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Item 1.01. |
Entry into a Material Definitive Agreement.
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Notes Offering
As previously disclosed, on October 26, 2021, Logan Ridge
Finance Corporation (the “Company”) priced an offering of
$50,000,000 in aggregate principal amount of its 5.25% Notes due
2026 (the “Notes”) in a private placement exempt from registration
under the Section 4(a)(2) of the Securities Act of 1933, as
amended (the “Securities Act”). The private offering closed on
October 29, 2021. The Notes have not been registered under the
Securities Act or any state securities laws and may not be
reoffered or resold in the United States absent registration or an
applicable exemption from such registration requirements. The net
proceeds to the Company were approximately $48.8 million,
after deducting estimated offering expenses. The Company intends to
use the net proceeds of this offering to repay certain
indebtedness, including to redeem a portion of the outstanding 2022
Notes, and for general corporate purposes.
On October 29, 2021, the Company and U.S. Bank National
Association (the “Trustee”) entered into a Supplemental Indenture
(the “Fourth Supplemental Indenture”), which supplements that
certain Base Indenture, dated as of June 16, 2014 (as may be
further amended, supplemented or otherwise modified from time to
time, the “Base Indenture” and, together with the Fourth
Supplemental Indenture, the “Indenture”). The Fourth Supplemental
Indenture relates to the Company’s issuance of the Notes.
The Notes will mature on October 30, 2026 and may be redeemed
in whole or in part at the Company’s option at any time or from
time to time at the redemption prices set forth in the Indenture.
The Notes bear interest at a rate of 5.25% per year payable
semi-annually on April 30 and October 30 of each year,
commencing on April 30, 2022. The Notes are general unsecured
obligations of the Company that rank senior in right of payment to
all of the Company’s existing and future indebtedness that is
expressly subordinated in right of payment to the Notes, rank
pari passu with all existing and future unsecured
unsubordinated indebtedness issued by the Company, rank effectively
junior to any of the Company’s secured indebtedness (including
unsecured indebtedness that the Company later secures) to the
extent of the value of the assets securing such indebtedness, and
rank structurally junior to all existing and future indebtedness
(including trade payables) incurred by the Company’s subsidiaries,
financing vehicles or similar facilities.
The Indenture contains certain covenants, including covenants
requiring the Company to comply with the asset coverage
requirements of Sections 18(a)(1)(A) and 18(a)(1)(B) as
modified by Section 61(a)(2) of the Investment Company Act of
1940, as amended, whether or not it is subject to those
requirements, and to provide financial information to the holders
of the Notes and the Trustee if the Company is no longer subject to
the reporting requirements under the Securities Exchange Act of
1934, as amended. Additionally, the Company has agreed to use its
commercially reasonable efforts to maintain a rating of the Notes
from a rating agency, as defined in the Indenture, as long as the
Notes are outstanding. These covenants are subject to important
limitations and exceptions that are described in the Indenture.
In addition, on the occurrence of a “change of control repurchase
event,” as defined in the Indenture, the Company will generally be
required to make an offer to purchase the outstanding Notes at a
price equal to 100% of the principal amount of such Notes plus
accrued and unpaid interest to the repurchase date. Further, as of
the date of an “interest rate adjustment event”, as defined in the
Indenture, to and until such date that an interest rate adjustment
event is no longer continuing, the Notes will bear interest at the
“adjusted interest rate,” as defined in the Indenture, which is
0.75% above the stated rate of the Notes.
The foregoing description of the Indenture does not purport to be
complete and is qualified in its entirety by reference to the full
text of the Indenture, filed as an exhibit hereto and incorporated
by reference herein.
Registration Rights Agreement
In connection with the offering, the Company entered into a
Registration Rights Agreement, dated as of October 29, 2021
(the “Registration Rights Agreement”), with the purchasers of the
Notes. Pursuant to the Registration Rights Agreement, the Company
is obligated to file with the Securities and Exchange Commission
(the “Commission”) a registration statement relating to an offer to
exchange the Notes for new notes issued by the Company that are
registered under the Securities Act and otherwise have terms
substantially identical to those of the