Terms

Series

5.375% Series A Cumulative Preferred Shares

Liquidation Preference

$25.00

Coupon Rate

5.375%

Rate Type

Fixed

Annual Dividend

$1.34

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

August 9, 2021

First Call Price

$25.00

Redemption Notice Period

15 days

Capital Stack Ranking

Junior To: All Indebtedness And Creditor Claims Of The Fund; Pari Passu With: Any Future Series Of Preferred Shares Of The Fund; Senior To: Common Shares, Any Shares Ranking Junior To Series A Preferred Shares

Regulatory (Basel III) Call

Yes

Tax Classification

Other

Shares Offered

1,200,000

Prospectus Summary

Bancroft Fund Ltd. (NYSE MKT: BCV) is offering 1,200,000 shares of its 5.375% Series A Cumulative Preferred Shares at a $25.00 liquidation preference per share, with no depositary share structure — investors hold direct preferred shares. Dividends accrue at a fixed 5.375% per annum ($1.34375 annually, or ~$0.336 per quarter), paid on March 26, June 26, September 26, and December 26, commencing September 26, 2016. These shares are cumulative, meaning any missed dividends accumulate and must be paid in full before common shareholders receive any distributions — providing a meaningful layer of income protection for preferred holders. The Series A Preferred Shares rank senior to Bancroft's common shares and on parity with any future preferred shares with respect to dividends and liquidation proceeds. They are, however, explicitly junior to all debt obligations and creditor claims of the Fund. As a closed-end fund organized as a Delaware statutory trust, the Fund has no bank subsidiary, so there is no structural subordination risk beyond this direct ranking. Notably, the Fund can mandatorily redeem the preferred shares if it fails to maintain the 1940 Act's 200% asset coverage ratio or Moody's Basic Maintenance Amount — meaning deterioration in portfolio value can force involuntary redemption. The Fund may also redeem at any time pre-call if necessary to preserve its RIC tax status. At the $25.00 offering price, the effective yield is exactly 5.375%. Dividends are paid quarterly with a record date falling on the fifth preceding business day before each payment date. The tax treatment is not explicitly characterized in this filing as qualifying for the 15%/20% QDI preferential rate or the corporate dividends-received deduction — investors should consult the full SAI and tax sections of the base prospectus. The dividend stopper mechanics are meaningful: the Fund cannot pay common dividends or repurchase common shares if asset coverage falls below 200%, and no full preferred dividends are paid unless all parity preferred series are simultaneously current, aligning preferred and common dividend risk with portfolio performance.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If the Fund fails to maintain the required 200% asset coverage ratio, it cannot declare or pay dividends on common shares or repurchase common shares; additionally, no full dividends on Series A Preferred Shares will be paid unless all parity preferred shares are also current on cumulative dividends.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 75 (Strong)