PHILADELPHIA, PA — CBRE Global Real Estate Income Fund (NYSE: IGR) plans a 1-for-3 reverse stock split effective around Sept. 8, a move intended to raise its per-share market price and potentially broaden its investor base and improve trading liquidity.
The closed-end fund’s Board of Trustees approved the split last week, according to the fund. CBRE Investment Management Listed Real Assets LLC, its investment adviser, supported the action.
Under the transaction, every three outstanding common shares will be converted into one share. The fund expects to complete the split before the New York Stock Exchange opens for trading on or about Sept. 8.
The transaction won’t change the aggregate value of a shareholder’s investment or the value of the fund’s portfolio solely as a result of the consolidation. Investors will instead hold one-third as many shares, with the market price and net asset value per share proportionally higher immediately after the adjustment, assuming no other changes.
CBRE said the higher per-share market price may expand the pool of potential investors while potentially improving liquidity and reducing secondary-market transaction costs.
The fund’s monthly distribution will be adjusted to $0.18 per share from $0.06 beginning with the first distribution declared after the split takes effect. Because investors will hold proportionally fewer shares, the adjustment is designed to leave their aggregate monthly cash distribution unchanged as a result of the split.
IGR will continue trading on the NYSE under its existing ticker. Its CUSIP will change to 12504G878 from 12504G100 after the transaction becomes effective.
The fund won’t issue fractional shares. Instead, fractional interests resulting from the consolidation will be aggregated and sold on the NYSE by transfer agent Computershare Trust Company, N.A.
Net proceeds from those sales will be distributed proportionally to shareholders who otherwise would have received fractional shares, after customary fees and expenses. Computershare will provide shareholders with additional information about the transaction.
The reverse split itself doesn’t alter the underlying dynamics of the closed-end fund’s market valuation. IGR shares can trade at either a premium or discount to the net asset value of its portfolio, with the market price determined by secondary-market conditions outside the direct control of the fund’s board or investment adviser.
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