RYE, N.Y.--(BUSINESS WIRE)--The GDL Fund (NYSE:GDL) (formerly named The Gabelli Global Deal Fund) has previously announced a transferrable rights offering to the Fund’s existing preferred shareholders. The rights offering will be made only to shareholders by means of a prospectus, and this press release does not constitute an offer of any of the Fund’s securities for sale. In this regard, we will describe the terms of the offer directly to you prior to the mailing of the prospectus.
The Series B Cumulative Puttable and Callable Preferred Shares (the “Series B Preferred” or “New Preferred”) will pay distributions quarterly and have an annual dividend rate of 7.00% for the dividend periods ending on or prior to March 26, 2012 and thereafter will be reset by the Fund’s Board of Trustees and publicly announced in a notice at least 60 days prior to March 26, 2012 for the four dividend periods ending March 26, 2013, at least 60 days prior to March 26, 2013 for the eight dividend periods ending March 26, 2015, and at least 60 days prior to March 26, 2015 for all remaining dividend periods prior to the mandatory redemption date of March 26, 2018. The New Preferred may be put back to the Fund during a period after announcement of the new rate, and may be redeemed by the Fund at any time after three years. Each reset date will take into account interest rates for debt securities with similar timeframes to put or maturity and may be substantially lower than 7.00% annually, but not less than 3.00% annually.
SUMMARY OF THE TERMS OF THE OFFER
- Each shareholder will receive three transferable rights (the “Rights”) for each Series A Cumulative Callable Preferred Share (the “Existing Preferred”) of the Fund held on the record date (March 1, 2011).
- Two Rights plus $50.00 or two Rights plus one share of the Existing Preferred with a liquidation value of $50.00 per share (the “Subscription Price”) will be required to purchase one share of New Preferred pursuant to the offering (the “Primary Subscription”).
- Rights acquired in the secondary market may not participate in the oversubscription privilege.
- The offer expires at 5:00 PM Eastern Time on April 5, 2011 unless extended.
The Fund expects to mail subscription certificates evidencing the Rights and a copy of the prospectus for this offering to record date shareholders beginning on March 3, 2011.
Any New Preferred shares issued as a result of the rights offering will not be record date shares for the Fund’s 2011 annual meeting scheduled to be held on May 16, 2011 which has a record date of March 21, 2011.
The GDL Fund is a non-diversified, closed-end management investment company with $423 million in net assets whose investment objective is to achieve absolute returns in various market conditions without excessive risk of capital. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (NYSE:GBL), which is a publicly traded NYSE listed company.