Prospect Capital Corp 8-K, filed Feb 19, 2021
Prospect Capital Corp (PSEC)
8-K
2021-02-19
For: 2021-02-19
View Original
Added on
April 10, 2026
About this 8-K
Prospect Capital Corp filed this 8-K on February 19, 2021.
Items reported
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 19, 2021 (February 19, 2021)
Prospect Capital Corporation
(Exact name of registrant as specified in its charter)
MARYLAND | 814-00659 | 43-2048643 | ||||||||||||
| (State or other jurisdiction | (Commission File Number) | (IRS Employer | ||||||||||||
| of incorporation) | Identification No.) | |||||||||||||
10 East 40th Street, 42nd Floor, New York, New York 10016
(Address of principal executive offices, including zip code)
(212) 448-0702
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||||
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||||
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||||
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered | ||||||
| Common Stock, $0.001 par value | PSEC | NASDAQ Global Select Market | ||||||
| 6.25% Notes due 2024, par value $25 | PBB | New York Stock Exchange | ||||||
| 6.25% Notes due 2028, par value $25 | PBY | New York Stock Exchange | ||||||
| 6.875% Notes due 2029, par value $25 | PBC | New York Stock Exchange | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 8.01. Other Events
On February 19, 2021, Prospect Capital Corporation (the “Company”) issued, in two separate offerings, $50,000,000 in aggregate principal amount of the Company’s 3.706% Notes due 2026 (the “Notes I”) and $25,000,000 in aggregate principal amount of the Company’s 3.706% Notes due 2026 (the “Notes II”). The offerings constitute further issuances of the 3.706% Notes due 2026 that the Company issued on January 22, 2021 in the aggregate principal amount of $325,000,000.
The Notes I were offered and sold in an offering that was made pursuant to the Company’s effective shelf registration statement on Form N-2 (Registration No. 333-236415) previously filed with the Securities and Exchange Commission, as supplemented by a preliminary prospectus supplement dated February 12, 2021 and a final prospectus supplement dated February 12, 2021.
The Notes II were offered and sold in an offering that was made pursuant to the Company’s effective shelf registration statement on Form N-2 (Registration No. 333-236415) previously filed with the Securities and Exchange Commission, as supplemented by a preliminary prospectus supplement dated February 17, 2021 and a final prospectus supplement dated February 17, 2021.
The Company expects to use the net proceeds of the offerings primarily for the refinancing of existing indebtedness, including but not limited to repayment of borrowings under its revolving credit facility. The Company intends to use the remainder of the net proceeds from the offerings, if any, to maintain balance sheet liquidity, including investments in high quality short-term debt instruments, and thereafter to make long-term investments in accordance with its investment objective.
Each of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Company, and Venable, special Maryland counsel to the Company, has issued opinions relating to the legality of the Notes I, copies of which are filed as Exhibit 5.1 and Exhibit 5.2, respectively, and the legality of the Notes II, copies of which are filed as Exhibit 5.3 and Exhibit 5.4, respectively, to this Report.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
5.2 Opinion of Venable LLP
5.3 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
5.4 Opinion of Venable LLP
23.1 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1)
23.2 Consent of Venable LLP (included in Exhibit 5.2)
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.3)
23.4 Consent of Venable LLP (included in Exhibit 5.4)
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
Prospect Capital Corporation
By: /s/ M. Grier Eliasek
Name: M. Grier Eliasek
Title: President and Chief Operating Officer
Date: February 19, 2021
4
Index to Exhibits
| Exhibit Number | Description | ||||
5
[On letterhead of Skadden, Arps, Slate, Meagher & Flom LLP]
February 19, 2021
Prospect Capital Corporation 10 East 40th Street, 42nd Floor New York, NY 10016 | ||
Re: Prospect Capital Corporation
Registration Statement on Form N-2
Ladies and Gentlemen:
We have acted as special New York counsel to Prospect Capital Corporation, a Maryland corporation (the “Company”), in connection with the public offering of $50,000,000 aggregate principal amount of the Company’s 3.706% Notes due 2026 (the “Notes”). The Notes are to be issued under the Indenture, dated as of February 16, 2012 (the “Indenture”), between the Company and American Stock Transfer & Trust Company, LLC, as trustee (the “Original Trustee”), as amended by the Agreement of Resignation, Appointment and Acceptance, dated as of March 12, 2012, by and among the Company, the Original Trustee and U.S. Bank National Association, as trustee (the “Agreement of Resignation, Appointment and Acceptance”), as supplemented by the Supplemental Indenture, dated as of January 22, 2021 (the “Supplemental Indenture”).
