Volatile stock to watch: Golub Capital BDC Inc (NASDAQ: GBDC)

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Golub Capital BDC Inc (NASDAQ: GBDC) stock fell 19.63% on April 2nd, 2020 (Source: Google finance) but recovered over 4.3% on April 3rd, 2020 (as of 10:48 am GMT-4; Source: Google finance). The company has recently approved the terms of a transferable rights offering for purchasing the shares of its common stock. Wells Fargo Securities, LLC will act as the Dealer Manager for the offering. The company is undertaking the rights offering as part of strategic decision in order to raise capital that will both boost GBDC’s balance sheet now and create opportunities in the future. The Company will issue to stockholders of record as of 5:00 p.m., New York City time, on April 8, 2020 transferable rights to subscribe for the total of up to 33,451,902 shares of the Company’s common stock. Each record date stockholder will be issued one transferable right for every four shares of the Company’s common stock owned on the record date. The rights entitle each holder to acquire at the subscription price one share of our common stock for every right held (the “Primary Subscription”). The shares is expected to be listed for trading on the Nasdaq Global Select Market under the symbol “GBDCR” with trading expected to begin on or around April 9, 2020. The rights can be exercised at any time during the subscription period, which starts on April 9, 2020, and ends at 5:00 p.m., New York City time, on May 6, 2020, the expiration date, unless the subscription period is extended by the Company (the “Expiration Date”).

Further, Certain affiliates of Golub Capital LLC, which is an affiliate of the investment adviser, GC Advisors LLC (collectively, “Golub Capital”), are intending to over-subscribe and to make a total investment of up to $125 million in shares of the common stock pursuant to exercise of the primary subscription and/or the Over Subscription Privilege. The subscription price for the shares to be issued is according to the rights will be 92.5% of the volume-weighted average of the sales prices of the Company’s shares of common stock on the Nasdaq Global Select Market for the five consecutive trading days ending on the Expiration Date.

On the other hand, at the end of December, 2019, the Company had cash, cash equivalents and foreign currencies of $19.4 million, restricted cash, cash equivalents and foreign currencies of $113.8 million and $2,264.8 million of debt outstanding. For the first fiscal quarter of 2020, the Company had the adjusted Net Income of $47.0 million and Adjusted Net Investment Income of $44.5 million.

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