Great Elm Capital Corp. - 8.75% Notes due 2028 (GECCZ)

Overview

Great Elm Capital is a distinguished business development company that operates under external management, focusing on providing financial solutions to middle-market companies. Engaged in investing in a diversified portfolio of debt instruments, the company's primary objective revolves around generating consistent current income and capital appreciation for its investors. By concentrating on the debt and equity investments in middle-market and small businesses, Great Elm Capital aims to offer a strategic pathway for these entities to access capital, facilitating their growth and operational goals.

Products and Services

Great Elm Capital offers a comprehensive range of financial products and services tailored to meet the funding requirements of middle-market companies. These offerings include:

• Senior Secured Debt: These are loans that hold the highest priority in case of a borrower's default and are secured against the company's assets. This type of debt offers investors a lower risk in comparison to other forms of investment, as it provides a collateral backing, ensuring priority in repayment.
• Senior Unsecured Debt: Unlike secured debt, senior unsecured debt does not have collateral backing, making it slightly riskier. However, it still maintains a priority over other forms of equity and junior debt in the event of liquidation, thereby offering a balance between risk and return for investors.
• Junior Loans: Positioned below senior debt, junior loans come with a higher yield to compensate for the increased risk. These loans are more subordinate in the payment hierarchy, making them an appealing option for investors seeking higher returns and willing to take on more risk.
• Mezzanine Debt: This type of debt is often utilized as a bridge between debt and equity financing. It is typically subordinated to senior and junior loans but offers potential upsides through warrants or conversion rights to equity. Mezzanine debt is an attractive tool for both growing companies seeking flexible capital and investors looking for higher yields and a stake in the company’s equity.