UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Not applicable
Former name, former address and former fiscal year, 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 |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ |
Accelerated filer |
☐ |
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Non-accelerated filer |
☐ |
Smaller reporting company |
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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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares of the registrant’s common stock, $.01 par value per share, outstanding at July 31, 2024 was
1
SIXTH STREET SPECIALTY LENDING, INC.
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INDEX |
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PAGE NO. |
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PART I. |
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4 |
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Item 1. |
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4 |
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Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023 |
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4 |
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5 |
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Consolidated Schedules of Investments as of June 30, 2024 (Unaudited) and December 31, 2023 |
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6 |
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21 |
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Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (Unaudited) |
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22 |
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23 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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46 |
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Item 3. |
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66 |
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Item 4. |
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67 |
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PART II. |
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68 |
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Item 1. |
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68 |
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Item 1A. |
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68 |
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Item 2. |
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68 |
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Item 3. |
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68 |
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Item 4. |
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68 |
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Item 5. |
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68 |
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Item 6. |
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69 |
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70 |
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2
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict, that could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.
In addition to factors previously identified elsewhere in the reports and other documents Sixth Street Specialty Lending, Inc. (the "Company", "we", "us", or "our") has filed with the Securities and Exchange Commission, or SEC, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance:
Although we believe that the assumptions on which these forward-looking statements are based are reasonable, some of those assumptions are based on the work of third parties and any of those assumptions could prove to be inaccurate; as a result, forward-looking statements based on those assumptions also could prove to be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans and objectives will be achieved. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this report. We do not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law.
The “TSLX” and “TAO” marks are marks of Sixth Street.
3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Sixth Street Specialty Lending, Inc.
Consolidated Balance Sheets
(Amounts in thousands, except share and per share amounts)
(Unaudited)
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June 30, |
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December 31, |
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2024 |
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2023 |
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Assets |
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Investments at fair value |
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Non-controlled, non-affiliated investments (amortized cost of $ |
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$ |
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$ |
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Controlled, affiliated investments (amortized cost of $ |
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Total investments at fair value (amortized cost of $ |
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Cash and cash equivalents (restricted cash of $ |
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Interest receivable |
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Prepaid expenses and other assets |
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Total Assets |
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$ |
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$ |
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Liabilities |
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Debt (net of deferred financing costs of $ |
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$ |
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Management fees payable to affiliate |
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Incentive fees on net investment income payable to affiliate |
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Incentive fees on net capital gains accrued to affiliate |
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Other payables to affiliate |
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Other liabilities |
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Total Liabilities |
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Net Assets |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Treasury stock at cost; |
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Distributable earnings |
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Total Net Assets |
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Total Liabilities and Net Assets |
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$ |
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$ |
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Net Asset Value Per Share |
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$ |
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$ |
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The accompanying notes are an integral part of these consolidated financial statements.
4
Sixth Street Specialty Lending, Inc.
Consolidated Statements of Operations
(Amounts in thousands, except share and per share amounts)
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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June 30, 2024 |
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June 30, 2023 |
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June 30, 2024 |
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June 30, 2023 |
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Income |
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Investment income from non-controlled, non-affiliated investments: |
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Interest from investments |
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$ |
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$ |
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$ |
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$ |
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Paid-in-kind interest income |
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Dividend income |
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Other income |
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Total investment income from non-controlled, non-affiliated investments |
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Investment income from controlled, affiliated investments: |
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Interest from investments |
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Other income |
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Total investment income from controlled, affiliated investments |
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Total Investment Income |
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Expenses |
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Interest |
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Management fees |
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Incentive fees on net investment income |
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Incentive fees on net capital gains |
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Professional fees |
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Directors’ fees |
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Other general and administrative |
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Total expenses |
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Management and incentive fees waived (Note 3) |
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Net Expenses |
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Net Investment Income Before Income Taxes |
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Income taxes, including excise taxes |
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Net Investment Income |
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Unrealized and Realized Gains (Losses) |
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Net change in unrealized gains (losses): |
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Non-controlled, non-affiliated investments |
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( |
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Controlled, affiliated investments |
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— |
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Translation of other assets and liabilities in foreign currencies |
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( |
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( |
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Interest rate swaps |
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— |
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— |
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Total net change in unrealized gains (losses) |
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( |
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Realized gains (losses): |
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Non-controlled, non-affiliated investments |
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Foreign currency transactions |
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Total net realized gains (losses) |
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Total Net Unrealized and Realized Gains (Losses) |
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( |
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Increase (Decrease) in Net Assets Resulting from Operations |
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$ |
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$ |
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$ |
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$ |
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Earnings per common share—basic and diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average shares of common stock outstanding—basic and diluted |
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The accompanying notes are an integral part of these consolidated financial statements.
5
Sixth Street Specialty Lending, Inc.
Consolidated Schedule of Investments as of June 30, 2024
(Amounts in thousands, except share amounts)
(Unaudited)
6
Company (1) |
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Investment |
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Initial |
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Reference |
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Interest Rate |
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Amortized |
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Fair Value (8) |
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Percentage |
Debt Investments |
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Automotive |
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Bestpass, Inc. (3)(5) |
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First-lien loan ($ |
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SOFR + |
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$ |
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$ |
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Truck-Lite Co., LLC (3) |
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First-lien loan ($ |
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SOFR + |
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First-lien revolving loan ($ |
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SOFR + |
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Business Services |
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Alpha Midco, Inc. (3)(5) |
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First-lien loan ($ |
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SOFR + |
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First-lien revolving loan ($ |
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SOFR + |
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Artisan Bidco, Inc.(3) |
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First-lien loan ($ |
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SOFR + |
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First-lien loan (EUR |
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E + |
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Azurite Intermediate Holdings, Inc. (3) |
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First-lien loan ($ |
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SOFR + |
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BCTO Ignition Purchaser, Inc. (3) |
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First-lien holdco loan ($ |
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SOFR + |
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Crewline Buyer, Inc.(3) |
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First-lien loan ($ |
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SOFR + |
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Dye & Durham Corp. (3)(4)(9) |
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First-lien loan ($ |
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SOFR + |
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Elements Finco Limited (3)(4) |
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First-lien loan ($ |
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SOFR + |
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First-lien loan (GBP |
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S + |
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ExtraHop Networks, Inc. (3)(5) |
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First-lien loan ($ |
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SOFR + |
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ForeScout Technologies, Inc. (3) |
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First-lien loan ($ |
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SOFR + |
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Galileo Parent, Inc. (3) |
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First-lien loan ($ |
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SOFR + |
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First-lien revolving loan ($ |
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SOFR + |
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Mitnick Corporate Purchaser, Inc. (3)(9) |
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First-lien loan ($ |
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SOFR + |
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Netwrix Corp. (3) |
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First-lien loan ($ |
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SOFR + |
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OutSystems Luxco SARL(3)(4)(5) |
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First-lien loan (EUR |
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E + |
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Price Fx Inc. (3)(4) |
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First-lien loan (EUR |
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E + |
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USA DeBusk, LLC (3) |
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First-lien loan ($ |
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SOFR + |
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First-lien revolving loan ($ |
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SOFR + |
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Wrangler TopCo, LLC (3) |
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First-lien loan ($ |
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SOFR + |
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Chemicals |
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Erling Lux Bidco SARL(3)(4) |
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First-lien loan (EUR |
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E + |
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First-lien loan (GBP |
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S + |
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First-lien revolving loan (GBP |
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S + |
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First-lien loan (NOK |
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N + |
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Communications |
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Aurelia Netherlands MidCo 2 B.V. (3)(4) |
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First-lien loan (EUR |
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E + |
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Babylon Finco Limited (3)(4) |
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First-lien loan ($ |
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SOFR + |
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Banyan Software Holdings, LLC (3)(4) |
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First-lien loan ($ |
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SOFR + |
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First-lien loan ($ |
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SOFR + |
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Celtra Technologies, Inc. (3)(5) |
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First-lien loan ($ |
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SOFR + |
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IntelePeer Holdings, Inc. |
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First-lien loan ($ |
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SOFR + |
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Convertible note ($ |
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Education |
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Astra Acquisition Corp. (3)(14) |
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Second-lien loan ($ |
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SOFR + |
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Destiny Solutions Parent Holding Company (3)(5) |
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First-lien loan ($ |
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SOFR + |
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EMS Linq, Inc. (3) |
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First-lien loan ($ |
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SOFR + |
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First-lien revolving loan ($ |
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SOFR + |
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Kangaroo Bidco AS (3)(4) |
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First-lien loan ($ |
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SOFR + |
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Financial Services |
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|
|
|
|
|
|
|
|
|
|
|
|
|
Alaska Bidco Oy (3)(4) |
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
BCTO Bluebill Buyer, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
BlueSnap, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
BTRS Holdings, Inc.(3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien revolving loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
7
CLGF Holdco 2, LLC(3)(4) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Second-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Fullsteam Operations, LLC(3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
GreenShoot BidCo B.V (3)(4) |
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
Ibis Intermediate Co. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Ibis US Blocker Co. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Kyriba Corp. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
Passport Labs, Inc. |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Convertible Promissory Note A ($ |
|
|
|
|
|
|
|
|
||||||
Ping Identity Holding Corp. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
PrimeRevenue, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
TradingScreen, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Volante Technologies, Inc. |
|
First-lien loan ($ |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Healthcare |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BCTO Ace Purchaser, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Second-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Edge Bidco B.V. (3)(4)(5) |
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
Merative L.P. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Raptor US Buyer II Corp. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
SL Buyer Corp. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Hotel, Gaming and Leisure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASG II, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Equinox Holdings, Inc. |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Second-lien loan ($ |
|
|
|
|
|
|
|
|
||||||
IRGSE Holding Corp. (3)(6) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien revolving loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Sports Alliance GmbH (3)(4) |
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Human Resource Support Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Axonify, Inc. (3)(4)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
bswift, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Elysian Finco Ltd. (3)(4)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
12.04% |
|
|
|
|
|
||||
|
|
First-lien revolving loan (GBP |
|
|
S + |
|
|
|
|
|
|
|
||||
Employment Hero Holdings Pty Ltd. (3)(4) |
|
First-lien loan (AUD |
|
|
B + |
|
|
|
|
|
|
|
||||
HireVue, Inc.(3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien revolving loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Madcap Software, Inc.(3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
PageUp People, Ltd. (3)(4)(5) |
|
First-lien loan (AUD |
|
|
B + |
|
|
|
|
|
|
|
||||
|
|
First-lien loan (GBP |
|
|
S + |
|
|
|
|
|
|
|
||||
|
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
PayScale Holdings, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
PrimePay Intermediate, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disco Parent, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Internet Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arrow Buyer, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Bayshore Intermediate #2, L.P. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Coupa Holdings, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
CrunchTime Information, Systems, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
EDB Parent, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Higher Logic, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Hippo XPA Bidco AB (3)(4) |
|
First-lien loan (SEK |
|
|
STIBOR + |
|
|
|
|
|
|
|
||||
LeanTaaS Holdings, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Lithium Technologies, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Lucidworks, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Merit Software Finance Holdings, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Piano Software, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
8
SMA Technologies Holdings, LLC(3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Manufacturing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aptean, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
ASP Unifrax Holdings, Inc. (9) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
|
|
Secured Note ($ |
|
|
|
|
|
|
|
|
||||||
|
|
Unsecured Note ($ |
|
|
|
|
|
|
|
|
||||||
Avalara, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Heritage Environmental Services, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Skylark UK DebtCo Limited (3)(4) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
|
|
First-lien loan (GBP |
|
|
S + |
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Office Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USR Parent, Inc. (3)(5) |
|
ABL FILO term loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Oil, Gas and Consumable Fuels |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laramie Energy, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Mach Natural Resources LP(3)(4) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Murchison Oil and Gas, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
TRP Assets, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Omnigo Software, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Scorpio Bidco (3)(4) |
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Pharmaceuticals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apellis Pharmaceuticals, Inc. (3)(4) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Retail and Consumer Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Achievement, Corp. (3)(14) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|
||||
|
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|
||||
|
|
Subordinated note ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Bed Bath and Beyond Inc. (3)(15) |
|
ABL FILO term loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Roll Up DIP term loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Super-Priority DIP term loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Cordance Operations, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Neuintel, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
PDI TA Holdings, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Rapid Data GmbH Unternehmensberatung (3)(4) |
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
Tango Management Consulting, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien revolving loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Transportation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ben Nevis Midco Limited (3)(4) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Marcura Equities LTD (3)(4) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien revolving loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Project44, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and Other Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clarience Technologies, LLC (11)(12) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
Business Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Artisan Topco LP(11)(12) |
|
Class A Preferred Units ( |
|
|
|
|
|
|
|
|
|
|
||||
Dye & Durham, Ltd. (4)(10) |
|
Common Shares ( |
|
|
|
|
|
|
|
|
|
|
|
9
Insight Hideaway Aggregator, L.P. (11)(12) |
|
Partnership Interest ( |
|
|
|
|
|
|
|
|
|
|
||||
Mitnick TA Aggregator, L.P. (11) |
|
Membership Interest ( |
|
|
|
|
|
|
|
|
|
|
||||
Newark FP Co-Invest, L.P.(11)(12) |
|
Partnership ( |
|
|
|
|
|
|
|
|
|
|
||||
ReliaQuest, LLC (13) |
|
Class A-1 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Class A-2 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Class A-3 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Series A Preferred Stock ( |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Warrants ( |
|
|
|
|
|
|
|
|
|
|
||||
Sprinklr, Inc. (10)(11) |
|
Common Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
Warrior TopCo LP (11)(12) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Communications |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Celtra Technologies, Inc. (11) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
IntelePeer Holdings, Inc. (11) |
|
Series C Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Series D Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Series C Warrants ( |
|
|
|
|
|
|
|
|
|
— |
|
|||
|
|
Series D Warrants ( |
|
|
|
|
|
|
|
— |
|
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Education |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Astra 2L Holdings II LLC (11) |
|
Membership Interest ( |
|
|
|
|
|
|
|
|
|
— |
|
|||
EMS Linq, Inc. (11) |
|
Class B Units ( |
|
|
|
|
|
|
|
|
|
|
||||
RMCF IV CIV XXXV, LP. (11) |
|
Partnership Interest ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AF Eagle Parent, L.P.(11)(12) |
|
Partnership ( |
|
|
|
|
|
|
|
|
|
|
||||
CLGF Holdco 2, LLC(4)(11)(12) |
|
Warrants ( |
|
|
|
|
|
|
|
|
|
|
||||
Newport Parent Holdings, L.P. (11) |
|
Class A-2 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
Oxford Square Capital Corp. (4)(10) |
|
Common Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
Passport Labs, Inc. (11) |
|
Warrants ( |
|
|
|
|
|
|
|
|
|
— |
|
|||
TradingScreen, Inc. (11)(13) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Healthcare |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Caris Life Sciences, Inc. (11) |
|
Series C Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Series D Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Warrants ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Warrants ( |
|
|
|
|
|
|
|
|
|
|
||||
Merative Topco L.P. (11) |
|
Class A-1 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
Raptor US Buyer II Corp. (11) |
|
Ordinary Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Hotel, Gaming and Leisure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IRGSE Holding Corp. (7)(11) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Class C-1 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Human Resource Support Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Axonify, Inc. (4)(11)(13) |
|
Class A-1 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
bswift, LLC (11) |
|
Class A-1 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
DaySmart Holdings, LLC (11) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
Employment Hero Holdings Pty Ltd. (4)(11) |
|
Series E Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Internet Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bayshore Intermediate #2, L.P. (11)(13) |
|
Co-Invest Common Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Co-Invest 2 Common Units ( |
|
|
|
|
|
|
|
|
|
|
||||
Lucidworks, Inc. (11) |
|
Series F Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
Piano Software, Inc. (11) |
|
Series C-1 Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Series C-2 Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
SMA Technologies Holdings, LLC (11) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Class B Units ( |
|
|
|
|
|
|
|
— |
|
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Marketing Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Validity, Inc. |
|
Series A Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
Oil, Gas and Consumable Fuels |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Murchison Oil and Gas, LLC (13) |
|
Preferred Units ( |
|
|
|
|
|
|
|
|
|
|
||||
TRP Assets, LLC (11)(13) |
|
Partnership Interest ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Pharmaceuticals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TherapeuticsMD, Inc. (4)(11) |
|
Warrants ( |
|
|
|
|
|
|
|
|
|
— |
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail and Consumer Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Achievement, Corp. (11) |
|
Class A Units ( |
|
|
|
|
|
|
|
— |
|
|
|
|||
Copper Bidco, LLC (9) |
|
Trust Certificates ( |
|
|
|
|
|
|
|
|
|
|
||||
Neuintel, LLC (11)(13) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Structured Credit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cedar Funding CLO Ltd, Series 2018-7A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Dryden Senior Loan Fund, Series 2020-86A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
MidOcean Credit CLO Ltd, Series 2018-9A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Voya CLO Ltd, Series 2018-3A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total Equity and Other Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total Investments |
|
|
|
|
|
|
|
|
|
$ |
|
$ |
|
|
|
Interest Rate Swaps as of June 30, 2024 |
|
|||||||||||||||||||
|
|
Company |
|
Company |
|
Maturity Date |
|
Notional |
|
|
Fair |
|
|
Upfront |
|
|
Change in |
|
||||
Interest rate swap (a) |
|
SOFR + |
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|||
Interest rate swap (a)(b)(c)(d) |
|
|
SOFR + |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
||||
Interest rate swap (a)(b)(c)(d) |
|
|
SOFR + |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
||||
Interest rate swap (a)(b) |
|
|
SOFR + |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
||||
Interest rate swap (a)(b) |
|
|
SOFR + |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|||
Interest rate swap (a)(b) |
|
|
SOFR + |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|||
Total Hedge Accounting Swaps |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Cash collateral |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Total derivatives |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
||
11
Controlled, Affiliated Investments during the six months ended June 30, 2024
Company |
|
Fair |
|
|
Gross |
|
|
Gross |
|
|
Net Change |
|
|
Realized |
|
|
Transfers |
|
|
Fair |
|
|
Other |
|
|
Interest |
|
|||||||||
IRGSE Holding Corp. |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Total |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
The accompanying notes are an integral part of these consolidated financial statements.
12
Sixth Street Specialty Lending, Inc.
Consolidated Schedule of Investments as of December 31, 2023
(Amounts in thousands, except share amounts)
13
Company (1) |
|
Investment |
|
Initial |
|
Reference |
|
Interest Rate |
|
|
Amortized |
|
|
Fair Value (8) |
|
Percentage |
Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bestpass, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
$ |
|
$ |
|
|||||
Business Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acceo Solutions, Inc. (3)(4)(5) |
|
First-lien loan (CAD |
|
|
C + |
|
|
|
|
|
|
|
||||
Alpha Midco, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Artisan Bidco, Inc.(3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
BCTO Ignition Purchaser, |
|
First-lien holdco loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Crewline Buyer, Inc.(3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Dye & Durham Corp. (3)(4) |
|
First-lien loan (CAD |
|
|
C + |
|
|
|
|
|
|
|
||||
|
|
First-lien revolving loan (CAD |
|
|
C + |
|
|
|
|
|
|
|
||||
ExtraHop Networks, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
ForeScout Technologies, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Galileo Parent, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien revolving loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Hornetsecurity Holding GmbH (3)(4) |
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
Information Clearinghouse, LLC and MS Market Service, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Mitnick Corporate Purchaser, Inc. (3)(9) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Netwrix Corp. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
OutSystems Luxco SARL(3)(4)(5) |
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
Price Fx Inc. (3)(4) |
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
ReliaQuest Holdings, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Wrangler TopCo, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Chemicals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Erling Lux Bidco SARL(3)(4) |
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
|
|
First-lien loan (GBP |
|
|
S + |
|
|
|
|
|
|
|
||||
|
|
First-lien revolving loan (GBP |
|
|
S + |
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Communications |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banyan Software Holdings, LLC (3)(4) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Celtra Technologies, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
IntelePeer Holdings, Inc. |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Convertible note ($ |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Education |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Astra Acquisition Corp. (3) |
|
Second-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Destiny Solutions Parent Holding Company (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
EMS Linq, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Kangaroo Bidco AS (3)(4) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alaska Bidco Oy (3)(4) |
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
BCTO Bluebill Buyer, |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
BTRS Holdings, Inc.(3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien revolving loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Bear OpCo, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
BlueSnap, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
CLGF Holdco 2, LLC(3)(4) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Second-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Fullsteam Operations, LLC(3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Ibis Intermediate Co. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Ibis US Blocker Co. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Kyriba Corp. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
14
|
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
Passport Labs, Inc. |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Convertible Promissory Note A ($ |
|
|
|
|
|
|
|
|
||||||
Ping Identity Holding Corp. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
PrimeRevenue, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
TradingScreen, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Volante Technologies, Inc. |
|
First-lien loan ($ |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Healthcare |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BCTO Ace Purchaser, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Second-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Edge Bidco B.V. (3)(4)(5) |
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
Homecare Software Solutions, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Merative L.P. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Raptor US Buyer II Corp. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
SL Buyer Corp. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Hotel, Gaming and Leisure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASG II, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
IRGSE Holding Corp. (3)(6) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien revolving loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Human Resource Support Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Axonify, Inc. (3)(4)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
bswift, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Elysian Finco Ltd. (3)(4)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Employment Hero Holdings Pty Ltd. (3)(4) |
|
First-lien loan (AUD |
|
|
B + |
|
|
|
|
|
|
|
||||
HireVue, Inc.(3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Madcap Software, Inc.(3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
PageUp People, Ltd. (3)(4)(5) |
|
First-lien loan (AUD |
|
|
B + |
|
|
|
|
|
|
|
||||
|
|
First-lien loan (GBP |
|
|
S + |
|
|
|
|
|
|
|
||||
|
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
PayScale Holdings, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
PrimePay Intermediate, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disco Parent, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Internet Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arrow Buyer, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Bayshore Intermediate #2, L.P. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien revolving loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Coupa Holdings, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
CrunchTime Information, Systems, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
EDB Parent, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Higher Logic, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
LeanTaaS Holdings, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Lithium Technologies, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Lucidworks, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Piano Software, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
SMA Technologies Holdings, LLC(3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Manufacturing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASP Unifrax Holdings, Inc. (9) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
|
|
Secured Note ($ |
|
|
|
|
|
|
|
|
||||||
|
|
Unsecured Note ($ |
|
|
|
|
|
|
|
|
||||||
Avalara, Inc. (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Skylark UK DebtCo Limited (3)(4) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
15
|
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
|
|
First-lien loan (GBP |
|
|
S + |
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Office Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USR Parent, Inc. (3)(5) |
|
ABL FILO term loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Oil, Gas and Consumable Fuels |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laramie Energy, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Mach Natural Resources LP(3)(4) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Murchison Oil and Gas, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
TRP Assets, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Omnigo Software, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Retail and Consumer Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99 Cents Only Stores LLC (3) |
|
ABL FILO term loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
American Achievement, Corp. (3)(14) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Subordinated note ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Bed Bath and Beyond Inc. (3)(15) |
|
ABL FILO term loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Roll Up DIP term loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
Super-Priority DIP term loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Cordance Operations, LLC (3) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Neuintel, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Rapid Data GmbH Unternehmensberatung (3)(4) |
|
First-lien loan (EUR |
|
|
E + |
|
|
|
|
|
|
|
||||
Tango Management Consulting, LLC (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Transportation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Project44, Inc. (3)(5) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Marcura Equities LTD (3)(4) |
|
First-lien loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
First-lien revolving loan ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total Debt Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and Other Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Artisan Topco LP(11)(12) |
|
Class A Preferred Units ( |
|
|
|
|
|
|
|
|
|
|
||||
Newark FP Co-Invest, L.P.(11)(12) |
|
Partnership ( |
|
|
|
|
|
|
|
|
|
|
||||
Dye & Durham, Ltd. (4)(10) |
|
Common Shares ( |
|
|
|
|
|
|
|
|
|
|
|
|||
Mitnick TA Aggregator, L.P. (11) |
|
Membership Interest ( |
|
|
|
|
|
|
|
|
|
|
||||
ReliaQuest, LLC (13) |
|
Class A-1 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Class A-2 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Class A-3 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Series A Preferred Stock ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sprinklr, Inc. (10)(11) |
|
Common Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
Warrior TopCo LP (11)(12) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Communications |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Celtra Technologies, Inc. (11) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
IntelePeer Holdings, Inc. (11) |
|
Series C Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Series D Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
— |
|
||||
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Education |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Astra 2L Holdings II LLC (11) |
|
Membership Interest ( |
|
|
|
|
|
|
|
|
|
|
||||
EMS Linq, Inc. (11) |
|
Class B Units ( |
|
|
|
|
|
|
|
|
|
|
||||
RMCF IV CIV XXXV, LP. (11) |
|
Partnership Interest ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
Financial Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AF Eagle Parent, L.P.(11)(12) |
|
Partnership ( |
|
|
|
|
|
|
|
|
|
|
||||
CLGF Holdco 2, LLC(4)(11)(12) |
|
|
|
|
|
|
|
|
|
|
|
|||||
Newport Parent Holdings, L.P. (11) |
|
Class A-2 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
Oxford Square Capital Corp. (4)(10) |
|
Common Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
Passport Labs, Inc. (11) |
|
|
|
|
|
|
|
|
|
|
— |
|
||||
TradingScreen, Inc. (11)(13) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Healthcare |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Caris Life Sciences, Inc. (11) |
|
Series C Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Series D Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Merative Topco L.P. (11) |
|
|
|
|
|
|
|
|
|
|
|
|||||
Raptor US Buyer II Corp. (11)(12) |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Hotel, Gaming and Leisure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IRGSE Holding Corp. (7)(11) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Class C-1 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Human Resource Support Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Axonify, Inc. (4)(11)(13) |
|
Class A-1 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
bswift, LLC (11)(12) |
|
Class A-1 Units ( |
|
|
|
|
|
|
|
|
|
|
||||
DaySmart Holdings, LLC (11) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
Employment Hero Holdings Pty Ltd. (4)(11) |
|
Series E Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Internet Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bayshore Intermediate #2, L.P. (11)(13) |
|
Co-Invest Common Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Co-Invest 2 Common Units ( |
|
|
|
|
|
|
|
|
|
|
||||
Lucidworks, Inc. (11) |
|
Series F Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
Piano Software, Inc. (11) |
|
Series C-1 Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Series C-2 Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
SMA Technologies Holdings, LLC (11)(12) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Class B Units ( |
|
|
|
|
|
|
|
— |
|
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Marketing Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Validity, Inc. |
|
Series A Preferred Shares ( |
|
|
|
|
|
|
|
|
|
|
||||
Oil, Gas and Consumable Fuels |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Murchison Oil and Gas, LLC (13) |
|
|
|
|
|
|
|
|
|
|
|
|||||
TRP Assets, LLC (11)(13) |
|
Partnership Interest ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Pharmaceuticals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TherapeuticsMD, Inc. (4)(11) |
|
|
|
|
|
|
|
|
|
|
— |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail and Consumer Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Achievement, Corp. (11) |
|
Class A Units ( |
|
|
|
|
|
|
|
— |
|
|
|
|||
Copper Bidco, LLC |
|
Trust Certificates ( |
|
|
|
|
|
|
|
— |
|
|
— |
|
||
|
|
Trust Certificates ( |
|
|
|
|
|
|
|
|
|
|
||||
Neuintel, LLC (11)(13) |
|
Class A Units ( |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Structured Credit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allegro CLO Ltd, Series 2018-1A, (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
American Money Management Corp CLO Ltd, Series 2016-18A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Ares CLO Ltd, Series 2021-59A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Ares Loan Funding I Ltd, Series 2021-ALFA, Class E (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Bain Capital Credit CLO Ltd, Series 2018-1A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Battalion CLO Ltd, Series 2021-21A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Benefit Street Partners CLO Ltd, Series 2015-BR (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Benefit Street Partners CLO Ltd, Series 2015-8A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
17
Carlyle Global Market Strategies CLO Ltd, Series 2014-4RA (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Carlyle Global Market Strategies CLO Ltd, Series 2016-1, Ltd (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Carlyle Global Market Strategies CLO Ltd, Series 2018-1A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
CarVal CLO III Ltd, Series 2019-2A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Cedar Funding CLO Ltd, Series 2018-7A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
CIFC CLO Ltd, Series 2018-3A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
CIFC CLO Ltd, Series 2021-4A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Crown Point CLO Ltd, Series 2021-10A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Dryden Senior Loan Fund, Series 2018-55A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Dryden Senior Loan Fund, Series 2020-86A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Eaton CLO Ltd, Series 2015-1A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Eaton CLO Ltd, Series 2020-1A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
GoldenTree CLO Ltd, Series 2020-7A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Gulf Stream Meridian, Series 2021-4A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Gulf Stream Meridian, Series 2021-6A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Jefferson Mill CLO Ltd, Series 2015-1A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
KKR CLO Ltd, 49A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Madison Park CLO, Series 2018-28A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Magnetite CLO Ltd, Series 2021-30A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
MidOcean Credit CLO Ltd, Series 2016-6A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
MidOcean Credit CLO Ltd, Series 2018-9A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Octagon 57 LLC, Series 2021-1A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Octagon Investment Partners 18 Ltd, Series 2018-18A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Octagon Investment Partners 38 Ltd, Series 2018-1A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Park Avenue Institutional Advisers CLO Ltd, Series 2018-1A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Pikes Peak CLO, Series 2021-9A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
RR Ltd, Series 2020-8A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Signal Peak CLO LLC, Series 2018-5A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Southwick Park CLO Ltd, Series 2019-4A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Stewart Park CLO Ltd, Series 2015-1A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Voya CLO Ltd, Series 2018-3A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Wind River CLO Ltd, Series 2014-2A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Wind River CLO Ltd, Series 2017-1A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
Wind River CLO Ltd, Series 2018-3A (3)(4)(9) |
|
Structured Credit ($ |
|
|
SOFR + |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total Equity and Other Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total Investments |
|
|
|
|
|
|
|
|
|
$ |
|
$ |
|
18
|
|
Interest Rate Swaps as of December 31, 2023 |
|
|||||||||||||||||||
|
|
Company |
|
Company |
|
Maturity Date |
|
Notional |
|
|
Fair |
|
|
Upfront |
|
|
Change in |
|
||||
Interest rate swap (a) |
|
SOFR + |
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|||
Interest rate swap (a)(b)(c)(d) |
|
|
SOFR + |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
||||
Interest rate swap (a)(b)(c)(d) |
|
|
SOFR + |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
||||
Interest rate swap (a)(b) |
|
|
SOFR + |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
||||
Interest rate swap (a)(b) |
|
|
SOFR + |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||
Total Hedge Accounting Swaps |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Cash collateral |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Total derivatives |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
19
Controlled, Affiliated Investments during the year ended December 31, 2023
Company |
|
Fair |
|
|
Gross |
|
|
Gross |
|
|
Net Change |
|
|
Realized |
|
|
Transfers |
|
|
Fair |
|
|
Other |
|
|
Interest |
|
|||||||||
IRGSE Holding Corp. |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Total |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
20
Sixth Street Specialty Lending, Inc.
Consolidated Statements of Changes in Net Assets
(Amounts in thousands, except share amounts)
(Unaudited)
|
|
Common Stock |
|
|
Treasury Stock |
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Shares |
|
|
Par |
|
|
Shares |
|
|
Cost |
|
|
Paid in Capital in |
|
|
Distributable |
|
|
Total Net |
|
|||||||
Balance at December 31, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net increase (decrease) in net assets resulting from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net investment income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Net change in unrealized gains (losses) on investments and |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net realized gains (losses) on investments and foreign |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Increase (decrease) in Net Assets Resulting from Capital Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Issuance of common stock, net of offering and |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Dividends to stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Stock issued in connection with dividend reinvestment plan |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Dividends declared from distributable earnings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at March 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net increase (decrease) in net assets resulting from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net investment income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Net change in unrealized gains (losses) on investments and |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net realized gains (losses) on investments and foreign |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Increase (decrease) in Net Assets Resulting from Capital Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Issuance of common stock, net of offering and |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Dividends to stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Stock issued in connection with dividend reinvestment plan |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Dividends declared from distributable earnings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
Common Stock |
|
|
Treasury Stock |
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Shares |
|
|
Par |
|
|
Shares |
|
|
Cost |
|
|
Paid in Capital in |
|
|
Distributable |
|
|
Total Net |
|
|||||||
Balance at December 31, 2022 |
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net increase (decrease) in net assets resulting from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net investment income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Net change in unrealized gains (losses) on investments and |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Net realized gains (losses) on investments and foreign |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Dividends to stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Stock issued in connection with dividend reinvestment plan |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Dividends declared from distributable earnings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Tax reclassification of stockholders' equity in accordance with |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
Balance at March 31, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net increase (decrease) in net assets resulting from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net investment income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Net change in unrealized gains (losses) on investments and |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
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Net realized gains (losses) on investments and foreign |
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— |
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— |
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— |
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— |
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— |
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Increase (decrease) in Net Assets Resulting from Capital Share |
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Issuance of common stock, net of offering and |
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— |
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— |
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— |
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Dividends to stockholders: |
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Stock issued in connection with dividend reinvestment plan |
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— |
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— |
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— |
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Dividends declared from distributable earnings |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance at June 30, 2023 |
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|
$ |
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$ |
( |
) |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these consolidated financial statements.
21
Sixth Street Specialty Lending, Inc.
Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
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Six Months Ended |
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Six Months Ended |
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June 30, 2024 |
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June 30, 2023 |
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Cash Flows from Operating Activities |
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Increase (decrease) in net assets resulting from operations |
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$ |
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$ |
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Adjustments to reconcile increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: |
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Net change in unrealized (gains) losses on investments |
|
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|
( |
) |
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|
Net change in unrealized (gains) losses on foreign currency transactions |
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( |
) |
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|
Net change in unrealized (gains) losses on interest rate swaps |
|
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|
( |
) |
|
|
Net realized (gains) losses on investments |
|
|
( |
) |
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|
( |
) |
|
Net realized (gains) losses on foreign currency transactions |
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( |
) |
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|
( |
) |
|
Net amortization of discount on investments |
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( |
) |
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( |
) |
|
Amortization of deferred financing costs |
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Amortization of discount on debt |
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||
Purchases and originations of investments, net |
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( |
) |
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( |
) |
|
Proceeds from investments, net |
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Repayments on investments |
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Paid-in-kind interest |
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( |
) |
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( |
) |
|
Changes in operating assets and liabilities: |
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Interest receivable |
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( |
) |
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( |
) |
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Interest receivable paid-in-kind |
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( |
) |
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( |
) |
|
Prepaid expenses and other assets |
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Management fees payable to affiliate |
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Incentive fees on net investment income payable to affiliate |
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( |
) |
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( |
) |
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Incentive fees on net capital gains accrued to affiliate |
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( |
) |
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Payable to affiliate |
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Other liabilities |
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Net Cash Provided by (Used in) Operating Activities |
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( |
) |
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|
Cash Flows from Financing Activities |
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||
Borrowings on debt |
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||
Repayments on debt |
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( |
) |
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|
( |
) |
|
Deferred financing costs |
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( |
) |
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( |
) |
|
Proceeds from issuance of common stock, net of offering and |
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||
Dividends paid to stockholders |
|
|
( |
) |
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|
( |
) |
|
Net Cash Provided by (Used in) Financing Activities |
|
|
( |
) |
|
|
|
|
|
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash |
|
|
|
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||
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
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||
Cash, Cash Equivalents, and Restricted Cash, End of Period |
|
$ |
|
|
$ |
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||
Supplemental Information: |
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|
||
Interest paid during the period |
|
$ |
|
|
$ |
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||
Excise and other taxes paid during the period |
|
$ |
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|
$ |
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||
Dividends declared during the period |
|
$ |
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|
$ |
|
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||
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||
Non-Cash Financing Activities: |
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||
Reinvestment of dividends during the period |
|
$ |
|
|
$ |
|
|
||
The accompanying notes are an integral part of these consolidated financial statements.
22
Sixth Street Specialty Lending, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
(Amounts in thousands, unless otherwise indicated)
1. Organization and Basis of Presentation
Organization
Sixth Street Specialty Lending, Inc. (the “Company”) is a Delaware corporation formed on July 21, 2010. The Company was formed primarily to lend to, and selectively invest in, middle-market companies in the United States. The Company has elected to be regulated as a business development company (“BDC”) under the 1940 Act. In addition, for tax purposes, the Company has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company is managed by Sixth Street Specialty Lending Advisers, LLC (the “Adviser”). On June 1, 2011, the Company formed a wholly-owned subsidiary, TC Lending, LLC, a Delaware limited liability company. On March 22, 2012, the Company formed a wholly-owned subsidiary, Sixth Street SL SPV, LLC, a Delaware limited liability company. On May 19, 2014, the Company formed a wholly-owned subsidiary, Sixth Street SL Holding, LLC, a Delaware limited liability company. On December 9, 2020, the Company formed a wholly-owned subsidiary, Sixth Street Specialty Lending Sub, LLC, a Cayman Islands limited liability company.
On March 21, 2014, the Company completed its initial public offering (“IPO”) and the Company’s shares began trading on the New York Stock Exchange (“NYSE”) under the symbol “TSLX.”
Basis of Presentation
The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and include the accounts of the Company and its subsidiaries. In the opinion of management, all adjustments considered necessary for the fair presentation of the consolidated financial statements for the periods presented have been included. The results of operations for interim periods are not indicative of results to be expected for the full year. All intercompany balances and transactions have been eliminated in consolidation.
Certain financial information that is normally included in annual financial statements, including certain financial statement footnotes, prepared in accordance with U.S. GAAP, is not required for interim reporting purposes and has been condensed or omitted herein. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes related thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission (“SEC”), on February 15, 2024.
The Company is an investment company and, therefore, applies the specialized accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies.
Fiscal Year End
The Company’s fiscal year ends on December 31.
2. Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual amounts could differ from those estimates and such differences could be material.
Cash and Cash Equivalents
Cash and cash equivalents may consist of demand deposits, highly liquid investments (e.g., money market funds, U.S. Treasury notes, and similar type instruments) with original maturities of three months or less, and restricted cash pledged as collateral for certain centrally cleared derivative instruments. Cash and cash equivalents denominated in U.S. dollars are carried at cost, which approximates fair value. The Company deposits its cash and cash equivalents with highly-rated banking corporations and, at times, cash deposits may exceed the insured limits under applicable law.
23
Investments at Fair Value
Loan originations are recorded on the date of the binding commitment, which is generally the funding date. Investment transactions purchased through the secondary markets are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. The net change in unrealized gains or losses primarily reflects the change in investment values and also includes the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.
Investments for which market quotations are readily available are typically valued at those market quotations. To validate market quotations, the Company utilizes a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available, as is the case for substantially all of our investments, are valued at fair value as determined in good faith by the Company’s Board of Directors (the “Board”), based on, among other things, the input of the Adviser, the Company’s Audit Committee and independent third-party valuation firms engaged at the direction of the Board.
As part of the valuation process, the Board takes into account relevant factors in determining the fair value of its investments, including and in combination of: the estimated enterprise value of a portfolio company (that is, the total value of the portfolio company’s net debt and equity), the nature and realizable value of any collateral, the portfolio company’s ability to make payments based on its earnings and cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company’s securities to any similar publicly traded securities, and overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Board considers whether the pricing indicated by the external event corroborates its valuation.
The Board undertakes a multi-step valuation process, which includes, among other procedures, the following:
The Company conducts this valuation process on a quarterly basis.
The Board has engaged independent third-party valuation firms to perform certain limited procedures that the Board has identified and requested them to perform in connection with the valuation process of investments for which no market quotations are readily available. At June 30, 2024, the independent third-party valuation firms performed their procedures over substantially all of the Company’s investments. Upon completion of such limited procedures, the third-party valuation firms concluded that the fair value, as determined by the Board, of those investments subjected to their limited procedures, appeared reasonable.
The Company applies Financial Accounting Standards Board Accounting Standards Codification Topic 820, Fair Value Measurement (“ASC Topic 820”), as amended, which establishes a framework for measuring fair value in accordance with U.S. GAAP and required disclosures of fair value measurements. ASC Topic 820 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are independent, knowledgeable, and willing and able to transact. In accordance with ASC Topic 820, the Company considers its principal market to be the market that has the greatest volume and level of activity. ASC Topic 820 specifies a fair value hierarchy that prioritizes and ranks the level of observability of inputs used in determination of fair value. In accordance with ASC Topic 820, these levels are summarized below:
24
Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfers occur. In addition to using the above inputs in investment valuations, the Company applies the valuation policy approved by its Board that is consistent with ASC Topic 820. Consistent with the valuation policy, the Company evaluates the source of inputs, including any markets in which its investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. When a security is valued based on prices provided by reputable dealers or pricing services (that is, broker quotes), the Company subjects those prices to various additional criteria in making the determination as to whether a particular investment would qualify for treatment as a Level 2 or Level 3 investment. For example, the Company reviews pricing provided by dealers or pricing services in order to determine if observable market information is being used, versus unobservable inputs. Some additional factors considered include the number of prices obtained as well as an assessment as to their quality, such as the depth of the relevant market relative to the size of the Company’s position.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, it could realize amounts that are different from the amounts presented and such differences could be material.
In addition, changes in the market environment including the impact of changes in broader market indices and credit spreads and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected herein.
Financial and Derivative Instruments
The Company recognizes all derivative instruments as assets or liabilities at fair value in its consolidated financial statements, pursuant to ASC Topic 815 Derivatives and Hedging, further clarified by the FASB’s issuance of the Accounting Standards Update (“ASU”) No. 2017-12, Derivatives and Hedging, which was adopted in 2019 by the Company. For all derivative instruments designated in a hedge accounting relationship, the entire change in the fair value of the hedging instrument shall be recorded in the same line item of the Consolidated Statements of Operations as the hedged item. The Company uses certain interest rate swaps as derivative instruments to hedge the Company’s fixed rate debt, and therefore both the periodic payment and the change in fair value for the effective hedge, if applicable, will be recognized as components of interest expense in the Consolidated Statements of Operations. For derivative contracts entered into by the Company that are not designated in a hedge accounting relationship, the Company presents changes in the fair value through current period earnings.
In the normal course of business, the Company has commitments and risks resulting from its investment transactions, which may include those involving derivative instruments. Derivative instruments are measured in terms of the notional contract amount and derive their value based upon one or more underlying instruments. While the notional amount gives some indication of the Company’s derivative activity, it generally is not exchanged, but is only used as the basis on which interest and other payments are exchanged. Derivative instruments are subject to various risks similar to non-derivative instruments including market, credit, liquidity, and operational risks. The Company manages these risks on an aggregate basis as part of its risk management process.
Derivatives, including the Company’s interest rate swaps, for which broker quotes are available are typically valued at those broker quotes.
Offsetting Assets and Liabilities
Foreign currency forward contract and interest rate swap receivables or payables pending settlement are offset, and the net amount is included with receivable or payable for foreign currency forward contracts or interest rate swaps in the Consolidated Balance Sheets when, and only when, they are with the same counterparty, the Company has the legal right to offset the recognized amounts, and it intends to either settle on a net basis or realize the asset and settle the liability simultaneously.
Foreign Currency
Foreign currency amounts are translated into U.S. dollars on the following basis:
25
Although net assets and fair values are presented based on the applicable foreign exchange rates described above, the Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in fair values of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. The Company’s current approach to hedging the foreign currency exposure in its non-U.S. dollar denominated investments is primarily to borrow the par amount in local currency under the Company’s Revolving Credit Facility to fund these investments. Fluctuations arising from the translation of foreign currency borrowings are included with the net change in unrealized gains (losses) on translation of assets and liabilities in foreign currencies on the Consolidated Statements of Operations.
Investments denominated in foreign currencies and foreign currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. dollar.
Equity Offering Expenses
The Company records expenses related to equity offerings as a reduction of capital upon completion of an offering of registered securities. The costs associated with renewals of the Company’s shelf registration statement are expensed as incurred.
Debt Issuance Costs
The Company records origination and other expenses related to its debt obligations as deferred financing costs, which are presented as a direct deduction from the carrying value of the related debt liability. These expenses are deferred and amortized using the effective interest method, or straight-line method, over the stated maturity of the debt obligation.
Interest and Dividend Income Recognition
Interest income is recorded on an accrual basis and includes the amortization of discounts and premiums. Discounts and premiums to par value on securities purchased or originated are amortized into interest income over the contractual life of the respective security using the effective interest method. The amortized cost of investments represents the original cost adjusted for the amortization of discounts and premiums, if any.
Unless providing services in connection with an investment, such as syndication, structuring or diligence, all or a portion of any loan fees received by the Company will be deferred and amortized over the investment’s life using the effective interest method.
Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when management has reasonable doubt that the borrower will pay principal or interest in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest has been paid and, in management’s judgment, the borrower is likely to make principal and interest payments in the future. Management may determine to not place a loan on non-accrual status if, notwithstanding any failure to pay, the loan has sufficient collateral value and is in the process of collection.
Dividend income on preferred equity securities is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies.
Other Income
From time to time, the Company may receive fees for services provided to portfolio companies by the Adviser. The services that the Adviser provides vary by investment, but may include syndication, structuring, diligence fees, or other service-based fees and fees for providing managerial assistance to our portfolio companies and are recognized as revenue when earned.
Earnings per share
The Company's earnings per share (“EPS”) amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period. Basic EPS is computed by dividing net increase (decrease) in net assets resulting from operations by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed by dividing net increase (decrease) in net assets resulting from operations by the weighted average number of shares of common stock assuming all potential shares had been issued and the additional shares of common stock were dilutive. Diluted EPS reflects the potential dilution, using the if-converted method for convertible debt, which could occur if all potentially dilutive securities were exercised.
26
Reimbursement of Transaction-Related Expenses
The Company may receive reimbursement for certain transaction-related expenses in pursuing investments. Transaction-related expenses, which are expected to be reimbursed by third parties, are typically deferred until the transaction is consummated and are recorded in Prepaid expenses and other assets on the date incurred. The transaction-related costs of pursuing investments not otherwise reimbursed are borne by the Company and for successfully completed investments included as a component of the investment’s cost basis.
Cash advances received in respect of transaction-related expenses are recorded as Cash and cash equivalents with an offset to Other liabilities or Other payables to affiliates. Other liabilities or Other payables to affiliates are relieved as reimbursable expenses are incurred.
Income Taxes, Including Excise Taxes
The Company has elected to be treated as a RIC under Subchapter M of the Code, and the Company intends to operate in a manner so as to continue to qualify for the tax treatment applicable to RICs. To qualify as a RIC, the Company must, among other things, distribute to its stockholders in each taxable year generally at least
The Company evaluates tax positions taken or expected to be taken in the course of preparing its financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reserved and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof.
