Trinity Capital Inc. (NASDAQ: TRIN) has announced an adjustment to the conversion rate of its 6.00% convertible notes due 2025 as a result of the company's cash dividend of $0.51 per share, payable on April 15, 2024, to stockholders of record as of March 28, 2024. The ex-dividend date for the dividend was March 27, 2024.
Effective immediately after the close of business on March 28, 2024, the conversion rate of the convertible notes has been adjusted to 78.0543 shares of the company's common stock per $1,000 principal amount of convertible notes. This is an increase from the prior conversion rate of 76.9453 shares of the company's common stock per $1,000 principal amount of convertible notes, which had been in effect since January 1, 2024. Consequently, the conversion price applicable to the convertible notes has been adjusted to $12.81 per share of common stock from $13.00 per share of common stock.
The adjustment to the conversion rate of the convertible notes is made pursuant to the second supplemental indenture, dated as of December 11, 2020, governing the convertible notes as a result of the company's regular quarterly cash dividend exceeding the initial dividend threshold of $0.30 per share of common stock set forth in the second supplemental indenture and the company paying a supplemental cash dividend.
Trinity's objective is to distribute four quarterly distributions in an amount that approximates 90% to 100% of its taxable quarterly income or potential annual income for a particular year in order to qualify for tax treatment as a regulated investment company under the Internal Revenue Code of 1986. Additionally, during any particular year, the company may pay additional supplemental distributions.
As a result of these announcements, the company's shares have moved 0.5% on the market, and are now trading at a price of $14.68. For more information, read the company's full 8-K submission here.
