GBDC - Golub Capital: A BDC To Consider Whether Or Not Rates Remain Higher

2024-02-24 08:00:00 ET

Summary

• GBDC recently merged with GBDC 3, which is expected to increase their liquidity and scale.
• The latest CPI report has raised questions about potential interest rate cuts, making Golub Capital a potential consideration for income-focused portfolios.
• Management also lowered their income incentive & management fee post-merger. This is expected to increase Nll by $0.13 on an annualized basis.
• This increase will likely be passed onto shareholders in the form of dividends. Even if rates do decline, this will provide a buffer for an expected decline in net investment income.

Introduction

Many who follow me know I mainly invest for income. I try my best to find the perfect balance between income and growth. And some of my holdings that I invest in for stable income include BDCs and REITs. These may not be every investor's cup of tea as some may look for more growth-oriented companies such as tech, or consumer staple stocks....

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