9% Yield, Monthly Payer, Benefits From Rising Rates

Are you familiar with the business development company industry recently? Known as BDC's, these firms lend money to privately held companies, which also have co-sponsors, such as VC groups and hedge funds. This BDC yields 9.59% and pays monthly. The company benefits from rising interest rates - its debt portfolio is 100% floating rate. It is trading at a -2.5% discount to NAV, lower than the BDC industry avg. premium of 1%.

We've covered several BDC's in our weekend articles, and this week we're covering PennantPark Floating Rate Capital Ltd. (NYSE:PFLT), a BDC under the Pennant Park Investment Advisors Group platform. PFLT seeks to make secondary direct, debt, equity, and loan investments. It focuses on companies that are owned by established middle market private equity sponsors with a track record of supporting their portfolio companies. The fund seeks to invest through floating rate loans in private or thinly traded or small market-cap, public middle market companies. It primarily invests in the United States and to a limited extent non-U.S. companies. The fund typically invests between $2 million and $20 million.

Source: Seeking Alpha

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