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Prospect Capital Corporation Message Board

  • the_spaniard_ii the_spaniard_ii May 14, 2014 10:50 AM Flag

    Nicholas Financial

    Why is PSEC buying this money looser? is it part of the collateral on a loan? can someone shed some light on this transaction? txs.

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    • That is what they do. They turn around companies that have potential but just may not be ran properly to make it happen.

    • It makes loans to allow people to finance an auto purchase. Buying that allows PSEC to expand its consumer loan business -- similar, but different than First Tower. Likely the plan was to put it into a seperate holding company and leverage it. I seriously doubt that NICK is losing money. However, now that PSEC's pps is down, the terms of the initial agreement may not be apealing to NICK stock holders. I would agree to purchase it at the initial terms; I would not agree to increase the price 10% or more becasue PSEC's pps is down. (We will get our chance to vote, if it goes that far.)

      Personally, I would not worry about it. From what PSEC already stated about consolidation of its holding companies, PSEC could do better by expanding its multi-family portfolio. And now that they are unable to issue more stock, I'm expecting them to adjust the existing portfolio.

    • My comment is the people running PSEC are smarter than you. Capiche??

    • It seems it would be a good fit with First Tower, one of Prospects control companies.

      It would give First Tower and Prospect more coverage. First Tower runs from Illinois to Louisiana and consumer lending is high yield.

      Seem this transaction too costly however at the current price per share. At this Price , I hope the deal is not done.

      Sentiment: Strong Buy

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