Priority Income Fund’s latest quarterly tender offer was significantly oversubscribed, resulting in shareholders having only about 15% of their requested shares repurchased as the closed-end fund’s net asset value continued to decline.
The fund offered to repurchase up to 1,550,812 common shares, representing 2.5% of shares outstanding as of the end of its June 30, 2025 fiscal year. By the July 31 expiration date, shareholders had tendered more than 10.18 million shares—more than six times the number the fund had offered to purchase.
Priority ultimately repurchased the full 1,550,812-share allotment at $3.15 per share, the fund’s NAV as of July 31. After giving priority to 178 shares held by investors with fewer than 100 shares, the remaining repurchases were allocated on a pro rata basis. Approximately 15.23% of the shares tendered by each participating shareholder were repurchased. The fund paid approximately $4.89 million in total.
The level of demand for liquidity represents a notable change from the same period last year. Priority’s July 2025 tender was also oversubscribed, but approximately 43% of tendered shares were ultimately repurchased. At that time, the fund paid $6.09 per share, compared with $3.15 in the latest tender.
The lower repurchase price reflects a substantial decline in Priority’s NAV. NAV stood at $6.14 per share on June 30, 2025 and declined to $4.48 by December 31. Priority’s website reports NAV of $3.70 as of April 30, 2026 and $3.18 as of June 30, before falling to $3.15 for the July tender.
Priority invests primarily in equity and junior debt tranches of collateralized loan obligations backed by pools of senior secured loans. In its December 2025 semiannual report, the fund attributed challenging performance during 2025 to elevated defaults and distressed exchanges in the broadly syndicated loan market combined with declining loan asset spreads. Those conditions pressured CLO equity investments by reducing collateral levels and impairing income potential.
The fund has also reduced its monthly common shareholder distribution during 2026. After paying $0.1007 per share in January, Priority reduced its distribution to $0.08056 in February, $0.05833 for March through May, and $0.03333 beginning in June. The $0.03333 monthly distribution remained in place for July and August.
The latest tender comes as Priority continues to evaluate a potential listing of its common stock on a national securities exchange. The fund previously indicated that it expected a listing to occur by December 31, 2026, subject to market and financial conditions and final approval by its board. Priority has cautioned that there is no assurance the listing will occur within that timeframe or at all.
Market conditions have already affected the timing of the plan. In its December 2025 semiannual report, Priority said it continued to monitor conditions related to a potential listing, noting that trading levels relative to NAV among comparable funds did not yet justify proceeding.
For shareholders, a listing could substantially change the fund’s liquidity structure by creating a secondary market for common shares. However, exchange-listed closed-end funds can trade at premiums or discounts to NAV, making prevailing market conditions an important consideration in determining when—or whether—to proceed.
Until a listing occurs, Priority’s quarterly tender offers remain an important source of liquidity for common shareholders. The latest results underscore the limits of that liquidity: shareholders sought to sell more than 10 million shares, while the fund repurchased approximately 1.55 million.
With NAV declining, distributions reduced and tender requests substantially exceeding the fund’s repurchase capacity, the timing and terms of Priority’s proposed listing will likely remain an important development for shareholders to watch.
