UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 9, 2020 (October 7, 2020)
OFS Capital Corporation
(Exact name of Registrant as specified in its charter)
Delaware | 814-00813 | 46-1339639 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
10 S. Wacker Drive, Suite 2500 Chicago, Illinois | 60606 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (847) 734-2000
Not applicable
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, $0.01 par value per share | OFS | The Nasdaq Global Select Market | ||
6.25% Notes due 2023 | OFSSG | The Nasdaq Global Select Market | ||
6.375% Notes due 2025 | OFSSL | The Nasdaq Global Select Market | ||
6.50% Notes due 2025 | OFSSZ | The Nasdaq Global Select Market | ||
5.95% Notes due 2026 | OFSSI | The Nasdaq Global Select Market | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01 | Entry into a Material Definitive Agreement. |
Amendment to Senior Secured Revolving Credit Facility
On October 7, 2020, OFS Capital Corporation, a Delaware corporation (the “Company” or “OFS”), executed an amendment (the “Secured Revolver Amendment”) to its Business Loan Agreement with Pacific Western Bank, as lender (“PacWest”), pursuant to which PacWest provides the Company with a senior secured revolving credit facility (as amended from time to time, the “PWB Credit Facility”) for general corporate purposes including investment funding.
Under the Secured Revolver Amendment, the total commitment under the PWB Credit Facility is reduced from $50.0 million to $20.0 million. The Company expects to benefit from a reduction in the unused commitment fee of 0.50% on any unused portion of the total commitment over $15,000,000. As of September 30, 2020, the Company had outstanding borrowings under the PWB Credit Facility of $-0-. There were no reduction penalties incurred by the Company in connection with the Secured Revolver Amendment.
At September 30, 2020, the Company held cash of $18.3 million, which includes cash of $5.1 million held by OFS SBIC I, LP, the Company’s wholly owned SBIC. At September 30, 2020, the unused commitment under the Company’s secured revolving credit facility with BNP Paribas was $125.4 million.
The foregoing description of the Secured Revolver Amendment is not complete and is qualified in its entirety by the full text of such amendment, which is filed as an exhibit to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated by reference herein.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K may contain forward-looking statements within the meaning of applicable securities laws. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements.
Forward-looking statements can be identified by terminology such as “anticipate,” “believe,” “could,” “could increase the likelihood,” “estimate,” “expect,” “intend,” “is planned,” “may,” “should,” “will,” “will enable,” “would be expected,” “look forward,” “may provide,” “would” or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including those risks, uncertainties and factors referred to in OFS’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission under the section “Risk Factors,” as well as other documents that may be filed by OFS from time to time with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, OFS’s actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. OFS is providing the information in this Current Report on Form 8-K as of this date and assumes no obligations to update the information included herein or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
OFS CAPITAL CORPORATION | ||
Date: October 9, 2020 | By: | /s/ Bilal Rashid |
Chief Executive Officer | ||
AMENDMENT NUMBER THREE TO BUSINESS LOAN AGREEMENT
THIS AMENDMENT NUMBER THREE TO BUSINESS LOAN AGREEMENT (this “Amendment”), dated as of October 7, 2020, is entered into among PACIFIC WESTERN BANK, a California state-chartered bank (“Lender”), and OFS CAPITAL CORPORATION, a Delaware corporation (“Borrower”), in light of the following facts:
RECITALS
WHEREAS, Borrower and Lender have previously entered into that certain Business Loan Agreement, dated April 10, 2019 (as amended to the date hereof, the “Loan Agreement”); and
WHEREAS, Lender and Borrower have agreed to amend the Loan Agreement to reduce the maximum principal cap on the revolving line of credit provided thereunder, on the terms and conditions set forth herein.
NOW, THEREFORE, the parties agree as follows:
1.DEFINITIONS. All terms which are defined in the Loan Agreement shall have the same definition when used herein unless a different definition is ascribed to such term under this Amendment, in which case, the definition contained herein shall govern.
2.AMENDMENT TO LOAN AGREEMENT. The Loan Agreement is hereby amended as follows:
(a)All references in the Loan Agreement, Note and other Related Documents to the $50,000,000 maximum principal cap on the revolving line of credit provided thereunder is hereby changed to and shall be $20,000,000, which shall continue to be subject to the other limitations and terms and conditions set forth therein.
(b)The following provision on page 1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“Unused Commitment Fee. Any unused portion of the $20,000,000.00 commitment, in an amount over $15,000,000.00, shall be subject to a monthly fee of 0.50% (one-half percentage point per annum).”
3.CONDITIONS PRECEDENT. Each of the following is a condition precedent to the effectiveness of this Amendment:
(a)Lender shall have received a fully executed original of this Amendment, together with the Guarantor Reaffirmation attached; and
(b)Lender shall have received all legal fees incurred by it in connection with this Amendment.
4.REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Lender that all representations and warranties of Borrower set forth in the Loan Agreement are true, complete and accurate as of the date hereof.
5.LIMITED EFFECT. Except for the specific amendment contained in this Amendment, the Loan Agreement shall remain unchanged and in full force and effect.
6.COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which when so executed and delivered shall be deemed to be an original. All such counterparts, taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Amendment. This Amendment shall become effective upon the execution of this Amendment by each of the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOWS]
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IN WITNESS WHEREOF, Borrower and Lender have executed this Amendment as of the date first written above.
OFS CAPITAL CORPORATION, a Delaware | ||
corporation, as Borrower | ||
By: | /s/ Jeffrey A. Cerny | |
Jeffrey A. Cerny, CFO | ||
PACIFIC WESTERN BANK | ||
By: | /s/ Todd Savitz | |
Todd Savitz, Senior Vice President | ||
GUARANTOR’S REAFFIRMATION
The undersigned has executed a Commercial Guaranty dated April 10, 2019 in favor of PACIFIC WESTERN BANK ("Lender") respecting the obligations of OFS CAPITAL CORPORATION ("Borrower"), owing to Lender (“Guaranty”). The undersigned acknowledges the terms of the above Amendment and reaffirms and agrees that: its Guaranty remains in full force and effect; nothing in such Guaranty obligates Lender to notify the undersigned of any changes in the financial accommodations made available to Borrower or to seek reaffirmations of such Guaranty; and no requirement to so notify the undersigned or to seek reaffirmations in the future shall be implied by the execution of this reaffirmation; references to the "Loan Agreement" in such Guaranty include amendments and restatements from time to time to and of such agreement, including the amendments being made concurrently herewith.
Dated as of October 7, 2020
OFSCC-MB, INC, a Delaware corporation, as | ||
Guarantor | ||
By: | /s/ Jeffrey A. Cerny | |
Jeffrey A. Cerny, CFO | ||
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