By Rebecca Melvin
New York, April 11 - Prospect Capital Corp. priced $130 million of 5.5-year convertible senior notes in an overnight deal Wednesday that was reoffered at 97.75 to yield 5.375% with an initial conversion premium of 10%, according to market sources.
The Rule 144A deal, which has a $20 million greenshoe, came at the cheap end of 5% to 5.375% coupon talk and at the talked price point for the premium.
Goldman Sachs & Co. was the bookrunner.
The notes are non-callable with no investor puts. The securities have dividend protection for dividends above 10.15 cents per share and change-of-control protection.
The new paper will rank pari passu with the company's 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.
| Issuer: | Prospect Capital Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $130 million
|
| Greenshoe: | $20 million
|
| Maturity: | Oct. 15, 2017
|
| Bookrunner: | Goldman Sachs & Co.
|
| Coupon: | 5.375%
|
| Price: | Par, reoffered at 97.75
|
| Yield: | 5.375%
|
| Conversion premium: | 10%
|
| Conversion price: | $11.65
|
| Conversion ratio: | 85.8442 shares per bond
|
| Call: | Non-callable
|
| Puts: | No puts
|
| Price talk: | 5%-5.375%, up 10%
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes, for dividends above 10.15 cents per share
|
| Pricing date: | April 11
|
| Distribution: | Rule 144A
|
| Stock symbol: | Nasdaq: PSEC
|
| Stock reference price: | $10.59 as of close April 10
|
| Market capitalization: | $1.13 billion
|
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