Hercules greenshoe exercised, ups convertibles to $230 million

By Marisa Wong

Morgantown, W.Va., Jan. 25– Hercules Capital Inc. sold an additional $30 million of 4.375% convertible senior notes due 2022 under a fully exercised greenshoe. This brings the total issue size to $230 million, according to a Wednesday press release.

The company priced an upsized $200 million of five-year convertible notes with a 4.375% coupon and a 15% initial conversion premium on Jan. 19.

The deal was increased from $150 million and came at the middle of talk, which had anticipated a yield of 4.25% to 4.5% and an initial conversion premium of 12.5% to 17.5%, as previously reported.

The greenshoe was raised to $30 million from $22.5 million initially.

Jefferies LLC is bookrunner for the Rule 144A deal.

Conversions will be settled with cash, common stock or a combination of both, at the company’s option. The notes have a contingent conversion provision.

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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