This opinion is being furnished in accordance with the requirements of sub paragraph (l) of Item 25.2 of Part C of Form N-2 under the Securities Act of 1933, as amended (the “Securities Act”).
In rendering the opinion stated herein, we have examined and relied upon the following:
(a)the registration statement on Form N-2 (File No. 333-236415) of the Company relating to debt securities and other securities of the Company filed with the Commission on February 13, 2020 under the Securities Act of 1933 (the “Securities Act”) allowing for delayed offerings pursuant to Rule 415 of the General Rules and Regulations under the Securities Act (the “Rules and Regulations”), and Post-Effective Amendments No. 1 through No. 45 thereto, including the Incorporated Documents (as defined below) and the information deemed to be a part of the registration statement pursuant to Rule 430B of the Rules and Regulations (such registration statement, as so amended, being hereinafter referred to as the “Registration Statement”);
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(b)the prospectus, dated February 13, 2020 (the “Base Prospectus”), which forms a part of and is included in the Registration Statement and in the form filed with the Commission pursuant to Rule 497(c) of the Rules and Regulations;
(c)the preliminary prospectus supplement, dated February 12, 2021, relating to the offering of the Notes, in the form filed with the Commission pursuant to Rule 424(b)(2) of the Rules and Regulations (together with the Base Prospectus, the “Preliminary Prospectus”);
(d)the final prospectus supplement, dated February 12, 2021 (the “Final Prospectus Supplement” and, together with the Base Prospectus and the Incorporated Documents, the “Prospectus”), relating to the offering of the Notes, in the form filed with the Commission pursuant to Rule 424(b)(2) of the Rules and Regulations;
(e)an executed copy of the Underwriting Agreement, dated February 12, 2021 (the “Underwriting Agreement”), by and among Goldman Sachs & Co. LLC, as representative of the several Underwriters named therein (the “Underwriters”), the Company, Prospect Capital Management L.P. and Prospect Administration LLC, relating to the sale by the Company to the Underwriters of the Notes;
(f)the documents described on Schedule I hereto filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934 and incorporated by reference into the Prospectus (collectively, the “Incorporated Documents”);
(g)an executed copy of the Indenture;
(h)an executed copy of the Supplemental Indenture;
(i)the global certificate evidencing the Notes registered in the name of Cede & Co. (the “Note Certificate”) in the form delivered by the Company to the Trustee for authentication and delivery; and
(j)an executed copy of a certificate of Kristin L. Van Dask, Secretary of the Company, dated the date hereof (the “Secretary’s Certificate”).
We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company and others, and such other documents as we have deemed necessary or appropriate as a basis for the opinion stated below.
In our examination, we have assumed the genuineness of all signatures, including electronic signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photocopied copies, and the
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authenticity of the originals of such copies. As to any facts relevant to the opinion stated herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company and others and of public officials, including the facts and conclusions set forth in the Secretary’s Certificate and the factual representations and warranties contained in the Underwriting Agreement.
We do not express any opinion with respect to the laws of any jurisdiction other than the laws of the State of New York (“Opined-on Law”).
As used herein, “Transaction Documents” means the Underwriting Agreement, the Indenture, the Supplemental Indenture and the Note Certificate.
Based upon the foregoing and subject to the qualifications and assumptions stated herein, we are of the opinion that the Note Certificate, when duly executed and delivered by duly authorized officers of the Company and when duly authenticated by the Trustee and delivered by the Company against payment therefor in accordance with the terms of the Underwriting Agreement, the Indenture and the Supplemental Indenture, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with its terms under the laws of the State of New York.
