MCLEAN, VA – Gladstone Capital Corp (NASDAQ:GLAD) has launched an offering of 5,561,275 shares of its 6.25% Series A Cumulative Redeemable Preferred Stock, as per a prospectus supplement filed today. This offering follows the dealer manager agreement with Gladstone Securities, LLC, dated May 31, 2023.
The Maryland-based investment company, specializing in debt and equity financing, filed the supplement to a prospectus dated January 17, 2024, under the Securities Exchange Act of 1934. The legal opinion regarding the securities legality provided by Venable LLP is also filed, ensuring the offering's compliance with applicable laws.
Gladstone Capital's preferred stock, with a par value of $0.001 per share, is now available for sale. This move comes as part of the company's strategy to raise capital for its operations and investments. The preferred stock offering is a common financial strategy for corporations looking to attract investors by offering dividends prioritized over common stock dividends.
The company, with its principal executive offices located at 1521 Westbranch Drive, Suite 100, McLean, Virginia, has a fiscal year-end on September 30. Gladstone Capital Corp has not disclosed the specific use of proceeds from this offering in the filing.
The preferred shares being offered will be listed on The Nasdaq Stock Market LLC under the ticker symbol GLAD. Additionally, the company has 7.75% notes due in 2028, listed under the ticker GLADZ on The Nasdaq Stock Market LLC.
In other recent news, Gladstone Capital Corporation reported strong financial results for the quarter and fiscal year ending September 30, 2024. The company's total interest income slightly increased to $23.4 million, while the annual net investment income grew by 12% to $46.1 million. However, the net investment income for the quarter decreased by 12% to $11 million. Gladstone also announced a significant equity exit from its investment in ARA, which resulted in $63.7 million in proceeds.
In addition, the company announced a supplemental distribution of $0.40 per share in December. Gladstone's net assets increased to $471 million, while maintaining a conservative leverage ratio with debt at 73% of Net Asset Value. The company anticipates an active quarter of new originations and continues to seek attractive financing opportunities in the lower middle market.
These recent developments underline Gladstone's strategic growth and resilience, even amidst a challenging market environment. It's worth noting that the company's focus on lower middle market investments and its conservative leverage approach have been viewed favorably by analysts.
InvestingPro Insights
Gladstone Capital Corp's recent offering of preferred stock aligns with its strong financial position and dividend history. According to InvestingPro data, the company boasts a market capitalization of $598.22 million and an attractive P/E ratio of 6.17, suggesting potential value for investors.
InvestingPro Tips highlight that Gladstone Capital has raised its dividend for 3 consecutive years and has maintained dividend payments for an impressive 24 consecutive years. This track record underscores the company's commitment to shareholder returns, which is particularly relevant given the new preferred stock offering. The current dividend yield stands at a substantial 8.98%, reinforcing the company's appeal to income-focused investors.
The company's financial health is further evidenced by its profitability over the last twelve months and a strong return over the last three months, with a 19.54% price total return. These factors may contribute to investor confidence in the new preferred stock issue.
For readers interested in a deeper analysis, InvestingPro offers 7 additional tips that could provide further insights into Gladstone Capital's investment potential.
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