- Quarterly Schedule of Portfolio Holdings of Registered Management Investment Company (N-Q)
November 23 2009 - 1:47PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment
Company Act file number
|
811-21074
|
|
|
Cohen
& Steers Premium Income Realty Fund, Inc.
|
(Exact name of registrant as specified in charter)
|
|
280 Park Avenue
New York, NY
|
|
10017
|
(Address of principal executive offices)
|
|
(Zip code)
|
|
Francis C. Poli
280 Park Avenue
New York, NY 10017
|
(Name and address of agent for service)
|
|
Registrants
telephone number, including area code:
|
(212)
832-3232
|
|
|
Date of
fiscal year end:
|
December 31
|
|
|
|
|
Date of
reporting period:
|
September
30, 2009
|
|
|
|
|
|
|
|
|
Item 1. Schedule of Investments
COHEN & STEERS PREMIUM INCOME REALTY
FUND, INC.
SCHEDULE OF INVESTMENTS
September 30, 2009 (Unaudited)
|
|
Number
of Shares
|
|
Value
|
|
COMMON STOCK 111.5%
|
|
|
|
|
|
DIVERSIFIED 9.7%
|
|
|
|
|
|
Cousins Properties
|
|
201,011
|
|
$
|
1,664,371
|
|
Dexus Property Group (Australia)
|
|
2,343,500
|
|
1,746,983
|
|
Lexington Realty Trust
|
|
292,900
|
|
1,493,790
|
|
Vornado Realty Trust
(a)
|
|
220,262
|
|
14,187,075
|
|
|
|
|
|
19,092,219
|
|
HEALTH CARE 14.7%
|
|
|
|
|
|
Brookdale Senior Living
(a)
|
|
183,027
|
|
3,318,279
|
|
Chartwell Seniors Housing (Canada)
|
|
161,467
|
|
1,002,901
|
|
Cogdell Spencer
|
|
292,840
|
|
1,405,632
|
|
HCP
(a)
|
|
377,808
|
|
10,858,202
|
|
Health Care REIT
(a)
|
|
56,451
|
|
2,349,491
|
|
Nationwide Health Properties
(a)
|
|
83,910
|
|
2,600,371
|
|
Senior Housing Properties Trust
|
|
156,805
|
|
2,996,544
|
|
Ventas
(a)
|
|
114,675
|
|
4,414,987
|
|
|
|
|
|
28,946,407
|
|
HOTEL 7.1%
|
|
|
|
|
|
Hospitality Properties Trust
(a)
|
|
197,100
|
|
4,014,927
|
|
Host Hotels & Resorts
(a)
|
|
848,847
|
|
9,990,929
|
|
|
|
|
|
14,005,856
|
|
INDUSTRIAL 7.2%
|
|
|
|
|
|
AMB Property Corp.
(a)
|
|
134,186
|
|
3,079,569
|
|
ProLogis
(a)
|
|
937,704
|
|
11,177,431
|
|
|
|
|
|
14,257,000
|
|
MORTGAGE 0.9%
|
|
|
|
|
|
MFA Financial
(a)
|
|
229,756
|
|
1,828,858
|
|
|
|
|
|
|
|
OFFICE 21.3%
|
|
|
|
|
|
BioMed Realty Trust
(a)
|
|
220,846
|
|
3,047,675
|
|
Boston Properties
(a)
|
|
176,198
|
|
11,549,779
|
|
Brandywine Realty Trust
(a)
|
|
272,441
|
|
3,007,749
|
|
|
|
|
|
|
|
|
1
|
|
Number
of Shares
|
|
Value
|
|
Brookfield Properties Corp.
|
|
266,995
|
|
$
|
3,006,364
|
|
Douglas Emmett
(a)
|
|
124,300
|
|
1,526,404
|
|
ING Office Fund (Australia)
|
|
3,411,700
|
|
1,685,489
|
|
Kilroy Realty Corp.
(a)
|
|
134,454
|
|
3,729,754
|
|
Liberty Property Trust
(a)
|
|
172,218
|
|
5,602,251
|
|
Mack-Cali Realty Corp.
(a)
|
|
170,820
|
|
5,522,610
|
|
SL Green Realty Corp.
