BDC News Briefing: June 2-6, 2025

This briefing summarizes all the notable BDC developments in the just completed week, as summarized by Notebook LM and fact checked and edited by the BDC Reporter.

Key Takeaways:

• Regular Distributions: PennantPark Floating Rate Capital (PFLT) and PennantPark Investment Corporation (PNNT), (both managed by PennantPark Investment Advisers, LLC) and Monroe Capital Corporation (MRCC) have declared their respective monthly and quarterly distributions. These distributions are expected to be paid from taxable net investment income.
• Proposed Merger: Portman Ridge Finance Corporation (PTMN) and Logan Ridge Finance Corporation (LRFC) are moving forward with a proposed merger, which has received favorable recommendations from independent proxy advisory firms Glass Lewis and ISS. The merger aims to increase scale, simplify structure, and enhance diversification for the combined entity.
• New Investment: Main Street Capital (MAIN) has announced a new significant investment in an aerial survey and geospatial services provider, structured as a combination of debt and equity, along with a revolving line of credit.

Detailed Analysis:

PennantPark Declarations:

• PennantPark Floating Rate Capital Ltd. (PFLT): Declared a monthly distribution of $0.1025 per share for June 2025. The distribution is payable on July 1, 2025, to stockholders of record as of June 16, 2025. As a regulated investment company (RIC), PFLT’s distributions may include qualified interest income and short-term capital gains potentially exempt from U.S. withholding tax for non-U.S. stockholders with proper documentation.
• Quote: “PennantPark Floating Rate Capital Ltd. (the “Company”) (NYSE: PFLT) declares its monthly distribution for June 2025 of $0.1025 per share, payable on July 1, 2025 to stockholders of record as of June 16, 2025.”
• PFLT primarily invests in U.S. middle-market private companies through floating rate senior secured loans, including first lien, second lien, and subordinated debt, and may also make equity investments.
• PennantPark Investment Corporation (PNNT): Declared a monthly distribution of $0.08 per share for June 2025, with the same payment and record dates as PFLT (payable July 1, 2025, record June 16, 2025).
• Quote: “PennantPark Investment Corporation (PNNT) declares its monthly distribution for June 2025 of $0.08 per share, payable on July 1, 2025 to stockholders of record as of June 16, 2025.”
• PNNT primarily invests in U.S. middle-market private companies through first lien secured debt, second lien secured debt, subordinated debt, and equity investments.
• Both PFLT and PNNT are managed by PennantPark Investment Advisers, LLC, a middle-market credit platform managing approximately $10 billion in investable capital.

Monroe Capital Corporation Distribution:

• Monroe Capital Corporation (MRCC): Announced a quarterly distribution of $0.25 per share for the second quarter of 2025, payable on June 30, 2025, to stockholders of record as of June 16, 2025.
• Quote: “Monroe Capital Corporation (MRCC) announced today that its Board of Directors has declared a distribution of $0.25 per share for the second quarter of 2025, payable on June 30, 2025 to stockholders of record as of June 16, 2025.”
• MRCC is a publicly-traded specialty finance company investing principally in senior, unitranche, and junior secured debt, and to a lesser extent, unsecured debt and equity in middle-market companies. They have a dividend reinvestment plan in place unless stockholders opt out.
• MRCC’s investment activities are managed by Monroe Capital BDC Advisors, LLC, an affiliate of Monroe Capital LLC.

Portman Ridge Finance Corporation and Logan Ridge Finance Corporation Merger:

• Leading independent proxy advisory firms, Glass Lewis and ISS, have recommended that shareholders of both LRFC and PTMN vote “FOR” the proposed merger of LRFC into PTMN.
• Quote (Glass Lewis): “We recognize the transaction would consolidate two entities that are managed by affiliated investment advisers, have overlapping portfolios of investments, and similar strategies and risks. The transaction aims at creating an entity with greater scale, a more efficient operating structure and greater liquidity.”
• Quote (ISS): “The strategic rationale appears sound, as the combined company will have increased scale, structural simplification, and more diversification.”
• The special meetings for shareholders to vote on the merger are scheduled for June 6, 2025.
• The proposed merger is expected to enhance PTMN’s scale, increase trading liquidity, further diversify the portfolio, and generate meaningful earnings accretion for shareholders.
• Quote (Ted Goldthorpe, President and CEO of PTMN and LRFC): “We’re encouraged by the support from both ISS and Glass Lewis, which reflects their alignment with the LRFC and PTMN Boards’ unanimous recommendations to their shareholders to vote in favor of the proposed merger.”
• Both PTMN and LRFC are Business Development Companies (BDCs) investing in middle-market companies, with overlapping investment strategies. PTMN is managed by Sierra Crest and LRFC by Mount Logan.

Main Street Capital Investment:

• Main Street Capital (MAIN) announced a new $45.4 million portfolio investment in an “aerial survey and geospatial services provider”.
• Quote: “Principal investment firm Main Street Capital (NYSE:MAIN) announced on Wednesday a new $45.4M portfolio investment in an “aerial survey and geospatial services provider”.”
• The investment was structured as a minority recapitalization in partnership with existing investors and included first lien, senior secured term debt, and a direct equity investment.
• Main Street also provided the portfolio company with a revolving line of credit.
• While the specific borrower is not named in the announcement, it is expected to be disclosed in future regulatory filings.

In Summary:

The start of June 2025 sees continued activity in the middle-market investment space with regular income distributions from established BDCs like PennantPark and Monroe Capital. Furthermore, a significant merger is progressing between Portman Ridge and Logan Ridge, aiming for synergistic benefits. Main Street Capital demonstrates continued investment activity with a substantial new commitment to a company in the aerial survey and geospatial services sector.

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