New Priority Income Fund Term Preferred Trading

Closed end fund Priority Income Fund (non traded fund) has sold a new offering of term preferred. These shares were part of an “at the market” offering by the company which was unlisted until they sold at least $10 million worth of shares.

The issue has the highest coupon of all the issues of term preferreds they have outstanding–with this issue they have 4 issues outstanding.

They have sold just over 1 million shares of this issue, but being part of an ongoing “at the market” offering they will be selling more shares.

The new issue is trading under the ticker of PRIF-D and has a coupon of 7%. We show the last trade at $24.94.

The shares have a mandatory redemption date on 6/30.2029 with an early redemption period starting 3/31/2022.

Being a CEF the company has to maintain the 200% asset coverage ratio which is always comforting. The ratio now is over 400%–although last December prior to numerous term preferred offering it was 800%.

The company holds a portfolio of CLOs (similar to Oxford Lane and Eagle Point Credit) which totals $465 million as of 5/30/2019.

You can see the data and chart here.

24 thoughts on “New Priority Income Fund Term Preferred Trading”

  1. PRIF-B shot up from $24.92 at close Thursday to $25.25 early Friday. Too high for me, but i did pick up some of the A under par and i’m pretty happy with the first call and maturity date.

  2. All four Priority Income preferreds (Series A, B, C, & D) have been rated AA- by Egan Jones as mentioned in the company’s April 29th announcement (http://www.destracapital.com/about/updates/priority-income-fund-launches-aa-rated-preferred-stock-program). As a conjecture, could anyone take a gander as to what this rating might have been if it were to be evaluated by any of the big three (S&P, Moody’s, Fitch). My own take is that no higher than Ba1/BB+. Comment?

  3. I own Series A. I bought it below par and my yield is 6.46%. The first call date and the maturity date on Series A is later than the Series B and C. With the new Series D having the highest coupon what do you think the odds are that A, B, and/or C will be called before maturity? TIA

    1. I don’t see them in any rush to call anything if they are paying a higher coupon rate on the new Series D. Wouldn’t make much sense but guess you never know.

    1. Shares of the parent company are not publicly traded. You can only buy the preferreds.

    1. I agree Andrew—I feel much better about the next couple of years—-versus the very unknown 2029.

      1. Tim – I have a generalized question – how come that mentality about feeling much better about the next couple of year vs the very unknown 2029 not enter into the equation when everyone’s jumping into all the perpetual preferreds for flipping purposes? Is the thought specific to Priority? Why not for New Residential as well?? I keep passing on all the flipping riches while trying to convince myself I’d be OK to own all these new issues if the flip didn’t work, but I never do, yet I would think a 10 year 7% Priority has to be worth enough of a flip as a perpetual New Residential 7 1/2%. I’m missing the boat but why should this one be different from all the others? BTW, I’ve looked at Priority before and hate that it traces to Prospect…

        1. 2whiteroses-

          I have to agree with you about this flipping issue. The benefits vs the risks don’t equate to pick up 1-2% (not to mention there may be a short term tax gain, or trading fee for some investors which would eat the gain). It is just a symptom of an overconfident market, which makes me feel bearish in general.

          If an investor wants to pick up a safer 1-2%, sell a short term option on a blue chip stock you would be OK with holding during earnings season. I don’t see buying an illiquid vehicle with a US President who says wacky things that move the market as a good risk reward.

          1. Skg, with all due respect please keep your political talk and issues off of this investment web site. No one cares about your feelings or for that matter anyone else’s emotions toward our President of the United States. You will ruin a great web site with political talk as it does nothing but divide instead of help.
            Nomad

            1. @Nomadicmist
              I agree , Sir . Investors who make purchases while attacking the President in office are simply hypocritical. If they feel things are so ‘wacky,’ why would they own investments until that individual has been retired or voted out. I am long only and fully invested on an income only basis. I do not ‘flip’ for a quick gain, preferreds or otherwise, but, of course, each to his/her own system.

              1. Those who love Trump pretty much hate Obama and vice-versa. If you didn’t invest during either one of these guys it was or has been your loss. Never let your political leanings dictate whether you invest or not.

