Gabelli Convertible and Income Securities Fund Reaffirms Its 8% Distribution Policy and Declares Fourth Quarter Distribution of $0.17 Per Share and Announces Additional Year End Distribution
November 12 2021 - 7:37AM
Business Wire
The Board of Directors of The Gabelli Convertible and Income
Securities Fund Inc. (NYSE:GCV) (the “Fund”) declared a $0.17 per
share cash distribution payable on December 17, 2021 to common
stock shareholders of record on December 10, 2021. With this fourth
quarter distribution, the total distributions from the Fund for
2021 would equate to $0.53 per share. The Fund paid distributions
of $0.12 per share in each of the first, second, and third quarters
of 2021.
The Fund intends to pay a minimum annual distribution of 8% of
the average net asset value of the Fund within a calendar year or
an amount sufficient to satisfy the minimum distribution
requirements of the Internal Revenue Code for regulated investment
companies. Each quarter, the Board of Directors reviews the amount
of any potential distribution from the income, realized capital
gain, or capital available.
We note that 8% of the average net asset value of the Fund would
be $0.53 based on the ending net asset values per share as of
December 31, 2020, March 31, 2021, June 30, 2021, and September 30,
2021 of $6.76, $6.54, $6.85, and $6.52, respectively.
The Board of Directors also authorized an additional year end
cash distribution in accordance with the minimum distribution
requirements for the Internal Revenue Code, which will include any
undistributed additional income and realized net capital gains in
excess of the quarterly distributions for the year. The amount and
dates of the additional distribution will be announced at a later
date.
The additional distribution will be included in 2021 income for
shareholders subject to income tax and all commons share
distributions will have the same proportion of net investment
income and short term capital gains.
The Board of Directors will continue to monitor the Fund’s
distribution level, taking into consideration the Fund’s net asset
value and the financial market environment. The Fund’s distribution
policy is subject to modification by the Board of Directors at any
time, and there can be no guarantee that the policy will continue.
The distribution rate should not be considered the dividend yield
or total return on an investment in the Fund.
All or part of the distribution may be treated as long-term
capital gain or qualified dividend income (or a combination of
both) for individuals, each subject to the maximum federal income
tax rate, 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.
If the Fund does not generate sufficient earnings (dividends and
interest income, less expenses, and realized net capital gain)
equal to or in excess of the aggregate distributions paid by the
Fund in a given year, then the amount distributed in excess of the
Fund’s earnings would be deemed a return of capital. Since this
would be considered a return of a portion of a shareholder’s
original investment, it is generally not taxable and would be
treated as a reduction in the shareholder’s cost basis.
Long-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. Based on the accounting records of the
Fund currently available, the distributions paid to common
shareholders in 2021 would include approximately 3% from net
investment income and 97% from net capital gains on a book basis.
This information 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. 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 Gabelli Convertible and Income Securities Fund
The Gabelli Convertible and Income Securities Fund Inc. is a
diversified, closed-end management investment company with $164
million in total net assets whose primary investment objective is
to seek a high level of total return on its assets through a
combination of current income and capital appreciation. The Fund is
managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors,
Inc. (NYSE:GBL).
NYSE: GCV CUSIP – 36240B109
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Laurissa Martire (914) 921-5399
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