Bain Capital Specialty Finance issues $350M in senior notes

Today, Bain Capital Specialty Finance , Inc. (NYSE:BCSF), a specialty finance company with a market capitalization of $1.17 billion and trading near its 52-week high of $18.35, announced the issuance of $350 million in senior unsecured notes, carrying an interest rate of 5.950% and maturing on March 15, 2030. According to InvestingPro data, the company maintains a healthy current ratio of 1.36x and has demonstrated consistent profitability. The transaction, which closed today, was facilitated by a Third Supplemental Indenture to the company’s existing indenture with U.S. Bank Trust Company, National Association as trustee.

The newly issued notes are payable semi-annually, with the first payment due on September 15, 2025. These notes are senior in right of payment to any future subordinated debt and rank equally with current and future unsecured unsubordinated debt. They are structurally subordinate to the indebtedness of the company’s subsidiaries. For detailed analysis of BCSF’s debt structure and financial health metrics, subscribers can access the comprehensive Pro Research Report available on InvestingPro.

The indenture includes covenants requiring compliance with certain asset coverage requirements and obligates Bain Capital Specialty Finance to provide financial information in the event it is no longer subject to Securities Exchange Act reporting requirements. Additionally, the company must offer to repurchase the notes upon a change of control repurchase event at 100% of their principal amount plus accrued interest.

The notes were offered through a registered offering under the Securities Act of 1933, as outlined in the Registration Statement on Form N-2 and the related prospectus supplement and pricing term sheet.

Bain Capital Specialty Finance intends to use the net proceeds, which amount to approximately $342.3 million after underwriting discounts, commissions, and estimated offering expenses, to repay existing secured debt and for general corporate purposes.

This financial move comes as part of Bain Capital Specialty Finance’s broader strategy to manage its debt portfolio and finance its operations. The details of the Third Supplemental Indenture and the notes are available in the exhibits filed with the SEC.

The information in this article is based on statements from a press release. BCSF currently offers an attractive dividend yield of 9.31% and has raised its dividend for three consecutive years. InvestingPro subscribers can access additional insights, including 7 more ProTips and extensive financial metrics that provide a comprehensive view of the company’s performance and outlook.

In other recent news, Bain Capital Specialty Finance, Inc. has priced a $350 million offering of 5.950% senior notes due on March 15, 2030. The notes are intended to repay existing secured debt and for general corporate purposes. The transaction is expected to close around February 6, 2025, with SMBC Nikko Securities America, Inc. and other financial institutions managing the book-running.

In addition, Bain Capital Specialty Finance reported a rise in net investment income per share to $0.53 in its latest earnings call, yielding an 11.9% annualized return. The company’s net asset value per share also increased to $17.76, and a total fourth-quarter dividend of $0.45 per share was declared. Gross originations surged, and the company’s investment portfolio maintained strong credit quality.

These are recent developments for Bain Capital Specialty Finance, a company that primarily provides financing to middle-market companies. Investors are encouraged to review the investment details and risks associated with the company as outlined in the pricing term sheet and prospectus supplement filed with the U.S. Securities and Exchange Commission.

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