The GDL Fund Resets Dividend Rate for Its Series C Cumulative Puttable and Callable Preferred Shares

Rhea-AI Summary

The GDL Fund (NYSE:GDL) announced it will maintain the annual dividend rate of 4.00% for its Series C Preferred Shares, effective for all quarterly periods until the mandatory redemption date of March 26, 2025. This dividend will be distributed quarterly, based on the $50.00 per share liquidation preference. Investors should note that part of these distributions may qualify as taxable income, impacting individual tax rates. The Fund, managed by Gabelli Funds, LLC, has total net assets of $186 million.

Positive

• Consistent annual dividend rate of 4.00% enhances income for shareholders.
• Maintaining dividend stability reflects company confidence in financial health.

Negative

• None.

The Board of Trustees (the “Board”) of The GDL Fund (NYSE:GDL) (the “Fund”) has determined to continue the annual dividend rate of 4.00% for the Series C Preferred Shares, effective for all remaining quarterly dividend periods prior to the mandatory redemption date for the Series C Preferred of March 26, 2025, pursuant to the provisions of its Statement of Preferences.

The Series C Preferred Shares, which trade on the New York Stock Exchange under the symbol “GDL Pr C”, were issued on March 26, 2018 at $50.00 per share. The Series C Preferred will pay distributions quarterly at an annualized dividend rate of 4.00% of the $50.00 per share liquidation preference of the Series C Preferred for the quarterly dividend periods ending on or prior to March 26, 2025.

The Series C Preferred may be put back to the Fund during the 30-day period prior to March 26, 2022 at the liquidation preference of $50.00 per share, plus any accumulated and unpaid dividends, and redeemed by the Fund, at its option, at the liquidation preference of $50.00 per share, plus any accumulated and unpaid dividends, on March 26, 2021 or March 26, 2023.

Part of the distribution may be treated as qualified dividend income for individuals, subject to the maximum federal income tax rate for long term capital gains, which is currently 20% in taxable accounts for individuals (or less depending on an individual’s tax bracket). In addition, certain U.S. shareholders who are individuals, estates or trusts and whose income exceeds certain thresholds will be required to pay a 3.8% Medicare surcharge on their "net investment income", which includes dividends received from the Fund and capital gains from the sale or other disposition of shares of the Fund.

Short-term capital gains, qualified dividend income, investment company taxable income, and return of capital, if any, will be allocated on a pro-rata basis to all distributions to common shareholders for the year. Long-term capital gains, if any, are distributed in the final distribution of the year. Based on the accounting records of the Fund currently available, the current distribution paid to common shareholders in 2021 would include approximately 18% from net capital gains and 82% would be deemed a return of capital on a book basis. This does not represent information for tax reporting purposes. The estimated components of each distribution are updated and provided to shareholders of record in a notice accompanying the distribution and are available on our website (www.gabelli.com). The final determination of the sources of all distributions in 2021 will be made after year end and can vary from the quarterly estimates. Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of the current distribution. All individual shareholders with taxable accounts will receive written notification regarding the components and tax treatment for all 2021 distributions in early 2022 via Form 1099-DIV.

Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. More information regarding the Fund’s distribution policy and other information about the Fund is available by calling 800-GABELLI (800-422-3554) or visiting www.gabelli.com.

About The GDL Fund

The GDL Fund is a diversified, closed-end management investment company with $186 million in total 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).

NYSE – GDL PrC
CUSIP – 361570401 

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FAQ

What is the dividend rate for GDL Series C Preferred Shares?

The GDL Series C Preferred Shares have an annual dividend rate of 4.00%.

When is the next dividend payment for GDL?

Dividends for GDL Series C Preferred Shares are paid quarterly.

What is the redemption date for GDL Series C Preferred Shares?

The mandatory redemption date for the Series C Preferred Shares is March 26, 2025.

How are dividends from GDL Series C Preferred Shares taxed?

Part of the dividends may be treated as qualified dividend income, subject to the maximum federal income tax rate for long-term capital gains.

What are the total net assets of The GDL Fund?

The GDL Fund has total net assets of $186 million.