Fifth Street Finance Corp. (NASDAQ:FSC) Files An 8-K Entry into a Material Definitive Agreement

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Fifth Street Finance Corp. (NASDAQ:FSC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

In connection with the Transaction, on July 14, 2017, the Company entered into an amendment (the “ING Amendment”) to its secured syndicated revolving credit facility (as amended, the “ING facility”) that amends the Amended and Restated Senior Secured Revolving Credit Agreement (as amended, the “ING Credit Agreement”) among the Company, FSFC Holdings, Inc., Fifth Street Fund of Funds LLC, ING Capital LLC, and the lenders party thereto. Under the ING Amendment, the ING facility now contemplates the appointment of Oaktree as the Company’s investment adviser; the covenant regarding minimum shareholders’ equity under the ING Credit Agreement was reduced from $978 million to $900 million, the consolidated interest coverage ratio was reduced from 2.50 to 1.0 to 2.25 to 1.0, a new minimum net worth covenant of $750 million was added and the lenders’ commitments were extended to January 31, 2018. The stated maturity date of the ING facility was not extended by the ING Amendment and remains August 6, 2018.

The foregoing description of the ING Amendment does not purport to be complete and is qualified in its entirety by reference to the ING Amendment, attached hereto as Exhibit 10.1 and incorporated by reference herein.

In connection with the Transaction, on July 13, 2017, the Company entered into a waiver and amendment (the “SMBC Amendment”) to its credit facility (the “Sumitomo facility”) with Sumitomo Mitsui Banking Corporation (“SMBC”), to which the stated maturity date of the Sumitomo facility was changed from September 16, 2021 to the earlier of (a) August 6, 2018 and (b) the date on which the ING facility is repaid, refinanced or terminated. In addition, under the SMBC Amendment, SMBC has agreed to waive the occurrence of the change of control under the Sumitomo facility and certain possible events of default that would result from the closing of the Transaction, including the proposed appointment of Oaktree as the Company’s investment adviser, for a definite period of time, commencing on the date of the SMBC Amendment and ending on the earlier of January 1, 2018 and the date on which the Purchase Agreement is terminated or ceases to be effective.

The foregoing description of the SMBC Amendment does not purport to be complete and is qualified in its entirety by reference to the SMBC Amendment, attached hereto as Exhibit 10.2 and incorporated by reference herein.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

In connection with the Transaction, on July 13, 2017, each of Messrs. Bernard D. Berman, James Castro-Blanco, Brian S. Dunn, Alexander C. Frank, Byron J. Haney and Douglas F. Ray executed resignation letters to which each will resign as a member of the Company’s Board of Directors effective as of the closing of the Transaction. In addition, each of Mr. Berman, the Company’s Chief Executive Officer, Mr. Steven Noreika, the Company’s Chief Financial Officer, and Ms. Kerry Acocella, the Company’s Secretary and Chief Compliance Officer, is expected to resign from his or her respective roles as officers of the Company effective as of the closing of the Transaction.

Item 8.01 Other Events

The information set forth in the introductory note is incorporated by reference into this Item 8.01.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

10.1 Amendment No. 8 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of July 14, 2017, among Fifth Street Finance Corp., FSFC Holdings, Inc., Fifth Street Fund of Funds LLC, the lenders party thereto and ING Capital LLC.
10.2 Waiver and Amendment No. 4 to Loan and Servicing Agreement, dated as of July 13, 2017, by and among Fifth Street Funding II, LLC, Fifth Street Finance Corp., Sumitomo Mitsui Banking Corporation, and each of the lenders from time to time party thereto.
99.1 Press release dated July 14, 2017.


Fifth Street Finance Corp. Exhibit
EX-10.1 2 v470886_ex10-1.htm EXHIBIT 10.1   Exhibit 10.1   AMENDMENT NO. 8 TO AMENDED AND RESTATED SENIOR SECURED REVOLVING CREDIT AGREEMENT   This AMENDMENT NO. 8 (this “Amendment”) with respect to the Amended and Restated Senior Secured Revolving Credit Agreement,…
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About Fifth Street Finance Corp. (NASDAQ:FSC)

Fifth Street Finance Corp. is a specialty finance company. The Company is a closed-end, non-diversified management investment company. The Company acts as a business development company (BDC). The Company’s investment objective is to maximize its portfolio’s total return by generating current income from its debt investments, and capital appreciation from its equity investments. The Company lends to and invests in small and mid-sized companies, primarily in connection with investments by private equity sponsors. The Company seeks to invest in companies in connection with private equity sponsors. The Company invests in sectors, such as healthcare services; Internet software and services; multi-sector holdings; advertising; airlines, and construction and engineering. Fifth Street Management LLC is the Company’s investment advisor.

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