October 5, 2011: Newish technology BDC, Horizon Technology Finance (ticker: HRZN) provided an update on additions to its investment portfolio in the third quarter of 2011, and the status of the latest backlog. The press release mentioned 3 new loans totaling $7mn in the quarter ended September 30, 2011 and no repayments. However, potential loan investments for “awarded backlog” (you’ll have to read the press release to understand the nomenclature) totals $12mn, but is not certain of closing.
BDC Reporter’s Two Cents: In times like these, we scan every press release for signs of what might be happening to a company and to the BDC sector generally. It’s hard to draw too many conclusions from this press release. On one hand, the activity level was modest, with new loan commitments of only $4mn, versus $36mn a quarter before. On the other hand, three new loans added is not too bad, and the deal business is notoriously lumpy, and we wouldn’t have it any other way. After all, loans cannot be added with conveyor belt regularity. Moreover, the awarded backlog data for three more new deals suggests Hercules remains active in the market, notwithstanding it’s being declined for an SBIC license last month. We wrote an article on the subject, which you can link to here. We wonder if Horizon’s new deal activity will become more selective with the absence of the desired SBIC monies. We’ll know more when the actual earnings are released.
