Gladstone Capital (NASDAQ:GLAD) Corporation (NASDAQ:GLAD), a business development company, has expanded its credit facility by $25 million, according to a filing with the Securities and Exchange Commission (SEC) on Thursday. The amendment to its credit agreement was carried out through its wholly-owned subsidiary, Gladstone Business Loan, LLC.
The newly amended credit arrangement involves KeyBank National Association, serving as the administrative agent, lead arranger, and lender, with the addition of First-Citizens Bank & Trust Company as a new managing agent. The credit facility, which now includes an increased commitment, features customary covenants, terms, and default events, alongside borrowing constraints that are based on collateral tests appropriate for a facility of its scale.
This credit facility amendment, referred to as Amendment No. 7, is part of the company's Sixth Amended and Restated Credit Agreement. The increased financial flexibility comes with standard fees and expenses for the services performed by KeyBank and other lenders in connection with the credit facility.
Gladstone Capital Corporation, based in McLean, Virginia, is known for providing financing solutions to small and medium-sized businesses. The company's stock is traded on The Nasdaq Stock Market under the ticker symbol GLAD, and it also has notes due in 2028 listed as GLADZ.
The SEC filing did not disclose specific plans for the use of the additional funds, but the expansion of the credit facility could suggest a strategic move to support the company's growth initiatives or to strengthen its lending capacity.
The details of the credit agreement amendment are outlined in Exhibit 10.1 of the SEC filing, which investors and interested parties can refer to for more comprehensive information. The announcement is based on the company's statement in the SEC filing and does not include any marketing language or speculative commentary on the potential impact of the credit facility expansion.
In other recent news, Gladstone Capital Corporation has reported its Q2 results, maintaining steady performance and dividend growth. The company announced a 1 for 2 reverse stock split and increased its monthly distributions, indicating confidence in its future. Despite a slight decrease in net investment income, total interest income rose by 3% to $23.7 million.
The company funded $45 million in the first quarter, with two-thirds as add-ons to existing investments. Senior debt remains the dominant component of the investment portfolio, making up 71% of the total. The company’s leverage is just below 89% of NAV.
Among the recent developments, Gladstone Capital has shown a focus on growth opportunities and capital redeployment. The company is optimistic about a new product line launch expected in mid-summer and increased fall bookings. Additionally, a recent acquisition in the elevator repair business indicates potential growth. Despite these positive developments, the company experienced a decline in net investment income and loan spread compression in the upper middle market.
InvestingPro Insights
Following the announcement of Gladstone Capital Corporation's (NASDAQ:GLAD) credit facility expansion, a closer look at the company's financial health through InvestingPro data and tips reveals noteworthy aspects for investors. Gladstone Capital boasts a solid market capitalization of $502.96 million and an attractive P/E ratio of 6.92, signaling a potentially undervalued stock in comparison to earnings. The company's revenue growth is also impressive, with a 34.81% increase over the last twelve months as of Q2 2024, and a quarterly revenue growth of 16.71% in Q2 2024.
Investors might find the company's dividend policy particularly appealing; Gladstone Capital has maintained dividend payments for 24 consecutive years, which is reflective of its consistent performance and commitment to shareholder returns. The current dividend yield stands at 8.62%, a significant return on investment. Additionally, the company's liquid assets surpass its short-term obligations, indicating a strong liquidity position that can support ongoing operations and dividend payouts.
For those interested in further analysis and additional InvestingPro Tips, the platform lists more insights that can help in making informed decisions. For example, while the company is trading near its 52-week high, which suggests a positive market sentiment, one should consider the valuation that implies a poor free cash flow yield. To access these and other valuable tips, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. Note that there are 5 additional InvestingPro Tips available for Gladstone Capital, which could further guide investment choices.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.