Stocks of Goldman Sachs BDC were 2.2% down during market hours.
Goldman Sachs BDC Inc. (NYSE:GSBD), the first incorporated company by an investment bank in the U.S., saw its stocks plunge in the trading debut, after selling stocks to the general public at a lower rate in its initial public offering (IPO) .
Stocks of the company, under the ticker GSBD, were trailing by 2.2% at $19.57 on the New York Stock Exchange last month, dragging down the market capitalization to roughly $690 million.
“We invest primarily in U.S. middle-market companies, which we believe have been underserved in recent years by traditional providers of capital such as banks and the public debt markets,” Goldman Sachs BDC said in a regulatory filing.
Goldman Sachs BDC is a business development company established by Goldman Sachs Group Inc. (NYSE:GS), which has issued loans worth $1 billion since 2012 to middle-large U.S. companies. Goldman Sachs Group had 20% stakes in the company in 2014.
Business Development companies are known to provide 90% of the net earnings as dividend to the shareholders, as they receive tax exemptions from the government for investing in small to middle companies in the U.S.
Goldman Sachs BDC, which is management by the asset management division of Goldman Sachs Group, provides financial services to its customers, including apparel retailer Avenue Stores LLC, Extraction Oil & Gas Holding LLC, aircraft engineer Heligear Acquisitions Co. and marketing agency Infinity Sales Group.
The commercial lending venture had assets and liabilities worth $967.5 million and $392.9 million, respectively, at 2014-yearend. It earned $73.3 million from investments in FY14, which boosted the net assets from operations by $36.9 million.
Goldman Sachs DBC raised around $120 million for 6 million shares at price of $20-21 per share on March 17. The shareholders of the newly formed company are promised to receive dividend per share of $0.45 on March 31.The business development company wants to use the proceeds from shares issue to settle its debts.
Credit Suisse Group AG is also considering form a business development company “Credit Suisse Park View BDC” this year, striving to raise about $500 million.
U.S. Business Development Companies Price Index – benchmark index for tracking the most liquid and largest BDC over the world – has climbed 1% in 2015, after plunging 15$ in 2014.
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