WhiteHorse Finance, Inc. (NASDAQ:WHF) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
On October 20, 2020, WhiteHorse Finance, Inc. (the “Company”) entered into a Note Purchase Agreement (the “Note Purchase Agreement”) governing the issuance of $40,000,000 in aggregate principal amount of unsecured notes (the “Notes”) to qualified institutional investors in a private placement. The Notes have a fixed interest rate of 5.375% and are due on October 20, 2025, unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms. Interest on the Notes will be due semiannually. This interest rate is subject to increase (up to 6.375%) in the event that, subject to certain exceptions, the Notes cease to have an investment grade rating. In addition, the Company is obligated to offer to repay the Notes at par if certain change in control events occur. The Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. The Notes were delivered and paid for on October 20, 2020. The Company intends to use the net proceeds from this offering to refinance and/or redeem existing debt and/or for general corporate purposes.
The Note Purchase Agreement contains customary terms and conditions for unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a business development company within the meaning of the Investment Company Act of 1940, as amended, and a regulated investment company under the Internal Revenue Code of 1986, as amended, minimum shareholders’ equity, minimum asset coverage ratio, maximum debt to equity ratio and prohibitions on certain fundamental changes of the Company or any subsidiary guarantor. The Note Purchase Agreement also contains customary events of default and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness of the Company or certain significant subsidiaries, certain judgements and orders, and certain events of bankruptcy.
The Notes were offered in reliance on Section 4(a)(2) of Securities Act of 1933, as amended (the “Securities Act”). The Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.
The description above is only a summary of the material provisions of the Note Purchase Agreement and is qualified in its entirety by reference to the copy of the Note Purchase Agreement which is filed as Exhibit 10.1 to this current report on Form 8-K and is incorporated herein by reference thereto.
The Company issued a press release on October 20, 2020 to announce the Company’s entry into of the Notes Purchase Agreement, a copy of which is attached hereto as Exhibit 99.1.
The disclosure set forth above under Item 1.01 is incorporated by reference herein.
| 10.1* | Note Purchase Agreement, dated October 20, 2020, by and among WhiteHorse Finance, Inc. and the Purchasers signatory thereto. |
| 99.1 | Press Release, dated October 20, 2020, of WhiteHorse Finance, Inc. |
| * | Exhibits and schedules to this Exhibit have been omitted in accordance with Item 601 of Regulation S-K. The registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request. |
WhiteHorse Finance, Inc. Exhibit
EX-10.1 2 tm2033840d1_ex10-1.htm EXHIBIT 10.1 Exhibit 10.1 Execution Version WhiteHorse Finance,…
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About WhiteHorse Finance, Inc. (NASDAQ:WHF)
WhiteHorse Finance, Inc. is a non-diversified, closed-end management investment company. The Company is a direct lender targeting debt investments in privately held, small-cap companies located in the United States. The Company’s investment objective is to generate attractive risk-adjusted returns primarily by originating and investing in senior secured loans, including first lien and second lien facilities, to performing small-cap companies across a range of industries that typically carry a floating interest rate based on the London Interbank Offered Rate (LIBOR) and have a term of 3 to 6 years. The Company may also make investments at other levels of a company’s capital structure, including mezzanine loans or equity interests. The Company’s investment portfolio consists primarily of senior secured loans across approximately 40 positions in over 30 companies. The Company’s investment activities are managed by its investment advisor, H.I.G. WhiteHorse Advisers, LLC.
