Anderson Energy Development Company Announces Board Approval of Proposal
to Withdraw Election to be Treated as a Business Development Company and
to Eliminate Incentive Fee to Advisor
HOUSTON--(BUSINESS WIRE)--May 17, 2010--Kayne Anderson Energy
Development Company (NYSE:KED) (the “Company”) announced today that its
Board of Directors unanimously approved a proposal to withdraw the
Company’s election to be treated as a business development company
(“BDC”) as defined in the Investment Company Act of 1940, as amended
(the “1940 Act”). The Board also approved submission of that proposal
for approval by the Company’s stockholders at its Annual Meeting of
Stockholders. The Company has filed a preliminary proxy statement with
the Securities and Exchange Commission (the “SEC”) with respect to its
Annual Meeting of Stockholders.
If the proposal is approved by stockholders, the Company would be
treated as a non-diversified closed-end management investment company
(“closed-end fund”) under the 1940 Act and it would no longer be
required to meet the requirement that 70% of its portfolio be comprised
of “qualifying assets” (the “70% Test”). The Company had previously
satisfied the 70% Test principally by owning eligible portfolio
companies, which generally include private companies with a principal
place of business in the United States.
If this proposal is approved, the Company’s investment objective would
remain unchanged. In order to achieve its investment objective, the
Company expects that, under normal market conditions, its portfolio
investments will be comprised of private MLPs (50% to 70%), public MLPs
(30% to 50%) and debt securities of public and private energy companies
(0% to 20%).
The proposal does not affect the Company’s distribution policy, tax
status or the tax attributes of its distributions.
Additionally, if this proposal is approved, the Company’s investment
management agreement with KA Fund Advisors, LLC (the “Adviser”) would be
amended to remove the incentive management fee payable to the Adviser.
There would be no change in the base management fee payable to the
Stockholders can find a copy of the Company’s preliminary proxy
statement (called the “PRE 14A”) at the Company’s website (www.kaynefunds.com/KedSECfilings.php)
or at the SEC’s website (www.sec.gov). The preliminary
proxy statement is subject to review by the SEC staff and other changes
by the Company. The Company expects to mail a definitive proxy statement
on or around June 4, 2010. Stockholders should review that document
carefully. Stockholders should make no decision about the proposal until
reviewing the definitive proxy statement sent to them. The date for the
Company’s Annual Meeting of Stockholders is June 30, 2010, to be held in
the Company’s offices in Houston, Texas.
The Company is a non-diversified, closed-end investment company that
elected to be treated as a business development company under the
Investment Company Act of 1940. The Company's investment objective is to
generate both current income and capital appreciation primarily through
equity and debt investments. The Company will seek to achieve this
objective by investing at least 80% of its net assets together with the
proceeds of any borrowings (its "total assets") in securities of
companies that derive the majority of their revenue from activities in
the energy industry, including: (a) Midstream Energy Companies, which
are businesses that operate assets used to gather, transport, process,
treat, terminal and store natural gas, natural gas liquids, propane,
crude oil or refined petroleum products; (b) Upstream Energy Companies,
which are businesses engaged in the exploration, extraction and
production of natural resources, including natural gas, natural gas
liquids and crude oil, from onshore and offshore geological reservoirs;
and (c) Other Energy Companies, which are businesses engaged in owning,
leasing, managing, producing, processing and sale of coal and coal
reserves; the marine transportation of crude oil, refined petroleum
products, liquefied natural gas, as well as other energy-related natural
resources using tank vessels and bulk carriers; and refining, marketing
and distributing refined energy products, such as motor gasoline and
propane to retail customers and industrial end-users.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press
release contains "forward-looking statements" as defined under the U.S.
federal securities laws. Generally, the words "believe," "expect,"
"intend," "estimate," "anticipate," "project," "will" and similar
expressions identify forward-looking statements, which generally are not
historical in nature. Forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to materially
differ from the Company's historical experience and its present
expectations or projections indicated in any forward-looking statement.
These risks include, but are not limited to, changes in economic and
political conditions; regulatory and legal changes; energy industry
risk; commodity pricing risk; leverage risk; valuation risk;
non-diversification risk; interest rate risk; tax risk; and other risks
discussed in the Company's filings with the SEC. You should not place
undue reliance on forward-looking statements, which speak only as of the
date they are made. The Company undertakes no obligation to publicly
update or revise any forward-looking statements made herein. There is no
assurance that the Company's investment objectives will be attained.
KA Fund Advisors, LLC
Monique Vo, 877-657-3863