For the past few days Gladstone Capital has been announcing significant changes to its debt facilities. This week, the BDC filled in the picture further, which has allowed us to quantify what the impact on its balance sheet and income statement will look like for the next year and a half.
As so often happens of late, the major indices and the BDC sector moved in different price directions this week. We discuss which BDCs were the most affected. We also take a clear-eyed view at where the BDC sector stands on the eve of short term rates being reduced again. There are numerous scenarios that could play out beyond a (0.25%) Fed rate cut and we discuss many of them.
Once again, one of the newest public BDCs – MSC Income Fund – has reached a new price low. Is this the bottom ? We have an opinion.
Gladstone Capital has tapped the Convertible market to raise funds to meet upcoming debt obligations. This has caused a big drop in the BDC’s stock price but the BDC Reporter believes this was an appropriate action which the BDC’s shareholders may learn to appreciate.
A month ago Kayne Anderson BDC promised a refinancing of its own debt stack was in the offing. Now that a private placement has occurred, we can begin to evaluate its impact on the BDC’s borrowings costs, earnings and balance sheet. We don’t have all the answers, but it seems like the BDC’s interest expense will be coming down, but there’s much else to consider.
Prospect Capital has promised to focus only on investing in “sponsor backed” middle market companies going forward. We have a look at whether this just announced transaction fits the bill.
The BDC sector moved down in price this weeks, as two of the major indices moved higher. Price-wise, though, both the sector and most of the BDCs we track remain in a narrow price channel that even lower interest rates in mid-September might not change. However, we have taken a longer term view and assessed what the impact might be on BDC prices up to 2027 if the market consensus for short term rates plays out. You might be surprised by our conclusion.
Everywhere all at once BDCs seems to be raising unsecured debt in one form or another and on good terms. Goldman Sachs BDC is doing so as well. Unfortunately, in the short term, the BDC’s interest bill will continue to grow…
Very unexpectedly, we learn that Horizon Technology Finance is issuing a new Convertible loam, custom made for an institutional investor. This is just one of many moving parts where the BDC, and its shareholders, are concerned.
Great Elm Capital is redeeming one of its many Baby Bonds outstanding three years early. We discuss the motivation behind the move and the complex, two stage nature of the redemption.
All of a sudden we hear that PennantPark Floating Rate has struck a deal which will materially boost the size of its portfolio. We review the details and what we know and what we were not told.
In a just published SEC filing Ares Capital discloses recent investment commitments exited, including a huge “net realized gain”.
In a longer than we planned article, the BDC Reporter reviews how Crescent Capital’s stock price and fundamentals have deteriorated of late. We take a hard, long look at the most recent results to ascertain if credit performance has improved and whether to be optimistic about what might lie ahead.
For a change, the BDC sector out-performed the major indices price-wise. In the Recap, we discuss the week’s major price winners and the principal news items of interest. We take a snapshot of where the sector stands with 8 months in the rear view mirror and consider what the last 4 months of the year might hold. We close with an optimistic scenario – one amongst many that could play out this year.
Great Elm Capital may be one of the smaller Business Development Companies but is regularly raising new equity capital. A new capital inflow has just been announced. We review how much new equity is coming in, from whom and on what terms. We also wonder aloud what the use of the new funds might be. There are many strings in the BDC’s bow…
Hot off the presses! Prospect Capital has ended the second quarter of BDC earnings season by reporting its quarterly and full year results through June. Seeking Alpha noted that earnings didn’t drop as much as expected. However, we are focused on another metric which – once again – has moved by a record breaking percentage.
We’ve been concerned about OFS Capital’s liquidity for some time. We recently concluded that any challenges might have been kicked down the road following two new debt raises. However, a new 8-K filing about the BDC’s Revolver has alarmed us all over again. We may very well be wrong, but we wanted to share our findings, thoughts and conclusions with our readers.
MSC Income Fund became public in January full of promise but has just reached a new 52 week price low. just 8 months later. We review the stock’s short – but bumpy path – and assess why investors are fleeing. We go on to explain how the falling price might also impact its external manager – Main Street Capital.
This was another quiet week for the BDC sector with little in the way of news, or price moves. We discuss the current state of limbo where BDC prices are concerned and spend an inordinate amount of time assessing how prospective changes in interest rates might help or hurt BDC performance. We even offer up our prediction for what the Fed might do rate-wise between now and mid 2026. Everybody else is. Looking into the BDC sector’s future, though, we see a myriad of ways things could go but don’t expect any clarity for some time yet. From a macro standpoint, this is the most uncertain stretch we’ve known since Covid happened.
We were closing up shop for the week when we noticed a new filing from OFS Capital, which led us to learn a great deal more about how the troubled BDC has chosen to address a pressing upcoming debt maturity that previously had is worried about a potential liquidity crisis. Much is now clearer but OFS is not out of the woods in the medium term.
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