The Fed's 25-basis-point rate hike will add about 2 cents per share, or about $1.8 million, in net investment income annually, Hercules Capital Inc. said Dec. 15.
About 93% of Hercules Capital's debt investment portfolio is in floating rate debt, in which yields rise or fall depending on moves in the baseline rate. The federal funds rate was raised by 25 basis points to a new range of 0.5% to 0.75% on Dec. 14, when the Federal Open Market Committee announced the results of its monthly meeting.
The expected benefit from the hike will appear throughout 2017, the company said.
Each 25-basis-point hike, including any in 2017, would boost net investment income by about $1.8 million, Hercules said.