As filed with the Securities and Exchange Commission on
October 28, 2022
Securities Act File No. 333-235356
Investment Company Act File No. 811-22725
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
Form N-2
ý
REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933
o
PRE-EFFECTIVE AMENDMENT NO.
ý
POST-EFFECTIVE AMENDMENT NO. 5
and/or
ý
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940
ý
AMENDMENT NO. 69
_________________________________
Priority Income Fund, Inc.
(Exact Name of Registrant as Specified in the Charter)
_________________________________
10 East 40th Street,
42nd Floor
New York, NY 10016
(Address of Principal Executive Offices)
(212) 448-0702
(Registrant’s Telephone Number, Including Area
Code)
M. Grier Eliasek
Priority Income Fund, Inc.
10 East 40th Street,
42nd Floor
New York, NY 10016
(Name and address of agent for service)
COPIES TO:
Steven B. Boehm, Esq.
Cynthia R. Beyea, Esq.
Eversheds Sutherland (US) LLP
700 Sixth Street, NW Suite 700
Washington, DC 20001-3980
Tel: (202) 383-0100
Fax: (202) 637-3593
_________________________________
Approximate date of commencement of proposed public
offering:
As soon as possible after the effective date of this Registration
Statement.
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Check box if the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans. |
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Check box if any securities being registered on this Form will be
offered on a delayed or continuous basis in reliance on Rule 415
under the Securities Act of 1933 (“Securities Act”), other than
securities offered in connection with a dividend reinvestment
plan. |
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Check box if this Form is a registration statement pursuant to
General Instruction A.2 or a post-effective amendment
thereto. |
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Check box if this Form is a registration statement pursuant to
General Instruction B or a post-effective amendment thereto that
will become effective upon filing with the Commission pursuant to
Rule 462(e) under the Securities Act. |
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Check box if this Form is a post-effective amendment to a
registration statement filed pursuant to General Instruction B to
register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act. |
It is proposed that this filing will become effective (check
appropriate box):
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when declared effective pursuant to Section 8(c) of the
Securities Act. |
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immediately upon filing pursuant to paragraph (b) |
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on (date) pursuant to paragraph (b) |
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60 days after filing pursuant to paragraph (a) |
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on (date) pursuant to paragraph (a) |
If appropriate, check the following box:
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This [post-effective] amendment designates a new effective date for
a previously filed [post-effective amendment] [registration
statement]. |
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This Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, and the
Securities Act registration statement number of the earlier
effective registration statement for the same offering is:
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This Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, and the Securities Act
registration statement number of the earlier effective registration
statement for the same offering is:
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This Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, and the Securities Act
registration statement number of the earlier effective registration
statement for the same offering is:
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Check each box that appropriately characterizes the
Registrant:
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Registered Closed-End Fund (closed-end company that is registered
under the Investment Company Act of 1940 (“Investment Company
Act”)). |
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Business Development Company (closed-end company that intends or
has elected to be regulated as a business development company under
the Investment Company Act). |
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Interval Fund (Registered Closed-End Fund or a Business Development
Company that makes periodic repurchase offers under Rule 23c-3
under the Investment Company Act). |
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A.2 Qualified (qualified to register securities pursuant to General
Instruction A.2 of this Form). |
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Well-Known Seasoned Issuer (as defined by Rule 405 under the
Securities Act). |
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Emerging Growth Company (as defined by Rule 12b-2 under the
Securities Exchange Act of 1934 (“Exchange Act”). |
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If an Emerging Growth Company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of
Securities Act. |
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New Registrant (registered or regulated under the Investment
Company Act for less than 12 calendar months preceding this
filing). |
Maximum Offering of 54,066,090 Shares
We are an externally managed,
non-diversified, closed-end management investment company that has
registered as an investment company under the Investment Company
Act of 1940, as amended. 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. These
investments, which are often referred to as “junk” or “high yield,”
have predominantly speculative characteristics with respect to the
issuer’s capacity to pay interest and repay principal. They may
also be difficult to value and illiquid. Our investments may take
the form of the purchase of Senior Secured Loans (either in the
primary or secondary markets) or through investments in entities
that in turn own a pool of Senior Secured Loans. This investment
objective may be changed by our Board of Directors if we provide
our stockholders with at least 60 days prior notice. We may
invest in Senior Secured Loans directly or in any security issued
by a CLO to implement our investment objective but have invested
primarily in the equity and junior debt tranches of a type of such
pools known as Collateralized Loan Obligations, or “CLOs.” We refer
to such investments, together with direct investments in Senior
Secured Loans, collectively as “Target Securities.” Structurally,
CLOs are entities that are formed to manage a portfolio of Senior
Secured Loans. The Senior Secured Loans within a CLO are limited to
Senior Secured Loans which meet specified credit and diversity
criteria and are subject to concentration limitations in order to
create an investment portfolio that is diverse by Senior Secured
Loan, borrower, and industry, with limitations on non-U.S.
borrowers.
We have elected to be treated for U.S. federal income tax purposes
as a regulated investment company under the Internal Revenue Code
of 1986, as amended. We are managed by Priority Senior Secured
Income Management, LLC, a private investment firm that is
registered as an investment adviser with the Securities and
Exchange Commission and is an affiliate of ours. Priority Senior
Secured Income Management, LLC oversees the management of our
activities and is responsible for making investment decisions for
our portfolio. Our administrator, Prospect Administration LLC,
provides administration services necessary for us to
operate.
Through Preferred Capital Securities, LLC, or the “Dealer Manager,”
the Dealer Manager for this offering, we are offering up to
54,066,090 shares of our common stock, or our “shares,” in this
offering at a current offering price of $12.39 per share. The
Dealer Manager is not required to sell any specific number or
dollar amount of shares but will use its best efforts to sell the
shares offered. The minimum permitted purchase is $1,000 of our
shares. The Dealer Manager authorizes one or more other
broker-dealers that are members of FINRA to sell our shares. See
“Plan of Distribution” in this prospectus.
We are offering our shares on a continuous basis at a current
offering price of $12.39 per share; however, to the extent that our
net asset value, or “NAV,” increases, we will sell at a price
necessary to ensure that shares are not sold at a price per share,
after deduction of selling commissions and dealer manager fees,
that is below our net asset value per share. In connection with the
monthly determination of our NAV, our Board of Directors will
establish a new net offering price that is greater than our net
asset value per share plus selling commissions and dealer manager
fees to ensure that shares are not sold below NAV. Therefore,
persons who tender subscriptions for our shares in this offering
must submit subscriptions for a certain dollar amount, rather than
a number of shares and, as a result, may receive fractional
shares.
We sell our shares of common stock with differing up-front sales
loads. Shares available to the general public are charged selling
commissions and dealer manager fees and are referred to as our
“Class R Shares.” Shares available to accounts managed by certain
registered investment advisers and broker-dealers that are managing
wrap or other fee-based accounts are charged dealer manager fees
but no selling commissions and are referred to as our “Class RIA
Shares.” Shares available for purchase (1) through certain
fee-based programs, also known as wrap accounts, of investment
dealers, (2) through certain participating broker-dealers that have
alternative fee arrangements with their clients, (3) through
certain registered investment advisers, (4) through bank trust
departments or any other organization or person authorized to act
in a fiduciary capacity for its clients or customers, such as an
endowment, foundation, or pension fund, or (5) to other
institutional investors are charged no selling commissions or
dealer manager fees and are referred to as our “Class I Shares.”
For example, you will pay (i) selling commissions of up to
6.0% and dealer manager fees of up to 0.75% for the purchase of our
Class R shares, (ii) dealer manager fees of up to 0.75%,
but no selling commissions, for the purchase of our Class RIA
shares and (iii) no selling commissions or dealer manager fees
for the purchase of our Class I shares. We are offering to
sell any combination of our shares, with an aggregate number of
shares up to the maximum offering of shares. In no event will the
aggregate selling commissions and dealer manager fees exceed 6.75%
of the gross offering proceeds received in this offering.
Regardless of the sales load paid, each share of our common stock
will have identical rights with respect to voting and
distributions, and will likewise bear its own pro rata portion of
our expenses and have the same net asset value as each other share
of our common stock. The minimum permitted purchase is $1,000.
Although we use “Class” designations to indicate our differing
sales load structures, the Company does not operate as a
multi-class fund. The Dealer Manager is not required to sell any
specific number or dollar amount of shares but will use its best
efforts to sell the shares offered.
Before making your investment decision, please consult with your
financial advisor regarding your account type and the classes of
shares you may be eligible to purchase.
We commenced the initial public offering of our shares in
2013. Since that time, we have filed post-effective
amendments to our prior registration statements that have allowed
us to continue the offering of our shares. As of October 27,
2022, we had sold an aggregate of 45,933,910 shares of our common
stock for gross proceeds of approximately $661.5
million.
Investing in our shares may be considered
speculative and involves a high degree of risk, including the risk
of a substantial loss of investment. See “Risk Factors” beginning
on page 38
to read about the risks you should consider before buying our
shares, including the risk of leverage.
•Our
shares will not be publicly traded and you should not expect to be
able to sell your shares regardless of how we perform.
•If
you are able to sell your shares, you will likely receive less than
your purchase price.
•Our
shares are not currently listed on any securities exchange, and we
do not expect a secondary market in the shares to develop in the
foreseeable future, if ever.
•To
offer liquidity to our shareholders, we have initiated, but are not
obligated to continue, a share repurchase program. We intend to
limit the number of shares to be repurchased in any calendar
quarter to up to 2.5% of the number of shares outstanding at the
close of business on the last day of the prior fiscal year. We may
determine in the future to conduct any future repurchase offers
more or less frequently than on a quarterly basis as well as for a
greater or lesser amount of our shares than currently expected, and
we may suspend or terminate the share repurchase program at any
time. We expect to offer to repurchase such shares at a price equal
to the then current net asset value per share of our common stock.
You will have no right to require us to repurchase your shares or
any portion thereof. See “Share Repurchase Program.”
•You
should consider that you may not have access to the money you
invest until we complete a liquidity event. The completion of a
liquidity event is in the sole discretion of our Board of
Directors, and depending upon the event, may require stockholder
approval, and there is no assurance that we will complete a
liquidity event at all. Accordingly, there is significant
uncertainty as to the timing when you may be able to sell your
shares and receive proceeds.
•An
investment in our shares is not suitable for investors that require
short-term liquidity. See “Liquidity Strategy.”
•Because
you will be unable to sell your shares, you will be unable to
reduce your exposure on any market downturn.
•Our
distributions may be funded from offering proceeds or borrowings,
which may constitute a return of capital and reduce the amount of
capital available to us for investment. Any capital returned to
stockholders through distributions will be distributed after
payment of fees and expenses.
_______________________________________________________________________________
Purchasers of our shares are subject to dilution as a result of
expenses we will incur in connection with this offering. In
addition, we intend to continue to issue shares, which subjects
your ownership percentage in us to further dilution. See “Risk
Factors-Risks Related to an Investment in Our Shares-Investors in
this offering will incur dilution” and “-Your interest in us will
be diluted if we issue additional shares, which could reduce the
overall value of an investment in us.”
This prospectus contains important information about us that a
prospective investor should know before investing in our shares.
Please read this prospectus before investing and keep it for future
reference. We have filed with the SEC a statement of additional
information, or “SAI,” dated as of the date of this prospectus, as
may be amended from time to time, containing additional information
about us. The SAI is incorporated by reference in its entirety into
this prospectus. See “Available Information” for a listing of the
contents of the SAI. We will also file annual and semi-annual
reports, proxy statements and other information about us with the
Securities and Exchange Commission, or the “SEC.” This information
and the SAI will be available free of charge by contacting us at
10 East 40th Street,
42nd
Floor, New York, New York, 10016, or by telephone at
(212) 448-0702 or on our website at
www.priorityincomefund.com
(which is not intended to be an active hyperlink). The information
on our website is not incorporated by reference in the prospectus,
and you should not consider it part of this prospectus. The SEC
also maintains a website at
www.sec.gov
that contains the SAI, and any amendments thereto, and other
information regarding us.
Neither the SEC nor any state securities commission has approved or
disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
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Per Share |
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Total Maximum |
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Price to Public(1)
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$12.39 |
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$669,878,855 |
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Sales Load(2)
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$0.84 |
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$45,415,516 |
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Proceeds to the Registrant and Other Persons(3)
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$11.55 |
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$624,463,339 |
(1)Assumes
all shares are sold at the current offering price per
share.
(2)This
table assumes that all shares sold in this offering are
Class R shares that incur a full sales load. The sales load
includes 6.0% of selling commissions and 0.75% of dealer manager
fees. The “dealer manager fee” may be used to pay the Dealer
Manager’s wholesalers for commissions and non-transaction based
compensation and may be reallowed by the Dealer Manager to
participating broker-dealers for assistance in selling and
marketing our shares. Under certain circumstances, as described in
this prospectus, selling commissions and the dealer manager fee may
be reduced or eliminated in connection with certain purchases. For
example, you will pay (i) selling commissions and dealer
manager fees for the purchase of our Class R shares,
(ii) dealer manager fees, but no selling commissions, for the
purchase of our Class RIA shares and (iii) no selling
commissions or dealer manager fees for the purchase of our
Class I shares. See “Plan of Distribution.”
(3)Before
expenses incurred in connection with the offering and distribution
of the shares offered hereby. We estimate that we will incur
approximately $3,148,431 of additional expenses if the maximum
number of shares is sold.
Because you will pay a sales load of up to 6.75% and estimated
offering expenses of up to 0.47%, if you invest $123.90 in our
shares and pay the full sales load, $114.95 of your investment will
actually be used by us for investments. All offering expenses that
would be characterized as underwriting compensation under FINRA
Rule 5110 cannot, when added to the selling commission and the
dealer manager fee, exceed the greater of 8% of gross offering
proceeds or the maximum allowed under FINRA Rule 5110. As a result,
based on the current offering price of $12.39, you would have to
experience a total return on your investment of 7.79% in order to
recover these expenses. See “Use of Proceeds.”
The date of this prospectus is October 28, 2022.
_______________________________________________________________________________
Preferred Capital Securities, LLC
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed
with the SEC, using a continuous offering process. Periodically, as
we make material investments or have other material developments,
we will provide a prospectus supplement that may add, update or
change information contained in this prospectus. We will endeavor
to avoid interruptions in the continuous offering of our shares,
including, to the extent permitted under the rules and regulations
of the SEC, by filing an amendment to the prospectus with the SEC
if our net asset value declines more than 10% from our net asset
value as of the effective date of this registration
statement.
Any statement that we make in this prospectus will be modified or
superseded by any inconsistent statement made by us in a subsequent
prospectus supplement. The registration statement we filed with the
SEC includes exhibits that provide more detailed descriptions of
the matters discussed in this prospectus. You should read this
prospectus and the related exhibits filed with the SEC and any
prospectus supplement, together with additional information
described below under “Available Information.”
You should rely only on the information contained in this
prospectus. Neither we nor the Dealer Manager have authorized any
other person to provide you with different information from that
contained in this prospectus. The information contained in this
prospectus is complete and accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus
or sale of our shares. Our business, financial condition and
results of operations may have changed since the date of this
prospectus. If there is a material change in the affairs of our
company, we will amend or supplement this prospectus.
TABLE OF CONTENTS
PROSPECTUS SUMMARY
This summary highlights some of the information in this prospectus.
It is not complete and may not contain all of the information that
you may want to consider. To understand this offering fully, you
should read the entire prospectus carefully, including the section
entitled
“Risk
Factors,”
before making a decision to invest in our shares.
Unless otherwise noted, the terms
“we,”
“us,”
“our,”
and the “Company” refer to Priority Income Fund, Inc.; the
term the “Adviser” refers to Priority Senior Secured Income
Management, LLC; the term “Prospect Capital Management” refers
to Prospect Capital Management L.P.; the term “Dealer Manager”
refers to Preferred Capital Securities, LLC; and the terms
“Prospect Administration” and the “Administrator” refer to Prospect
Administration LLC. In addition, in this prospectus, we use
the term
“day”
to refer to a calendar day, and we use the term
“business
day”
to refer to any day other than Saturday, Sunday, a legal holiday or
a day on which banks in New York City are authorized or required to
close.
