NexPoint Credit Strategies Fund Announces a 20% Increase in the Regular Monthly Dividend

NexPoint Credit Strategies Fund (NYSE: NHF) today announced a 20% increase to its regular monthly dividend on its common stock. Effective for the March 2013 dividend, the dividend will increase from $0.035 per share to $0.042 per share. As of January 31, 2013, the Trust had estimated undistributed net investment income of approximately $4.0 million (unaudited).

NexPoint Credit Strategies Fund (“NHF” or the “Fund”) is a closed-end fund managed by NexPoint Advisors, L.P. (the “Manager”). The Fund invests primarily in below investment grade debt and equity and has the ability to hedge risk. The Manager attempts to deliver consistent monthly dividends while attempting to exceed the return of the DJ Credit Suisse Hedge Fund and the HFRX Global Hedge Fund indices in a transparent, registered fund format.

Since Mr. Dondero began taking an active role with the portfolio management team in June 2012, the following has been accomplished:

• The Fund’s NAV has increased from $6.86 to $7.99, or a 21.6% increase including reinvested dividends as of February 22, 2013.
• Net income available for distribution has increased from an annual run rate of $25.0 million to an annual run rate of $32.2 million as of February 22, 2013.
• Administration, accounting, legal and other operational expenses have been reduced from an annual rate of $2.5 million as of December 31, 2102, to an annual rate of $1.6 million as of February 22, 2013.
• Leverage costs have been reduced from an annual run rate of $4.6 million to an annual run rate of $4.4 million with additional savings of $1.7 million anticipated in April 2013 with the refinancing of long-term notes to a more cost effective short-term credit facility.
• Assets classified as Level 3 assets*, which tend to be less liquid and may not pay current income, has been reduced from 37% of the portfolio as of June 30, 2012 to 12% of the portfolio as of February 15, 2013.
• Beginning February 1, 2013, the Manager began publishing the Fund’s NAV daily, creating greater transparency.

In July 2012, the Manager implemented a unique and creative Dividend Reinvestment Plan (the “DRIP Program”). The purpose of the DRIP Program is to promote shareholder loyalty. Existing shareholders that purchase additional shares of NHF in the secondary market through a brokerage account held with the DRIP Program’s administrator, AST Fund Solutions, are entitled to a 2% gross-up. The gross-up is funded by the Manager and is used to purchase shares of NHF to be held in escrow for 12 months. If at the end of the 12 month period the shareholder continues to hold the additional purchased shares, the gross-up shares are transferred out of escrow and to their brokerage account. Employees of the Manager and affiliates have purchased approximately 2.0 million shares between July 2012 and February 2013.

The distribution rate is based on an estimation of investment income and may or may not include a return of capital. This press release is not for tax reporting purposes but is being provided to announce the amount of the Fund’s distributions that have been declared by the Board. In early 2014, after definitive information is available, the Trust will send shareholders a Form 1099-DIV specifying how the distributions paid by the Fund during the calendar year should be characterized for purposes of reporting the distributions on a shareholder’s tax return (e.g., ordinary income, short-term capital gain, long-term capital gain or return of capital).

About NexPoint Credit Strategies Fund

NexPoint Credit Strategies Fund is a closed-end fund managed by NexPoint Advisors, L.P. The Fund is invested primarily in below investment grade debt and equity securities and has the ability to hedge risk. The manager attempts to exceed the return of Dow Jones Credit Suisse Hedge Fund Index in a transparent, registered fund format with monthly dividends. An investment in the Fund is not appropriate for all investors. No assurance can be given that the Fund will achieve its investment objectives.

Shares of closed-end investment companies frequently trade at a discount to net asset value. The price of the Fund’s shares is determined by a number of factors, several of which are beyond the control of the Fund. Therefore, the Fund cannot predict whether its shares will trade at, below or above net asset value.

Past performance does not guarantee future results.

*Level 3 assets are assets whose valuations are determined using one or more significant inputs or significant value drivers that are unobservable.