DALLAS - Capital Southwest (NASDAQ:CSWC) Corporation (NASDAQ:CSWC), a business development company specializing in middle market financing, has announced the establishment of a new senior secured revolving credit facility through its subsidiary, Capital Southwest SPV LLC.
The $150 million facility, provided by Deutsche Bank AG (NYSE:DB), New York Branch, offers the company an option to increase commitments to $200 million by June 20, 2024, or earlier at the company's request. Furthermore, the facility includes an accordion feature permitting future expansion up to $400 million with the consent of current or new lenders.
The credit agreement, which matures on March 20, 2029, features interest rates of three-month Term SOFR plus a 2.50% margin and is secured by a first lien on all of the SPV's assets. However, the obligations under this facility are non-recourse to Capital Southwest itself.
Michael Sarner, the Chief Financial Officer of Capital Southwest, expressed satisfaction with the continuation of the company's relationship with Deutsche Bank and emphasized that the new facility will provide Capital Southwest with substantial flexibility for funding as it aims to expand its balance sheet.
Capital Southwest, headquartered in Dallas, Texas, holds approximately $1.4 billion in investments at fair value as of December 31, 2023. The company is known for its strategic support of middle market business acquisitions and growth, offering a range of investment solutions from first lien loans to equity co-investments.
This financial maneuver comes as part of Capital Southwest's broader strategy to diversify its capital sources and align the growth of its credit facilities with the anticipated expansion of its asset base. The information disclosed is based on a press release statement and reflects the company's current expectations and projections about future commitments and asset growth.
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