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Hercules to increase net investment income through proactive management of capital structure

Hercules Technology Growth Capital has completed the previously-announced redemption of USD40.0 million of the USD85.9 million in issued and outstanding aggregate principal amount of the Company’s 7.00 per cent Senior Unsecured Notes due September 2019.

The partial redemption of the Notes will result in an annual interest expense savings of approximately USD3.0 million, prior to a one-time non-cash expense in the fourth quarter of 2015, attributed to acceleration of unamortised original debt issuance costs of approximately USD825,000, or USD0.01 per share of additional expense during the quarter. Hercules may elect to complete additional redemptions of its 7.0 per cent 2019 Notes throughout calendar year 2016, subject to market conditions and its anticipated liquidity position. The Company will provide notice for, and complete all, redemptions in compliance with the terms of the Indenture.

“We continue to be extremely proactive in the management of our overall capital structure as we work to continue to optimise the Company’s balance sheet, particularly as the interest rate environment changes,” says Mark R Harris, chief financial officer at Hercules. “As rising interest rates are expected to benefit our net investment income, we are also opportunistically taking steps to lower our cost of financing on the right side of the ledger. By actively managing our liquidity and balance sheet, we continue to further strengthen Hercules’ balance sheet and lower our cost of financing while also generating positive earnings growth to our investors, despite the one-time, non-cash expense of approximately USD0.01 per share in Q4 2015. The partial retirement of our 7.00 per cent 2019 Notes will become immediately accretive to earnings per share in 2016 and beyond. The strength of our platform and balance sheet continues to be one of Hercules’ competitive advantages and is a critical component to supporting our future growth objectives.”

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