Unless otherwise specified, this prospectus assumes that each
investor will purchase Class R shares and that such purchase
will incur a full sales load.
Priority Income Fund, Inc.
We are an externally managed, non-diversified, closed-end
management investment company that has registered as an investment
company under the Investment Company Act of 1940, as amended, or
the 1940 Act. As such, we are required to comply with certain
regulatory requirements. See “Regulation” in the statement of
additional information, or SAI. We are managed by Priority Senior
Secured Income Management, LLC, a registered investment
adviser under the Investment Advisers Act of 1940, as amended, or
the Advisers Act, which oversees the management of our activities
and is responsible for making investment decisions for our
portfolio. We have elected to be treated for U.S. federal income
tax purposes as a regulated investment company, or RIC, under
Subchapter M of the Internal Revenue Code of 1986, as amended,
or the Code.
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. These investments, which are often
referred to as “junk” or “high yield,” have predominantly
speculative characteristics with respect to the issuer’s capacity
to pay interest and repay principal. They may also be difficult to
value and illiquid. Our investments may take the form of the
purchase of Senior Secured Loans (either in the primary or
secondary markets) or through investments in entities that in turn
own a pool of Senior Secured Loans. This investment objective may
be changed by our Board of Directors if we provide our stockholders
with at least 60 days prior notice. We may invest in Senior
Secured Loans directly or in any security issued by a CLO to
implement our investment objective but have invested primarily in
the equity and junior debt tranches of a type of such pools known
as Collateralized Loan Obligations, or “CLOs.” We refer to such
investments, together with direct investments in Senior Secured
Loans, collectively as “Target Securities.” Structurally, CLOs are
entities that are formed to manage a portfolio of Senior Secured
Loans. The Senior Secured Loans within a CLO are limited to Senior
Secured Loans which meet specified credit and diversity criteria
and are subject to concentration limitations in order to create an
investment portfolio that is broadly assorted across different
Senior Secured Loans, borrowers, and industries, with limitations
on non-U.S. borrowers. The typical underlying borrowers for Senior
Secured Loans are U.S.-based privately-held and publicly-held
companies across a wide range of industries and
sectors.
Our Adviser manages our investments and its affiliate, Prospect
Administration, provides the administrative services necessary for
us to operate.
Status of Our Ongoing Public Offering
Since commencing our initial public offering and through
October 27, 2022, we had sold 45,933,910 shares of our common
stock for gross proceeds of approximately $661.5 million. The
following table summarizes the sales of our common stock on a
quarterly basis since we formally commenced investment operations
in January 2014. Dollar amounts are presented in thousands, except
per share data:
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Quarter Ended |
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Shares Sold |
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Average Price per Share |
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Gross Proceeds |
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Fiscal 2014 |
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681,772 |
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$ |
14.65 |
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$ |
9,987 |
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Fiscal 2015 |
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4,326,239 |
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$ |
14.94 |
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64,645 |
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Fiscal 2016 |
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7,271,509 |
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$ |
14.98 |
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108,926 |
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Fiscal 2017 |
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6,614,396 |
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$ |
16.00 |
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105,828 |
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Fiscal 2018 |
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4,822,552 |
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$ |
15.86 |
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76,498 |
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Fiscal 2019 |
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3,377,378 |
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$ |
15.14 |
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51,120 |
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Fiscal 2020 |
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2,059,226 |
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$ |
13.98 |
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28,785 |
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Fiscal 2021 |
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3,932,267 |
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$ |
12.11 |
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47,608 |
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Fiscal 2022 |
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7,752,485 |
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$ |
13.41 |
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103,969 |
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Fiscal 2023 |
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September 30, 2022 |
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4,616,846 |
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$ |
12.62 |
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58,261 |
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December 31, 2022 (through October 27, 2022) |
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479,240 |
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$ |
12.32 |
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5,906 |
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Total Fiscal 2023 |
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5,096,086 |
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$ |
12.59 |
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64,167 |
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Total |
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45,933,910 |
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$ |
14.40 |
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$ |
661,533 |
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About Our Adviser
We are managed by Priority Senior Secured Income
Management, LLC pursuant to an Investment Advisory Agreement,
or the “Investment Advisory Agreement.” Our Adviser is owned 50% by
Prospect Capital Management, an asset management firm and
registered investment adviser under the Advisers Act, and 50% by
Stratera Holdings, LLC. Our Adviser is registered as an investment
adviser with the SEC under the Advisers Act and is led by a team of
investment professionals from the investment and operations team of
Prospect Capital Management and Prospect Administration. These
individuals are responsible for our day-to-day operations on behalf
of our Adviser and are responsible for developing, recommending and
implementing our investment strategy. Prospect Capital Management
also manages Prospect Capital Corporation, a business development
company traded on the NASDAQ Global Select Market. See “Risk
Factors-Risks Related to Our Adviser and Its Affiliates.” Prospect
Capital Corporation had total assets of approximately $7.7 billion
as of June 30, 2022. Our Adviser’s professionals also manage
Prospect Floating Rate and Alternative Income Fund, Inc., or
“PFLOAT,” which has elected to be regulated as a business
development company under the Investment Company Act of 1940, as
amended. As of June 30, 2022, PFLOAT had total assets of
approximately $38.2 million.
Our Adviser’s investment professionals have significant experience
and an extensive track record of investing in companies, managing
high-yielding debt and equity investments, and managing and
investing in CLOs, including the equity and junior debt tranches of
CLOs, and Target Securities. Such parties also have extensive
knowledge of the managerial, operational and regulatory
requirements of publicly registered investment companies. Our
Adviser does not currently have employees, but has access to
certain investment, finance, accounting, legal and administrative
personnel of Prospect Capital Management and Prospect
Administration and may retain additional personnel as our
activities expand. In particular, certain personnel of Prospect
Capital Management will be made available to our Adviser to assist
it in managing our portfolio and operations, provided that they are
supervised at all times by our Adviser’s management team. See
“Investment Objective and Strategy-About Our Adviser.” We believe
that this depth of experience and disciplined investment approach
will help our Adviser to successfully execute our investment
strategy. See “Management” and “Portfolio Management” for
biographical information regarding our Adviser’s
professionals.
All investment decisions will be made by our Adviser’s
professionals. Our Board of Directors, including a majority of
independent directors, will oversee and monitor our investment
performance and relationship with our Adviser. See “Investment
Advisory Agreement.”
Risk Factors
An investment in our shares involves a high degree of risk and may
be considered speculative. You should carefully consider the
information found in “Risk Factors” before deciding to invest in
our shares. The following are some of the risks an investment in us
involves:
•Global
economic, political and market conditions may adversely affect our
business, results of operations and financial condition, including
our revenue growth and profitability.
•We
are not obligated to complete a liquidity event by a specified
date; therefore, it will be difficult or impossible for an investor
to sell his or her shares, which are not listed on a securities
exchange.
•Our
shares are not currently listed on any securities exchange, and we
do not expect a public market for them to develop in the
foreseeable future, if ever. Therefore, stockholders should not
expect to be able to sell their shares promptly or at a desired
price. No stockholder will have the right to require us to
repurchase his or her shares or any portion thereof. Because no
public market will exist for our shares, and none is expected to
develop, stockholders will not be able to liquidate their
investment prior to our liquidation or other liquidity event, other
than through our share repurchase program, or, likely in limited
circumstances, as a result of transfers of shares to other eligible
investors.
•We
intend to offer to repurchase a limited number of shares on a
quarterly basis, though we are under no obligation to do so. As a
result you will have limited opportunities to sell your shares and,
to the extent you are able to sell your shares under the program,
you may not be able to recover the amount of your investment in our
shares.
•The
amount of any distributions we may make is uncertain. Our
distribution proceeds may exceed our earnings. Therefore, portions
of the distributions that we make may be a return of the money that
you originally invested and represent a return of capital to you
for tax purposes. Such a return of capital is not immediately
taxable, but reduces your tax basis in our shares, which may result
in higher taxes for you even if your shares are sold at a price
below your original investment.
•Legislative
or other actions relating to taxes could have a negative effect on
us.
•We
intend to maintain our status as a RIC but may fail to do so. Such
failure would subject us to corporate-level U.S. federal income tax
on all of our income, which would have a material adverse effect on
our financial performance.
•As
a result of the annual distribution requirement to qualify as a
RIC, we will likely need to continually raise equity, make
borrowings or sell existing investments to fund new investments. At
times, these sources of funding may not be available to us on
acceptable terms, if at all.
•We
are subject to financial market risks, including changes in
interest rates, which may have a substantially negative impact on
our investments.
•Changes
relating to the LIBOR calculation process, and its discontinuation,
may adversely affect the value of the LIBOR-indexed, floating-rate
debt securities in our portfolio.
•Changes
in credit spreads may adversely affect our profitability and result
in realized and unrealized depreciation on our
investments.
•A
significant portion of our portfolio will be recorded at fair value
as determined in good faith by our Board of Directors and, as a
result, there may be uncertainty as to the value of our
investments.
•Investing
in Senior Secured Loans indirectly through CLO securities involves
particular risks in addition to the risks typically associated with
investing in Senior Secured Loans directly.
•Our
investments in CLO securities and other structured finance
securities involve certain risks in addition to the general risks
typically associated with investing in debt
securities.
•Our
investments in the primary CLO market involve certain additional
risks, including a negative market environment hampering a CLO
collateral manager's ability to acquire sufficient collateral
obligations that satisfy the CLO's concentration limitations and,
in turn, the CLO's target initial par amount of collateral prior to
the CLO's effective date.
•Investments
in foreign securities may involve significant risks in addition to
the risks inherent in U.S. securities.
•Our
investments in the equity and junior debt tranches of CLOs are
exposed to leveraged credit risk.
•Our
investments in the equity and junior debt tranches of CLOs may be
riskier and less transparent to us and our stockholders than direct
investments in the underlying companies.
•CLOs
typically will have no significant assets other than their
underlying Senior Secured Loans; payments on the CLOs are and will
be payable solely from the cashflows from such Senior Secured
Loans.
•Failure
to maintain adequate diversification of underlying obligors across
the CLOs in which we invest would make us more vulnerable to
defaults.
•There
is the potential for interruption and deferral of cashflow to our
investments in the equity and junior debt tranches of
CLOs.
•Our
investments in Target Securities may be illiquid.
•We
may invest in assets with no or limited performance or operating
history.
•We
are exposed to underlying borrower fraud through our portfolio
securities.
•The
inability of a CLO collateral manager to reinvest the proceeds of
the prepayment of Senior Secured Loans in a CLO may adversely
affect us.
•Our
investments are subject to prepayments and calls, increasing
re-investment risk.
•There
is limited control of the administration and amendment of Senior
Secured Loans in CLOs.
•Senior
Secured Loans in CLOs may be sold and replaced resulting in a loss
to us.
•Non-investment
grade debt, which is often referred to as “junk” or “high-yield,”
involves a greater risk of default and higher price volatility than
investment grade debt.
•We
will generally have the right to receive payments only from the
CLOs in which we invest, and will generally not have direct rights
against the underlying borrowers comprising the CLOs’ investments
or the entities that sponsored the CLOs.
•Our
investments in equity and junior debt tranches of CLOs will likely
be subordinate to the other debt tranches of such CLOs, and are
subject to a higher degree of risk of total loss.
•We
have not identified specific investments that we will make with the
proceeds of this offering, and therefore you will not have the
opportunity to evaluate our investments prior to purchasing our
shares.
•We
may be more susceptible than a diversified fund to being adversely
affected by any single corporate, economic, political or regulatory
occurrence.
•The
potential for our Adviser to earn incentive fees under the
Investment Advisory Agreement may create an incentive for it to
enter into investments that are riskier or more speculative than
would otherwise be in our best interests, and, since the base
management fee is based on average total assets, our Adviser may
have an incentive to increase portfolio leverage in order to earn
higher base management fees.
•Our
Adviser and its affiliates face conflicts of interest as a result
of compensation arrangements, time constraints and competition for
investments, which they will attempt to resolve in a fair and
equitable manner, but which may result in actions that are not in
our stockholders’ best interests.
•Our
ability to enter into transactions with our affiliates will be
restricted.
•The
purchase price at which you may purchase shares will be determined
at each closing date. As a result, such purchase price may be
higher than the prior closing price per share, and therefore you
may receive a smaller number of shares than if you had subscribed
at the prior closing price.
•We
may be unable to invest a significant portion of the net proceeds
of our offering on acceptable terms in an acceptable
timeframe.
•Because
we intend to continue to issue and offer for sale additional
shares, investors in this offering will incur
dilution.
•We
have issued shares of preferred stock and may borrow funds to make
investments. We may also issue additional shares of preferred stock
in order to provide funding to make investments. As a result, we
would be exposed to the risks of borrowing, also known as leverage,
which may be considered a speculative investment technique.
Leverage increases the volatility of investments and magnifies the
potential for loss on amounts invested, therefore increasing the
risks associated with investing in our shares.
•Our
investments may be concentrated in a limited number of investments,
which would magnify the effect of any losses suffered by a few of
these investments.
See “Risk Factors” beginning on page 38
and the other information included in this prospectus for a
discussion of factors you should carefully consider before deciding
to invest in our shares.
Investment Strategy
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, with an emphasis on current
income. Our investments may take the form of the purchase of Senior
Secured Loans (either in the primary or secondary markets) or
through investments in entities that in turn own a pool of Senior
Secured Loans. This investment objective may be changed by our
Board of Directors if we provide our stockholders with at least
60 days prior notice. We may invest in Senior Secured Loans
directly or in any security issued by a CLO to implement our
investment objective but have invested primarily by directly
purchasing (either in the primary or secondary markets) the equity
and junior debt tranches of CLOs. Structurally, CLOs are entities
that are formed to manage a portfolio of Senior Secured Loans. The
Senior Secured Loans within a CLO are limited to Senior Secured
Loans which meet specified credit and diversity criteria and are
subject to concentration limitations in order to create an
investment portfolio that is broadly assorted across different
Senior Secured Loans, borrowers, and industries, with limitations
on non-U.S. borrowers.
The CLOs in which we invest typically will be issued by special
purpose vehicles and will be predominantly collateralized against
pools of Senior Secured Loans. Such Senior Secured Loans typically
will be BB or B rated (non-investment grade or “junk”) and in
limited circumstances, unrated, Senior Secured Loans originated in
the U.S., with a first lien on the borrower’s assets. We invest in
new issue transactions in the primary market and transactions in
the secondary market.
We will identify potential investments using our Adviser’s market
knowledge, experience and industry relationships. Our Adviser’s
relationships with CLO collateral managers, underwriters and
trading desks will be used to source transactions. In determining
when to sell an investment, our Adviser will consider the following
factors: the performance of such investment, the expected
performance by evaluating the company if such investment is a
Senior Secured Loan or evaluating the pool of Senior Secured Loans
if such investment is in a CLO, current market conditions, our
capital needs, and other factors.
We seek to invest a majority of our assets in a broad portfolio of
cashflow CLOs and have currently invested a majority of our assets
in the equity and junior debt tranches of cashflow CLOs. The
underlying assets of cashflow CLOs are comprised primarily of
Senior Secured Loans. Therefore, there is a direct relationship
between the market for Senior Secured Loans and the market for
cashflow CLOs in which we will seek to invest. We invest so as to
obtain exposure across a relatively broad range of underlying
borrowers and credit ratings, sectors, CLO collateral managers, and
CLO maturity profiles. We also take into consideration any
correlation between different underlying securities. In order to
comply with diversification requirements
applicable to RICs, with respect to half of our investment
portfolio, our interest in any one investment will not exceed 5% of
the value of our gross assets, and with respect to the other half
of our portfolio, our interest in any one investment will not
exceed 25% of the value of our gross assets. By virtue of our
investments in cashflow CLOs, which will be predominantly
collateralized against pools of Senior Secured Loans, we expect to
be broadly invested with respect to credit exposure to any one
particular industry or borrower although we will have no
restrictions on the industry or borrower exposure of the underlying
assets and we do not operate as a “diversified” investment company
within the meaning of the 1940 Act. We do not invest in any CLOs or
investment companies managed by our Adviser or its affiliates. See
“Material U.S. Federal Income Tax Considerations” for our detailed
RIC diversification requirements.
