Gladstone Investment Corporation Prices Public Offering of 7.875% Notes due 2030

Rhea-AI Summary

Gladstone Investment (NASDAQ:GAIN) has priced a public offering of $110.0 million in 7.875% Notes due 2030. The Notes will mature on February 1, 2030, with an option for early redemption after February 1, 2027. Interest will be paid quarterly starting February 1, 2025. The company granted underwriters a 30-day option to purchase an additional $16.5 million in Notes for overallotments.

The Notes will be listed on Nasdaq Global Select Market under symbol 'GAINI'. Proceeds will be used to repay revolving credit facility debt, fund new investments, and for general corporate purposes. The offering is expected to close around December 17, 2024.

Positive

• Raised substantial capital of $110.0 million through Notes offering
• Potential for additional $16.5 million through underwriters' overallotment option
• Notes will be listed on Nasdaq Global Select Market, providing liquidity for investors
• Proceeds will help reduce existing debt and fund new investment opportunities

Negative

• High interest rate of 7.875% represents significant debt servicing cost
• Additional debt burden could impact company's financial flexibility
• Quarterly interest payments may affect cash flow

Insights

Fixed Income Analyst

This $110 million notes offering at 7.875% represents a significant financing move for Gladstone Investment. The pricing and terms are competitive in the current market environment, with quarterly interest payments and a 5.5-year call protection period. The intended use of proceeds to repay revolving credit facility debt and fund new investments suggests a strategic refinancing that could enhance financial flexibility. The inclusion of a $16.5 million overallotment option indicates strong potential demand. The expected Nasdaq listing under 'GAINI' should provide good liquidity for investors. The joint book-running managers represent a solid syndicate, which could support strong distribution of the notes.

Financial Analyst

The debt offering strengthens Gladstone's capital structure and provides additional investment capacity. The 7.875% interest rate, while reflecting current market conditions, will impact the cost of capital. However, deploying proceeds into new investments could potentially generate returns above this cost, creating positive spread. The planned repayment of revolving credit facility should improve the debt maturity profile and could reduce interest rate risk exposure. The 2030 maturity provides long-term financing stability. The deal size relative to GAIN's $506.7 million market cap is substantial and demonstrates the company's ability to access capital markets effectively.

MCLEAN, VA / ACCESSWIRE / December 10, 2024 / Gladstone Investment Corporation (NASDAQ:GAIN) (the "Company") today announced that it priced a public offering of $110.0 million aggregate principal amount of 7.875% Notes due 2030 (the "Notes") on December 10, 2024. The Notes will mature on February 1, 2030 and may be redeemed in whole or in part at any time or from time to time at the Company's option on or after February 1, 2027. The Notes will bear interest at a rate of 7.875% per year payable quarterly on February 1, May 1, August 1 and November 1 of each year, beginning February 1, 2025. The Company also granted the underwriters a 30-day option to purchase up to an additional $16.5 million in aggregate principal amount of Notes to cover overallotments, if any. The Company expects to list the Notes on the Nasdaq Global Select Market under the trading symbol "GAINI" within 30 days of issuance. Oppenheimer & Co. Inc., B. Riley Securities, Inc. and Lucid Capital Markets, LLC are acting as joint book-running managers for this offering. InspereX LLC, Janney Montgomery Scott LLC and Wedbush Securities Inc. are acting as co-managers for this offering.

The closing of the transaction is subject to customary closing conditions and the Notes are expected to be delivered on or about December 17, 2024.

The Company intends to use the net proceeds from this offering to repay a portion of the amount outstanding under its revolving credit facility, to fund new investment opportunities, and for other general corporate purposes.

Investors are advised to carefully consider the investment objectives, risks and charges and expenses of the Company before investing. The preliminary prospectus supplement, dated December 9, 2024, and the accompanying prospectus, dated April 18, 2024, which have been filed with the U.S. Securities and Exchange Commission (the "SEC"), contain this and other information about the Company and should be read carefully before investing.

The offering is being conducted as a public offering under the Company's effective shelf registration filed with the SEC (File No. 333-277452).

To obtain a copy of the preliminary prospectus supplement for this offering and the accompanying prospectus, please contact: Oppenheimer & Co. Inc., Attention: Syndicate Prospectus Department, 85 Broad Street, 26th Floor, New York, NY 10004, by telephone at (212) 667-8055, or by email at EquityProspectus@opco.com.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

About Gladstone Investment Corporation: Gladstone Investment Corporation is a publicly traded business development company that seeks to make secured debt and equity investments in lower middle market businesses in the United States in connection with acquisitions, changes in control and recapitalizations.

Forward-Looking Statements
This press release contains statements as to the Company's intentions and expectations of the outcome of future events that are forward-looking statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These statements relate to the offering of Notes and the anticipated use of the net proceeds by the Company. No assurance can be given that the transaction discussed above will be completed on the terms described, or at all. Completion of the offering on the terms described, and the application of net proceeds, are subject to numerous conditions, many of which are beyond the control of the Company. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. For a description of certain risks to which the Company is or may be subject, please refer to the factors discussed under the captions "Forward-Looking Statements" and "Risk Factors" included in the Company's filings with the SEC (accessible at www.sec.gov).

CONTACT: For further information: Gladstone Investment Corporation, (703) 287-5893

SOURCE: Gladstone Investment Corporation

View the original press release on accesswire.com

FAQ

What is the interest rate and maturity date for GAIN's 2024 Notes offering?

The Notes offer a 7.875% interest rate and will mature on February 1, 2030, with quarterly interest payments beginning February 1, 2025.

How much capital did Gladstone Investment (GAIN) raise in its December 2024 Notes offering?

GAIN priced a public offering of $110.0 million in Notes, with an additional $16.5 million available through an underwriters' overallotment option.

What will GAIN use the proceeds from its 2024 Notes offering for?

The proceeds will be used to repay a portion of their revolving credit facility, fund new investment opportunities, and for general corporate purposes.

When can GAIN redeem the Notes issued in December 2024?

The Notes may be redeemed in whole or in part at the Company's option on or after February 1, 2027.

What is the trading symbol for GAIN's new Notes on Nasdaq?

The Notes will be listed on the Nasdaq Global Select Market under the trading symbol 'GAINI' within 30 days of issuance.