PennantPark Floating Rate Capital Ltd. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation
$PFLT
Finance: Consumer Services
Finance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 25, 2024
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Item 1.01. |
Entry into a Material Definitive Agreement |
CLO Reset Transaction
On July 25, 2024 (“” and, together with the Issuer, the “351.0 million debt securitization in the form of a collateralized loan obligation (the “
Closing Date
”), PennantPark CLO I, Ltd (the “Issuer
”), a wholly-owned
and consolidated subsidiary of PennantPark Floating Rate Capital Ltd. (the “Company
”), and PennantPark CLO I LLC, a wholly-owned subsidiary of the Issuer (the “Co-Issuer
Issuers
”), closed the refinancing and upsize of a four-year reinvestment period, twelve-year final maturity $CLO Reset Transaction
”). The CLO Reset Transaction was executed through: (A) the issuance by the Issuers of the following classes of notes pursuant that certain indenture, dated September 19, 2019, by and among the Issuers and U.S. Bank Trust Company, National Association, as amended by the second supplemental indenture, dated June 25, 2024, the “ Notes, which bear interest at the three-month secured overnight financing rate (“ Notes, which bear interest at three-month SOFR plus 1.90%, (iii) $12 million of ” and, together with the Replacement Notes, the “
Indenture
”): (i) $203 million of A-1-R
SOFR
”) plus 1.75%, (ii) $10.5 million of A-2-R
Class B-R
Notes, which bear interest at three-month SOFR plus 2.05%, (iv) $28 million of C-R
Notes, which bear interest at three-month SOFR plus 2.75% and (v) $21 million of D-R
Notes, which bear interest at three-month SOFR plus 4.30% (collectively, the “Secured Notes
”), (B) the issuance by the Issuer of $64 million of subordinated notes pursuant to the Indenture (the “Subordinated Notes
” and, together with the Secured Notes, the “Replacement Notes
”) and (C) the borrowing by the Issuer of $12.5 million of Class B-R
Loans, which bear interest at three-month SOFR plus 2.05% (the “Class
B-R
LoansReplacement Debt
”), pursuant to a credit agreement, dated the Closing Date (the “Credit Agreement
”), by and among the Issuers, the various financial institutions and other persons party thereto, as lenders and U.S. Bank Trust Company, National Association, as loan agent and as trustee. The Replacement Debt matures in July 2036. The Replacement Debt was 100% funded at closing. The obligations of the Issuers under the Replacement are
non-recourse
to the Company. The Company will retain the Class D-R
Notes and the Subordinated Notes through a consolidated subsidiary. The Replacement Notes offered as part of the term CLO Reset Transaction have not been and will not be registered under the Securities Act of 1933, as amended (the “
Securities Act
”), or any state “blue sky” laws, and may not be offered or sold in the United States absent registration under Section 5 of the Securities Act or an applicable exemption from such registration requirements As part of the CLO Reset Transaction, on the Closing Date, the Company and the Issuer also amended and restated the master loan sale agreement, originally dated as of the September 19, 2019 (as amended, the “
Amended and Restated Master Loan Sale Agreement
”), by and between the Company, the Issuer and PennantPark CLO I Depositor, LLC, a wholly-owned subsidiary of the Company (the “Depositor
”), which provided for the sale and contribution of approximately $277 million par amount of middle market loans from the Company to the Issuer on the Closing Date and for future sales and contributions, as applicable, from the Company to the Issuer on an ongoing basis. Such loans constituted part of the initial portfolio of assets securing the Replacement Debt (other than the Subordinated Notes). The Company made customary representations, warranties, and covenants to the Issuer and the Depositor pursuant to the Amended and Restated Master Loan Sale Agreement. The Company will continue to serve as portfolio manager to the Issuer pursuant to an Amended and Restated Collateral Management Agreement, dated as of the Closing Date (the “
Amended and Restated Collateral Management Agreement
”), between the Company and the Issuer. For so long as the Company serves as portfolio manager, the Company will elect to irrevocably waive any base management fee or subordinated interest to which it may be entitled under the Amended and Restated Collateral Management Agreement. The description of the second supplemental indenture, the Credit Agreement, Amended and Restated Master Loan and Sale Agreement and the Amended and Restated Collateral Management Agreement contained in this Current Report on Form
8-K
do not purport to be complete and are qualified in their entirety by reference to the full text of the second supplemental indenture, the Credit Agreement, the Amended and Restated Master Loan and Sale Agreement and the Amended and Restated Collateral Management Agreement attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively. Item 2.03. |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The information set forth under Item 1.01 of this current report on Form
8-K
is hereby incorporated in this Item 2.03 by reference. Item 9.01. |
Financial Statements and Exhibits |
(d) Exhibits.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PENNANTPARK FLOATING RATE CAPITAL LTD. | ||||||
| Date: July 29, 2024 | By: | /s/ Richard T. Allorto, Jr. | ||||
| Name: | Richard T. Allorto, Jr. | |||||
| Title: | Chief Financial Officer & Treasurer | |||||