Great Elm Capital Corp. Prices Public Offering of $50 Million of 7.75% Notes Due 2030

Rhea-AI Summary

Great Elm Capital Corp. (NASDAQ: GECC) has priced a public offering of $50.0 million of 7.75% notes due 2030. The notes will generate net proceeds of approximately $48.1 million after expenses and will mature on December 31, 2030.

The notes, trading under symbol GECCG, can be redeemed after December 31, 2027. Underwriters have a 30-day option to purchase up to $7.5 million additional notes. The company plans to use proceeds to redeem outstanding 8.75% notes due 2028, with remaining funds potentially used to repurchase other outstanding notes, repay revolving credit facility, or for general corporate purposes.

The offering, led by Lucid Capital Markets and Piper Sandler as joint book-running managers, is expected to close around September 11, 2025.

Positive

• New notes offer lower interest rate (7.75%) compared to existing 8.75% notes being redeemed
• Additional $48.1 million in net proceeds strengthens company's capital structure
• 30-day overallotment option could provide up to $7.5 million in additional capital
• Flexibility in use of proceeds allows for debt refinancing and investment opportunities

Negative

• New debt issuance increases overall leverage and interest expense burden
• Offering expenses and underwriting discounts reduce net proceeds by approximately $1.9 million

Insights

Fixed Income Specialist

GECC's $50M note offering at 7.75% will refinance higher-cost debt, potentially improving interest expense and extending maturity profile.

GECC has priced a $50 million offering of 7.75% notes due 2030, netting approximately $48.1 million after expenses. This strategic debt refinancing appears designed to optimize the company's capital structure by replacing higher-cost debt with lower-rate notes. The company plans to use proceeds to redeem its outstanding 8.75% notes due 2028 - representing a 100 basis point interest savings on that portion of debt.

The transaction includes standard features for BDC notes: a 5-year non-call period (redeemable after December 2027), expected Nasdaq listing (symbol GECCG), and an underwriter over-allotment option for an additional $7.5 million. Beyond redeeming the 2028 notes, management has outlined multiple potential uses for remaining proceeds, including retiring portions of three other outstanding note series (5.875% 2026 notes, 8.50% 2029 notes, and 8.125% 2029 notes) or repaying revolving credit facility borrowings.

This offering represents prudent liability management - extending debt maturities while potentially reducing interest expense. By replacing 8.75% notes with 7.75% notes, GECC can improve its interest coverage ratios and free up additional capital for investment. The offering's success will depend on investor reception, but the joint book-running managers (Lucid Capital Markets and Piper Sandler) suggest institutional support. The expected September 11 closing indicates confidence in completing the offering under current market conditions.

PALM BEACH GARDENS, Fla., Sept. 04, 2025 (GLOBE NEWSWIRE) -- Great Elm Capital Corp. (the “Company” or “GECC”) (NASDAQ: GECC) announced today the pricing of its underwritten public offering of $50.0 million aggregate principal amount of its 7.75% notes due 2030 (the “Notes”), which will result in net proceeds to the Company of approximately $48.1 million after payment of underwriting discounts and commissions and estimated offering expenses payable by the Company.

The Notes will mature on December 31, 2030, and may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after December 31, 2027. The Company has also granted the underwriters a 30-day option to purchase up to an additional $7.5 million aggregate principal amount of Notes to cover over-allotments, if any.

The closing of the transaction is subject to customary closing conditions, and the Notes are expected to be delivered on or about September 11, 2025. The Notes are expected to be listed on The Nasdaq Global Market under the trading symbol “GECCG,” and to trade thereon within 30 days from the original issue date.

The Company expects to use the net proceeds from the offering to redeem all of its outstanding 8.75% notes due 2028 and the remainder of the proceeds may be used (i) to redeem or repurchase all or a portion of its outstanding 5.875% notes due 2026; (ii) to repurchase all or a portion of its outstanding 8.50% notes due 2029; (iii) to repurchase all or a portion of its outstanding 8.125% notes due 2029; (iv) to repay all or a portion of any borrowings outstanding under its revolving credit facility or (v) for general corporate purposes, including making investments consistent with its investment objectives.

Lucid Capital Markets, LLC and Piper Sandler & Co. are acting as joint book-running managers for the offering. Clear Street LLC, InspereX LLC and Janney Montgomery Scott LLC 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 on Form N-2 (No. 333-283503) relating to these securities is on file with and has been declared effective by the Securities and Exchange Commission (the “SEC”). A preliminary prospectus supplement and accompanying prospectus relating to the Notes offering has been filed with the SEC and is available on SEC’s website located at www.sec.gov. A final prospectus supplement and accompanying prospectus relating to the Notes offering will be filed with the SEC and will be available on SEC’s website located at www.sec.gov. Copies of the final prospectus supplement and accompanying prospectus 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 supplement and accompanying prospectus contain a description of these matters and other important information about the Company and should be read carefully before investing.

About Great Elm Capital Corp.

GECC is an externally managed business development company that seeks to generate current income and capital appreciation by investing in debt and income generating equity securities, including investments in specialty finance businesses and CLOs.

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 include statements regarding the closing of the Notes offering, the expected use of proceeds thereof and the expected listing of the Notes. 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, rising 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 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

What is the size and interest rate of GECC's new notes offering?

GECC priced a $50.0 million notes offering with a 7.75% interest rate, maturing in 2030.

When will GECC's 2030 notes begin trading on Nasdaq?

The notes will trade under symbol GECCG on The Nasdaq Global Market within 30 days from the original issue date.

How will GECC use the proceeds from the 2030 notes offering?

GECC will use proceeds to redeem all outstanding 8.75% notes due 2028, with remaining funds potentially used to repurchase other notes, repay revolving credit facility, or for general corporate purposes.

What is the redemption date for GECC's new 2030 notes?

The notes may be redeemed in whole or in part at GECC's option on or after December 31, 2027.

Who are the underwriters for GECC's 2030 notes offering?

Lucid Capital Markets and Piper Sandler are acting as joint book-running managers, with Clear Street, InspereX, and Janney Montgomery Scott as co-managers.