Liquidity and Capital Resources
The Company ended Q3 2018 with $137.3 million in available liquidity, including $43.2 million in unrestricted cash and cash equivalents, and
$94.1 million in available credit facilities, subject to existing terms and advance rates and regulatory and covenant requirements.
In September
2018, the Company issued $40.0 million in aggregate principal amount of 6.25% notes due 2033 (the “2033 Notes”) to fund debt and equity investment growth. The 2033 Notes are listed on the NYSE under the symbol “HCXY.”
On July 13, 2018, the Company completed repayment of the $41.2 million outstanding debentures of Hercules Technology II, L.P. and subsequently
surrendered the SBA license.
During Q3 2018, the Company sold 2.4 million shares of common stock, which were issued under the equity ATM program,
for total accumulated net proceeds of approximately $30.9 million, including $540,000 of offering expenses.
For the nine months ended
September 30, 2018, the Company sold 5.0 million shares of common stock under the equity ATM program for total accumulated net proceeds of approximately $62.3 million, including $1.4 million of offering expenses.
On November 1, 2018, the Company completed a term debt securitization in connection with which an affiliate of the Company made an offering of
$200,000,000 in aggregate principal amount of fixed-rate asset-backed notes (the “2027 Asset-Backed Notes”). The 2027 Asset-Backed Notes were rated A(sf) by Kroll Bond Rating Agency, Inc. (“KBRA”). Interest on the 2027
Asset-Backed Notes will be paid, to the extent of funds available, at a fixed rate of 4.605% per annum. The 2027 Asset-Backed Notes have a stated maturity of November 22, 2027.
Bank Facilities
As of September 30, 2018, Hercules
has two committed accordion credit facilities, one with Wells Fargo Capital Finance, part of Wells Fargo & Company (NYSE: WFC) (the “Wells Fargo Facility”), and another with Union Bank (the “Union Bank
Facility”) for $75.0 million and $100.0 million, respectively. The Wells Fargo and Union Bank Facilities both include an accordion feature that enables the Company to increase the existing facilities to a maximum value of
$300.0 million and $200.0 million, respectively, or $500.0 million in aggregate. Pricing at September 30, 2018 under the Wells Fargo Facility and Union Bank Facility were both LIBOR+3.25%, and no floor, respectively.
There were $42.4 million in outstanding borrowings under the Union Bank Facility and $38.5 million in outstanding borrowings under the Wells Fargo Facility, for a total of $80.9 million at September 30, 2018.
On July 31, 2018, the Company entered into an amendment to the Wells Facility to extend the maturity date and fully repay the pro-rata portion of outstanding balances of Alostar Bank of Commerce and Everbank Commercial Finance Inc., thereby resigning both as lenders and terminating their commitments thereunder.
On October 26, 2018, the Company entered into a further amendment to the Wells Facility to, among other things, extend the maturity date.
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