By Michael Tsang Feb. 9 (Bloomberg) — Solar Capital Ltd. , which invests in companies with junk-rated debt, fell in its first day of trading after cutting the price for its $93 million initial public offering by as much as 12 percent. The New York-based firm, run by former Apollo Management LP partner Michael Gross , declined 4.9 percent to $17.59 as of 12:02 p.m. in New York trading. The company sold 5 million shares for $18.50 apiece after asking investors to pay as much as $21 each, a Jan. 27 filing with the Securities and Exchange Commission and Bloomberg data showed. Solar Capital began trading today on the Nasdaq Stock Market under the ticker SLRC. The IPO comes after U.S. companies from Imperial Capital Group Inc. to FriendFinder Networks Inc. postponed or delayed initial sales. The four previous companies that completed deals this year cut them by an average of 23 percent as the Standard & Poor’s 500 Index fell for four straight weeks, the longest decline since July. Solar Capital, backed by former Citadel Investment Group LLC traders at Evanston, Illinois-based Magnetar Capital LLC and Seth Klarman’s Baupost Group LLC in Boston, plans to use the proceeds to make investments, pay operating expenses and repay debt, according to the filing. Solar Capital hired Citigroup Inc. and JPMorgan Chase & Co. of New York to lead its sale. 2010 IPO Slump While Barclays Plc of London estimates that initial U.S. sales will triple to $50 billion this year, Ironwood Pharmaceuticals Inc.’s offering was the only IPO of four scheduled for last week to be completed. The Cambridge, Massachusetts-based drug developer cut its price by 30 percent in the biggest reduction for a U.S. sale this year. Imperial Capital of Los Angeles shelved what would have been the first IPO by a U.S. investment bank since 2007. Boca Raton, Florida-based FriendFinder , the publisher of Penthouse magazine, said it postponed due to “market conditions.” At least three U.S. companies are scheduled to offer stock through IPOs today, according to Bloomberg data. Graham Packaging Co. , 75-percent owned by New York-based Blackstone Group LP, is scheduled to sell as much as $373 million of shares in the first U.S. IPO of 2010 for the world’s largest private-equity firm. Terreno Realty Corp. , the San Francisco-based company formed to buy industrial properties in coastal markets, plans to sell stock after cutting its offering to 8.75 million shares. The fund on Jan. 25 became the first U.S. company to postpone an IPO in 2010 after its lead underwriter, New York based Goldman Sachs Group Inc., couldn’t find enough buyers for 10 million shares at $20 each. The IPO had already been reduced from 15 million shares and pushed back from Jan. 21. To contact the reporter on this story: Michael Tsang in New York at mtsang1@bloomberg.net .
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Solar Capital Falls After Junk Bond Investor Cuts Price of $93 Million IPO
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