Terms

Series

5.00% Series K Cumulative Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

5%

Rate Type

Fixed

Annual Dividend

$1.25

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

December 16, 2024

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Indebtedness Of The Fund (Creditors); Pari Passu With: Series C Auction Rate Cumulative Preferred Stock, Series D Preferred, Series E Auction Rate Preferred Stock, Series G Preferred, Series H Preferred, Series J Preferred; Senior To: Common Stock, Any Stock Ranking Junior To Series K Preferred As To Distributions And Liquidation

Regulatory (Basel III) Call

Yes

Tax Classification

Other

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Shares Offered

4,000,000

Prospectus Summary

The Gabelli Equity Trust Inc. (NYSE: GAB), a non-diversified closed-end equity fund managed by Gabelli Funds, LLC, is offering 4,000,000 shares of its 5.00% Series K Cumulative Preferred Stock at a $25.00 liquidation preference per share, callable at the Fund's option on or after December 16, 2024 at par plus accrued dividends. These are direct preferred shares (not depositary receipts). Dividends are cumulative, meaning any missed payments accrue and must be paid in full before any distributions can be made to common stockholders — providing meaningful downside protection relative to non-cumulative structures. Series K Preferred sits senior to the Fund's common stock and any junior equity in both distributions and liquidation, but is junior to all of the Fund's creditors. It ranks pari passu with the Fund's existing Series C, D, E, G, H, and J preferred series. Because the Fund is a closed-end investment company subject to the 1940 Act, it must maintain at least 200% asset coverage on all senior securities (preferred stock); if this threshold is breached and not cured, the Fund is required to mandatorily redeem sufficient shares to restore compliance. Additionally, the Board may redeem Series K shares at any time prior to the first call date if necessary to preserve the Fund's regulated investment company status — a structural risk investors should weigh. At the $25.00 offering price, the Series K Preferred yields 5.00% annually ($1.25/share), paid quarterly on March 26, June 26, September 26, and December 26, with the record date set five business days prior to each payment date. Distributions may consist of qualified dividend income (eligible for the 15%/20% preferential QDI rate for individuals) and/or ordinary income eligible for the corporate dividends-received deduction, though the Fund cannot guarantee what portion will qualify in any given year. Dividends on the Series K Preferred are blocked if parity preferred dividends are in arrears (pro-rata sharing required), and the Fund cannot pay common dividends unless 200% asset coverage is maintained — a trigger that could also compress the Fund's ability to sustain preferred distributions in a severe market downturn.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If cumulative dividends on the Series K Preferred Shares (or any parity preferred) are in arrears, no dividends may be paid on common stock or junior securities, and distributions on all parity preferred series must be made pro rata. Additionally, the 1940 Act prohibits the Fund from declaring common stock dividends unless asset coverage on all preferred stock is at least 200%.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 81 (Very Strong)