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Kayne Anderson BDC , Inc. (NYSE:KBDC), a $1.22 billion market cap business development company with a notable 9.3% dividend yield, has successfully amended its senior secured revolving credit facility, according to a recent filing with the Securities and Exchange Commission.
According to InvestingPro data, the company maintains a GOOD financial health score, suggesting strong operational fundamentals. The amendment, effective as of Monday, saw the company’s commitment from lenders increase from $150 million to $250 million. This expansion comes as KBDC trades near its 52-week high of $17.35, with InvestingPro analysis showing historically low price volatility - a characteristic that may appeal to stability-focused investors. For deeper insights into KBDC’s valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Alongside the expansion of the credit facility, the company also secured a reduction in borrowing costs. The interest rate on the outstanding borrowings has been decreased from 3-month term SOFR plus 2.70% to 3-month term SOFR plus 2.25%. This reduction in interest rate is anticipated to lower the cost of capital for Kayne Anderson BDC, potentially enhancing its financial position and operational capabilities. Trading at a P/E ratio of ~13.4, the stock’s valuation metrics and additional financial insights are available through InvestingPro’s detailed analysis tools.
The company, alongside its wholly-owned subsidiary Kayne Anderson BDC Financing II, LLC, reached this agreement to amend the terms of the Revolving Funding Facility II. The rest of the terms of the credit facility remain substantially unchanged.
This financial development is based on a press release statement and further details of the amendment to the Revolving Funding Facility II can be found in the Exhibit 10.1 of the Current Report on Form 8-K filed with the SEC.
In other recent news, Kayne Anderson BDC’s stock outlook has been upgraded by RBC Capital Markets. The firm cited the company’s strategic moves, value-lending focus, and opportunities in stable markets as key factors for the positive adjustment. The updated outlook follows a review of Kayne Anderson’s third-quarter performance, which showed significant efforts to scale its portfolio and achieve targeted leverage.
RBC Capital’s analyst praised Kayne Anderson’s focus on direct lending in the core middle-market segment, particularly in slow-growing or stable markets. The company’s dividend yield, currently around 10 to 11 percent, was also highlighted as attractive, with the potential for special dividends in 2025. According to RBC’s analysis, investors could expect a total return of approximately 18 percent over the next year, largely driven by the dividend yield.
These recent developments underscore the company’s strategic positioning and growth trajectory. As Kayne Anderson continues to execute its growth strategy, analysts and investors alike will be closely monitoring the company’s progress, particularly in light of the revised price target and maintained Outperform rating by RBC Capital Markets.
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