EX-99.2(T)(2) 8 tm2523786d1_ex99-2xtx2.htm EXHIBIT 99.2(T)(2)

Exhibit 99.2(t)(2)

 

The information in this Prospectus Supplement is not complete and may be changed. A Registration Statement relating to these securities has been filed with and declared effective by the Securities and Exchange Commission. This Prospectus Supplement and the accompanying Prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

Subject to Completion, dated

 

Filed Pursuant to Rule 424(b)(2)

Registration Statement No. 333-______

 

FORM OF PRELIMINARY PROSPECTUS SUPPLEMENT TO BE USED IN CONNECTION WITH OFFERINGS OF COMMON SHARES1
(to Prospectus dated                , 2025)

 

[·] Shares

abrdn Global Dynamic Dividend Fund

Common Shares

 

$[·] per Share

 

 

 

The Fund. abrdn Global Dynamic Dividend Fund (the “Fund”) is a diversified, closed-end management investment company.

 

Investment Objectives. The Fund’s primary investment objective is to seek high current dividend income, more than 50% of which qualifies for the reduced federal income tax rate, as created by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Fund also focuses on long-term growth of capital as a secondary investment objective. The Fund’s investment objectives and some of its investment policies are considered fundamental policies and may not be changed without shareholder approval.

 

Investment Strategies. Under normal circumstances, the Fund invests at least 80% of its net assets in the equity securities of domestic and foreign corporations that pay dividends. The Board of Trustees may change this 80% policy on not less than 60 days’ notice to shareholders. Under normal circumstances, the Fund expects to invest in securities of issuers located in the United States and in approximately 10 to 30 foreign countries.

 

The Fund may borrow for investment purposes. abrdn Investments Limited (the “Adviser”) currently intends to limit leverage through borrowing to 10% of the Fund’s total assets (calculated at the time of borrowing) and to borrow for investment purposes only when the Adviser believes that the potential return on additional investments acquired with the proceeds of leverage is likely to exceed the costs incurred in connection with the borrowings.

 

NYSE Listing. The Fund’s currently outstanding Common Shares are, and the Common Shares offered by this Prospectus Supplement will be, subject to notice of issuance, listed on the New York Stock Exchange (the “NYSE”) under the symbol “AGD.” As of                     , the last reported sale price for the Fund’s Common Shares on the NYSE was $         per Common Share, and the net asset value of the Fund’s Common Shares was $         per Common Share, representing a [discount/premium] to net asset value of         %.

 

1In addition to the sections outlined in this form of prospectus supplement, each prospectus supplement actually used in connection with an offering conducted pursuant to the registration statement to which this form of prospectus supplement is attached will be updated to include such other information as may then be required to be disclosed therein pursuant to applicable law or regulation as in effect as of the date of each such prospectus supplement, including, without limitation, information particular to the terms of each security offered thereby and any related risk factors or tax considerations pertaining thereto. This form of prospectus supplement is intended only to provide a rough approximation of the nature and type of disclosure that may appear in any actual prospectus supplement used for the purposes of offering securities pursuant to the registration statement to which this form of prospectus supplement is attached, and is not intended to and does not contain all of the information that would appear in any such actual prospectus supplement, and should not be used or relied upon in connection with any offer or sale of securities.

 

 

 

 

Investing in the Fund’s Common Shares involves certain risks. You could lose some or all of your investment. See “Risk factors” on page [ ] of the accompanying Prospectus and “                        ” on page         of this Prospectus Supplement.

 

Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this Prospectus Supplement or the accompanying Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

    Per Share    Total 
Public offering price  $[·]   $[·] 
Underwriting discounts and commissions  $[·]   $[·] 
Proceeds, before expenses, to the Fund(1)  $[·]   $[·] 

 

 

(1) The aggregate expenses of the offering (excluding underwriting discounts and commissions) are estimated to be $[·].

