As a final note, for shares you own, I recommend always voting your shares, as the absence of a vote is sometimes taken as a No vote. This article intends to be a resource to point to during these discussions and a forum for discussing granting under the NAV share issuance capabilities to BDCs investors own. Powered and implemented by FactSet Digital Solutions Group. In short, voting No throws the BDC under the bus. 在 Yahoo 財經討論區查看最新的 Ares Capital Corporation - Clos (ARCC) 股票討論內容。分享你的意見，並參考其他股票交易員和投資者的深入分析。 I have no business relationship with any company whose stock is mentioned in this article. Earnings and ratings provided by Zacks. Please do not count shares issued as part of dividend reinvestment programs, another contentious discussion not in scope here, as a means of offering shares under NAV. Upfront: Issuing shares under NAV is generally a bad thing for existing shareholders. These proceeds were also used to create liquidity and financial flexibility in an uncertain time of extreme volatility. Each time this request is made by a BDC, I see a heated debate that reinvents a wheel that was invented a long, long time ago, in my opinion. ATM) sales of shares under NAV?

I am not looki... "Buy the rumor, sell the news." It is also why, in a sudden and artificial downturn (BDC portfolio assets are not shedding income but are marked down because of “throwing out the baby with the bath water” scenarios), investors would like a BDC to get more cash with a secondary under NAV rather than be torn apart by the covenants on their bank revolvers. Arguments for and against without drilling down into the particular clauses of these requests reinvent the wheel. It's not surprising that several investment experts chose stocks from the financial sector when asked for their favorite investment idea for the year ahead. Find the latest Ares Capital Corporation - Clos (ARCC) stock discussions in Yahoo Finance's forum. In fact, I challenge each investor or potential investor to review secondary offerings particular BDCs have done under NAV. This is why many BDCs, especially after the Great Recession, turn to capital markets to get their cash using secondaries, baby bonds, and convertible notes rather than rely heavily on lending facilities with covenants. Ares Capital Corp ARCC Morningstar Rating Rating as of Oct 12, 2020. I am NOT looking f... "Buy the rumor, sell the news." An accretive secondary offering is when a BDC, or other company, offers shares for sale enough above NAV to add value for shareholders. I’ve been in this game for over 10 years now as more or less a layperson, and I’ve been burnt a number of ways I’ve had to learn from. I am not receiving compensation for it (other than from Seeking Alpha). Energy and materials names dominate the bearish ledger. Therefore, I afford the managers the ability to do so - supporting their negotiations under duress and outside of duress in order to obtain better funding options under both. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month. Mutual fund data provided by Valueline. If a BDC trips the “equity ratio” covenant, the bank can tell the BDC to stop paying dividends. Ares Capital's NAV, Dividend, And Valuation Vs. 14 BDC Peers - Part 2 (Includes Q4 2020 Dividend Projection For All Peers) Seeking Alpha 9/29/2020

We also believe market conditions will continue to provide attractive opportunities for us to deploy capital. The request that the BDC is making just means the BDC has the right to issue shares under NAV, and it does not say that they will. Quotes delayed at least 20 minutes for all exchanges. I can discuss this further some other time in another topic article.). Information about your device and internet connection, including your IP address, Browsing and search activity while using Verizon Media websites and apps. ... Ares Capital's NAV, Dividend, And Valuation Versus 14 BDC Peers (Post Q1 2020 Earnings - Attractive Valuation) What's in the Cards for Ares Capital (ARCC) in Q4 Earnings? This is a dilutive offering, reducing the overall NAV of the BDC by selling shares less than NAV. However, accretive NAV secondaries are not in scope for this discussion. We and our partners will store and/or access information on your device through the use of cookies and similar technologies, to display personalised ads and content, for ad and content measurement, audience insights and product development. How many times have they conducted secondary or shelf offerings under NAV? Long Only, Value, Special Situations, Dividend Investing, Follow Code Talker Market Analysis and get email alerts. Dear Shareholder:On behalf of Prospect Capital Corporation (ticker symbol “PSEC”), I would like to thank you for being a supportive PSEC shareholder.Regarding the Annual Meeting of Shareholders Proposal II (NAV Proposal), we believe voting FOR such proposal is important to help avoid losing the investment grade bond rating of PSEC. Ares Capital Corporation Common Stock (ARCC) Stock Quotes - Nasdaq offers stock quotes & market activity data for US and global markets. The increase in the Company's NAV from June 30, 2009 to June 30, 2010 includes a $1.11 per share increase related to the gain on the Allied Acquisition.

