We now know that PSEC is offering the 9 million shares, in a private placement, at a price of $11.40/share. Of course, there is share dilution, but it is presumed that this "new found" money will allow PSEC to further grow their business portfolio, pay down any credit line debt, and re-capitalize their war chest.
I like and trust management and certainly enjoy the monthly dividend payout. I am surprised that they did this offering, in light of the fact they seemed to indicate, in their last conference call, that they were sensitive to previous share offerings/dilution, and were looking to refrain from doing, in the near future. Oh well, things change, I guess.
It will be interesting to see, over the next coupe of days, whether PSEC's share price moves lower than the $11.40/share price, now that we all know what the "smart money" is purchasing the shares at. Good luck to all.
I think it is too soon to know whether this is a neutral thing or a negative thing. I refrain from seeing it as positive because any dilution puts pressure on NAV and dividends. But they may not have many choices. Banks are reacting weird to historical standards (Who really knows the banks problems). This may be the method going forward to help provide financing.
Like you, I like PSEC. PSEC has performed well throughout this crisis. I don't know when or if we will be back to normal again. As long as they pay a good dividend I am with them. I have not felt compelled to buy more of their stock, though I think it is still a 'BUY'. I am fishing on some other stocks and got on this board to find where the downward pressure was coming from to see if I need to bail.
The news and boards have me feeling 'ok' about the stock reaction and still good about PSEC.
There is no dilution to BV, in fact it looks like this will raise the BV.
As to earnings, if they can lend the money out there should not be any earnings dilution over the next year.
The issue for the economy going forward and the BDC's is how the US will manage fiscal and monetary policy. Fiscal policy restraint - reducing deficits - will hit corporate profitability. IF we do not see fiscal restraint the FED will be forced to withdraw monetary liquidity - that will hit asset prices. So how the market will play out is in the hands of our leaders - pity us. JMHO
I do think PSEC can again be bought on dips below the offering price. Not that I will - but I might.
PS - on AGNC & NLY, I probably won't be smart enough to avoid a hit if rates rise. :-(