<SEC-DOCUMENT>0001193125-17-014317.txt : 20170120
<SEC-HEADER>0001193125-17-014317.hdr.sgml : 20170120
<ACCEPTANCE-DATETIME>20170120171755
ACCESSION NUMBER:		0001193125-17-014317
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20170120
ITEM INFORMATION:		Other Events
FILED AS OF DATE:		20170120
DATE AS OF CHANGE:		20170120

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Flaherty & Crumrine PREFERRED INCOME OPPORTUNITY FUND INC
		CENTRAL INDEX KEY:			0000882071
		IRS NUMBER:				954355600
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1130

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	811-06495
		FILM NUMBER:		17539279

	BUSINESS ADDRESS:	
		STREET 1:		301 E COLORADO BLVD STE 720
		STREET 2:		C/O FLAHERTY & CRUMRINE INC
		CITY:			PASADENA
		STATE:			CA
		ZIP:			91101
		BUSINESS PHONE:		(626) 795-7300

	MAIL ADDRESS:	
		STREET 1:		301 COLORADO BLVD STE 720
		STREET 2:		C/O FLAHERTY & CRUMRINE INC
		CITY:			PASADENA
		STATE:			CA
		ZIP:			91101

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PREFERRED INCOME OPPORTUNITY FUND INC
		DATE OF NAME CHANGE:	19920929
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d331317d8k.htm
<DESCRIPTION>FLAHERTY & CRUMRINE PREFERRED INCOME OPPORTUNITY FLAHERTY & CRUMRINE PREFERRED INCOME OPPORTUNITY
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<TITLE>FLAHERTY &amp;amp; CRUMRINE PREFERRED INCOME OPPORTUNITY</TITLE>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:13.5pt; font-family:Times New Roman" ALIGN="center"><B>UNITED STATES </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:13.5pt; font-family:Times New Roman" ALIGN="center"><B>SECURITIES AND EXCHANGE COMMISSION </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Washington, D.C. 20549 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>FORM <FONT STYLE="white-space:nowrap">8-K</FONT> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>CURRENT REPORT </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Pursuant to Section&nbsp;13 or 15(d) of the </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Securities Exchange Act of 1934 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Date of Report (date of earliest event reported): January&nbsp;20, 2017 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:13.5pt; font-family:Times New Roman" ALIGN="center"><B>FLAHERTY&nbsp;&amp; CRUMRINE PREFERRED INCOME OPPORTUNITY </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:13.5pt; font-family:Times New Roman" ALIGN="center"><B>FUND INCORPORATED </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">(Exact
name of Registrant as specified in its charter) </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"><B>Maryland</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B><FONT STYLE="white-space:nowrap">811-06495</FONT></B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B><FONT STYLE="white-space:nowrap">95-4355600</FONT></B></TD></TR>
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<TD VALIGN="top" ALIGN="center">(State or other jurisdiction of</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center">(Commission File Number)</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center">(I.R.S. Employer Identification</TD></TR>
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<TD VALIGN="top" ALIGN="center">incorporation)</TD>
<TD VALIGN="bottom">&nbsp;</TD>
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<TD VALIGN="top" ALIGN="center">No.)</TD></TR>
</TABLE> <P STYLE="margin-top:36pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>301 E. Colorado Blvd. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Suite 720 </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Pasadena, CA
91101 </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">(Address of principal executive offices and zip code) </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">Registrant&#146;s telephone number, including area code:
<B><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">626-795-7300</FONT></FONT></B> </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B><U>Not Applicable </U></B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">(Former name or former address, if changed since last report) </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Check the appropriate box below if the Form <FONT STYLE="white-space:nowrap">8-K</FONT> filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction A.2. below): </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">&#9744;</TD>
<TD ALIGN="left" VALIGN="top">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </TD></TR></TABLE> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top">Soliciting material pursuant to Rule <FONT STYLE="white-space:nowrap">14a-12</FONT> under the Exchange Act (17 CFR <FONT STYLE="white-space:nowrap">240.14a-12)</FONT> </TD></TR></TABLE>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR>
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<TD ALIGN="left" VALIGN="top"><FONT STYLE="white-space:nowrap">Pre-commencement</FONT> communications pursuant to Rule <FONT STYLE="white-space:nowrap">14d-2(b)</FONT> under the Exchange Act (17 CFR
<FONT STYLE="white-space:nowrap">240.14d-2(b))</FONT> </TD></TR></TABLE> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&#9744;</TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="white-space:nowrap">Pre-commencement</FONT> communications pursuant to Rule <FONT STYLE="white-space:nowrap">13e-4(c)</FONT> under the Exchange Act (17 CFR
<FONT STYLE="white-space:nowrap">240.13e-4(c))</FONT> </TD></TR></TABLE> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="line-height:1.5pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.50pt solid #999999">&nbsp;</P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Item&nbsp;8.01. Other Events. </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:11pt; font-family:Times New Roman">The following changes will be made to the investment policies of Flaherty&nbsp;&amp; Crumrine Preferred Income Opportunity Fund Incorporated (the
&#147;Fund&#148;) effective on February&nbsp;21, 2017. </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top"><I>Old Policy</I>:</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top">At time of purchase, at least 75% of the securities that the Fund will acquire will be rated investment grade by any one of Moody&#146;s Investor Service, Inc. (&#147;Moody&#146;s&#148;), Standard and Poor&#146;s Global Ratings
