Pacholder High Yield Fund cuts dividend due to lower interest rates, higher defaults

New York, Nov. 26 - Pacholder High Yield Fund said it is cutting its monthly dividend to 11 cents per share from 14 cents per share due to the general decline in interest rates and the increase in defaults.

The American Stock Exchange-traded closed-end fund said that it had to take the action even though its default history in 2000 and 2001 has been better than the high-yield market as a whole at 6.98% versus Moody's Investors Service measure of 7.35%.

Based on the closing price last Friday of $10.55, Pacholder said the yield at the new dividend rate is 12.5%.

Pacholder has held its dividend stable since 1996 "despite the past few years being one of the most difficult periods in the history of the high yield market," the fund said in a press release. It noted that 23 other closed-end high yield funds have had 61 dividend cuts since 1999.

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