<SEC-DOCUMENT>0000017313-21-000156.txt : 20220421
<SEC-HEADER>0000017313-21-000156.hdr.sgml : 20220421
<ACCEPTANCE-DATETIME>20211018161906
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000017313-21-000156
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20211018

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CAPITAL SOUTHWEST CORP
		CENTRAL INDEX KEY:			0000017313
		IRS NUMBER:				751072796
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		8333 DOUGLAS AVE
		STREET 2:		SUITE 1100
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75225
		BUSINESS PHONE:		2142385700

	MAIL ADDRESS:	
		STREET 1:		8333 DOUGLAS AVE
		STREET 2:		SUITE 1100
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75225
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
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<title>Document</title></head><body><div id="i07f87f27d48b4f29a5cef1a0b0537bef_1"></div><div style="min-height:134.89pt;width:100%"><div style="margin-bottom:6pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:100.000%"><tr><td style="width:1.0%"></td><td style="width:69.631%"></td><td style="width:0.1%"></td><td style="width:1.0%"></td><td style="width:28.169%"></td><td style="width:0.1%"></td></tr><tr style="height:15pt"><td colspan="3" style="padding:0 1pt"></td><td colspan="3" style="padding:0 1pt"></td></tr></table></div><div><font><br></font></div></div><div style="margin-bottom:18pt;margin-top:24pt;text-align:center"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">&#91;Eversheds Sutherland (US) LLP Letterhead&#93;</font></div><div style="margin-bottom:18pt;margin-top:24pt"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">October 18, 2021</font></div><div><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:700;line-height:120%;text-decoration:underline">Via EDGAR</font></div><div><font><br></font></div><div><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">Megan Miller</font></div><div><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">Division of Investment Management,</font></div><div><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">Disclosure Review and Accounting </font></div><div><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">U.S. Securities and Exchange Commission</font></div><div><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">100 F Street, N.E.</font></div><div><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">Washington, D.C. 20549</font></div><div><font><br></font></div><div><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">&#160;&#160;&#160;&#160;</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:700;line-height:120%">Re&#58;&#160;&#160;&#160;&#160;Capital Southwest Corporation</font></div><div><font><br></font></div><div><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">Dear Ms. Miller&#58;</font></div><div style="margin-bottom:11pt;margin-top:11pt;text-align:justify;text-indent:36pt"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">On behalf of Capital Southwest Corporation (the &#8220;</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-style:italic;font-weight:700;line-height:120%">Company</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">&#8221;), set forth below are the Company&#8217;s responses to the comments of the staff of the Division of Investment Management (the &#8220;</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-style:italic;font-weight:700;line-height:120%">Staff</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">&#8221;) of the Securities and Exchange Commission (the &#8220;</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-style:italic;font-weight:700;line-height:120%">SEC</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">&#8221;) that we received on October 6, 2021, in connection with the SEC&#8217;s review of the Company&#8217;s reports filed pursuant to the Securities and Exchange Act of 1934, as amended, as required by Section 408 of the Sarbanes-Oxley Act of 2002, as amended. The Staff&#8217;s comments are set forth below and are followed by the Company&#8217;s responses thereto. </font></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">1.</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%;padding-left:9.01pt">The Staff refers to Exhibit 21.1 included in the Company&#8217;s annual report on Form 10-K for fiscal year ended March 31, 2021 (the &#8220;</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-style:italic;font-weight:700;line-height:120%">Form 10-K</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">&#8221;). Please advise on a supplemental basis whether Capital Southwest Equity Investments, Inc. is a consolidated subsidiary of the Company and whether Capital Southwest SBIC I, LP will be a consolidated subsidiary of the Company. </font></div><div><font><br></font></div><div style="padding-left:36pt;text-align:justify"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:700;line-height:120%;text-decoration:underline">Response</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">&#58; The Company respectfully advises