COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS(Continued)
June 30, 2022 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Amount |
|
|
Value |
|
FINANCIAL |
|
|
2.8% |
|
|
|
|
|
|
|
|
|
Apollo Management Holdings LP, 4.95% to 12/17/24, due 1/14/50, 144Aa,b,g,h |
|
|
$
|
1,424,000 |
|
|
$
|
1,233,533 |
|
Ares Finance Co. III LLC, 4.125% to 6/30/26, due 6/30/51, 144Ag,h |
|
|
|
2,365,000 |
|
|
|
1,970,040 |
|
Charles Schwab Corp./The, 4.00% to 12/1/30, Series Hf,g |
|
|
|
4,370,000 |
|
|
|
3,369,270 |
|
Charles Schwab Corp./The, 4.00% to 6/1/26, Series Ia,f,g |
|
|
|
9,855,000 |
|
|
|
8,366,008 |
|
Charles Schwab Corp./The, 5.00% to 6/1/27f,g |
|
|
|
2,860,000 |
|
|
|
2,570,938 |
|
Charles Schwab Corp./The, 6.106% (3 Month US LIBOR + 4.82%) (FRN)f,i |
|
|
|
1,800,000 |
|
|
|
1,797,750 |
|
Charles Schwab Corp./The, 5.375% to 6/1/25, Series Ga,f,g |
|
|
|
6,183,000 |
|
|
|
6,136,627 |
|
Discover Financial Services, 6.125% to 6/23/25, Series Df,g |
|
|
|
790,000 |
|
|
|
791,896 |
|
ILFC E-Capital Trust I, 4.85% (30 Year CMT + 1.55%), due 12/21/65,
144A (FRN) (TruPS)h,i |
|
|
|
3,009,000 |
|
|
|
2,204,121 |
|
Julius Baer Group Ltd., 6.875% to 6/9/27 (Switzerland)f,g,j,k |
|
|
|
2,000,000 |
|
|
|
1,922,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,362,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOOD |
|
|
0.9% |
|
|
|
|
|
|
|
|
|
Dairy Farmers of America, Inc., 7.875%, Series B, 144Aa,b,f,h |
|
|
|
82,000 |
|
|
|
8,036,000 |
|
Land O Lakes, Inc., 7.00%, 144Af,h |
|
|
|
1,650,000 |
|
|
|
1,560,446 |
|
Land O Lakes, Inc., 7.25%, 144Af,h |
|
|
|
945,000 |
|
|
|
902,376 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,498,822 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INDUSTRIALSDIVERSIFIED
MANUFACTURING |
|
|
0.2% |
|
|
|
|
|
|
|
|
|
General Electric Co., 5.159% (3 Month US LIBOR + 3.33%), Series D (FRN)a,b,f,i |
|
|
|
2,123,000 |
|
|
|
1,868,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSURANCE |
|
|
6.8% |
|
|
|
|
|
|
|
|
|
FINANCE |
|
|
0.1% |
|
|
|
|
|
|
|
|
|
Liberty Mutual Group, Inc., 4.125% to 9/15/26, due 12/15/51, 144Ag,h |
|
|
|
2,096,000 |
|
|
|
1,675,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFE/HEALTH INSURANCE |
|
|
2.4% |
|
|
|
|
|
|
|
|
|
Equitable Holdings, Inc., 4.95% to 9/15/25, Series Bf,g |
|
|
|
3,480,000 |
|
|
|
3,278,905 |
|
MetLife Capital Trust IV, 7.875%, due 12/15/37, 144A (TruPS)a,h |
|
|
|
2,381,000 |
|
|
|
2,572,357 |
|
See accompanying notes to the consolidated financial statements.
19
COHEN
& STEERS REIT AND PREFERRED AND INCOME
FUND, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS(Continued)
June 30, 2022 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Amount |
|
|
Value |
|
MetLife, Inc., 9.25%, due 4/8/68, 144Aa,b,h |
|
|
$
|
7,665,000 |
|
|
$
|
9,024,889 |
|
MetLife, Inc., 10.75%, due 8/1/69a,b |
|
|
|
3,592,000 |
|
|
|
4,771,487 |
|
SBL Holdings, Inc., 6.50% to 11/13/26, 144Af,g,h |
|
|
|
3,120,000 |
|
|
|
2,519,400 |
|
SBL Holdings, Inc., 7.00% to 5/13/25, 144Af,g,h |
|
|
|
2,100,000 |
|
|
|
1,737,754 |
|
Voya Financial, Inc., 5.65% to 5/15/23, due 5/15/53g |
|
|
|
1,200,000 |
|
|
|
1,127,538 |
|
Voya Financial, Inc., 6.125% to 9/15/23, Series Af,g |
|
|
|
1,800,000 |
|
|
|
1,703,026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,735,356 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFE/HEALTH
INSURANCEFOREIGN |
|
|
1.3% |
|
|
|
|
|
Dai-ichi Life Insurance Co., Ltd./The, 5.10% to 10/28/24, 144A (Japan)f,g,h |
|
|
|
5,200,000 |
|
|
|
5,166,715 |
|
Kyobo Life Insurance Co., Ltd., 5.90% to 6/15/2027, due 6/15/52 144A
(South Korea)f,g,h |
|
|
|
1,800,000 |
|
|
|
1,798,794 |
|
La Mondiale SAM, 5.875% to 1/26/27, due 1/26/47 (France)g,j |
|
|
|
1,415,000 |
|
|
|
1,378,468 |
|
Phoenix Group Holdings PLC, 5.625% to 1/29/25 (United Kingdom)f,g,j,k |
|
|
|
1,200,000 |
|
|
|
1,110,414 |
|
Rothesay Life PLC, 4.875% to 4/13/27, Series NC6 (United Kingdom)f,g,j,k |
|
|
|
2,800,000 |
|
|
|
2,334,388 |
|
Rothesay Life PLC, 6.875% to 9/12/28 (United Kingdom)f,g,j,k |
|
|
|
2,200,000 |
|
|
|
2,516,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,304,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MULTI-LINE |
|
|
0.2% |
|
|
|
|
|
|
|
|
|
Hartford Financial Services Group, Inc./The, 3.536% (3 Month US LIBOR
+ 2.125%), due 2/12/67, 144A, Series ICON (FRN)h,i |
|
|
|
2,200,000 |
|
|
|
1,741,884 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MULTI-LINEFOREIGN |
|
|
0.3% |
|
|
|
|
|
|
|
|
|
AXA SA, 6.379% to 12/14/36, 144A (France)a,b,f,g,h |
|
|
|
2,399,000 |
|
|
|
2,738,164 |
|
UnipolSai Assicurazioni SpA, 6.375% to 4/27/30 (Italy)f,g,j,k |
|
|
|
900,000 |
|
|
|
830,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,568,199 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROPERTY CASUALTY |
|
|
1.0% |
|
|
|
|
|
|
|
|
|
Assurant, Inc., 7.00% to 3/27/28, due 3/27/48a,g |
|
|
|
2,900,000 |
|
|
|
2,838,824 |
|
Enstar Finance LLC, 5.50% to 1/15/27, due 1/15/42g |
|
|
|
2,975,000 |
|
|
|
2,436,681 |
|
Enstar Finance LLC, 5.75% to 9/1/25, due 9/1/40g |
|
|
|
2,484,000 |
|
|
|
2,265,962 |
|
Markel Corp., 6.00% to
6/1/25f,g |
|
|
|
3,000,000 |
|
|
|
2,962,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,503,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the consolidated financial statements.
20
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS(Continued)
June 30, 2022 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Amount |
|
|
Value |
|
PROPERTY
CASUALTYFOREIGN |
|
|
1.0% |
|
|
|
|
|
|
|
|
|
Athora Netherlands NV, 7.00% to 6/19/25 (Netherlands)f,g,j,k |
|
|
$
|
2,200,000 |
|
|
$
|
2,182,358 |
|
Lancashire Holdings Ltd., 5.625% to 3/18/31, due 9/18/41 (United Kingdom)g,j |
|
|
|
2,200,000 |
|
|
|
1,859,000 |
|
QBE Insurance Group Ltd., 5.875% to 5/12/25, 144A (Australia)f,g,h |
|
|
|
4,200,000 |
|
|
|
4,095,000 |
|
QBE Insurance Group Ltd., 5.875% to 6/17/26, due 6/17/46, Series EMTN
(Australia)g,j |
|
|
|
2,600,000 |
|
|
|
2,534,154 |
|
Sompo Japan Insurance, Inc., 5.325% to 3/28/23, due 3/28/73, 144A (Japan)g,h |
|
|
|
615,000 |
|
|
|
614,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,284,822 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REINSURANCE |
|
|
0.5% |
|
|
|
|
|
|
|
|
|
AXIS Specialty Finance LLC, 4.90% to 1/15/30, due 1/15/40a,g |
|
|
|
1,475,000 |
|
|
|
1,245,285 |
|
Global Atlantic Fin Co., 4.70% to 7/15/26, due 10/15/51, 144Ag,h |
|
|
|
4,850,000 |
|
|
|
3,902,171 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,147,456 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL INSURANCE |
|
|
|
|
|
|
|
74,961,869 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEGRATED TELECOMMUNICATIONS
SERVICESFOREIGN |
|
|
0.4% |
|
|
|
|
|
|
|
|
|
Vodafone Group PLC, 4.125% to 3/4/31, due 6/4/81 (United Kingdom)g |
|
|
|
4,290,000 |
|
|
|
3,221,154 |
|
Vodafone Group PLC, 7.00% to 1/4/29, due 4/4/79 (United Kingdom)a,g |
|
|
|
1,030,000 |
|
|
|
1,013,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,234,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OIL &
GASFOREIGN |
|
|
0.8% |
|
|
|
|
|
|
|
|
|
BP Capital Markets PLC, 4.875% to 3/22/30 (United Kingdom)a,f,g |
|
|
|
9,950,000 |
|
|
|
8,694,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PIPELINES |
|
|
0.6% |
|
|
|
|
|
|
|
|
|
Energy Transfer LP, 6.50% to 11/15/26, Series Hf,g |
|
|
|
2,520,000 |
|
|
|
2,233,772 |
|
Energy Transfer LP, 7.125% to 5/15/30, Series Gf,g |
|
|
|
4,800,000 |
|
|
|
4,131,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,364,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PIPELINESFOREIGN |
|
|
2.9% |
|
|
|
|
|
|
|
|
|
Enbridge, Inc., 5.75% to 4/15/30, due 7/15/80, Series 20-A (Canada)g |
|
|
|
4,620,000 |
|
|
|
4,235,708 |
|
See accompanying notes to the consolidated financial statements.
21
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS(Continued)
June 30, 2022 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Amount |
|
|
Value |
|
Enbridge, Inc., 6.00% to 1/15/27, due 1/15/77, Series 16-A (Canada)a,g |
|
|
$
|
4,012,000 |
|
|
$
|
3,717,351 |
|
Enbridge, Inc., 6.25% to 3/1/28, due 3/1/78 (Canada)a,g |
|
|
|
5,330,000 |
|
|
|
4,749,019 |
|
Transcanada Trust, 5.50% to 9/15/29, due 9/15/79 (Canada)a,b,g |
|
|
|
9,014,000 |
|
|
|
8,060,129 |
|
Transcanada Trust, 5.60% to 12/7/31, due 3/7/82 (Canada)g |
|
|
|
2,592,000 |
|
|
|
2,355,480 |
|
Transcanada Trust, 5.625% to 5/20/25, due 5/20/75 (Canada)g |
|
|
|
2,733,000 |
|
|
|
2,586,180 |
|
Transcanada Trust, 5.875% to 8/15/26, due 8/15/76, Series 16-A
(Canada)a,g |
|
|
|
7,002,000 |
|
|
|
6,669,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,373,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REAL
ESTATERETAILFOREIGN |
|
|
0.8% |
|
|
|
|
|
|
|
|
|
Scentre Group Trust 2, 4.75% to 6/24/26, due 9/24/80, 144A (Australia)g,h |
|
|
|
6,500,000 |
|
|
|
5,799,235 |
|
Scentre Group Trust 2, 5.125% to 6/24/30, due 9/24/80, 144A (Australia)g,h |
|
|
|
4,000,000 |
|
|
|
3,302,753 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,101,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UTILITIES |
|
|
2.0% |
|
|
|
|
|
|
|
|
|
ELECTRIC |
|
|
1.6% |
|
|
|
|
|
|
|
|
|
Edison International, 5.00% to 12/15/26, Series Ba,f,g |
|
|
|
4,497,000 |
|
|
|
3,589,192 |
|
Edison International, 5.375% to 3/15/26, Series Aa,f,g |
|
|
|
3,860,000 |
|
|
|
3,145,900 |
|
NextEra Energy Capital Holdings, Inc., 5.65% to 5/1/29, due 5/1/79a,g |
|
|
|
2,407,000 |
|
|
|
2,117,608 |
|
Sempra Energy, 4.125% to 1/1/27, due 4/1/52g |
|
|
|
3,360,000 |
|
|
|
2,701,324 |
|
Sempra Energy, 4.875% to 10/15/25a,f,g |
|
|
|
6,430,000 |
|
|
|
5,931,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,485,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ELECTRICFOREIGN |
|
|
0.3% |
|
|
|
|
|
|
|
|
|
Algonquin Power & Utilities Corp., 4.75% to 1/18/27, due 1/18/82
(Canada)g |
|
|
|
4,368,000 |
|
|
|
3,644,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GASDISTRIBUTION |
|
|
0.1% |
|
|
|
|
|
|
|
|
|
South Jersey Industries, Inc., 5.02%, due 4/15/31 |
|
|
|
1,040,000 |
|
|
|
927,305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL UTILITIES |
|
|
|
|
|
|
|
22,057,196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL PREFERRED
SECURITIESCAPITAL SECURITIES (Identified cost$672,528,090) |
|
|
|
|
|
|
|
614,191,159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the consolidated financial statements.
22
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS(Continued)
June 30, 2022 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ownership %* |
|
|
Value |
|
PRIVATE REAL
ESTATEOFFICE |
|
|
1.5% |
|
|
|
|
|
|
|
|
|
Legacy Gateway JV LLC, Plano, TXd |
|
|
|
33.6% |
|
|
$
|
16,222,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL PRIVATE REAL
ESTATE (Identified cost$14,071,976) |
|
|
|
|
|
|
|
16,222,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
|
SHORT-TERM INVESTMENTS |
|
|
2.9% |
|
|
|
|
|
|
|
|
|
MONEY MARKET
FUNDS |
|
State Street Institutional Treasury Money Market Fund, Premier Class,
1.04%l |
|
|
|
31,687,300 |
|
|
|
31,687,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL SHORT-TERM
INVESTMENTS (Identified cost$31,687,300) |
|
|
|
|
|
|
|
31,687,300 |
|
|
|
|
|
|
|
PURCHASED OPTION CONTRACTS (Premiums
paid$564,549) |
|
|
0.2% |
|
|
|
|
|
|
|
2,151,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL INVESTMENTS IN
SECURITIES (Identified cost$1,391,178,360) |
|
|
139.9% |
|
|
|
|
|
|
|
1,530,847,436 |
|
WRITTEN OPTION CONTRACTS (Premiums
received$580,368) |
|
|
(0.2) |
|
|
|
|
|
|
|
(1,731,328 |
) |
SERIES A CUMULATIVE PREFERRED
STOCK, AT LIQUIDATION VALUE |
|
|
(0.0) |
|
|
|
|
|
|
|
(125,000 |
) |
LIABILITIES IN EXCESS OF
OTHER ASSETS |
|
|
(39.7) |
|
|
|
|
|
|
|
(434,903,217 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS (Equivalent to $22.99 per share based on
47,595,257 shares of common stock outstanding) |
|
|
100.0% |
|
|
|
|
|
|
$ |
1,094,087,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange-Traded Option Contracts
Purchased Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description |
|
Exercise Price |
|
Expiration Date |
|
|
Number of Contracts |
|
|
Notional Amountm |
|
|
Premiums Paid |
|
|
Value |
|
CallEquinix Inc. |
|
$740.00 |
|
|
7/15/22 |
|
|
|
26 |
|
|
|
$1,708,252 |
|
|
|
$26,037 |
|
|
|
$1,773 |
|
|
|
See accompanying notes to the consolidated financial statements.
