Capital Southwest (NASDAQ:CSWC) Corporation (NASDAQ:CSWC), a Dallas-based investment firm, has amended its equity distribution agreements related to its "at-the-market" (ATM) offering program, according to a recent SEC filing. On Wednesday, the company entered into fifth amendments with sales agents including Jefferies LLC, Raymond James & Associates, Inc., Citizens JMP Securities, LLC, and B. Riley Securities, Inc.
These amendments transition the ATM Program to a new shelf registration statement from the previous one. The program allows Capital Southwest to sell shares of its common stock, with the potential to raise up to $1.0 billion. As of today, approximately $412.2 million worth of shares remain available for sale under the program.
The ATM Program's details, including the terms of the equity distribution agreements and the amendments, are outlined in the company's prospectus supplement and the accompanying prospectus filed with the Securities and Exchange Commission.
The shares offered through the ATM Program will be issued pursuant to Capital Southwest's shelf registration statement and the Prospectus, as supplemented from time to time. The SEC filing emphasized that this report does not constitute an offer to sell or a solicitation of an offer to buy any securities.
In other recent news, Capital Southwest Corporation reported a robust financial performance in its second quarter of fiscal year 2025. The company's pre-tax net investment income reached $0.64 per share, while the regular dividend was declared at $0.58 per share, with an additional supplemental dividend of $0.05 for the December quarter. Despite a slight decrease in net asset value (NAV) per share, the firm's diversified portfolio and disciplined investment strategy suggest potential for future growth.
Capital Southwest's credit portfolio grew to $1.4 billion, predominantly backed by private equity firms. The firm increased its credit facility to $485 million and raised $21 million through its equity ATM program. The company also reported 86 portfolio company exits, generating over $1.1 billion in proceeds.
However, the company experienced a decrease in total investment income to $48.7 million, primarily due to reduced one-time cash dividends and fee revenue. Two new non-accruals emerged, expected to be restructured by December.
Despite these challenges, executives noted significant upgrades in overall portfolio ratings, strong interest coverage, and a higher percentage of cash income. The firm anticipates significant net portfolio growth in the upcoming quarters.
InvestingPro Insights
Capital Southwest Corporation's recent amendment to its ATM offering program aligns with its strong financial position and growth trajectory. According to InvestingPro data, CSWC has a market capitalization of $1.14 billion and has demonstrated impressive revenue growth of 27.41% over the last twelve months. This growth is complemented by a robust EBITDA growth of 30.49% during the same period, indicating the company's ability to expand its operations efficiently.
InvestingPro Tips highlight that CSWC "pays a significant dividend to shareholders" and "has maintained dividend payments for 42 consecutive years." This is reflected in the current dividend yield of 10.33%, which may be attractive to income-focused investors considering the ATM program. The company's consistent dividend history suggests a commitment to shareholder returns, which could be supported by the potential capital raised through the amended ATM offering.
Additionally, CSWC's profitability over the last twelve months and strong return over the last five years, as noted in the InvestingPro Tips, indicate a solid financial foundation. This performance may provide confidence to potential investors in the ATM program.
For readers interested in a more comprehensive analysis, InvestingPro offers 5 additional tips for CSWC, providing deeper insights into the company's financial health and market position.
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