The Prudential Short Duration High Yield Fund raised USD699 million in its common share offering (assuming full exercise of the underwriters’ overallotment option, which may not occur) and its shares have begun trading on the New York Stock Exchange under the symbol "ISD."
The Fund is a newly organised closed-end fund that seeks to provide investors with a high level of current income. It invests in a portfolio consisting primarily of higher-rated, below investment-grade fixed income instruments. It seeks to maintain a weighted average portfolio duration of three years or less and an average maturity of five years or less. There is no guarantee the Fund’s objective will be achieved.
"We’re excited to currently offer the only closed-end fund that focuses on the sub-style of higher-rated, short duration high yield bonds," says Stuart Parker, president of Prudential Investments. "We believe the Fund will help investors address the challenge of finding yield in today’s low interest rate environment, but with less risk than lower-rated high yield bonds."
The Fund’s portfolio managers are part of Prudential Fixed Income, a credit-research-driven fixed income manager with a sharp focus on managing risk. Prudential Fixed Income and its predecessors have been managing fixed income portfolios since 1875 and is among the largest fixed income managers in the US, with about USD335 billion in assets under management as of December 31, 2011. Day-to-day fund management is provided by Prudential Fixed Income’s Leveraged Finance Team, whose 12-member portfolio management team averages 20 years of experience. The team works closely with 27 experienced high yield and bank loan analysts.
The underwriting syndicate was led by Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC, and Raymond James & Associates, Inc.