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1. Logan Ridge Finance (LRFC) & Portman Ridge Finance (PTMN) Merger and Rebranding

Key Developments:

• Merger Details: Logan Ridge Finance Corporation (LRFC) is merging with Portman Ridge Finance Corporation (PTMN).
• Shareholder Compensation: LRFC shareholders will receive an incremental cash payment of $0.47 per share, financed by Mount Logan Management LLC, contingent on the merger closing. This is in addition to a previously announced tax distribution of at least $0.38 per share and 1.5x PTMN shares for each LRFC share. This package aims to ensure LRFC shareholders receive “100% of LRFC’s net asset value (NAV) as of March 31, 2025, adjusted for estimated transaction costs.”
• Post-Merger Rebranding: Following the merger, Portman Ridge Finance Corporation will rebrand as BCP Investment Corporation (BCIC) and trade under the new ticker symbol “BCIC” on Nasdaq.
• Distribution Policy Change: In 2026, BCIC will transition from quarterly to monthly base distributions, with the possibility of quarterly supplemental distributions (approx. 50% of incremental net investment income above the base monthly payout). This aims to “increase liquidity and market appeal.”
• Share Repurchase Plan: The company, its management, adviser, and affiliates plan to acquire “up to 20% of the outstanding common stock over the next 24 months if the shares trade below 80% of NAV,” with purchases starting no earlier than 60 days post-merger. This demonstrates “managementʼs commitment to supporting the share price and maximizing long-term value for all shareholders.”

Analysis and Rationale:

• Addressing Shareholder Concerns: The additional cash payment to LRFC shareholders directly responds to feedback to ensure “they receive full value for their shares,” potentially “to quell any objection from LRFC shareholders or in any lawsuit that might have been brought about the fairness of the merger.”
• Improving Market Perception: The rebranding to BCIC, the shift to monthly dividends, and the planned stock repurchases are “tried and true methods for boosting BDC stock prices at any time and have been employed by many market participants.”
• Financial Challenges: Both LRFC and PTMN have faced “weak performance.” LRFC’s NAV per share dropped 7.5% in Q1 2025 (from $32.04 to $29.66), while PTMN’s NAVPS fell 2.9% for the most recent quarter and over 16% over the past 12 months, effectively “cut in half” over 6 years under current management.
• Non-Performing Loans: The combined entities will contend with “an estimated $40mn at cost of non-performing loans” (3 from LRFC, 6 from PTMN), against a total portfolio cost of roughly $580mn.
• Limited Strategic Change: Despite the cosmetic changes, the “basic strategy of focusing on companies in the lower and core middle market (EBITDA $10mn-$50mn) remains unchanged as does the external management team and the Board of PTMN.”
• Cost Savings: The merger is expected to yield “$2.8mn of estimated annual costs savings – some permanent and others temporary fee waivers.”

Outlook (BDC Reporter’s Opinion):

• Skepticism: The BDC Reporter is “not optimistic” that these steps will “arrest the decline in PTMNʼs NAVPS, earnings and dividend.”

1. Reasons for Skepticism:The merged BDC will still be “under-sized compared to most of its peers.”
2. “No change in the current strategy or management team, neither of which has performed too well in recent years.”
3. A significant portion of PTMN’s recent net investment income (NII) has been “Pay In Kind Form” (PIK), estimated to be “probably more like 50%.”

• Best Solution (Unsolicited): The report suggests the “best outcome for PTMNʼs shareholders post merger would be for the Board/external manager to explore selling the just-merged but still under-sized portfolio to a third party for book value.” This would “result in an almost immediate gain and not leaves shareholders facing the very real risk of further credit losses and a lower payout.”
• Short-term Bounce: A “short time price bounce” is possible after the announcement, but “any enthusiasm is likely to fade” due to “continuing question marks about performance fundamentals.”

2. Wingspire Equipment Finance (OBDC Portfolio Company)

Key Developments:

• Major AI Funding: Wingspire Equipment Finance closed an “equipment finance transaction exceeding $65 million for a rapidly scaling artificial intelligence (AI) company.”
• Purpose of Funding: The capital injection will enable the AI company to expand its “high-performance computing environment with the latest cutting-edge GPUs built on Blackwell architecture,” strengthening its “capacity for developing and deploying machine learning (ML) models.”
• Speed and Certainty: Francisco Barba Jr., VP of Business Development, highlighted that securing the funding “as a single transaction…allowed our client to activate an entire fleet of GPUs almost immediately,” emphasizing that “This certainty of funding is precisely what AI companies rely on to keep pace with surging customer demand.”
• Strategic Positioning: Wingspire Equipment Finance aims to be a “long-term financing partner to innovative technology companies across the entire AI value chain.”

Company Profile:

• Provider: Wingspire Equipment Finance is a “leading provider of equipment financing solutions” for “middle market companies.”
• Parent Company: It is the equipment financing arm of Wingspire Capital, a portfolio company of Blue Owl Capital Corporation (NYSE: OBDC).
• Management: OBDC is externally managed by Blue Owl Credit Advisors LLC, an indirect affiliate of Blue Owl Capital, Inc. (NYSE: OWL), a “global alternative asset manager with $273 billion of assets under management as of March 31, 2025.”
• Financing Capabilities: Wingspire offers “flexible financing to fuel your growth,” providing solutions from “$5MM to $100MM+” across various industries, with “highly competitive rates” and a “streamlined credit process.”
• Portfolio Snapshot: As of March 31, 2025, Wingspire Equipment Finance reports “425+ Unique Obligors,” “1,000+ Unique Schedules,” and “$2B+ Funded Volume.”

