Capital Southwest Receives Affirmed Investment Grade Rating from Moody’s Investors Service

Rhea-AI Summary

Capital Southwest (Nasdaq: CSWC) has received an affirmed investment grade rating of Baa3 with a stable outlook from Moody's Investors Service. The rating affirmation reflects the company's strong fundamentals, including:

• Strong capitalization
• Diverse funding profile
• First-lien oriented investment portfolio
• Recurring earnings generation
• Internally managed structure

The business development company (BDC) focuses on providing flexible financing solutions to support middle market businesses' acquisition and growth.

Positive

• Maintained investment grade credit rating (Baa3)
• Strong capitalization profile
• Diverse funding sources
• Stable recurring earnings generation
• Conservative first-lien oriented portfolio structure

Negative

• None.

Moody’s affirms Baa3 long-term issuer rating with a stable outlook

DALLAS, March 25, 2025 (GLOBE NEWSWIRE) -- Capital Southwest Corporation (“Capital Southwest,” or the “Company”) (Nasdaq: CSWC), an internally managed business development company focused on providing flexible financing solutions to support the acquisition and growth of middle market businesses, today announced that Moody’s Investors Service, Inc. (“Moody’s”) has affirmed Capital Southwest’s investment grade long-term issuer rating of Baa3 with a stable outlook. Factors cited by Moody’s in support of its rating include Capital Southwest’s strong capitalization and diverse funding profile, first-lien oriented investment portfolio, recurring earnings generation, and internally managed structure.

About Capital Southwest

Capital Southwest Corporation (Nasdaq: CSWC) is a Dallas, Texas-based, internally managed business development company with approximately $1.7 billion in investments at fair value as of December 31, 2024. Capital Southwest is a middle market lending firm focused on supporting the acquisition and growth of middle market businesses with $5 million to $50 million investments across the capital structure, including first lien, second lien and non-control equity co-investments. As a public company with a permanent capital base, Capital Southwest has the flexibility to be creative in its financing solutions and to invest to support the growth of its portfolio companies over long periods of time.

Forward-Looking Statements

This press release contains historical information and forward-looking statements with respect to the business and investments of Capital Southwest, including, but not limited to, the statements about Capital Southwest's future performance and financial performance and financial condition. Forward-looking statements are statements that are not historical statements and can often be identified by words such as "will," "believe," "expect" and similar expressions and variations or negatives of these words. These statements are based on management's current expectations, assumptions and beliefs. They are not guarantees of future results and are subject to numerous risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement. These risks include risks related to: changes in the markets in which Capital Southwest invests; changes in the financial, capital, and lending markets; changes in the interest rate environment and its impact on our business and our portfolio companies; regulatory changes; tax treatment; an economic downturn and its impact on the ability of our portfolio companies to operate and the investment opportunities available to us; the impact of supply chain constraints and labor shortages on our portfolio companies; and the elevated levels of inflation and its impact on our portfolio companies and the industries in which we invests.

Readers should not place undue reliance on any forward-looking statements and are encouraged to review Capital Southwest's Annual Report on Form 10-K for the year ended March 31, 2024 and any subsequent filings with the SEC, including the "Risk Factors" sections therein, for a more complete discussion of the risks and other factors that could affect any forward-looking statements. Except as required by the federal securities laws, Capital Southwest does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this press release.

Investor Relations Contact:

Michael S. Sarner, President and Chief Executive Officer
214-884-3829

FAQ

What is Capital Southwest's (CSWC) current Moody's credit rating?

Capital Southwest (CSWC) has a Baa3 investment grade long-term issuer rating from Moody's with a stable outlook.

What factors led to Moody's affirming CSWC's Baa3 rating in March 2025?

Moody's cited CSWC's strong capitalization, diverse funding profile, first-lien oriented portfolio, recurring earnings generation, and internally managed structure.

What type of business is Capital Southwest (CSWC)?

CSWC is an internally managed business development company that provides flexible financing solutions for middle market business acquisitions and growth.

What does the stable outlook mean for CSWC's credit rating?

The stable outlook indicates Moody's expects CSWC's credit profile to remain consistent with its current Baa3 rating in the near to medium term.