**Capital Southwest Corporation Reports Fiscal Year Results**
Capital Southwest Corporation (CSWC), an internally managed business development company, released its 10-K filing, detailing its financial performance and strategic initiatives. The company, specializing in customized financing for middle-market businesses, reported a net increase in net assets from operations of $70.5 million for the fiscal year ended March 31, 2025, compared to $83.4 million in the prior year. Total investment income reached $204.4 million, a 14.8% increase from $178.1 million in the previous fiscal year, driven by growth in the investment portfolio. However, interest expenses also rose to $55.0 million, up 27.6% from $43.1 million, due to increased borrowings and higher interest rates.
The company's investment portfolio, valued at $1.79 billion, consisted primarily of first-lien debt securities, representing 88.9% of the portfolio. The weighted average annual effective yield on debt investments was 11.7%. During the fiscal year, CSWC made new debt investments totaling $554.0 million and equity investments of $14.5 million. The company also experienced contractual principal repayments of $60.8 million and full prepayments of $151.4 million. Investments on non-accrual status represented 1.7% of the total investment portfolio's fair value.
Strategic developments included an increase in total commitments under the Corporate Credit Facility by $25 million, bringing the total to $510 million. The company also received its second SBIC license, allowing its SBIC subsidiaries to borrow up to $350 million in SBA-guaranteed debentures. CSWC continued to utilize its Equity ATM Program, selling 7.7 million shares of common stock for net proceeds of $178.5 million. The company's board declared a total dividend of $0.64 per share for the quarter ending June 30, 2025.
Looking ahead, CSWC intends to maintain its focus on credit-focused investments in middle-market companies. The company plans to continue leveraging its internally managed structure and access to capital to generate attractive risk-adjusted returns. However, the filing also includes a cautionary statement regarding forward-looking statements, highlighting various risks and uncertainties that could affect future performance, including market conditions, interest rate volatility, and regulatory changes. The company's asset coverage for borrowed amounts was 211% as of March 31, 2025.
About CAPITAL SOUTHWEST CORP
About 10-K Filings
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- Management's Discussion and Analysis (MD&A) of financial condition and results
- Description of the company's business, properties, and legal proceedings
- Risk factors and market risks
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- Importance: Considered the most comprehensive and important document a public company files with the SEC.
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