Solar Capital Sees Lower Investment Income; Cuts Dividend; Stock Down

(RTTNews) - Solar Capital Ltd.(SLRC), a closed-end investment company, Wednesday said it intends to monetize its second lien loan to DS Waters of America, Inc. and its preferred investments in DSW Holding Company. The company also expects its investment in Midcap Financial Intermediate Holdings to be redeemed. The total proceeds expected from these amount to nearly $237 million

Pending monetizations and reinvestments of these, the company sees significantly reduced investment income in the near-term, it said in a statement.  Consequently, it also reduced quarterly dividend to $0.40 per share, starting with the third quarter.  In the pre-market trading, shares of Solar Capital were trading down more than 11 %.

The company now expects net investment income to be in the range of $0.41 to $0.43 per share for the quarter ended June 30. Net asset value per share at June 30 is also expected to be in the range of $22.35 to $22.40.

Solar Capital Ltd. said it expects to receive about $150 million for its second lien loan to DS Waters of America, Inc. and its preferred investments in DSW Holding Company,  pursuant to a definitive sale agreement, which is expected to close in 90 days. Also, the company said that its received notice that its investment in Midcap Financial Intermediate Holdings, LLC will be redeemed at a premium to par for $87 million.   The company said the third-quarter dividend will be paid on October 2 to stockholders of record on September 19.