Alcentra Capital to repay debt, invest in lower-middle-market firms

By Toni Weeks

San Luis Obispo, Calif., March 12 - Alcentra Capital Corp. will conduct its initial public offering of stock, according to an N-2 filing with the Securities and Exchange Commission.

The newly formed specialty finance company operates as a non-diversified, closed-end management investment company. It seeks to generate both current income and capital appreciation primarily by making direct investments in lower middle-market companies in the form of subordinated debt and, to a lesser extent, senior debt and minority equity investments.

In connection with the IPO, Alcentra will acquire substantially all of the assets of BNY Mellon-Alcentra Mezzanine III, LP as well as a portfolio of debt and equity securities held by affiliate Alcentra Group Holdings, Inc. and purchased under a warehouse facility.

The company registered $57.5 million of shares with a 30-day greenshoe in the filing and expects to sell them at $15 per share via underwriter Raymond James & Associates, Inc.

Proceeds will be used to repay in full outstanding debt under the company's bridge facility, which will be incurred in connection with the purchase of the warehouse portfolio, and fund the cash portion of the consideration for the acquisition. The remaining proceeds will be used to invest in portfolio companies consistent with Alcentra's investment guidelines and underwriting standards and for general corporate purposes.

The company applied to list its common shares on the Nasdaq Global Select Market under the symbol "ABDC."

Stockholder fees, management fees and total annual expenses have not yet been determined.

New York-based Alcentra NY, LLC is the investment adviser.

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