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Horizon Technology Finance Corporation (NASDAQ:HRZN), a leading specialty finance company with a market capitalization of $355 million and current revenue of $100 million, announced today that it has entered into amended agreements to extend its borrowing capabilities and adjust interest rates. According to InvestingPro data, the company maintains a strong liquidity position with a current ratio of 5.08, indicating robust financial flexibility. The company, which provides secured loans to venture capital and private equity-backed development-stage companies, has made significant changes to its funding structure through its subsidiary, Horizon Funding I, LLC.
On Monday, Horizon Funding I, LLC, an indirect wholly owned subsidiary of Horizon Technology Finance Corporation, executed an amendment to its existing indenture agreement, extending the Legal Final Payment Date to June 2032. This amendment is expected to provide the company with extended financial flexibility.
In conjunction with the indenture amendment, Horizon Technology Finance Corporation also entered into Amendment No. 6 to its Sale and Servicing Agreement. This amendment introduces a new fixed Interest Rate for borrowings made after the amendment date, set at the higher of 4.60% or a benchmark rate plus 2.95%. The Interest Rate will be reset on any Advance Date according to the specified terms.
Moreover, the amendment includes the addition of a new excess concentration amount for loans with a six-year term and extends the Investment Period Termination Date from June 5, 2025, to June 5, 2027. This extension, with an option for a further extension upon mutual agreement, is designed to allow the company to continue its investment activities without interruption.
These strategic moves come as Horizon Technology Finance Corporation aims to optimize its financing structure to support its lending activities to development-stage companies in the technology, life science, healthcare information and services, and sustainability industries. InvestingPro analysis reveals that the company has maintained dividend payments for 16 consecutive years, with a substantial current dividend yield of 15.09%. For deeper insights into HRZN’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
The details of these amendments are outlined in the documentation filed with the SEC and are based on a press release statement. These changes reflect the company’s ongoing efforts to manage its financial operations effectively and to ensure long-term growth and stability.
Horizon Technology Finance Corporation’s stock is traded on The Nasdaq Stock Market under the ticker symbol HRZN, currently priced at $8.78, and its notes are listed on The New York Stock Exchange under the symbols HTFB and HTFC for its 4.875% Notes due 2026 and 6.25% Notes due 2027, respectively. The stock has shown resilience, trading above its 52-week low of $7.55, while maintaining its position as one of the market’s highest dividend-yielding financial stocks.
In other recent news, Horizon Technology Finance Corporation has reported robust loan activity in the first quarter of 2025, originating over $100 million in new loans and closing new loan commitments totaling $121.8 million to seven companies. This marks an increase from the previous quarter’s $80.2 million to six companies. The company noted liquidity events from five portfolio companies, which led to principal prepayments of $68.1 million, generating additional income and prepayment fees. However, Horizon’s fourth-quarter earnings fell short of analyst expectations, with net investment income at $0.27 per share versus the anticipated $0.32 per share, and revenue at $23.55 million compared to the expected $23.8 million. The company’s net asset value per share declined to $8.43 at the end of 2024, influenced by stressed investments. Keefe, Bruyette & Woods adjusted their price target for Horizon to $8.00, down from $9.00, maintaining an Underperform rating due to ongoing venture capital fundraising challenges and credit issues impacting net asset value and net investment income. Despite these challenges, Horizon’s President expressed confidence in the company’s direction, citing a growing venture debt portfolio and an increase in the committed backlog to $235.5 million. The company ended 2024 with $100.9 million in cash and $244 million in credit facility capacity.
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