Flaherty & Crumrine Preferred and Income fund plans offer of shares

By Toni Weeks

San Diego, Oct. 25 - Flaherty & Crumrine Preferred and Income Allocation Fund Inc. plans to offer common shares, according to an N-2 filing with the Securities and Exchange Commission.

The newly organized, non-diversified, closed-end management investment company seeks total return with an emphasis on high current income by investing at least 80% of its managed assets in a portfolio of preferred and other income-producing securities issued by U.S. and non-U.S. companies. Managed assets are net assets plus assets obtained through leverage.

The securities may include preferred stock, trust preferred securities, hybrid securities with both equity and debt characteristics, convertible securities, contingent-capital securities, subordinated debt, senior debt and securities of other open-end, closed-end or exchange-traded funds that invest primarily in the same types of securities.

The fund will invest primarily in investment-grade securities or high-yield preferred or subordinated securities of companies with outstanding investment-grade senior debt. Under normal conditions, it will invest more than 25% of its total assets in the financials sector.

The portfolio management team includes Donald F. Crumrine, Robert M. Ettinger, R. Eric Chadwick and Bradford S. Stone.

The fund registered a token $1 million of shares in the filing.

The underwriters, public offering price and sales load have not yet been determined. The fund's common shares have been authorized for listing on the New York Stock Exchange. The ticker symbol has not yet been set.

Pasadena, Calif.-based Flaherty & Crumrine Inc. is the investment adviser.

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