As a stockholder of the Company, you will not be able to directly
enforce any rights and remedies in the event of a default of a
Senior Secured Loan. In the case of the equity and junior debt
tranches of CLO securities owned by the Company, the Company will
not be able to directly enforce any rights and remedies in the
event of a default of a Senior Secured Loan held by a CLO
vehicle.
Our Target Securities, and particularly our investments in the
equity and junior debt tranches of CLOs, are difficult to value by
virtue of the fact that they are not publicly traded or actively
traded on a secondary market but, instead, are traded on a
privately negotiated over-the-counter secondary basis by
institutional investors. As a result, we will value these
securities monthly at fair value as determined in good faith
pursuant to our valuation procedures.
We will be subject to certain regulatory restrictions in making our
investments. On January 13, 2020 we received a co-investment
exemptive order from the SEC, or the “Order,” which superseded a
prior co-investment exemptive order granted on February 10, 2014,
granting us the ability to negotiate terms other than price and
quantity of co-investment transactions with other funds managed or
owned by our Adviser or certain affiliates, including Prospect
Capital Corporation and PFLOAT, where co-investing would otherwise
be prohibited under the 1940 Act, subject to the conditions
included therein. Under the terms of the Order, a majority of our
independent directors who have no financial interest in the
transaction must make certain conclusions in connection with a
co-investment transaction, including that (1) the terms of the
proposed transaction, including the consideration to be paid, are
reasonable and fair to us and our stockholders and do not involve
overreaching of us or our stockholders on the part of any person
concerned and (2) the transaction is consistent with the interests
of our stockholders and is consistent with our investment objective
and strategies. The Order also imposes reporting and record keeping
requirements and limitations on transactional fees. We may only
co-invest with other funds managed or owned by our Adviser or
certain affiliates in accordance with such Order and existing
regulatory guidance. See “Certain Relationships and Related Party
Transactions-Allocation of Investments” in the statement of
additional information.
To seek to enhance our returns to our common stockholders, we may
borrow money from time to time at the discretion of our Adviser
within the levels permitted by the 1940 Act (which generally allows
us to incur indebtedness so long as our asset coverage ratio is at
least 300% with respect to and after incurring such indebtedness or
issue preferred stock so long as our asset coverage ratio is at
least 200% with respect to and after issuing such preferred stock)
when the terms and conditions available are favorable to long-term
investing and well-aligned with our investment strategy and
portfolio composition. In determining whether to borrow money, we
will analyze the maturity, covenant package and rate structure of
the proposed borrowings as well as the risks of such borrowings
compared to our investment outlook. As of June 30, 2022, we had,
approximately, $27.4 million of shares of 7.00% Series D Term
Preferred Stock due 2029 outstanding, $30.8 million of 6.625%
Series F Term Preferred Stock due 2027 outstanding, $36.8 million
of 6.250% Series G Term Preferred Stock due 2026 outstanding, $29.9
million of 6.000% Series H Term Preferred Stock due 2026
outstanding, $40.0 million of 6.125% Series I Term Preferred Stock
due 2028 outstanding, $39.5 million of 6.000% Series J Term
Preferred Stock due 2028 outstanding, $27.5 million of 6.375%
Series L Term Preferred Stock due 2029 outstanding, $40.0 million
of 7.000% Series K Cumulative Preferred Stock outstanding
(collectively, the “Preferred Stock”), $24.8 million under the
Facility outstanding and $30 million in aggregate principal amount
of our 2035 Notes outstanding and our asset coverage ratio, with
respect to the Preferred Stock, was approximately 260%. The table
below summarizes our asset coverage per unit as of June 30,
2022.
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|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Securities as of June 30, 2022(a)
|
|
Senior Securities |
Aggregate Amount Outstanding |
Asset Coverage per Unit |
Involuntary Liquidating Price per Preferred share |
Average market value per unit(b)
|
|
The Facility |
$ |
24,800,000 |
|
$ |
34,205 |
|
$ |
— |
|
$ |
— |
|
|
2035 Notes |
$ |
30,000,000 |
|
$ |
15,479 |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series D Term Preferred Stock Due 2029 |
$ |
27,351,625 |
|
$ |
65 |
|
$ |
25.00 |
|
$ |
25.37 |
|
|
Series F Term Preferred Stock Due 2027 |
$ |
30,835,700 |
|
$ |
65 |
|
$ |
25.00 |
|
$ |
25.33 |
|
|
Series G Term Preferred Stock Due 2026 |
$ |
36,800,000 |
|
$ |
65 |
|
$ |
25.00 |
|
$ |
25.26 |
|
|
Series H Term Preferred Stock Due 2026 |
$ |
29,900,000 |
|
$ |
65 |
|
$ |
25.00 |
|
$ |
25.07 |
|
|
Series I Term Preferred Stock Due 2028 |
$ |
40,000,000 |
|
$ |
65 |
|
$ |
25.00 |
|
$ |
24.99 |
|
|
Series J Term Preferred Stock Due 2028 |
$ |
39,500,000 |
|
$ |
65 |
|
$ |
25.00 |
|
$ |
24.75 |
|
|
Series L Term Preferred Stock Due 2029 |
$ |
27,500,000 |
|
$ |
65 |
|
$ |
25.00 |
|
$ |
24.37 |
|
|
Series K Cumulative Preferred Stock |
$ |
40,000,000 |
|
$ |
65 |
|
$ |
25.00 |
|
$ |
24.22 |
|
|
|
|
|
|
|
|
(a)The asset coverage ratio of the Facility is calculated as our
total assets, less all liabilities and indebtedness not represented
by senior securities, divided by the secured senior securities
balance of the Facility. The asset coverage ratio of the 2035 Notes
is calculated as our total assets, less all liabilities and
indebtedness not represented by senior securities, divided by the
secured senior securities balance of the Facility and the 2035
Notes. This asset coverage ratio is multiplied by $1,000 to
determine the Asset Coverage Per Unit for the Facility and the 2035
Notes. The asset coverage ratio for a class of senior securities
representing stock is calculated as our total assets, less all
liabilities and indebtedness not represented by senior securities,
divided by senior securities representing indebtedness plus the
aggregate of the involuntary liquidation preference of senior
securities which are a stock. With respect to the Preferred Stock,
the asset coverage per unit figure is expressed in terms of dollar
amounts per share of outstanding Preferred Stock (based on a per
share liquidation preference of $25). |
|
(b)Represents
the average daily closing market price per share of each respective
series of Preferred Stock for the respective periods listed on NYSE
from June 30, 2021 to June 30, 2022. For series that were not
outstanding at June 30, 2021, the average starts from the first day
of trading of that particular series.
|
On March 18, 2020, the Company announced a program for the
repurchase of up to $50 million worth of the outstanding shares of
the Company’s Preferred Stock in aggregate. The Company may, but is
not obligated to, repurchase its outstanding term Preferred Stock
in the open market from time to time upon the approval of the Board
of Directors. Under the repurchase program, the Company repurchased
18,748 Series A Term Preferred Stock, at an average net price of
$18.32 per share, 15,082 Series B Term Preferred Stock, at an
average net price of $18.25 per share, 52,901 Series C Term
Preferred Stock at an average net price of $18.29 per share, 1,000
Series D Term Preferred Stock, at an average net price of $16.93
per share, 60,684 Series E Term Preferred Stock, at an average net
price of $18.84 per share, and 64,652 Series F Term Preferred
Stock, at an average net price of $16.99 per share, for the year
ended June 30, 2020. In connection with our repurchased Preferred
Stock, the Company recognized a realized gain of $1,299,945, net of
previously unamortized deferred issuance costs of $190,339. On
February 1, 2021, our Board of Directors authorized a program for
the repurchase of up to $25 million worth of our outstanding shares
of our Preferred Stock in aggregate, pursuant to terms consistent
with those of the program announced in March 2020. Under the
repurchase program, we repurchased 13,170 shares of our Series A
Term Preferred Stock, at an average net price of $25.02 per share,
3,710 shares of our Series C Term Preferred Stock at an average net
price of $25.20 per share, 1,942 shares of our Series D Term
Preferred Stock, at an average net price of $25.27 per share,
17,642 shares of our Series E Term Preferred Stock, at an average
net price of $25.02 per share, and 1,920 Series F Term Preferred
Stock, at an average net price of $25.00 per share, from March 1,
2021 through March 5, 2021. In connection with our repurchased
Preferred Stock, the Company recognized a realized loss of $20,687,
net of previously unamortized deferred issuance costs of
$29,957.
On September 6, 2022, we entered into a
secured revolving credit facility (the “Facility”). The aggregate
commitment of the Facility is $40 million and is collateralized by
our CLO investments. The Facility matures on March 6, 2027 and
generally bears interest at the current 1 month SOFR Rate plus
3.25% subject to a SOFR floor of 0.25%. As of October 27,
2022, we had $33.8 million outstanding on the Facility.
Additionally, the lender charges a fee on the unused portion of the
credit facility equal to 0.375% per annum on the difference between
the commitment amount and the average daily funded amount of the
Facility. The agreement governing our Facility requires us to
comply with certain financial and operational covenants. These
covenants include restrictions on the level of indebtedness that we
are permitted to incur in relation to the value of our assets and a
minimum total net asset level that we are required to maintain. As
of October 27, 2022, we were in compliance with these
covenants. However, our continued compliance with these covenants
depends on many factors, some of
which are beyond our control. Accordingly, there are no assurances
that we will comply with the covenants in our Facility. Failure to
comply with these covenants would result in a default under the
Facility that, if we were unable to obtain a waiver from the
lenders thereunder, could result in an acceleration of repayments
under the Facility and thereby have a material adverse impact on
our business, financial condition and results of
operations.
On January 27, 2020, we issued $15 million
in aggregate principal amount of notes (the “2035 Notes”) in a
private placement to an institutional investor. On March 3, 2022,
we completed a further issuance of $15 million of the 2035 Notes in
a private placement to the same institutional investor. The 2035
Notes mature on March 1, 2035 and bear interest at a rate of 6.50%
per year, payable quarterly on March 31, June 30, September 30 and
December 31 of each year. As of October 27, 2022, $30 million
in aggregate principal amount of the 2035 Notes remained
outstanding.
The use of borrowed funds, such as through the Facility, or the
proceeds of notes, such as the 2035 Notes, or the proceeds of
preferred stock, such as the Preferred Stock, to make investments
has its own specific set of benefits and risks, and all of the
costs of borrowing funds or issuing preferred stock would be borne
by holders of our shares. See “Risk Factors-Risks Related to Our
Capital Structure and Leverage” for a discussion of the risks
inherent to employing leverage.
While a registered closed-end management investment company may
list its shares for trading in the public markets, we have
currently elected not to do so. We believe that a non-traded
structure is appropriate for the long-term nature of the assets in
which we invest. This structure allows us to operate with a
long-term view, similar to that of other types of private
investment funds-instead of managing to quarterly market
expectations-and to pursue our investment objective without
subjecting our investors to the daily share price volatility
associated with the public markets because our shares will not be
listed on a national securities exchange. To provide our
stockholders with limited liquidity, we intend to, but are not
obligated to, conduct quarterly repurchase offers pursuant to our
share repurchase program. We intend to limit the number of shares
to be repurchased in any calendar quarter to up to 2.5% of the
number of shares outstanding at the close of business on the last
day of the prior fiscal year. We may determine in the future to
conduct any future repurchase offers more or less frequently than
on a quarterly basis as well as for a greater or lesser amount of
our shares than currently expected, and we may suspend or terminate
the share repurchase program at any time. We expect to offer to
repurchase such shares at a price equal to the then current net
asset value per share of our common stock. This will be the only
method of liquidity that we offer prior to a liquidity event. Also,
if you invest through a fee-based program, also known as a wrap
account, of an investment dealer, your liquidity may be further
restricted by the terms and conditions of such program, which may
limit your ability to request the repurchase of your shares that
are held in such account. See “Share Repurchase Program.”
Therefore, stockholders may not be able to sell their shares
promptly or at a desired price.
Our shares are not currently listed on an exchange, and we do not
expect a public market to develop for them in the foreseeable
future, if ever.
We intend to pursue a liquidity event for our stockholders, such as
a public listing of our shares, following the completion of this
offering, subject to then-current market conditions. The completion
of a liquidity event is in the sole discretion of our Board of
Directors, and depending upon the event, may require stockholder
approval, and there can be no assurance that we will complete a
liquidity event at all. See “Liquidity Strategy” for a discussion
of what constitutes a liquidity event.
We commenced the initial public offering of our shares in 2013.
Since that time, we have filed post-effective amendments to our
prior registration statements that have allowed us to continue the
offering of our Shares. The current offering will terminate on the
earlier of (i) December 31, 2022 or (ii) the date upon which
150,000,000 shares of our common stock have been sold in the course
of our offerings, unless further extended by the Board of
Directors, in its sole discretion. As of October 27, 2022, we
had sold an aggregate of 45,933,910 shares of our common stock for
gross proceeds of approximately $661.5 million.
See “Investment Objective and Strategy” for additional information
regarding our investment strategy.
Market Opportunity
CLOs are investment vehicles that own a broadly assorted pool of
Senior Secured Loans. A CLO uses the cash flows from a broadly
assorted portfolio of Senior Secured Loans to service multiple
classes of rated debt securities, the proceeds of which together
with the junior capital tranches are used to fund the purchase of
the underlying Senior Secured Loans. A CLO is a special purpose
vehicle (typically formed in the Cayman Islands or another similar
foreign jurisdiction) formed to purchase the Senior Secured Loans
and issue rated debt securities and equity tranches and/or unrated
debt securities (generally treated as equity interests). The rated
debt tranches consist of long-term financing with specified
financing terms, including floating interest rates at a stated
spread to LIBOR or SOFR. See “Risk Factors-Risks Related to Our
Investments-Investments in foreign securities may involve
significant risks in addition to the risks inherent in U.S.
investments” and “Our financial results may be affected adversely
if one or more of our significant equity or junior debt investments
in a CLO vehicle defaults on its payment obligations or fails to
perform as we expect.”
In a typical CLO, as shown in the chart below, the capital
structure would include approximately 90% debt, with the remainder
comprising the junior most CLO securities, typically referred to as
the CLO’s equity tranche. Interest and principal repayment
cashflows derived from the pool of Senior Secured Loans are
allocated sequentially first to cover the operational and
administrative costs of the CLO, second to the debt service of the
highest ranking debt tranche, third to the debt service of the next
highest ranking debt tranche and so on until all obligations of the
CLO have been met. This sequential cashflow allocation is usually
referred to as the “payment waterfall.” The most subordinated
tranche of securities is therefore the most sensitive to defaults
and realized losses in relation to the underlying assets, and the
most senior tranche is the least sensitive to them.
The equity tranche represents the most junior tranche in the CLO
capital structure. The equity tranche is typically not rated and is
subordinated to the debt tranches. The holders of equity tranche
interests are typically entitled to any cash reserves that form
part of the structure at the point at which such reserves are
permitted to be released. The equity tranche captures available
payments at the bottom of the payment waterfall, after operational
and administrative costs of the CLO and servicing of the debt
securities. Economically, the equity tranche benefits from the
difference between the interest received from the Senior Secured
Loans and the interest paid to the holders of debt tranches of the
CLO structure. Should a default or decrease in expected payments to
a particular CLO occur, that deficiency typically first affects the
equity tranche in that holders of that position generally will be
the first to have their payments decreased by the
deficiency.
Debt tranches of CLOs typically are rated and have a stated coupon.
Equity tranches of CLOs are typically unrated and do not have a
stated coupon. Rather, payments to the equity tranches of CLOs are
dependent on the residual cashflows after all interest, fees and
expenses on the debt tranches have been paid. The equity tranche of
a CLO is the most sensitive to defaults and realized losses as it
is the most subordinated tranche in the CLO’s capital structure,
whereas CLO debt tranches are not impacted by defaults and realized
losses until total losses exceed the value of the equity tranche.
CLO payment provisions are detailed in a CLO’s indenture and are
referred to as the “priority of payments” or
“waterfall.”