Depending on the level of taxable income earned in a tax year, the Company can be expected to carry forward taxable income (including net capital gains, if any) in excess of current year dividend distributions from the current tax year into the next tax year and pay a nondeductible
For the three and six months ended June 30, 2024, the Company recorded a net expense of $
The Company changed its tax year end from March 31st to December 31st.
Dividends to Common Stockholders
Dividends to common stockholders are recorded on the record date. The amount to be paid out as a dividend is determined by the Board and is generally based upon the earnings estimated by the Adviser. Net realized long-term capital gains, if any, would generally be distributed at least annually, although the Company may decide to retain such capital gains.
The Company has adopted a dividend reinvestment plan that provides for reinvestment of any dividends declared in cash on behalf of stockholders, unless a stockholder elects to receive cash. As a result, if the Board authorizes, and it declares, a cash dividend, then the stockholders who have not “opted out” of the dividend reinvestment plan will have their cash dividends automatically reinvested in additional shares of the Company’s common stock, rather than receiving the cash dividend. The Company expects to use newly issued shares to satisfy the dividend reinvestment plan.
27
Recent Accounting Standards and Regulatory Updates
On June 28, 2024, the Canadian Dollar Offer Rates (“CDOR”) ceased to be published. In accordance with the cessation of CDOR, CDOR-based contracts were transitioned to the Canadian Overnight Repo Rate Average (“CORRA”).
3. Agreements and Related Party Transactions
Administration Agreement
On March 15, 2011, the Company entered into the Administration Agreement with the Adviser. Under the terms of the Administration Agreement, the Adviser provides administrative services to the Company. These services include providing office space, equipment and office services, maintaining financial records, preparing reports to stockholders and reports filed with the SEC, and managing the payment of expenses and the oversight of the performance of administrative and professional services rendered by others. Certain of these services are reimbursable to the Adviser under the terms of the Administration Agreement. In addition, the Adviser is permitted to delegate its duties under the Administration Agreement to affiliates or third parties and the Company pays or reimburses the Adviser for certain expenses incurred by any such affiliates or third parties for work done on its behalf.
In February 2017, the Board of Directors of the Company and the Adviser entered into an amended and restated administration agreement (the “Administration Agreement”) reflecting certain clarifications to the agreement to provide greater detail regarding the scope of the reimbursable costs and expenses of the Administrator’s services.
In November 2023, the Board renewed the Administration Agreement. Unless earlier terminated as described below, the Administration Agreement will remain in effect until November 2024, and may be extended subject to required approvals. The Administration Agreement may be terminated by either party without penalty on
No person who is an officer, director or employee of the Adviser or its affiliates and who serves as a director of the Company receives any compensation from the Company for his or her services as a director. However, the Company reimburses the Adviser (or its affiliates) for the allocable portion of the costs of compensation, benefits, and related administrative expenses of the Company’s officers who provide operational and administrative services to the Company pursuant to the Administration Agreement, their respective staffs and other professionals who provide services to the Company (including, in each case, employees of the Adviser or an affiliate). Such reimbursable amounts include the allocable portion of the compensation paid by the Adviser or its affiliates to the Company’s Chief Financial Officer, Chief Compliance Officer, and other professionals who provide operational and administrative services to the Company pursuant to the Administration Agreement, including individuals who provide “back office” or “middle office” financial, operational, legal and/or compliance services to the Company. The Company reimburses the Adviser (or its affiliates) for the allocable portion of the compensation paid by the Adviser (or its affiliates) to such individuals based on the percentage of time those individuals devote, on an estimated basis, to the business and affairs of the Company and in acting on behalf of the Company. The Company may also reimburse the Adviser or its affiliates for the allocable portion of overhead expenses (including rent, office equipment and utilities) attributable thereto. Directors who are not affiliated with the Adviser receive compensation for their services and reimbursement of expenses incurred to attend meetings.
For the three and six months ended June 30, 2024 the Company incurred expenses of $
Investment Advisory Agreement
On April 15, 2011, the Company entered into the Investment Advisory Agreement with the Adviser. The Investment Advisory Agreement was subsequently amended on December 12, 2011. Under the terms of the Investment Advisory Agreement, the Adviser provides investment advisory services to the Company. The Adviser’s services under the Investment Advisory Agreement are not exclusive, and the Adviser is free to furnish similar or other services to others so long as its services to the Company are not impaired. Under the terms of the Investment Advisory Agreement, the Company will pay the Adviser the Management Fee and may also pay certain Incentive Fees.
The Management Fee is calculated at an annual rate of
For the three and six months ended June 30, 2024, Management Fees (gross of waivers) were $
28
Any waived Management Fees are not subject to recoupment by the Adviser.
The Adviser intends to waive a portion of the Management Fee payable under the Investment Advisory Agreement by reducing the Management Fee on assets financed using leverage over
The Incentive Fee consists of two parts, as follows:
Pre-Incentive Fee net investment income means dividends, interest and fee income accrued by the Company during the calendar quarter, minus the Company’s operating expenses for the quarter (including the Management Fee, expenses payable under the Administration Agreement to the Administrator, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with pay-in-kind interest and zero coupon securities), accrued income that the Company may not have received in cash. Pre-Incentive Fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital gains or losses.
For purposes of determining whether pre-Incentive Fee net investment income exceeds the hurdle rate, pre-Incentive Fee net investment income is expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter.
Section 205(b)(3) of the Investment Advisers Act of 1940, as amended (the “Advisers Act”), prohibits the Adviser from receiving the payment of fees on unrealized gains until those gains are realized, if ever. There can be no assurance that such unrealized gains will be realized in the future.
For three and six months ended June 30, 2024, Incentive Fees were $
Any waived Incentive Fees are not subject to recoupment by the Adviser.
29
Since the Company’s IPO, with the exception of its waiver of Management Fees and certain Incentive Fees attributable to the Company’s ownership of certain investments and the Leverage Waiver, the Adviser has not waived its right to receive any Management Fees or Incentive Fees payable pursuant to the Investment Advisory Agreement.
In November 2023, the Board renewed the Investment Advisory Agreement. Unless earlier terminated as described below, the Investment Advisory Agreement will remain in effect until November 2024, and may be extended subject to required approvals. The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either party without penalty on
From time to time, the Adviser may pay amounts owed by the Company to third-party providers of goods or services, including the Board, and the Company will subsequently reimburse the Adviser for such amounts paid on its behalf. Amounts payable to the Adviser are settled in the normal course of business without formal payment terms.
4. Investments at Fair Value
Under the 1940 Act, the Company is required to separately identify non-controlled investments where it owns 5% or more of a portfolio company’s outstanding voting securities as investments in “affiliated” companies. In addition, under the 1940 Act, the Company is required to separately identify investments where it owns more than 25% of a portfolio company’s outstanding voting securities and/or had the power to exercise control over the management or policies of such portfolio company as investments in “controlled” companies. Detailed information with respect to the Company’s non-controlled, non-affiliated; non-controlled, affiliated; and controlled, affiliated investments is contained in the accompanying consolidated financial statements, including the Consolidated Schedules of Investments. The information in the tables below is presented on an aggregate portfolio basis, without regard to whether they are non-controlled, non-affiliated; non-controlled, affiliated; or controlled, affiliated investments.
Investments at fair value consisted of the following at June 30, 2024 and December 31, 2023:
|
|
June 30, 2024 |
|
|||||||||
|
|
Amortized Cost (1) |
|
|
Fair Value |
|
|
Net Unrealized |
|
|||
First-lien debt investments |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Second-lien debt investments |
|
|
|
|
|
|
|
|
( |
) |
||
Mezzanine debt investments |
|
|
|
|
|
|
|
|
|
|||
Equity and other investments |
|
|
|
|
|
|
|
|
|
|||
Structured credit investments |
|
|
|
|
|
|
|
|
|
|||
Total Investments |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
December 31, 2023 |
|
|||||||||
|
|
Amortized Cost (1) |
|
|
Fair Value |
|
|
Net Unrealized |
|
|||
First-lien debt investments |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Second-lien debt investments |
|
|
|
|
|
|
|
|
( |
) |
||
Mezzanine debt investments |
|
|
|
|
|
|
|
|
|
|||
Equity and other investments |
|
|
|
|
|
|
|
|
|
|||
Structured credit investments |
|
|
|
|
|
|
|
|
|
|||
Total Investments |
|
$ |
|
|
$ |
|
|
$ |
|
|||
30
The industry composition of investments at fair value at June 30, 2024 and December 31, 2023 is as follows:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
Automotive |
|
|
% |
|
|
% |
||
Business Services |
|
|
% |
|
|
% |
||
Chemicals |
|
|
% |
|
|
% |
||
Communications |
|
|
% |
|
|
% |
||
Education |
|
|
% |
|
|
% |
||
Financial Services |
|
|
% |
|
|
% |
||
Healthcare |
|
|
% |
|
|
% |
||
Hotel, Gaming and Leisure |
|
|
% |
|
|
% |
||
Human Resource Support Services |
|
|
% |
|
|
% |
||
Insurance |
|
|
% |
|
|
% |
||
Internet Services |
|
|
% |
|
|
% |
||
Manufacturing |
|
|
% |
|
|
% |
||
Marketing Services |
|
|
% |
|
|
% |
||
Office Products |
|
|
% |
|
|
% |
||
Oil, Gas and Consumable Fuels |
|
|
% |
|
|
% |
||
Other |
|
|
% |
|
|
% |
||
Pharmaceuticals |
|
|
% |
|
— |
|
||
Retail and Consumer Products |
|
|
% |
|
|
% |
||
Transportation |
|
|
% |
|
|
% |
||
Total |
|
|
% |
|
|
% |
||
The geographic composition of investments at fair value at June 30, 2024 and December 31, 2023 is as follows:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
United States |
|
|
|
|
|
|
||
Midwest |
|
|
% |
|
|
% |
||
Northeast |
|
|
% |
|
|
% |
||
South |
|
|
% |
|
|
% |
||
West |
|
|
% |
|
|
% |
||
Australia |
|
|
% |
|
|
% |
||
Canada |
|
|
% |
|
|
% |
||
Finland (1) |
|
|
% |
|
|
% |
||
France |
|
|
% |
|
— |
|
||
Germany |
|
|
% |
|
|
% |
||
Luxembourg |
|
|
% |
|
|
% |
||
Netherlands |
|
|
% |
|
|
% |
||
Norway |
|
|
% |
|
|
% |
||
Sweden |
|
|
% |
|
— |
|
||
United Kingdom |
|
|
% |
|
|
% |
||
Total |
|
|
% |
|
|
% |
||
5. Derivatives
Interest Rate Swaps
The Company enters into interest rate swap transactions from time to time to hedge fixed rate debt obligations and certain fixed rate debt investments. The Company’s interest rate swaps are all with one counterparty and are centrally cleared through a registered commodities exchange. Refer to the Consolidated Schedule of Investments for additional disclosure regarding these interest rate swaps.
31
The following tables present the amounts paid and received on the Company’s interest rate swap transactions, excluding upfront fees, for the three and six months ended June 30, 2024 and 2023:
|
|
|
|
|
|
|
For the Three Months Ended June 30, 2024 |
|
|
For the Six Months Ended June 30, 2024 |
|
|||||||||||||||||||
|
|
Maturity Date |
|
Notional Amount |
|
|
Paid |
|
|
Received |
|
|
Net |
|
|
Paid |
|
|
Received |
|
|
Net |
|
|||||||
Interest rate swap |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||||
Interest rate swap |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Interest rate swap |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||||
Interest rate swap |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Interest rate swap |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Interest rate swap |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Total |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||
|
|
|
|
|
|
|
For the Three Months Ended June 30, 2023 |
|
|
For the Six Months Ended June 30, 2023 |
|
|||||||||||||||||||
|
|
Maturity Date |
|
Notional Amount |
|
|
Paid |
|
|
Received |
|
|
Net |
|
|
Paid |
|
|
Received |
|
|
Net |
|
|||||||
Interest rate swap (1) |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Interest rate swap |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Interest rate swap |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Interest rate swap |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||||
Interest rate swap |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Total |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||
For the three and six months ended June 30, 2024, the Company recognized $
For the three and six months ended June 30, 2023, the Company recognized $
As of June 30, 2024, the swap transactions had a fair value of $(
The Company is required under the terms of its derivatives agreements to pledge assets as collateral to secure its obligations underlying the derivatives. The amount of collateral required varies over time based on the mark-to-market value, notional amount and remaining term of the derivatives, and may exceed the amount owed by the Company on a mark-to-market basis. Any failure by the Company to fulfill any collateral requirement (e.g., a so-called “margin call”) may result in a default. In the event of a default by a counterparty, the Company would be an unsecured creditor to the extent of any such overcollateralization.
As of June 30, 2024, $
32
6. Fair Value of Financial Instruments
Investments
The following tables present fair value measurements of investments as of June 30, 2024 and December 31, 2023:
|
|
Fair Value Hierarchy at June 30, 2024 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
First-lien debt investments |
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Second-lien debt investments |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Mezzanine debt investments |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Equity and other investments |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Structured credit investments |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total investments at fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest rate swaps |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
|
|
Fair Value Hierarchy at December 31, 2023 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
First-lien debt investments |
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Second-lien debt investments |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Mezzanine debt investments |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Equity and other investments |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Structured credit investments |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total investments at fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest rate swaps |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfers occur.
The following tables present the changes in the fair value of investments for which Level 3 inputs were used to determine the fair value as of and for the three and six months ended June 30, 2024:
|
|
As of and for the Three Months Ended |
|
|||||||||||||||||
|
|
June 30, 2024 |
|
|||||||||||||||||
|
|
First-lien |
|
|
Second-lien |
|
|
Mezzanine |
|
|
Equity |
|
|
Total |
|
|||||
Balance, beginning of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Purchases or originations |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
Repayments / redemptions |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Sales Proceeds |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Paid-in-kind interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Net amortization of discount on securities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Transfers within Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Transfers into (out of) Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Balance, End of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
33
|
|
As of and for the Six Months Ended |
|
|||||||||||||||||
|
|
June 30, 2024 |
|
|||||||||||||||||
|
|
First-lien |
|
|
Second-lien |
|
|
Mezzanine |
|
|
Equity |
|
|
Total |
|
|||||
Balance, beginning of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Purchases or originations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Repayments / redemptions |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Sales Proceeds |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Paid-in-kind interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|||
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
||
Net amortization of discount on securities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Transfers within Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Transfers into (out of) Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Balance, End of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
The following tables present the changes in the fair value of investments for which Level 3 inputs were used to determine the fair value as of and for the three and six months ended June 30, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
As of and for the Three Months Ended |
|
|||||||||||||||||
|
|
June 30, 2023 |
|
|||||||||||||||||
|
|
First-lien |
|
|
Second-lien |
|
|
Mezzanine |
|
|
Equity |
|
|
Total |
|
|||||
Balance, beginning of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Purchases or originations |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Repayments / redemptions |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Sale Proceeds |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Paid-in-kind interest |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|||
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Net amortization of discount on securities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Transfers within Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Transfers into (out of) Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance, End of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
As of and for the Six Months Ended |
|
|||||||||||||||||
|
|
June 30, 2023 |
|
|||||||||||||||||
|
|
First-lien |
|
|
Second-lien |
|
|
Mezzanine |
|
|
Equity |
|
|
Total |
|
|||||
Balance, beginning of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Purchases or originations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Repayments / redemptions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Sale Proceeds |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Paid-in-kind interest |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||||
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Net amortization of discount on securities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Transfers within Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Transfers into (out of) Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance, End of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
34
Copper Bidco, LLC was transferred into Level 3 from Level 2 for fair value measurement purposes during the three and six months ended June 30, 2023, as a result of changes in observability of inputs into the security valuation for this portfolio company.
The following table presents information with respect to the net change in unrealized gains or losses on investments for which Level 3 inputs were used in determining fair value that are still held by the Company at June 30, 2024 and 2023:
|
|
Net Change in Unrealized |
|
|
Net Change in Unrealized |
|
||
|
|
Gains or (Losses) |
|
|
Gains or (Losses) |
|
||
|
|
for the Three Months Ended |
|
|
for the Three Months Ended |
|
||
|
|
June 30, 2024 on |
|
|
June 30, 2023 on |
|
||
|
|
Investments Held at |
|
|
Investments Held at |
|
||
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||
First-lien debt investments |
|
$ |
( |
) |
|
$ |
|
|
Second-lien debt investments |
|
|
|
|
|
( |
) |
|
Mezzanine debt investments |
|
|
|
|
|
( |
) |
|
Equity and other investments |
|
|
|
|
|
( |
) |
|
Total |
|
$ |
( |
) |
|
$ |
|
|
|
|
Net Change in Unrealized |
|
|
Net Change in Unrealized |
|
||
|
|
Gains or (Losses) |
|
|
Gains or (Losses) |
|
||
|
|
for the Six Months Ended |
|
|
for the Six Months Ended |
|
||
|
|
June 30, 2024 on |
|
|
June 30, 2023 on |
|
||
|
|
Investments Held at |
|
|
Investments Held at |
|
||
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||
First-lien debt investments |
|
$ |
( |
) |
|
$ |
|
|
Second-lien debt investments |
|
|
( |
) |
|
|
( |
) |
Mezzanine debt investments |
|
|
|
|
|
|
||
Equity and other investments |
|
|
|
|
|
( |
) |
|
Total |
|
$ |
( |
) |
|
$ |
|
|
The following tables present the fair value of Level 3 Investments at fair value and the significant unobservable inputs used in the valuations as of June 30, 2024 and December 31, 2023. The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Company’s determination of fair values.
|
|
June 30, 2024 |
||||||||||
|
|
|
|
|
Valuation |
|
Unobservable |
|
Range (Weighted |
|
Impact to Valuation |
|
|
|
Fair Value |
|
|
Technique |
|
Input |
|
Average) |
|
Increase to Input |
|
First-lien debt investments |
|
$ |
|
|
Income approach (1) |
|
Discount rate |
|
|
Decrease |
||
Second-lien debt investments |
|
|
|
|
Income approach (2) |
|
Discount rate |
|
|
Decrease |
||
Mezzanine debt investments |
|
|
|
|
Income approach (3) |
|
Discount rate |
|
|
Decrease |
||
Equity and other investments |
|
|
|
|
Market Multiple (4) |
|
Comparable multiple |
|
|
Increase |
||
Total |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2023 |
||||||||||
|
|
|
|
|
Valuation |
|
Unobservable |
|
Range (Weighted |
|
Impact to Valuation |
|
|
|
Fair Value |
|
|
Technique |
|
Input |
|
Average) |
|
Increase to Input |
|
First-lien debt investments |
|
$ |
|
|
Income approach (1) |
|
Discount rate |
|
|
Decrease |
||
Second-lien debt investments |
|
|
|
|
Income approach (2) |
|
Discount rate |
|
|
Decrease |
||
Mezzanine debt investments |
|
|
|
|
Income approach (3) |
|
Discount rate |
|
|
Decrease |
||
Equity and other investments |
|
|
|
|
Market Multiple (4) |
|
Comparable multiple |
|
|
Increase |
||
Total |
|
$ |
|
|
|
|
|
|
|
|
|
|
35
The Company typically determines the fair value of its performing Level 3 debt investments utilizing a yield analysis. In a yield analysis, a price is ascribed for each investment based upon an assessment of current and expected market yields for similar investments and risk profiles. Additional consideration is given to the expected life, portfolio company performance since close, and other terms and risks associated with an investment. Among other factors, a determinant of risk is the amount of leverage used by the portfolio company relative to the total enterprise value of the company, and the rights and remedies of our investment within each portfolio company’s capital structure.
Significant unobservable quantitative inputs typically considered in the fair value measurement of the Company’s Level 3 debt investments primarily include current market yields, including relevant market indices, but may also include quotes from brokers, dealers, and pricing services as indicated by comparable investments. If debt investments are credit impaired, an enterprise value analysis may be used to value such debt investments; however, in addition to the methods outlined above, other methods such as a liquidation or wind-down analysis may be utilized to estimate enterprise value. For the Company’s Level 3 equity investments, multiples of similar companies’ revenues, earnings before income taxes, depreciation and amortization (“EBITDA”) or some combination thereof and comparable market transactions are typically used.
Financial Instruments Not Carried at Fair Value
Debt
The fair value of the Company’s Revolving Credit Facility, which is categorized as Level 3 within the fair value hierarchy, as of June 30, 2024 and December 31, 2023, approximates its carrying value as the outstanding balance is callable at carrying value.
The following table presents the fair value of the Company’s 2024 Notes, 2026 Notes, 2028 Notes and 2029 Notes, as of June 30, 2024 and December 31, 2023.
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||||||||||
|
|
Outstanding |
|
|
Fair |
|
|
Outstanding |
|
|
Fair |
|
||||
2024 Notes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
2026 Notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2028 Notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2029 Notes |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other Financial Assets and Liabilities
Under the fair value hierarchy, cash and cash equivalents are classified as Level 1 while the Company’s other assets and liabilities, other than investments at fair value and Revolving Credit Facility, are classified as Level 2.
7. Debt
Revolving Credit Facility
On August 23, 2012, the Company entered into a senior secured revolving credit agreement with Truist Bank (as a successor by merger to SunTrust Bank), as administrative agent, and J.P. Morgan Chase Bank, N.A., as syndication agent, and certain other lenders (as amended and restated, the “Revolving Credit Facility”).
As of June 30, 2024, aggregate commitments under the facility were $
Pursuant to the Fourteenth Amendment dated June 12, 2023, with respect to $
36
million of commitments, the revolving period ends on
Pursuant to the Fifteenth Amendment dated April 24, 2024, aggregate commitments were increased to $
The Company may borrow amounts in U.S. dollars or certain other permitted currencies. As of June 30, 2024, the Company had outstanding debt denominated in Australian dollars (AUD) of
The Revolving Credit Facility also provides for the issuance of letters of credit up to an aggregate amount of $
Amounts drawn under the Revolving Credit Facility, including amounts drawn in respect of letters of credit, bear interest at either the applicable reference rate plus an applicable credit spread adjustment, plus a margin of either
The Revolving Credit Facility is guaranteed by Sixth Street SL SPV, LLC, TC Lending, LLC and Sixth Street SL Holding, LLC. The Revolving Credit Facility is secured by a perfected first-priority security interest in substantially all the portfolio investments held by the Company and each guarantor. Proceeds from borrowings may be used for general corporate purposes, including the funding of portfolio investments.
The Revolving Credit Facility includes customary events of default, as well as customary covenants, including restrictions on certain distributions and financial covenants. In accordance with the terms of the Fifteenth Amendment, the financial covenants require:
The Revolving Credit Facility also contains certain additional concentration limits in connection with the calculation of the borrowing base, based on the Obligor Asset Coverage Ratio.
Net proceeds received from the Company’s common stock issuances in February 2024 and April 2024 and net proceeds received from the issuance of the 2029 Notes were used to pay down borrowings on the Revolving Credit Facility.
As of June 30, 2024 and December 31, 2023, the Company was in compliance with the terms of the Revolving Credit Facility.
2023 Notes
In January 2018, the Company issued $
37
option at any time at par plus a “make whole” premium. Total proceeds from the issuance of the 2023 Notes, net of underwriting discounts and offering costs, were $
2024 Notes
In November 2019, the Company issued $
On February 5, 2020, the Company issued an additional $
In connection with the 2024 Notes offering and the reopening of the 2024 Notes, the Company entered into interest rate swaps to align the interest rates of its liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. The notional amount of the two interest rates swaps is $
During the year ended December 31, 2020, the Company repurchased on the open market and extinguished $
2026 Notes
On February 3, 2021, the Company issued $
In connection with the issuance of the 2026 Notes, the Company entered into an interest rate swap to align the interest rates of its liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. The notional amount of the interest rate swap is $
38
2028 Notes
On August 14, 2023, the Company issued $
In connection with the issuance of the 2028 Notes, the Company entered into an interest rate swap to align the interest rates of its liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. The notional amount of the interest rate swap is $
2029 Notes
On January 8, 2024, the Company issued $
In connection with the issuance of the 2029 Notes, the Company entered into an interest rate swap to align the interest rates of its liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. The notional amount of the interest rate swap is $
For the three and six months ended June 30, 2024 and 2023, the components of interest expense related to the 2023 Notes, 2024 Notes, 2026 Notes, 2028 Notes and 2029 Notes were as follows:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||||
Interest expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Accretion of original issue discount |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of deferred financing costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Interest Expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total interest expense in the table above does not include the effect of the interest rate swaps related to the 2024 Notes, 2026 Notes, 2028 Notes and 2029 Notes. During the three and six months ended June 30, 2024, the Company received $
39
As June 30, 2024, the components of the carrying value of the 2024 Notes, 2026 Notes, 2028 Notes and 2029 Notes and the stated interest rate were as follows:
|
|
June 30, 2024 |
|
|||||||||||||
|
|
2024 Notes |
|
|
2026 Notes |
|
|
2028 Notes |
|
|
2029 Notes |
|
||||
Principal amount of debt |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Original issue discount, net of accretion |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Deferred financing costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Fair value of an effective hedge |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Carrying value of debt |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Stated interest rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
As of December 31, 2023, the components of the carrying value of the 2024 Notes, 2026 Notes, 2028 Notes and the stated interest rate were as follow:
|
|
December 31, 2023 |
|
|||||||||
|
|
2024 Notes |
|
|
2026 Notes |
|
|
2028 Notes |
|
|||
Principal amount of debt |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Original issue discount, net of accretion |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Deferred financing costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Fair value of an effective hedge |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Carrying value of debt |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Stated interest rate |
|
|
% |
|
|
% |
|
|
% |
|||
The stated interest rate in the table above does not include the effect of the interest rate swaps. As of June 30, 2024, the Company's swap-adjusted interest rate on the 2024 Notes, 2026 Notes, 2028 Notes and 2029 Notes was
As of June 30, 2024, the Company was in compliance with the terms of the indentures governing the 2024 Notes, 2026 Notes, 2028 Notes and 2029 Notes. As of December 31, 2023, the Company was in compliance with the terms of the indentures governing the 2024 Notes, 2026 Notes and 2028 Notes.
In accordance with the 1940 Act, with certain limitations, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing. As of June 30, 2024 and December 31, 2023, the Company’s asset coverage was
Debt obligations consisted of the following as of June 30, 2024 and December 31, 2023:
|
|
June 30, 2024 |
|
|||||||||||||
|
|
Aggregate |
|
|
Outstanding |
|
|
Amount |
|
|
Carrying |
|
||||
Revolving Credit Facility |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
2024 Notes |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
2026 Notes |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
2028 Notes |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
2029 Notes |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Total Debt |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
40
|
|
December 31, 2023 |
|
|||||||||||||
|
|
Aggregate |
|
|
Outstanding |
|
|
Amount |
|
|
Carrying |
|
||||
Revolving Credit Facility |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
2024 Notes |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
2026 Notes |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
2028 Notes |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Total Debt |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
For the three and six months ended June 30, 2024 and 2023, the components of interest expense were as follows:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||||
Interest expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Commitment fees |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of deferred financing costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accretion of original issue discount |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Swap settlement |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Interest Expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Average debt outstanding (in millions) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Weighted average interest rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
8. Commitments and Contingencies
Portfolio Company Commitments
From time to time, the Company may enter into commitments to fund investments; such commitments are incorporated into the Company’s assessment of its liquidity position. The Company’s senior secured revolving loan commitments are generally available on a borrower’s demand and may remain outstanding until the maturity date of the applicable loan. The Company’s senior secured delayed draw term loan commitments are generally available on a borrower’s demand and, once drawn, generally have the same remaining term as the associated loan agreement. Undrawn senior secured delayed draw term loan commitments generally have a shorter availability period than the term of the associated loan agreement.
As of June 30, 2024 and December 31, 2023, the Company had the following commitments to fund investments in current portfolio companies:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
Alaska Bidco Oy - Delayed Draw & Revolver |
|
$ |
|
|
$ |
|
||
Alpha Midco, Inc. - Delayed Draw & Revolver |
|
|
|
|
|
|
||
American Achievement, Corp. - Revolver |
|
|
|
|
|
|
||
Apellis Pharmaceuticals, Inc. - Delayed Draw |
|
|
|
|
|
— |
|
|
Aptean, Inc. - Delayed Draw & Revolver |
|
|
|
|
|
— |
|
|
Arrow Buyer, Inc. - Delayed Draw |
|
|
|
|
|
|
||
Artisan Bidco, Inc. - Revolver |
|
|
|
|
|
|
||
ASG II, LLC - Delayed Draw |
|
|
|
|
|
|
||
Avalara, Inc. - Revolver |
|
|
|
|
|
|
||
Axonify, Inc. - Delayed Draw |
|
|
|
|
|
|
||
Azurite Intermediate Holdings, Inc. - Delayed Draw, Revolver & Equity |
|
|
|
|
|
— |
|
|
41
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
Babylon Finco Limited - Delayed Draw |
|
|
|
|
|
— |
|
|
Banyan Software Holdings, LLC - Delayed Draw |
|
|
|
|
|
|
||
Bayshore Intermediate #2, L.P. - Revolver |
|
|
|
|
|
|
||
BCTO Ace Purchaser, Inc. - Delayed Draw |
|
|
|
|
|
|
||
BCTO Bluebill Buyer, Inc. - Delayed Draw |
|
|
|
|
|
|
||
Bear OpCo, LLC - Delayed Draw |
|
|
|
|
|
|
||
Ben Nevis Midco Limited - Delayed Draw |
|
|
|
|
|
— |
|
|
BlueSnap, Inc. - Delayed Draw & Revolver |
|
|
|
|
|
|
||
BTRS Holdings, Inc. - Delayed Draw & Revolver |
|
|
|
|
|
|
||
Cordance Operations, LLC - Delayed Draw & Revolver |
|
|
|
|
|
|
||
Coupa Holdings, LLC - Delayed Draw & Revolver |
|
|
|
|
|
|
||
Crewline Buyer, Inc. - Revolver & Equity |
|
|
|
|
|
|
||
Disco Parent, Inc. - Revolver |
|
|
|
|
|
|
||
Dye & Durham Corp. - Revolver |
|
|
|
|
|
|
||
EDB Parent, LLC - Delayed Draw |
|
|
|
|
|
|
||
Edge Bidco B.V. - Delayed Draw & Revolver |
|
|
|
|
|
|
||
Elements Finco Limited - Delayed Draw |
|
|
|
|
|
— |
|
|
Elysian Finco Ltd. - Delayed Draw & Revolver |
|
|
|
|
|
|
||
Employment Hero Holdings Pty Ltd. - Delayed Draw & Revolver |
|
|
|
|
|
|
||
EMS Linq, Inc. - Revolver |
|
|
|
|
|
|
||
Erling Lux Bidco SARL - Delayed Draw & Revolver |
|
|
|
|
|
|
||
ExtraHop Networks, Inc. - Delayed Draw & Revolver |
|
|
|
|
|
|
||
ForeScout Technologies, Inc. - Delayed Draw & Revolver |
|
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|
||
Fullsteam Operations, LLC - Delayed Draw & Revolver |
|
|
|
|
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|
||
Galileo Parent, Inc. - Revolver |
|
|
|
|
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|
||
Greenshoot Bidco B.V. - Revolver |
|
|
|
|
|
— |
|
|
Heritage Environmental Services, Inc. - Revolver |
|
|
|
|
|
— |
|
|
Hippo XPA Bidco AB - Delayed Draw & Revolver |
|
|
|
|
|
— |
|
|
Hirevue, Inc. - Revolver |
|
|
|
|
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|
||
Hornetsecurity Holding GmbH - Delayed Draw & Revolver |
|
|
|
|
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|
||
Ibis Intermediate Co. - Delayed Draw |
|
|
|
|
|
|
||
IRGSE Holding Corp. - Revolver |
|
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|
|
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|
||
Kangaroo Bidco AS - Delayed Draw |
|
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|
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|
||
Kyriba Corp. - Revolver |
|
|
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|
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|
||
Laramie Energy, LLC - Delayed Draw |
|
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|
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|
||
LeanTaaS Holdings, Inc. - Delayed Draw |
|
|
|
|
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|
||
Lucidworks, Inc. - Delayed Draw |
|
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|
|
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|
||
Marcura Equities LTD - Delayed Draw & Revolver |
|
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|
|
|
||
Merit Software Finance Holdings, LLC - Delayed Draw & Revolver |
|
|
|
|
|
— |
|
|
Netwrix Corp. - Delayed Draw & Revolver |
|
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|
||
OutSystems Luxco SARL - Delayed Draw |
|
|
|
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|
||
Passport Labs, Inc. - Revolver |
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|
||
PDI TA Holdings, Inc. - Delayed Draw & Revolver |
|
|
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|
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— |
|
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Ping Identity Holding Corp. - Revolver |
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|
||
PrimeRevenue, Inc. - Revolver |
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Project44, Inc. - Delayed Draw |
|
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|
||
Rapid Data GmbH Unternehmensberatung - Delayed Draw & Revolver |
|
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|
||
ReliaQuest Holdings, LLC - Delayed Draw & Equity |
|
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|
||
Scorpio Bidco - Delayed Draw |
|
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|
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— |
|
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SkyLark UK DebtCo Limited - Delayed Draw |
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|
||
SL Buyer Corp. - Delayed Draw |
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|
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Sport Alliance GmbH - Revolver |
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— |
|
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Tango Management Consulting, LLC - Delayed Draw & Revolver |
|
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TRP Assets, LLC - Delayed Draw |
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|
||
Truck-Lite Co., LLC - Delayed Draw & Revolver |
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|
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|
|
— |
|
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USA Debusk LLC - Delayed Draw & Revolver |
|
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|
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— |
|
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Wrangler TopCo, LLC - Revolver |
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||
Total Portfolio Company Commitments (1)(2) |
|
$ |
|
|
$ |
|
||
42
Other Commitments and Contingencies
As of June 30, 2024 and December 31, 2023, the Company did
From time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business. As of June 30, 2024 and December 31, 2023, management is not aware of any material pending or threatened litigation that would require accounting recognition or financial statement disclosure.
9. Net Assets
On May 15, 2023, the Company issued a total of
On March 5, 2024, the Company issued a total of
The Company has a dividend reinvestment plan, whereby the Company may buy shares of its common stock in the open market or issue new shares in order to satisfy dividend reinvestment requests. The number of shares to be issued to a stockholder is determined by dividing the total dollar amount of the cash dividend or distribution payable to a stockholder by the market price per share of the Company’s common stock at the close of regular trading on the NYSE on the payment date of a distribution, or if no sale is reported for such day, the average of the reported bid and ask prices. However, if the market price per share on the payment date of a cash dividend or distribution exceeds the most recently computed net asset value per share, the Company will issue shares at the greater of (i) the most recently computed net asset value per share and (ii)
Pursuant to the Company’s dividend reinvestment plan, the following tables summarize the shares issued to stockholders who have not opted out of the Company’s dividend reinvestment plan during the six months ended June 30, 2024 and 2023. All shares issued to stockholders in the tables below are newly issued shares.
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For the Six Months Ended |
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June 30, 2024 |
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Date |
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Date Declared |
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Dividend (1) |
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Record Date |
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Shares Issued |
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Shares Issued |
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Supplemental |
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||||
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Base |
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Supplemental |
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Base |
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Total Shares Issued |
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For the Six Months Ended |
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June 30, 2023 |
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Date |
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Date Declared |
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Dividend (1) |
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Record Date |
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Shares Issued |
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Shares Issued |
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Supplemental |
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||||
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Base |
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Supplemental |
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Base |
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Total Shares Issued |
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43
On August 4, 2015, the Company's Board authorized the Company to acquire up to $
10. Earnings per share
The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2024 and 2023:
|
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Three Months Ended |
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Six Months Ended |
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June 30, 2024 |
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June 30, 2023 |
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June 30, 2024 |
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June 30, 2023 |
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||||
Increase in net assets resulting from operations |
|
$ |
|
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$ |
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$ |
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$ |
|
||||
Weighted average shares of common stock outstanding—basic and diluted |
|
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||||
Earnings per common share—basic and diluted |
|
$ |
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$ |
|
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$ |
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$ |
|
||||
11. Dividends
The Company has historically paid a dividend to stockholders on a quarterly basis. The Company has a dividend framework that provides for a quarterly base dividend and a variable supplemental dividend, subject to satisfaction of certain measurement tests and the approval of the Board.
The following tables summarize dividends declared during the six months ended June 30, 2024 and 2023:
|
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For the Six Months Ended |
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|||||||
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June 30, 2024 |
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Date Declared |
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Dividend |
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Record Date |
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Payment Date |
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Dividend per Share |
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$ |
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Total Dividends Declared |
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$ |
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For the Six Months Ended |
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June 30, 2023 |
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Date Declared |
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Dividend |
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Record Date |
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Payment Date |
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Dividend per Share |
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$ |
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|||||
Total Dividends Declared |
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$ |
|
|
The dividends declared during the six months ended June 30, 2024 and 2023 were derived from net investment income, determined on a tax basis.
44
12. Financial Highlights
The following per share data and ratios have been derived from information provided in the consolidated financial statements. The following are the financial highlights for one share of common stock outstanding during the six months ended June 30, 2024 and 2023.
|
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Six Months Ended |
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Six Months Ended |
|
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June 30, 2024 |
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June 30, 2023 |
|
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Per Share Data (8) |
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||
Net asset value, beginning of period |
|
$ |
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$ |
|
||
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Net investment income (1) |
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Net realized and unrealized gains |
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( |
) |
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Total from operations |
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Issuance of common stock, net of offering costs (2) |
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||
Dividends declared from net investment income (2) |
|
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( |
) |
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( |
) |
Total increase/(decrease) in net assets |
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|
||
Net Asset Value, End of Period |
|
$ |
|
|
$ |
|
||
Per share market value at end of period |
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$ |
|
|
$ |
|
||
Total return based on market value with reinvestment of dividends (3) |
|
|
% |
|
|
% |
||
Total return based on market value (4) |
|
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% |
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% |
||
Total return based on net asset value (5) |
|
|
% |
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% |
||
Shares Outstanding, End of Period |
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Ratios / Supplemental Data (6)(7) |
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Ratio of net expenses to average net assets |
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% |
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% |
||
Ratio of net investment income to average net assets |
|
|
% |
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% |
||
Portfolio turnover |
|
|
% |
|
|
% |
||
Net assets, end of period |
|
$ |
|
|
$ |
|
||
13. Subsequent Events
The Company’s management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events, except as already disclosed, that occurred during such period that would require disclosure in this Form 10-Q or would be required to be recognized in the consolidated financial statements as of and for the three and six months ended June 30, 2024.
45
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information contained in this section should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report. This discussion also should be read in conjunction with the “Cautionary Statement Regarding Forward-Looking Statements” set forth on page 3 of this Quarterly Report on Form 10-Q.
Overview
Sixth Street Specialty Lending, Inc. is a Delaware corporation formed on July 21, 2010. The Adviser is our external manager. We have four wholly owned subsidiaries, TC Lending, LLC, a Delaware limited liability company, which holds a California finance lender and broker license, Sixth Street SL SPV, LLC, a Delaware limited liability company Sixth Street SL Holding, LLC, a Delaware limited liability company, and Sixth Street Specialty Lending Sub, LLC, a Cayman Islands limited liability company.
We have elected to be regulated as a BDC under the 1940 Act and as a RIC under the Code. We made our BDC election on April 15, 2011. As a result, we are required to comply with various statutory and regulatory requirements, such as:
Our shares are listed on the NYSE under the symbol “TSLX.”
Our Investment Framework
We are a specialty finance company focused on lending to middle-market companies. Since we began our investment activities in July 2011, through June 30, 2024, we have originated approximately $37.9 billion aggregate principal amount of investments and retained approximately $10.4 billion aggregate principal amount of these investments on our balance sheet prior to any subsequent exits and repayments. We seek to generate current income primarily in U.S.-domiciled middle-market companies through direct originations of senior secured loans and, to a lesser extent, originations of mezzanine and unsecured loans and investments in corporate bonds, equity securities, and other instruments.
By “middle-market companies,” we mean companies that have annual EBITDA, which we believe is a useful proxy for cash flow, of $10 million to $250 million, although we may invest in larger or smaller companies on occasion. As of June 30, 2024, our core portfolio companies, which exclude certain investments that fall outside of our typical borrower profile and represent 97.9% of our total investments based on fair value, had weighted average annual revenue of $310.4 million and weighted average annual EBITDA of $104.4 million.
We invest in first-lien debt, second-lien debt, mezzanine and unsecured debt and equity and other investments. Our first-lien debt may include stand-alone first-lien loans; “last out” first-lien loans, which are loans that have a secondary priority behind super-senior “first out” first-lien loans; “unitranche” loans, which are loans that combine features of first-lien, second-lien and mezzanine debt, generally in a first-lien position; and secured corporate bonds with similar features to these categories of first-lien loans. Our second-lien debt may include secured loans, and, to a lesser extent, secured corporate bonds, with a secondary priority behind first-lien debt.
The debt in which we invest typically is not rated by any rating agency, but if these instruments were rated, they would likely receive a rating of below investment grade (that is, below BBB- or Baa3 as defined by Standard & Poor’s and Moody’s Investors Services, respectively), which is often referred to as “junk.”
The companies in which we invest use our capital to support organic growth, acquisitions, market or product expansion and recapitalizations (including restructurings). As of June 30, 2024, the largest single investment based on fair value represented 2.4% of our total investment portfolio.
As of June 30, 2024, the average investment size in each of our portfolio companies was approximately $30.4 million based on fair value. Portfolio companies includes investments in structured credit investments, which include each series of collateralized loan obligation as a portfolio company investment. When excluding investments in structured credit investments the average investment in our remaining portfolio companies was approximately $31.5 million as of June 30, 2024.
46
Through our Adviser, we consider potential investments utilizing a four-tiered investment framework and against our existing portfolio as a whole:
Business and sector selection. We focus on companies with enterprise value between $50 million and $1 billion. When reviewing potential investments, we seek to invest in businesses with high marginal cash flow, recurring revenue streams and where we believe credit quality will improve over time. We look for portfolio companies that we think have a sustainable competitive advantage in growing industries or distressed situations. We also seek companies where our investment will have a low loan-to-value ratio.
We currently do not limit our focus to any specific industry and we may invest in larger or smaller companies on occasion. We classify the industries of our portfolio companies by end-market (such as healthcare, and business services) and not by the products or services (such as software) directed to those end-markets.
As of June 30, 2024, the largest industry represented 16.8% of our total investment portfolio based on fair value.
Investment Structuring. We focus on investing at the top of the capital structure and protecting that position. As of June 30, 2024, approximately 93.6% of our portfolio was invested in secured debt, including 92.8% in first-lien debt investments. We carefully perform diligence and structure investments to include strong investor covenants. As a result, we structure investments with a view to creating opportunities for early intervention in the event of non-performance or stress. In addition, we seek to retain effective voting control in investments over the loans or particular class of securities in which we invest through maintaining affirmative voting positions or negotiating consent rights that allow us to retain a blocking position. We also aim for our loans to mature on a medium term, between two to seven years after origination. For the six months ended June 30, 2024, the weighted average term on new investment commitments in new portfolio companies was 6.1 years.
Deal Dynamics. We focus on, among other deal dynamics, direct origination of investments, where we identify and lead the investment transaction. A substantial majority of our portfolio investments are sourced through our direct or proprietary relationships.
Risk Mitigation. We seek to mitigate non-credit-related risk on our returns in several ways, including call protection provisions to protect future interest income. As of June 30, 2024, we had call protection on 75.1% of our debt investments based on fair value, with weighted average call prices of 106.5% for the first year, 103.3% for the second year and 101.0% for the third year, in each case from the date of the initial investment. As of June 30, 2024, 99.6% of our debt investments based on fair value bore interest at floating rates, with 100.0% of these subject to interest rate floors, which we believe helps act as a portfolio-wide hedge against inflation.
Relationship with our Adviser and Sixth Street
Our Adviser is a Delaware limited liability company. Our Adviser acts as our investment adviser and administrator and is a registered investment adviser with the SEC under the Advisers Act. Our Adviser sources and manages our portfolio through a dedicated team of investment professionals predominately focused on direct lending, which we refer to as our Investment Team. Our Investment Team is led by our Chairman and Chief Executive Officer and our Adviser’s Co-Chief Investment Officer Joshua Easterly and our Adviser’s Co-Chief Investment Officer Alan Waxman, both of whom have substantial experience in credit origination, underwriting and asset management. Our investment decisions are made by our Investment Review Committee, which includes senior personnel of our Adviser and affiliates of Sixth Street Partners, LLC, or “Sixth Street.”
Sixth Street is a global investment business with over $78 billion of assets under management as of June 30, 2024. Sixth Street’s direct lending platforms include Sixth Street Specialty Lending, Sixth Street Lending Partners, which is aimed at U.S. upper middle-market loan originations, Sixth Street Specialty Lending Europe, which is aimed at European middle-market loan originations. Additional Sixth Street core platforms include Sixth Street TAO, which has the flexibility to invest across all of Sixth Street’s private credit market investments, Sixth Street Opportunities, which focuses on actively managed opportunistic investments across the credit cycle, Sixth Street Credit Market Strategies, which is the firm’s “public-side” credit investment platform focused on investment opportunities in broadly syndicated leveraged loan markets, Sixth Street Growth, which provides financing solutions to growing companies, Sixth Street Fundamental Strategies, which primarily invests in secondary credit, and Sixth Street Agriculture, which invests in niche agricultural opportunities. Sixth Street has a long-term oriented, highly flexible capital base that allows it to invest across industries, geographies, capital structures and asset classes. Sixth Street has extensive experience with highly complex, global public and private investments executed through primary originations, secondary market purchases and restructurings, and has a team of over 610 investment and operating professionals. As of June 30, 2024, sixty-six (66) of these personnel are dedicated to direct lending, including fifty-one (51) investment professionals.
Our Adviser consults with Sixth Street in connection with a substantial number of our investments. The Sixth Street platform provides us with a breadth of large and scalable investment resources. We believe we benefit from Sixth Street’s market expertise, insights into industry, sector and macroeconomic trends and intensive due diligence capabilities, which help us discern market
47
conditions that vary across industries and credit cycles, identify favorable investment opportunities and manage our portfolio of investments. Sixth Street and its affiliates will refer all middle-market loan origination activities for companies domiciled in the United States to us and conduct those activities through us. The Adviser will determine whether it would be permissible, advisable or otherwise appropriate for us to pursue a particular investment opportunity allocated to us.
