Gladstone Capital Executes Strategic Debt Refinancing and Rewards Shareholders

Gladstone Capital is implementing a dual-pronged financial strategy, simultaneously rewarding its income-focused investors with a special dividend payment while aggressively restructuring its debt obligations. This coordinated move demonstrates the business development company’s focused approach to capital management.

Shareholder Compensation and Key Dates

The company has declared a special cash dividend of $0.10 per share, scheduled for distribution on September 29. To qualify for this extraordinary payment, shareholders must hold the stock through tomorrow’s ex-dividend date.

This supplemental distribution runs concurrently with Gladstone’s regular monthly dividend program. Shareholders will receive $0.165 per share for September, with payment set for September 30 and the record date also falling today. The company maintained its $0.165 monthly distributions for July and August as well.

Comprehensive Debt Restructuring Initiative

While rewarding equity holders, Gladstone is simultaneously executing a significant debt reduction strategy. The company announced plans to redeem all outstanding 5.125% notes maturing in 2026, representing a total value of $150 million. This retirement is scheduled for completion by October 31.

In a parallel move, Gladstone will address its higher-cost debt by repaying $57 million in 7.75% notes due in 2028. This earlier-than-scheduled redemption is set for October 15, eliminating what had become a comparatively expensive interest obligation.

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Critical Financial Milestones

• Special dividend: $0.10 per share, payable September 29
• Regular monthly dividend: $0.165 for September, payable September 30
• Debt retirement: $150 million 5.125% notes due 2026, by October 31
• Additional debt reduction: $57 million 7.75% notes due 2028, by October 15
• Recent earnings: Net investment income of $0.50 per share (Q3 2025)

Strategic Financing Through Convertible Notes

The debt repayment initiative is funded through recently issued convertible notes. In September, Gladstone successfully placed 5.875% convertible notes due in 2030, ultimately securing greater proceeds than initially anticipated through this offering.

This refinancing operation demonstrates strategic financial planning, replacing higher-cost existing debt with more favorably priced capital. For business development companies like Gladstone, effective management of interest expenses represents a crucial component of long-term profitability and operational flexibility.

Operational Performance Underpins Strategy

Recent quarterly results provide the foundation for these financial maneuvers. For the third quarter ending June 30, Gladstone reported net investment income of $0.50 per share, indicating stable operational performance in its core business activities.

The company’s ability to simultaneously compensate shareholders while aggressively optimizing its balance sheet reflects this underlying operational strength. As Gladstone executes these substantial financial transactions in the coming weeks, market observers will monitor the successful implementation of this balanced approach to capital allocation.