Terms

Series

Series C Convertible Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

2.75%

Rate Type

Fixed

Annual Dividend

$0.6875

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

No

Convertible

Yes

Callable

No

Mandatory Redemption Date

January 21, 2027

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: Creditors Of The Fund, Debt Obligations Of The Fund; Pari Passu With: Other Series Of Preferred Stock, If Any; Senior To: Common Stock

Regulatory (Basel III) Call

No

Tax Classification

Other

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

2,542,593

Prospectus Summary

Special Opportunities Fund, Inc. (NYSE: SPE), a closed-end diversified management investment company advised by Bulldog Investors, LLP, is offering up to 2,542,593 shares of its 2.75% Series C Convertible Preferred Stock at $25.00 per share via a transferable rights offering to existing common stockholders. Each share carries a fixed 2.75% annual dividend ($0.6875 per share annually, paid quarterly on the last day of March, June, September, and December), a $25.00 liquidation preference, and is convertible into common stock at $20.50 per share (ratio of 1.2195 common shares per preferred share). The preferred stock is cumulative — meaning unpaid dividends accumulate without interest and must be paid in full before any distributions to common stockholders, providing holders meaningful protection against dividend interruptions. The security has a mandatory redemption date of January 21, 2027 (five years from the offering's expiration), making it a term preferred rather than a perpetual instrument. The Series C Convertible Preferred Stock sits senior to the Fund's common stock in the capital structure with respect to dividends and liquidation proceeds, but is subordinate to all creditors and debt obligations of the Fund. As a registered closed-end fund under the Investment Company Act of 1940, the Fund is subject to asset coverage requirements for preferred stock; asset coverage must be maintained at adequate levels to support the leverage introduced by this preferred issuance. There is no regulatory capital call provision, as the Fund is not a bank or insurance company. Notably, the Board retains discretion to redeem all or any portion of the preferred stock beginning two years after the offering (after January 21, 2024) at $25.00 per share, with 30–90 days' notice, and may compel conversion if the common stock trades at or above $23.75. At the $25.00 subscription price, the effective yield is 2.75% ($0.171875 per quarter). Quarterly payment dates fall on the last calendar day of March, June, September, and December, with the first dividend pro-rated from issuance. As a regulated investment company investing in other closed-end funds and equities, the tax character of dividends will depend on the Fund's underlying income mix — including potential pass-through of qualified dividend income, capital gains, and return of capital — and investors should consult personal tax advisors for specific treatment. No explicit qualified dividend income (QDI) or dividends-received deduction (DRD) eligibility is confirmed in the prospectus. Common stockholder distributions are subordinated: if the Fund fails to pay preferred dividends, it risks losing its RIC status, creating a structural incentive to prioritize preferred dividend payments.

Summarized from the SEC prospectus filing.

Distribution History

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

As a senior equity security, holders of the Convertible Preferred Stock must receive their accumulated dividends before any distributions can be made to common stockholders; failure by the Fund to pay preferred dividends could impair its ability to maintain its regulated investment company status.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 74 (Strong)