Neuberger Berman MLP and Energy Income Fund Announces Increase in Distribution Rate and Declaration of Next Monthly Distribution
Neuberger Berman Investment Advisers LLC
NEW YORK, June 30, 2020 – Neuberger Berman MLP and Energy Income Fund Inc. (NYSE American: NML) (the “Fund”) has announced an increase in its monthly distribution rate to $0.01345 per share of common stock from the prior monthly distribution rate of $0.0117 per share, representing an increase of approximately 15%. The Fund has also declared its next monthly distribution at the new rate, which is payable on July 31, 2020, has a record date of July 15, 2020 and has an ex-date of July 14, 2020.
The new monthly distribution rate of $0.01345 per share represents an annualized distribution per share of $0.1614 versus the prior annualized amount of $0.1404 and results in a distribution rate of approximately 4.37% and 5.49%, of the Fund’s net asset value and market price, respectively, as of June 30, 2020.
As previously announced in March 2020, the Fund’s Board of Directors (the “Board”) approved a reduction in the Fund’s monthly distribution rate in response to a period of extreme volatility, price depreciation in the market for master limited partnerships (“MLPs”) and other energy companies, and uncertainty regarding the impact on the Fund’s future earnings. Management and the Board have continued to monitor the MLP and energy markets, as well as the expected impact of market conditions on the Fund’s earnings, and approved the increase in the Fund’s monthly distribution rate. Management and the Board considered, among other factors, the amount of distributable cash flow expected to be received from the Fund’s investments, the amount of leverage the Fund is currently employing, the expected cost of leverage and the level of other Fund expenses. Management and the Board will continue to closely monitor market conditions, the Fund’s ability to generate distributable cash flow and the expected impact on the Fund’s earnings.
The Fund remains committed to its investment strategy dedicated to comprehensive analysis of high quality MLPs and energy companies, with an emphasis on the midstream natural resources sector. Due to the ongoing market volatility and the associated changes that have and may continue to occur with MLPs and other energy companies, as well as the impact that these changes continue to have on closed-end funds that invest in MLPs, the Fund has again declared one monthly distribution payment rather than three. The Fund will continue to evaluate the stability and appropriateness of its distribution rate in the months ahead.
The Fund currently intends to make regular monthly cash distributions to holders of its common stock at a fixed rate per share, to be determined based on the projected net rate of return of the Fund’s investments as well as other factors, subject to ongoing review and adjustment from time to time. The Fund currently intends to pay its regular monthly distributions out of its distributable cash flow, which generally consists of (1) cash and paid-in-kind distributions from MLPs or their affiliates, dividends from common stocks, interest from debt instruments and income from other investments held by the Fund less (2) current or accrued operating expenses, including leverage costs, if any, and taxes on its taxable income.
The Fund expects that a portion of its distributions to stockholders will constitute a non-taxable return of capital. A “return of capital” is a distribution by the Fund that exceeds the Fund’s current and accumulated earnings and profits and which represents a return of a common stockholder’s original investment, and should not be confused with a dividend. To the extent the Fund pays a return of capital, a common stockholder’s basis in Fund shares will be reduced, which will increase a capital gain or reduce a capital loss upon sale of those shares. There is no assurance that the Fund will always be able to pay distributions of a particular size, or that a distribution will consist solely of the Fund’s current and accumulated earnings and profits.
In compliance with Section 19 of the Investment Company Act of 1940, as amended, a notice would be provided for any distribution that does not consist solely of income. The notice would be for informational purposes and not for tax reporting purposes, and would disclose, among other things, estimated portions of the distribution, if any, consisting of net investment income, capital gains and return of capital. The final determination of the source and tax characteristics of all distributions paid in 2020 will be made after the end of the year.
The Fund is subject to federal income tax on its taxable income, unlike most investment companies. Any taxes paid by the Fund will reduce the amount available to pay distributions to stockholders, and therefore investors in the Fund will likely receive lower distributions than if they invested directly in MLPs.
About Neuberger Berman
Neuberger Berman, founded in 1939, is a private, independent, employee-owned investment manager. The firm manages a range of strategies—including equity, fixed income, quantitative and multi-asset class, private equity, real estate and hedge funds—on behalf of institutions, advisors and individual investors globally. With offices in 24 countries, Neuberger Berman’s diverse team has 2,300 professionals. For six consecutive years, the company has been named first or second in Pensions & Investments Best Places to Work in Money Management survey (among those with 1,000 employees or more). The firm was awarded an A+ in every category in the latest 2019 PRI report for our approach to ESG integration across asset classes. The firm manages $330 billion in client assets as of March 31, 2020. For more information, please visit our website at www.nb.com.