Heavy Repurchase Demand Prorates Priority Income Fund Tender

Priority Income Fund's latest tender offer drew repurchase requests far exceeding the shares the fund had set aside to buy back. Investors are therefore getting prorated — each request trimmed to the fund's available capacity. Blue Vault Partners reported the oversubscription, with the report's title pointing to a declining net asset value as the backdrop.

The combination is a double squeeze. An investor who wanted out of the semiliquid BDC gets fewer shares repurchased than asked, and the shares that do get bought back are priced against a falling NAV. The cash that lands in the account is smaller in both share count and per-share terms. The proration mechanism is what keeps the fund from selling assets into a weak market to meet all requests, but it also means the queue of unsatisfied repurchases carries into the next tender — at whatever price that tender brings.