Think

Surprising BDC COMMON STOCKS

On May 1st, the BDC sector – as measured by BDCS – dropped to $19.54. That was sharply off the $19.87 at the end of the prior week on Friday April 26, 2019.

BDC Filing season is in full swing. This report will analyze nine BDCs that have filed this week. Aggregate Fair Value reported by these BDCs is 19.3 Billion USD which is approximately 20% of aggregate AUM of all BDCs.

LBOs at API Technologies, GlobalTranz to take out debt held by BCSF, PFLT, Audax, BBDC, PSEC

Loan market conditions continued to strengthen last week amid a paucity of new-issue activity ahead of the week’s early close. Both the bond and loan markets were seasonably slow, with a total of $2.6 billion from five bond deals and $2.1 billion of loans launched via seven issuers. Time-sensitive M&A situations accounted for nearly all of the week’s new deal flow in loans.

Medley Merger: The week of the three-way Medley Group vote has arrived. On Friday April 19, 2019 the ballots at Medley Capital (MCC); Sierra Income (SIC) and Medley Management (MDLY) will be counted and we’ll know if the three will become one under a newly public SIC banner. Or will we ? The chances of yet another postponement of the vote are high. Although the BDC Reporter noted – just last week – that the SBA has caused MCC to promise to redeem all its $135mn in subordinated debentures in short order, no official word has come to investors by dint of an update of the Proxy. Nor have the disclosures required by the Delaware Chancery Court following a lawsuit regarding this vote been made by the Medley defendants. Nor have shareholders been officially updated on the multiple offers made by third parties in recent weeks and the Board’s reaction to them. Speaking of the Board, MCC has lost two of its “independent” directors. Can a BDC even function – legally speaking – with those positions still unfilled ? We don’t know the answer but we may be about to find out.