the Staff on a supplemental basis that Capital Southwest Equity Investments, Inc. is a wholly owned subsidiary that serves as a tax blocker for the Company, which is referred to as the &#8220;Taxable Subsidiary&#8221; in the Form 10-K. As disclosed in Note 1 to the consolidated financial statements under the caption entitled &#8220;Consolidation&#8221; on page 97 of the Form 10-K, Capital Southwest Equity Investments, Inc. is consolidated with the Company&#8217;s financial statements. In addition, the Company respectfully advises the Staff on a supplemental basis that Capital Southwest SBIC I, LP will be a consolidated subsidiary of the Company and will be disclosed under the caption titled &#8220;Consolidation&#8221; in future filings. </font></div><div style="text-align:justify"><font><br></font></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">2.</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%;padding-left:9.01pt">The Staff refers to the Company&#8217;s &#8220;Schedule of Investments in and Advances to Affiliates&#8221; statement starting on page 136 of the Form 10-K. Please advise if the information required under Column B in Rule 12-14 of Regulation S-X is included in the schedule.</font></div><div style="padding-left:36pt;text-align:justify"><font><br></font></div><div style="padding-left:36pt;text-align:justify"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:700;line-height:120%;text-decoration:underline">Response</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">&#58; The Company respectfully advises the Staff on a supplemental basis that the number of shares for equity positions held at the close of each specified period is disclosed under the column entitled &#8220;Type of Investment&#8221; in the Schedule of Investments in and Advances to Affiliates. With respect to the requirement under Column B in Rule 12-14 to include the principal amount of the loans and other indebtedness, while the Company currently includes a footnote referring to the </font></div><div style="height:72pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div style="margin-bottom:6pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:100.000%"><tr><td style="width:1.0%"></td><td style="width:98.900%"></td><td style="width:0.1%"></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:6.5pt;font-weight:400;line-height:133%">Eversheds Sutherland (US) LLP is part of a global legal practice, operating through various separate and distinct legal entities, under Eversheds Sutherland.  For a full description of the structure and a list of offices, please visit www.eversheds-sutherland.com.</font></td></tr></table></div><div><font><br></font></div><div><font><br></font></div></div></div><hr style="page-break-after:always"><div style="min-height:134.89pt;width:100%"><div><font><br></font></div></div><div style="padding-left:36pt;text-align:justify"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">Consolidated Schedule of Investments for such information, the Company undertakes to include such information in the &#8220;Schedule of Investments in and Advances to Affiliates&#8221; in future filings. </font></div><div style="padding-left:36pt;text-align:justify"><font><br></font></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">3.</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%;padding-left:9.01pt">The Staff refers to the disclosure relating to the approximately 10.7% of the Company&#8217;s total investment income being attributable to non-cash PIK interest income in Note 1 to the consolidated financial statements in the Form 10-K. In future filings, please disclose the amount of PIK income in the Company&#8217;s Consolidated Statement of Operations as required by Rule 6-07-1 of Regulation S-X. </font></div><div style="padding-left:36pt;text-align:justify"><font><br></font></div><div style="padding-left:36pt;text-align:justify"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:700;line-height:120%;text-decoration:underline">Response</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">&#58; The Company respectfully advises the Staff on a supplemental basis that it will include PIK income in the Company&#8217;s Consolidated Statement of Operations in future filings if the amount of such PIK income exceeds 5% of total investment income for such period in accordance with Rule 6-07-1 of Regulation S-X.  </font></div><div style="padding-left:36pt;text-align:justify"><font><br></font></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">4.</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%;padding-left:9.01pt">On a supplemental basis, please explain how the total distributable earnings in the notes to the consolidated financial statements in the Form 10-K reconcile with the Consolidated Statement of Assets and Liabilities.