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Stellus Capital Investment Corporation (NYSE: SCM) is an externally-managed, closed-end, non-diversified investment management company that has elected to be regulated as a business development company under the Investment Company Act of 1940. Headquartered in Houston, Texas, Stellus Capital is dedicated to maximizing the total return for its stockholders through a combination of current income and capital appreciation.
The company primarily invests in private middle-market companies with EBITDA ranging between $5 million to $50 million. Stellus Capital employs a strategic investment approach utilizing first lien, second lien, unsecured debt, and mezzanine debt financing, often coupled with corresponding equity co-investments. The sectors targeted by the company include business services, energy, industrials, government services, healthcare, software, and specialty finance.
Stellus Capital Investment Corporation is managed by its investment adviser, Stellus Capital Management, a firm known for its financial acumen and industry expertise. The company generates revenue primarily from interest income on debt investments, capital gains, and distributions.
Recent financial performances underscore the company's robust operational strategy. For the quarter ended September 30, 2023, Stellus reported a U.S. GAAP net investment income of $0.47 per share and core net investment income of $0.49 per share, covering the regular dividend declared of $0.40 per share. The loan portfolio, valued at $886 million, is yielding 11.5%. Operating expenses were detailed at $16.3 million against an investment income of $27.2 million for the same period.
Stellus maintains a solid liquidity position with a senior secured revolving credit agreement allowing for borrowings up to $265 million, with potential expansion up to $280 million. As of September 30, 2023, $162.3 million was outstanding under this facility. The company also raised $21.9 million through its At-the-Market Program (ATM Program) during the quarter.
The Board of Directors has declared consistent monthly dividends, affirming the company's commitment to shareholder returns. For the first quarter of 2024, a total of $0.40 per share will be distributed, reflecting financial stability and consistent income generation capabilities.
Stellus Capital continues to engage in disciplined portfolio management and prudent investment strategies, ensuring sustained growth and value maximization for its investors. For more information on Stellus Capital Investment Corporation, please visit their website.
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