Yesterday, 2:19 PM
- "We believe that KCAP Financial (NASDAQ:KCAP) is not well understood by investors and KCAP shares are materially undervalued," says DG Capital Management, disclosing a 3.1% stake in the company, and urging the board to consider a sale of the company, or a sale of certain assets to raise cash with which to buy back stock.
- "We believe that a sale of the entire business to another Business Development Company ("BDC") would likely yield the highest return for shareholders," says DG.
- Up more than 5% on the news earlier today, KCAP is now ahead 2.1% for the session.
Mon, Sep. 28, 11:16 AM
- A weekend WSJ story highlighting growing spreads in the high-yield market and the solvency of commodity giant Glencore being called into question are possibly teaming to spook investors in BDCs today.
- On Friday, Altice sold $4.8B of junk bonds to fund its purchase of Cablevision, well less than the $6.3B it hoped to sell. The 10-year paper on the deal priced to yield 10.875%, more than 100 bps higher than what had been initially expected. Olin on Friday sold $1.2B of paper to fund an acquisition. It had hoped to sell $1.5B. For the privilege, Olin is paying 10% for the 10-year notes, up from 7% expected earlier this month.
- Prospect Capital (PSEC -4.2%), Fifth Street (FSC -3%), Ares (ARCC -3.2%), FS Investment (FSIC -2.3%), Main Street (MAIN -3.4%), Triangle (TCAP -5.6%), Medley (MCC -2.5%), KCAP (KCAP -3.7%), Gladstone (GLAD -3.9%), WhiteHorse (WHF -5.6%).
- ETFs: BDCL, BDCS, BIZD, FGB
Tue, Sep. 22, 4:08 PM
Wed, Sep. 16, 11:35 AM
- KCAP's closing price on Friday of $4.73 was a 32% discount to the most recent NAV per share of $6.96, writes Philip Mause. The current dividend of $0.21 per share leads to an annualized yield of 17.5%, leaving plenty of room for a substantial yield even if the payout is cut.
- Turning to operations, asset performance has been fine, with just one loan representing 0.05% of all assets in default. No loans made since 2008 are in default, meaning the company's new lending standards are paying off.
- Why the discount? The biggest factor could be KCAP coming up against its leverage limits (BDCs can have debt no more than 50% of total asset value). Scaling back on leverage, says Mause, could give the company more flexibility.
- The stock's higher by 4.9% on the session.
Thu, Aug. 27, 2:57 PM
- Prospect Capital is higher by 7.4% after beating earnings estimates and reporting a slight increase in NAV, and also helping is a near-10% jump in the price of oil.
- Ares Capital (ARCC +2.5%), Triangle Capital (TCAP +1.8%), PennantPark Investment (PNNT +5.4%), Medley Capital (MCC +3.2%), KCAP Financial (KCAP +3.1%), OHA Investment (OHAI +2.2%), Gladstone Capital (GLAD +4.6%).
- ETFs: BDCL, BDCS, BIZD, FGB
Thu, Aug. 6, 11:51 AM
- Q2 net investment income of $5.8M or $0.16 per share vs. $6.5M and $0.18 in Q1. Dividend was $0.21.
- Net asset value per share of $6.96 slips from $7.16 in Q1. The current stock price is $5.01.
- CEO Dayl Pearson notes a "moderation" in new deal activity from Q1, but says the company maintains a healthy pipeline.
- Previously: KCAP Financial misses by $0.02, misses on total investment income (Aug. 5)
- KCAP -2.9%
Wed, Aug. 5, 5:02 PM
Fri, Jul. 24, 3:01 PM
- Just a 1% decline in the major averages (which are being helped by some high-profile earnings moves) is masking far greater carnage in a number of other sectors, notably healthcare (XLV -2.5%) and energy (XLE -2%).
- Business development companies and mortgage REITs are being socked again as well, suggesting the worry may go beyond interest rates and to credit in general, especially as commodity prices continue to tumble - to pick one, crude oil at $48.06 per barrel is at its lowest price in about four months.
- Among BDCs: Hercules Technology Growth (HTGC -4.2%), Triangle Capital (TCAP -3.3%), PennantPark Investment (PNNT -5.4%), Prospect Capital (PSEC -1.4%), Main Street Capital (MAIN -2.8%), TICC Capital (TICC -2.4%), KCAP Financial (KCAP -2.6%), THL Credit (TCRD -2.7%), FS Investment (FSIC -1.8%).
