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Some Priority Income Fund Data

I see there is some discussion surrounding untraded closed end fund Priority Income Fund.

As most of us know Priority Income Fund has numerous ‘term preferred’ stock issues outstanding and 1 ‘perpetual preferred’ issue outstanding. Of course the difference is the ‘term preferreds’ have a ‘date certain’ for redemption (assuming the company remains solvent) while the ‘perpetual’ issue will remain outstanding until at least 2026–and maybe forever as there is no mandatory redemption date.

You can see all of the issues outstanding here.

The problem expressed by many is the lack of information from the company–mainly to preferred shareholders. I will say that owning 2 or 3 issues of the preferreds I have noted a lack of information–BUT there has been no issue whatsoever in receipt of dividends on a timely basis.

If a stockholder would look for any normal announcements of dividend declaration–good luck. It appears that the company has substantial difficulty with their investor relations–at least as far as ‘senior security’ holders go recently.

Here you can find the company’s press releases. You will find plenty of information–but little related to preferred stock dividends. They did announce a declaration in May, 2021 and previous to that they announced for all of the quarters in 2020.

On the other hand if you dig you can find the information–just not with a traditional press release.

Here is how I get my info on the company–and no one should have to dig this hard–but I do it because I need to know before I invest in a company.

Go to the menu for Priority Income Fund on the SEC Edgar website–here. The first item on the list is the N-2 Registration for the new proposed preferred stock offering. THIS DOCUMENT HAS EVERYTHING YOU WANT TO KNOW.

Click here and you have a summary of 7 years worth of financials. For me the net asset values at the beginning and end of each year are of interest.

If you scroll 30 pages down from the above information you will find information on the preferred shares. Included in this information is the fact that they have $68 in assets for each $25 preferred share outstanding–a leverage coverage ratio in the 270% area (as of 6/30/2021) and slightly better as of 9/30/2021. As a preferred holder you want his as high as possible and it is required to be not less than 200%.

If you go all the way down to page F-15 (I can’t link this page) you will find the ‘audit’ letter from BDO for the year ending 6/30/22021—AND the audited financials statements –balance sheet, statement of operations, cash flow statements etc. for the year ending 6/30/2021. You will note that the company has performed well over the years (although they pay Prospect Capital, their manager, plenty).

The company does publish a semi-annual and annual report each year. For some this may be an easier ‘read’. The last one was filed on 8/27/2021 for the year ending 6/30/2021. Like the N-2 registration statement noted above this annual report has a plethora of information.

So in summary you won’t find official announcements very often from Priority, but the documents mentioned above will give you substantial had data to review.

15 thoughts on “Some Priority Income Fund Data”

  1. Quick follow-up: I finally heard back from Prospect on the PRIF pfd divs: issues D-K declared and payable on 31 dec, as expected.

  2. Just wondering out loud – given information from Priority is so difficult to come by, how do they not get picked up by the 15c-2-11 Police????

    Personally all I need to know about them is that they’re the PSEC people in another wrapper…. That’s enough for me personally to say nyet… Did you know that PSEC issued 5 more Inter-Notes this week with maturities ranging from 20216 to 2051?????????? Management just rubs me the wrong way..a personal opinion kind of thing.

    Prospect Capital Corporation Issuer Logo
    CUSIP Pricing Supplement Maturity Coupon Payment Callable Yield* Ratings** Trade Date
    74348GGM6 Pricing Supplement 12/15/26 3.250 % S/A 06/15/22 3.250% Baa3/BBB-/NA 12/27/21
    74348GGN4 Pricing Supplement 12/15/28 3.500 % S/A 06/15/22 3.500% Baa3/BBB-/NA 12/27/21
    74348GGP9 Pricing Supplement 12/15/31 3.750 % S/A 06/15/22 3.750% Baa3/BBB-/NA 12/27/21
    74348GGQ7 Pricing Supplement 12/15/36 4.000 % S/A 06/15/22 4.000% Baa3/BBB-/NA 12/27/21
    74348GGR5 Pricing Supplement 12/15/51 4.250 %

    1. You realize priority prefs are exchange listed and file with the SEC? 15c2-11 does not apply

      1. Hmmmmmmmmm, good point…. yet somehow it makes me feel so less protected than I thought I was by this wonderful new initiative. 😉 Just wondering outloud – an issue like SLMNP is being affected by 15c-2-11, yet LyondellBasell, the parent, is listed. Could they simply solve the problem by choosing to take SLMNP to an exchange??? That would be in their power to do, wouldn’t it?

  3. Thank you Tim for providing this information. It is very helpful.

    Also, Merry Christmas to you and your family.

