We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Gladstone (GAIN) Taps Debt Market With $117M Notes Offering
Read MoreHide Full Article
Gladstone Investment Corporation (GAIN - Free Report) recently priced a public offering of notes worth $117 million in aggregate principal amount. The notes, which are set to mature on Nov 1, 2028, will carry an interest of 4.875%.
The company also ceded the underwriters with a 30-day option to buy up to an additional $17.6 million principal amount of notes to cover any overallotments to the offering. Awaiting certain customary closing conditions, this offering is anticipated to close on Aug 18, 2021.
The notes may be redeemed in part from time to time or in whole at any time at the company’s discretion on or after Nov 1, 2023. Gladstone will make interest payment on the notes on a quarterly basis, starting Nov 1, 2021. Such payments will be made on Feb 1, May 1, Aug 1 and Nov 1 of each year.
The company anticipates utilizing the net proceeds from the offering in a number of purposes, including redeeming all of its outstanding 6.375% Series E Cumulative Term Preferred Stock due 2025, repaying part of the amount drawn under its revolving credit facility, funding any new opportunistic endeavors and tapping liquidity for general corporate contingencies.
Gladstone’s efforts to strengthen its near-term liquidity in these testing times, and resorting to raising capital through the debt market amid the current low-interest-rate environment are strategic fits. However, the note offering increases the company’s long-term debt obligation. As of Jun 30, it had $171 million of debt. The notes offering might lead to a further increase in interest expenses, thereby limiting bottom-line growth.
Nonetheless, with an improving times interest earned ratio as well as $26.8 million of cash and cash equivalents (as of Jun 30, 2021), Gladstone carries a lower likelihood of default of interest and debt repayments if the economic situation worsens.
Recently in August 2021, Franklin Resources, Inc. (BEN - Free Report) priced a public offering of two series of notes, aggregating $450 million in principal amount. This includes all or part of its $300-million, 2.800% notes due 2022, along with $250 million of Legg Mason’s 3.950% senior notes maturing in 2024. (Read more: Franklin to Procure Capital With $450M of Notes Offering)
In the same month, Huntington Bancshares Incorporated (HBAN - Free Report) also resorted to a private offering of unsecured subordinated notes. The company priced $500 million in principal amount of fixed-to-fixed rate notes at 100% of the aggregate principal amount. The notes carry a coupon rate of 2.487% and are set to mature in 2036.
A Stock to Consider
Main Street Capital Corporation’s (MAIN - Free Report) Zacks Consensus Estimate for 2021 earnings has been revised marginally upward over the past seven days. Also, it carries a Zacks Rank #2, at present.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Gladstone (GAIN) Taps Debt Market With $117M Notes Offering
Gladstone Investment Corporation (GAIN - Free Report) recently priced a public offering of notes worth $117 million in aggregate principal amount. The notes, which are set to mature on Nov 1, 2028, will carry an interest of 4.875%.
The company also ceded the underwriters with a 30-day option to buy up to an additional $17.6 million principal amount of notes to cover any overallotments to the offering. Awaiting certain customary closing conditions, this offering is anticipated to close on Aug 18, 2021.
The notes may be redeemed in part from time to time or in whole at any time at the company’s discretion on or after Nov 1, 2023. Gladstone will make interest payment on the notes on a quarterly basis, starting Nov 1, 2021. Such payments will be made on Feb 1, May 1, Aug 1 and Nov 1 of each year.
The company anticipates utilizing the net proceeds from the offering in a number of purposes, including redeeming all of its outstanding 6.375% Series E Cumulative Term Preferred Stock due 2025, repaying part of the amount drawn under its revolving credit facility, funding any new opportunistic endeavors and tapping liquidity for general corporate contingencies.
Gladstone’s efforts to strengthen its near-term liquidity in these testing times, and resorting to raising capital through the debt market amid the current low-interest-rate environment are strategic fits. However, the note offering increases the company’s long-term debt obligation. As of Jun 30, it had $171 million of debt. The notes offering might lead to a further increase in interest expenses, thereby limiting bottom-line growth.
Nonetheless, with an improving times interest earned ratio as well as $26.8 million of cash and cash equivalents (as of Jun 30, 2021), Gladstone carries a lower likelihood of default of interest and debt repayments if the economic situation worsens.
Gladstone currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Shares of the company gained 25.4%, outperforming the industry’s growth of 13.9%.
Image Source: Zacks Investment Research
Recently in August 2021, Franklin Resources, Inc. (BEN - Free Report) priced a public offering of two series of notes, aggregating $450 million in principal amount.
This includes all or part of its $300-million, 2.800% notes due 2022, along with $250 million of Legg Mason’s 3.950% senior notes maturing in 2024. (Read more: Franklin to Procure Capital With $450M of Notes Offering)
In the same month, Huntington Bancshares Incorporated (HBAN - Free Report) also resorted to a private offering of unsecured subordinated notes. The company priced $500 million in principal amount of fixed-to-fixed rate notes at 100% of the aggregate principal amount. The notes carry a coupon rate of 2.487% and are set to mature in 2036.
A Stock to Consider
Main Street Capital Corporation’s (MAIN - Free Report) Zacks Consensus Estimate for 2021 earnings has been revised marginally upward over the past seven days. Also, it carries a Zacks Rank #2, at present.