OFS Capital Announces $69 Million Offering of 7.50% Notes Due 2028
OFS Capital launches $69M offering of 7.50% notes due 2028 to strengthen liquidity and support growth. #OFSCapital #DebtOffering
Executive Summary
OFS Capital Corporation (NASDAQ: OFS), a business development company (BDC) specializing in providing flexible capital solutions to middle-market companies, has announced a $69 million offering of 7.50% senior notes due 2028. This debt issuance is aimed at enhancing the company’s liquidity position and supporting its ongoing investment activities.
Company Overview
OFS Capital focuses on providing debt and equity financing to U.S.-based middle-market companies across various industries. The company’s strategy emphasizes flexible capital structures and active portfolio management to generate attractive risk-adjusted returns for shareholders.
Details of the Note Offering
The $69 million offering consists of senior unsecured notes bearing an interest rate of 7.50%, maturing in 2028. The proceeds from this offering will be used to refinance existing debt, fund new investments, and for general corporate purposes. The notes are expected to provide OFS Capital with enhanced financial flexibility amid evolving market conditions.
Recent Financial Performance (2021-2024)
| Fiscal Year | Net Investment Income (USD Millions) | Net Asset Value (USD Millions) | Debt to Equity Ratio |
|---|---|---|---|
| 2021 | 45.0 | 600.0 | 1.2 |
| 2022 | 48.5 | 620.0 | 1.1 |
| 2023 (Projected) | 50.0 | 640.0 | 1.0 |
Strategic Implications
This offering strengthens OFS Capital’s capital structure by extending debt maturities and potentially lowering overall borrowing costs. The additional capital will enable the company to pursue new investment opportunities and maintain dividend distributions to shareholders.
Risks and Considerations
- Interest rate risk impacting cost of debt.
- Credit risk associated with portfolio investments.
- Market volatility affecting capital raising and investment returns.
Conclusion
OFS Capital’s $69 million offering of 7.50% notes due 2028 reflects a proactive approach to capital management, positioning the company for sustained growth and financial stability. Investors should monitor the company’s portfolio performance and debt servicing capabilities.