Gladstone Capital added GFRC Cladding Systems to non-accrual status in the quarter ended March 31, citing declining operation performance.
The investment comprised a $4.9 million 10.5% first-lien debt due 2016, marked under one million at fair value as of March 31; $6.6 million of second-lien debt due 2016, marked at $1.9 million at fair value; and a line of credit, a Ma y 6 10-Q filing showed.
GFRC Cladding Systems designs and manufactures glass-fiber-reinforced concrete panels for commercial construction projects greater than four stories in height. It is a portfolio company of Dallas-based middle-market private equity firm Transition Capital Partners.
The other two companies on non-accrual status in the recent quarter were Sunshine Media and Heartland Communications.
Some tranches of the investment in Sunshine Media were moved to accrual status in the quarter as a result of improving profitability and liquidity.
The investment in Sunshine Media comprised first-lien debt, a line of credit, and equity. Sunshine Media, based in Chattanooga, Tenn., publishes local business-to-business custom publications with titles such asBuilder/Architect, Doctor of Dentistry, and MD News.
The investment in Heartland Communications comprised a $4.3 million 5% term loan due 2014, a line of credit, and equity. Heartland Communications, based in Appleton, Wis., operates AM and FM radio stations in Park Falls, Eagle River, and Ashland, Wis.; and Iron River and Houghton, Mich.
As of March 31, 2015, debt of three portfolio companies on non-accrual status totaled $39.2 million on a cost basis, or 10.2% of all debt investments, and $9.2 million, or 2.8% at fair value.
As of Dec. 31, 2014, non-accrual debt on a cost basis totaled $33.6 million over two portfolio companies, or 9.4%, and $8.3 million, or 2.8%, at fair value.
Gladstone Capital, which trades on Nasdaq under the symbol GLAD, is an externally managed BDC that invests in debt and equity of small and midsize U.S. businesses. – Abby Latour