(a)
|
|
75,100
|
|
3,293,135
|
|
|
|
|
|
41,971,210
|
|
OFFICE/INDUSTRIAL 1.3%
|
|
|
|
|
|
PS Business Parks
(a)
|
|
49,027
|
|
2,516,066
|
|
|
|
|
|
|
|
RESIDENTIAL 18.0%
|
|
|
|
|
|
APARTMENT 17.2%
|
|
|
|
|
|
American Campus Communities
(a)
|
|
73,566
|
|
1,975,247
|
|
Apartment Investment & Management Co.
(a)
|
|
246,566
|
|
3,636,849
|
|
AvalonBay Communities
(a)
|
|
90,221
|
|
6,561,773
|
|
Colonial Properties Trust
|
|
47,950
|
|
466,554
|
|
Education Realty Trust
|
|
207,275
|
|
1,229,141
|
|
Equity Residential
(a)
|
|
382,993
|
|
11,757,885
|
|
Home Properties
(a)
|
|
39,477
|
|
1,701,064
|
|
Post Properties
|
|
110,063
|
|
1,981,134
|
|
UDR
(a)
|
|
288,776
|
|
4,545,334
|
|
|
|
|
|
33,854,981
|
|
MANUFACTURED HOME 0.8%
|
|
|
|
|
|
Equity Lifestyle Properties
(a)
|
|
39,598
|
|
1,694,398
|
|
TOTAL RESIDENTIAL
|
|
|
|
35,549,379
|
|
|
|
|
|
|
|
SELF STORAGE 7.5%
|
|
|
|
|
|
Public Storage
(a)
|
|
121,072
|
|
9,109,457
|
|
Sovran Self Storage
(a)
|
|
101,007
|
|
3,073,643
|
|
U-Store-It Trust
(a)
|
|
430,800
|
|
2,692,500
|
|
|
|
|
|
14,875,600
|
|
|
|
|
|
|
|
|
2
|
|
Number
of Shares
|
|
Value
|
|
SHOPPING CENTER 23.8%
|
|
|
|
|
|
COMMUNITY CENTER 8.6%
|
|
|
|
|
|
Developers Diversified Realty Corp.
|
|
361,200
|
|
$
|
3,337,488
|
|
Federal Realty Investment Trust
(a)
|
|
36,372
|
|
2,232,150
|
|
Inland Real Estate Corp.
(a)
|
|
129,165
|
|
1,131,486
|
|
Kimco Realty Corp.
(a)
|
|
354,821
|
|
4,626,866
|
|
Regency Centers Corp.
(a)
|
|
59,666
|
|
2,210,625
|
|
Weingarten Realty Investors
(a)
|
|
167,123
|
|
3,329,090
|
|
|
|
|
|
16,867,705
|
|
FREE STANDING 0.8%
|
|
|
|
|
|
National Retail Properties
(a)
|
|
69,156
|
|
1,484,779
|
|
|
|
|
|
|
|
REGIONAL MALL 14.4%
|
|
|
|
|
|
Glimcher Realty Trust
|
|
205,185
|
|
753,029
|
|
Macerich Co.
(a)
|
|
190,922
|
|
5,790,664
|
|
Simon Property Group
(a)
|
|
315,981
|
|
21,938,561
|
|
|
|
|
|
28,482,254
|
|
TOTAL SHOPPING CENTER
|
|
|
|
46,834,738
|
|
|
|
|
|
|
|
TOTAL COMMON STOCK (Identified cost$195,427,020)
|
|
|
|
219,877,333
|
|
|
|
|
|
|
|
PREFERRED SECURITIES$25 PAR VALUE 41.2%
|
|
|
|
|
|
FINANCE 0.4%
|
|
|
|
|
|
MORTGAGE LOAN/BROKER
|
|
|
|
|
|
Countrywide Capital V, 7.00%, due 11/1/36
|
|
40,000
|
|
822,800
|
|
|
|
|
|
|
|
REAL ESTATE 40.8%
|
|
|
|
|
|
DIVERSIFIED 3.8%
|
|
|
|
|
|
Duke Realty Corp., 6.60%, Series L
|
|
100,000
|
|
2,001,000
|
|
Duke Realty Corp., 8.375%, Series O
(a)
|
|
51,000
|
|
1,237,770
|
|
Lexington Realty Trust, 7.55%, Series D
(a)
|
|
176,500
|
|
3,000,500
|
|
Vornado Realty Trust, 6.625%, Series I
(a)
|
|
60,000
|
|
1,275,000
|
|
|
|
|
|
7,514,270
|
|
HEALTH CARE 4.0%
|
|
|
|
|
|
Health Care REIT, 7.875%, Series D
(a)
|
|
110,009
|
|
2,645,717
|
|
Health Care REIT, 7.625%, Series F
(a)
|
|
155,413
|
|
3,681,734
|
|
|
|
|
|
|
|
|
3
|
|
Number
of Shares
|
|
Value
|
|
Omega Healthcare Investors, 8.375%, Series D
(a)
|
|
60,000
|
|
$
|
1,474,500
|
|
|
|
|
|
7,801,951
|
|
HOTEL 5.0%
|
|
|
|
|
|
Hospitality Properties Trust, 8.875%,
