Gabelli Utility anticipates exchange offer for series B preferreds

By Wendy Van Sickle

Columbus, Ohio, Sept. 6 – Gabelli Utility Trust expects to begin an offer to exchange its series B preferred shares for newly issued promissory notes at the exchange ratio of $912 per $1,000 of liquidation preference of preferreds, according to a press release on Wednesday.

Accrued dividends will be paid in cash.

The promissory notes will have a maturity date of Dec. 31, 2024 and will pay interest monthly at an annual rate of 5.25%.

The notes will require 300% asset coverage under the Investment Company Act of 1940. If the offer is commenced and all of the series B preferreds are exchanged, the fund’s leverage associated with its common stock will be reduced to 23% and will require increased asset coverage.

The exchange offer was approved by the issuer’s board of trustees and is expected to commence this month.

The trust is a closed-end equity mutual fund launched by Gamco Investors, Inc. and managed by Gabelli Funds, LLC.

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