Stellus Capital Investment Corporation filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
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Item 1.01 Entry into a Material Definitive Agreement.
On September 22, 2025, Stellus Capital Investment Corporation (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) by and among the Company and Stellus Capital Management, LLC (the “Adviser”), on the one hand, and Raymond James & Associates, Inc., as representative of the several underwriters named in Exhibit A thereto, on the other hand, in connection with the issuance and sale of $50 million aggregate principal amount of the Company’s 7.250% Notes due 2030 (the “Notes” and the issuance and sale of the Notes, the “Offering”) for total proceeds of $50,648,000 before underwriting discounts and offering expenses. The Underwriting Agreement includes customary representations, warranties, and covenants by the Company and the Adviser. It also provides for customary indemnification by each of the Company, the Adviser and the underwriters against certain liabilities and customary contribution provisions in respect of those liabilities.
The Notes were issued on September 25, 2025 as additional notes under the Base Indenture, dated May 5, 2014 (the “Base Indenture”), between the Company and U.S. Bank National Association, as trustee (together with its successor in interest, U.S. Bank Trust Company, National Association, the “Trustee”), as supplemented by the Fourth Supplemental Indenture, dated April 1, 2025 (the “Fourth Supplemental Indenture”; and together with the Base Indenture, the “Indenture”), pursuant to which the Company issued $75,000,000 aggregate principal amount of the 7.250% Notes due 2030 (the “Existing Notes”) on April 1, 2025. The Notes are treated as a single series with the Existing Notes under the Indenture and have the same terms as the Existing Notes (other than issue date and issue price). The Notes have the same CUSIP number and are fungible and rank equally with the Existing Notes. The outstanding aggregate principal amount of the Company’s 7.250% Notes due 2030 is $125,000,000.
The Notes will mature on April 1, 2030, unless previously redeemed or repurchased in accordance with their terms. The interest rate of the Notes is 7.250% per year and will be paid semi-annually in arrears on April 1 and October 1 of each year, commencing October 1, 2025. The Notes are the Company’s direct unsecured obligations and rank pari passu with the Company’s existing and future unsecured, unsubordinated indebtedness, including the Existing Notes and the Company’s 4.875% Notes due 2026 (the “2026 Notes”); senior to 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 all of the Company’s existing and future secured indebtedness (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, including, without limitation, borrowings under the Company’s amended and restated senior secured revolving credit agreement with certain lenders party thereto and Zions Bancorporation, N.A. dba Amegy Bank, as administrative agent and lender (as amended from time to time, the “Credit Facility”); and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s existing or future subsidiaries.
Prior to October 1, 2029 (six months prior to the maturity date) (the “Par Call Date”), the Notes may be redeemed in whole or in part, at any time and from time to time at the Company’s option, at a redemption price (expressed as a percentage of the principal amount and rounded to three decimal places) equal to the greater of: (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the Notes matured on the Par Call Date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points less (b) interest accrued to the date of redemption; and (2) 100% of the principal amount of the Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to the redemption date. On or after the Par Call Date, the Company may redeem the Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to the redemption date. In addition, if a Change of Control Repurchase Event (as defined in the Fourth Supplemental Indenture) occurs prior to maturity of the Notes, holders of the Notes will have the right, at their option, to require the Company to repurchase for cash some or all of the Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.
The Indenture contains certain covenants, including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2) of the Investment Company Act of 1940, as amended (the “1940 Act”), or any successor provisions, to comply with Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act, or any successor provisions, whether or not the Company continues to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to the Company by the Securities and Exchange Commission (the “SEC”) and certain other exceptions, and to provide financial information to the holders of the Notes and the Trustee if the Company should no longer be subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are set forth in the Indenture.
The Offering was made pursuant to the Company’s effective shelf registration statement on Form N-2 (File No. 333-288252) previously filed with the Securities and Exchange Commission (the “SEC”), as supplemented by a preliminary prospectus supplement dated September 22, 2025, a final prospectus supplement dated September 22, 2025, and a pricing term sheet filed with the SEC on September 23, 2025. This Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction. The transaction closed on September 25, 2025.
The Company expects to use the net proceeds from the Offering to repay a portion of the 2026 Notes.
The foregoing descriptions of the Underwriting Agreement, Fourth Supplemental Indenture and the Notes do not purport to be complete and are qualified in their entirety by reference to the full text of the Underwriting Agreement, Fourth Supplemental Indenture and the form of global note representing the Notes, respectively, each filed or incorporated by reference as exhibits hereto and incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of Registrant.
The information contained in Item 1.01 to this current report on Form 8-K is by this reference incorporated in this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 as amended, the Registrant has duly caused this Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: September 26, 2025 | STELLUS CAPITAL INVESTMENT CORPORATION | |
| By: | /s/ W. Todd Huskinson | |
| W. Todd Huskinson | ||
| Chief Financial Officer | ||