Think

Medley Merger: The next scheduled vote on the merger of the three Medley Group entities into a public BDC fronted by Sierra Income, which will go from non-traded to public company, is another week away. Nonetheless, we’ll be looking out for developments during this penultimate week. There are still a number of outstanding items for which some resolution is required. Will Medley Capital (MCC) be following the instructions of the Delaware Chancery Court and providing an updated Proxy with a fuller account of how the merger was conceived ? Or has MCC – as indicated in when the judge’s opinion was first published – decided to appeal ? Or ignore ? Also, we wonder what the status is of the proposed transfer of the MCC SBA licenses to Sierra Income. Has the SBA – in charge of such things – decided to give the go ahead, or not ? That’s a major item. Also, the initial deadline for the merger is past. How will an extension be handled ? Also, what’s happening about replacing the “independent” directors and meeting stock exchange rules for corporate governance ? (We’ve written multiple feature articles about these and a multitude of other aspects of this subject. Just type “Medley” into the Search box at the top of the website and see what we mean !)

LBO to take out Wrench Group debt held by Crescent; BDVC's holdings include Hexion’s prepetition notes

Investor demand for large transactions such as Ultimate Software and Staples underscored a palpable shift in loan market tone last week as accounts scrambled to commit to the relatively few deals in syndication. A few stragglers aside, numerous deals have accelerated, upsized or flexed lower in recent days, for a lopsided downward-to-upward flex ratio of 7:3. Bonds, meanwhile, plowed forward with oversubscribed new issuance, steady retail cash inflows, and an upside grind in more active trading.

Medley Redux Redux: Now that the vote on the three way Merger has been postponed for the umpteenth time, we’ll be looking this week for the reasons why the delay has occurred. That may or may not come from Medley Capital (MCC) or Medley Management (MDLY) by way of press release or SEC filing. Or, we might hear from one of the activists as to the why of the situations, or read a court transcript to learn what shareholders – who are mostly playing the role of spectator in this situation – have a right to know.

Medley Mania: This week brings the triple merger vote – postponed multiple times – by the Medley companies on March 29. However, chances are there will be much happening even before the digital ballot boxes are opened. Last week we had the sudden – and shocking – resignation of two of Medley Capital’s (MCC) “independent” directors. That’s caused problems for the BDC which needs a quota of disinterested directors to be publicly listed and to meet SEC regulations. We just don’t know by when MCC has to name replacements, and who they might be. Moreover, what role do “independent” directors play now that the votes are almost cast ? And – throwing one more question into the pot – what about the two remaining “independent” directors at MCC ? Are they happy to stay around or will further resignations be coming ?