The opinion stated herein is subject to the following qualifications:
(a)we do not express any opinion with respect to the effect on the opinion stated herein of any bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, preference and other similar laws or governmental orders affecting creditors’ rights generally, and the opinion stated herein is limited by such laws and by general principles of equity (regardless of whether enforcement is sought in equity or at law);
(b)we do not express any opinion with respect to the effect on the opinion stated herein of (i) the compliance or non-compliance of any party to any of the Transaction Documents with any laws, rules or regulations applicable to such party or (ii) the legal status or legal capacity of any party to any of the Transaction Documents;
(c)we do not express any opinion with respect to any law, rule or regulation that is applicable to any party to any of the Transaction Documents or the transactions contemplated thereby solely because such law, rule or regulation is part of a regulatory regime applicable to any such party or any of its affiliates as a result of the specific assets or business operations of such party or such affiliates;
(d)we do not express any opinion with respect to any securities, antifraud, consumer credit, debt collection, privacy, derivatives or commodities laws, rules or regulations, Regulations T, U or X of the Board of Governors of the Federal Reserve System or laws, rules or regulations relating to national security;
(e)except to the extent expressly stated in the opinion contained herein, we have assumed that each of the Transaction Documents constitutes the valid and binding
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obligation of each party to such Transaction Document, enforceable against such party in accordance with its terms;
(f)the opinion stated herein is limited to the agreements and documents specifically identified in the opinion contained herein without regard to any agreement or other document referenced in such agreement or document (including agreements or other documents incorporated by reference or attached or annexed thereto);
(g)we do not express any opinion with respect to the enforceability of any provision contained in any Transaction Document relating to any indemnification, contribution, non-reliance, exculpation, release, limitation or exclusion of remedies, waiver or other provisions having similar effect that may be contrary to public policy or violative of federal or state securities laws, rules or regulations, or to the extent any such provision purports to, or has the effect of, waiving or altering any statute of limitations;
(h)we do not express any opinion with respect to the enforceability of Section 1.13 of the Indenture to the extent that such section purports to bind the Company to the exclusive jurisdiction of any particular federal court or courts;
(i)we call to your attention that irrespective of the agreement of the parties to any Transaction Document, a court may decline to hear a case on grounds of forum non conveniens or other doctrine limiting the availability of such court as a forum for resolution of disputes; in addition, we call to your attention that we do not express any opinion with respect to the subject matter jurisdiction of the federal courts of the United States of America in any action arising out of or relating to any Transaction Document; and
(j)to the extent that any opinion relates to the enforceability of the choice of New York law and choice of New York forum provisions contained in any Transaction Document, the opinion stated herein is subject to the qualification that such enforceability may be subject to, in each case, (i) the exceptions and limitations in New York General Obligations Law sections 5-1401 and 5-1402 and (ii) principles of comity or constitutionality.
In addition, in rendering the foregoing opinion we have assumed that, at all applicable times:
1.the Company (i) is duly incorporated and is validly existing and in good standing, (ii) has requisite legal status and legal capacity under the laws of the jurisdiction of its organization and (iii) has complied and will comply with all aspects of the laws of the jurisdiction of its organization in connection with the transactions contemplated by, and the performance of its obligations under, the Transaction Documents;
2.the Company has the corporate power and authority to execute, deliver and perform all its obligations under each of the Transaction Documents;
3.each of the Transaction Documents had been duly authorized, executed and delivered by all requisite corporate action on the part of the Company;
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4.any agent of service will have accepted appointment as agent to receive service of process and call to your attention that we do not express any opinion if and to the extent such agent shall resign such appointment; further, we do not express any opinion with respect to the irrevocability of the designation of such agent to receive service of process;
5.the choice of New York law to govern the Indenture and any supplemental indenture thereto is a valid and legal provision;
6.neither the execution and delivery by the Company of the Transaction Documents nor the performance by the Company of its obligations thereunder, including the issuance and sale of the Notes: (i) conflicted or will conflict with the Articles of Amendment and Restatement of the Company or by-laws of the Company, (ii) constituted or will constitute a violation of, or a default under, any lease, indenture, instrument or other agreement to which the Company or its property is subject (except that we do not make the assumption set forth in this clause (ii) with respect to those agreements or instruments which are listed in Item 25.2 of Part C of the Registration Statement or the Company’s Annual Report on Form 10-K), (iii) contravened or will contravene any order or decree of any governmental authority to which the Company or its property is subject, or (iv) violated or will violate any law, rule or regulation to which the Company or its property is subject (except that we do not make the assumption set forth in this clause (iv) with respect to the Opined-on Law);
7.the Indenture has not been amended, modified, supplemented (other than by the Agreement of Resignation, Appointment and Acceptance and the Supplemental Indenture), rescinded or terminated, the Supplemental Indenture has not been amended, modified, supplemented, rescinded or terminated and that none of the parties to the Indenture or the Supplemental Indenture have taken any steps or other action to amend, modify, supplement, rescind or terminate the Indenture or the Supplemental Indenture; and
8.neither the execution and delivery by the Company of the Transaction Documents nor the performance by the Company of its obligations thereunder, including the issuance and sale of the Notes, required or will require the consent, approval, licensing or authorization of, or any filing, recording or registration with, any governmental authority under any law, rule or regulation of any jurisdiction.
