PFD and PFO Announce New Regular Monthly Dividends and Special Year-End Dividends
December 10 2012 - 5:25PM
Business Wire
The Boards of Directors of Flaherty & Crumrine Preferred
Income Fund Incorporated (NYSE: PFD) and Flaherty &
Crumrine Preferred Income Opportunity Fund Incorporated (NYSE:
PFO) today declared a new regular monthly dividend and a
special year-end dividend to be paid in December.
The new regular monthly dividend rate for PFD will be $0.09 per
share, which equates to an annual dividend of $1.08 per share. This
new monthly dividend represents a decrease of approximately 3.2%
from the prior monthly dividend. In addition, shareholders will
receive a special year-end dividend from net investment income of
$0.12 per share.
The new regular monthly dividend rate for PFO will be $0.073 per
share, which equates to an annual dividend of $0.876 per share.
This new monthly dividend represents a decrease of approximately
3.3% from the prior monthly dividend. In addition, shareholders
will receive a special year-end dividend from net investment income
of $0.1165 per share.
Donald F. Crumrine, Chairman of the Boards of the funds, said
“We are pleased that both funds delivered on their objectives of
high current income during 2012. The funds ended the year with
undistributed income, primarily resulting from modest increases in
leverage balances throughout the year, lower cost of leverage, and
slightly lower redemption experience than expected. The funds also
received income from a bankruptcy settlement late in the year –
having recovered the full principal amount several years earlier.
As we have previously discussed, our market continues to transition
from trust preferred securities to more traditional preferred
stock, and existing issuers of preferred from many industries
continue to refinance higher-coupon securities where possible. This
transition is driven both by regulatory guidelines as well as the
absolute level of interest rates. As a result, we have recalibrated
our dividends to reflect the modestly lower income we expect to
earn on the funds’ portfolios in the coming year.”
The December monthly dividend and the special year-end dividend
will be paid on December 31, 2012 to holders of record of each
fund’s common stock on December 21, 2012. The expected ex-dividend
date is December 19, 2012. The tax breakdown of all 2012
distributions will be available early next year, but at this point
the funds anticipate that all dividends paid in 2012, including the
special year-end dividend, will be taxable as income and not
capital gains.
PFD was organized in 1991 and PFO was organized in 1992 as
closed-end, diversified investment companies which invest primarily
in preferred securities. Each Fund’s investment objective for
holders of its common stock is high current income consistent with
preservation of capital. PFD and PFO are managed by Flaherty &
Crumrine Incorporated, an independent investment adviser which was
founded in 1983 to specialize in the management of portfolios of
preferred and related securities. Flaherty & Crumrine also
manages two other U.S. closed-end funds: Flaherty &
Crumrine/Claymore Preferred Securities Income Fund (NYSE: FFC); and
Flaherty & Crumrine/Claymore Total Return Fund (NYSE: FLC).
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