23
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS(Continued)
June 30, 2022 (Unaudited)
Written Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description |
|
Exercise Price |
|
Expiration Date |
|
|
Number of Contracts |
|
|
Notional Amountm |
|
|
Premiums Received |
|
|
Value |
|
CallAmerican Tower Corp. |
|
$270.00 |
|
|
8/19/22 |
|
|
|
(106 |
) |
|
|
$(2,709,254 |
) |
|
|
$(40,473 |
) |
|
|
$(63,600 |
) |
CallEquinix Inc. |
|
760.00 |
|
|
7/15/22 |
|
|
|
(52 |
) |
|
|
(3,416,504 |
) |
|
|
(27,224 |
) |
|
|
(1,599 |
) |
CallWeyerhaeuser Co. |
|
37.00 |
|
|
8/19/22 |
|
|
|
(662 |
) |
|
|
(2,192,544 |
) |
|
|
(37,099 |
) |
|
|
(33,100 |
) |
PutCrown Castle International Corp. |
|
160.00 |
|
|
8/19/22 |
|
|
|
(109 |
) |
|
|
(1,835,342 |
) |
|
|
(40,061 |
) |
|
|
(49,050 |
) |
PutDigital Realty Trust Inc. |
|
125.00 |
|
|
8/19/22 |
|
|
|
(73 |
) |
|
|
(947,759 |
) |
|
|
(18,870 |
) |
|
|
(35,405 |
) |
PutIron Mountain Inc. |
|
47.50 |
|
|
7/15/22 |
|
|
|
(391 |
) |
|
|
(1,903,779 |
) |
|
|
(32,675 |
) |
|
|
(36,754 |
) |
PutPrologis Inc. |
|
110.00 |
|
|
8/19/22 |
|
|
|
(177 |
) |
|
|
(2,082,405 |
) |
|
|
(47,425 |
) |
|
|
(65,490 |
) |
|
|
|
|
|
|
|
|
|
|
|
(1,570 |
) |
|
|
$(15,087,587 |
) |
|
|
$(243,827 |
) |
|
|
$(284,998 |
) |
|
|
Over-the-Counter Option Contracts
Purchased Options
Interest Rate
Swaptions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description |
|
Counterparty |
|
Exercise Rate |
|
|
Expiration Date |
|
|
Notional Amountn |
|
|
Premiums Paid |
|
|
Value |
|
Option to receive USD-SOFR-OIS Annually, Pay 2.00% Annually,maturing
8/29/32 |
|
Goldman Sachs International |
|
|
2.00 |
% |
|
|
8/25/22 |
|
|
|
$29,984,000 |
|
|
|
$538,512 |
|
|
|
$2,149,673 |
|
|
|
Written Options
Equity Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description |
|
Counterparty |
|
Exercise Rate |
|
|
Expiration Date |
|
|
Number of Contracts |
|
|
Notional Amountm |
|
|
Premiums Received |
|
|
Value |
|
PutAmericold Realty Trust |
|
Goldman Sachs International |
|
|
$26.50 |
|
|
|
7/15/22 |
|
|
|
(816 |
) |
|
|
$(2,451,264 |
) |
|
|
$(45,696 |
) |
|
|
$(11,865 |
) |
|
|
Interest Rate Swaptions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description |
|
Counterparty |
|
Exercise Rate |
|
|
Expiration Date |
|
|
Notional Amountn |
|
|
Premiums Received |
|
|
Value |
|
Option to pay USD-SOFR-OIS Annually, Receive 2.30% Annually, maturing
8/29/32 |
|
Goldman Sachs International |
|
|
2.30 |
% |
|
|
8/25/22 |
|
|
|
$(29,984,000 |
) |
|
|
$(290,845 |
) |
|
|
$(1,434,465 |
) |
|
|
See accompanying notes to the consolidated financial statements.
24
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS(Continued)
June 30, 2022 (Unaudited)
Centrally Cleared Interest Rate Swap Contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional Amount |
|
|
Fixed Rate Payable |
|
|
Fixed Payment Frequency |
|
Floating
Rate Receivable (resets
monthly) |
|
Floating Payment Frequency |
|
|
Maturity Date |
|
Value |
|
|
Upfront Receipts (Payments) |
|
|
Unrealized Appreciation |
|
|
$105,000,000 |
|
|
|
0.670% |
|
|
Monthly |
|
1.324%o |
|
|
Monthly |
|
|
9/15/25 |
|
|
$7,282,709 |
|
|
|
|
|
|
|
$7,282,709 |
|
|
87,500,000 |
|
|
|
1.240% |
|
|
Monthly |
|
1.120%o |
|
|
Monthly |
|
|
2/3/26 |
|
|
4,991,910 |
|
|
|
(25,792 |
) |
|
|
4,966,118 |
|
|
65,000,000 |
|
|
|
0.762% |
|
|
Monthly |
|
1.324%o |
|
|
Monthly |
|
|
9/15/26 |
|
|
5,504,269 |
|
|
|
|
|
|
|
5,504,269 |
|
|
105,000,000 |
|
|
|
1.237%p |
|
|
Monthly |
|
1 Month LIBORp |
|
|
Monthly |
|
|
9/15/27 |
|
|
7,616,553 |
|
|
|
|
|
|
|
7,616,553 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$25,395,441 |
|
|
|
$(25,792) |
|
|
|
$25,369,649 |
|
|
|
|
The total amount of all interest rate swap contracts as presented in the table above are representative of the
volume of activity for this derivative type during the six months ended June 30, 2022.
Forward Foreign Currency
Exchange Contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Counterparty |
|
Contracts to Deliver |
|
|
In Exchange For |
|
|
Settlement Date |
|
|
Unrealized Appreciation (Depreciation) |
|
Brown Brothers Harriman |
|
CAD |
|
|
2,678,012 |
|
|
USD |
|
|
2,119,628 |
|
|
|
7/5/22 |
|
|
$ |
39,134 |
|
Brown Brothers Harriman |
|
EUR |
|
|
28,080,126 |
|
|
USD |
|
|
30,178,413 |
|
|
|
7/5/22 |
|
|
|
751,845 |
|
Brown Brothers Harriman |
|
GBP |
|
|
4,397,497 |
|
|
USD |
|
|
5,395,421 |
|
|
|
7/5/22 |
|
|
|
42,347 |
|
Brown Brothers Harriman |
|
GBP |
|
|
1,371,841 |
|
|
USD |
|
|
1,716,709 |
|
|
|
7/5/22 |
|
|
|
46,767 |
|
Brown Brothers Harriman |
|
GBP |
|
|
6,719,996 |
|
|
USD |
|
|
8,481,038 |
|
|
|
7/5/22 |
|
|
|
300,785 |
|
Brown Brothers Harriman |
|
USD |
|
|
1,887,589 |
|
|
EUR |
|
|
1,792,043 |
|
|
|
7/5/22 |
|
|
|
(9,618 |
) |
Brown Brothers Harriman |
|
USD |
|
|
493,696 |
|
|
GBP |
|
|
402,047 |
|
|
|
7/5/22 |
|
|
|
(4,285 |
) |
Brown Brothers Harriman |
|
USD |
|
|
2,076,268 |
|
|
CAD |
|
|
2,678,012 |
|
|
|
7/5/22 |
|
|
|
4,226 |
|
Brown Brothers Harriman |
|
USD |
|
|
1,377,539 |
|
|
EUR |
|
|
1,320,152 |
|
|
|
7/5/22 |
|
|
|
5,914 |
|
Brown Brothers Harriman |
|
USD |
|
|
14,677,955 |
|
|
GBP |
|
|
12,087,287 |
|
|
|
7/5/22 |
|
|
|
35,903 |
|
Brown Brothers Harriman |
|
USD |
|
|
26,105,220 |
|
|
EUR |
|
|
24,967,931 |
|
|
|
7/5/22 |
|
|
|
59,923 |
|
Brown Brothers Harriman |
|
EUR |
|
|
24,393,899 |
|
|
USD |
|
|
25,549,926 |
|
|
|
8/2/22 |
|
|
|
(60,642 |
) |
Brown Brothers Harriman |
|
GBP |
|
|
12,379,539 |
|
|
USD |
|
|
15,038,664 |
|
|
|
8/2/22 |
|
|
|
(38,206 |
) |
Brown Brothers Harriman |
|
GBP |
|
|
657,233 |
|
|
USD |
|
|
801,875 |
|
|
|
8/2/22 |
|
|
|
1,440 |
|
Brown Brothers Harriman |
|
CAD |
|
|
2,646,761 |
|
|
USD |
|
|
2,051,880 |
|
|
|
8/3/22 |
|
|
|
(4,262 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,171,271 |
|
|
|
See accompanying notes to the consolidated financial statements.
25
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS(Continued)
June 30, 2022 (Unaudited)
Glossary of Portfolio Abbreviations
|
|
|
CAD |
|
Canadian Dollar |
CMT |
|
Constant Maturity Treasury |
EMTN |
|
Euro Medium Term Note |
EUR |
|
Euro Currency |
FRN |
|
Floating Rate Note |
GBP |
|
Great British Pound |
LIBOR |
|
London Interbank Offered Rate |
OIS |
|
Overnight Indexed Swap |
REIT |
|
Real Estate Investment Trust |
SOFR |
|
Secured Overnight Financing Rate |
TruPS |
|
Trust Preferred Securities |
USD |
|
United States Dollar |
See accompanying notes to the consolidated financial statements.
26
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS(Continued)
June 30, 2022 (Unaudited)
Note: Percentages indicated are
based on the net assets of the Fund.
* |
Ownership % represents the Funds contractual ownership in the limited liability company prior
to the impact of promote structures. |
a |
All or a portion of the security is pledged as collateral in connection with the Funds
revolving credit agreement. $908,116,509 in aggregate has been pledged as collateral. |
b |
A portion of the security has been rehypothecated in connection with the Funds revolving
credit agreement. $402,430,629 in aggregate has been rehypothecated. |
c |
All or a portion of the security is pledged in connection with exchange-traded written option
contracts. $32,087,947 in aggregate has been pledged as collateral. |
d |
Security value is determined based on significant unobservable inputs (Level 3). |
e |
Restricted security. Aggregate holdings equal 0.5% of the net assets of the Fund. This security was
acquired on August 3, 2020, at a cost of $3,755,469. Security value is determined based on significant unobservable inputs Level 3). |
f |
Perpetual security. Perpetual securities have no stated maturity date, but they may be
called/redeemed by the issuer. |
g |
Security converts to floating rate after the indicated fixed-rate coupon period. |
h |
Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities
may only be resold to qualified institutional buyers. Aggregate holdings amounted to $163,610,125 which represents 15.0% of the net assets of the Fund, of which 0.0% are illiquid.
|
i |
Variable rate. Rate shown is in effect at June 30, 2022. |
j |
Securities exempt from registration under Regulation S of the Securities Act of 1933. These
securities are subject to resale restrictions. Aggregate holdings amounted to $78,948,633 which represents 7.2% of the net assets of the Fund, of which 0.0% are illiquid.
|
k |
Contingent Capital security (CoCo). CoCos are debt or preferred securities with loss absorption
characteristics built into the terms of the security for the benefit of the issuer. Aggregate holdings amounted to $207,248,779 which represents 18.9% of the net assets of the Fund (13.4% of the managed assets of the Fund). |
l |
Rate quoted represents the annualized seven-day
yield. |
m |
Represents the number of contracts multiplied by notional contract size multiplied by the
underlying price. |
n |
Represents the notional amount of the underlying swap contract. |
o |
Based on 1-Month LIBOR. Represents rates in effect at June 30, 2022. |
p |
Represents a forward-starting interest rate swap contract with interest receipts and payments
commencing on December 24, 2022 (effective date). |
See accompanying notes to the consolidated financial statements.
27
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
June 30, 2022 (Unaudited)
|
|
|
|
|
ASSETS: |
|
Investments in securities, at
valuea (Identified cost$1,391,178,360) |
|
$ |
1,530,847,436 |
|
Cash |
|
|
773,966 |
|
Cash collateral pledged for interest rate swap contracts |
|
|
9,648,680 |
|
Foreign currency, at value (Identified cost$491,050) |
|
|
488,882 |
|
Receivable for: |
|
|
|
|
Dividends and interest |
|
|
10,047,356 |
|
Investment securities sold |
|
|
987,902 |
|
Unrealized appreciation on forward foreign currency exchange contracts |
|
|
1,288,284 |
|
Other assets |
|
|
62,058 |
|
|
|
|
|
|
Total Assets |
|
|
1,554,144,564 |
|
|
|
|
|
|
LIABILITIES: |
|
Written option contracts, at value (Premiums received$580,368) |
|
|
1,731,328 |
|
Unrealized depreciation on forward foreign currency exchange contracts |
|
|
117,013 |
|
Payable for: |
|
|
|
|
Credit agreement |
|
|
450,000,000 |
|
Investment securities purchased |
|
|
2,761,232 |
|
Variation margin on interest rate swap contracts |
|
|
2,173,307 |
|
Interest expense |
|
|
950,126 |
|
Investment management fees |
|
|
839,169 |
|
Cash collateral received for over-the-counter option contracts |
|
|
540,000 |
|
Dividends and distributions declared |
|
|
248,817 |
|
Administration fees |
|
|
77,462 |
|
Directors fees |
|
|
839 |
|
Other liabilities |
|
|
492,380 |
|
|
|
|
|
|
Total Liabilities |
|
|
459,931,673 |
|
|
|
|
|
|
Series A Cumulative Preferred Stock (Preferred Stock) (125 shares authorized and
issued at $1,000 per share) (Note 7) |
|
|
125,000 |
|
|
|
|
|
|
TOTAL NET ASSETS APPLICABLE TO COMMON SHARES |
|
$ |
1,094,087,891 |
|
|
|
|
|
|
NET ASSETS Applicable to Common Shareholders consist of: |
|
Paid-in capital |
|
$ |
809,183,495 |
|
Total distributable earnings/(accumulated loss) |
|
|
284,904,396 |
|
|
|
|
|
|
|
|
$ |
1,094,087,891 |
|
|
|
|
|
|
NET ASSET VALUE PER COMMON SHARE: |
|
($1,094,087,891 ÷ 47,595,257 common shares outstanding) |
|
$ |
22.99 |
|
|
|
|
|
|
MARKET PRICE PER COMMON SHARE |
|
$ |
21.34 |
|
|
|
|
|
|
MARKET PRICE PREMIUM (DISCOUNT) TO NET ASSET VALUE PER COMMON SHARE |
|
|
(7.18 |
)% |
|
|
|
|
|
a |
Includes $908,116,509 pledged, of which $402,430,629 has been rehypothecated, in connection with
the Funds credit agreement, as described in Note 9. |
See accompanying notes to the consolidated financial statements.
