Prospect Capital talks $150 million six-year convertible notes at 98 with a coupon of 6.25%-6.375%

By Abigail W. Adams

Portland, Me., Feb. 26 – Prospect Capital Corp. plans to price $150 million of six-year convertible notes (Baa3/BBB-) prior to the market open on Wednesday with price talk for a reoffer price of 98, a coupon of 6.25% to 6.375%, a yield of 6.76% to 6.89% and an initial conversion premium of 30.5%, according to a 497AD filing with the Securities and Exchange Commission.

Goldman Sachs & Co. LLC, Barclays and RBC Capital Markets LLC are joint bookrunners for the registered offering, which carries a greenshoe of $22.5 million.

The notes are non-callable until Dec. 1, 2024. There are no investor puts.

There is takeover protection and dividend protection above a monthly threshold of 6 cents.

Proceeds will be used to repurchase a portion of the company’s 4.75% convertible notes due 2020 from time to time, for the repayment of debt under its credit facility and to make short-term and long-term investments.

Prospect Capital is a New York-based business development company.

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