What distribution will be made to shareholders upon dissolution and how will it be calculated?

Distribution Mechanics

When a closed‑end fund such as Pioneer High Income Fund (PHT) dissolves, the liquidation plan calls for a cash‑in‑kind distribution of the fund’s net assets to shareholders. The amount each shareholder receives is calculated as:

[
\text{Distribution per share} = \frac{\text{Total cash proceeds from the sale of the portfolio} \;-\; \text{liquidation, redemption and other closing expenses}}{\text{Outstanding common shares}}
]

In other words, the fund will first sell all remaining securities, deduct any transaction costs, outstanding liabilities, and the modest winding‑up fees outlined in the Plan of Liquidation and Dissolution. The net cash remaining is then divided by the number of shares that are still outstanding on the record date of the final liquidation, producing a final cash payout (often expressed as “final NAV”) that is paid out to shareholders on the dissolution date.

Trading Implications

• Price compression: As the liquidation date approaches, the market price of PHT will gravitate toward the announced final NAV (the expected cash distribution). Once the distribution is made, the security will cease to trade, and any residual price movement will be driven solely by the timing of the cash payment.
• Short‑term positioning: Traders can capture the spread between the current market price and the expected final NAV. If the market is still pricing in a premium to the anticipated distribution, a short‑position may be justified; conversely, a discount could present a buying opportunity to lock in the cash payout.
• Tax considerations: The distribution is treated as a capital‑gain event for shareholders, so investors should be prepared for potential tax liabilities on the cash received. This may affect the net benefit of the trade, especially for high‑tax‑bracket participants.

Bottom line: Expect a final cash distribution equal to the fund’s net assets per share after all liquidation costs are deducted. The payout will be calculated by dividing the net cash proceeds by the total outstanding shares, and the stock’s price will converge to that amount in the days leading up to the dissolution. Position accordingly, keeping an eye on the announced final NAV and any premium/discount in the market.