Prospect Capital plans to price $130 million 5.5-year convertibles to yield 5%-5.375%, up 10%

By Rebecca Melvin

New York, April 10 - Prospect Capital Corp. launched an overnight offering of $130 million of 5.5-year convertible senior notes that were seen pricing Wednesday morning and were talked to yield 5% to 5.375% with an initial conversion premium of 10%, according to market sources.

The Rule 144A deal has a $20 million greenshoe.

Goldman Sachs & Co. is the bookrunner.

The notes are non-callable with no investor puts. The securities have full dividend protection in the form of a conversion rate adjustment and change-of-control protection.

The new paper will rank pari passu with the existing 6.25% and 5.5% convertibles.

Proceeds will be used to maintain balance sheet liquidity, including repayment of debt under the company's credit facility, investments in high-quality short-term debt instruments, and thereafter long-term investments in accordance with Prospect's investment objectives.

Prospect Capital is a New York venture capital and private equity firm.

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