OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC (NYSE:OZM) Files An 8-K Entry into a Material Definitive Agreement

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC (NYSE:OZM) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

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New Credit and Guaranty Agreement

On April 10, 2018 (the “Closing Date”), OZ Management LP, as borrower (the “Borrower”), and certain other subsidiaries of Och-Ziff Capital Management Group LLC (“Oz Management”), as guarantors, entered into a senior secured credit and guaranty agreement (the “Senior Credit Agreement”) consisting of (i) a $250 million term loan facility (the “Term Loan Facility”) and (ii) a $100 million revolving credit facility (the “Revolving Facility”), with certain financial institutions, as lenders, and JPMorgan Chase Bank, N.A., as administrative agent. The Borrower borrowed the full amount available under the Term Loan Facility on the Closing Date. The Term Loan Facility initially matures five years after the Closing Date. The Revolving Facility initially matures four years and six months after the Closing Date. The maturity date of both the Term Loan Facility and the Revolving Facility may be extended to the terms of the Senior Credit Agreement. The proceeds of the loans under the Term Loan Facility together with cash on hand will be used to redeem the Notes (as defined below). The Borrower intends to use the proceeds of the Revolving Facility for working capital and general corporate purposes. Any amounts borrowed under the Term Loan Facility and subsequently repaid may not be reborrowed. Any amounts borrowed under the Revolving Facility and subsequently repaid may be reborrowed until the maturity or termination of the Revolving Facility.

Loans under the Term Loan Facility will bear interest at a per annum rate equal to, at the Borrower’s option, one, three or six month (or (i) twelve month with the consent of each lender or (ii) with respect to the loans under the Term Loan Facility on the Closing Date, any period of less than three months as may be agreed by the administrative agent and the Borrower) LIBOR plus a margin of 4.75%, or a base rate plus a margin of 3.75%. Loans under the Revolving Facility will bear interest at a per annum rate equal to, at the Borrower’s option, one, three or six month (or twelve month with the consent of each lender) LIBOR plus a margin of 1.75% to 2.75%, or a base rate plus a margin of 0.75% to 1.75%. The Borrower is required to pay an undrawn commitment fee at a rate per annum equal to 0.20% to 0.75% of the undrawn portion of the commitments under the Revolving Facility computed on a daily basis. The LIBOR and base rate margins under the Revolving Facility, as well as the amount of the commitment fee owed by the Borrower under the Revolving Facility, are based on the Borrower’s corporate rating at the time.

The obligations of the Borrower under the Senior Credit Agreement are guaranteed by OZ Advisors LP (“OZA”) and OZ Advisors II LP (“OZA II,” together with the Borrower and OZA, the “Operating Group Entities”) and are secured by a lien on substantially all of the Borrower’s and such guarantors’ assets, subject to certain exclusions. The Senior Credit Agreement also requires that certain sister companies and material domestic subsidiaries formed or acquired after the Closing Date and that are “Investment Advisers” or “Relying Advisers” (as defined in the U.S. Investment Advisers Act of 1940) grant a lien on substantially all of their respective assets, subject to certain exclusions, to secure the obligations of the Borrower and the other guarantors under the Senior Credit Agreement and to guarantee the obligations of the Borrower and the other guarantors under the Senior Credit Agreement.

The Senior Credit Agreement contains customary representations and warranties and covenants for a transaction of this type, including two financial maintenance covenants. The first financial maintenance covenant prohibits the total fee-paying assets under management of the Borrower, the guarantors, and their consolidated subsidiaries as of the last day of any fiscal quarter to be less than $20 billion, and the second prohibits the total net leverage ratio as of the last day of any fiscal quarter, beginning with the fiscal quarter ending on March 31, 2018, to exceed (i) 3.00 to 1.00, or (ii) following the third anniversary of the Closing Date, 2.50 to 1.00. The Senior Credit Agreement allows a limited right to cure an event of default resulting from noncompliance with the total net leverage ratio test described above with an equity contribution made to the Borrower. Such cure right may not be used more than two times in any four-quarter period or more than three times during the term of the Senior Credit Agreement. Certain subsidiaries of Oz Management, including, but not limited to, funds and other investment vehicles owned or managed by Oz Management and its subsidiaries, are excluded from the representations and warranties and the restrictions contained in certain of the foregoing covenants.

