Item 1.01. Entry into a Material Definitive Agreement. OnFebruary 25, 2021 ,Barings BDC, Inc. (the "Company") entered into a Note Purchase Agreement (the "February 2021 NPA") governing the issuance of (1)$80.0 million in aggregate principal amount of Series D senior unsecured notes dueFebruary 26, 2026 (the "Series D Notes") with a fixed interest rate of 3.41% per year and (2)$70.0 million in aggregate principal amount of Series E senior unsecured notes dueFebruary 26, 2028 (the "Series E Notes" and, collectively with the Series D Notes, the "February Notes") with a fixed interest rate of 4.06% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable February Notes do not satisfy certain investment grade rating conditions and/or (y) 1.50% per year, to the extent the ratio of the Company's secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The February Notes are expected to be delivered and paid for on or aboutFebruary 26, 2021 . The Company intends to use the net proceeds from the offering of the February Notes for general corporate purposes, including to make investments and make distributions permitted by theFebruary 2021 NPA. The Series D Notes will mature onFebruary 26, 2026 , and the Series E Notes will mature onFebruary 26, 2028 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with the terms of theFebruary 2021 NPA. Interest on the February Notes will be due semiannually in February and August of each year, beginning inAugust 2021 . In addition, the Company is obligated to offer to repay the February Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of theFebruary 2021 NPA, the Company may redeem the Series D Notes and the Series E Notes in whole or in part at any time or from time to time at the Company's option at par plus accrued interest to the prepayment date and, if redeemed on or beforeAugust 26, 2025 , with respect to the Series D Notes, or on or beforeAugust 26, 2027 , with respect to the Series E Notes, a make-whole premium. TheFebruary 2021 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for agreements of this type, including, without limitation, information reporting, maintenance of the Company's status as a BDC within the meaning of the Investment Company Act of 1940, as amended (the "1940 Act"), and certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments. In addition, theFebruary 2021 NPA contains the following financial covenants: (a) maintaining a minimum obligors' net worth, measured as of each fiscal quarter end; (b) not permitting the Company's asset coverage ratio, as of the date of the incurrence of any debt for borrowed money or the making of any cash dividend to shareholders, to be less than the statutory minimum then applicable to the Company under the 1940 Act; and (c) not permitting the Company's net debt to equity ratio to exceed 2.0x, measured as of each fiscal quarter end. TheFebruary 2021 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness or that of the Company's subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of certain events of default, the holders of at least 66-2/3% in principal amount of the February Notes at the time outstanding may declare all February Notes then outstanding to be immediately due and payable. The Company's obligations under theFebruary 2021 NPA will be guaranteed by certain of the Company's subsidiaries, and will be general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. The February Notes were offered in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"). The February 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 inthe United States except pursuant 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 theFebruary 2021 NPA and is qualified in its entirety by reference to the copy of theFebruary 2021 NPA which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information in this Current Report on Form 8-K set forth under Item 1.01 is incorporated by reference into this Item 2.03. -------------------------------------------------------------------------------- Item 9.01. Financial Statements and Exhibits. Exhibit No. Description 10.1* Note Purchase Agreement by and between the Company and the purchase rs part y thereto, dated February 25 , 202 1 *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 theSEC upon its request.
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