</font></div><div style="padding-left:36pt;text-align:justify"><font><br></font></div><div style="padding-left:36pt;text-align:justify"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:700;line-height:120%;text-decoration:underline">Response</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">&#58; The Company respectfully advises the Staff on a supplemental basis that the total distributable earnings disclosed in the Consolidated Statement of Assets and Liabilities is disclosed in accordance with U.S. Generally Accepted Accounting Principles (&#8220;</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-style:italic;font-weight:700;line-height:120%">GAAP</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">&#8221;). The total distributable earnings disclosed in Note 6 to the consolidated financial statements in the Form 10-K is determined and disclosed in accordance with income tax regulations. Moreover, the Company&#8217;s tax year end is December 31 and its fiscal year end is March 31. As disclosed in the fourth paragraph under Note 6 on page 116 of the Form 10-K, book and tax basis differences relating to shareholder dividends and distributable and other permanent book and tax differences are typically reclassified among the Company&#8217;s capital accounts, and the character of income and gains to be distributed that is determined in accordance with income tax regulations may differ from GAAP. &#160;</font></div><div style="padding-left:36pt;text-align:justify"><font><br></font></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">5.</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%;padding-left:9.01pt">In future filings, please include a column with the percentage of net assets of each category of investments included in the Consolidated Schedule of Investments in accordance with footnote 5 of Rule 12-12 of Regulation S-X.</font></div><div style="text-align:justify"><font><br></font></div><div style="padding-left:36pt;text-align:justify"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:700;line-height:120%;text-decoration:underline">Response</font><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">&#58; The Company respectfully advises the Staff on a supplemental basis that it will include a column with the percentage of net assets of each category of investments included in the Consolidated Schedule of Investments.</font></div><div style="padding-left:36pt;text-align:justify"><font><br></font></div><div style="margin-bottom:10pt"><font><br></font></div><div style="height:72pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div style="text-align:center"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">2</font></div><div><font><br></font></div></div></div><hr style="page-break-after:always"><div style="min-height:134.89pt;width:100%"><div><font><br></font></div></div><div style="margin-bottom:11pt;text-align:center"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">*&#160;&#160;&#160;&#160;*&#160;&#160;&#160;&#160;*</font></div><div style="text-align:justify;text-indent:36pt"><font><br></font></div><div style="text-align:justify;text-indent:36pt"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">If you have any questions or additional comments concerning the foregoing, please contact the undersigned at (202) 383-0176, Payam Siadatpour at (202) 383-0278 or Sara Sabour at (202) 383-0806.</font></div><div style="text-align:justify;text-indent:36pt"><font><br></font></div><div style="text-align:justify"><font><br></font></div><div style="padding-left:252pt;text-align:justify"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">Sincerely,</font></div><div style="padding-left:252pt;text-align:justify"><font><br></font></div><div style="padding-left:252pt;text-align:justify"><font><br></font></div><div style="padding-left:252pt;text-align:justify"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%;text-decoration:underline">&#47;s&#47; Steven B. Boehm____</font></div><div style="padding-left:252pt;text-align:justify"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">Steven B. Boehm</font></div><div style="padding-left:252pt;text-align:justify"><font><br></font></div><div style="text-align:justify"><font><br></font></div><div style="padding-left:36pt;text-align:justify;text-indent:-36pt"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">Cc&#58; &#160;&#160;&#160;&#160;Bowen S. Diehl, President and Chief Executive Officer </font></div><div style="padding-left:36pt;text-align:justify"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">Michael S. Sarner, Chief Financial Officer, Treasurer and Secretary </font></div><div style="text-align:justify"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">&#160;&#160;&#160;&#160;Payam Siadatpour, Esq., Eversheds Sutherland (US) LLP</font></div><div style="text-align:justify;text-indent:36pt"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">Sara Sabour, Esq., Eversheds Sutherland (US) LLP</font></div><div style="height:72pt;position:relative;width:100%"><div style="bottom:0;position:absolute;width:100%"><div style="text-align:center"><font style="color:#000000;font-family:'Verdana',sans-serif;font-size:9pt;font-weight:400;line-height:120%">3</font></div><div><font><br></font></div></div></div></body></html>
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</DOCUMENT>
</SEC-DOCUMENT>