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February 19, 2021
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We hereby consent to the reference to our firm under the heading “Legal Matters” in the Preliminary Prospectus and the Prospectus. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations. We also hereby consent to the filing of this opinion with the Commission as an exhibit to the Company’s Current Report on Form 8-K being filed on the date hereof and incorporated by reference into the Registration Statement. This opinion is expressed as of the date hereof unless otherwise expressly stated, and we disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable laws.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
MKH
Schedule I
1.The Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020 filed with the Commission on August 26, 2020
2.The Financial Highlights in Note 16 to the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015 filed with the Commission on September 11, 2015
3.The Company’s Quarterly Reports on Form 10-Q for the period ended September 30, 2020, filed with the Commission on November 9, 2020, and for the period ended December 31, 2020, filed with the Commission on February 9, 2021
4.The Company’s Current Reports on Form 8-K filed with the Commission on July 23, 2020, August 5, 2020, September 3, 2020, October 19, 2020, November 4, 2020, November 17, 2020, December 7, 2020, December 16, 2020 (two filings), December 28, 2020, January 15, 2021, January 22, 2021 and February 1, 2021
5.The Company’s definitive Proxy Statement on Schedule 14A filed with the Commission on September 28, 2020
6.The description of the Company’s 5.50% Series A1 Preferred Stock, 5.50% Series M1 Preferred Stock and 5.50% Series M2 Preferred Stock contained in the Company’s Registration Statement on Form 8-A (File No. 001-35554) filed with the Commission on September 8, 2020, including any amendment or report filed for the purpose of updating such description prior to the termination of the offering registered hereby
7.The description of the Company’s 5.50% Series AA1 Preferred Stock contained in the Company’s Registration Statement on Form 8-A (File No. 001-35554) filed with the Commission on November 27, 2020, including any amendment or report filed for the purpose of updating such description prior to the termination of the offering registered hereby
8.The description of the Company’s common stock contained in the Company’s Registration Statement on Form 8-A (File No. 000-50691) filed with the Commission on April 16, 2004, as updated by Exhibit 4.914 to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020 filed with the Commission on August 26, 2020 and including any amendment or report filed for the purpose of updating such description prior to the termination of the offering registered hereby
[On letterhead of Venable LLP]
February 19, 2021
Prospect Capital Corporation
10 East 40th Street, 44th Floor
New York, New York 10016
Re: Registration Statement on Form N-2 (File No. 333-236415)
Ladies and Gentlemen:
We have served as Maryland counsel to Prospect Capital Corporation, a Maryland corporation (the “Company”) and a business development company under the Investment Company Act of 1940, as amended (the “1940 Act”), in connection with certain matters of Maryland law arising out of the registration by the Company of $50,000,000 aggregate principal amount of the Company’s 3.706% Senior Notes due 2026 (the “Notes”), covered by the above-referenced Registration Statement, and all amendments thereto (the “Registration Statement”), filed by the Company with the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”).
