CION Investment Corporation, a publicly registered non-traded business development company that manages approximately $1.6 billion in assets, plans to list its shares on a national securities exchange within nine to 18 months, or earlier/later depending on market conditions, according to its 2020 annual report filed with the Securities and Exchange Commission on March 17th.
On Wednesday, the company filed a preliminary proxy statement for its yet-to-be scheduled 2021 annual meeting, where shareholders will be asked to vote on five proposals to amend the company’s charter to more closely align with those of other publicly traded BDCs. If the proposals are approved, they will become effective when the company lists on a national securities exchange.
Shareholders will also vote on an amendment to the investment advisory agreement between the BDC and CION Investment Management, its investment adviser, which will become effective upon a future listing, except for a change to the calculation of the incentive fee paid to the adviser that it is based on net assets rather than “adjusted capital.” If approved, the incentive fee change will be effective regardless of a listing.
Shareholders will also be asked to authorize flexibility for the company, with the board’s approval, to offer and sell shares below net asset value during the next 12 months. As of March 25, 2021, CION’s NAV per share was $7.83 per share.
In August 2020, CION similarly obtained approval from shareholders to issue shares below the then current NAV per share in one or more offerings for a 12-month period, however, the company did not issue any shares below NAV. According to the annual filing, selling shares below NAV would allow the company to access the capital markets in a way that it was previously unable to do as a result of restrictions that, absent shareholder approval, apply to BDCs under the 1940 Act.
In February 2021, CION Investment Corporation closed a $125 million offering of 4.50 percent senior unsecured notes due in 2026. The company plans to use the proceeds to repay debt under its secured financing arrangements.
CION Investment Corporation focuses primarily on senior secured loans to U.S. middle-market companies. Since launching in July 2012, the company raised approximately $1.2 billion in investor equity before closing its follow-on offering in January 2019. CION’s investment portfolio had a fair value of nearly $1.6 billion, as of December 31, 2020.