Item 1.01. Entry into a Material Definitive Agreement.
On February 22, 2019 (the
Effective Date
), PennantPark Investment Funding I, LLC (the
Borrower
), a wholly-owned
subsidiary of PennantPark Investment Corporation (the
Company
), entered into a credit facility (the
Credit Facility
). In connection with the Credit Facility, the Borrower entered into, among other agreements,
(i) the revolving credit and security agreement (the
Warehouse Credit Agreement
) with the lenders from time to time parties thereto, BNP Paribas, as administrative agent, the Company, as equityholder, PennantPark
Investment Advisers, LLC, as servicer (in such capacity, the
Servicer
), and The Bank of New York Mellon Trust Company, National Association (the
Bank
), as collateral agent (in such capacity, the
Collateral Agent
), (ii) the account control agreement (the
Control Agreement
), by and among the Borrower, the Bank, as secured party (in such capacity, the
Secured Party
), the Servicer, and
the Bank, as securities intermediary, (iii) the custodian agreement (the
Custodian Agreement
), by and among the Borrower, the Bank, as custodian (in such capacity, the
Custodian
), and the Collateral Agent,
and (iv) the purchase and sale agreement (the
Purchase and Sale Agreement
), by and between the Borrower and the Company, as seller.
The Warehouse Credit Agreement provides for borrowings in an aggregate amount up to $250,000,000. Borrowings under the Warehouse Credit Agreement will bear
interest based on an annual adjusted London interbank offered rate for the relevant interest period, plus an applicable spread. Interest is payable quarterly in arrears. Any amounts borrowed under the Warehouse Credit Agreement will mature, and all
accrued and unpaid interest thereunder will be due and payable, on the earlier of (i) February 22, 2024 or (ii) upon certain other events which result in accelerated maturity under the Warehouse Credit Facility. Borrowing under the
Warehouse Credit Facility is subject to certain restrictions contained in the Investment Company Act of 1940, as amended.
Borrowings under the Warehouse
Credit Agreement are secured by all of the assets held by the Borrower. Pursuant to the Warehouse Credit Agreement, the Servicer will perform certain duties with respect to the purchase and management of the assets securing the Warehouse Credit
Facility. The Servicer will not receive any fees under the Warehouse Credit Agreement. The Borrower will not reimburse the expenses incurred by the Servicer in the performance of its obligations under the Warehouse Credit Agreement. The Borrower has
made customary representations and warranties under the Warehouse Credit Agreement and is required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities.
All of the collateral pledged to the lenders by the Borrower under the Warehouse Credit Agreement is held in the custody of the Bank in its capacities as
Secured Party under the Control Agreement and as Custodian under the Custodian Agreement. The Custodian will maintain and perform certain collateral administration services with respect to the collateral pursuant to the Custodian Agreement. As
compensation for the services rendered by the Custodian, the Borrower will pay the Custodian, on a quarterly basis, customary fee amounts and reimburse the Custodian for its
reasonable out-of-pocket expenses.
The Custodian Agreement and the obligations of the Custodian will continue until the date on which all obligations have been
paid in full.
Concurrently with closing of the Credit Facility, the Company contributed and/or sold certain assets to the Borrower pursuant to the
Purchase and Sale Agreement, and the Company expects to continue to contribute and/or sell assets to the Borrower pursuant to the Purchase and Sale Agreement in the future. The Company may, but shall not be required to, repurchase and/or substitute
certain assets previously transferred to the Borrower subject to the conditions specified in the Purchase and Sale Agreement and the Warehouse Credit Agreement.
The Company incurred certain customary fees, costs and expenses in connection with the closing of the Warehouse Credit Facility.
The foregoing descriptions of the Warehouse Credit Agreement, the Control Agreement, the Custodian Agreement and the Purchase and Sale Agreement do not
purport to be complete and are qualified in their entirety by the full text of each of the Warehouse Credit Facility, the Control Agreement, the Custodian Agreement and the Purchase and Sale Agreement, which are attached hereto as Exhibit 10.1,
Exhibit 10.2, Exhibit 10.3, and Exhibit 10.4, respectively, and are incorporated herein by reference.