Great Elm Capital Corp. Announces Public Offering of Unsecured Notes
Rhea-AI Summary
Great Elm Capital Corp. (GECC) announced the launch of an underwritten public offering of unsecured notes due 2029. The notes, expected to trade under the NASDAQ symbol GECCH, will have an interest rate determined through negotiations. The net proceeds will be used along with cash to redeem 6.75% unsecured notes due 2025. Lucid Capital Markets, Janney Montgomery Scott, and Piper Sandler are joint book-running managers, while Clear Street, InspereX, and Ladenburg Thalmann are co-managers. Investors can obtain a prospectus from Lucid Capital Markets. The press release emphasizes careful consideration of investment objectives, risks, and charges before investing. The offering is subject to SEC approval and is not yet effective.
Positive
- Launch of a new public offering of unsecured notes due 2029.
- Net proceeds will redeem existing 6.75% unsecured notes due 2025, potentially improving financial stability.
Negative
- Potential shareholder dilution due to the new issuance of notes.
Insights
Great Elm Capital Corp.'s (GECC) announcement of a public offering of unsecured notes due 2029 is a strategic move to refinance its debt. The company plans to use the proceeds to redeem its outstanding 6.75% notes due 2025, potentially lowering its interest expenses. This could improve GECC's financial flexibility and extend its debt maturity profile. However, the success of this offering depends on market conditions and investor appetite. Key points to watch:
- The new interest rate, which will impact GECC's future interest expenses
- The total amount raised, indicating investor confidence
- Any changes in the company's debt-to-equity ratio post-offering
While debt refinancing can be positive, investors should carefully assess the terms of the new notes and their impact on GECC's overall financial health.
The unsecured notes offering by GECC reflects broader trends in the business development company (BDC) sector. With interest rates at elevated levels, many BDCs are reassessing their debt structures. This move by GECC could be seen as a proactive step to optimize its capital structure in a challenging market environment. Key market implications:
- Investor appetite for this offering may indicate sentiment towards the BDC sector
- The pricing of the notes could set a benchmark for other BDCs considering similar refinancing
- GECC's ability to successfully place the notes may signal market confidence in its business model and management
Investors should monitor how this offering is received, as it could provide insights into the overall health of the BDC market and investor risk appetite in the current economic climate.
PALM BEACH GARDENS, Fla., Sept. 12, 2024 (GLOBE NEWSWIRE) -- Great Elm Capital Corp. (the “Company” or “GECC”) (NASDAQ: GECC) announced today the commencement of an underwritten public offering of unsecured notes due 2029 (the “Notes”). The Notes are expected to be listed on The Nasdaq Global Market under the trading symbol “GECCH,” and to trade thereon within 30 days from the original issue date. The interest rate and other terms of the Notes will be determined by negotiations between the Company and the underwriters.
The Company expects to use the net proceeds from the offering together with cash on hand to redeem all of its outstanding
Lucid Capital Markets, LLC, Janney Montgomery Scott LLC and Piper Sandler & Co. are acting as joint book-running managers for the offering. Clear Street LLC, InspereX LLC and Ladenburg Thalmann & Co. Inc. are acting as co-managers for the offering.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities in this offering or any other securities nor will there be any sale of these securities or any other securities referred to in this press release in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction.
A registration statement relating to these securities has been filed with the Securities and Exchange Commission (the “SEC”) but has not yet been declared effective. These securities may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective. The offering will be made only by means of a prospectus, copies of which may be obtained, when available, from:
Lucid Capital Markets, LLC
570 Lexington Ave., 40th Floor
New York, New York 10022
(646) 362-0256
Investors are advised to carefully consider the investment objectives, risks and charges and expenses of the Company before investing. The preliminary prospectus, dated September 9, 2024, which has been filed with the SEC, contains a description of these matters and other important information about the Company and should be read carefully before investing.
The information in this press release and the preliminary prospectus is not complete and may be changed.
About Great Elm Capital Corp.
GECC is an externally managed business development company that seeks to generate both current income and capital appreciation through debt and income generating equity investments, including investments in specialty finance businesses.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this communication that are not historical facts are “forward-looking” statements within the meaning of the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “expect,” “anticipate,” “should,” “will,” “estimate,” “designed,” “seek,” “continue,” “upside,” “potential” and similar expressions. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are: conditions in the credit markets, fluctuations in interest rates, inflationary pressure, the price of GECC common stock and the performance of GECC’s portfolio and investment manager. Information concerning these and other factors can be found in GECC’s registration statement, its Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission. GECC assumes no obligation to, and expressly disclaims any duty to, update any forward-looking statements contained in this communication or to conform prior statements to actual results or revised expectations except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
Media & Investor Contact:
Investor Relations
investorrelations@greatelmcap.com
Source: Great Elm Capital Corp.
FAQ
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