NEW YORK – CION Investment Corporation (NYSE:CION), a Maryland-based company, has entered into a material definitive agreement, as reported in a recent SEC filing on Thursday. The company has issued $172.5 million in aggregate principal amount of 7.50% Notes due December 30, 2029.
The notes, which will pay interest quarterly, are unsecured and rank equally with CION's existing and future unsecured, unsubordinated debt. They are senior to any potential future preferred stock issuance and any future subordinated debt. However, the notes are effectively subordinated to all existing and future secured debt to the extent of the collateral's value and structurally subordinated to any obligations of CION's subsidiaries.
CION has the option to redeem the notes, in whole or in part, on or after December 30, 2026, with appropriate notice at a redemption price of $25 per note plus accrued interest.
The company has covenanted to comply with certain provisions of the Investment Company Act of 1940, as amended, and to provide financial information to note holders and the trustee if it is no longer subject to the Securities Exchange Act of 1934 reporting requirements. These covenants have certain limitations and exceptions.
In other recent news, CION Investment Corporation has had an eventful period with several significant developments. The company reported a net investment income of $0.43 per share for the second quarter of 2024, effectively covering an increased quarterly base dividend. The net asset value per share rose to $16.08, marking a 5% appreciation year-over-year.
CION has also issued $150 million in 7.50% notes due in 2029, a move aimed at raising capital through the sale of debt securities. Additionally, the company secured an additional $100 million in floating rate Senior Unsecured Notes, due 2027, intending to use the net proceeds for various corporate purposes.
In strategic moves, CION has formed a partnership with GCM Grosvenor to broaden access to private market assets for individual investors, leveraging both companies' expertise. Furthermore, CION's shareholders have approved a proposal allowing the company to issue up to 25% of its outstanding shares at a price below the net asset value over the next 12 months, reflecting the company's commitment to strategic growth.
InvestingPro Insights
CION Investment Corporation's recent issuance of $172.5 million in notes aligns with its strong financial position and dividend strategy. According to InvestingPro data, CION boasts a market capitalization of $628.09 million and an attractive P/E ratio of 5.22, suggesting the stock may be undervalued relative to its earnings.
InvestingPro Tips highlight that CION has raised its dividend for 3 consecutive years and currently pays a significant dividend to shareholders. This is further supported by the impressive dividend yield of 14.38%, which could be particularly appealing to income-focused investors in the current market environment.
The company's profitability is also noteworthy, with InvestingPro data showing a robust operating income margin of 76.58% for the last twelve months as of Q2 2024. This strong profitability, combined with the company's dividend growth of 3.68% over the same period, suggests that CION's new debt issuance is likely aimed at optimizing its capital structure rather than addressing any financial distress.
Investors interested in a deeper analysis of CION's financial health and future prospects can access 5 additional InvestingPro Tips, providing a more comprehensive view of the company's investment potential.
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