On December 16, 2014, we were granted an exemptive order from the SEC that allows us to co-invest, subject to certain conditions and to the extent the size of an investment opportunity exceeds the amount our Adviser has independently determined is appropriate to invest, with certain of our affiliates (including affiliates of Sixth Street) in middle-market loan origination activities for companies domiciled in the United States and certain “follow-on” investments in companies in which we have already co-invested pursuant to the order and remain invested. On January 16, 2020, we filed a further application for co-investment exemptive relief with the SEC to better align our existing co-investment relief with more recent SEC exemptive orders. Subsequent further applications were also made, most recently as June 29, 2022. On August 3, 2022, the SEC granted the new order in response to our application.
We believe our ability to co-invest with Sixth Street affiliates is particularly useful where we identify larger capital commitments than otherwise would be appropriate for us. We expect that with the ability to co-invest with Sixth Street affiliates we will continue to be able to provide “one-stop” financing to a potential portfolio company in these circumstances, which may allow us to capture opportunities where we alone could not commit the full amount of required capital or would have to spend additional time to locate unaffiliated co-investors.
Under the terms of the Investment Advisory Agreement and Administration Agreement, the Adviser’s services are not exclusive, and the Adviser is free to furnish similar or other services to others, so long as its services to us are not impaired. Under the terms of the Investment Advisory Agreement, we will pay the Adviser the base management fee, or the Management Fee, and may also pay certain incentive fees, or the Incentive Fees.
Under the terms of the Administration Agreement, the Adviser also provides administrative services to us. These services include providing office space, equipment and office services, maintaining financial records, preparing reports to stockholders and reports filed with the SEC, and managing the payment of expenses and the oversight of the performance of administrative and professional services rendered by others. Certain of these services are reimbursable to the Adviser under the terms of the Administration Agreement.
Key Components of Our Results of Operations
Investments
We focus primarily on the direct origination of loans to middle-market companies domiciled in the United States.
Our level of investment activity (both the number of investments and the size of each investment) can and does vary substantially from period to period depending on many factors, including the amount of debt and equity capital generally available to middle-market companies, the level of merger and acquisition activity for such companies, the general economic environment and the competitive environment for the types of investments we make.
In addition, as part of our risk strategy on investments, we may reduce certain levels of investments through partial sales or syndication to additional investors.
Revenues
We generate revenues primarily in the form of interest income from the investments we hold. In addition, we may generate income from dividends on direct equity investments, capital gains on the sale of investments and various loan origination and other fees. Our debt investments typically have a term of two to seven years, and, as of June 30, 2024, 99.6% of these investments based on fair value bore interest at a floating rate, with 100.0% of these subject to interest rate floors. Interest on debt investments is generally payable monthly or quarterly. Some of our investments provide for deferred interest payments or PIK interest. For the three and six months ended June 30, 2024, 7.7% and 7.3%, respectively, of our total investment income was comprised of PIK interest.
Changes in our net investment income are primarily driven by the spread between the payments we receive from our investments in our portfolio companies against our cost of funding, rather than by changes in interest rates. Our investment portfolio primarily consists of floating rate loans, and our credit facilities, 2024 Notes, 2026 Notes, 2028 Notes and 2029 Notes, after taking into account the effect of the interest rate swaps we have entered into in connection with these securities, all bear interest at floating rates. Macro trends in base interest rates like SOFR or other reference rates may affect our net investment income over the long term. However, because we generally originate loans to a limited number of portfolio companies each quarter, and those investments also vary in size, our results in any given period—including the interest rate on investments that were sold or repaid in a period compared to the interest
48
rate of new investments made during that period—often are idiosyncratic, and reflect the characteristics of the particular portfolio companies that we invested in or exited during the period and not necessarily any trends in our business.
In addition to interest income, our net investment income is also driven by prepayment and other fees, which also can vary significantly from quarter to quarter. The level of prepayment fees is generally correlated to the movement in credit spreads and risk premiums, but also will vary based on corporate events that may take place at an individual portfolio company in a given period—e.g., merger and acquisition activity, initial public offerings and restructurings. As noted above, generally a small but varied number of portfolio companies may make prepayments in any quarter, meaning that changes in the amount of prepayment fees received can vary significantly between periods and can vary without regard to underlying credit trends.
Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income using the effective interest method for term instruments and the straight-line method for revolving or delayed draw instruments. Repayments of our debt investments can reduce interest income from period to period. We record prepayment premiums on loans as interest income when earned. We also may generate revenue in the form of commitment, amendment, structuring, syndication or due diligence fees, fees for providing managerial assistance and consulting fees. The frequency or volume of these items of revenue may fluctuate significantly.
Dividend income on common equity investments is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.
Our portfolio activity also reflects the proceeds of sales of investments. We recognize realized gains or losses on investments based on the difference between the net proceeds from the disposition and the amortized cost basis of the investment without regard to unrealized gains or losses previously recognized. We record current period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized gains (losses) on investments in the Consolidated Statements of Operations.
Expenses
Our primary operating expenses include the payment of fees to our Adviser under the Investment Advisory Agreement, expenses reimbursable under the Administration Agreement and other operating costs described below. Additionally, we pay interest expense on our outstanding debt. We bear all other costs and expenses of our operations, administration and transactions, including those relating to:
49
We expect that during periods of asset growth, our general and administrative expenses will be relatively stable or will decline as a percentage of total assets, and will increase as a percentage of total assets during periods of asset declines.
Leverage
While as a BDC the amount of leverage that we are permitted to use is limited in significant respects, we use leverage to increase our ability to make investments. The amount of leverage we use in any period depends on a variety of factors, including cash available for investing, the cost of financing and general economic and market conditions, however, under the 1940 Act, our total borrowings are limited so that our asset coverage ratio cannot fall below 150% immediately after any borrowing, as defined in the 1940 Act. In any period, our interest expense will depend largely on the extent of our borrowing and we expect interest expense will increase as we increase leverage over time within the limits of the 1940 Act. In addition, we may dedicate assets as collateral to financing facilities from time to time.
Market Trends
We believe trends in the middle-market lending environment, including the limited availability of capital from traditional regulated financial institutions, strong demand for debt capital and specialized lending requirements, are likely to continue to create favorable opportunities for us to invest at attractive risk-adjusted rates.
Subsequent to the global financial crisis, the implementation of regulatory changes such as Basel III requirements, Leverage Lending Guidance, and the Volcker Rule, tightened risk appetites and reduced the capacity of traditional lenders to serve middle-market companies. We believe that these dynamics create a significant opportunity for us to directly originate investments. We also believe that the large amount of uninvested capital held by private equity firms will continue to drive deal activity, which may in turn create additional demand for debt capital.
This market dynamic is further exacerbated by the specialized due diligence and underwriting capabilities, as well as extensive ongoing monitoring, required for middle-market lending. We believe middle-market lending is generally more labor-intensive than lending to larger companies due to smaller investment sizes and the lack of publicly available information on these companies. As a result, the opportunities for dedicated private lenders such as us has continued to expand.
An imbalance between the supply of, and demand for, middle-market debt capital creates attractive pricing dynamics for investors such as BDCs. The negotiated nature of middle-market financings also generally provides for more favorable terms to the lenders, including stronger covenant and reporting packages, better call protection and lender-protective change of control provisions. We believe that BDCs have flexibility to develop loans that reflect each borrower’s distinct situation, provide long-term relationships and a potential source for future capital, which renders BDCs, including us, attractive lenders.
Portfolio and Investment Activity
As of June 30, 2024, our portfolio based on fair value consisted of 92.8% first-lien debt investments, 0.8% second-lien investments, 1.3% mezzanine debt investments, 4.9% equity and other investments and 0.2% structured credit investments. As of December 31, 2023, our portfolio based on fair value consisted of 91.3% first-lien debt investments, 1.1% second-lien debt investments, 1.2% mezzanine debt investments, 4.7% equity and other investments and 1.7% structured credit investments.
As of June 30, 2024 and December 31, 2023, our weighted average total yield of debt and income producing securities at fair value (which includes interest income and amortization of fees and discounts) was 13.8% and 14.1%, respectively, and our weighted
50
average total yield of debt and income-producing securities at amortized cost (which includes interest income and amortization of fees and discounts) was 13.9% and 14.2%, respectively.
As of June 30, 2024 and December 31, 2023, we had investments in 109 portfolio companies (including 4 structured credit investments, which include each series of collateralized loan obligation as a separate portfolio company investment) and 136 portfolio companies (including 42 structured credit investments, which include each series of collateralized loan obligation as a separate portfolio company investment), respectively, with an aggregate fair value of $3,317.1 million and $3,283.1 million, respectively.
For the three months ended June 30, 2024, the principal amount of new investments funded was $163.6 million in eight new portfolio companies and five existing portfolio companies. For this period, we had $290.3 million aggregate principal amount in exits and repayments.
For the three months ended June 30, 2023, the principal amount of new investments funded was $240.0 million in six new portfolio companies and four existing portfolio companies. For this period, we had $114.0 million aggregate principal amount in exits and repayments.
Our investment activity for the three months ended June 30, 2024 and 2023 is presented below (information presented herein is at par value unless otherwise indicated).
|
|
Three Months Ended |
|
|||||
($ in millions) |
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||
New investment commitments: |
|
|
|
|
|
|
||
Gross originations (1) |
|
$ |
1,858.8 |
|
|
$ |
1,522.9 |
|
Less: Syndications/sell downs (1) |
|
|
1,627.8 |
|
|
|
1,262.5 |
|
Total new investment commitments |
|
$ |
231.0 |
|
|
$ |
260.4 |
|
Principal amount of investments funded: |
|
|
|
|
|
|
||
First-lien |
|
$ |
163.6 |
|
|
$ |
209.3 |
|
Second-lien |
|
|
— |
|
|
|
30.0 |
|
Mezzanine |
|
|
— |
|
|
|
— |
|
Equity and other |
|
|
— |
|
|
|
0.7 |
|
Structured Credit |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
163.6 |
|
|
$ |
240.0 |
|
Principal amount of investments sold or repaid: |
|
|
|
|
|
|
||
First-lien |
|
$ |
265.2 |
|
|
$ |
112.3 |
|
Second-lien |
|
|
— |
|
|
|
— |
|
Mezzanine |
|
|
— |
|
|
|
— |
|
Equity and other |
|
|
25.1 |
|
|
|
1.7 |
|
Structured Credit |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
290.3 |
|
|
$ |
114.0 |
|
Number of new investment commitments in |
|
|
8 |
|
|
|
6 |
|
Average new investment commitment amount in |
|
$ |
21.2 |
|
|
$ |
41.3 |
|
Weighted average term for new investment |
|
|
6.1 |
|
|
|
6.7 |
|
Percentage of new debt investment commitments |
|
|
100.0 |
% |
|
|
100.0 |
% |
Weighted average interest rate of new |
|
|
11.6 |
% |
|
|
12.6 |
% |
Weighted average spread over reference rate of new |
|
|
6.6 |
% |
|
|
7.3 |
% |
Weighted average interest rate on investments |
|
|
13.4 |
% |
|
|
15.6 |
% |
51
As of June 30, 2024 and December 31, 2023, our investments consisted of the following:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||||||||||
($ in millions) |
|
Amortized Cost |
|
|
Fair Value |
|
|
Amortized Cost |
|
|
Fair Value |
|
||||
First-lien debt investments |
|
$ |
3,048.8 |
|
|
$ |
3,078.5 |
|
|
$ |
2,956.1 |
|
|
$ |
2,996.2 |
|
Second-lien debt investments |
|
|
52.5 |
|
|
|
28.0 |
|
|
|
51.4 |
|
|
|
36.0 |
|
Mezzanine debt investments |
|
|
41.1 |
|
|
|
43.5 |
|
|
|
38.0 |
|
|
|
39.5 |
|
Equity and other investments |
|
|
156.4 |
|
|
|
161.0 |
|
|
|
152.6 |
|
|
|
155.6 |
|
Structured credit investments |
|
|
5.8 |
|
|
|
6.1 |
|
|
|
52.9 |
|
|
|
55.8 |
|
Total |
|
$ |
3,304.6 |
|
|
$ |
3,317.1 |
|
|
$ |
3,251.0 |
|
|
$ |
3,283.1 |
|
The following tables show the fair value and amortized cost of our performing and non-accrual investments as of June 30, 2024 and December 31, 2023:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||||||||||
($ in millions) |
|
Fair Value |
|
|
Percentage |
|
|
Fair Value |
|
|
Percentage |
|
||||
Performing |
|
$ |
3,280.0 |
|
|
|
98.9 |
% |
|
$ |
3,262.4 |
|
|
|
99.4 |
% |
Non-accrual (1) |
|
|
37.1 |
|
|
|
1.1 |
|
|
|
20.7 |
|
|
|
0.6 |
|
Total |
|
$ |
3,317.1 |
|
|
|
100.0 |
% |
|
$ |
3,283.1 |
|
|
|
100.0 |
% |
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||||||||||
($ in millions) |
|
Amortized Cost |
|
|
Percentage |
|
|
Amortized Cost |
|
|
Percentage |
|
||||
Performing |
|
$ |
3,235.3 |
|
|
|
97.9 |
% |
|
$ |
3,222.9 |
|
|
|
99.1 |
% |
Non-accrual (1) |
|
|
69.3 |
|
|
|
2.1 |
|
|
|
28.1 |
|
|
|
0.9 |
|
Total |
|
$ |
3,304.6 |
|
|
|
100.0 |
% |
|
$ |
3,251.0 |
|
|
|
100.0 |
% |
The weighted average yields and interest rates of our performing debt investments at fair value as of June 30, 2024 and December 31, 2023 were as follows:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
Weighted average total yield of debt and income |
|
|
13.8 |
% |
|
|
14.1 |
% |
Weighted average interest rate of debt and income |
|
|
13.3 |
% |
|
|
13.7 |
% |
Weighted average spread over reference rate of all floating |
|
|
8.0 |
% |
|
|
8.3 |
% |
The Adviser monitors our portfolio companies on an ongoing basis. The Adviser monitors the financial trends of each portfolio company to determine if it is meeting its business plans and to assess the appropriate course of action for each company. The Adviser has a number of methods of evaluating and monitoring the performance of our investments, which may include the following:
52
As part of the monitoring process, the Adviser regularly assesses the risk profile of each of our investments and, on a quarterly basis, grades each investment on a risk scale of 1 to 5. Risk assessment is not standardized in our industry and our risk assessment may not be comparable to ones used by our competitors. Our assessment is based on the following categories:
The following table shows the distribution of our investments on the 1 to 5 investment performance rating scale at fair value as of June 30, 2024 and December 31, 2023. Investment performance ratings are accurate only as of those dates and may change due to subsequent developments relating to a portfolio company’s business or financial condition, market conditions or developments, and other factors.
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||||||||||
Investment |
|
Investments at |
|
|
|
|
|
Investments at |
|
|
|
|
||||
Performance |
|
Fair Value |
|
|
Percentage of |
|
|
Fair Value |
|
|
Percentage of |
|
||||
Rating |
|
($ in millions) |
|
|
Total Portfolio |
|
|
($ in millions) |
|
|
Total Portfolio |
|
||||
1 |
|
$ |
3,058.4 |
|
|
|
92.2 |
% |
|
$ |
2,939.1 |
|
|
|
89.5 |
% |
2 |
|
|
139.1 |
|
|
|
4.2 |
|
|
|
196.6 |
|
|
|
6.0 |
|
3 |
|
|
82.5 |
|
|
|
2.5 |
|
|
|
126.7 |
|
|
|
3.9 |
|
4 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
5 |
|
|
37.1 |
|
|
|
1.1 |
|
|
|
20.7 |
|
|
|
0.6 |
|
Total |
|
$ |
3,317.1 |
|
|
|
100.0 |
% |
|
$ |
3,283.1 |
|
|
|
100.0 |
% |
Results of Operations
Operating results for the three and six months ended June 30, 2024 and 2023 were as follows:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
($ in millions) |
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||||
Total investment income |
|
$ |
121.8 |
|
|
$ |
107.6 |
|
|
$ |
239.6 |
|
|
$ |
204.1 |
|
Less: Net expenses |
|
|
65.4 |
|
|
|
57.9 |
|
|
|
130.0 |
|
|
|
111.1 |
|
Net investment income before income taxes |
|
|
56.4 |
|
|
|
49.7 |
|
|
|
109.6 |
|
|
|
93.0 |
|
Less: Income taxes, including excise taxes |
|
|
1.3 |
|
|
|
0.9 |
|
|
|
2.1 |
|
|
|
1.3 |
|
Net investment income |
|
|
55.1 |
|
|
|
48.8 |
|
|
|
107.5 |
|
|
|
91.7 |
|
Net realized gains (losses) (1) |
|
|
1.8 |
|
|
|
1.5 |
|
|
|
3.9 |
|
|
|
6.7 |
|
Net change in unrealized gains (losses) (1) |
|
|
(9.5 |
) |
|
|
2.8 |
|
|
|
(16.5 |
) |
|
|
7.6 |
|
Net increase (decrease) in net assets resulting from operations |
|
$ |
47.4 |
|
|
$ |
53.1 |
|
|
$ |
94.9 |
|
|
$ |
106.0 |
|
53
Investment Income
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
($ in millions) |
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||||
Interest from investments |
|
$ |
105.0 |
|
|
$ |
98.1 |
|
|
$ |
209.7 |
|
|
$ |
188.2 |
|
Paid-in-kind interest income |
|
|
9.4 |
|
|
|
4.6 |
|
|
|
17.5 |
|
|
|
7.7 |
|
Dividend income |
|
|
1.8 |
|
|
|
0.8 |
|
|
|
2.6 |
|
|
|
1.4 |
|
Other income |
|
|
5.6 |
|
|
|
4.1 |
|
|
|
9.8 |
|
|
|
6.8 |
|
Total investment income |
|
$ |
121.8 |
|
|
$ |
107.6 |
|
|
$ |
239.6 |
|
|
$ |
204.1 |
|
Interest from investments, which includes amortization of upfront fees and prepayment fees, increased from $98.1 million for the three months ended June 30, 2023 to $105.0 million for the three months ended June 30, 2024. The increase in interest from investments was primarily the result of an increase in interest earned due to an increase in reference rates for the period ended June 30, 2024 compared to the same period in June 30, 2023 and a larger average portfolio size for the period ended June 30, 2024 compared to the same period in 2023. Paid-in-kind interest income increased from $4.6 million for the three months ended June 30, 2023 to $9.4 million for the three months ended June 30, 2024 due to increased PIK election. Dividend income increased from $0.8 million for the three months ended June 30, 2023 to $1.8 million for the three months ended June 30, 2024 due to increased investments in dividend yielding securities compared to the same period in 2023. Other income increased from $4.1 million for the three months ended June 30, 2023 to $5.6 million for the three months ended June 30, 2024, primarily due to increased amendment fees during the three months ended June 30, 2024 compared to the same period in 2023.
Interest from investments, which includes amortization of upfront fees and prepayment fees, increased from $188.2 million for the six months ended June 30, 2023 to $209.7 million for the six months ended June 30, 2024. The increase in interest from investments was primarily the result of an increase in interest earned due to an increase in reference rates for the period ended June 30, 2024 compared to the same period in June 30, 2023 and a larger average portfolio size for the period ended June 30, 2024 compared to the same period in 2023. Paid-in-kind interest income increased from $7.7 million for the six months ended June 30, 2023 to $17.5 million for the six months ended June 30, 2024 due to increased PIK election. Dividend income increased from $1.4 million for the six months ended June 30, 2023 to $2.6 million for the six months ended June 30, 2024 due to increased investments in dividend yielding securities compared to the same period in 2023. Other income increased from $6.8 million for the six months ended June 30, 2023 to $9.8 million for the six months ended June 30, 2024, primarily due to increased amendment fees during the six months ended June 30, 2024 compared to the same period in 2023.
Expenses
Operating expenses for the three and six months ended June 30, 2024 and 2023 were as follows:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
($ in millions) |
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||||
Interest |
|
$ |
39.2 |
|
|
$ |
32.4 |
|
|
$ |
78.3 |
|
|
$ |
60.9 |
|
Management fees (net of waivers) |
|
|
12.5 |
|
|
|
11.1 |
|
|
|
24.7 |
|
|
|
21.6 |
|
Incentive fees on net investment income |
|
|
11.4 |
|
|
|
10.5 |
|
|
|
22.3 |
|
|
|
20.0 |
|
Incentive fees on net capital gains |
|
|
(1.3 |
) |
|
|
0.7 |
|
|
|
(2.2 |
) |
|
|
2.5 |
|
Professional fees |
|
|
2.1 |
|
|
|
1.8 |
|
|
|
3.9 |
|
|
|
3.5 |
|
Directors’ fees |
|
|
0.2 |
|
|
|
0.2 |
|
|
|
0.4 |
|
|
|
0.4 |
|
Other general and administrative |
|
|
1.3 |
|
|
|
1.2 |
|
|
|
2.6 |
|
|
|
2.2 |
|
Net Expenses |
|
$ |
65.4 |
|
|
$ |
57.9 |
|
|
$ |
130.0 |
|
|
$ |
111.1 |
|
54
Interest
Interest expense, including other debt financing expenses, increased from $32.4 million for the three months ended June 30, 2023 to $39.2 million for the three months ended June 30, 2024. This increase was primarily due to an increase in the average interest rate on our debt outstanding and an increase in the average debt outstanding from $1,713.0 million for the three months ended June 30, 2023 to $1,857.8 million for the three months ended June 30, 2024. The average interest rate on our debt outstanding increased from 7.1% for the three months ended June 30, 2023 to 7.7% for the three months ended June 30, 2024.
Interest expense, including other debt financing expenses, increased from $60.9 million for the six months ended June 30, 2023 to $78.3 million for the six months ended June 30, 2024. This increase was primarily due to an increase in the average interest rate on our debt outstanding and an increase in the average debt outstanding from $1,641.8 million for the six months ended June 30, 2023 to $1,870.9 million for the six months ended June 30, 2024. The average interest rate on our debt outstanding increased from 6.9% for the six months ended June 30, 2023 to 7.7% for the six months ended June 30, 2024.
Management Fees
Management Fees (gross of waivers) increased from $11.4 million for the three months ended June 30, 2023 to $12.8 million for the three months ended June 30, 2024 due to an increase in average assets for the three months ended June 30, 2024 compared to the same period in 2023. Management Fees (net of waivers) increased from $11.1 million for the three months ended June 30, 2023 to $12.5 million for the three months ended June 30, 2024. The Adviser waived Management Fees of $0.3 million for the three months ended June 30, 2024 pursuant to the Leverage Waiver. The Adviser waived Management Fees of $0.3 million for the three months ended June 30, 2023 pursuant to the Leverage Waiver.
Management Fees (gross of waivers) increased from $22.1 million for the six months ended June 30, 2023 to $25.4 million for the six months ended June 30, 2024 due to an increase in average assets for the six months ended June 30, 2024 compared to the same period in 2023. Management Fees (net of waivers) increased from $21.6 million for the six months ended June 30, 2023 to $24.7 million for the six months ended June 30, 2024. The Adviser waived Management Fees of $0.7 million for the six months ended June 30, 2024 pursuant to the Leverage Waiver. The Adviser waived Management Fees of 0.6 million for the six months ended June 30, 2023 pursuant to the Leverage Waiver.
Any waived Management Fees are not subject to recoupment by the Adviser.
Incentive Fees
Incentive Fees related to pre-Incentive Fee net investment income increased from $10.5 million for the three months ended June 30, 2023 to $11.4 million for the three months ended June 30, 2024. This increase resulted from an increase in reference rates for the three months ended June 30, 2024. The Adviser did not waive any Incentive Fees related to pre-Incentive Fee net investment income for the three months ended June 30, 2024 or 2023. For the three months ended June 30, 2024 and 2023, $(1.3) million and $0.7 million, respectively, of Incentive Fees were accrued related to Capital Gains Fees. As of June 30, 2024, these accrued Incentive Fees are not contractually payable to the Adviser.
Incentive Fees related to pre-Incentive Fee net investment income increased from $20.0 million for the six months ended June 30, 2023 to $22.3 million for the six months ended June 30, 2024. This increase resulted from an increase in reference rates for the six months ended June 30, 2024. The Adviser did not waive any Incentive Fees related to pre-Incentive Fee net investment income for the six months ended June 30, 2024 or 2023. For the six months ended June 30, 2024 and 2023, $(2.2) million and $2.5 million, respectively, of Incentive Fees were accrued related to Capital Gains Fees. As of June 30, 2024, these accrued Incentive Fees are not contractually payable to the Adviser.
Professional Fees and Other General and Administrative Expenses
Professional fees increased from $1.8 million for the three months ended June 30, 2023 to $2.1 million for the three months ended June 30, 2024. Other general and administrative expenses increased from $1.2 million for the three months ended June 30, 2023 to $1.3 million for the three months ended June 30, 2024.
Professional fees increased from $3.5 million for the six months ended June 30, 2023 to $3.9 million for the six months ended June 30, 2024. Other general and administrative expenses increased from $2.2 million for the six months ended June 30, 2023 to $2.6 million for the six months ended June 30, 2024.
55
Income Taxes, Including Excise Taxes
We have elected to be treated as a RIC under Subchapter M of the Code, and we intend to operate in a manner so as to continue to qualify for the tax treatment applicable to RICs. To qualify as a RIC, we must, among other things, distribute to our stockholders in each taxable year generally at least 90% of our investment company taxable income, as defined by the Code, and net tax-exempt income for that taxable year. To maintain our RIC status, we, among other things, have made and intend to continue to make the requisite distributions to our stockholders, which generally relieve us from corporate-level U.S. federal income taxes.
Depending on the level of taxable income earned in a tax year, we can be expected to carry forward taxable income (including net capital gains, if any) in excess of current year dividend distributions from the current tax year into the next tax year and pay a nondeductible 4% U.S. federal excise tax on such taxable income, as required. To the extent that we determine that our estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such income, we accrue excise tax on estimated excess taxable income.
For the three and six months ended June 30, 2024, we recorded a net expense of $1.2 million and $2.1 million, respectively, for U.S. federal excise tax and other taxes. For the three and six months ended June 30, 2023, we recorded a net expense of $0.9 million and $1.3 million, respectively, for U.S. federal excise tax and other taxes.
Net Realized and Unrealized Gains and Losses
The following table summarizes our net realized and unrealized gains (losses) for the three and six months ended June 30, 2024 and 2023:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
($ in millions) |
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||||
Net realized gains (losses) on investments |
|
$ |
1.6 |
|
|
$ |
1.6 |
|
|
$ |
3.9 |
|
|
$ |
6.4 |
|
Net realized gains (losses) on foreign currency transactions |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.8 |
) |
|
|
0.1 |
|
Net realized gains (losses) on foreign currency investments (1) |
|
|
(1.7 |
) |
|
(0.0) |
|
|
|
(2.4 |
) |
|
(0.0) |
|
||
Net realized gains (losses) on foreign currency borrowings (1) |
|
|
2.0 |
|
|
(0.0) |
|
|
|
3.2 |
|
|
|
0.2 |
|
|
Net Realized Gains (Losses) |
|
$ |
1.8 |
|
|
$ |
1.5 |
|
|
$ |
3.9 |
|
|
$ |
6.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in unrealized gains on investments |
|
$ |
13.9 |
|
|
$ |
18.0 |
|
|
$ |
23.7 |
|
|
$ |
40.0 |
|
Change in unrealized (losses) on investments |
|
|
(21.8 |
) |
|
|
(13.1 |
) |
|
|
(43.2 |
) |
|
|
(29.6 |
) |
Net Change in Unrealized Gains (Losses) on |
|
$ |
(7.9 |
) |
|
$ |
4.9 |
|
|
$ |
(19.5 |
) |
|
$ |
10.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gains (losses) on foreign currency borrowings |
|
|
(1.6 |
) |
|
|
(2.0 |
) |
|
|
3.0 |
|
|
$ |
(2.7 |
) |
Unrealized gains (losses) on foreign currency cash (1) |
|
(0.0) |
|
|
|
0.0 |
|
|
(0.0) |
|
|
|
(0.3 |
) |
||
Unrealized gains (losses) on interest rate swaps |
|
|
— |
|
|
|
(0.1 |
) |
|
|
— |
|
|
|
0.2 |
|
Net Change in Unrealized Gains (Losses) on Foreign |
|
$ |
(1.6 |
) |
|
$ |
(2.1 |
) |
|
$ |
3.0 |
|
|
$ |
(2.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Change in Unrealized Gains (Losses) |
|
$ |
(9.5 |
) |
|
$ |
2.8 |
|
|
$ |
(16.5 |
) |
|
$ |
7.6 |
|
For the three and six months ended June 30, 2024, we had net realized gains on investments of $1.6 million and $3.9 million, respectively, primarily driven by nineteen investments and thirty-six investments, respectively. For the three and six months ended June 30, 2024, we had net realized losses of $0.1 million and net realized losses of $0.8 million, respectively on foreign currency transactions, primarily as a result of translating foreign currency related to our non-USD denominated investments. For the three and six months ended June 30, 2024, we had net realized losses of $1.7 million and net realized losses of $2.4, respectively, on foreign currency investments. For the three and six months ended June 30, 2024, we had net realized gains of $2.0 million and net realized gains of $3.2 million on foreign currency borrowings. The net realized gains and losses on foreign currency borrowings were a result of payments on our revolving credit facility.
56
For the three months ended June 30, 2024, we had $13.9 million in unrealized gains on 57 portfolio company investments, which was offset by $21.8 million in unrealized losses on 73 portfolio company investments. Unrealized gains primarily resulted from tightening credit spreads and positive portfolio company specific developments. Unrealized losses primarily resulted from negative portfolio company specific developments and the reversal of prior period unrealized gains due to realizations. For the six months ended June 30, 2024, we had $23.7 million in unrealized gains on 63 portfolio company investments, which was offset by $43.2 million in unrealized losses on 89 portfolio company investments. Unrealized gains primarily resulted from tightening credit spreads and positive portfolio company specific developments. Unrealized losses primarily resulted from negative portfolio company specific developments and the reversal of prior period unrealized gains due to realizations.
For the three and six months ended June 30, 2024, we had unrealized losses on foreign currency borrowings of $1.6 million and unrealized gains of $3.0 million, respectively, on foreign currency borrowings, as a result of fluctuations in the AUD, CAD, EUR, SEK and GBP exchange rates. For the three and six months ended June 30, 2024, we had unrealized losses on foreign currency cash of less than $0.1 million and unrealized losses of less than $0.1 million, respectively. For the three and six months ended June 30, 2024, we had no unrealized gains or losses on interest rate swaps, respectively.
For the three and six months ended June 30, 2023, we had net realized gains on investments of $1.6 million and $6.4 million, respectively, primarily driven by one investment and one investment, respectively. For the three and six months ended June 30, 2023, we had net realized losses of $0.1 million and net realized gains of $0.1 million, respectively on foreign currency transactions, primarily as a result of translating foreign currency related to our non-USD denominated investments. For the three and six months ended June 30, 2023, we had net realized losses of less than $0.1 million, respectively, on foreign currency investments. For the three and six months ended June 30, 2023, we had net realized losses of less than $0.1 million and net realized gains of $0.2 million on foreign currency borrowings. The net realized gains and losses on foreign currency borrowings were a result of payments on our revolving credit facility.
For the three months ended June 30, 2023, we had $18.0 million in unrealized gains on 102 portfolio company investments, which was offset by $13.1 million in unrealized losses on 30 portfolio company investments. Unrealized gains resulted from an increase in fair value, primarily due to positive portfolio company specific developments. Unrealized losses primarily resulted from widening credit spreads, lesser impacts from the reversal of prior period unrealized gains due to realizations and negative portfolio company specific developments. For the six months ended June 30, 2023, we had $40.0 million in unrealized gains on 108 portfolio company investments, which was offset by $29.6 million in unrealized losses on 26 portfolio company investments. Unrealized gains resulted from an increase in fair value, primarily due to positive portfolio company specific developments. Unrealized losses primarily resulted from widening credit spreads, and also lesser impacts from the reversal of prior period unrealized gains due to realizations and negative portfolio company specific developments.
For the three and six months ended June 30, 2023, we had unrealized losses on foreign currency borrowings of $2.0 million and $2.7 million, respectively, on foreign currency borrowings, as a result of fluctuations in the AUD, CAD, EUR and GBP exchange rates. For the three and six months ended June 30, 2023, we had unrealized gains on foreign currency cash of less than $0.1 million and unrealized losses of $0.3 million, respectively. For the three and six months ended June 30, 2023, we had unrealized losses on interest rate swaps of $0.1 million and unrealized gains of $0.2 million, respectively, due to fluctuations in interest rates and the periodic settlement of interest rate swaps.
Realized Gross Internal Rate of Return
Since we began investing in 2011 through June 30, 2024, weighted by capital invested, our exited investments have generated an average realized gross internal rate of return to us of 17.3% (based on total capital invested of $7.5 billion and total proceeds from these exited investments of $9.5 billion). Ninety two percent of these exited investments resulted in a realized gross internal rate of return to us of 10% or greater.
Gross IRR, with respect to an investment, is calculated based on the dates that we invested capital and dates we received distributions, regardless of when we made distributions to our stockholders. Initial investments are assumed to occur at time zero, and all cash flows are deemed to occur on the fifteenth of each month in which they occur.
Gross IRR reflects historical results relating to our past performance and is not necessarily indicative of our future results. In addition, gross IRR does not reflect the effect of Management Fees, expenses, Incentive Fees or taxes borne, or to be borne, by us or our stockholders, and would be lower if it did.
Average gross IRR is the average of the gross IRR for each of our exited investments (each calculated as described above), weighted by the total capital invested for each of those investments.
57
Average gross IRR on our exited investments reflects only invested and realized cash amounts as described above, and does not reflect any unrealized gains or losses in our portfolio.
Internal rate of return, or IRR, is a measure of our discounted cash flows (inflows and outflows). Specifically, IRR is the discount rate at which the net present value of all cash flows is equal to zero. That is, IRR is the discount rate at which the present value of total capital invested in each of our investments is equal to the present value of all realized returns from that investment. Our IRR calculations are unaudited.
Capital invested, with respect to an investment, represents the aggregate cost basis allocable to the realized or unrealized portion of the investment, net of any upfront fees paid at closing for the term loan portion of the investment. Capital invested also includes realized losses on hedging activity, with respect to an investment, which represents any inception-to-date realized losses on foreign currency forward contracts allocable to the investment, if any.
Realized returns, with respect to an investment, represents the total cash received with respect to each investment, including all amortization payments, interest, dividends, prepayment fees, upfront fees, administrative fees, agent fees, amendment fees, accrued interest, and other fees and proceeds. Realized returns also include realized gains on hedging activity, with respect to an investment, which represents any inception-to-date realized gains on foreign currency forward contracts allocable to the investment, if any.
Interest Rate and Foreign Currency Hedging
We use interest rate swaps to hedge our fixed rate debt and certain fixed rate investments. We have designated certain interest rate swaps to be in a hedge accounting relationship. See Note 2 for additional disclosure regarding our accounting for derivative instruments designated in a hedge accounting relationship. See Note 5 for additional disclosure regarding these derivative instruments and the interest payments paid and received. See Note 7 for additional disclosure regarding the carrying value of our debt.
Our current approach to hedging the foreign currency exposure in our non-U.S. dollar denominated investments is primarily to borrow the par amount in local currency under our Revolving Credit Facility to fund these investments. For the six months ended June 30, 2024 and 2023, we had $3.0 million of unrealized gains and $2.7 million of unrealized losses, respectively, on the translation of our non-U.S. dollar denominated debt into U.S. dollars; such amounts approximate the corresponding unrealized gains and losses on the translation of our non-U.S. dollar denominated investments into U.S. dollars for the six months ended June 30, 2024 and 2023. See Note 2 for additional disclosure regarding our accounting for foreign currency. See Note 7 for additional disclosure regarding the amounts of outstanding debt denominated in each foreign currency at June 30, 2024. See our Consolidated Schedule of Investments for additional disclosure regarding the foreign currency amounts (in both par and fair value) of our non-U.S. dollar denominated investments.
Financial Condition, Liquidity and Capital Resources
Our liquidity and capital resources are derived primarily from proceeds from equity issuances, advances from our credit facilities, and cash flows from operations. The primary uses of our cash and cash equivalents are:
We intend to continue to generate cash primarily from cash flows from operations, future borrowings and future offerings of securities. We may from time to time enter into additional debt facilities, increase the size of existing facilities or issue debt securities. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities or issue preferred stock if immediately after the borrowing or issuance the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. For more information, see “Key Components of Our Results of Operations — Leverage” above. As of June 30, 2024 and December 31, 2023, our asset coverage ratio was 189.9% and 181.6%, respectively. We carefully consider our unfunded commitments for the purpose of planning our capital resources and ongoing liquidity, including our financial leverage. Further, we maintain sufficient borrowing capacity within the 150% asset coverage limitation under the 1940 Act and the asset coverage limitation under our credit facilities to cover any outstanding unfunded commitments we are required to fund.
58
Cash and cash equivalents as of June 30, 2024, taken together with cash available under our credit facilities, is expected to be sufficient for our investing activities and to conduct our operations in the near term. As of June 30, 2024, we had approximately $1.2 billion of availability on our Revolving Credit Facility, subject to asset coverage limitations.
As of June 30, 2024, we had $34.6 million in cash and cash equivalents, including $29.5 million of restricted cash. During the six months ended June 30, 2024, cash provided by operating activities was $59.7 million, primarily attributable to an increase in net assets resulting from operations of $94.9 million and repayments and proceeds from investments of $433.7 million, which was offset by funding portfolio investments of $458.9 million and other operating activity of $10.0 million. Cash used in financing activities was $(50.3) million during the period, primarily attributable to paydowns on our Revolving Credit Facility of $905.2 million, dividends paid to stockholders of $85.6 million, deferred financing costs of $8.8 million, which was offset due to borrowings of $856.0 million and proceeds from the issuance of common stock $93.3 million.
Equity
On May 15, 2023, we issued a total of 4,500,000 shares of common stock at $17.33 per share. Net of underwriting fees and offering costs, we received total cash proceeds of $77.6 million. Subsequent to the offering we issued an additional 675,000 shares on June 12, 2023 pursuant to the overallotment option granted to underwriters and received, net of underwriting fees, total cash proceeds of $11.7 million.
On March 5, 2024, we issued a total of 4,000,000 shares of common stock at $20.52 per share. Net of underwriting fees and offering costs, we received total cash proceeds of $81.5 million. Subsequent to the offering, the Company issued an additional 600,000 shares on April 1, 2024 pursuant to the overallotment option granted to underwriters and received, net of offering and underwriting fees, additional total cash proceeds of $11.9 million.
During the six months ended June 30, 2024 and 2023, we also issued 587,706 and 676,944 shares of our common stock, respectively, to investors who have not opted out of our dividend reinvestment plan for proceeds of $11.9 million and $11.8 million, respectively.
On August 4, 2015, our Board authorized us to acquire up to $50 million in aggregate of our common stock from time to time over an initial six month period, and has continued to authorize the refreshment of the $50 million amount authorized under and extension of the stock repurchase program prior to its expiration since that time, most recently as of May 1, 2024. The amount and timing of stock repurchases under the program may vary depending on market conditions, and no assurance can be given that any particular amount of common stock will be repurchased.
No shares were repurchased for the three and six months ended June 30, 2024 and 2023.
Debt
Revolving Credit Facility
In August 2012, we entered into a senior secured revolving credit agreement with Truist Bank (as a successor by merger to SunTrust Bank), as administrative agent, and J.P. Morgan Chase Bank, N.A., as syndication agent, and certain other lenders (as amended and restated, the “Revolving Credit Facility”).
As of June 30, 2024, aggregate commitments under the facility were $1.7 billion. The facility includes an uncommitted accordion feature that allows the Company, under certain circumstances, to increase the size of the facility to up to $2.0 billion.
Pursuant to the Fourteenth Amendment dated June 12, 2023, with respect to $1.465 billion in commitments, the revolving period, during which period we, subject to certain conditions, may make borrowings under the facility, was extended to June 11, 2027 and the stated maturity date was extended to June 12, 2028. For the remaining $220.0 million of commitments, (A) with respect to $50.0 million of commitments, the revolving period ends on February 4, 2025 and the stated maturity is February 4, 2026 and (B) with respect to $170.0 million of commitments, the revolving period ends April 24, 2026 and the stated maturity is April 23, 2027.
Pursuant to the Fifteenth Amendment dated April 24, 2024, aggregate commitments were increased to $1.7 billion. With respect to $1.505 billion of commitments, the revolving period was extended to April 24, 2028 and the stated maturity was extended to April 24, 2029. For the remaining $195.0 million of commitments, (A) with respect to $25.0 million of commitments, the revolving period ends on February 4, 2025 and the stated maturity is February 4, 2026 and (B) with respect to $170.0 million of commitments, the revolving period ends April 24, 2026 and the stated maturity is April 23, 2027.
59
We may borrow amounts in U.S. dollars or certain other permitted currencies. As of June 30, 2024, we had outstanding debt denominated in Australian dollars (AUD) of 64.9 million, British pounds (GBP) of 41.0 million, Canadian dollars (CAD) of 5.0 million, Swedish Krona (SEK) of 78.1 million and Euro (EUR) of 101.2 million on its Revolving Credit Facility, included in the Outstanding Principal amount in the table below. As of December 31, 2023, the Company had outstanding debt denominated in Australian dollars (AUD) of 66.4 million, British pounds (GBP) of 32.3 million, Canadian dollars (CAD) of 96.8 million, and Euro (EUR) of 57.2 million on our Revolving Credit Facility, included in the Outstanding Principal amount in the table below.
The Revolving Credit Facility also provides for the issuance of letters of credit up to an aggregate amount of $75.0 million. As of June 30, 2024 and December 31, 2023 the Company had $3.0 million and $0.2 million, respectively, letters of credit issued through the Revolving Credit Facility. The amount available for borrowing under the Revolving Credit Facility is reduced by any letters of credit issued through the Revolving Credit Facility.
Amounts drawn under the Revolving Credit Facility, including amounts drawn in respect of letters of credit, bear interest at either the applicable reference rate plus an applicable credit spread adjustment, plus a margin of either 1.75% or 1.875%, or the base rate plus a margin of either 0.75% or 0.875%, in each case, based on the total amount of the borrowing base relative to the sum of the total commitments (or, if greater, the total exposure) under the Revolving Credit Facility plus certain other designated secured debt. We may elect either the applicable reference rate or base rate at the time of drawdown, and loans may be converted from one rate to another at any time, subject to certain conditions. We also pay a fee of 0.375% on undrawn amounts and, in respect of each undrawn letter of credit, a fee and interest rate equal to the then applicable margin while the letter of credit is outstanding.
The Revolving Credit Facility is guaranteed by Sixth Street SL SPV, LLC, TC Lending, LLC and Sixth Street SL Holding, LLC. The Revolving Credit Facility is secured by a perfected first-priority security interest in substantially all the portfolio investments held by us and each guarantor. Proceeds from borrowings may be used for general corporate purposes, including the funding of portfolio investments.
The Revolving Credit Facility includes customary events of default, as well as customary covenants, including restrictions on certain distributions and financial covenants. In accordance with the terms of the Fifteenth Amendment, the financial covenants require:
The Revolving Credit Facility also contains certain additional concentration limits in connection with the calculation of the borrowing base, based on the Obligor Asset Coverage Ratio.
Net proceeds received from the Company’s common stock issuances in February 2024 and April 2024 and net proceeds received from the issuance of the 2029 Notes were used to pay down borrowings on the Revolving Credit Facility.
As of June 30, 2024 and December 31, 2023, the Company was in compliance with the terms of the Revolving Credit Facility.
2023 Notes
In January 2018, the Company issued $
2024 Notes
In November 2019, the Company issued $
60
On February 5, 2020, the Company issued an additional $
In connection with the 2024 Notes offering and the reopening of the 2024 Notes, the Company entered into interest rate swaps to align the interest rates of its liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. The notional amount of the two interest rates swaps is $300.0 million and $50.0 million, respectively, each of which matures on November 1, 2024, matching the maturity date of the 2024 Notes. As a result of the swaps, the Company’s effective interest rate on the 2024 Notes is SOFR plus 2.54% (on a weighted average basis). The interest expense related to the 2024 Notes is offset by proceeds received from the interest rate swaps designated as a hedge. The swap adjusted interest expense is included as a component of interest expense on the Company’s Consolidated Statements of Operations. As of June 30, 2024, and December 31, 2023, the effective hedge interest rate swaps had a fair value of $(5.0) million and $(10.4) million, respectively, which is offset within interest expense by an equal, but opposite, fair value change for the hedged risk on the 2024 Notes.
During the year ended December 31, 2020, the Company repurchased on the open market and extinguished $2.5 million in aggregate principal amount of the 2024 Notes for $2.4 million. In connection with the repurchase of the 2024 Notes, the Company entered into a floating-to-fixed interest rate swap with a notional amount equal to the amount of 2024 Notes repurchased, which had the effect of reducing the notional exposure of the fixed-to-floating interest rate swaps, which were entered into in connection with the issuance of the 2024 Notes, to match the remaining principal amount of the 2024 Notes outstanding. As a result of the swap, the Company’s effective interest rate on the outstanding 2024 Notes is SOFR plus 2.54% (on a weighted average basis).
2026 Notes
On February 3, 2021, the Company issued $
In connection with the issuance of the 2026 Notes, the Company entered into an interest rate swap to align the interest rates of its liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. The notional amount of the interest rate swap is $300.0 million, which matures on August 1, 2026, matching the maturity date of the 2026 Notes. As a result of the swap, the Company’s effective interest rate on the 2026 Notes is SOFR plus 2.17%. The interest expense related to the 2026 Notes is offset by proceeds received from the interest rate swaps designated as a hedge. The swap adjusted interest expense is included as a component of interest expense on the Company’s Consolidated Statements of Operations. As of June 30, 2024 and December 31, 2023, the effective hedge interest rate swaps had a fair value of $(25.4) million and $(26.1) million, respectively, which is offset within interest expense by an equal, but opposite, fair value change for the hedged risk on the 2026 Notes.
2028 Notes
On August 14, 2023, the Company issued $
In connection with the issuance of the 2028 Notes, the Company entered into an interest rate swap to align the interest rates of its liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. The notional amount of the interest rate swap is $300.0 million, which matures on August 14, 2028, matching the maturity date of the 2028 Notes. As a result of the swap, the Company’s effective interest rate on the 2028 Notes is SOFR plus 2.99%. The interest expense related to the 2028 Notes is offset by proceeds received from the interest rate swaps designated as a hedge. The swap adjusted interest expense is included as a
61
component of interest expense on the Company’s Consolidated Statements of Operations. As of June 30, 2024 and December 31, 2023, the effective hedge interest rate swaps had a fair value of $(2.5) million and $4.7 million, respectively, which is offset within interest expense by an equal, but opposite, fair value change for the hedged risk on the 2028 Notes.