(&#147;S&amp;P&#148;) or Fitch Ratings Group (&#147;Fitch&#148;). In addition, the Fund may invest up to 25% of its assets at the time of purchase in securities rated below investment grade by all of Moody&#146;s, S&amp;P and Fitch, provided that
(a)&nbsp;such securities are rated at least &#147;Ba3&#148; by Moody&#146;s, <FONT STYLE="white-space:nowrap">&#147;BB-&#148;</FONT> by S&amp;P, or <FONT STYLE="white-space:nowrap">&#147;BB-&#148;</FONT> by Fitch or (b)&nbsp;such securities are
issued by an issuer having an outstanding class of senior debt rated investment grade by any one of Moody&#146;s, S&amp;P, or Fitch at the time of purchase. Thus, the Fund may invest in securities rated below &#147;Ba3&#148; by Moody&#146;s, <FONT
STYLE="white-space:nowrap">&#147;BB-&#148;</FONT> by S&amp;P and <FONT STYLE="white-space:nowrap">&#147;BB-&#148;</FONT> by Fitch if the issuer has investment grade senior debt outstanding. In addition, the Fund may invest in unrated securities that
the Fund&#146;s investment adviser deems to be comparable in quality to rated issues in which the Fund is authorized to invest.</TD></TR>
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<TD VALIGN="top"><I>New Policy</I>:</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top">At time of purchase, at least 85% of the Fund&#146;s managed assets will be either (a)&nbsp;rated investment grade by any one of Moody&#146;s, S&amp;P or Fitch or (b)&nbsp;issued by companies with issuer or senior unsecured debt
ratings that are investment grade by any one of Moody&#146;s, S&amp;P or Fitch. In addition, the Fund may invest in unrated securities that the Fund&#146;s investment adviser deems to be comparable in quality to rated issues in which the Fund is
authorized to invest.</TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:11pt; font-family:Times New Roman"><I>Reasoning for Changes </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:11pt; font-family:Times New Roman">Rating methodologies for each of Moody&#146;s, S&amp;P, and Fitch have evolved in dramatic fashion ever since the financial crisis of 2008-2009, and ratings
on preferred securities are lower than <FONT STYLE="white-space:nowrap">pre-crisis</FONT> levels, despite what the Fund&#146;s investment adviser views as substantial credit strengthening at most issuers. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:11pt; font-family:Times New Roman">The Fund&#146;s ratings guidelines were designed prior to this evolution and are now stale in light of the current market. According to the adviser&#146;s
data, preferreds with an investment grade rating by at least one agency only comprise approximately 62% of the total market &#150; prior to the financial crisis, they comprised 90%. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:11pt; font-family:Times New Roman">The adviser recommended these changes in order to address both the change in the composition of the preferred market and frequent changes in rating
methodologies for preferred securities by referencing the issuer or senior unsecured debt ratings. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:11pt; font-family:Times New Roman"><I>Impact of Changes </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:11pt; font-family:Times New Roman">The Fund would be authorized to purchase below investment-grade preferred securities of investment grade issuers. In addition, subject to its 15% limit, the
Fund may now purchase securities rated below <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">Ba3/BB-/BB-</FONT></FONT> by each of Moody&#146;s, S&amp;P and Fitch, respectively, even if the issuer rating or senior debt of the same
issuer is rated below investment grade by Moody&#146;s, S&amp;P or Fitch at the time of purchase. While this change would permit the Fund to acquire securities rated B and below by all the ratings agencies, the Fund&#146;s adviser has no current
intention of doing so. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">-&nbsp;2&nbsp;- </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:11pt; font-family:Times New Roman">As before, the Fund will apply the ratings criteria at the time of purchase and the Fund will not be required to
dispose of securities if, after purchase, they are downgraded, although the adviser may take this into account in determining whether to retain a security. As a result, more than 15% of the Fund&#146;s holdings at any time may be issued by companies
with issuer ratings or senior debt ratings that are below investment grade. In addition, as before, the Fund may invest in unrated securities that the Fund&#146;s investment adviser deems to be comparable in quality to rated issues in which the Fund
is authorized to invest. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">-&nbsp;3&nbsp;- </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:11pt; font-family:Times New Roman" ALIGN="center"><B>SIGNATURES </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:11pt; font-family:Times New Roman">Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized. </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:11pt; font-family:Times New Roman">FLAHERTY&nbsp;&amp; CRUMRINE</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:11pt; font-family:Times New Roman">PREFERRED INCOME OPPORTUNITY</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:11pt; font-family:Times New Roman">FUND INCORPORATED</P></TD></TR>
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<TD VALIGN="top">Date: January&nbsp;20, 2017</TD>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top">By:</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"><U>&nbsp;&nbsp;/s/&nbsp;&nbsp; R. Eric Chadwick&nbsp;&nbsp;&nbsp;</U></TD></TR>
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<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
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<TD VALIGN="top">R. Eric Chadwick</TD></TR>
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<TD VALIGN="top">President</TD></TR>
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 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">-&nbsp;4&nbsp;- </P>

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