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Priority Income Fund Term Preferreds on Sale

The Priority Income Fund (no publicly trading) is a closed end fund which holds collateralized loan obligations (CLOs).

There are 5 outstanding issues of term preferreds from Priority Income Fund and most of them have gone ‘on sale’ during the last month.

The issues are generally down 4-5% since highs reached in September. For instance the PRIF-C 6.625% issue is trading at $24.70 after hitting a high in the $26.20 area.

Shares went ex-dividend on 12/12 for payment on 12/31/2019–so there is no accrual in the shares.

Disclosure–I own the PRIF-D 7% issue. Additionally I’m looking to see if I want to add the PRIF-C issue now (both are small – less than full positions).

Being a CEF Priority Income Fund must maintain a 200% coverage ratio and they are currently at around 400% (at least last time I calculated it), but are assets are ‘level 3’–meaning the value is not directly observable so each investor should do their own due diligence as many may not be comfortable holding CLO related securities.

I expect Priority to issue more term preferreds in the months and years ahead as this is their method of utilizing leverage.

You can check all the outstanding issue here.

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