Carlyle BDC ends first trading day below IPO pricing – update

The IPO of TCG would raise $171m at the mid-point of pricing expectations.

UPDATE: The Carlyle Group's business development company, TCG BDC, closed its first day of trading on Wednesday at $18.11, slightly below the $18.50 the Washington, DC-based firm priced its initial public offering on Tuesday. 

On Friday, Carlyle closed a merger of its other private BDC, NF Investment Corp, which was a prerequisite to taking TCG BDC public. For merger consideration, NFIC shareholders received 434,233 shares of TCG BDC stock and $145.6 million in cash.

Original story 6 June:

Carlyle Group plans to proceed with an initial public offering of 9 million shares of common stock of its business development company TCG BDC, the firm said on Monday.

TCG BDC will list its common stock on the NASDAQ Global Select Market under the ticker “CGBD”, according to a regulatory filing also submitted Monday. The anticipated pricing will be between $18.50 and $19.50 per share, which, based on the mid-point of the price range, would generate approximately $171 million in proceeds. The stock is expected to be priced on 13 June.

The offering underwriters are expected to have an option to purchase up to an additional 1.35 million shares of common stock, according to a separate regulatory filing. Should 10.35 million shares be offered at $19.50, some $201.83 million would be raised.

TGC BDC would use the proceeds to pay down outstanding obligations on its credit facilities.

The firm declined to comment.

BofA Merrill Lynch, Morgan Stanley, JPMorgan and Citigroup are the joint book-running managers for the offering, the statement read. Keefe, Bruyette & Woods and Wells Fargo Securities are also bookrunners, while HSBC and Mizuho Securities are co-managers.

Carlyle is also set to merge its TCG BDC with its other private BDC, NF Investment Corporation, prior to its IPO as Private Debt Investor reported previously. TCG BDC will be the surviving entity of the merger, pending a shareholder vote on Tuesday, and will then proceed with its public offering.

Once the merger agreement is sealed, the NFIC common stock will be converted into cash and shares of TCG BDC common stock with each NFIC stockholder entitled to receive up to 95 percent of his or her consideration in cash instead of TCG BDC shares, a filing reads.

The net asset value of such shares will be determined as of the business day immediately prior to the closing date.

According to its latest earnings results, TCG BDC’s net asset value per share was $18.30 as of 31 March and $18.32 as of 31 December, while NFIC’s net asset value per share hit $19.03 at the end of first quarter, compared with $19.07 at the end of last year.