Gabelli Dividend & Income Trust Offering New Preferred

The Gabelli Dividend & Income Trust (NYSE:GDV), a closed end fund, will be offering a new issue of preferred stock.

The CEF now has 3 issues outstanding and and you can see them here.

The shares will be cumulative and will pay on the normal quarterly dividend schedule. The new ticker will be GDV-H–no OTC Grey market ticker has been announced yet.

The company has stated they intend to use the proceed from this issue to redeem their auction rate preferreds which are outstanding.

The preliminary prospectus can be read here.

The anticipated rating on these from Moodys is Aa3—strongly investment grade.

Remember that the CEF must have a leverage ratio of 200% or more on senior securities. The assets held by the CEF are Level 1, meaning they are securities traded on an exchange and have directly observable values. The last time we calculated the leverage ratio for this CEF it was over 400%–in fact the company states the ratio of 404% upon this issuance.

Over the last number of quarters the dividend paid by the fund have been a combination of long term gains, investment income and return of capital so it is likely that the preferred dividend will be structured in a similar manner.

It is likely we may buy a little of this issue if we can get it on the Grey market–this would be for our sock drawer.

21 thoughts on “Gabelli Dividend & Income Trust Offering New Preferred”

  1. I deferred to SS to be a payment for MediGap ins payment only and rely on the rest of our kitty for everything else. If there’s enough for the Sunday morning coffee date we have then great (…NO that is NOT being cheap)! Of course SS pushes everything up in income bracket so you’ll be avoiding that. I’ll be interested in a new view from a Robo. Being “thrifty” still works!!

  2. “Sock-Drawer it to Me” Tim (below $25??)
    Cusip: 36242H800 and Int rate via GAMCO Larry. Dig into sponsor’s site there.
    TDAM trade desk said no sign this AM and CUSIP did not come up. Told me to wait for secondary market Friday.
    Other GAMCO’s look more competitive, but vols are so thin. JA

    1. Joel, I went into local TD office to transfer assets and talked to a rep. He said anytime TD gets an allotment of any income security they already have people lined up and they call these people and they are immediately swooped up. Probably a reason why TD struggles to have any inventory available before they really hit grey market for trading.

      1. Grid, By the way I went to TD Des Peres to open a Solo-k for some commission work I did ( I can plop 100% of the net into the account!) and ended up talking to Aaron a CFP, well versed and good old StL level headed guy, a real jewel. We reviewed my whole plan as SS is looming for us. He gave me a thumbs up, esp in organizing what goes in what account and was very adept/fluent. He is going to do a full advanced software plug in of all our variables which included possible: ins to Medicare age (big yikes), re-characterizations, when to take SS, Monte Carlo Sim and more. A very robust tool which I can log onto and play with too. I am looking to learn anything new and make tweaks that make sense for us AFTER I understand. Just a lead, may be a long drive up there, but he said he learned things from me and it is that way: a give-take-maximize. The interesting element is TIME my friend!! 2-2 LGB!

        1. Hey Joel, final 3 games…Nut cuttin’ time, now! My rep wanted to do that tool thing also, so we did. I tried to discourage him as I knew the result before we did it. I had a 99.9% success rate, lol. Not because of my investments, but because of my cola pension that I dont spend maybe 65% monthly, it didnt take a genius to figure it out. Mix in frugalness and tightwadness and usually there isnt a problem, ha. As for SS, Im not too excited over that. About $150 a month coming at 62. That wont even cover the medicare payment. 🙁

          1. I deferred to SS to be a payment for MediGap ins payment only and rely on the rest of our kitty for everything else. If there’s enough for the Sunday morning coffee date we have then great (…NO that is NOT being cheap)! Of course SS pushes everything up in income bracket so you’ll be avoiding that. I’ll be interested in a new view from a Robo. Being “thrifty” still works!!

          2. Grid – Interesting. My local TD rep tried to push that tool thingy on me too, but I declined. My rational was that it was too easy for it to be a garbage in garbage out situation as far as the conclusions they’d get to (meaning using history and averages to tell me where I’ll be years from now if I switch to a higher percentage of equities, etc.) plus my own reluctance to change what I’m doing just because some computer thinks I should…. Maybe I should do it anyway, but I never seem to get anywhere when I share my full financial life with a “professional.” All I really get is the feeling I’ve given the world an even better picture of my finances than can already be discerned in this all public internet world….. I know I did it with my insurance guy and he never even came back with ANY suggestions.

            1. 2WR, it wont be of any assistance to you. Though it may amuse you, so while your healing it could kill some time for ya! :)….I think the mass majority dont really know much about asset spending and retirement, so these things can help a lot for them “see the light” a bit better. My rep certainly wasnt pushing anything on me, he just wanted me to see the projections.
              But mine is pretty simple…My pension check shows up, another month of relative luxury. If it ever quit showing up, well its back to the salt mines, I go!

  3. Called Schwab (bond desk). They got back to me after the close – they “think’ they may be able to do a broker trade tomorrow. Will report back if successful.

    1. Schwab Bond Desk tells me it is not trading gray market yet (pre-market open 6/5).
      CUSIP: 36242H880

      1. No, but check the FINRA dailies frequently. Once a ticker is assigned you can btrade it. Sometimes before, with a call to your broker.

        This will price quickly and trade quickly. I would bet on tomorrow.

        1. Sorry, I was asking Jacob where he got the rate from. It’s not in the SEC filing at this moment.

            1. Ah, so it is. It’s in the “Press Releases” tab in the middle of the page. Not under “Investor Relations Press Releases”.

              Also of interest to some who have asked here about which existing issues would get called, the press release says “The Fund expects to use the net proceeds from the offering to redeem a portion of the Fund’s outstanding Series E Auction Rate Preferred Shares.”

              I’m curious to know how this was originally discovered, since yesterday it was not in either QOL or the FINRA Daily List.

              added: It’s now in the Daily List, temporary ticker GDVVP

    1. Hope they will not call any of the other Preferreds – but the prospectus said they intend to call the Auction Rate preferreds, not the regular series.

      I own GDV-A & GDV-D, so really hoping this is the case.

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