On December 31, 2009, GSC Investment (ticker: GNV) announced the results of the recent dividend payout of $1.825 in cash and stock. Shareholders had until December 17, 2009 to elect whether to receive a portion of the dividend in cash with the remainder in shares of common stock. Shareholders who elected to receive the cash received a combination of cash and common stock.
1) The total payout was $2.1 million in cash and 8,648,725 shares of common stock or 104% of GSC Investment Corp.’s outstanding shares prior to the dividend.
2) The amount of cash elected to be received was greater than the cash limit of 13.7% of the aggregate dividend amount allowed. The number of shares of common stock comprising the stock portion was calculated based on a price of $1.5099 per share, which equaled the volume weighted average trading price per share of the common stock on December 24 and 28, 29 of 2009.
3) Shareholders who elected to receive the dividend solely in shares of common stock received 1.209 shares of common stock for each share of common stock they owned on the record date. Holders of approximately 39% of the Company’s common stock elected to receive only stock or did not make an election so this was the default option.
4) Shareholders who elected to receive the dividend in all cash, received cash in the amount of $0.411 per share or 22.5% of the $1.825 dividend and 0.936 shares of common stock or 77.5% of the total dividend for each share of common stock they owned on the record date.
GSC Investment has not reported the new NAV value yet on cefconnect which still shows 6.91. Most likely the new value after the offering will drop to around 3.40. The stock closed at 1.75 on Friday, so the new discount to NAV should be around 50%. While this may look attractive, the expense ratio for GNV is reported on cefconnect is very high at 5.08% before interest expense. I almost never buy closed-end funds with expense ratios over 2% a year.
Full Disclosure: No position in GNV