American Capital's $750M Credit Facility Enhances Flexibility - Analyst Blog

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Maryland based private equity firm and global asset manager American Capital, Ltd. ( ACAS ) announced the closure of a senior secured revolving credit facility worth $750 million. The facility, which has been provided by Bank of America Corp. ( BAC ), is set to mature in June 2016 and carries interest of LIBOR plus 1.60%.

Management stated that the new revolving credit facility enhances the company's financial flexibility to invest in senior secured floating rate loans. This may also boost net operating income, if utilized properly.

Notably, during first-quarter 2014, American Capital recorded $442 million of cash proceeds from the realization of portfolio investments and made new investments worth $321 million including senior floating rate loans of $199 million.

As of Mar 31, 2014, American Capital's total debt was $790 million while cash and cash equivalents stood at $468 million.

We believe the company will proceed with strong investment opportunities this year as it is expected to utilize capital for investing in new companies and at the same time provide additional finance to the existing ones.

American Capital currently carries a Zacks Rank #3 (Hold). Some better ranked stocks in this space include Fifth Street Senior Floating Rate Corp. ( FSFR ) and Saratoga Investment Corp. ( SAR ). Both the stocks sport a Zacks Rank #1 (Strong Buy).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ACAS , FSFR , BAC , SAR

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