Gladstone Capital Announces Intent to Redeem All Outstanding 5.125% Notes due 2026 and 7.75% Notes due 2028

Rhea-AI Summary

Gladstone Capital (Nasdaq:GLAD) has announced plans to redeem all outstanding notes from two series. The company will redeem its $150 million 5.125% Notes due 2026 on October 31, 2025, and its $57 million 7.75% Notes due 2028 on October 15, 2025.

The redemption price for both notes will be 100% of their respective principal amounts plus accrued and unpaid interest. Following the redemption, the 2028 Notes will be delisted from the Nasdaq Global Select Market. U.S. Bank Trust Company will mail redemption notices to all registered noteholders.

Positive

• Full redemption of $207 million in total outstanding notes demonstrates strong financial position
• Early redemption could potentially reduce future interest expenses
• Simplification of capital structure by eliminating two debt instruments

Negative

• Loss of 7.75% Notes listing on Nasdaq Global Select Market reduces trading flexibility for current noteholders

Insights

Debt Capital Markets Specialist

Gladstone Capital's early redemption of $207M in notes signals strong liquidity position and potential interest expense savings.

Gladstone Capital's announcement to redeem $150 million of 5.125% Notes due 2026 and $57 million of 7.75% Notes due 2028 represents a significant balance sheet management move. The company is exercising its early redemption rights, with the 2026 Notes being redeemed about 8 months ahead of schedule and the 2028 Notes nearly 3 years early.

This decision likely stems from two key factors. First, Gladstone appears to have sufficient liquidity to retire these obligations without replacement issuance. Second, the current interest rate environment may allow the company to refinance at more favorable rates if needed later, particularly for the higher-coupon 7.75% 2028 Notes.

The redemption at par value (100% of principal) without premium penalties suggests these notes don't carry substantial make-whole provisions, giving Gladstone financial flexibility. The delisting of the 2028 Notes from Nasdaq further streamlines the company's capital structure.

For business development companies like Gladstone, proactive debt management is crucial for maintaining favorable leverage ratios and ensuring continued access to capital markets. This move could potentially reduce annual interest expenses by approximately $12.2 million ($7.7 million from the 2026 Notes and $4.5 million from the 2028 Notes), improving the company's financial flexibility for new investments or increased shareholder returns.

MCLEAN, VA / ACCESS Newswire / September 15, 2025 / Gladstone Capital Corporation (Nasdaq:GLAD) (the "Company") today announced that it plans to redeem all of its outstanding 5.125% Notes due 2026 (the "2026 Notes") on October 31, 2025 and all of its outstanding 7.75% Notes due 2028 (the "2028 Notes") on October 15, 2025. A notice of redemption will be mailed to all registered holders of the 2026 Notes and the 2028 Notes by U.S. Bank Trust Company, National Association (the "Trustee"), in accordance with the terms of the Indenture, dated as of November 6, 2018, between the Company and the Trustee, and Section 1.01(g) of each of the Third Supplemental Indenture dated as of December 15, 2020 and the Fifth Supplemental Indenture dated as of August 17, 2023 (collectively, the "Indenture"). The 2026 Notes redemption date is October 31, 2025 and the 2028 Notes redemption date is October 15, 2025 (each, a "Redemption Date"). The redemption price for the 2026 Notes equals 100% of the $150,000,000 aggregate principal amount of the 2026 Notes being redeemed plus accrued and unpaid interest, if any, to, but excluding, the applicable Redemption Date. The redemption price for the 2028 Notes equals 100% of the $57,000,000 aggregate principal amount of the 2028 Notes being redeemed, plus accrued and unpaid interest otherwise payable for the then-current quarterly interest period accrued to, but excluding, the applicable Redemption Date. In connection with the redemption, the 2028 Notes will be delisted from the Nasdaq Global Select Market.

This communication does not constitute a notice of redemption under the terms of the Indenture, nor an offer to tender for, or purchase of, any 2026 Notes, 2028 Notes or any other security.

About Gladstone Capital Corporation: Gladstone Capital Corporation is a publicly traded business development company that invests in debt and equity securities consisting primarily of secured first and second lien term loans to lower middle market businesses in the United States.

Forward-Looking Statements

This press release contains statements as to the Company's intentions and expectations of the outcome of future events that are forward-looking statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These statements relate to the redemption of its 2026 Notes and 2028 Notes. Completion of the transaction on the terms described above is subject to numerous conditions, many of which are beyond the control of the Company, and such transaction may not be completed on the terms described, or at all. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. For a description of certain risks to which the Company is or may be subject, please refer to the factors discussed under the captions "Forward-Looking Statements" and "Risk Factors" included in the Company's filings with the Securities and Exchange Commission (accessible at www.sec.gov).

CONTACT: Investor Relations Inquiries: Please call (703) 287-5893

SOURCE: Gladstone Capital Corporation

View the original press release on ACCESS Newswire

FAQ

When will Gladstone Capital (GLAD) redeem its 5.125% Notes due 2026?

Gladstone Capital will redeem the 5.125% Notes due 2026 on October 31, 2025 at 100% of the $150 million principal amount plus accrued interest.

What is the redemption amount for GLAD's 7.75% Notes due 2028?

The redemption amount is 100% of the $57 million principal amount plus accrued and unpaid interest, with redemption scheduled for October 15, 2025.

Will GLAD's 7.75% Notes continue trading on Nasdaq after redemption?

No, the 7.75% Notes will be delisted from the Nasdaq Global Select Market following their redemption.

How much is the total value of notes being redeemed by Gladstone Capital?

Gladstone Capital is redeeming a total of $207 million in notes, comprising $150 million of 5.125% Notes and $57 million of 7.75% Notes.

What is the redemption price for GLAD's notes?

Both series of notes will be redeemed at 100% of their principal amount plus accrued and unpaid interest up to their respective redemption dates.