Non pubicly traded CEF (closed end fund) Priority Income Fund has posted their semi-annual report for the period ending 12/31/2021.
Of course Priority has 1 perpetual preferred outstanding as well as many other term preferreds which can be seen here.
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Numbers look good, $802 million in assets against $254 million of term preferred & other liabilities, about 3x coverage. Another way of looking at it is the portfolio of investment in CLOs would have to drop by 68% to begin impairment on the term preferreds. Nothing remotely like this happened in either 2008 or March 2020. I continue to add to positions.
Just not sure being in extremely low rated SSL’s is a great place to be in this current environment. “Our investments may take the form of the purchase of Senior Secured Loans (either in the primary or secondary markets) or through investments in the equity and junior debt tranches of collateralized loan obligation (“CLO”) vehicles that in turn own pools of Senior Secured Loans. The Company intends to invest in both the primary and secondary markets.” Just extremely complicated instruments and an uneasy feeling about their business as CLO’s are illiquid. Thoughts?