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KCAP Financial, Inc. Message Board

  • financefred financefred Jul 7, 2008 9:56 AM Flag

    dividend/sec filing etc

    the dividend is to be paid out to holders of record on july 9. I thought for sure the stock would run up a bit before the 9th, instead it is tanking. Does anyone have any thoughts on this. is the news in the recent sec filings that Kohlberg was leaving the company and the directors won't be taking options to buy stock but will recieve restricted shares instead sinking the stock? Will Kohlberg continue to pay a divi? It has been growing the divi since the company was started. With a divi of .41 cents a share shouldn't this stock be at least 21 dollars a share. The divi started at .29 and the company IPO'd at the divi is .41 which is a 40% increase in the dividend in a little over 1 year. Isn't that good? What am I missing???

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    • Listen to the latest conference call at their website. It will answer your questions.

      • 1 Reply to lightforth
      • According to the conference call the company holds corporate loans-senior secured loans NO CDO's or mortgage backed paper. CLO investment activities with high returns in the 28% range. Growing the middle market portfolio. Completed an oversubscribed 1 for 6 rights offering that was at about 9 dollars a share producing cash on the balance sheet for for future investing. Stock trades at a 25% discount at the already heavily discounted NAV as of CC. They have not been overdistributing the divi. Only one issurer in default with a significant asset value for recovery. Very well diversified compared to other BDC's. No exposure to consumer lending or lenders. The loans are doing great and generating healthy cash returns. 90% of the portfolio in secured first and second lien loans. The problem seems to be that because the loans are hard to sell to other parties and are therefore illiquid. They expect to continue to raise the divi as time goes by. Nav is about 14 a share. So why is the stock at 8.50 a share prior to divi???? Is it because Kohlberg is off the board and the directors are giving up options in favor of restricted shares? Kohlberg himself owns over 1 million shares. Thought?

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