Medley BDC to increase first lien exposure

The firm described it’s BDC as a “legacy” portfolio, looking to bring its investments in line with the firm’s other assets.

Medley Capital Corporation, the business development company managed by Medley Management, is poised to increase the amount of first lien investments it makes, according to its management team.

Executives from Medley noted the shift in thinking during a call discussing the BDC’s earnings for the period between January and March this year. The BDC experience a net loss of $12.2 million during the quarter, Richard Allorto, chief financial officer, noted during the earnings call. 

The executives said the BDC is planning a few initiatives to buttress shareholder value. Among these are pushes to increase the BDC’s allocation to floating rate notes while also focusing on first lien senior secured loans. 

Brook Taube, chief executive, noted the majority of Medley’s assets, outside of MCC, were allocated to floating-rate first lien senior secured debt. “At this point, the legacy portfolio [of MCC] that we're working through will look different going forward,” he noted, adding it would come more in line with the firm’s other assets which have performed better. 

The BDC has approximately 83 percent of its portfolio allocated to floating-rate loans and 64.4 percent allocated to first lien senior secured loans, according to presentation materials provided by the firm.