This closed-end fund’s annual dividend yield is 5.77%, paid monthly.
BlackRock Floating Rate Income Strategies Fund, Inc. (FRA)
From Income Securities Investor
BlackRock Floating Rate Income Strategies Fund, Inc.; Discount to Net Asset Value -2.95%; Pay Cycle Me; Expense Ratio 1.72%; Leverage Ratio 29.10%; CUSIP 09255X100; Family Closed-End Fund
BlackRock Floating Rate Income Strategies Fund, Inc. seeks high current income and capital preservation, consistent with investment in a diversified, albeit leveraged portfolio of floating- and variable-rate debt securities. The fund aims to achieve its objective by investing, under normal market conditions, at least 80% of its managed assets in floating- or variable-rate instruments.
A substantial portion of FRA’s managed assets are invested in secured and unsecured, non-investment grade, floating-rate senior loans. The fund may also invest in securities synthetically or through the use of derivatives. As of 09/30/21, the portfolio consisted almost entirely of term loans, with 53.1% of the maturities in the range of 5-7 years and 34.2% in 3-5 years. Holdings were essentially all non-investment grade term loans and bonds.
The top five holdings on 09/30/21 were UKG, Inc (1.32%), Sophia, LP (1.31%), RealPage, Inc. (1.28%), Peraton Corp. (1.26%), and Magenta Buyer, LLC (1.23%). FRA’s performance has been sound historically, with market price five-year and ten-year total returns of +5.11% and +6.58%, respectively.
The market price total return for full-year 2021 was a strong +17.79%. This closed-end fund is suitable for medium- to high-risk tax-deferred portfolios. Distributions are taxed on a variable basis and may include ordinary income, capital gains, and return of capital. Buy at $16.25 or lower for a 4.95% annualized yield.
Martin Fridson, CFA, Income Securities Investor, isinewsletter.com, 800-472-2680, February 2022