Hercules Well Positioned to Benefit From Rising Rates & Expects to Realize Increased Net Investment Income From the Recent FO...
December 17 2015 - 2:00PM
Business Wire
- ~98.2% of Hercules Existing Loan
Portfolio is Priced at Floating Interest Rates
- Prime Rate has increased from 3.25% to
3.50%, per the Wall Street Journal today
- Each 25 Basis Points Rise in the Prime
Rate Generates Approximately $2.0 Million, or $0.03 per Share of
Additional Net Investment Income or NII
Hercules Technology Growth Capital, Inc. (NYSE:HTGC)(“Hercules”
or the “Company”), the leading specialty financing provider to
innovative venture growth stage companies backed by leading venture
capital firms, today announced the estimated accretive impact to
its investment loan portfolio attributed to the Federal Reserve -
Federal Open Market Committee’s (“FOMC”) increase in the federal
funds rate by 25 basis points, or 0.25%. Hercules anticipates each
25 basis points increase in the Prime Rate will contribute
approximately $2.0 million, or $0.03 per share, of net investment
income per annum. As of September 30, 2015, 98.2% of Hercules’ loan
investment portfolio of $1.1 billion was primarily priced at PRIME
or LIBOR-based floating interest rates, while 100% of the Company’s
outstanding debt obligations have a fixed rate of interest, well
positioned Hercules for additional future rate increases. The
expected net investment income benefit is expected to be realized
beginning in Q1 2016.
Based on Hercules’ Consolidated Statement of Assets and
Liabilities as of September 30, 2015, the following table
illustrates the approximate annualized increase in components of
net income resulting from hypothetical base rate changes in
interest rates, such as prime rate, assuming no changes in the
Company’s investments and borrowings.
(in thousands) Interest
Interest Net EPS(2) Basis Point Increase
(1) Income (2) Expense Income 25 $
2,382 $ 370 $ 2,012 $ 0.03 50 $ 4,764 $ 394 $ 4,370 $ 0.06 75 $
7,146 $ 418 $ 6,728 $ 0.10 100 $ 9,528 $ 442 $ 9,086 $ 0.13 200 $
19,506 $ 538 $ 18,968 $ 0.28 300 $ 30,278 $ 633 $ 29,645 $ 0.43
(1) A decline in interest rates would not
have a material impact on our Consolidated Financial Statements
(2) EPS calculated on basic weighted
shares outstanding of 68,897
About Hercules Technology Growth Capital, Inc.
Hercules Technology Growth Capital, Inc. (NYSE:HTGC) is the
leading specialty finance company focused on providing senior
secured venture growth loans to high-growth, innovative venture
capital-backed companies in the technology, biotechnology, life
sciences, healthcare, and energy & renewable technology
industries. Since inception (December 2003), Hercules has committed
more than $5.6 billion to over 325 companies and is the lender of
choice for entrepreneurs and venture capital firms seeking growth
capital financing. Companies interested in learning more about
financing opportunities should contact info@htgc.com, or call
650.289.3060.
Hercules’ common stock trades on the New York Stock Exchange
under the ticker symbol "HTGC."
In addition to the Notes which trade on the NYSE under the
symbol “HTGY”, Hercules has two outstanding bond issuances of 7.00%
Senior Notes due April 2019 and 6.25% Notes due July 2024, which
trade on the NYSE under the symbols “HTGZ,” and “HTGX,”
respectively.
Forward-Looking Statements
The information disclosed in this press release is made as of
the date hereof and reflects Hercules most current assessment of
its historical financial performance. Actual financial results
filed with the Securities and Exchange Commission may differ from
those contained herein due to timing delays between the date of
this release and confirmation of final audit results. These
forward-looking statements are not guarantees of future performance
and are subject to uncertainties and other factors that could cause
actual results to differ materially from those expressed in the
forward-looking statements including, without limitation, the
risks, uncertainties, including the uncertainties surrounding the
current market volatility, and other factors the Company identifies
from time to time in its filings with the Securities and Exchange
Commission. Although Hercules believes that the assumptions on
which these forward-looking statements are based are reasonable,
any of those assumptions could prove to be inaccurate and, as a
result, the forward-looking statements based on those assumptions
also could be incorrect. You should not place undue reliance on
these forward-looking statements. The forward-looking statements
contained in this release are made as of the date hereof, and
Hercules assumes no obligation to update the forward-looking
statements for subsequent events.
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version on businesswire.com: http://www.businesswire.com/news/home/20151217006417/en/
Hercules Technology Growth Capital, Inc.Michael Hara,
650-433-5578 HT-HNInvestor Relations and Corporate
Communicationsmhara@htgc.com
Hercules Capital (NYSE:HTGC)
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