Special dividend at Main Street Capital

Dividenden_Dompteur · 2025-02-25T13:05:02.456290Z

Despite falling interest rates in US & A $MAIN again with special dividend in March 😍

Enrique@Dividenden_Monteur

1Yr

What does $MAIN have to do with falling interest rates?
Right, nothing at all.

This is not a bank 😅

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Saarastronaut@Watzeklicker

1Yr

@Dividenden_Monteur And because of its business model, it does have something to do with interest rates.

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Imvestment4Life@Investment4Life

1Yr

@Dividenden_Monteur they distribute many loans (~30% of their portfolio), which are of course market-oriented.

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Enrique@Dividenden_Monteur

1Yr

@Watzeklicker nope.

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Enrique@Dividenden_Monteur

1Yr

@Investment4Life no.
BDCs get their loans at a fixed interest rate, no matter what the current interest rate is.
That's why they are called BDCs.
And they finance projects for which no one would get a loan from a bank

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Saarastronaut@Watzeklicker

1Yr

@Dividenden_Monteur And you don't really believe that interest rates don't matter for this business, do you?

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Saarastronaut@Watzeklicker

1Yr

@Dividenden_Monteur Quote from Finanzentdecker: "In addition, the BDCs generate regular income by granting loans to the companies in which they invest. These loans have variable interest rates. Repayments are then made in the form of regular interest payments, profit distributions or company shares, for example

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Enrique@Dividenden_Monteur

1Yr

@Watzeklicker I don't believe that, I know that.
How else did BDC's make money between 2009 and 2021 while paying 0 interest?
As I said, this is risk capital for which no bank will open its wallet,
Best example $HTGC who lent a loan at 12% interest to $BMY for a cancer study.
@Investment4Life 10-K Filling page 51, how do you arrive at 30%? I see almost 100% split between equity and debt loans

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Saarastronaut@Watzeklicker

1Yr

@Dividenden_Monteur Well, all the sources I've found so far contradict your statement. In addition, they don't grant the loans at the market interest rate. Especially if no bank will grant a loan, the risk premium is correspondingly higher. I am very much of the opinion that you are completely wrong. Especially as the demand for credit in the period you mentioned is likely to have been significantly higher.

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Enrique@Dividenden_Monteur

1Yr

@Watzeklicker okay then believe it 😅
The BDCs will continue to pay special dividends as long as their NII is correct. Regardless of whether the key interest rate is 0 or 5.

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Saarastronaut@Watzeklicker

1Yr

@Dividenden_Monteur Again, I know that and it is only logical. I have no doubts about the other special dividends.

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BockaufDividenden@BockaufDividenden

1Yr

I'm a fan of $MAIN, but at the risk of it happening every year, Scalable paid out 2x dividends in February, then deducted 1x cancellation again so that there was less total dividend in February than in January or December 2024, for example. It's stupid when the cancellation occurs and the net dividend ends up being less than in January :(

Did you have the same experience?

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Enrique@Dividenden_Monteur

1Yr

@BockaufDividenden https://getqu.in/FAeigd/ This is normal.
BDC's are taxed like REIT's with the corrections

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DerEchte@DieZukunft

1Yr

So I currently have the problem that I cannot buy any more Mainstreet shares via Comdirect because it is prohibited for regulatory reasons. And that the Mainstreet share will be presented as a fund in future. What do you think?

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BockaufDividenden@BockaufDividenden

1Yr

@DieZukunft is unfortunately also regarded as a fund for tax purposes, so be careful with the loss pot (applies here to general and not to the share loss pot)

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