Hercules Technology Growth Capital Announces Strong New Commitments in
Quarter-to-Date Q4 2012 and Provides Year-to-Date 2012 Portfolio Update
Securitization transaction strengthens balance sheet and enhances liquidity
*Quarter-to-date Q4 2012 closed commitments of $205 million
*Year-to-date 2012 closed and pending commitments of $668 million
*Completes Securitization of $231 million and issues $129 million Class A
Notes that are rated A2 (sf) by Moody’s Investors Service
PALO ALTO, Calif. -- December 19, 2012
Hercules Technology Growth Capital, Inc. (NYSE: HTGC), the leading specialty
finance company focused on providing senior secured loans to venture
capital-backed companies in technology-related markets, including technology,
biotechnology, life science and cleantech industries, at all stages of
development, today announced its quarter-to-date fourth quarter 2012 portfolio
“2012 has been a tremendous year for Hercules in which we executed across all
areas of our business and clearly established the company as the undisputed
business development company (BDC) leader in venture lending,” said Manuel A.
Henriquez, Hercules co-founder, chairman and chief executive officer. “2012
was marked with numerous first-time achievements, ranging from completing our
first Moody’s-rated A2 (sf) securitization of $231.0 million with net proceeds
of approximately $129.0 million, to completing three senior unsecured and
unrated 7.0% seven-year bond offerings or our first ‘baby bond’ capital raises
totaling approximately $170.0 million, to executing two equity capital raises
totaling approximately $81.0 million, all while achieving portfolio and
earnings growth for our investors. We are very pleased that the financial
community continues to recognize the quality of our portfolio, the caliber of
our team, and our ability to identify investment opportunites, which is all
underscored by Moody’s A2 (sf) rating of our securitization.”
Henriquez continued, “Despite a turbulent and unpredictable market triggered
by post U.S. election uncertainty, the continued Euro crisis and now the
looming fiscal cliff, we continued to meet the strong demand for venture
lending from entrepreneurial companies during the fourth quarter. However, as
has been the case through most of 2012, many of these commitments closed near
the end of the quarter. We do not expect the majority of the new fundings to
have a meaningful impact on our fourth quarter financial results given the
late close, but they should provide for a strong start to 2013.”
Q4 Quarter-to-Date Originations:
As ofDecember 19, 2012, Hercules has originated approximately $205.0 million
of debt and equity commitments to new and existing portfolio companies.
Hercules' new investment commitments include:
*$40.0 million to Merrimack Pharmaceuticals(NASDAQ: MACK), a
biopharmaceutical company with an initial focus on cancer that is engaged
in discovering, developing and preparing to commercialize innovative
medicines that are paired with companion diagnostics for the treatment of
*$34.0 million commitment to Comverge, Inc., the leading provider of
Intelligent Energy Management solutions for Residential and Commercial &
Industrial (C&I) customers.
*$15.0 million commitment to ShareThis, the largest platform for sharing
and influence across the web, reaching more than 600 million users across
more than two million websites.
*$14.5 million commitment to WomensForum.com, an online media platform that
delivers women-focused content to its 20 million viewers.
*$10.0 million commitment to Redwood Systems, the leading provider of
building-performance lighting solutions.
*$10.0 million commitment to Identive Group (NASDAQ: INVE; Frankfurt: INV),
a provider of solutions and services for the identification, security and
*$8.5 million commitment to NuPathe, Inc. (NASDAQ:PATH), a specialty
pharmaceutical company focused on innovative neuroscience solutions for
diseases of the central nervous system including neurological and
*$6.0 million commitment to Polyera, a leading supplier of advanced
semiconductor materials for the electronics industry including flat panel
*$1.0 million commitment to Clustrix,the scale-out SQL database for Big
In addition, Hercules provided more than $65.0 million in new commitments and
renewals to existing portfolio companies.
Year-to-Date 2012 Total Commitments:
As ofDecember 19, 2012, Hercules has closed total loan commitments and
renewals of approximately $581.0 million to new and existing portfolio
Current Signed Term Sheets: Future Portfolio Growth Potential
As of December 19, 2012, Hercules has approximately $87.0 million in
non-binding signed term sheets outstanding. These non-binding term sheets
generally convert to contractual commitments in approximately 45-to-60 days
from signing. Non-binding outstanding term sheets are subject to completion of
Hercules' due diligence and final approval process as well as negotiation of
definitive documentation with the prospective portfolio companies. It is
important to note that not all non-binding term sheets are expected to close
and do not necessarily represent future cash requirements. Closed Commitments
generally fund 70-80% of the committed amount in aggregate over the life of
Closed Commitments and Pending Commitments (in millions)
(see footnotes below)
January 1- September 30, 2012 Closed Commitments $376.7
Q4 2012 Closed Commitments (as of December 19, 2012) $204.5
Total year-to-date 2012 Closed Commitments^(a) $581.2
Pending Commitments (as of December 19, 2012)^(b) $87.0
Total year-to-date Closed and Pending Commitments $668.2
(a.) Closed Commitments may include renewals of existing credit facilities.
