PURCHASE, N.Y., Aug. 11, 2014 (GLOBE NEWSWIRE) -- MVC Capital, Inc. (NYSE:MVC), a publicly traded business development company that makes private debt and equity investments, today announced that it has sold its interest in Octagon Credit Investors, LLC ("Octagon"), a New York-based asset management company that manages leveraged loans and high yield bonds. MVC sold its equity interest to Octagon as part of a put option negotiated in 2008.
MVC initially provided debt and equity financing to support management buying majority control of Octagon from J.P. Morgan in May 2004. In 2011, MVC received payment in full for its initial debt investment, while continuing to hold its equity interest. As a result of the sale, MVC generated an 8.9X return on equity capital and an IRR of 39%1, including fees and cash distributions received from Octagon.
Michael Tokarz, Chairman & Portfolio Manager of MVC Capital, said, "We are proud of our long and productive partnership with Octagon's management since supporting their spin out in 2004 and believe they are well-positioned for continued success. Monetizing our equity portfolio and accelerating our shift to yielding investments continues to be a key strategic priority for MVC, and the sale of our equity stake in Octagon is consistent with that goal. As we continue to seek to realize the value in our equity portfolio, we will seek to increase dividends organically through emphasizing redeployment into yielding investments and looking to make capital gain distributions over time."
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About MVC Capital, Inc.
MVC Capital is a Business Development Company traded on the New York Stock Exchange that provides long-term debt and equity investment capital to fund growth, acquisitions and recapitalizations of companies in a variety of industries. For MVC's investor relations, please call Jackie Rothchild at 914-510-9400 or Jeffrey Goldberger at 212-896-1249. All media inquiries should be directed to Nathaniel Garnick at 212-687-8080.
Forward-Looking Statements
The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, including: MVC Capital's ability to execute its investment strategy; the performance of MVC Capital's investments; the ability of MVC Capital to grow its dividend; and changes in economic or financial market conditions and other factors that are enumerated in the company's periodic filings with the Securities and Exchange Commission. MVC Capital disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release.
The amount and specific timing of any future dividends or capital gain distribution is subject to the final determination of the Board of Directors and depends upon the actual results of the Company and applicable provisions of law. At this time, the Fund is unable to make a conclusive determination as to the characteristics of the distributions discussed herein. In January, a Form 1099 DIV will be sent to shareholders that will state the aggregate amount and actual tax characterization of distributions for the preceding year. There can be no assurance that future MVC dividend payments or other distributions will match or exceed historic ones, or that they will be made at all.
1The anticipated gain and resulting IRR includes all fees and income earned over the life of the investment (not including any fees and income generated from the initial debt investment).