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The Gabelli Equity Trust Inc. (NYSE - GAB) is pleased to announce the placement of two series of
Preferred Stock valued at a total of $125 million. The placement consists of $75 million of 5.875%
Series D Cumulative Preferred Stock and $50 million of Series E Auction Rate Cumulative Preferred
Stock. The proceeds raised will be used for investment purposes.
The 5.875% Series D Preferred Shares are rated "Aaa" by Moody's Investors Service, Inc. The 5.875%
Series D Preferred Shares are perpetual, non-callable for five years and will be issued at $25 per
share. Distributions will be paid quarterly beginning on December 26, 2003. The Fund expects that
the 5.875% Series D Preferred Shares will trade on the New York Stock Exchange under the symbol
"GAB Pr D" within 30 days.
The Series E Auction Rate Preferred Shares are rated "Aaa" by Moody's Investors Service, Inc. and
"AAA" by Standard & Poor's Ratings Services. The Series E Preferred Shares are perpetual and generally
are callable at any time without premium. The initial dividend rate for the Series E Preferred Shares
will be 1.15% for the period ending October 16, 2003. The dividend rates for subsequent periods will
be determined by an auction process.
The Board of Directors shares the Investment Adviser's view that the issuance of the preferred stock
is designed to benefit the common shareholders. To the extent that, following investment of the
proceeds, the Fund earns in excess of the dividend rate on the preferred shares, additional value
will thereby be created for its common shareholders.
It should be noted that the Investment Adviser will not receive a management fee on the incremental
assets raised unless the total return of the Fund to common shareholders during the year exceeds the
dividend rate of the preferred stock, including the costs of any interest rate swap agreement the
Fund may enter into to protect against short-term interest rate increases. The Investment Adviser
believes this fee arrangement is in the best interests of all shareholders.
Citigroup, Merrill Lynch & Co., and Gabelli & Company, Inc. served as underwriters for the offering,
which is expected to close on October 7, 2003.
The Gabelli Equity Trust Inc. is a closed-end, non-diversified management investment company with
$1.4 billion in total assets, after giving effect to the issuance of the preferred shares. The Fund's
primary objective is long term growth of capital. The Trust is managed by Gabelli Funds, LLC, a
subsidiary of Gabelli Asset Management Inc. (GBL - NYSE), which is a publicly traded NYSE listed
company.
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