Priority Income Fund Buys 15% of Shares Tendered at $3.15, Down From $6.09 a Year Earlier

Priority Income Fund, Inc., a non-traded closed-end fund that invests in the equity and junior debt of collateralized loan obligations (CLOs), bought 1,551,221 of the 10,184,037 shares tendered in its repurchase offer that closed July 31, 2026, about 15.23%, at $3.15 per share, its net asset value per share on July 31, according to the final amendment to its tender offer statement filed October 22, 2026. The comparable offer a year earlier bought 1,516,379 of 3,552,367 shares tendered at $6.09.

What the filings show

The offer was for up to 1,550,812 shares, 2.5% of shares outstanding at June 30, 2025. Holders tendered 10,184,037. The fund first bought from holders of fewer than 100 shares and prorated the rest, reporting 1,550,812 shares bought for about $4,885,054 in Amendment No. 1 (August 14, 2026). Amendment No. 2 (October 22, 2026) says an administrative error at processing left 2,368 validly tendered shares unreported to the fund; after the fund and its transfer agent arranged their repurchase under the offer's terms, the total bought was 1,551,221 shares, including 410 of those shares, at the same $3.15. The fund made a similar correction in its April 2025 offer.

The prices in its last five completed offers trace the fall in NAV:

Why the gap between offers

The fund's annual report explains the year without an offer. On April 25, 2025 the company announced that it intends to seek to list its common stock on a national securities exchange, and its board suspended the sale of new shares after the May 1, 2025 monthly purchase date. On June 20, 2025 it announced that the tender offer expiring July 31, 2025 would be its final regular quarterly tender offer under the share repurchase program. At the annual meeting on January 8, 2026, stockholders approved a charter amendment that would limit the sale or transfer of common shares for 270 days after a listing; it takes effect only if a listing occurs. The report says there can be no assurance the listing will be completed and that the company is not obligated to complete a liquidity event by a specified date.

In the same report's shareholder letter, the company says current conditions, "including significantly discounted trading levels versus net asset value for comparable funds," are "not yet justifying" a listing. The offer that closed July 31, 2026 was made after the announcement, and so was the next one: filed September 18, 2026 for up to 1,621,557 shares, 2.5% of shares outstanding at June 30, 2026, priced at the October 31 NAV and scheduled to expire October 30, 2026 unless extended. As of November 3, EDGAR showed no extension or result for it.

The annual report

The fund's annual report for the year to June 30, 2026 (Form N-CSR) shows NAV per share of $10.85 at June 30, 2024, $6.14 at June 30, 2025 and $3.18 at June 30, 2026, with total returns based on NAV of -34.21% and -36.20% for the two years. Net assets fell from $658.0 million to $380.9 million to $206.2 million. In the latest year, net investment income was $22.6 million against net realized losses on investments of $153.9 million. Those losses include $87.6 million on CLO investments sold and $69.8 million recognized on CLO equity positions whose expected remaining cash flows, the fund determined, no longer exceed their amortized cost. The financial highlights classify the $1.03 per share distributed to common stockholders as return of capital; the tax note calls that the expected tax character, with the final determination made when the company files its tax return for the year.

Management's letter in the report attributes the year to "elevated defaults (including distressed exchanges) coupled with declining loan asset spreads" in the broadly syndicated loan market, conditions it says have persisted for three years and pressured CLO equity by reducing collateral levels and income. The fund is managed by Priority Senior Secured Income Management, LLC.

What the filings do not show

The tender filings report shares tendered and bought, not why tenders nearly tripled from the year before. The explanations quoted here are management's. The annual report gives no date for the planned listing, and the outcome of the offer scheduled to expire October 30 will be in a later amendment.