Item 1.01. Entry into a Material Definitive Agreement.
On August 7, 2020, Golub Capital BDC, Inc. (the “Company”)
priced a term debt securitization (the “2020 Debt Securitization”). Term debt securitization is also known as a collateralized
loan obligation and is a form of secured financing incurred by the Company, which is consolidated by the Company and subject to
its overall asset coverage requirement.
In connection with pricing of the 2020 Debt Securitization,
on August 7, 2020, the Company and Golub Capital BDC CLO 4 LLC (the “2020 Issuer”), an indirect, wholly-owned, consolidated
subsidiary of the Company entered into a Note Purchase Agreement (the “Purchase Agreement”) with Wells Fargo Securities,
LLC, as the initial purchaser (the “Initial Purchaser”), pursuant to which the 2020 Issuer agreed to sell certain of
the notes to be issued pursuant to an indenture (the “2020 Notes”) to the Initial Purchaser as part of the 2020 Debt
Securitization. In addition, the Company expects to enter into a Credit Agreement (the “Credit Agreement”) with Deutsche
Bank Trust Company Americas, as loan agent and collateral agent, and the lenders party thereto (the “Lenders”), pursuant
to which the Lenders will agree to make loans to the Company in an aggregate amount equal to $20.0 million (the “2020 Loans,”
together with the 2020 Notes, the “2020 Debt”) as part of the 2020 Debt Securitization.
The 2020 Notes consist of $137.5 million of AAA Class A-1 2020
Notes, which bear interest at the three-month LIBOR plus 2.35%; $10.5 million of AAA Class A-2 2020 Notes, which bear interest
at the three-month LIBOR plus 2.75%; $21.0 million of AA Class B 2020 Notes, which bear interest at the three-month LIBOR plus
3.20%; up to $33.0 million A Class C 2020 Notes, which will remain unfunded upon closing of the transactions; and approximately
$108.4 million of Subordinated 2020 Notes, which do not bear interest. The Class A-1 2020 Notes, the Class A-2 2020 Notes and the
Class B 2020 Notes will be issued through a private placement pursuant to the Purchase Agreement. The Company will indirectly retain
all of the Class C and Subordinated 2020 Notes. The Company is permitted, subject to certain conditions, to request a one-time
funding of the Class C 2020 Notes, which will not be deemed an additional issuance of notes, but would cause the Class C 2020 Notes
to be additional debt of the Company. The 2020 Debt is backed by a diversified portfolio of senior secured and second lien loans.
Through November 5, 2022, all principal collections received on the underlying collateral may be used by the 2020 Issuer to purchase
new collateral under the direction of GC Advisors LLC, the Company’s investment adviser (“GC Advisors”), in its
capacity as collateral manager of the 2020 Issuer and in accordance with the Company’s investment strategy, allowing the
Company to maintain the initial leverage in the 2020 Debt Securitization. The 2020 Notes, other than the Subordinated 2020 Notes,
are due on November 5, 2032. The Subordinated 2020 Notes are due in 2120.
Pursuant to the Credit Agreement, the Lenders will make $20.0
million of AAA Class A-1-L 2020 Loans to the Company, which bear interest at the three-month LIBOR plus 2.35% and will be fully
drawn upon closing of the transactions. The 2020 Loans are scheduled to mature and, unless earlier repaid, the entire unpaid principal
balance thereof will be due and payable on November 5, 2032. Any Lender may elect to convert all or a portion of the Class A-1-L
2020 Loans held by such Lender into Class A-1 2020 Notes upon written notice to the Company in accordance with the Credit Agreement.
The closing of the issuance of the 2020 Debt, pursuant to the
Purchase Agreement and the Credit Agreement, as applicable, is subject to customary closing conditions, including that the closing
occur on or prior to August 26, 2020 (the “Closing Date”) and that certain of the 2020 Debt has been assigned agreed-upon
ratings by S&P Global Ratings, an S&P Global Ratings Inc. business, or any respective successor or successors thereto.
The Company intends to use the proceeds from the 2020 Debt Securitization
to pay down existing debt, including redeeming notes that were issued by Golub Capital BDC CLO 2014 LLC in a term debt securitization
that initially funded on June 5, 2014 (the “2014 Debt Securitization”) and, following such redemption, the agreements
governing the 2014 Debt Securitization will be terminated.
Two loan sale agreements will be entered into on the Closing
Date in connection with the 2020 Debt Securitization. Under the terms of the loan sale agreement (the “Closing Date Loan
Sale Agreement”) that will provide for the sale of assets on the Closing Date to satisfy risk retention requirements, (1)
the Company will transfer to GC Advisors a portion of its ownership interest in the portfolio company investments securing the
2020 Debt Securitization for the purchase price and other consideration set forth in the Closing Date Loan Sale Agreement and (2)
immediately thereafter, GC Advisors will sell to the 2020 Issuer all of its ownership interest in such portfolio loans for the
purchase price and other consideration set forth in the Closing Date Loan Sale Agreement. Under the terms of the other loan sale
agreement (the “Depositor Loan Sale Agreement”) that will provide for the sale of assets on the Closing Date as well
as future sales from the Company to the 2020 Issuer through Golub Capital BDC CLO 4 Depositor LLC, a direct, wholly-owned and consolidated
subsidiary of the Company (the “CLO Depositor”), (3) the Company will sell and/or contribute to the CLO Depositor
the remainder of its ownership interest in the portfolio company investments securing the 2020 Debt Securitization and participations
for the purchase price and other consideration set forth in the Depositor Loan Sale Agreement and (4) CLO Depositor, in turn,
will sell to the 2020 Issuer all of its ownership interest in such portfolio loans and participations for the purchase price and
other consideration set forth in one of the loan sale agreements. Following these transfers, the 2020 Issuer, and not GC Advisors,
CLO Depositor or the Company, will hold all of the ownership interest in such portfolio company investments and participations.
The Company will make customary representations, warranties and covenants in these loan sale agreements.
The 2020 Debt will be
the secured obligations of the 2020 Issuer, and an indenture and the Credit Agreement, as applicable, governing the 2020 Debt will
include customary covenants and events of default. The 2020 Debt has not been, and will not be, registered under the
Securities Act of 1933, as amended, or any state “blue sky” laws and may not be offered or sold in the United States
absent registration with the Securities and Exchange Commission or an applicable exemption from registration.
GC Advisors, will serve as collateral manager to the 2020 Issuer
under a collateral management agreement and will receive a fee for providing these services. Pursuant to the Company’s
third amended and restated investment advisory agreement with GC Advisors (the “Investment Advisory Agreement”), the
total fees paid to GC Advisors for rendering collateral management services, which will be less than the management fee payable
under the Investment Advisory Agreement, will be offset against such management fee.
The description of the Purchase Agreement contained in this
Current Report on Form 8-K does not purport to be complete and is qualified in its entirety by reference to the underlying agreement,
attached hereto as Exhibit 10.1 and incorporated into this Current Report on Form 8-K by reference. The description of each of
the Credit Agreement, the Closing Date Loan Sale Agreement, the Depositor Loan Sale Agreement, the indenture governing the 2020
Debt Securitization, and the collateral management agreement contained in this Current Report on Form 8-K does not purport to be
complete and is qualified in its entirety by reference to the underlying agreement, each of which will be filed as an exhibit to
the Company’s Annual Report on Form 10-K for the fiscal year ending September 30, 2020.