Main Street Capital Corporation (NYSE: MAIN) has announced that its non-listed business development company, MSC Income Fund, Inc., has filed a definitive proxy statement with the U.S. Securities and Exchange Commission (SEC) in connection with a potential listing of its shares on a national securities exchange. This move is part of Main Street's efforts to find the best long-term outcome for all MSC Income Fund stakeholders.
The proposed changes detailed in the definitive special proxy statement include a transition of MSC Income Fund's investment strategy and portfolio to focus solely on its private loan investment strategy. This shift is intended to generate an attractive recurring and growing quarterly dividend for shareholders.
The potential listing and related actions are expected to provide several benefits for MSC Income stakeholders, including the opportunity for significant growth through access to additional capital in the public markets, a focus on generating attractive dividends, and a path to full liquidity for existing shareholders who desire such an option.
Furthermore, a listing would offer MSC Income the longer-term opportunity to access additional leverage capacity through a potential future reduction in its minimum asset coverage ratio from 200% to 150%. This reduction, subject to future approval, would allow MSC Income to optimize its leverage profile and shareholder returns while supporting the growth of its investment portfolio.
Upon a listing, MSC Income and its adviser, MSC Adviser I, LLC, would amend their existing investment advisory agreement to better align with MSC Income's transition to focus on its private loan investment strategy, including changes to the base management fee and incentive fee structures.
The proposed transactions and changes outlined in the definitive special proxy statement, including the amendment of MSC Income's investment advisory agreement, have been approved by MSC Income's board of directors but are subject to shareholder approval.
Main Street's CEO, Dwayne L. Hyzak, expressed excitement about the potential changes, stating that they represent significant catalysts for the future growth of MSC Income Fund and strengthen its ability to provide shareholders with favorable total returns. He also highlighted the future benefits for Main Street's asset management business, anticipating growth in management fees as MSC Income Fund executes its growth plans.
As a result of these announcements, the company's shares have moved 0.0% on the market, and are now trading at a price of $48.76. For the full picture, make sure to review Main Street Capital's 8-K report.
