Hercules to price $150 million five-year convertibles to yield 4.25%-4.5%, up 12.5%-17.5%

By Stephanie N. Rotondo

Seattle, Jan. 18 – Hercules Capital Inc. is offering $150 million of five-year convertible senior notes with a yield talked at 4.25% to 4.5% and an initial conversion premium of 12.5% to 17.5% (expected ratings: BBB-/BBB+).

Jefferies is running the Rule 144A deal. Pricing is expected after the market closes on Thursday.

There is a $22.5 million greenshoe.

Conversions will be settled with cash, common stock or a combination, at the company’s option.

The notes are not redeemable. There is dividend and takeover protection.

Proceeds will be used to repurchase or otherwise redeem all of the company’s outstanding 7% notes due 2019, to fund investments in debt and equity securities in accordance with investment objectives and for working capital purposes.

Hercules Capital is a Palo Alto, Calif.-based specialty finance company.

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