Gladstone Capital Prices Baby Bonds

Business development company, Gladstone Capital (NASDAQ:GLAD) has priced a new baby bond issue with a coupon of 6.125%.  This issue has a maturity date in 2023.  They will sell 2 million shares with another 300,000 available for overallotment.

The new issue will pay quarterly interest payments and will trade under the permanent ticker of GLADD when it begins to trade in the next week or 2.  Being that it is debt it is unlikely to trade on the OTC Grey market prior to permanent exchange trading.

The pricing term sheet can be found here.

The company does have a ‘term’ preferred outstanding (NASDAQ:GLADN) with a coupon of 6% which has a mandatory redemption in 2024.

It is likely we will buy a little of the new debt issue.

8 thoughts on “Gladstone Capital Prices Baby Bonds”

  1. Hello guys, quick one for you. What ratios you actually calculate to tale a decision when investing in Baby bonds?

  2. If this one approaches 6.5%, I will most likely buy this one. I’ve done well with the Glads and the Gains over the years. It would really be nice if it were a monthly but I will buy it anyway!

  3. Given that I believe the Fed forecast is what they intend on doing (which is 3-4 more rate hikes), I am looking for a minimum of 6.5% for any new investment. In my view 3-4 more rate hikes brings the 10 year bond of 4% – 4.25% unless the yield curve inverts. Trying to stay at least 1.5 times the projected 10 year treasury yield.

    My own personal belief is that kind of interest rate shock will cause an economic slowdown and result in future interest rate cuts.

    Given that the safety margin has been cut to 150% for Gladstone, I will likely pass. But if I can get the yield in the 6.5% – 7.0% range, maybe

    1. The annualized increase in hourly wages announced Friday was 3.1%. The social security increases announced for 2019 is 2.8%. I think this adds fuel to the fed forecast and believe that the fed neutral rate is 3% to 3.25%.

      1. Hi SteveA–I haven’t checked them all so no I am not aware of a list–maybe it is a project for the next week or so.

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