Item 1.01. Entry Into a Material Definitive Agreement.
On September 9, 2025, Gladstone Capital Corporation (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) by and among the Company, Gladstone Management Corporation, Gladstone Administration, LLC and Oppenheimer & Co. Inc. in connection with the issuance and sale of $149.5 million aggregate principal amount of the Company’s 5.875% convertible notes due 2030 (the “Notes” and the issuance and sale of the Notes, the “Offering”) (which includes the full exercise of the underwriter’s option to purchase an additional $19.5 million aggregate principal amount of the Notes solely to cover overallotments). The Offering closed on September 12, 2025.
The Offering was made pursuant to the Company’s effective shelf registration statement on Form
N-2
(Registration No. 333–275934) previously filed with the Securities and Exchange Commission, as supplemented by a preliminary prospectus supplement dated September 8, 2025, the pricing term sheet dated September 9, 2025 and a final prospectus supplement dated September 9, 2025.
On September 12, 2025, the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee (the “Trustee”), entered into a Sixth Supplemental Indenture (the “Sixth Supplemental Indenture”) to the Indenture, dated November 6, 2018, between the Company and the Trustee (together with the Sixth Supplemental Indenture, the “Indenture”) pursuant to which the Company issued the Notes.
The interest rate of the Notes is 5.875% per year. The Company will pay interest on the Notes semi-annually in arrears on April 1 and October 1 of each year, beginning April 1, 2026. The Notes will mature on October 1, 2030, unless earlier converted, redeemed or repurchased.
Noteholders may convert all or any portion of their Notes at their option at any time prior to the close of business on the business day immediately preceding the maturity date. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The conversion rate for the Notes will initially be 38.4394 shares of the Company’s common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $26.02 per share of the Company’s common stock). The conversion rate will be subject to adjustment in certain events. In addition, following certain corporate events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a noteholder who elects to convert its Notes in connection with such a corporate event or notice of redemption, as the case may be.
The Company may not redeem the Notes prior to October 6, 2028. The Company may redeem for cash all or any portion of the Notes (subject to certain limitations), at the Company’s option, on a redemption date on or after October 6, 2028 and on or before the 45th scheduled trading day immediately prior to the maturity date if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed,
accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes.
If the Company undergoes a fundamental change, then, subject to certain conditions, noteholders may require the Company to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased,
accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
The Notes are the Company’s direct unsecured obligations and rank pari passu with the Company’s existing and future unsecured, unsubordinated indebtedness, including its 5.125% Notes due 2026 (“2026 Notes”), 3.75% Notes due 2027 and 7.75% Notes due 2028 (“2028 Notes”); senior to the Company’s 6.25% Series A Cumulative Redeemable Preferred Stock and any series of preferred stock that the Company may issue in the future; senior to any of the Company’s future indebtedness that expressly provides it is subordinated to the Notes; effectively subordinated to any future secured indebtedness of the Company (including indebtedness that is initially unsecured to which the Company subsequently grants security), to the extent of the value of the assets securing such indebtedness; and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s existing or future subsidiaries, including, without limitation, borrowings under the Company’s credit facility.