Series B
(a)
|
|
94,825
|
|
2,242,611
|
|
Hospitality Properties Trust, 7.00%, Series C
(a)
|
|
99,600
|
|
1,937,220
|
|
Host Hotels & Resorts, 8.875%,
Series E
(a)
|
|
40,000
|
|
1,000,000
|
|
LaSalle Hotel Properties, 8.00%, Series E
(a)
|
|
40,600
|
|
898,478
|
|
LaSalle Hotel Properties, 7.25%, Series G
(a)
|
|
150,000
|
|
3,000,000
|
|
Sunstone Hotel Investors, 8.00%, Series A
(a)
|
|
41,900
|
|
783,530
|
|
|
|
|
|
9,861,839
|
|
INDUSTRIAL 0.2%
|
|
|
|
|
|
ProLogis Trust, 6.75%, Series F
|
|
20,000
|
|
394,000
|
|
|
|
|
|
|
|
OFFICE 8.3%
|
|
|
|
|
|
Alexandria Real Estate, 7.00%, Series D
|
|
110,000
|
|
2,145,000
|
|
BioMed Realty Trust, 7.375%, Series A
(a)
|
|
186,950
|
|
4,159,637
|
|
Brandywine Realty Trust, 7.50%, Series C
(a)
|
|
20,000
|
|
441,800
|
|
Cousins Properties, 7.50%, Series B
(a)
|
|
110,700
|
|
2,161,971
|
|
HRPT Properties Trust, 8.75%, Series B
(a)
|
|
102,040
|
|
2,408,144
|
|
HRPT Properties Trust, 6.50%, Series D
|
|
35,000
|
|
643,300
|
|
Kilroy Realty Corp., 7.50%, Series F
(a)
|
|
78,300
|
|
1,708,506
|
|
SL Green Realty Corp., 7.625%, Series C
(a)
|
|
125,034
|
|
2,772,004
|
|
|
|
|
|
16,440,362
|
|
OFFICE/INDUSTRIAL 1.9%
|
|
|
|
|
|
PS Business Parks, 7.00%, Series H
(a)
|
|
122,000
|
|
2,712,060
|
|
PS Business Parks, 7.375%, Series O
(a)
|
|
50,000
|
|
1,100,000
|
|
|
|
|
|
3,812,060
|
|
RESIDENTIAL- APARTMENT 4.8%
|
|
|
|
|
|
Apartment Investment & Management Co.,
7.75%, Series U
(a)
|
|
190,000
|
|
3,933,000
|
|
Apartment Investment & Management Co.,
8.00%, Series V
(a)
|
|
82,900
|
|
1,755,822
|
|
Apartment Investment & Management Co.,
7.875%, Series Y
(a)
|
|
100,000
|
|
2,100,000
|
|
UDR, 6.75%, Series G
(a)
|
|
79,400
|
|
1,659,460
|
|
|
|
|
|
9,448,282
|
|
|
|
|
|
|
|
|
4
|
|
Number
of Shares
|
|
Value
|
|
SELF STORAGE 1.2%
|
|
|
|
|
|
Public Storage, 6.625%, Series M
(a)
|
|
100,000
|
|
$
|
2,277,000
|
|
|
|
|
|
|
|
SHOPPING CENTER 8.9%
|
|
|
|
|
|
COMMUNITY CENTER 3.5%
|
|
|
|
|
|
Developers Diversified Realty Corp., 8.00%,
Series G
|
|
75,000
|
|
1,425,000
|
|
Developers Diversified Realty Corp., 7.375%,
Series H
|
|
70,000
|
|
1,228,500
|
|
Kimco Realty Corp., 7.75%, Series G
(a)
|
|
38,211
|
|
930,438
|
|
Urstadt Biddle Properties, 8.50%, Series C
($100 par value)
(a),(b)
|
|
16,000
|
|
1,576,000
|
|
Weingarten Realty Investors, 6.50%, Series F
(a)
|
|
82,000
|
|
1,640,000
|
|
|
|
|
|
6,799,938
|
|
FREE STANDING 0.9%
|
|
|
|
|
|
National Retail Properties, 7.375%, Series C
(a)
|
|
80,000
|
|
1,831,200
|
|
|
|
|
|
|
|
REGIONAL MALL 4.5%
|
|
|
|
|
|
CBL & Associates Properties, 7.75%,
Series C
(a)
|
|
105,000
|
|
2,047,500
|
|
CBL & Associates Properties, 7.375%,
Series D
(a)
|
|
150,000
|
|
2,766,000
|
|
Simon Property Group, 8.375%, Series J ($50
par value)
(a),(b)
|
|
70,800
|
|
4,141,800
|
|
|
|
|
|
8,955,300
|
|
TOTAL SHOPPING CENTER
|
|
|
|
17,586,438
|
|
|
|
|
|
|
|
SPECIALTY 2.7%
|
|
|
|
|
|
Digital Realty Trust, 8.50%, Series A
(a)
|
|
130,600
