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The Gabelli Utility Trust (NYSE - GUT) is pleased to announce the completion of an offering of two
series of Preferred Shares valued at a total of $55 million. The issuance consists of $30 million
of 5.625% Series A Cumulative Preferred Shares and $25 million of Series B Auction Market Preferred
Shares. The proceeds raised will be used for investment purposes.
The 5.625% Series A Preferred Shares are rated "Aaa" by Moody's Investors Service, Inc. The 5.625%
Series A Preferred Shares are perpetual, non-callable for five years and were issued at $25 per share.
Distributions will be paid quarterly beginning on September 26, 2003. The 5.625% Series A Preferred
Shares will begin trading on the New York Stock Exchange under the symbol "GUT Pr A" on August 4, 2003.
The Series B Auction Market Preferred Shares are rated "Aaa" by Moody's Investors Service, Inc.
and "AAA" by Standard & Poor's Ratings Services. The Series B Preferred Shares were issued at $25,000
per share and are perpetual and generally are callable at any time without premium. The initial
dividend rate for the Series B Preferred Shares will be 1.07% for the period ending August 12, 2003.
The dividend rates for subsequent periods will be determined by an auction process.
The Board of Trustees shares the Investment Adviser's view that the issuance of the Preferred Shares
is designed to benefit the common shareholders. The Fund expects that following investment of the
proceeds, it will be able to earn in excess of the dividend rate on the Preferred Shares and thereby
create additional value 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 Shares, 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.
Merrill Lynch & Co. and Gabelli & Company, Inc. served as underwriters for the offering, which
closed on July 31, 2003.
The Gabelli Utility Trust is a closed-end, non-diversified management investment company with $151
million in total assets, after giving effect to the issuance of the Preferred Shares. The Fund's
primary investment objective is to seek long-term growth of capital and income by investing primarily
in utility companies involved in the generation and distribution of electricity, gas and water.
The Fund 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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