In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (hereinafter collectively referred to as the “Documents”):
1. The Registration Statement;
2. The Prospectus, dated February 13, 2020, as supplemented by the Prospectus Supplement, dated February 12, 2021, filed by the Company with the Commission pursuant to Rule 424(b) under the 1933 Act;
3. The charter of the Company, certified by the State Department of Assessments and Taxation of Maryland (the “SDAT”);
4. The Bylaws of the Company, certified as of the date hereof by an officer of the Company;
5. A certificate of the SDAT as to the good standing of the Company, dated as of a recent date;
6. Resolutions adopted by the Board of Directors of the Company relating to, among other matters, the authorization of the issuance of the Notes and the execution, delivery and performance by the Company of the Note Documents (as defined herein), certified as of the date hereof by an officer of the Company;
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7. The Indenture, dated as of February 16, 2012 (the “Base Indenture”), between the Company and U.S. Bank National Association (the “Trustee”), as successor to American Stock Transfer & Trust Company, as trustee;
8. The Supplemental Indenture, dated as of January 22, 2021 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), between the Company and the Trustee;
9. The global note representing the Notes (the “Global Note” and, together with the Indenture, the “Note Documents”);
10. A certificate executed by an officer of the Company, dated as of the date hereof; and
11. Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of such individual or any other person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms.
4. All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.
Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT.
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2. The execution and delivery by the Company of the Note Documents, and the performance by the Company of its obligations thereunder, have been duly authorized by the Company. The issuance of the Notes has been duly authorized by the Company.
3. The Note Documents have been duly executed and delivered by the Company.
The foregoing opinion is limited to the laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to compliance with the 1940 Act or other federal securities laws, or state securities laws, including the securities laws of the State of Maryland. We note that the Note Documents are governed by the laws of the State of New York. To the extent that any matter as to which our opinion is expressed herein would be governed by the laws of any jurisdiction other than the State of Maryland, we do not express any opinion on such matter. The opinion expressed herein is subject to the effect of judicial decisions which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.
The opinion expressed herein is limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.
This opinion is being furnished to you for submission to the Commission as an exhibit to the Registration Statement. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act.
Very truly yours,
/s/ Venable LLP
43589/415693
[On letterhead of Skadden, Arps, Slate, Meagher & Flom LLP]
February 19, 2021
Prospect Capital Corporation 10 East 40th Street, 42nd Floor New York, NY 10016 | ||
Re: Prospect Capital Corporation
Registration Statement on Form N-2
Ladies and Gentlemen:
We have acted as special New York counsel to Prospect Capital Corporation, a Maryland corporation (the “Company”), in connection with the public offering of $25,000,000 aggregate principal amount of the Company’s 3.706% Notes due 2026 (the “Notes”). The Notes are to be issued under the Indenture, dated as of February 16, 2012 (the “Indenture”), between the Company and American Stock Transfer & Trust Company, LLC, as trustee (the “Original Trustee”), as amended by the Agreement of Resignation, Appointment and Acceptance, dated as of March 12, 2012, by and among the Company, the Original Trustee and U.S. Bank National Association, as trustee (the “Agreement of Resignation, Appointment and Acceptance”), as supplemented by the Supplemental Indenture, dated as of January 22, 2021 (the “Supplemental Indenture”).
This opinion is being furnished in accordance with the requirements of sub paragraph (l) of Item 25.2 of Part C of Form N-2 under the Securities Act of 1933, as amended (the “Securities Act”).
In rendering the opinion stated herein, we have examined and relied upon the following:
(a)the registration statement on Form N-2 (File No. 333-236415) of the Company relating to debt securities and other securities of the Company filed with the Commission on February 13, 2020 under the Securities Act of 1933 (the “Securities Act”) allowing for delayed offerings pursuant to Rule 415 of the General Rules and Regulations under the Securities Act (the “Rules and Regulations”), and Post-Effective Amendments No. 1 through No. 45 thereto, including the Incorporated Documents (as defined below) and the information deemed to be a part of the registration statement pursuant to Rule 430B of the Rules and Regulations (such registration statement, as so amended, being hereinafter referred to as the “Registration Statement”);
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(b)the prospectus, dated February 13, 2020 (the “Base Prospectus”), which forms a part of and is included in the Registration Statement and in the form filed with the Commission pursuant to Rule 497(c) of the Rules and Regulations;
(c)the preliminary prospectus supplement, dated February 17, 2021, relating to the offering of the Notes, in the form filed with the Commission pursuant to Rule 424(b)(2) of the Rules and Regulations (together with the Base Prospectus, the “Preliminary Prospectus”);
(d)the final prospectus supplement, dated February 17, 2021 (the “Final Prospectus Supplement” and, together with the Base Prospectus and the Incorporated Documents, the “Prospectus”), relating to the offering of the Notes, in the form filed with the Commission pursuant to Rule 424(b)(2) of the Rules and Regulations;
(e)an executed copy of the Underwriting Agreement, dated February 17, 2021 (the “Underwriting Agreement”), by and among Goldman Sachs & Co. LLC, as representative of the several Underwriters named therein (the “Underwriters”), the Company, Prospect Capital Management L.P. and Prospect Administration LLC, relating to the sale by the Company to the Underwriters of the Notes;
(f)the documents described on Schedule I hereto filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934 and incorporated by reference into the Prospectus (collectively, the “Incorporated Documents”);
(g)an executed copy of the Indenture;
(h)an executed copy of the Supplemental Indenture;
(i)the global certificate evidencing the Notes registered in the name of Cede & Co. (the “Note Certificate”) in the form delivered by the Company to the Trustee for authentication and delivery; and
(j)an executed copy of a certificate of Kristin L. Van Dask, Secretary of the Company, dated the date hereof (the “Secretary’s Certificate”).
