The board of Priority Income Fund Inc., a non-traded closed-end fund, has reinstated the quarterly cash “bonus” distribution for September through November 2020, in addition to declaring new monthly cash “base” distributions to common shareholders.
The annualized total cash distribution rate for Class R common shares is 10.36 percent for distributions from September 4, 2020 through November 30, 2020 based on the current offering price of $11.58 per common share.
The quarterly bonus distribution of $0.03750 per share will be paid on September 28, 2020 to common shareholders of record as of September 25, 2020. This represents the 26th quarterly bonus distribution that the fund has declared.
“We were comfortable with reinstating a portion of the bonus dividend because the impact of COVID-19 on the senior secured loan market has not been as severe as we were projecting,” said Grier Eliasek, chief executive officer of Priority Income Fund. “Furthermore, credit markets and specifically the senior secured loan market have rebounded quicker than expected.”
The fund also declared base distributions for September, October, and November that have weekly record dates and will be paid monthly to common stockholders of record as of the close of business each week. These declared distributions equal a weekly cash amount of $0.02014 per share of common stock (representing $0.26182 per common share on a quarterly basis).
The monthly base distributions represent the 81st, 82nd, and 83rd consecutive such monthly distributions paid by the fund at a rate of at least $0.02014 per share.
Eliasek also noted that the dividend, including the bonus dividend, continues to be covered by GAAP net investment income.
“Priority Income Fund has each full fiscal year since inception out-earned its shareholder distributions through net investment income,” he added. “That cumulative total out-earned value ‘storehouse’ is now $16.6 million, which equates to 51 cents per share.”
Priority Income Fund had $571 million of total assets as of December 31, 2019 and invests in pools of senior secured loans made primarily to U.S. companies whose debt is rated below investment grade or, in limited circumstances, unrated. The fund launched in May 2013 and raised 380.4 million in investor equity as of June 2020.