Capital Southwest Corporation (NASDAQ:CSWC) (“Capital Southwest”)
announced today that it has priced a registered public offering of
$50,000,000 in aggregate principal amount of its 5.95% notes due
2022 (the “Notes”), which will result in net proceeds to Capital
Southwest of approximately $48,500,000 (or approximately
$55,775,000 if the underwriters fully exercise their option to
purchase additional Notes) based on the purchase price paid by the
underwriters of 97% of the aggregate principal amount of the Notes,
before deducting estimated offering expenses payable by Capital
Southwest. This is an increase of $15,000,000 from the offering
size previously announced.
The Notes will mature on December 15, 2022 and may be redeemed
in whole or in part at any time, or from time to time, at Capital
Southwest’s option on or after December 15, 2019 upon not less than
30 days nor more than 60 days written notice by mail prior to
the date fixed for redemption thereof, 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, September
15, and December 15 of each year, beginning on
March 15, 2018. Capital Southwest has also granted the underwriters
an option to purchase an additional $7,500,000 aggregate principal
amount of Notes within 30 days of the date of the prospectus
supplement.
The offering is subject to customary closing conditions and is
expected to close on December 15, 2017. The Notes are expected to
be listed, and trade, on The Nasdaq Global Select Market under the
trading symbol “CSWCL” within 30 days from the original issue
date.
Capital Southwest intends to use the net proceeds from this
offering to repay outstanding indebtedness under its existing
credit facility. 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 Capital Southwest’s investment objective and strategies, to
make investments in marketable securities and other temporary
investments, and for other general corporate purposes, including
payment of operating expenses. As of December 12, 2017, Capital
Southwest had $86.0 million of indebtedness outstanding under its
credit facility. The credit facility matures on November 16, 2021,
and borrowings under the credit facility currently bear interest on
a per annum basis equal to LIBOR plus 3.00%.
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 for the
offering. BB&T Capital Markets, a division of BB&T
Securities, LLC and B. Riley FBR, Inc. are acting as co-managers
for the offering.
The pricing term sheet, the preliminary prospectus supplement,
the accompanying prospectus and this press release do not
constitute offers to sell or the solicitation of offers to buy, nor
will there be any sale of the Notes referred to in this press
release, in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to the registration or qualification
under the securities laws of such 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 preliminary 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: 1-800-966-1559); Janney Montgomery Scott LLC,
Attn: Taxable Fixed Income, 1717 Arch Street, Philadelphia, PA
19103, or by emailing
prospectus@janney.com; or Ladenburg
Thalmann & Co. Inc., Attn: Syndicate Department, 277 Park
Avenue, 26th Floor, New York, NY 10172, or by emailing
prospectus@ladenburg.com (telephone:
1-800-573-2541).
The preliminary prospectus supplement dated December 12,
2017, the accompanying prospectus dated November
1, 2017 and the pricing term sheet dated December 12,
2017, each of which has been filed with the
Securities and Exchange Commission, contain this and other
information about Capital Southwest and should be read carefully
before investing. Investors are advised to carefully consider the
investment objectives, risks and charges and expenses of Capital
Southwest before investing.
About Capital SouthwestCapital Southwest
Corporation 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.
Forward-Looking StatementsThis press release
may contain certain forward-looking statements within the meaning
of the federal securities laws, including statements with regard to
Capital Southwest’s Notes offering, the anticipated use of the net
proceeds of the offering, and the listing of the Notes on The
Nasdaq Global Select Market. These statements are often, but not
always, made through the use of word or phrases such as “will,”
“may,” “could,” “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 identified
from time to time in our filings with the Securities and Exchange
Commission. Readers should not place undue reliance on any
forward-looking statements and are encouraged to review Capital
Southwest's registration statement 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.
Contact:Michael S. Sarner, Chief Financial
Officermsarner@capitalsouthwest.com214-884-3829
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