SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): March 10, 2021 (March 5, 2021)
Gladstone Capital Corporation
(Exact Name of Registrant as Specified in Charter)
(State or Other Jurisdiction
1521 Westbranch Drive, Suite 100
|(Address of Principal Executive Offices)||(Zip Code)|
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange on which registered
|Common Stock, $0.001 par value per share||GLAD||The Nasdaq Stock Market LLC|
|5.375% Notes due 2024, $25.00 par value per note||GLADL||The Nasdaq Stock Market LLC|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On March 5, 2021, Gladstone Capital Corporation (the Company) entered into an underwriting agreement (the Underwriting Agreement) by and among the Company, Gladstone Management Corporation, Gladstone Administration, LLC and Raymond James & Associates, Inc., in connection with the issuance and sale of an additional $50 million aggregate principal amount of the Companys 5.125% Notes due 2026 (the New Notes and the issuance and sale of the New Notes, the Offering).
The description above is only a summary of the material provisions of the Underwriting Agreement and is qualified in its entirety by reference to a copy of the Underwriting Agreement, which is filed as Exhibit 1.1 to this Current Report on Form 8-K and incorporated by reference herein.
On March 10, 2021, the Company issued the New Notes pursuant to the Third Supplemental Indenture (the Third Supplemental Indenture), dated December 15, 2020, between the Company and U.S. Bank National Association (the Trustee), to the Indenture, dated November 6, 2018, between the Company and the Trustee. The New Notes are being treated as a single series with the $100 million aggregate principal amount of the Companys 5.125% Notes due 2026 issued on December 15, 2020 (the Existing Notes and, together with the New Notes, the Notes) and have the same terms as the Existing Notes. The New Notes have the same CUSIP number and are fungible and rank equally with the Existing Notes. Following closing of the Offering on March 10, 2021, the aggregate principal amount of the Notes is $150 million.
The Notes will mature on January 31, 2026, unless previously redeemed or repurchased in accordance with their terms. The interest rate of the Notes is 5.125% per year and will be paid semi-annually in arrears on January 31 and July 31 of each year, commencing July 31, 2021. The Notes are the Companys direct unsecured obligations and rank pari passu with the Companys existing and future unsecured, unsubordinated indebtedness, including the Companys 5.375% Notes due 2024; senior to any series of preferred stock that the Company may issue in the future; senior to any of the Companys future indebtedness that expressly provides it is subordinated to the Notes; effectively subordinated to all of the Companys existing and future secured indebtedness (including indebtedness that is initially unsecured to which the Company subsequently grants security), to the extent of the value of the assets securing such indebtedness; and structurally subordinated to all existing and future indebtedness and other obligations of any of the Companys existing or future subsidiaries, including, without limitation, borrowings under the Companys credit facility.
The Notes may be redeemed in whole or in part at any time or from time to time at the Companys option, at a redemption price (as determined by the Company) equal to the greater of the following amounts, plus, in each case, accrued and unpaid interest to, but excluding, the redemption date: (1) 100% of the principal amount of the Notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest (exclusive of accrued and unpaid interest to the date of redemption) on the Notes to be redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) using the applicable Treasury Rate (as defined in the Third Supplemental Indenture) plus 50 basis points; provided, however, that if the Company redeems any Notes on or after October 31, 2025 (the date falling three months prior to the maturity date of the Notes), the redemption price for the Notes will be equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. In addition, if a Change of Control Repurchase Event (as defined in the Third Supplemental Indenture) occurs in respect of the Company, holders of the Notes may require the Company to repurchase for cash all or part of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.
The Indenture contains certain covenants, including 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 Investment Company Act), or any successor provisions, to comply with Section 18(a)(1)(B) as modified by Section 61(a)(2) of the Investment Company Act, or any successor provisions but giving effect to any exemptive relief granted by the Securities and Exchange Commission (the SEC) to another business development company and upon which the Company may reasonably rely (or to the Company if the Company determines to seek such similar no-action or other relief), and to provide financial information to the holders of the Notes and the Trustee if the Company should no longer be 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 set forth in the Indenture.
The description above is only a summary of the material provisions of the Third Supplemental Indenture and the Notes and is qualified in its entirety by reference to copies of the Third Supplemental Indenture and the Notes, respectively, each filed as an exhibit to the Companys Current Report on Form 8-K filed with the SEC on December 15, 2020 and incorporated by reference herein.
The Offering was made pursuant to the Companys effective shelf registration statement on Form N-2 (Registration No. 333-228720) previously filed with the SEC, as supplemented by a preliminary prospectus supplement dated March 5, 2021, the pricing term sheet dated March 5, 2021 and a final prospectus supplement dated March 5, 2021. This Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
The Company intends to use the net proceeds from the offering to repay a portion of the amount outstanding under its credit facility, to fund new investment opportunities and for other general corporate purposes. The Company intends to re-borrow under its credit facility to make investments in portfolio companies in accordance with its investment objectives depending on the availability of appropriate investment opportunities consistent with its investment objectives and market conditions.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant
The information set forth under Item 1.01 of this Form 8-K is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
|1.1||Underwriting Agreement, dated as of March 5, 2021, by and among Gladstone Capital Corporation, Gladstone Management Corporation, Gladstone Administration, LLC and Raymond James & Associates, Inc.|
|5.1||Opinion of Proskauer Rose LLP.|
|5.2||Opinion of Venable LLP.|
|23.1||Consent of Proskauer Rose LLP (included in Exhibit 5.1 hereto).|
|23.2||Consent of Venable LLP (included in Exhibit 5.2 hereto).|
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|Chief Financial Officer and Treasurer|