Yesterday I was a buyer, as I had mentioned I would be, of the Priority Income Fund 7% term preferred (PRIF-D) at a price of $23.65. The issue currently has a yield of 7.4% which meets my ‘hurdle’ of 7%. This is the second Priority Income Fund issue in the portfolio–I also own the PRIF-H 6% term preferred issue (PRIF-H) . I made the change to capture a higher current yield and yield to maturity. This continues my slow shift into higher yielding issues–from CDs, Treasuries and money markets.
Well equities are trading very quietly this morning–apparently because we are on ‘Nvidia Watch’. The company reports earnings tonight–I really hate that markets trade simply on the performance of 1 company. I even hate that markets trade on the performance of 7 companies (tech), but this is the way markets move and it has certainly been highly profitable–you live by the sword and you die by the sword and the opposite will happen at some point in time.
The 10 year treasury continues in a narrow range with the yield at 3.81%–this will continue until we see some more economic news with the personal consumption expenditures (PCE) on Friday. This number is incredibly important and will no doubt move markets.
Regarding PRIF,does anyone know the percentage of dividends are from PIK?
losingtrader—I doubt they have any–they own CLOs and I am not aware of any CLOs that do PIK. Prospect is a BDC which is a totally different animal than a CEF CLO owner. Will do some checking this weekend.
Tim & Others
Sorry if late to the party.
From the Priority income prospectus on page 13.
“We are managed by Priority Senior Secured Income Management, LLC, a private
investment firm that is registered as an investment adviser with the Securities and Exchange Commission and is an affiliate of
ours. Priority Senior Secured Income Management, LLC oversees the management of our activities and is responsible for
making investment decisions for our portfolio.”
Here is a link to see the SEC Investment Advisor registry.
https://adviserinfo.sec.gov/firm/summary/165500
Okay, there are two portfolio managers bio on the Priority Income page that say…..drum roll PROSPECT CAPITAL…aaahahahaahhhaahahah
https://www.priorityincomefund.com/managers
Hi Tim – I’m a little late to the convo.. Am sure this Bloomberg article was mentioned, but forwarding just in case.
https://archive.ph/roH2K
Thanks for the article Maine–I hadn’t seen it, but maybe someone had posted it. PSEC is apparently getting 1/3rd of their income from PIK–giant warning sign. If I saw a CLO owner get PIK income I would be surprised–but maybe I will get surprised.
here is another Prospect article from today.
https://archive.ph/A23WQ
Thanks Maine!!
I own some PRIF’s more shares than I am comfortable with after I doubled down at a lower price due to the high YTM. Good purchase if they stay alive long enough to redeem. I didn’t see major red flags other than the low prices investors were demanding a year or two ago.
Martin–everyone has been down on them because they are managed by Prospect Capital-BUT try as I might I don’t find issues with their portfolio or performance. They have been around since 2014 so they have some track record to bank on. Short of out and fraud I don’t see issues.
My allocation to both issues is modest–so am comfortable holding them is a falling rate environment.
I dipped my toe into this one too. Unusual for me to purchase preferred without the common paying a dividend but did. Fidelity notes it is an illiquid security fwiw. But for small holding, fat dividend and ?decent company seems ok. I also need more diversification. Actually have looked at it before but finally pulled trigger. Individual bond offerings now definitely less appealing, the niche preferreds offer definitely as result more appealing imo.
Hi Tacitus–the common does pay a nice dividend (11.5% annualized as of 12/31/2023–their last semi annual report)–and they have been declaring ‘specials’ as well in recent quarter. Their last semi-annual report is here.
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001554625/000155462524000009/pris-20231231.htm
Here is their distribution page going back 10 years.
https://www.priorityincomefund.com/distributions
You certainly seem correct. I had checked buyupside.com and they offered per cut and paste as follows.
buyupside
free stock market info
Home Calculators Portfolios
Dividend Chart and Dividend Growth Chart
No dividends were found for prif.
Dividend Chart Input Form
Now checked too Morningstar and they also offer different info. of dividends but only since 2023. https://www.morningstar.com/stocks/grey/prif/dividends
Curious.
On their site, they state their stock pays $1.34/yr -BUT it is not publicly traded–the 2014 offering lasted up to 18 mo.
I do recall that when I bought my Prif issues.
They also mention PRIS as the company? Nothing there. They were also trading PRIF Sitra until recently when it merged.
Oddly they state that the average investment is 1+B, but their total investments/loans = $93.3B & “exposure to 2034 senior secured loans to over 1,400 companies through approximately 255 CLO positions”
Not able to see the real ratio of debt to equity CLO positions.
Hi Gary–correct it is not publicly traded–that has been true since day 1. It is an interval fund so they tender for shares monthly I believe. I use their filed semi-annual report for my data—$968 million in assets and $292 in liabilities (which is virtually all term preferred issues carried onb the balance sheet as debt because of the mandatory redemption).
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001554625/000155462524000009/pris-20231231.htm
i bought RITM-D as a place to stash cash for a couple years.
7.4% current yield will float in now 2026 at 6.22 over 5 year treasuries but i expect it to be called then.
Not quite priced for a call but getting closer than it was. They’re not calling A and B now so it’s hard to predict what will happen. Either result could be a reasonable outcome.
There is extremely low volume on these preferred shares, almost nonexistent in some cases…pass
Website link https://www.priorityincomefund.com/
CW–correct—had to use a good til cancelled limit order–took all day to get a fill.
I’ve never found low volume to be a reason to slide past an investment opportunity. I look at is a feature, not a bug. I’d say most of my net worth has been the result of investments in low volume entities. To each his own.
Couldn’t agree more PP! It’s amazing how frequently you can find opportunities in the places that others aren’t looking.
Prospect Capital Management manages it. No thanks.
PRIF-H is due in 2026 which I consider short term, PRIF-D is 2029 a little farther out on what I would consider the short term scale. My Fido nanny is telling me I have too much in one IRA of short term holdings.
Charles M……. Other than having to look for reinvestment opportunities periodically I like short holdings as they stay around par pretty good due to the upcoming redemption. What I don’t know like is to buy something of longer duration and then see it drop down due to interest rate dropping etc. Then I am stuck with it. Personally I see nothing wrong with holding a lot of short term and don’t see the logic your Fido nanny follows. Maybe my outlook will change as I age and lose interest in the wheeling and dealing involved. Right now it keeps my mind active!
The power of NVDA is nuts… I am short some very deep in the money puts. It’s annoying the Mag 7 and then this company in general wields so much influence but at least we are fortunate enough to realize it. I have been watching economist and futures traders talk and some aren’t even mentioning this 5 pm earnings and only focus on what is listed on trading economics.