Great Elm Capital Corp. Announces Public Offering of Unsecured Notes
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Insights
The announcement by Great Elm Capital Corp. regarding the commencement of an underwritten public offering of unsecured notes due 2029 is a strategic move that may have a significant impact on the company's capital structure and liquidity. The decision to list these notes on the Nasdaq Global Market under the symbol 'GECCI' within 30 days reflects an effort to enhance marketability and provide investors with an accessible trading platform.
The use of net proceeds for general corporate purposes and potential redemption of outstanding debts indicates a proactive approach to capital management. The redemption of higher interest unsecured notes due in the coming years could potentially reduce interest expenses and improve the company's debt profile. However, the actual impact on the company's financials will depend on the interest rate and terms negotiated with the underwriters.
Investors should monitor the interest rate set for the new notes, as it will be a critical factor in determining the attractiveness of the offering and the potential cost savings from debt redemption. The involvement of reputable financial institutions as joint book-running managers could signal confidence in the offering, yet the final terms will be decisive.
The public offering of unsecured notes by GECC introduces a new instrument into the market, which could appeal to fixed-income investors looking for new opportunities. The listing of the notes on a prominent exchange like Nasdaq increases their visibility and could potentially enhance liquidity for the notes.
It's essential to consider the current market conditions for fixed-income securities and how they might influence investor appetite for these notes. Factors such as prevailing interest rates, investor sentiment towards corporate debt and competition from other investment opportunities will play a role in the success of this offering.
Furthermore, the choice to potentially redeem portions of existing debt suggests a strategic shift in GECC's capital allocation. While this may be seen as a positive move to manage liabilities, it will be important to watch how the market reacts to the new notes and whether they are seen as a favorable investment in comparison to the company's existing debt instruments.
The legal framework surrounding the issuance of unsecured notes is stringent, requiring compliance with SEC regulations and state securities laws. The fact that a registration statement has been filed with the SEC, but not yet declared effective, is a standard procedure in the issuance of new securities. Potential investors should be aware that they cannot legally purchase these notes until the registration statement becomes effective.
The disclaimer in the press release regarding the offer and sale of securities only being lawful once the registration statement is effective is a necessary legal safeguard. This protects both the company and potential investors from any legal repercussions that could arise from premature transactions. Additionally, the involvement of multiple joint book-running managers could indicate a complex offering that necessitates careful coordination to ensure compliance with all regulatory requirements.
Prospective buyers of these notes should thoroughly review the preliminary prospectus, which will detail the risks, charges and expenses associated with the investment. It is important for the investors to understand the terms and conditions of the notes, as well as the company's investment objectives, to make informed decisions.
PALM BEACH GARDENS, Fla., April 09, 2024 (GLOBE NEWSWIRE) -- Great Elm Capital Corp. (the “Company” or “GECC”) (NASDAQ: GECC) announced today the commencement of an underwritten public offering of unsecured notes due 2029 (the “Notes”). The Notes are expected to be listed on The Nasdaq Global Market under the trading symbol “GECCI,” and to trade thereon within 30 days from the original issue date. The interest rate and other terms of the Notes will be determined by negotiations between the Company and the underwriters.
The Company expects to use the net proceeds from the offering for general corporate purposes, including making investments consistent with its investment objectives, and may also elect to (i) redeem a portion of its outstanding
Ladenburg Thalmann & Co. Inc., InspereX LLC, Janney Montgomery Scott LLC and Piper Sandler & Co. are acting as joint book-running managers for the offering.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities in this offering or any other securities nor will there be any sale of these securities or any other securities referred to in this press release in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction.
A registration statement relating to these securities has been filed with the Securities and Exchange Commission (the “SEC”) but has not yet been declared effective. These securities may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective. The offering will be made only by means of a prospectus, copies of which may be obtained, when available, from:
Ladenburg Thalmann & Co. Inc.
640 5th Avenue, 4th Floor
New York, New York 10019
prospectus@ladenburg.com
Investors are advised to carefully consider the investment objectives, risks and charges and expenses of the Company before investing. The preliminary prospectus, dated April 9, 2024, which has been filed with the SEC, contains a description of these matters and other important information about the Company and should be read carefully before investing.
The information in this press release and the preliminary prospectus is not complete and may be changed.
About Great Elm Capital Corp.
GECC is an externally managed business development company that seeks to generate current income and capital appreciation by investing in debt and income generating equity securities, including investments in specialty finance businesses.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this communication that are not historical facts are “forward-looking” statements within the meaning of the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “expect,” “anticipate,” “should,” “will,” “estimate,” “designed,” “seek,” “continue,” “upside,” “potential” and similar expressions. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are: conditions in the credit markets, fluctuations in interest rates, inflationary pressure, the price of GECC common stock and the performance of GECC’s portfolio and investment manager. Information concerning these and other factors can be found in GECC’s registration statement, its Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission. GECC assumes no obligation to, and expressly disclaims any duty to, update any forward-looking statements contained in this communication or to conform prior statements to actual results or revised expectations except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
Media & Investor Contact:
Investor Relations
investorrelations@greatelmcap.com
FAQ
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