The Board of Directors of The Gabelli Convertible and Income Securities Fund Inc. (NYSE:GCV)
declared a $0.20 per share cash distribution payable on September 25, 2006 to common stock
shareholders of record on September 15, 2006, pursuant to the Gabelli Convertible and Income
Securities Fund's 8% Distribution Policy.
Under the Convertible and Income Securities Fund's distribution policy, the Fund pays a minimum
annual distribution of 8% of the average net asset value of the Fund. Pursuant to this policy,
the Fund pays $0.20 per share in each of the first three quarters of the year and an adjusting
distribution in the fourth quarter of a sufficient amount to pay 8% of the average net asset
value of the Fund, as of the last day of the four preceding calendar quarters, or to satisfy
the minimum distribution requirements of the Internal Revenue Code, whichever is greater.
Each quarter, the Board of Directors reviews the amount of any potential distribution based
on the income, capital gains, or capital available.
We note that 8% of the current average net asset value per share would be $0.64 based on the
ending net asset values per share for the previous three quarters, December 31, 2005,
March 31, 2006 and June 30, 2006, of $7.95, $8.16, and $7.95, respectively, and the net asset
value per share on July 31, 2006 of $8.06. The average net asset value per share is subject
to change as of year-end.
A portion of the distribution may be treated as long-term capital gain and qualified dividend
income for individuals, each subject to the maximum Federal income tax rate, which is currently
15% in taxable accounts for individuals. If the Fund does not generate earnings from dividends,
interest, and net realized capital gains equal to or in excess of the aggregate distributions
paid by the Fund for the year, then the amount distributed in excess of the Fund's investment
income and net realized capital gains will be deemed a non-taxable return of capital.
Long-term capital gains, qualified dividend income, ordinary income, and paid-in capital, if
any, will be allocated on a pro-rata basis to all distributions to common shareholders for
the year. As of August 17, 2006, the date of this press release, each of the distributions
paid in 2006 would include approximately 39% from net investment income, 30% from net capital
gains, and 31% from paid-in capital. The estimated components of each distribution are 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 2006
will be made after year-end. All shareholders with taxable accounts will receive written
notification regarding the components and tax treatment for all 2006 distributions in early
2007 via Form 1099-DIV.
The Gabelli Convertible and Income Securities Fund Inc. is a diversified, closed-end management
investment company with $149 million in total assets whose primary investment objective is to
seek a high level of total return 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), which
is a publicly traded NYSE listed company.