KCAP Financial, Inc. (Nasdaq:KCAP) (the “Company” or “KCAP”) today
announced the pricing of its public offering of $17.8 million in
aggregate principal amount of additional 6.125% Notes due 2022 (the
“Notes”). The Notes will be a further issuance of, rank equally in
right of payment with, and form a single series with the $57.5
million in aggregate principal amount of the 6.125% Notes due 2022
that the Company initially issued on August 14, 2017 and
September 5, 2017 (the “Existing Notes”). The Company estimates
that the net proceeds it will receive from the sale of the Notes
will be approximately $17.2 million (or approximately $19.7 million
if the underwriters fully exercise their option to purchase
additional Notes), based on the purchase price paid by the
underwriters of 96.2924% of the aggregate principal amount of the
Notes, before deducting estimated offering expenses payable by the
Company.
The Notes will mature on September 30,
2022, and may be redeemed in whole or in part at any time or from
time to time at the Company’s option on or after September 30,
2019. The Notes will bear interest at a rate of 6.125% per
year payable quarterly on March 30, June
30, September 30, and December 30 of each year,
beginning December 30, 2017. The Company has also granted the
underwriters a 30-day option to purchase up to an additional $2.7
million in aggregate principal amount of the Notes to cover
overallotments, if any.
The closing of the transaction is subject to
customary closing conditions, and the Notes are expected to be
delivered on or about September 20, 2017. The Existing Notes
currently trade on the NASDAQ Global Select Market under the symbol
“KCAPL,” and it is anticipated that the Notes will trade under the
same symbol.
KCAP intends to use the net proceeds of
this offering for general corporate purposes, which includes
investing in portfolio companies and collateralized loan obligation
funds in accordance with its investment objective and strategies.
In addition, KCAP may use a portion of the net proceeds from the
sale of the Notes to redeem a portion of the outstanding
indebtedness under its 7.375% Notes Due 2019. KCAP currently
has $27,000,000 in aggregate principal amount of 7.375%
Notes Due 2019 outstanding, plus accrued interest.
Keefe, Bruyette & Woods, Inc., A
Stifel Company, Janney Montgomery Scott LLC and Ladenburg
Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann
Financial Services Inc. (NYSE MKT:LTS), are acting as joint
book-running managers for this offering. BB&T Capital Markets,
a division of BB&T Securities, LLC, FBR Capital Markets &
Co., and William Blair & Company, L.L.C. are acting as
co-managers for the offering.
This press release does not constitute an offer
to sell or the solicitation of an offer to buy the securities in
this offering or any other securities nor will there be any sale of
these securities or any other securities referred to in this press
release in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of such state or
jurisdiction.
A shelf registration statement relating
to these securities is on file with and has been declared effective
by the Securities and Exchange Commission. The offering may be made
only by means of a prospectus and a related prospectus supplement,
copies of which may be obtained, when available, from any of the
following investment banks: Keefe, Bruyette &
Woods, Inc., Attn: Debt Capital Markets, 787 Seventh Avenue, Fourth
Floor, New York, NY 10019 (telephone number
1-800-966-1559); Janney Montgomery Scott LLC,
Attn: Syndicate Department, 1717 Arch Street, Philadelphia, PA
19103, or by emailing prospectus@janney.com; or Ladenburg Thalmann
& Co. Inc., Attn: Syndicate Department, 277 Park Ave, 26th
Floor, New York, NY 10172, or by emailing prospectus@ladenburg.com
(telephone number 1-800-573-2541).
The preliminary prospectus supplement,
dated September 18, 2017, and accompanying prospectus, dated July
21, 2017, each of which has been filed with the Securities and
Exchange Commission, contain a description of these matters and
other important information about the Company
and should be read carefully before investing. Investors are
advised to carefully consider the investment objectives, risks and
charges and expenses of the Company before investing.
About KCAP Financial,
Inc.
KCAP Financial, Inc. is a publicly traded,
internally managed business development company. The Company’s
middle market investment business originates, structures, finances
and manages a portfolio of term loans, mezzanine investments and
selected equity securities in middle market companies. The
Company’s wholly owned portfolio companies, Trimaran Advisors,
L.L.C. and Katonah Debt Advisors, L.L.C. and related entities,
manage collateralized debt obligation funds that invest in broadly
syndicated corporate term loans, high-yield bonds and other credit
instruments.
Forward-Looking Statements
This press release contains certain
forward-looking statements, including statements with regard to
KCAP Financial Inc.'s securities offering and the anticipated use
of the net proceeds of the offering. Words such as “believes,”
“expects,” “projects,” “anticipates,” and “future” or similar
expressions are intended to identify forward-looking statements.
These forward-looking statements are subject to the inherent
uncertainties in predicting future results and conditions and no
assurance can be given that the securities offering discussed above
will be consummated on the terms described or at all. Completion of
the securities offering and the terms thereof are subject to
numerous factors, many of which are beyond the control of KCAP
Financial, Inc., including, without limitation, market conditions,
changes in interest rates, failure of customary closing conditions
and other matters set forth in KCAP Financial, Inc.’s prospectus
supplement and accompanying prospectus. KCAP Financial, Inc.
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by law.
KCAP-G
Contact:Ted
Gilpingilpin@kcapinc.com(212) 455-8300
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