Contact Information: Contact: Ellen E. Terry Vice President Telephone: 617-263-6400 www.newamerica-hyb.com
The New America High Income Fund, Inc. Declares Dividend
| Source: The New America High Income Fund, Inc.
BOSTON, MA--(Marketwire - February 29, 2008) - The New America High Income Fund, Inc. (the
"Fund") (NYSE : HYB ) announced today that it intends to pay a dividend of
$.013 per share on the company's common stock on March 31, 2008 to common
shareholders of record as of the close of business on March 17, 2008. The
ex-dividend date will be March 13th.
The Fund's capital structure employs leverage in the form of an Auction
Term Preferred Stock (the "ATP") which pays dividends based on a rate that
resets through a monthly auction procedure. The reduced dividend reflects
lower net income available for distribution to common stockholders due to a
reduced contribution to earnings from the Fund's leverage and a related
interest rate swap.
In late summer 2007, as the consequences of the sub-prime mortgage collapse
spread, demand for auction rate securities like the Fund's ATP fell
sharply, resulting in a higher dividend rate for the ATP. Beginning in
August the rate set in the ATP auctions rose sharply to as high as 200
basis points above LIBOR, increasing the Fund's costs, and thereby
decreasing its net income. Investor demand for auction rate securities has
continued to decline in 2008 with insufficient buyer interest resulting in
the recently reported auction failures. Under the terms of the ATP, the
maximum dividend rate payable on the ATP is 150% of the AA-rated 30-day
commercial paper rate. The principal consequence to the Fund of a failed
auction is that it must pay the maximum dividend rate on the ATP until the
next auction date when the dividend rate for the succeeding 28-day period
is determined. To date, the Fund has had two auction failures, resulting in
a dividend rate of 4.512% in the most recent instance. The Fund will
continue to actively monitor conditions in the auction rate securities
markets and look for avenues to address their impact on the Fund's
leverage.
The New America High Income Fund, Inc. is a diversified, closed-end
management investment company with a leveraged capital structure. The
Fund's investment adviser is T. Rowe Price Associates, Inc. ("T. Rowe
Price"). As of December 31, 2007, T. Rowe Price and its affiliates managed
approximately $400 billion of assets, including approximately $10.5 billion
of "high yield" investments. T. Rowe Price has provided investment advisory
services to investment companies since 1937.