By Wendy Van Sickle
Columbus, Ohio, May 23 – Capitala Finance Corp. priced $50 million of 5.75% $25-par unsecured convertible notes due May 31, 2022 on Tuesday with an initial conversion premium of 14%, according to a company news release.
There is a $7.5 million over-allotment option.
Keefe Bruyette & Woods is the bookrunner.
The conversion rate is 1.5913 shares per each $25.00 of notes, equal to a conversion price of $15.71 a share.
The convertibles are non-callable. Holders can put the issue upon a fundamental change.
Conversions will be settled in common stock, or cash in the instance of fractional shares.
The notes will be listed on the Nasdaq Global Select Market.
Proceeds, along with funds from a recent sale of 6% $25-par notes due 2021, will be used to redeem all of the issuer’s outstanding 7.125% fixed-rate notes due 2021. Any remaining funds will be used to repay borrowings under a senior secured revolving credit agreement.
Capitala Finance is a Charlotte, N.C.-based business development company.
| Issuer: | Capitala Finance Corp.
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| Securities: | $25-par unsecured convertible notes
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| Amount: | $50 million
|
| Greenshoe: | $7.5 million
|
| Maturity: | May 31, 2022
|
| Bookrunner: | Keefe Bruyette & Woods
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| Co-managers: | BB&T Capital Markets, Janney Montgomery Scott LLC and Seaport Global Securities LLC
|
| Coupon: | 5.75%
|
| Conversion premium: | 14%
|
| Conversion price: | $15.71 a share
|
| Conversion rate: | 1.5913 shares
|
| Call: | No
|
| Put: | Upon a fundamental change
|
| Pricing date: | May 23
|
| Settlement date: | May 26
|
| Stock price: | $13.78 as of May 23 close
|
| Market capitalization: | $219.59 million
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