Bain Capital Specialty Finance has moved closer to its planned initial public offering.
The Bain Capital-affiliated business development company plans to list on the New York Stock Exchange under the ticker BCSF. The initial target offering price is between $20.25 and $21.25, according to documents filed with the Securities and Exchange Commission.
Plans for the IPO include an offering of 7.5 million shares of common stock, which would be worth approximately $155.6 million, according to SEC documents. The vehicle plans to use a substantial portion, if not all, of the proceeds from the IPO to pay off outstanding debts.
Bain declined to comment.
If the listing goes through, the vehicle’s hurdle rate will remain at 6 percent, with the performance fee rising to 17.5 percent from 15 percent upon a successful IPO.
The vehicle expects to seek shareholder approval to increase its leverage capacity from a debt-to-equity ratio of 1:1 to 2:1 upon approval for the public offering. The assets acquired prior to the offering will continue to have a 1.5 percent base management fee, while the rate for assets acquired after will be 1 percent.
The vehicle’s net asset value per share has largely stayed constant, according to the database LPC BDC Collateral. The vehicle reported that figure at $20.17 per share at the end of the third quarter and $20.33 at the same time last year. The firm’s return on NAV is 4.91 percent.
Private Debt Investor previously reported the vehicle’s announcement for an IPO on 12 October and later reported on 19 October that the IPO may be pushed back due to market conditions and concerns over the vehicle’s yield.
The BDC usually invests in mid-market companies in the form of senior secured debt through first-lien loans, unitranche and second-lien loans. The vehicle also invests in strategic joint ventures, equity investments and corporate bonds.
The BDC was formed in October 2016 and has invested $1.7 billion through the third quarter of this year. The vehicle is affiliated with Bain Capital Credit, which currently has $40 billion in assets under management.