MCGC - MCG Capital Corporation (Public, NASDAQ)

[BadThad]

Just found this, I'm going to DD it next week. Right now, I don't know squat about it, but I wanted to toss it out there.

MCGC - MCG Capital Corporation - Google Finance

Current Price: $3.17

Feel free to contribute your DD here!

[sg1efc]

Their latest quarterly report Aug 8, 2008, is here:
Summary of MCG CAPITAL CORP - Yahoo! Finance

Overview

We are a solutions-focused commercial finance company providing capital and advisory services to middle-market companies throughout the United States. We make debt and equity investments primarily in companies with annual revenue of $20 million to $200 million and earnings before interest, taxes, depreciation and amortization, or EBITDA, of $3 million to $25 million, which we refer to as "middle-market" companies. Generally, our portfolio companies use our capital investment to finance acquisitions, recapitalizations, buyouts, organic growth and working capital. We identify and source new customers through multiple channels, including private equity sponsors, investment bankers, brokers, fund-less sponsors, institutional syndication partners, other club lenders and owner operators.

We are an internally managed, non-diversified, closed-end investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, or the 1940 Act. As a business development company, we are required to meet various regulatory tests, which include investing at least 70% of our total assets in private or thinly traded public U.S.-based companies and meeting a coverage ratio of total net assets to total senior securities, which include all of our borrowings (including accrued interest payable) and any preferred stock we may issue in the future, of at least 200%. In addition, we have elected to be treated for federal income tax purposes as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code. In order to continue to qualify as a RIC for federal income tax purposes and obtain favorable RIC tax treatment, we must meet certain requirements, including certain minimum distribution requirements. If we satisfy these requirements, we generally will not have to pay corporate-level taxes on any income we distribute to

MCGC Stock Quote - MCG CAPITAL CORP

Shares Outstanding 75.62M
Market Capitalization 229.12M
% Held by Institutions 50.00
Annual Dividend 1.08
Yield % 35.60

Not sure if they are still giving that dividend in the next quarter though.

[BadThad]

Thanks for the DD bro!

They keep reporting earnings, no loss yet.....hummmmmm....

MCGC reported 2nd quarter 2008 earnings of $0.20 per share on August 6, 2008.
The next earnings announcement from MCGC is expected the week of October 27, 2008.

PPS run down from $15 to $3 over fear? PPS well below the 200MA. The only negative I see is the volume is very light. Looking at 3-month chart, A/D is rising, RSI below 50 and rising, volume is picking up and there looks to be a MACD bullish xover forming.

I'm liking this play fundamentally and technically.

[BadThad]

I'm in at 3.13, prob get beat up a little today, the financials are getting hurt.

[rshaggy4]

I got in on this today also.
Couldn't really find a reason not to.

[BadThad]

Originally Posted by rshaggy4

I got in on this today also.
Couldn't really find a reason not to.

Good call if you got in this morning. I'm up 0.09 in a crappy market. I did a fair amount of DD on this it looks really good IMO. It seems to be a victim of the general financial meltdown.

[rshaggy4]

Yeah, it's really nice to be up overall in a down market.
Making green and the Dow is down 200 points.
Thanks to these financials

[soupcan]

NEW YORK, Aug 07, 2008 (BUSINESS WIRE) -- Fitch Ratings has downgraded the long-term Issuer Default Rating (IDR) and unsecured debt rating of MCG Capital Corporation (MCG) to 'BB+' from 'BBB-'. The Rating Outlook is Negative. Approximately $75 million of unsecured debt is affected by this action.
Fitch downgrades the following ratings:
--Long-term IDR to 'BB+' from 'BBB-';
--Senior unsecured debt to 'BB+' from 'BBB-'.
The downgrade reflects MCG's reduced funding flexibility as a result of extended disruptions in the collateralized loan obligation (CLO) markets and the expectation that the company will be unable to obtain additional secured funding until capital market conditions improve. Funding is limited to available capacity on the company's unsecured revolver and capacity on the warehouse facility, although actual capacity on the warehouse is limited by the need for overcollateralization.
Following the announcement of staffing reductions and the temporary suspension of the dividend, Fitch believes liquidity levels will be adequate to support current portfolio investments and operations; however, the company's profitability potential will be negatively affected by an inability to originate new investments to any significant degree.
The Negative Outlook reflects the expectation that business development companies (BDCs) may continue to record unrealized depreciation on portfolio company investments as a result of weaker economic conditions, reduced market multiples, and changing interest spreads. Continued reductions in MCG's portfolio valuation could pressure the asset coverage ratio, which is required to remain above 200%. The asset coverage ratio was 210% as of June 30, 2008. Resolution of the Negative Outlook will be dependent on the maintenance of adequate liquidity, stability in portfolio company performance, and the sustainability of a wider cushion on the asset coverage ratio. Conversely, reduced liquidity or additional pressure on financial covenants could result in negative rating action.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, Fitch Ratings. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site

[BadThad]

Originally Posted by soupcan

NEW YORK, Aug 07, 2008 (BUSINESS WIRE) -- Fitch Ratings has downgraded the long-term Issuer Default Rating (IDR) and unsecured debt rating of MCG Capital Corporation (MCG) to 'BB+' from 'BBB-'. The Rating Outlook is Negative. Approximately $75 million of unsecured debt is affected by this action.
Fitch downgrades the following ratings:
--Long-term IDR to 'BB+' from 'BBB-';
--Senior unsecured debt to 'BB+' from 'BBB-'.
The downgrade reflects MCG's reduced funding flexibility as a result of extended disruptions in the collateralized loan obligation (CLO) markets and the expectation that the company will be unable to obtain additional secured funding until capital market conditions improve. Funding is limited to available capacity on the company's unsecured revolver and capacity on the warehouse facility, although actual capacity on the warehouse is limited by the need for overcollateralization.
Following the announcement of staffing reductions and the temporary suspension of the dividend, Fitch believes liquidity levels will be adequate to support current portfolio investments and operations; however, the company's profitability potential will be negatively affected by an inability to originate new investments to any significant degree.
The Negative Outlook reflects the expectation that business development companies (BDCs) may continue to record unrealized depreciation on portfolio company investments as a result of weaker economic conditions, reduced market multiples, and changing interest spreads. Continued reductions in MCG's portfolio valuation could pressure the asset coverage ratio, which is required to remain above 200%. The asset coverage ratio was 210% as of June 30, 2008. Resolution of the Negative Outlook will be dependent on the maintenance of adequate liquidity, stability in portfolio company performance, and the sustainability of a wider cushion on the asset coverage ratio. Conversely, reduced liquidity or additional pressure on financial covenants could result in negative rating action.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, Fitch Ratings. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site

That's old news.

[BadThad]

I can't believe this stock....it's having a green day amidst a financial market meltdown! For me, this brings a new level of confidence in the company.