2029 Notes
On January 8, 2024, the Company issued $
In connection with the issuance of the 2029 Notes, the Company entered into an interest rate swap to align the interest rates of its liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. The notional amount of the interest rate swap is $350.0 million, which matures on March 1, 2029, matching the maturity date of the 2029 Notes. As a result of the swap, the Company’s effective interest rate on the 2029 Notes is SOFR plus 2.44%. As of June 30, 2024, the effective hedge interest rate swaps had a fair value of $(6.3) million which is offset within interest expense by an equal, but opposite, fair value change for the hedged risk on the 2029 Notes.
Debt obligations consisted of the following as of June 30, 2024 and December 31, 2023:
|
|
June 30, 2024 |
|
|||||||||||||
|
|
Aggregate Principal |
|
|
Outstanding |
|
|
Amount |
|
|
Carrying |
|
||||
($ in millions) |
|
Amount Committed |
|
|
Principal |
|
|
Available (1) |
|
|
Value (2)(3) |
|
||||
Revolving Credit Facility |
|
$ |
1,700.0 |
|
|
$ |
487.5 |
|
|
$ |
1,209.5 |
|
|
$ |
470.3 |
|
2024 Notes |
|
|
347.5 |
|
|
|
347.5 |
|
|
— |
|
|
|
342.0 |
|
|
2026 Notes |
|
|
300.0 |
|
|
|
300.0 |
|
|
— |
|
|
|
272.2 |
|
|
2028 Notes |
|
|
300.0 |
|
|
|
300.0 |
|
|
— |
|
|
|
292.4 |
|
|
2029 Notes |
|
|
350.0 |
|
|
|
350.0 |
|
|
— |
|
|
|
336.0 |
|
|
Total Debt |
|
$ |
2,997.5 |
|
|
$ |
1,785.0 |
|
|
$ |
1,209.5 |
|
|
$ |
1,712.9 |
|
|
|
December 31, 2023 |
|
|||||||||||||
|
|
Aggregate Principal |
|
|
Outstanding |
|
|
Amount |
|
|
Carrying |
|
||||
($ in millions) |
|
Amount Committed |
|
|
Principal |
|
|
Available (1) |
|
|
Value (2)(3) |
|
||||
Revolving Credit Facility |
|
$ |
1,710.0 |
|
|
$ |
889.7 |
|
|
$ |
820.2 |
|
|
$ |
874.5 |
|
2024 Notes |
|
|
347.5 |
|
|
|
347.5 |
|
|
— |
|
|
|
335.9 |
|
|
2026 Notes |
|
|
300.0 |
|
|
|
300.0 |
|
|
— |
|
|
|
270.9 |
|
|
2028 Notes |
|
|
300.0 |
|
|
|
300.0 |
|
|
— |
|
|
|
299.0 |
|
|
Total Debt |
|
$ |
2,657.5 |
|
|
$ |
1,837.2 |
|
|
$ |
820.2 |
|
|
$ |
1,780.3 |
|
62
As of June 30, 2024 and December 31, 2023, we were in compliance with the terms of our debt arrangements. We intend to continue to utilize our credit facilities to fund investments and for other general corporate purposes.
Off-Balance Sheet Arrangements
Portfolio Company Commitments
From time to time, we may enter into commitments to fund investments. We incorporate these commitments into our assessment of our liquidity position. Our senior secured revolving loan commitments are generally available on a borrower’s demand and may remain outstanding until the maturity date of the applicable loan. Our senior secured delayed draw term loan commitments are generally available on a borrower’s demand and, once drawn, generally have the same remaining term as the associated loan agreement. Undrawn senior secured delayed draw term loan commitments generally have a shorter availability period than the term of the associated loan agreement. As of June 30, 2024 and December 31, 2023, we had the following commitments to fund investments in current portfolio companies:
($ in millions) |
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
Alaska Bidco Oy - Delayed Draw & Revolver |
|
$ |
0.2 |
|
|
$ |
0.2 |
|
Alpha Midco, Inc. - Delayed Draw & Revolver |
|
|
0.6 |
|
|
|
0.5 |
|
American Achievement, Corp. - Revolver |
|
|
2.4 |
|
|
|
2.4 |
|
Apellis Pharmaceuticals, Inc. - Delayed Draw |
|
|
5.3 |
|
|
|
— |
|
Aptean, Inc. - Delayed Draw & Revolver |
|
|
2.1 |
|
|
|
— |
|
Arrow Buyer, Inc. - Delayed Draw |
|
|
5.5 |
|
|
|
7.6 |
|
Artisan Bidco, Inc. - Revolver |
|
|
5.7 |
|
|
|
5.7 |
|
ASG II, LLC - Delayed Draw |
|
|
— |
|
|
|
3.4 |
|
Avalara, Inc. - Revolver |
|
|
3.9 |
|
|
|
3.9 |
|
Axonify, Inc. - Delayed Draw |
|
|
2.1 |
|
|
|
3.4 |
|
Azurite Intermediate Holdings, Inc. - Delayed Draw, Revolver & Equity |
|
|
16.3 |
|
|
|
— |
|
Babylon Finco Limited - Delayed Draw |
|
|
0.3 |
|
|
|
— |
|
Banyan Software Holdings, LLC - Delayed Draw |
|
|
18.5 |
|
|
|
10.0 |
|
Bayshore Intermediate #2, L.P. - Revolver |
|
|
2.4 |
|
|
|
1.9 |
|
BCTO Ace Purchaser, Inc. - Delayed Draw |
|
|
0.2 |
|
|
|
0.5 |
|
BCTO Bluebill Buyer, Inc. - Delayed Draw |
|
|
4.1 |
|
|
|
5.1 |
|
Bear OpCo, LLC - Delayed Draw |
|
|
— |
|
|
|
1.2 |
|
Ben Nevis Midco Limited - Delayed Draw |
|
|
1.7 |
|
|
|
— |
|
BlueSnap, Inc. - Delayed Draw & Revolver |
|
|
7.5 |
|
|
|
2.5 |
|
BTRS Holdings, Inc. - Delayed Draw & Revolver |
|
|
4.0 |
|
|
|
5.6 |
|
Cordance Operations, LLC - Delayed Draw & Revolver |
|
|
10.3 |
|
|
|
2.0 |
|
Coupa Holdings, LLC - Delayed Draw & Revolver |
|
|
6.8 |
|
|
|
6.8 |
|
Crewline Buyer, Inc. - Revolver & Equity |
|
|
6.1 |
|
|
|
6.1 |
|
Disco Parent, Inc. - Revolver |
|
|
0.5 |
|
|
|
0.5 |
|
Dye & Durham Corp. - Revolver |
|
|
— |
|
|
|
1.2 |
|
EDB Parent, LLC - Delayed Draw |
|
|
8.6 |
|
|
|
11.4 |
|
Edge Bidco B.V. - Delayed Draw & Revolver |
|
|
1.0 |
|
|
|
1.1 |
|
Elements Finco Limited - Delayed Draw |
|
|
4.0 |
|
|
|
— |
|
Elysian Finco Ltd. - Delayed Draw & Revolver |
|
|
2.5 |
|
|
|
4.7 |
|
Employment Hero Holdings Pty Ltd. - Delayed Draw & Revolver |
|
|
8.7 |
|
|
|
8.9 |
|
EMS Linq, Inc. - Revolver |
|
|
3.3 |
|
|
|
8.8 |
|
Erling Lux Bidco SARL - Delayed Draw & Revolver |
|
|
10.4 |
|
|
|
3.2 |
|
ExtraHop Networks, Inc. - Delayed Draw & Revolver |
|
|
6.6 |
|
|
|
9.8 |
|
ForeScout Technologies, Inc. - Delayed Draw & Revolver |
|
|
0.8 |
|
|
|
3.4 |
|
Fullsteam Operations, LLC - Delayed Draw & Revolver |
|
|
10.2 |
|
|
|
11.2 |
|
Galileo Parent, Inc. - Revolver |
|
|
4.0 |
|
|
|
6.8 |
|
Greenshoot Bidco B.V. - Revolver |
|
|
0.4 |
|
|
|
— |
|
Heritage Environmental Services, Inc. - Revolver |
|
|
1.7 |
|
|
|
— |
|
Hippo XPA Bidco AB - Delayed Draw & Revolver |
|
|
4.4 |
|
|
|
— |
|
Hirevue, Inc. - Revolver |
|
|
6.0 |
|
|
|
6.9 |
|
Hornetsecurity Holding GmbH - Delayed Draw & Revolver |
|
|
— |
|
|
|
2.1 |
|
Ibis Intermediate Co. - Delayed Draw |
|
|
— |
|
|
|
6.3 |
|
IRGSE Holding Corp. - Revolver |
|
|
0.9 |
|
|
|
0.9 |
|
63
Kangaroo Bidco AS - Delayed Draw |
|
|
4.4 |
|
|
|
9.4 |
|
Kyriba Corp. - Revolver |
|
|
2.5 |
|
|
|
2.5 |
|
Laramie Energy, LLC - Delayed Draw |
|
|
7.7 |
|
|
|
7.7 |
|
LeanTaaS Holdings, Inc. - Delayed Draw |
|
|
23.1 |
|
|
|
38.0 |
|
Lucidworks, Inc. - Delayed Draw |
|
|
— |
|
|
|
0.8 |
|
Marcura Equities LTD - Delayed Draw & Revolver |
|
|
11.7 |
|
|
|
11.7 |
|
Merit Software Finance Holdings, LLC - Delayed Draw & Revolver |
|
|
15.7 |
|
|
|
— |
|
Netwrix Corp. - Delayed Draw & Revolver |
|
|
2.9 |
|
|
|
13.1 |
|
OutSystems Luxco SARL - Delayed Draw |
|
|
2.1 |
|
|
|
2.2 |
|
Passport Labs, Inc. - Revolver |
|
|
— |
|
|
|
2.8 |
|
PDI TA Holdings, Inc. - Delayed Draw & Revolver |
|
|
5.4 |
|
|
|
— |
|
Ping Identity Holding Corp. - Revolver |
|
|
2.3 |
|
|
|
2.3 |
|
PrimeRevenue, Inc. - Revolver |
|
|
6.3 |
|
|
|
6.3 |
|
Project44, Inc. - Delayed Draw |
|
|
19.9 |
|
|
|
19.9 |
|
Rapid Data GmbH Unternehmensberatung - Delayed Draw & Revolver |
|
|
4.6 |
|
|
|
6.3 |
|
ReliaQuest Holdings, LLC - Delayed Draw & Equity |
|
|
0.8 |
|
|
|
4.4 |
|
Scorpio Bidco - Delayed Draw |
|
|
0.5 |
|
|
|
— |
|
SkyLark UK DebtCo Limited - Delayed Draw |
|
|
7.0 |
|
|
|
7.1 |
|
SL Buyer Corp. - Delayed Draw |
|
|
12.1 |
|
|
|
13.2 |
|
Sport Alliance GmbH - Revolver |
|
|
0.7 |
|
|
|
— |
|
Tango Management Consulting, LLC - Delayed Draw & Revolver |
|
|
4.7 |
|
|
|
11.0 |
|
TRP Assets, LLC - Delayed Draw |
|
|
1.0 |
|
|
|
1.0 |
|
Truck-Lite Co., LLC - Delayed Draw & Revolver |
|
|
8.6 |
|
|
|
— |
|
USA Debusk LLC - Delayed Draw & Revolver |
|
|
3.2 |
|
|
|
— |
|
Wrangler TopCo, LLC - Revolver |
|
|
0.4 |
|
|
|
0.4 |
|
Total Portfolio Company Commitments (1)(2) |
|
$ |
327.6 |
|
|
$ |
316.1 |
|
Other Commitments and Contingencies
As of June 30, 2024 and December 31, 2023, the Company did not have any unfunded commitments to fund investments to new borrowers that were not current portfolio companies as of such date.
From time to time, we may become a party to certain legal proceedings incidental to the normal course of our business. As of June 30, 2024, management is not aware of any material pending or threatened litigation that would require accounting recognition or financial statement disclosure.
We have certain contracts under which we have material future commitments. Under the Investment Advisory Agreement, our Adviser provides us with investment advisory and management services. For these services, we pay the Management Fee and the Incentive Fee.
Under the Administration Agreement, our Adviser furnishes us with office facilities and equipment, provides us clerical, bookkeeping and record keeping services at such facilities and provides us with other administrative services necessary to conduct our day-to-day operations. We reimburse our Adviser for the allocable portion (subject to the review and approval of our Board) of expenses incurred by it in performing its obligations under the Administration Agreement, the fees and expenses associated with performing compliance functions and our allocable portion of the compensation of our Chief Compliance Officer, Chief Financial Officer and other professionals who spend time on those related activities (based on a percentage of time those individuals devote, on an estimated basis, to our business and affairs). Our Adviser also offers on our behalf significant managerial assistance to those portfolio companies to which we are required to offer to provide such assistance.
64
Contractual Obligations
A summary of our contractual payment obligations as of June 30, 2024 is as follows:
|
|
Payments Due by Period |
|
|||||||||||||||||
|
|
|
|
|
Less than |
|
|
|
|
|
|
|
|
|
|
|||||
($ in millions) |
|
Total |
|
|
1 year |
|
|
1-3 years |
|
|
3-5 years |
|
|
After 5 years |
|
|||||
Revolving Credit Facility |
|
$ |
487.5 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
487.5 |
|
|
$ |
— |
|
2024 Notes |
|
|
347.5 |
|
|
|
347.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
2026 Notes |
|
|
300.0 |
|
|
|
— |
|
|
|
300.0 |
|
|
|
— |
|
|
|
— |
|
2028 Notes |
|
|
300.0 |
|
|
|
— |
|
|
|
— |
|
|
|
300.0 |
|
|
|
— |
|
2029 Notes |
|
|
350.0 |
|
|
|
— |
|
|
|
— |
|
|
|
350.0 |
|
|
|
— |
|
Total Contractual Obligations |
|
$ |
1,785.0 |
|
|
$ |
347.5 |
|
|
$ |
300.0 |
|
|
$ |
1,137.5 |
|
|
$ |
— |
|
In addition to the contractual payment obligations in the tables above, we also have commitments to fund investments and to pledge assets as collateral under the terms of our derivatives agreements.
Distributions
We have elected and qualified to be treated for U.S. federal income tax purposes as a RIC under subchapter M of the Code. To maintain our RIC status, we must distribute (or be treated as distributing) in each taxable year dividends for tax purposes equal to at least 90 percent of the sum of our:
As a RIC, we (but not our stockholders) generally will not be subject to U.S. federal income tax on investment company taxable income and net capital gains that we distribute to our stockholders.
We intend to distribute annually all or substantially all of such income. To the extent that we retain our net capital gains or any investment company taxable income, we generally will be subject to corporate-level U.S. federal income tax. We may choose to retain our net capital gains or any investment company taxable income, and pay the U.S. federal excise tax described below.
Amounts not distributed on a timely basis in accordance with a calendar year distribution requirement are subject to a nondeductible 4% U.S. federal excise tax payable by us. To avoid this tax, we must distribute (or be treated as distributing) during each calendar year an amount at least equal to the sum of:
While we intend to distribute any income and capital gains in the manner necessary to minimize imposition of the 4% U.S. federal excise tax, sufficient amounts of our taxable income and capital gains may not be distributed to avoid entirely the imposition of this tax. In that event, we will be liable for this tax only on the amount by which we do not meet the foregoing distribution requirement.
We intend to pay quarterly dividends to our stockholders out of assets legally available for distribution. All dividends will be paid at the discretion of our Board and will depend on our earnings, financial condition, maintenance of our RIC status, compliance with applicable BDC regulations and such other factors as our Board may deem relevant from time to time.
To the extent our current taxable earnings for a year fall below the total amount of our distributions for that year, a portion of those distributions may be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. Stockholders should read any written disclosure carefully and should not assume that the source of any distribution is our ordinary income or gains.
65
We have adopted an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a cash dividend or other distribution, each stockholder that has not “opted out” of our dividend reinvestment plan will have their dividends or distributions automatically reinvested in additional shares of our common stock rather than receiving cash dividends. Stockholders who receive distributions in the form of shares of common stock will be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions.
Related-Party Transactions
We have entered into a number of business relationships with affiliated or related parties, including the following:
Critical Accounting Estimates
Our critical accounting policies and estimates, including those relating to the valuation of our investment portfolio, are described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 15, 2024, and elsewhere in our filings with the SEC. The critical accounting policies and estimates should be read in connection with our risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to financial market risks, including valuation risk, interest rate risk and currency risk.
Valuation Risk
We have invested, and plan to continue to invest, primarily in illiquid debt and equity securities of private companies. Most of our investments will not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board in accordance with our valuation policy. There is no single standard for determining fair value. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material.
Interest Rate Risk
Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. We also fund portions of our investments with borrowings. Our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. Accordingly, we cannot assure you that a significant change in market interest rates will not have a material adverse effect on our net investment income.
We regularly measure our exposure to interest rate risk. We assess interest rate risk and manage our interest rate exposure on an ongoing basis by comparing our interest rate-sensitive assets to our interest rate-sensitive liabilities. Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.
As of June 30, 2024, 99.6% of our debt investments based on fair value in our portfolio bore interest at floating rates, with 100.0% of these subject to interest rate floors. Our credit facilities also bear interest at floating rates, and in connection with our 2024 Notes, 2026 Notes, 2028 Notes and 2029 Notes, which bear interest at fixed rates, we entered into fixed-to-floating interest rate swaps in order to align the interest rates of our liabilities with our investment portfolio.
66
Assuming that our consolidated balance sheet as of June 30, 2024 were to remain constant and that we took no actions to alter our existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates (considering interest rate floors for floating rate instruments):
($ in millions) |
|
|
|
|
|
|
|
|
|
|||
Basis Point Change |
|
Interest Income |
|
|
Interest Expense |
|
|
Net Interest Income |
|
|||
Up 300 basis points |
|
$ |
93.6 |
|
|
$ |
53.6 |
|
|
$ |
40.0 |
|
Up 200 basis points |
|
$ |
62.4 |
|
|
$ |
35.7 |
|
|
$ |
26.7 |
|
Up 100 basis points |
|
$ |
31.2 |
|
|
$ |
17.9 |
|
|
$ |
13.3 |
|
Down 25 basis points |
|
$ |
(7.8 |
) |
|
$ |
(4.5 |
) |
|
$ |
(3.3 |
) |
Down 50 basis points |
|
$ |
(15.6 |
) |
|
$ |
(8.9 |
) |
|
$ |
(6.7 |
) |
Although we believe that this analysis is indicative of our existing sensitivity to interest rate changes, it does not adjust for changes in the credit market, credit quality, the size and composition of the assets in our portfolio and other business developments that could affect our net income. Accordingly, we cannot assure you that actual results would not differ materially from the analysis above.
We may in the future hedge against interest rate fluctuations by using hedging instruments such as additional interest rate swaps, futures, options and forward contracts. While hedging activities may mitigate our exposure to adverse fluctuations in interest rates, certain hedging transactions that we may enter into in the future, such as interest rate swap agreements, may also limit our ability to participate in the benefits of changes in interest rates with respect to our portfolio investments.
Currency Risk
From time to time, we may make investments that are denominated in a foreign currency. These investments are translated into U.S. dollars at each balance sheet date, exposing us to movements in foreign exchange rates. We may employ hedging techniques to minimize these risks, but we cannot assure you that such strategies will be effective or without risk to us. We may seek to utilize instruments such as, but not limited to, forward contracts to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates. We also have the ability to borrow in certain foreign currencies under our Revolving Credit Facility. Instead of entering into a foreign exchange forward contract in connection with loans or other investments we have made that are denominated in a foreign currency, we may borrow in that currency to establish a natural hedge against our loan or investment. To the extent the loan or investment is based on a floating rate other than a rate under which we can borrow under our Revolving Credit Facility, we may seek to utilize interest rate derivatives to hedge our exposure to changes in the associated rate.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them to material information relating to us that is required to be disclosed by us in the reports we file or submit under the Exchange Act.
Changes in Internal Control over Financial Reporting. There have been no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
67
PART II – OTHER INFORMATION
ITEM 1. Legal Proceedings.
From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under loans to or other contracts with our portfolio companies. We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us.
Item 1A. Risk Factors.
In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which could materially affect our business, financial condition and/or operating results. These risks are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Rule 10b5-1 Trading Plans
During the three months ended June 30, 2024,
68
Item 6. Exhibits.
3.1 |
|
|
3.2 |
|
|
10.1 |
|
|
31.1 |
|
|
31.2 |
|
|
32 |
|
|
101.INS |
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document With Embedded Linkbase Documents |
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
69
SIGNATURES
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 thereunto duly authorized.
|
|
SIXTH STREET SPECIALTY LENDING, INC. |
||
|
|
|
|
|
Date: July 31, 2024 |
|
By: |
|
/s/ Joshua Easterly |
|
|
|
|
Joshua Easterly |
|
|
|
|
Chief Executive Officer |
|
|
|
|
(principal executive officer) |
|
|
|
|
|
|
|
|
|
|
Date: July 31, 2024 |
|
By: |
|
/s/ Ian Simmonds |
|
|
|
|
Ian Simmonds |
|
|
|
|
Chief Financial Officer |
|
|
|
|
(principal financial officer) |
70
Exhibit 10.1
EXECUTION VERSION
FIFTEENTH AMENDMENT
TO SECOND AMENDED AND RESTATED SENIOR SECURED REVOLVING CREDIT AGREEMENT
THIS FIFTEENTH AMENDMENT TO SECOND AMENDED AND RESTATED SENIOR SECURED REVOLVING CREDIT AGREEMENT, dated as of April 24, 2024 (this
“Amendment”), to the Existing Credit Agreement (capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in Article I) is among SIXTH STREET SPECIALTY LENDING, INC., a Delaware corporation (the “Borrower”), the LENDERS and ISSUING BANKS party hereto and TRUIST BANK, as Administrative Agent (the “Administrative Agent”).
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders party hereto and the Administrative Agent are parties to the Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of February 27, 2014 (as amended by the First Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of June 3, 2014, the Second Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of June 27, 2014, the Third Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of October 17, 2014, the Fourth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of October 2, 2015, the Fifth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of December 22, 2016, the Sixth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of February 20, 2018, the Seventh Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of November 5, 2018, the Eighth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of February 14, 2019, the Ninth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of January 31, 2020, the Tenth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of February 5, 2021, the Eleventh Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of December 14, 2021, the Twelfth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of April 25, 2022, the Thirteenth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of May 19, 2022, and the Fourteenth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of June 12, 2023 (the “Existing Credit Agreement”), and by this Amendment and as the same may be further amended, supplemented, amended and restated or otherwise modified from time to time, the “Credit Agreement”); and
WHEREAS, the Borrower has requested that the Lenders agree to amend the Existing Credit Agreement, and the Lenders party hereto are willing, on the terms and subject to the conditions hereinafter set forth, to agree to the amendment set forth below and the other terms hereof;
NOW, THEREFORE, the parties hereto hereby covenant and agree as follows:
ARTICLE I DEFINITIONS
SECTION 1.1. Certain Definitions. The following terms when used in this Amendment
shall have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):
“Amendment” is defined in the preamble. “Borrower” is defined in the preamble.
“Credit Agreement” is defined in the first recital. “Existing Credit Agreement” is defined in the first recital.
“Fifteenth Amendment Effective Date” is defined in Article IV.
SECTION 1.2. Other Definitions. Capitalized terms for which meanings are provided in the Existing Credit Agreement are, unless otherwise defined herein or the context otherwise requires, used in this Amendment with such meanings.
ARTICLE II [RESERVED]
SECTION 2.1. [Reserved].
ARTICLE III
AMENDMENTS TO EXISTING CREDIT AGREEMENT
SECTION 3.1. Amendments. Subject to the occurrence of the Fifteenth Amendment Effective Date (as hereinafter defined), the parties hereby agree that:
2
ARTICLE IV CONDITIONS TO EFFECTIVENESS
SECTION 4.1. Effective Date. This Amendment shall become effective on the date (the
“Fifteenth Amendment Effective Date”) when the Administrative Agent shall have received (a) counterparts of this Amendment duly executed and delivered on behalf of the Borrower and each of the Lenders party hereto, (b) a favorable written opinion (addressed to the Administrative Agent and the Lenders party hereto and dated as of the date hereof) of (i) Cleary Gottlieb Steen & Hamilton LLP, New York counsel for the Borrower, and (ii) Young Conaway Stargatt & Taylor, LLP, Delaware counsel for the Borrower, in each case, in form and substance reasonably acceptable to the Administrative Agent (and the Borrower hereby instructs such counsel to deliver such opinions to the Lenders party hereto and the Administrative Agent), (c) such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the Borrower, the authorization of this Amendment and any other legal matters relating to the Borrower, this Amendment, all in form and substance satisfactory to the Administrative Agent and its counsel and (d) for the benefit of Administrative Agent and each of the Lenders party hereto, as applicable, fees and expenses owing by the Borrower in connection with this Amendment as of the date hereof.
ARTICLE V MISCELLANEOUS
SECTION 5.1. Representations. The Borrower hereby represents and warrants that (i) this
Amendment constitutes a legal, valid and binding obligation of it, enforceable against it in accordance with its terms, (ii) upon the effectiveness of this Amendment, no Default or Event of Default shall exist and (iii) its representations and warranties as set forth in the Loan Documents, as applicable, are true and correct in all material respects (except those representations and warranties qualified by materiality or by reference to a material adverse effect, which are true and correct in all respects) on and as of the date hereof as though made on and as of the date hereof (unless such representations and warranties specifically refer to a previous day, in which case, they shall be complete and correct in all material respects (or, with respect to such representations or warranties qualified by materiality or by reference to a material adverse effect, complete and correct in all respects) on and as of such previous day).
SECTION 5.2. Cross-References. References in this Amendment to any Article or Section are, unless otherwise specified, to such Article or Section of this Amendment.
SECTION 5.3. Loan Document Pursuant to Existing Credit Agreement. This Amendment is a Loan Document executed pursuant to the Existing Credit Agreement and shall (unless otherwise expressly indicated therein) be construed, administered and applied in accordance with all of the terms and provisions of the Existing Credit Agreement, as amended hereby, including Article IX thereof.
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SECTION 5.4. Successors and Assigns. The provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 5.5. Counterparts. This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or electronically (e.g. pdf) shall be effective as delivery of a manually executed counterpart of this Amendment.
SECTION 5.6. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York.
SECTION 5.7. Full Force and Effect; Limited Amendment. Except as expressly amended hereby, all of the representations, warranties, terms, covenants, conditions and other provisions of the Existing Credit Agreement and the other Loan Documents shall remain unchanged and shall continue to be, and shall remain, in full force and effect in accordance with their respective terms. This Amendment does not constitute a novation or termination of the Credit Agreement Obligations (as defined in the Guarantee and Security Agreement) under the Credit Agreement as in effect immediately prior to the effectiveness of this Amendment and which remain outstanding. The amendment set forth herein shall be limited precisely as provided for herein to the provisions expressly amended herein and shall not be deemed to be an amendment to, waiver of, consent to or modification of any other terms or provisions of the Existing Credit Agreement or any other Loan Document or of any transaction or further or future action on the part of the Borrower. Upon and after the execution of this Amendment by each of the parties hereto, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified hereby.
SECTION 5.8. Reaffirmation. Each of Sixth Street SL Holding, LLC, TC Lending, LLC and Sixth Street SL SPV, LLC hereby consents to the terms of this Amendment, confirms that its Guarantee under the Guarantee and Security Agreement remains unaltered and in full force and effect and hereby reaffirms, ratifies and confirms the terms and conditions of the Guarantee and Security Agreement.
SECTION 5.9. Assignment and Reallocation of Existing Commitments and Existing
Loans.
the outstanding Loans and (B) simultaneously borrow new Loans in an amount equal to such prepayment; provided that with respect to subclauses (A) and (B), (x) the prepayment to, and borrowing from, any Lender shall be effected by book entry to the extent that any portion of the amount prepaid to such Lender will be subsequently borrowed from such Lender, (y) the Lenders shall make and receive payments among themselves, in a manner acceptable to the Administrative Agent, so that, after giving effect thereto, the Loans of such Class are held ratably by the Lenders of such Class in accordance with the respective Commitments of such Class of such Lenders (after
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giving effect to this Amendment), which, for the purposes of the Credit Agreement and each other Loan Document, will be as set forth opposite such Person’s name on Schedule 1.01(b) to the Credit Agreement (as amended by this Amendment) and (z) each Lender party hereto hereby agrees that no amounts shall be required to be paid to such Lender under Section 2.15 of the Credit Agreement in connection with the reallocation described in this Section 5.9(a). Concurrently therewith, the Lenders of each Class shall be deemed to have adjusted their participation interests in any outstanding Letters of Credit of such Class so that such interests are held ratably in accordance with their Applicable Percentage of Commitments of such Class.
SECTION 5.10. Outstanding Term Benchmark Loans Denominated in Canadian Dollars. Notwithstanding anything to the contrary in the Credit Agreement, as amended by this Amendment, all outstanding Term Benchmark Loans denominated in Canadian Dollars as of the Fifteenth Amendment Effective Date shall remain outstanding, with interest being calculated based on the Term Benchmark Rate as in effect under the Existing Credit Agreement, until the end of the Interest Period applicable thereto and thereafter, if continued, interest on such Term Benchmark Loans shall be calculated in accordance with the terms of the Credit Agreement, as amended by this Amendment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the date first above written.
BORROWER: SIXTH STREET SPECIALTY LENDING, INC.
By: /s/ Ian Simmonds
Name: Ian Simmonds
Title: Chief Financial Officer
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
LENDERS: TRUIST BANK,
as Administrative Agent, Swingline Lender, Issuing Bank and as a Lender
By: /s/ Andrew Silsbee
Name: Andrew Silsbee
Title: Vice President
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
JPMORGAN CHASE BANK, N.A.,
as Swingline Lender, Issuing Bank and as a Lender
By: /s/ Alevtina Dudyreva
Name: Alevtina Dudyreva
Title: Vice President
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
MUFG BANK, LTD.,
as Swingline Lender and as a Lender
By: /s/ Jorge Campos
Name: Jorge Campos
Title: Director
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
STATE STREET BANK AND TRUST COMPANY,
as Swingline Lender and as a Lender
By: /s/ John Doherty
Name: John Doherty
Title: Vice President
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
SUMITOMO MITSUI BANKING CORPORATION,
as Swingline Lender and as a Lender
By: /s/ Shane Klein
Name: Shane Klein
Title: Managing Director
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
BANK OF AMERICA, N.A.,
as a Lender
By: /s/ Chris Choi
Name: Chris Choi
Title: Managing Director
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED, NEW YORK BRANCH,
as a Lender
By: /s/ Huacheng Lin
Name: Huacheng Lin
Title: AVP
By: /s/ Charles Inkeles
Name: Charles Inkeles
Title: Executive Director
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
MIZUHO BANK, LTD.,
as a Lender
By: /s/ Donna DeMagistris
Name: Donna DeMagistris
Title: Managing Director
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Michael Kusner
Name: Michael Kusner
Title: Managing Director
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
HSBC BANK USA, N.A.,
as a Lender
By: /s/ Ryan Gabriele
Name: Ryan Gabriele
Title: Vice President
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
CITIBANK, N.A.,
as a Lender
By: /s/ Patrick Marsh
Name: Patrick Marsh
Title: Vice President
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
FIRST-CITIZENS BANK & TRUST COMPANY,
as a Lender
By: /s/ Robert L. Klein
Name: Robert L. Klein
Title: Managing Director
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
GOLDMAN SACHS BANK USA,
as a Lender
By: /s/ Dan Starr
Name: Dan Starr
Title: Authorized Signatory
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
MORGAN STANLEY BANK, N.A.,
as a Lender
By: /s/ Michael King
Name: Michael King
Title: Authorized Signatory
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
APPLE BANK,
as a Lender
By: /s/ Burt Feinberg
Name: Burt Feinberg
Title: Managing Director
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
ROYAL BANK OF CANADA,
as a Lender
By: /s/ Joseph Simoneau
Name: Joseph Simoneau
Title: Authorized Signatory
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
CITIZENS BANK, N.A.,
as a Lender
By: /s/ Christopher O’Brien
Name: Christopher O’Brien
Title: Vice President
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
STIFEL BANK & TRUST,
as a Lender
By: /s/ Daniel P. McDonald
Name: Daniel P. McDonald
Title: Vice President
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
Agreed and acknowledged solely with respect to (a) the amendments to Section 1.01 (Defined Terms) of the Existing Credit Agreement to (i) add the defined terms “Canadian Prime Rate”, “Central Bank Rate”, “Central Bank Rate Adjustment”, “CORRA”, “Maximum Rate”, “Periodic Term CORRA Determination Date”, “Term CORRA”, “Term CORRA Administrator”, “Term CORRA Credit Adjustment Spread” and “Term CORRA Reference Rate” and (ii) modify the defined terms “Alternate Base Rate”, “Benchmark”, “Benchmark Transition Event”, “Conforming Changes”, “Relevant Governmental Body”, “T2”, “TARGET Day” and “Term Benchmark Rate”, (b) the amendments to Section 2.13 (Inability to Determine Interest Rates) and Section 2.19 (Defaulting Lenders) and Section 2.22 (Effect of Benchmark Transition Event) of the Existing Credit Agreement and (c) the addition of Section 2.21 (Illegality) and Section 9.20 (Interest Rate Limitation) to the Existing Credit Agreement, in each case in the manner as set forth in Exhibit A hereto
SANTANDER BANK, N.A.,
as a Lender
By: /s/ Elizabeth Dalton
Name: Elizabeth Dalton
Title: SVP
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
COMERICA BANK,
as a Lender
By: /s/ Robert Wilson
Name: Robert Wilson
Title: Senior Vice President
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
Agreed and acknowledged solely with respect to (a) the amendments to Section 1.01 (Defined Terms) of the Existing Credit Agreement to (i) add the defined terms “Canadian Prime Rate”, “Central Bank Rate”, “Central Bank Rate Adjustment”, “CORRA”, “Maximum Rate”, “Periodic Term CORRA Determination Date”, “Term CORRA”, “Term CORRA Administrator”, “Term CORRA Credit Adjustment Spread” and “Term CORRA Reference Rate” and (ii) modify the defined terms “Alternate Base Rate”, “Benchmark”, “Benchmark Transition Event”, “Conforming Changes”, “Relevant Governmental Body”, “T2”, “TARGET Day” and “Term Benchmark Rate”, (b) the amendments to Section 2.13 (Inability to Determine Interest Rates) and Section 2.19 (Defaulting Lenders) and Section 2.22 (Effect of Benchmark Transition Event) of the Existing Credit Agreement and (c) the addition of Section 2.21 (Illegality) and Section 9.20 (Interest Rate Limitation) to the Existing Credit Agreement, in each case in the manner as set forth in Exhibit A hereto
GOLDMAN SACHS BANK USA,
as a Lender
By: /s/ Dan Starr
Name: Dan Starr
Title: Authorized Signatory
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
Agreed and acknowledged solely with respect to Section 5.8.
TC LENDING, LLC
By: /s/ Ian Simmonds
Name: Ian Simmonds
Title: Chief Financial Officer
SIXTH STREET SL HOLDING, LLC
By: /s/ Ian Simmonds
Name: Ian Simmonds
Title: Chief Financial Officer
SIXTH STREET SL SPV, LLC
By: /s/ Ian Simmonds
Name: Ian Simmonds
Title: Chief Financial Officer
SIGNATURE PAGE TO FIFTEENTH AMENDMENT
Exhibit A CONFORMED CREDIT AGREEMENT
[Attached.]
Exhibit A to FourteenthFifteenth Amendment, dated as of June 12April 24, 20232024
SECOND AMENDED AND RESTATED SENIOR SECURED
REVOLVING CREDIT AGREEMENT
dated as of February 27, 2014
as amended by the First Amendment to Second Amended and Restated Senior Secured
Revolving Credit Agreement dated as of June 3, 2014, the Second Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of June 27, 2014, the Third Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of October 17, 2014, the Fourth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of October 2, 2015, the Fifth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of December 22, 2016, the Sixth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of February 20, 2018, the Seventh Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of November 5, 2018, the Eighth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of February 14, 2019, the Ninth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of January 31, 2020, the Tenth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of February 5, 2021, the Eleventh Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of December 14, 2021, the Twelfth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of April 25, 2022, the Thirteenth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of May 19, 2022, and the Fourteenth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of June 12, 2023, and the Fifteenth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of April 24, 2024
among
SIXTH STREET SPECIALTY LENDING, INC.
as Borrower
The LENDERS and ISSUING BANKS Party Hereto and
TRUIST BANK
as Administrative Agent
JPMORGAN CHASE BANK, N.A.
as Syndication Agent
$1,710,000,0001,700,000,000
TRUIST SECURITIES, INC. JPMORGAN CHASE BANK, N.A.
as Joint Lead Arrangers and Joint Book Runners
MUFG BANK, LTD.
SUMITOMO MITSUI BANKING CORPORATION STATE STREET BANK AND TRUST COMPANY
as Joint Lead Arrangers
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 21
SECTION 1.01. Defined Terms 21 SECTION 1.02. Classification of Loans and Borrowings 48
SECTION 1.03. Terms Generally 48
SECTION 1.04. Accounting Terms; GAAP 49
SECTION 1.05. Currencies; Currency Equivalents. 4950 SECTION 1.06. Letter of Credit Amounts 51
SECTION 1.061. 07. Rates 5051
ARTICLE II THE CREDITS 51
SECTION 2.01. The Commitments 51
SECTION 2.02. Loans and Borrowings. 5152 SECTION 2.03. Requests for Syndicated Borrowings. 5253 SECTION 2.04. Swingline Loans 54
SECTION 2.05. Letters of Credit. 5657 SECTION 2.06. Funding of Borrowings. 6162 SECTION 2.07. Interest Elections. 6163 SECTION 2.08. Termination, Reduction or Increase of the Commitments. 6364 SECTION 2.09. Repayment of Loans; Evidence of Debt. 6667 SECTION 2.10. Prepayment of Loans. 6869 SECTION 2.11. Fees. 7173
SECTION 2.12. Interest. 7374 SECTION 2.13. Inability to Determine Interest Rates. 7475 SECTION 2.14. Increased Costs. 7577 SECTION 2. 15. Break Funding Payments 7778
SECTION 2.16. Taxes. 7779
SECTION 2.17. Payments Generally; Pro Rata Treatment: Sharing of Set-offs. 8183 SECTION 2.18. Mitigation Obligations; Replacement of Lenders. 8385 SECTION 2.19. Defaulting Lenders. 8486 SECTION 2.20. Reallocation Following a Non-Extended Commitment
Termination Date 8890 SECTION 2.21. Illegality 92
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TABLE OF CONTENTS
(continued)
Page
SECTION 2.22. Effect of Benchmark Transition Event 8993 ARTICLE III REPRESENTATIONS AND WARRANTIES 9296
SECTION 3.01. Organization; Powers 9296 SECTION 3.02. Authorization; Enforceability 9296 SECTION 3.03. Governmental Approvals; No Conflicts 9296 SECTION 3.04. Financial Condition; No Material Adverse Change. 9397 SECTION 3.05. Litigation 9397 SECTION 3.06. Compliance with Laws and Agreements 9397 SECTION 3.07. Taxes 9397
SECTION 3.08. ERISA 9498
SECTION 3.09. Disclosure 9498 SECTION 3.10. Investment Company Act; Margin Regulations. 9498 SECTION 3.11. Material Agreements and Liens. 9499 SECTION 3.12. Subsidiaries and Investments. 9599 SECTION 3.13. Properties. 9599 SECTION 3.14. Affiliate Agreements 95100 SECTION 3.15. Sanctions 95100 SECTION 3.16. Patriot Act 96100 SECTION 3.17. Collateral Documents 96100 SECTION 3.18. EEA Financial Institutions 96101 ARTICLE IV CONDITIONS 97101
SECTION 4.01. Effective Date 97101 SECTION 4.02. Each Credit Event 97102 ARTICLE V AFFIRMATIVE COVENANTS 98102
SECTION 5.01. Financial Statements and Other Information 98102 SECTION 5.02. Notices of Material Events 100105 SECTION 5.03. Existence: Conduct of Business 101105 SECTION 5.04. Payment of Obligations 101105 SECTION 5.05. Maintenance of Properties; Insurance 101105 SECTION 5.06. Books and Records; Inspection and Audit Rights 101106
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TABLE OF CONTENTS
(continued)
Page
SECTION 5.07. Compliance with Laws 101106 SECTION 5.08. Certain Obligations Respecting Subsidiaries; Further Assurances.102106 SECTION 5.09. Use of Proceeds 103107 SECTION 5.10. Status of RIC and BDC 103108 SECTION 5.11. Investment Policies 103108 SECTION 5.12. Portfolio Valuation and Diversification Etc. 103108 SECTION 5.13. Calculation of Borrowing Base. 107111 ARTICLE VI NEGATIVE COVENANTS 111116
SECTION 6.01. Indebtedness 112116
SECTION 6.02. Liens 113118
SECTION 6.03. Fundamental Changes 114119 SECTION 6.04. Investments 116121 SECTION 6.05. Restricted Payments 116122 SECTION 6.06. Certain Restrictions on Subsidiaries 117122 SECTION 6.07. Certain Financial Covenants. 118123 SECTION 6.08. Transactions with Affiliates 118123 SECTION 6.09. Lines of Business 118123 SECTION 6.10. No Further Negative Pledge 118124 SECTION 6.11. Modifications of Longer-Term Indebtedness Documents 119124 SECTION 6.12. Payments of Longer-Term Indebtedness, the 2024 Notes and, the
2026 Notes 119, the 2028 Notes and the 2029 Notes 124 SECTION 6.13. Accounting Changes 120125 SECTION 6.14. SBIC Guarantee 120126
ARTICLE VII EVENTS OF DEFAULT 120126 ARTICLE VIII THE ADMINISTRATIVE AGENT 124130
SECTION 8.01. Appointment of the Administrative Agent 124130 SECTION 8.02. Capacity as Lender 125130 SECTION 8.03. Limitation of Duties; Exculpation 125130 SECTION 8.04. Reliance 125131
SECTION 8.05. Sub-Agents 125131
SECTION 8.06. Resignation; Successor Administrative Agent 126131
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TABLE OF CONTENTS
(continued)
Page
SECTION 8.07. Reliance by Lenders 126132 SECTION 8.08. Modifications to Loan Documents 127132 SECTION 8.09. Erroneous Payments. 127133 ARTICLE IX MISCELLANEOUS 130136
SECTION 9.01. Notices; Electronic Communications. 130136 SECTION 9.02. Waivers; Amendments. 133138 SECTION 9.03. Expenses; Indemnity; Damage Waiver. 135141 SECTION 9.04. Successors and Assigns. 137143 SECTION 9.05. Survival 142148
SECTION 9.06. Counterparts; Integration; Effectiveness; Electronic Execution. 142148 SECTION 9.07. Severability 143149 SECTION 9.08. Right of Setoff 143149 SECTION 9.09. Governing Law; Jurisdiction; Etc. 143149 SECTION 9.10. WAIVER OF JURY TRIAL 144150
SECTION 9.11. Judgment Currency 144150 SECTION 9.12. Headings 145151
SECTION 9.13. Treatment of Certain Information; No Fiduciary Duty;
Confidentiality. 145151 SECTION 9.14. USA PATRIOT Act 147153
SECTION 9.15. Effect of Amendment and Restatement of the Existing Credit Agreement 147153
SECTION 9.16. [Reserved] 147153
SECTION 9.17. Acknowledgement and Consent to Bail-In of Affected Financial Institutions 147153
SECTION 9.18. Certain ERISA Matters 148154 SECTION 9.19. Acknowledgement Regarding Any Supported QFCs 149155 SECTION 9.20. Interest Rate Limitation 156
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SCHEDULE 1.01(a) - Approved Dealers and Approved Pricing Services SCHEDULE 1.01(b) - Commitments
SCHEDULE 1.01(c) - Industry Classification Group List SCHEDULE 2.04 - Swingline Lender Swingline Sublimit SCHEDULE 2.05 - Issuing Bank LC Exposure SCHEDULE 3.11 - Material Agreements and Liens SCHEDULE 3.12(a) - Subsidiaries
SCHEDULE 3.12(b) - Investments
SCHEDULE 6.08 - Transactions with Affiliates
EXHIBIT A - Form of Assignment and Assumption EXHIBIT B - Form of Borrowing Base Certificate EXHIBIT C - Form of Borrowing Request
-i-
753176866 11299570763630265
EXECUTION VERSION
SECOND AMENDED AND RESTATED SENIOR SECURED REVOLVING
CREDIT AGREEMENT dated as of February 27, 2014, as amended as of June 3, 2014, as of June 27, 2014, as of October 17, 2014, as of October 2, 2015, as of December 22, 2016, as of
February 20, 2018, as of November 5, 2018, as of February 14, 2019, as of January 31, 2020,
February 5, 2021, December 14, 2021, April 25, 2022, May 19, 2022, and June 12, 2023, and April 24, 2024 (this “Agreement”), among SIXTH STREET SPECIALTY LENDING, INC. (F/K/A TPG Specialty Lending, Inc.), a Delaware corporation (the “Borrower”), the LENDERS party hereto, and TRUIST BANK, as Administrative Agent.
The original Senior Secured Revolving Credit Agreement was dated as of August 23, 2012 and was amended and restated pursuant to the Amended and Restated Senior Secured Revolving Credit Agreement dated as of July 2, 2013 (as amended, supplemented or otherwise modified prior to the Effective Date, the “Existing Credit Agreement”), among the Borrower, the lenders party thereto (collectively, the “Existing Lenders”) and the Administrative Agent, the Existing Lenders agreed to make extensions of credit to the Borrower on the terms and conditions set forth therein, including making loans (the “Existing Loans”) to the Borrower.