The Senior Credit Agreement contains customary events of default for a transaction of this type. If an event of default under the Senior Credit Agreement occurs and is continuing, then, at the request (or with the consent) of the lenders holding a majority of the commitments and loans under the Senior Credit Agreement, upon notice by the

administrative agent to the Borrower, the obligations under the Senior Credit Agreement shall become immediately due and payable. In addition, if the Borrower or any of its material subsidiaries becomes the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law, then any outstanding obligations under the Senior Credit Agreement will automatically become immediately due and payable.

The preceding is a summary of the terms of the Senior Credit Agreement and is qualified in its entirety by reference to the full text of the Senior Credit Agreement attached hereto as Exhibit 10.1, which is incorporated herein by reference as though they were fully set forth herein.

Amendment to the Unit Designations of the Class A Cumulative Preferred Units of the Operating Group Entities

In connection with the Senior Credit Agreement, conforming and related amendments have been made to the terms of the Class A Cumulative Preferred Units in each of the Operating Group Entities, as set forth in the Unit Designation of the Preferences and Relative, Participating, Optional, and Other Special Rights, Powers and Duties of Class A Cumulative Preferred Units of the Operating Group Entities (the “Unit Designations”), by amending and restating the Unit Designations.

Item 1.02 Termination of a Material Definitive Agreement.

Termination of the Revolving Credit Agreement

On the Closing Date, in connection with entry into the Senior Credit Agreement as described in Item 1.01 above, the Borrower terminated all commitments and repaid all obligations under the Borrower’s existing credit and guaranty agreement, dated as of November 20, 2014 (as amended, the “Revolving Credit Agreement”), among the Operating Group Entities, Och Ziff Finance Co. LLC, certain financial institutions, as lenders and JPMorgan Chase Bank, N.A. as administrative agent. On the Closing Date, upon the termination of all commitments and repayment of all obligations, all of the guarantees of the obligations under the Revolving Credit Agreement were released, and the Revolving Credit Agreement was terminated. No early termination penalties were incurred by the Borrower in connection with the termination of the Revolving Credit Agreement.

The information set forth in Item 1.01 above is hereby incorporated by reference in this Item 1.02.

Satisfaction and Discharge of 4.500% Senior Notes due 2019

On April 5, 2018, Och-Ziff Finance Co. LLC, a wholly owned subsidiary of Oz Management (“Oz Finance”), delivered a conditional notice of redemption (the “Notice”) to holders of all $400,000,000 in aggregate principal amount of its outstanding 4.500% Senior Notes due 2019 (the “Notes”). The Notes had been issued under the First Supplemental Indenture, dated as of November 20, 2014, to the Indenture, dated as of November 20, 2014 (as so supplemented, the “Indenture”), among Oz Finance, as issuer, the guarantors named therein and Wilmington Trust, National Association, as trustee (the “Trustee”). Upon completion by Oz Management of the debt financing under the Senior Credit Agreement, as set forth in Item 1.01 above, the conditions to the redemption under the Notice were satisfied.

On April 10, 2018, Oz Finance deposited or caused to be deposited with the Trustee an amount sufficient to pay and discharge the entire indebtedness under the Notes and the Indenture was satisfied and discharged with respect to the Notes (other than with respect to those provisions of the Indenture that expressly survive satisfaction and discharge). As previously announced, the Notes will be redeemed on May 5, 2018, in accordance with the Indenture.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information required by this Item 2.03 is set forth under Item 1.01 above and is hereby incorporated by reference in response to this Item 2.03.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


Och-Ziff Capital Management Group LLC Exhibit
EX-10.1 2 ex101.htm EXHIBIT 10.1 Form 8-K Exhibit 10.1 EXECUTION VERSION CREDIT AND GUARANTY AGREEMENT dated as of April 10,…
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About OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC (NYSE:OZM)

Och-Ziff Capital Management Group LLC (Och-Ziff) is an institutional alternative asset manager. The Company provides asset management services through its funds, which pursue a range of global investment opportunities. The Company operates through two segments: the Och-Ziff Funds and Other Operations. The Och-Ziff Funds segment provides asset management services to its multi-strategy funds, credit funds and other alternative investment vehicles. Its Other Operations segment includes real estate business, which provides asset management services to its real estate funds. It offers customized solutions within and across its product platforms to help its fund investors meet their investment objectives. Its global multi-strategy fund, The OZ Master Fund, allocates capital between its investment strategies in North America, Europe and Asia based on market conditions. It manages assets under management in its Institutional Credit Strategies products, real estate and other funds.

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