Item 1.01. Entry into a Material Definitive Agreement.
On November 23, 2021, Barings BDC, Inc. (the "Company") and U.S. Bank National
Association (the "Trustee") entered into an Indenture (the "Base Indenture") and
a Supplemental Indenture (the "First Supplemental Indenture" and, together with
the Base Indenture, the "Indenture"). The First Supplemental Indenture relates
to the Company's issuance of $350,000,000 aggregate principal amount of its
3.300% notes due 2026 (the "Notes").
The Notes will mature on November 23, 2026 and may be redeemed in whole or in
part at the Company's option at any time or from time to time at the redemption
prices set forth in the Indenture. The Notes bear interest at a rate of 3.300%
per year payable semi-annually on May 23 and November 23 of each year,
commencing on May 23, 2022. The Notes are general unsecured obligations of the
Company that rank senior in right of payment to all of the Company's existing
and future indebtedness that is expressly subordinated in right of payment to
the Notes, rank pari passu with all existing and future unsecured unsubordinated
indebtedness issued by the Company, rank effectively junior to any of the
Company's secured indebtedness (including unsecured indebtedness that the
Company later secures) to the extent of the value of the assets securing such
indebtedness, and rank structurally junior to all existing and future
indebtedness (including trade payables) incurred by the Company's subsidiaries,
financing vehicles or similar facilities.
The Indenture contains certain covenants, including covenants requiring the
Company to comply with the asset coverage requirements of Section 18(a)(1)(A) as
modified by Section 61(a)(1) and (2) of the Investment Company Act of 1940, as
amended, whether or not it is subject to those requirements, and to provide
financial information to the holders of the Notes and the Trustee if the Company
is no longer subject to the reporting requirements under the Securities Exchange
Act of 1934, as amended. These covenants are subject to important limitations
and exceptions that are described in the Indenture.
In addition, on the occurrence of a "change of control repurchase event," as
defined in the Indenture, the Company will generally be required to make an
offer to purchase the outstanding Notes at a price equal to 100% of the
principal amount of such Notes plus accrued and unpaid interest to the
repurchase date.
The foregoing description of the Indenture does not purport to be complete and
is qualified in its entirety by reference to the full text of the Indenture,
filed as an exhibit hereto and incorporated by reference herein.
The Notes were offered to persons reasonably believed to be qualified
institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act"), and to certain non-U.S. persons outside the
United States pursuant to Regulation S under the Securities Act (the "Notes
Offering"). The Notes have not been registered under the Securities Act or any
state securities laws and may not be offered or sold in the United States absent
registration or an applicable exemption from such registration requirements. The
Notes Offering closed on November 23, 2021. The net proceeds to the Company were
approximately $343.6 million, after deducting the initial purchaser discount and
estimated offering expenses. The Company expects to use the net proceeds of the
Notes Offering to repay indebtedness (which may include its revolving credit
facility with ING Capital LLC), make investments in portfolio companies in
accordance with its investment objectives, and for general corporate purposes of
it and its subsidiaries.
Registration Rights Agreement
In connection with the Notes Offering, the Company entered into a Registration
Rights Agreement, dated as of November 23, 2021 (the "Registration Rights
Agreement"), with J.P. Morgan Securities LLC, ING Financial Markets LLC, MUFG
Securities Americas Inc. and Wells Fargo Securities, LLC, as the representatives
of the Initial Purchasers of the Notes. Pursuant to the Registration Rights
Agreement, the Company is obligated to file with the Securities and Exchange
Commission (the "Commission") a registration statement relating to an offer to
exchange the Notes for new notes issued by the Company that are registered under
the Securities Act and otherwise have terms substantially identical to those of
the Notes, and to use its commercially reasonable efforts to cause such
registration statement to be declared effective. If the Company is not able to
effect the exchange offer, the Company will be obligated to file a shelf
registration statement covering the resale of the Notes and use its commercially
reasonable efforts to cause such registration statement to be declared
effective. If the Company fails to satisfy its registration obligations by
certain dates specified in the Registration Rights Agreement, it will be
required to pay additional interest to the holders of the Notes.
The foregoing description of the Registration Rights Agreement does not purport
to be complete and is qualified in its entirety by reference to the full text of
the Registration Rights Agreement, filed as an exhibit hereto and incorporated
by reference herein.
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 Item 2.03 contained in Item 1.01 of this Current
Report on Form 8-K is incorporated herein by reference.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
EXHIBIT
NUMBER DESCRIPTION
4.1 Indenture, dated as of November 23, 2021, by and between the Company and
U.S. Bank National Association, as trustee.
4.2 First Supplemental Indenture, dated as of November 23, 2021, relating to
the 3.300% Notes due 2026, by and between the Company and U.S. Bank
National Association, as trustee.
4.3 Form of 3.300% Notes due 2026 (incorporated by reference to Exhibit 4.2
hereto).
4.4 Registration Rights Agreement, dated as of November 23, 2021, relating to
the 2026 Notes, by and among the Company and J.P. Morgan Securities LLC,
ING Financial Markets LLC, MUFG Securities Americas Inc. and Wells Fargo
Securities, LLC, as the representatives of the Initial Purchasers.
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