(1) Reflects the maximum sales charge of 6.75% of gross offering proceeds applicable to Class R shares, comprised of 6.0% sales commission and 0.75% Dealer Manager Fee and also includes the maximum amount of offering expenses we may incur of 1.96% of gross offering proceeds, including certain costs and expenses reimbursed to our Dealer Manager. Please note that prior to January 23, 2020, the maximum sales charge was 8%, comprised of 6.0% sales commission and 2% Dealer Manager Fee and also includes the maximum amount of offering expenses we may incur of 2% of gross offering proceeds, including certain costs and expenses reimbursed to our Dealer Manager.
(2) Reflects no sales charge, applicable to our Class I shares [but does include the maximum amount of offering expenses we may incur of 1.96% of gross offering proceeds, including certain costs and expenses reimbursed to our Dealer Manager].
(3) Performance is Annualized
(4) There are differences between an investment in Priority Income Fund (“PIF”) and the securities comprising the Bloomberg Barclays US Aggregate Bond Index (“Agg Index”). For example, PIF invests at least 80% of its total assets in senior secured loans to companies whose debt is rated below investment grade, or in limited circumstances unrated, which have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal, may be difficult to value and illiquid. Conversely, the Agg Index is comprised of government Treasury securities, corporate bonds, mortgage-backed securities, asset-backed securities, and municipal securities that are investment-grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $100 million. Further, there may be different costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, and tax features for the securities comprising the Agg Index and PIF.
(5) There are differences between an investment in PIF and the securities comprising the Credit Suisse Leverage Loan Index (“CSLLI”). For example, PIF invests at least 80% of its total assets in senior secured loans to companies whose debt is rated below investment grade, or in limited circumstances unrated, which have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal, may be difficult to value and illiquid. Conversely, the CSLLI is comprised of loans that meet the following criteria: 1) Loan facilities must be rated “5B” or lower. That is, the highest Moody’s/S&P ratings are Baa1/BB+ or Ba1/BBB+. If unrated, the initial spread level must be Libor plus 125 basis points or higher. 2) Only fully-funded term loan facilities are included. 3) The tenor must be at least one year. 4) Issuers must be domiciled in developed countries. Further, there may be different costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, and tax features for the securities comprising the CSLLI and PIF.
Past performance is not an indication of future results. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Performance includes reinvestment of distributions and reflects management fees and other expenses. Due to financial statement adjustments, performance information presented herein for the Fund differs from the Fund’s financial highlights which are prepared in accordance with U.S. GAAP. The Fund return does not reflect the deduction of all fees, including third-party brokerage commissions or third-party investment advisory fees paid by investors to a financial intermediary for brokerage services. If the deduction of such fees was reflected, the performance would be lower. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
The Fund’s distribution policy is to authorize distributions on a quarterly basis and pay such distributions on a monthly basis. You should understand that such distributions may not be based on our investment performance and can only be sustained if we achieve positive investment performance in future periods. You should also understand that reimbursements to our Adviser (if any such reimbursements are made) would 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. Our distributions may exceed our earnings. As a result, a portion of the distributions we make may represent a return of capital for tax purposes. See PIF’s quarterly and annual reports filed with the U.S. Securities and Exchange Commission for additional information regarding the composition of our distributions.
An investment in Priority Income Fund is speculative and involves a high degree of risk, including the risk of a substantial loss of investment. You should carefully consider the information set forth in the “Risk Factors” section of the Prospectus for a discussion of material risk factors relevant to an investment in the Priority Income Fund, including the risk of leverage. Additional risk factors to be considered include but are not limited to the following:
The Fund seeks to achieve its objective by investing at least 80% of its total assets in senior secured loans made to companies whose debt is rated below investment grade. Senior Secured Debt involves a greater risk of default and higher price volatility than investment grade debt.
The Fund will invest in equity and junior tranches of collateralized loan obligations (“CLOs”), which may be riskier than a direct investment in the underlying companies.
CLOs will typically have no significant assets other than their underlying Senior Secured Loans.
The Fund’s investment strategy involves investments in securities issued by foreign entities, which will expose investors to risks not typically associated with investing in U.S. securities.
The Fund may invest a substantial percentage of its portfolio in securities that are considered illiquid, which may prevent the advisor from readily disposing of securities at favorable prices.
Priority Income Fund is 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.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED ANY OFFERING OF PRIORITY INCOME FUND, INC. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This material is not intended to be a recommendation or investment advice and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her advisors. This is neither an offer to sell nor a solicitation to purchase any security. Investors should carefully consider the investment objectives, risks, charges and expenses of the PIF. This and other important information about the Fund is contained in the prospectus, which can be obtained by contacting your financial advisor or visiting www.pcsalts.com. Please read the prospectus carefully before investing.
Preferred Capital Securities, LLC (Member FINRA/SIPC) is the Dealer Manager for Priority Income Fund