We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company and others, and such other documents as we have deemed necessary or appropriate as a basis for the opinion stated below.
In our examination, we have assumed the genuineness of all signatures, including electronic signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photocopied copies, and the
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authenticity of the originals of such copies. As to any facts relevant to the opinion stated herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company and others and of public officials, including the facts and conclusions set forth in the Secretary’s Certificate and the factual representations and warranties contained in the Underwriting Agreement.
We do not express any opinion with respect to the laws of any jurisdiction other than the laws of the State of New York (“Opined-on Law”).
As used herein, “Transaction Documents” means the Underwriting Agreement, the Indenture, the Supplemental Indenture and the Note Certificate.
Based upon the foregoing and subject to the qualifications and assumptions stated herein, we are of the opinion that the Note Certificate, when duly executed and delivered by duly authorized officers of the Company and when duly authenticated by the Trustee and delivered by the Company against payment therefor in accordance with the terms of the Underwriting Agreement, the Indenture and the Supplemental Indenture, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with its terms under the laws of the State of New York.
The opinion stated herein is subject to the following qualifications:
(a)we do not express any opinion with respect to the effect on the opinion stated herein of any bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, preference and other similar laws or governmental orders affecting creditors’ rights generally, and the opinion stated herein is limited by such laws and by general principles of equity (regardless of whether enforcement is sought in equity or at law);
(b)we do not express any opinion with respect to the effect on the opinion stated herein of (i) the compliance or non-compliance of any party to any of the Transaction Documents with any laws, rules or regulations applicable to such party or (ii) the legal status or legal capacity of any party to any of the Transaction Documents;
(c)we do not express any opinion with respect to any law, rule or regulation that is applicable to any party to any of the Transaction Documents or the transactions contemplated thereby solely because such law, rule or regulation is part of a regulatory regime applicable to any such party or any of its affiliates as a result of the specific assets or business operations of such party or such affiliates;
(d)we do not express any opinion with respect to any securities, antifraud, consumer credit, debt collection, privacy, derivatives or commodities laws, rules or regulations, Regulations T, U or X of the Board of Governors of the Federal Reserve System or laws, rules or regulations relating to national security;
(e)except to the extent expressly stated in the opinion contained herein, we have assumed that each of the Transaction Documents constitutes the valid and binding
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obligation of each party to such Transaction Document, enforceable against such party in accordance with its terms;
(f)the opinion stated herein is limited to the agreements and documents specifically identified in the opinion contained herein without regard to any agreement or other document referenced in such agreement or document (including agreements or other documents incorporated by reference or attached or annexed thereto);
(g)we do not express any opinion with respect to the enforceability of any provision contained in any Transaction Document relating to any indemnification, contribution, non-reliance, exculpation, release, limitation or exclusion of remedies, waiver or other provisions having similar effect that may be contrary to public policy or violative of federal or state securities laws, rules or regulations, or to the extent any such provision purports to, or has the effect of, waiving or altering any statute of limitations;
(h)we do not express any opinion with respect to the enforceability of Section 1.13 of the Indenture to the extent that such section purports to bind the Company to the exclusive jurisdiction of any particular federal court or courts;
(i)we call to your attention that irrespective of the agreement of the parties to any Transaction Document, a court may decline to hear a case on grounds of forum non conveniens or other doctrine limiting the availability of such court as a forum for resolution of disputes; in addition, we call to your attention that we do not express any opinion with respect to the subject matter jurisdiction of the federal courts of the United States of America in any action arising out of or relating to any Transaction Document; and
(j)to the extent that any opinion relates to the enforceability of the choice of New York law and choice of New York forum provisions contained in any Transaction Document, the opinion stated herein is subject to the qualification that such enforceability may be subject to, in each case, (i) the exceptions and limitations in New York General Obligations Law sections 5-1401 and 5-1402 and (ii) principles of comity or constitutionality.
