Gladstone Capital (NASDAQ:GLAD) Corporation (NASDAQ:GLAD), a business development company, announced today that it has entered into a new Equity Distribution Agreement, enabling the issuance of up to $150 million in common stock. The agreement, dated today, was established with Jefferies LLC and Huntington Securities, Inc., as sales agents.
Under the terms of the Sales Agreement, the sales agents will use commercially reasonable efforts to sell the shares at market prices. They will receive up to a 2.0% commission on the gross sales price of each share sold. This arrangement follows the termination of the previous Amended and Restated Equity Distribution dated July 28, 2023.
The shares will be offered in accordance with the Company's registration statement on Form N-2, which became effective on January 17, 2024, and includes a base prospectus from the same date and a prospectus supplement specific to this offering.
Gladstone Capital Corporation has agreed to indemnify the sales agents against certain liabilities, including those under the Securities Act of 1933. As part of the sales process, the agents will be acting as underwriters, and their compensation will be considered underwriting commissions or discounts.
The legal opinion regarding the shares to be sold was provided by Venable LLP and is included in the exhibits of the current report. This move is part of Gladstone Capital's broader strategy to raise capital for operations and investments.
In other recent news, Gladstone Capital Corporation has made notable strides in its financial operations. The firm has expanded its borrowing capacity through its subsidiary, Gladstone Business Loan, LLC, amending its existing credit agreement and increasing its commitment from Webster Bank, N.A. from $40 million to $65 million.
This move could potentially provide the firm with greater financial flexibility for future investments or operations. In addition, the company has disclosed its Q3 financial results, revealing a modest funding of $46 million and a steady yield of 13.9% on its investment portfolio. Despite a 2.2% decrease in total interest income to $23.2 million, the company's net investment income saw a 15% rise to $12.4 million.
Moreover, Gladstone Capital has maintained a conservative leverage position at 77% of NAV and expanded its bank credit facility to $269 million. Amidst moderate refinancing activity and potential sale transactions, the company remains ready to capitalize on investment opportunities, especially in the private equity market.
InvestingPro Insights
In light of Gladstone Capital Corporation's recent announcement regarding its new Equity Distribution Agreement, current and potential investors may find the following InvestingPro Insights particularly relevant. Gladstone Capital boasts a solid market capitalization of $504.92 million, which speaks to the company's size and stability within the market. Additionally, with a P/E ratio of 6.54, the company presents a potentially attractive valuation metric for those looking to invest in the financial sector.
InvestingPro Tips further enrich the context for potential investors; the company pays a significant dividend to shareholders, which is underscored by its impressive track record of maintaining dividend payments for 24 consecutive years. Furthermore, Gladstone Capital has been profitable over the last twelve months, which is a reassuring sign for investors concerned with the company's performance.
For those considering an investment in Gladstone Capital, it's noteworthy that the company has experienced a robust revenue growth of 22.95% in the last twelve months as of Q3 2024. This growth is complemented by a high gross profit margin of 100% for the same period, which indicates strong financial health and efficiency in the company's operations.
Investors seeking additional insights will find a wealth of further InvestingPro Tips, including analyst earnings revisions and valuation implications, by visiting https://www.investing.com/pro/GLAD. These tips provide a deeper understanding of the company's financial nuances and can be invaluable for making informed investment decisions.
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