Flaherty and Crumrine To... (NYSE:FLC)
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The Boards of Directors of the Flaherty &
Crumrine/Claymore Preferred Securities Income Fund (NYSE: FFC) and
Flaherty & Crumrine/Claymore Total Return Fund (NYSE: FLC) have
adopted new regular monthly dividend amounts. The changes will be
effective with the dividends to be paid on March 31, 2006 and will
remain in effect until further notice.
The new regular monthly dividend for FFC will be $0.1275 per
share, which equates to an annual dividend of $1.53 per share.
The new regular monthly dividend for FLC will be $0.1275 per
share, which equates to an annual dividend of $1.53 per share.
Donald F. Crumrine, Chairman of the Board of the Funds, said "The
dividend reductions reflect the continuing changes in the relationship
between the levels of short-term and long-term interest rates. The
Funds are not immune to this changing relationship and other factors
that continue to cause many leveraged, income oriented, closed-end
funds to further reduce their monthly dividends. For more than 20
months, short-term rates have steadily risen while long-term rates
have remained basically stable, resulting in a relatively 'flat' yield
curve. Typically, rising short-term rates are accompanied by rising
long-term rates, which increase the value of the hedging instruments
each Fund holds and allow that Fund to reinvest the hedge gains in
more income-producing securities, at least partially offsetting the
rising cost of leveraging the Fund with auction market preferred
stock. The recent higher short-term rates have increased the cost of
the Funds' leverage, and without any accompanying higher long-term
rates, these costs have not been offset by the Funds' hedging
strategies. As a result, there is less distributable income available
to the common shareholders."