I am an AFC owner, used to be an ALD owner but switched over. Look, ALD announced they did not anticipate paying a dividend for the foreseeable future. This was because with all of the "unrealized depreciation" they took on their portfolio companies they did not HAVE to pay a dividend under IRS rules in order to maintain their status as a BDC. I think that this merger is a good deal for ARCC owners and it will be accretive, but don't expect someone to add $.65 to your dividend. That aint gonna happen. This is also a GREAT deal for AFC owners since the credit risk has just been eliminated. Thanks alot folks.
Yes, AFC is having a great day, up over 20%. The yield is about the same as ARCC. Which is a better investment at the current price? AFC has a lot of upside price potential, assuming that it becomes and obligation of ARCC. The yield is stable, whereas the ARCC dividend is subject to continuous revisions.
AFC == ALLIED CAPITAL CORP 6.875% NOTES DUE 4/15/2047