CAPITALA FINANCE CORP. (NASDAQ:CPTA) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
On December 23, 2019, Capitala Finance Corp. (the “Company”) entered into Amendment No. 6 (the “Amendment”) to its Senior Secured Revolving Credit Agreement with ING Capital LLC, as administrative agent, arranger and bookrunner, and the lenders party thereto (as amended from time to time, immediately prior to the effectiveness of the Amendment, the “Credit Facility”).
The Amendment amended the Credit Facility to, among other things, (a) modify the size of the current revolver commitments under the Credit Facility to $60.0 million, (b) modify the size of the accordion feature of the Credit Facility to $150.0 million, (c) modify the pricing of the Credit Facility to bear interest at a rate per annum equal to (i) the one, two, three or six month adjusted LIBOR (subject to a floor of zero), as applicable, plus 3.50% (in the case of eurocurrency loans) or (ii) 2.50% plus the highest of (A) a prime rate, (B) the Federal Funds rate plus 0.50%, (C) three month adjusted LIBOR plus 1.00% and (D) zero (in the case of alternate base rate loans), in each case of the preceding clauses (i) and (ii), subject to a 0.50% step-down in pricing when certain conditions are met, (d) extend the expiration of the revolving period to October 31, 2021, during which period the Company, subject to certain conditions, may make borrowings under the Credit Facility, and (e) extend the stated maturity date of the Credit Facility to April 30, 2022.
The Company will pay an unused commitment fee at a rate of (a) 0.75% per annum on the unutilized portion of the aggregate commitments under the Credit Facility, as amended, on each day when the utilized portion of the aggregate commitments is less than 35% for such day, and (b) 0.50% per annum on the unutilized portion of the aggregate commitments under the Credit Facility, as amended, on each day when the utilized portion of the aggregate commitments is equal to or greater than 35% for such day.
The Credit Facility, as amended, will continue to be secured by a first priority security interest in all of the Company’s and its subsidiaries’ portfolio investments (other than those held by the Company’s existing Small Business Investment Company (“SBIC”) subsidiaries), equity interests in certain of the Company’s direct and indirect subsidiaries (other than the Company’s existing SBIC subsidiaries) and substantially all of the Company’s and its subsidiaries’ other assets. Any future subsidiaries formed by the Company (other than SBIC subsidiaries or certain special purpose financing subsidiaries) will be required to guarantee the Credit Facility, as amended, and pledge all of their assets in support of such guarantee. The Credit Facility, as amended, continues to contain certain customary affirmative and negative covenants and events of default. In particular, the Credit Facility, as amended, contains certain financial covenants that, among other things, require the Company to maintain a minimum amount of equity supporting the Credit Facility, as amended, and to maintain compliance with certain collateral concentration limits, quality and coverage tests.
The description above is only a summary of the material provisions of the Amendment to the Credit Facility and is qualified in their entirety by reference to the copies of the Form of Amendment No. 6 to the Senior Secured Revolving Credit Agreement, which is filed as Exhibit 10.1 to this current report on Form 8-K and are incorporated herein by reference thereto.
The disclosure set forth above under Item 1.01 is incorporated by reference herein.
| 10.1 | Form of Amendment No. 6, to Senior Secured Revolving Credit Agreement, dated as of December 23, 2019, among Capitala Finance Corp., as borrower, the lenders from time to time party thereto, and ING Capital LLC, as administrative agent. |
Capitala Finance Corp. Exhibit
EX-10.1 2 tm1927303d2_ex10-1.htm EXHIBIT 10.1 Exhibit 10.1 [FORM OF AMENDMENT NO. 6 TO SENIOR SECURED REVOLVING CREDIT AGREEMENT] AMENDMENT NO. 6 TO SENIOR SECURED REVOLVING CREDIT AGREEMENT This AMENDMENT NO. 6 TO SENIOR SECURED REVOLVING CREDIT AGREEMENT (this “Amendment”) dated as of December 23,…
To view the full exhibit click here
About CAPITALA FINANCE CORP. (NASDAQ:CPTA)
Capitala Finance Corp. is an externally managed non-diversified, closed-end management investment company. The Company’s investment objective is to generate both current income and capital appreciation through debt and equity investments. Both directly and through its subsidiaries that are licensed by the United States Small Business Administration (SBA), the Company offers financing to business owners, management teams and financial sponsors for change of ownership transactions, recapitalizations, strategic acquisitions, business expansion and other growth initiatives. It invests in mezzanine, senior subordinated and unitranche debt, as well as senior and second-lien loans and, to a lesser extent, equity securities issued by lower middle-market and middle-market companies. It invests in various sectors, which include oil and gas services, consumer electronics, transportation, financial services and business services. It is managed by Capitala Investment Advisors, LLC.
