Prospect Capital Closes Private Offering of $200M of 5.875% 6.1-Year Unsecured Convertible Senior Notes
Prospect Capital Corporation (NASDAQ: PSEC) announced today that it has closed a private placement of 6.1-year unsecured 5.875% Senior Convertible Notes Due 2019 (the "Notes"). A total of $200 million aggregate principal amount of the Notes were issued at the closing with net proceeds to the Company of approximately $193.6 million. The Company has also granted the initial purchaser of the Notes an option to purchase up to an additional $30 million in aggregate principal amount of the Notes.
The Notes are convertible into shares of Prospect's common stock based on an initial conversion rate of 79.7766 shares of Prospect's common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $12.54 per share of common stock, representing a 15% conversion premium over the last reported sale price of Prospect's common stock on December 17, 2012, which was $10.90 per share. The conversion price for the Notes will be reduced for monthly cash dividends paid to common shares at more than $0.110025 per share, subject to adjustment.
The Notes will mature on January 15, 2019, unless previously converted in accordance with their terms. The Notes will bear interest at an annual rate of 5.875%, payable semiannually in arrears on January 15 and July 15 of each year, beginning July 15, 2013. The Notes will be general unsecured obligations of Prospect, will rank equally in right of payment with Prospect's existing and future senior unsecured debt (including Prospect's outstanding 6.25% convertible senior notes due 2015, 5.5% convertible senior notes due 2016, 5.375% convertible senior notes due 2017, 5.75% convertible senior notes due 2018, 6.95% senior notes due 2022 and any Prospect Capital InterNotes® outstanding), and will rank senior in right of payment to any potential subordinated debt, should any be issued in the future.
Prospect intends to use the net proceeds from the sale of the Notes to maintain balance sheet liquidity, including investments in high quality short-term debt instruments, and thereafter to make long-term investments in accordance with Prospect's investment objectives. The Notes have no restrictions related to the type and security of assets in which Prospect might invest.
The Notes and the shares of common stock issuable upon conversion of the Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any applicable state securities laws. The Notes were offered only to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act.
This press release is for informational purposed only and shall not constitute an offer to sell or the solicitation of an offer to buy the Notes, nor shall there be any sale of these securities, in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state.
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