The Borrower has requested that the Existing Credit Agreement be amended and restated in its entirety to become effective and binding on the Borrower pursuant to the terms of this Agreement, and the Lenders (including certain of the Existing Lenders) have agreed (subject to the terms of this Agreement) to amend and restate the Existing Credit Agreement in its entirety to read as set forth in this Agreement, and it has been agreed by the parties to the Existing Credit Agreement that (a) the commitments which the Existing Lenders have agreed to extend to the Borrower under the Existing Credit Agreement shall be extended or advanced upon the amended and restated terms and conditions contained in this Agreement; and (b) the Existing Loans and other obligations outstanding under the Existing Credit Agreement shall be governed by and deemed to be outstanding under the amended and restated terms and conditions contained in this Agreement on and after the date hereof, with the intent that the terms of this Agreement shall supersede the terms of the Existing Credit Agreement (each of which shall hereafter have no further effect upon the parties thereto, other than for accrued and unpaid fees and expenses, and indemnification provisions accrued and owing, under the terms of the Existing Credit Agreement on or prior to the Effective Date or arising (in the case of indemnification) under the terms of the Existing Credit Agreement).
The parties hereto hereby agree to amend and restate the Existing Credit Agreement, and the Existing Credit Agreement is hereby amended and restated in its entirety as follows:
ARTICLE I DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:
“2024 Notes” means the Borrower’s $350,000,000 aggregate principal amount notes due November 2024.
“2026 Notes” means the Borrower’s $300,000,000 aggregate principal amount notes due August 2026.
“2028 Notes” means the Borrower’s $300,000,000 aggregate principal amount notes due August 2028.
“2029 Notes” means the Borrower’s $350,000,000 aggregate principal amount notes due March 2029.
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan is, or the Loans constituting such Borrowing are, denominated in Dollars and bearing interest at a rate determined by reference to the Alternate Base Rate.
“Adjusted Covered Debt Balance” means, on any date, the aggregate Covered Debt Amount on such date minus the aggregate amount of Cash and Cash Equivalents included in the Portfolio Investments held by the Obligors (provided that Cash Collateral for outstanding Letters of Credit shall not be treated as a portion of the Portfolio Investments).
“Adjusted Term Benchmark Rate” means an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the Term Benchmark Rate for such Interest Period for such Currency.
“Administrative Agent” means Truist, in its capacity as administrative agent for the Lenders hereunder.
“Administrative Agent Appraisal Testing Period” has the meaning assigned to such term in Section 5.12(b)(ii)(E)(y).
“Administrative Agent’s Account” means, for each Currency, an account in respect of such Currency designated by the Administrative Agent in a notice to the Borrower and the Lenders.
“Administrative Agent Appraisal Testing Period” has the meaning assigned to such term in Section 5.12(b)(ii)(E)(y).
“Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Administrative Agent.
“Advance Rate” has the meaning assigned to such term in Section 5.13. “Affected Currency” has the meaning assigned to such term in Section 2.13. “Affected Financial Institution” means (a) any EEA Financial Institution or (b)
any UK Financial Institution.
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“Affiliate” means, with respect to a specified Person at any time, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified at such time. Anything herein to the contrary notwithstanding, the term “Affiliate” shall not include any Person that constitutes an Investment held by any Obligor or Financing Subsidiary in the ordinary course of business; provided that the term “Affiliate” shall include any Financing Subsidiary.
“Affiliate Agreements” means collectively, (a) the Administration Agreement dated as of March 15, 2011 between the Borrower and the External Manager, (b) the Amended and Restated Investment Advisory and Management Agreement dated as of December 12, 2011 between the Borrower and the External Manager and (c) the License Agreement dated as of March 14, 2011 between the Borrower and Tarrant Capital IP, LLC.
“Agreed Foreign Currency” means, at any time, (i) any of Canadian Dollars, Sterling, Euros, Japanese Yen, Australian Dollars, Swiss Francs, Swedish Krona and New Zealand Dollars, and (ii) with the agreement of each Multicurrency Lender, any other Foreign Currency, so long as, in respect of any such specified Foreign Currency or other Foreign Currency, at such time (a) such Foreign Currency is freely transferable and convertible into Dollars in the relevant local market, and (b) no central bank or other governmental authorization in the country of issue of such Foreign Currency (including, in the case of the Euro, any authorization by the European Central Bank) is required to permit use of such Foreign Currency by any Multicurrency Lender for making any Loan hereunder and/or to permit the Borrower to borrow and repay the principal thereof and to pay the interest thereon, unless such authorization has been obtained and is in full force and effect.
“Agreement” has the meaning assigned to such term in the preamble to this
Agreement.
“Alternate Base Rate” means, for any day, a rate per annum equal to the greater of
(a) zero and (b) the highest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate for such day plus 1/2 of 1% and (iii) the rate per annum equal to 1% plus Term SOFR for an interest period of one (1) month foron such day. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or Term SOFR (or successor therefor) as set forth above shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or Term SOFR (or successor thereof), respectively. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrative Agent to obtain a quotation in accordance with the terms thereof, the Alternate Base Rate shall be determined without regard to clause (b)(ii) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist.
“Applicable Dollar Percentage” means, with respect to any Dollar Lender, the percentage of the total Dollar Commitments represented by such Dollar Lender’s Dollar Commitment. If the Dollar Commitments have terminated or expired, the Applicable Dollar Percentages shall be determined based upon the Dollar Commitments most recently in effect, giving effect to any assignments; provided that, for the avoidance of doubt, on and after the
3
Non-Extended Commitment Termination Date for any Non-Extending Lender, the Applicable Dollar Percentage of such Non-Extending Lender that is a Dollar Lender shall be 0%.
“Applicable Financial Statements” means, as at any date, the most-recent audited financial statements of the Borrower delivered to the Lenders; provided that if immediately prior to the delivery to the Lenders of new audited financial statements of the Borrower a Material Adverse Change (the “Pre-existing MAC”) shall exist (regardless of when it occurred), then the “Applicable Financial Statements” as at said date means the Applicable Financial Statements in effect immediately prior to such delivery until such time as the Pre-existing MAC shall no longer exist.
“Applicable Multicurrency Percentage” means, with respect to any Multicurrency Lender, the percentage of the total Multicurrency Commitments represented by such Multicurrency Lender’s Multicurrency Commitment. If the Multicurrency Commitments have terminated or expired, the Applicable Multicurrency Percentages shall be determined based upon the Multicurrency Commitments most recently in effect, giving effect to any assignments; provided that, for the avoidance of doubt, on and after the Non-Extended Commitment Termination Date for any Non-Extending Lender, the Applicable Multicurrency Percentage of such Non-Extending Lender that is a Multicurrency Lender shall be 0%.
“Applicable Percentage” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments; provided that, for the avoidance of doubt, on and after the Non-Extended Commitment Termination Date for any Non-Extending Lender, the Applicable Percentage of such Non-Extending Lender shall be 0%.
“Approved Dealer” means (a) in the case of any Portfolio Investment that is not a
U.S. Government Security, a bank or a broker-dealer registered under the Securities Exchange Act of 1934, as amended, of nationally recognized standing or an Affiliate thereof, (b) in the case of a U.S. Government Security, any primary dealer in U.S. Government Securities, and (c) in the case of any foreign Portfolio Investment, any foreign bank or broker-dealer of internationally recognized standing or an Affiliate thereof, in the case of each of clauses (a), (b) and (c) above, as set forth on Schedule 1.01(a) or any other bank or broker-dealer or Affiliate thereof acceptable to the Administrative Agent in its reasonable determination.
“Approved Pricing Service” means a pricing or quotation service as set forth in Schedule 1.01(a) or any other pricing or quotation service approved by the Board of Directorsboard of directors of the Borrower and designated in writing to the Administrative Agent (which designation shall be accompanied by a copy of a resolution of the Board of Directorsboard of directors of the Borrower that such pricing or quotation service has been approved by the Borrower).
“Approved Third-Party Appraiser” means any Independent nationally recognized third-party appraisal firm (a) designated by the Borrower in writing to the Administrative Agent (which designation shall be accompanied by a copy of a resolution of the Board of Directorsboard of directors of the Borrower that such firm has been approved by the Borrower
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for purposes of assisting the Board of Directorsboard of directors of the Borrower in making valuations of portfolio assets to determine the Borrower’s compliance with the applicable provisions of the Investment Company Act) and (b) acceptable to the Administrative Agent. It is understood and agreed that Houlihan Lokey Howard & Zukin Capital, Inc., Duff & PhelpsKroll, LLC, Murray, Devine and Company, Lincoln International LLC (formerly known as Lincoln Partners LLC) and Valuation Research Corporation are acceptable to the Administrative Agent. As used in Section 5.12 hereof, an “Approved Third-Party Appraiser selected by the Administrative Agent” shall mean any of the firms identified in the preceding sentence and any other Independent nationally recognized third-party appraisal firm identified by the Administrative Agent and consented to by the Borrower (such consent not to be unreasonably withheld).
“Assignment and Assumption” means an Assignment and Assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A (with adjustments thereto to reflect the Classes of Commitments and/or Loans being assigned or outstanding at the time of the respective assignment) or any other form approved by the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower.
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Australia.
“Assuming Lender” has the meaning assigned to such term in Section 2.08(e)(i). “ASU” has the meaning assigned to such term in Section 1.04.
“Australian Dollars” means the lawful currency of The Commonwealth of
“Availability Period” means (a) in the case of any Extending Lender (with respect
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to such Extending Lender’s Extended Loans), the Extended Availability Period or (b) in the case of any Non-Extending Lender (with respect to such Non-Extending Lender’s Non-Extended Loans), the Non-Extended Availability Period for such Non-Extending Lender, as applicable.
“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark for any Currency, as applicable, (x) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark pursuant to this Agreement, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 2.212.22(d).
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
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of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Base Rate Term SOFR Determination Day” has the meaning set forth in the definition of “Term SOFR”.
“Benchmark” means, initially, with respect to any Loans denominated in (a) Dollars, the Term SOFR Reference Rate, (b) Canadian Dollars, the Term CORRA Reference Rate, (c) Sterling or Swiss Francs, the Daily Simple RFR for such Currency, and (cd) any other Agreed Foreign Currency, the Adjusted Term Benchmark Rate for such Currency; provided that, if a Benchmark Transition Event or an Other Benchmark Rate Election and its related Benchmark Replacement Date have occurred with respect to the Term SOFR Reference Rate, the Term CORRA Reference Rate, the Daily Simple RFR or the Adjusted Term Benchmark Rate for such Currency or the then current Benchmark, as applicable, then “Benchmark” shall mean the applicable Benchmark Replacement for such Currency, to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (a) of Section 2.212.22.
“Benchmark Replacement” means, with respect to any Benchmark Transition Event for any then-current Benchmark or Other Benchmark Rate Election, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date; provided that, other than in the case of the replacement of the Term SOFR Reference Rate, but including in connection with any Other Benchmark Rate Election, such alternative shall be the alternative set forth in clause (2) below:
If the Benchmark Replacement as determined pursuant to clause (1) or (2) of this definition would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark for a Currency with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any such setting of such Unadjusted
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Benchmark Replacement (excluding, for the avoidance of doubt, Daily Simple SOFR), the spread adjustment, or method for calculating or determining such spread adjustment (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower for such Currency giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for syndicated credit facilities denominated in the applicable Currency in the U.S. syndicated loan market at such time.
“Benchmark Replacement Date” means a date and time determined by the Administrative Agent, which date shall be no later than the earliest to occur of the following events with respect to the then-current Benchmark:
therein; and
component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof);
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) of this definition with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
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“Benchmark Transition Event” means, with respect to any then-current Benchmark, the occurrence of one or more of the following events with respect to such Benchmark:
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability Period” means, with respect to any then-current Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement Date has occurred with respect to such Benchmark if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any other Loan Document in accordance with Section 2.212.22 and (y) ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any other Loan Document in accordance with Section 2.212.22.
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any person whose assets include (for purposes of ERISA Section 3(42) or
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otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“Board” means the Board of Governors of the Federal Reserve System of the United States of America (or any successor thereof).
“Borrower” has the meaning assigned to such term in the preamble to this
Agreement.
“Borrower Asset Coverage Ratio” means the ratio, determined for the Obligors,
without duplication, of (a) (i) Total Assets minus (ii) Total Assets Concentration Limitation to
(b) Total Secured Debt.
“Borrowing” means (a) all Syndicated ABR Loans of the same Class made, converted or continued on the same date, (b) all Term Benchmark Loans of the same Class denominated in the same Currency that have the same Interest Period, (c) all RFR Loans of the same Class and Type denominated in the same Currency that have the same Interest Period or
(d) a Swingline Loan.
“Borrowing Base” has the meaning assigned to such term in Section 5.13. “Borrowing Base Certificate” means a certificate of a Financial Officer of the
Borrower, substantially in the form of Exhibit B (or such other form as shall be reasonably satisfactory to the Administrative Agent) and appropriately completed.
“Borrowing Base Deficiency” means, at any date on which the same is determined, the amount, if any, that (a) the aggregate Covered Debt Amount as of such date exceeds (b) the Borrowing Base as of such date.
“Borrowing Request” means a request by the Borrower for a Syndicated Borrowing in accordance with Section 2.03, which, if in writing, shall be substantially in the form of Exhibit C.
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed, provided that (a) when used in relation to Term Benchmark Loans or any interest rate settings, fundings, disbursements, settlements or payments of any such Term Benchmark Loan, or any other dealings in the applicable Currency of such Term Benchmark Loan, the term “Business Day” shall also exclude any day that is not a Term Benchmark Banking Day for such Currency and (b) when used in relation to RFR Loans or any interest rate settings, fundings, disbursements, settlements or payments of any such RFR Loan, or any other dealings in the applicable Currency of such RFR Loan, the term “Business Day” shall also exclude any day that is not a RFR Business Day for such Currency.
“Calculation Amount” shall mean, as of the end of any Testing Period, an amount equal to the greater of: (a) (i) 125% of the Adjusted Covered Debt Balance (as of the end of such Testing Period) minus (ii) the aggregate Value of all Quoted Investments included in the
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Borrowing Base (as of the end of such Testing Period) and (b) 10% of the aggregate Value of all
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Unquoted Investments included in the Borrowing Base (as of the end of such Testing Period); provided that in no event shall more than 25% (or, if clause (b) applies, 10%, or as near thereto as reasonably practicable) of the aggregate Value of the Unquoted Investments in the Borrowing Base be tested in respect of any applicable Testing Period.
“CAM Exchange” means the exchange of the Lenders’ interests provided for in
Article VII.
“CAM Exchange Date” means the date on which any Event of Default referred to
in clause (j) of Article VII shall occur or the date on which the Borrower receives written notice from the Administrative Agent that any Event of Default referred to in clause (i) of Article VII has occurred.
“CAM Percentage” means, as to each Lender, a fraction, expressed as a decimal, of which (a) the numerator shall be the aggregate Dollar Equivalent of the Designated Obligations owed to such Lender (whether or not at the time due and payable) immediately prior to the CAM Exchange Date and (b) the denominator shall be the aggregate Dollar Equivalent amount of the Designated Obligations owed to all the Lenders (whether or not at the time due and payable) immediately prior to the CAM Exchange Date.
“Canadian Dollars” means the singlelawful currency of Canada.
“Canadian Prime Rate” means, on any day, the rate determined by the Administrative Agent to be the higher of (i) the rate equal to the PRIMCAN Index rate that appears on the Bloomberg screen at 10:15 a.m. Toronto time on such day (or, in the event that the PRIMCAN Index is not published by Bloomberg, any other information services that publishes such index from time to time, as selected by the Administrative Agent in its reasonable discretion) and (ii) the rate per annum equal to Term CORRA plus 1%; provided, that if any of the above rates shall be less than 0%, such rate shall be deemed to be 0% for purposes of this Agreement. Any change in the Canadian Prime Rate due to a change in the PRIMCAN Index or Term CORRA shall be effective from and including the effective date of such change in the PRIMCAN Index or Term CORRA, respectively.
“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Cash” means any immediately available funds in Dollars or in any currency other than Dollars (measured in terms of the Dollar Equivalent thereof) which is a freely convertible currency.
“Cash Collateralize” means, in respect of a Letter of Credit or any obligation hereunder, to provide and pledge cash collateral pursuant to Section 2.05(k), at a location and pursuant to documentation in form and substance reasonably satisfactory to Administrative Agent and each Issuing Bank. “Cash Collateral”, “Cash Collateralized” and “Cash
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Collateralization” shall have meanings correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“Cash Equivalents” means investments (other than Cash) that are one or more of the following obligations:
(I) money market deposit accounts, (II) eurodollar time deposits, (III) commercial eurodollar
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sweep services or (IV) open commercial paper services, in each case having, at such date of
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acquisition, a credit rating at least A-1 from S&P and at least P-1 from Moody’s and maturing not later than 270 days from the date of acquisition thereof;
provided that (i) in no event shall Cash Equivalents include any obligation that provides for the payment of interest alone (for example, interest-only securities or “IOs”); (ii) if any of Moody’s or S&P changes its rating system, then any ratings included in this definition shall be deemed to be an equivalent rating in a successor rating category of Moody’s or S&P, as the case may be;
(iii) Cash Equivalents (other than U.S. Government Securities, repurchase agreements or the money market funds described in clause (e) of this definition of Cash Equivalents) shall not include any such investment of more than 10% of total assets of the Borrower and its Subsidiaries in any single issuer; and (iv) in no event shall Cash Equivalents include any obligation that is not denominated in Dollars or an Agreed Foreign Currency.
“Central Bank Rate” means the greater of (A) the sum of (i) for any Loan denominated in (x) Sterling, the Bank of England (or any successor thereto)’s “Bank Rate” as published by the Bank of England (or any successor thereto) from time to time, (y) Euro, one of the following three rates as may be selected by the Administrative Agent in its reasonable discretion: (1) the fixed rate for the main refinancing operations of the European Central Bank (or any successor thereto), or, if that rate is not published, the minimum bid rate for the main refinancing operations of the European Central Bank (or any successor thereto), each as published by the European Central Bank (or any successor thereto) from time to time, (2) the rate for the marginal lending facility of the European Central Bank (or any successor thereto), as published by the European Central Bank (or any successor thereto) from time to time or (3) the rate for the deposit facility of the central banking system of the Participating Member States, as published by the European Central Bank (or any successor thereto) from time to time or (z) any other Agreed Foreign Currency, a central bank rate as determined by the Administrative Agent in its reasonable discretion; plus (ii) the applicable Central Bank Rate Adjustment and (B) 0%.
“Central Bank Rate Adjustment” means, for any date, for any Loan denominated in (A) Sterling, a rate equal to the difference (which may be a positive or negative value or zero) of (i) the average of the Daily Simple RFR for Sterling for the five most recent RFR Business Days preceding such day for which SONIA was available (excluding, from such averaging, the highest and the lowest SONIA applicable during such period of five RFR Business Days) minus
(ii) the Central Bank Rate in respect of Sterling in effect on the last RFR Business Day in such period, (B) Euro, a rate equal to the difference (which may be a positive or negative value or zero) of (i) the average of the Adjusted Term Benchmark Rate for Euros for the five most recent Term Benchmark Bank Days for Euro preceding such day for which the EURIBOR Screen Rate was available (excluding, from such averaging, the highest and the lowest EURIBOR Screen Rate applicable during such period of five Term Benchmark Bank Days for Euro) minus (ii) the Central Bank Rate in respect of Euro in effect on the last Term Benchmark Bank Day for Euro in such period and (C) any other Agreed Foreign Currency, a Central Bank Rate Adjustment as determined by the Administrative Agent in its reasonable discretion. For the purposes of this definition, (x) the term “Central Bank Rate” shall be determined disregarding clause (A)(ii) of the definition of such term and (y) the Adjusted Term Benchmark Rate for Euros on any day shall be based on the EURIBOR Screen Rate, on such day at approximately the time referred to in the definition of such term for deposits in Euro for a maturity of one month.
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“Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) other than TSSP Management Holdings, L.P or any of its Affiliates that are in the business of managing and advising clients, of shares representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of the Borrower; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i) nominated by the requisite members of the board of directors of the Borrower nor (ii) appointed by a majority of the directors so nominated; (c) the acquisition of direct or indirect Control of the Borrower by any Person or group other than TSSP Management Holdings, L.P or any of its Affiliates that are in the business of managing and advising clients; or (d) the External Manager ceases to be Controlled by TSSP Management Holdings, L.P. (or any of its Affiliates).
“Change in Law” means the occurrence, after the date of this Agreement (or with respect to a Person becoming a Lender by assignment or joinder after the date of this Agreement, the effective date thereof), of (a) the adoption of any law, treaty or governmental rule or regulation or any change in any law, treaty or governmental rule or regulation or in the interpretation, administration or application thereof (regardless of whether the underlying law, treaty or governmental rule or regulation was issued or enacted prior to the date hereof (or with respect to a Person becoming a Lender by assignment or joinder after the date of this Agreement, the effective date thereof)), but excluding proposals thereof, or any determination of a court or Governmental Authority, (b) any guideline, request or directive by any Governmental Authority (whether or not having the force of law) or any implementation rules or interpretations of previously issued guidelines, requests or directives, in each case that is issued or made after the date hereof (or with respect to a Person becoming a Lender by assignment or joinder after the date of this Agreement, the effective date thereof) or (c) compliance by any Lender (or its applicable lending office) or any company controllingControlling such Lender with any guideline, request or directive regarding capital adequacy or liquidity (whether or not having the force of law) of any such Governmental Authority, in each case adopted after the date hereof (or with respect to a Person becoming a Lender by assignment or joinder after the date of this Agreement, the effective date thereof). For the avoidance of doubt, all requests, rules, guidelines or directives concerning liquidity and capital adequacy issued (i) by any United States regulatory authority under or in connection with the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and (ii) by any Governmental Authority in connection with the implementation of the recommendations of the Bank for International Settlements or the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority), in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date adopted, issued, promulgated or implemented.
“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan is, or the Loans constituting such Borrowing are, Syndicated Dollar Loans, Syndicated Multicurrency Loans or Swingline Loans; when used in reference to any Lender’s (i) Class of Commitment, refers to whether such Lender is a Dollar Lender or a Multicurrency Lender and
(ii) Class of Final Maturity Date, refers to whether such Lender is an Extending Lender or a Non-Extending Lender; and, when used in reference to any Commitment, refers to whether such
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Commitment is a Dollar Commitment or a Multicurrency Commitment. The “Class” of a Letter
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of Credit refers to whether such Letter of Credit is a Dollar Letter of Credit or a Multicurrency Letter of Credit.
“Code” means the Internal Revenue Code of 1986, as amended from time to time. “Collateral” has the meaning assigned to such term in the Guarantee and Security
Agreement.
“Collateral Agent” means Truist in its capacity as Collateral Agent under the
Guarantee and Security Agreement and the other Security Documents, and includes any successor Collateral Agent thereunder.
“Collateral Pool” means, at any time, each Portfolio Investment that has been Delivered (as defined in the Guarantee and Security Agreement) to the Collateral Agent and is subject to the Lien of the Guarantee and Security Agreement, and then only for so long as such Portfolio Investment continues to be Delivered as contemplated therein and in which the Collateral Agent has a first-priority perfected Lien as security for the Secured Obligations (as such term is defined in the Guarantee and Security Agreement) (subject to any Lien permitted by Section 6.02 hereof with respect to such Portfolio Investment); provided that in the case of any Portfolio Investment in which the Collateral Agent has a first-priority perfected security interest pursuant to a valid Uniform Commercial Code filing (and for which no other method of perfection with a higher priority is possible), such Portfolio Investment may be included in the Borrowing Base so long as all remaining actions to complete “Delivery” are satisfied in full within seven (7) days of such inclusion.
“Combined Debt Amount” means, as of any date, (i) the aggregate amount of Commitments as of such date (or, if greater, the Revolving Credit Exposures of all Lenders as of such date) plus (ii) the aggregate amount of outstanding Designated Indebtedness (as such term is defined in the Guarantee and Security Agreement) and, without duplication, the aggregate amount of unused commitments under any Designated Indebtedness (as such term is defined in the Guarantee and Security Agreement).
“Commitment Increase” has the meaning assigned to such term in Section 2.08(e)(i).
“Commitment Increase Date” has the meaning assigned to such term in Section 2.08(e)(i).
“Commitment Increase Supplement” has the meaning assigned in Section
2.08(e)(ii).
“Commitment Termination Date” means the Extended Commitment Termination
Date or the relevant Non-Extended Commitment Termination Date, as applicable.
“Commitments” means, collectively, the Dollar Commitments and the Multicurrency Commitments.
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“Conforming Changes” means with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Term Benchmark Rate”, the definition of “Alternate Base Rate”, the definition of “Canadian Prime Rate”, the definition of “Business Day”, the definition of “Term Benchmark Banking Day”, the definition of “U.S. Government Securities Business Day”, the definition of “Daily Simple RFR”, the definition of “RFR”, the definition of “RFR Business Day”, the definition of “RFR Interest Day”, the definition of “RFR Reference Day”, the definition of “Interest Period” or any similar or analogous definition, timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section 2.15 and other technical, administrative or operational matters) that the Administrative Agent, after consultation with the Borrower, decides in its reasonable discretion may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent (after consultation with the Borrower) decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Consolidated Asset Coverage Ratio” means the ratio, determined on a consolidated basis for Borrower and its Subsidiaries, without duplication, of (a) the value of total assets of the Borrower and its Subsidiaries, less all liabilities and indebtedness not represented by senior securities to (b) the aggregate amount of senior securities representing indebtedness of Borrower and its Subsidiaries (including this Agreement), in each case as determined pursuant to the Investment Company Act and any orders of the Securities and Exchange Commission issued to or with respect to Borrower thereunder, including any exemptive relief granted by the Securities and Exchange Commission with respect to the indebtedness of any SBIC Subsidiary.
“Consolidated Group” has the meaning assigned to such term in Section 5.13(a). “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlled” has a meaning correlative thereto; provided, however, “Control” shall not include “negative” control or “blocking” rights that constitute “protective rights” whereby action cannot be taken without the vote or consent of any Person.
“CORRA” means the Canadian Overnight Repo Rate Average administered and published by the Bank of Canada (or any successor administrator of the Canadian Overnight Repo Rate Average).
“Covered Debt Amount” means, on any date, the sum of (x) all of the Revolving Credit Exposures of all Lenders on such date plus (y) the aggregate amount of Other Covered Indebtedness, the 2024 Notes, the 2026 Notes, the 2028 Notes, the 2029 Notes, Special
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Unsecured Indebtedness and Unsecured Longer-Term Indebtedness on such date minus (z) the LC Exposures fully Cash Collateralized on such date pursuant to Section 2.05(k) and the last paragraph of Section 2.09(a); provided that the 2024 Notes, the 2026 Notes, the 2028 Notes, the 2029 Notes, Special Unsecured Indebtedness and Unsecured Longer-Term Indebtedness shall be excluded from the calculation of the Covered Debt Amount, in each case, until the date that is nine (9) months prior to the scheduled maturity date of the 2024 Notes, the 2026 Notes, the 2028 Notes, the 2029 Notes, Special Unsecured Indebtedness or such Unsecured Longer-Term Indebtedness, as applicable (provided that, to the extent, but only to the extent, any portion of the 2024 Notes, the 2026 Notes, the 2028 Notes, the 2029 Notes, Special Unsecured Indebtedness or Unsecured Longer-Term Indebtedness is subject to a contractually scheduled amortization payment or other principal payment or mandatory redemption earlier than six (6) months after the Final Maturity Date (in the case of the 2024 Notes, the 2026 Notes, the 2028 Notes, the 2029 Notes and Unsecured Longer-Term Indebtedness) or earlier than the original final maturity date of such Indebtedness (in the case of Special Unsecured Indebtedness), such portion of such Indebtedness, to the extent then outstanding, shall be included in the calculation of the Covered Debt Amount beginning upon the date that is the later of (i) nine (9) months prior to such scheduled amortization payment or other principal payment or mandatory redemption and (ii) the date the Borrower becomes aware that such Indebtedness is required to be paid or redeemed).
“Currency” means Dollars or any Foreign Currency.
“Daily Simple RFR” means, for any day (an “RFR Interest Day”), an interest rate per annum equal to (a) for any RFR Loan denominated in Sterling, the greater of (i) SONIA for the day (the “RFR Reference Day”) that is five (5) RFR Business Days prior to (A) if such RFR Interest Day is an RFR Business Day, such RFR Interest Day or (B) if such RFR Interest Day is not an RFR Business Day, the RFR Business Day immediately preceding such RFR Interest Day, in each case, plus the applicable RFR Applicable Credit Adjustment Spread for the Interest Period in which such RFR Interest Day occurs and (ii) 0.00%; and (b) for any RFR Loan denominated in Swiss Francs, the greater of (i) SARON for the RFR Reference Day that is five
(5) Business Days prior to (A) if such RFR Interest Day is an RFR Business Day, such RFR Interest Day or (B) if such RFR Interest Day is not an RFR Business Day, the RFR Business Day immediately preceding such RFR Interest Day, in each case, plus the applicable RFR Applicable Credit Adjustment Spread for the Interest Period in which such RFR Interest Day occurs and (ii) 0.00%. If by 5:00 pm (local time for the applicable RFR), on the second RFR Business Day immediately following any RFR Reference Day, the applicable RFR Rate in respect of such RFR Reference Day has not been published on the applicable RFR Administrator’s Website and a Benchmark Replacement Date with respect to the applicable Daily Simple RFR has not occurred, then the RFR Rate for such RFR Reference Day will be the RFR Rate as published in respect of the first preceding RFR Business Day for which such RFR Rate was published on the RFR Administrator’s Website; provided that any RFR Rate as determined pursuant to this sentence shall be utilized for purposes of calculating the Daily Simple RFR for no more than three (3) consecutive RFR Interest Days. Any change in Daily Simple RFR due to a change in the applicable RFR Rate shall be effective from and including the effective date of such change in such RFR Rate without notice to the Borrower.
“Daily Simple SOFR” means, for any day (a “Daily Simple SOFR Interest Day”) the greater of (i) SOFR for the day that is five (5) Business Days prior to (A) if such Daily
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Simple SOFR Interest Day is a Business Day, such Daily Simple SOFR Interest Day, (B) if such Daily Simple SOFR Interest Day is not a Business Day, the Business Day immediately preceding such Daily Simple SOFR Interest Day and (ii) 0.00%.
“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“Defaulting Lender” means, subject to Section 2.19(b), any Lender that, as determined by the Administrative Agent, (a) has failed to (i) fund all or any portion of its Loans or participations in Letters of Credit or Swingline Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s reasonable determination that one or more conditions precedent to funding (each of which conditions precedent, together with the applicable default, if any, shall be specifically identified in detail in such writing) has not been satisfied or has not otherwise been waived in accordance with the terms of this Agreement, or (ii) pay to the Administrative Agent, any Issuing Bank, any Swingline Lender or any Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two (2) Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent, any Issuing Bank or any Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s reasonable determination that a condition precedent to funding (which condition precedent, together with the applicable default, if any, shall be specifically identified in detail in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by Administrative Agent and Borrower), or (d) Administrative Agent has received notification that such Lender has become, or has a direct or indirect parent company that is, (i) insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, (ii) other than via an Undisclosed Administration, the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Lender or its direct or indirect parent company, or such Lender or its direct or indirect parent company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment or (iii) the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority or instrumentality so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or
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agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or
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more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.19(b)) upon such determination (and the Administrative Agent shall deliver written notice of such determination to the Borrower, each Issuing Bank and each Lender and each Swingline Lender).
“Designated Obligations” means all obligations of the Borrower with respect to
(a) principal of and interest on the Loans and (b) accrued and unpaid fees under the Loan Documents.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith; provided that the term “Disposition” or “Dispose” shall not include the disposition of Investments originated by the Borrower and immediately transferred to a Financing Subsidiary pursuant to a transaction not prohibited hereunder.
“Disqualified Equity Interest” means any Equity Interest of the Borrower that is not a Permitted Equity Interest.
“Dollar Commitment” means, with respect to each Dollar Lender during such Dollar Lender’s Availability Period, the commitment of such Dollar Lender to make Syndicated Loans, and to acquire participations in Letters of Credit and Swingline Loans, denominated in Dollars hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Dollar Credit Exposure hereunder, as such commitment may be (a) reduced or increased from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s Dollar Commitment is, as of the Fourteenth Amendment Effective Date, set forth on Schedule 1.01(b), or in thea Commitment Increase Supplement or Assignment and Assumption pursuant to which such Lender shall have assumed its Dollar Commitment, as applicable. The aggregate amount of the Lenders’ Dollar Commitments as of the FourteenthFifteenth Amendment Effective Date is $560,000,000550,000,000.
“Dollar Equivalent” means, on any date of determination, with respect to an amount denominated in any Foreign Currency, the amount of Dollars that would be required to purchase such amount of such Foreign Currency on the date two (2) Business Days prior to such date, based upon the spot selling rate at which the Administrative Agent offers to sell such Foreign Currency for Dollars in the Principal Financial Center for such Foreign Currency at approximately 11:00 a.m., local time in such Principal Financial Center, for delivery two (2) Business Days later.
“Dollar LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Dollar Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements in respect of such Letters of Credit that have not yet been reimbursed by or on behalf of the Borrower at such time. The Dollar LC Exposure of any Lender at any time shall be its Applicable Dollar Percentage of the total Dollar LC Exposure at such time.
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“Dollar Lender” means the Persons listed on Schedule 1.01(b) as having Dollar Commitments and any other Person that shall have become a party hereto pursuant to ana Commitment Increase Supplement or Assignment and Assumption that provides for it to assume a Dollar Commitment or to acquire Revolving Dollar Credit Exposure, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
“Dollar Letters of Credit” means Letters of Credit that utilize the Dollar
Commitments.
“Dollar Loan” means a Loan denominated in Dollars.
“Dollars” or “$” refers to lawful money of the United States of America.
“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein and Norway.
“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02), which date is February 27, 2014.
“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests or equivalents (however designated, including any instrument treated as equity for U.S. federal income tax purposes) in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) any failure by any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to
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such Plan; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
“Erroneous Payment” has the meaning assigned to it in Section 8.09(a). “Erroneous Payment Deficiency Assignment” has the meaning assigned to it in
Section 8.09(d).
“Erroneous Payment Impacted Class” has the meaning assigned to it in Section
8.09(d).
“Erroneous Payment Return Deficiency” has the meaning assigned to it in Section
8.09(d).
“Erroneous Payment Subrogation Rights” has the meaning assigned to it in
Section 8.09(d).
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“EURIBOR Screen Rate” has the meaning set forth in the definition of “Term Benchmark Rate”.
“Euro” means a single currency of the Participating Member States. “Event of Default” has the meaning assigned to such term in Article VII.
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) Taxes imposed on (or measured by) its net income (however denominated), net profits, franchise Taxes and branch profits or any similar Taxes, in each case, (i) imposed by the United States of America (or any state or political subdivision thereof), or by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) any Taxes imposed by any jurisdiction by reason of the recipient having any present or former connection with such jurisdiction (other than a connection arising solely from entering into, receiving any payment under or enforcing its
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rights under this Agreement or any other Loan Document or selling or assigning an interest in any Loan or Loan Document), (b) in the case of a Lender, any Taxes that are U.S. withholding taxes imposed on amounts payable to such Lender (i) at the time such Lender (other than an assignee pursuant to a request by the Borrower under Section 2.18(b)) becomes a party to this Agreement or designates a new lending office, except to the extent that such Lender’s assignor or such Lender was entitled to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.16, at the time of such assignment or designation (other than to the extent such withholding is as a result of a CAM Exchange), or (ii) that is attributable to such Lender’s failure or inability to comply with Section 2.16(f), (c) any U.S. federal, state or local backup withholding Taxes imposed on payments made under any Loan Document, and (d) any Taxes that are imposed under FATCA.
“Existing Credit Agreement” has the meaning assigned to such term in the recitals to this Agreement.
“Existing Lenders” has the meaning assigned to such term in the recitals to this
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Agreement. Agreement.
“Existing Loans” has the meaning assigned to such term in the recitals to this “Extended Applicable Margin” means, with respect to any Extending Lender: (a)
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if the Borrowing Base (as of the most recently delivered Borrowing Base Certificate) is equal to or greater than 1.60 times the Combined Debt Amount, (i) with respect to any ABR Loan, 0.75% per annum; (ii) with respect to any Term Benchmark Loan, 1.75% per annum; and (iii) with respect to any RFR Loan 1.75% per annum; and (b) if the Borrowing Base (as of the most recently delivered Borrowing Base Certificate) is less than 1.60 times the Combined Debt Amount (i) with respect to any ABR Loan, 0.875% per annum; (ii) with respect to any Term Benchmark Loan, 1.875% per annum; and (iii) with respect to any RFR Loan 1.875% per annum. Any change in the Extended Applicable Margin due to a change in the ratio of the Borrowing Base to the Combined Debt Amount as set forth in any Borrowing Base Certificate shall be effective from and including the day immediately succeeding the date of delivery of such Borrowing Base Certificate; provided that if any Borrowing Base Certificate has not been delivered in accordance with Section 5.01(d), then from and including the day immediately succeeding the date on which such Borrowing Base Certificate was required to be delivered, the Extended Applicable Margin shall be the Extended Applicable Margin set forth in clause (b) above to and including the date on which the required Borrowing Base Certificate is delivered.
“Extended Availability Period” means, with respect to any Extending Lender, the period from and including the Effective Date to but excluding the earlier of the Extended Commitment Termination Date and the date of termination of the Commitments.
“Extended Commitment Termination Date” means, with respect to each Extending Lender, June 11April 24, 20272028.
“Extended Final Maturity Date” means, with respect to each Extending Lender, June 12April 24, 20282029.
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“Extended Loans” means Loans or Borrowings of any Extending Lender maturing on the Extended Final Maturity Date.
“Extending Lender” means each Lender designated as an “Extending Lender” on Schedule 1.01(b).
“External Manager” means Sixth Street Specialty Lending Advisers, LLC. “Extraordinary Receipts” means any cash received by or paid to any Obligor on
account of any foreign, United States, state or local tax refunds, pension plan reversions, judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, condemnation awards (and payments in lieu thereof), indemnity payments received not in the ordinary course of business and any purchase price adjustment received not in the ordinary course of business in connection with any purchase agreement and proceeds of insurance (excluding, however, for the avoidance of doubt, proceeds of any issuance of Equity Interests and issuances of Indebtedness by any Obligor); provided that Extraordinary Receipts shall not include any (x) amounts that the Borrower receives from the Administrative Agent or any Lender pursuant to Section 2.16(f), or (y) cash receipts to the extent received from proceeds of insurance, condemnation awards (or payments in lieu thereof), indemnity payments or payments in respect of judgments or settlements of claims, litigation or proceedings to the extent that such proceeds, awards or payments are received by any Person in respect of any unaffiliated third party claim against or loss by such Person and promptly applied to pay (or to reimburse such Person for its prior payment of) such claim or loss and the costs and expenses of such Person with respect thereto.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any regulations promulgated thereunder and official interpretations thereof and any foreign legislation implemented to give effect to any intergovernmental agreements entered into thereunder and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“Fifteenth Amendment Effective Date” means April 24, 2024.
“Final Maturity Date” means (i) in the case of any Extending Lender (with respect to such Extending Lender’s Extended Loans), the Extended Final Maturity Date or (ii) in the case of any Non-Extending Lender (with respect to such Non-Extending Lender’s Non-Extended Loans), such Non-Extending Lender’s Non-Extended Final Maturity Date, as applicable.
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“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.
“Financing Subsidiary” means an SPE Subsidiary or an SBIC Subsidiary. “Floor” means a rate of interest equal to zero percent (0.00%).
“Foreign Currency” means at any time any Currency other than Dollars.
“Foreign Currency Equivalent” means, with respect to any amount in Dollars, the amount of any Foreign Currency that could be purchased with such amount of Dollars using the reciprocal of the foreign exchange rate(s) specified in the definition of the term “Dollar Equivalent”, as determined by the Administrative Agent.
“Foreign Lender” means any Lender that is not a “United States person” as defined under Section 7701(a)(30) of the Code.
“Foreign Subsidiary” means any (a) direct or indirect Subsidiary of the Borrower that is organized under the laws of any jurisdiction other than the United States or its territories or possessions and that is treated as a corporation for United States federal income tax purposes,
(b) direct or indirect Subsidiary of the Borrower which is a “controlled foreign corporation” within the meaning of the Code or (c) direct or indirect Subsidiary that is disregarded as an entity that is separate from its owner for United States federal income tax purposes and substantially all of its assets consist of the Capital Stock of one or more direct or indirect Foreign Subsidiaries.
“Fourteenth Amendment Effective Date” means June 12, 2023.
“Fronting Exposure” means, at any time there is a Defaulting Lender, with respect to any Issuing Bank, such Defaulting Lender’s (a) Applicable Dollar Percentage of the outstanding Dollar LC Exposure and (b) Applicable Multicurrency Percentage of the outstanding Multicurrency LC Exposure, in each case with respect to Letters of Credit issued by such Issuing Bank other than Dollar LC Exposure or Multicurrency LC Exposure, as the case may be, as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.
“GAAP” means generally accepted accounting principles in the United States of
America.
“Governmental Authority” means the government of the United States of
America, or of any other nation, or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank, supranational authority or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Guarantee” of, or “Guaranteed” by, any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the
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guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include (i) endorsements for collection or deposit in the ordinary course of business or (ii) customary indemnification agreements entered into in the ordinary course of business, provided that such indemnification obligations are unsecured, such Person has determined that any liability thereunder is remote and such indemnification obligations are not the functional equivalent of the guaranty of a payment obligation of the primary obligor.
“Guarantee and Security Agreement” means that certain Amended and Restated Guarantee and Security Agreement dated as of July 2, 2013 among the Borrower, the Administrative Agent, each Subsidiary of the Borrower from time to time party thereto, each holder (or a representative or trustee therefor) from time to time of any Secured Longer-Term Indebtedness or Secured Shorter-Term Indebtedness, and the Collateral Agent, as the same shall be amended, restated, modified and supplemented and in effect from time to time.
“Guarantee Assumption Agreement” means a Guarantee Assumption Agreement substantially in the form of Exhibit B to the Guarantee and Security Agreement between the Collateral Agent and an entity that pursuant to Section 5.08 is required to become a “Subsidiary Guarantor” under the Guarantee and Security Agreement (with such changes as the Administrative Agent shall request consistent with the requirements of Section 5.08).
“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange protection agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.
“Immaterial Subsidiaries” means those Subsidiaries of the Borrower that are “designated” as Immaterial Subsidiaries by the Borrower from time to time (it being understood that the Borrower may at any time change any such designation); provided that such designated Immaterial Subsidiaries shall collectively meet all of the following criteria as of the date of the most recent balance sheet required to be delivered pursuant to Section 5.01: (a) the aggregate assets of such Subsidiaries and their Subsidiaries (on a consolidated basis) as of such date do not exceed an amount equal to 3% of the consolidated assets of the Borrower and its Subsidiaries as of such date; and (b) the aggregate revenues of such Subsidiaries and their Subsidiaries (on a consolidated basis) for the fiscal quarter ending on such date do not exceed an amount equal to 3% of the consolidated revenues of the Borrower and its Subsidiaries for such period.
“Increasing Lender” has the meaning assigned to such term in Section 2.08(e)(i). “Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any kind, (b) all
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obligations of such Person evidenced by bonds, debentures, notes or similar instruments representing extensions of credit, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person (excluding accounts payable and accrued expenses incurred in the ordinary course of business), (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding accounts payable and accrued expenses incurred in the ordinary course of business), (e) all Indebtedness of others secured by any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed (with the value of such Indebtedness being the lower of the outstanding amount of such Indebtedness and the fair market value of the property subject to such Lien), (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and, (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and (j) all Disqualified Equity Interests. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Notwithstanding the foregoing, “Indebtedness” shall not include (x) escrows or purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset or Investment to satisfy unperformed obligations of the seller of such asset or Investment or (y) a commitment arising in the ordinary course of business to make a future Portfolio Investment.
“Indemnified Taxes” means Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under this Agreement.
“Indemnitee” has the meaning assigned to such term in Section 9.03(b). “Independent” when used with respect to any specified Person means that such
Person (a) does not have any direct financial interest or any material indirect financial interest in the Borrower or any of its Subsidiaries or Affiliates (including its investment advisor or any Affiliate thereof) and (b) is not connected with the Borrower or of its Subsidiaries or Affiliates (including its investment advisor or any Affiliate thereof) as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions.
“Industry Classification Group” means (a) any of the classification groups set forth in Schedule 1.01(c) hereto, together with any such classification groups that may be subsequently established by Moody’s and provided by the Borrower to the Lenders, and (b) up to three additional industry group classifications established by the Borrower pursuant to Section 5.12.
“Interest Election Request” means a request by the Borrower to convert or continue a Syndicated Borrowing in accordance with Section 2.07.
“Interest Payment Date” means (a) with respect to any Syndicated ABR Loan, each Quarterly Date, (b) with respect to any Term Benchmark Loan or RFR Loan, in each case,
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in respect of which the Borrower has selected a one- or three-month Interest Period, the last day of such Interest Period therefor and, in the case of any Term Benchmark Loan with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at three-month intervals after the first day of such Interest Period and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid.
“Interest Period” means, for any Term Benchmark Loan or Borrowing or any RFR Loan or Borrowing, the period commencing on the date of such Loan or Borrowing and ending on the numerically corresponding day in the calendar month that is one month, three months or, except with respect to Term Benchmark Loans denominated in Canadian Dollars and RFR Loans, six months thereafter or, with respect to such portion of any Term Benchmark Loan or Borrowing or any RFR Loan or Borrowing denominated in a Foreign Currency that is scheduled to be repaid on the applicable Final Maturity Date, a period of less than one month’s duration commencing on the date of such Loan or Borrowing and ending on the applicable Final Maturity Date, as specified in the applicable Borrowing Request or Interest Election Request; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period (other than an Interest Period pertaining to a Term Benchmark Borrowing denominated in a Foreign Currency or RFR Borrowing that ends on the applicable Final Maturity Date that is permitted to be of less than one month’s duration as provided in this definition) that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, and (iii) no tenor that has been removed from this definition pursuant to Section 2.212.22(d) shall be available for specification in such Borrowing Request or notice of conversion or continuation unless or until it is reinstated pursuant to Section 2.212.22(d). For purposes hereof, the date of a Loan initially shall be the date on which such Loan is made and thereafter shall be the effective date of the most recent conversion or continuation of such Loan, and the date of a Syndicated Borrowing comprising Loans that have been converted or continued shall be the effective date of the most recent conversion or continuation of such Loans.
“Investment” means, for any Person: (a) Equity Interests, bonds, notes, debentures or other securities of any other Person or any agreement to acquire any Equity Interests, bonds, notes, debentures or other securities of any other Person (and any rights or proceeds in respect of
(x) any “short sale” of securities or (y) any sale of any securities at a time when such securities are not owned by such Person); (b) deposits, advances, loans or other extensions of credit made to any other Person (including purchases of property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such property to such Person); or
(c) Hedging Agreements.