 

The underwriter is expected to deliver the Common Shares to purchasers on or about

 

This Prospectus Supplement is dated

 

 

 

 

You should read this Prospectus Supplement, the accompanying Prospectus and the documents incorporated herein or therein by reference, which contain important information about the Fund that you should know before deciding whether to invest, and retain them for future reference. A Statement of Additional Information, dated                , 2025 (the “SAI”), containing additional information about the Fund, has been filed with the SEC and is incorporated by reference in its entirety into the accompanying Prospectus. This Prospectus Supplement, the accompanying Prospectus and the SAI are part of a “shelf” Registration Statement that the Fund filed with the SEC. This Prospectus Supplement describes the specific details regarding this offering, including the method of distribution. If information in this Prospectus Supplement is inconsistent with the accompanying Prospectus or the SAI, you should rely on this Prospectus Supplement. You may request free copies of the SAI, annual and semi-annual reports to shareholders and other information about the Fund, and make shareholder inquiries, by calling Investor Relations toll-free at 1-800-522-5465 or by writing to the Fund, or you may obtain a copy (and other information regarding the Fund) from the SEC’s website (www.sec.gov). Free copies of the Fund’s Prospectus, SAI, reports and any incorporated information will also be available from the Fund’s website at https://www.aberdeeninvestments.com/en-us/investor/investment-solutions/closed-end-funds. Information contained on the Fund’s website is not considered to be a part of, nor incorporated by reference in, this Prospectus Supplement or the accompanying Prospectus.

 

The Fund’s Common Shares do not represent a deposit or obligation of, and are not guaranteed or endorsed by, any bank or other insured depository institution and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.

 

This Prospectus Supplement, the accompanying Prospectus and the SAI contain (or will contain) or incorporate (or will incorporate) by reference “forward-looking statements.” Forward-looking statements can be identified by the words “may,” “will,” “intend,” “expect,” “estimate,” “continue,” “plan,” “anticipate,” and similar terms with the negative of such terms. By their nature, all forward-looking statements involve risks and uncertainties, and actual results could differ materially from those contemplated by the forward-looking statements. Several factors that could materially affect the Fund’s actual results are the performance of the portfolio of securities the Fund holds, the price at which the Fund’s Securities (including the Common Shares) trade in the public markets and other factors discussed in this Prospectus Supplement, the accompanying Prospectus and the SAI, and in the Fund’s periodic filings with the SEC.

 

Although the Fund believes that the expectations expressed in the forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in the Fund’s forward-looking statements. Future financial condition and results of operations, as well as any forward-looking statements, are subject to change and are subject to inherent risks and uncertainties, such as those disclosed in “      ” in this Prospectus Supplement and the “Risk factors” section of the accompanying Prospectus. All forward-looking statements contained in this Prospectus Supplement, the accompanying Prospectus or in the SAI are made as of the date of this Prospectus Supplement, the accompanying Prospectus or SAI, as the case may be. Except for ongoing obligations under the federal securities laws, the Fund does not intend and is not obligated, to update any forward-looking statement.

 

You should rely only on the information contained or incorporated by reference in this Prospectus Supplement and the accompanying Prospectus. The Fund has not and the underwriters have not authorized any person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The Fund is not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information in this Prospectus Supplement and the accompanying Prospectus is accurate as of any date other than the date of this Prospectus Supplement. The Fund’s business, financial condition and results of operations may have changed since that date. The Fund will amend this Prospectus Supplement and the accompanying Prospectus if, during the period that this Prospectus Supplement and the accompanying Prospectus is required to be delivered, there are any subsequent material changes.

 

Capitalized terms used herein that are not otherwise defined shall have the meanings assigned to them in the accompanying Prospectus.

