Legg Mason Partners Fund Advisor, LLC announced today that certain closed end funds have declared their distributions for the month of May 2020.
The following dates apply to the distribution schedule below:
Month | Record Date | Ex-Dividend Date | Payable Date | ||||||
May | 5/21/2020 | 5/20/2020 | 5/29/2020 |
The distribution information for all three Funds are as followed:
Fund Name | Ticker | Previous Distribution | Current Distribution | % Change | ||||||||
ClearBridge MLP and Midstream Fund Inc. | CEM | $0.295 | $0.095 | (68)% | ||||||||
ClearBridge MLP and Midstream Total Return Fund Inc. | CTR | $0.220 | $0.080 | (64)% | ||||||||
ClearBridge Energy Midstream Opportunity Fund Inc. | EMO | $0.230 | $0.065 | (72)% |
The distribution rates have been reduced to a level that aligns with each Fund’s cash flows after portfolio repositioning following the significant market volatility experienced by Midstream energy companies during the first quarter of 2020.
During the first quarter of 2020, the Alerian MLP Index generated a negative total return of -57.2%. This unprecedented decline in Midstream stock prices forced each Fund to reduce borrowings to remain in compliance with applicable leverage limits. Reduced borrowings coupled with some portfolio holdings reducing their distributions to investors negatively impacted each Fund’s cash flow.
ClearBridge portfolio manager, Chris Eades, gave his views on the current market: “The magnitude and swiftness of the downdraft in Midstream stocks during March 2020 is without comparison. The energy market became both supply and demand challenged. Global oil demand has been reduced by roughly 25% due to Covid-19. At the same time, global oil supply surged as Saudi Arabia started a price war. The Funds management team believes each Fund’s new distribution rate is set at an appropriate level to navigate the new global environment.”
The distributions may be treated as dividend income, return of capital or a combination thereof for tax purposes. This press release is not for tax reporting purposes. In early 2021, after definitive information is available, the Funds will send stockholders a Form 1099-DIV, if applicable, specifying how the distributions paid by the Funds during the prior calendar year should be characterized for purposes of reporting the distributions on a stockholder’s tax return (e.g., dividend income or return of capital).
For more information about the Funds, please call 1-888-777-0102 or consult the Funds’ website at www.lmcef.com. Hard copies of the Funds’ complete audited financial statements are available free of charge upon request.
Data and commentary provided in this press release are for informational purposes only. Legg Mason and its affiliates do not engage in selling shares of the Funds.
Category: Distribution Related
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