“Investment Company Act” means the Investment Company Act of 1940, as amended from time to time.
“Investment Policies” means the investment objectives, policies, restrictions and limitations set forth in the “BUSINESS” section of its Registration Statement, and as the same
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may be changed, altered, expanded, amended, modified, terminated or restated from time to time.
“Issuing Bank” means Truist, JPMorgan Chase Bank, N.A. and any other Issuing Bank designated pursuant to Section 2.05(l), in their capacity as the issuers of Letters of Credit hereunder, and their respective successors in such capacity as provided in Section 2.05(j). In the case of any Letter of Credit to be issued in an Agreed Foreign Currency, Truist and JPMorgan Chase Bank, N.A., respectively, may designate any of their respective affiliates as the “Issuing Bank” for purposes of such Letter of Credit.
“Japanese Yen” means the lawful currency of Japan.
“Joint Lead Arrangers” means Truist Securities, Inc., JPMorgan Chase Bank, N.A., MUFG Union Bank, N.A., Sumitomo Mitsui Banking Corporation and State Street Bank and Trust Company.
“LC Disbursement” means a payment made by any Issuing Bank pursuant to a Letter of Credit.
“LC Exposure” means, at any time, the sum of the Dollar LC Exposure and the Multicurrency LC Exposure.
“Lenders” means, collectively, the Dollar Lenders and the Multicurrency Lenders.
Unless the context otherwise requires, the term “Lenders” includes each Swingline Lender. “Letter of Credit” means any letter of credit issued pursuant to this Agreement.
“Letter of Credit Collateral Account” has the meaning assigned to such term in Section 2.05(k).
“Letter of Credit Documents” means, with respect to any Letter of Credit, collectively, any application therefor and any other agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit or (b) any collateral security for any of such obligations, each as the same may be modified and supplemented and in effect from time to time.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities, except in favor of the issuer thereof (and in the case of Investments that are securities, excluding customary drag-along, tag-along, right of first refusal and other similar rights in favor of the equity holders of the same issuer).
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“Loan Documents” means, collectively, this Agreement, the Letter of Credit Documents, the Security Documents and the First Amendment to this Agreement dated as of June 3, 2014, the Second Amendment to this Agreement dated as of June 27, 2014, the Third Amendment to this Agreement dated as of October 17, 2014, the Fourth Amendment to this Agreement dated as of October 2, 2015, the Fifth Amendment to this Agreement dated as of December 22, 2016, the Sixth Amendment to this Agreement dated as of February 20, 2018, the Seventh Amendment to this Agreement dated as of November 5, 2018, the Eighth Amendment to this Agreement dated as of February 14, 2019, the Ninth Amendment to this Agreement dated as of January 31, 2020, the Tenth Amendment to this Agreement dated as of February 5, 2021, the Eleventh Amendment to this Agreement dated as of December 14, 2021, the Twelfth Amendment to this Agreement dated as of April 25, 2022, the Thirteenth Amendment to this Agreement dated as of May 19, 2022, and the Fourteenth Amendment to this Agreement dated as of June 12, 2023, and the Fifteenth Amendment to this Agreement dated as of April 24, 2024.
“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.
“Margin Stock” means “margin stock” within the meaning of Regulations T, U
and X.
“Material Adverse Change” has the meaning assigned to such term in
Section 3.04(b).
“Material Adverse Effect” means a material adverse effect on (a) the business, Portfolio Investments and other assets, liabilities and financial condition of the Borrower or the Borrower and its Subsidiaries (other than Financing Subsidiaries) taken as a whole (excluding in any case a decline in the net asset value of the Borrower or a change in general market conditions or values of the Portfolio Investments), or (b) the validity or enforceability of any of the Loan Documents or the rights or remedies of the Collateral Agent, the Administrative Agent and the Lenders thereunder.
“Material Indebtedness” means (a) Indebtedness (other than the Loans, Letters of Credit and Hedging Agreements), of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $50,000,000 and (b) obligations in respect of one or more Hedging Agreements under which the maximum aggregate amount (giving effect to any netting agreements) that the Borrower and its Subsidiaries would be required to pay if such Hedging Agreement(s) were terminated at such time would exceed $50,000,000.
“Maximum Rate” has the meaning assigned to such term in Section 9.20. “Minimum Collateral Amount” means, at any time, with respect to Cash
Collateral consisting of Cash or deposit account balances, an amount equal to 100% of the Fronting Exposure of each Issuing Bank with respect to Letters of Credit issued and outstanding at such time.
“Moody’s” means Moody’s Investors Service, Inc. or any successor thereto.
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“Multicurrency Commitment” means, with respect to each Multicurrency Lender during such Multicurrency Lender’s Availability Period, the commitment of such Multicurrency Lender to make Syndicated Loans, and to acquire participations in Letters of Credit and Swingline Loans, denominated in Dollars and in Agreed Foreign Currencies hereunder, during such Multicurrency Lender’s Availability Period, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Multicurrency Credit Exposure hereunder, as such commitment may be (a) reduced or increased from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s Multicurrency Commitment is, as of the Fourteenth Amendment Effective Date, set forth on Schedule 1.01(b), or in thea Commitment Increase Supplement or Assignment and Assumption pursuant to which such Lender shall have assumed its Multicurrency commitment, as applicable. The aggregate amount of the Lenders’ Multicurrency Commitments as of the FourteenthFifteenth Amendment Effective Date is $1,150,000,000.
“Multicurrency LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Multicurrency Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements in respect of such Letters of Credit that have not yet been reimbursed by or on behalf of the Borrower at such time. The Multicurrency LC Exposure of any Lender at any time shall be its Applicable Multicurrency Percentage of the total Multicurrency LC Exposure at such time.
“Multicurrency Lender” means the Persons listed on Schedule 1.01(b) as having Multicurrency Commitments and any other Person that shall have become a party hereto pursuant to ana Commitment Increase Supplement or Assignment and Assumption that provides for it to assume a Multicurrency Commitment or to acquire Revolving Multicurrency Credit Exposure, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
“Multicurrency Letters of Credit” means Letters of Credit that utilize the Multicurrency Commitments.
“Multicurrency Loan” means a Loan denominated in Dollars or an Agreed Foreign Currency.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“National Currency” means the currency, other than the Euro, of a Participating
Member State.
“Net Cash Proceeds” means:
(other than Financing Subsidiaries), or any Extraordinary Receipt received or paid to the account of the Borrower or any of its Subsidiaries (other than Financing Subsidiaries) (in each case, which requires a payment of the Loans under Section 2.10(d)), an amount equal to (a) the sum of cash
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and Cash Equivalents received in connection with such transaction (including any cash or
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Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) minus (b) the sum of (i) the principal amount of any Indebtedness that is secured by the applicable asset and that is required to be repaid in connection with such transaction (other than Indebtedness under the Loan Documents),
(ii) the reasonable out-of-pocket fees, costs and expenses incurred by the Borrower or such Subsidiary in connection with such transaction, (iii) the taxes paid or reasonably estimated to be actually payable within two years of the date of the relevant transaction in connection with such transaction; provided that, if the amount of any estimated taxes pursuant to clause (iii) exceeds the amount of taxes actually required to be paid in cash in respect of such Disposition, the aggregate amount of such excess shall constitute Net Cash Proceeds (as of the date the Borrower determines such excess exists) and (iv) any reasonable costs, fees, commissions, premiums and expenses incurred by the Borrower or any of its Subsidiaries in connection with such Disposition; and
“New Zealand Dollars” means the lawful currency of New Zealand. “Ninth Amendment Effective Date” means January 31, 2020.
“Non-Consenting Lender” has the meaning assigned to such term in Section 9.02(d).
“Non-Defaulting Lender” means, at any time, a Lender that is not a Defaulting Lender at such time.
“Non-Extended Applicable Margin” means:
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(as of the most recently delivered Borrowing Base Certificate) is less than 1.85 times the Combined Debt Amount (A) with respect to any ABR Loan, 0.875% per annum; (B) with respect to any Term Benchmark Loan, 1.875% per annum; and (C) with respect to any RFR Loan, 1.875% per annum plus the RFR Applicable Credit Adjustment Spread;
Any change in the Non-Extended Applicable Margin due to a change in the ratio of the Borrowing Base to the Combined Debt Amount as set forth in any Borrowing Base Certificate shall be effective from and including the day immediately succeeding the date of delivery of such Borrowing Base Certificate; provided that if any Borrowing Base Certificate has not been delivered in accordance with Section 5.01(d), then from and including the day immediately succeeding the date on which such Borrowing Base Certificate was required to be delivered, the Non-Extended Applicable Margin shall be the Non-Extended Applicable Margin set forth in clause (a)(ii), clause (b)(ii) or clause (c)(ii) above, as applicable, to and including the date on which the required Borrowing Base Certificate is delivered.
“Non-Extended Availability Period” means, with respect to any Non-Extending Lender, the period from and including the Effective Date to but excluding the earlier of the Non-Extended Commitment Termination Date for such Non-Extending Lender and the date of termination of the Commitments.
“Non-Extended Commitment Termination Date” means, with respect to each Non-Extending Lender, the “Non-Extended Commitment Termination Date” set forth next to such Non-Extending Lender’s name on Schedule 1.01(b).
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“Non-Extended Final Maturity Date” means, with respect to each Non-Extending Lender, the “Non-Extended Final Maturity Date” set forth next to such Non-Extending Lender’s name on Schedule 1.01(b).
“Non-Extended Loans” means Loans or Borrowings of any Non-Extending Lender maturing on the Non-Extended Final Maturity Date for such Non-Extending Lender.
“Non-Extending Lender” means each Lender designated as a “Non-Extending Lender” on Schedule 1.01(b).
“Non-Public Information” means material non-public information (within the meaning of United States federal, state or other applicable securities laws) with respect to Borrower or its Affiliates or their Securities.
“Obligor” means, collectively, the Borrower and the Subsidiary Guarantors. “Original Currency” has the meaning assigned to such term in Section 2.17. “Original Effective Date” means July 3, 2013.
“Other Benchmark Rate Election” means, with respect to any Loan denominated in Dollars, if a Benchmark Replacement for the Term SOFR Reference Rate has been determined in accordance with clause (1) of the definition of “Benchmark Replacement”, that the Administrative Agent, in its sole discretion, and the Borrower have jointly elected to trigger a fallback from the then-current Benchmark and the Administrative Agent has provided written notice of such election to the Borrower and the Lenders.
“Other Covered Indebtedness” means, collectively, Secured Longer-Term Indebtedness, Secured Shorter-Term Indebtedness and Unsecured Shorter-Term Indebtedness; provided that “Other Covered Indebtedness” shall not include any Indebtedness secured by a Lien on Portfolio Investments permitted under Section 6.02(e).
“Other Permitted Indebtedness” means (a) accrued expenses and current trade accounts payable incurred in the ordinary course of the Borrower’s business which are not overdue for a period of more than 90 days or which are being contested in good faith by appropriate proceedings, (b) Indebtedness (other than Indebtedness for borrowed money) arising in connection with transactions in the ordinary course of the Borrower’s business in connection with its securities transactions, derivatives transactions, reverse repurchase agreements or dollar rolls to the extent such transactions are permitted under the Investment Company Act and the Borrower’s Investment Policies (after giving effect to any Permitted Policy Amendments), provided that such Indebtedness does not arise in connection with the purchase of Portfolio Investments other than Cash Equivalents and U.S. Government Securities and (c) Indebtedness in respect of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as such judgments or awards do not constitute an Event of Default under clause (l) of Article VII.
“Other Taxes” means any and all present or future stamp or documentary Taxes or
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any other excise or property Taxes, charges or similar levies arising from any payment made
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under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document, excluding (i) any such Taxes, charges or similar levies resulting from an assignment by any Lender in accordance with Section 9.04 hereof (unless such assignment is made pursuant to Section 2.18(b)) or (ii) any Taxes imposed by any jurisdiction by reason of the recipient of any payment on or account of this Agreement having any present or former connection with such jurisdiction (other than a connection arising solely from entering into, receiving any payment under or enforcing its rights under this Agreement or any other Loan Document).
“Participant” has the meaning assigned to such term in Section 9.04(f). “Participant Register” has the meaning assigned to such term in Section 9.04(f). “Participating Member State” means any member state of the European
Community that adopts or has adopted the Euro as its lawful currency in accordance with the legislation of the European Union relating to the European Monetary Union.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
“Periodic Term CORRA Determination Day” has the meaning specified in the definition of “Term CORRA”.
“Periodic Term SOFR Determination Day” has the meaning set forth in the definition of “Term SOFR”.
“Permitted Equity Interests” means common stock of the Borrower that after its issuance is not subject to any agreement between the holder of such common stock and the Borrower where the Borrower is required to purchase, redeem, retire, acquire, cancel or terminate any such common stock.
“Permitted Liens” means (a) Liens imposed by any Governmental Authority for taxes, assessments or charges not yet due or that are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Borrower in accordance with GAAP; (b) Liens of clearing agencies, broker-dealers and similar Liens incurred in the ordinary course of business, provided that such Liens (i) attach only to the securities (or proceeds) being purchased or sold and (ii) secure only obligations incurred in connection with such purchase or sale, and not any obligation in connection with margin financing; (c) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmens’, storage and repairmen’s Liens and other similar Liens arising in the ordinary course of business and securing obligations (other than Indebtedness for borrowed money) not yet due or that are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Borrower in accordance with GAAP; (d) Liens incurred or pledges or deposits made to secure obligations incurred in the ordinary course of business under workers’ compensation laws, unemployment insurance or other similar social security legislation (other than liens in respect of employee benefit plans arising under ERISA) or to secure public or statutory obligations; (e) Liens securing the performance of, or payment in respect of, bids,
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insurance premiums, deductibles or co-insured amounts, tenders,
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government or utility contracts (other than for the repayment of borrowed money), surety, stay, customs and appeal bonds and other obligations of a similar nature incurred in the ordinary course of business; (f) Liens arising out of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as such judgments or awards do not constitute an Event of Default under clause (l) of Article VII; (g) customary rights of setoff and liens upon (i) deposits of cash in favor of banks or other depository institutions in which such cash is maintained in the ordinary course of business, (ii) cash and financial assets held in securities accounts in favor of banks and other financial institutions with which such accounts are maintained in the ordinary course of business and (iii) assets held by a custodian in favor of such custodian in the ordinary course of business securing payment of fees, indemnities and other similar obligations; (h) Liens arising solely from precautionary filings of financing statements under the Uniform Commercial Code of the applicable jurisdictions in respect of operating leases entered into by the Borrower or any of its Subsidiaries in the ordinary course of business; (i) deposits of money securing leases to which Borrower is a party as lessee made in the ordinary course of business; (j) easements, rights of way, zoning restrictions and similar encumbrances on real property and minor irregularities in the title thereto that do not (i) secure obligations for the payment of money or (ii) materially impair the value of such property or its use by any Obligor or any of its Subsidiaries in the normal conduct of such Person’s business; and (k) Liens in favor of any escrow agent solely on and in respect of any cash earnest money deposits made by any Obligor in connection with any letter of intent or purchase agreement (to the extent that the acquisition or disposition with respect thereto is otherwise permitted hereunder).
“Permitted Policy Amendment” means any change, alteration, expansion, amendment, modification, termination or restatement of the Investment Policies that is either (a) approved in writing by the Administrative Agent (with the consent of the Required Lenders), (b) required by applicable law, rule, regulation or Governmental Authority, or (c) not materially adverse to the rights, remedies or interests of the Lenders in the reasonable discretion of the Administrative Agent (for the avoidance of doubt, no change, alteration, expansion, amendment, modification, termination or restatement of the Investment Policies shall be deemed “materialmaterially adverse” if investment size proportionately increases as the size of the Borrower’s capital base changes).
“Permitted SBIC Guarantee” means a guarantee by the Borrower of Indebtedness of an SBIC Subsidiary on the SBA’s then applicable form, provided that the recourse to the Borrower thereunder is expressly limited only to periods after the occurrence of an event or condition that is an impermissible change in the control of such SBIC Subsidiary (it being understood that, as provided in clause (s) of Article VII, it shall be an Event of Default hereunder if any such event or condition giving rise to such recourse occurs).
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were
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terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Platform” has the meaning set forth in Section 5.01(i).
“Portfolio Investment” means any Investment held by the Obligors in their asset portfolio (and solely for purposes of determining the Borrowing Base, Cash). Without limiting the generality of the foregoing, the following Investments shall not be considered Portfolio Investments under this Agreement or any other Loan Document: (a) any Investment by an Obligor in any Subsidiary or Affiliate of such Obligor or any Financing Subsidiary (including, for the avoidance of doubt, any Investment by an Obligor in an entity constituting a portfolio investment of such Obligor or an Affiliate of such Obligor); (b) any Investment that provides in favor of the obligor in respect of such Portfolio Investment an express right of rescission, set-off, counterclaim or any other defenses; (c) any Investment, which if debt, is an obligation (other than a revolving loan or delayed draw term loan) pursuant to which any future advances or payments to the Obligor may be required to be made by the Borrower; (d) any Investment which is made to a bankrupt entity (other than a debtor-in-possession financing and current pay obligations); and (e) any Investment, Cash or account in which a Financing Subsidiary has an interest.
“Prime Rate” means the rate which is quoted as the “prime rate” in the print edition of The Wall Street Journal, Money Rates Section.
“Principal Financial Center” means, in the case of any Currency, the principal financial center where such Currency is cleared and settled, as determined by the Administrative Agent.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Public Lender” means Lenders that do not wish to receive Non-Public Information with respect to the Borrower or any of its Subsidiaries or their Securities.
“Quarterly Dates” means the last Business Day of March, June, September and December in each year, commencing on September 30, 2013.
“Quoted Investments” means a Portfolio Investment with a value assigned by the Borrower pursuant to Section 5.12(b)(ii)(A).
“Register” has the meaning set forth in Section 9.04(c).
“Registration Statement” means the Registration Statement filed by the Borrower with the Securities and Exchange Commission on March 14, 2011.
“Regulations D, T, U and X” means, respectively, Regulations D, T, U and X of the Board, as the same may be modified and supplemented and in effect from time to time.
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“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective partners, directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.
“Relevant Governmental Body” means (a) with respect to a Benchmark Replacement in respect of obligations, interest, fees, commissions or other amounts owing hereunder denominated in, or calculated with respect to Dollars, the Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board and/or the Federal Reserve Bank of New York or, in each case, any successor thereto, (b) with respect to a Benchmark Replacement in respect of obligations, interest, fees, commissions or other amounts owing hereunder denominated in, or calculated with respect to, SterlingCanadian Dollars, the Bank of EnglandCanada, or a committee officially endorsed or convened by the Bank of EnglandCanada or, in each case, any successor thereto, (c) with respect to a Benchmark Replacement in respect of obligations, interest, fees, commissions or other amounts owing hereunder denominated in, or calculated with respect to, Sterling, the Bank of England, or a committee officially endorsed or convened by the Bank of England or, in each case, any successor thereto, (d) with respect to a Benchmark Replacement in respect of obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Euro, the European Central Bank, or a committee officially endorsed or convened by the European Central Bank or, in each case, any successor thereto, and (de) with respect to a Benchmark Replacement in respect of obligations, interest, fees, commissions or other amounts owing hereunder denominated in, or calculated with respect to, any Currency (other than Dollars, Canadian Dollars, Sterling or Euro), (1) the central bank for the Currency in which such obligations, interest, fees, commissions or other amounts are denominated, or calculated with respect thereto, or any central bank or other supervisor which is responsible for supervising either (A) such Benchmark Replacement or (B) the administrator of such Benchmark Replacement or (2) any working group or committee officially endorsed or convened by (A) the central bank for the Currency in which such obligations, interest, fees, commissions or other amounts are denominated, or calculated with respect to, (B) any central bank or other supervisor that is responsible for supervising either (i) such Benchmark Replacement or (ii) the administrator of such Benchmark Replacement, (C) a group of those central banks or other supervisors or (D) the Financial Stability Board or any part thereof.
“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures and unused Commitments representing more than 50% of the sum of the total Revolving Credit Exposures and unused Commitments at such time; provided that the Revolving Credit Exposures and unused Commitments of any Defaulting Lender shall be disregarded in the determination of Required Lenders. The Required Lenders of a Class (which shall include the terms “Required Dollar Lenders” and “Required Multicurrency Lenders”) means Lenders having Revolving Credit Exposures and unused Commitments of such Class representing more than 50% of the sum of the total Revolving Credit Exposures and unused Commitments of such Class at such time. Notwithstanding the foregoing, the Revolving Credit Exposure and unused Commitments of any Defaulting Lender shall be disregarded in the determination of Required Lenders or Required Lenders of a Class.
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“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or controller of an Obligor.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any shares of any class of capital stock of the Borrower or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such shares of capital stock of the Borrower or any option, warrant or other right to acquire any such shares of capital stock of the Borrower (it being understood that none of: (w) the conversion features under convertible notes;
(x) the triggering and/or settlement thereof; or (y) any cash payment made by the Borrower in respect thereof, shall constitute a Restricted Payment hereunder).
“Return of Capital” means (a) any net cash amount received by any Obligor in respect of the outstanding principal of any Portfolio Investment (whether at stated maturity, by acceleration or otherwise), (b) without duplication of amounts received under clause (a), any net cash proceeds received by any Obligor from the sale of any property or assets pledged as collateral in respect of any Portfolio Investment to the extent such net cash proceeds are less than or equal to the outstanding principal balance of such Portfolio Investment, (c) any net cash amount received by any Obligor in respect of any Portfolio Investment that is an Equity Interest
(x) upon the liquidation or dissolution of the issuer of such Portfolio Investment, (y) as a distribution of capital made on or in respect of such Portfolio Investment, or (z) pursuant to the recapitalization or reclassification of the capital of the issuer of such Portfolio Investment or pursuant to the reorganization of such issuer or (d) any similar return of capital received by any Obligor in cash in respect of any Portfolio Investment (in the case of clauses (a), (b), (c) and (d), net of any fees, costs, expenses and taxes payable with respect thereto).
“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Dollar Credit Exposure and Revolving Multicurrency Credit Exposure at such time.
“Revolving Dollar Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Syndicated Loans, and its LC Exposure and Swingline Exposure, at such time made or incurred under the Dollar Commitments.
“Revolving Multicurrency Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Syndicated Loans, and its LC Exposure and Swingline Exposure, at such time made or incurred under the Multicurrency Commitments.
“Revolving Percentage” means, as of any date of determination, the result, expressed as a percentage, of the Revolving Credit Exposure on such date divided by the aggregate outstanding Covered Debt Amount on such date.
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“RFR”, when used in reference to any Loan or Borrowing, refers to whether such Loan is, or the Loans constituting such Borrowing are, bearing interest at a rate determined by reference to the Daily Simple RFR for the applicable Currency.
“RFR Administrator” means the SONIA Administrator or the SARON Administrator, as applicable.
“RFR Administrator’s Website” means the SONIA Administrator’s Website or the SARON Administrator’s Website, as applicable.
“RFR Applicable Credit Adjustment Spread” means, (a) with respect to RFR Loans denominated in Sterling, (i) with an Interest Period of three months, 0.1193% and (ii) with an Interest Period of one month, 0.0326%, and (b) with respect to RFR Loans denominated in Swiss Francs (i) with an Interest Period of three months, 0.0031% and (ii) with an Interest Period of one month, -0.0571%.
“RFR Business Day” means, for any Loans, Borrowings, interest, fees, commissions or other amounts denominated in, or calculated with respect to, (a) Sterling, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which banks are closed for general business in London, and (b) Swiss Francs, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which banks are closed for the settlement of payments and foreign exchange transactions in Zurich.
“RFR Interest Day” has the meaning specified in the definition of “Daily Simple
RFR”.
“RFR Rate” means, for any Loans, Borrowings, interest, fees, commissions or
other amounts denominated in, or calculated with respect to (a) Sterling, SONIA, and (b) Swiss Francs, SARON.
“RFR Reference Day” has the meaning specified in the definition of “Daily
Simple RFR”.
“RIC” means a person qualifying for treatment as a “regulated investment
company” under the Code.
“S&P” means S&P Global Ratings or any successor thereto.
“Sanctioned Country” means, at any time, a country, territory or region that is the subject or the target of country-wide or territory-wide Sanctions broadly prohibiting dealings with such country, territory or region (currently, Cuba, Iran, North Korea and Syria, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic and non-government-controlled areas of the Zaporizhzhia and Kherson Regions of Ukraine).
“Sanctions” has the meaning assigned to such term in Section 3.15(a).
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“SARON” means a rate equal to the Swiss Average Rate Overnight as administered by the SARON Administrator.
“SARON Administrator” means the SIX Swiss Exchange AG (or any successor administrator of the Swiss Average Rate Overnight).
“SARON Administrator’s Website” means SIX Swiss Exchange AG’s website, currently at https://www.six-group.com, or any successor source for the Swiss Average Rate Overnight identified as such by the SARON Administrator from time to time.
“SBA” means the United States Small Business Administration.
“SBIC Equity Commitment” means a commitment by the Borrower to make one or more capital contributions to an SBIC Subsidiary.
“SBIC Subsidiary” means any direct or indirect Subsidiary (including such Subsidiary’s general partner or managing entity to the extent that the only material asset of such general partner or managing entity is its equity interest in the SBIC Subsidiary) of the Borrower licensed as a small business investment company under the Small Business Investment Act of 1958, as amended, (or that has applied for such a license and is actively pursuing the granting thereof by appropriate proceedings promptly instituted and diligently conducted) and which is designated by the Borrower (as provided below) as an SBIC Subsidiary, so long as (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of such Subsidiary: (i) is Guaranteed by any Obligor (other than a Permitted SBIC Guarantee), (ii) is recourse to or obligates any Obligor in any way (other than in respect of any SBIC Equity Commitment or Permitted SBIC Guarantee), or (iii) subjects any property of any Obligor, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than Equity Interests in any SBIC Subsidiary pledged to secure such Indebtedness, and (b) no Obligor has any obligation to maintain or preserve such Subsidiary’s financial condition or cause such entity to achieve certain levels of operating results. Any such designation by the Borrower shall be effected pursuant to a certificate of a Financial Officer delivered to the Administrative Agent, which certificate shall include a statement to the effect that, to the best of such officer’s knowledge, such designation complied with the foregoing conditions.
“Secured Longer-Term Indebtedness” means, as at any date, Indebtedness (other than Indebtedness hereunder) of an Obligor (which may be Guaranteed by Subsidiary Guarantors) that (a) has no scheduled amortization (other than for amortization in an amount not greater than 1% of the aggregate initial principal amount of such Indebtedness per annum, provided that amortization in excess of 1% per annum shall be permitted so long as the amount of such amortization in excess of 1% is permitted to be incurred pursuant to Section 6.01(i) and 6.01(o)) prior to, and a final maturity date not earlier than, six months after the Extended Final Maturity Date (it being understood that none of: (w) the conversion features into Permitted Equity Interests under convertible notes; (x) the triggering and/or settlement thereof; or (y) any cash payment made in respect thereof, shall constitute “amortization” for purposes of this clause (a)), (b) is incurred pursuant to documentation that is substantially comparable to market terms for substantially similar debt of other similarly situated borrowers as determined by the Borrower in its reasonable judgment and (c) is not secured by any assets of any Obligor other than pursuant
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to this Agreement or the Security Documents and the holders of which (or an authorized agent, representative or trustee of such holders) have either executed (i) a joinder agreement to the Guarantee and Security Agreement or (ii) such other document or agreement, in a form reasonably satisfactory to the Administrative Agent and the Collateral Agent, pursuant to which the holders (or an authorized agent, representative or trustee of such holders) of such Secured Longer-Term Indebtedness shall have become a party to the Guarantee and Security Agreement and assumed the obligations of a Financing Agent or Designated Indebtedness Holder (in each case, as defined in the Guarantee and Security Agreement).
“Secured Shorter-Term Indebtedness” means, collectively, (a) any Indebtedness of an Obligor that is secured by any assets of any Obligor and that does not constitute Secured Longer-Term Indebtedness, (b) any Indebtedness of an Obligor that is not secured by any assets of any Obligor other than pursuant to this Agreement or the Security Documents and the holders of which (or an authorized agent, representative or trustee of such holders) have either executed
(i) a joinder agreement to the Guarantee and Security Agreement or (ii) such other document or agreement, in a form reasonably satisfactory to the Administrative Agent and the Collateral Agent, pursuant to which the holders (or an authorized agent, representative or trustee of such holders) of such Secured Shorter-Term Indebtedness shall have become a party to the Guarantee and Security Agreement and assumed the obligations of a Financing Agent or Designated Indebtedness Holder (in each case, as defined in the Guarantee and Security Agreement) and
(c) any Indebtedness that is designated as “Secured Shorter-Term Indebtedness” pursuant to Section 6.11(a).
“Security Documents” means, collectively, the Guarantee and Security Agreement, all Uniform Commercial Code financing statements filed with respect to the security interests in personal property created pursuant to the Guarantee and Security Agreement and all other assignments, pledge agreements, security agreements, control agreements and other instruments executed and delivered on or after the date hereof by any of the Obligors pursuant to the Guarantee and Security Agreement or otherwise providing or relating to any collateral security for any of the Secured Obligations under and as defined in the Guarantee and Security Agreement.
“Shareholders’ Equity” means, at any date, the amount determined on a consolidated basis, without duplication, in accordance with GAAP, of shareholders equity for the Borrower and its Subsidiaries at such date.
“SOFR” means a rate per annum equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“SONIA” means a rate equal to the Sterling Overnight Index Average as administered by the SONIA Administrator.
“SONIA Administrator” means the Bank of England (or any successor administrator of the Sterling Overnight Index Average).
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“SONIA Administrator’s Website” means the Bank of England’s website, currently at http://www.bankofengland.co.uk, or any successor source for the Sterling Overnight Index Average identified as such by the SONIA Administrator from time to time.
“SPE Subsidiary” means a direct or indirect Subsidiary of the Borrower to which any Obligor sells, conveys or otherwise transfers (whether directly or indirectly) Portfolio Investments, which engages in no material activities other than in connection with the purchase, holding, disposition or financing of such assets and which is designated by the Borrower (as provided below) as an SPE Subsidiary:
Any such designation by the Borrower shall be effected pursuant to a certificate of a Financial Officer delivered to the Administrative Agent, which certificate shall include a statement to the effect that, to the best of such officer’s knowledge, such designation complied with the foregoing conditions. Each Subsidiary of an SPE Subsidiary shall be deemed to be an SPE Subsidiary and shall comply with the foregoing requirements of this definition.
“Special Equity Interest” means any Equity Interest that is subject to a Lien in favor of creditors of the issuer of such Equity Interest provided that (a) such Lien was created to secure Indebtedness owing by such issuer to such creditors, (b) such Indebtedness was (i) in existence at the time the Obligors acquired such Equity Interest, (ii) incurred or assumed by such issuer substantially contemporaneously with such acquisition or (iii) already subject to a Lien granted to such creditors and (c) unless such Equity Interest is not intended to be included in the Collateral, the documentation creating or governing such Lien does not prohibit the inclusion of such Equity Interest in the Collateral.
“Special Unsecured Indebtedness” means Indebtedness of an Obligor issued after the FourteenthFifteenth Amendment Effective Date (which may be Guaranteed by Subsidiary Guarantors) that (a) has no amortization (other than for amortization in an amount not greater than 1% of the aggregate initial principal amount of such Indebtedness per annum, provided that amortization in excess of 1% per annum shall be permitted so long as the amount of such amortization in excess of 1% is permitted to be incurred pursuant to Section 6.01(m) and Section
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6.01(o)) prior to, and a final maturity date not earlier than, five years from the date such Indebtedness is issued (it being understood that (A) none of: (w) the conversion features into Permitted Equity Interests under convertible notes; (x) the triggering and/or settlement thereof or
(y) any cash payment made in respect thereof, shall constitute “amortization” for purposes of this clause (a); and (B) any mandatory amortization that is contingent upon the happening of an event that is not certain to occur (including a change of control or bankruptcy) shall not in and of itself be deemed to disqualify such Indebtedness under this clause (a)), (b) is incurred pursuant to documentation containing (i) covenants and events of default that are not materially more burdensome on the Borrower than those set forth in the Loan Documents or (ii) terms substantially comparable to market terms for substantially similar debt of other similarly situated borrowers as determined by the Borrower in its reasonable judgment and (c) is not secured by any assets of any Obligor; provided that Special Unsecured Indebtedness shall not include any Indebtedness permitted pursuant to Section 6.01(l).
“Specified Event of Default” means an Event of Default under Section 7.01(a), (b), (i), (j) and (k).
“Standard Securitization Undertakings” means, collectively, (a) customary arms-length servicing obligations (together with any related performance guarantees),
(b) obligations (together with any related performance guarantees) to refund the purchase price or grant purchase price credits for dilutive events or misrepresentations (in each case unrelated to the collectibility of the assets sold or the creditworthiness of the associated account debtors) and
(c) representations, warranties, covenants and indemnities (together with any related performance guarantees) of a type that are reasonably customary in accounts receivable securitizations.
“Sterling” means the lawful currency of the United Kingdom.
“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or
(b) that is, as of such date, otherwise Controlled by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Anything herein to the contrary notwithstanding, the term “Subsidiary” shall not include any Person that constitutes an Investment held by the Borrower in the ordinary course of business and that is not, under GAAP, consolidated on the financial statements of the Borrower and its Subsidiaries. Unless otherwise specified, “Subsidiary” means a Subsidiary of the Borrower.
“Subsidiary Guarantor” means any Subsidiary that is a Guarantor under the Guarantee and Security Agreement. It is understood and agreed that no Financing Subsidiary,
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Immaterial Subsidiary, Foreign Subsidiary or a Subsidiary of a Foreign Subsidiary shall be a Subsidiary Guarantor.
“Swedish Krona” means the lawful currency of Sweden.
“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be the sum of (a)(i) in the case of any Dollar Lender, its Applicable Dollar Percentage of the total Swingline Exposure at such time incurred under the Dollar Commitments and (ii) in the case of any Multicurrency Lender, its Applicable Multicurrency Percentage of the total Swingline Exposure at such time incurred under the Multicurrency Commitments (excluding, for purpose of this clause (a), in the case of any Lender that is a Swingline Lender, Swingline Loans made by it that are outstanding at such time to the extent that the other Lenders under such Lender’s Class of Commitments shall not have funded their participations in such Swingline Loans), adjusted, in each case, to give effect to any reallocation under Section 2.19 of the Swingline Exposure of Defaulting Lenders in effect at such time, plus (b) in the case of any Lender that is a Swingline Lender, the aggregate principal amount of all Swingline Loans made by such Lender outstanding at such time, less the amount of participations funded by the other Lenders under such Lender’s Class of Commitments in such Swingline Loans.
“Swingline Lender” means any of Truist, JPMorgan Chase Bank, N.A., MUFG Bank, Ltd., Sumitomo Mitsui Banking Corporation or State Street Bank and Trust Company, in its capacity as lender of Swingline Loans hereunder, and its successors in such capacity as provided in Section 2.04(d).
“Swingline Loan” means a Loan made pursuant to Section 2.04. “Swiss Franc” means the lawful currency of Switzerland.
“Syndicated”, when used in reference to any Loan or Borrowing, refers to whether such Loan is, or the Loans constituting such Borrowing are, made pursuant to Section 2.01.
“T2” means the real time gross settlement system operated by the Eurosystem, or any successor system as determined by the Administrative Agent to be a suitable replacement.
“TARGET Day” means any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer payment system (or any successor settlement system as determined by the Administrative Agent to be a suitable replacement)T2 is open for the settlement of payments in Euros.
“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings (including backup withholding), assessments, fees, or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
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“Term Benchmark”, when used in reference to any Loan or Borrowing, refers to whether such Loan is, or the Loans constituting such Borrowing are, bearing interest at a rate determined by reference to the Adjusted Term Benchmark Rate.
“Term Benchmark Banking Day” means for Term Benchmark Loans, Term Benchmark Borrowings, interest, fees, commissions or other amounts denominated in, or calculated with respect to:
“Term Benchmark Rate” means, for any Interest Period:
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Canadian Dollar bankers’ acceptances as may be designated by the Administrative Agent from time to time in its reasonable discretion) for a term equivalent to such Interest Period (or if such Interest Period is not equal to a number of months, for a term equivalent to the number of months closest to such Interest Period);;
a.m. (Tokyo time) two (2) Term Benchmark Banking Days for Japanese Yen prior to the first day of such Interest Period;
provided, in each case, if such rate for any Currency is less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
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“Term CORRA” means,
(2) Term Benchmark Banking Days prior to such day, as such rate is published by the Term CORRA Administrator and is displayed on a screen or other information service, as identified or selected by the Administrative Agent; provided, however, that if as of 1:00 p.m. (Toronto time) on any Canadian Prime Rate Term CORRA Determination Day the Term CORRA Reference Rate for the applicable tenor has not been published by the Term CORRA Administrator and a Benchmark Replacement Date with respect to the Term CORRA Reference Rate has not occurred, then clause (a)(ii) of this definition will be the Term CORRA Reference Rate for such tenor as published by the Term CORRA Administrator on the first preceding Term Benchmark Banking Day for which such Term CORRA Reference Rate for such tenor was published by the Term CORRA Administrator so long as such first preceding Term Benchmark Banking Day is not more than three (3) Business Days prior to such Canadian Prime Rate Term CORRA Determination Day.
“Term CORRA Administrator” means Candeal Benchmark Administration Services Inc., TSX Inc., or any successor administrator of the Term CORRA Reference Rate selected by the Administrative Agent in its reasonable discretion.
“Term CORRA Credit Adjustment Spread” means, with respect to Term Benchmark Loans denominated in Canadian Dollars, (a) with an Interest Period of one month, 0.29547% and (b) with an Interest Period of three months, 0.32138%.
“Term CORRA Reference Rate” means the forward-looking term rate based on
CORRA.
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“Term SOFR” means,
(ii) the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFRclause (a)(ii) of this definition will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day, and
U.S. Government Securities Business Days prior to such day, as such rate is published by the Term SOFR Administrator; provided that if as of 5:00 p.m. (New York City time) on any Base Rate Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFRclause (a)(ii) of this definition will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three
(3) U.S. Government Securities Business Days prior to such Base Rate Term SOFR Determination Day.
“Term SOFR Administrator” means the CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).
“Term SOFR Credit Adjustment Spread” means 0.10%.
“Term SOFR Reference Rate” means the forward-looking term rate based on
SOFR.
“Termination Date” means the earliest to occur of (i) the Extended Final Maturity
Date, (ii) the date of the termination of the Commitments in full pursuant to Section 2.08(c), or
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“Testing Period” has the meaning assigned to such term in Section 5.12(b)(ii)(E)(x).
“Testing Quarter” has the meaning assigned to such term in Section 5.12(b)(ii)(B).
“Total Assets” means, as of any date of determination, the value of the total assets of the Obligors, less all liabilities and indebtedness not represented by senior securities, in each case, as of such date of determination.
“Total Assets Concentration Limitation” means, as of any date of determination, the amount by which the aggregate value of Equity Interests in Financing Subsidiaries held by the Obligors as of such date of determination exceeds 15% of the Total Assets as of such date of determination.
“Total Secured Debt” means, as of any date of determination, the aggregate amount of senior securities representing secured indebtedness of the Obligors as of such date of determination.
“Transactions” means the execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.
“Truist” means Truist Bank.
“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans constituting such Borrowing, is determined by reference to the Adjusted Term Benchmark Rate, the Daily Simple RFR or the Alternate Base Rate.
“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“Unasserted Contingent Obligations” means all (i) unasserted contingent indemnification obligations not then due and payable and (ii) unasserted expense reimbursement obligations not then due and payable. For the avoidance of doubt, “Unasserted Contingent Obligations” shall not include any reimbursement obligations in respect of any Letter of Credit.
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“Undisclosed Administration” means, in relation to a Lender, the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator under or based on the law in the country where such Lender is subject to home jurisdiction supervision if applicable law requires that such appointment is not to be publicly disclosed.
“Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State of New York.
“Unquoted Investments” means a Portfolio Investment with a value assigned by the Borrower pursuant to Section 5.12(b)(ii)(B).
“Unsecured Longer-Term Indebtedness” means any Indebtedness of an Obligor (which may be Guaranteed by Subsidiary Guarantors) that (a) has no amortization (other than for amortization in an amount not greater than 1% of the aggregate initial principal amount of such Indebtedness per annum, provided that amortization in excess of 1% per annum shall be permitted so long as the amount of such amortization in excess of 1% is permitted to be incurred pursuant to Section 6.01(m) and Section 6.01(o)) prior to, and a final maturity date not earlier than, six months after the Extended Final Maturity Date (it being understood that (A) none of:
“Unsecured Shorter-Term Indebtedness” means, collectively, (a) any Indebtedness of an Obligor that is not secured by any assets of any Obligor and that does not constitute Unsecured Longer-Term Indebtedness and (b) any Indebtedness that is designated as “Unsecured Shorter-Term Indebtedness” pursuant to Section 6.11(a); provided that Unsecured Shorter-Term Indebtedness shall not include any Indebtedness permitted pursuant to Section 6.01(l).
“U.S. Government Securities” means securities that are direct obligations of, and obligations the timely payment of principal and interest on which is fully guaranteed by, the United States or any agency or instrumentality of the United States the obligations of which are backed by the full faith and credit of the United States and in the form of conventional bills, bonds, and notes.
“U.S. Government Securities Business Day” means any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
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“Value” has the meaning assigned to such term in Section 5.13.
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Syndicated Dollar Loan” or “Syndicated Multicurrency Loan”), by Type (e.g., an “ABR Loan”) or by Class and Type (e.g., a “Syndicated Multicurrency Term Benchmark Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Dollar Borrowing”, “Multicurrency Borrowing” or “Syndicated Borrowing”), by Type (e.g., an “ABR Borrowing”) or by Class and Type (e.g., a “Syndicated ABR Borrowing” or “Syndicated Multicurrency Term Benchmark Borrowing”). Loans and Borrowings may also be identified by Currency.
SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. Any reference herein to a merger, amalgamation, consolidation, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation), as if it were a merger, amalgamation,
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consolidation or similar term, as applicable, to, of or with a separate Person. Any division of a limited liability company shall constitute a separate Person hereunder (and each division of any limited liability company that is a Subsidiary, joint venture or any other like term shall also constitute such a Person or entity).
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, (a) if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith and (b) all leases that are or would have been treated as operating leases for purposes of GAAP prior to the issuance on February 25, 2016 of the Accounting Standards Update (the “ASU”) shall continue to be accounted for as operating leases for purposes of all financial definitions and calculations for purposes of the Loan Documents (whether or not such operating lease obligations were in effect on such date) notwithstanding the fact that such obligations are required in accordance with the ASU (on a prospective or retroactive basis or otherwise) to be treated as capitalized lease obligations in the financial statements to be delivered pursuant to the Loan Documents. The Borrower covenants and agrees with the Lenders that whether or not the Borrower may at any time adopt Financial Accounting Standard No. 159 (or successor standard solely as it relates to fair valuing liabilities) or accounts for liabilities acquired in an acquisition on a fair value basis pursuant to Financial Accounting Standard No. 141(R) (or successor standard solely as it relates to fair valuing liabilities), all determinations of compliance with the terms and conditions of this Agreement shall be made on the basis that the Borrower has not adopted Financial Accounting Standard No. 159 (or such successor standard solely as it relates to fair valuing liabilities) or, in the case of liabilities acquired in an acquisition, Financial Accounting Standard No. 141(R) (or such successor standard solely as it relates to fair valuing liabilities).
SECTION 1.05. Currencies; Currency Equivalents..
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is denominated in any Foreign Currency or the Value or the fair market value of any Portfolio Investment that is denominated in any Foreign Currency shall be deemed to be the Dollar Equivalent of the amount of the Foreign Currency of such Borrowing, Letter of Credit or Portfolio Investment, as the case may be, determined as of the date of such Borrowing or Letter of Credit (determined in accordance with the last sentence of the definition of the term “Interest Period”) or the date of valuation of such Portfolio Investment, as the case may be. Wherever in this Agreement in connection with a Borrowing or Loan an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such Borrowing or Loan is denominated in a Foreign Currency, such amount shall be the relevant Foreign Currency Equivalent of such Dollar amount (rounded to the nearest 1,000 units of such Foreign Currency). Notwithstanding the foregoing, for purposes of determining compliance with any basket in SectionsSection 6.01(i), 6.01(m), 6.01(n), 6.01(o), 6.02(e), 6.02(i), 6.03(g), 6.04(e) or 6.04(f), in no event shall the Borrower or any Obligor be deemed to not be in compliance with any such basket solely as a result of a change in exchange rates.
Without prejudice to the respective liabilities of the Borrower to the Lenders and the Lenders to the Borrower under or pursuant to this Agreement, each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time, in consultation with the Borrower, reasonably specify to be necessary or appropriate to reflect the introduction or changeover to the Euro in any country that becomes a Participating Member State after the date hereof; provided that the Administrative Agent shall provide the Borrower and the Lenders with prior notice of the proposed change with an explanation of such change in sufficient time to permit the Borrower and the Lenders an opportunity to respond to such proposed change.
SECTION 1.06. Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be the stated amount of such Letter of Credit
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available to be drawn at such time. Notwithstanding anything herein to the contrary, no Letter of Credit shall, by its terms, provide for any automatic increase in the available amount thereof.
SECTION 1.07.SECTION 1.06. Rates. The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the continuation of, administration of, submission of, calculation of or any other matter related to the Alternate Base Rate, the Daily Simple RFR, or the Term Benchmark Rate, or any component definition thereof or rates referred to in the definition thereof, or any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Alternate Base Rate, the Daily Simple RFR, the Term Benchmark Rate or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Conforming Changes. The Administrative Agent and its affiliates or other related entities may engage in transactions that affect the calculation of the Alternate Base Rate, the Daily Simple RFR, the Term Benchmark Rate, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to the Borrower. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain the Alternate Base Rate, the Daily Simple RFR, the Term Benchmark Rate or any other Benchmark, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation by any such information source or service of any such rate (or component thereof).
ARTICLE II THE CREDITS
SECTION 2.01. The Commitments. Subject to the terms and conditions set forth herein:
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Multicurrency Commitments at such time or (iii) the total Covered Debt Amount exceeding the Borrowing Base then in effect.
Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Syndicated Loans.
SECTION 2.02. Loans and Borrowings..
