Hercules Technology Growth Capital, Inc. (HTGC), the Palo Alto, CA-based specialty finance firm has announced that holders of the 6% Convertible Senior Notes have exercised their conversion rights. This time, $23.1 million will be converted to equities. Notably, these Senior Notes are due in 2016.
In Oct 2014, Hercules Technology announced the extension of the conversion deadline to Dec 31, 2014, from the existing Sep 30, 2014. Nearly $34,495,000 in principal amount of the notes had exercised conversion rights.
The current conversion will bring the total conversion amount of 6% Convertible Senior Notes to nearly $57.2 million and around $17.8 million worth notes will remain outstanding after this conversion. The conversion will take place in accordance with the terms and conditions contained in the indenture.
As per the agreement, Hercules Technology will settle the remaining principal amount in cash and issue common share for the rest of the amount. This issuance of common shares is anticipated to negatively impact the company’s earnings per share in the fourth quarter.
Currently, Hercules Technology carries a Zacks Rank #3 (Hold). Other better-ranked specialty finance companies include Saratoga Investment Corp. (SAR), Solar Capital Ltd. (SLRC) and Alcentra Capital Corp. (ABDC). While both Saratoga Investment and Solar Capital sport a Zacks Rank #1 (Strong Buy), Alcentra Capital carries a Zacks Rank #2 (Buy).
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