Medley Capital Corp. (MCC), an investment firm that makes direct loans to private companies, raised $133 million in its initial public offering.
The closed-end investment company sold 10.3 million shares at $12 each through its underwriters, according to the company’s statement today. New York-based Medley Capital also sold 833,333 shares directly to affiliates at the same price. The company will invest the proceeds in its portfolio companies, its filing with the Securities and Exchange Commission showed. The shares gained 1.2 percent to close at $12.14 in New York Stock Exchange trading.
The IPO follows San Diego-based American Assets Trust Inc.’s (AAT) $648 million offering. Barclays Plc of London estimates U.S. companies will raise $50 billion this year, an increase of 34 percent from 2010, after the Standard & Poor’s 500 Index (SPX) recovered all its losses spurred by the September 2008 collapse of Lehman Brothers Holdings Inc.
The company makes secured loans to companies with enterprise or asset values between $25 million and $250 million in North America, according to its prospectus.
It also selectively makes subordinated debt and equity investments in some of those borrowers and aims to deliver total returns of 15 percent over time to investors in its portfolio of companies, the SEC filing said. Since 2003, funds affiliated with Medley Capital have delivered a total average annual return of 14.8 percent, according to the filing.
Medley Capital currently has six portfolio companies, including Allied Cash Holding LLC, a Miami-based payday lender, and Bennu Glass Inc., which owns and operates a glass bottling facility in Kalama, Washington, according to its filing. The weighted average yield to maturity for the portfolio of loans to those companies was approximately 14.6 percent as of Sept. 30.
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