$1,000,000 or a larger multiple of $100,000 (or, in each case, such smaller amounts as may be agreed by the Administrative Agent); provided that a Syndicated ABR Borrowing of a Class may be in an aggregate amount that is equal to the entire unused balance of the total Commitments of such Class or that is required to finance the reimbursement of an LC Disbursement of such Class as contemplated by Section 2.05(f). Borrowings of more than one Class, Currency and Type may be outstanding at the same time.
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upon the percentage of the aggregate Commitments represented by the Dollar Commitments and the Multicurrency Commitments, respectively; provided that, if the ratable share of such Syndicated Loan, Swingline Loan or Letter of Credit that would be applied to the Multicurrency Commitments pursuant to this clause (e) exceeds the unused Multicurrency Commitments, such excess shall be allocated to the Dollar Commitments (rather than the Multicurrency Commitments) up to an amount not to exceed the unused Dollar Commitments.
SECTION 2.03. Requests for Syndicated Borrowings..
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applicable Lender of the details thereof and of the amounts of such Lender’s Loan to be made as part of the requested Borrowing.
SECTION 2.04. Swingline Loans..
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shall be a Business Day) and the amount of the requested Swingline Loan. The Administrative Agent will promptly advise the applicable Swingline Lender of any such notice received from the Borrower. Each Swingline Lender shall make each applicable Swingline Loan by wire transfer of immediately available funds to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders by 4:00 p.m., New York City time, on the requested date of such Swingline Loan. The Administrative Agent will make such Swingline Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower designated by the Borrower; provided that Swingline Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(f) shall be remitted by the Administrative Agent to the applicable Issuing Bank.
(x) the conditions set forth in Section 4.02 would not be satisfied in respect of a Borrowing at the time such Swingline Loan was made and (y) the Required Lenders of the respective Class shall have so notified the applicable Swingline Lender in writing and shall not have subsequently determined that the circumstances giving rise to such conditions not being satisfied no longer exist. Unless a Swingline Lender has received the written notice referred to in the previous sentence prior to the time such Swingline Loan was made, then, subject to the terms and conditions hereof, such Swingline Lender shall be entitled to assume all such conditions are satisfied.
Subject to the foregoing and Section 2.20, each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph (c) is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments of the respective Class, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the applicable Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the relevant Swingline Lender. Any amounts received by a Swingline Lender from the Borrower (or other party on behalf of the
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Borrower) in respect of a Swingline Loan after receipt by such Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the applicable Swingline Lender, as their interests may appear. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.
SECTION 2.05. Letters of Credit..
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Currency for its own account or the account of its designee (provided that the Obligors shall remain primarily liable to the Lenders hereunder for payment and reimbursement of all amounts payable in respect of the Letters of Credit hereunder) in such form as is acceptable to such Issuing Bank in its reasonable determination. Letters of Credit issued hereunder shall constitute utilization of the Commitments up to the aggregate amount available to be drawn thereunder. Without limiting any rights of an Issuing Bank under this Section 2.05, no Issuing Bank shall be obligated to issue, amend, renew or extend any Letter of Credit denominated in any Foreign Currency if at the time of such issuance, such Issuing Bank, in its capacity as a Lender, would not be required to make Loans in such Foreign Currency hereunder.
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duplication) its other Swingline Exposure shall not exceed its Multicurrency Commitment then in effect; and (v) the total Covered Debt Amount shall not exceed the Borrowing Base then in effect.
(y) the Administrative Agent or any Lender shall have so notified such Issuing Bank in writing at least two (2) Business Days prior to the requested date of issuance of such Letter of Credit and shall not have subsequently determined that the circumstances giving rise to such conditions not being satisfied no longer exist. Unless an Issuing Bank has received written notice from any Lender, the Administrative Agent or the Borrower, at least two (2) Business Days prior to the requested date of issuance of the applicable Letter of Credit, that one or more applicable conditions contained in Section 4.02 shall not then be satisfied, then, subject to the terms and conditions hereof, such Issuing Bank shall be entitled to assume all such conditions are satisfied.
Subject to Section 2.20, in consideration and in furtherance of the foregoing, each Lender of a Class of Commitment hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for account of each Issuing Bank, such Lender’s Applicable Dollar Percentage or Applicable Multicurrency Percentage, as the case may be, of each LC Disbursement made by such Issuing Bank in respect of Letters of Credit of such Class promptly upon the request of such Issuing Bank at any time from the time of such LC Disbursement until such LC Disbursement is reimbursed by the Borrower or at any time after any reimbursement
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payment is required to be refunded to the Borrower for any reason. Such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each such payment shall be made in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to the next following paragraph, the Administrative Agent shall distribute such payment to the applicable Issuing Bank or, to the extent that the Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse an Issuing Bank for any LC Disbursement shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.
If the Borrower fails to make such payment when due, the Administrative Agent shall notify each applicable Lender with a Commitment then in effect of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Applicable Dollar Percentage or Applicable Multicurrency Percentage, as the case may be, thereof.
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Neither the Administrative Agent, the Lenders nor any Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit by such Issuing Bank or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of such Issuing Bank; provided that the foregoing shall not be construed to excuse any Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to special, indirect, consequential or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Bank’s fraud, gross negligence or willful misconduct as finally determined by a court of competent jurisdiction when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that:
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Business Days following the date when due pursuant to paragraph (f) of this Section, then the provisions of Section 2.12(d) shall apply. Interest accrued pursuant to this paragraph shall be for account of the applicable Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (f) of this Section to reimburse such Issuing Bank shall be for account of such Lender to the extent of such payment.
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SECTION 2.06. Funding of Borrowings..
(ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing. Nothing in this paragraph shall relieve any Lender of its obligation to fulfill its commitments hereunder, and this paragraph shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.
SECTION 2.07. Interest Elections..
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Borrowing, shall have the Interest Period specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a Borrowing of a different Type or to continue such Borrowing as a Borrowing of the same Type and, in the case of a Term Benchmark Borrowing or RFR Borrowing, may elect the Interest Period therefor, all as provided in this Section; provided, however, that (i) a Syndicated Borrowing of a Class may only be continued or converted into a Syndicated Borrowing of the same Class, (ii) a Syndicated Borrowing denominated in one Currency may not be continued as, or converted to, a Syndicated Borrowing in a different Currency, (iii) prior to the Extended Commitment Termination Date, no Term Benchmark Borrowing denominated in a Foreign Currency or RFR Borrowing may be continued if, after giving effect thereto, the aggregate Revolving Multicurrency Credit Exposures would exceed the aggregate Multicurrency Commitments, and (iv) a Term Benchmark Borrowing denominated in a Foreign Currency or RFR Borrowing may not be converted to a Borrowing of a different Type. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders of the respective Class holding the Loans constituting such Borrowing, and the Loans constituting each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Loans, which may not be converted or continued.
(iv) of this paragraph shall be specified for each resulting Borrowing);
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a period contemplated by the definition of the term “Interest Period” and permitted under Section 2.02(d).
(ii) if such Borrowing is denominated in a Foreign Currency, the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Notwithstanding any contrary provision hereof (other than the last paragraph of Article VII), if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, (i) any Term Benchmark Borrowing denominated in Dollars shall, at the end of the applicable Interest Period for such Term Benchmark Borrowing, be automatically converted to an ABR Borrowing and (ii) any Term Benchmark Borrowing or RFR Borrowing denominated in a Foreign Currency shall not have an Interest Period of more than one month’s duration.
SECTION 2.08. Termination, Reduction or Increase of the Commitments..
(b) of this Section at least three (3) Business Days prior to the effective date of such termination
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or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the applicable Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments of a Class delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities or events, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.
$2,000,000,000;
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Promptly following satisfaction of such conditions, the Administrative Agent shall notify the Lenders of such Class (including any Assuming Lenders) thereof and of the occurrence of the Commitment Increase Date by facsimile transmission or electronic messaging system.
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the amount of any fees, expenses or amounts due by the Borrower on or prior to the Commitment Increase Date); provided that with respect to subclauses (A) and (B), (x) the prepayment to, and borrowing from, any existing Lender shall be effected by book entry to the extent that any portion of the amount prepaid to such Lender will be subsequently borrowed from such Lender and (y) the existing Lenders, the Increasing Lenders and the Assuming Lenders shall make and receive payments among themselves, in a manner acceptable to the Administrative Agent, so that, after giving effect thereto, the Loans of such Class are held ratably by the Lenders of such Class in accordance with the respective Commitments of such Class of such Lenders (after giving effect to such Commitment Increase) and (C) pay to the Lenders of such Class the amounts, if any, payable under Section 2.15 as a result of any such prepayment. Concurrently therewith, the Lenders of such Class shall be deemed to have adjusted their participation interests in any outstanding Swingline Loans and Letters of Credit of such Class so that such interests are held ratably in accordance with their commitments of such Class as so increased.
SECTION 2.09. Repayment of Loans; Evidence of Debt..
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In addition, on the Extended Commitment Termination Date, the Borrower shall deposit Cash into the Letter of Credit Collateral Account (denominated in the Currency of the Letter of Credit under which such LC Exposure arises) in an amount equal to 100% of the undrawn face amount of all Letters of Credit outstanding on the close of business on the Extended Commitment Termination Date, such deposit to be held by the Administrative Agent as collateral security for the LC Exposure under this Agreement in respect of the undrawn portion of such Letters of Credit.
(iii) the amount and Currency of any sum received by the Administrative Agent hereunder for account of the Lenders and each Lender’s share thereof.
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SECTION 2.10. Prepayment of Loans..
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Multicurrency Commitment (and/or provide Cash Collateral for Multicurrency LC Exposure as specified in Section 2.05(k)) within 15 Business Days following the Borrower’s receipt of such request in such amounts as shall be necessary so that after giving effect thereto the aggregate Revolving Multicurrency Credit Exposure does not exceed the Multicurrency Commitments.
For purposes hereof “Currency Valuation Notice” means a notice given by the Required Multicurrency Lenders to the Administrative Agent stating that such notice is a “Currency Valuation Notice” and requesting that the Administrative Agent determine the aggregate Revolving Multicurrency Credit Exposure. The Administrative Agent shall not be required to make more than one valuation determination pursuant to Currency Valuation Notices within any rolling three month period.
Any prepayment pursuant to this paragraph shall be applied, first to Swingline Multicurrency Loans outstanding, second, to Syndicated Multicurrency Loans outstanding and third, as cover for Multicurrency LC Exposure.
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Net Cash Proceeds no later than the fifth Business Day following the receipt of such Net Cash Proceeds (such prepayments to be applied as set forth in Section 2.09(b)).
Notwithstanding the foregoing, (I) Net Cash Proceeds and Return of Capital required to be applied to the prepayment of the Loans pursuant to this Section 2.10(d) shall (A) (I) from the period commencing on any Non-Extended Commitment Termination Date and ending on the Extended Commitment Termination Date, be applied ratably among the Non-Extending Lenders for which any Non-Extended Commitment Termination Date shall have occurred and (II) from the Extended Commitment Termination Date to the Extended Final Maturity Date, be applied in accordance with the Guarantee and Security Agreement and (B) exclude the amount necessary for the Borrower to make all required distributions (which shall be no less than the amount estimated in good faith by Borrower under Section 6.05(b) herein) to maintain the status of a RIC under the Code and a “business development company” under the Investment Company Act for so long as the Borrower retains such status and to avoid payment by the Borrower of federal
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excise Taxes imposed by Section 4982 of the Code for so long as the Borrower retains the status of a RIC under the Code and (II) if the Loans to be prepaid pursuant to this Section 2.10(d) are Term Benchmark Loans, the Borrower may defer such prepayment until the last day of the Interest Period applicable to such Loans owed to such Lender or Lenders, so long as the Borrower deposits an amount equal to such Net Cash Proceeds, no later than the fifth Business Day following the receipt of such Net Cash Proceeds, into a segregated collateral account in the name and under the dominion and control of the Administrative Agent, pending application of such amount to the prepayment of the Loans on the last day of such Interest Period; provided, further, that the Administrative Agent may direct the application of such deposits as set forth in Section 2.09(b) at any time and if the Administrative Agent does so, no amounts will be payable by the Borrower pursuant to Section 2.15.
(i) in the case of prepayment of a Term Benchmark Borrowing denominated in Dollars (other than in the case of a prepayment pursuant to Section 2.10(d)), not later than 11:00 a.m., New York City time, three (3) Business Days before the date of prepayment (or such shorter period as may be agreed to by the Administrative Agent), (ii) in the case of prepayment of a Term Benchmark Borrowing denominated in a Foreign Currency (other than in the case of a prepayment pursuant to Section 2.10(d)), not later than 11:00 a.m., London time, four (4) Business Days before the date of prepayment, (iii) in the case of prepayment of a RFR Borrowing (other than in the case of a prepayment pursuant to Section 2.10(d)), not later than 11:00 a.m., London time, four (4) Business Days before the date of prepayment, (iv) in the case of prepayment of a Syndicated ABR Borrowing (other than in the case of a prepayment pursuant to Section 2.10(d)), not later than 11:00 a.m., New York City time on the date of prepayment, (v) in the case of prepayment of a Swingline Loan, not later than 11:00 a.m., New York City time, on the date of prepayment, and (vi) in the case of any prepayment pursuant to Section 2.10(d), not later than 1:00 p.m., New York City time, on the date of prepayment or, in each case of the notice periods described in this clause (e), such lesser period as the Administrative Agent may reasonably agree. Each such notice shall be irrevocable and shall specify the prepayment date, the principal amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment; provided that, if (i) a notice of prepayment is given in connection with a conditional notice of reduction or termination of the Commitments of a Class as contemplated by Section 2.08, then such notice of prepayment may be revoked if such notice of reduction or termination is revoked in accordance with Section 2.08 and (ii) any notice given in connection with Section 2.10(d) may be conditioned on the consummation of the applicable transaction contemplated by such Section and the receipt by the Borrower or any such Subsidiary (other than a Financing Subsidiary) of Net Cash Proceeds. Promptly following receipt of any such notice relating to a Syndicated Borrowing, the Administrative Agent shall advise the affected Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of a Borrowing of the same Type as provided in Section 2.02 or in the case of a Swingline Loan, as provided in Section 2.04, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Syndicated Borrowing of a Class of Commitments or Final Maturity Date shall be applied ratably to the Loans held by the
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Lenders of such Class included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
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interest to the extent required by Section 2.12 and shall be made in the manner specified in Section 2.09(b) unless such prepayment is made in connection with the reduction of Commitments in accordance with Section 2.08(b) or (f) in which case such prepayment shall be applied in accordance with Section 2.08(d) or (f), as applicable.
SECTION 2.11. Fees..
(ii) the Commitment of any Class of a Lender shall be deemed to be used to the extent of the outstanding Syndicated Loans and LC Exposure of such Class of such Lender (and the Swingline Exposure of such Class of such Lender shall be disregarded for such purpose).
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Termination Date, the Borrower shall prepay on the Termination Date the full amount of the participation and fronting fees that will accrue on such Letters of Credit subsequent to the Termination Date through but not including the date such outstanding Letters of Credit are scheduled to expire (and, in that connection, the Lenders agree not later than the date two (2) Business Days after the date upon which the last such Letter of Credit shall expire or be terminated to rebate to the Borrower the excess, if any, of the aggregate participation and fronting fees that have been prepaid by the Borrower over the sum of the amount of such fees that ultimately accrue through the date of such expiration or termination and the aggregate amount of all other unpaid obligations hereunder at such time). Any other fees payable to an Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
SECTION 2.12. Interest..
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Non-Extending Lenders shall bear interest at a rate per annum equal to the Daily Simple RFR plus the Non-Extended Applicable Margin.
SECTION 2.13. Inability to Determine Interest Rates . Subject to Section 2.212.22, if, prior to the commencement of any Interest Period for any Term Benchmark Borrowing of a Class or at any time for an RFR Borrowing (the Currency of such Borrowing herein called the “Affected Currency”):
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then the Administrative Agent shall give written notice thereof (or telephonic notice, promptly confirmed in writing) to the Borrower and the affected Lenders as promptly as practicable thereafter. Until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Syndicated Borrowing to, or the continuation of any Syndicated Borrowing as, a Term Benchmark Borrowing or RFR Borrowing denominated in the Affected Currency shall be ineffective and, if the Affected Currency is Dollars, such Syndicated Borrowing (unless prepaid) shall be continued as, or converted to, a Syndicated ABR Borrowing at the end of the applicable Interest Period, (ii) if the Affected Currency is Dollars and any Borrowing Request requests a Term Benchmark Borrowing denominated in Dollars, such Borrowing shall be made as a Syndicated ABR Borrowing, and (iii) if the Affected Currency is a Foreign Currency other than Canadian Dollars, (A) any Borrowing Request that requests a Term Benchmark Borrowing or RFR Borrowing denominated in the Affected Currency shall be made as a Term Benchmark Borrowing with a Term Benchmark Rate equal to the Central Bank Rate for the applicable Agreed Foreign Currency; provided, that if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Agreed Foreign Currency cannot be determined, such Borrowing Request shall be ineffective, and (B) any outstanding Term Benchmark Borrowing or RFR Borrowing in the Affected Currency, at the Borrower’s election shall either (1) be converted to a Term Benchmark Borrowing with a Term Benchmark Rate equal to the Central Bank Rate for the applicable Agreed Foreign Currency; provided that, if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Agreed Foreign Currency cannot be determined, such Borrowing shall be converted into an ABR Borrowing denominated in Dollars (in an amount equal to the Dollar Equivalent of such Affected Currency) immediately in the case of an RFR Borrowing or, in the case of a Term Benchmark Borrowing, at the end of the applicable Interest Period, (2) be converted into a Syndicated ABR Borrowing denominated in Dollars (in an amount equal to the Dollar Equivalent of such Affected Currency) immediately in the case of an RFR Borrowing or, in the case of a Term Benchmark Borrowing, at the end of the applicable Interest Period, or (23) be prepaid in full immediately in the case of an RFR Borrowing or, in the case of a Term
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Benchmark Borrowing, at the end of the applicable Interest Period, and (iv) if the
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Affected Currency is Canadian Dollars, (A) any Borrowing Request that requests a Term Benchmark Borrowing denominated in Canadian Dollars shall be made as a Term Benchmark Borrowing with a Term Benchmark Rate equal to the Canadian Prime Rate; provided, that if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Canadian Prime Rate cannot be determined, such Borrowing Request shall be ineffective, and (B) any outstanding Term Benchmark Borrowing in Canadian Dollars, at the Borrower’s election, shall either (1) be converted to a Term Benchmark Borrowing denominated in Canadian Dollars with a Term Benchmark Rate equal to the Canadian Prime Rate at the end of applicable Interest Period; provided that, if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Canadian Prime Rate cannot be determined, such Borrowing shall be converted into an ABR Borrowing denominated in Dollars (in an amount equal to the Dollar Equivalent of such Affected Currency) at the end of the applicable Interest Period, (2) be converted into a Syndicated ABR Borrowing denominated in Dollars (in an amount equal to the Dollar Equivalent of such Affected Currency) at the end of the applicable Interest Period, or (3) be prepaid in full at the end of the applicable Interest Period; provided that if no election is made by the Borrower by the date that is three (3) Business Days after receipt by the Borrower of such notice or, in the case of a Term Benchmark Borrowing, the last day of the current Interest Period for the applicable Term Benchmark Loan, if earlier, the Borrower shall be deemed to have elected clause (iii)(B)(1) or (iv)(B)(1) above, as applicable.
SECTION 2.14. Increased Costs..
and the result of any of the foregoing shall be to increase the cost to such Lenders of making, converting to, continuing or maintaining any Term Benchmark Loan or RFR Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or such Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or such Issuing Bank hereunder (whether of principal, interest or otherwise), then upon the request of such Lender or such Issuing Bank the Borrower will pay to such Lender or such Issuing Bank, as the case may be, in Dollars, such additional amount or amounts as will compensate such Lender or such Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered; provided that
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no Lender will claim the payment of any of the amounts referred to in this paragraph if not generally claiming similar compensation from its other similar customers in similar circumstances (it being understood that no Lender shall be required to disclose price sensitive information or any other information).
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SECTION 2.15. Break Funding Payments. In the event of (a) the payment of any principal of any Term Benchmark Loan other than on the last day of an Interest Period therefor (including as a result of the occurrence of any Commitment Increase Date or an Event of Default), (b) the conversion of any Term Benchmark Loan other than on the last day of an Interest Period therefor, (c) the failure to borrow, convert, continue or prepay any Term Benchmark Loan on the date specified in any notice delivered pursuant hereto (including, in connection with any Commitment Increase Date, and regardless of whether such notice is permitted to be revocable under Section 2.10(e) and is revoked in accordance herewith), or
(d) the assignment as a result of a request by the Borrower pursuant to Section 2.18(b) of any Term Benchmark Loan other than on the last day of an Interest Period therefor, then, in any such event, the Borrower shall compensate each affected Lender for such Lender’s loss, cost and reasonable expense attributable to such event (excluding loss of anticipated profits). In the case of a Term Benchmark Loan, the loss to any Lender attributable to any such event shall be deemed to include an amount determined by such Lender to be equal to the excess, if any, of:
Payment under this Section shall be made upon written request of a Lender delivered to the Borrower not later than five (5) Business Days following the payment, conversion, or failure to borrow, convert, continue or prepay that gives rise to a claim under this Section accompanied by a written certificate of such Lender setting forth in reasonable detail the basis for and the calculation of the amount or amounts that such Lender is entitled to receive pursuant to this Section, which certificate shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) Business Days after receipt thereof.
SECTION 2.16. Taxes..
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may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.
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or times prescribed by applicable law or reasonably requested by the Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate. In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.16(f)(ii) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
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Section 881(c)(3)(C) of the Code and (2) duly completed and executed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E (or any successor form) certifying that the Foreign Lender is not a U.S. Person, or
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Agent, any Lender or an Issuing Bank be required to pay any amount to Borrower pursuant to this clause (h), the payment of which would place such Person in a less favorable net after-Tax position than such Person would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This subsection shall not be construed to require the Administrative Agent, any Lender or an Issuing Bank to make available its tax returns or its books or records (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.
SECTION 2.17. Payments Generally; Pro Rata Treatment: Sharing of Set-offs..
All amounts owing under this Agreement (including commitment fees, payments required under Section 2.14, and payments required under Section 2.15 relating to any Loan denominated in Dollars, but not including principal of and interest on any Loan denominated in any Foreign Currency or payments relating to any such Loan required under Section 2.15, which are payable in such Foreign Currency) or under any other Loan Document (except to the extent otherwise provided therein) are payable in Dollars. Notwithstanding the foregoing, if the Borrower shall fail to pay any principal of any Loan when due (whether at stated maturity, by acceleration, by mandatory prepayment or otherwise), the unpaid portion of such Loan shall, if such Loan is not denominated in Dollars, automatically be redenominated in Dollars on the due date thereof (or, if such due date is a day other than the last day of the Interest Period therefor, on the last day of such Interest Period) in an amount equal to the Dollar Equivalent thereof on the date of such redenomination and such principal shall be payable on demand; and if the Borrower shall fail to pay any interest on any Loan that is not denominated in Dollars, such interest shall automatically be redenominated in Dollars on the due date therefor (or, if such due date is a day
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other than the last day of the Interest Period therefor, on the last day of such Interest Period) in an amount equal to the Dollar Equivalent thereof on the date of such redenomination and such interest shall be payable on demand.
Notwithstanding the foregoing provisions of this Section, if, after the making of any Borrowing in any Foreign Currency, currency control or exchange regulations are imposed in the country which issues such currency with the result that the type of currency in which the Borrowing was made (the “Original Currency”) no longer exists or the Borrower is not able to make payment to the Administrative Agent for the account of the Lenders in such Original Currency, then all payments to be made by the Borrower hereunder in such currency shall instead be made when due in Dollars in an amount equal to the Dollar Equivalent (as of the date of repayment) of such payment due, it being the intention of the parties hereto that the Borrower takes all risks of the imposition of any such currency control or exchange regulations.
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SECTION 2.18. Mitigation Obligations; Replacement of Lenders..
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SECTION 2.19. Defaulting Lenders..
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Defaulting Lender to Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Bank or any Swingline Lender hereunder; third, to Cash Collateralize each Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender in the manner described in Section 2.09(a); fourth, as Borrower may request (so long as no Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by Administrative Agent; fifth, if so determined by Administrative Agent and Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize each Issuing Bank’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in the manner described in Section 2.09(a); sixth, to the payment of any amounts owing to the Lenders, Issuing Banks or Swingline Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender, any Issuing Bank or any Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, to the payment of any amounts owing to Borrower as a result of any judgment of a court of competent jurisdiction obtained by Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or reimbursement obligations in respect of any LC Disbursement for which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied and waived, such payment shall be applied solely to pay the Loans of, and reimbursement obligations in respect of any LC Disbursement that is owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or reimbursement obligations in respect of any LC Disbursement that is owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in Letters of Credit and Swingline Loans are held by the Lenders pro rata in accordance with the applicable Commitments without giving effect to Section 2.19(a)(iii). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.19(a)(i) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
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Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.19(d).
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any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.
SECTION 2.20. Reallocation Following a Non-Extended Commitment Termination
Date.
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(III) the aggregate Revolving Multicurrency Credit Exposure of all of the Multicurrency Lenders with Multicurrency Commitments then in effect to exceed the aggregate Multicurrency Commitments at such time and (z) the proceeds of any such Loan are applied solely to reduce the Revolving Credit Exposure of the applicable Non-Extending Lender or Non-Extending Lenders, as applicable.
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Commitments then in effect to exceed the aggregate Multicurrency Commitments at such time.
SECTION 2.21. Illegality. If any Change in Law shall make it unlawful or impossible for any Lender to perform any of its obligations hereunder, to make, maintain or fund any RFR Loan or Term Benchmark Loan or to determine or charge interest rates based upon any applicable Daily Simple RFR or Term Benchmark Rate and such Lender shall so notify the Administrative Agent, the Administrative Agent shall give written notice thereof (or telephonic notice, promptly confirmed in writing) to the Borrower and the other Lenders as promptly as practicable thereafter, whereupon until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such notice no longer exist, (i) the Alternate Base Rate shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to clause (iii) thereof, (ii) any Interest Election Request that requests the conversion of any Borrowing to, or the continuation of any Borrowing as, a Term Benchmark Borrowing denominated in the affected Currency shall be ineffective and, if the affected Currency is Dollars, such Borrowing (unless prepaid) shall be continued as, or converted to, an ABR Borrowing either (A) at the end of the applicable Interest Period if such Lender may lawfully continue to maintain such Loan to such date or (B) immediately if such Lender shall determine that it may not lawfully continue to maintain such Term Benchmark Loan to such date, (iii) if the affected Currency is Dollars and any Borrowing Request requests a Term Benchmark Borrowing denominated in Dollars, such Borrowing shall be made as an ABR Borrowing, (iv) if the affected Currency is a Foreign Currency other than Canadian Dollars, (A) any Borrowing Request that requests a Term Benchmark Borrowing or RFR Borrowing denominated in the affected Currency shall be made
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as a Term Benchmark Borrowing with a
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Term Benchmark Rate equal to the Central Bank Rate for the applicable Agreed Foreign Currency; provided, that if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Agreed Foreign Currency cannot be determined, such Borrowing Request shall be ineffective, and (B) any outstanding Term Benchmark Borrowing or RFR Borrowing in the affected Currency, at the Borrower’s election shall either (1) be converted to a Term Benchmark Borrowing with a Term Benchmark Rate equal to the Central Bank Rate for the applicable Agreed Foreign Currency; provided that, if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Agreed Foreign Currency cannot be determined, such Borrowing shall be converted into an ABR Borrowing denominated in Dollars (in an amount equal to the Dollar Equivalent of such affected Currency) immediately in the case of an RFR Borrowing or, in the case of a Term Benchmark Borrowing, either (x) at the end of the applicable Interest Period if such Lender may lawfully continue to maintain such Loan to such date or (y) immediately if such Lender shall determine that it may not lawfully continue to maintain such Term Benchmark Loan to such date, (2) be converted into an ABR Borrowing denominated in Dollars (in an amount equal to the Dollar Equivalent of such affected Currency) immediately in the case of an RFR Borrowing or, in the case of a Term Benchmark Borrowing, either (x) at the end of the applicable Interest Period if such Lender may lawfully continue to maintain such Loan to such date or (y) immediately if such Lender shall determine that it may not lawfully continue to maintain such Term Benchmark Loan to such date, or (3) be prepaid in full immediately in the case of an RFR Borrowing or, in the case of a Term Benchmark Borrowing, either (x) at the end of the applicable Interest Period if such Lender may lawfully continue to maintain such Loan to such date or (y) immediately if such Lender shall determine that it may not lawfully continue to maintain such Term Benchmark Loan to such date, and (v) if the affected Currency is Canadian Dollars, (A) any Borrowing Request that requests a Term Benchmark Borrowing denominated in Canadian Dollars shall be made as a Term Benchmark Borrowing with a Term Benchmark Rate equal to the Canadian Prime Rate; provided, that if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Canadian Prime Rate cannot be determined, such Borrowing Request shall be ineffective, and (B) any outstanding Term Benchmark Borrowing in Canadian Dollars, at the Borrower’s election, shall either (1) be converted to a Term Benchmark Borrowing denominated in Canadian Dollars with a Term Benchmark Rate equal to the Canadian Prime Rate at the end of applicable Interest Period; provided that, if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Canadian Prime Rate cannot be determined, such Borrowing shall be converted into an ABR Borrowing denominated in Dollars (in an amount equal to the Dollar Equivalent of such affected Currency) either (x) at the end of the applicable Interest Period if such Lender may lawfully continue to maintain such Loan to such date or (y) immediately if such Lender shall determine that it may not lawfully continue to maintain such Term Benchmark Loan to such date, (2) be converted into an ABR Borrowing denominated in Dollars (in an amount equal to the Dollar Equivalent of such affected Currency) either (x) at the end of the applicable Interest Period if such Lender may lawfully continue to maintain such Loan to such date or (y) immediately if such Lender shall determine that it may not lawfully continue to maintain such Term Benchmark Loan to such date, or (3) be prepaid in full at the end of the applicable Interest Period; provided that if no election is made by the Borrower by the date that is three (3) Business Days after receipt by the Borrower of such notice
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or, in the case of a Term Benchmark Borrowing, the last day of the current Interest Period for the applicable Term Benchmark Loan, if earlier, the Borrower shall be deemed to have elected clause (iv)(B)(1) or (v)(B)(1) above, as applicable. Notwithstanding the foregoing, the affected Lender shall, prior to giving such notice to the Administrative Agent, use reasonable efforts to designate a different lending office if such designation would avoid the need for giving such notice and if such designation would not otherwise be disadvantageous to such Lender in the good faith exercise of its discretion. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted, together with any additional amounts required pursuant to Section 2.15.
SECTION 2.22.SECTION 2.21. Effect of Benchmark Transition Event.
(2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for such Currency for all purposes hereunder and under any other Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders (which, in the case of a Benchmark Replacement in connection with an Other Benchmark Rate Election, may be delivered on the same day that notice of such Other Benchmark Rate Election is provided to the Lenders) without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising (x) in the case of a Benchmark Replacement for Dollars, the Required Lenders, and, (y) in the case of a Benchmark Replacement for any Foreign Currency, the Required Multicurrency Lenders. If the Benchmark Replacement is Daily Simple SOFR, all interest payments will be payable on a quarterly basis.
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Replacement, and (ii) the effectiveness of any Conforming Changes in connection with the use, administration, adoption or implementation of a Benchmark Replacement. The Administrative Agent will promptly notify the Borrower of (x) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (d) below and (y) the commencement of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.212.22, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.212.22.
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equal to the Central Bank Rate for the applicable Agreed Foreign Currency; provided, that if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Foreign Currency cannot be determined, such Borrowing Request shall be ineffective, and (B) any outstanding Term Benchmark Borrowing or RFR Borrowing in the affected Currency, at the Borrower’s election, shall either (1) be converted to a Term Benchmark Borrowing with a Term Benchmark Rate equal to the Central Bank Rate for the applicable Agreed Foreign Currency; provided that, if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Agreed Foreign Currency cannot be determined, such Borrowing shall be converted into an ABR Borrowing denominated in Dollars (in an amount equal to the Dollar Equivalent of such affected Currency) immediately in the case of an RFR Borrowing or, in the case of a Term Benchmark Borrowing, at the end of the applicable Interest Period, (2) be converted into an ABR Borrowing denominated in Dollars (in an amount equal to the Dollar Equivalent of such affected Currency) immediately in the case of an RFR Borrowing or, in the case of a Term Benchmark Borrowing, at the end of the applicable Interest Period, or (23) be prepaid in full immediately in the case of an RFR Borrowing or, in the case of a Term Benchmark Borrowing, at the end of the applicable Interest Period, and (iv) if the affected Currency is Canadian Dollars, (A) any Borrowing Request that requests a Term Benchmark Borrowing denominated in Canadian Dollars shall be made as a Term Benchmark Borrowing with a Term Benchmark Rate equal to the Canadian Prime Rate; provided, that if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Canadian Prime Rate cannot be determined, such Borrowing Request shall be ineffective, and (B) any outstanding Term Benchmark Borrowing in Canadian Dollars, at the Borrower’s election, shall either (1) be converted to a Term Benchmark Borrowing denominated in Canadian Dollars with a Term Benchmark Rate equal to the Canadian Prime Rate at the end of applicable Interest Period; provided that, if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Canadian Prime Rate cannot be determined, such Borrowing shall be converted into an ABR Borrowing denominated in Dollars (in an amount equal to the Dollar Equivalent of such affected Currency) at the end of the applicable Interest Period, (2) be converted into an ABR Borrowing denominated in Dollars (in an amount equal to the Dollar Equivalent of such affected Currency) at the end of the applicable Interest Period, or (3) be prepaid in full at the end of the applicable Interest Period; provided that, if no election is made by the Borrower by the date that is three (3) Business Days after receipt by the Borrower of such notice or, in the case of a Term Benchmark Borrowing, the last day of the current Interest Period for the applicable Term Benchmark Loan, if earlier, the Borrower shall be deemed to have elected clause (iii)(B)(1) or (iv)(B)(1) above, as applicable. During a Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Alternate Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Alternate Base Rate.
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ARTICLE III REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and its Subsidiaries is (a) duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has all requisite power and authority to carry on its business as now conducted and, (c) is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required of the Borrower or such Subsidiary, as applicable, except where the failure to comply with this clause (c) would not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.02. Authorization; Enforceability. The Transactions are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate and, if required, by all necessary shareholder action. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each of the other Loan Documents when executed and delivered by each Obligor party thereto will constitute, a legal, valid and binding obligation of such Obligor, enforceable in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors’ rights and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except for (i) such as have been or will be obtained or made and are or will be in full force and effect and (ii) filings and recordings in respect of the Liens created pursuant to the Security Documents, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Borrower or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default in any material respect under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or assets, or give rise to a right thereunder to require any payment to be made by any such Person, in each case, except as would not reasonably be expected to have a Material Adverse Effect, and (d) except for the Liens created pursuant to this Agreement or the Security Documents, will not result in the creation or imposition of any Lien on any asset of the Borrower or any Obligor.
SECTION 3.04. Financial Condition; No Material Adverse Change..
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material respects, the consolidated financial position and results of operations and cash flows of the Borrower and its Subsidiaries as of such date and for such period in accordance with GAAP.
SECTION 3.05. Litigation. There are no actions, suits, investigations or proceedings by or before any arbitrator or Governmental Authority now pending against or, to the knowledge of the Borrower, threatened in writing against or affecting the Borrower or any of its Subsidiaries
(i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that directly involve this Agreement or the Transactions (other than any action brought by the Borrower against a Defaulting Lender).
SECTION 3.06. Compliance with Laws and Agreements. Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect. Neither the Borrower nor any other Obligor is subject to any contract or other arrangement, the performance of which by the Borrower or such Obligor would reasonably be expected to result in a Material Adverse Effect.
SECTION 3.07. Taxes. Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all material Tax returns and reports required to have been filed and has paid or caused to be paid all material Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Person has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.08. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, would reasonably be expected to result in a Material Adverse Effect.
SECTION 3.09. Disclosure As of the Effective Date, the Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. As of the Effective Date, none of the reports, financial statements, certificates or other written information (other than
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projected financial information, other forward looking information relating to third parties and information of a general economic or general industry nature) furnished by or on behalf of the Borrower to the Administrative Agent in connection with the negotiation of this Agreement and the other Loan Documents or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) when taken as a whole (and after giving effect to all updates, modifications and supplements) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.
SECTION 3.10. Investment Company Act; Margin Regulations..
SECTION 3.11. Material Agreements and Liens..
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Date, and the aggregate principal or face amount outstanding or that is, or may become, outstanding under each such arrangement is correctly described in Part A of Schedule 3.11.
SECTION 3.12. Subsidiaries and Investments..
SECTION 3.13. Properties..
SECTION 3.14. Affiliate Agreements. As of the Original Effective Date, the Borrower has heretofore delivered to the Administrative Agent true and complete copies of each of the Affiliate Agreements (including and schedules and exhibits thereto, and any amendments, supplements or waivers executed and delivered thereunder). As of the Original Effective Date, each of the Affiliate Agreements was in full force and effect.
SECTION 3.15. Sanctions.
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SECTION 3.16. Patriot Act. Each of the Borrower and its Subsidiaries is in material compliance with (a) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds of the Loans or Letters of Credit will be used, directly or, to the knowledge of a Responsible Officer of the Borrower, indirectly, for any payments (i) to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, all in violation by the Borrower or its Subsidiaries of the United States Foreign Corrupt Practices Act of 1977, as amended, or the UK Bribery Act or in material violation of US or UK regulations implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (collectively, the “Anti-Corruption Laws”) or (ii) for the purpose of financing the activities in or with any Sanctioned Country, or of any Person, at the time of such financing (A) the subject or target of any Sanctions or (B) located, organized or resident in a Sanctioned Country, in each case as would result in a violation of Sanctions.
SECTION 3.17. Collateral Documents. The provisions of the Security Documents are effective to create in favor of the Collateral Agent a legal, valid and enforceable first priority Lien (subject to Liens permitted by Section 6.02) on all right, title and interest of the Borrower and each Subsidiary Guarantor in the Collateral described therein except for any failure that would not constitute an Event of Default under clause (q) of Article VII. Except for filings completed on or prior to the Effective Date and as contemplated hereby and by the Security Documents and the taking of possession or control by the Collateral Agent of the Collateral with respect to which a security interest may be perfected by possession or control, no filing or other action will be necessary to perfect such Liens, to the extent required thereunder, except for the failure to make any filing or take any other action that would not constitute an Event of Default under clause (q) of Article VII.
SECTION 3.18. EEA Financial Institutions. Neither the Borrower nor any Subsidiary is an EEA Financial Institution.
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ARTICLE IV CONDITIONS
SECTION 4.01. Effective Date. The effectiveness of this Agreement and of the
obligations of the Lenders to make Loans and of the Issuing Banks to issue Letters of Credit hereunder shall not become effective until completion of each of the following conditions precedent (unless a condition shall have been waived in accordance with Section 9.02):
(A) Cleary Gottlieb Steen & Hamilton LLP, New York counsel for the Borrower and the Subsidiary Guarantors and (B) Young Conaway Stargatt & Taylor, LLP, Delaware counsel for the Borrower and the Subsidiary Guarantors, in each case, in form and substance reasonably acceptable to the Administrative Agent (and the Borrower hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent).
SECTION 4.02. Each Credit Event. The obligation of each Lender to make any Loan, and of each Issuing Bank to issue, amend, renew or extend any Letter of Credit, is additionally subject
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to the satisfaction of the following conditions:
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Each Borrowing (but, for the avoidance of doubt, not a continuation or conversion thereof) and each issuance, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in the preceding sentence.
ARTICLE V AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal of and
accrued interest on each Loan and all fees payable hereunder (other than Unasserted Contingent Obligations) shall have been paid in full and all Letters of Credit shall have expired, been terminated, Cash Collateralized or backstopped and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Borrower will furnish to the Administrative Agent (for distribution to each Lender):
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and results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP (except as disclosed therein) consistently applied; provided that the requirements set forth in this clause (a) may be fulfilled by providing to the Administrative Agent the report of the Borrower to the SEC on Form 10-K for the applicable fiscal year;
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Retrieval system; provided, that the Borrower shall notify the Administrative Agent (by telecopier or electronic mail) of the posting of any such documents.
SECTION 5.02. Notices of Material Events. The Borrower will furnish to the Administrative Agent (for distribution to each Lender) prompt written notice upon any Responsible Officer obtaining knowledge of the following:
Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.03. Existence: Conduct of Business. The Borrower will, and will cause each of its Subsidiaries (other than Immaterial Subsidiaries) to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution not prohibited under Section 6.03.
SECTION 5.04. Payment of Obligations. The Borrower will, and will cause each of its Subsidiaries to, pay its obligations, including income tax and other material tax liabilities and material contractual obligations, that, if not paid, could reasonably be expected to result in a Material Adverse Effect before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by appropriate proceedings,
(b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance. The Borrower will, and will cause each of its Subsidiaries (other than Immaterial Subsidiaries) to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted except where failure to keep or maintain would not reasonably be expected to result
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in a Material Adverse Effect; provided that the foregoing shall not prohibit any
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merger, consolidation, liquidation or dissolution not prohibited under Section 6.03, and
(b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.
SECTION 5.06. Books and Records; Inspection and Audit Rights. The Borrower will, and will cause each of its Subsidiaries to, keep books of record and account in accordance with GAAP in all material respects. The Borrower will, and will cause each other Obligor to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties during business hours, to examine and make extracts from its books and records (but only to the extent the Borrower is not prohibited from disclosing such information or providing access to such information pursuant to applicable law or an agreement any Obligor entered into with a third party in the ordinary course of its business), and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested, in each case, to the extent such inspection or requests for such information are reasonable and such information can be provided or discussed without violation of law, rule, regulation or contract; provided that (i) the Borrower or such Obligor shall be entitled to have its representatives and advisors present during any inspection of its books and records and (ii) unless an Event of Default shall have occurred and be continuing, the Borrower’s obligation to reimburse any costs and expenses incurred by the Administrative Agent and the Lenders in connection with any such inspection shall be limited to one inspection per calendar year.
SECTION 5.07. Compliance with Laws. The Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations, including the Investment Company Act, and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Without limiting the generality of the foregoing, the Borrower will, and will cause its Subsidiaries to, conduct its business and other activities in compliance in all material respects with the provisions of the Investment Company Act and any applicable rules, regulations or orders issued by the Securities and Exchange Commission thereunder.
SECTION 5.08. Certain Obligations Respecting Subsidiaries; Further Assurances.
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Borrower pursuant to Section 4.01 upon the Effective Date or as the Administrative Agent shall have reasonably requested.
(i) to create, in favor of the Collateral Agent for the benefit of the Lenders (and any affiliate thereof that is a party to any Hedging Agreement entered into with the Borrower) and the holders of any Secured Longer-Term Indebtedness or Secured Shorter-Term Indebtedness, perfected security interests and Liens in the Collateral; provided that any such security interest or Lien shall be subject to the relevant requirements of the Security Documents, (ii) in the case of any Portfolio Investment consisting of a Bank Loan (as defined in Section 5.13) that does not constitute all of the credit extended to the underlying borrower under the relevant underlying loan documents and a Financing Subsidiary holds any interest in the loans or other extensions of credit under such loan documents, (x) to cause such Financing Subsidiary to be party to such underlying loan documents as a “lender” having a direct interest (or a participation not acquired from an Obligor) in such underlying loan documents and the extensions of credit thereunder and
(y) to ensure that all amounts owing to such Obligor or Financing Subsidiary by the underlying borrower or other obligated party are remitted by such borrower or obligated party directly to separate accounts of such Obligor and such Financing Subsidiary, (iii) in the event that any Obligor is acting as an agent or administrative agent under any loan documents with respect to any Bank Loan that does not constitute all of the credit extended to the underlying borrower under the relevant underlying loan documents, to ensure that all funds held by such Obligor in such capacity as agent or administrative agent is segregated from all other funds of such Obligor and clearly identified as being held in an agency capacity and (iv) if an Event of Default has occurred and is continuing, to cause the closing sets and all executed amendments, consents, forbearances and other modifications and assignment agreements relating to any Portfolio Investment and any other documents relating to any Portfolio Investment requested by the Collateral Agent, in each case, to be held by the Collateral Agent or a custodian pursuant to the terms of a custodian agreement reasonably satisfactory to the Collateral Agent.
SECTION 5.09. Use of Proceeds. The Borrower will use the proceeds of the Loans only for general corporate purposes of the Borrower, including the acquisition and funding (either directly or through one or more wholly-owned Subsidiaries) of leveraged loans, mezzanine loans, high-yield securities, convertible securities, preferred stock, common stock and other Portfolio Investments; provided that neither the Administrative Agent nor any Lender shall have any responsibility as to the use of any of such proceeds. No part of the proceeds of any Loan will be used in violation of (a) applicable law or, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying any Margin Stock or (b) Section 3.16.
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Margin Stock shall be purchased by the Obligors only with the proceeds of Indebtedness not directly or indirectly secured by Margin Stock, or with the proceeds of equity capital of the Borrower.
SECTION 5.10. Status of RIC and BDC. The Borrower shall at all times, subject to applicable grace periods set forth in the Code, maintain its status as a RIC under the Code, and as a “business development company” under the Investment Company Act.
SECTION 5.11. Investment Policies. The Borrower shall at all times be in compliance in all material respects with its Investment Policies (after giving effect to any Permitted Policy Amendments).
SECTION 5.12. Portfolio Valuation and Diversification Etc.
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135
(B) as at the last day of the next succeeding Testing Quarter with respect to such Portfolio Investment;
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months following the end of the immediately preceding Testing Quarter for such Portfolio Investment.
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(provided that such Approved Third-Party Appraiser delivers such valuation at least seven (7) Business Days before the 20th day after the end of the applicable monthly accounting period and, if such valuation is delivered after such time, it shall be included in the Borrowing Base Certificate for the following monthly period and applied to the then applicable balance of the related Portfolio Investment). For illustrative purposes, if the given fiscal quarter is the fourth quarter ending on December 31, 2012, then (A) the Administrative Agent would initiate the testing of Values using the December 31, 2012 Calculation Values for purposes of determining the scope of the testing under clauses (E)(x) during the month of February with the anticipation of receiving the valuations from the applicable Approved Third-Party Appraiser(s) on or after February 28, 2013 and (B)(xx) if such valuations were received before the 7th Business Day before March 20, 2013, such valuations would be included in the March 20, 2013 Borrowing Base Certificate covering the month of February, or (yy) if such valuations were received after such time, they would be included in the April 20, 2013 Borrowing Base Certificate for the month of March.
