Source Capital, Inc. Increases Monthly Distribution Rate to 5.25%, Implements Discount Management Program, and Announces Investor Call

The Board of Directors of Source Capital, Inc. (NYSE: SOR) (the “Fund”), today approved a revision to the Fund’s regular monthly distribution rate announced last week by increasing the annualized distribution rate to $2.22 per common share (18.5 cents per common share monthly) for each of the next three months as follows:

Month

Cents per
Common Share

Record Date

Payable Date

March 2021

18.5

March 16, 2021

March 31, 2021

April 2021

18.5

April 16, 2021

April 30, 2021

May 2021

18.5

May 17, 2021

May 28, 2021

This equates to an approximate 5.25% distribution rate based on the Fund’s closing market price on March 4, 2021. This revision enhances last week’s announcement for a total increase of 122% in the monthly distribution rate above the rate paid in February 2021. The newly approved distribution rate aligns with the monthly distribution strategy implemented this year. One of the goals of that strategy is to deliver more earnings, more quickly, to shareholders through a higher, regular monthly distribution rate.

The Board also approved a Discount Management Program (the “Program”). Under the terms of the Program, the Fund’s Board of Directors approved annual tender offers for calendar years 2021 and 2022 for 10% of the Fund’s outstanding shares of common stock at a price equal to 98% of net asset value (NAV) per share. The Fund would conduct a tender offer if its shares trade at an average discount to NAV of more than 10% during the measurement periods from April 1, 2021 through December 31, 2021 for 2021, and January 1, 2022 through December 31, 2022 for 2022. Should a tender offer be required for the 2021 measurement period, it shall close prior to March 31, 2022. If a tender offer is required under the Program terms for the 2022 measurement period, the tender offer shall close no later than June 30, 2023. In the future, the Board may determine to extend the Program beyond 2022.