Item
1.01.
|
Entry
into a Material Definitive Agreement
|
Second
Amendment and Restatement of the Senior Secured Revolving Credit Facility
On
December 23, 2020, FS KKR Capital Corp. II, or the Company, entered into a second amended and restated senior secured revolving
credit facility, or the Second Amended and Restated Senior Secured Revolving Credit Facility, with FS KKR Capital Corp., or FSK,
as borrowers, JPMorgan Chase Bank, N.A., or JPMorgan, as administrative agent, ING Capital LLC, or ING, as collateral agent, and
the lenders party thereto, which amended and restated the senior secured revolving credit facility originally entered into on
August 9, 2018, which was subsequently amended and restated on November 7, 2019, among the Company and FSK, as borrowers, JPMorgan,
as administrative agent, ING, as collateral agent, and the lenders party thereto. The Second Amended and Restated Senior Secured
Revolving Credit Facility provides for borrowings in U.S. dollars and certain agreed upon foreign currencies in an initial aggregate
amount of up to $4,025,000,000 with an option for the Company to request, at one or more times, that existing and/or new lenders,
at their election, provide up to $2,012,500,000 of additional commitments. The Second Amended and Restated Senior Secured Revolving
Credit Facility initially provides for a sublimit available for the Company to borrow up to $2,410,000,000 of the total facility
amount, subject to increase or reduction from time to time pursuant to the terms of the Second Amended and Restated Senior Secured
Revolving Credit Facility and the oversight and approval of the Company’s board of directors. A sublimit of the total facility
amount also is available to FSK, as an additional borrower, and the obligations of the borrowers under the Second Amended and
Restated Senior Secured Revolving Credit Facility are several (and not joint) in all respects. The Second Amended and Restated
Senior Secured Revolving Credit Facility provides for the issuance of letters of credit in an initial aggregate face amount of
up to $400,000,000, with a sublimit available for the Company to request the issuance of letters of credit in an aggregate face
amount of up to $75,353,407.44, subject to increase or reduction from time to time pursuant to the terms of the Second Amended
and Restated Senior Secured Revolving Credit Facility.
Availability
under the Second Amended and Restated Senior Secured Revolving Credit Facility will terminate on December 23, 2024, or the Revolver
Termination Date, and the outstanding loans under the Second Amended and Restated Senior Secured Revolving Credit Facility will
mature on December 23, 2025. The Second Amended and Restated Senior Secured Revolving Credit Facility also requires mandatory
prepayment of interest and principal upon certain events during the term-out period commencing on the Revolver Termination Date
and at certain other times when the Company’s adjusted asset coverage ratio is less than 185%.
Borrowings
under the Second Amended and Restated Senior Secured Revolving Credit Facility are subject to compliance with a borrowing base
test. Interest under the Second Amended and Restated Senior Secured Revolving Credit Facility for (i) loans for which the
Company elects the base rate option, (A) if the value of the borrowing base is equal to or greater than 1.85 times the aggregate
amount of certain outstanding indebtedness of the Company, or the Combined Debt Amount, is payable at an “alternate base
rate” (which is the greatest of (a) the prime rate as publicly announced by JPMorgan, (b) the sum of (x) the
greater of (I) the federal funds effective rate and (II) the overnight bank funding rate plus (y) 0.5%, and (c) the
one month LIBOR plus 1% per annum) plus 0.75% and, (B) if the value of the borrowing base is less than 1.85 times the
Combined Debt Amount, the alternate base rate plus 1.00%; and (ii) loans for which the Company elects the Eurocurrency option
(A) if the value of the borrowing base is equal to or greater than 1.85 times the Combined Debt Amount, is payable at a rate
equal to LIBOR plus 1.75% and (B) if the value of the borrowing base is less than 1.85 times the Combined Debt Amount, is
payable at a rate equal to LIBOR plus 2.00%. The Company will pay a commitment fee of at least 0.375% and up to 0.50% per
annum (based on the immediately preceding quarter’s average usage) on the unused portion of its sublimit under the Second
Amended and Restated Senior Secured Revolving Credit Facility during the revolving period. The Company also will be required to
pay letter of credit participation fees and a fronting fee on the average daily amount of any lender’s exposure with respect
to any letters of credit issued at the request of the Company under the Second Amended and Restated Senior Secured Revolving Credit
Facility.
In
connection with the Second Amended and Restated Senior Secured Revolving Credit Facility, the Company has made certain representations
and warranties and must comply with various covenants and reporting requirements customary for facilities of this type. In addition,
the Company must comply with the following financial covenants: (a) the Company must maintain a minimum shareholders’ equity,
measured as of each fiscal quarter end; and (b) the Company must maintain at all times a 150% asset coverage ratio (or, if greater,
the statutory requirement then applicable to the Company).
The
Second Amended and Restated Senior Secured Revolving Credit Facility contains events of default customary for facilities of this
type. Upon the occurrence of an event of default, JPMorgan, at the instruction of the lenders, may terminate the commitments and
declare the outstanding advances and all other obligations under the Second Amended and Restated Senior Secured Revolving Credit
Facility immediately due and payable.
The
Company’s obligations under the Second Amended and Restated Senior Secured Revolving Credit Facility are guaranteed by certain
of the Company’s subsidiaries. The Company’s obligations under the Second Amended and Restated Senior Secured Revolving
Credit Facility are secured by a first priority security interest in substantially all of the assets of the Company and certain
of the Company’s subsidiaries thereunder.
The
foregoing description of the Second Amended and Restated Senior Secured Revolving Credit Facility does not purport to be complete
and is qualified in its entirety by reference to the full text of the Second Amended and Restated Senior Secured Revolving Credit
Facility attached hereto as Exhibit 10.1.