SCHEDULE: Herzfeld Fund Ownership Update: Tender Offer & Trading

Thomas J. Herzfeld and affiliates updated their beneficial ownership in Herzfeld Credit Income Fund, Inc., detailing participation in a tender offer and subsequent open market transactions.

Summary

• Thomas J. Herzfeld and affiliates beneficially own 7,453,704 shares of Herzfeld Credit Income Fund, Inc. common stock, representing 46.4% of the 16,063,219 shares outstanding as of December 11, 2025.
• The reporting person holds sole voting and dispositive power over 1,542,799 shares and shared power over 5,910,905 shares.
• The Fund completed a cash tender offer on October 21, 2025, to purchase up to 5% (845,433 shares) of its outstanding common stock at 97.5% of net asset value (NAV) as of October 15, 2025.
• The reporting person tendered 1,664,037 shares, but due to oversubscription, only 121,238 shares were purchased at $3.5935 per share on a pro-rata basis of 7.2858%.
• Advisory clients engaged in multiple open market transactions between October 23, 2025, and December 10, 2025, involving both purchases and sales of shares at prices ranging from $2.2798 to $2.5979.

Sentiment

Score: 4

Explanation: The filing details a significant beneficial ownership stake and active trading. While the tender offer provided an opportunity for liquidity at a premium to market price, its oversubscription limited the extent to which the reporting person could participate. Subsequent open market sales by advisory clients occurred at lower prices, suggesting a less favorable market environment for selling shares.

Positives

• The Fund completed a tender offer, providing liquidity to shareholders at 97.5% of NAV, which can be seen as a positive for participating shareholders.
• The reporting person's advisory clients continued to engage in open market purchases, indicating ongoing interest in the stock.

Negatives

• The tender offer was oversubscribed, leading to a pro-rata purchase of only 7.2858% of tendered shares, meaning many shareholders, including the reporting person, could not sell all desired shares at the tender offer price.
• The tender offer price of $3.5935 per share was significantly higher than subsequent open market trading prices for advisory clients, which ranged from $2.2798 to $2.5979.

Future Outlook

The filing does not contain explicit forward-looking statements or guidance regarding the company's future performance or strategic direction, focusing instead on historical ownership and transaction details.

Management Comments

• "After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct." Thomas J. Herzfeld, Chairman.

Industry Context

This Schedule 13D filing reflects significant insider ownership and activity in a closed-end fund. Such filings are common for funds where a principal or affiliated entities hold a substantial stake, often indicating a long-term investment perspective or active management of their position. The tender offer activity is a mechanism often used by closed-end funds to manage discounts to NAV and provide liquidity, which is a common practice in the investment fund industry.

Comparison to Industry Standards

• The tender offer at 97.5% of NAV is a common strategy for closed-end funds to address persistent discounts to net asset value, similar to actions taken by funds like Gabelli Equity Trust or Western Asset Global Corporate Defined Opportunity Fund.
• The pro-rata acceptance due to oversubscription is standard procedure when tender offers exceed the target amount.
• The subsequent open market trading by advisory clients reflects active portfolio management, a typical characteristic of investment advisors managing client accounts, comparable to the trading patterns seen in other actively managed funds or large institutional investors.

Stakeholder Impact

• Shareholders: The tender offer provided an opportunity for some shareholders to sell shares at a premium to market price, but the pro-rata acceptance limited this benefit. The significant beneficial ownership by Thomas J. Herzfeld and affiliates indicates a concentrated ownership structure.

Key Dates

Recommendation

The filing indicates a significant beneficial ownership by Thomas J. Herzfeld and affiliates, suggesting a strong insider interest. The tender offer, while oversubscribed, provided a mechanism for liquidity at a premium. However, subsequent open market sales by advisory clients at lower prices suggest a fluctuating market. Given the substantial insider stake and the fund's active management of its capital structure (via tender offer), a 'hold' recommendation is appropriate for existing investors, awaiting further clarity on market conditions and fund performance. New investors should consider the current market price relative to NAV and the implications of such concentrated ownership.

Keywords

Herzfeld Credit Income Fund, Schedule 13D, Beneficial Ownership, Tender Offer, Common Stock, Open Market Transactions, Shareholder Activity, Investment Fund, SEC Filing