Each tranche within a CLO has voting rights on any amendments that
would have a material effect on such tranche. Neither the debt
tranches nor equity tranche of CLOs have voting rights on the
management of the underlying Senior Secured Loan portfolio. The
holders of the equity tranches of CLOs typically have the right to
approve and/or replace the CLO collateral manager after such CLO
manager has triggered a default. The equity tranche of a CLO has
the ability to call the debt tranches following a non-call period.
Debt tranches of CLOs do not have the right to call the other CLO
security tranches.
We believe that the CLO market, including the U.S. Senior Secured
Loan markets have represented and continue to represent attractive
areas for investment. We believe that investments in the equity
securities and junior debt obligations of CLOs provide an efficient
mechanism for investing in the U.S. Senior Secured Loan market
because investments in CLOs
allow for us to invest in a highly diversified and levered pool of
assets in a cost efficient manner. We may choose not to invest in
Senior Secured Loans directly because our principle investment
strategy is to invest in the equity and junior debt tranches of
CLOs.
We are able to invest in equity securities and junior debt
obligations of CLOs that have leveraged exposure without the
execution costs of creating such a portfolio. Investments in the
more senior debt obligations of CLOs, on the other hand, do not
provide the same efficiencies in terms of leverage and do not have
the same equity exposure. We believe that while the U.S. Senior
Secured Loan market is relatively large, with Standard &
Poor’s estimating the total par value outstanding at approximately
$1.43 trillion as of September 30, 2022,(1)
this market remains largely inaccessible to a significant portion
of investors that are not lenders or approved
institutions.
An investment in a CLO offers access to a diversified and actively
managed or actively monitored portfolio of Senior Secured Loans in
a single investment. An investment in the equity class of a CLO
provides the potential for enhanced returns generated by the
difference between the yield on the underlying assets in the
portfolio and the cost of funding the rated debt
liabilities.
The most junior classes of all U.S. CLOs (typically referred to as
CLO equity classes) have delivered over 19% annual average cash
yields from January 2003 through December 2021, as shown in the
chart below,(2)
and, according to Wells Fargo, 98.1% of U.S. CLOs that have been
issued since 2000 and redeemed through March 2015, which is the
most recent date that is available for this data, have generated a
positive return to equity investors.(3)
Despite the historically favorable returns delivered by most junior
classes of U.S. CLOs, these investments have generated lower
returns during periods of extreme market volatility, particularly
as a result of events impacting the U.S. credit markets. See “Risk
Factors - Price declines in the markets for Target Securities,
especially equity and junior tranches of CLOs and Senior Secured
Loans, may adversely affect the fair value of our portfolio,
reducing our net asset value through increased net unrealized
depreciation.”
__________________________________
(1) Source:
S&P Capital IQ - S&P LSTA Leveraged Lending Review
3Q22.
(2) Source:
Citigroup Global Capital Markets Research – Citi US CLO Scorecard –
April 11, 2022; Citigroup Global Markets Research - 2012 Equity
Study Spreadsheet; Citigroup Global Markets Research - Global
Structured Credit Strategy - March 12, 2013.
(3) Source:
Wells Fargo Structured Products Research, Intex and data provided
by CLO Collateral Managers.
__________________________
Source: Citigroup Global Markets Research - Citi US CLO Scorecard –
April 11, 2022; Citigroup Global Markets Research - 2012 Equity
Study Spreadsheet; Citigroup Global Markets Research - Global
Structured Credit Strategy - March 12, 2013.
Cashflow transactions
The underlying assets of cashflow transactions may be either
actively managed by a CLO collateral manager, or structured as
static pools where few if any changes can be made to the initial
asset selection. We invest primarily in actively-managed
transactions where the portfolios will be managed according to
typically stringent investment guidelines set out at the inception
of the transaction. These guidelines likely will include specific
requirements determined by the rating agencies (Moody’s,
Standard & Poor’s, and/or Fitch), such as a portfolio
broadly invested by industry and issuer and weighted average rating
requirements on the Senior Secured Loans in the
portfolio.
Broad investment variety is a key feature of the portfolios of the
CLOs in which we invest, and is aimed at minimizing the effect of
potential credit deterioration. Typical guidelines require broad
investment variety by issuer and industry. Individual CLO
portfolios will generally consist of a large number of issuers in
various industries.
Returns to investors in the equity classes of CLOs depend on a
number of factors. One of the principal drivers is the number and
timing of defaults in the portfolio, as well as recovery rates on
any defaulted Senior Secured Loans. Other factors which contribute
to return performance are correlation among assets, portfolio
purchase price, repayment rate, reinvestment
interest rate, trading gains/losses, test levels, frequency of
payment on assets and liabilities, and timing of allocation of
cashflows.
The Senior Secured Loan market is characterized by various factors,
including:
•Seniority. A
Senior Secured Loan typically has a first lien, or sometimes second
lien, on the borrower’s assets and ranks senior in a borrower’s
capital structure to other forms of debt or equity. As such, that
loan maintains the senior-most claim on the borrower’s assets and
cash flow, and, we believe should, all other things being equal,
offer the prospect of a more stable and lower-risk investment
relative to other debt and equity securities issued by the
borrower.
•Consistent
long-term performance. Senior
Secured Loans have provided positive cash yields in all years since
1997, and only two full years (2008 and 2015) of negative returns
including mark-to-market volatility. Senior Secured Loans provided
a 2-year return of 7.5% in 2008 and 2009 despite the market
downturn.(4)
•Floating
rate instruments. A
Senior Secured Loan typically contains a floating interest rate
versus a fixed interest rate, which we believe provides some
measure of protection against the risk of increases in interest
rates and inflation. Also, the debt tranches of a CLO have floating
interest rates as well, which provides a partial matching of
changes in the interest rates on the CLO’s assets and
liabilities.
•Low
default-rate environment. The
default rate on all Senior Secured Loans included in the
S&P/LSTA Leveraged Loan Index has averaged 2.11% from January
1, 2003 through June 30, 2022.(5)
The S&P/LSTA Leveraged Loan Index reflects the market-weighted
performance of a selection of U.S. dollar-denominated institutional
Senior Secured Loans.
_______________________________________________________________________________
(4) Source:
S&P Capital IQ - Leveraged Loan Index Returns
Summary.
(5) Source:
S&P Capital IQ - S&P/LSTA Leveraged Loan Index Default
Rates.
In the current environment, we believe the above attributes are
particularly desirable.
We believe that the equity and junior debt tranches of CLO
securities in which we invest currently represent, as a class, an
opportunity to obtain attractive risk-adjusted investment returns.
We believe that a number of factors support this conclusion,
including:
•The
U.S. CLO market is relatively large, with a total outstanding
notional balance of approximately $980 billion as of September 30,
2022;(6)
•CLOs
are not significantly impacted solely by the same mark to market
volatility of Senior Secured Loans. Therefore, we believe a decline
in Senior Secured Loan prices similar to 2008, August 2011, and
March 2020 does not solely have a directly negative impact on CLOs
and provides CLOs an opportunity to acquire Senior Secured Loans at
discounted prices;
•CLOs
are typically subject to significant investment restrictions
resulting in diversified portfolios. Investment restrictions
include limitations on exposure to any one borrower, Senior Secured
Loan, or particular industry, requirements for minimum weighted
average spreads and minimum weighted average ratings, and
limitations on low rated Senior Secured Loans. Required diversity
tests typically result in the average Senior Secured Loan or issuer
representing less than 2% and no industry exceeding 15% of a CLO’s
portfolio;
•We
believe that investing in Target Securities requires high levels of
research and analysis. We believe that typically this analysis can
only be conducted by knowledgeable market participants, as the
nature of the analysis tends to be highly specialized;
and
•U.S.
CLO equity tranches have delivered over 19% average annual cash
yields from January 2003 through December 2021.(7)
_______________________________________________________________________________
(6) Source:
Kanerai.
(7) Source:
Citigroup Global Markets Research - Citi US CLO Scorecard – April
11, 2022; Citigroup Global Markets Research - 2012 Equity Study
Spreadsheet; Citigroup Global Markets Research - Global Structured
Credit Strategy - March 12, 2013.
We caution investors that the past performance described above is
not indicative of future returns and the results do not include
fees, expenses or taxes that a stockholder may incur. The results
described above may not be representative of our
portfolio.
Potential Competitive Strengths
We believe that we offer our investors the following potential
competitive strengths:
Established platform with seasoned investment professionals.
We will benefit from the wider resources of our Adviser through the
personnel it utilizes from Prospect Capital Management, which is
focused on sourcing, structuring, executing, monitoring and exiting
a broad range of investments. We believe these personnel possess
market knowledge, experience and industry relationships that enable
them to identify potentially attractive investment opportunities in
Target Securities.
Long-term investment horizon.
Unlike private equity and venture capital funds, we will not be
subject to standard periodic capital return requirements. Such
requirements typically stipulate that capital invested in these
funds, together with any capital gains on such investment, can be
invested only once and must be returned to investors after a
pre-determined time period. We believe our ability to make
investments with a longer-term view and without the capital return
requirements of traditional private investment vehicles will
provide us with greater flexibility to seek investments that can
generate attractive returns on invested capital.
Efficient tax structure.
As a regulated investment company, or “RIC,” we generally will not
be subject to U.S. federal income taxes on any ordinary income or
capital gains that we timely distribute to our stockholders as
dividends. Furthermore, tax-exempt investors in our securities who
do not finance their acquisition of our securities with
indebtedness should not be required to recognize unrelated business
taxable income, or “UBTI.” Although, as a RIC, we generally will
not be subject to U.S. federal income taxes on dividends we receive
from taxable entities and that we timely distribute to our
stockholders, any taxable entities we own generally will be subject
to U.S. federal and state income taxes on their income. As a
result, the net return to us on such investments that are held by
such subsidiaries will be reduced to the extent that the
subsidiaries are subject to income taxes.
Disciplined, income-oriented investment philosophy.
Our Adviser employs a conservative investment approach focused on
current income and long-term investment performance. This
investment approach involves a multi-stage selection process for
each investment opportunity, as well as ongoing monitoring of each
investment made, with particular emphasis on early detection of
deteriorating credit conditions at issuers of Senior Secured Loans
which could result in adverse portfolio developments. This strategy
is designed to maximize current income and minimize the risk of
capital loss while maintaining potential for long-term capital
appreciation.
Investment expertise across all levels of the corporate capital
structure.
We believe the personnel available to our Adviser have broad
expertise and experience investing in companies, managing
high-yielding debt and equity investments, and managing and
investing in Target Securities. We will attempt to capitalize on
this expertise in an effort to produce and maintain an investment
portfolio that will perform well in a broad range of economic
conditions.
Plan of Distribution
We commenced the initial public offering of
our shares in 2013. Since that time, we have filed post-effective
amendments to our prior registration statements that have allowed
us to continue the offering of our shares. The current offering
will terminate on the earlier of (i) December 31, 2022 or (ii) the
date upon which 150,000,000 shares of our common stock have been
sold in the course of our offerings, unless further extended by the
Board of Directors, in its sole discretion. As of October 27,
2022, we had sold an aggregate of 45,933,910 shares of our common
stock for gross proceeds of approximately $661.5 million. We sell
our shares of common stock with differing up-front sales loads.
Shares available to the general public are charged selling
commissions and dealer manager fees and are referred to as our
“Class R Shares.” Shares available to accounts managed by certain
registered investment advisers and broker-dealers that are managing
wrap or other fee-based accounts are charged dealer manager fees
but no selling commissions and are referred to as our “Class RIA
Shares.” Shares available for purchase (1) through certain
fee-based programs, also known as wrap accounts, of investment
dealers, (2) through certain participating broker-dealers that have
alternative fee arrangements with their clients, (3) through
certain registered investment advisers, (4) through bank trust
departments or any other organization or person authorized to act
in a fiduciary capacity for its clients or customers, such as an
endowment, foundation, or pension fund, or (5) to other
institutional investors are charged no selling commissions or
dealer manager fees and are referred to as our “Class I Shares.”
For example, you will pay (i) selling commissions of up to 6.0% and
dealer manager fees of up to 0.75% for the purchase of our Class R
shares, (ii) dealer manager fees of up to 0.75%, but no selling
commissions, for the purchase of our Class RIA shares and (iii) no
selling commissions or dealer manager fees for the purchase of our
Class I shares. We are offering to sell any combination of our
shares, with an aggregate number of shares up to the maximum
offering of shares. In no event will the aggregate selling
commissions and dealer manager fees exceed 6.75% of the gross
offering proceeds received in this offering. Regardless of the
sales load paid, each share of our common stock will have identical
rights with respect to voting and distributions, and will likewise
bear its own pro rata portion of our expenses and have the same net
asset value as each other share of our common stock. The minimum
permitted purchase is $1,000. Although we use “Class” designations
to indicate our differing sales load structures, the Company does
not operate as a multi-class fund. The dealer manager is not
required to sell any specific number
or dollar amount of shares but will use its best efforts to sell
the shares offered. In addition to the payment of selling
commissions and the dealer manager fee, so long as costs and
expenses are reasonable and documented and mutually agreed to by us
and the Dealer Manager in advance of incurring such costs, we will
reimburse the Dealer Manager for certain expenses as permitted by
FINRA Rule 5110. In some cases, we will pay these expenses
directly, but under no circumstances will these payments or
expenses, when added to the Dealer Manager Fee and sales
commission, exceed the greater of 8% of the gross offering proceeds
or the maximum allowed under FINRA Rule 5110.
Before making your investment decision, please consult with your
financial advisor regarding your account type and the classes of
shares you may be eligible to purchase.
We are currently offering our shares on a continuous basis at an
offering price of $12.39 per share; however, to the extent that our
net asset value increases, we will sell at a price necessary to
ensure that shares are not sold at a price per share, after
deduction of selling commissions and dealer manager fees, that is
below our net asset value per share. In the event of a decline in
our net asset value per share over the course of one month, we will
reduce our offering price accordingly. Promptly following any such
adjustment to the offering price per share, we will file a
prospectus supplement with the SEC disclosing the adjusted offering
price, and we will also post the updated information on our website
at
www.priorityincomefund.com
(which is not intended to be an active hyperlink).
Preferred Capital Securities, LLC acts as the Dealer Manager in
connection with the sale of shares registered in this offering. The
Dealer Manager is not an affiliate of our Adviser. To purchase
shares in this offering, you must complete and sign a subscription
agreement (in the form attached to this prospectus as Appendix A)
for a specific dollar amount equal to or greater than that share
class’ investment minimum and pay such amount at the time of
subscription. You should make your check payable to “Priority
Income Fund, Inc.” Subscriptions will be effective only upon
our acceptance, and we reserve the right to reject any subscription
in whole or in part. See “—How to Subscribe.”
How to Subscribe
Investors seeking to purchase our shares should proceed as
follows:
•Read
this entire prospectus and any appendices and supplements
accompanying this prospectus.
•Complete
the execution copy of the subscription agreement provided by your
financial representative. A specimen copy of the subscription
agreement, including instructions for completing it, is included in
this prospectus as Appendix A.
•Deliver
a check for the full purchase price of the shares being subscribed
for made out to “Priority Income Fund, Inc.,” along with the
completed subscription agreement, to the selected broker-dealer or
registered investment adviser. The selected broker-dealer or
registered investment adviser, as the case may be, should deliver
or mail your check and subscription agreement to:
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Via Mail: |
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Via Express/Overnight Delivery: |
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Priority Income Fund, Inc. |
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Priority Income Fund, Inc. |
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c/o Preferred Capital Securities, LLC |
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c/o Preferred Capital Securities, LLC |
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P.O. Box 219768 |
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430 West 7th Street |
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Kansas City, MO 64121-9768 |
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Kansas City, MO 64105-1407 |
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866-655-3650 |
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866-655-3650 |
After you have satisfied the applicable minimum purchase
requirement, additional purchases must be in increments of $500,
except for purchases made pursuant to our distribution reinvestment
plan.
By executing the subscription agreement and paying the total
purchase price for the shares subscribed for, each investor attests
that he meets the requirements as stated in the subscription
agreement and agrees to be bound by all of its terms.
Subscriptions will be effective only upon our acceptance, and we
reserve the right to reject any subscription in whole or in part.