3. Oxford Square Capital Corp. (OXSQ) Debt Redemption

Key Developments:

• Early Redemption: Oxford Square Capital Corp. (the “Company”) announced its election to redeem $10,000,000 in aggregate principal amount of its 6.25% Notes due 2026 (NASDAQGS: OXSQZ).
• Redemption Date and Price: The redemption is expected on July 18, 2025, at a price of “$25 plus accrued and unpaid interest thereon from April 30, 2025.”
• Outstanding Notes: Prior to this redemption, $34.8 million of the OXSQZ Notes were issued and outstanding. This redemption will reduce that amount significantly.

Background on OXSQZ (Baby Bond):

• Issuer: Oxford Square Capital Corp. (formerly TICC Capital Corp.) is a BDC founded in 2003, focusing on “debt and equity securities of technology-related companies, with a focus on those with annual revenues under $200 million and market caps below $300 million.”
• Bond Details: OXSQZ is an “unsecured note” with a “6.25% Coupon Rate,” “Par Value $25.00,” and a “Maturity Date April 30, 2026.” It is callable at par since April 30, 2022.
• Yield Profile: The bond currently offers a “Yield to Maturity of approximately 7.5%,” reflecting a “higher risk profile of Oxford Square Capital compared to larger, more diversified BDCs.”
• Risk Considerations: The company is “less diversified and more volatile than larger peers,” and investors should be “aware of the company’s smaller market cap and the inherent risks of lending to smaller technology companies.”

Analysis:

• Financial Prudence: Early redemption of debt often signals a company’s strong liquidity position or efforts to manage its debt maturity profile, especially for notes that are callable. Given the 6.25% coupon, the company may be looking to reduce interest expense or free up capital for other investments.
• Comparison to Other BDC Debt: The Hercules Capital debt issuance analysis notes that “only paying 6.00% for 5 year unsecured, covenant-free, interest only debt is still a remarkable bargain,” and “is cheaper than what HTGC would pay if it borrowed on one of its Revolvers.” While OXSQZ is a 6.25% note, the principal repayment reduces interest obligations.

4. Trinity Capital Inc. (TRIN) Dividend Declaration

Key Developments:

• Consistent Dividend: Trinity Capital Inc. (Nasdaq: TRIN) declared a cash dividend of $0.51 per share for the second quarter of 2025.
• 22nd Consecutive Quarter: This marks the “22nd consecutive quarter of a consistent or increased dividend for Trinity Capital shareholders.”
• Dividend Dates: Declaration Date: June 18, 2025; Record Date: June 30, 2025; Payment Date: July 15, 2025.
• Tax Qualification: The company’s objective is to distribute approximately “90% to 100% of its taxable quarterly income or potential annual income” to qualify for tax treatment as a regulated investment company (RIC).

Company Profile:

• Focus: Trinity Capital Inc. is an “international alternative asset manager” that provides “tailored debt solutions” to “well-capitalized growth-oriented companies.”
• Business Verticals: It operates in five distinct areas: Sponsor Finance, Equipment Finance, Tech Lending, Asset-Based Lending, and Life Sciences.
• Headquarters: Phoenix, Arizona, with a team located across the U.S. and in London.

Analysis:

• Shareholder Confidence: The long streak of consistent or increased dividends demonstrates financial stability and a commitment to returning value to shareholders, which is a key attraction for BDC investors.
• Strategic Growth: Trinity Capital’s diversified business verticals and focus on growth-oriented companies indicate a robust strategy for generating consistent taxable income to support its dividend policy.

5. MidCap Financial Leadership Change

Key Developments:

• Howard Widra’s Retirement: Howard Widra, Co-Founder of MidCap Financial and Partner at MidCap’s investment manager, Apollo Global Management, Inc., will retire from MidCap and Apollo at the end of 2026. He will continue in his current role through December 31, 2026.
• New Leadership Structure: Steve Curwin (Co-Founder and CEO) and Chad Leat (non-executive Board Chair) have been named Co-Executive Chairmen of MidCap. David Moore and Josh Groman will continue as Co-Presidents.
• Growth Under Widra: During Widra’s 17-year tenure, MidCap grew from a “start-up venture to a leader in private credit with over $55 billion of commitments under management and administration.” MidCap is now a “market leader in each of its seven core markets and has one of the largest private credit origination teams in the industry.”

Significance (BDC Reporter’s View):

• Major Senior Management Change: This is deemed an “even bigger name” departure, following the recent departure of MFIC’s CFO.
• Impact on MFIC: The BDC Reporter notes Widra’s significant impact, stating that the BDC, “once upon a time an also ran when under the tutelage of Apollo and bearing their name,” has “since then, … renamed and re-positioned under the MidCap banner has gone on to much better things.”
• Future Outlook: The BDC Reporter plans to further discuss “the outlook for MFIC without Widra and Seifert shortly,” suggesting potential implications for the BDC.

Analysis:

• Leadership Transition: The planned retirement and new Co-Executive Chairmen structure indicate a managed transition, allowing for continuity.
• Legacy of Growth: Widra’s impact on MidCap’s growth into a significant private credit leader underscores the importance of experienced leadership in the sector. The substantial AUM growth to $55 billion highlights MidCap’s prominence.
• Apollo’s Role: MidCap Financial is managed by Apollo Capital Management, L.P., a subsidiary of Apollo Global Management, Inc., which had approximately $785 billion in AUM as of March 31, 2025. This affiliation provides substantial backing and expertise.

Curated By the BDC Reporter Using NotebookLM