 

 

 

 

TABLE OF CONTENTS

 

 

Prospectus Supplement      Page
Prospectus Supplement Summary    
Summary of Fund Expenses    
Capitalization    
Use of Proceeds    
Recent Developments    
Tax Matters    
Additional Information    
     
Prospectus    
About this Prospectus    
Where you can find more information    
Incorporation by reference    
Summary of Fund expenses    
The Fund at a glance    
Financial highlights    
Senior securities    
The Fund    
Use of proceeds    
Description of Common Shares    
Investment objectives and policies    
Risk factors    
Management of the Fund    
Legal proceedings    
Net asset value of Common Shares    
Distributions    
Tax matters    
Closed-end fund structure    
Dividend reinvestment and optional cash purchase plan    
Description of capital structure    
Plan of distribution    
Custodian, dividend paying agent, transfer agent and registrar    
Legal opinions    
Independent registered public accounting firm    
Additional information    

 

 

 

 

PROSPECTUS SUPPLEMENT SUMMARY

 

This is only a summary of information contained elsewhere in this Prospectus Supplement and the accompanying Prospectus. This summary does not contain all the information that you should consider before investing in the Fund’s Common Shares. You should carefully read the more detailed information contained in this Prospectus Supplement and the accompanying Prospectus and the Statement of Additional Information, dated                , 2025 (the “SAI”), especially the information set forth under the headings “Investment Objectives, Strategies and Policies” and “Risks.”

 

The Fund

abrdn Global Dynamic Dividend Fund (the “Fund” or “we”) is a diversified, closed-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund was organized as a statutory trust under the laws of the State of Delaware on May 11, 2006.

 

Listing and Symbol

The Fund’s currently outstanding Common Shares are, and the Common Shares offered by this Prospectus Supplement and the accompanying Prospectus will be, subject to notice of issuance, listed on the New York Stock Exchange (the “NYSE”) under the symbol “AGD.” As of                 , the last reported sale price for the Fund’s Common Shares on the NYSE was $           per Common Share, and the net asset value of the Fund’s Common Shares was $         per Common Share, representing a [discount/premium] to net asset value of         %.

 

Distributions

The Board of Trustees has authorized a managed distribution policy of paying monthly distributions equal to 12% on an annual basis of the average daily NAV as of month-end prior to declaration. Payment of future distributions is subject to approval by the Fund’s Board of Trustees, as well as meeting the covenants of any outstanding borrowings and the asset coverage requirements of the 1940 Act.

 

The Fund’s next regularly scheduled distribution will be for the month ending          and, if approved by the Board of Trustees, is expected to be paid to Common Shareholders on or about         [Such distribution will not be payable with respect to Common Shares that are issued pursuant to the Offer after the record date for such distribution.]

 

The Offering

The Fund is offering           Common Shares through a group of underwriters.

 

Common Shares Offered by the Fund

 

[TO COME]

 

Common Shares Outstanding after the Offering

 

[The Fund’s Common Shares have recently traded at a premium to net asset value (“NAV”) per share and the price of the Common Shares is expected to be above net asset value per share. Therefore, investors in this offering are likely to experience immediate dilution of their investment. Furthermore, shares of closed-end investment companies, such as the Fund, frequently trade at a price below their NAV. The Fund cannot predict whether its Common Shares will trade at a premium or a discount to NAV.]

 

Risks

See “Risk factors” beginning on page         of the accompanying Prospectus for a discussion of factors you should consider carefully before deciding to invest in the Fund’s Common Shares.

 

Use of Proceeds

The Fund estimates the net proceeds of the offering to be approximately $ .

The Fund intends to invest the net proceeds of the offering in accordance with its investment objectives and policies as stated in the accompanying Prospectus under the heading “Investment objectives and policies.” It is currently anticipated that the Fund will be able to invest substantially all of the net proceeds of the offering in accordance with its investment objectives and policies within [·] months after the completion of the offering. However, until it is able to do so, the Fund may invest in temporary investments, such as cash, cash equivalents, short-term debt securities or U.S. government securities, which could negatively impact the Fund’s returns during such period. The Fund may also use the proceeds for working capital purposes, including the payment of distributions, interest and operating expenses, although the Fund currently has no intent to issue Securities primarily for these purposes.

