News & Analysis

BDCs lay out plans for potential capital raises

Four mid-market lenders are seeking additional funding, several through raising capital and another couple through debt securities. 

By
Andrew Hedlund
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The business development companies associated with Golub Capital, Goldman Sachs, Bain Capital and TPG Capital all have developed plans for new capital, according to multiple regulatory filings with the US Securities and Exchange Commission made last month.

Golub Capital BDC and Goldman Sachs BDC laid out plans to potentially raise a combined $1 billion in new capital should the firms see fit, $800 million for the former and $200 million for the latter. The registration statements filed with the SEC show the two BDCs could issue common stock, preferred stock, warrants, subscription rights or debt. The filings did not the breakdown which shares or securities could be issued.

Golub Capital reported a share price of $18.41 as of 21 December, the day before the 22 December filing, which is well above the $15.96 net asset value per share the company reported as of 30 September. Goldman Sachs’ shares stood at $23.44 on 22 December, before the 23 December filing. That was also above the reported $18.58 net asset value per share the New York-based firm reported on 30 September.

Bain Capital Specialty Finance and TPG Specialty Lending secured access to more debt capital, with Bain locking down a $150 million loan with Sumitomo Mitsui Banking Corporation while TPG boosted an existing facility by $123.7 million.

The Bain loan, which matures 22 December 2019, is the Boston-based firm’s first facility and can be increased up to $350 million with the lender’s consent. Bain officially launched its BDC in October 2016 and has raised $546.42 million in equity so fair.

TPG’s gained access to the additional funding after it increased its senior secured revolver commitments with SunTrust Bank and JPMorgan Chase Bank NA from $821.3 million to $945 million. The agreement also lengthened the maturity date from 2 October 2020 to 22 December 2021 for $885 million of the commitments.

Representatives for the four firms were not available for comment. The four BDCs lend to mid-market companies and have a 1:1 leverage ratio statutory limit.