Chicago Atlantic Real Estate Finance: A Lower Yield Can Still Work

Chicago Atlantic Real Estate Finance is rated buy, with a forward yield likely to reset post-merger with Chicago Atlantic BDC. The merger is NAV-for-NAV, with an illustrative exchange ratio of ~1.085 LIEN shares per REFI share, and both stocks trade at a 23% discount to NAV. Post-merger, a sustainable dividend is projected at $0.37–$0.40 per quarter, implying a 15–16% yield—lower than the current 17%, but still attractive. Koach Capital’s contribution preserves REFI’s earning power but does not materially increase per-share earnings; upside depends on improved deployment and merger synergies.

A proper article on Chicago Atlantic Real Estate Finance (REFI) is just one question: what happens to its attractive 17% dividend yield when it merges with Chicago Atlantic BDC (LIEN) later