In addition, in rendering the foregoing opinion we have assumed that, at all applicable times:
1.the Company (i) is duly incorporated and is validly existing and in good standing, (ii) has requisite legal status and legal capacity under the laws of the jurisdiction of its organization and (iii) has complied and will comply with all aspects of the laws of the jurisdiction of its organization in connection with the transactions contemplated by, and the performance of its obligations under, the Transaction Documents;
2.the Company has the corporate power and authority to execute, deliver and perform all its obligations under each of the Transaction Documents;
3.each of the Transaction Documents had been duly authorized, executed and delivered by all requisite corporate action on the part of the Company;
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4.any agent of service will have accepted appointment as agent to receive service of process and call to your attention that we do not express any opinion if and to the extent such agent shall resign such appointment; further, we do not express any opinion with respect to the irrevocability of the designation of such agent to receive service of process;
5.the choice of New York law to govern the Indenture and any supplemental indenture thereto is a valid and legal provision;
6.neither the execution and delivery by the Company of the Transaction Documents nor the performance by the Company of its obligations thereunder, including the issuance and sale of the Notes: (i) conflicted or will conflict with the Articles of Amendment and Restatement of the Company or by-laws of the Company, (ii) constituted or will constitute a violation of, or a default under, any lease, indenture, instrument or other agreement to which the Company or its property is subject (except that we do not make the assumption set forth in this clause (ii) with respect to those agreements or instruments which are listed in Item 25.2 of Part C of the Registration Statement or the Company’s Annual Report on Form 10-K), (iii) contravened or will contravene any order or decree of any governmental authority to which the Company or its property is subject, or (iv) violated or will violate any law, rule or regulation to which the Company or its property is subject (except that we do not make the assumption set forth in this clause (iv) with respect to the Opined-on Law);
7.the Indenture has not been amended, modified, supplemented (other than by the Agreement of Resignation, Appointment and Acceptance and the Supplemental Indenture), rescinded or terminated, the Supplemental Indenture has not been amended, modified, supplemented, rescinded or terminated and that none of the parties to the Indenture or the Supplemental Indenture have taken any steps or other action to amend, modify, supplement, rescind or terminate the Indenture or the Supplemental Indenture; and
8.neither the execution and delivery by the Company of the Transaction Documents nor the performance by the Company of its obligations thereunder, including the issuance and sale of the Notes, required or will require the consent, approval, licensing or authorization of, or any filing, recording or registration with, any governmental authority under any law, rule or regulation of any jurisdiction.
