Seeking Alpha

Nicholas Marshi's  Instablog

Nicholas Marshi
Send Message
Nicholas Marshi is the Chief Investment Officer of Southland Capital Management (SCM). The Company is a Registered Investment Adviser in Santa Monica, California. SCM's principal expertise is in the area of publicly traded leveraged finance to U.S. private companies, including the Business... More
My company:
Southland Capital Management, LLC
My blog:
BDC Reporter
  • THL Credit Withdraws Application For SBIC License 0 comments
    Jan 18, 2013 9:52 AM | about stocks: TCRD

    January 18, 2013: Two days ago, mezzanine-focused BDC THL Credit (NASDAQ:TCRD) announced it's decision to withdraw it's "application for a license from the Small Business Administration to operate a subsidiary as a small business investment company".

    Management explained that the Company was doing very well raising term money and new equity capital and increasing it's Revolver limits.

    Still, the application had been submitted back in the spring of 2011. That begs the question why the SBIC had not come through in over 18 months for TCRD while seemingly approving other licenses for new and existing BDC applicants (and others) left, right and center. Admittedly during the last 18 months the parent company of the BDC has expanded it's asset management footprint and may have been focused elsewhere than the time consuming SBIC process. The press release does not really tell us what happened here.

    Looking at the big picture, we have mixed feelings: On the one hand, we were never convinced that the SBIC program, with it's requirement that loans be directed to smaller borrower entities, was a perfect fit for TCRD. On the other hand, this still means the Company has one less string on it's financing bow. That will not have any impact on results in the short or medium term. Longer term,though, the SBIC borrowing rates are so low (as low as 3%), and so favorable from a repayment standpoint (ten year money !) and the assets do not even count (in most cases) against the 200% asset coverage test, that we can't help feeling the Company may have let an opportunity slip.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: BDC, Dividends Income Stocks: TCRD
Back To Nicholas Marshi's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.