Solar Capital Ltd. (SLRC) has focused on strengthening its balance sheet through a timely combination of debt issuances with very targeted equity offerings, positioning the company with little need to raise capital this year, says Michael Gross, CEO of Solar Capital Ltd.
“As you know, BDCs are required to pay out substantially all of their income, so the only way for us to grow our balance sheet is through issuing additional equity and debt. Timing our access to the capital market is incredibly critical,” Gross said.
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SLRC spent much of 2012 strengthening their balance sheet for the long term by taking advantage of attractive conditions in the liquid capital markets as well as using their investment-grade ratings from S&P and Fitch to access two additional sources of longer-term capital, Gross says.
“The first was the private insurance company market where we raised $75 million in senior notes from insurance companies early last year. Then we followed up in the fourth quarter by raising $100 million in 30-year unsecured notes at 6.75%…The combination of the debt issuances with very targeted equity offerings, which we did for both Solar Capital and for Solar Senior Capital, have positioned our balance sheets so that essentially we have no need to raise capital in 2013,” Gross said.
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