Sierra Income Corporation, a non-traded business development company, has suspended its distribution reinvestment plan in connection with the proposed merger with Barings BDC Inc. (NYSE: BBDC), a publicly traded BDC.
As a result, beginning with the Sierra’s first distribution following the September 2021 distribution, any distributions declared by the company will be paid in cash to all stockholders unless and until the DRIP is reinstated. The company suspended its share repurchase program, as well as repurchases related to death and disability, at the beginning of September.
As reported last week, Sierra announced plans to merge into Barings BDC to create a combined company with approximately $2.2 billion of investments. The transaction is expected to close in the first quarter of 2022 with the approval of both companies’ shareholders.
Sierra invests primarily in first lien senior secured debt, second lien secured debt and, to a lesser extent, subordinated debt of middle market companies in a range of industries with annual revenue between $50 million and $1 billion. The company oversees a portfolio of investments with a fair value of $631.4 million as of June 30, 2021.