Filed pursuant to Rule 424(b)(3)
File No. 333-282873
Up to $1,000,000,000
Common Stock
Supplement No. 2, dated May 20, 2025
to
Prospectus, dated October 29, 2024 and
Prospectus Supplement, dated October 30, 2024
This supplement amends, supplements or modifies certain information contained in the prospectus supplement, dated October 30, 2024 (the “ATM Prospectus Supplement”), and the accompanying prospectus, dated October 29, 2024 (the “Base Prospectus,” and together with the ATM Prospectus Supplement and the documents deemed incorporated by reference in each, the “Prospectus”), which relate to the sale of shares of common stock of Capital Southwest Corporation in an “at-the-market” offering (the “ATM Program”) pursuant to those certain (i) third amended and restated equity distribution agreements, each dated May 26, 2021 and as amended from time to time, with each of Jefferies LLC (“Jefferies”) and Raymond James & Associates, Inc. (“Raymond James”) and (ii) amended and restated equity distribution agreements, each dated May 26, 2021 and as amended from time to time, with each of Citizens JMP Securities, LLC (f/k/a JMP Securities LLC) (“Citizens JMP”) and B. Riley Securities, Inc. (“B. Riley” and, together with Jefferies, Raymond James and Citizens JMP, the “Sales Agents”). The terms the “Company,” “CSWC,” “we,” “us,” and “our” refer to Capital Southwest Corporation and its subsidiaries, unless indicated otherwise. Capitalized terms used but not defined herein shall have the same meaning given them in the ATM Prospectus Supplement.
You should carefully read the entire Prospectus and this supplement before investing in our common stock. This supplement should be read in conjunction with the Prospectus. You should also carefully consider the information set forth under the sections entitled “Risk Factors” on page S-9 of the ATM Prospectus Supplement, page 10 of the Base Prospectus and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, which is incorporated by reference into the Prospectus, as well as in our subsequent filings with the Securities and Exchange Commission that are incorporated into the Prospectus, before investing in our common stock.
STATUS OF THE "AT-THE-MARKET" OFFERING
From March 4, 2019 to March 31, 2025, we sold a total of 33,041,177 shares of our common stock under the ATM Program for gross proceeds of approximately $710.0 million and net proceeds of approximately $697.2 million, after deducting commissions to the Sales Agents on shares sold and offering expenses. As a result and as of the date hereof, up to approximately $290.0 million in aggregate amount of our common stock remains available for sale under the ATM Program.
FEES AND EXPENSES
| Shareholder Transaction Expenses: | |||||||||||
| Sales load (as a percentage of offering price) | % | (1) | |||||||||
| Offering expenses (as a percentage of offering price) | % | (2) | |||||||||
| Dividend reinvestment plan expenses | % | (3) | |||||||||
| Total shareholder transaction expenses (as a percentage of offering price) | 1.75 | % | |||||||||
| Annual Expenses (as a percentage of net assets attributable to common stock for the fiscal year ended March 31, 2025): | |||||||||||
| Operating expenses | % | (4) | |||||||||
| Interest payments on borrowed funds | % | (5) | |||||||||
| Income tax provision/(benefit) | % | (6) | |||||||||
| Total annual expenses | % | ||||||||||
(1)Represents the Sales Agents’ commission with respect to the shares of common stock being sold in this offering. There is no guarantee that there will be any additional sales of our common stock pursuant to the Prospectus.
(2)The percentage reflects estimated offering expenses for this offering of approximately $2,500,000, of which we have incurred $1,810,000 as of May 16, 2025, and assumes that we sell all $1.0 billion of shares of common stock available under the equity distribution agreements with the Sales Agents.
(3)The expenses of administering our dividend reinvestment plan (“DRIP”) are included in operating expenses. The DRIP does not allow shareholders to sell shares through the DRIP. If a shareholder wishes to sell shares they would be required to select a broker of their choice and pay any fees or other costs associated with the sale.
(4)Operating expenses in this table represent the estimated annual operating expenses of CSWC and its consolidated subsidiaries based on actual operating expenses for the year ended March 31, 2025. We do not have an investment adviser and are internally managed by our executive officers under the supervision of our board of directors. As a result, we do not pay investment advisory fees, but instead we pay the operating costs associated with employing investment management professionals including, without limitation, compensation expenses related to salaries, discretionary bonuses and restricted stock grants.
(5)Interest payments on borrowed funds represents (a) our estimated annual interest payments based on actual interest rate terms under our credit facilities, with available commitments of $510 million under the Company's senior secured revolving credit facility (the “Corporate Credit Facility”) and available commitments of $200 million under the Company's special purpose vehicle financing credit facility (the “SPV Credit Facility”), and our anticipated drawdowns from our credit facilities, (b) our actual interest rate terms under the SBA-guaranteed debentures issued by Capital Southwest SBIC I, LP (the "SBA Debentures") and our anticipated drawdowns of the SBA Debentures, and (c) our estimated annual interest payments, based on actual interest rate terms, on the 3.375% notes due 2026 (the “October 2026 Notes”), the 7.75% notes due 2028 (the “August 2028 Notes”), and the 5.125% convertible notes due 2029 (the "2029 Convertible Notes"). As of March 31, 2025, we had $235.0 million outstanding under our Corporate Credit Facility, $108.0 million outstanding under our SPV Credit Facility, $175.0 million outstanding under the SBA Debentures, $150.0 million in aggregate principal of the October 2026 Notes outstanding, $71.9 million in aggregate principal of the August 2028 Notes outstanding, and $230.0 million in aggregate principal of the 2029 Convertible Notes outstanding. Any future issuances of debt securities will be made at the discretion of management and our board of directors after evaluating the investment opportunities and economic situation of the Company and the market as a whole.
Example
The following example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed we would have no additional leverage and that our annual operating expenses would remain at the levels set forth in the table above. These amounts assume (1) a 1.50% sales load (Sales Agents discounts and commissions) and (2) offering expenses totaling 0.25%.
| 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||||||||||||
| You would pay the following expenses on a $1,000 investment, assuming 5.0% annual return | $ | $ | $ | $ | ||||||||||||||||||||||