28
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2022 (Unaudited)
|
|
|
|
|
Investment Income: |
|
Interest income |
|
$ |
15,860,132 |
|
Dividend income (net of $1,527 of foreign withholding tax) |
|
|
13,999,523 |
|
Rehypothecation income |
|
|
232,242 |
|
|
|
|
|
|
Total Investment Income |
|
|
30,091,897 |
|
|
|
|
|
|
Expenses: |
|
Investment management fees |
|
|
5,425,777 |
|
Interest expense |
|
|
4,284,506 |
|
Administration fees |
|
|
572,657 |
|
Shareholder reporting expenses |
|
|
227,967 |
|
Professional fees |
|
|
123,615 |
|
Custodian fees and expenses |
|
|
82,820 |
|
Directors fees and expenses |
|
|
20,079 |
|
Transfer agent fees and expenses |
|
|
13,985 |
|
Miscellaneous |
|
|
21,024 |
|
|
|
|
|
|
Total Expenses |
|
|
10,772,430 |
|
|
|
|
|
|
Net Investment Income (Loss) |
|
|
19,319,467 |
|
|
|
|
|
|
Net Realized and Unrealized Gain (Loss): |
|
Net realized gain (loss) on: |
|
Investments in securities |
|
|
17,537,159 |
|
Written option contracts |
|
|
321,153 |
|
Interest rate swap contracts |
|
|
(685,340 |
) |
Forward foreign currency exchange contracts |
|
|
1,787,666 |
|
Foreign currency transactions |
|
|
(46,764 |
) |
|
|
|
|
|
Net realized gain (loss) |
|
|
18,913,874 |
|
|
|
|
|
|
Net change in unrealized appreciation (depreciation) on: |
|
Investments in securities |
|
|
(318,886,576 |
) |
Written option contracts |
|
|
(1,236,535 |
) |
Interest rate swap contracts |
|
|
21,561,578 |
|
Forward foreign currency exchange contracts |
|
|
1,650,383 |
|
Foreign currency translations |
|
|
(9,661 |
) |
|
|
|
|
|
Net change in unrealized appreciation (depreciation) |
|
|
(296,920,811 |
) |
|
|
|
|
|
Net Realized and Unrealized Gain (Loss) |
|
|
(278,006,937 |
) |
|
|
|
|
|
Net Increase (Decrease) in Net Assets Resulting from Operations |
|
|
(258,687,470 |
) |
|
|
|
|
|
Distributions Paid to Series A Cumulative Preferred Stockholders (Note
7) |
|
|
(6,416 |
) |
|
|
|
|
|
Net Increase (Decrease) in Net Assets Applicable to Common Shareholders
From Operations |
|
$ |
(258,693,886 |
) |
|
|
|
|
|
See accompanying notes to the
consolidated financial statements.
29
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS APPLICABLE TO COMMON SHARES (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, 2022 |
|
|
For the Year Ended December 31, 2021 |
|
Change in Net Assets Applicable to Common Shareholders: |
|
|
|
|
|
|
|
|
From Operations: |
|
|
|
|
|
|
|
|
Net investment income (loss) |
|
$ |
19,319,467 |
|
|
$ |
34,663,763 |
|
Net realized gain (loss) |
|
|
18,913,874 |
|
|
|
101,388,747 |
|
Net change in unrealized appreciation (depreciation) |
|
|
(296,920,811 |
) |
|
|
202,345,809 |
|
Distributions paid to Series A Cumulative Preferred Stockholders |
|
|
(6,416 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets applicable to Common Shareholders from
operations |
|
|
(258,693,886 |
) |
|
|
338,398,319 |
|
|
|
|
|
|
|
|
|
|
Distributions to Common Shareholders |
|
|
(38,837,730 |
) |
|
|
(70,808,239 |
) |
|
|
|
|
|
|
|
|
|
Capital Stock Transactions: |
|
|
|
|
|
|
|
|
Increase (decrease) in net assets from Fund share transactions |
|
|
|
|
|
|
361,950 |
|
Decrease in net assets from offering expenses from issuance of preferred
stock |
|
|
(19,400 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets from capital stock transactions |
|
|
(19,400 |
) |
|
|
361,950 |
|
|
|
|
|
|
|
|
|
|
Total increase (decrease) in net assets applicable to
Common Shareholders |
|
|
(297,551,016 |
) |
|
|
267,952,030 |
|
Net Assets Applicable to Common Shareholders: |
|
|
|
|
|
|
|
|
Beginning of period |
|
|
1,391,638,907 |
|
|
|
1,123,686,877 |
|
|
|
|
|
|
|
|
|
|
End of period |
|
$ |
1,094,087,891 |
|
|
$ |
1,391,638,907 |
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the
consolidated financial statements.
30
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 2022 (Unaudited)
|
|
|
|
|
Increase (Decrease) in Cash: |
|
Cash Flows from Operating Activities: |
|
Net increase (decrease) in net assets resulting from operations* |
|
$ |
(258,687,470 |
) |
Adjustments to reconcile net increase (decrease) in net assets resulting from
operations to net cash provided by operating activities: |
|
|
|
|
Purchases of long-term investments |
|
|
(402,189,697 |
) |
Proceeds from sales and maturities of long-term investments |
|
|
359,604,360 |
|
Net purchases, sales and maturities of short-term investments |
|
|
7,305,726 |
|
Net amortization of premium on investments in securities |
|
|
1,690,437 |
|
Net decrease in dividends and interest receivable and other assets |
|
|
527,014 |
|
Net increase in payable for collateral on option contracts |
|
|
240,000 |
|
Net increase in interest expense payable, accrued expenses and
other liabilities |
|
|
190,858 |
|
Net increase in payable for variation margin on interest rate swap
contracts |
|
|
1,982,242 |
|
Net increase in premiums received from written option contracts |
|
|
189,473 |
|
Net change in unrealized depreciation on written option contracts |
|
|
1,236,535 |
|
Net change in unrealized depreciation on investments in securities |
|
|
318,886,576 |
|
Net change in unrealized appreciation on forward foreign currency
exchange contracts |
|
|
(1,650,383 |
) |
Net realized gain on investments in securities |
|
|
(17,537,159 |
) |
|
|
|
|
|
Cash provided by operating activities |
|
|
11,788,512 |
|
|
|
|
|
|
Cash Flows from Financing Activities: |
|
Drawdown on revolving credit agreement |
|
|
25,000,000 |
|
Distributions paid on Series A Cumulative Preferred Stock (net of distributions
payable). |
|
|
(6,416 |
) |
Proceeds from issuance of Series A Cumulative Preferred Stock |
|
|
125,000 |
|
Offering Costs from issuance of Series A Cumulative Preferred Stock |
|
|
(19,400 |
) |
Dividends and distributions paid |
|
|
(38,663,069 |
) |
|
|
|
|
|
Cash used for financing activities |
|
|
(13,563,885 |
) |
|
|
|
|
|
Increase (decrease) in cash and restricted cash |
|
|
(1,775,373 |
) |
Cash and restricted cash at beginning of period (including foreign
currency) |
|
|
12,686,901 |
|
|
|
|
|
|
Cash and restricted cash at end of period (including foreign currency) |
|
$ |
10,911,528 |
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
For the six months ended June 30, 2022, interest paid was $4,085,599.
* |
Does not include distributions paid to Series A Cumulative Preferred Stockholders.
|
See accompanying notes to the
consolidated financial statements.
31
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS(Continued)
For the Six Months Ended June 30, 2022 (Unaudited)
The following table provides a reconciliation of cash and
restricted cash reported within the Consolidated Statement of Assets and Liabilities that sums to the total of such amounts shown on the Consolidated Statement of Cash Flows.
|
|
|
|
|
Cash |
|
$ |
773,966 |
|
Restricted cash |
|
|
9,648,680 |
|
Foreign currency |
|
|
488,882 |
|
|
|
|
|
|
Total cash and restricted cash shown on the Consolidated Statement of
Cash Flows |
|
$ |
10,911,528 |
|
|
|
|
|
|
Restricted cash consists of cash that has been deposited with a broker and pledged to cover the
Funds collateral or margin obligations under derivative contracts. It is reported on the Consolidated Statement of Assets and Liabilities as cash collateral pledged for interest rate swap contracts.
See accompanying notes to the consolidated financial
statements.
32
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
The following table includes selected data for a common share outstanding throughout each period and other performance information
derived from the financial statements. It should be read in conjunction with the financial statements and notes thereto.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, 2022a |
|
|
For the Year Ended December 31, |
|
Per Share Operating Data: |
|
2021a |
|
|
2020 |
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
Net asset value per common share, beginning of period |
|
|
$29.24 |
|
|
|
$23.62 |
|
|
|
$24.73 |
|
|
|
$19.98 |
|
|
|
$22.80 |
|
|
|
$21.75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from investment operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
(loss)b |
|
|
0.41 |
|
|
|
0.73 |
|
|
|
0.79 |
|
|
|
0.87 |
|
|
|
0.88 |
|
|
|
0.94 |
|
Net realized and unrealized gain (loss) |
|
|
(5.84 |
) |
|
|
6.38 |
|
|
|
(0.41 |
) |
|
|
5.37 |
|
|
|
(2.21 |
)c |
|
|
1.60 |
|
Distributions paid to Series A Cumulative Preferred Stockholders |
|
|
(0.00 |
)d |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total from investment operations applicable to common shares |
|
|
(5.43 |
) |
|
|
7.11 |
|
|
|
0.38 |
|
|
|
6.24 |
|
|
|
(1.33 |
) |
|
|
2.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less dividends and distributions to common shareholders from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
(0.82 |
) |
|
|
(0.51 |
) |
|
|
(0.51 |
) |
|
|
(0.85 |
) |
|
|
(0.92 |
) |
|
|
(0.92 |
) |
Net realized gain |
|
|
|
|
|
|
(0.98 |
) |
|
|
(0.98 |
) |
|
|
(0.64 |
) |
|
|
(0.57 |
) |
|
|
(0.57 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions to common shareholders |
|
|
(0.82 |
) |
|
|
(1.49 |
) |
|
|
(1.49 |
) |
|
|
(1.49 |
) |
|
|
(1.49 |
) |
|
|
(1.49 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net asset value per common share |
|
|
(6.25 |
) |
|
|
5.62 |
|
|
|
(1.11 |
) |
|
|
4.75 |
|
|
|
(2.82 |
) |
|
|
1.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value per common share, end of period |
|
|
$22.99 |
|
|
|
$29.24 |
|
|
|
$23.62 |
|
|
|
$24.73 |
|
|
|
$19.98 |
|
|
|
$22.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market value per common share, end of period |
|
|
$21.34 |
|
|
|
$28.62 |
|
|
|
$22.83 |
|
|
|
$23.79 |
|
|
|
$17.80 |
|
|
|
$21.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net asset value
returne |
|
|
18.71 |
%f |
|
|
31.05 |
% |
|
|
2.87 |
% |
|
|
32.35 |
% |
|
|
5.20 |
%c |
|
|
12.65 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total market value
returne |
|
|
22.91 |
%f |
|
|
32.71 |
% |
|
|
3.36 |
% |
|
|
42.92 |
% |
|
|
9.47 |
% |
|
|
19.58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the consolidated financial statements.
33
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)(Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, 2022 |
|
|
For the Year Ended December 31, |
|
Ratios/Supplemental Data: |
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
Net assets applicable to common shareholders, end of period
(in millions) |
|
|
$1,094.2 |
|
|
|
$1,391.6 |
|
|
|
$1,123.7 |
|
|
|
$1,176.5 |
|
|
|
$950.3 |
|
|
|
$1,084.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to average daily net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
1.76 |
%g |
|
|
1.78 |
% |
|
|
2.07 |
% |
|
|
1.96 |
% |
|
|
1.93 |
%b |
|
|
1.67 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses (excluding interest expense) |
|
|
1.06 |
%g,h |
|
|
1.04 |
% |
|
|
1.04 |
% |
|
|
1.02 |
% |
|
|
1.05 |
% |
|
|
1.01 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss) |
|
|
3.16 |
%g,h |
|
|
2.77 |
% |
|
|
3.56 |
% |
|
|
3.72 |
% |
|
|
4.10 |
% |
|
|
4.19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of expenses to average daily managed assetsi |
|
|
1.29 |
%g |
|
|
1.33 |
% |
|
|
1.55 |
% |
|
|
1.49 |
% |
|
|
1.43 |
% |
|
|
1.26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover rate |
|
|
21 |
%f |
|
|
40 |
% |
|
|
57 |
% |
|
|
53 |
% |
|
|
39 |
% |
|
|
26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Agreement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset coverage ratio for credit agreement |
|
|
343 |
% |
|
|
427 |
% |
|
|
381 |
% |
|
|
436 |
% |
|
|
372 |
% |
|
|
410 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset coverage per $1,000 for credit agreement |
|
|
$3,432 |
|
|
|
$4,274 |
|
|
|
$3,809 |
|
|
|
$4,361 |
|
|
|
$3,715 |
|
|
|
$4,099 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of loan outstanding (in millions) |
|
|
$450.0 |
|
|
|
$425.0 |
|
|
|
$400.0 |
|
|
|
$350.0 |
|
|
|
$350.0 |
|
|
|
$350.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A Cumulative Preferred Stock at liquidation value, end of period
(in 000s) |
|
|
$125.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset coverage ratio for Series A Cumulative Preferred Stock |
|
|
343 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Coverage, per $1,000 Liquidation Value per Share of Series A Cumulative
Preferred Stock |
|
|
$3,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the
consolidated financial statements.
34
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)(Continued)
a |
Consolidated (see Note 1). |
b |
Calculation based on average shares outstanding. |
c |
During the reporting period the Fund settled legal claims against one issuer of securities
previously held by the Fund. As a result, the net realized and unrealized gain (loss) on investments per share includes proceeds received from the settlement. Without these proceeds the net realized and unrealized gain (loss) on investments per
share would have been $(2.22). Additionally, the expense ratio includes extraordinary expenses related to the direct action. Without these expenses, the ratio of expenses to average daily net assets would have been 1.92%. Excluding the proceeds from
and expenses relating to the settlements, the total return on a NAV basis would have been -5.24%. |
d |
Amount is less than $0.005. |
e |
Total net asset value return measures the change in net asset value per share over the period
indicated. Total market value return is computed based upon the Funds market price per share and excludes the effects of brokerage commissions. Dividends and distributions are assumed, for purposes of these calculations, to be reinvested at
prices obtained under the Funds dividend reinvestment plan. |
h |
Calculated on the basis of average net assets of common stock shareholders. Ratios do not reflect
the effect of dividend payments to Series A Cumulative Preferred Stockholders. |
i |
Average daily managed assets represent net assets plus the outstanding balance of the credit
agreement. Ratios do not reflect the effect of dividend payments to Series A Cumulative Preferred Stockholders. |
See accompanying notes to the consolidated financial statements.
35
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Note 1. Organization and Significant Accounting Policies
Cohen & Steers REIT and Preferred and Income Fund, Inc. (the Fund) was incorporated under the laws of the State of
Maryland on March 25, 2003 and is registered under the Investment Company Act of 1940 (the 1940 Act) as a diversified, closed-end management investment company. The Funds investment objective is
high current income. The Funds secondary investment objective is capital appreciation.
