Item 1.01. Entry into a Material Definitive Agreement.
On February 25, 2020, in connection with a previously announced public offering,
Oaktree Specialty Lending Corporation (the "Company") and Deutsche Bank Trust
Company Americas, as trustee (the "Trustee"), entered into a Fifth Supplemental
Indenture (the "Fifth Supplemental Indenture") to the Indenture, dated April 30,
2012, between the Company and the Trustee (the "Indenture"). The Fifth
Supplemental Indenture relates to the Company's issuance, offer and sale of
$300 million aggregate principal amount of its 3.500% Notes due 2025 (the
"Notes").
The Company expects to use the net proceeds of the offering to reduce its
outstanding debt and for general corporate purposes. The Company may reborrow
under its debt facilities to make investments in accordance with its investment
objective and strategies or general corporate purposes.
The Notes mature on February 25, 2025 (the "Maturity Date"), unless previously
redeemed or repurchased in accordance with their terms. The Notes bear interest
at a rate of 3.500% per year payable semiannually in arrears on February 25 and
August 25 of each year, commencing on August 25, 2020. The Notes are the
Company's direct, unsecured obligations and rank senior in right of payment to
the Company's future indebtedness that is expressly subordinated in right of
payment to the Notes; equal in right of payment to the Company's existing and
future unsecured indebtedness that is not so subordinated; effectively junior in
right of payment to any of the Company's secured indebtedness (including
existing unsecured indebtedness that the Company later secures) to the extent of
the value of the assets securing such indebtedness; and structurally junior to
all future indebtedness (including trade payables) incurred by the Company's
subsidiaries, financing vehicles or similar facilities.
At any time or from time to time, the Company may redeem some or all of the
Notes at a redemption price equal to the greater of (1) 100% of the principal
amount of the Notes to be redeemed or (2) the sum of the present values of the
remaining scheduled payments of principal and interest (exclusive of accrued and
unpaid interest to the date of redemption) on the Notes to be redeemed through
January 25, 2025 (the date falling one month prior to the maturity date of the
Notes), discounted to the redemption date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) using the applicable Treasury
Rate plus 35 basis points, plus, in each case, accrued and unpaid interest, if
any, to, but excluding, the date of redemption; provided, however, that if the
Company redeems any Notes on or after January 25, 2025 (the date falling one
month prior to the maturity date of the Notes), the redemption price for the
Notes will be equal to 100% of the principal amount of the Notes to be redeemed,
plus accrued and unpaid interest, if any, to, but excluding, the date of
redemption. No sinking fund is provided for the Notes. In addition, if a change
of control repurchase event (as defined in the Fifth Supplemental Indenture)
occurs in respect of the Company, holders of the Notes may require the Company
to repurchase for cash all or part of their Notes at a repurchase price equal to
100% of the principal amount of the Notes to be repurchased, plus accrued and
unpaid interest to, but not including, the repurchase date.
The Indenture, as supplemented by the Fifth Supplemental Indenture, contains
certain covenants, including a covenant requiring the Company to comply with
Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment
Company Act of 1940, as amended, or any successor provisions, but giving effect
to any exemptive relief granted to the Company by the Securities and Exchange
Commission (the "SEC") and to provide financial information to the holders of
the Notes and the Trustee if the Company should no longer be 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 set
forth in the Indenture.
The Notes were offered and sold pursuant to the Company's effective shelf
registration statement on Form N-2 (Registration No. 333-234798) previously
filed with the SEC, as supplemented by a preliminary prospectus supplement dated
February 13, 2020, a final prospectus supplement dated February 13, 2020 and the
pricing term sheet filed with the SEC on February 13, 2020. This Current Report
on Form 8-K shall not constitute an offer to sell or a solicitation of an offer
to buy any securities, nor shall there be any sale of these securities in any
state or jurisdiction in which such an offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such state or other jurisdiction. The transaction closed on February 25, 2020.
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The description above is only a summary of the material provisions of the Fifth
Supplemental Indenture and the Notes and is qualified in its entirety by
reference to copies of the Fifth Supplemental Indenture and the Notes,
respectively, each filed as exhibits to this Current Report on Form 8-K and
incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
4.1 Fifth Supplemental Indenture, dated as of February 25, 2020, relating to
the 3.500% Notes due 2025, between the Company and Deutsche Bank Trust
Company Americas, as trustee
4.2 Form of 3.500% Notes due 2025 (contained in the Fifth Supplemental
Indenture filed as Exhibit 4.1 hereto)
5.1 Opinion of Proskauer Rose LLP
23.1 Consent of Proskauer Rose LLP (contained in the opinion filed as Exhibit
5.1 hereto)
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