BC Partners Lending Corp. closes all-stock ACIF merger, ending repurchases

BC Partners Lending Corp. closed its all-stock acquisition of Alternative Credit Income Fund, a deal that ends the target's interval-fund repurchases. The combined private credit vehicle reported net asset value above $223 million, according to Stanger's weekly filing review.

About 84.6% of ACIF's voting shareholders supported the merger on Sept. 10, according to the same review.

Because the consideration was stock, ACIF shareholders are not being cashed out; their exposure moves into the combined company. The periodic repurchase window that gave the fund its liquidity feature ends with the deal.

A sponsor retiring a semi-liquid pool has a few routes: keep running the repurchase window, price a cash tender for a slice of the fund, or merge the fund into another vehicle. The first two require a cash price, and repurchase requests can be prorated when they exceed the amount a fund makes available. In an all-stock merger, holders stay invested rather than realizing a cash price, so the exit does not have to be priced at a discount to net asset value.

Two other funds in Stanger's review, Cox Capital and VineBrook Homes Trust, have priced tender-offer exits at 20% and 37% below net asset value.