The Board of Trustees of The GDL Fund (NYSE: GDL) (the “Fund”) declared a $0.32 per share cash distribution payable on March 21, 2013 to common shareholders of record on March 14, 2013. Each quarter, the Board of Trustees reviews the amount of any potential distribution from the income, capital gain, or capital available. The Board of Trustees will continue to monitor the Fund’s distribution level, taking into consideration the Fund’s net asset value and the financial market environment. In light of the Fund’s income, net asset value and the financial market environment, the Board of Trustees is reviewing the quarterly cash distribution amount for future periods. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund. In addition to quarterly cash distributions of all or a portion of its investment company taxable income (which includes ordinary income and realized net short-term capital gains) to common shareholders, the Fund makes annual distributions of its realized net long-term capital gains, if any. A portion of the distribution may be a return of capital. Various factors will affect the level of the Fund’s income, such as its asset mix and use of merger arbitrage strategies. To permit the Fund to maintain more stable distributions, the Fund may from time to time distribute more or less than the entire amount of income earned in a particular period. Because the Fund’s current quarterly distributions are subject to modification by the Board of Trustees at any time and the Fund’s income will fluctuate, there can be no assurance that the Fund will pay distributions at a particular rate or frequency. If the Fund does not generate sufficient earnings (dividends and interest income and realized net capital gain) equal to or in excess of the aggregate distributions paid by the Fund in a given year, then the amount distributed in excess of the Fund’s earnings would be deemed a return of capital. Since this would be considered a return of a portion of a shareholder’s original investment, it is generally not taxable and is treated as a reduction in the shareholder’s cost basis. Under federal tax regulations, some or all of the return of capital distributed by the Fund may be taxable as ordinary income in certain circumstances. This may occur when the Fund has a capital loss carry forward, net capital gains are realized in a fiscal year, and distributions are made in excess of investment company taxable income.