Herzfeld Credit shares surge 22.37% premarket after year-end distribution of $0.6867 per share, entirely from net realized long-term capital gains.

Herzfeld Credit Income Fund (HERZ) surged 22.37% in premarket trading following the announcement of a year-end distribution of $0.6867 per share, entirely attributed to net realized long-term capital gains. The distribution, structured as 20% cash and 80% stock, avoided return of capital (ROC), preserving net asset value (NAV) and offering tax efficiency for shareholders. Approximately 84.49% of shareholders elected stock, reducing cash outflows and signaling confidence in compounding through CLO/structured credit investments. The fund’s strategic shift to capital gains over ROC, coupled with a revised dividend reinvestment plan permitting share issuance regardless of price, enhanced liquidity flexibility and balance sheet strength. This move aligns with investor preferences for tax-advantaged returns in a high-inflation environment, directly driving the premarket price surge.