Terms

Series

6.000% Series J Term Preferred Stock Due 2028

Liquidation Preference

$25.00

Coupon Rate

6%

Rate Type

Fixed

Annual Dividend

$1.50

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

No

Convertible

No

Callable

Yes

First Call Date

August 10, 2024

First Call Price

$25.00

Mandatory Redemption Date

December 31, 2028

Capital Stack Ranking

Junior To: 6.50% Senior Unsecured Notes Due 2035 ($15,000,000), Secured Revolving Credit Facility; Pari Passu With: Series A Term Preferred Stock, Series D Term Preferred Stock, Series E Term Preferred Stock, Series F Term Preferred Stock, Series G Term Preferred Stock, Series H Term Preferred Stock, Series I Term Preferred Stock, Any Future Preferred Stock; Senior To: Common Stock

Regulatory (Basel III) Call

No

Tax Classification

Ordinary

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

1,400,000

Prospectus Summary

Priority Income Fund, Inc. — an externally managed, non-diversified closed-end fund focused on CLO equity and senior secured loans — is offering 1,400,000 shares of its 6.000% Series J Term Preferred Stock Due 2028, with a $25.00 liquidation preference per share. The fixed coupon pays $1.50 per share annually ($0.375 per quarter), and the stock carries a mandatory redemption date of December 31, 2028. The issuer may optionally redeem shares at $25.00 on or after August 10, 2024. Dividends are non-cumulative in practice only in that they require Board authorization and legal availability of funds — however, arrears of two or more years trigger preferred holders' right to elect a majority of directors, indicating de facto cumulative protections. Series J Term Preferred ranks pari passu with all other outstanding Priority Income Fund preferred series (A, D, E, F, G, H, and I) and senior to common stock. However, it is explicitly subordinated to the company's $15 million 6.50% senior unsecured notes due 2035 and the $35 million secured revolving credit facility. There is no holding-company structural subordination concern as this is a direct fund-level issuance. There is no bank regulatory capital call provision — instead, the key covenant risk is the 1940 Act asset coverage test: if asset coverage on preferred stock falls below 200%, the company is required to mandatorily redeem preferred shares to restore compliance, creating meaningful redemption risk in a portfolio stress scenario. At par, the Series J Term Preferred yields exactly 6.00% annually, paid quarterly. As a RIC, Priority Income Fund passes through income derived primarily from CLO equity distributions and senior secured loan interest; these distributions are generally characterized as ordinary income rather than qualified dividend income (QDI) and do not qualify for the dividends-received deduction (DRD) for corporate holders. Payment dates follow the quarterly calendar (expected March 31, June 30, September 30, December 31) with record dates approximately 15 days prior. Dividends may be interrupted if the Board does not declare them or if legally available funds are insufficient — and mandatory preferred share redemptions triggered by a sub-200% asset coverage ratio could further disrupt expected income streams.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If the company's asset coverage ratio falls below 200%, it must redeem preferred shares (potentially including Series J) to restore compliance; dividends are non-automatic and require Board authorization and legal availability of funds.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 58 (Average)