ARC’s BDCA Gets BBB+ from Egan-Jones Ratings Co.

Egan-Jones Ratings Co. has initiated coverage on New York City-based Business Development Corporation of America, a non-traded business development company sponsored by AR Capital, with an investment grade rating of BBB+ on BDCA’s outstanding $100 million aggregate principal amount of 6 percent senior unsecured notes due September 2020.

According to the firm’s chairman and CEO, Peter M. Budko, this additional investment grade—following the receipt of an investment grade rating of BBB from Kroll Bond Rating Agency in September—provides “further confirmation of the credit quality of BDCA’s portfolio, its management team and our conservative approach.”

KBRA had affirmed its investment grade rating of BBB with stable outlook on BDCA and the notes on September 25, 2015.

Robert K. Grunewald, president, COO and CIO of BDCA, adds, “With the receipt of an additional investment grade rating from Egan-Jones, we will have greater ability to enhance BDCA’s capital structure for the benefit of its investors.”

BDCA invests in both the debt and equity of private middle market companies. BDCA is closed to new investments.

As The DI Wire previously reported in September, BDCA entered into a purchase agreement relating to the company’s sale of $100 million aggregate principal amount of its 6 percent fixed rate senior notes due 2020 in a private placement and for initial resale to qualified institutional buyers. The purchasers were Sandler O’Neill & Partners LP, Keefe, Bruyette & Woods Inc., UBS Securities, William Blair & Company LLC, and Ladenburg Thalmann & Co. Inc. The net proceeds from the sale of the notes was approximately $97.9 million, after deducting initial purchasers’ discounts and commissions of approximately $1.6 million payable by the company and estimated offering expenses of approximately $500,000. The company intends to use the net proceeds to make investments in accordance with their investment objectives and for general corporate purposes.