Great Elm Capital Corp. (NASDAQ:GECC) has announced its intention to redeem all of its 6.75% Notes due 2025 on October 12, 2024. The redemption is conditional upon the successful completion of the company's public offering of 8.12% Notes due 2029.
The notes will be redeemed at 100% of their principal amount, plus accrued and unpaid interest up until the redemption date, excluding the redemption date itself. This interest will be calculated from the last interest payment date on September 30, 2024. The redemption is being made under the terms set forth in the company's indenture agreement dated September 18, 2017, and the related second supplemental indenture dated January 19, 2018.
This strategic financial move by Great Elm Capital Corp. was detailed in a Form 8-K filed with the Securities and Exchange Commission on Friday. The notice of redemption attached to the filing outlines the terms and conditions under which the notes are to be redeemed.
This redemption is part of the company's broader financial management strategy, as it seeks to restructure its debt under potentially more favorable terms with the new offering.
In other recent news, Great Elm Capital Corp. has been active in strategic moves and financial performance. The company has launched a public offering of unsecured notes due in 2029, with the aim to redeem all its 6.75% unsecured notes that are due in 2025. The offering is managed by Lucid (NASDAQ:LCID) Capital Markets, Janney Montgomery Scott, and Piper Sandler, among others, and is contingent upon the effectiveness of a registration statement filed with the Securities and Exchange Commission.
Further, Great Elm Capital has increased its stake in a joint venture focused on collateralized loan obligation (CLO) entities, showing a deeper commitment to the CLO market. The firm now holds a 71.25% ownership interest, with partners Green SPE and Crown LB retaining 23.75% and 5% stakes respectively.
In terms of financial performance, Great Elm Capital reported a decrease in net asset value (NAV) per share to $12.06 from $12.57 due to nonaccruals in two portfolio companies for the second quarter of 2024. The net investment income (NII) per share was reported at $0.32.
Despite the NAV decline, the company expects to surpass first-half results in the second half of the year, anticipating increased income from its CLO-focused joint venture and other strategic investments. These are among the recent developments shaping the trajectory of Great Elm Capital Corp.
InvestingPro Insights
In light of Great Elm Capital Corp.'s (NASDAQ:GECC) announcement to redeem its 6.75% Notes due 2025, investors may find additional context in the company's financial health and market performance through InvestingPro metrics. With a market capitalization of $105.91 million and a P/E ratio of 8.32, GECC demonstrates a valuation that reflects its earnings potential. The company's revenue growth over the last twelve months as of Q2 2024 stands at a robust 20.0%, indicating a solid upward trajectory in its financial performance.
Furthermore, GECC's commitment to returning value to shareholders is evident with its significant dividend yield of 13.79% as of the latest data, underscoring its investor-friendly approach. Notably, GECC has maintained dividend payments for 9 consecutive years, a testament to its financial stability and reliability. This is particularly relevant for investors and note holders considering the company's strategic debt management moves, including the redemption of notes and the offering of new ones.
For those seeking more comprehensive analysis and tips, InvestingPro offers additional insights on GECC, including the company’s stock price volatility and its short-term liquidity challenges, with short term obligations exceeding liquid assets. There are a total of 6 InvestingPro Tips available for GECC at https://www.investing.com/pro/GECC, which can provide investors with a deeper understanding of the company's financial nuances and investment potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.