CSC - Capital Southwest Corporation
09/15/2026 | Press release | Distributed by Public on 09/15/2026 14:30
Material Agreement, Financial Obligation (Form 8-K)
Item 1.01 Entry into a Material Definitive Agreement.
On September 10, 2026, Capital Southwest Corporation (the "Company") entered into an underwriting agreement (the "Underwriting Agreement") by and among the Company and Deutsche Bank Securities Inc., Huntington Securities, Inc., ING Financial Markets LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC, as representatives (the "Representatives") of the several underwriters named on Schedule A thereto, in connection with the issuance and sale of $350.0 million in aggregate principal amount of the Company's 6.750% Notes due 2031 (the "Notes" and the issuance and sale of the Notes, the "Offering").
The Underwriting Agreement includes customary representations, warranties, and covenants by the Company. It also provides for customary indemnification by each of the Company and the underwriters against certain liabilities and customary contribution provisions in respect of those liabilities.
On September 15, 2026, the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee (the "Trustee"), entered into an eighth supplemental indenture (the "Eighth Supplemental Indenture") to the indenture, dated as of October 23, 2017, by and between the Company and the Trustee (the "Base Indenture" and together with the Eighth Supplemental Indenture, the "Indenture"). The Eighth Supplemental Indenture relates to the Company's issuance of the Notes.
The Notes bear interest at a rate of 6.750% per year payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2027. The Notes will mature on September 15, 2031 and may be redeemed at the Company's option, in whole or in part, at any time prior to August 15, 2031 at par plus a "make-whole" premium, and thereafter at par.
The Company intends to use the net proceeds from the Offering to repay a portion of the outstanding indebtedness under the Company's senior secured revolving credit facility (the "Corporate Credit Facility").
The Notes are the direct unsecured obligations of the Company and rank pari passu with all outstanding and future unsecured, unsubordinated indebtedness issued by the Company, senior to any of the Company's future indebtedness that expressly provides it is subordinated to the Notes, effectively subordinated to all of the existing and future secured indebtedness issued by the Company (including indebtedness that is initially unsecured in respect of which the Company subsequently grants security), to the extent of the value of the assets securing such indebtedness, including, without limitation, borrowings under the Corporate Credit Facility, and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company's subsidiaries, including, without limitation, borrowings under the special purpose vehicle credit facility and the debentures guaranteed by the U.S. Small Business Administration.
The Indenture contains certain covenants, including certain covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2) of the Investment Company Act of 1940, as amended (the "1940 Act"), or any successor provisions, whether or not the Company continues to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to the Company by the Securities and Exchange Commission (the "SEC"), to comply with Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act, or any successor provisions, after giving effect to any exemptive relief granted to the Company by the SEC and subject to certain other exceptions, and to provide financial information to the holders of the Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the Indenture.
In addition, holders of the Notes can require the Company to repurchase some or all of the Notes at a purchase price equal to 100% of their principal amount, plus accrued and unpaid interest to, but not including, the repurchase date upon the occurrence of a "Change of Control Repurchase Event" (as defined in the Eighth Supplemental Indenture).
The Offering was made pursuant to the Company's effective shelf registration statement on Form N-2 (File No. 333-282873) previously filed with the SEC, as supplemented by a preliminary prospectus supplement dated September 10, 2026, the pricing term sheet filed with the SEC on September 10, 2026, and a final prospectus supplement dated September 10, 2026. The transaction closed on September 15, 2026. The net proceeds to the Company were approximately $342.1 million, based on a public offering price of 98.985% of par, after deducting the underwriting discount of $3.5 million and the estimated offering expenses of approximately $0.9 million payable by the Company.
The foregoing descriptions of the Underwriting Agreement, the Eighth Supplemental Indenture and the Notes do not purport to be complete and are qualified in their entirety by reference to the full text of the Underwriting Agreement, the Eighth Supplemental Indenture and the form of global note representing the Notes, respectively, which are filed as Exhibits 1.1, 4.2, and 4.3 hereto, respectively, and incorporated by reference herein.
In connection with the Offering, the Company is filing the opinion of its counsel, Eversheds Sutherland (US) LLP, regarding the validity of the securities being registered, and the related consent, as Exhibits 5.1 and 23.1 hereto, respectively.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated in this Item 2.03 by reference.
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