Gladstone Capital has unveiled a dual-pronged initiative this week that significantly strengthens its capital position while directly rewarding shareholders. The business development company (BDC) confirmed plans to fully redeem $207 million in outstanding notes and declared a special cash distribution for its common stockholders.
Strategic Debt Management and Shareholder Reward
The company’s board approved a special dividend of $0.10 per share, payable on September 29 to shareholders of record as of September 23. This decision, authorized on September 13, represents an extra distribution beyond Gladstone Capital’s regular monthly dividend payments.
Simultaneously, management announced the complete repayment of two debt issues. The company will redeem $150 million of its 5.125% notes due 2026 on October 31, 2025, and $57 million of its 7.75% notes due 2028 on October 15, 2025. Both redemptions will be made at 100% of principal value plus accrued interest.
Should investors sell immediately? Or is it worth buying Gladstone Capital?
Financing Strategy and Implications
This debt elimination strategy follows Gladstone’s successful issuance of $130 million in 5.875% convertible notes due 2030 in early September. The retirement of the higher-cost debt, particularly the 7.75% notes, suggests improved capital efficiency and potential interest savings. Following their repayment, the 2028 notes will be delisted from the Nasdaq Global Select Market.
The special dividend payment highlights the BDC’s strong cash generation capabilities and indicates management’s confidence in its financial stability. This move comes after Gladstone Capital reported third-quarter 2025 earnings that met expectations, with earnings per share of $0.50.
Market observers will be watching the execution of these debt repayments in October and awaiting the next earnings announcement scheduled for November 12. The combination of accelerated debt reduction and shareholder rewards could potentially attract increased investor interest in the company.
Ad
Gladstone Capital Stock: Buy or Sell?! New Gladstone Capital Analysis from December 19 delivers the answer:
The latest Gladstone Capital figures speak for themselves: Urgent action needed for Gladstone Capital investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from December 19.
Gladstone Capital: Buy or sell? Read more here...
