Harvest Capital Credit (HCAP) and Portman Ridge Finance (PTMN) entered into a definitive agreement under which HCAP will merge with and into PTMN, a business development company managed by Sierra Crest Investment Management.
Increased exposure to floating-rate investments and generally heavy use of fixed rate funding has positioned U.S. business development companies (BDCs) well to adjust to the rising rate environment longer term, according to Fitch Ratings.
Goldman Sachs has registered a specialty finance company, Liberty Harbor Capital, which will be regulated as a BDC. The company will focus on middle-market companies that have been underserved in recent years by banks.
With an imbalance between supply and demand, conditions this year were supposed to favor lenders. Instead, the first half of 2012 has been lackluster, with loan volumes below last year’s pace. In order to win financings, flexible participation has become increasingly important. And, those lenders with multiple sources of funding are finding themselves at a growing advantage.