As expected BDC Hercules Capital has priced their new baby bonds with a low coupon of 5.25%.
The most attractive item of these baby bonds is the maturity that will occur in 2025.
Hercules is a larger business development company focusing on technology startups and is a quality company. Regardless of the quality of the company at a 5.25% coupon and 7 years to maturity we have no interest. Low coupon issues have not traded well in the last year and there is no reason to own this issue at the issue price.