Just after we wrote an evaluation of the TICC-BSP proposal to manage TICC Capital last Friday, the Company issued a new presentation on Monday to shareholders. TICC repeated many points made previously, but also added several new comments which we could not help but bring to our readers attention, and which leave us more confused than ever.
The BDC Reporter will be reviewing each of the three outstanding proposals to manage TICC Capital (albeit with a new name and ticker) from Benefit Street Partners, TPG Specialty and NexPoint Advisors. We begin with the current Board's favorite: Benefit Street Partners, go deep into the Proxy and come to some disturbing conclusions.
On Monday, the BDC Sector dropped sharply in price across the board and some key indices reached new record lows, as the 2 year drawdown continues. We detail the nature and extent of the carnage and seek to learn lessons therefrom. We offer up some hope of a turn around in the short term. Longer term, we still...
Now the would External Managers and/or owners of TICC Capital have made their initial bids for the Company, the time has arrived for mutual mud slinging. We review the latest developments, but come away still undecided, despite the debate underway by dint of press releases.
The BDC Reporter disagrees with a Barron's article pointing to short term Return On Equity as an indicator of which BDCs might be worth investing in. We illustrate our point by using the case in point of Gladstone Capital (GLAD) and suggest a better way to analyze who to buy or stay away from.
We provide some color about the direction of BDC stock prices on a turbulent day, and discuss two stories of interest: Fifth Street Finance's change of heart about stock repurchases and Oxford Lane's disclosure that Taxable Income might be hurt by higher 3 Month LIBOR.Written in a hurry after the market closed.
On the day before Pennant Park Floating Rate Capital (PFLT) swallows up MCGC Capital (MCGC) forever, its price is at a two year low. We call Buying Opportunity for potential PFLT investors just before the conservatively managed BDC gets set to nearly double in size.
We take on the subject of BDC stock buybacks, touted in Barron's recently. We review the wide discrepancy between BDC managers enthusiasm for stock repurchases and reality. We end by diagnosing why the BDC sector needs a more viable and longer term solution than buybacks to its current depressed state. Plus, how we are positioned.
With half the Business Development Companies having reported earnings for the second quarter, we have a look at the direction of the sector and highlight a number of developments underway. It's just a snapshot and not a comprehensive review. We'll have a full survey once earnings season is over.