Bain Capital BDC files for IPO

Bain Capital Specialty Finance, a BDC affiliated with Bain Capital Credit that focuses on mid-market investments, has filed with the SEC to enter the public market.

The company is set to trade on the New York Stock Exchange under the ticker BCSF. The initial offering price for the stock and the potential timeline were unavailable at press time.

Bain Capital Credit will serve as the adviser for the company. Most of the proceeds from the listing will be used to repay BCSF’s outstanding debt, with any remaining funds invested in line with the company’s current strategies or used for general corporate purposes. The company expects any new investment allocations to be completed within six months of going public, according to SEC documents.

The BDC recorded having more than $1.2 billion in assets under management at the end of June. The top industries BCSF invests in include high-tech, healthcare and pharmaceutical companies.

The company’s investment portfolio is comprised of 58 percent senior secured first-lien loans, 15.8 percent secured senior second-lien loans and less than 10 percent in equity and other investment categories. A further 18.6 percent is invested in a joint venture with Antares known as ABC Complete Financing Solution.

After the listing, base management fees for assets with an asset coverage rate of more than 200 percent will remain at 1.5 percent, but the management fee will drop to 1 percent on assets under the 200 percent coverage rate.

The hurdle rate will remain at 6 percent with the performance fee rising to 17.5 percent from 15 percent upon a successful IPO.

Bank of America Merrill Lynch, Goldman Sachs, Morgan Stanley, Citigroup, Credit Suisse, Keefe, Bruyette & Woods and Wells Fargo Securities are joint book-runners for the offering. Janney Montgomery Scott, JMP Securities and Academy Securities are acting as co-managers.

Bain Capital declined to add additional details as of press time.

The Carlyle Group listed its BDC in June 2017, followed by KKR, which listed its BDC – corporate Corporate Capital Trust – in Q4 2017, as reported by Private Debt Investor.