Cohen & Steers
RNP Trust (the REIT Subsidiary), is a wholly-owned subsidiary of the Fund organized under the laws of the state of Maryland as a statutory trust on July 9, 2021 that commenced operations on November 30, 2021. The REIT Subsidiary acts as an
investment vehicle for the Fund in order to effect certain investments on behalf of the Fund, consistent with the Funds investment objectives and policies. The Fund expects that it will achieve a significant portion of its exposure to private
real estate investments through investment in the REIT Subsidiary. The REIT Subsidiary may use wholly-owned, limited liability companies to contain the exposure of individual private real estate investments. Unlike the Fund, the REIT Subsidiary may
invest without limitation in private real estate. Investments in the REIT Subsidiary are limited to 25% of the Funds total assets. The Consolidated Schedule of Investments includes positions of the Fund and the REIT Subsidiary. The financial
statements have been consolidated and include the accounts of the Fund and the REIT Subsidiary. All significant inter-company balances and transactions have been eliminated in consolidation.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its
consolidated financial statements. The Fund is an investment company and, accordingly, follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic
946Investment Companies. The accounting policies of the Fund are in conformity with accounting principles generally accepted in the United States of America (GAAP). The preparation of the consolidated financial statements in accordance with
GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period.
Actual results could differ from those estimates.
Portfolio Valuation: Investments in securities that are listed
on the New York Stock Exchange (NYSE) are valued, except as indicated below, at the last sale price reflected at the close of the NYSE on the business day as of which such value is being determined. If there has been no sale on such day, the
securities are valued at the mean of the closing bid and ask prices on such day or, if no ask price is available, at the bid price. Centrally cleared interest rate swaps are valued at the price determined by the relevant exchange or clearinghouse.
Exchange-traded options are valued at their last sale price as of the close of options trading on applicable exchanges on the valuation date. In the absence of a last sale price on such day, options are valued at the average of the quoted bid and
ask prices as of the close of business. Over-the-counter (OTC) options are valued based upon prices provided by a third-party pricing service or counterparty. Forward
foreign currency exchange contracts are valued daily at the prevailing forward exchange rate.
Securities not listed on
the NYSE but listed on other domestic or foreign securities exchanges (including NASDAQ) are valued in a similar manner. Securities traded on more than one securities
36
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
exchange are valued at the last sale price reflected at the close of the
exchange representing the principal market for such securities on the business day as of which such value is being determined. If after the close of a foreign market, but prior to the close of business on the day the securities are being valued,
market conditions change significantly, certain non-U.S. equity holdings may be fair valued pursuant to procedures established by the Board of Directors.
Readily marketable securities traded in the OTC market, including listed securities whose primary market is believed by
Cohen & Steers Capital Management, Inc. (the investment manager) to be OTC, are valued on the basis of prices provided by a third-party pricing service or third-party broker-dealers when such prices are believed by the investment manager,
pursuant to delegation by the Board of Directors, to reflect the fair value of such securities.
Fixed-income securities
are valued on the basis of prices provided by a third-party pricing service or third-party broker-dealers when such prices are believed by the investment manager, pursuant to delegation by the Board of Directors, to reflect the fair value of such
securities. The pricing services or broker-dealers use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services or broker-dealers may utilize a market-based approach through
which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services or broker-dealers also utilize proprietary valuation models which may consider market
transactions in comparable securities and the various relationships between securities in determining fair value and/or characteristics such as benchmark yield curves, option-adjusted spreads, credit spreads, estimated default rates, coupon rates,
anticipated timing of principal repayments, underlying collateral, and other unique security features which are then used to calculate the fair values.
Short-term debt securities with a maturity date of 60 days or less are valued at amortized cost, which approximates fair value.
Investments in open-end mutual funds are valued at net asset value (NAV).
The
Fund utilizes an independent valuation services firm (the Independent Valuation Advisor) to assist the investment manager in the determination of the Funds fair value of private real estate investments held by the REIT Subsidiary. Limited
scope appraisals are prepared on a monthly basis and typically include a limited comparable sales and a full discounted cash flow analysis. Annually, a full scope, detailed appraisal report is completed which typically includes market analysis, cost
approach, sales comparison approach and an income approach containing a discounted cash flow analysis. The full scope report is prepared by a third-party appraisal firm. The investment manager, including through communication with the Independent
Valuation Advisor, monitors for material events that the investment manager believes may be expected to have a material impact on the most recent estimated fair values of such private real estate investments. However, rapidly changing market
conditions or material events may not be immediately reflected in the Funds or REIT Subsidiarys daily NAV. The investment manager, in conjunction with the Independent Valuation Advisor, values the private real estate investments using
the valuation methodology it deems most appropriate and consistent with industry best practices and market conditions. The investment manager expects the primary methodology used to value private real estate investments will be the income approach.
Consistent with industry practices, the income approach incorporates actual contractual lease income, professional judgments regarding comparable rental and operating expense data, the capitalization or discount rate and projections of
37
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
future rent and expenses based on appropriate market evidence, and other
subjective factors. Other methodologies that may also be used to value properties include, among other approaches, sales comparisons and cost approaches. Private real estate appraisals are reported on a free and clear basis (i.e. any property-level
indebtedness that may be in place is not incorporated into the valuation). Property level debt is valued separately in accordance with GAAP.
The policies and procedures approved by the Funds Board of Directors delegate authority to make fair value determinations to the investment manager, subject to the oversight of the Board of Directors. The investment manager
has established a valuation committee (Valuation Committee) to administer, implement and oversee the fair valuation process according to the policies and procedures approved annually by the Board of Directors. Among other things, these procedures
allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
Securities for which market prices are unavailable, or securities for which the investment manager determines that the bid and/or
ask price or a counterparty valuation does not reflect market value, will be valued at fair value, as determined in good faith by the Valuation Committee, pursuant to procedures approved by the Funds Board of Directors. Circumstances in which
market prices may be unavailable include, but are not limited to, when trading in a security is suspended, the exchange on which the security is traded is subject to an unscheduled close or disruption or material events occur after the close of the
exchange on which the security is principally traded. In these circumstances, the Fund determines fair value in a manner that fairly reflects the market value of the security on the valuation date based on consideration of any information or factors
it deems appropriate. These may include, but are not limited to, recent transactions in comparable securities, information relating to the specific security and developments in the markets.
For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and
risk are used and these securities would be categorized as Level 2 or 3 in the hierarchy, depending on the relative significance of the valuation inputs. Securities, including private placements or other restricted securities, for which
observable inputs are not available are valued using alternate valuation approaches, including the market approach, the income approach and cost approach, and are categorized as Level 3 in the hierarchy. The market approach considers factors
including the price of recent investments in the same or a similar security or financial metrics of comparable securities. The income approach considers factors including expected future cash flows, security specific risks and corresponding discount
rates. The cost approach considers factors including the value of the securitys underlying assets and liabilities.
The Funds use of fair value pricing may cause the NAV of Fund shares to differ from the NAV that would be calculated using
market quotations. Fair value pricing involves subjective judgments and it is possible that the fair value determined for a security may be materially different than the value that could be realized upon the sale of that security.
Fair value is defined as the price that the Fund would expect to receive upon the sale of an investment or expect to pay to
transfer a liability in an orderly transaction with an independent buyer in the principal market or, in the absence of a principal market, the most advantageous market for the
38
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
investment or liability. The hierarchy of inputs that are used in
determining the fair value of the Funds investments is summarized below.
|
|
|
Level 1quoted prices in active markets for identical investments
|
|
|
|
Level 2other significant observable inputs (including quoted prices for similar
investments, interest rates, credit risk, etc.) |
|
|
|
Level 3significant unobservable inputs (including the Funds own assumptions in
determining the fair value of investments) |
The inputs or methodology used for valuing investments may
or may not be an indication of the risk associated with those investments. Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy.
The following is a summary of the inputs used as of June 30, 2022 in valuing the Funds investments carried at value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted Prices in Active Markets for Identical Investments (Level 1) |
|
|
Other Significant Observable Inputs (Level 2) |
|
|
Significant Unobservable Inputs (Level 3) |
|
|
Total |
|
Common Stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real EstateIndustrials |
|
$ |
109,630,102 |
|
|
$ |
|
|
|
$ |
5,549,808 |
a |
|
$ |
115,179,910 |
|
Other Industries |
|
|
641,035,087 |
|
|
|
|
|
|
|
|
|
|
|
641,035,087 |
|
Preferred Securities $25 Par Value |
|
|
110,380,220 |
|
|
|
|
|
|
|
|
|
|
|
110,380,220 |
|
Preferred Securities Capital Securities |
|
|
|
|
|
|
614,191,159 |
|
|
|
|
|
|
|
614,191,159 |
|
Private Real StateOffice |
|
|
|
|
|
|
|
|
|
|
16,222,314 |
b |
|
|
16,222,314 |
|
Short-Term Investments |
|
|
|
|
|
|
31,687,300 |
|
|
|
|
|
|
|
31,687,300 |
|
Purchased Option Contracts |
|
|
|
|
|
|
2,151,446 |
|
|
|
|
|
|
|
2,151,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments
in Securitiesc |
|
$ |
861,045,409 |
|
|
$ |
648,029,905 |
|
|
$ |
21,772,122 |
|
|
$ |
1,530,847,436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign Currency Exchange Contracts |
|
$ |
|
|
|
$ |
1,288,284 |
|
|
$ |
|
|
|
$ |
1,288,284 |
|
Interest Rate Swap Contracts |
|
|
|
|
|
|
25,369,649 |
|
|
|
|
|
|
|
25,369,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Derivative
Assetsc |
|
$ |
|
|
|
$ |
26,657,933 |
|
|
$ |
|
|
|
$ |
26,657,933 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted Prices in Active Markets for Identical Investments (Level 1) |
|
|
Other Significant Observable Inputs (Level 2) |
|
|
Significant Unobservable Inputs (Level 3) |
|
|
Total |
|
Forward Foreign Currency Exchange Contracts |
|
$ |
|
|
|
$ |
(117,013 |
) |
|
$ |
|
|
|
$ |
(117,013 |
) |
Written Option Contracts |
|
|
(234,349 |
) |
|
|
(1,496,979 |
) |
|
|
|
|
|
|
(1,731,328 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Derivative
Liabilitiesc |
|
$ |
(234,349 |
) |
|
$ |
(1,613,992 |
) |
|
$ |
|
|
|
$ |
(1,848,341 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a |
Restricted security, where observable inputs are limited, has been fair valued by the Valuation
Committee, pursuant to the Funds fair value procedures and classified as Level 3 security. |
b |
Private Real Estate, where observable inputs are limited, has been fair valued by the Valuation
Committee, pursuant to the Funds fair value procedures and classified as Level 3 security. See Note 1 Portfolio Valuation. |
c |
Portfolio holdings are disclosed individually on the Consolidated Schedule of Investments.
|
The following is a reconciliation of investments for which significant unobservable inputs (Level 3)
were used in determining fair value:
|
|
|
|
|
|
|
|
|
|
|
Common Stock Real Estate Industrials |
|
|
Private Real Estate Office |
|
Balance as of December 31, 2021 |
|
$ |
6,136,507 |
|
|
$ |
|
|
Purchase |
|
|
|
|
|
|
30,428,348 |
|
Return of capital distribution |
|
|
|
|
|
|
(16,356,372 |
) |
Change in unrealized appreciation (depreciation) |
|
|
(586,699 |
) |
|
|
2,150,338 |
|
|
|
|
|
|
|
|
|
|
Balance as of June 30, 2022 |
|
$ |
5,549,808 |
|
|
$ |
16,222,314 |
|
|
|
|
|
|
|
|
|
|
The change in unrealized appreciation (depreciation) attributable to securities owned on
June 30, 2022 which were valued using significant unobservable inputs (Level 3) amounted to $1,563,639.
40
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
The following table summarizes the quantitative inputs and
assumptions used for investments categorized in Level 3 of the fair value hierarchy.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value at June 30, 2022 |
|
|
Valuation Technique |
|
|
Unobservable Inputs |
|
Amount |
|
|
Valuation Impact from an Increase in Inputa |
|
Common Stock Real Estate Industrials |
|
|
$ 5,549,808 |
|
|
|
Market Comparable
Companies |
|
|
Enterprise Value/
EBITDAb Multiple
Liquidity Discount |
|
|
24.0x 15% |
|
|
|
Increase Decrease |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Real Estate Office |
|
|
$16,222,314 |
|
|
|
Discounted Cash Flow |
|
|
Discount Rate
Terminal Capitalization Rate |
|
|
7.00%
6.00% |
|
|
|
Decrease
Decrease |
|
a |
Represents the directional change in the fair value of the Level 3 investments that could have
resulted from an increase in the corresponding input as of period end. A decrease to the unobservable input would have had the opposite effect. Significant changes in these inputs may result in a materially higher or lower fair value measurement.
|
b |
Earnings Before Interest, Taxes, Depreciation and Amortization. |
Security Transactions and Investment Income: Security transactions are recorded on trade date. Realized gains and losses on
investments sold are recorded on the basis of identified cost. Interest income, which includes the amortization of premiums and accretion of discounts, is recorded on the accrual basis. Dividend income is recorded on
the ex-dividend date except for certain dividends on foreign securities, which are recorded as soon as the Fund is informed after the ex-dividend date. Distributions from real estate investment
trusts (REITs) are recorded as ordinary income, net realized capital gain or return of capital based on information reported by the REITs and managements estimates of such amounts based on historical information. These estimates are adjusted
when the actual source of distributions is disclosed by the REITs and actual amounts may differ from the estimated amounts.
Foreign Currency Translation: The books and records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based
upon prevailing exchange rates on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollars based upon prevailing exchange rates on the
respective dates of such transactions. The Fund does not isolate that portion of the results of operations resulting from fluctuations in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Net realized
foreign currency transaction gains or losses arise from sales of foreign currencies, (excluding gains and losses on forward foreign currency exchange contracts, which are presented separately, if any) currency gains or losses realized between the
trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign currency translation gains and losses arise from changes in the values of assets and liabilities, other than investments in securities, on the date of valuation, resulting
41
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
from changes in exchange rates. Pursuant to U.S. federal income tax
regulations, certain foreign currency gains/losses included in realized and unrealized gains/losses are included in or are a reduction of ordinary income for federal income tax purposes.
Forward Foreign Currency Exchange Contracts: The Fund enters into forward foreign currency exchange contracts to hedge the
currency exposure associated with certain of its non-U.S. dollar denominated securities. A forward foreign currency exchange contract is a commitment between two parties to purchase or sell foreign currency at
a set price on a future date. The market value of a forward foreign currency exchange contract fluctuates with changes in foreign currency exchange rates. These contracts are marked to market daily and the change in value is recorded by the Fund as
unrealized appreciation and/or depreciation on forward foreign currency exchange contracts. Realized gains or losses equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed are
included in net realized gain or loss on forward foreign currency exchange contracts. For federal income tax purposes, the Fund has made an election to treat gains and losses from forward foreign currency exchange contracts as capital gains and
losses.
Forward foreign currency exchange contracts involve elements of market risk in excess of the amounts reflected
on the Consolidated Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the foreign exchange rate underlying the contract. Risks may also arise upon entering these contracts from the potential inability of the
counterparties to meet the terms of their contracts. In connection with these contracts, securities may be identified as collateral in accordance with the terms of the respective contracts.
Option Contracts: The Fund may purchase and write exchange-listed and OTC put or call options on securities, stock indices
and other financial instruments for hedging purposes, to enhance portfolio returns and/or reduce overall volatility.
