Capital Southwest Corp. priced a public offering of $50 million of its 5.95% notes due 2022.
The size of the offering was increased from the previously announced $35 million.
Capital Southwest also granted the underwriters an option to purchase an additional $7.5 million of the notes. The offering is subject to closing conditions and is expected to close Dec. 15. The notes are expected to be listed, and trade, on the Nasdaq Global Select Market under the trading symbol CSWCL.
Net proceeds to the company from the offering are expected to be approximately $48.5 million, or approximately $55.8 million if the underwriters fully exercise their option to purchase additional notes, before deducting estimated offering expenses payable by the company.
The notes will mature Dec. 15, 2022, and may be redeemed in whole or in part at any time, or from time to time, on or after Dec. 15, 2019, at a redemption price equal to 100% of the outstanding principal amount of the notes to be redeemed plus accrued and unpaid interest payments otherwise payable thereon for the then-current quarterly interest period accrued to the date fixed for redemption.
The notes will bear interest at a rate of 5.95% per year, payable quarterly on March 15, June 15, Sept. 15, and Dec. 15 of each year, beginning March 15, 2018.
Capital Southwest intends to use the net proceeds from the offering to repay outstanding indebtedness under its existing credit facility. Through reborrowings under its credit facility, Capital Southwest intends to make investments in lower middle market and upper middle market portfolio companies, as well as in marketable securities; make other temporary investments; and for other general corporate purposes, including payment of operating expenses. As of Dec. 12, Capital Southwest had $86.0 million of debt outstanding under the credit facility, which matures Nov. 16, 2021.
Keefe Bruyette & Woods Inc. is acting as sole book-running manager for the offering. Janney Montgomery Scott LLC and Ladenburg Thalmann & Co. Inc. are acting as lead managers. BB&T Capital Markets and B. Riley FBR Inc. are acting as co-managers.
