67 WALL STREET, New York - December 18, 2012 - 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, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Decreased Bank Loan Competition - Low Corporate Credit Default Rate - Consistent BDC Dividend Yield - Stronger Middle Market Loan Origination - BDC Risk/Reward Profile - Private Middle Market Funding
Companies include: Main Street Capital Corporation (MAIN)
In the following excerpt from the Business Development Companies Report, the CFO of Main Street Capital discusses the outlook for his company for investors:
TWST: Please provide a brief history of Main Street Capital.
Mr. Hyzak: Main Street Capital Corporation operates as a publicly traded business development company, or a BDC as most people know it. We're listed on the New York Stock Exchange under the ticker symbol MAIN. We've been publicly traded since October 2007, so we just recently had our five-year anniversary as a publicly traded company. We initially started as a privately owned investment firm and have been investing in companies similar to the companies we invest in today since 1997. And we initiated our current focus on the combined debt and equity investment strategy in 2002 with the receipt of our first SBIC, or small business investment company, license. We received a second SBIC license in 2006 and followed that with a conversion to the current BDC structure and our initial public offering in 2007.
From an investment standpoint, we are a principal investor in debt and equity in private companies and we focus on companies in the lower middle market and the middle market. We're structured as an internally managed BDC, which we believe is a significant advantage for our shareholders. We believe that this internally managed structure should continue to provide significant benefits to our shareholders as we grow, as it allows us to deliver a greater portion of our gross investment returns to our shareholders through our monthly dividend and other benefits to our shareholders.
TWST: Why did you decide to structure as a BDC?
Mr. Hyzak: The BDC structure is one that's been around for a number years, but when we went public in 2007, the industry was much smaller. The BDC regulations, and the regulated investment company regulations that typically go along with it, allowed us to continue to provide significant benefits to our shareholders and to do so on a tax-efficient basis similar to when we were a private investment firm, because our earnings and the other benefits that we generate for our shareholders are not taxed at the Main Street corporate level, allowing us to pass those benefits to our shareholders on a tax-efficient basis. In addition, the decision to form the BDC was done in conjunction with us deciding to go public. At the time we didn't realize that the benefits would be as significant as they have proven to be, but we saw the benefits of a permanent investment vehicle and the ability to access the public markets to raise capital, and this has served us and our shareholders very well over the last five years.
TWST: You mentioned being managed internally; would you tell us about your management team and your management structure?
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.