Allied Capital posts loss, shares fall
(Reuters) - Allied Capital Corp (ALD.N), a provider of financing to small- and mid-sized businesses, on Monday posted its sixth straight quarterly loss, and said it remained in default on its credit facilities.
Shares of the Washington-based Allied fell as much as 6 percent to $3.65 in pre-market trading on the New York Stock Exchange.
"Events of default related to certain covenants have occurred and are continuing under the company's revolving line of credit and private notes," the company said in a news statement.
The company, which at June 30 had about $1.75 billion of debt outstanding, said it agreed in principle to terms with lenders and private note holders on a comprehensive restructuring of these debt agreements in July.
Allied also said it would not be able to pay a cash dividend for an extended period of time due to higher costs associated with the restructuring of its debt.
Quarterly loss equaled $29.1 million, or 16 cents a share, and compared with a year-earlier loss of $102.2 million, or 59 cents per share, for the company.
Net realised losses rose seven-fold to $126.1 million in the quarter ended June 30.
For the second-quarter, net investment income fell more than three-folds to $18.2 million or 10 cents a share.
Analysts were looking for a profit of 19 cents a share, excluding items, according to Reuters Estimates.
Business development companies like Allied and bigger rival American Capital Ltd (ACAS.O), which make loans to small and mid-sized businesses in return for equity stakes, are facing shrinking investment portfolios and finding it increasingly difficult to raise capital in the current environment. (Reporting by Archana Shankar in Bangalore, Editing by Dinesh Nair)
