Capital Southwest Corporation Prices Public Offering of Additional $65 million of 4.50% Notes due 2026 with a Yield-to-Maturity of Approximately 4.0%
DALLAS, Feb. 22, 2021 (GLOBE NEWSWIRE) -- Capital Southwest Corporation (NASDAQ: CSWC) (“Capital Southwest” or the “Company”) is pleased to announce that it has priced an underwritten public
offering of an additional $65 million in aggregate principal amount of 4.50% notes due 2026 (the “Notes”). The Notes will be issued at a price of 102.11% of the aggregate principal amount of the
Notes, resulting in a yield-to-maturity of approximately 4.0%.
Purchasers will be required to pay accrued and unpaid interest on the Notes from December 29, 2020 up to, but not including, the date of delivery of the Notes. On July 31, 2021, Capital Southwest will pay this pre-issuance accrued interest on the Notes to the holders of the Notes as of the applicable record date, along with interest accrued on the Notes offered hereby from the date of delivery to such interest payment date.
The Notes will constitute a further issuance of, have the same terms as, rank equally in right of payment with, and be fungible and form a single series with the $75 million in aggregate principal amount of the 4.50% notes due 2026 that the Company initially issued on December 29, 2020. Upon the issuance of the Notes, the outstanding aggregate principal amount of the Company’s 4.50% notes due 2026 will be $140 million.
The Notes will bear interest at a rate of 4.50% per year, payable semi-annually, will mature on January 31, 2026 and may be redeemed in whole or in part at Capital Southwest’s option at any time prior to October 31, 2025, at par plus a “make-whole” premium, and thereafter at par. The offering is subject to customary closing conditions and is expected to close on February 25, 2021.
Capital Southwest intends to use the net proceeds from this offering to repay the outstanding indebtedness under its credit facility. However, through re-borrowings under its credit facility, Capital Southwest intends to make investments in lower middle market and upper middle market portfolio companies in accordance with its investment objective and strategies, and for other general corporate purposes, including payment of operating expenses. As of February 19, 2021, Capital Southwest had $173.0 million of indebtedness outstanding under its credit facility. The credit facility matures on December 21, 2023, and borrowings under the credit facility currently bear interest on a per annum basis equal to LIBOR plus 2.50%.