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Management of The Gabelli Equity Trust Inc. (NYSE - GAB) intends to recommend to the Board of Directors
that it consider refinancing options with respect to the Trust's outstanding 7.25% Cumulative Preferred
Stock. The Preferred Shares were issued on June 9, 1998 and are callable at any time after June 9, 2003
at a liquidation value of $25.00 per share plus accrued dividends. The timing of any refinancing will
be announced at a later date.
The Preferred Shares, which trade on the New York Stock Exchange under the symbol "GAB Pr", are rated
'Aaa' by Moody's Investor Services and have an annual dividend rate of $1.8125 per share. The Preferred
Shares pay distributions quarterly.
In management's view, taking advantage of the current historically low interest rate environment would
benefit long-term common shareholders as the ability to earn a return in excess of the cost of current
financing options available to the Trust (including the cost of any refinancing) provides the Trust an
opportunity to create value for long-term common shareholders.
The actual amount of any capital to be raised, the dividend rate and the timing of any new offering
will be determined at a later date. Any offering will be made only by means of a prospectus. Pursuant
to an agreement with the Investment Adviser, a management fee on any incremental assets raised through
an offering of preferred stock is only earned when the net asset value total return of the Trust during
the year exceeds the stated dividend rate of the preferred stock. The Investment Adviser believes that
this provision is in the best interest of our shareholders.
The Gabelli Equity Trust Inc. is a closed-end, non-diversified management investment company with
$1.3 billion in total assets whose primary investment objective is long-term growth of capital. The
Fund is managed by Gabelli Funds, LLC, a subsidiary of Gabelli Asset Management Inc. (GBL - NYSE),
which is a publicly traded NYSE listed company.
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