KBRA Assigns BBB+ Rating to Hercules Capital’s $250 Million Convertible Notes
New York, NY – In a recent rating action, KBRA, a leading credit rating agency, assigned a rating of BBB+ to Hercules Capital, Inc.’s (HTGC) $250 million 4.75% convertible unsecured notes due September 2028. The Outlook for this rating is Stable.
Key Credit Considerations
The rating assigned to Hercules Capital’s convertible notes reflects the following key credit considerations:
- Diversified Investment Portfolio: The rating acknowledges the company’s investment portfolio, which currently stands at $3.66 billion, with 118 portfolio companies. The portfolio’s focus on senior secured first lien venture debt investments, accounting for 86.9% of the total, is particularly noteworthy.
- Technology and Life Sciences Sectors: The technology and life sciences sectors, which account for a significant portion of the company’s investments, have shown resilience and growth potential, making them attractive investment areas.
- Risk Management: Hercules Capital’s risk management framework includes a disciplined investment approach, underwriting process, and portfolio management strategy, which help mitigate potential risks.
- Financial Profile: The company’s financial profile is supported by its strong cash position, stable revenue, and a history of profitability.
Impact on Individuals
For individual investors, the KBRA rating of BBB+ assigned to Hercules Capital’s convertible notes indicates a good credit quality. This rating implies that the issuer has a satisfactory capacity to meet its financial commitments as they come due. However, it is essential to keep in mind that any investment comes with risks, and individuals should consider their financial situation, investment objectives, and risk tolerance before making investment decisions.
Impact on the World
On a broader scale, the KBRA rating action for Hercules Capital’s convertible notes could have implications for the venture debt market, particularly in the technology and life sciences sectors. The rating acknowledges the attractiveness of these sectors and the potential for continued growth. Additionally, the stable outlook for the rating suggests a positive view of the company’s financial profile and ability to meet its obligations, which could boost investor confidence in the venture debt market.
Conclusion
In conclusion, KBRA’s rating of BBB+ and Stable Outlook for Hercules Capital’s $250 million convertible unsecured notes underscores the company’s strong investment portfolio, focus on technology and life sciences sectors, robust risk management framework, and financial profile. This rating action could have positive implications for individual investors and the venture debt market as a whole. As always, it is essential to consider individual financial circumstances and risk tolerance when making investment decisions.
