BDCA May Target Institutional Investors
Business Development Corporation of America, a publicly registered non-traded BDC advised by an affiliate of Benefit Street Partners, will hold its annual meeting of stockholders on May 19th at 10:00 a.m. EST at the Harmonie Club in New York City. Shareholders of record as of March 15th will be eligible to vote at the meeting.
At the meeting, stockholders will be asked to authorize BDCA to sell or issue up to 25 percent of its outstanding common stock at a price below the company’s then-current net asset value per share. The company said that the proposal could provide flexibility to raise capital from institutional investors and enhance its prospects for a favorable liquidity event in the future.
BDCA said that although it has no immediate plans to sell shares at a discount, the option could provide a safety net in certain circumstances, and may provide opportunities to invest at attractive risk-adjusted returns during periods of disruption, uncertainty, and volatility in the capital markets. The company noted that several traded and non-traded BDC have similar proposals in their proxies.
BDCA is also seeking to amend its charter to remove the remaining provisions published by the North American Securities Administrators Association in order to align its charter with that of listed BDCs. The company said that it is no longer required to include the provisions since the offering is now closed and such charter amendments are the first step in preparing the company to list on a securities exchange.
Shareholders will vote on seven board nominees including chairman Richard Byrne and independent directors Lee Hillman, Ronald Kramer, Leslie Michelson, Randolph Read, Edward Rendell, and Dennis Schaney.
Shareholders will also vote for the following proposals: to provide a classified board of directors; to provide that directors may only be removed for cause with a two-thirds vote; to limit a stockholder’s right to inspect company books and records if the board determines that the request is improper; to permit stockholders to take action without a meeting by consent; and to increase the votes required to change the charter, the composition of the board, and to liquidate the company.
BDCA primarily invests in senior secured loans, and to a lesser extent, mezzanine loans, unsecured loans and equity of private middle-market companies. The company commenced its initial public offering in January 2011 and raised $1.9 billion before closing the offering in April 2015. As of 4Q16, BDCA had $2.2 billion in investments, according to Summit Investment Research.
