Capital Southwest Announces Proposed Convertible Notes Offering
Capital Southwest (Nasdaq: CSWC) has announced a registered public offering of unsecured convertible notes due 2029. The notes will pay quarterly interest and can be converted into cash, CSWC common stock, or a combination of both at the company's discretion. The specific terms, including interest rate and initial conversion rate, will be determined during pricing.
The company plans to use the proceeds to redeem its 4.50% Notes due 2026 and repay part of its senior secured revolving credit facility with ING Capital Oppenheimer & Co. is serving as the sole book-running manager for the offering, which is being conducted under Capital Southwest's automatic shelf registration statement.
Capital Southwest (Nasdaq: CSWC) ha annunciato un'offerta pubblica registrata di note convertibili non garantite in scadenza nel 2029. Le note pagheranno interessi trimestrali e possono essere convertite in contante, in azioni ordinarie CSWC, o in una combinazione di entrambi a discrezione dell'azienda. I termini specifici, inclusi il tasso di interesse e il tasso di conversione iniziale, saranno determinati durante la fase di pricing.
L'azienda prevede di utilizzare i proventi per riscattare le sue note al 4,50% in scadenza nel 2026 e rimborsare parte della sua linea di credito revolving senior garantita con ING Capital. Oppenheimer & Co. funge da unico gestore del libro per l'offerta, che è condotta sotto la dichiarazione di registrazione automatica di Capital Southwest.
Capital Southwest (Nasdaq: CSWC) ha anunciado una oferta pública registrada de notas convertibles no garantizadas con vencimiento en 2029. Las notas pagarán intereses trimestrales y pueden ser convertidas en efectivo, acciones ordinarias de CSWC, o una combinación de ambos a discreción de la empresa. Los términos específicos, incluido el tipo de interés y el tipo de conversión inicial, se determinarán durante la fijación de precios.
La empresa planea utilizar los ingresos para redimir sus notas al 4,50% con vencimiento en 2026 y reembolsar parte de su línea de crédito rotativa senior garantizada con ING Capital. Oppenheimer & Co. actúa como el único gestor del libro para la oferta, que se realiza bajo la declaración de registro automático de Capital Southwest.
캐피탈 사우스웨스트(Nasdaq: CSWC)는 2029년에 만료되는 무담보 전환사채의 등록 공개 제안을 발표했습니다. 이 사채는 분기별 이자를 지급하며 회사의 재량에 따라 현금, CSWC 일반 주식 또는 둘의 조합으로 전환될 수 있습니다. 이자율과 초기 전환 비율을 포함한 특정 조건은 가격 책정 중에 결정됩니다.
회사는 이 수익금을 사용하여 2026년 만기 4.50% 사채를 상환하고 ING Capital과의 선담보 회전 신용 시설의 일부를 상환할 계획입니다. Oppenheimer & Co.는 이 제안의 단독 북 레인저로 활동하며, 이 제안은 캐피탈 사우스웨스트의 자동 선반 등록 성명서에 따라 진행됩니다.
Capital Southwest (Nasdaq: CSWC) a annoncé une offre publique enregistrée de obligations convertibles non garanties arrivant à échéance en 2029. Les obligations paieront des intérêts trimestriels et pourront être converties en espèces, en actions ordinaires CSWC ou en une combinaison des deux à la discrétion de l'entreprise. Les termes spécifiques, y compris le taux d'intérêt et le taux de conversion initial, seront déterminés lors de la fixation des prix.
L'entreprise prévoit d'utiliser les produits pour récupérer ses obligations à 4,50 % arrivant à échéance en 2026 et rembourser une partie de sa ligne de crédit revolving senior garantie avec ING Capital. Oppenheimer & Co. agit en tant que seul gestionnaire de livre pour l'offre, qui est réalisée sous la déclaration d'enregistrement automatique de Capital Southwest.
Capital Southwest (Nasdaq: CSWC) hat eine registrierte öffentliche Angebot von nicht besicherten wandelbaren Schuldverschreibungen mit Fälligkeit im Jahr 2029 angekündigt. Die Schuldverschreibungen werden vierteljährlich Zinsen zahlen und können nach Ermessen des Unternehmens in Bargeld, CSWC-Stammaktien oder eine Kombination aus beidem umgewandelt werden. Die spezifischen Bedingungen, einschließlich des Zinssatzes und des anfänglichen Umwandlungsverhältnisses, werden während der Preisfestsetzung festgelegt.
Das Unternehmen plant, die Erlöse zu nutzen, um seine 4,50%-Schuldverschreibungen mit Fälligkeit im Jahr 2026 zurückzukaufen und einen Teil seiner gesicherten revolvierenden Kreditfazilität bei ING Capital zurückzuzahlen. Oppenheimer & Co. fungiert als alleiniger Buchführer für das Angebot, das unter dem automatischen Registrierungsstatement von Capital Southwest durchgeführt wird.