When the Fund writes (sells) an option, an amount equal to the premium received by the Fund is recorded on the Consolidated
Statement of Assets and Liabilities as a liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option
written. When an option expires, the Fund realizes a gain on the option to the extent of the premium received. Premiums received from writing options which are exercised or closed are added to or offset against the proceeds or amount paid on the
transaction to determine the realized gain or loss. If a put option on a security is exercised, the premium reduces the cost basis of the security purchased by the Fund. If a call option is exercised, the premium is added to the proceeds of the
security sold to determine the realized gain or loss. The Fund, as writer of an option, bears the market risk of an unfavorable change in the price of the underlying investment. Other risks include the possibility of an illiquid options market or
the inability of the counterparties to fulfill their obligations under the contracts.
Put and call options purchased
are accounted for in the same manner as portfolio securities. Premiums paid for purchasing options which expire are treated as realized losses. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or
offset against the proceeds on the underlying investment transaction to determine the realized gain or loss when the underlying transaction is executed. The risk associated with purchasing an option is that the Fund pays a premium whether or not the
option is exercised. Additionally, the Fund bears the risk of loss of the premium and change in market value should the counterparty not perform under the contract.
42
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
Centrally Cleared Interest Rate Swap Contracts: The
Fund uses interest rate swaps in connection with borrowing under its credit agreement. The interest rate swaps are intended to reduce interest rate risk by countering the effect that an increase in short-term interest rates could have on the
performance of the Funds shares as a result of the floating rate structure of interest owed pursuant to the credit agreement. When entering into interest rate swaps, the Fund agrees to pay the other party to the interest rate swap (which is
known as the counterparty) a fixed rate payment in exchange for the counterpartys agreement to pay the Fund a variable rate payment that was intended to approximate the Funds variable rate payment obligation on the credit agreement, the
accruals for which would begin at a specific date in the future (the effective date). The payment obligation is based on the notional amount of the swap. Depending on the state of interest rates in general, the use of interest rate swaps could
enhance or harm the overall performance of the Fund. Swaps are marked-to-market daily and changes in the value are recorded as unrealized appreciation (depreciation).
Immediately following execution of the swap agreement, the swap agreement is novated to a central counterparty (the
CCP) and the Funds counterparty on the swap agreement becomes the CCP. The Fund is required to interface with the CCP through a broker. Upon entering into a centrally cleared swap, the Fund is required to deposit initial margin with the broker
in the form of cash or securities in an amount that varies depending on the size and risk profile of the particular swap. Securities deposited as initial margin are designated on the Consolidated Schedule of Investments and cash deposited is
recorded on the Consolidated Statement of Assets and Liabilities as cash collateral pledged for interest rate swap contracts. The daily change in valuation of centrally cleared swaps is recorded as a receivable or payable for variation margin on
interest rate swap contracts in the Consolidated Statement of Assets and Liabilities. Any upfront payments paid or received upon entering into a swap agreement would be recorded as assets or liabilities, respectively, in the Consolidated Statement
of Assets and Liabilities, and amortized or accreted over the life of the swap and recorded as realized gain (loss) in the Consolidated Statement of Operations. Payments received from or paid to the counterparty during the term of the swap
agreement, or at termination, are recorded as realized gain (loss) in the Consolidated Statement of Operations.
Swap
agreements involve, to varying degrees, elements of market and counterparty risk, and exposure to loss in excess of the related amounts reflected on the Consolidated Statement of Assets and Liabilities. Such risks involve the possibility that there
will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of contractual terms in the agreements and that there may be unfavorable changes in
interest rates.
Dividends and Distributions to Shareholders: Dividends from net investment income and capital
gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from GAAP. Dividends from net investment income, if any, are typically declared quarterly and paid monthly. Net realized capital gains, unless
offset by any available capital loss carryforward, are typically distributed to shareholders at least annually. Dividends and distributions to shareholders are recorded on the ex-dividend date and are
automatically reinvested in full and fractional shares of the Fund in accordance with the Funds Reinvestment Plan, unless the shareholder has elected to have them paid in cash.
43
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
The Fund has a managed distribution policy in accordance
with exemptive relief issued by the U.S. Securities and Exchange Commission (SEC). The Plan gives the Fund greater flexibility to realize long-term capital gains throughout the year and to distribute those gains on a more regular basis to
shareholders. Therefore, regular monthly distributions throughout the year may include a portion of estimated realized long-term capital gains, along with net investment income, short-term capital gains and return of capital, which is not taxable.
In accordance with the Plan, the Fund is required to adhere to certain conditions in order to distribute long-term capital gains during the year.
Dividends from net investment income are subject to recharacterization for tax purposes. Based upon the results of operations for
the six months ended June 30, 2022, the investment manager considers it likely that a portion of the dividends will be reclassified to distributions from net realized gain upon the final determination of the Funds taxable net income after
December 31, 2022, the Funds fiscal year end.
Distributions Subsequent to June 30,
2022: The following distributions have been declared by the Funds Board of Directors and are payable subsequent to the period end of this report.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ex-Date |
|
|
Record Date |
|
|
Payable Date |
|
|
Amount |
|
|
7/12/22 |
|
|
|
7/13/22 |
|
|
|
7/29/22 |
|
|
$ |
0.136 |
|
|
8/16/22 |
|
|
|
8/17/22 |
|
|
|
8/31/22 |
|
|
$ |
0.136 |
|
|
9/13/22 |
|
|
|
9/14/22 |
|
|
|
9/30/22 |
|
|
$ |
0.136 |
|
Distributions to holders of Series A Cumulative Preferred Stock are accrued daily and paid
semi-annually and are determined as described in Note 7. The payments made to the holders of the Funds Series A Cumulative Preferred Stock are treated as dividends or distributions.
Income Taxes: It is the policy of the Fund to continue to qualify as a regulated investment company (RIC), if such
qualification is in the best interest of the shareholders, by complying with the requirements of Subchapter M of the Internal Revenue Code applicable to RICs, and by distributing substantially all of its taxable earnings to its shareholders. Also,
in order to avoid the payment of any federal excise taxes, the Fund will distribute substantially all of its net investment income and net realized gains on a calendar year basis. Accordingly, no provision for federal income or excise tax is
necessary. Dividend and interest income from holdings in non-U.S. securities is recorded net of non-U.S. taxes paid. Management has analyzed the Funds tax positions taken on federal and applicable state income tax returns as well as its tax
positions in non-U.S. jurisdictions in which it trades for all open tax years and has concluded that as of June 30, 2022, no additional provisions for income tax are required in the Funds
consolidated financial statements. The Funds tax positions for the tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service, state departments of revenue and by
foreign tax authorities.
The REIT Subsidiary intends to elect to be taxed as a REIT under Subchapter M of the Code. The
REIT Subsidiarys qualification and taxation as a REIT depends upon the REIT Subsidiarys ability to meet on a continuing basis, through actual operating results, certain qualification tests set forth in the Code. Those qualification tests
involve the percentage of income that it earns from specified sources, the percentage of its assets that falls within specified categories, the diversity of the ownership of its shares, and the percentage of its taxable income that the REIT
Subsidiary distributes. As a REIT, the
44
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
REIT Subsidiary generally will be allowed to deduct dividends paid to its
shareholders and, as a result, the REIT Subsidiary will not be subject to U.S. federal income tax on that portion of its ordinary income and net capital gain that the REIT Subsidiary annually distributes to its shareholders, as long as the REIT
Subsidiary meets the minimum distribution requirements under the Code. The REIT Subsidiary intends to make distributions on a regular basis as necessary to avoid material U.S. federal income tax and to comply with the REIT distribution requirements.
Note 2. Investment Management Fees, Administration Fees and Other Transactions with Affiliates
Investment Management Fees: Cohen & Steers Capital Management, Inc. serves as the Funds investment manager
pursuant to an investment management agreement (the investment management agreement). Under the terms of the investment management agreement, the investment manager provides the Fund with day-to-day investment decisions and generally manages the Funds investments in accordance with the stated policies of the Fund, subject to the supervision of the Board of Directors.
For the services provided to the Fund, the investment manager receives a fee, accrued daily and paid monthly, at the annual rate of
0.65% of the average daily managed assets of the Fund. Managed assets are equal to the net assets plus the amount of any borrowings used for leverage outstanding.
Administration Fees: The Fund has entered into an administration agreement with the investment manager under which the
investment manager performs certain administrative functions for the Fund and receives a fee, accrued daily and paid monthly, at the annual rate of 0.06% of the average daily managed assets of the Fund. For the six months ended June 30, 2022,
the Fund incurred $500,841 in fees under this administration agreement. Additionally, the Fund pays State Street Bank and Trust Company as co-administrator under a fund accounting and administration agreement.
Directors and Officers Fees: Certain directors and officers of the Fund are also directors, officers
and/or employees of the investment manager. The Fund does not pay compensation to directors and officers affiliated with the investment manager except for the Chief Compliance Officer, who received compensation from the investment manager, which was
reimbursed by the Fund, in the amount of $5,023 for the six months ended June 30, 2022.
Note 3. Purchases and Sales of Securities
Purchases and sales of securities, excluding short-term investments, for the six months ended June 30, 2022,
totaled $405,002,126 and $337,330,688, respectively.
45
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
Note 4. Investments in
Non-Consolidated Limited Liability Company
In accordance with requirements
under Regulation S-X Rules 3-09 and 4-08(g), the Fund evaluates its unconsolidated subsidiaries as significant subsidiaries under
the rules and, accordingly, below is summary financial information for the Funds investments in non-consolidated limited liability companies at historical cost as of June 30, 2022. The Fund states
its ownership interests in non-consolidated limited liability companies at fair value.
|
|
|
|
|
|
|
Legacy Gateway JV LLCa |
|
Balance Sheet: |
|
|
|
|
Assets: |
|
|
|
|
Real estate, net (total cost) |
|
$ |
87,993,256 |
|
Cash |
|
|
6,138,764 |
|
Other current assets |
|
|
1,861,754 |
|
|
|
|
|
|
Total Assets |
|
$ |
95,993,774 |
|
|
|
|
|
|
|
|
Liabilities and Equity: |
|
|
|
|
Mortgage notes payable |
|
$ |
52,000,000 |
|
Accrued expenses and accounts payable |
|
|
2,222,695 |
|
Tenant security deposits |
|
|
65,447 |
|
Other liabilities |
|
|
153,737 |
|
|
|
|
|
|
Total Liabilities |
|
|
54,441,879 |
|
|
|
|
|
|
|
|
Equity |
|
|
41,551,895 |
|
|
|
|
|
|
|
|
Total Liabilities and Equity |
|
$ |
95,993,774 |
|
|
|
|
|
|
|
|
Income Statement |
|
|
|
|
Revenue |
|
$ |
4,008,196 |
|
Expenses |
|
|
3,152,006 |
|
|
|
|
|
|
Net Income |
|
$ |
856,190 |
|
|
|
|
|
|
a |
Represents summarized financial information of Legacy Gateway JV LLC, a Class A office building
located at 6860 N. Dallas Parkway, Plano, Texas 75024, which includes 100% of ownership interests in the limited liability company. |
46
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
Note 5. Derivative Investments
The following tables present the value of derivatives held at June 30, 2022 and the effect of derivatives held during the six
months ended June 30, 2022, along with the respective location in the consolidated financial statements.
Consolidated Statement of
Assets and Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
Liabilities |
|
Derivatives |
|
Location |
|
Fair Value |
|
|
Location |
|
Fair Value |
|
Equity Risk: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchased Option Contracts Exchange-Tradeda |
|
Investments in securities, at value |
|
$ |
1,773 |
|
|
|
|
$ |
|
|
Written Option Contracts Exchange-Tradeda |
|
|
|
|
|
|
|
Written option contracts, at value |
|
|
284,998 |
|
Written Option Contracts Over-the-Counter |
|
|
|
|
|
|
|
Written option contracts, at value |
|
|
11,865 |
|
|
|
|
|
|
Foreign Exchange Risk: |
|
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign Currency Exchange Contractsb |
|
Unrealized appreciation |
|
|
1,288,283 |
|
|
Unrealized depreciation |
|
|
117,012 |
|
|
|
|
|
|
Interest Rate Risk: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest Rate
Swap Contractsa |
|
|
|
|
|
|
|
Payable for variation margin on interest rate swap contracts |
|
|
25,369,649 |
c |
Purchased Option Contracts Over-the-Counter |
|
Investments in securities, at value |
|
|
2,149,673 |
|
|
|
|
|
|
|
Written Option Contracts Over-the-Counter |
|
|
|
|
|
|
|
Written option contracts, at value |
|
|
1,434,465 |
|
a |
Not subject to a master netting agreement or another similar arrangement.
