Flaherty & Crumrine Preferred Income Opportunity Fund to loosen ratings limits Feb. 21
Effective February 21, 2017, the Fund will change its investment policies, replacing a test that at least 75% of securities be investment grade with one requiring at least 85% of managed assets to be either rated investment grade or issued by companies with investment grade issuer or senior unsecured debt ratings. The adviser says the change responds to ratings methodology changes and to the fact that only about 62% of the preferred market now carries an investment grade rating from at least one agency, versus 90% before the financial crisis. Shareholders would see the Fund able to hold up to 15% of holdings in below investment grade securities issued by investment grade issuers.
Key points
- New policy effective February 21, 2017 requires at least 85% of managed assets to be investment grade rated or issued by investment grade issuers, up from the prior 75% securities test
- Adviser says about 62% of the preferred market is investment grade rated by at least one agency, down from 90% before the financial crisis
- Fund may hold below investment grade preferreds of investment grade issuers, subject to a 15% limit
- Adviser has no current intention to buy securities rated B and below; ratings are applied at time of purchase
The filing
Written by AI on Nov 9, 2026, 8:28 AM ET, from this filing only. Written later: this filing was briefed after the fact, when past filings were added to the site, so the brief may be read with hindsight; the filing itself is the record of what was known on January 20, 2017.
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