PALM BEACH GARDENS, Fla. - Great Elm Capital Corp. (NASDAQ: GECC), an investment firm, has initiated an underwritten public offering of unsecured notes due in 2029, the company announced Today. The notes, pending successful negotiations on interest rates and terms with underwriters, are expected to be traded on The Nasdaq Global Market under the symbol "GECCH" within 30 days of issuance.
The company plans to use the net proceeds from the sale of these notes, along with its available cash, to redeem all of its 6.75% unsecured notes that are due in 2025. The joint book-running managers for this offering are Lucid (NASDAQ:LCID) Capital Markets, LLC, Janney Montgomery Scott LLC, and Piper Sandler & Co. Additionally, Clear Street LLC, InspereX LLC, and Ladenburg Thalmann & Co. Inc. will co-manage the offering.
The offering is contingent upon the effectiveness of a registration statement filed with the Securities and Exchange Commission (SEC), which has not yet been declared effective. Therefore, the securities cannot be sold, nor can offers to buy be accepted until the registration statement is officially effective. A preliminary prospectus has been filed with the SEC and contains important details about the investment risks, objectives, charges, and expenses of the company.
Investors are cautioned to read the prospectus carefully before making any investment decisions. The prospectus will be available from Lucid Capital Markets, LLC upon its availability.
Great Elm Capital Corp. is a business development company that focuses on generating both current income and capital appreciation through debt and equity investments, including those in specialty finance businesses.
This press release contains forward-looking statements that involve certain risks and uncertainties, including conditions in the credit markets, interest rate fluctuations, inflationary pressures, the price of GECC common stock, and the performance of its portfolio and investment manager. These statements are based on current expectations and may change as a result of various factors, including those listed in the company's SEC filings.
The information presented is based on a press release statement and is meant for general informational purposes. Investors should not place undue reliance on forward-looking statements as they reflect only the company's views as of the date of the press release.
In other recent news, Great Elm Capital Corp. has further committed to the collateralized loan obligation (CLO) market by amending an agreement to increase its stake in a joint venture focused on CLO entities. The firm now holds a 71.25% ownership interest, with partners Green SPE, LLC, and Crown LB, LLC retaining 23.75% and 5% stakes respectively.
This development follows Great Elm Capital Corp's robust performance in the second quarter of 2024, where it advanced its growth strategy through portfolio enhancements and strong financing activities. The company raised significant capital and issued additional debt, strengthening its financial position. However, it reported a decrease in net asset value (NAV) per share to $12.06 from $12.57 due to nonaccruals in two portfolio companies. The net investment income (NII) per share was reported at $0.32.
According to an earnings call, Great Elm Capital Corp. expects to surpass first-half results in the second half of the year. The company anticipates increased income from its CLO-focused joint venture and other strategic investments. It is also evaluating options to refinance its baby bond maturity in 2025. These are among the recent developments that continue to shape the trajectory of Great Elm Capital Corp.
InvestingPro Insights
As Great Elm Capital Corp. (NASDAQ: GECC) forges ahead with its public offering of unsecured notes, investors may find the following data and tips from InvestingPro invaluable for making informed decisions. The company's market capitalization stands at a modest $107.22M, reflecting its size within the investment firm landscape. Moreover, GECC's price-to-earnings (P/E) ratio is currently at 8.41, which could be an indicator of the stock's valuation in relation to its earnings.
InvestingPro Tips suggest that GECC pays a significant dividend to shareholders, boasting a high dividend yield of 13.65%, which can be particularly attractive for income-focused investors. Additionally, it’s worth noting that the company has upheld its commitment to dividend payments for 9 consecutive years. This consistency could be a reassuring sign for investors who value steady income streams.
On the growth front, GECC has reported a revenue increase of 20.0% in the last twelve months as of Q2 2024, with a gross profit margin standing at a robust 100%. These figures indicate a strong operational performance, which might be a compelling factor for potential investors. Furthermore, for those interested in more in-depth analysis, InvestingPro offers additional tips on GECC, available at https://www.investing.com/pro/GECC.
Investors considering GECC as part of their portfolio should be aware of the company's recent financial performance and dividend reliability, as these factors can significantly impact investment decisions in the context of the current offering and the broader market conditions.
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