Subscriptions will be accepted or rejected within 30 days of
receipt by us and, if rejected, all funds shall be returned to
subscribers within such timeframe without deduction for any
expenses.
An approved trustee must process and forward to us subscriptions
made through IRAs, Keogh plans and 401(k) plans. In the case of
investments through IRAs, Keogh plans and 401(k) plans, we will
send the confirmation and notice of our acceptance to the
trustee.
Use of Proceeds
We intend to use substantially all of the proceeds from this
offering, net of expenses, to make investments, with an emphasis on
current income in accordance with our investment objective and
using the strategies described in this prospectus. Those
investments may take the form of the purchase of Target Securities.
The remainder we expect to be used to reduce then-outstanding
obligations under the Facility, to pay interest on, or repurchase
from time to time, our outstanding shares of preferred stock, and
for general corporate purposes. There can be no assurance we will
be able to sell all the shares we are registering. If we sell only
a portion of the shares we are registering, we may be unable to
achieve our investment objective or provide variation in our
portfolio, including the variation necessary to meet the asset
diversification requirements applicable to RICs. See “Risk Factors
- Federal Income Tax Risks.”
We estimate that it will take up to three months for us to
substantially invest the net proceeds from each closing of this
continuous offering, depending on the availability of attractive
opportunities and market conditions. However, we can offer no
assurance that we will be able to achieve this goal. Pending such
use, we will invest the net proceeds of this offering primarily in
cash, cash equivalents, U.S. government securities, money market
funds, repurchase agreements and high-quality debt instruments
maturing in one year or less from the time of investment,
consistent with our election to be taxed as a RIC. See “Use of
Proceeds.”
Share Repurchase Program
Our shares are not currently listed on any securities exchange, and
we do not expect a public market for them to develop in the
foreseeable future, if ever. Therefore, stockholders should not
expect to be able to sell their shares promptly or at a desired
price.
To provide our stockholders with limited liquidity, we intend to
conduct quarterly tender offers pursuant to our share repurchase
program. The first such tender offer commenced in May 2015 and the
repurchase occurred in connection with our July 10, 2015 weekly
closing. The following table reflects certain information regarding
the tender offers we have conducted to date.
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Ended |
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Repurchase Date |
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Shares Repurchased |
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Percentage of Shares Tendered That Were Repurchased |
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Repurchase Price Per Share |
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Aggregate Consideration for Repurchased Shares |
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For year ended June 30, 2017 |
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June 30, 2016 |
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July 26, 2016 |
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65,696 |
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100.00 |
% |
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$ |
14.24 |
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$ |
935,513 |
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September 30, 2016 |
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November 3, 2016 |
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66,998 |
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100.00 |
% |
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13.86 |
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928,594 |
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December 31, 2016 |
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January 25, 2017 |
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59,538 |
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100.00 |
% |
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14.70 |
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875,211 |
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March 31, 2017 |
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April 27, 2017 |
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195,988 |
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57.90 |
% |
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14.54 |
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2,849,662 |
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Total for year ended June 30, 2017 |
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388,220 |
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5,588,980 |
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For year ended June 30, 2018 |
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June 30, 2017 |
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July 31, 2017 |
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213,636 |
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79.39 |
% |
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14.46 |
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3,089,170 |
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September 30, 2017 |
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October 27, 2017 |
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235,220 |
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100.00 |
% |
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14.10 |
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3,316,611 |
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December 31, 2017 |
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January 26, 2018 |
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272,534 |
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91.22 |
% |
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13.87 |
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3,780,039 |
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March 31, 2018 |
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April 30, 2018 |
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289,237 |
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36.51 |
% |
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13.78 |
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3,985,681 |
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Total for year ended June 30, 2018 |
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1,010,627 |
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14,171,501 |
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For year ended June 30, 2019 |
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June 30, 2018 |
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July 27, 2018 |
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306,581 |
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62.16 |
% |
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13.50 |
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4,138,842 |
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September 30, 2018 |
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November 1, 2018 |
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322,429 |
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53.07 |
% |
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13.24 |
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4,268,965 |
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December 31, 2018 |
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January 25, 2019 |
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323,492 |
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73.11 |
% |
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13.07 |
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4,228,024 |
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March 31, 2019 |
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April 29, 2019 |
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331,607 |
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69.19 |
% |
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13.42 |
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4,450,171 |
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Total for year ended June 30, 2019 |
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1,284,109 |
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17,086,002 |
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Quarter Ended |
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Repurchase Date |
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Shares Repurchased |
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Percentage of Shares Tendered That Were Repurchased |
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Repurchase Price Per Share |
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Aggregate Consideration for Repurchased Shares |
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For year ended June 30, 2020 |
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June 30, 2019 |
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July 30, 2019 |
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341,354 |
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39.93 |
% |
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13.03 |
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4,447,835 |
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September 30, 2019 |
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October 25, 2019 |
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370,981 |
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33.90 |
% |
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12.76 |
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4,733,715 |
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December 31, 2019 |
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January 27, 2020 |
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404,532 |
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42.90 |
% |
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12.55 |
|
|
5,076,868 |
|
|
March 31, 2020 |
|
April 28, 2020 |
|
478,340 |
|
|
57.43 |
% |
|
10.75 |
|
|
5,141,523 |
|
|
Total for year ended June 30, 2020 |
|
1,595,207 |
|
|
|
|
|
|
19,399,941 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For year ended June 30, 2021 |
|
|
|
|
|
|
|
|
|
June 30, 2020 |
|
July 27, 2020 |
|
470,321 |
|
|
62.22 |
% |
|
$ |
10.59 |
|
|
$ |
4,980,700 |
|
|
September 30, 2020 |
|
October 28, 2020 |
|
381,283 |
|
|
31.07 |
% |
|
10.35 |
|
|
3,946,290 |
|
|
December 31, 2020 |
|
January 25, 2021 |
|
352,720 |
|
|
35.59 |
% |
|
11.62 |
|
|
4,098,605 |
|
|
March 31, 2021 |
|
April 27, 2021 |
|
360,479 |
|
|
32.28 |
% |
|
11.95 |
|
|
4,307,720 |
|
|
Total for year ended June 30, 2021 |
|
1,564,803 |
|
|
|
|
|
|
17,333,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For year ended June 30, 2022 |
|
|
|
|
|
|
|
|
|
June 30, 2021 |
|
July 28, 2021 |
|
375,861 |
|
|
35.91 |
% |
|
$ |
12.17 |
|
|
$ |
4,574,228 |
|
|
September 30, 2021 |
|
October 27, 2021 |
|
377,475 |
|
|
36.90 |
% |
|
12.46 |
|
|
4,700,039 |
|
|
December 31, 2021 |
|
January 31, 2022 |
|
384,510 |
|
|
36.17 |
% |
|
12.69 |
|
|
4,979,428 |
|
|
March 31, 2022 |
|
April 24, 2022 |
|
1,263,700 |
|
|
70.44 |
% |
|
12.77 |
|
|
16,137,449 |
|
|
Total for year ended June 30, 2022 |
|
2,401,546 |
|
|
|
|
|
|
30,391,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For year ended June 30, 2023 |
|
|
|
|
|
|
|
|
|
June 30, 2022 |
|
August 2, 2022 |
|
848,423 |
|
|
100.00 |
% |
|
$ |
12.08 |
|
|
$ |
10,248,950 |
|
|
Total for year ended June 30, 2023 |
|
848,423 |
|
|
|
|
|
|
10,248,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
On a quarterly basis, we intend to offer to repurchase shares on
such terms as may be determined by our Board of Directors unless,
in the judgment of our Board of Directors, such repurchases would
not be in our best interests or in the best interests of our
stockholders, or would violate applicable law. In months in which
we repurchase shares, we will conduct repurchases on the same date
that we hold our first closing in such month for the sale of shares
in this offering. We will conduct such repurchase offers in
accordance with the requirements of Regulation 14E and
Rule 13e-4 under the Exchange Act and the 1940 Act. Any offer
to repurchase shares will be conducted solely through tender offer
materials mailed to each stockholder and is not being made through
this prospectus.
We intend to limit the number of shares to be repurchased in any
calendar quarter to up to 2.5% of the number of shares outstanding
at the close of business on the last day of the prior fiscal year.
We may determine in the future to conduct any future repurchase
offers more or less frequently than on a quarterly basis as well as
for a greater or lesser amount of our shares than currently
expected, and we may suspend or terminate the share repurchase
program at any time. We expect to offer to repurchase such shares
at a price equal to the then current net asset value per share of
our common stock.
In connection with its consideration of whether to repurchase
shares, our Board of Directors will consider any requests it has
received from stockholders. If the amount of repurchase requests
exceeds the number of shares we seek to repurchase, we will
repurchase shares on a pro-rata basis (subject to odd-lot
priority). As a result, we may repurchase less than the full amount
of shares that you request to have repurchased. Further, we will
not be obligated to repurchase shares if doing so would violate
restrictions on distributions under applicable federal or Maryland
law prohibiting distributions that would cause us to fail to meet
statutory tests of solvency. If we do not repurchase the full
amount of your shares that you have requested to be repurchased, or
we determine not to make repurchases of our shares, you may not be
able to dispose of your shares, even if we under-perform. Any
periodic repurchase offers will be subject in part to our available
cash and compliance with the RIC qualification and diversification
rules promulgated under the Code and the 1940 Act.
While we intend to conduct quarterly repurchases of our shares as
described above, we are not required to do so. If you invest
through a fee-based program, also known as a wrap account, of an
investment dealer, your liquidity may be further restricted by the
terms and conditions of such program, which may limit your ability
to request the repurchase of your shares that are held in such
account. See “Share Repurchase Program.”
Liquidity Strategy
We intend to pursue a liquidity event for our stockholders, such as
a public listing of our shares, following the completion of this
offering, subject to then-current market conditions. The completion
of a liquidity event is in the sole discretion of our Board of
Directors, and depending upon the event, may require stockholder
approval, and there can be no assurance that we will complete a
liquidity event at all. The current offering will terminate on the
earlier of (i) December 31, 2022 or (ii) the date upon which
150,000,000 shares of our common stock have been sold in the course
of our offerings, unless further extended by the Board of
Directors, in its sole discretion. As of October 27, 2022, we
had sold an aggregate of 45,933,910 shares of our common stock for
gross proceeds of approximately $661.5 million. This offering will
be complete when we have sold the maximum number of shares offered
hereby, or earlier in the event we determine in our sole discretion
to cease offering additional shares for sale to investors. A
liquidity event could include, among other things, (1) the
sale of all or substantially all of our assets either on a complete
portfolio basis or individually followed by a liquidation,
(2) a listing of our shares on a national securities exchange
or (3) a merger or another transaction approved by our Board
of Directors in which our stockholders will receive cash or shares
of a publicly traded company. We refer to the aforementioned
scenarios as “liquidity events.” While our intention is to pursue a
liquidity event following the completion of this offering, the
completion of a liquidity event is in the sole discretion of our
Board of Directors, and depending upon the event, may require
stockholder approval, and there can be no assurance that a suitable
transaction will be available or that market conditions will permit
a liquidity event. As a result, a liquidity event may not occur at
all. In making a determination of what type of liquidity event is
in the best interest of our stockholders, our Board of Directors,
including our independent directors, may consider a variety of
criteria, including, but not limited to, portfolio diversification,
portfolio performance, our financial condition, potential access to
capital as a listed company, market conditions for the sale of our
assets or listing of our shares, internal management considerations
and the potential for stockholder liquidity. If we determine to
pursue a listing of our shares on a national securities exchange in
the future, at that time we may consider either an internal or an
external management structure.
Prior to the completion of a liquidity event, our share repurchase
program may provide a limited opportunity for you to have your
shares repurchased, subject to certain restrictions and
limitations, at a price which may reflect a discount from the
purchase price you paid for the shares being repurchased. See
“Share Repurchase Program” for a detailed description of our share
repurchase program.
Advisory Fees
Our Adviser is compensated for its services. Under the Investment
Advisory Agreement, our Adviser is entitled to a fee consisting of
two components—a base management fee and an incentive fee. When we
determine to use leverage, as is the case with the issuance of
preferred stock, the fees paid to the Adviser for investment
advisory services are higher than if we did not use leverage
because the fees paid are calculated based on total assets, which
includes assets attributable to leverage. The base management fee
is calculated at an annual rate of 2.0% of our total assets. The
base management fee is payable quarterly in arrears and is
calculated based on the average value of our total assets as of the
end of the two most recently completed calendar quarters. The
subordinated incentive fee, which we refer to as the subordinated
incentive fee on income, will be calculated and payable quarterly
in arrears based upon our “pre-incentive fee net investment income”
for the immediately preceding quarter and will be subordinated to a
fixed preferred return on the value of our net assets at the end of
the immediately preceding calendar quarter equal to 1.5% per
quarter, or an annualized rate of 6.0%. See “Investment Advisory
Agreement—Overview of Our Adviser—Advisory Fees.”
Administration
We have entered into an administration agreement, or the
“Administration Agreement,” under which we have agreed to reimburse
Prospect Administration for our allocable portion of overhead and
other expenses incurred by it in performing its obligations under
the Administration Agreement, including furnishing us with office
facilities, equipment and clerical, bookkeeping and record keeping
services at such facilities, as well as providing us with other
administrative services. Prospect Administration is controlled by
Prospect Capital Management. See “Administration
Agreement.”
Conflicts of Interest
Our Adviser and certain of its affiliates may experience conflicts
of interest in connection with the management of our business
affairs, including, but not limited to, the following:
•The
directors, officers and other personnel of our Adviser and its
affiliates allocate their time between advising us and managing
other investment activities and business activities in which they
may be involved, including managing and operating Prospect Capital
Corporation;
•The
compensation payable by us to our Adviser and other affiliates will
be approved by our Board of Directors consistent with the exercise
of the requisite standard of care applicable to directors under
Maryland law and our charter and bylaws. Such compensation is
payable, in most cases, whether or not our stockholders receive
distributions;
•We
will compete with certain affiliates for investments, including
Prospect Capital Corporation and PFLOAT, subjecting our Adviser and
its affiliates to certain conflicts of interest in evaluating the
suitability of investment opportunities and making or recommending
acquisitions on our behalf;
•Regardless
of the quality of the assets acquired or the services provided to
us, or whether we make distributions to our stockholders, our
Adviser will receive base management fees and reimbursement of
routine non-compensation overhead expenses in connection with the
management of our portfolio, such as expenses incurred by Prospect
Administration or us in connection with administering our business,
including expenses incurred by Prospect Administration in
performing administrative services for us, and the reimbursement of
the compensation of our Chief Financial Officer, Chief Compliance
Officer, Treasurer and Secretary and other administrative personnel
paid by Prospect Administration, subject to the limitations
included in the Administration Agreement, and may receive
subordinated incentive fees in connection with the generation of
net investment income;
•We
may compete with other funds managed by affiliates of our Adviser
for investment opportunities, subjecting our Adviser and its
affiliates to certain conflicts of interest in evaluating the
suitability of investment opportunities and making or recommending
acquisitions to us;
•From
time to time, to the extent consistent with the 1940 Act and the
rules and regulations promulgated thereunder, we and other clients
(if any) for which our Adviser provides investment management
services or carries on investment activities may make investments
at different levels of an investment entity’s capital structure or
otherwise in different classes of an issuer’s securities. These
investments may inherently give rise to conflicts of interest or
perceived conflicts of interest between or among the various
classes of securities that may be held by us and such other
clients;
•Our
Adviser and its respective affiliates may give advice and recommend
securities to other clients which may differ from advice given to,
or securities recommended or bought for, us, even though their
investment objective may be similar to ours;
•Prospect
Capital Management and its affiliates may have existing business
relationships or access to material, non-public information that
would prevent our Adviser from recommending certain investment
opportunities that would otherwise fit within our investment
objective;
•Our
Adviser and its affiliates are not restricted from forming
additional investment funds, from entering into other investment
advisory relationships or from engaging in other business
activities, even though such activities may be in competition with
us and/or may involve substantial time and resources of our Adviser
or its affiliates. Affiliates of our Adviser, whose primary
business includes the origination of investments, engage in
investment advisory business with accounts that compete with us.
