CNL / KKR's Corporate Capital Trust (CCT), a business development company (BDC), filed an 8-K on Monday, July 10, 2017, announcing that it plans to list its shares on the NYSE shortly after its August 3, 2017, shareholder meeting. It plans to trade under the stock symbol CCT. The planned liquidity event was initially announced on April 3, 2017, and a fourth-month time from announcement to listing is fast. As part of its listing, Corporate Capital Trust is lowering its annualized distribution to $.715 per share from $.805 per share. It will make two special distributions over the next year of $.045 per share each to make up for the $.09 per share by which it is dropping the distribution.
The distribution adjustment puts it in line with what Corporate Capital Trust is earning in its Net Investment Income, while the bonus distribution is coming from cash reserves. Realistically, the market's reception to a BDC paying a distribution more than its net investment income would not have been kind, so the cut makes sense for shareholders. Corporate Capital Trust's Net Asset Value per share is currently $9.00 and has ranged from a high of $10.15 per share in June 2014, to a low of $8.62 per share in March of 2016. The price investors paid for their shares is NAV plus offering costs. Investors should use the price they paid for their shares to determine their yield, not the current NAV. For example, if an investor paid $10.00 per share their yield is 7.15%, and if an investor paid $11.00 per share their yield is 6.5%
A nearly $3 billion liquidity event is good news for a market place that has not seen any liquidity in a long time.