The Preferred Shares, which trade on the New York Stock Exchange under the symbol "GCV Pr", are rated 'AAA' by Standard and Poor's and have an annual dividend rate of $2.00 per share. The 1,200,000 Preferred Shares were issued on May 16, 1997 at $25.00 per share and pay distributions quarterly.

A portion of this distribution will be treated as long-term capital gains. This has the effect of providing individual shareholders with an ordinary income tax equivalent yield that is higher than the current yield. Long-term capital gains will be allocated to all distributions for the year. The final determination of the source of all distributions in 1999 will be made after year-end.

The Gabelli Convertible Securities Fund is a closed-end, diversified management investment company with $123 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 by investing primarily in convertible securities.