OFS Capital Prices Baby Bonds

Business development company OFS Capital (NASDAQ:OFS) has priced a new baby bond offering with a coupon of 6.375%.

Of course we hoped for a bit higher (we always hope for a bit higher), but we will be a buyer of these baby bonds as they mature in 2025 and the company has solid financials.  They meet our needs for shorter duration issues.

We will try to write in more detail in the coming days.

The pricing term sheet can be found here.

9 thoughts on “OFS Capital Prices Baby Bonds”

  1. Yes for me, it just got too far ahead of its skies. Speaking of that unloaded about half my ALLY-A at 26.43 today…I just added a smaller 300 shares last week below $26. Following payment will jump to over 8.2%. How much more Libor pain will ALLY endure with this 2 billion plus issue? They can lock in long term somewhere a bit north of 6% I suspect, though it would have to be QDI, I am sure…Understanding Tier 1 and 2 is beyond my scope. But I do know they called ALLY-B , two years ago…Three interest payments above par, is getting pretty dicey for me to hold…..I am buying more short term treasuries with proceeds, to hide some cash for a few months.

      1. Figured you did–I have free subscriptions for moodys, s&p and fitch just so I can review credit ratings—not usually allowed any deep detail.

        1. I have trouble enough digesting the one or two page synopsis the way it is Tim. I would get way over my skies if I got deeper into any more financial morass than that, lol….BYW..Hated to but I unloaded all my GDL-C shares at $51.92 (give or take a penny, I forgot already) . That put value has little use $2 over par… ALLY-A performing like a rock star today…Glad I added to an alreay overloaded positon under $26 last week.

          1. Grid–have considered the same with my 300 GDL-C shares–it has been a good ride and I was looking forward to the .50 divi–guess we got it (and a couple more) kind of quick. May let mine go and look to re-enter later.

  2. Yes I noticed that and just basically ignore. On the other hand I pretty much ignore moodys and s&p as well. I have my own standards and they shift–depends on the macro environment.

    1. For me, I do find Moodys synopsis summaries very informative, as it gives me valuable info that helps me understand where they reach the conclusion of their stated ratings. Predicting the future is hard. For example, the fact they keep an eye on NS, allows me to be comfortable in stretching my size on NSS. And of course a rising Libor tethered to payment and semi soft backside “put” on the issue being past call also helps.

  3. Tim, I looked at the prospectus and saw good ol Egan Jones did a rating….They make me laugh every time they rate something. While S&P has rating options basically from triple A to triple C, Egan seems to only have the option of A or A, lol. Its amazing some of the companies they had rated A recently. Im not saying this company is solid, I am just musing on Egan. They crack me up!

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