Priority Income Fund, Inc.: Investor Loss Update, August 2026
If you’re researching Priority Income Fund losses, here’s the latest: the fund’s July 2026 tender offer paid out at just 15.23% of shares requested, the lowest rate in at least two years, as net asset value fell to $3.15 per share. If you own shares and could not get out, our FINRA arbitration attorneys may be able to help you recover your losses.
July 2026 Tender Offer Results
Priority Income Fund offered to repurchase up to 1,550,812 shares of common stock, or 2.5% of shares outstanding, at net asset value as of July 31, 2026. Shareholders tendered 10,184,037 shares, more than six and a half times the amount the fund had agreed to buy. The fund purchased the full 1,550,812 shares it offered, filling 178 shares first from holders with fewer than 100 shares under its de minimis provision and prorating the rest, for a total of roughly $4.9 million.
The payout rate has fallen sharply from prior cycles. The comparable annual tender completed in August 2025 returned about 43% of tendered shares at a $6.09 NAV. An earlier 2025 repurchase offer returned about 60% of tendered shares at a $7.17 NAV as of April 30, 2025. Fewer shareholders are getting out at NAV each time the fund runs this program.
Net Asset Value Has Fallen Sharply
Priority Income Fund’s reported NAV per share has dropped more than 70% in roughly two years, and it has fallen further since our last update. Shares were originally offered at $15.00.
- $12.64 per share as of November 30, 2021
- $10.85 per share as of June 30, 2024
- $7.17 per share as of April 30, 2025
- $6.14 per share as of June 30, 2025
- $4.48 per share as of December 31, 2025
- $3.61 per share as of March 31, 2026
- $3.70 per share as of April 30, 2026
- $3.15 per share as of July 31, 2026
Priority Income Fund has attributed the decline to elevated defaults and distressed exchanges in the broadly syndicated loan market, along with declining loan asset spreads. Those conditions have allegedly pressured the fund’s CLO equity holdings by reducing collateral levels and squeezing income. According to trade press reports, the fund realized $178 million in investment losses in the fiscal year ended June 30, 2025, and another $82.2 million in the six months ended December 31, 2025. Total assets fell to $479 million by the end of 2025, down from more than $900 million a year earlier.
Distributions and Return of Capital
The fund has kept paying monthly cash distributions through the decline. As of December 31, 2025, Priority reported an annualized distribution rate of 23.44% of NAV. Fiscal 2025 distributions reportedly included $71.5 million characterized as return of capital, against just $11.6 million from earnings. A high distribution rate calculated against a falling NAV can look attractive even as the underlying value of an investor’s shares keeps shrinking.
Listing Timeline Now in Question
Priority Income Fund has said it intends to list its common shares on a national securities exchange before December 31, 2026. Shareholders approved tiered transfer restrictions at the fund’s December 2025 annual meeting, capping sales at 25% of a holder’s shares in each of the first three 90-day windows after any listing, meaning only 75% of shares could be sold in the first 270 days.
According to trade press reports, Priority said as of December 31, 2025, that current trading levels for comparable listed funds relative to NAV did not yet justify moving forward with a listing, a position that has reportedly not been publicly updated since. The fund has also been unwinding its preferred stock ahead of a possible listing, redeeming four series totaling $138 million in aggregate. The New York Stock Exchange moved to delist the fund’s 6.000% Series J Term Preferred Stock due 2028 in April 2026, following Priority’s announcement that it would redeem those shares.
Non-traded closed-end funds that convert to an exchange listing have historically traded at discounts to NAV in the early period after listing. Shareholders who are unable to exit through a tender offer beforehand may find that a future listing does not restore the value they have lost.
Complex, High-Risk CLO Investment Strategy
Priority Income Fund invests at least 80% of its total assets in securitized pools of senior secured loans, according to the fund’s prospectus. Its strategy includes equity and junior tranches of collateralized loan obligations (CLOs), which absorb losses first when loans in the pool default and are generally riskier than direct loan investments. As of its fiscal year ended June 30, 2025, the fund reportedly held 149 CLO equity positions and 30 CLO debt investments backed by more than 2,000 senior secured loans. The underlying loans are made to companies whose debt is rated below investment grade, which carries a greater risk of default and higher price volatility than investment-grade debt.
Investors Are Allegedly Filing Claims Over Priority Income Fund Sales
According to press reports, investors have filed FINRA arbitration claims against the brokerage firms and advisers who sold them Priority Income Fund, alleging the investment was unsuitable for retirees and conservative investors who needed liquid, income-producing accounts. These are allegations only. No broker-dealer has been found liable in connection with the sale of Priority Income Fund. The White Law Group is investigating whether broker-dealers and registered investment advisers who sold the fund performed adequate due diligence and made suitable recommendations.
About Priority Income Fund
Launched in 2013 and affiliated with Prospect Capital Management, Priority Income Fund is a non-traded closed-end fund focused primarily on CLO securities. Preferred Capital Securities, LLC serves as the fund’s dealer-manager, distributing shares through broker-dealers and registered investment advisers.
If you are concerned about your investment in Priority Income Fund, the securities attorneys of The White Law Group may be able to help you. For a free consultation, please call (888) 637-5510 or contact us online. The White Law Group is a national securities fraud and investor protection law firm with offices in Chicago and Seattle.
Frequently Asked Questions
How do I file a claim to recover money I invested in Priority Income Fund?
Most claims against a brokerage firm go through FINRA arbitration rather than court, because most brokerage account agreements typically include a pre-dispute arbitration clause. Arbitration can still result in a monetary recovery, and our FINRA arbitration attorneys can review your account statements for free to see whether you have a claim.
What does it mean if Priority Income Fund was unsuitable for me?
A recommendation is unsuitable when it doesn’t fit an investor’s age, income needs, risk tolerance, or ability to have money locked up. Priority Income Fund is an illiquid, leveraged CLO fund, and it may not have been appropriate for retirees or investors who needed steady access to their principal.
Can my brokerage firm be held responsible even if it didn’t make the decision to invest?
Yes, a firm can still be liable if it failed to supervise the broker who recommended the investment. Firms are required to review products before allowing representatives to sell them and to monitor whether recommendations fit each client’s profile.
Contact Us
The White Law Group, national securities fraud attorneys with offices in Chicago and Seattle, represents investors in FINRA arbitration claims. Call (888) 637-5510 or contact us online for a free consultation.
