Item 1.01.
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Entry into a Material Definitive Agreement.
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On February 1, 2019 (the “Effective Date”),
Golub Capital BDC Funding II LLC (“Funding II”), a direct, wholly-owned, consolidated subsidiary of Golub Capital BDC,
Inc. (the “Company”), entered into a loan and servicing agreement (the “MS Credit Facility II”), with the
Company, as the originator and as the servicer, Morgan Stanley Senior Funding, Inc., as the administrative agent, each
of the lenders from time to time party thereto,
each of the securitization subsidiaries from
time to time party thereto, and Wells Fargo Bank, N.A., as collateral agent, account bank, and collateral custodian.
Under the MS Credit Facility
II, the lenders have agreed to extend credit to
Funding II
in an aggregate
principal amount of up to $200.0 million as of the Effective Date. The period during which
Funding II
may
request drawdowns under the MS Credit Facility II (the “Revolving Period”) commenced on the Effective Date and will
continue through
February 1, 2021
unless there is an earlier termination
or event of default. The MS Credit Facility II will mature on
February 1, 2024
unless
there is an earlier termination or event of default.
During the Revolving Period, borrowings under the
MS
Credit Facility II
and, after any ramp-up period (as defined in the MS Credit Facility II), any undrawn amount under
the MS Credit Facility II in excess of 35% of the maximum principal amount of the MS Credit Facility II (up to 65% of the
maximum principal amount), will bear interest at the applicable base rate plus 2.05%. Following expiration of the
Revolving Period, the interest rate on outstanding borrowings under the
MS Credit
Facility II
will reset to the applicable base rate plus 2.55% for the remaining term of the
MS
Credit Facility II
. The base rate under the MS Credit Facility II is (i) the one-month London Interbank Offered Rate
with respect to any advances denominated in U.S. dollars or U.K. pound sterling, (ii) the one-month Euro Interbank Offered
Rate with respect to any advances denominated in euros, and (iii) the one-month Canadian Dollar Offered Rate with respect to
any advances denominated in Canadian dollars.
In connection
with the MS Credit Facility II, the Company paid one-time, up-front structuring and commitment fees equal to 0.50%
of the aggregate commitments under the MS Credit Facility II as of the Effective Date. During the Revolving Period, a
non-usage fee of 0.50% per annum multiplied by the lesser of the undrawn amount under the MS Credit Facility II and 35.0% of
the maximum principal amount of the MS Credit Facility II is payable in arrears each quarter;
provided
that
, solely during any ramp-up period, the non-usage fee will be calculated as a fee of 0.25% per annum
multiplied by the undrawn amount under the MS Credit Facility II.
The
MS Credit Facility
II
is secured by all of the assets held by Funding II. Both the Company and Funding II have made customary representations
and warranties and are required to comply with various covenants, reporting requirements and other customary requirements for similar
credit facilities.
The borrowings of the Company, including under the MS Credit Facility
II, are subject to the leverage restrictions contained in the Investment Company Act of 1940, as amended.
In connection with the
MS
Credit Facility II
, on February 1, 2019, the Company entered into a Purchase and Sale Agreement (the “Purchase
and Sale Agreement”) with Funding II pursuant to which the Company will sell and transfer to Funding II certain loans and
debt securities the Company has originated or acquired, or will originate or acquire, from time to time consistent with the Company's
investment objectives. Proceeds from the
MS Credit Facility II
will be used to finance
the origination and acquisition of eligible assets by Funding II, including the purchase of such assets from the Company. The Company
retains a residual interest in assets transferred to or acquired by Funding II through the Company’s ownership of Funding
II.
The description above is only a summary of the material provisions
of the
MS Credit Facility II
and is qualified in its entirety by reference to copies
of the
MS Credit Facility II
and Purchase and Sale Agreement, which are filed as Exhibits
10.1 and 10.2, respectively, to this current report on Form 8-K
and incorporated by reference
herein.