Capitala Finance Corp. Enters into Amendment No. 6 to Its Senior Secured Revolving Credit Agreement with ING Capital LLC
December 26, 2019 at 04:32 pm EST
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On December 23, 2019, Capitala Finance Corp. entered into Amendment No. 6 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.
Logan Ridge Finance Corporation is a business development company. The Companyâs investment objective is to generate both current income and capital appreciation through debt and equity investments. It offers customized financing to business owners, management teams and financial sponsors for change of ownership transactions, recapitalizations, strategic acquisitions, business expansion and other growth initiatives. The Company invests in first lien loans, and, to a lesser extent, second lien loans and equity securities issued by lower middle-market and traditional middle-market companies. The Company invests in a portfolio of sectors, such as healthcare, business services, financials, information technology, industrials, consumer discretionary, communication services, consumer staples, entertainment, and data processing and digital marketing. The Company's investment advisor is Mount Logan Management LLC (Mount Logan).