                1. Indded! And our goal here is to make informed, hopefully, wise investment decisions – which is possible no matter who is president, who controls legislative branches, who is the Fed chair, and – whether stocks are up, down, or flat.

            2. @nomadicmist

              Thank you, Nomad. I have seen too many great websites ruined with political talk, the end result being a defunct board that no one benefits from.

              All of us come here to learn from each other about investing strategies, and political opinion is really an unwelcome topic. There are many other boards on which one can express such opinions to their heart’s content, that can satisfy whoever wants to vent.

        2. The New Residential preferred may be perpetual, but it’s a fixed to floating, which reduces its duration and therefore risk from my perspective and why i bought it.

        3. On 2/27/2019, I bought 400 shares of PRIF-C @ $24.88. As I recall some billionaire was sponsoring this private company with PSEC (Prospect) managing or co-managing this fund. At that time, I felt uneasy because I thought no one at Tim’s website was interested in this weird one. Further, I do NOT Prospect with its long history of risking taking history, despite at times (as it was just a few days ago) by the venerable BDC’s Scott Kennedy of SA. I was watching this one like a hawk. It went up after I bought it. Then it started to slide. On 3/18/2019, sold them all @ $24.77 after ex div, collecting some $69 worth of dividends. All PRIO-x funds have sharply climbed at this hour (after I dosed off) around 12:30 pm EDT. So, I will pass with some legacy of Amtrust preferreds + 1 of Karfunkel/Zyskind baby bond (just 100 shares) doing okay but always intensely fearful of climate change in hurricanes and floods (possibly a new threat these days + California wildfires). BTW, JerryMac at SiliconInvestor.com just posted:
          Sempra Energy 5.75 live symbol today..SREA

          Jr subordinated investment grade long dated debt with 5 yr call protection.
          SREA has been trading on FIDO with current bid $25.13 200 shares vs. ask $25.14 1500 shares with 533,xxx shares sold. Day Range: $25.10 – $25.22. No idea on total number of shares offered. I own just 50 shares of SRE-B, bought at IPO, mandatory convertible, unrated. This San Diego Energy was rated for its senior unsecured debt a bit higher than Edison International which own Southern CA Edison. Both have negative outlook but deemed stable by Moody. IMHO, the utilities in Southern Ca should be less risky as compared to PG & E which rates were tightly controlled by the Public Utility Commission in Northern CA IMHO as I recall from my living on both sides of the coasts for decades. Looks like SREA is trading on Day 1. So the question is: will it get higher as most of the preferreds these days on IPO’s such as the NRXPP. I was attempting to find things to sell from my IRA account and was “lucky” to get just 275 shares @ $25.14. It has gapped up to $25.29. SREA bid down to $25.12 last trade $25.13 for 300 shares. I will have to find things to sell again.

          1. Many here, including myself, made good money earlier this year flipping SCE-L one or more times. Now that fire season is looming and the price of SCE-L is not as advantageous I’m staying away from it and other Cal Utes. YMMV of course.

            1. Me too. I sold my SCE-L when it went down together with EIX. I kept my SEC-H. Both are doing fine at this time. Definitely not a SWAN. I decided not to chase after SREA. Insufficient yield already above par. I will stay my current SWAN EPR-G, the best IG preferred with its 5.75% coupon. Makes no sense to sell my legacy CLNY-G, 7.5%. The lower two preferreds got on Rida Morwa’s powerful machine as BUY just a few days ago. Ex Div tomorrow. Picked up 300 shares of HT-C near par and got one quarter worth dividend. Offered to sell at $25.22. It did not get filled. So I cancelled the order. Some call risk. Worth holding. Best not to trade and get some rest.

                1. I sold one of the SWAN notes and picked up 200 shares of SYNPP SYNOVUS FINANCIAL CORPORATION 5.875% QDI, with its Amazon.com biz @$25.38. It is still available at $25.39 (last trade) with 250000 bids $ $25.38 vs. ask $25.40 with 1657. Some in Silicon is thinking of ARR-B. ARR seems to be too risky to me, although it seems to be doing okay for this highly leveraged small cap mREIT of some sort.

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