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MCG Capital Shares Surge On Analyst Upgrade

NEW YORK (AP) ¿ Shares of MCG Capital Corp. surged to an annual high Tuesday after an analyst upgraded the commercial finance company's stock and said it should soon be in a position to reinstate its dividend.

Stifel Nicolaus analyst Greg Mason raised his rating to "Buy" from "Hold" with a price target of $6 and said that the company's credit and liquidity should return to "normalcy" by early 2010.

MCG needs to reduce its debt by $87 million to meet lenders requirements, Mason said, estimating that the company currently has $35 million in cash and can meet the remaining obligation by the beginning of next year.

"Once the deleveraging requirements are met, we believe MCGC could be in a position to reinstate its dividend after being forced to eliminate it due to liquidity issues," Mason said.

The company suspended its dividend in August 2008 after it was unable to renew a $200 million credit line.

Shares of MCG jumped 62 cents, or 17.7 percent, to $4.12 in late afternoon trading after hitting a 52-week high of $4.34 earlier in the session.

Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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