|
|
3,186,640
|
|
Digital Realty Trust, 7.875%, Series B
(a)
|
|
42,000
|
|
1,000,020
|
|
Entertainment Properties Trust, 9.00%,
Series E
|
|
50,000
|
|
1,078,500
|
|
|
|
|
|
5,265,160
|
|
TOTAL REAL ESTATE
|
|
|
|
80,401,362
|
|
|
|
|
|
|
|
TOTAL PREFERRED
SECURITIES$25 PAR VALUE
(Identified cost$90,487,919)
|
|
|
|
81,224,162
|
|
|
|
|
|
|
|
PREFERRED SECURITIESCAPITAL SECURITIES 1.8%
|
|
|
|
|
|
FINANCE - CREDIT CARD 0.4%
|
|
|
|
|
|
Capital One Capital V, 10.25%, due 08/15/39
|
|
750,000
|
|
830,840
|
|
|
|
|
|
|
|
|
5
|
|
Number
of Shares
|
|
Value
|
|
INSURANCE
|
|
|
|
|
|
MULTI-LINE 0.7%
|
|
|
|
|
|
MetLife Capital Trust X, 9.25%, due 4/8/38, 144A
(c)
|
|
1,250,000
|
|
$
|
1,303,347
|
|
|
|
|
|
|
|
|
PROPERTY CASUALTY 0.7%
|
|
|
|
|
|
Liberty Mutual Group, 10.75%, due 6/15/58, 144A
(c)
|
|
1,500,000
|
|
1,447,500
|
|
|
|
|
|
|
|
TOTAL INSURANCE
|
|
|
|
2,750,847
|
|
|
|
|
|
|
|
TOTAL PREFERRED
SECURITIESCAPITAL SECURITIES
(Identified cost$3,478,509)
|
|
|
|
3,581,687
|
|
|
|
|
|
|
|
|
|
Principal
Amount
|
|
|
|
CORPORATE BONDS 2.0%
|
|
|
|
|
|
REAL ESTATE
|
|
|
|
|
|
INDUSTRIAL 0.6%
|
|
|
|
|
|
ProLogis International Funding, 5.875%, due
10/23/14
|
|
EUR
|
900,000
|
|
1,132,632
|
|
|
|
|
|
|
|
OFFICE 0.5%
|
|
|
|
|
|
Brandywine Operating Partnership LP, 7.50%, due
5/15/15
|
|
$
|
1,000,000
|
|
1,001,589
|
|
|
|
|
|
|
|
SHOPPING CENTER - COMMUNITY CENTER 0.9%
|
|
|
|
|
|
Developers Diversified Realty Corp., 9.625%, due
3/15/16
|
|
1,750,000
|
|
1,757,573
|
|
|
|
|
|
|
|
TOTAL CORPORATE BONDS (Identified cost$3,531,453)
|
|
|
|
3,891,794
|
|
|
|
|
|
|
|
|
|
Number
of Shares
|
|
|
|
SHORT-TERM INVESTMENTS 1.7%
|
|
|
|
|
|
MONEY MARKET FUNDS
|
|
|
|
|
|
Dreyfus Treasury Cash Management Fund, 0.00%
(d)
|
|
2,059,751
|
|
2,059,751
|
|
Fidelity Institutional Money Market Treasury Only
Fund, 0.08%
(d)
|
|
1,300,000
|
|
1,300,000
|
|
|
|
|
|
|
|
TOTAL SHORT-TERM
INVESTMENTS (Identified cost$3,359,751)
|
|
|
|
3,359,751
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
Value
|
|
TOTAL INVESTMENTS
(Identified cost$296,284,652)
|
|
158.2
|
%
|
|
|
$
|
311,934,727
|
|
|
|
|
|
|
|
|
|
LIABILITIES IN EXCESS OF OTHER ASSETS
|
|
(58.2
|
)%
|
|
|
(114,736,620
|
)
|
|
|
|
|
|
|
|
|
NET ASSETS (Equivalent to $6.16 per share based on
32,011,316 shares of common stock outstanding)
|
|
100.0
|
%
|
|
|
$
|
197,198,107
|
|
Glossary
of Portfolio Abbreviations
EUR
|
|
Euro
|
REIT
|
|
Real
Estate Investment Trust
|
Note: Percentages indicated are based on the
net assets of the Fund.
(a)
A portion or
all of the security is pledged in connection with the revolving credit
agreement: $247,887,471 has been pledged as collateral.
(b)
Illiquid
security. Aggregate holdings equal 2.9%
of net assets of the Fund.
(c)
Resale is
restricted to qualified institutional investors. Aggregate holdings equal 1.4% of net assets
of the Fund.
(d)
Rate quoted
represents the seven day yield of the fund.
7
Interest rate
