NXG Rights Offering Set to Close Soon: A Closer Look

NXG NextGen Infrastructure Income Fund's rights offering is underway and closing soon. The fund's board of trustees approved the offering, which is open to existing shareholders who can purchase additional shares at a discounted price. The offering aims to raise capital for the fund's infrastructure investments.

NXG NextGen Infrastructure Income Fund (NYSE:NXG) is currently conducting a rights offering, which is set to close soon. The fund's board of trustees has approved the terms of this offering, which is open to existing shareholders. This article provides a comprehensive overview of the rights offering, including its structure, subscription price determination, and potential implications for investors.

The rights offering allows shareholders to purchase additional shares at a discounted price, with the goal of raising capital for the fund's infrastructure investments. The subscription price per share will be determined on the Expiration Date, which is currently anticipated to be August 13, 2025. The subscription price will be the higher of 90% of the fund's net asset value (NAV) per share on the Expiration Date or 95% of the average closing share price over the last five trading days prior to the Expiration Date. This "higher of" mechanism is designed to prevent a vicious cycle of widening discounts during the offering period [1].

As of August 4, 2025, NXG was trading at $51.00, with an NAV of $51.13, resulting in a narrow discount of -0.25%. This indicates that the subscription price would be approximately $49.00, based on the average closing share price over the last five days. However, if the discount widens significantly (e.g., wider than -10%), it may be more cost-effective to purchase shares directly on the open market [1].

Investors who do not wish to expand their share count in NXG should consider selling their rights on the open market, as previous experience has shown that the rights tend to lose value as the expiry date approaches [1]. This is due to the potential for NAV dilution, which makes shares less attractive and widens the discount. However, the recent strong underlying NAV performance of NXG has helped to buck this trend, boosting investor confidence and demand for the fund [1].

In summary, NXG NextGen Infrastructure Income Fund's rights offering is an opportunity for existing shareholders to purchase additional shares at a discounted price. The subscription price will be determined based on the fund's NAV and the average closing share price over the last five trading days. Investors should consider their individual circumstances and the potential implications of the offering before making a decision. As the offering is set to close soon, shareholders should act promptly if they wish to participate.

References:
[1] https://seekingalpha.com/article/4813269-nxg-rights-offering-closing-soon