Main Street Capital has raised $500 million through a new issue of 6.55% unsecured notes due in January 2030. The offering closed on October 29, and the company plans to use the proceeds initially to repay outstanding debt, including borrowings under its credit facilities.
The financing adds a four-year debt obligation to Main Street’s capital structure. The notes pay interest twice a year and rank alongside the company’s other unsecured debt, but behind secured debt to the extent of the assets securing that debt.
Key details
- Size and proceeds: Main Street issued $500 million of notes and received about $493 million after underwriting discounts and estimated offering expenses.
- Interest and maturity: The notes carry a 6.55% annual cash interest rate, beginning October 29, 2026. Interest is payable each January 15 and July 15, starting July 15, 2027. The notes mature on January 15, 2030, unless redeemed or repurchased earlier.
- Use of funds: Main Street intends initially to use the net proceeds to repay outstanding indebtedness, including amounts under its credit facilities.
- Position in the capital structure: The notes are unsecured obligations and rank equally with Main Street’s existing and future unsecured debt. They are effectively behind secured debt to the extent of the value of the collateral, and behind obligations of the company’s subsidiaries and financing vehicles.
- Redemption terms: Before December 15, 2029, Main Street may redeem the notes at a price based on a Treasury-rate formula plus 30 basis points, subject to a floor of 100% of principal, and plus accrued interest. From December 15, 2029 onward, it may redeem them at 100% of principal plus accrued interest.
- Change-of-control protection: If a defined change-of-control repurchase event occurs, noteholders can require Main Street to buy back some or all of their notes for 100% of principal, plus accrued interest.
- Covenants: The notes include an asset-coverage requirement, subject to stated limitations and exceptions. If Main Street ceases to be subject to public-company reporting requirements, it must provide financial information to noteholders and the trustee.
Plain-English implications
The proceeds are intended to fund debt repayment, so the announced use is refinancing rather than a stated plan to finance new investment. The company has not specified how much of the proceeds will go to each borrowing or whether the repayment will fully offset the new notes.