Golub Capital BDC Raises $450M with 7.050% Notes Due 2028
December 1, 2023
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Golub ($NASDAQ:GBDC) Capital BDC is a publicly traded business development company that specializes in providing financing solutions to middle market companies. The company recently announced the pricing of a public offering of $450 million worth of 7.050% notes due in 2028. The proceeds from the offering will be used for general corporate purposes, including lending activities and working capital.
The company has a long track record of providing capital to help these businesses achieve their strategic objectives and create lasting value for their shareholders. This offering will further strengthen its capital base and enable it to continue to provide much-needed capital to these companies.
Analysis
We have conducted an analysis of GOLUB CAPITAL BDC’s well-being and found that according to the Star Chart they are strong in growth, medium in dividend and weak in asset and profitability. GOLUB CAPITAL BDC has a low health score of 2/10 with regard to their cashflows and debt, which is less likely to safely ride out any crisis without the risk of bankruptcy. We classify GOLUB CAPITAL BDC as a ‘cheetah’ company, which are those that achieved high revenue or earnings growth but are considered less stable due to lower profitability. These types of companies may be attractive to investors looking for a higher return, but they should be aware of the risk they are taking on. A cheetah company is not as likely to weather a financial crisis as a company with a higher health score and better balance sheet. In conclusion, investors looking for higher returns may be interested in GOLUB CAPITAL BDC as a ‘cheetah’ company, however they should be aware of the risks associated with this type of company. More…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for GBDC. More…
| Total Revenues | Net Income | Net Margin |
| 284.43 | 258.63 | 90.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for GBDC. More…
| Operations | Investing | Financing |
| 195.37 | 13.42 | -235.55 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for GBDC. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 5.73k | 3.19k | 15.02 |
Key Ratios Snapshot
Some of the financial key ratios for GBDC are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 62.1% | – | – |
| FCF Margin | ROE | ROA |
| 68.7% | 6.5% | 2.9% |
Peers
The Company’s investment activities are focused on leveraged buyouts, middle market lending, and mezzanine investments. Golub Capital BDC Inc is managed by Golub Capital LLC, an affiliate of Golub Capital Partners, LLC. OFS Capital Corp is a US-based closed-end investment company. The Company’s investment objective is to provide current income and capital gains. OFS Capital Corp invests primarily in middle-market companies in the form of mezzanine loans, first-lien, and second-lien loans, and equity securities. PhenixFIN Corp is a private equity firm specializing in growth capital, middle market, and mezzanine investments. PhenixFIN Corp was founded in 2006 and is based in Boston, Massachusetts. Princeton Capital Corp is a US-based investment company. The Company’s investment objective is to provide current income and capital gains. Princeton Capital Corp invests primarily in middle-market companies in the form of mezzanine loans, first-lien, and second-lien loans, and equity securities.
– OFS Capital Corp ($NASDAQ:OFS)
OFS Capital Corp is a publicly traded business development company that provides financing solutions to middle market companies. The company has a market cap of 114.02M as of 2022. OFS Capital Corp’s investment objective is to generate both current income and capital appreciation through debt and equity investments. The company invests primarily in senior secured and mezzanine loans of middle market companies.
– PhenixFIN Corp ($NASDAQ:PFX)
PhenixFIN Corp is a publicly traded company with a market capitalization of $79.3 million as of 2022. The company is engaged in the business of providing financial services and products to consumers and businesses. The company offers a wide range of services, including credit cards, loans, and investment products. PhenixFIN Corp is headquartered in San Francisco, California.
– Princeton Capital Corp ($OTCPK:PIAC)
Princeton Capital Corporation is a publicly traded company with a market capitalization of $33.13 million as of 2022. The company is engaged in the business of lending and investing in real estate and other businesses. Princeton Capital Corporation is headquartered in New York, New York.
Summary
Golub Capital BDC, Inc. recently announced a public offering of $450M 7.050% notes due 2028. For investors, it is crucial to analyze the potential risks and rewards of investing in Golub Capital BDC. The notes will mature on April 1, 2028 and have an initial yield to maturity of 7.050%. The notes are senior unsecured obligations of Golub and will rank equally in right of payment with all of the Company’s existing and future senior unsecured indebtedness.
In addition, the notes will be guaranteed on a senior unsecured basis by certain of the Company’s domestic subsidiaries. The notes may be redeemed in whole or in part at any time at the Company’s option, subject to certain conditions. There are risks associated with the notes, such as credit risk, market risk and interest rate risk, which need to be taken into consideration before investing.
Additionally, the notes will be subject to restrictions on transfer and may only be resold through an applicable resale exemption. Investors must carefully evaluate the risks and potential rewards of investing in Golub Capital BDC before making a decision.
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