- Among mREITs: Armour Residential (ARR -3.1%), Two Harbors (TWO -0.9%), CYS Investments (CYS -2%), Invesco Mortgage (IVR -1.5%), Capstead Mortgage (CMO -1.2%), Apollo Residential (AMTG -2.6%), Arlington Asset (AI -3.7%), American Capital Mortgage (MTGE -0.9%), Orchid Island (ORC -5.8%).
- MReit ETFs: MORL, REM, MORT, LMBS
- BDC ETFs: BDCL, BDCS, BIZD, FGB
Thu, May 7, 9:40 AM
- Net investment income of $6.5M or $0.18 per share vs. $4.5M and $0.13 one year ago. Dividend is $0.21.
- NAV per share of $7.16 up from $6.94 at start of year.
- Investment income from investments in CLO fund securities of $4.6M up 45% Y/Y.
- The asset management unit priced Catamaran CLO 2015-1 in Q1, and the $464M deal closed on May 5.
- Previously: KCAP Financial beats by $0.03 (May 6)
- KCAP +2.5%
Wed, May 6, 4:58 PM
Wed, May 6, 12:42 PM
- What suspiciously looks like the cracking of a major government debt bubble in Europe continues to affect the U.S., where the 10-year Treasury yield is up five more basis points today to 2.24% - its highest level of 2015.
- German 10-year yields are up another 7 bps to 0.59% - two weeks ago, they were 0.05%.
- Italian and Spanish 10-year yields have now about doubled since mid-March, but are still under 2%.
- Income favorites have struggled as rates have gone higher and the BDCs are particularly hard-hit today: Prospect Capital (PSEC -2.5%), Ares Capital (ARCC -1.6%), FS Investment (FSIC -1.3%), Main Street (MAIN -1.4%), Apollo Investment (AINV -3.6%), Triangle (TCAP -2.1%), PennantPark Investment (PNNT -1.4%), KCAP Financial (KCAP -1.5%).
- Earlier, Prospect Capital declared dividends of $0.083 per share for May, June, July, and August - inline with previous.
- ETFs: BDCL, BDCS, BIZD
Tue, Mar. 31, 10:56 AM
- 2014 net investment income of $20.1M or $0.59 per share vs. $19.9M and $0.62 in 2013 (restated).
- Taxable distribution income of $0.78 per share vs. $0.70 (restated).
- Net asset value of $6.94 per share vs. $7.51 (no effect from restatement).
- 2013 total investment income restated of $39.18M vs. $48.27M originally reported.
- Quarterly distribution was $0.25 per share at the end of 2014, and has since been cut to $0.21.
- KCAP -3.7%
Mon, Mar. 30, 11:25 PM
Wed, Mar. 25, 1:16 PM
- The Q1 quarterly distribution of $0.21 per share stands against the previous $0.25 payout.
- Previously: KCAP Financial declares $0.21 dividend (March 24)
- The company one week ago announced a delay in the filing of its Q4 results and annual report after identifying an error in its accounting for NII from equity investments in CLOs, though NAV, EPS, and distributable income will not be impacted by the correction of the error.
- KCAP -4.6%
Tue, Mar. 24, 5:18 PM
Tue, Jan. 6, 2:11 PM
- These income producers might typically enjoy the big run lower in interest rates (the 10-year yield is all the way down to 1.94%), but it's coming alongside a continued plunge in oil (now all the way down to $47.61).
- ETFs: BDCL, BDCS, BIZD
- Individual names: Fifth Street Finance (FSC -2.1%), Ares Capital (ARCC -1%), FS Investment (FSIC -1.6%), Main Street Capital (MAIN -2.6%), PennantPark Investment (PNNT -3.2%), TCP Capital (TCPC -2.9%), KCAP Financial (KCAP -1.6%).
- Notably higher for a 2nd straight day is OHA Investment (OHAI +1.9%) after SA Pro's Cahaba Research on Monday morning made the case for buying this busted BDC at a greater than 40% discount to book value.
KCAP vs. ETF Alternatives
KCAP Financial Inc is an internally managed closed-end investment company. The Company originates, structures and invests in senior secured term loans, mezzanine debt and privately-held middle market companies.
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