Source Capital, Inc. Increases Monthly Distribution Rate 46%

Rhea-AI Summary

The Board of Directors of Source Capital announced a 46% increase in its monthly distribution rate, raising it from an annualized rate of $1.00 to $1.46 per common share. This translates to regular monthly distributions of 12.167 cents each for March, April, and May 2021. The record and payable dates for these distributions are specified for each month. Source Capital is a closed-end investment company aiming for maximum total return for shareholders.

Positive

• 46% increase in distribution rate to $1.46 per share.
• Monthly distributions of 12.167 cents per share for three months.

Negative

• Distributions may not be indicative of actual net income or performance.
• Returns of capital may reduce shareholders' tax basis.

The Board of Directors of Source Capital, Inc. (NYSE: SOR) (the “Fund”), today announced that the Fund’s regular monthly distribution rate would be increased 46% from the $1.00 a common share annualized rate paid in January and February, to an annualized rate of $1.46 a common share, by declaring regular monthly distributions of 12.167 cents a common share for each of the next three months (March, April and May) as follows:

Month		Cents per Common Share		Record Date		Payable Date
March 2021		12.167		March 16, 2021		March 31, 2021
April 2021		12.167		April 16, 2021		April 30, 2021
May 2021		12.167		May 17, 2021		May 28, 2021

Source Capital, Inc. is a closed-end investment company managed by First Pacific Advisors, LP.

Distributions may include ordinary income, net capital gains and/or returns of capital. Generally, a return of capital would occur when the amount distributed by the Fund includes a portion of (or is comprised entirely of) your investment in the Fund in addition to (or rather than) your pro-rata portion of the Fund’s net income or capital gains. The Fund’s distributions in any period may be more or less than the net return earned by the Fund on its investments, and therefore should not be used as a measure of performance or confused with “yield” or “income.” A return of capital is not taxable; rather it reduces a shareholder’s tax basis in his or her shares of the Fund. If the Fund estimates that a portion of its distribution may be comprised of amounts from sources other than net investment income, the Fund will notify shareholders of the estimated composition of such distribution through a separate written Section 19 notice. Such notices are provided for informational purposes only, and should not be used for tax reporting purposes. Final tax characteristics of all Fund distributions will be provided on Form 1099-DIV, which is mailed after the close of the calendar year.

It is important to note that differences exist between the Fund’s daily internal accounting records and practices, the Fund’s financial statements prepared in accordance with U.S. GAAP, and recordkeeping practices under income tax regulations. Please see the Fund’s most recent shareholder reports for more detailed tax information.

The Fund’s distribution rate may be affected by numerous factors, including changes in realized and projected market returns, Fund performance, and other factors. There can be no assurance that a change in market conditions or other factors will not result in a change in the Fund’s distribution rate at a future time.

As with any stock, the price of the Fund’s common shares will fluctuate with market conditions and other factors. Shares of closed-end management investment companies frequently trade at a price that is less than (a “discount”) or more than (a “premium”) their net asset value. If the Fund’s shares trade at a premium to net asset value, there is no assurance that any such premium will be sustained for any period of time and will not decrease, or that the shares will not trade at a discount to net asset value thereafter.

The Fund’s daily New York Stock Exchange closing market prices, net asset values per share, as well as other information, including updated portfolio statistics and performance are available by visiting the website at https://fpa.com/funds/overview/source-capital, by email at crm@fpa.com, toll free by calling 1-800-279-1241 (option 1), or by contacting the Fund in writing.

About Source Capital, Inc.

The Fund is a diversified, closed-end management investment company seeking maximum total return for shareholders from both capital appreciation and investment income to the extent consistent with protection of invested capital. Its shares are listed on the New York Stock Exchange under the symbol “SOR.” The Fund is managed by First Pacific Advisors, LP.

You should consider the Fund’s investment objectives, risks, and charges and expenses carefully before you invest. You can obtain additional information by visiting the website at www.fpa.com, by email at crm@fpa.com, toll free by calling 1-800-279-1241 (option 1), or by contacting the Fund in writing.

Investments, including investments in closed-end funds, carry risks and investors may lose principal value. Capital markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. It is important to remember that there are risks inherent in any investment and there is no assurance that any investment or asset class will provide positive performance over time. Value style investing presents the risk that the holdings or securities may never reach our estimate of intrinsic value because the market fails to recognize what the portfolio management team considers the true business value or because the portfolio management team has misjudged those values. In addition, value style investing may fall out of favor and underperform growth or other style investing during given periods. Non-U.S. investing presents additional risks, such as the potential for adverse political, currency, economic, social or regulatory developments in a country, including lack of liquidity, excessive taxation, and differing legal and accounting standards. Non-U.S. securities, including American Depository Receipts (ADRs) and other depository receipts, are also subject to interest rate and currency exchange rate risks.

Fixed income instruments are subject to interest rate, inflation and credit risks. Such investments may be secured, partially secured or unsecured and may be unrated, and whether or not rated, may have speculative characteristics. The market price of the Fund’s fixed income investments will change in response to changes in interest rates and other factors. Generally, when interest rates rise, the values of fixed income instruments fall, and vice versa. Certain fixed income instruments are subject to prepayment risk and/or de

FAQ

What is the new distribution rate for Source Capital (SOR)?

The new distribution rate for Source Capital (SOR) is $1.46 per common share, reflecting a 46% increase.

When are the record and payable dates for the new distribution of Source Capital (SOR)?

The record and payable dates are March 16 and March 31 for March 2021; April 16 and April 30 for April 2021; and May 17 and May 28 for May 2021.

What does the increase in distribution mean for shareholders of Source Capital (SOR)?

The increase in distribution indicates a higher return for shareholders in the form of regular cash payments.

Is a return of capital taxable for Source Capital (SOR) shareholders?

A return of capital is not taxable but reduces a shareholder's tax basis in their shares.

How does Source Capital (SOR) aim to achieve returns for its shareholders?

Source Capital seeks maximum total return through both capital appreciation and investment income while protecting invested capital.