swaps outstanding at September 30, 2009 are as follows:
|
|
|
|
Fixed
|
|
Floating Rate(a)
|
|
|
|
|
|
|
|
Notional
|
|
Rate
|
|
(reset monthly)
|
|
Termination
|
|
Unrealized
|
|
Counterparty
|
|
Amount
|
|
Payable
|
|
Receivable
|
|
Date
|
|
Depreciation
|
|
Merrill
Lynch Derivative Products AG
|
|
$
|
55,000,000
|
|
3.600
|
%
|
0.246
|
%
|
January 29,
2014
|
|
$
|
(2,952,964
|
)(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Based on LIBOR (London Interbank Offered
Rate). Represents rates in effect at September 30,
2009.
(b) $3,239,000 is segregated as collateral for
interest rate swap transactions.
NOTES TO FINANCIAL STATEMENTS
Note 1.
Portfolio
Valuation:
Investments in
securities that are listed on the New York Stock Exchange are valued, except as
indicated below, at the last sale price reflected at the close of the New York
Stock Exchange 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 asked prices for the day or, if no asked price is
available, at the bid price.
Exchange traded options are valued at their last sale price as of the
close of options trading on applicable exchanges. In the absence of a last
sale, options are valued at the average of the quoted bid and asked prices as
of the close of business. Over-the-counter options quotations are provided by
the respective counterparty.
Securities not listed on the New York Stock Exchange but listed on
other domestic or foreign securities exchanges or admitted to trading on the
National Association of Securities Dealers Automated Quotations, Inc.
(Nasdaq) national market system are valued in a similar manner. Securities
traded on more than one securities exchange are valued at the last sale price
on the business day as of which such value is being determined as reflected on
the tape at the close of the exchange representing the principal market for
such securities. If after a close of the
foreign market, but prior to the close of business on the day the securities
are being valued, market conditions change significantly, certain foreign
securities may be fair valued pursuant to procedures established by the Board
of Directors.
Readily marketable securities traded in the over-the-counter market,
including listed securities whose primary market is believed by Cohen &
Steers Capital Management, Inc. (the investment manager) to be
over-the-counter, are valued at the official closing prices as reported by
sources as the Board of Directors deem appropriate to reflect their fair market
value. If there has been no sale on such day, the securities are valued at the
mean of the closing bid and asked prices for the day, or if no asked price is
available, at the bid price. However, certain fixed-income securities may be
valued on the basis of prices provided by a pricing service when such prices
are believed by the Board of Directors to reflect the fair market value of such
securities. Interest rate swaps are valued utilizing quotes received from an
outside pricing service.
