Capital Southwest Increases Credit Facility to $180 Million
November 16 2017 - 4:01PM
Capital Southwest Corporation (“Capital Southwest” or the
“Company”) (Nasdaq:CSWC), an internally managed Business
Development Company focused on providing flexible financing
solutions to support the acquisition and growth of middle market
businesses, today announced an amendment to its Senior Secured
Credit Facility (the “Credit Facility”). The amended Credit
Facility provides total commitments of $180 million and an
expansion of the accordion feature to $250 million to accommodate
future growth of the Company. The amendment also includes, among
other things, a reduction in pricing, an extension to the revolving
period and final maturity, and an increase in advance rates on
first lien loans made by the Company. The financing was led by ING
Capital LLC.
Total commitments under the amended Credit
Facility increased by $65 million, to an aggregate of $180 million,
provided by a diversified group of eight lenders. The accordion
feature of the amended Credit Facility allows for an increase in
total commitments under the facility from new and existing lenders
on the same terms and conditions as the existing commitments.
As of quarter end September 30, 2017, Capital Southwest had
$56 million outstanding on the Credit Facility.
The pricing on the facility was reduced from
LIBOR plus 3.25% to LIBOR plus 3.00%, with a step-down to LIBOR
plus 2.75% when certain conditions, as outlined in the credit
agreement, are met. Unused commitment fees were also reduced.
The Credit Facility’s revolving period was
extended from August 30, 2019 to November 16, 2020; and the final
maturity was extended from August 30, 2020 to November 16,
2021.
Michael Sarner, Chief Financial Officer,
commented, “We were pleased with the substantial interest in the
amendment and upsize of our credit facility. This amendment
provides us significant funding capacity to continue to grow our
investment portfolio and increase balance sheet leverage towards
our target, while lowering the facility cost and increasing advance
rates. Improving the cost and efficiency of our financing
sources allows us to generate attractive risk adjusted returns for
our shareholders without reaching for yield in our investment
portfolio. We value our relationships with our existing and
new lenders and are grateful for their continued support.”
About Capital Southwest
Capital Southwest Corporation (Nasdaq:CSWC) is a
Dallas, Texas-based, internally managed Business Development
Company, with approximately $293 million in net assets as of
September 30, 2017. Capital Southwest is a middle-market
lending firm focused on supporting the acquisition and growth of
middle market businesses and makes investments ranging from $5 to
$20 million in securities across the capital structure, including
first lien, unitranche, second lien, subordinated debt and
non-control equity co-investments. As a public company with a
permanent capital base, Capital Southwest has the flexibility to be
creative in its financing solutions and to invest to support the
growth of its portfolio companies over long periods of time.
About ING Capital LLC
ING Capital LLC is a financial services firm
offering a full array of wholesale financial lending products and
advisory services to its corporate and institutional clients. ING
Capital LLC is an indirect U.S. subsidiary of ING Bank NV, part of
ING Group (NYSE:ING), a global financial institution of Dutch
origin. The purpose of ING Bank is empowering people to stay a step
ahead in life and in business. The Investment Industry Finance
(IIF) group at ING Capital offers a broad range of structured
finance solutions to its clients active in the investment industry,
including Business Development Companies.
Forward-Looking Statements
This press release contains historical
information and forward-looking statements within the meaning of
The Private Securities Litigation Reform Act of 1995 with respect
to the business and investments of Capital Southwest.
Forward-looking statements are statements that are not historical
statements and can often be identified by words such as “will, “
“may,” “could,” “believe, ““expect“ and similar expressions and
variations or negatives of these words. These statements are based
on management's current expectations, assumptions and beliefs. They
are not guarantees of future results and are subject to numerous
risks, uncertainties and assumptions that could cause actual
results to differ materially from those expressed in any
forward-looking statement. These risks include risks related to
changes in the markets in which Capital Southwest invests, changes
in the financial and lending markets, regulatory changes, tax
treatment and general economic and business conditions.
Readers should not place undue reliance on any
forward-looking statements and are encouraged to review Capital
Southwest's Annual Report on Form 10-K for the year ended March 31,
2017 and subsequent filings with the Securities and Exchange
Commission for a more complete discussion of the risks and other
factors that could affect any forward-looking statements. Except as
required by the federal securities laws, Capital Southwest does not
undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, changing circumstances or any other reason after the
date of this press release.
Investor Relations Contact:
Michael S. Sarner, Chief Financial
Officer214-884-3829
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