Affiliates of our Adviser have no obligation to make their
originated investment opportunities available to us;
and
•To
the extent permitted by the 1940 Act and staff interpretations, our
Adviser may seek to have us and one or more other investment
accounts managed or owned by our Adviser or certain of its
affiliates participate in an investment opportunity. The Order
permitting us to co-invest with other funds managed or owned by our
Adviser or certain affiliates grants us the ability to negotiate
terms other than price and quantity of co-investment transactions
with other funds managed or owned by our Adviser or certain
affiliates, including Prospect Capital Corporation and PFLOAT,
where co-investing would otherwise be prohibited by the 1940 Act,
subject to the conditions included therein. Under the terms of the
Order, a majority of our independent directors who have no
financial interest in the transaction must make certain conclusions
in connection with a co-investment transaction, including that (1)
the terms of the proposed transaction, including the consideration
to be paid, are reasonable and fair to us and our stockholders and
do not involve overreaching of us or our stockholders on the part
of any person concerned and (2) the transaction is consistent with
the interests of our stockholders and is consistent with our
investment objective and strategies. The Order also imposes
reporting and record keeping requirements and limitations on
transactional fees. We may only co-invest with other funds managed
or owned by our Adviser or certain affiliates in accordance with
such Order and existing regulatory guidance. See “Certain
Relationships and Related Party Transactions—Allocation of
Investments” in the statement of additional information. These
co-investment transactions may give rise to conflicts of interest
or perceived conflicts of interest among us and the other
participating accounts. To mitigate these conflicts, our Adviser
and its affiliates will seek to allocate portfolio transactions for
all of the participating investment accounts, including us, on a
fair and equitable basis, taking into account such factors as the
relative amounts of capital available for new
investments, the applicable investment programs and portfolio
positions, the clients for which participation is appropriate and
any other factors deemed appropriate.
Available Information
We file periodic reports, proxy statements and other information
with the SEC. This information will be available on the SEC’s
website at
www.sec.gov.
This information will also be available free of charge by
contacting us at 10 East 40th Street,
42nd Floor,
New York, New York, 10016 or on our website at
www.priorityincomefund.com
(which is not intended to be an active hyperlink). These reports
should not be considered a part of or as incorporated by reference
into this prospectus, or the registration statement of which this
prospectus is a part.
Distributions
Subject to our Board of Directors’ discretion and applicable legal
restrictions, we intend to authorize and declare ordinary cash
distributions on a quarterly basis and pay such distributions on a
monthly basis. We will then calculate each stockholder’s specific
distribution amount for the period using weekly record dates with
each stockholder eligible to receive distributions beginning the
week we accept the stockholder’s order for our shares. Prior to the
termination of the expense support and conditional reimbursement
agreement, a portion of or substantially all of our distributions
had resulted from expense support payments provided by our Adviser
that may be subject to repayment by us within three years if
certain conditions are met. You should understand that
reimbursements to our Adviser (if any such reimbursements are made)
may reduce the future distributions that you would otherwise be
entitled. There can be no assurance that we will achieve the
performance necessary to sustain our distributions or that we will
be able to pay distributions at all. See “Distributions-Conditional
Obligation to Reimburse the Adviser Pursuant to Terminated Expense
Support Agreement.” From time to time, we may also pay interim
special distributions in cash or in our shares at the discretion of
our Board of Directors. For example, our Board of Directors may
periodically declare share distributions in order to reduce our net
asset value per share if necessary to ensure that we do not sell
shares at a price below net asset value per share. Our
distributions may exceed our earnings. Therefore, portions of the
distributions that we make may be a return of the money that you
originally invested and represent a return of capital to you for
tax purposes. Such a return of capital is not immediately taxable,
but reduces your tax basis in our shares, which may result in
higher taxes for you even if your shares are sold at a price below
your original investment. Each year a statement on
Form 1099-DIV identifying the source of the distribution will
be mailed to our stockholders. There can be no assurance that we
will be able to pay distributions at a specific rate or at all. See
“Material U.S. Federal Income Tax Considerations.”
We intend to make our ordinary distributions in the form of
additional shares pursuant to our distribution reinvestment plan,
unless shareholders elect to receive their distributions in cash.
Any distributions reinvested under the plan will nevertheless
remain taxable to a U.S. stockholder. If stockholders hold shares
in the name of a broker or financial intermediary, they should
contact the broker or financial intermediary if they wish to
receive distributions in cash.
Our current regular weekly cash distribution amount is $0.02014 per
share as of June 30, 2022, and our four special distributions were
$0.06750, $0.07000, $0.070625 and $0.071250 which were declared
during the year ended June 30, 2022. Based on our most recent
public offering price of $12.39 per Class R shares as of September
30, 2022 and our latest weekly cash and quarterly bonus
distributions of $0.02014 and $0.071875, respectively, the
annualized distribution rate to our stockholders as of
October 27, 2022 was approximately 10.8%. The annualized
distribution rate to our stockholders does not represent an actual
investment return to our stockholders and may include income,
realized capital gains and a return of investors’ capital. Our
annualized distribution rate to our stockholders is subject to
change and in the future may be greater or less than the annualized
distribution rate set forth above. See “Financial Highlights” and
“Distributions.”
Portfolio Update
As of June 30, 2022, our investment portfolio consisted of
interests in 182 investments. The following is our investment
portfolio as of June 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule of Investments |
|
As of June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Investments(1)(5)(9)
|
|
Investment |
|
Estimated Yield(2)/Interest
Rate
|
|
Legal Maturity |
|
Acquisition date |
|
Principal Amount |
|
Amortized Cost |
|
Fair Value(3)
Level
3
|
|
% of Net Assets |
|
Collateralized Loan Obligation - Equity Class (Cayman
Islands) |
|
Adams Mill CLO Ltd.(6)(7) |
|
Subordinated Notes |
|
— |
% |
|
7/15/2026 |
|
7/3/2014 |
|
$ |
500,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIMCO CLO 11, Ltd. |
|
Subordinated Notes |
|
22.07 |
% |
|
10/17/2034 |
|
4/4/2022 |
|
5,000,000 |
|
|
4,872,394 |
|
|
4,863,387 |
|
|
0.9 |
% |
|
Apidos CLO XVIII-R |
|
Subordinated Notes |
|
12.25 |
% |
|
10/22/2030 |
|
9/26/2018 |
|
410,000 |
|
|
496,976 |
|
|
390,154 |
|
|
0.1 |
% |
|
Apidos CLO XX |
|
Subordinated Notes |
|
29.05 |
% |
|
7/16/2031 |
|
3/4/2020 |
|
12,500,000 |
|
|
6,799,271 |
|
|
7,551,592 |
|
|
1.4 |
% |
|
Apidos CLO XXI(6)(7) |
|
Subordinated Notes |
|
— |
% |
|
7/19/2027 |
|
5/13/2015 |
|
5,000,000 |
|
|
3,070,605 |
|
|
— |
|
|
— |
% |
|
Apidos CLO XXII |
|
Subordinated Notes |
|
20.69 |
% |
|
4/21/2031 |
|
9/17/2015 |
|
9,894,611 |
|
|
6,403,429 |
|
|
6,986,707 |
|
|
1.3 |
% |
|
Apidos CLO XXIV |
|
Subordinated Notes |
|
27.84 |
% |
|
10/21/2030 |
|
5/17/2019 |
|
12,214,397 |
|
|
6,715,689 |
|
|
7,472,318 |
|
|
1.4 |
% |
|
Apidos CLO XXVI |
|
Subordinated Notes |
|
17.82 |
% |
|
7/18/2029 |
|
7/25/2019 |
|
6,000,000 |
|
|
4,464,440 |
|
|
4,531,189 |
|
|
0.9 |
% |
|
Babson CLO Ltd. 2015-I |
|
Subordinated Notes |
|
8.63 |
% |
|
1/20/2031 |
|
4/1/2015 |
|
3,400,000 |
|
|
2,098,394 |
|
|
1,499,617 |
|
|
0.3 |
% |
|
Barings CLO Ltd. 2018-III(6) |
|
Subordinated Notes |
|
— |
% |
|
7/20/2029 |
|
10/10/2014 |
|
397,600 |
|
|
174,479 |
|
|
116,086 |
|
|
0.0 |
% |
|
BlueMountain CLO 2012-2 Ltd.(6)(7) |
|
Subordinated Notes |
|
— |
% |
|
11/20/2028 |
|
1/7/2015 |
|
3,000,000 |
|
|
858,325 |
|
|
— |
|
|
— |
% |
|
BlueMountain CLO 2013-2 Ltd. |
|
Subordinated Notes |
|
0.55 |
% |
|
10/22/2030 |
|
10/1/2015 |
|
1,900,000 |
|
|
1,423,539 |
|
|
968,652 |
|
|
0.2 |
% |
|
BlueMountain CLO XXVI Ltd. |
|
Subordinated Notes |
|
21.27 |
% |
|
10/20/2034 |
|
11/18/2021 |
|
8,906,000 |
|
|
7,480,440 |
|
|
7,029,595 |
|
|
1.3 |
% |
|
BlueMountain CLO XXVIII Ltd. |
|
Subordinated Notes |
|
22.39 |
% |
|
4/17/2034 |
|
4/1/2022 |
|
3,300,000 |
|
|
2,832,329 |
|
|
2,770,842 |
|
|
0.5 |
% |
|
BlueMountain CLO XXIX Ltd. |
|
Subordinated Notes |
|
22.25 |
% |
|
7/25/2034 |
|
12/15/2021 |
|
6,000,000 |
|
|
5,405,324 |
|
|
5,182,363 |
|
|
1.0 |
% |
|
BlueMountain CLO XXXI Ltd. |
|
Subordinated Notes |
|
23.22 |
% |
|
4/19/2034 |
|
4/28/2022 |
|
5,000,000 |
|
|
4,021,776 |
|
|
3,862,073 |
|
|
0.7 |
% |
|
BlueMountain CLO XXXII Ltd. |
|
Subordinated Notes |
|
21.64 |
% |
|
10/16/2034 |
|
2/18/2022 |
|
6,000,000 |
|
|
5,081,190 |
|
|
4,842,432 |
|
|
0.9 |
% |
|
BlueMountain CLO XXXIV Ltd. |
|
Subordinated Notes |
|
22.23 |
% |
|
4/20/2035 |
|
3/23/2022 |
|
5,700,000 |
|
|
5,210,439 |
|
|
4,925,047 |
|
|
0.9 |
% |
|
BlueMountain Fuji US CLO II Ltd. |
|
Subordinated Notes |
|
12.45 |
% |
|
10/21/2030 |
|
8/22/2017 |
|
2,500,000 |
|
|
2,170,681 |
|
|
1,848,795 |
|
|
0.3 |
% |
|
California Street CLO IX, Ltd. |
|
Preference Shares |
|
25.58 |
% |
|
7/16/2032 |
|
12/13/2019 |
|
4,670,000 |
|
|
2,212,092 |
|
|
2,318,847 |
|
|
0.4 |
% |
|
Carlyle Global Market Strategies CLO 2013-1, Ltd. |
|
Subordinated Notes |
|
7.71 |
% |
|
8/14/2030 |
|
6/23/2016 |
|
17,550,000 |
|
|
11,489,607 |
|
|
8,388,496 |
|
|
1.6 |
% |
|
Carlyle Global Market Strategies CLO 2013-4, Ltd. |
|
Income Notes |
|
9.42 |
% |
|
1/15/2031 |
|
12/22/2016 |
|
11,839,488 |
|
|
6,998,756 |
|
|
5,532,762 |
|
|
1.0 |
% |
|
Carlyle Global Market Strategies CLO 2014-1, Ltd. |
|
Income Notes |
|
18.29 |
% |
|
4/17/2031 |
|
2/25/2016 |
|
12,870,000 |
|
|
7,977,720 |
|
|
8,071,750 |
|
|
1.5 |
% |
|
Carlyle Global Market Strategies CLO 2014-3-R, Ltd. |
|
Subordinated Notes |
|
10.47 |
% |
