TPG Specialty Lending Inc. agreed to sell to initial purchasers in a private offering $100 million aggregate principal amount of its 4.50% convertible senior notes due 2022.
The initial purchasers were granted an option to purchase up to an additional $15 million aggregate principal amount of the notes to cover any overallotments. The notes will be offered only to qualified institutional buyers.
The notes are expected to be delivered and paid for on Feb. 1. Interest on the notes are payable semiannually.
In certain circumstances, TPG may convert the notes to cash, common stock or a combination of cash and common stock, at an initial conversion rate of 46.8516 common stock per $1,000 principal amount of the notes, which is equivalent to an initial conversion price of about $21.34 per common stock. The conversion price is 15% above the $18.56 per share closing price of the company's common stock on Jan. 26. TPG will not have the right to redeem the notes before maturity. The notes will mature Aug. 1, 2022, unless repurchased or converted.
TPG expects to use the offering's net proceeds to pay down debt under its revolving credit facility.
Also, the company plans to enter into interest rate swaps to better align the interest rates of its liabilities with its investment portfolio, which consists of predominately floating rate loans.