Trinity Capital Inc . (NASDAQ:TRIN), a business development company, has entered into an underwriting agreement for the issuance and sale of $100 million in 7.875% notes due in 2029. The offering, which closed on Friday, also includes an option for underwriters to purchase up to an additional $15 million in notes to cover over-allotments.
The Phoenix-based investment firm stated that the proceeds from the offering would be primarily used to reduce existing debt under a credit arrangement with KeyBank National Association, and potentially to redeem a portion of its outstanding 7.00% notes due in 2025. As of July 11, Trinity Capital had approximately $286.2 million outstanding under its credit agreement and about $152.5 million in 7.00% notes due in 2025.
The newly issued notes, which began interest accrual on July 16, will pay quarterly interest and are set to mature on September 30, 2029. They can be redeemed at the company's discretion on or after September 30, 2026, at par value plus accrued interest.
According to the company, the notes are unsecured and rank equally with Trinity's other unsecured and unsubordinated debt. They are, however, effectively subordinated to any future secured debt and structurally subordinated to obligations of the company's subsidiaries.
The notes are expected to be listed on the Nasdaq Global Select Market under the symbol "TRINI" within 30 days of their issue date.
Trinity Capital also disclosed that its subsidiary, Trinity Capital Adviser LLC, has started serving as an investment adviser to a private credit fund as of June 28, following SEC exemptive relief. The company and a specialty credit manager have committed capital to the fund, with Trinity holding a 16.7% ownership stake.
For the quarter ending June 30, Trinity Capital reported new commitments totaling approximately $289.0 million, with gross investment funding of around $231.0 million. Repayments during the same period amounted to roughly $180.0 million.
This news is based on a press release statement and the 8-K filing with the U.S. Securities and Exchange Commission.
In other recent news, Trinity Capital Inc. has reported strong growth in its first-quarter earnings, with a 30% increase in net investment income to $25.2 million and a rise in quarterly dividend to $0.51 per share. The company's gross fundings amounted to $243 million, allocated across 20 portfolio companies, and assets under management reached $1.6 billion.
Despite a decrease in net asset value per share due to platform growth expenses and unrealized depreciation, Trinity Capital showcased a robust investment pipeline and a commitment to expanding its direct lending platform.
In another development, Trinity Capital has expanded its operations into Europe, appointing Craig Fox, former Managing Director & Head of Fintech at HSBC Innovation Banking, as Managing Director to oversee the expansion. This move is part of the company's strategy to engage with the region's growing venture capital scene and deliver value to its shareholders.
These recent developments highlight Trinity Capital's strategic growth initiatives and consistent low loss rate in their portfolio. The company also maintains a strong liquidity position, with $172 million in liquidity and plans to repay $30 million of debt. Looking ahead, Trinity Capital plans to launch and fund an RIA in the second quarter and has a 5-year growth plan focused on generating fee income and diversifying their portfolio.
InvestingPro Insights
As Trinity Capital Inc. (NASDAQ:TRIN) ventures into the market with its new issuance of notes, investors may find the latest data from InvestingPro particularly insightful. The company's market capitalization stands at a robust $689.24 million, and it boasts a favorable P/E ratio of 8.44, which could signal an attractive valuation to potential investors.
Over the last twelve months as of Q1 2024, Trinity Capital has achieved a remarkable revenue growth of 21.69%, reflecting the firm's capacity to expand its financial footprint in a competitive landscape.
InvestingPro Tips suggest that while Trinity Capital has been profitable over the last twelve months, potential investors should be aware that the company's short-term obligations exceed its liquid assets, which could indicate a liquidity risk.
Moreover, the firm's valuation implies a poor free cash flow yield, which may be a concern for those focused on the company's ability to generate cash after investments. However, for those interested in income-generating investments, Trinity Capital pays a significant dividend, with a yield of 18.64% as of the latest data, which is considerably high for the industry. The company is trading near its 52-week low, which could represent a buying opportunity for value investors.
For readers seeking further analysis and additional InvestingPro Tips, they can explore more at https://www.investing.com/pro/TRIN. There are 5 more tips available, which could provide deeper insights into Trinity Capital's financial health and market position. To access these insights, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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