A Great Income Play in a Rising-Interest-Rate Environment. In today’s market, one of the things that investors should keep an eye on is rising interest rates. For the greater part of the last decade, interest rates in the U.S. were kept at artificially low levels. But, more recently, they started to increase again. When so many businesses have gotten comfortable with the ultra-low-rate environment, there have been concerns about whether the U.S. economy can handle higher interest rates...
Today, I’m going to show you a company that would not only survive, but prosper in a rising interest rate environment: Garrison Capital Inc (NASDAQ:GARS). Headquartered in New York City, Garrison Capital Inc is a closed-end investment company structured as a business development company (BDC). Garrison was founded to make debt and equity investments in middle-market companies in the U.S., but most recently, its focus has been on first lien debt. By the end of the second quarter of 2017, 97.4% of the company’s portfolio was invested in first lien debt. This means that if there’s any type of collateral used to back the debt, Garrison will be the first in line to get paid in the case of default.
Source: Income Investors
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