|
7/28/2031 |
|
5/23/2018 |
|
15,000,000 |
|
|
12,697,347 |
|
|
10,301,924 |
|
|
1.9 |
% |
|
Carlyle Global Market Strategies CLO 2016-1, Ltd. |
|
Subordinated Notes |
|
11.49 |
% |
|
4/20/2034 |
|
3/16/2016 |
|
6,844,556 |
|
|
6,073,361 |
|
|
5,228,773 |
|
|
1.0 |
% |
|
Carlyle Global Market Strategies CLO 2016-3, Ltd. |
|
Subordinated Notes |
|
13.53 |
% |
|
7/20/2034 |
|
8/8/2016 |
|
3,245,614 |
|
|
2,753,921 |
|
|
2,643,114 |
|
|
0.5 |
% |
|
Carlyle Global Market Strategies CLO 2017-2, Ltd. |
|
Subordinated Notes |
|
31.04 |
% |
|
7/21/2031 |
|
1/4/2022 |
|
4,450,000 |
|
|
2,367,891 |
|
|
2,311,461 |
|
|
0.4 |
% |
|
Carlyle Global Market Strategies CLO 2017-4, Ltd. |
|
Income Notes |
|
27.73 |
% |
|
1/15/2030 |
|
10/14/2021 |
|
9,107,000 |
|
|
5,092,682 |
|
|
4,848,127 |
|
|
0.9 |
% |
|
Carlyle Global Market Strategies CLO 2017-5, Ltd. |
|
Subordinated Notes |
|
8.58 |
% |
|
1/22/2030 |
|
12/18/2017 |
|
10,000,000 |
|
|
8,831,000 |
|
|
7,429,833 |
|
|
1.4 |
% |
|
Cedar Funding II CLO, Ltd. |
|
Subordinated Notes |
|
15.50 |
% |
|
4/20/2034 |
|
9/27/2017 |
|
2,500,000 |
|
|
2,055,422 |
|
|
1,820,775 |
|
|
0.3 |
% |
|
Cedar Funding IV CLO, Ltd. |
|
Subordinated Notes |
|
15.73 |
% |
|
7/23/2030 |
|
6/19/2017 |
|
26,698,229 |
|
|
21,114,649 |
|
|
19,597,526 |
|
|
3.8 |
% |
|
Cedar Funding V CLO, Ltd. |
|
Subordinated Notes |
|
26.50 |
% |
|
7/17/2031 |
|
10/15/2018 |
|
7,358,000 |
|
|
7,087,461 |
|
|
7,254,209 |
|
|
1.4 |
% |
|
Cedar Funding VI CLO, Ltd. |
|
Subordinated Notes |
|
16.63 |
% |
|
4/20/2034 |
|
8/7/2017 |
|
$ |
6,722,117 |
|
|
$ |
6,425,745 |
|
|
$ |
5,724,185 |
|
|
1.1 |
% |
|
Cedar Funding X CLO, Ltd. |
|
Subordinated Notes |
|
24.60 |
% |
|
10/20/2032 |
|
1/12/2022 |
|
10,775,000 |
|
|
8,978,675 |
|
|
8,590,671 |
|
|
1.6 |
% |
|
Cedar Funding XI CLO, Ltd. |
|
Subordinated Notes |
|
23.86 |
% |
|
6/1/2032 |
|
7/12/2021 |
|
17,500,000 |
|
|
13,389,179 |
|
|
13,790,274 |
|
|
2.6 |
% |
|
Cedar Funding XII, Ltd. |
|
Subordinated Notes |
|
23.04 |
% |
|
10/25/2034 |
|
3/28/2022 |
|
3,300,000 |
|
|
2,754,738 |
|
|
2,690,667 |
|
|
0.5 |
% |
|
Cedar Funding XIV, Ltd. |
|
Subordinated Notes |
|
23.67 |
% |
|
7/15/2033 |
|
4/7/2022 |
|
10,000,000 |
|
|
7,569,452 |
|
|
7,516,059 |
|
|
1.4 |
% |
|
Cent CLO 21 Limited(6) |
|
Subordinated Notes |
|
— |
% |
|
7/26/2030 |
|
5/15/2014 |
|
510,555 |
|
|
351,027 |
|
|
271,923 |
|
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CIFC Falcon 2019, Ltd. |
|
Subordinated Notes |
|
19.06 |
% |
|
1/20/2033 |
|
5/14/2021 |
|
8,500,000 |
|
|
7,840,321 |
|
|
7,753,009 |
|
|
1.5 |
% |
|
CIFC Funding 2013-I, Ltd. |
|
Subordinated Notes |
|
16.94 |
% |
|
7/16/2030 |
|
6/1/2018 |
|
3,000,000 |
|
|
1,797,636 |
|
|
1,684,217 |
|
|
0.3 |
% |
|
CIFC Funding 2013-II, Ltd. |
|
Income Notes |
|
7.73 |
% |
|
10/18/2030 |
|
2/6/2014 |
|
305,000 |
|
|
172,695 |
|
|
128,062 |
|
|
0.0 |
% |
|
CIFC Funding 2013-III-R, Ltd. |
|
Subordinated Notes |
|
26.75 |
% |
|
4/24/2031 |
|
1/19/2021 |
|
4,900,000 |
|
|
2,101,240 |
|
|
2,285,145 |
|
|
0.4 |
% |
|
CIFC Funding 2013-IV, Ltd. |
|
Subordinated Notes |
|
16.90 |
% |
|
4/28/2031 |
|
3/15/2019 |
|
8,000,000 |
|
|
5,014,125 |
|
|
4,938,442 |
|
|
0.9 |
% |
|
CIFC Funding 2014, Ltd. |
|
Income Notes |
|
10.58 |
% |
|
1/21/2031 |
|
2/6/2014 |
|
2,758,900 |
|
|
1,646,591 |
|
|
1,347,076 |
|
|
0.3 |
% |
|
CIFC Funding 2014-III, Ltd. |
|
Income Notes |
|
14.11 |
% |
|
10/22/2031 |
|
11/14/2016 |
|
11,700,000 |
|
|
6,881,483 |
|
|
5,658,273 |
|
|
1.1 |
% |
|
CIFC Funding 2014-IV-R, Ltd. |
|
Income Notes |
|
15.39 |
% |
|
1/17/2035 |
|
8/5/2014 |
|
4,833,031 |
|
|
2,980,929 |
|
|
2,613,457 |
|
|
0.5 |
% |
|
CIFC Funding 2015-I, Ltd. |
|
Subordinated Notes |
|
14.31 |
% |
|
1/22/2031 |
|
11/24/2015 |
|
7,500,000 |
|
|
5,035,978 |
|
|
4,502,886 |
|
|
0.8 |
% |
|
CIFC Funding 2015-III, Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
4/19/2029 |
|
5/29/2018 |
|
10,000,000 |
|
|
5,659,528 |
|
|
5,166,357 |
|
|
1.0 |
% |
|
CIFC Funding 2015-IV, Ltd. |
|
Subordinated Notes |
|
16.96 |
% |
|
4/20/2034 |
|
4/27/2016 |
|
22,930,000 |
|
|
12,745,429 |
|
|
11,453,905 |
|
|
2.2 |
% |
|
CIFC Funding 2016-I, Ltd. |
|
Subordinated Notes |
|
25.23 |
% |
|
10/21/2031 |
|
12/9/2016 |
|
6,500,000 |
|
|
4,368,481 |
|
|
5,544,155 |
|
|
1.0 |
% |
|
CIFC Funding 2017-I, Ltd. |
|
Subordinated Notes |
|
1.62 |
% |
|
4/20/2029 |
|
2/3/2017 |
|
8,000,000 |
|
|
6,485,309 |
|
|
5,594,010 |
|
|
1.1 |
% |
|
CIFC Funding 2017-IV, Ltd. |
|
Subordinated Notes |
|
15.15 |
% |
|
10/24/2030 |
|
8/14/2017 |
|
18,000,000 |
|
|
17,064,568 |
|
|
15,349,902 |
|
|
3.0 |
% |
|
CIFC Funding 2018-IV, Ltd. |
|
Subordinated Notes |
|
25.30 |
% |
|
10/17/2031 |
|
6/19/2020 |
|
6,000,000 |
|
|
4,313,927 |
|
|
4,902,001 |
|
|
0.9 |
% |
|
CIFC Funding 2020-II, Ltd. |
|
Income Notes |
|
28.26 |
% |
|
10/20/2034 |
|
7/20/2020 |
|
2,000,000 |
|
|
1,577,419 |
|
|
1,832,097 |
|
|
0.3 |
% |
|
CIFC Funding 2020-III, Ltd. |
|
Subordinated Notes |
|
23.08 |
% |
|
10/20/2034 |
|
9/11/2020 |
|
7,350,000 |
|
|
6,558,500 |
|
|
7,056,700 |
|
|
1.3 |
% |
|
Columbia Cent CLO 29 Limited |
|
Subordinated Notes |
|
27.27 |
% |
|
10/20/2034 |
|
7/10/2020 |
|
16,000,000 |
|
|
11,763,190 |
|
|
13,651,421 |
|
|
2.6 |
% |
|
Columbia Cent CLO 31 Limited |
|
Subordinated Notes |
|
21.59 |
% |
|
4/20/2034 |
|
2/1/2021 |
|
12,100,000 |
|
|
9,998,167 |
|
|
10,074,323 |
|
|
1.9 |
% |
|
Dryden 86 CLO, Ltd. |
|
Subordinated Notes |
|
24.76 |
% |
|
7/17/2034 |
|
3/10/2022 |
|
10,250,000 |
|
|
7,370,408 |
|
|
7,185,676 |
|
|
1.4 |
% |
|
Dryden 87 CLO, Ltd. |
|
Subordinated Notes |
|
24.05 |
% |
|
5/22/2034 |
|
3/10/2022 |
|
4,000,000 |
|
|
3,414,920 |
|
|
3,305,856 |
|
|
0.6 |
% |
|
Dryden 95 CLO, Ltd. |
|
Subordinated Notes |
|
23.26 |
% |
|
8/21/2034 |
|
4/27/2022 |
|
10,500,000 |
|
|
8,522,795 |
|
|
8,775,370 |
|
|
1.7 |
% |
|
Galaxy XIX CLO, Ltd. |
|
Subordinated Notes |
|
16.07 |
% |
|
7/24/2030 |
|
12/5/2016 |
|
2,750,000 |
|
|
1,946,258 |
|
|
1,445,554 |
|
|
0.3 |
% |
|
Galaxy XX CLO, Ltd. |
|
Subordinated Notes |
|
25.97 |
% |
|
4/21/2031 |
|
5/28/2021 |
|
2,000,000 |
|
|
1,549,977 |
|
|
1,559,401 |
|
|
0.3 |
% |
|
Galaxy XXI CLO, Ltd. |
|
Subordinated Notes |
|
27.66 |
% |
|
4/21/2031 |
|
5/28/2021 |
|
4,775,000 |
|
|
2,856,549 |
|
|
2,889,137 |
|
|
0.5 |
% |
|
Galaxy XXVII CLO, Ltd. |
|
Subordinated Notes |
|
32.42 |
% |
|
5/16/2031 |
|
7/23/2021 |
|
2,212,500 |
|
|
921,699 |
|
|
1,071,161 |
|
|
0.2 |
% |
|
Galaxy XXVIII CLO, Ltd. |
|
Subordinated Notes |
|
27.98 |
% |
|
7/15/2031 |
|
5/30/2014 |
|
5,295,000 |
|
|
2,339,303 |
|
|
2,309,735 |
|
|
0.4 |
% |
|
GoldenTree Loan Opportunities IX, Ltd. |
|
Subordinated Notes |
|
0.08 |
% |
|
10/29/2029 |
|
7/19/2017 |
|
3,250,000 |
|
|
2,249,399 |
|
|
1,839,762 |
|
|
0.3 |
% |
|
Halcyon Loan Advisors Funding 2014-2 Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
4/28/2025 |
|
4/14/2014 |
|
400,000 |
|
|
210,313 |
|
|
— |
|
|
— |
% |
|
Halcyon Loan Advisors Funding 2014-3 Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
10/22/2025 |
|
9/12/2014 |
|
$ |
500,000 |
|
|
$ |
298,545 |
|
|
$ |
— |
|
|
— |
% |
|
Halcyon Loan Advisors Funding 2015-1 Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
4/20/2027 |
|
3/16/2015 |
|
3,000,000 |
|
|
1,849,511 |
|
|
— |
|
|
— |
% |
|
Halcyon Loan Advisors Funding 2015-2 Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
7/26/2027 |
|
6/3/2015 |
|
3,000,000 |
|
|
1,927,789 |
|
|
— |
|
|
— |
% |
|
Halcyon Loan Advisors Funding 2015-3 Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
10/18/2027 |
|
7/27/2015 |
|
7,000,000 |
|
|
5,329,399 |
|
|
20,770 |
|
|
0.0 |
% |
|
HarbourView CLO VII-R, Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
7/18/2031 |
|
6/5/2015 |
|
275,000 |
|
|
190,055 |
|
|
95,189 |
|
|
0.0 |
% |
|
Jefferson Mill CLO Ltd. |
|
Subordinated Notes |
|
5.50 |
% |
|
10/20/2031 |
|
6/30/2015 |
|
6,049,689 |
|
|
4,652,718 |
|
|
3,302,287 |
|
|
0.6 |
% |
|
LCM XV Limited Partnership |
|
Income Notes |
|
0.84 |
% |
|
7/19/2030 |
|
1/28/2014 |
|
250,000 |
|
|
159,333 |
|
|
113,606 |
|
|
0.0 |
% |
|
LCM XVI Limited Partnership |
|
Income Notes |
|
6.53 |
% |
|
10/15/2031 |
|
5/12/2014 |
|
6,814,685 |
|
|
4,416,365 |
|
|
3,146,506 |
|
|
0.6 |
% |
|
LCM XVII Limited Partnership |
|
Income Notes |
|
8.68 |
% |
|
10/15/2031 |
|
9/17/2014 |
|
1,000,000 |
|
|
693,425 |
|
|
531,863 |
|
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LCM XVIII Limited Partnership |
|
Income Notes |
|
37.83 |
% |
|
4/21/2031 |
|
10/29/2021 |
|
12,195,000 |
|
|
4,659,321 |
|
|
4,251,384 |
|
|
0.8 |
% |
|
LCM XXVIII Limited Partnership |
|
Subordinated Notes |
|
30.52 |
% |
|
10/21/2030 |
|
10/29/2021 |
|
2,000,000 |
|
|
1,167,435 |
|
|
1,096,607 |
|
|
0.2 |
% |
|
LCM XXXII Limited Partnership |
|
Income Notes |
|
22.95 |
% |
|
7/20/2034 |
|
3/2/2022 |
|
9,390,000 |
|
|
7,534,031 |
|
|
7,275,912 |
|
|
1.4 |
% |
|
Madison Park Funding XIII, Ltd. |
|
Subordinated Notes |
|
4.24 |
% |
|
4/19/2030 |
|
2/3/2014 |
|
13,000,000 |
|
|
7,853,138 |
|
|
7,652,616 |
|
|
1.4 |
% |
|
Madison Park Funding XIV, Ltd. |
|
Subordinated Notes |
|
18.23 |
% |
|
10/22/2030 |
|
7/3/2014 |
|
23,750,000 |
|
|
15,586,848 |
|
|
13,680,997 |
|
|
2.6 |
% |
|
Madison Park Funding XL, Ltd. |
|
Subordinated Notes |
|
37.06 |
% |
|
5/28/2030 |
|
10/8/2020 |
|
7,000,000 |
|
|
3,149,826 |
|
|
3,453,849 |
|
|
0.7 |
% |
|
Mountain View CLO 2014-1 Ltd.(6) |
|
Income Notes |
|
— |
% |
|
10/15/2026 |
|
8/29/2014 |
|
1,000,000 |
|
|
497,106 |
|
|
— |
|
|
— |
% |
|
Mountain View CLO IX Ltd. |
|
Subordinated Notes |
|
11.15 |
% |
|
7/15/2031 |
|
5/13/2015 |
|
8,815,500 |
|
|
4,602,301 |
|
|
4,148,777 |
|
|
0.8 |
% |
|
Neuberger Berman CLO XVI-S, Ltd. |
|
Subordinated Notes |
|
23.17 |
% |
|
4/17/2034 |
|
2/9/2022 |
|
16,000,000 |
|
|
14,899,279 |
|
|
14,114,980 |
|
|
2.7 |
% |
|
Neuberger Berman CLO XXI, Ltd. |
|
Subordinated Notes |
|
23.81 |
% |
|
4/20/2034 |
|
2/16/2022 |
|
8,501,407 |
|
|
6,644,918 |
|
|
6,135,373 |
|
|
1.2 |
% |
|
Octagon Investment Partners XIV, Ltd. |
|
Income Notes |
|
4.06 |
% |
|
7/16/2029 |
|
12/1/2017 |
|
6,150,000 |
|
|
3,353,752 |
|
|
2,676,611 |
|
|
0.5 |
% |
|
Octagon Investment Partners XV, Ltd. |
|
Income Notes |
|
22.04 |
% |
|
7/19/2030 |
|
5/23/2019 |
|
8,937,544 |
|
|
4,830,091 |
|
|
5,093,555 |
|
|
1.0 |
% |
|
Octagon Investment Partners XVII, Ltd. |
|
Subordinated Notes |
|
13.77 |
% |
|
1/27/2031 |
|
6/28/2018 |
|
16,153,000 |
|
|
8,033,338 |
|
|
6,881,748 |
|
|
1.3 |
% |
|
Octagon Investment Partners 18-R, Ltd. |
|
Subordinated Notes |
|
10.81 |
% |
|
4/16/2031 |
|
7/30/2015 |
|
4,568,944 |
|
|
2,211,394 |
|
|
1,703,959 |
|
|
0.3 |
% |
|
Octagon Investment Partners 20-R, Ltd. |
|
Subordinated Notes |
|
15.26 |
% |
|
5/12/2031 |
|
4/25/2019 |
|
3,500,000 |
|
|
2,917,035 |
|
|
2,404,634 |
|
|
0.5 |
% |
|
Octagon Investment Partners XXI, Ltd. |
|
Subordinated Notes |
|
16.00 |
