Not a good sign. If banks had faith they would have extended credit line capacity at much lower rates than will be paid on the senior note offering. ACAS is in the self-liquidation business thus the need to tap private sources. Besides, their present LC terms suck compared to best of breed in the BDC group.
Indeed, this may possibly be the most significant sign of a healthy balance sheet and prospects investments in the near future... general business is back to normal. Next sign is a steady increase to NOI.
What do they need the capital for? Leveraging money for buyouts, mezz loans etc.a typical BDC finance mechanism that allows management to take advantage of low interest rates while they still exist.
BETHESDA, Md., Sept. 11, 2013 /PRNewswire/ -- American Capital, Ltd. (ACAS) ("American Capital" or the "Company") announced today that it intends to offer $350 million aggregate principal amount of Senior Notes due 2018 (the "Notes"). American Capital intends to use the net proceeds of this offering for working capital and general corporate purposes, including to make portfolio investments. "