on December 23, 2008 and Resumption of Monthly Dividends
Pacholder High Yield Fund, Inc.
Cincinnati, December 11, 2008 -- The Pacholder High Yield Fund, Inc. declared a distribution of $0.13 per common share. The distribution will be payable on December 23, 2008 to shareholders of record on December 22, 2008. The ex-date for the dividend is December 18, 2008.
On November 26, 2008, the Fund announced that it was not permitted to pay the November monthly dividend on December 9, 2008 because the Fund's asset coverage was less than 200% for its Auction Rate Preferred Shares ("ARPS"). The Fund also indicated that it would be unable to resume the declaration and payment of dividends until the asset coverage requirements were met. As announced yesterday, the Fund has issued a notice to redeem 800 shares of ARPS and has deposited the redemption price with the Paying Agent thereby allowing the Fund to resume the declaration and payment of monthly dividends. The dividend declared today consists of $0.075 which is in lieu of the cancelled dividend for November and $0.055 which represents a dividend for the month of December.
In addition to the dividend announced above, the Board of Directors has authorized the Fund to resume the declaration and payment of a monthly dividend beginning in January 2009 and expects that the Fund would redeem additional shares of ARPS if necessary for the Fund to maintain an asset coverage over 200% of the ARPS after payment of dividends. From October 2003 until November 2008, the Fund paid a monthly dividend of $0.075. Due to the redemption of the ARPS described above and current market and economic conditions, the Fund anticipates that monthly dividends will be $0.055, beginning in January 2009.
Management believes that the lower monthly dividend is necessary to allow the Fund to continue to declare and pay monthly dividends given current market conditions. In the event that the Fund does not meet its asset coverage requirements and is not able to declare or pay a dividend, shareholders will be notified. The Fund has posted an updated Q&A on the Fund's website at www.phf-hy.com that is intended to provide shareholders with additional information concerning the asset coverage requirements and the impact that such requirements have on the ability to declare and pay dividends.
The Fund is a closed-end diversified management investment company with a leveraged capital structure. Its investment objective is to provide a high level of total return through current income and capital appreciation. Under normal circumstances, the Fund invests at least 80% of the value of its assets in high yield securities. The Fund invests primarily in fixed income securities of domestic companies. The Fund's common stock is traded on the NYSE ALTERNEXT US under the symbol "PHF".
Statements made in this release that look forward in time involve risks and uncertainties and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such risks and uncertainties include, without limitation, the adverse effect from further declines in the securities markets and in the Fund's performance, a general downturn in the economy, competition from other companies, changes in government policy or regulation, inability to attract or retain key employees, inability to implement its operating strategy and/or acquisition strategy, and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations. The Fund's ability to maintain leverage and to declare and pay dividends to common shareholders is subject to the restrictions in its governing documents.
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