BlackRock Capital Allocation Trust Shares Fall After Announcing Discounted Rights Offering

Shares of BlackRock Capital Allocation Trust (NYSE:BCAT) fell 4.2% in premarket trading Friday after the fund announced a transferable rights offering for its common shareholders.

Details of the Offering

The fund plans to issue one transferable right for each common share held as of the record date, September 25, 2026. According to the announcement, shareholders will need five rights to subscribe for one new common share.

The subscription price will be set on October 21, 2026. It will be determined by a formula: 95% of the average closing price on the New York Stock Exchange on the expiration date and the four prior trading days. However, the price is capped at a maximum of $0.01 below the fund's net asset value (NAV) per share and has a floor of 98.5% of the NAV per share on the expiration date.

Key terms of the offering include:

• Record Date: September 25, 2026
• Transferability: The rights are expected to be transferable and trade on the NYSE under the ticker "BCAT RT" until October 20, 2026.
• Over-Subscription: Shareholders who fully exercise their rights will have the option to subscribe for additional shares not purchased by other rights holders, subject to certain conditions.

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Rationale and Shareholder Impact

The fund's board and its adviser, BlackRock Advisors, stated that the offering is in the best interests of the fund and its shareholders. The primary goal is to increase the fund's assets to capitalize on investment opportunities consistent with its objective of providing total return and income.

Rights offerings can be dilutive to the net asset value per share if not all shareholders participate, and the discounted purchase price often puts downward pressure on the market price of the stock. BlackRock Advisors will bear all expenses related to the offer, which will not be charged to the fund.

BlackRock Capital Allocation Trust also noted that it intends to maintain its current distribution level through the remainder of 2026. Shares issued through the offering will not be eligible for dividends or distributions with a record date prior to the offer's expiration.