Supply Capital, Inc. Will increase Month-to-month Distribution Price to five.25%, Implements Low cost Administration Program, and Broadcasts Investor Name

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

month

Cents per

Common share

Date of recording

date of payment

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 translates to a payout rate of approximately 5.25% based on the fund’s closing price on March 4, 2021. This revision improves on last week’s announcement for a total of 122% increase in the monthly payout rate from the rate paid in February 2021. The approved payout rate corresponds to the monthly distribution strategy implemented this year. One of the goals of this strategy is to deliver more profits to shareholders faster through a higher, regular monthly payout rate.

The Board also approved a discount management program (the “Program”). Under the terms of the program, the Board of Directors of the Fund approved annual takeover bids for the calendar years 2021 and 2022 for 10% of the Fund’s outstanding common stock at a price equal to 98% of the Net Asset Value (NAV) per Share. The Fund would make a takeover offer if its shares in the valuation periods from April 1, 2021 to December 31, 2021 for 2021 and from January 1, 2022 to December 31, 2022 for with an average discount to the net asset value of more than 10 % are traded in 2022. If a takeover offer is required for the 2021 measurement period, it will end before March 31, 2022. If a takeover offer is required for the 2022 measurement period according to the program conditions, the takeover offer will end on June 30, 2023 at the latest. In the future the board of directors can decide to extend the program beyond 2022.

The portfolio managers, officers and directors of the Fund do not intend to offer their shares if an offer is required under the program for 2021 or 2022.

In addition to the program, the Fund will continue its share buyback program to buy back shares at prices that are beneficial to Shareholders.

The portfolio managers also announced that as of December 31, 2020, around 12% of the fund was invested in or tied to the personal / credit asset class. This means that the fund has achieved its year-end target of 12% for 2020 announced in the press release dated October 13, 2020.

Finally, the fund will host an investor call on March 18, 2021 at 1:00 p.m. PST. For details on calling and submitting questions, please visit https://fpa.com/funds/overview/source-capital.

About Source Capital, Inc.

Source Capital, Inc. is a closed-ended investment company managed by First Pacific Advisors, LP. Its shares are listed on the New York Stock Exchange under the symbol “SOR”. The investment objective of the fund is to achieve the maximum total return for the unitholders from capital appreciation and investment income, insofar as this is compatible with the protection of the capital invested. In pursuit of its investment objective, the fund may invest in longer-term assets such as dividend-paying stocks and illiquid assets such as personal loans and is therefore only intended for investors with a long-term investment horizon (greater than or equal to ~ 5 years).

For more information, please visit the website at www.fpa.com, email [email protected], toll-free 1-800-982-4372, or write to the Fund.

Important specifications

You should carefully consider the investment objectives, risks, and fees and expenses of the Fund before investing.

Distributions may include ordinary income, net capital gains and / or returns on capital. In general, a return on capital would occur if the amount distributed by the Fund includes, in addition to your pro rata portion of the Fund’s net income, some (or all of) capital gains from your investment in the Fund. The Fund’s distributions over any period may be more or less than the Fund’s net return on its investments and should not be used as a measure of performance or confused with “return” or “income”. A capital repayment is not taxable; Rather, the tax base of a unit holder is reduced for his fund units. If the Fund estimates that a portion of its distribution may consist of amounts from sources other than net investment income, the Fund will notify Shareholders of the estimated composition of that distribution by separate written notice in accordance with section 19. Such communications are for informational purposes only and should not be used for tax reporting purposes. The final tax characteristics of all fund distributions are set out on Form 1099-DIV, which is mailed after the calendar year is up.

It is important to note that there are differences between the Fund’s daily internal accounting records and practices, the Fund’s US GAAP financial statements, and income tax record-keeping practices. Please refer to the Fund’s most recent shareholder reports for more detailed tax information.

A number of factors can affect the fund’s distribution rate, including changes in realized and projected market returns, fund performance and other factors. There can be no guarantee that a change in market conditions or any other factor will not change the Fund’s distribution rate at a later date.

As with any stock, the price of the common stock in the Fund will fluctuate with market conditions and other factors. Closed-ended management investment company shares often trade at a price below (a “discount”) or more than (a “premium”) their net asset value. If the Fund’s units trade at a premium to the net asset value, there can be no guarantee that such a premium will be sustained and not diminish for any given period or that the units will not trade at a discount to the net asset value thereafter.

The daily closing prices of the Fund on the New York Stock Exchange, the Net Asset Value per Share and other information, including updated portfolio statistics and performance, can be found on the website at https://fpa.com/funds/overview/source- capital, per Email [email protected], toll-free at 1-800-279-1241 (option 1) or in writing to the fund.

This press release does not constitute an offer to sell or the solicitation of an offer to buy or a sale of the securities in any state in which such offer, solicitation or sale would be unlawful under the securities laws of such state. In the event of a takeover offer, this can have tax consequences for a shareholder. For example, a shareholder may owe capital gains taxes on any increase in the value of the shares over their original cost.

Investments, including investments in closed-end funds, involve risk and investors can lose face value. The capital markets are volatile and can decline significantly in response to negative issuer, political, regulatory, market or economic developments. It is important to remember that there is risk associated with an investment and there can be no guarantee that an investment or asset class will perform well over time. Value style investing carries the risk that stocks or securities will never reach our estimate of intrinsic value because the market fails to see what the portfolio management team thinks is the real goodwill, or because the portfolio management team has misjudged these values. In addition, during certain periods of time, value style investments can fall out of favor and lag behind growth or other style investments. Investing outside of the US carries additional risks, such as: B. the potential for adverse political, monetary, economic, social or regulatory developments in a country, including lack of liquidity, excessive taxation and differing legal and accounting standards. Non-US securities, including American Depository Receipts (ADRs) and other Depository Receipts, are also subject to interest rate and exchange rate risks.

Annuity instruments are subject to interest rate, inflation and credit risks. Such investments can be secured, partially secured or unsecured and cannot be rated. Regardless of whether they are rated or not, they can have speculative characteristics. The market price of the Fund’s fixed income investments will change due to changes in interest rates and other factors. In general, when interest rates rise, the values ​​of fixed income instruments fall and vice versa. Certain Fixed Income Instruments are subject to prepayment and / or default risk.

Private placement securities are securities that are not registered under federal securities laws and generally can only be sold to certain eligible investors. Private placements can be illiquid and therefore more difficult to sell as there may be relatively few potential buyers for such investments and the sale of such investments may also be restricted under securities laws.

The fund can use leverage. While the use of leverage may help increase the potential dividend and return of the Fund, it also increases the volatility of the Fund’s Net Asset Value (NAV) and potentially increases the volatility of its distributions and the market price. There are costs associated with the use of leverage, including ongoing dividend and / or interest expenses. There may also be costs for issuing or managing leverage. Leverage alters the capital structure of the Fund by issuing preferred stocks and / or debt securities, both of which are senior to the common stocks. When short-term interest rates rise, the cost of leverage increases and is likely to reduce the returns generated by the common shareholders of the Fund.

This material has been distributed for informational purposes only and should not be viewed as investment advice or a recommendation of any particular security, strategy, or product. No part of this material may be reproduced in any form or referred to in any other publication without express written permission.