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Capital Southwest offers additional notes due 2024

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Capital Southwest offers additional notes due 2024

Capital Southwest Corp. is offering $10 million aggregate principal amount of 5.375% notes due Oct. 1, 2024.

The notes offered are a further issuance of the 5.375% notes due 2024 that were issued Sept. 27 and will have the same terms as the existing notes. Upon the issuance of the additional notes, the outstanding aggregate principal amount of the 5.375% notes due 2024 will be $75 million, according to a prospectus supplement.

Raymond James & Associates Inc., the sole underwriter for the offering of the additional notes, agreed to purchase the notes from the company at 98.000% of the aggregate principal amount, plus accrued and unpaid interest from Sept. 27 up to, but not including, the date of delivery. Aggregate proceeds are expected to be about $9.8 million after deducting expenses.

Capital Southwest intends to use the net proceeds from the offering to repay outstanding debt under its credit facility, which matures Dec. 21, 2023. As of Oct. 3, the company had $94.0 million of debt outstanding under the facility. Borrowings under the facility currently bear interest on a per annum basis equal to the London interbank offered rate plus 2.50%.

Through re-borrowings under the credit facility, the company plans to invest in lower middle-market and upper middle-market portfolio companies, marketable securities and other temporary investments, and for other general corporate purposes, including payment of operating expenses.

The issue price is 100.000% of the aggregate principal amount, subject to variable price re-offer. The underwriter proposes to offer the notes for sale from time to time, in one or more negotiated transactions, at prices that may be different than par, plus accrued and unpaid interest from Sept. 27 up to, but not including, the date of delivery.

Interest on the notes will be paid April 1 and Oct. 1 of each year, starting April 1, 2020. The notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.