trillion in assets under management as of December 31, 2021. For more information, please visit www.franklintempleton.com.

Category: Fund Announcement

Source: Franklin Resources, Inc.

Source: Legg Mason Closed-End Fund


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