|
b |
Forward foreign currency exchange contracts executed with Brown Brothers Harriman are not subject
to a master netting agreement or another similar arrangement. |
c |
Amount represents the cumulative net appreciation on interest rate swap contracts as reported on
the Consolidated Schedule of Investments. The Consolidated Statement of Assets and Liabilities only reflects the current day variation margin payable to the broker. |
47
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
Consolidated Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
Derivatives |
|
Location |
|
Realized Gain (Loss) |
|
|
Change in Unrealized Appreciation (Depreciation) |
|
Equity Risk: |
|
|
|
|
|
|
|
|
|
|
Purchased Option
Contractsa |
|
Net Realized and Unrealized Gain (Loss) |
|
$ |
(74,531 |
) |
|
$ |
(24,264 |
) |
Written Option Contracts |
|
Net Realized and Unrealized Gain (Loss) |
|
|
710,668 |
|
|
|
4,392 |
|
|
|
|
|
Foreign Exchange Risk: |
|
|
|
|
|
|
|
|
|
|
Forward Foreign Currency Exchange Contracts |
|
Net Realized and Unrealized Gain (Loss) |
|
|
1,787,666 |
|
|
|
1,650,383 |
|
|
|
|
|
Foreign Currency Risk: |
|
|
|
|
|
|
|
|
|
|
Purchased Option
Contractsa |
|
Net Realized and Unrealized Gain (Loss) |
|
|
(52,186 |
) |
|
|
|
|
|
|
|
|
Interest Rate Risk: |
|
|
|
|
|
|
|
|
|
|
Interest Rate Swap Contracts |
|
Net Realized and Unrealized Gain (Loss) |
|
|
(685,340 |
) |
|
|
21,561,578 |
|
Purchased Option
Contractsa |
|
Net Realized and Unrealized Gain (Loss) |
|
|
778,321 |
|
|
|
1,691,432 |
|
Written Option Contracts |
|
Net Realized and Unrealized Gain (Loss) |
|
|
(389,515 |
) |
|
|
(1,240,927 |
) |
a |
Purchased option contracts are included in net realized gain (loss) and change in unrealized
appreciation (depreciation) on investments in securities. |
At June 30, 2022, the Funds
derivative assets and liabilities (by type), which are subject to a master netting agreement, are as follows:
|
|
|
|
|
|
|
|
|
Derivative Financial Instruments |
|
Assets |
|
|
Liabilities |
|
Interest Rate Risk: |
|
|
|
|
|
|
|
|
Purchased Option ContractsOver-the-Countera |
|
$ |
2,149,673 |
|
|
$ |
|
|
Written Option
ContractsOver-the-Counter |
|
|
|
|
|
|
1,446,330 |
|
a |
Purchased option contracts are included in investments in securities, at value on the Consolidated
Statement of Assets & Liabilities. |
48
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
The following table presents the Funds derivative
assets and liabilities by counterparty net of amounts available for offset under a master netting agreement and net of the related collateral received and pledged by the Fund, if any, as of June 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Counterparty |
|
Gross Amount of Assets Presented in the Consolidated Statement of
Assets and Liabilities |
|
|
Financial Instruments and Derivatives Available for Offset |
|
|
Collateral Receiveda |
|
|
Net Amount of Derivative Assetb |
|
Goldman Sachs International |
|
$ |
2,149,673 |
|
|
$ |
(1,446,330 |
) |
|
$ |
(540,000 |
) |
|
$ |
163,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Counterparty |
|
Gross Amount of Liabilities Presented in the
Consolidated Statement of Assets and Liabilities |
|
|
Financial Instruments and Derivatives Available for Offset |
|
|
Collateral Pledgeda |
|
|
Net Amount of Derivative Liabilitiesb |
|
Goldman Sachs International |
|
$ |
1,446,330 |
|
|
$ |
(1,446,330 |
) |
|
$ |
|
|
|
$ |
|
|
a |
Collateral received or pledged is limited to the net derivative asset or net derivative liability
amounts. Actual collateral amounts received or pledged may be higher than amounts above. |
b |
Net amount represents the net receivable from the counterparty or the net payable due to the
counterparty in the event of default. |
The following summarizes the volume of the Funds option
contracts and forward foreign currency exchange contracts activity for the six months ended June 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased Option Contractsa |
|
|
Written Option Contractsa |
|
|
Forward Foreign Currency Exchange Contracts |
|
Average Notional Amount |
|
$ |
32,731,477 |
|
|
$ |
53,590,525 |
|
|
$ |
41,846,214 |
|
a |
Notional amount for swaption contracts represents the notional amount of the underlying swap
contract. Notional amount for all other option contracts is calculated using the number of contracts multiplied by notional contract size multiplied by the underlying price. |
49
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
Note 6. Income Tax Information
As of June 30, 2022, the federal tax cost and net unrealized appreciation (depreciation) in value of investments held were as
follows:
|
|
|
|
|
Cost of investments in securities for federal income
tax purposes |
|
$ |
1,391,178,360 |
|
|
|
|
|
|
Gross unrealized appreciation on investments |
|
$ |
261,153,562 |
|
Gross unrealized depreciation on investments |
|
|
(96,104,319 |
) |
|
|
|
|
|
Net unrealized appreciation (depreciation) on investments |
|
$ |
165,049,243 |
|
|
|
|
|
|
Note 7. Series A Cumulative Preferred Stock
On January 27, 2022, the Funds wholly-owned REIT Subsidiary completed a private placement of 125 shares of 12.0% Series A
Cumulative Non-Voting Preferred Stock (the Preferred Stock) for aggregate gross proceeds of $125,000. The Preferred Stock has a liquidation preference of $1,000 per share plus an amount equal to accrued but unpaid dividends (the Liquidation
Preference). The Preferred Stock dividends are cumulative at a rate of 12.0% per annum and are redeemable under certain conditions by the REIT Subsidiary or subject to mandatory redemption upon default of certain coverage requirements at a
redemption price equal to the Liquidation Preference.
Note 8. Capital Stock
The Fund is authorized to issue 100 million shares of common stock at a par value of $0.001 per share.
During the six months ended June 30, 2022, the Fund did not issue shares of common stock for the reinvestment of dividends.
During the year ended December 31, 2021, the Fund issued 13,064 shares of common stock at $361,950 for the reinvestment of dividends.
On December 7, 2021, the Board of Directors approved the continuation of the delegation of its authority to management to effect repurchases, pursuant to managements discretion and subject to market conditions and
investment considerations, of up to 10% of the Funds common shares outstanding (Share Repurchase Program) as of January 1, 2022, through the fiscal year ended December 31, 2022.
During the six months ended June 30, 2022 and the year ended December 31, 2021, the Fund did not effect any repurchases.
Note 9. Borrowings
The Fund has entered into an amended and restated credit agreement (the credit agreement) with BNP Paribas Prime Brokerage International, Ltd. (BNPP) in which the Fund pays a monthly financing charge based on a combination of London
Interbank Offered Rate (LIBOR)-based variable and fixed rates through June 30, 2022 and a combination of Secured Overnight Financing Rate (SOFR)-based variable and fixed rates effective July 1, 2022, pursuant to an amendment to the credit agreement.
The commitment amount of the credit agreement is $450,000,000. The Fund may pay a fee of 0.45% per
50
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
annum on any unused portion of the credit agreement. BNPP may not change
certain terms of the credit agreement except upon 360 days notice. Also, if the Fund violates certain conditions, the credit agreement may be terminated. The Fund is required to pledge portfolio securities and/or cash as collateral in an
amount up to two times the loan balance outstanding (or more depending on the terms of the credit agreement) and has granted a security interest in the securities pledged to, and in favor of, BNPP as security for the loan balance outstanding. If the
Fund fails to meet certain requirements, or maintain other financial covenants required under the credit agreement, the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the credit agreement,
necessitating the sale of portfolio securities at potentially inopportune times. Under the terms of the credit agreement, the Fund may, upon prior written notice to BNPP, prepay all or a portion of the fixed rate portions of the credit facility. In
the event of such prepayment, the Fund will receive or pay any gain or loss associated with BNPPs interest rate hedge with respect to the applicable fixed rate portions of the credit facility, which could be material in certain circumstances
(breakage fee). The credit agreement also permits, subject to certain conditions, BNPP to rehypothecate portfolio securities pledged by the Fund up to the amount of the loan balance outstanding and the Fund receives a portion of the fees earned by
BNPP in connection with the rehypothecation of portfolio securities. The Fund continues to receive dividends and interest on rehypothecated securities. The Fund also has the right under the credit agreement to recall the rehypothecated securities
from BNPP on demand. If BNPP fails to deliver the recalled security in a timely manner, the Fund will be compensated by BNPP for any fees or losses related to the failed delivery or, in the event a recalled security will not be returned by BNPP, the
Fund, upon notice to BNPP, may reduce the loan balance outstanding by the amount of the recalled security failed to be returned.
As of June 30, 2022, the Fund had outstanding borrowings of $450,000,000 at a weighted average rate of 2.8%. The fair value of these borrowings at June 30, 2022 was approximately $450,042,000, including estimated breakage
fees of approximately $42,000 in the event of a prepayment of all of the fixed rate financing. The borrowings are classified as Level 2 within the fair value hierarchy. During the six months ended June 30, 2022, the Fund borrowed an
average daily balance of $449,585,635 at a weighted average borrowing cost of 1.9%.
Note 10. Other Risks
Market Price Discount from Net Asset Value Risk: Shares of closed-end investment
companies frequently trade at a discount from their NAV. This characteristic is a risk separate and distinct from the risk that NAV could decrease as a result of investment activities. Whether investors will realize gains or losses upon the sale of
the shares will depend not upon the Funds NAV but entirely upon whether the market price of the shares at the time of sale is above or below the investors purchase price for the shares. Because the market price of the shares is
determined by factors such as relative supply of and demand for shares in the market, general market and economic conditions, and other factors beyond the control of the Fund, Fund shares may trade at, above or below NAV.
Common Stock Risk: While common stocks have historically generated higher average returns than fixed-income securities over
the long-term, common stocks have also experienced significantly more volatility in those returns, although under certain market conditions, fixed-income investments may have
51
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
comparable or greater price volatility. The value of common stocks and other
equity securities will fluctuate in response to developments concerning the company, political and regulatory circumstances, the stock market, and the economy. In the short term, stock prices can fluctuate dramatically in response to these
developments. Different parts of the market and different types of equity securities can react differently to these developments. For example, stocks of large companies can react differently than stocks of smaller companies, and value stocks (stocks
of companies that are undervalued by various measures and have potential for long-term capital appreciation), can react differently from growth stocks (stocks of companies with attractive cash flow returns on invested capital and earnings that are
expected to grow). These developments can affect a single company, all companies within the same industry, economic sector or geographic region, or the stock market as a whole.
Real Estate Market Risk: Since the Fund concentrates its assets in companies in the real estate industry, an investment in
the Fund will be closely linked to the performance of the real estate markets. Risks of investing in real estate securities include falling property values due to increasing vacancies, declining rents resulting from economic, legal, tax, political
or technological developments, lack of liquidity, limited diversification, and sensitivity to certain economic factors such as interest-rate changes and market recessions. Real estate company prices also may drop because of the failure of borrowers
to pay their loans and poor management, and residential developers, in particular, could be negatively impacted by falling home prices, slower mortgage origination and rising construction costs. The risks of investing in REITs are similar to those
associated with direct investments in real estate securities.
REIT Risk: In addition to the risks of securities
linked to the real estate industry, REITs are subject to certain other risks related to their structure and focus. REITs are dependent upon management skills and generally may not be diversified. REITs are also subject to heavy cash flow dependency,
defaults by borrowers and self-liquidation. In addition, REITs could possibly fail to (i) qualify for favorable tax treatment under applicable tax law, or (ii) maintain their exemptions from registration under the 1940 Act. The above
factors may also adversely affect a borrowers or a lessees ability to meet its obligations to the REIT. In the event of a default by a borrower or lessee, the REIT may experience delays in enforcing its rights as a mortgagee or lessor
and may incur substantial costs associated with protecting its investments.
Small- and Medium-Sized Companies Risk: Real estate companies in the industry tend to be small- to medium-sized companies in relation to the equity markets as a whole. There may be
less trading in a smaller companys stock, which means that buy and sell transactions in that stock could have a larger impact on the stocks price than is the case with larger company stocks. Smaller companies also may have fewer lines of
business so that changes in any one line of business may have a greater impact on a smaller companys stock price than is the case for a larger company. Further, smaller company stocks may perform differently in different cycles than larger
company stocks. Accordingly, real estate company shares can, and at times will, perform differently than large company stocks.
Preferred Securities Risk: Preferred securities are subject to credit risk, which is the risk that a security will decline in price, or the issuer of the security will fail to make dividend, interest or principal payments
when due, because the issuer experiences a decline in its financial status. Preferred securities are also subject to interest rate risk and may decline in value because of changes in market interest rates. The Fund may be subject to a greater risk
of rising interest rates than would normally be
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
the case in an environment of low interest rates and the effect of potential
government fiscal policy initiatives and resulting market reaction to those initiatives. In addition, an issuer may be permitted to defer or omit distributions. Preferred securities are also generally subordinated to bonds and other debt instruments
in a companys capital structure. During periods of declining interest rates, an issuer may be able to exercise an option to redeem (call) its issue at par earlier than scheduled, and the Fund may be forced to reinvest in lower yielding
securities. Certain preferred securities may be substantially less liquid than many other securities, such as common stocks. Generally, preferred security holders have no voting rights with respect to the issuing company unless certain events occur.
Certain preferred securities may give the issuers special redemption rights allowing the securities to be redeemed prior to a specified date if certain events occur, such as changes to tax or securities laws.
Contingent Capital Securities Risk: Contingent capital securities (sometimes referred to as CoCos) are debt or
preferred securities with loss absorption characteristics built into the terms of the security, for example, a mandatory conversion into common stock of the issuer under certain circumstances, such as the issuers capital ratio falling below a
certain level. Since the common stock of the issuer may not pay a dividend, investors in these instruments could experience a reduced income rate, potentially to zero, and conversion would deepen the subordination of the investor, hence worsening
the investors standing in a bankruptcy. Some CoCos provide for a reduction in the value or principal amount of the security under such circumstances. In addition, most CoCos are considered to be high yield or junk securities and
are therefore subject to the risks of investing in below investment-grade securities. Finally, CoCo issuers can, at their discretion, suspend dividend distributions on their CoCo securities and are more likely to do so in response to negative
economic conditions and/or government regulation. Omitted distributions are typically non-cumulative and will not be paid on a future date. Any omitted distribution may negatively impact the returns or
distribution rate of the Fund.
Credit and Below-Investment-Grade Securities Risk: Preferred securities may be
rated below investment grade or may be unrated. Below-investment-grade securities, or equivalent unrated securities, which are commonly known as high-yield bonds or junk bonds, generally involve greater volatility of price
and risk of loss of income and principal, and may be more susceptible to real or perceived adverse economic and competitive industry conditions than higher grade securities. It is reasonable to expect that any adverse economic conditions could
disrupt the market for lower-rated securities, have an adverse impact on the value of those securities and adversely affect the ability of the issuers of those securities to repay principal and interest on those securities.
Leverage Risk: The use of leverage is a speculative technique and there are special risks and costs associated with
leverage. The NAV of the Funds shares may be reduced by the issuance and ongoing costs of leverage. So long as the Fund is able to invest in securities that produce an investment yield that is greater than the total cost of leverage, the
leverage strategy will produce higher current net investment income for the shareholders. On the other hand, to the extent that the total cost of leverage exceeds the incremental income gained from employing such leverage, shareholders would realize
lower net investment income. In addition to the impact on net income, the use of leverage will have an effect of magnifying capital appreciation or depreciation for shareholders. Specifically, in an up market, leverage will typically generate
greater capital appreciation than if the Fund were not employing leverage. Conversely, in down markets, the use of leverage will generally result in greater capital
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& STEERS REIT AND
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
depreciation than if the Fund had been unlevered. To the extent that the
Fund is required or elects to reduce its leverage, the Fund may incur applicable breakage fees under the Funds credit arrangement and may need to liquidate investments, including under adverse economic conditions which may result in capital
losses potentially reducing returns to shareholders. The use of leverage also results in the investment management fees payable to the investment manager being higher than if the Fund did not use leverage and can increase operating costs, which may
reduce total return. There can be no assurance that a leveraging strategy will be successful during any period in which it is employed.
Liquidity Risk: Liquidity risk is the risk that particular investments of the Fund may become difficult to sell or purchase. The market for certain investments may become less liquid or illiquid due to adverse changes in the
conditions of a particular issuer or due to adverse market or economic conditions. In addition, dealer inventories of certain securities, which provide an indication of the ability of dealers to engage in market making, are at, or near,
historic lows in relation to market size, which has the potential to increase price volatility in the fixed income markets in which the Fund invests. Federal banking regulations may also cause certain dealers to reduce their inventories of certain
securities, which may further decrease the Funds ability to buy or sell such securities. As a result of this decreased liquidity, the Fund may have to accept a lower price to sell a security, sell other securities to raise cash, or give up an
investment opportunity, any of which could have a negative effect on performance. Further, transactions in less liquid or illiquid securities may entail transaction costs that are higher than those for transactions in liquid securities.
Foreign (Non-U.S.) Securities Risk: The Fund directly purchases securities of
foreign issuers. Risks of investing in foreign securities include currency risks, future political and economic developments and possible imposition of foreign withholding taxes on income or proceeds payable on the securities. In addition, there may
be less publicly available information about a foreign issuer than about a domestic issuer, and foreign issuers may not be subject to the same accounting, auditing and financial recordkeeping standards and requirements as domestic issuers. Moreover,
securities of many foreign issuers and their markets may be less liquid and their prices more volatile than securities of comparable U.S. issuers.
Investing in securities of companies in emerging markets may entail special risks relating to potential economic, political or
social instability and the risks of expropriation, nationalization, confiscation, trade sanctions or embargoes or the imposition of restrictions on foreign investment, the lack of hedging instruments, and repatriation of capital invested. The
securities and real estate markets of some emerging market countries have in the past experienced substantial market disruptions and may do so in the future.
