Kayne Anderson Energy Total Return Fund Announces Distribution of $0.33 per Share for Q4 2015; Announces Investment in Closed-End Funds by Kayne Anderson
Kayne Anderson Energy Total Return Fund, Inc. (the “Fund”) (NYSE:KYE)
announced today its quarterly distribution of $0.33 per share for the
quarter ended November 30, 2015. The distribution will be payable on
January 15, 2016 to common stockholders of record on December 30, 2015,
with an ex-dividend date of December 28, 2015.
“The board has elected to reduce the quarterly distribution from $0.485
per share to $0.33 per share, a reduction of $0.155 per share, in light
of the weak conditions in the energy equity and debt markets,” said
Kevin McCarthy, CEO of the Fund. “Our net distributable income has
declined over the past twelve months due to a variety of factors,
including merger activity (where the acquirer has a lower yield), the
effects of deleveraging (where lower rate debt has been repaid by
selling higher rate securities) and the dividend cut by Kinder Morgan,
Inc. Further, we’ve become more convinced that MLP management teams will
slow their distribution growth rates in 2016, and many MLPs will opt to
build coverage instead and keep distribution levels flat. As a result of
these factors, we’ve reduced the Fund’s dividend to a level that we
believe is sustainable, given current market conditions.”
Separately, the advisor to the Fund, KA Fund Advisors (or “KAFA”), and
its principals have agreed to purchase newly issued shares of KYE, KYN,
KMF and KED, funded in part with 100% of the after-tax management fees
received during the quarter. These purchases total $14 million across
all the four closed-end funds managed by KAFA, and of this amount, $1.8
million will be invested in KYE. The purchases will be made at the
greater of market price or net asset value as of the close of business
on Friday, December 18. As of Wednesday, December 16, the purchase price
for KYE would have represented a premium of 16.8% to the closing market
price. Bob Sinnott, President and CEO of Kayne Anderson Capital Advisors
commented, “Kayne Anderson continues to believe in the long-term
prospects of the Fund as well as the sustainability of the MLP market.
Because Kayne Anderson is purchasing primary shares, this transaction at
the same time strengthens the Fund’s balance sheet.” The transaction is
expected to close on December 23, 2015.
The Fund estimates that none of its distribution for the quarter ended
November 30, 2015 will be treated as a return of capital for tax
purposes. This estimate is based on the Fund’s anticipated earnings and
profits for fiscal 2015 and its accumulated earnings and profits as of
November 30, 2015. The final determination of the tax character of the
distribution will be made in early 2016 when the Fund can determine its
actual earnings and profits for the full year (including gains and
losses on the sale of securities) and may differ substantially from this
preliminary information.
The Fund is a non-diversified, closed-end management investment
company registered under the Investment Company Act of 1940 whose common
stock is traded on the NYSE. The Fund’s investment objective is
to obtain a high total return with an emphasis on current income by
investing primarily in securities of companies engaged in the energy
industry, principally including publicly-traded energy-related master
limited partnerships and limited liability companies taxed as
partnerships and their affiliates, energy-related U.S. and Canadian
trusts and income trusts and other companies that derive at least 50% of
their revenues from operating assets used in, or providing
energy-related services for, the exploration, development, production,
gathering, transportation, processing, storing, refining, distribution,
mining or marketing of natural gas, natural gas liquids (including
propane), crude oil, refined petroleum products or coal.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press
release contains "forward-looking statements" as defined under the U.S.
federal securities laws. Generally, the words "believe," "expect,"
"intend," "estimate," "anticipate," "project," "will" and similar
expressions identify forward-looking statements, which generally are not
historical in nature. Forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to materially
differ from the Fund’s historical experience and its present
expectations or projections indicated in any forward-looking statement.
These risks include, but are not limited to, changes in economic and
political conditions; regulatory and legal changes; energy industry
risk; commodity pricing risk; leverage risk; valuation risk;
non-diversification risk; interest rate risk; tax risk; and other risks
discussed in the Fund’s filings with the SEC. You should not
place undue reliance on forward-looking statements, which speak only as
of the date they are made. The Fund undertakes no obligation to publicly
update or revise any forward-looking statements made herein. There is no
assurance that the Fund’s investment objectives will be attained.
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