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We hereby consent to the reference to our firm under the heading “Legal Matters” in the Preliminary Prospectus and the Prospectus. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations. We also hereby consent to the filing of this opinion with the Commission as an exhibit to the Company’s Current Report on Form 8-K being filed on the date hereof and incorporated by reference into the Registration Statement. This opinion is expressed as of the date hereof unless otherwise expressly stated, and we disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable laws.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
MKH
Schedule I
1.The Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020 filed with the Commission on August 26, 2020
2.The Financial Highlights in Note 16 to the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015 filed with the Commission on September 11, 2015
3.The Company’s Quarterly Reports on Form 10-Q for the period ended September 30, 2020, filed with the Commission on November 9, 2020, and for the period ended December 31, 2020, filed with the Commission on February 9, 2021
4.The Company’s Current Reports on Form 8-K filed with the Commission on July 23, 2020, August 5, 2020, September 3, 2020, October 19, 2020, November 4, 2020, November 17, 2020, December 7, 2020, December 16, 2020 (two filings), December 28, 2020, January 15, 2021, January 22, 2021, February 1, 2021 and February 16, 2021
5.The Company’s definitive Proxy Statement on Schedule 14A filed with the Commission on September 28, 2020
6.The description of the Company’s 5.50% Series A1 Preferred Stock, 5.50% Series M1 Preferred Stock and 5.50% Series M2 Preferred Stock contained in the Company’s Registration Statement on Form 8-A (File No. 001-35554) filed with the Commission on September 8, 2020, including any amendment or report filed for the purpose of updating such description prior to the termination of the offering registered hereby
7.The description of the Company’s 5.50% Series AA1 Preferred Stock contained in the Company’s Registration Statement on Form 8-A (File No. 001-35554) filed with the Commission on November 27, 2020, including any amendment or report filed for the purpose of updating such description prior to the termination of the offering registered hereby
8.The description of the Company’s common stock contained in the Company’s Registration Statement on Form 8-A (File No. 000-50691) filed with the Commission on April 16, 2004, as updated by Exhibit 4.914 to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020 filed with the Commission on August 26, 2020 and including any amendment or report filed for the purpose of updating such description prior to the termination of the offering registered hereby
[On letterhead of Venable LLP]
February 19, 2021
Prospect Capital Corporation
10 East 40th Street, 44th Floor
New York, New York 10016
Re: Registration Statement on Form N-2 (File No. 333-236415)
Ladies and Gentlemen:
We have served as Maryland counsel to Prospect Capital Corporation, a Maryland corporation (the “Company”) and a business development company under the Investment Company Act of 1940, as amended (the “1940 Act”), in connection with certain matters of Maryland law arising out of the registration by the Company of $25,000,000 aggregate principal amount of the Company’s 3.706% Senior Notes due 2026 (the “Notes”), covered by the above-referenced Registration Statement, and all amendments thereto (the “Registration Statement”), filed by the Company with the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”).
In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (hereinafter collectively referred to as the “Documents”):
1. The Registration Statement;
2. The Prospectus, dated February 13, 2020, as supplemented by the Prospectus Supplement, dated February 17, 2021, filed by the Company with the Commission pursuant to Rule 424(b) under the 1933 Act;
3. The charter of the Company, certified by the State Department of Assessments and Taxation of Maryland (the “SDAT”);
4. The Bylaws of the Company, certified as of the date hereof by an officer of the Company;
5. A certificate of the SDAT as to the good standing of the Company, dated as of a recent date;
6. Resolutions adopted by the Board of Directors of the Company relating to, among other matters, the authorization of the issuance of the Notes and the execution, delivery and performance by the Company of the Note Documents (as defined herein), certified as of the date hereof by an officer of the Company;
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7. The Indenture, dated as of February 16, 2012 (the “Base Indenture”), between the Company and U.S. Bank National Association (the “Trustee”), as successor to American Stock Transfer & Trust Company, as trustee;
8. The Supplemental Indenture, dated as of January 22, 2021 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), between the Company and the Trustee;
9. The global note representing the Notes (the “Global Note” and, together with the Indenture, the “Note Documents”);
10. A certificate executed by an officer of the Company, dated as of the date hereof; and
11. Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of such individual or any other person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms.
4. All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.
Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT.
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2. The execution and delivery by the Company of the Note Documents, and the performance by the Company of its obligations thereunder, have been duly authorized by the Company. The issuance of the Notes has been duly authorized by the Company.
3. The Note Documents have been duly executed and delivered by the Company.
The foregoing opinion is limited to the laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to compliance with the 1940 Act or other federal securities laws, or state securities laws, including the securities laws of the State of Maryland. We note that the Note Documents are governed by the laws of the State of New York. To the extent that any matter as to which our opinion is expressed herein would be governed by the laws of any jurisdiction other than the State of Maryland, we do not express any opinion on such matter. The opinion expressed herein is subject to the effect of judicial decisions which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.
The opinion expressed herein is limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.
This opinion is being furnished to you for submission to the Commission as an exhibit to the Registration Statement. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act.
Very truly yours,
/s/ Venable LLP