Item 1.01. Entry into a Material Definitive Agreement
Amended and Restated CLO Indenture and CLO Reset Transaction
On
The CLO Reset Transaction was executed through a private placement of
The CLO Reset Notes are the secured obligations of the Issuer, and the Amended
and Restated Indenture governing the CLO Reset Notes includes customary
covenants and events of default. The CLO Reset Notes have not been, and will not
be, registered under the Securities Act of 1933, as amended, or any state
securities or "blue sky" laws and may not be offered or sold in
The Company will continue to serve as portfolio manager to the Issuer pursuant to an Amended and Restated Portfolio Management Agreement between the Company and the Issuer, or the Portfolio Management Agreement. For so long as the Company serves as portfolio manager, the Company will elect to irrevocably waive any base management fee or subordinated interest to which it may be entitled under the Portfolio Management Agreement. The obligations of the Issuer under the CLO Reset Transaction are non-recourse to the Company.
The description of the Amended and Restated Indenture contained in this Current Report on Form 8-K does not purport to complete and is qualified in its entirety by reference to the full text of the Amended and Restated Indenture attached hereto as Exhibit 10.1.
Second Amendment and Restatement of the Senior Secured Revolving Credit Facility
On
Availability under the Second Amended and Restated Senior Secured Revolving
Credit Facility will terminate on
Borrowings under the Second Amended and Restated Senior Secured Revolving Credit Facility are subject to compliance with a borrowing base test. Interest under the Second Amended and Restated Senior Secured Revolving Credit Facility for (i) loans for which the Company elects the base rate option, (A) if the value of the borrowing base is equal to or greater than 1.85 times the aggregate amount of certain outstanding indebtedness of the Company, or the Combined Debt Amount, is payable at an "alternate base rate" (which is the greatest of (a) the prime rate as publicly announced by JPMorgan, (b) the sum of (x) the greater of (I) the federal funds effective rate and (II) the overnight bank funding rate plus (y) 0.5%, and (c) the one month LIBOR plus 1% per annum) plus 0.75% and, (B) if the value of the borrowing base is less than 1.85 times the Combined Debt Amount, the alternate base rate plus 1.00%; and (ii) loans for which the Company elects the Eurocurrency option (A) if the value of the borrowing base is equal to or greater than 1.85 times the Combined Debt Amount, is payable at a rate equal to LIBOR plus 1.75% and (B) if the value of the borrowing base is less than 1.85 times the Combined Debt Amount, is payable at a rate equal to LIBOR plus 2.00%. The Company will pay a commitment fee of at least 0.375% and up to 0.50% per annum (based on the immediately preceding quarter's average usage) on the unused portion of its sublimit under the Second Amended and Restated Senior Secured Revolving Credit Facility during the revolving period. The Company also will be required to pay letter of credit participation fees and a fronting fee on the average daily amount of any lender's exposure with respect to any letters of credit issued at the request of the Company under the Second Amended and Restated Senior Secured Revolving Credit Facility.
In connection with the Second Amended and Restated Senior Secured Revolving Credit Facility, the Company has made certain representations and warranties and must comply with various covenants and reporting requirements customary for facilities of this type. In addition, the Company must comply with the following financial covenants: (a) the Company must maintain a minimum shareholders' equity, measured as of each fiscal quarter end; and (b) the Company must maintain at all times a 150% asset coverage ratio (or, if greater, the statutory requirement then applicable to the Company).
The Second Amended and Restated Senior Secured Revolving Credit Facility contains events of default customary for facilities of this type. Upon the occurrence of an event of default, JPMorgan, at the instruction of the lenders, may terminate the commitments and declare the outstanding advances and all other obligations under the Second Amended and Restated Senior Secured Revolving Credit Facility immediately due and payable.
The Company's obligations under the Second Amended and Restated Senior Secured Revolving Credit Facility are guaranteed by certain of the Company's subsidiaries. The Company's obligations under the Second Amended and Restated Senior Secured Revolving Credit Facility are secured by a first priority security interest in substantially all of the assets of the Company and certain of the Company's subsidiaries thereunder.
The foregoing description of the Second Amended and Restated Senior Secured Revolving Credit Facility does not purport to be complete and is qualified in its entirety by reference to the full text of the Second Amended and Restated Senior Secured Revolving Credit Facility attached hereto as Exhibit 10.2.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
The information set forth under Item 1.01 of this current report on Form 8-K is hereby incorporated in this Item 2.03 by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits. Exhibit No. Description 10.1 Amended and Restated Indenture, datedDecember 22, 2020 , by and between FS KKR MM CLO 1 LLC andU.S. Bank National Association . 10.2 Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as ofDecember 23, 2020 , by and amongFS KKR Capital Corp. and FS KKR Capital Corp. II, as borrowers,JPMorgan Chase Bank, N.A ., as administrative agent,ING Capital LLC , as collateral agent, and the lenders, documentation agents, joint bookrunners, and joint lead arrangers party thereto.
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