General Finance to Sell Senior Notes

Leasing company General Finance (GFN) will be sell a new issue of Senior Notes with maturity in 2025.

The company will use the proceeds to redeem a portion of their 8.125% notes due in 2021 (GFNSL) which can be seen here.

The company has a $100/share 9% preferred outstanding (GFNCP) which is redeemable now, but chose to refinance the debt.

The new notes will be unrated.

The preliminary prospectus can be found here.

Investors beware that GFN has shown net income in only 1 of the last 5 years, although free cash has been decent because of the giant sized non cash charge expense of depreciation. The company leases steel containers, mobile offices and other modular products which depreciate fairly rapidly.

GFN has a new presentation out to accompany the new issue.

mcg and Eugene were on top of this one.

14 thoughts on “General Finance to Sell Senior Notes”

  1. General Finance (NASDAQ:GFN) prices an underwritten public offering of $60M in principal amount of 7.875% Senior Notes due 2025.
    Offering expected to close on or about October 27, 2020.
    The company expects to list the notes on the NASDAQ Global Market under the symbol ‘GFNSZ’ and to commence trading within 30 days of the original issue date.
    Company intends to use the net proceeds to redeem a portion of the $77.4M principal amount of its 8.125% Senior Notes due July 2021.
    http://seekingalpha.com/pr/18052987-general-finance-corporation-announces-pricing-of-public-offering-of-7_875-senior-notes-due?source=news_body_link

  2. I’ve been a long term owner of the non rated GFNSL notes, and while this Pasadena based storage rental company isn’t hitting any home runs, their business is doing well enough to pay the bills on time (which is all a note-holder should really care about imo). The smaller Asia Pacific business lines under perform somewhat consistently and are subject to currency risk, while the larger North American business lines do much better. Recently their Texas based oil storage rental business has under performed due to the pandemic driven slow down in North American oil production. I’d be a cautious buyer of these new notes on weakness for a long term hold, but you’ll need to watch them carefully.

  3. Anyone else unable to post in the Sandbox?
    I get a message: Sorry, comments for this item are closed

    Was trying to post this:
    Couple getting hammered:
    RILYP -range: 23.88 low, closed yesterday at 24.35, a recent hi -almost neg2% -not terrible-
    but-
    SAF 25.05 low, HI 26.77 up from yesterday’s 25.72 – about a 6.87% range.
    SAK is up
    Not seeing SACH news.

  4. This is one of my favorite trading/dividend capture companies for both the baby bond and preferred. Both securities fly under the radar.

    1. GFNCP is a good one for trades though you have to be patient. Somebody just dumped it $1 under par I grabbed 200 shares.

      1. Martin, though this sounds like a great idea at first, to me enthusiasm has to be tempered when you factor in price talk of 8% for a 5 year piece of paper to only partially refinance an 8.125% that’s due in 9 months. Then again, I do realize you’re talking about dividend capture and you’re out kind of trade, not owning this sucker longterm and from that point of view, no argument as their being able to be in the mkt at all to refinance certainly is a confidence builder for owning GFNCP…. To be honest, I don’t follow this one at all

        1. I do dividend captures and they have one next week, though GFNCP is more about price movement and playing the spread. It’s not a long term hold but at 9% I’m not in a hurry to sell until i get a good price.

          I’ve had a couple bankruptcies and several busts over the years. It’s the cost of doing business.

          1. I hear you Martin. I lost on Vanguard Natural Resources Preferred (VNRBP) and am losing on Navios Maritime Preferred G. In energy and shipping, if I do dip my toe in the water, it’s with shorter term notes like SBLKZ.

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