By Angela McDaniels
Tacoma, Wash., April 18 - GDL Fund issued $143.99 million of series B cumulative preferred stock through a rights offering, according to a company news release.
The preferreds have a liquidation preference of $50.00 each.
The dividend rate is 7% for the first year. After that period, the rate will be reset by the fund's board of trustees. Distributions are paid quarterly.
The rate will be announced at least 60 days prior to March 26, 2012 for the year ending March 26, 2013, at least 60 days prior to March 26, 2013 for the two years ending March 26, 2015 and at least 60 days prior to March 26, 2015 for the remaining dividend periods.
The reset rates will take into account interest rates for debt securities with similar timeframes. The fund said they may be lower than 7% but will not be less than 3% per year.
The preferreds can be put back to GDL after the announcement of the new rate.
The preferreds are callable after three years. If not called previously, they must be redeemed on March 26, 2018.
The rights offering expired at 5 p.m. ET on April 5, and the new preferreds were issued on April 15. The offering was managed by Gabelli & Co., Inc.
Existing holders received three transferable rights for each series A cumulative callable preferred share held on March 1. Rights holders were entitled to purchase one series B preferred by submitting two rights and either $50 or one existing preferred.
About 95% of the series B preferreds were subscribed for in the primary offering. The remaining 5% was allocated according to the terms of the oversubscription privilege.
Subscribing holders surrendered about $11 million of series A preferreds, which were retired.
An application has been made to list the new preferreds on the New York Stock Exchange.
Proceeds will be used to make investments and to redeem outstanding series A preferreds.
GDL Fund, formerly known as the Gabelli Global Deal Fund, is a non-diversified closed-end management investment company based in Rye, N.Y.
| Issuer: | GDL Fund
|
| Issue: | Series B cumulative preferred stock
|
| Amount: | $143,987,900
|
| Shares: | 2,879,758
|
| Dividends: | Initially 7%; reset on March 26, 2012, March 26, 2013 and March 26, 2015, subject to 3% floor; payable quarterly
|
| Price: | $50.00
|
| Mandatory redemption: | March 26, 2018
|
| Call option: | Beginning April 15, 2014
|
| Put option: | Following announcement of new dividend rate
|
| Manager: | Gabelli & Co., Inc.
|
| Settlement date: | April 15
|
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