 

 

 

 

 

Summary of Fund expenses

 

The purpose of the following table and the example below is to help you understand the fees and expenses that holders of Common Shares (“Common Shareholders”) would bear directly or indirectly. The expenses shown in the table under “Other expenses” are estimated for the current fiscal year ended [·]. The expenses shown in the table under “Interest expenses on bank borrowings” and “Total annual expenses” are estimated based on the Fund’s average net assets for the current fiscal year ended [·] of $[·]. The tables also reflect the estimated use of leverage by the Fund through bank borrowings representing in the aggregate [·]% of total assets (consistent with the percentage of leverage in place as of [·]) of the Fund’s total assets (including the assets subject to, and obtained with the proceeds of, such borrowings), and show Fund expenses as a percentage of net assets attributable to Common Shares. The table reflects the anticipated net proceeds of the Common Shares offered pursuant to this Prospectus Supplement and the accompanying Prospectus and assuming the Fund incurs the estimated offering expenses. If the Fund issues fewer than all of the Common Shares available for sale pursuant to the Distribution Agreement and the net proceeds to the Fund are less, all other things being equal, the total annual expenses shown would increase.

 

Common Shareholder transaction expenses     
Sales load (as a percentage of offering price)(1)   -- 
Offering expenses Borne by the Fund (as a percentage of offering price)(2)   -- 
Dividend reinvestment and optional cash purchase plan fees(3)     
Fee for Open Market Purchases of Common Shares   $[ ] (per share) 
Fee for Optional Shares Purchases   $[ ] (max) 
Sales of Shares Held in a Dividend  Reinvestment Account   $[ ] (per share) and $[ ] (max) 

 

   Annual expenses
(as a percentage of net assets
attributable to
Common Shares)		   
       
Advisory fee(4)   1.00%  
Interest expenses on bank borrowings(5)   [·]%  
Other expenses   [·]%  
Total annual expenses   [·]%  

 

 

(1)            Represents the estimated commission with respect to the Common Shares being sold under this Prospectus Supplement and the accompanying Prospectus. There is no guarantee that there will be any sales of Common Shares under this Prospectus Supplement and the accompanying Prospectus. Actual sales of Common Shares under this Prospectus Supplement and the accompanying Prospectus, if any, may be less than as set forth under “Capitalization” below. In addition, the price per Common Share of any such sale may be greater or less than the price set forth under “Capitalization” below, depending on market price of the Common Shares at the time of any such sale.

 

(2)            Assumes the sale of Common Shares at a sales price per Common Share of $ , which represents the last reported sales price of the Common Shares on the NYSE on . There is no guarantee that there will be any sales of Common Shares under this Prospectus Supplement and the accompanying Prospectus. Actual sales, if any, of the Common Shares under this Prospectus Supplement and the accompanying Prospectus may be at a price greater or less than $ per Common Share, depending on the market price of the Common Shares at the time of any such sale.

 

(3)            You will pay a brokerage commission if you direct the Plan Agent to sell your Common Shares held in a dividend reinvestment account.

 

(4)            abrdn Investments Limited receives an annual investment advisory fee of 1.00% based on the Fund’s average daily net assets, computed daily and payable monthly.

 

(5)            The percentage in the table is based on average total borrowings of $ (the balance outstanding under the Fund’s secured, uncommitted line of credit (the “Credit Facility”) as of , representing approximately % of the Fund’s total assets, which includes the assets purchased through leverage) and an average interest rate during the period ended , of . There can be no assurances that the Fund will be able to obtain such level of borrowing (or to maintain its current level of borrowing), that the terms under which the Fund borrows will not change, or that the Fund’s use of leverage will be profitable. The Fund currently intends during the next twelve months to maintain a similar proportionate amount of borrowings but may increase such amount to 33 1/3% of the average daily value of the Fund’s total assets.