% |
|
2/14/2031 |
|
1/6/2016 |
|
13,822,188 |
|
|
8,415,480 |
|
|
6,642,710 |
|
|
1.3 |
% |
|
Octagon Investment Partners XXII, Ltd. |
|
Subordinated Notes |
|
9.07 |
% |
|
1/22/2030 |
|
11/12/2014 |
|
6,625,000 |
|
|
4,829,796 |
|
|
3,730,182 |
|
|
0.7 |
% |
|
Octagon Investment Partners 27, Ltd. |
|
Subordinated Notes |
|
14.46 |
% |
|
7/15/2030 |
|
10/31/2018 |
|
5,000,000 |
|
|
3,332,225 |
|
|
2,825,014 |
|
|
0.5 |
% |
|
Octagon Investment Partners 30, Ltd. |
|
Subordinated Notes |
|
9.98 |
% |
|
3/18/2030 |
|
11/16/2017 |
|
9,525,000 |
|
|
7,976,149 |
|
|
7,195,545 |
|
|
1.4 |
% |
|
Octagon Investment Partners 31, Ltd. |
|
Subordinated Notes |
|
24.63 |
% |
|
7/19/2030 |
|
12/20/2019 |
|
3,067,500 |
|
|
1,970,283 |
|
|
1,974,557 |
|
|
0.4 |
% |
|
Octagon Investment Partners 33, Ltd. |
|
Subordinated Notes |
|
13.29 |
% |
|
1/20/2031 |
|
7/9/2018 |
|
2,850,000 |
|
|
2,349,225 |
|
|
2,047,237 |
|
|
0.4 |
% |
|
Octagon Investment Partners 36, Ltd. |
|
Subordinated Notes |
|
20.93 |
% |
|
4/15/2031 |
|
12/20/2019 |
|
10,400,960 |
|
|
7,952,133 |
|
|
7,463,296 |
|
|
1.4 |
% |
|
Octagon Investment Partners 37, Ltd. |
|
Subordinated Notes |
|
22.44 |
% |
|
7/25/2030 |
|
3/17/2021 |
|
14,500,000 |
|
|
10,907,381 |
|
|
10,997,449 |
|
|
2.1 |
% |
|
Octagon Investment Partners 39, Ltd. |
|
Subordinated Notes |
|
21.13 |
% |
|
10/21/2030 |
|
1/9/2020 |
|
10,250,000 |
|
|
7,845,886 |
|
|
8,023,819 |
|
|
1.5 |
% |
|
Octagon Loan Funding, Ltd. |
|
Subordinated Notes |
|
17.19 |
% |
|
11/18/2031 |
|
8/25/2014 |
|
5,014,526 |
|
|
2,978,384 |
|
|
2,729,515 |
|
|
0.5 |
% |
|
OZLM VI, Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
4/17/2031 |
|
10/31/2016 |
|
$ |
15,688,991 |
|
|
$ |
10,941,670 |
|
|
$ |
7,583,520 |
|
|
1.4 |
% |
|
OZLM VII, Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
7/17/2029 |
|
11/3/2015 |
|
2,654,467 |
|
|
1,430,145 |
|
|
626,025 |
|
|
0.1 |
% |
|
OZLM VIII, Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
10/17/2029 |
|
8/7/2014 |
|
950,000 |
|
|
571,130 |
|
|
321,811 |
|
|
0.1 |
% |
|
OZLM IX, Ltd. |
|
Subordinated Notes |
|
5.03 |
% |
|
10/20/2031 |
|
2/22/2017 |
|
15,000,000 |
|
|
10,953,853 |
|
|
7,650,572 |
|
|
1.4 |
% |
|
OZLM XII, Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
4/30/2027 |
|
1/17/2017 |
|
12,122,952 |
|
|
7,169,134 |
|
|
1,533,891 |
|
|
0.3 |
% |
|
OZLM XXII, Ltd. |
|
Subordinated Notes |
|
5.38 |
% |
|
1/17/2031 |
|
5/11/2017 |
|
27,343,000 |
|
|
14,818,659 |
|
|
11,647,832 |
|
|
2.2 |
% |
|
Redding Ridge 3 CLO, Ltd. |
|
Preference Shares |
|
16.71 |
% |
|
1/15/2030 |
|
3/26/2021 |
|
12,293,000 |
|
|
6,753,884 |
|
|
6,422,536 |
|
|
1.2 |
% |
|
Redding Ridge 4 CLO, Ltd. |
|
Subordinated Notes |
|
16.26 |
% |
|
4/15/2030 |
|
1/29/2021 |
|
14,000,000 |
|
|
12,579,614 |
|
|
12,293,759 |
|
|
2.3 |
% |
|
Redding Ridge 5 CLO, Ltd. |
|
Subordinated Notes |
|
17.87 |
% |
|
10/15/2031 |
|
5/27/2021 |
|
5,500,000 |
|
|
4,899,287 |
|
|
4,875,328 |
|
|
0.9 |
% |
|
Rockford Tower CLO 2021-3, Ltd. |
|
Subordinated Notes |
|
21.61 |
% |
|
10/20/2034 |
|
2/11/2022 |
|
8,000,000 |
|
|
6,878,864 |
|
|
7,060,370 |
|
|
1.3 |
% |
|
Romark WM-R Ltd. |
|
Subordinated Notes |
|
6.59 |
% |
|
4/21/2031 |
|
4/11/2014 |
|
490,713 |
|
|
362,389 |
|
|
258,716 |
|
|
0.0 |
% |
|
Sound Point CLO II, Ltd. |
|
Subordinated Notes |
|
9.36 |
% |
|
1/26/2031 |
|
5/16/2019 |
|
21,053,778 |
|
|
10,822,581 |
|
|
8,471,240 |
|
|
1.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sound Point CLO VII-R, Ltd. |
|
Subordinated Notes |
|
12.53 |
% |
|
10/23/2031 |
|
7/31/2019 |
|
9,002,745 |
|
|
3,473,695 |
|
|
2,678,997 |
|
|
0.5 |
% |
|
Sound Point CLO XVII, Ltd. |
|
Subordinated Notes |
|
11.81 |
% |
|
10/20/2030 |
|
7/11/2018 |
|
20,000,000 |
|
|
15,442,016 |
|
|
13,631,175 |
|
|
2.6 |
% |
|
Sound Point CLO XVIII, Ltd. |
|
Subordinated Notes |
|
17.75 |
% |
|
1/20/2031 |
|
10/29/2018 |
|
15,563,500 |
|
|
11,294,800 |
|
|
11,090,683 |
|
|
2.1 |
% |
|
Sound Point CLO XIX, Ltd. |
|
Subordinated Notes |
|
24.26 |
% |
|
4/15/2031 |
|
9/23/2021 |
|
7,500,000 |
|
|
4,198,507 |
|
|
4,149,604 |
|
|
0.8 |
% |
|
Sound Point CLO XX, Ltd. |
|
Subordinated Notes |
|
25.63 |
% |
|
7/28/2031 |
|
11/5/2021 |
|
8,000,000 |
|
|
4,990,349 |
|
|
4,676,384 |
|
|
0.9 |
% |
|
Sound Point CLO XXIII, Ltd. |
|
Subordinated Notes |
|
19.35 |
% |
|
7/17/2034 |
|
8/27/2021 |
|
5,915,000 |
|
|
4,276,068 |
|
|
4,258,642 |
|
|
0.8 |
% |
|
Symphony CLO XIV, Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
7/14/2026 |
|
5/6/2014 |
|
750,000 |
|
|
379,097 |
|
|
219,163 |
|
|
0.0 |
% |
|
Symphony CLO XVI, Ltd. |
|
Subordinated Notes |
|
11.44 |
% |
|
10/15/2031 |
|
7/1/2015 |
|
5,000,000 |
|
|
4,031,086 |
|
|
3,219,534 |
|
|
0.6 |
% |
|
Symphony CLO XIX, Ltd. |
|
Subordinated Notes |
|
20.64 |
% |
|
4/16/2031 |
|
5/6/2021 |
|
2,000,000 |
|
|
1,321,996 |
|
|
1,305,571 |
|
|
0.2 |
% |
|
TCI-Symphony CLO 2017-1, Ltd. |
|
Income Notes |
|
31.58 |
% |
|
7/15/2030 |
|
9/15/2020 |
|
3,000,000 |
|
|
1,778,156 |
|
|
1,904,260 |
|
|
0.4 |
% |
|
THL Credit Wind River 2013-1 CLO, Ltd. |
|
Subordinated Notes |
|
1.91 |
% |
|
7/19/2030 |
|
11/1/2017 |
|
10,395,000 |
|
|
7,186,435 |
|
|
5,289,231 |
|
|
1.0 |
% |
|
THL Credit Wind River 2013-2 CLO, Ltd. |
|
Income Notes |
|
9.65 |
% |
|
10/18/2030 |
|
12/27/2017 |
|
3,250,000 |
|
|
2,010,985 |
|
|
1,561,570 |
|
|
0.3 |
% |
|
THL Credit Wind River 2014-1 CLO, Ltd. |
|
Subordinated Notes |
|
10.80 |
% |
|
7/18/2031 |
|
7/11/2018 |
|
11,800,000 |
|
|
6,932,939 |
|
|
5,901,542 |
|
|
1.1 |
% |
|
THL Credit Wind River 2014-2 CLO, Ltd. |
|
Income Notes |
|
31.28 |
% |
|
1/15/2031 |
|
1/22/2021 |
|
7,550,000 |
|
|
2,485,253 |
|
|
2,634,071 |
|
|
0.5 |
% |
|
THL Credit Wind River 2017-4 CLO, Ltd. |
|
Subordinated Notes |
|
30.00 |
% |
|
11/20/2030 |
|
6/25/2020 |
|
3,765,400 |
|
|
2,657,854 |
|
|
2,703,011 |
|
|
0.5 |
% |
|
THL Credit Wind River 2018-2 CLO, Ltd. |
|
Subordinated Notes |
|
15.80 |
% |
|
7/15/2030 |
|
3/11/2019 |
|
8,884,000 |
|
|
7,621,918 |
|
|
6,852,277 |
|
|
1.3 |
% |
|
THL Credit Wind River 2018-3 CLO, Ltd. |
|
Subordinated Notes |
|
18.87 |
% |
|
1/20/2031 |
|
6/28/2019 |
|
13,000,000 |
|
|
11,576,463 |
|
|
11,128,913 |
|
|
2.1 |
% |
|
Venture XVIII CLO, Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
10/15/2029 |
|
7/16/2018 |
|
4,750,000 |
|
|
2,914,781 |
|
|
2,535,817 |
|
|
0.5 |
% |
|
Venture 28A CLO, Ltd. |
|
Subordinated Notes |
|
17.03 |
% |
|
10/20/2034 |
|
7/16/2018 |
|
17,715,000 |
|
|
12,854,134 |
|
|
11,942,297 |
|
|
2.3 |
% |
|
Venture XXX CLO, Ltd. |
|
Subordinated Notes |
|
14.15 |
% |
|
1/15/2031 |
|
7/16/2018 |
|
5,100,000 |
|
|
4,132,572 |
|
|
3,923,102 |
|
|
0.7 |
% |
|
Venture XXXII CLO, Ltd. |
|
Subordinated Notes |
|
16.01 |
% |
|
7/18/2031 |
|
10/9/2018 |
|
7,929,328 |
|
|
7,069,631 |
|
|
6,237,204 |
|
|
1.2 |
% |
|
Venture XXXIV CLO, Ltd. |
|
Subordinated Notes |
|
20.99 |
% |
|
10/15/2031 |
|
7/30/2019 |
|
13,903,000 |
|
|
10,705,316 |
|
|
10,631,561 |
|
|
2.0 |
% |
|
Venture 41 CLO, Ltd. |
|
Subordinated Notes |
|
22.38 |
% |
|
1/20/2034 |
|
1/26/2021 |
|
$ |
8,249,375 |
|
|
$ |
7,166,376 |
|
|
$ |
6,926,771 |
|
|
1.3 |
% |
|
Venture 42 CLO, Ltd. |
|
Subordinated Notes |
|
21.31 |
% |
|
4/17/2034 |
|
11/5/2021 |
|
15,000,000 |
|
|
12,742,386 |
|
|
11,978,751 |
|
|
2.3 |
% |
|
Venture 43 CLO, Ltd. |
|
Subordinated Notes |
|
22.24 |
% |
|
4/17/2034 |
|
9/1/2021 |
|
12,000,000 |
|
|
9,490,916 |
|
|
9,630,857 |
|
|
1.8 |
% |
|
Voya IM CLO 2013-1, Ltd. |
|
Income Notes |
|
6.64 |
% |
|
10/15/2030 |
|
6/9/2016 |
|
4,174,688 |
|
|
2,681,420 |
|
|
2,032,315 |
|
|
0.4 |
% |
|
Voya IM CLO 2013-3, Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
10/18/2031 |
|
2/13/2015 |
|
4,000,000 |
|
|
1,941,217 |
|
|
1,248,694 |
|
|
0.2 |
% |
|
Voya IM CLO 2014-1, Ltd.(6) |
|
Subordinated Notes |
|
— |
% |
|
4/18/2031 |
|
2/5/2014 |
|
314,774 |
|
|
201,720 |
|
|
126,121 |
|
|
0.0 |
% |
|
Voya CLO 2014-3, Ltd.(6)(7) |
|
Subordinated Notes |
|
— |
% |
|
7/24/2026 |
|
4/10/2015 |
|
7,000,000 |
|
|
2,853,170 |
|
|
— |
|
|
— |
% |
|
Voya CLO 2014-4, Ltd. |
|
Subordinated Notes |
|
2.26 |
% |
|
7/14/2031 |
|
11/10/2014 |
|
1,000,000 |
|
|
670,955 |
|
|
458,851 |
|
|
0.1 |
% |
|
Voya CLO 2015-2, Ltd.(6)(7) |
|
Subordinated Notes |
|
— |
% |
|
7/23/2027 |
|
6/24/2015 |
|
13,712,000 |
|
|
3,300,779 |
|
|
— |
|
|
— |
% |
|
Voya CLO 2016-1, Ltd. |
|
Subordinated Notes |
|
12.04 |
% |
|
1/21/2031 |
|
1/22/2016 |
|
7,750,000 |
|
|
6,229,593 |
|
|
5,668,806 |
|
|
1.1 |
% |
|
Voya CLO 2016-3, Ltd. |
|
Subordinated Notes |
|
10.17 |
% |
|
10/20/2031 |
|
9/30/2016 |
|
10,225,000 |
|
|
7,935,849 |
|
|
6,844,803 |
|
|
1.3 |
% |
|
Voya CLO 2017-3, Ltd. |
|
Subordinated Notes |
|
12.00 |
% |
|
4/20/2034 |
|
6/15/2017 |
|
5,750,000 |
|
|
6,341,986 |
|
|
5,261,562 |
|
|
1.0 |
% |
|
Voya CLO 2017-4, Ltd. |
|
Subordinated Notes |
|
29.33 |
% |
|
10/15/2030 |
|
3/25/2021 |
|
2,500,000 |
|
|
1,522,088 |
|
|
1,523,904 |
|
|
0.3 |
% |
|
Voya CLO 2018-1, Ltd. |
|
Subordinated Notes |
|
16.28 |
% |
|
4/18/2031 |
|
2/23/2018 |
|
20,000,000 |
|
|
16,204,883 |
|
|
14,842,975 |
|
|
2.8 |
% |
|
Voya CLO 2018-2, Ltd. |
|
Subordinated Notes |
|
27.71 |
% |
|
7/15/2031 |
|
4/27/2021 |
|
6,778,666 |
|
|
4,164,659 |
|
|
4,227,925 |
|
|
0.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voya
CLO 2018-4, Ltd. |
|
Subordinated Notes |
|
26.88 |
% |
|
1/15/2032 |
|
8/9/2021 |
|
3,192,000 |
|
|
2,222,270 |
|
|
2,246,022 |
|
|
0.4 |
% |
|
Voya CLO 2019-1, Ltd. |
|
Subordinated Notes |
|
20.61 |
% |
|
4/15/2031 |
|
1/27/2020 |
|
15,500,000 |
|
|
14,167,058 |
|
|
13,494,103 |
|
|
2.5 |
% |
|
Voya CLO 2020-1, Ltd. |
|
Subordinated Notes |
|
22.93 |
% |
|
7/17/2034 |
|
3/3/2022 |
|
6,500,000 |
|
|
5,387,120 |
|
|
5,085,701 |
|
|
1.0 |
% |
|
Voya CLO 2022-1, Ltd. |
|
Subordinated Notes |
|
21.20 |
% |
|
4/20/2035 |
|
3/18/2022 |
|
17,600,000 |
|
|
15,389,762 |
|
|
15,188,944 |
|
|
3.0 |
% |
|
West CLO 2014-1 Ltd.(6)(7) |
|
Subordinated Notes |
|
— |
% |
|
7/17/2026 |
|
6/24/2014 |
|
13,375,000 |
|
|
2,623,161 |
|
|
— |
|
|
— |
% |
|
Total
Collateralized Loan Obligation - Equity Class |
|
$ |
857,954,106 |
|
|
$ |
766,507,176 |
|
|
144.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collateralized Loan Obligation - Debt Class (Cayman
Islands)(4)
|
|
Apidos CLO XXIV |
|
Class E-R Notes |
|
8.92% (3M LIBOR + 7.86%) |
|
10/21/2030 |
|
3/10/2020 |
|
$ |
2,000,000 |
|
|
$ |
1,558,442 |
|
|
$ |
1,544,637 |
|
|
0.3 |
% |
|
California Street CLO IX, Ltd. |
|
Class F-R2 Notes |
|
9.56% (3M LIBOR + 8.52%) |
|
7/16/2032 |
|
9/2/2020 |
|
2,000,000 |
|
|
1,616,761 |
|
|
1,704,718 |
|
|
0.3 |
% |
|
Carlyle Global Market Strategies 2014-2-R, Ltd. |
|
Class E Notes |
|
9.41% (3M LIBOR + 8.00%) |
|
5/15/2031 |
|
3/6/2019 |
|
7,500,000 |
|
|
6,979,606 |
|
|
5,295,066 |
|
|
1.0 |
% |
|
Carlyle CLO 17, Ltd. |
|
Class E-R Notes |
|
9.64% (3M LIBOR + 8.35%) |
|
4/30/2031 |
|
|