Sound Point Meridian Capital Announces Offering of Series A Preferred Shares

Rhea-AI Summary

Sound Point Meridian Capital (NYSE: SPMC) has announced a public offering of Series A Preferred Shares, rated 'BBB' by Egan-Jones Ratings Company. The shares will be listed on the NYSE under ticker symbol 'SPMA' within 30 days of issuance. Oppenheimer & Co, B. Riley Securities, Janney Montgomery Scott, Lucid Capital Markets, and Piper Sandler are joint bookrunners, with Clear Street and InspereX as co-managers. The company will grant underwriters a 30-day option to purchase additional shares. Terms will be determined through negotiations between the company and underwriters.

Positive

• BBB rating from Egan-Jones Ratings Company indicates investment-grade status
• NYSE listing provides enhanced liquidity and visibility
• Multiple established financial institutions participating as underwriters

Negative

• Potential dilution of existing shareholders through new share issuance
• Final terms and pricing not yet determined, creating uncertainty
• Additional shares may be issued through underwriters' 30-day option

Insights

Financial Analyst

This Series A Preferred Share offering marks a significant capital raising initiative for Sound Point Meridian Capital. The BBB rating from Egan-Jones suggests moderate credit quality, positioning these shares as a potentially attractive fixed-income investment. The involvement of multiple prominent underwriters including Oppenheimer, B. Riley Securities and Piper Sandler indicates strong institutional backing.

The structure as a closed-end fund focused on CLO equity and junior debt tranches is particularly noteworthy in the current market environment. CLOs typically offer higher yields than traditional fixed-income investments, though they carry increased complexity and risk. The pending NYSE listing under ticker SPMA should provide good liquidity for investors. However, without specific pricing and size details announced, investors should await the final terms to evaluate the risk-reward proposition.

NEW YORK--(BUSINESS WIRE)-- Sound Point Meridian Capital, Inc. (the “Company”) (NYSE: SPMC), an externally managed closed-end fund focused on primarily investing in equity and junior debt tranches of collateralized loan obligations, has commenced an underwritten public offering of its Series A Preferred Shares. Certain financial and other terms of the Series A Preferred Shares are to be determined by negotiations between the Company and the underwriters. The Series A Preferred Shares are rated ‘BBB’ by Egan-Jones Ratings Company, an independent rating agency. In addition, the Company plans to grant the underwriters a 30-day option to purchase additional Series A Preferred Shares on the same terms and conditions. The Series A Preferred Shares are expected to be listed on the New York Stock Exchange and to trade thereon within 30 days of the original issue date under the ticker symbol “SPMA”.

Oppenheimer & Co. Inc., B. Riley Securities, Inc., Janney Montgomery Scott LLC, Lucid Capital Markets, LLC, and Piper Sandler & Co. are acting as joint bookrunners for the offering. Clear Street LLC and InspereX LLC are serving as co-managers for the offering.

Investors should consider the Company’s investment objectives, risks, charges, and expenses carefully before investing. The preliminary prospectus dated October 24, 2024, which has been filed with the Securities and Exchange Commission (“SEC”), contains this and other information about the Company and should be read carefully before investing. The information in the preliminary prospectus and this press release is not complete and may be changed. The preliminary prospectus and this press release are not offers to sell these securities and are not soliciting an offer to buy these securities in any state where such offer or sale is not permitted.

A registration statement relating to these securities is on file with, but has not yet been declared effective by, the SEC.

The offering may be made only by means of a prospectus, copies of which may be obtained by writing 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 FixedIncomeProspectus@opco.com. Copies may also be obtained by visiting EDGAR on the SEC’s website at www.sec.gov.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy the Series A Preferred Shares, nor shall there be any sale of Series A Preferred Shares in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such jurisdiction.

Egan-Jones Ratings Company is a nationally recognized statistical rating organization (NRSRO). A security rating is not a recommendation to buy, sell or hold securities, and any such rating may be subject to revision or withdrawal at any time by the applicable rating agency.

ABOUT THE COMPANY

The Company is an externally managed, non-diversified closed-end management investment company. The Company’s investment objective is to generate high current income, with a secondary objective to generate capital appreciation, by investing primarily in third-party collateralized loan obligation (“CLO”) equity and mezzanine tranches of predominately U.S. dollar-denominated CLOs backed by corporate leveraged loans issued primarily to U.S. obligors. The Company is externally managed and advised by Sound Point Meridian Management Company, LLC, a Delaware limited liability company. The Company’s public filings are available free of charge by writing to the Company at 375 Park Avenue, 34th Floor, New York, New York 10152, Attention: Investor Relations, or by telephone at (833) 217-6665.

FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the prospectus and the Company’s other filings with the SEC. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

NOT FDIC INSURED ● NO BANK GUARANTEE ● MAY LOSE VALUE

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030622556/en/

Investor Relations:

Garrett Edson – ICR; Julie Smith – Sound Point Capital

(833) 217-6665

ir@soundpointmeridiancap.com

www.soundpointmeridiancap.com

Source: Sound Point Meridian Capital, Inc.

FAQ

What is the ticker symbol for Sound Point Meridian Capital's new Series A Preferred Shares?

The Series A Preferred Shares will trade on the NYSE under the ticker symbol 'SPMA' within 30 days of the original issue date.

What is the credit rating of SPMC's Series A Preferred Shares?

The Series A Preferred Shares have received a 'BBB' rating from Egan-Jones Ratings Company.

Who are the joint bookrunners for SPMC's Series A Preferred Shares offering?

The joint bookrunners are Oppenheimer & Co. Inc., B. Riley Securities, Inc., Janney Montgomery Scott , Lucid Capital Markets, , and Piper Sandler & Co.

When was the preliminary prospectus for SPMC's Series A Preferred Shares filed?

The preliminary prospectus was filed with the SEC on October 24, 2024.