Already accessing the asset-backed commercial paper market via First Union Securities' Variable Funding Capital Corp., Arlington, Va.-based MCG Capital Corp. could be a future player in the burgeoning mezzanine finance securitization sector.
The company recently filed with the Securities & Exchange Commission to raise up to $250 million in a stock offering. MCG has about $75 million outstanding in its variable funding securitization facility with First Union, which has a $150 million limit. Following the equity offering, First Union will increase the facility to $200 million, MCG said in its filing.
MCG has described its lending as "venture debt." The company makes loans and invests in media and telecommunications growth companies. MCG has originated more than $2.1 billion in loans since inception, according to public statements.
MCG is the former small- and mid-capitalization lending division of Signet Bank, which was acquired by First Union in 1997. MCG was spun-off in 1998, via a portfolio buyout and equity partnership of MCG's management, Goldman Sachs, First Union, and Heller Financial. The portfolio sale was worth approximately $220 million.
First Union's Variable ABCP conduit is approximately $13 billion in size, with a $15 billion limit.