- Potential debt refinancing could improve capital structure
- Flexibility in conversion terms (cash, stock, or combination)
- Potential dilution risk for existing shareholders if notes are converted to stock
- New debt issuance increases overall debt burden
Insights
This convertible notes offering represents a significant financial restructuring move by Capital Southwest. The company aims to refinance its existing 4.50% 2026 notes and reduce its revolving credit facility debt. The new 2029 notes provide longer-term financing flexibility with the convertible feature adding potential equity upside for investors.
The timing is strategic, as companies often refinance debt ahead of maturity to optimize their capital structure. The conversion feature could help reduce cash interest burden if bondholders convert to equity. However, this also presents potential dilution risk for existing shareholders. The success of this offering will largely depend on the final pricing terms, particularly the conversion premium and interest rate in the current high-rate environment.
This debt refinancing initiative through convertible notes is a calculated move in the current market environment. The structure allows Capital Southwest to potentially extend debt maturities while providing flexibility through the equity conversion option. The selection of Oppenheimer as sole book-runner suggests a targeted institutional approach to placement.
The automatic shelf registration and timing indicate proactive capital management, though final terms will be important for assessing the true impact. The market's reception will depend heavily on the conversion premium and coupon rate relative to existing debt costs. This could affect both the company's weighted average cost of capital and future financial flexibility.
DALLAS, Nov. 04, 2024 (GLOBE NEWSWIRE) -- Capital Southwest Corporation (Nasdaq: CSWC) (“Capital Southwest”) today announced the commencement of a registered public offering of unsecured convertible notes due 2029 (the “notes”) in an underwritten offering (the “offering”).
The notes will be unsecured obligations of Capital Southwest, will accrue interest payable quarterly in arrears and will mature in 2029, unless earlier converted, redeemed or repurchased. Upon conversion, Capital Southwest will pay or deliver, as the case may be, cash, shares of Capital Southwest’s common stock or a combination of cash and shares of Capital Southwest’s common stock, at Capital Southwest’s election. The interest rate, initial conversion rate, redemption or repurchase rights and other terms of the notes will be determined at the time of pricing of the offering.
Capital Southwest expects to use the net proceeds from the offering to redeem in full its
Oppenheimer & Co. is acting as sole book-running manager for the proposed offering.
The proposed offering is being conducted pursuant to Capital Southwest’s automatic shelf registration statement on Form N-2, including a base prospectus, that was filed with the Securities and Exchange Commission (the “SEC”) on October 29, 2024 and became effective upon filing. A preliminary prospectus and accompanying prospectus relating to the proposed offering will be filed with the SEC and will be available for free on the SEC’s website located at http://www.sec.gov. Copies of the preliminary prospectus supplement relating to this offering and the accompanying prospectus may be obtained, when available, from: Oppenheimer & Co. Inc., Attention: Syndicate Prospectus Department, 85 Broad Street, 26th Floor, New York, NY 10004, by telephone at (212) 667-8055, or by email at EquityProspectus@opco.com.
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation or sale of any securities 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 any such state or jurisdiction.
About Capital Southwest
Capital Southwest Corporation (Nasdaq: CSWC) is a Dallas, Texas-based, internally managed business development company with approximately
Forward-Looking Statements
This press release contains “forward-looking” statements, as that term is defined under the federal securities laws, including statements concerning the proposed terms of the notes, the completion, timing and size of the proposed offering of the notes, the anticipated use of proceeds from the offering, the potential impact of the foregoing or related transactions on dilution to holders of Capital Southwest’s common stock, the market price of Capital Southwest’s common stock or the notes or the conversion price of the notes. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Capital Southwest’s control. Capital Southwest’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to whether Capital Southwest will consummate the offering of notes on the expected terms or at all, which could differ or change based upon market conditions or for other reasons, and the other risks detailed in Capital Southwest’s Form 10-K filed with the SEC for the year ended March 31, 2024, in Capital Southwest’s quarterly report on Form 10-Q for the quarter ended September 30, 2024 and in other filings and reports that Capital Southwest may file from time to time with the SEC. The forward-looking statements included in this press release represent Capital Southwest’s views as of the date of this press release. Capital Southwest anticipates that subsequent events and developments will cause Capital Southwest’s views to change. Capital Southwest undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing Capital Southwest’s views as of any date subsequent to the date of this press release.
Investor Relations Contact:
Michael S. Sarner, Chief Financial Officer
214-884-3829
FAQ
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