BDC Gladstone Investment Prices a Term Preferred Issue

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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.

Tim McPartland

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Tim McPartland
Tim McPartland is a private investor with over 45 years of investing experience. His analysis, research and writing is devoted to the hunt for income producing securities of all types, but in particular specializing in preferred stocks, exchange traded debt and Master Limited Partnerships.
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