Prospect greenshoe exercised, lifts convertibles to $172.5 million

By Devika Patel

Knoxville, Tenn., Feb. 18 - Underwriters for Prospect Capital Corp.'s 5.5% 5.5-year convertible senior notes exercised their over-allotment option in full for $22.5 million more of the convertibles, increasing the size of the issue to $172.5 million, the company said in a press release Friday.

As previously reported, the company sold the convertibles at par of $1,000 on Feb. 14 in a Rule 144A offering via bookrunner Goldman Sachs & Co. RBC Capital Markets Corp. was also involved in the deal.

The convertibles have an initial conversion premium of 10% and an initial conversion price of $12.76, which equals a conversion ratio of 78.3699 shares per bond.

The bonds are non-callable with no puts. There is dividend protection in the form of a no-cap conversion rate adjustment and also takeover protection.

Proceeds will be used to maintain balance sheet liquidity, including repayment of debt under the company's credit facility, investments in high-quality short-term debt instruments, and thereafter long-term investments in accordance with Prospect's investment objectives.

Prospect is a New York venture capital and private equity firm.

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