We are a closed-end investment company that has elected to be regulated as a BDC under the 1940 Act. This group has a plan to deliver natural gas from the Marcellus to the Northeast. Just because they're not in an index doesn't mean they can't be winners. As a result, I do not intend this to be a recommendation to buy or to sell any particular equity, nor can I tell you how to vote your shares. There is a contentious issue for BDCs that arises frequently during annual shareholder meetings and their associated proxy voting requests: The BDC asks for permission to sell shares under net asset value (NAV), given certain restrictions and clauses. Here is an example from a September 2016 DEF 14A SEC filing made by Prospect Capital Corporation (PSEC). Failure of this vote might put our investment grade bond rating at risk, thereby potentially increasing the cost of capital of PSEC and restricting our access to the financing markets. This article is intended to be a resource to point to regarding that debate, and a forum in which to conduct discussions helpful to BDC owners considering how to vote their shares. BDCs borrow from banks and lending facilities. 225 Liberty Street, 27th Floor, New York, NY 10281. Yahoo is part of Verizon Media.

Disclosure: I am/we are long PSEC, FSFR, MAIN, ARCC, FSC. The same, however, is bad for existing shareholders, generally, as their shares are being diluted by new shares flooding the market, increasing the overall market cap without increasing their stake in the company, and offering $10 of value for shares purchased at $9 a share. It might be a dilutive offering, but it allows them other options during sudden and severe downturns than falling victim to banks, who can force BK, ask them not to pay dividends, or liquidate paying assets. The comments section below would be a good chance to air findings, but I am confident this only happens under extreme market duress and in limited and infrequent opportunities. However, hopefully this and other analysis of the topics herein can help you arrive at a buy, sell, or hold decision based on your own financial situation and risk tolerance, and can be a helpful resource in determining how to vote your shares when you get the chance. This is very simple. 14.13, 7.90 / The BDC is exchanging some percent of NAV for existing shareholders for cash. While such issuance was at a price below NAV, it resulted in less than a 2.5% dilution in the aggregate net asset value of the Company. Market Data & Company fundamental data provided by FactSet. Share your opinion and gain insight from other stock traders and investors. To report a factual error in this article.

To enable Verizon Media and our partners to process your personal data select 'I agree', or select 'Manage settings' for more information and to manage your choices. That kind of offering increases the NAV for existing shareholders while obtaining cash for the BDC. Check the proxy statement for the conditions every time, but a safe assumption is that BDCs will not issue shares under NAV willy-nilly, destroying shareholder value, if given the permission. Join the company named for the Greek god of war in the battle for profits. I hope this article helps, and I look forward to the comments. If a shareholder does not trust management to use this responsibility only if needed and in a manner respecting their fiduciary duty, the shareholder should not buy the BDC and should sell any shares they own. Find out more about how we use your information in our Privacy Policy and Cookie Policy. However, if no rating change occurs, the data on this page does not update. Buy 5 Safe Stocks, Buy These 5 Top-Ranked Stocks With Robust Sales Growth, The Zacks Analyst Blog Highlights: Agile Therapeutics, Ares Capital, Cable One, Evolution Petroleum and Royal Gold, Here's How to Play Stocks as US-Iran Tensions Mount, Ares Capital's NAV, Dividend And Valuation Vs. 14 BDC Peers - Part 2 (Post Q3 2019 Earnings), The Big Boys Continue To Pile Into This Dividend Sector: Goldman Sachs BDC, 13.95 /

I have no business relationship with any company whose stock is mentioned in this article. I wrote this article myself, and it expresses my own opinions. SPX (Long-Term ... From MAIN to GAIN: Get High Returns in BDCs, 7 Under-the-Radar Financial Stock Favorites, TriplePoint (TPVG) Q4 Earnings Beat Estimates, Costs Rise, Capitala Finance (CPTA) Q4 Earnings & Revenues Lag Estimates, Hercules Capital (HTGC) Q4 Earnings Beat on Higher Revenues, Ares Capital (ARCC) Q4 Earnings Meet, Stock Declines 1.2%. If I don’t believe, in good faith, I can check Yes to the option for a BDC to issue shares under NAV if needed, I sell the stock. Prev Close ... Ares Capital's NAV, Dividend And Valuation Vs. 14 BDC Peers - Part 2 (Post Q3 2019 Earnings) SeekingAlpha. This is because as RIC companies, they must pay out 90% of their earnings to shareholders in the form of dividends in order to avoid certain taxes. To get a more comprehensive answer, I suggest focusing on a few key terms and concepts: The BDC is not asking to sell shares under NAV. Stick with real results. You can change your choices at any time by visiting Your Privacy Controls. June , 2020 . They are asking for the right to do so. Actually, I would not be an owner in the first place. However, certain provisions of the 1940 Act permit such a sale if approved by our stockholders and, in certain cases, if our Board of Directors makes certain determinations.
Chipotle, Wendy's on the bull side and gold stocks on the bear side. As much distrust as I have had with Prospect Capital’s management, the Fifth Street management banner (prior to the acquisition by Oaktree (OAK)) for companies like Fifth Street Finance Corp. (FSC) and Fifth Street Senior Floating Rate Corp (FSFR), I certainly have not believed they would perform dilutive secondaries under NAV unless forced to by significant market conditions, nor have they. I don’t invest in BDCs whose managers would do that without good reason. Banks assert restrictive covenants on their loans to BDCs.