Prospect Capital Corporation Announces Launch of Cash Tender Offer For its 4.95% Senior Convertible Notes due 2022

Rhea-AI Summary

Prospect Capital Corporation has initiated a cash tender offer for up to $30,000,000 of its 4.95% Senior Convertible Notes due 2022. The tender offer, expiring on March 2, 2021, aims to purchase notes with a total outstanding principal amount of $136,228,000. Investors will receive $1,030.00 for each validly tendered $1,000 principal amount, plus accrued interest. If total tenders exceed the $30 million target, proration will apply. D.F. King & Co., Inc. is the appointed Information and Tender Agent.

Positive

• Initiation of a cash tender offer for $30 million increases liquidity for the company.
• Offer aids in managing outstanding debt effectively.

Negative

• Total outstanding notes of $136,228,000 indicates significant debt levels.
• Potential proration could lead to investor dissatisfaction if tenders exceed $30 million.

NEW YORK, Feb. 01, 2021 (GLOBE NEWSWIRE) -- Prospect Capital Corporation (the “Company”) today announced that it has commenced a cash tender offer (the “Tender Offer”) to purchase up to $30,000,000 aggregate principal amount of outstanding 4.95% Senior Convertible Notes due 2022 (the “Notes”). The Tender Offer will expire at 12:00 midnight, New York City time, on March 2, 2021 (one minute after 11:59 p.m., New York City time, on March 1, 2021), or any other date and time to which the Company extends the Tender Offer (such date and time, as it may be extended, the “Expiration Date”). The Tender Offer is made pursuant to an Offer to Purchase dated today, which sets forth the terms and conditions of the Tender Offer.

Title of Security	CUSIP / ISIN Nos.	Outstanding Principal Amount		Aggregate Principal Amount Sought
4.95% Senior Convertible Notes due 2022	74348TAR3 / US74348TAR32	$136,228,000		$30,000,000

The consideration to be paid for each $1,000 principal amount of Notes that are validly tendered and not validly withdrawn on or prior to the Expiration Date is $1,030.00, plus accrued and unpaid interest on the Notes, if any, from the last interest payment date up to, but not including, the Settlement Date (as defined herein).

The Company will purchase any Notes that have been validly tendered at or prior to the Expiration Date and accepted for purchase, subject to all conditions to the Tender Offer having been either satisfied or waived by the Company, promptly following the Expiration Date (the date of such acceptance and purchase, the “Settlement Date”). If Notes with an aggregate principal amount in excess of $30,000,000 are validly tendered and not validly withdrawn at or prior to the Expiration Date, proration for each holder tendering Notes will be calculated with a proration factor of such amount so that the Company only accepts for purchase an aggregate principal amount of Notes of $30,000,000. The Settlement Date is expected to occur within three business days following the Expiration Date, assuming the conditions to the Tender Offer have been either satisfied or waived by the Company at or prior to the Expiration Date.

As described in the Offer to Purchase, tendered Notes may be validly withdrawn from the Tender Offer at or prior to the Expiration Date. The Tender Offer is not conditioned on any minimum amount of Notes being tendered. The Company may amend, extend or, subject to certain conditions and applicable law, terminate the Tender Offer at any time in its sole discretion.

The Company has retained D.F. King & Co., Inc. to serve as the Information and Tender Agent for the Notes in the Tender Offer.

The Tender Offer is being made pursuant to the terms and conditions contained in the Offer to Purchase, a copy of which may be obtained from D.F. King & Co., Inc. at (212) 269-5550 (Banks and Brokers) or (866) 388-7452 (toll free), or via psec@dfking.com.

A copy of the Offer to Purchase is also available at the following web address: http://www.dfking.com/psec

This announcement is for informational purposes only and is not an offer to purchase or sell or a solicitation of an offer to purchase or sell, with respect to any securities. The solicitation of offers to buy the Notes is only being made pursuant to the terms of the Offer to Purchase, as it may be amended or supplemented. Holders should read the Company’s commencement Tender Offer statement on Schedule TO filed with the SEC in connection with the Tender Offer, which will include as an exhibit the Offer to Purchase and related materials, as well as any amendments or supplements to the Schedule TO when they become available, because they will contain important information. Each of these documents will be filed with the SEC, and, when available, holders may obtain them for free from the SEC at its website (www.sec.gov) or from the Company’s information and tender agent in connection with the Tender Offer. The Tender Offer is not being made in any state or jurisdiction in which such offer would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. None of the Company or the Information and Tender Agent are making any recommendation as to whether or not holders should tender their Notes in connection with the Tender Offer.

About Prospect Capital Corporation

Prospect Capital Corporation is a business development company that focuses on lending to and investing in private businesses. Prospect's investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.

Prospect has elected to be treated as a business development company under the Investment Company Act of 1940 (“1940 Act”). Prospect is required to comply with regulatory requirements under the 1940 Act as well as applicable NASDAQ, federal and state rules and regulations. We have elected to be treated as a regulated investment company under the Internal Revenue Code of 1986.

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, whose safe harbor for forward-looking statements does not apply to business development companies. These forward-looking statements include statements regarding expectations as to the completion of the transactions contemplated by the Tender Offer. Any such statements, other than statements of historical fact, are highly likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under our control, and that we may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from any forward-looking statements. Such statements speak only as of the time when made, and we undertake no obligation to update any such statement now or in the future.

For further information, contact:

Grier Eliasek, President and Chief Operating Officer
grier@prospectcap.com
Telephone (212) 448-0702

FAQ

What is the purpose of Prospect Capital Corporation's tender offer for March 2021?

The tender offer aims to purchase up to $30 million of its 4.95% Senior Convertible Notes due 2022.

What is the expiration date for the tender offer by Prospect Capital Corporation?

The tender offer expires on March 2, 2021.

How much will investors receive per $1,000 of validly tendered notes in the tender offer?

Investors will receive $1,030.00 per $1,000 principal amount, plus accrued interest.

What happens if the total tendered notes exceed $30 million?

If more than $30 million in notes are tendered, proration will be used to determine which notes are accepted.

Who is the Information and Tender Agent for Prospect Capital Corporation's tender offer?

D.F. King & Co., Inc. has been retained as the Information and Tender Agent.