Prospect Capital Corporation Announces Results of Cash Tender Offer For Any and All of its Outstanding 3.706% Notes due 2026

Rhea-AI Summary

Prospect Capital (PSEC) has announced the results of its cash tender offer for its outstanding 3.706% Notes due 2026. As of the expiration time on April 17, 2025, a total of $142,961,000 aggregate principal amount of Notes had been validly tendered, including $8,732,000 tendered through guaranteed delivery procedures.

The company will pay $990.00 for each $1,000 principal amount of eligible Notes, plus accrued and unpaid interest. The settlement date is expected to be April 22, 2025. The tender offer targeted Notes with an outstanding principal amount of $342,947,000.

RBC Capital Markets, is serving as the Dealer Manager, while D.F. King & Co., Inc. is acting as the Information and Tender Agent for the tender offer.

Positive

• Company's debt reduction initiative through tender offer demonstrates proactive liability management
• Successful tender of $142.9M worth of Notes represents 41.7% of outstanding amount

Negative

• Company paying premium of $990 per $1,000 of Notes, resulting in additional costs
• Majority of noteholders (58.3%) declined to participate in the tender offer

Insights

Fixed Income Analyst

Prospect Capital's tender offer repurchased 41.7% of its 2026 notes at a slight discount, modestly improving its debt profile while preserving capital flexibility.

Prospect Capital (PSEC) has successfully completed a strategic tender offer for its 3.706% Notes due 2026, with $142.96 million of the $342.95 million outstanding principal amount tendered (representing 41.7% of the notes). The company is purchasing these notes at $990 per $1,000 face value, representing a modest 1% discount to par.

This tender offer represents a calculated financial engineering move that achieves several objectives. First, PSEC is effectively repurchasing its own debt at a discount, creating an immediate gain of approximately $1.43 million (the 1% discount on $142.96 million). Second, the company reduces its future interest payment obligations by eliminating these notes from its liability structure.

The 41.7% participation rate indicates moderate noteholder interest in the tender offer. The relatively small discount (1%) likely contributed to many holders choosing to retain their notes rather than tender them. This selective participation actually benefits PSEC by allowing debt reduction without requiring excessive cash deployment.

From a balance sheet perspective, this transaction will modestly improve PSEC's debt profile by reducing outstanding liabilities while preserving capital flexibility. The tender offer represents thoughtful liability management rather than a transformative financial event. The company's decision to purchase these notes suggests management believes it has adequate liquidity and is making a calculated move to optimize its capital structure incrementally.

NEW YORK, April 18, 2025 (GLOBE NEWSWIRE) -- Prospect Capital Corporation (the “Company”) today announced the results of its previously announced cash tender offer (the “Tender Offer”) to purchase any and all of the outstanding notes listed below. The Tender Offer was made pursuant to an Offer to Purchase dated April 9, 2025 (the “Offer to Purchase”), which set forth the terms and conditions of the Tender Offer, and the accompanying notice of guaranteed delivery (the “Notice of Guaranteed Delivery”).

As of the previously announced expiration time of 5:00 p.m., New York City time, on April 17, 2025 (the “Expiration Time”), according to information provided by D.F. King & Co., Inc., the Information and Tender Agent for the Tender Offer, a total of $142,961,000 aggregate principal amount of Notes (defined below) had been validly tendered and not validly withdrawn in the Tender Offer. This amount includes $8,732,000 tendered pursuant to the guaranteed delivery procedures described in the Offer to Purchase and the Notice of Guaranteed Delivery, which remains subject to the holders’ performance of the delivery requirements under such procedures. Withdrawal rights for the Notes expired at 5:00 p.m., New York City time, on April 17, 2025. The table below sets forth the aggregate principal amount and percentage of the Notes validly tendered and not validly withdrawn by the Expiration Time that will be accepted for purchase by the Company (the “Eligible Notes”).

Title of Security	CUSIP / ISIN Nos.	Outstanding Principal Amount	Principal Amount Tendered
3.706% Notes due 2026 (the “Notes”)	74348TAU6 / US74348TAU60	$342,947,000	$142,961,000

The consideration to be paid for the Eligible Notes is $990.00 for each $1,000 principal amount of Eligible Notes, plus accrued and unpaid interest on the Eligible Notes, if any, from the applicable last interest payment date up to, but not including, the settlement date, which date is expected to be April 22, 2025.

The Company has retained RBC Capital Markets, LLC to serve as the Dealer Manager for the Tender Offer. Questions and requests for assistance regarding the Tender Offer should be directed to RBC Capital Markets, LLC at +1 (212) 618-7843 (collect) or +1 (877) 381-2099 (toll free).

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 (800) 967-5068 (toll free), or via psec@dfking.com.

Copies of the Offer to Purchase and Retail Processing Fee Form are also available at the following web address: https://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. 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, the Dealer Manager, 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. Prospect has 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 transaction 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 tender offer price for PSEC's 3.706% Notes due 2026?

PSEC is offering $990.00 for each $1,000 principal amount of eligible Notes, plus accrued and unpaid interest.

How much of PSEC's 2026 Notes were tendered in the offer?

$142,961,000 aggregate principal amount of Notes were tendered, including $8,732,000 through guaranteed delivery procedures.

When is the settlement date for PSEC's tender offer?

The settlement date is expected to be April 22, 2025.

What percentage of PSEC's outstanding 2026 Notes were tendered?

41.7% of the outstanding $342,947,000 principal amount of Notes were tendered.