Securities for which market prices are unavailable, or
securities for which the investment manager determines that bid and/or asked
price does not reflect market value, will be valued at fair value 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.
The Funds use of fair value
pricing may cause the net asset value of Fund shares to differ from the net
asset value that would be calculated using market quotations. Fair value
pricing
NOTES TO FINANCIAL STATEMENTS (continued)
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.
Short-term debt securities with a maturity date of 60 days or less are
valued at amortized cost, which approximates value.
Fair
value is defined as the price that the Fund would receive to sell an investment
or 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 investment or liability. The hierarchy of inputs that are used in
determining the fair value of the Funds investments is summarized below.
·
Level 1
quoted prices in active markets for identical investments
·
Level 2 other
significant observable inputs (including quoted prices for similar investments,
interest rates, prepayment speeds, credit risk, etc.)
·
Level 3
significant unobservable inputs (including the Funds own assumptions in
determining the fair value of investments)
The
inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The
following is a summary of the inputs used as of September 30, 2009 in
valuing the Funds investments carried at value:
NOTES TO FINANCIAL STATEMENTS (continued)
|
|
Fair Value Measurements at September 30, 2009 Using
|
|
|
|
Total
|
|
Quoted
Prices In
Active
Market for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Common Stock
|
|
$
|
219,877,333
|
|
$
|
219,877,333
|
|
$
|
|
|
$
|
|
|
Preferred Securities - $25 Par Value - Shopping
Center - Community Center
|
|
6,799,938
|
|
5,223,938
|
|
1,576,000
|
|
|
|
Preferred Securities - $25 Par Value Other
Industries
|
|
74,424,224
|
|
74,424,224
|
|
|
|
|
|
Preferred Securities Capital Securities
|
|
3,581,687
|
|
|
|
3,581,687
|
|
|
|
Corporate Bonds
|
|
3,891,794
|
|
|
|
3,891,794
|
|
|
|
Money Market Funds
|
|
3,359,751
|
|
|
|
3,359,751
|
|
|
|
Total Investments
|
|
$
|
311,934,727
|
|
$
|
299,525,495
|
|
$
|
12,409,232
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Instruments*
|
|
$
|
(2,952,964
|
)
|
$
|
|
|
$
|
(2,952,964
|
)
|
|
|
* Other financial instruments are
interest rate swap contracts.
Note 2. Derivative Instruments
The following is a
summary of the market valuations of the Funds derivative instruments as of September 30,
2009:
Interest Rate Swaps
|
|
$
|
(2,952,964
|
)
|
|
|
|
|
|
|
|
Interest Rate Swaps:
The Fund uses interest rate
swaps in connection with the sale of preferred shares and borrowing under its
credit agreement. The interest rate swaps are intended to reduce the risk that
an increase in short-term interest rates could have on the performance of the
Funds common shares as a result of the floating rate structure of the
preferred shares and the credit agreement. In these 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 counterparty
agreeing to pay the Fund a variable rate payment that is intended to
approximate the Funds variable rate payment obligation on the preferred shares
and the credit agreement. The payment obligation is based on the
NOTES TO FINANCIAL STATEMENTS (continued)
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
common shares. The market value of interest rate swaps is based on pricing
models that consider the time value of money, volatility, the current market
and contractual prices of the underlying financial instrument. Unrealized
appreciation is reported as an asset and unrealized depreciation is reported as
a liability on the Statement of Assets and Liabilities. The change in value of
swaps, including the accrual of periodic amounts of interest to be paid or
received on swaps, is reported as unrealized appreciation or depreciation in
the Statement of Operations. A realized gain or loss is recorded upon payment
or receipt of a periodic payment or termination of swap agreements. Swap
agreements involve, to varying degrees, elements of market and counterparty
risk, and exposure to loss in excess of the related amounts reflected in the
Statement of Assets and Liabilities. The Funds maximum risk of loss from
counterparty credit risk is the discounted net value of the cash flows to be
received from or paid to the counterparty over the contracts remaining life,
to the extent that such amount is positive.
