Monroe Capital to Acquire Loan Portfolio With IPO Proceeds
Monroe Capital announced an increase in its planned initial public offering (IPO) to 5 million shares of common stock.
In connection with the IPO, Monroe said it expects to purchase an initial portfolio of loans for $67.6 million from two funds managed by affiliates of Monroe Capital BDC Advisors, Monroe’s external investment adviser.
Monroe noted that it currently expects that the IPO price per share of common stock will be $15.00 per share. Assuming an IPO price of $15.00 per share, Monroe will receive gross proceeds of $75 million and net proceeds of $73.5 million.
Purchasers in the offering will experience dilution to the net asset value of the shares of approximately $0.30 per share. The underwriters will reserve up to 500,000 shares from this offering for sale, directly or indirectly, to Monroe’s directors and executive officers and to certain other parties affiliated with Monroe Capital at the initial offering price without payment of an underwriting discount or commission. If Monroe sells these shares, it will have the effect of decreasing the dilution to investors in the initial public offering.
Monroe has granted the underwriters a 30-day option to purchase up to an additional 750,000 shares of their common stock at the public offering price, less underwriting discounts and commissions (sales load). If the over-allotment option is exercised in full, the total public offering price will be $86.3 million and the net proceeds will be $84.5 million, assuming a public offering price of $15.00 a share.
As part of the initial public offering, Monroe Capital BDC Advisors has agreed to pay the expenses incurred by Monroe in connection with their formation and this offering and has agreed to pay to the underwriters a portion of the sales load equal to $3 million ($3.5 million if the underwriters exercise their over-allotment option in full), or 4% of the offering price. Monroe will pay the remaining sales load equal to $1.5 million ($1.7 million if the underwriters exercise their over-allotment option in full), or 2% of the offering price.