UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 24, 2015 |
FS Investment Corporation III
(Exact name of Registrant as specified in its charter)
Maryland (State or other jurisdiction of incorporation) |
814-01047 (Commission File Number) |
90-0994912 (I.R.S. Employer Identification No.) |
201 Rouse Boulevard Philadelphia, Pennsylvania (Address of principal executive offices) |
19112 (Zip Code) |
Registrant’s telephone number, including area code: (215) 495-1150 |
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
On February 24, 2015, Dunlap Funding LLC, a wholly-owned financing subsidiary of FS Investment Corporation III (the “Company”), entered into an amendment (“Amendment No. 1”) to the revolving credit facility (the “Dunlap Credit Facility”) it originally entered into on December 2, 2014 with Deutsche Bank AG, New York Branch, as administrative agent, each of the lenders from time to time party thereto, the other agents parties thereto, and Wells Fargo Bank, National Association, as collateral agent and collateral custodian under the Dunlap Credit Facility.
Amendment No. 1 increased the aggregate principal amount of borrowings available under the Dunlap Credit Facility by $50 million to $150 million on a committed basis. No other material terms of the Dunlap Credit Facility changed in connection with Amendment No. 1.
The foregoing description of Amendment No. 1 as set forth in this Item 1.01 is a summary only and is qualified in all respects by the provisions of such agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.
Item 2.02. Results of Operations and Financial Condition.
On March 2, 2015, the Company issued a press release that announced selected preliminary estimates of its financial condition and results of operations for the fiscal year ended December 31, 2014, and the details of its annual stockholder conference call to discuss its final results of operations for the quarter and fiscal year ended December 31, 2014, which will be held on Thursday, March 19, 2015 at 4:00 p.m. Eastern Time.
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant .
The information
in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
FS Investment Corporation III | ||||
Date: | March 2, 2015 | By: | /s/ Stephen S. Sypherd | |
Stephen S. Sypherd | ||||
Vice President |
EXHIBIT INDEX
EXHIBIT NUMBER | DESCRIPTION | |
10.1 | Amendment No. 1 to Loan Financing and Servicing Agreement, dated as of February 24, 2015, between Dunlap Funding LLC, as borrower, and Deutsche Bank AG, New York Branch, as administrative agent. | |
99.1 | Press Release, dated March 2, 2015. |
FS Investment Corporation III 8-K
EXHIBIT 10.1
AMENDMENT NO. 1 TO LOAN FINANCING AND SERVICING AGREEMENT, dated as of February 24, 2015 (this “ Amendment ”), between Dunlap Funding LLC, a Delaware limited liability company (the “ Borrower ”), and Deutsche Bank AG, New York Branch, as administrative agent (the “ Administrative Agent ”).
WHEREAS, the Borrower, Wells Fargo Bank, National Association, as collateral agent and collateral custodian, each Lender party thereto and the Administrative Agent are party to the Loan Financing and Servicing Agreement, dated as of December 2, 2014 (as amended, supplemented, amended and restated and otherwise modified from time to time, the “ Loan Agreement ”); and
WHEREAS, the Borrower and the Administrative Agent have agreed to amend the Loan Agreement in accordance with the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing premises and the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE
I
Definitions
SECTION 1.1. Defined Terms . Terms used but not defined herein have the respective meanings given to such terms in the Loan Agreement.
ARTICLE
II
Amendments
SECTION 2.1. Amendments to the Loan Agreement . As of the date of this Amendment, the Loan Agreement is hereby amended as follows:
(a) by deleting “$100,000,000” in the definition of “Facility Amount” and inserting “$150,000,000” in lieu thereof; and
(b) by deleting “$100,000,000” on Annex B and inserting “$150,000,000” in lieu thereof.
ARTICLE
III
Conditions to Effectiveness
SECTION 3.1. This Amendment shall become effective as of the date first written above upon the satisfaction of the following conditions:
(a) the execution and delivery of this Amendment by the Borrower and the Administrative Agent;
(b) the Administrative Agent’s receipt of a legal opinion of counsel for the Borrower, in form and substance reasonably satisfactory to the Administrative Agent covering such matters as the Administrative Agent may reasonably request;
(c) the Administrative Agent’s receipt of a good standing certificate for the Borrower issued by the applicable Official Body of its jurisdiction of organization and a certified copy of the resolutions of the board of directors of the Borrower approving this Amendment and the transactions contemplated hereby, certified by its secretary, assistant secretary or an Executive Officer; and
(d) the Administrative Agent’s receipt of an amendment fee equal to the product of (x) $50,000,000 and (y) 1.0%.
ARTICLE IV
Representations and Warranties
SECTION 4.1. The Borrower hereby represents and warrants to the Administrative Agent that, as of the date first written above, (i) no Facility Termination Event or Unmatured Facility Termination Event has occurred and is continuing and (ii) the representations and warranties of the Borrower contained in the Loan Agreement are true and correct in all material respects on and as of such day (other than any representation and warranty that is made as of a specific date).
ARTICLE V
Miscellaneous
SECTION 5.1. Governing Law . THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 5.2. Severability Clause . In case any provision in this Amendment shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 5.3. Ratification . Except as expressly amended and waived hereby, the Loan Agreement is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.
SECTION 5.4. Counterparts . The parties hereto may sign one or more copies of this Amendment in counterparts, all of which together shall constitute one and the same agreement. Delivery of an executed signature page of this Amendment by facsimile or email transmission shall be effective as delivery of a manually executed counterpart hereof.
SECTION 5.5. Headings . The headings of the Articles and Sections in this Amendment are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.
[Signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above.
