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2 min read CSWC

American Nuts, LLC/Gauge American Nuts Operations, LLC: Debt Restructured

A long troubled Californian nuts company has undergone a restructuring which will allow its BDC lenders to return debt outstanding to accrual status. However, we are only upgrading the company one notch.

Upgraded From CCR 5 To CCR 4. Remains Important Underperformer

May 27, 2025

American Nuts, Inc. is a leading full-service importer, processor, and distributor of nuts, seeds, dried fruit, and related ingredients, headquartered in Sylmar, California. Founded in 1989, the company has grown significantly, now operating across multiple facilities and producing over 12 million pounds of seeds annually, making it one of the largest processors of pumpkin seeds and sunflower kernels in North America. American Nuts offers a wide range of services, including custom roasting, seasoning, blending, packaging, and merchandising, serving retail, industrial, and foodservice markets. The company has been backed by private equity sponsor Gauge Capital, which completed a majority recapitalization in partnership with management in 2018 and remains actively involved in its strategic direction. However, ownership may have changed in the recent restructuring. American Nuts operates within the Food and Beverage Manufacturing industry and is classified under SIC codes 51 (Wholesale Trade—Nondurable Goods) and 514 (Groceries, General Line)

We've written about American Nuts, LLC multiple times before. See the Company File. Most recently, in February 2025, we warned that a restructuring might be in the cards, which would entail the 4 public BDCs involved booking a realized loss. That's pretty much what has occurred, but none of the BDCs involved have spelled out what happened, leaving us to play forensic financial detective.

We know that total BDC exposure dropped from $79mn to $53mn from the end of IVQ 2024 to the IQ 2025. Moreover, all the BDCs have taken "haircuts" on the cost of their first lien loans outstanding. For example, CSWC's debt fell from $25mn to $12mn. The debt has been extended from a maturity in 2026 to 2029. Importantly, the interest rate on the debt has been reduced but is only being paid in Pay In Kind (PIK). There's more: 3 of the BDCs have received Preferred stock, presumably instead of debt forgone. New equity has been issued as well to ICMB and CSWC. The current value of all these investments comes to $48.1mn.

We have upgraded the company from CCR 5, but only one notch to CCR 4. (Debt had been non-performing since the IIQ 2023, according to Advantage Data's record).Based on the information at hand - especially the non-cash form of interest payment and the relatively modest losses required of the lenders - we're not convinced American Nuts has yet been "saved". We'll see what future valuations tell us. The company remains an Important Underperformer and serves as yet another test of whether BDC lenders can successfully become owners and turn around troubled businesses.

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