    A somewhat unusual event coming up on Saturday. Looks like we are likely to have a white Christmas here in the northwest.

    1. Not only that, but single-digit temps coming early next week in both here in Seattle and in Portland. Yow!

      1. Absolutely Bur. Born and raised in Seattle so those overnight temps look shocking. I imagine plumbers will be busy next week dealing with a lot of frozen pipes!

    2. Thanks Tim. It does sound like PSEC was one of the managers if I recall correctly. Perhaps, the new unloved ECC-D could be a good replacement or HT-C. HT-C could be riskier even assuming HT has enjoyed some recovery in the hotel biz. Merry Christmas.

      1. Johnkcal – From PSEC-A prospectus: “We are externally managed by our investment adviser, Prospect Capital Management….” and “The terms “we,” “us,” “our” and “Company” refer to Prospect Capital Corporation; “Prospect Capital Management,” “Investment Adviser” and “PCM” refer to Prospect Capital Management L.P.” https://www.sec.gov/Archives/edgar/data/0001287032/000128703221000349/a20210713-psectradedprefer.htm….. “Our investment objective is to generate both current income and long-term capital appreciation through debt and equity investments”

        From Priority Income Fund website – https://www.priorityincomefund.com/psectradedprefer.htm: “Portfolio Manager: Prospect Capital Management, L.P.” and “Our investment objective is to generate current income and, as a secondary objective, long-term capital appreciation. We seek to achieve our investment objective by investing, under normal circumstances, at least 80% of our total assets, or net assets plus borrowings, in senior secured loans made to companies whose debt is rated below investment grade or, in limited circumstances, unrated, which we collectively refer to as “Senior Secured Loans,” with an emphasis on current income”

        One and the same……….different wrappers. They share the same 10 East 40th Street, 42nd Floor, New York, NY 10016 address according to QOL

        1. Zwhiterose, Thanks so much for refreshing my memory. Well said. At times, debt market can be bewildering. The GBRPP has been trading continuing climbing with the Egan Jones A rating with volumes just fractions of the offering. I quit chasing and went with SACH-A. SACH common still rated bullish with Fidelity analysts and its sister debt been doing fine. Much earlier, I did take a good size position of EFSCP when it was in the pink sheet. With Knoll bond rating, which is just as good or perhaps better than the 3 top rating agencies. I gave up on the GBRPP. The bid is now $25.5 region. LOL.
          Back to PRIF-K, it is possible that the dividend was only for the December 2021. Issuer seems to be either short of cash to pay because of the lack of subscription OR it could be so stated in the offering document. I could have sold some this morning. Not now. ECC-D presumably a considerably issuer than PRIF fund, has its ECC-D unloved, still lingering on below $24.50. People must be putting their money in common stocks and the mega billion tech names.

          1. My theory on ECC-D’s pricing is that ECCB is a term preferred with a higher coupon (7.75) than ECC-D (6.75), and ECC-D is NOT a term preferred. ECCB was half redeemed but the rest is still out there and is more attractive; ECC-D can’t compete with its own cousin. ECCB is above par but pretty close, the recent redemption of half of it is keeping it close to par.

            1. RJZ, with all my due respect, I beg to differ. ECCC, a 10 year preferred stock with 6.5% coupon has been trading “comfortably” above par. BTW, I tested by selling 200 shares out of 300 shares today PRIF-K at the BID price of $24.52. It got filled immediately at $24.56+. After I sold it, the bidder continue to keep the BID price as 25.52 200 shares. I am convinced totally that Tim McPartland, who tirelessly with painstaking Herculean effort, digging out all the hidden financials on PRIF., that AT THIS TIME, PRIF with all its preferreds are on solid ground. I replaced some of the sold assets to buy one of the best of Gridbird’s gem, LBRDP at $29, with ex div date of 12/30/2021. My thanks to both Tim and Gridbired. They are the very best, now Tim is famous with Baron’s mag, well deserved indeed.

              1. johnkcal,

                My comment was directed at the relative disparity between ECC-D and ECCB and ECCC, not specifically on PRIF. ECCB and ECCC are both term preferred. ECCB trades above but relatively close to par based on partial redemption despite having the highest interest rate of the group. ECCC trades well above par despite having the lowest interest rate. ECC-D trades below par despite having a higher coupon than ECCC – so the term preferred nature of ECCC is definitely worth something to buyers. As to PRIF-K, no comment, other the management has made a mess out of PSEC, so I’m not really interested. I would like to be interested, I like these preferreds of CEFs because the leverage rules keep them a little safer.

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