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Offering Price Drop for a Non-Traded BDC

Non-traded BDC, Corporate Capital Trust (CCT), announced that it has lowered its public offering price per share after a decrease in its net asset value per share.

Formerly offered at $11.30 per share, the offering price is now $11.00 per share, a decrease that is effective for share subscriptions that were accepted after December 16, 2014. This is CCT’s first share price decrease after nine consecutive increases.

Externally managed by CNL and KKR, CCT’s portfolio is approximately 75% composed of senior debt and approximately 19% made up of subordinated debt securities. Through September 30, 2014, CCT had raised over $2.16 billion in its public offering and had total assets valued at $2.4 billion, including investment interests in 112 companies.

According to the company, the decrease of 2.7% in the public offering price is due to a broad price decline in the high yield bond and leveraged loan markets. It also attributes the price lowering to supply and demand dynamics in the leveraged loan market as well as oil price declines and low seasonal trading volume.

“Over the past two quarters, there has been significant volatility in the credit markets,” commented Thomas Sittema, CEO of Corporate Capital Trust. He continued, “While Corporate Capital Trust is not immune to market movement, we believe short-term technical volatility offers investors with long-term perspective great fundamental investment opportunities. We believe that our pipeline remains robust, and our conservative use of debt enables us to deploy capital very efficiently through this period.”

In October, the company issued a tender offer to repurchase up to 4,000,694 shares of its common stock at $10.06 per share and it was hinted at in a job post earlier this month that CCT may be getting ready for a public listing.

In addition to lowering the offering price per share, CCT’s board also declared weekly distributions through January 27, 2015. The recalculated annualized distribution rate with the new offering price will change from 7.12% to 7.32%.