CHARLOTTE, N.C.--(BUSINESS WIRE)--
Capitala Finance Corp. (NasdaqGS: CPTA) (the "Company") today announced
the pricing of $50 million in aggregate principal amount of unsecured
5.75% convertible notes due 2022 (the "Notes").
The offering is expected to close on May 26, 2017, subject to customary
closing conditions. The Company has granted the underwriters an option
to purchase up to an additional $7.5 million in aggregate principal
amount of Notes.
The Notes will be convertible into shares of the Company's common stock
based on an initial conversion rate of 1.5913 shares of the Company's
common stock per $25 principal amount of Notes, which is equivalent to
an initial conversion price of approximately $15.71 per share of common
stock, representing a 14% conversion premium over the last reported sale
price of the Company's common stock on May 23, 2017 which was $13.78 per
The Notes are expected to be listed on the NASDAQ Capital Market and to
trade thereon within 30 days of the original issue date. The Notes will
mature on May 31, 2022, unless previously converted or repurchased in
accordance with their terms. Interest on the Notes will be payable on
February 28, May 31, August 31 and November 30 of each year, beginning
on August 31, 2017. The Notes will be general unsecured obligations of
the Company and will rank equally in right of payment with the Company's
outstanding and future unsecured unsubordinated debt.
The Company expects to use a portion of the net proceeds from this
offering, together with the net proceeds from the offering of the
Company's 6.00% fixed-rate notes due 2022 that was completed on May 16,
2017 (the "2022 Notes"), to redeem all of the outstanding indebtedness
under its 7.125% fixed-rate notes due 2021 (the "2014 Notes"), which
currently have an aggregate principal amount of approximately $113.4
million, plus accrued interest. Any net proceeds from this offering,
together with the net proceeds from the offering of the 2022 Notes, in
excess of the outstanding indebtedness of the 2014 Notes will be used to
repay borrowings under the Company's senior secured revolving credit
Keefe, Bruyette & Woods, A Stifel Company, is serving as the
sole book-running manager. BB&T Capital Markets, a division of BB&T
Securities, LLC, Janney Montgomery Scott LLC and Seaport Global
Securities LLC are serving as co-managers.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy the securities in this offering or any
other securities nor will there be any sale of these securities or any
other securities referred to in this press release in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful
prior to the registration or qualification under the securities laws of
such state or jurisdiction.
A shelf registration statement relating to these securities is on
file with and has been declared effective by the Securities and Exchange
Commission. The offering may be made only by means of a prospectus and a
related prospectus supplement, copies of which may be obtained, when
available, from any of the following investment banks: Keefe, Bruyette &
Woods, Inc., 787 Seventh Avenue, Fourth Floor, New York, NY 10019
(telephone number 1-800-966-1559). The preliminary prospectus
supplement, dated May 22, 2017, and accompanying prospectus, dated May
1, 2017, each of which has been filed with the Securities and Exchange
Commission, contain a description of these matters and other important
information about the Company and should be read carefully
before investing. Investors are advised to carefully consider the
investment objectives, risks and charges and expenses of the Company
About Capitala Finance Corp.
Capitala Finance Corp. is a business development company that invests
primarily in first and second liens, subordinated debt and, to a lesser
extent, equity securities issued by lower and traditional middle-market
companies. The Company is managed by Capitala Investment Advisors, LLC.
Forward Looking Statements
This press release contains forward-looking statements subject to the
inherent uncertainties in predicting future results and conditions,
including statements with regard to the Company's securities offering
and the anticipated use of the net proceeds of the offering. Any
statements that are not statements of historical fact (including
statements containing the words "believes," "plans," "anticipates,"
"expects," "estimates" and similar expressions) should also be
considered to be forward-looking statements. Certain factors could cause
actual results and conditions to differ materially from those projected
in these forward-looking statements. These factors are identified from
time to time in our filings with the Securities and Exchange Commission.
We undertake no obligation to update such statements to reflect
subsequent events, except as may be required by law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170523006596/en/
Capitala Finance Corp.
Stephen Arnall, 704-376-5502
Source: Capitala Finance Corp.
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