Hercules Capital, Inc. (NYSE:HTGZ) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

As previously disclosed, on February 5, 2020, Hercules Capital, Inc. (the “Company”) entered into a Note Purchase Agreement (the “Note Purchase Agreement”) governing the issuance of $120,000,000 in aggregate principal amount of senior unsecured notes (the “Notes”) to qualified institutional investors in a private placement, consisting of $50,000,000 in aggregate principal amount of Notes due February 2025 with a fixed interest rate of 4.28% per year (the “February Notes”) and $70,000,000 in aggregate principal amount of Notes due June 2025 with a fixed interest rate of 4.31% per year (the “June Notes”). The February Notes were issued on February 5, 2020 and will mature on February 5, 2025, and the June Notes were issued on June 3, 2020 and will mature on June 3, 2025, in each case unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms. Interest on the Notes will be due semiannually. In addition, the Company is obligated to offer to repay the Notes at par if certain change in control events occur. The Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

The Company intends to use the net proceeds from this offering (i) to pay down existing credit facilities, (ii) to fund investments in debt and equity securities in accordance with its investment objective, and (iii) for other general corporate purposes.

The Note Purchase Agreement contains customary terms and conditions for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a business development company within the meaning of the Investment Company Act of 1940, as amended, minimum shareholders’ equity, maximum debt to equity ratio and minimum unencumbered asset coverage ratio. The Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness of the Company or subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy.

The Notes were offered in reliance on Section 4(a)(2) of Securities Act of 1933, as amended (the “Securities Act”). The Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.

The information on this Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to purchase the Notes or any other securities, and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.

The description above is only a summary of the material provisions of the Note Purchase Agreement and is qualified in its entirety by reference to the copy of the Note Purchase Agreement which was filed as Exhibit 10.1 to current report on Form 8-K that was filed on February 6, 2020 and is incorporated herein by reference thereto.

The Company issued a press release on June 3, 2020 to announce the issuance of the June Notes, a copy of which is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits 

* Previously filed as Exhibit 10.1 to the Current Report on Form 8-K of the Company, filed on February 6, 2020. 

Hercules Capital, Inc. Exhibit
EX-99.1 2 ex_188950.htm EXHIBIT 99.1 ex_188950.htm Exhibit 99.1     Hercules Capital Completes 5-Year Investment Grade Bond Offering of $70.0 Million of 4.31% Notes due June 2025     PALO ALTO,…
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