Foreign Currency Risk: Although the Fund will report its NAV and pay dividends in U.S. dollars, foreign securities often are
purchased with and make any dividend and interest payments in foreign currencies. Therefore, the Funds investments in foreign securities will be subject to foreign currency risk, which means that the Funds NAV could decline solely as a
result of changes in the exchange rates between foreign currencies and the U.S. dollar. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal, dividends and interest to
investors located outside the country, due to blockage of foreign currency exchanges or otherwise. The Fund may, but is not required to, engage in various investments that are designed to hedge the Funds foreign currency risks, and such
investments are subject to the risks described under Derivatives and Hedging Transactions Risk below.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
Derivatives and Hedging Transactions Risk: The
Funds use of derivatives, including for the purpose of hedging interest rate or foreign currency risks, presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. Among the
risks presented are counterparty risk, financial leverage risk, liquidity risk, OTC trading risk and tracking risk. The use of derivatives can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate,
which may be magnified by certain features of the derivatives.
Options Risk: Gains on options transactions
depend on the investment managers ability to predict correctly the direction of stock prices, indexes, interest rates, and other economic factors, and unanticipated changes may cause poorer overall performance for the Fund than if it had not
engaged in such transactions. A rise in the value of the security or index underlying a call option written by the Fund exposes the Fund to possible loss or loss of opportunity to realize appreciation in the value of any portfolio securities
underlying or otherwise related to the call option. By writing a put option, the Fund assumes the risk of a decline in the underlying security or index. There can be no assurance that a liquid market will exist when the Fund seeks to close out an
option position, and for certain options not traded on an exchange no market usually exists. Trading could be interrupted, for example, because of supply and demand imbalances arising from a lack of either buyers or sellers, or an options exchange
could suspend trading after the price has risen or fallen more than the maximum specified by the exchange.
Although the
Fund may be able to offset to some extent any adverse effects of being unable to liquidate an option position, that Fund may experience losses in some cases as a result of such inability, may not be able to close its position and, in such an event
would be unable to control its losses.
Private Real Estate Risk: The Funds investments in private real
estate include additional risks. For example, lease defaults, terminations by one or more tenants or landlord-tenant disputes may reduce the Funds revenues and net income. Any of these situations may result in extended periods during which
there is a significant decline in revenues or no revenues generated by a property. If this occurred, it could adversely affect the Funds results of operations.
The Funds investments in private real estate are expected to be substantially less liquid than many other securities, such as
common stocks or U.S. government securities.
REIT Subsidiary Risk: Investments in a REIT Subsidiary are subject
to risks associated with the direct ownership of real estate. A REIT Subsidiary, and therefore the Fund, may be affected by changes in the real estate markets generally as well as changes in the values of any properties owned by a REIT Subsidiary or
securing any mortgages owned by a REIT Subsidiary (which changes in value could be influenced by market conditions for real estate in general or issues related to the particular property). If a REIT Subsidiarys underlying assets are
concentrated in properties used by a particular industry, it will be subject to risks associated with such industry.
By
investing through a REIT Subsidiary, the Fund bears the fees and expenses of the REIT Subsidiary (including, among other things operating costs, transaction expenses, administrative and custody fees, legal expenses and custody expenses). Thus,
investing through a REIT Subsidiary may cause the Fund to be subject to higher operating expenses than if it invested directly.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
Real Estate Limited Liability Company Risk: The Fund
through a REIT subsidiary may invest in real estate limited liability companies with third parties. The Fund may also make investments in partnerships or other co-ownership arrangements or participations. Such investments may involve risks not
otherwise present with other methods of investment, which include risks associated with having a limited liability company partner, such as the real estate limited liability company partner becoming insolvent or bankrupt, engaging in fraud or other
misconduct or having economic or business interests or goals that conflict with the Funds business interest or goals. Also, the terms of the limited liability company agreement could restrict the Funds ability to sell or transfer its
interest to a third party or could cause the Fund to sell its interest or acquire its partners interest at a time when the Fund otherwise would not have initiated such a transaction.
In addition, disputes between the Fund and its real estate limited liability company partners may result in litigation or
arbitration that would increase the Funds expenses and prevent the Funds officers and trustees from focusing their time and efforts on the Funds business. Any of the above might subject the Fund to liabilities and thus reduce its
returns on the investment with that real estate limited liability company partner.
Geopolitical Risk: Occurrence
of global events similar to those in recent years, such as war (including Russias military invasion of Ukraine), terrorist attacks, natural or environmental disasters, country instability, infectious disease epidemics, such as that caused by COVID-19, market instability, debt crises and downgrades, embargoes, tariffs, sanctions and other trade barriers and other governmental trade or market control programs, the potential exit of a country from its
respective union and related geopolitical events, may result in market volatility and may have long-lasting impacts on both the U.S. and global financial markets. Events occurring in one region of the world may negatively impact industries and
regions that are not otherwise directly impacted by the events. Additionally, those events, as well as other changes in foreign and domestic political and economic conditions, could adversely affect individual issuers or related groups of issuers,
securities markets, interest rates, secondary trading, credit ratings, inflation, investor sentiment and other factors affecting the value of the Funds investments.
Although the long-term economic fallout of COVID-19 is difficult to predict, it has contributed to, and may continue to contribute
to, market volatility, inflation and systemic economic weakness. In addition, the U.S. government and other central banks across Europe, Asia, and elsewhere announced and/or adopted economic relief packages in response to COVID-19. The end of any
such program could cause market downturns, disruptions and volatility, particularly if markets view the ending as premature. The COVID-19 pandemic and its effects are expected to continue through 2022 and beyond, and therefore the economic outlook,
particularly for certain industries and businesses, remains inherently uncertain.
On January 31, 2020, the United
Kingdom (UK) withdrew from the European Union (EU) (referred to as Brexit), commencing a transition period that ended on December 31, 2020. The EU-UK Trade and Cooperation Agreement, a bilateral trade and
cooperation deal governing the future relationship between the UK and the EU (TCA), provisionally went into effect on January 1, 2021, and entered into force officially on May 1, 2021. Notwithstanding the TCA, following the transition
period, there is likely to be considerable uncertainty as to the UKs post-transition framework, including how the financial markets will react. As this process unfolds, markets may be further disrupted. Given the size and
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& STEERS REIT AND
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
importance of the UKs economy, uncertainty about its legal, political
and economic relationship with the remaining member states of the EU may continue to be a source of instability.
On
February 24, 2022, Russia launched a large-scale invasion of Ukraine significantly amplifying already existing geopolitical tensions. The United States and many other countries have instituted various economic sanctions against Russian
individuals and entities. The extent and duration of the military action, sanctions imposed and other punitive actions taken and resulting future market disruptions in Europe and globally cannot be easily predicted, but could be significant and have
a severe adverse effect on the global economy, securities markets and commodities markets globally. To the extent the Fund has exposure to the energy sector, the Fund may be especially susceptible to these risks. These disruptions may also make it
difficult to value the Funds portfolio investments and cause certain of the Funds investments to become illiquid. The strengthening or weakening of the U.S. dollar relative to other currencies may, among other things, adversely affect
the Funds investments denominated in non-U.S. dollar currencies. It is difficult to predict when similar events affecting the U.S. or global financial markets may occur, the effects that such events may
have, and the duration of those effects.
Regulatory Risk: The U.S. government has proposed and adopted multiple
regulations that could have a long-lasting impact on the Fund and on the mutual fund industry in general. The SECs final rules, related requirements and amendments to modernize reporting and disclosure, along with other potential upcoming
regulations, could, among other things, restrict the Funds ability to engage in transactions, and/or increase overall expenses of the Fund. In addition to recently adopted Rule 18f-4, which governs the
way derivatives are used by registered investment companies, the SEC, Congress, various exchanges and regulatory and self-regulatory authorities, both domestic and foreign, have undertaken reviews of the use of derivatives by registered investment
companies, which could affect the nature and extent of instruments used by the Fund. While the full extent of all of these regulations is still unclear, these regulations and actions may adversely affect both the Fund and the instruments in which
the Fund invests and its ability to execute its investment strategy. Similarly, regulatory developments in other countries may have an unpredictable and adverse impact on the Fund.
LIBOR Risk: Many financial instruments are tied to the LIBOR to determine payment obligations, financing terms, hedging
strategies, or investment value. LIBOR is the offered rate for short-term Eurodollar deposits between major international banks. The Head of the UK Financial Conduct Authority the (FCA) and LIBORs administrator, ICE Benchmark Administration
(IBA) ceased publication of most LIBOR settings at the end of 2021 and the IBA is expected to cease publication of a majority of U.S. dollar LIBOR settings after June 30, 2023. In addition, global regulators have announced that, with limited
exceptions, no new LIBOR-based contracts should be entered into after 2021. Actions by regulators have resulted in the establishment of alternative reference rates to LIBOR in most major currencies (e.g., the SOFR for U.S. dollar LIBOR and the
Sterling Overnight Interbank Average Rate for GBP LIBOR). Other countries are introducing their own local-currency-denominated alternative reference rates for short-term lending and global consensus on alternative rates is lacking.
There remains uncertainty and risk regarding the willingness and ability of issuers and lenders to include enhanced provisions in
new and existing contracts or instruments, the suitability of the proposed replacement rates, and the process for amending existing contracts and instruments remains unclear. As such, the transition away from LIBOR may lead to increased volatility
and illiquidity in markets that
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
are tied to LIBOR, reduced values of, inaccurate valuations of, and
miscalculations of payment amounts for LIBOR-related investments or investments in issuers that utilize LIBOR, increased difficulty in borrowing or refinancing and reduced effectiveness of hedging strategies, adversely affecting the Funds
performance or NAV. In addition, any alternative reference rate may be a less effective substitute resulting in prolonged adverse market conditions for the Fund. Since the usefulness of LIBOR as a benchmark could deteriorate during the transition
period, these effects could occur prior to the cessation of LIBOR publications.
Note 11. Other
In the normal course of business, the Fund enters into contracts that provide general indemnifications. The Funds maximum
exposure under these arrangements is dependent on claims that may be made against the Fund in the future and, therefore, cannot be estimated; however, based on experience, the risk of material loss from such claims is considered remote.
Note 12. New Accounting Pronouncement
In January 2021, the Financial Accounting Standards Board issued Accounting Standards Update No. 2021-01 (ASU 2021-01), Reference Rate Reform
(Topic 848). ASU 2021-01 is an update of ASU 2020-04, which is in response to concerns about structural risks of interbank offered rates, and particularly the risk
of cessation of LIBOR, and the reference rate reform initiatives that the regulators have undertaken to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2020-04 is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be
discontinued because of reference rate reform. The ASU 2021-01 update clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives
that are affected by the discounting transition. The amendments in this update are effective immediately through December 31, 2022, for all entities. Management does not expect any impact to the Funds net assets or results of operations.
Note 13. Subsequent Events
Management has evaluated events and transactions occurring after June 30, 2022 through the date that the consolidated
financial statements were issued, and has determined that no additional disclosure in the consolidated financial statements is required.
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PROXY RESULTS (Unaudited)
Cohen & Steers REIT and Preferred and Income Fund, Inc. shareholders voted on the following proposals at the annual
meeting held on April 27, 2022. The description of each proposal and number of shares voted are as follows:
|
|
|
|
|
|
|
|
|
Common Shares |
|
Shares Voted For |
|
|
Authority Withheld |
|
To elect Directors: |
|
|
|
|
|
|
|
|
|
|
|
Joseph M. Harvey |
|
|
36,145,281 |
|
|
|
831,061 |
|
Gerald J. Maginnis |
|
|
36,242,415 |
|
|
|
733,927 |
|
Daphne L. Richards |
|
|
36,316,301 |
|
|
|
660,041 |
|
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COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
(The following pages are unaudited)
REINVESTMENT PLAN
We urge shareholders who want to take advantage of this plan and whose shares are held in Street Name to consult your broker as soon as possible to determine if you must change registration into your own name to
participate.
OTHER INFORMATION
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities
is available (i) without charge, upon request, by calling 866-227-0757, (ii) on our website at cohenandsteers.com or (iii) on the U.S. Securities and Exchange Commissions (SEC) website at http://www.sec.gov. In addition, the
Funds proxy voting record for the most recent 12-month period ended June 30 is available by August 31 of each year (i) without charge, upon request, by calling 866-227-0757 or (ii) on
the SECs website at http://www.sec.gov.
Disclosures of the Funds complete holdings are required to be made
monthly on Form N-PORT, with every third month made available to the public by the SEC 60 days after the end of the Funds fiscal quarter. The Funds Form N-PORT is available (i) without charge, upon request, by calling 866-227-0757
or (ii) on the SECs website at http://www.sec.gov.
Please note that distributions paid by the Fund to
shareholders are subject to recharacterization for tax purposes and are taxable up to the amount of the Funds investment company taxable income and net realized gains. Distributions in excess of the Funds investment company taxable
income and net realized gains are a return of capital distributed from the Funds assets. To the extent this occurs, the Funds shareholders of record will be notified of the estimated amount of capital returned to shareholders for each
such distribution and this information will also be available at cohenandsteers.com. The final tax treatment of all distributions is reported to shareholders on their 1099-DIV forms, which are mailed after the close of each calendar year.
Distributions of capital decrease the Funds total assets and, therefore, could have the effect of increasing the Funds expense ratio. In addition, in order to make these distributions, the Fund may have to sell portfolio securities at a
less than opportune time.
Notice is hereby given in accordance with Rule 23c-1
under the 1940 Act that the Fund may purchase, from time to time, shares of its common stock in the open market.
The following
information in this semiannual shareholder report is a summary of certain changes since the Funds most recent annual shareholder report. This information may not reflect all of the changes that have occurred since you purchased the Fund.
Addition to Portfolio Management Team
Effective April 29, 2022, Ms. Elaine Zaharis-Nikas and Mr. Jerry Dorost were added as portfolio managers of the Fund. Ms.
Zaharis-Nikas joined the investment manager in 2003 and currently serves as Senior Vice President of the investment manager. Mr. Dorost joined the investment manager in 2010 and currently serves as Senior Vice President of the investment manager.
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APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
The Board of Directors of the Fund, including a majority of the directors who are not parties to the Funds investment
management agreement (the Management Agreement), or interested persons of any such party (the Independent Directors), has the responsibility under the Investment Company Act of 1940 to approve the Funds Management Agreement for its initial two
year term and its continuation annually thereafter at a meeting of the Board of Directors called for the purpose of voting on the approval or continuation. The Management Agreement was discussed at a meeting of the Independent Directors, in their
capacity as the Contract Review Committee, held on June 7, 2022 and at meetings of the full Board of Directors held on March 15, 2022 and June 14, 2022. The Independent Directors, in their capacity as the Contract Review Committee,
also discussed the Management Agreement in executive session on June 14, 2022. At the meeting of the full Board of Directors on June 14, 2022, the Management Agreement was unanimously continued for a term ending June 30, 2023 by the
Funds Board of Directors, including the Independent Directors. The Independent Directors were represented by independent counsel who assisted them in their deliberations during the meetings and executive session.
