Premium Income Corp T.PIC.A

Reply from Mulvihill

[Donwaan]

While I cannot provide specific numbers on the redemptions that came as a result of the Special Retraction right for the November 1, 2024 valuation I can say that the consolidation ratio was set in anticipation of an overnight issue of preferred shares in mind. The preferred share issuance partly offsets the redemption. This reduces the consolidation of the A class shares necessary to balance the outstandings of the two classes. 100 shares now will become about 67 shares as of November 12th. The NAV of the A class will have a corresponding increase of about 1.49 times. The NAV will be restruck for this corporate action but by way of example we can say that the 100 shares of A class at a 4.25 NAV will become around 67 shares with a NAV of about $6.34. I understand that the redemption, consolidation, and new issuance viewed in isolation it may appear unclear. Looked at more wholistically we were able to anticipate the conversion ratio such that it would not need to be adjusted after the overnight issue was done. I hope this provides some context for you in this matter. Regards Jeff Thompson I Portfolio Manager

[elonmuskrat247]

So, with about 15% yield at $6.20 consolidated price, and a 25 year track record of payouts, it is still an attractive alternative for yield investors. Albeit, not as good as before the consolidation. In an economy with lowering interest rates and investors needing more yield with, the higher prices of everything, it may attract money from expiring GICS. 

[marcrobert]

to recap , on nov 12, the number of A shares will be sliced by a third, the nav will be 6.34, and the yield goes from the current roughly 20% (81 cents /4.20 ) to 15%, unless of course A shares trade way under nav: At 4.80 after consolidation, yield would still be 20%, but that would be 24% discount to NAV vs about 0% today. Also i was on the site and as of end of July, cash was 60.4%. Why would

[mnztr]

Punched out before everyone else catches on. I agree, don't seen any reason at all to hold until Nov 12th. 

[marcrobert]

We should have a poll. consolidated shares will trade as of the 14th (after ex date i think? we should see a further drop after the ex div of the new 8 cent monthly. I think it'll be around 5  

[mnztr]

NAV is up by 32% and and it looks like divvy is up by 18.5% and monthly. May go back in after the 12th not sure

[marcrobert]

how do you get 32%, it seems to be 50% and yield  (81 to 96 cents). would the price stay at nav after a 25% distribution cut? the more i think about it, a selloff in price makes more sense unless magically a bunch of new buyers arrive who want a lower yield. Is the lower yield more sustainable, maybe... will it support the nav better with less volatility? maybe, but many splits are close to

[mnztr]

I was using 4.64 a NAV . In any case Yield is going down so may as well back off until the dust settles...at least.