Bain Capital Specialty Finance, Inc. (NYSE: BCSF), a finance company valued at $1.17 billion, has successfully issued $350 million in senior unsecured notes, as part of its ongoing financial strategy. The notes, carrying an interest rate of 5.950%, will mature on March 15, 2030, with the first semi-annual interest payment scheduled for September 15, 2025. The transaction, finalized today, was executed under the Third Supplemental Indenture to the company’s existing debt agreement, with U.S. Bank Trust Company, National Association serving as trustee.
The senior notes offer investors an attractive fixed rate of return and will be used by Bain Capital Specialty Finance to restructure its debt portfolio. Specifically, the company intends to allocate the net proceeds, approximately $342.3 million after fees and expenses, to repay outstanding secured debt, as well as for general corporate purposes.
These newly issued notes hold seniority over any future subordinated debt, while also ranking equally with existing unsecured unsubordinated debt. However, they are subordinate to the debt of Bain Capital Specialty Finance’s subsidiaries. The indenture agreement includes provisions that mandate compliance with asset coverage requirements and stipulate that Bain Capital Specialty Finance must provide financial disclosures if it ceases to be subject to Securities Exchange Act reporting requirements. Additionally, the company is obligated to repurchase the notes at 100% of their principal amount plus accrued interest in the event of a change of control.
Bain Capital Specialty Finance’s latest financial move reflects its efforts to optimize its balance sheet and maintain flexibility in its capital structure. The company, known for its investments in middle-market companies, remains on solid financial footing with a current ratio of 1.36x and a track record of consistent profitability.
This offering was made through a registered transaction under the Securities Act of 1933, in accordance with the company’s Form N-2 Registration Statement and related prospectus supplement.
In related developments, Bain Capital Specialty Finance recently reported a rise in net investment income per share to $0.53, representing an 11.9% annualized return. The company’s net asset value per share also increased to $17.76, and it declared a fourth-quarter dividend of $0.45 per share. Bain Capital Specialty Finance’s gross originations have seen a significant increase, and its investment portfolio remains robust, maintaining strong credit quality.
For further details on Bain Capital Specialty Finance’s financial health, investors can access comprehensive metrics through InvestingPro, which provides an in-depth look at the company’s debt structure and performance.
The offering was led by SMBC Nikko Securities America, Inc., among other financial institutions, with an expected close date of February 6, 2025. As the company continues to strengthen its financial position, it remains a key player in the specialty finance sector.
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