In considering whether to continue the Management Agreement, the Board of Directors reviewed materials provided by an independent
data provider, which included, among other items, fee, expense and performance information compared to peer funds (the Peer Funds and, collectively with the Fund, the Peer Group) and performance comparisons to a larger category universe; summary
information prepared by the Funds investment manager (the Investment Manager); and a memorandum from counsel to the Independent Directors outlining the legal duties of the Board of Directors. The Board of Directors also spoke directly with
representatives of the independent data provider and met with investment management personnel. In addition, the Board of Directors considered information provided from time to time by the Investment Manager throughout the year at meetings of the
Board of Directors, including presentations by portfolio managers relating to the investment performance of the Fund and the investment strategies used in pursuing the Funds objective. The Board of Directors also considered information
provided by the Investment Advisor in response to a request for information submitted by counsel to the Independent Directors, on behalf of the Independent Directors, as well as information provided by the Investment Advisor in response to a
supplemental request. Additionally, the Independent Directors noted that in connection with their considerations, that they had received information from the Investment Manager about, and discussed with the Investment Manager, the operations of its
business continuity plan and related matters and the operations of third party service providers during the COVID-19 pandemic. In particular, the Board of Directors considered the following:
(i) The nature, extent and quality of services to be provided by the Investment Manager: The Board of Directors reviewed the
services that the Investment Manager provides to the Fund, including, but not limited to, making the day-to-day investment decisions for the Fund, placing orders for the
investment and reinvestment of the Funds assets, furnishing information to the Board of Directors of the Fund regarding the Funds portfolio, providing individuals to serve as Fund officers, managing the Funds debt leverage level,
and generally managing the Funds investments in accordance with the stated policies of the Fund. The Board of Directors also discussed with officers and portfolio managers of the Fund the types of transactions conducted on behalf of the Fund.
Additionally, the Board of Directors took into account the services provided by the Investment Manager to its other funds and accounts, including those that have investment objectives and strategies similar to those of the Fund. The Board of
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Directors also considered the education, background and experience of the Investment Managers personnel, particularly noting the potential
benefit that the portfolio managers work experience and favorable reputation can have on the Fund. The Board of Directors further noted the Investment Managers ability to attract qualified and experienced personnel. The Board of
Directors also considered the administrative services provided by the Investment Manager, including compliance and accounting services. After consideration of the above factors, among others, the Board of Directors concluded that the nature, extent
and quality of services provided by the Investment Manager are satisfactory and appropriate.
(ii) Investment
performance of the Fund and the Investment Manager: The Board of Directors considered the investment performance of the Fund compared to Peer Funds and compared to a relevant linked blended benchmark. The Board of Directors noted that the
Funds dual focus on REITs and preferred securities is uncommon and as a result, the Peer Funds generally consisted of real-estate only or preferred-only funds, making it difficult to make quantitative comparisons of the Funds performance
with that of the Peer Funds. The Board of Directors noted that the Fund outperformed the Peer Group medians for the one-, three-, five- and ten-year periods ended
March 31, 2022, ranking the Fund in the second, second, first and first quintiles, respectively. The Fund outperformed the relevant linked blended benchmark for the one-, three-, five- and ten-year periods ended March 31, 2022. The Board of Directors engaged in discussions with the Investment Manager regarding the contributors to and detractors from the Funds performance during the period,
the relevant implications of the continuing COVID-19 pandemic, as well as the impact of leverage on the Funds performance. The Board of Directors also considered supplemental information provided by the
Investment Manager, including a narrative summary of various factors affecting performance and the Investment Managers performance in managing similarly managed funds and accounts. The Board of Directors determined that Fund performance, in
light of all the considerations noted above, supported the continuation of the Management Agreement.
(iii) Cost of
the services to be provided and profits to be realized by the Investment Manager from the relationship with the Fund: The Board of Directors considered the contractual and actual management fees paid by the Fund as well as the Funds total
expense ratios. As part of its analysis, the Board of Directors gave consideration to the fee and expense analyses provided by the independent data provider. The Board of Directors considered that the Funds actual management fees at managed
and common asset levels are lower than the Peer Group medians, ranking in the first quintile for each. The Board of Directors noted that the Funds total expense ratio including investment-related expenses at common and managed asset levels
were higher than the Peer Group median, ranking the Fund in the fourth quintile for each. The Board of Directors also noted that the Funds total expense ratios excluding investment-related expenses at managed and common asset levels were lower
than the Peer Group medians, ranking in the first quintile for each. The Board of Directors considered the impact of leverage levels on the Funds fees and expenses at managed and common asset levels. In light of the considerations above, the
Board of Directors concluded that the Funds current expense structure was satisfactory.
The Board of Directors
also reviewed information regarding the profitability to the Investment Manager of its relationship with the Fund. The Board of Directors considered the level of the Investment Managers profits and whether the profits were reasonable for the
Investment Manager. The Board of Directors took into consideration other benefits to be derived by the Investment Manager in connection
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PREFERRED AND INCOME FUND, INC.
with the Management Agreement, noting particularly the research and related services, within the meaning of Section 28(e) of the Securities
Exchange Act of 1934, that the Investment Manager receives by allocating the Funds brokerage transactions. The Board of Directors further considered that the Investment Manager continues to reinvest profits back in the business, including
upgrading and/or implementing new trading, compliance and accounting systems, and by adding investment personnel to the portfolio management teams. The Board of Directors also considered the administrative services provided by the Investment Manager
and the associated administration fee paid to the Investment Manager for such services under the Administration Agreement. The Board of Directors determined that the services received under the Administration Agreement are beneficial to the Fund.
The Board of Directors concluded that the profits realized by the Investment Manager from its relationship with the Fund were reasonable and consistent with the Investment Managers fiduciary duties.
(iv) The extent to which economies of scale would be realized as the Fund grows and whether fee levels would reflect such
economies of scale: The Board of Directors noted that, as a closed-end fund, the Fund would not be expected to have inflows of capital that might produce increasing economies of scale. The Board of
Directors determined that, given the Funds closed-end structure, there were no significant economies of scale that were not already being shared with shareholders. In considering economies of scale, the
Board of Directors also noted, as discussed above in (iii), that the Investment Manager continues to reinvest profits back in the business.
(v) Comparison of services to be rendered and fees to be paid to those under other investment management contracts, such as contracts of the same and other investment advisors or other clients: As discussed above in (iii),
the Board of Directors compared the fees paid under the Management Agreement to those under other investment management contracts of other investment advisors managing Peer Funds. The Board of Directors also compared the services rendered and fees
paid under the Management Agreement to fees paid, including the ranges of such fees, under the Investment Managers other fund management agreements and advisory contracts with institutional and other clients with similar investment mandates,
noting that the Investment Manager provides more services to the Fund than it does for institutional or subadvised accounts. The Board of Directors also considered the entrepreneurial risk and financial exposure assumed by the Investment Manager in
developing and managing the Fund that the Investment Manager does not have with institutional and other clients and other differences in the management of registered investment companies and institutional accounts. The Board of Directors determined
that on a comparative basis the fees under the Management Agreement were reasonable in relation to the services provided.
No single factor was cited as determinative to the decision of the Board of Directors, and each Director may have assigned different weights to the various factors. Rather, after weighing all of the considerations and conclusions
discussed above, the Board of Directors, including the Independent Directors, unanimously approved the continuation of the Management Agreement.
63
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
Cohen & Steers Privacy Policy
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Facts |
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What Does Cohen & Steers Do With Your Personal Information? |
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Why? |
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Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires
us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
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What? |
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The types of personal information we collect and share depend on the product or service
you have with us. This information can include: Social Security number and account balances
Transaction history and account transactions
Purchase history and wire
transfer instructions |
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How? |
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All financial companies need to share customers personal information to run their everyday business. In the section below, we list the reasons financial
companies can share their customers personal information; the reasons Cohen & Steers chooses to share; and whether you can limit this sharing. |
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Reasons we can share your personal information |
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Does Cohen & Steers share? |
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Can you limit this sharing? |
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For our everyday business purposes
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or reports to
credit bureaus |
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Yes |
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No |
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For our marketing purposes
to offer our products and services to you |
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Yes |
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No |
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For joint marketing with other financial companies |
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No |
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We dont share |
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For our affiliates everyday business purposes
information about your transactions and experiences |
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No |
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We dont share |
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For our affiliates everyday business purposes
information about your creditworthiness |
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No |
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We dont share |
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For our affiliates to market to you |
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No |
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We dont share |
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For non-affiliates to market to you |
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No |
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We dont share |
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Questions? Call 800.330.7348 |
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64
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
Cohen & Steers Privacy Policy(Continued)
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Who we are |
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Who is providing this notice? |
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Cohen & Steers Capital Management, Inc., Cohen & Steers Asia Limited, Cohen & Steers Japan Limited, Cohen & Steers UK Limited,
Cohen & Steers Ireland Limited, Cohen & Steers Securities, LLC, Cohen & Steers Private Funds and Cohen & Steers Open and Closed-End Funds (collectively, Cohen &
Steers). |
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What we do |
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How does Cohen & Steers protect my personal information? |
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To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer
safeguards and secured files and buildings. We restrict access to your information to those employees who need it to perform their jobs, and also require companies that provide services on our behalf to protect your information. |
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How does Cohen & Steers collect my personal information? |
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We collect your personal information, for example, when you:
Open an account or buy
securities from us
Provide account information or give us your contact information
Make deposits or
withdrawals from your account We also collect your personal
information from other companies. |
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Why cant I limit all sharing? |
|
Federal law gives you the right to limit only:
sharing for
affiliates everyday business purposesinformation about your creditworthiness
affiliates from using your information to market to you
sharing for non-affiliates to market to you
State law and individual companies may give you additional rights to limit sharing. |
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Definitions |
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Affiliates |
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Companies related by common ownership or control. They can be financial and
nonfinancial companies.
Cohen & Steers does not share with affiliates. |
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Non-affiliates |
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Companies not related by common ownership or control. They can be financial and
nonfinancial companies.
Cohen & Steers does not share with
non-affiliates. |
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Joint marketing |
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A formal agreement between non-affiliated
financial companies that together market financial products or services to you.
Cohen & Steers does not jointly market. |
65
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
Cohen & Steers Open-End Mutual Funds
COHEN & STEERS REALTY
SHARES
|
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Designed for investors seeking total return, investing primarily in U.S. real estate securities |
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Symbols: CSJAX, CSJCX, CSJIX, CSRSX, CSJRX, CSJZX |
COHEN & STEERS REAL ESTATE SECURITIES
FUND
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Designed for investors seeking total return, investing primarily in U.S. real estate securities |
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Symbols: CSEIX, CSCIX, CREFX, CSDIX, CIRRX, CSZIX |
COHEN & STEERS INSTITUTIONAL REALTY SHARES
|
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Designed for institutional investors seeking total return, investing primarily in U.S. real estate securities |
COHEN &
STEERS GLOBAL REALTY SHARES
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Designed for investors seeking total return, investing primarily in global real estate equity securities |
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Symbols: CSFAX, CSFCX, CSSPX, GRSRX, CSFZX |
COHEN & STEERS INTERNATIONAL REALTY FUND
|
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Designed for investors seeking total return, investing primarily in international (non-U.S.) real estate securities |
|
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Symbols: IRFAX, IRFCX, IRFIX, IRFRX, IRFZX |
COHEN & STEERS REAL ASSETS FUND
|
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Designed for investors seeking total return and the maximization of real returns during inflationary environments by investing primarily in real assets |
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Symbols: RAPAX, RAPCX, RAPIX, RAPRX, RAPZX
|
COHEN & STEERS PREFERRED
SECURITIES AND INCOME FUND
|
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Designed for investors seeking total return (high current income and capital appreciation), investing primarily in preferred and debt securities issued by U.S. and
non-U.S. companies |
|
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Symbols: CPXAX, CPXCX, CPXFX, CPXIX, CPRRX, CPXZX |
COHEN & STEERS LOW DURATION PREFERRED
AND INCOME FUND
|
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Designed for investors seeking high current income and capital preservation by investing in low-duration preferred and other income securities issued by U.S.
and non-U.S. companies |
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Symbols: LPXAX, LPXCX, LPXFX, LPXIX, LPXRX, LPXZX |
COHEN & STEERS MLP & ENERGY OPPORTUNITY
FUND
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Designed for investors seeking total return, investing primarily in midstream energy master limited partnership (MLP) units and related stocks |
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Symbols: MLOAX, MLOCX, MLOIX, MLORX, MLOZX |
COHEN & STEERS GLOBAL INFRASTRUCTURE FUND
|
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Designed for investors seeking total return, investing primarily in global infrastructure securities |
|
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Symbols: CSUAX, CSUCX, CSUIX, CSURX, CSUZX |
COHEN & STEERS ALTERNATIVE INCOME FUND
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Designed for investors seeking high current income and capital appreciation, investing in equity, preferred and debt securities, focused on real assets and alternative income strategies
|
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Symbols: DVFAX, DVFCX, DVFIX, DVFRX, DVFZX |
Distributed by Cohen & Steers Securities, LLC.
Please consider the investment objectives, risks,
charges and expenses of any Cohen & Steers U.S. registered open-end fund carefully before investing. A summary prospectus and prospectus containing this and other information can be obtained by
calling 800-330-7348 or by visiting cohenandsteers.com. Please read the summary prospectus and prospectus carefully before investing.
66
COHEN
& STEERS REIT AND
PREFERRED AND INCOME FUND, INC.
OFFICERS AND DIRECTORS
Joseph M. Harvey
Director,
Chairman and Vice President
Adam M. Derechin
Director
Michael G. Clark
Director
George
Grossman
Director
Dean A. Junkans
Director
Gerald J. Maginnis
Director
Jane F. Magpiong
Director
Daphne L.
Richards
Director
Ramona Rogers-Windsor
Director
James Giallanza
President and Chief Executive Officer
Albert Laskaj
Treasurer and Chief Financial Officer
Dana A. DeVivo
Secretary and
Chief Legal Officer
Stephen Murphy
Chief Compliance Officer
and Vice President
Yigal D. Jhirad
Vice President
William F. Scapell
Vice President
Mathew Kirschner
Vice President
Jason
Yablon
Vice President
KEY INFORMATION
Investment Manager and Administrator
Cohen & Steers Capital Management, Inc.
280 Park Avenue
New York, NY 10017
(212) 832-3232
Co-administrator and Custodian
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111
Transfer Agent
Computershare
150
Royall Street
Canton, MA 02021
(866) 227-0757
Legal Counsel
Ropes & Gray LLP
1211
Avenue of the Americas
New York, NY 10036
|
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New York Stock Exchange Symbol: |
|
RNP |
Website: cohenandsteers.com
This report is for shareholder information. This is not a prospectus intended for use in the purchase or sale of Fund shares. Performance data
quoted represent past performance. Past performance is no guarantee of future results and your investment may be worth more or less at the time you sell your shares.
67
eDelivery AVAILABLE
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receive your shareholder reports
and prospectus online.
Sign up at cohenandsteers.com
Cohen & Steers
REIT and
Preferred and
Income Fund
(RNP)
Semiannual Report June 30, 2022
As permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Funds annual and semiannual shareholder reports are no
longer sent by mail, unless you specifically requested paper copies of the reports. Instead, the reports are made available on the Funds website at www.cohenandsteers.com, and you will be notified by mail each time a report is posted and
provided with a website link to access the report.
If you have already elected to receive shareholder reports electronically, you will not be affected by this change
and you need not take any action. You may elect to receive shareholder reports and other communications from a Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, by signing up at
www.cohenandsteers.com.
You may elect to receive all future reports in paper, free of charge, at anytime. If you invest through a financial intermediary, you can
contact your financial intermediary or, if you are a direct investor, you can call (866) 227-0757 to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to
all Funds held in your account if you invest through your financial intermediary or all Funds held within the fund complex if you invest directly with the Fund.
RNPSAR