67 WALL STREET, New York - December 17, 2013 - The Wall Street Transcript has just published its Business Development Companies Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: BDC Risk/Reward Profile - Business Development Companies Historical Overview - Yield Compression Issues - Internally and Externally Managed BDCs - BDC Dividend Growth
Companies include: Solar Senior Capital Ltd. (SUNS) and many more.
In the following excerpt from the Business Development Companies Report, senior management at Solar Senior Capital Ltd. (SUNS) discusses company strategy and the outlook for this vital industry:
TWST: How would you fund your acquisition strategy? How strong is the balance sheet in these days?
Mr. Spohler: We are fortunate that Solar Senior has a very supportive group of equity investors as well as lenders. Specifically, at the end of Q3, we had over $80 million of available capital to invest under our credit facility at a cost of LIBOR plus 200 basis points. We have an additional $50 million available under a delayed draw provision and have an accordion feature that allows us to grow that credit facility to $600 million, subject to borrowing base limitations. We completed a secondary equity offering for Solar Senior this past January and believe that between the support we have from both the debt and the equity markets, there is ample capital to grow Solar Senior.
TWST: What are some of the characteristics that you look for in companies that you invest in? What industries tend to fit your investment criteria?
Mr. Spohler: We're predominantly focused on noncyclical companies. We look for businesses that operate in defensible niches with a long history of strong free-cash-flow generation, preferably recurring revenues and good visibility on future revenue and cash flows. This general profile leads us to invest in consumer staples, insurance services, food and beverage companies, and other businesses that are less cyclical in general and that have low-growth, stable, predictable cash-flow profiles.
The primary source of repayment of our loans at Solar Senior is the cash generated by the underlying businesses we invest in. In addition, having two investment vehicles that are focused on different parts of the capital structure has allowed us to capitalize on our underwriting knowledge of certain credits that can migrate between Solar Capital and Solar Senior when issuers refinance their capital structure. These incumbent relationships allow us to leverage our investment in due diligence and extend duration in known and strong credits.
TWST: For an investor looking at Solar Senior Capital, what would you suggest as the one or two items or sets of information to focus on from your financial statements and your annual report in order to gain insight into what the company is doing and where it's going?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.