For the avoidance of doubt, all calculations of value pursuant to this Section 5.12(b)(ii)(E) shall be determined without application of the Advance Rates.
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portfolio diversification requirements set forth in the Code applicable to RICs, to the extent applicable.
SECTION 5.13. Calculation of Borrowing Base. . For purposes of this Agreement, the “Borrowing Base” shall be determined, as at any date of determination, as the sum of the Advance Rates of the Value of each Portfolio Investment (excluding any Cash Collateral held by the Administrative Agent pursuant to Section 2.05(k) or the last paragraph of Section 2.09(a)); provided that:the Advance Rate applicable to that portion of the aggregate Value of the Portfolio Investments of all issuers in a consolidated group of corporations or other entities (collectively, a “Consolidated Group”), in accordance with GAAP, that exceeds 6% of the aggregate Value of all Portfolio Investments in the Collateral Pool as of the end of the most recent quarter shall be 50% of the Advance Rate otherwise applicable;
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140
As used herein, the following terms have the following meanings:
“Advance Rate” means, as to any Portfolio Investment and subject to adjustment as provided in Section 5.13(a), (b) and (c), the following percentages with respect to such Portfolio Investment:
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Portfolio Investment
Quoted
Unquoted
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Cash, Cash Equivalents and |
|
|
Short-Term U.S. Government Securities |
100% |
0% |
Long-Term U.S. Government Securities |
95% |
0% |
Performing First Lien Bank Loans |
85% |
75% |
Performing Unitranche Loans |
80% |
70% |
Performing Second Lien Bank Loans |
75% |
65% |
Performing Cash Pay High Yield Securities |
70% |
60% |
Performing Cash Pay Mezzanine Investments |
65% |
55% |
Performing Non-Cash Pay High Yield Securities |
60% |
50% |
Performing Non-Cash Pay Mezzanine Investments |
55% |
45% |
Non-Performing First Lien Bank Loans |
45% |
45% |
Non-Performing Unitranche Loans |
40% |
40% |
Non-Performing Second Lien Bank Loans |
40% |
30% |
Non-Performing High Yield Securities |
30% |
30% |
Non-Performing Cash Pay Mezzanine Investments |
30% |
25% |
Performing Common Equity (and zero cost or |
30% |
20% |
penny warrants with performing debt) Non-Performing Common Equity |
0% |
0% |
Structured Finance Obligations and Finance Leases |
0% |
0% |
“Bank Loans” means debt obligations (including term loans, notes, revolving loans, debtor-in-possession financings, the funded and unfunded portion of revolving credit lines and letter of credit facilities and other similar loans and investments including interim loans and
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senior subordinated loans) which are generally under a loan or credit facility (whether or not syndicated) or note purchase agreement.
“Capital Stock” of any Person means any and all shares of corporate stock (however designated) of and any and all other Equity Interests and participations representing ownership interests (including membership interests and limited liability company interests) in, such Person.
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Agreement.
“Cash” has the meaning assigned to such term in Section 1.01 of this Agreement. “Cash Equivalents” has the meaning assigned to such term in Section 1.01 of this
“Finance Lease” means any transaction representing the obligation of a lessee to
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pay rent or other amounts under a lease which is required to be classified and accounted for as a capital lease on the balance sheet of such lessee under GAAP.
“First Lien Bank Loan” means a Bank Loan that is entitled to the benefit of a first lien and first priority perfected security interest (subject to Liens for “ABL” revolvers and customary encumbrances) on a substantial portion of the assets of the respective borrower and guarantors obligated in respect thereof.
“High Yield Securities” means debt Securities and Preferred Stock, in each case
(a) issued by public or private issuers, (b) issued pursuant to an effective registration statement or pursuant to Rule 144A under the Securities Act (or any successor provision thereunder) or other exemption to the Securities Act and (c) that are not Cash Equivalents, Mezzanine Investments or Bank Loans.
“Long-Term U.S. Government Securities” means U.S. Government Securities maturing more than one year from the applicable date of determination.
“Mezzanine Investments” means debt Securities (including convertible debt Securities (other than the “in-the-money” equity component thereof)) and Preferred Stock in each case (a) issued by public or private issuers, (b) issued without registration under the Securities Act, (c) not issued pursuant to Rule 144A under the Securities Act (or any successor provision thereunder), (d) that are not Cash Equivalents and (e) contractually subordinated in right of payment to other debt of the same issuer.
“Non-Performing Common Equity” means Capital Stock (other than Preferred Stock) and warrants of an issuer having any debt outstanding that is non-Performing.
“Non-Performing First Lien Bank Loans” means First Lien Bank Loans other than Performing First Lien Bank Loans.
“Non-Performing High Yield Securities” means High Yield Securities other than Performing High Yield Securities.
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“Non-Performing Mezzanine Investments” means Mezzanine Investments other than Performing Mezzanine Investments.
“Non-Performing Portfolio Investment” means Portfolio Investments for which the issuer is in default of any payment obligations of principal or interest in respect thereof after the expiration of any applicable grace period.
“Non-Performing Second Lien Bank Loans” means Second Lien Bank Loans other than Performing Second Lien Bank Loans.
“Non-Performing Unitranche Loans” means Unitranche Loans other than Performing Unitranche Loans.
“Performing” means (a) with respect to any Portfolio Investment that is debt, the issuer of such Portfolio Investment is not in default of any payment obligations in respect thereof after the expiration of any applicable grace period and (b) with respect to any Portfolio Investment that is Preferred Stock, the issuer of such Portfolio Investment has not failed to meet any scheduled redemption obligations or to pay its latest declared cash dividend, after the expiration of any applicable grace period.
“Performing Cash Pay High Yield Securities” means High Yield Securities (a) as to which, at the time of determination, not less than 2/3rds of the interest (including accretions and “pay-in-kind” interest) for the current monthly, quarterly, semiannual or annual period (as applicable) is payable in cash and (b) which are Performing.
“Performing Cash Pay Mezzanine Investments” means Mezzanine Investments
(a) as to which, at the time of determination, not less than 2/3rds of the interest (including accretions and “pay-in-kind” interest) for the current monthly, quarterly, semi-annual or annual period (as applicable) is payable in cash and (b) which are Performing.
“Performing Common Equity” means Capital Stock (other than Preferred Stock) and warrants of an issuer all of whose outstanding debt is Performing.
“Performing First Lien Bank Loans” means First Lien Bank Loans which are
Performing.
“Performing Non-Cash Pay High Yield Securities” means Performing High Yield
Securities other than Performing Cash Pay High Yield Securities.
“Performing Non-Cash Pay Mezzanine Investments” means Performing Mezzanine Investments other than Performing Cash Pay Mezzanine Investments.
“Performing Second Lien Bank Loans” means Second Lien Bank Loans which are Performing.
“Preferred Stock,” as applied to the Capital Stock of any Person, means Capital Stock of such Person of any class or classes (however designated) that ranks prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary
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liquidation, dissolution or winding up of such Person, to any shares (or other interests) of other Capital Stock of such Person, and shall include, without limitation, cumulative preferred, non-cumulative preferred, participating preferred and convertible preferred Capital Stock.
“Second Lien Bank Loan” means a Bank Loan that is entitled to the benefit of a second lien and second priority perfected security interest (subject to customary encumbrances) on specified assets of the respective Borrower and guarantors obligated in respect thereof.
“Securities” means common and preferred stock, units and participations, member interests in limited liability companies, partnership interests in partnerships, notes, bonds, debentures, trust receipts and other obligations, instruments or evidences of indebtedness, including debt instruments of public and private issuers and tax-exempt securities (including warrants, rights, put and call options and other options relating thereto, representing rights, or any combination thereof) and other property or interests commonly regarded as securities or any form of interest or participation therein, but not including Bank Loans.
“Securities Act” means the United States Securities Act of 1933, as amended. “Short-Term U.S. Government Securities” means U.S. Government Securities
maturing within one year of the applicable date of determination.
“Structured Finance Obligation” means any obligation issued by a special purpose vehicle and secured directly by, referenced to, or representing ownership of, a pool of receivables or other financial assets of any obligor, including collateralized debt obligations and mortgaged-backed securities. For the avoidance of doubt, if an obligation satisfies the definition of “Structured Finance Obligation”, such obligation shall not (a) qualify as any other category of Portfolio Investment and (b) be included in the Borrowing Base.
“U.S. Government Securities” has the meaning assigned to such term in
Section 1.01.
“Unitranche Loan” means a Bank Loan that is a First Lien Bank Loan, a portion
of which is, in effect, subject to superpriority rights of other lenders following an event of default (such portion, a “second out” portion). The Borrower’s investment in the second out portion shall be treated as a Unitranche Loan for purposes of determining the applicable Advance Rate for such Portfolio Investment under this Agreement.
“Value” means, with respect to any Portfolio Investment, the lower of:
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ARTICLE VI NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and
accrued interest on each Loan and all fees payable hereunder (other than Unasserted Contingent Obligations) have been paid in full and all Letters of Credit have expired, been terminated, Cash Collateralized or backstopped and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness. Subject to the last sentence of this Section 6.01, the Borrower will not, nor will it permit any of the Subsidiary Guarantors to, create, incur, assume or permit to exist any Indebtedness, except:
U.S. Government Securities;
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incurrence of any such Indebtedness, the Covered Debt Amount does not or would not exceed the Borrowing Base then in effect;
(i) no Default exists at the time of the incurrence thereof, (ii) the aggregate amount (determined at the time of the incurrence of such Indebtedness) of such Indebtedness does not exceed
$500,000,000, (iii) the aggregate amount (determined at the time of the incurrence of such Indebtedness) of such Indebtedness, taken together with then-outstanding Special Unsecured Indebtedness incurred pursuant to Section 6.01(n), does not exceed $1,000,000,000, (iv) the aggregate amount of such Indebtedness, taken together with other then-outstanding Indebtedness, does not exceed the amount required to comply with the provisions of Sections 6.07(c) and (d), and (v) prior to and immediately after giving effect to the incurrence of any such Indebtedness, the Covered Debt Amount does not or would not exceed the Borrowing Base then in effect;
SECTION 6.02. Liens. The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof except:
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replacements thereof that do not increase the outstanding principal amount thereof except to the extent not prohibited hereunder;
(i) or increase the aggregate amount of collateral securing any Liens previously permitted under this clause (i) unless both before and after giving effect to the creation, incurrence or assumption of such Lien or such increase in the aggregate amount of collateral securing such Lien the Covered Debt Amount does not exceed the Borrowing Base (after giving effect to the exclusion of all such collateral from the Borrowing Base); and
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SECTION 6.03. Fundamental Changes. The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution). The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, acquire any business or property from, or capital stock of, or be a party to any acquisition of, any Person, except for purchases or acquisitions of Portfolio Investments and other assets in the normal course of the day-to-day business activities of the Borrower and its Subsidiaries and not in violation of the terms and conditions of this Agreement or any other Loan Document. The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, any part of its assets, whether now owned or hereafter acquired, but excluding (x) assets (other than Portfolio Investments) sold or disposed of in the ordinary course of business (including to make expenditures of cash in the normal course of the day-to-day business activities of the Borrower and its Subsidiaries) and (y) subject to the provisions of clauses (d) and (e) below, Portfolio Investments.
Notwithstanding the foregoing provisions of this Section:
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immediately prior to such release is not diminished as a result of such release or (y) the Borrowing Base immediately after giving effect to such release is at least 110% of the Covered Debt Amount;
$5,000,000 in any fiscal year.; and
SECTION 6.04. Investments. The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, acquire, make or enter into, or hold, any Investments except:
(x) all Investments under this clause (e) that occur after the Extended Commitment Termination Date and (y) all Investments under clause (f) below that occur after the Extended Commitment Termination Date, shall not exceed $10,000,000 in the aggregate;
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For purposes of clause (f) of this Section, the aggregate amount of an Investment at any time shall be deemed to be equal to (A) the aggregate amount of cash, together with the aggregate fair market value of property, loaned, advanced, contributed, transferred or otherwise invested that gives rise to such Investment minus (B) the aggregate amount of dividends, distributions or other payments received in cash in respect of such Investment; provided that in no event shall the aggregate amount of such Investment be deemed to be less than zero; the amount of an Investment shall not in any event be reduced by reason of any write-off of such Investment nor increased by any increase in the amount of earnings retained in the Person in which such Investment is made that have not been dividended, distributed or otherwise paid out.
SECTION 6.05. Restricted Payments. The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except that the Borrower may declare and pay:
(i) maintain the status of the Borrower as a RIC, and (ii) avoid federal excise taxes for such taxable year imposed by Section 4982 of the Code;
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Borrower’s estimate of taxable income exceeded the actual amounts specified in subclauses (i) and (ii) of such foregoing clause (b) for such taxable year.
Nothing herein shall be deemed to prohibit the payment of Restricted Payments by any Subsidiary of the Borrower to the Borrower or to any other Subsidiary Guarantor.
SECTION 6.06. Certain Restrictions on Subsidiaries. The Borrower will not permit any of its Subsidiaries (other than Financing Subsidiaries) to enter into or suffer to exist any indenture, agreement, instrument or other arrangement (other than the Loan Documents) that prohibits or restrains, in each case in any material respect, or imposes materially adverse conditions upon, the incurrence or payment of Indebtedness, the declaration or payment of dividends, the making of loans, advances, guarantees or Investments or the sale, assignment, transfer or other disposition of property to the Borrower by any Subsidiary; provided that the foregoing shall not apply to (i) indentures, agreements, instruments or other arrangements pertaining to other Indebtedness permitted hereby (provided that such restrictions would not adversely affect the exercise of rights or remedies of the Administrative Agent or the Lenders hereunder or under the Security Documents or restrict any Subsidiary in any manner from performing its obligations under the Loan Documents) and (ii) indentures, agreements, instruments or other arrangements pertaining to any lease, sale or other disposition of any asset permitted by this Agreement or any Lien permitted by this Agreement on such asset so long as the applicable restrictions only apply to the assets subject to such lease, sale, other disposition or Lien.
SECTION 6.07. Certain Financial Covenants.
$500,000,000650,000,000 plus 25% of the net proceeds of the sale of Equity Interests by the Borrower and its Subsidiaries after the NinthFifteenth Amendment Effective Date (other than proceeds of sales of Equity Interests by and among the Borrower and its Subsidiaries).
SECTION 6.08. Transactions with Affiliates. The Borrower will not, and will not permit any of its Subsidiaries to enter into any transactions with any of its Affiliates, even if otherwise
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permitted under this Agreement, except (a) transactions at prices and on terms and conditions not materially less favorable to the Borrower or such Subsidiary (other than a SBIC Subsidiary) than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Borrower and its Subsidiaries not involving any other Affiliate, (c) Restricted Payments permitted by Section 6.05, (d) the Affiliate Agreements and the transactions provided in the Affiliate Agreements, (e) transactions described on Schedule 6.08, (f) any Investment that results in the creation of an Affiliate or (g) transactions between or among the Obligors and any SBIC Subsidiary or any “downstream affiliate” (as such term is used under the rules promulgated under the Investment Company Act) company of an Obligor at prices and on terms and conditions, taken as a whole, not materially less favorable to the Obligors than could be obtained at the time on an arm’s-length basis from unrelated third parties.
SECTION 6.09. Lines of Business. The Borrower will not, nor will it permit any of its Subsidiaries (other than Immaterial Subsidiaries) to, engage to any material extent in any business other than in accordance with its Investment Policies. The Borrower will not, nor will it permit any of its Subsidiaries to amend or modify the Investment Policies (other than a Permitted Policy Amendment).
SECTION 6.10. No Further Negative Pledge. The Borrower will not, and will not permit any of the Subsidiary Guarantors to, enter into any agreement, instrument, deed or lease which prohibits or limits in any material respect the ability of any Obligor to create, incur, assume or suffer to exist any Lien upon any of its properties, assets or revenues, whether now owned or hereafter acquired, or which requires the grant of any security for an obligation if security is granted for another obligation, except the following: (a) this Agreement, the other Loan Documents and documents with respect to Indebtedness permitted under Section 6.01(b), (i), (m) or (n); (b) covenants in documents creating Liens permitted by Section 6.02 (including covenants with respect to the Designated Indebtedness Obligations or Designated Indebtedness Holders under (and, in each case, as defined in) the Security Documents) prohibiting further Liens on the assets encumbered thereby; (c) customary restrictions contained in leases not subject to a waiver; (d) any such agreement that imposes restrictions on investments or other interests in Financing Subsidiaries (but no other assets of any Obligor); and (e) any other agreement that does not restrict in any manner (directly or indirectly) Liens created pursuant to the Loan Documents on any Collateral securing the “Secured Obligations” under and as defined in the Guarantee and Security Agreement and does not require the direct or indirect granting of any Lien securing any Indebtedness or other obligation by virtue of the granting of Liens on or pledge of property of any Obligor to secure the Loans or any Hedging Agreement.
SECTION 6.11. Modifications of Longer-Term Indebtedness Documents. The Borrower will not consent to any modification, supplement or waiver of:
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designates such Indebtedness as “Secured Shorter-Term Indebtedness” (whereupon such Indebtedness shall be deemed to constitute “Secured Shorter-Term Indebtedness” for all purposes of this Agreement) and (ii) in the case of Unsecured Longer-Term Indebtedness, such Indebtedness would have been permitted to be incurred as Unsecured Shorter-Term Indebtedness at the time of such modification, supplement or waiver and the Borrower so designates such Indebtedness as “Unsecured Shorter-Term Indebtedness” (whereupon such Indebtedness shall be deemed to constitute “Unsecured Shorter-Term Indebtedness” for all purposes of this Agreement); or
SECTION 6.12. Payments of Longer-Term Indebtedness, the 2024 Notes and, the 2026 Notes, the 2028 Notes and the 2029 Notes. The Borrower will not, nor will it permit any of the Subsidiary Guarantors to, purchase, redeem, retire or otherwise acquire for value, or set apart any money for a sinking, defeasance or other analogous fund for the purchase, redemption, retirement or other acquisition of or make any voluntary payment or prepayment of the principal of or interest on, or any other amount owing in respect of, any Secured Longer-Term Indebtedness, Unsecured Longer-Term Indebtedness, Special Unsecured Indebtedness, the 2024 Notes or, the 2026 Notes, the 2028 Notes or the 2029 Notes (other than the refinancing of Secured Longer-Term Indebtedness, Unsecured Longer-Term Indebtedness, Special Unsecured Indebtedness, the 2024 Notes or, the 2026 Notes, the 2028 Notes or the 2029 Notes with Indebtedness permitted under Section 6.01), except for
(ii) no Default shall exist or be continuing;
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pursuant to the conversion features thereunder), the 2023 Notes, the 2024 Notes and, the 2026 Notes, the 2028 Notes and the 2029 Notes so long as both before and after giving effect to such payment (i) no Event of Default shall exist or be continuing and (ii) the Covered Debt Amount does not exceed the Borrowing Base; and
Notwithstanding anything herein to the contrary, in no event shall any Obligor be permitted to prepay or settle (whether as a result of a mandatory redemption, conversion or otherwise) any such Indebtedness if, immediately after giving effect thereto, the Covered Debt Amount would exceed the Borrowing Base.
SECTION 6.13. Accounting Changes. The Borrower will not, nor will it permit any of its Subsidiaries to, make any change in (a) accounting policies or reporting practices, except as permitted under GAAP or required by law or rule or regulation of any Governmental Authority, or (b) its fiscal year.
SECTION 6.14. SBIC Guarantee. The Borrower will not, nor will it permit any of its Subsidiaries to, cause or permit the occurrence of any event or condition that would result in any recourse to any Obligor under any Permitted SBIC Guarantee.
ARTICLE VII EVENTS OF DEFAULT
If any of the following events (“Events of Default”) shall occur and be continuing:
(ii) fail to deposit any amount into the Letter of Credit Collateral Account as required by Section 2.09(a) on the Extended Commitment Termination Date or as required by Section 2.20(b) on the date so required;
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Agreement or any other Loan Document or any amendment or modification hereof or thereof, shall prove to have been incorrect when made or deemed made in any material respect and such failure shall continue unremedied for a period of ten (10) or more Business Days after the earlier of the Borrower obtaining actual knowledge thereof or receiving notice thereof from the Administrative Agent (given at the request of any Lender);
(ii) Sections 5.01 (d) and (e) or Section 5.02 and such failure shall continue unremedied for a period of five (5) or more days after notice thereof by the Administrative Agent (given at the request of any Lender) to the Borrower;
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“event of default” (as defined in the documents governing such convertible Material Indebtedness);
(i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (i) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any of its Subsidiaries (other than Immaterial Subsidiaries) or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
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permitted at any time to replace any person designated as a “principal” with a senior professional selected by the External Manager so long as such replacement has either been approved by a majority of the Borrower’s independent directors or by a majority of the Borrower’s shareholders;
then, and in every such event (other than an event with respect to the Borrower described in clause (i) or (j) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder and under the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (i) or
(j) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder and under the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.
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In the event that the Loans shall be declared, or shall become, due and payable pursuant to the immediately preceding paragraph then, upon notice from the Administrative Agent or Lenders with LC Exposure representing more than 50% of the total LC Exposure demanding the deposit of Cash Collateral pursuant to this paragraph, the Borrower shall immediately deposit into the Letter of Credit Collateral Account cash in an amount equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (i) or (j) of this Article.
Notwithstanding anything to the contrary contained herein, on the CAM Exchange Date, to the extent not otherwise prohibited by law, (a) the Lenders shall automatically and without further act be deemed to have exchanged interests in the Designated Obligations such that, in lieu of the interests of each Lender in the Designated Obligations under each Loan in which it shall participate as of such date, such Lender shall own an interest equal to such Lender’s CAM Percentage in the Designated Obligations under each of the Loans and (b) simultaneously with the deemed exchange of interests pursuant to clause (a) above, the interests in the Designated Obligations to be received in such deemed exchange shall, automatically and with no further action required, be converted into the Dollar Equivalent of such amount (as of the Business Day immediately prior to the CAM Exchange Date) and on and after such date all amounts accruing and owed to the Lenders in respect of such Designated Obligations shall accrue and be payable in Dollars at the rate otherwise applicable hereunder. Each Lender, each Person acquiring a participation from any Lender as contemplated by Section 9.04 and the Borrower hereby consents and agrees to the CAM Exchange. The Borrower and the Lenders agree from time to time to execute and deliver to the Administrative Agent all such promissory notes and other instruments and documents as the Administrative Agent shall reasonably request to evidence and confirm the respective interests and obligations of the Lenders after giving effect to the CAM Exchange, and each Lender agrees to surrender any promissory notes originally received by it in connection with its Loans hereunder to the Administrative Agent against delivery of any promissory notes so executed and delivered; provided that the failure of the Borrower to execute or deliver or of any Lender to accept any such promissory note, instrument or document shall not affect the validity or effectiveness of the CAM Exchange. As a result of the CAM Exchange, on and after the CAM Exchange Date, each payment received by the Administrative Agent pursuant to any Loan Document in respect of the Designated Obligations shall be distributed to the Lenders pro rata in accordance with their respective CAM Percentages (to be redetermined as of each such date of payment).
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01. Appointment of the Administrative Agent. Each of the Lenders and the Issuing Banks hereby irrevocably appoints the Administrative Agent as its agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental
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thereto. Each of the Lenders and the Issuing Banks hereby irrevocably appoints the Collateral Agent as its agent hereunder and under the other Loan Documents and authorizes the Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Collateral Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The Collateral Agent shall be a third-party beneficiary of this Section 8.01 and shall have all of the rights, benefits and privileges of a third-party beneficiary, including an independent right of action to enforce such rights, benefits and privileges directly, without the consent or joinder of any other Person.
SECTION 8.02. Capacity as Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such Person and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.
SECTION 8.03. Limitation of Duties; Exculpation. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders, and (c) except as expressly set forth herein and in the other Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders or in the absence of its own fraud, gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein or therein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
SECTION 8.04. Reliance. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it
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orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
SECTION 8.05. Sub-Agents. The Administrative Agent may perform any and all of its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that the Administrative Agent acted with fraud, gross negligence or willful misconduct in the selection of such sub-agents.
SECTION 8.06. Resignation; Successor Administrative Agent. The Administrative Agent may resign by providing not less than thirty (30) days advance written notice to the Lenders, the Issuing Banks and the Borrower. Upon any such notice of resignation, the Required Lenders shall have the right, with the consent of the Borrower not to be unreasonably withheld (or, if an Event of Default has occurred and is continuing in consultation with the Borrower), to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent’s resignation shall nonetheless become effective at the end of such thirty (30) day period (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the Issuing Bank under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and (2) the Required Lenders shall perform the duties of the Administrative Agent (and all payments and communications provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly) until such time as the Required Lenders appoint a successor agent as provided for above in this paragraph. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder (if not already discharged therefrom as provided above in this paragraph). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.
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Any resignation by Truist as Administrative Agent pursuant to this Section shall also constitute its resignation as an Issuing Bank and a Swingline Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Bank and Swingline Lender, (b) the retiring Issuing Bank and Swingline Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor Issuing Bank shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring Issuing Bank to effectively assume the obligations of the retiring Issuing Bank with respect to such Letters of Credit.
SECTION 8.07. Reliance by Lenders. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, any Joint Lead Arranger or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent, any Joint Lead Arranger or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder. The Administrative Agent shall have no duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Lenders or to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter, and the Administrative Agent shall have no responsibility with respect to the accuracy of or the completeness of any information provided to Lenders.
Each Lender, by delivering its signature page to this Agreement or any Assignment and Assumption and funding any Loan shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be approved by the Administrative Agent, Required Lenders or Lenders.
SECTION 8.08. Modifications to Loan Documents. Except as otherwise provided in Section 2.212.22 or Section 9.02(b) or (c) of this Agreement or the Security Documents with respect to this Agreement, the Administrative Agent may, with the prior consent of the Required Lenders (but not otherwise), consent to any modification, supplement or waiver under any of the Loan Documents; provided that, without the prior consent of each Lender, the Administrative Agent shall not (except as provided herein or in the Security Documents) release all or substantially all of the Collateral or otherwise terminate all or substantially all of the Liens under any Security Document providing for collateral security, agree to additional obligations being secured by all or substantially all of such collateral security (except in connection with securing additional obligations equally and ratably with the Loans and other obligations hereunder in accordance with the Guarantee and Security Agreement), or alter the relative priorities of the obligations entitled to the benefits of the Liens created under the Security Documents with respect to all or substantially all of the Collateral, except that no such consent shall be required, and the Administrative Agent is hereby authorized, (v) to release any Subsidiary Guarantor (and any property of such Subsidiary Guarantor) from its guarantee obligations to the extent it may be
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released in accordance with Section 10.03(f) of the Guarantee and Security Agreement, (w) to release any Lien covering property that is the subject of either a Disposition of property (including, without limitation, any property subject to a participation or repurchase transaction) permitted hereunder or a Disposition to which the Required Lenders have consented, (x) for the avoidance of doubt, execute and deliver agreements, instruments and other documents reasonably requested by the Borrower to implement collateral sharing with respect to Secured Longer-Term Indebtedness and Secured Shorter-Term Indebtedness, (y) following the (i) cancellation, expiration or termination of any commitment to extend credit or issue Letters of Credit under this Agreement or any other Loan Document, (ii) final payment in full of all principal of and interest on each Loan, any LC Disbursements, any fees and any other amounts then due and owing under this Agreement or any other Loan Document and (iii) termination of this Agreement, to release all Liens and guarantees by Obligors, and (z) to allocate the Liens created under the Security Documents to any Designated Indebtedness Obligations or Hedging Agreement Obligations (as such terms are defined in the Guarantee and Security agreement) in accordance with the Guarantee and Security Agreement.
SECTION 8.09. Erroneous Payments..
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or otherwise) from the Administrative Agent (or any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in a notice of payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates), or
(z) that such Lender, Issuing Bank or Indemnitee, or other such recipient, otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part) in each case:
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Assignment, and such Lender or Issuing Bank shall deliver any notes evidencing such Loans to the Borrower or the Administrative Agent, (ii) the Administrative Agent as the assignee Lender shall be deemed to acquire the Erroneous Payment Deficiency Assignment, (iii) upon such deemed acquisition, the Administrative Agent as the assignee Lender shall become a Lender or Issuing Bank, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment and the assigning Lender or assigning Issuing Bank shall cease to be a Lender or Issuing Bank, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification provisions of this Agreement and its applicable Commitments which shall survive as to such assigning Lender or assigning Issuing Bank and (iv) the Administrative Agent may reflect in the Register its ownership interest in the Loans subject to the Erroneous Payment Deficiency Assignment. So long as any sale of Loans complies with the terms of Section 9.04(b), the Administrative Agent may, in its discretion, sell any Loans acquired pursuant to an Erroneous Payment Deficiency Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by the applicable Lender or Issuing Bank shall be reduced by the net proceeds of the sale of such Loan (or portion thereof), and the Administrative Agent shall retain all other rights, remedies and claims against such Lender or Issuing Bank (and/or against any recipient that receives funds on its respective behalf). For the avoidance of doubt, no Erroneous Payment Deficiency Assignment will reduce the Commitments of any Lender or Issuing Bank and such Commitments shall remain available in accordance with the terms of this Agreement. In addition, each party hereto agrees that, except to the extent that the Administrative Agent has sold a Loan (or portion thereof) acquired pursuant to an Erroneous Payment Deficiency Assignment, and irrespective of whether the Administrative Agent may be equitably subrogated, the Administrative Agent shall be contractually subrogated to all the rights and interests of the applicable Lender, or Issuing Bank or Indemnitee under the Loan Documents with respect to each Erroneous Payment Return Deficiency (the “Erroneous Payment Subrogation Rights”).
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ARTICLE IX MISCELLANEOUS
SECTION 9.01. Notices; Electronic Communications..
Sixth Street Specialty Lending, Inc. 888 Seventh Avenue, 41st Floor New York, New York 10019 Attention: Ian Simmonds
Telecopy Number:
Telephone:
Truist Bank
3333 Peachtree Road, 8th Floor Atlanta, Georgia 30326 Attention: Hays Wood
Telecopy Number:
with a copy to:
Truist Bank
303 Peachtree Street, NE, 25th Floor Atlanta, GA 30308
Attention: Karen Weich
Email:
Telecopy Number:
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Truist Bank
303 Peachtree Street, NE, 25th Floor Atlanta, GA 30308
Attention: Karen Weich
Email:
Telecopy Number:
JPMorgan Chase Bank, N.A.
Ground floor, 1st to 6th floors, Platina 3, Kodbis, Floor 03 Bengaluru, 560 103, India
Attention: Sneha Machani Telecopy Number:
Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).
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e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
Each party hereto understands that the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution and agrees and assumes the risks associated with such electronic distribution, except to the extent caused by the fraud, willful misconduct or gross negligence of Administrative Agent, any Lender or their respective Related Parties, as determined by a final, non-appealable judgment of a court of competent jurisdiction. The Platform and any electronic communications media approved by the Administrative Agent as provided herein are provided “as is” and “as available”. None of the Administrative Agent or its Related Parties warrant the accuracy, adequacy, or completeness of such media or the Platform and each expressly disclaims liability for errors or omissions in the Platform and such media. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects is made by the Administrative Agent and any of its Related Parties in connection with the Platform or the electronic communications media approved by the Administrative Agent as provided for herein.
(i) other Lenders may have availed themselves of such information and (ii) neither Borrower nor Administrative Agent has any responsibility for such Public Lender’s decision to limit the scope of the information it has obtained in connection with this Agreement and the other Loan Documents.
SECTION 9.02. Waivers; Amendments..
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right or power hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Banks, the Swingline Lenders and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan, Swingline Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Swingline Lender, any Lender or any Issuing Bank may have had notice or knowledge of such Default at the time.
provided further that (x) no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Banks or the Swingline Lenders hereunder without the prior written consent of the Administrative Agent, the Issuing Banks or the Swingline Lenders, as the case may be and (y) the consent of Lenders holding not less than
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two-thirds of the Revolving Credit Exposure and unused Commitments will be required (A) for any adverse change affecting the provisions of this Agreement relating to the determination of the Borrowing Base (excluding changes to the provisions of Section 5.12(b)(ii)(E) and (F), but including changes to the provisions of Section 5.12(c)(ii) and the definitions set forth in Section 5.13), and (B) for any release of any material portion of the Collateral other than for fair value or as otherwise permitted hereunder or under the other Loan Documents.
Anything in this Agreement to the contrary notwithstanding, no waiver or modification of any provision of this Agreement or any other Loan Document that could reasonably be expected to adversely affect the Lenders of any Class in a manner that does not affect all Classes equally shall be effective against the Lenders of such Class unless the Required Lenders of such Class shall have concurred with such waiver or modification. Anything in this Agreement to the contrary notwithstanding, this Agreement may be amended by the Borrower with the consent of the Administrative Agent and any Non-Extending Lender (but without the consent of the Required Lenders) for the sole purpose of extending the Commitments of such Non-Extending Lender so that such Non-Extending Lender becomes an Extending Lender hereunder.
$2,000,000,000) except pursuant to an agreement or agreements in writing entered into by the Borrower, and by the Collateral Agent with the consent of the Required Lenders; provided that,
(i) without the written consent of each Lender, no such agreement shall release all or substantially all of the Obligors from their respective obligations under the Security Documents and (ii) without the written consent of each Lender, no such agreement shall release all or substantially all of the collateral security or otherwise terminate all or substantially all of the Liens under the Security Documents, alter the relative priorities of the obligations entitled to the Liens created under the Security Documents (except in connection with securing additional obligations equally and ratably with the Loans and other obligations hereunder) with respect to all or substantially all of the collateral security provided thereby, or release all or substantially all of the guarantors under the Guarantee and Security Agreement from their guarantee obligations thereunder, except that no such consent shall be required, and the Administrative Agent is hereby authorized (and so agrees with the Borrower) to direct the Collateral Agent under the Guarantee and Security Agreement, (x) to release any Lien covering property (and to release any such guarantor) that is the subject of either a disposition of property permitted hereunder or a disposition to which the Required Lenders have consented, (y) to release any Lien and/or guarantee obligation in accordance with the Guarantee and Security Agreement and (z) to release (and to acknowledge the release of) all Liens and guarantees of Obligors upon the termination of this Agreement (including in connection with a complete refinancing).
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long as no Event of Default has occurred and is continuing) the Borrower shall have the right, at its sole cost and expense, to replace each such Non-Consenting Lender or Lenders with one or more replacement Lenders pursuant to Section 2.18(b) so long as at the time of such replacement, each such replacement Lender consents to the proposed change, waiver, discharge or termination.
SECTION 9.03. Expenses; Indemnity; Damage Waiver..
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cause or on contract or otherwise and related expenses or disbursements of any kind (other than Taxes or Other Taxes which shall only be indemnified by the Borrower to the extent provided in Section 2.16), including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of; in connection with, or as a result of
(i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan, Swingline Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by an Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit) or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and whether brought by the Borrower or a third party and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (A) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the fraud, willful misconduct or gross negligence of such Indemnitee or its Related Parties, (B) result from the settlement of any such claim, investigation, litigation or other proceedings described in clause (iii) above unless the Borrower has consented to such settlement (which consent shall not be unreasonably withheld, delayed or conditioned (provided that nothing in this clause (B) shall restrict the right of any person to settle any claim for which it has waived its right of indemnity by the Borrower)) or (C) result from disputes solely among Indemnitees and not involving any act or omission of an Obligor or any of its Affiliates (other than any dispute against the Administrative Agent in its capacity as such). Notwithstanding the foregoing, it is understood and agreed that indemnification for Taxes is subject to the provisions of Section 2.16.
The Borrower shall not be liable to any Indemnitee for any special, indirect, consequential or punitive damages arising out of, in connection with, or as a result of the Transactions asserted by an Indemnitee against the Borrower or any other Obligor; provided that the foregoing limitation shall not be deemed to impair or affect the obligations of the Borrower under the preceding provisions of this subsection.
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the use of the proceeds thereof. No Indemnitee shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby, except to the extent caused by the fraud, willful misconduct or gross negligence of such Indemnitee, as determined by a final, non-appealable judgment of a court of competent jurisdiction.
SECTION 9.04. Successors and Assigns..
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Lenders or the Issuing Banks shall be required for an assignment by a Lender to an Affiliate of such Lender.
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comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (e) of this Section. Notwithstanding anything to the contrary herein, in connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions set forth in Section 9.04(b)(ii) or otherwise, the parties to the assignment shall make such additional payments to Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of Borrower and Administrative Agent, the Applicable Percentage of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to Administrative Agent, each Issuing Bank, each Swingline Lender and each Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full Applicable Percentage of all Loans and participations in Letters of Credit and Swingline Loans. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
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to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make; provided that (i) nothing herein shall constitute a commitment to make any Loan by any SPC, (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall, subject to the terms of this Agreement, make such Loan pursuant to the terms hereof, (iii) the rights of any such SPC shall be derivative of the rights of the Granting Lender, and such SPC shall be subject to all of the restrictions upon the Granting Lender herein contained, and (iv) no SPC shall be entitled to the benefits of Sections 2.14 (or any other increased costs protection provision), 2.15 or 2.16. Each SPC shall be conclusively presumed to have made arrangements with its Granting Lender for the exercise of voting and other rights hereunder in a manner which is acceptable to the SPC, the Administrative Agent, the Lenders and the Borrower, and each of the Administrative Agent, the Lenders and the Obligors shall be entitled to rely upon and deal solely with the Granting Lender with respect to Loans made by or through its SPC. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by the Granting Lender.
Each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States or any State thereof, in respect of claims arising out of this Agreement; provided that the Granting Lender for each SPC hereby agrees to indemnify, save and hold harmless each other party hereto for any loss, cost, damage and expense arising out of their inability to institute any such proceeding against its SPC. In addition, notwithstanding anything to the contrary contained in this Section, any SPC may (i) without the prior written consent of the Borrower and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to its Granting Lender or to any financial institutions providing liquidity and/or credit facilities to or for the account of such SPC to fund the Loans made by such SPC or to support the securities (if any) issued by such SPC to fund such Loans (but nothing contained herein shall be construed in derogation of the obligation of the Granting Lender to make Loans hereunder); provided that neither the consent of the SPC or of any such assignee shall be required for amendments or waivers hereunder except for those amendments or waivers for which the consent of participants is required under paragraph (f) below, and (ii) disclose on a confidential basis (in the same manner described in Section 9.13(b)) any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of a surety, guarantee or credit or liquidity enhancement to such SPC.
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may be provided pursuant to this Agreement (and the Lender selling such participation agrees with the Borrower at the time of the sale of such participation that it will not deliver such non-public information to the Participant), (ii) such Lender’s obligations under this Agreement and the other Loan Documents shall remain unchanged, (iii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iv) the Borrower, the Administrative Agent, the Issuing Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Loan Documents. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and the other Loan Documents and to approve any amendment, modification or waiver of any provision of this Agreement or any other Loan Document; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. Subject to paragraph (g) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant shall not be entitled to receive any greater payment under Sections 2.14, 2.15 or 2.16, with respect to any participation, than its participating Lenders would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation; provided, further, that no Participant shall be entitled to the benefits of Section 2.16 unless the Borrower is notified of the participation granted to such Participant and such Participant shall have complied with the requirements of Section
2.16 as if such Participant is a Lender. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender; provided such Participant agrees to be subject to Section 2.17(d) as though it were a Lender hereunder. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest of each Participant’s interest in the loans or other obligations under the Loan Documents) (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any other information relating to a Participant’s interest in any commitments, loans, letters of credit or is other obligations under any Loan Document) to any person except to the extent that such disclosures are necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
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of Section 2.16 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with paragraphs (e) and (f) of Section 2.16 as though it were a Lender and in the case of a Participant claiming exemption for portfolio interest under Section 871(h) or 881(c) of the Code, the applicable Lender shall provide the Borrower with satisfactory evidence that the participation is in registered form and shall permit the Borrower to review such register as reasonably needed for the Borrower to comply with its obligations under applicable laws and regulations.
SECTION 9.05. Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination, Cash Collateralization or backstop of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness; Electronic Execution..
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the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page to this Agreement by telecopy electronically (e.g. pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to Administrative Agent for further application in accordance with the provisions of Sections 2.17(d) and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of Administrative Agent, the Issuing Banks, and the Lenders, and (y) the Defaulting Lender shall provide promptly to Administrative Agent a statement describing in reasonable detail the amounts owing to such Defaulting Lender hereunder as to which it exercised such right of setoff. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have. Each Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.
SECTION 9.09. Governing Law; Jurisdiction; Etc.Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York.
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District of New York sitting in New York County, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement and any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Administrative Agent, any Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against the Borrower or its properties in the courts of any jurisdiction.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS. THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Judgment Currency. This is an international loan transaction in which the specification of Dollars or any Foreign Currency, as the case may be (the “Specified Currency”), and payment in New York City or the country of the Specified Currency, as the case may be (the “Specified Place”), is of the essence, and the Specified Currency shall be the currency of account in all events relating to Loans denominated in the Specified Currency. The payment obligations of the Borrower under this Agreement shall not be discharged or satisfied by an amount paid in another currency or in another place, whether pursuant to a judgment or
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otherwise, to the extent that the amount so paid on conversion to the Specified Currency and transfer to the Specified Place under normal banking procedures does not yield the amount of the Specified Currency at the Specified Place due hereunder. If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in the Specified Currency into another currency (the “Second Currency”), the rate of exchange that shall be applied shall be the rate at which in accordance with normal banking procedures the Administrative Agent could purchase the Specified Currency with the Second Currency on the Business Day next preceding the day on which such judgment is rendered. The obligation of the Borrower in respect of any such sum due from it to the Administrative Agent or any Lender hereunder or under any other Loan Document (in this Section called an “Entitled Person”) shall, notwithstanding the rate of exchange actually applied in rendering such judgment be discharged only to the extent that on the Business Day following receipt by such Entitled Person of any sum adjudged to be due hereunder in the Second Currency such Entitled Person may in accordance with normal banking procedures purchase and transfer to the Specified Place the Specified Currency with the amount of the Second Currency so adjudged to be due; and the Borrower hereby, as a separate obligation and notwithstanding any such judgment, agrees to indemnify such Entitled Person against, and to pay such Entitled Person on demand, in the Specified Currency. the amount (if any) by which the sum originally due to such Entitled Person in the Specified Currency hereunder exceeds the amount of the Specified Currency so purchased and transferred.
SECTION 9.12. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 9.13. Treatment of Certain Information; No Fiduciary Duty; Confidentiality..
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Subsidiaries each acknowledge and agree that (i) the transactions contemplated by the Loan Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions between the Lenders, on the one hand, and the Borrower and its Subsidiaries, on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of the Borrower or any of its Subsidiaries, any of their stockholders or affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise the Borrower or any of its Subsidiaries, their stockholders or their affiliates on other matters) or any other obligation to the Borrower or any of its Subsidiaries except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of the Borrower or any of its Subsidiaries, their management, stockholders, creditors or any other Person. The Borrower and each of its Subsidiaries each acknowledge and agree that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. The Borrower and each of its Subsidiaries each agree that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Borrower or any of its Subsidiaries, in connection with such transaction or the process leading thereto.
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providers to the lending industry and service providers to the Administrative Agent or any Lender in connection with the administration or servicing of this Agreement, the other Loan Documents and the Commitments.
For purposes of this Section, “Information” means all information received from the Borrower or any of its Subsidiaries relating to the Borrower or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent any Lender or any Issuing Bank on a nonconfidential basis prior to disclosure by the Borrower or any of its Subsidiaries; provided that, in the case of Information received from the Borrower or any of its Subsidiaries after the date hereof; such Information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
SECTION 9.14. USA PATRIOT Act. Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), it is required to obtain, verify and record information that identifies the Borrower, each other Obligor and each designee of a Letter of Credit, which information includes the name and address of the Borrower, each other Obligor and each designee of a Letter of Credit and other information that will allow such Lender to identify Borrower, each other Obligor and each designee of a Letter of Credit in accordance with said Act.
SECTION 9.15. Effect of Amendment and Restatement of the Existing Credit Agreement. On the Effective Date, the Existing Credit Agreement shall be amended and restated in its entirety. The parties hereto acknowledge and agree that (a) this Agreement and the other Loan Documents, whether executed and delivered in connection herewith or otherwise, do not constitute a novation or termination of the obligations for principal, interest or fees of the Borrower under the Existing Credit Agreement as in effect immediately prior to the Effective Date and which remain outstanding; and (b) except for any of the Borrower’s obligations under the Existing Credit Agreement which are expressly contemplated to be repaid on the Effective Date and to the extent are in fact so repaid, the obligations of the Borrower under the Existing Credit Agreement (as amended and restated hereby and which are on and after the date hereof subject to the terms herein) are in all respects continuing, and shall continue to be secured as provided in the Security Documents.
SECTION 9.16. [Reserved]
SECTION 9.17. Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Solely to the extent any Lender that is an Affected Financial Institution is a party to this Agreement and notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and
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Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
SECTION 9.18. Certain ERISA Matters.
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Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection
SECTION 9.19. Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Hedging Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
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subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
SECTION 9.20.Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable law (the “Maximum Rate”). If Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest,
Exhibit 31.1
CEO CERTIFICATION
I, Joshua Easterly, certify that:
(1) I have reviewed this quarterly report on Form 10-Q of Sixth Street Specialty Lending, Inc.;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: July 31, 2024 |
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By: |
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/s/ Joshua Easterly |
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Joshua Easterly |
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Chief Executive Officer |
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(principal executive officer) |
Exhibit 31.2
CFO CERTIFICATION
I, Ian Simmonds, certify that:
(1) I have reviewed this quarterly report on Form 10-Q of Sixth Street Specialty Lending, Inc.;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: July 31, 2024 |
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By: |
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/s/ Ian Simmonds |
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Ian Simmonds |
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Chief Financial Officer |
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(principal financial officer) |
Exhibit 32
Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the quarterly report on Form 10-Q of Sixth Street Specialty Lending, Inc. (the “Company”) for the quarterly period ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Joshua Easterly as Chief Executive Officer of the Company, and Ian Simmonds, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Joshua Easterly |
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Name: |
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Joshua Easterly |
Title: |
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Chief Executive Officer |
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(principal executive officer) |
Date: |
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July 31, 2024 |
/s/ Ian Simmonds |
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Name: |
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Ian Simmonds |
Title: |
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Chief Financial Officer |
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(principal financial officer) |
Date: |
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July 31, 2024 |
The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.