BDC Gladstone Investment Prices a Term Preferred Issue
By: Tim McPartland,
Business Development Company Gladstone Investment (ticker:GAIN) has priced a new Term Preferred issue with a mandatory redemption date of 12/31/2021.
This issue will carry a coupon of 6.75% and is an unrated issue.
Dividends will be paid monthly.
Details of the issue are here.
While Gladstone Investment Corp is not a quality BDC we will be buying this issue for the model. Remember that BDC’s must maintain specific leverage ratios. They must maintain net assets equal to 200% or more of their preferred stock redemption costs. Thus the entire portfolio is available to preferred and/or debt holders while holders of the common are last in line (as usual). This gives an added level of safety to BDC’s (and all closed end fund preferred stocks) that a typical corporation doesn’t offer.