Capital Southwest ups credit facility to $180 million, trims pricing

By Sarah Lizee

Olympia, Wash., Nov. 16 – Capital Southwest Corp. amended its senior secured credit facility to increase total commitments to $180 million from $115 million and expand the accordion feature to $250 million, according to a press release.

The amendment also includes, among other things, a reduction in pricing, an extension to the revolving period and final maturity and an increase in advance rates on first-lien loans made by the company.

Pricing was reduced to Libor plus 300 basis points from Libor plus 325 bps, with a step-down to Libor plus 275 bps when certain conditions are met.

Unused commitment fees were also reduced.

The revolving period was extended to Nov. 16, 2020 from Aug. 30, 2019, and the final maturity was extended to Nov. 16, 2021 from Aug. 30, 2020.

As of Sept. 30, Capital Southwest had $56 million outstanding on the facility.

The financing was led by ING Capital LLC.

“We were pleased with the substantial interest in the amendment and upsize of our credit facility. This amendment provides us significant funding capacity to continue to grow our investment portfolio and increase balance sheet leverage towards our target, while lowering the facility cost and increasing advance rates,” chief financial officer Michael Sarner said in the release.

“Improving the cost and efficiency of our financing sources allows us to generate attractive risk adjusted returns for our shareholders without reaching for yield in our investment portfolio. We value our relationships with our existing and new lenders and are grateful for their continued support.”

Capital Southwest is a Dallas-based middle market lender.

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