Entry Into a Material Definitive Agreement.
On March 2, 2021, in connection with a previously announced
public offering, Gladstone Investment Corporation (the “Company”)
and UMB Bank, National Association, as trustee (the “Trustee”),
entered into a Second Supplemental Indenture (the “Second
Supplemental Indenture”) to the Indenture, dated May 22, 2020,
between the Company and the Trustee (together with the Second
Supplemental Indenture, the “Indenture”). The Second Supplemental
Indenture relates to the Company’s issuance, offer and sale of
$127,937,500 aggregate principal amount of its 5.00% Notes due 2026
The Notes will mature on May 1, 2026, unless previously
redeemed or repurchased in accordance with their terms. The
interest rate of the Notes is 5.00% per year, and interest on the
Notes will be paid on February 1, May 1, August 1
and November 1 of each year, beginning on May 1, 2021.
The Notes are the Company’s direct unsecured obligations and rank
pari passu with the Company’s existing and future unsecured,
unsubordinated indebtedness; senior to the Company’s existing
6.250% Series D Cumulative Term Preferred Stock due 2023 (“Series D
Term Preferred Stock”) and 6.375% Series E Cumulative Term
Preferred Stock due 2025 and any series of preferred stock that the
Company may issue in the future; senior to any of the Company’s
future indebtedness that expressly provides it is subordinated to
the Notes; effectively subordinated to any future secured
indebtedness of the Company (including indebtedness that is
initially unsecured to which the Company subsequently grants
security), to the extent of the value of the assets securing such
indebtedness; and structurally subordinated to all existing and
future indebtedness and other obligations of any of the Company’s
existing or future subsidiaries, including, without limitation,
borrowings under the Company’s credit facility.
The Notes may be redeemed in whole or in part at any time or from
time to time at the Company’s option on or after May 1, 2023,
upon not less than 30 days nor more than 60 days written notice by
mail prior to the date fixed for redemption thereof, at a
redemption price of 100% of the outstanding principal amount of the
Notes to be redeemed plus accrued and unpaid interest payments
otherwise payable for the then-current quarterly interest period
accrued to, but not including, the date fixed for redemption.
The Indenture contains certain covenants, including covenants
requiring the Company to comply with Section 18(a)(1)(A) as
modified by Section 61(a)(2) of the Investment Company Act of
1940, as amended (the “Investment Company Act”), or any successor
provisions, to comply with Section 18(a)(1)(B) as modified by
Section 61(a)(2) of the Investment Company Act, or any
successor provisions but giving effect to any no-action relief granted by the
Securities and Exchange Commission (the “SEC”) to another business
development company and upon which the Company may reasonably rely
(or to the Company if the Company determines to seek such similar
no-action or other relief),
and to provide certain financial information to the holders of the
Notes and the Trustee if the Company should no longer be subject to
the reporting requirements under the Securities Exchange Act of
1934, as amended. These covenants are subject to important
limitations and exceptions that are set forth in the Indenture.
The Notes were offered and sold pursuant to the Company’s effective
shelf registration statement on Form N-2 (Registration No. 333-232124) previously filed
with the SEC, as supplemented by a preliminary prospectus
supplement dated February 23, 2021, the pricing term sheet
dated February 23, 2021 and a final prospectus supplement
dated February 23, 2021. This Current Report on Form
8-K shall not constitute an
offer to sell or a solicitation of an offer to buy any securities,
nor shall there be any sale of these securities in any state or
jurisdiction in which such an offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state or other jurisdiction. The
transaction closed on March 2, 2021.
The Company intends to use the net proceeds from the offering to
redeem all of the Series D Term Preferred Stock, to repay a portion
of the amount outstanding under its credit facility, to fund new
investment opportunities and for other general corporate purposes.
The Company intends to re-borrow under its
credit facility to make investments in portfolio companies in
accordance with its investment objectives depending on the
availability of appropriate investment opportunities consistent
with its investment objectives and market conditions and for
other general corporate purposes.
The description above is only a summary of the material provisions
of the Second Supplemental Indenture and the Notes and is qualified
in its entirety by reference to copies of the Second Supplemental
Indenture and the Notes, respectively, each filed as exhibits to
this Current Report on Form 8-K and incorporated
by reference herein.
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 Form 8-K is incorporated
herein by reference.
Financial Statements and Exhibits.