Not all Closed Commitments result in future cash requirements. Commitments
generally fund over the two succeeding quarters from close.
(b.) Not all Pending Commitments (signed non-binding term sheets) are expected
to close and do not necessarily represent any future cash requirements.
As of December 19, 2012, Hercules had unfunded debt commitments of
approximately $89.0 million. Since these commitments may expire without being
drawn upon, unfunded commitments do not necessarily represent future cash
requirements or future earning assets for Hercules. Approximately one
third-to-one half of these unfunded commitments are dependent upon the
portfolio company reaching certain milestones before the Hercules debt
commitment would become available.
Portfolio Company Liquidity Events Quarter-to-Date:
InNovember 2012, Pfizer Inc. (NYSE: PFE) closed its acquisition of Hercules'
portfolio companyNextwave Pharmaceuticals for a total potential transaction
value of approximately $700.0 million.
In December 2012, Hercules' portfolio company deCODE Genetics reached a
definite agreement to be acquired by Amgen (NASDAQ: AMGN) in a transaction
valued at approximately $415.0 million, subject to customary closing
Current Companies in IPO Registration and Existing Warrant Portfolio:
As of December 19, 2012, Hercules had warrant positions in more than 120
different technology, life science and cleantech companies, and three
portfolio companies had filed Form S-1 Registration Statements in
contemplation of a potential IPO:
1. iWatt, Inc.
2. Glori Energy, Inc.
3. Paratek Pharmaceuticals, Inc.
There can be no assurances that these companies will complete their IPOs in a
timely manner or at all.
Quarter-to-date, Fulcrum Bioenergy withdrew its Registration Statement for its
Capital Raising Activities Quarter-to-Date:
On December 19, 2012, Hercules Capital Funding Trust 2012-1 LLC, a
newly-formed wholly owned subsidiary of Hercules, issued $129.0 million of
Class A Notes (the Notes) rated A2 (sf) by Moody’s Investors Service, Inc.
(Moody's) backed by $231.0 million of senior secured loans originated by
Hercules. The Notes bear interest at a fixed rate of 3.32%. The Notes will
have a stated maturity date of December 16, 2017 and an expected weighted
average life of 1.15 years.
On October 3, 2012, Hercules closed a public offering of 3.1 million shares of
its common stock at a price of $10.85per share, resulting in proceeds of
approximately$33.6 million,excluding other offering expenses.
In October 2012, in connection with the public offering of$75.0 millionin
aggregate principal amount of 7.00% Senior Unsecured Notes due 2019 (the
September 2019 Notes), the underwriters exercised their over-allotment option
for an additional$10.9 million in aggregate principal amount of the September
2019 Notes, bringing the total size of the offering to approximately$85.9
About Hercules Technology Growth Capital, Inc.:
Hercules Technology Growth Capital, Inc. (NYSE: HTGC) (“Hercules”) is the
leading specialty finance company focused on providing senior secured loans to
venture capital-backed companies in technology-related markets, including
technology, biotechnology, life science and cleantech industries at all stages
of development. Since inception (December 2003), Hercules has committed more
than $3.2 billion to over 220 companies and is the lender of choice for
entrepreneurs and venture capital firms seeking growth capital financing.
Hercules’ common stock trades on the New York Stock Exchange (NYSE) under the
ticker symbol "HTGC."
In addition, Hercules has two outstanding bond issuances of 7.00% Senior Notes
due 2019—the April 2019 Notes and September 2019 Notes—which trade on the NYSE
under the symbols “HTGZ” and “HTGY,” respectively.
Companies interested in learning more about financing opportunities should
contact firstname.lastname@example.org, or call 650.289.3060.
The statements contained in this release that are not purely historical are
forward-looking statements. 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 turbulence, and other factors we identify from time to time in our
filings with the Securities and Exchange Commission. Although we believe 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.
Hercules Technology Growth Capital, Inc.
Main, 650-289-3060 HT-HN
Sally Borg, 650-289-3066
Merrill Freund or Lauren Whitehouse, 415-512-0770
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