Closed end fund (CEF) Gabelli Dividend and Income (GDV) will be selling a new perpetual preferred stock in a refinancing of a higher coupon issue.
The fund will be calling the 5.25% GDV-G issue which can be seen here.
The issue will likely be strongly investment grade (Aa3 from Moodys) so look for a low coupon.
The preliminary prospectus can be seen here.
10 thoughts on “CEF Gabelli Dividend and Income to Sell Preferred in a ‘REFI’ Transaction”
Priced @ 4.25
Just in case anyone wants to play the game, the Use of Proceeds says GDV-G is expected to be called “within 3 months.” If I calculated correctly, were the call announced today, the 30 day notice requirement makes minimum payout of 25.13 minimum… Last trade = 25.12, down 48¢. I bot some as lo as 25.08 figuring it’s essentially riskless and can’t be any worse than having cash sitting around doing nothing.
2WR – you may be disappointed to read the terms on that one. I wouldn’t be buying any at those prices.
xerty – I see that their advance notice requirement is not the normal 30 days but is only 15…. Is that what you’re referring to??? Or do you see something more?
“30 day requirement” How do you figure that?
I like Gabelli’s CEFs. Will look for the new issue. Thanks, Tim.
Had a nice ride here on 500 shares since July of ’19. Thought I might dodge another bullet since it had been trading in high 25’s since callable, but no such luck. “sock drawer” continues to empty out with little hope?
I’m surprised that only a few CEF preferreds have been refinanced so far. There are plenty of yields much higher than 4.25% that could be taken out.
4.25 is not bad, today, to toss some core money at this but it is not 100% QDI which is slightly annoying and the higher interest rate risk that seems to be coming down the road over the next 12-24 months. I might just buy a few hundred shares in this case and tuck it in the BBB+/A rated bucket along with PSA and what not. Nice to have some securities that you do not have to worry much about even if pay lower.
I just get that tingling sense I might regret it down the road in some fashion. Tough env looking for income. No clear cut choices unless you watch things like a hawk for an opportunity that is gone in a blink of an eye.