CAPITAL SOUTHWEST CORPORATION

(CSWC)
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Delayed Nasdaq  -  05/20 04:00:00 pm EDT
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05/12CAPITAL SOUTHWEST CORP : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits (form 8-K)
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CAPITAL SOUTHWEST CORP : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits (form 8-K)

11/09/2021 | 04:07pm EDT

Item 1.01 Entry into a Material Definitive Agreement


On November 4, 2021, Capital Southwest Corporation (the "Company") entered into
an underwriting agreement (the "Underwriting Agreement") by and between the
Company and Raymond James & Associates, Inc., as representative of the several
underwriters named on Schedule A thereto, in connection with the issuance and
sale of $50,000,000 aggregate principal amount of the Company's 3.375% Notes due
2026 (the "New Notes" and the issuance and sale of the New Notes, the
"Offering").

The New Notes were issued on November 9, 2021 as additional notes under the Base
Indenture, dated October 23, 2017 (the "Base Indenture"), between the Company
and U.S. Bank National Association, as trustee (the "Trustee"), as supplemented
by the Fourth Supplemental Indenture, dated August 27, 2021 (the "Fourth
Supplemental Indenture"; and together with the Base Indenture, the "Indenture"),
pursuant to which the Company issued $100,000,000 aggregate principal amount of
the 3.375% Notes due 2026 (the "Existing Notes") on August 27, 2021. The New
Notes are treated as a single series with the Existing Notes under the Indenture
and have the same terms as the Existing Notes. The New Notes have the same CUSIP
number and are fungible and rank equally with the Existing Notes. Upon issuance
of the New Notes, the outstanding aggregate principal amount of the Company's
3.375% Notes due 2026 is $150,000,000.

The New Notes bear interest at a rate of 3.375% per year payable semi-annually
in arrears on April 1 and October 1 of each year, beginning on April 1, 2022.
The New Notes will mature on October 1, 2026 and may be redeemed in whole or in
part at the Company's option at any time prior to July 1, 2026, at par plus a
"make-whole" premium, and thereafter at par.

The Company intends to use the net proceeds from the Offering to repay a portion
of its outstanding indebtedness under the Company's senior secured revolving
credit facility (the "Credit Facility"). However, through re-borrowings under
the Credit Facility, the Company intends to make investments in accordance with
the Company's investment objective and strategies and for other general
corporate purposes, including payment of operating expenses.

The New Notes are the direct unsecured obligations of the Company and rank pari
passu with all existing and future unsubordinated unsecured indebtedness issued
by the Company, senior to any of the Company's future indebtedness that
expressly provides it is subordinated to the New Notes, effectively subordinated
to all of the existing and future secured indebtedness issued by the
Company (including indebtedness that is initially unsecured in respect of which
the Company subsequently grants security), to the extent of the value of the
assets securing such indebtedness, including, without limitation, borrowings
under the Credit Facility, and structurally subordinated to all existing and
future indebtedness and other obligations of any of the Company's subsidiaries,
including, without limitation, the debentures guaranteed by U.S. Small Business
Administration.

The Indenture contains certain covenants, including certain covenants requiring
the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2)
of the Investment Company Act of 1940, as amended (the "1940 Act"), or any
successor provisions, whether or not the Company continues to be subject to such
provisions of the 1940 Act, but giving effect, in either case, to any exemptive
relief granted to the Company by the U.S. Securities and Exchange Commission
(the "SEC"), to comply with Section 18(a)(1)(B) as modified by Section 61(a)(2)
of the 1940 Act, or any successor provisions, after giving effect to any
exemptive relief granted to the Company by the SEC and subject to certain other
exceptions, and to provide financial information to the holders of the New Notes
and the Trustee if the Company is no longer subject to the reporting
requirements under the Securities Exchange Act of 1934, as amended. These
covenants are subject to important limitations and exceptions that are described
in the Indenture.

In addition, holders of the New Notes can require the Company to repurchase some
or all of the New Notes at a purchase price equal to 100% of their principal
amount, plus accrued and unpaid interest to, but not including, the repurchase
date upon the occurrence of a "Change of Control Repurchase Event," as defined
in the Fourth Supplemental Indenture.

--------------------------------------------------------------------------------


The New Notes were offered and sold in an offering registered under the
Securities Act of 1933, as amended, pursuant to the Registration Statement on
Form N-2 (File No. 333-259455), the prospectus supplement dated November 4, 2021
and the pricing term sheet filed with the SEC on November 4, 2021. The
transaction closed on November 9, 2021. The net proceeds to the Company were
approximately $48.9 million, based on the public offering price of 99.993% of
the aggregate principal amount of the New Notes, after deducting the
underwriting discount of $1.0 million and the estimated offering expenses of
approximately $0.1 million payable by the Company.

The foregoing descriptions of the Underwriting Agreement, the Fourth
Supplemental Indenture, and the New Notes do not purport to be complete and are
qualified in their entirety by reference to the full text of the Underwriting
Agreement, the Fourth Supplemental Indenture, and the form of global note
representing the New Notes, respectively, each filed or incorporated by
reference as exhibits hereto and incorporated by reference herein.


Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information required by Item 2.03 contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits


    Exhibit No.            Description
        1.1                  Underwriting Agreement, dated November 4, 

2021, by and between the Company and

                           Raymond James & Associates, Inc., as 

representative of the several underwriters

                           named on Schedule A thereto.
        4.1                  Indenture dated as of October 23, 2017, by and 

between the Company and U.S. Bank

                           National Association, as trustee (Incorporated 

by reference to Exhibit (d)(2) to

                           Registration Statement on Form N-2 (Reg. No. 

333-220385) filed on October 23,

                           2017).
        4.2                  Fourth Supplemental Indenture, dated as of

August 27, 2021, relating to the 3.375%

                           Notes due 2026, by and between the Company and 

U.S. Bank National Association, as

                           trustee (Incorporated by reference to Exhibit 

4.2 to Current Report on Form 8-K

                           filed on August 27, 2021).
        4.3                  Form of Global Note with respect to the 3.375% 

Notes due 2026 (Incorporated by

                           reference to Exhibit 4.3 to Current Report on 

Form 8-K filed on August 27, 2021).

        5.1                  Opinion of Eversheds Sutherland (US) LLP.
        23.1                 Consent of Eversheds Sutherland (US) LLP 

(Included in Exhibit 5.1 hereto).

--------------------------------------------------------------------------------

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