DUNLAP FUNDING LLC, as Borrower | ||
By: | /s/ Gerald F. Stahlecker | |
Name: Gerald F. Stahlecker | ||
Title: Executive Vice President |
DEUTSCHE BANK AG, NEW YORK
BRANCH , as Administrative Agent |
||
By: | /s/ Katherine Bologna | |
Name: Katherine Bologna | ||
Title: Director | ||
By: | /s/ Casey Rust | |
Name: Casey Rust | ||
Title: Vice President |
FS Investment Corporation III 8-K
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
FS Investment Corporation III Announces Selected Preliminary Fiscal 2014 Financial Results and Details of Annual Stockholder Conference Call
PHILADELPHIA, PA, March 2, 2015 – FS Investment Corporation III (FSIC III), a business development company (BDC) focused on providing customized credit solutions to private middle-market U.S. companies, announced selected preliminary estimates of its financial condition and results of operations for the year ended December 31, 2014 and the details of its annual stockholder conference call to discuss final financial results for the quarter and fiscal year ended December 31, 2014.
Selected Preliminary Fiscal 2014 Financial Results
Set forth below are selected preliminary estimates of FSIC III’s financial condition and results of operations for the year ended December 31, 2014. These estimates are subject to the completion of FSIC III’s financial closing procedures and are not a comprehensive statement of FSIC III’s financial results for the year ended December 31, 2014. FSIC III’s actual results may differ materially from these estimates as a result of the completion of its financial closing procedures, final adjustments and other developments arising between now and the time that FSIC III’s financial results for the year ended December 31, 2014 are finalized.
FSIC III’s net asset value per share as of December 31, 2014 is estimated to be between $8.61 and $8.65.
FSIC III’s net investment income per share for the year ended December 31, 2014 is estimated to be between $0.61 and $0.66.
As of December 31, 2014, FSIC III had approximately $112 million of aggregate debt outstanding.
FSIC III paid regular cash distributions to stockholders totaling approximately $0.52 per share during the year ended December 31, 2014.
Details of Annual Stockholder Conference Call
FSIC III will host a conference call to discuss its final operating results for the quarter and fiscal year ended December 31, 2014 on Thursday, March 19, 2015 at 4:00 p.m. Eastern Time. Prior to the call, FSIC III will report its financial highlights for the quarter and year ended December 31, 2014.
In order to participate, interested parties should dial 1 (800) 447-0521 at least 10 minutes prior to the beginning of the conference call and provide the confirmation code 38913498 when prompted. An audio archive of the call will be available for replay. The link to the audio archive can be found under FSIC III’s “Literature” page at www.franklinsquare.com and will be available for a period of 30 days following the call.
About FSIC III
FSIC III is a publicly registered, non-traded BDC sponsored by Franklin Square Capital Partners (Franklin Square). FSIC III focuses primarily on investing in the debt securities of private U.S. companies, with the investment objectives of generating current income and, to a lesser extent, long-term capital appreciation for its investors. FSIC III is advised by FSIC III Advisor, LLC, an affiliate of Franklin Square, and is sub-advised by GSO / Blackstone Debt Funds Management LLC, an affiliate of GSO Capital Partners LP (GSO). GSO, with approximately $72.9 billion in assets under management as of December 31, 2014, is the credit platform of Blackstone. For more information, please visit www.franklinsquare.com.
About Franklin Square
Franklin Square is a leading manager of alternative investment funds designed to enhance investors’ portfolios by providing access to asset classes, strategies and asset managers that typically have been available to only the largest institutional investors. The firm’s funds offer “endowment-style” investment strategies that help construct diversified portfolios and manage risk. Franklin Square strives not only to maximize investment returns but also to set the industry standard for best practices by focusing on transparency, investor protection and education for investment professionals and their clients.
Founded in Philadelphia in 2007, Franklin Square quickly established itself as a leader in the world of alternative investments by introducing innovative credit-based income funds, including the industry’s first non-traded BDC. Franklin Square managed approximately $13.6 billion in assets as of September 30, 2014. Franklin Square distributes its non-traded funds through its affiliated broker-dealer, FS 2 Capital Partners, LLC. For more information, please visit www.franklinsquare.com.
Forward-Looking Statements and Important Disclosures
This announcement may contain certain forward-looking statements, including statements with regard to future performance or operations of FSIC III. Words such as “believes,” “expects,” “projects” and “future” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements, and some of these factors are enumerated in the filings FSIC III makes with the SEC. FSIC III undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The preliminary financial data included herein have been prepared by, and is the responsibility of, management of FSIC III. FSIC III’s independent registered public accounting firm has not audited, reviewed, compiled or performed any procedures with respect to the accompanying preliminary financial data. Accordingly, FSIC III’s independent registered public accounting firm does not express an opinion or any other form of assurance with respect thereto.
Individual investors and endowments may have different investment horizons, liquidity needs and risk tolerances. In addition, fees that may be incurred by an investor in any of the funds sponsored by Franklin Square may be different than fees incurred by an endowment investing in similar assets as those in which the funds invest.
FSIC III’s previous distributions to stockholders were funded in significant part by the reimbursement of certain expenses, including through the waiver of certain investment advisory fees, that are subject to repayment to its affiliate, Franklin Square, and its future distributions may be funded from such waivers and reimbursements. Significant portions of these distributions were not based on FSIC III’s investment performance and such waivers and reimbursements by Franklin Square may not continue in the future. The payment of future distributions on FSIC III’s shares of common stock is subject to the sole discretion of FSIC III’s board of directors and applicable legal restrictions and, therefore, there can be no assurance as to the amount or timing of any such future distributions.