Options:
The Fund may
write covered call options on an index or a security with the intention of
earning option premiums. Option premiums generate current income and may help
increase distributable income. When a Fund writes (sells) an option, an amount
equal to the premium received by the Fund is recorded in the 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 or loss on the option
to the extent of the premiums received. Premiums received from writing options
which are exercised or are closed, are added to or offset against the proceeds
or amount paid on the transaction 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 index or security. Other risks include the
possibility of an illiquid options market or the inability of the counterparties
to fulfill their obligations under the contract.
Note 3
.
Income Tax Information
As of September 30,
2009, the federal tax cost and net unrealized appreciation on securities were
as follows:
Gross unrealized appreciation
|
|
$
|
38,221,755
|
|
Gross unrealized depreciation
|
|
(22,571,680
|
)
|
Net unrealized appreciation
|
|
$
|
15,650,075
|
|
|
|
|
|
Cost for federal income tax purposes
|
|
$
|
296,284,652
|
|
NOTES TO FINANCIAL STATEMENTS (continued)
Note 4
.
Merger
On June 10, 2009, the
Boards of Directors of the Fund and each of Cohen & Steers Advantage
Income Realty Fund, Inc. (RLF), Cohen & Steers Worldwide Realty
Income Fund, Inc. (RWF and collectively with the Fund and RLF, the Acquired
Funds) and Cohen & Steers Quality Income Realty Fund, Inc. (RQI)
approved a merger, subject to approval by the Funds shareholders, in which the
Fund, and RLF and RWF would merge with and into RQI in accordance with Maryland
General Corporation Law. If each funds shareholders approve the mergers,
shareholders of the Fund, and shareholders of RLF and RWF would become
shareholders of RQI. In connection with the mergers, all of the Funds assets
and liabilities will be combined with RQI, and each shareholder of the Fund
will receive a number of shares of RQI in exchange for their shares of the Fund
having an aggregate net asset value equal to the aggregate net asset value of
the Funds shares held as of the close of business of the New York Stock Exchange
on the closing date of the mergers. Each merger is subject to approval of the
shareholders of each of RLF, RWF, RQI and the Fund and shareholders of RLF, RWF
and RQI will vote separately on the merger involving their respective fund.
Shareholders of RQI must also approve an amendment to RQIs charter to increase
the number of authorized common shares. Additionally, the merger of RWF with
and into RQI is conditioned on the approval of the merger of RLF with and into
RQI or on the approval of the merger of the Fund with and into RQI. If
shareholders approve the mergers and if the shareholders of RQI approve an
increase in the number of authorized common shares, the closing date of the
mergers is expected to be on or about December 18, 2009.
If RQIs shareholders do not
approve the amendment to RQIs charter to increase the number of authorized
shares, but the proposals approving the mergers are approved, RQI will not have
sufficient authorized but unissued common shares to issue to all of the Funds,
and RLFs and RWFs shareholders, and will not be able to consummate all of the
mergers. Should this occur, the Funds Boards of Directors reserve the right to
consummate the mergers of only one or two of the Acquired Funds with and into
RQI and will publicly announce prior to the closing date which mergers will be
consummated.
Merger related expenses,
which will be borne by the Fund, are estimated to be approximately $256,000.
Item 2.
Controls and Procedures
(a)
The registrants principal
executive officer and principal financial officer have concluded that the
registrants disclosure controls and procedures (as defined in Rule 30a-3(c) under
the Investment Company Act of 1940) are effective based on their evaluation of
these disclosure controls and procedures required by Rule 30a-3(b) under
the Investment Company Act of 1940 and Rule 13a-15(b) or 15d-15(b) under
the Securities Exchange Act as of a date within 90 days of the filing of this
report.
(b)
During the last fiscal
quarter, there were no changes in the registrants internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940) that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over financial reporting.
Item 3. Exhibits.
(a)
Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
COHEN &
STEERS PREMIUM INCOME REALTY FUND, INC.
By:
|
/s/
Adam M. Derechin
|
|
|
Name:
Adam M. Derechin
|
|
|
Title:
President
|
|
|
|
|
|
Date:
November 23, 2009
|
|
Pursuant
to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates indicated.
By:
|
/s/
Adam M. Derechin
|
|
By:
|
/s/
James Giallanza
|
|
Name:
Adam M. Derechin
|
|
|
Name:
James Giallanza
|
|
Title:
President and principal executive officer
|
|
|
Title:
Treasurer and principal financial officer
|
|
|
|
|
|
|
Date:
November 23, 2009
|
|
|
|
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