8-K: Trinity Capital Secures $125 Million Through 6.75% Notes Due 2030

Trinity Capital Inc. has entered into an underwriting agreement for the issuance and sale of $125 million aggregate principal amount of 6.750% Notes due 2030, with the transaction expected to close on July 3, 2025.

Summary

• Trinity Capital Inc. (the Company) entered into an underwriting agreement on June 26, 2025, with Keefe, Bruyette & Woods, Inc. and Morgan Stanley & Co. LLC, as representatives of the underwriters.
• The agreement facilitates the issuance and sale of $125,000,000 aggregate principal amount of the Company's 6.750% Notes due 2030.
• The Notes were offered at a price to public (issue price) of 98.960% of the principal amount, resulting in a yield to maturity of 7.00%.
• Interest on the Notes will be paid semi-annually on January 3 and July 3, commencing January 3, 2026.
• The Notes mature on July 3, 2030, unless earlier repurchased or redeemed.
• The Company may redeem some or all of the Notes prior to June 3, 2030 (Par Call Date) at a price equal to the greater of the present value of remaining scheduled payments (discounted at Treasury Rate plus 50 basis points less accrued interest) or 100% of the principal amount, plus accrued and unpaid interest.
• On or after the Par Call Date, the redemption price will be 100% of the principal amount plus accrued and unpaid interest.
• The transaction is expected to close on July 3, 2025.
• The Notes are rated Baa3 by Moody's, BBBL by Morningstar, and BBB by Egan-Jones.
• The offering was made pursuant to the Company's effective shelf registration statement on Form N-2 (File No. 333-275970).

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The Company successfully secured a significant amount of capital through a debt offering, which is a positive step for funding operations and growth. The terms appear to be within market expectations for a company with its credit profile, and the transaction is proceeding as planned without reported issues or delays.

Positives

• Successfully secured $125 million in capital through a debt offering, providing additional financial resources for the Company's operations and strategic initiatives.
• The offering was supported by multiple underwriters, including Keefe, Bruyette & Woods, Inc. and Morgan Stanley & Co. LLC, indicating market confidence.
• The Notes received ratings from three different agencies (Moody's, Morningstar, Egan-Jones), providing transparency on credit quality.

Negatives

• The issuance of new debt increases the Company's leverage and future interest payment obligations.
• The yield to maturity of 7.00% represents a fixed interest expense for the Company until 2030.

Risks

• The underwriting agreement includes termination clauses allowing underwriters to withdraw if trading is suspended or materially limited on major exchanges (NYSE or Nasdaq), or if trading of the Company's securities is suspended.
• A general moratorium on commercial banking activities declared by U.S. federal or New York State authorities could lead to termination of the agreement.
• Outbreak or escalation of hostilities, significant changes in financial markets, or any major calamity or crisis could make the offering impracticable or inadvisable, leading to termination.
• The Company acknowledges that underwriters and their affiliates may have interests that differ from the Company's, and they have no obligation to disclose such interests.

Future Outlook

The Company intends to apply the net proceeds from the sale of the Notes as described in the Pricing Disclosure Package and the Prospectus under the heading 'Use of Proceeds'. The Company also intends to operate its business in a manner that enables it to continue to qualify as a regulated investment company under Subchapter M of the Code and maintain its status as a business development company under the Investment Company Act.

Management Comments

• Kyle Brown, Chief Executive Officer, President and Chief Investment Officer, signed the Form 8-K on behalf of Trinity Capital Inc.

Industry Context

This debt offering by Trinity Capital Inc., a Business Development Company (BDC), aligns with the typical capital-raising activities of BDCs, which frequently access debt markets to fund their investment portfolios. The 6.75% coupon and 7.00% yield reflect current market conditions for corporate debt, particularly for entities with a mix of investment-grade and high-yield credit ratings.

Comparison to Industry Standards

• The Notes are rated Baa3 by Moody's, which is considered investment grade, indicating relatively low credit risk.
• The Notes are rated BBBL by Morningstar and BBB by Egan-Jones, which are generally considered speculative or high-yield, suggesting a higher degree of credit risk compared to investment-grade ratings from other agencies.
• Without specific comparable debt issuances from other BDCs or similar financial institutions at the same time, a detailed assessment against global benchmarks is not possible based solely on this document.

Stakeholder Impact

• Shareholders: The capital raise provides additional funding for the Company's investments, potentially supporting future growth and returns, but also increases leverage.
• Creditors: The issuance of new debt adds to the Company's overall indebtedness, impacting its credit profile and potentially the risk for existing creditors.

Next Steps

• The transaction is expected to close on July 3, 2025, at which point the Notes will be delivered and payment will be made.
• The Company will apply the net proceeds from the sale of the Securities as described in the Pricing Disclosure Package and the Prospectus.
• The Company will continue to maintain its status as a business development company under the Investment Company Act and use commercially reasonable efforts to qualify as a regulated investment company under Subchapter M of the Code.

Key Dates

Keywords

Debt Offering, Notes, Underwriting Agreement, Trinity Capital Inc., TRIN, 6.75% Notes due 2030, Capital Raise, SEC Filing, Form 8-K, Corporate Finance, Fixed Income, Business Development Company, BDC