How will the extension influence the fund’s NAV and potential capital appreciation?

Impact on NAV

The five‑year term extension pushes the fund’s cash‑flow horizon out to 2031, which means the underlying asset base now accrues an additional five years of projected earnings and infrastructure‑related cash‑generating projects. Because the extension is not a taxable event, the fund’s existing capital pool is untouched, so the NAV per share will not be diluted by a redemption‑type reset. Instead, the longer‑dated assets are discounted at a slightly lower rate than a near‑term maturity, which typically nudges the NAV upward modestly (often 1‑3 % in comparable split‑share structures) as the present‑value of future distributions rises.

Potential for Capital Appreciation

With the maturity pushed back, the fund can continue to offer the 10.2 % distribution rate on the August 11, 2025 price, but the real upside now hinges on the preferred‑share dividend rate that will be set 60 days before the original 2026 date. If market yields for similar‑term preferreds fall—as they often do when interest‑rate cycles ease—the announced dividend could be lower than the current 10.2 % payout, creating a “price‑gain” component for Class A holders. Conversely, if yields hold steady or rise, the distribution rate may stay attractive, and the longer term gives the market more time for the underlying sustainable‑power assets to appreciate as projects come online and revenue ramps up. In practice, the combination of a stable, high‑yield distribution and an extended cash‑flow runway tends to support a modest capital‑gain premium (typically 2‑5 % over the next 12‑18 months) for investors who can tolerate the low‑volatility, income‑focused profile.

Trading Implications

• Hold or add on dips – The extension removes the forced liquidation risk in 2026, so the share price can trade on the yield alone. For investors seeking a 10 %+ distribution with limited upside risk, the current level is attractive; a pull‑back toward the 2025 closing price could be a buying opportunity.
  
• Watch the dividend‑rate announcement – The preferred‑share dividend set before the original maturity will be the key catalyst. A lower dividend than the 10.2 % payout will likely trigger a price rally in Class A shares, while a higher dividend could cap upside but still sustain the high‑yield profile.
  
• Position for rate‑environment moves – In a falling‑rate environment, the fund’s NAV and price should rise as the discount factor compresses; in a rising‑rate scenario, the high‑yield may act as a floor, but capital‑gain potential will be muted.
  

Overall, the term extension should lift the NAV slightly and preserve a strong distribution base, giving the fund room for modest capital appreciation—especially if the preferred‑share dividend is set lower than the current 10.2 % payout. A “buy‑the‑dip” stance with a focus on the upcoming dividend‑rate disclosure is the most actionable approach.