I just knew this had to start happening–and I am less than happy that the Gabelli funds have now figured out they can save a bunch of money by calling old outstanding perpetuals.
Gabelli Convertible and Income Securities Fund (GCV) has announced a redemption of their 6% GCV-B issue (see it here). This is going to be painful for holders of this security–currently trading at $26.55.
Investors should make sure that they don’t hold any crazy highly priced Gabelli CEF preferreds. You can peruse the CEF preferred list here and see that the Gabelli family of funds has over 20 issues outstanding (Ellsworth and Bancroft are Gabelli managed funds as well) and many have been redeemable for years. Many are trading at steep premiums.
I would suggest income investors double check their portfolios and make sure those with the largest premiums and are currently callable hit their sell list tomorrow. I am not firmly predicting they are all going to be called–BUT…….
Disclosure–I own at least 5 Gabelli issues–but I don’t believe I have the big premium issues, but I will be double checking later tonight.
NOTE– Gabelli Equity Trust (GAB) filed a registration statement for new issuances of common and preferred stock on 9/24/2019. Within the prospectus supplement it states that the proceeds of any preferred shares issuance will be used to redeem outstanding preferred issues. There is 1 issue at high risk of the 4 outstanding. GAB-D 5.88% is trading at $26.31 and is redeemable.
NOTE–Gabelli Dividend and Income Trust (GDV) has filed a right offering to attempt to raise $162 million in new common equity. The fund states they may use a portion to redeem the 6% GDV-D issue which is currently trading at $26.95 and is redeemable.
NOTE–Gabelli Multimedia Trust (GGT) filed a registration statement on 9/26/2019 for new issuance of common and preferred shares and state proceeds from issuance of preferred shares will be used to redeem outstanding preferreds. The 6% GGT-B issue is trading at $26.66 and is redeemable.
I didn’t go further in researching. Obviously there are numerous issues at risk here–some at absolutely huge premiums–some at more reasonable premiums. If you read through the above documents you will have to dig deep to find redemption references.
Additionally even though the funds have filed various registration statements there is no guarantee issues will be redeemed.