Credit Suisse BDC for sale – exclusive

The Swiss bank’s own M&A advisory group is representing the non-traded vehicle in a sales process. Bids were due yesterday.  

The Credit Suisse Park View BDC is on the block a little over a year after going live, with a sales process moving swiftly along.

Sources familiar with the sales process said bids on the non-traded vehicle were due yesterday (21 July) midday. The BDC is being represented by Credit Suisse’s own Financial Institutions Group, these sources told PDI. One source told PDI this is the second time the BDC shopped its assets around; the first time only certain assets were up for sale, in its latest effort Credit Suisse included the entire vehicle.

A Credit Suisse spokesman declined to comment.

It’s not yet clear which firms are considering a purchase. Sources told PDI that it’d likely be an alternative investment firm that is looking to add a private credit capability.

The BDC was declared effective by the SEC last spring with a maximum offering amount of $500 million at $10.18 per share. It now has $206 million in net assets, according to the BDC’s website. Part of the reason for the sale is that the BDC has had performance challenges, and the potential for going public looks bleak.

All non-traded BDCs need to have an exit strategy, either by going public or selling the portfolio. Many BDCs have been trading poorly and going public in this market would likely weigh down their stock prices.

The Credit Suisse BDC itself has seen its net asset value (NAV) per share decline to $8.79 as of 30 June from $10.09 in March 2015. The first quarterly dividend it paid out was $0.19 in June 2015. The dividend later rose to $0.22 and $0.49 for the following two quarters, but then fell back down to $0.16 as of this March. The last dividend it paid out was back to the original 19 cents.

Other BDCs have been on the block because of challenges related to performance, shareholder activism or poor trading prices. American Capital also hired Credit Suisse and Goldman Sachs bankers to represent it in a sales process last November. That BDC has since signed a deal to be sold to the Ares Capital Corporation.

Fifth Street Asset Management is also said to be shopping itself or some of its business around to potential buyers and working with Morgan Stanley as an advisor. Full Circle Capital Corporation is working with Houlihan Lokey on a potential sale.

Sources say that many small BDCs are challenged with getting up to scale and poor trading prices and would likely fall victim to a consolidation wave, which at least one source said would likely crash ashore sooner rather than later.

Additional reporting by Andrew Hedlund