By Jennifer Chiou
New York, April 6 - GDL Fund, formerly known as the Gabelli Global Deal Fund, announced the completion of a rights offering giving existing preferred shareholders the chance to acquire newly issued series B cumulative putable and callable preferred stock.
In the offer, existing holders received three transferable rights for each series A cumulative callable preferred share held on March 1. Holders of those rights were entitled to purchase one series B preferred by submitting two rights and either $50 per new preferred share or two rights plus one existing preferred share.
The offering expired at 5 p.m. ET on April 5.
The series B preferreds have an annual dividend rate of 7% for periods ending on or prior to March 26, 2012, distributable quarterly. After that period, the rate will be reset by the fund's board of trustees, according to a news release.
The reset rates will be announced 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 series B preferreds may be put back to GDL after announcement of the new rate and may be redeemed by the fund at any time after three years.
The reset rates will take into account interest rates for debt securities with similar timeframes and may be substantially lower than 7% annually, the release noted. The rate will not be less than 3% per year.
Application has been made to list the preferreds on the NYSE.
The rights offering was managed by Gabelli & Co., Inc.
The non-diversified closed-end management investment company is based in Rye, N.Y.
| Issuer: | GDL Fund (formerly the Gabelli Global Deal Fund)
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| Issue: | Rights offering for series B cumulative putable and callable preferred stock
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| Dividend: | 7% per year for periods ending on or prior to March 26, 2012; after March 26, 2012, reset by the fund's board of trustees with floor of 3% per year, distributable quarterly
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| Call: | After three years; put option following announcement of new dividend rate
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| Settlement date: | April 5
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