LMP Capital & Income Fund Inc. (“SCD”) Announces: Quarterly Distribution for June 2011 & Increased Managed Distribution R...

LMP Capital and Income Fund Inc. (NYSE: SCD) today announced a quarterly distribution of $0.15 per share payable June 2011, and an increased quarterly managed distribution rate of $0.28 per share payable September 2011. The Fund also announced a repositioning of its equity portfolio and some changes to the equity team.

The distribution schedules appear below:

Month

Ex-Date

Record Date

Payable Date

Amount

        
      
      
        
          June
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          6/15/2011
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          6/17/2011
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          6/24/2011
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $0.15
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          September
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          9/21/2011
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          9/23/2011
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          9/30/2011
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          $0.28
        
      
    
    

The Fund’s new quarterly managed distribution rate of $0.28 per common share is payable September 30, 2011 to shareholders of record as of September 23, 2011. This is the Fund’s second increase in its quarterly distribution rate since December 2010; prior to that the Fund had paid a quarterly distribution of $0.13 per share since March 2009. The newly announced managed distribution rate equates to an annualized distribution rate of approximately 8.1% based on a May 18, 2011 market price of $13.85 per share.

In declaring the new rate, the Fund cited a repositioning of its equity assets which ClearBridge Advisors, LLC (“ClearBridge Advisors”), the Fund’s equity sub-advisor, believes is likely to increase the level of income available from the Fund’s equity investments. The Fund’s equity allocation will be repositioned to include a broader range of higher-yielding securities such as real estate investment trusts (“REITS”) and master limited partnerships (“MLPs”). The Fund may increase its international exposure and may opportunistically employ other techniques such as option writing. The Fund continues to utilize a line of credit to enhance portfolio returns; this line of credit provides the Fund with the ability to moderate its use as market conditions and opportunities change. As of May 18, 2011, the Fund was utilizing $120 million of a total available line of credit of $150 million. While the quarterly distributions are anticipated to be derived from a combination of net investment income and potential short- and long-term capital gains, these managed distributions also may include a return of capital.

As part of the repositioning, the Fund announced changes to the portfolio management team from ClearBridge Advisors that is responsible for the day-to-day management of the Fund’s equity assets and for the allocation of the Fund’s assets between equity and fixed-income investments effective immediately. The portfolio management team consists of Peter Vanderlee, CFA, Mark McAllister, CFA, Tim Daubenspeck and Tatiana Thibodeau. Mr. Vanderlee continues to be responsible for the Fund’s asset allocation, and will focus on dividend-paying securities. Other members of the portfolio management team will focus on their respective areas of investment expertise: Mr. McAllister on REITS, Mr. Daubenspeck on telecommunications, and Ms. Thibodeau on utilities. Hersh Cohen and Mike Clarfeld, having been involved in turning the Fund around after 2008, will leave the team to focus on their other mutual fund and private client portfolios. In addition, Mr. Cohen will continue to lead the portfolio management team at ClearBridge Advisors as Chief Investment Officer. “Hersh and Mike have done a very effective job of managing the Fund. During this period, shareholders have benefitted from a significant increase in net asset value along with rising income distributions,” remarked Peter Sundman, Chief Executive Officer of ClearBridge Advisors. The portfolio management team from Western Asset Management Company will continue to be responsible for the Fund’s fixed income investments and there are no changes to its portfolio management team.

Under the terms of the Fund's managed distribution policy, the Fund seeks to maintain a consistent distribution level, stated as a fixed rate per common share per quarter, that may be paid in part or in full from net investment income, realized capital gains and return of capital, or a combination thereof. Shareholders should note, however, that if the Fund's aggregate net investment income and net realized capital gains are less than the amount of the distribution level, the difference will be distributed from the Fund's assets and will constitute a return of the shareholder's capital. A return of capital is generally not taxable; however, under certain circumstances a return of capital may be deemed to be a taxable distribution to shareholders.

The Board of Directors may reduce the Fund's quarterly distribution rate in the future or terminate or suspend the managed distribution policy at any time. Any such reduction in the quarterly distribution rate, termination or suspension could have an adverse effect on the market price of the Fund’s shares.

Based on the Fund's accounting records as of the date of this press release, the Fund estimates that approximately 100% of the cumulative fiscal year-to-date distributions through September 2011 are sourced from net investment income. The estimated components of each distribution will be provided to shareholders of record in a separate notice.

Please note that neither this press release nor the separate notice should be used for tax reporting purposes and that each is being provided to announce the amount and estimated source of the Fund's distributions that have been declared by the Board of Directors. In early 2012, after definitive information is available, the Fund will send shareholders a Form 1099-DIV, if applicable, specifying how the distributions paid by the Fund during the prior calendar year should be characterized for purposes of reporting the distributions on a shareholder's tax return (e.g., ordinary income, long-term capital gain or return of capital).

LMP Capital and Income Fund Inc. is a non-diversified, closed-end management investment company. Legg Mason Partners Fund Advisor, LLC, a wholly-owned subsidiary of Legg Mason, Inc., serves as the Fund's investment manager. The Fund is sub-advised by ClearBridge Advisors and Western Asset Management Company, affiliates of the investment manager.

Contact the Fund at 1-888-777-0102 for additional information, or consult the Fund’s web site at www.leggmason.com/cef.

Data and commentary provided in this press release are for informational purposes only. Legg Mason and its affiliates do not engage in selling shares of the Fund. An investment in the Fund involves risk, including loss of principal. Investment returns and the value of shares will fluctuate. The repositioning of the Fund’s portfolio, as described in this press release, may increase a shareholder’s risk of loss associated with an investment in the Fund’s shares.