US closed-end investment company Prospect Capital Corp (NASDAQ:PSEC) said that it was planning to launch a public offer of USD130m (EUR99m) in senior unsecured convertible notes that would fall due in 2017.

The company said also that the initial investors who buy the notes will receive an overallotment option to purchase up to an additional USD20m in aggregate principal amount of notes. Only qualified institutional investors will be able to buy the notes.

The notes, which mature on 15 October 2017, can be converted into common shares at a rate that is still to be determined.

The holders of the notes will receive interest payments twice a year, on 15 April and on 15 October, with the first payment being made on 15 October 2012. The company will define the interest rate, the conversion rate and other terms of the issue upon announcing the offering’s pricing.

Net proceeds from the offering will be used to strengthen Prospect’s balance sheet liquidity, including debt repayment and investments in short-term debt instruments.

Prospect Capital Corp is a New York-based closed-end investment company specialising in investments in private and microcap public businesses.