As previously announced on November 9, 2017, Oaktree Capital
Management, L.P. (the Issuer), and Oaktree Capital I, L.P., Oaktree Capital II, L.P. and Oaktree AIF Investments, L.P. (the Guarantors and together with the Issuer, the Obligors) entered into a note and guaranty
agreement (the Note Agreement) with certain accredited investors (collectively, the Investors) on November 16, 2017, pursuant to which the Issuer agreed to issue and sell to the Investors $250.0 million aggregate
principal amount of its 3.78% Senior Notes due December 18, 2032 (the Notes). Funding of the Notes is expected to occur on December 18, 2017. In connection with the Notes offering, the Issuer entered into a cross-currency swap
agreement to Euros, reducing the interest cost to 1.95% per year. The Notes will be senior unsecured obligations of the Issuer, guaranteed (the Guarantees) by the Guarantors on a joint and several basis. The offer and sale of the Notes
and the Guarantees were and will be made solely in private placement transactions exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.
The Notes will bear interest at a rate of 3.78% per annum, payable semi-annually, and will be due on December 18, 2032. The Note
Agreement provides for certain affirmative and negative covenants, including financial covenants relating to the Obligors combined leverage ratio and minimum assets under management. In addition, the Note Agreement contains customary
representations and warranties of the Obligors and customary events of default, in certain cases, subject to cure periods. The Issuer may prepay all, or from time to time any part of, the Notes at any time, subject to the Issuers payment of
the applicable make-whole amount determined with respect to such principal amount prepaid. Upon the occurrence of a change of control, the Issuer will be required to make an offer to prepay the Notes together with the applicable make-whole amount
determined with respect to such principal amount prepaid. The Note Agreement contains customary events of default, including, among other things, failure to pay interest, breach of certain covenants, failure to pay certain other indebtedness at
maturity or upon earlier acceleration, and certain events of insolvency or bankruptcy. Upon the occurrence and continuance of an event of default, the holders of at least a majority in outstanding principal amount of the Notes may declare the Notes
immediately due and payable by providing notice to the Issuer and exercise other rights and remedies. Such termination and declaration will occur automatically in the event of certain insolvency or bankruptcy related events of default.
The Issuer intends to use the proceeds from the sale of the Notes, together with cash on hand, to redeem its $250 million of 6.75% Senior
Notes due 2019 and pay the related make-whole payment to the holders thereof.
The above description of the terms and conditions of the
Notes and the Note Agreement does not purport to be complete and is qualified in its entirety by the full text of the Note Agreement and the form of the Notes attached as Exhibits 4.1 and 4.2, respectively, to this Form
8-K
and incorporated herein by reference.
On November 16, 2017, Oaktree Capital Group, LLC issued a
press release announcing that the Obligors entered into the Note Agreement with the Investors on November 16, 2017.
A copy of the
press release is attached to this Form
8-K
as Exhibit 99.1.