 

 

 

 

Example

 

An investor would directly or indirectly pay the following expenses on a $1,000 investment in Common Shares, assuming a 5% annual return. This example assumes that (i) all dividends and other distributions are reinvested at NAV and (ii) the percentage amounts listed under “Total annual expenses” above remain the same in the years shown.

 

The example should not be considered a representation of future expenses or rate of return and actual Fund expenses may be greater or less than those shown.

 

1 Year   3 Years   5 Years   10 Years  
$ [·]   $ [·]   $ [·]   $ [·]  

 

CAPITALIZATION

 

The following table sets forth the audited capitalization of the Fund as of [·] and the as adjusted capitalization of the Fund assuming the issuance of [·] Common Shares offered in this Prospectus Supplement, including estimated offering expenses of $[·] and underwriting discounts and commissions of $[·].

 

    Actual as of [·]    As Adjusted as of [·] 
Common Shareholders’ Equity:          
Common Shares, no par value; [·] shares authorized  (The “Actual” and “As Adjusted” columns reflect the [·] shares outstanding as of [·].)   [·]    [·] 
Paid-in capital*   [·]      
Total distributable loss   [·]    [·] 
Net Assets  $[·]   $[·] 

 

 

 * As adjusted paid-in surplus reflects a deduction for estimated offering expenses of $[·] and underwriting discounts and commissions of $[·].

 

USE OF PROCEEDS

 

The Fund estimates total net proceeds of the offering to be approximately $[·], based on the public offering price of $[·] per share and after deduction of the underwriting discounts and commissions and estimated offering expenses payable by the Fund.

 

The Fund intends to invest the net proceeds of the offering in accordance with its investment objectives and policies as stated in the accompanying Prospectus under the heading “Investment objectives and policies.” It is currently anticipated that the Fund will be able to invest substantially all of the net proceeds of the offering in accordance with its investment objectives and policies within [·] months after the completion of the offering. However, until it is able to do so, the Fund may invest in temporary investments, such as cash, cash equivalents, short-term debt securities or U.S. government securities, which could negatively impact the Fund’s returns during such period. A delay in the anticipated use of proceeds could lower returns and reduce the Fund’s distribution to Common Shareholders.

 

Recent developments

 

[TO COME, if any]

 

TAX matters

 

[TO COME]

 

UNDERWRITERS

 

[TO COME]

 

LEGAL MATTERS

 

Certain legal matters in connection with the Common Shares will be passed on for the Fund by Dechert LLP. Certain legal matters will be passed on by             ,             ,             , as special counsel to the underwriters in connection with the offering of Common Shares.

 

 

 

 

ADDITIONAL INFORMATION

 

This Prospectus Supplement, the accompanying Prospectus and the documents incorporated herein or therein by reference constitute part of a Registration Statement filed by the Fund with the SEC under the Securities Act, and the 1940 Act. This Prospectus Supplement and the accompanying Prospectus omit certain of the information contained in the Registration Statement, and reference is hereby made to the Registration Statement and related exhibits for further information with respect to the Fund and the Common Shares offered hereby. Any statements contained herein concerning the provisions of any document are not necessarily complete, and, in each instance, reference is made to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the SEC. Each such statement is qualified in its entirety by such reference. The complete Registration Statement may be obtained from the SEC upon payment of the fee prescribed by its rules and regulations or free of charge through the SEC’s website (www.sec.gov). Free copies of the Fund’s Prospectus, SAI, reports and any incorporated information will also be available from the Fund’s website at https://www.aberdeeninvestments.com/en-us/investor/investment-solutions/closed-end-funds. Information contained on the Fund’s website is not considered to be a part of, nor incorporated by reference in, this Prospectus Supplement or the accompanying Prospectus.

 

 

 

 

Shares

 

abrdn Global Dynamic Dividend Fund

 

Common Shares

 

FORM OF

PROSPECTUS

SUPPLEMENT