THL Credit Prices Baby Bonds

Business development company THL Credit (NASDAQ:TRCD) has priced their new baby bonds with a coupon of 6.125%.

They are offering 2 million shares with another 300,000 reserved for overallotment.

All of the terms are normal–quarterly interest payments, with an optional redemption starting on October 30, 2021 with maturity on October 30, 2023.

There will be no OTC Grey market trading–the issue will traded on the NYSE under the permanent ticker of TCRW within the next 10 days or so.

The pricing term sheet can be seen here,

4 thoughts on “THL Credit Prices Baby Bonds”

  1. The 2 outstanding issues are both 6.75% and closed yesterday almost exactly at stripped par. And the new issue is priced lower by 60+ bp. Perhaps the old issues are pinned to par by their call dates but 6.125 still strikes me as very low.

    Will see where it trades.

    1. I’m not familiar with the company, but my first reaction was that the 2 outstanding issues seem to offer a nice yield for a relatively short term, reducing the risk of rising interest rates. But when I look at the common, I see it is yielding over 13%, which tells me that the market likely thinks this is a risky company in our current economy, and things might get ugly in a recession. Do you have any thoughts on the credit risk here?

      1. Oops. I took my yield info from yahoo. I see that the most recent dividend would imply a forward yield closer to 6.8%.

      2. This is not a very big company. Nor is it making obscene profits. I own both outstanding issues in small amounts. I’m expecting them to be called. If I can pick up the new issue at a 24.50 or so I am probably a buyer.

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