Main Street Receives Board Approval to Reduce Asset Coverage Ratio to 150%

Rhea-AI Summary

Main Street Capital Corporation (NYSE: MAIN) has received approval from its Board of Directors to lower its minimum asset coverage ratio from 200% to 150%. This change, aligned with the Investment Company Act of 1940, will take effect on the one-year anniversary of the Board's approval. Additionally, a proposal to officially adopt this reduced ratio will be presented at the 2022 annual stockholders' meeting. Main Street plans to provide more details about the strategic implications of this decision in the proxy statement for the meeting.

Positive

• Potential for increased leverage may enhance investment opportunities.

Negative

• Lowering the asset coverage ratio could raise concerns about financial stability.
• Reduced asset coverage may increase risk exposure for shareholders.

HOUSTON, Feb. 28, 2022 /PRNewswire/ -- Main Street Capital Corporation (NYSE: MAIN) ("Main Street") is pleased to announce that it has received approval from its Board of Directors to reduce its minimum asset coverage ratio to 150% from 200%. The reduction to Main Street's minimum asset coverage ratio is being made pursuant to Section 61(a)(2) of the Investment Company Act of 1940, which provides that such approval shall take effect on the one-year anniversary of the Board of Directors' approval. The Board of Directors has also approved the submission of a proposal to adopt the reduced minimum asset coverage ratio at Main Street's 2022 annual meeting of stockholders, which, if approved, would take effect the day after the meeting. Main Street will provide additional detail regarding the Company's anticipated objectives and expectations for utilizing additional leverage in its proxy statement relating to the 2022 annual meeting of stockholders.

ABOUT MAIN STREET CAPITAL CORPORATION
Main Street (www.mainstcapital.com) is a principal investment firm that primarily provides long-term debt and equity capital to lower middle market companies and debt capital to middle market companies. Main Street's portfolio investments are typically made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in diverse industry sectors. Main Street seeks to partner with entrepreneurs, business owners and management teams and generally provides "one stop" financing alternatives within its lower middle market investment strategy. Main Street's lower middle market companies generally have annual revenues between $10 million and $150 million. Main Street's middle market debt investments are made in businesses that are generally larger in size than its lower middle market portfolio companies.

Main Street, through its wholly owned portfolio company MSC Adviser I, LLC ("MSC Adviser"), also maintains an asset management business through which it manages investments for external parties. MSC Adviser is registered as an investment adviser under the Investment Advisers Act of 1940.

FORWARD-LOOKING STATEMENTS
This press release may contain certain forward-looking statements, including but not limited to the timing of Main Street's adoption of the reduced minimum asset coverage ratio. Any such statements other than statements of historical fact are likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under Main Street's control, and that Main Street may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual performance and results could vary materially from these estimates and projections of the future as a result of a number of factors, including those described from time to time in Main Street's filings with the Securities and Exchange Commission. Such statements speak only as of the time when made and are based on information available to Main Street as of the date hereof and are qualified in their entirety by this cautionary statement. Main Street assumes no obligation to revise or update any such statement now or in the future.

Contacts:
Main Street Capital Corporation
Dwayne L. Hyzak, CEO, dhyzak@mainstcapital.com
Jesse E. Morris, CFO and COO, jmorris@mainstcapital.com
713-350-6000

Dennard Lascar Investor Relations
Ken Dennard | ken@dennardlascar.com
Zach Vaughan | zvaughan@dennardlascar.com 
713-529-6600

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SOURCE Main Street Capital Corporation

FAQ

What is the new minimum asset coverage ratio for MAIN?

Main Street's new minimum asset coverage ratio is 150%, reduced from 200%.

When will the new asset coverage ratio take effect for MAIN?

The new ratio will take effect on the one-year anniversary of the Board's approval.

What is the significance of the asset coverage ratio reduction for MAIN?

The reduction could allow Main Street to utilize additional leverage for investments.

Will shareholders vote on the asset coverage ratio reduction for MAIN?

Yes, a proposal to adopt the new ratio will be presented at the 2022 annual stockholders' meeting.

How does the asset coverage ratio affect MAIN's investment strategy?

A lower ratio may enhance Main Street's ability to invest in more opportunities but increases risk.