Capital Southwest Corporation filed an 8-K with the SEC on September 15, 2026, disclosing the issuance and sale of $350.0 million in aggregate principal amount of 6.750% Notes due 2031, with the transaction closing on September 15, 2026.

Key Highlights

  • Offering size: $350.0 million in aggregate principal amount of 6.750% Notes due 2031.
  • Net proceeds: Approximately $342.1 million, after deducting an underwriting discount of $3.5 million and estimated offering expenses of approximately $0.9 million.
  • Public offering price: 98.985% of par.
  • Maturity and interest: Notes mature September 15, 2031, and pay interest semi-annually at 6.750% per year on March 15 and September 15 each year, beginning March 15, 2027.
  • Use of proceeds: The company intends to use net proceeds to repay a portion of outstanding indebtedness under its senior secured revolving credit facility.
  • Change of control: Holders may require repurchase at 100% of principal amount plus accrued and unpaid interest upon a "Change of Control Repurchase Event."

Capital Southwest's $350 Million Notes Offering: Terms and Structure

According to the filing, Capital Southwest Corporation (NASDAQ:CSWC) entered into an underwriting agreement on September 10, 2026, with Deutsche Bank Securities Inc., Huntington Securities, Inc., ING Financial Markets LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, and Wells Fargo Securities, LLC acting as representatives of the several underwriters. The transaction closed on September 15, 2026, the same date the company and U.S. Bank Trust Company, National Association, as trustee, executed the Eighth Supplemental Indenture governing the Notes under the Base Indenture originally dated October 23, 2017.

The filing states that the Notes are direct unsecured obligations of the company and rank pari passu with all outstanding and future unsecured, unsubordinated indebtedness. They are effectively subordinated to all existing and future secured indebtedness of the company, including borrowings under the Corporate Credit Facility, to the extent of the value of assets securing such indebtedness. The Notes are also structurally subordinated to all existing and future indebtedness of the company's subsidiaries, including borrowings under the special purpose vehicle credit facility and debentures guaranteed by the U.S. Small Business Administration.

The Indenture includes covenants requiring the company to comply with specified provisions of the Investment Company Act of 1940, subject to any exemptive relief granted by the SEC and subject to other exceptions described in the Indenture. Prior to August 15, 2031, the company may redeem the Notes at par plus a "make-whole" premium; on or after that date, redemption may occur at par. The offering was made pursuant to the company's effective shelf registration statement on Form N-2 (File No. 333-282873).

What Was Disclosed

Capital Southwest disclosed the closing of a $350.0 million notes offering at 6.750% due 2031, with net proceeds of approximately $342.1 million intended for repayment of revolving credit facility borrowings. The Eighth Supplemental Indenture governing the Notes was executed on September 15, 2026.