Large BDC Hercules Capital to Sell Baby Bonds

Business development company Hercules Capital (NASDAQ:HTGC) will be selling a new baby bond with a maturity date in 2025.  It is likely the company will use some of the proceeds to retire the 2024 baby bonds, which had already had a partial call and which carry a coupon of 6.25%.

The terms are fairly normal with quarterly interest payments and an early optional redemption becoming available to the company in 2021.

The issue has not yet been priced, but it is expected to be in the low 5’s—too low to be of interest to us.

The preliminary prospectus for the issue is here.

The anticipated ticker for the new issue will be HCXZ–but this may change.