Great Elm Capital's Yield Swells To 19.6% On First Brands Group Exposure

2025-10-30 23:19:36 ET

Great Elm Capital's ( GECC ) history of dividend cuts could be compounded by a net investment income ("NII") set to dip as the BDC faces intense near-term headwinds from the collapse of First Brands Group ("FBG") and pending Fed rate cuts. FBG was an automotive parts company based in Rochester, Michigan, whose September 29 Chapter 11 bankruptcy filing revealed a web of traditional on-balance sheet debt and invoice-based financing that has ensnared a broad range of large financial institutions, from UBS Group ( UBS ) and Jefferies ( JEF ) to smaller boutiques like Raistone , which reportedly had to lay off dozens of its employees as it derived a majority of its income from FBG. GECC is an FBG creditor, publishing a press release on October 07 detailing its total exposure to FBG. The BDC's total exposure is tranched across first lien and second lien loans and stood at $23.3 million at fair market value. The BDC's total debt investment portfolio at fair market value stands at $217.4 million , with the aggregate of the FBG loans forming 10.7% of this. Further, GECC also has more FBG exposure in the CLO component of its total investment portfolio. This was roughly 0.9% across all the CLOs held by the BDC as of the end of its fiscal 2025 second quarter. The BDC is yet to announce a date for its third-quarter earnings....

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