AllianzGI Convertible & Income 2024 raises $165 million via IPO

By Marisa Wong

Morgantown, W.Va., July 5 – Allianz Global Investors (AllianzGI) announced that AllianzGI Convertible & Income 2024 Target Term Fund has completed its initial public offering, raising $165 million from its sale of common stock.

The diversified, limited-term, closed-end fund has begun trading on the New York Stock Exchange under the ticker symbol “CBH,” according to a press release.

The fund’s investment objectives are to provide a high level of income and to return at least $9.835 per common share on or around its currently scheduled termination date of Sept. 1, 2024.

Under normal market conditions, the fund seeks to reach its investment objectives by investing in a diversified portfolio of convertible securities and income-producing debt instruments, primarily of U.S. issuers.

The fund will normally invest at least 80% of its managed assets in a diversified portfolio of convertible securities and income-producing debt instruments. These income-producing debt instruments are expected to include high-yield securities and senior secured loans.

The fund has a limited-term feature, which means it intends, on or around Sept. 1, 2024, to cease its investment operations, liquidate its portfolio, retire or redeem any outstanding leverage facilities and distribute all of its liquidated assets to its then record shareholders, unless the term is extended. The extension, for up to six months, requires approval from the fund’s board of trustees, trustee and shareholder approval.

According to the release, the public offering includes a 45-day greenshoe. If exercised in full, the fund would raise a total of $188.5 million.

Assuming the use of leverage of roughly 28% of the fund’s managed assets and depending on the amount of the greenshoe that is exercised, the fund’s managed assets could range from about $225 million to about $255 million.

The fund intends to pay a regular monthly income distribution to holders of common shares. Its initial monthly distribution is expected to be declared 30 to 45 days and paid 45 to 60 days after the completion of the IPO.

Allianz Global Investors U.S. LLC is the investment manager of the fund and a wholly owned indirect subsidiary of Allianz Asset Management of America LP and of Munich-based Allianz SE.

Wells Fargo Securities, BofA Merrill Lynch, Morgan Stanley and UBS Investment Bank were the co-lead underwriters for the stock offering.

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