The Board of Directors of Source Capital, Inc. (NYSE:SOR) (the "Fund"), today announced that for the Fund's Discount Management Program (the "Program") measurement period from April 1, 2021 through December 31, 2021, the Fund traded at an average discount to net asset value (NAV) of less than 10%, including that the Fund traded at a discount to NAV as low as 3.8% during this period, its lowest discount in more than 10 years. As a result, the tender offer for calendar year 2021 under the Fund's Program will not occur.
In addition to the contingent tender offer in place for calendar year 2022 (as described in the March 5, 2021 press release), the Board approved a contingent tender offer for calendar year 2023. Under the terms of the updated Program, the Board approved extending the Program through the year ending December 31, 2023. Under the Program's extension, the Fund would conduct a tender offer for 10% of the Fund's outstanding shares of common stock at a price equal to 98% of NAV per share if its shares trade at an average discount to NAV of more than 10% during the measurement period from January 1, 2023 through December 31, 2023. Should a tender offer be required it shall close no later than June 30, 2024. In the future, the Board may determine to extend the Program beyond 2023.
The Fund's portfolio managers, officers and Board of Directors do not intend to tender their shares if a tender is required under the Program for 2022 or 2023.
In addition to the Program, the Fund will continue to implement its Stock Repurchase Program to repurchase stock at prices that are accretive to shareholders.
The portfolio managers also announced that as of November 30, 2021, approximately 22% of the Fund is invested in, or committed to, the private-credit/loan asset class. This is up from approximately 12% as of December 31, 2020.
Finally, the Fund will host an investor call on February 16, 2022 at 1pm PST. Details of the call and how to submit questions will be posted at https://fpa.com/funds/overview/source-capital.