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
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Date of Report (Date of earliest event reported): June 12, 2019 |
FS Investment Corporation III
(Exact name of Registrant as specified in its charter)
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Maryland (State or other jurisdiction of incorporation) |
814-01047 (Commission File Number) |
90-0994912 (I.R.S. Employer Identification No.) |
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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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| ☒ | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Securities registered pursuant to Section 12(b) of the Exchange Act: None.
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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| N/A | N/A | N/A |
| Item 1.01. | Entry into a Material Definitive Agreement. |
On June 12, 2019, Burholme Funding LLC (“Burholme Funding”), a wholly owned financing subsidiary of FS Investment Corporation III (the “Company”), entered into a Seventh Amendment Agreement (the “Seventh Amendment”) to the Committed Facility Agreement dated as of October 17, 2014 (as amended, modified or supplemented from time to time, the “Committed Facility”) with BNP Paribas Prime Brokerage International, Ltd. (“BNPP”). The Seventh Amendment, among other things, (i) amended the maximum committed amount from $250,000,000 to, on any given date, the average outstanding borrowings over the past ten business days, (ii) reduced the tenor from a 270-day rolling period to a 179-day rolling period, (iii) provided Burholme Funding with the right to terminate the Committed Facility at any time upon two business days’ notice, (iv) amended the interest rate from three-month LIBOR plus 125 basis points to one-month LIBOR plus 125 basis points, (v) eliminated the commitment fee, and (vi) replaced BNPP’s right to terminate the Committed Facility if BNP Paribas’ long term credit rating declines three or more notches below its highest rating by any of Moody’s Investors Service, Inc., Standard & Poor’s Ratings Services or Fitch IBCA, Inc. during the term of the Committed Facility (a “Funding Event”) with automatic termination of the Committed Facility upon the occurrence of a Funding Event.
The foregoing description of the Seventh Amendment 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 2.03. | 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
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EXHIBIT
NUMBER |
DESCRIPTION | |||
| 10.1 | Seventh Amendment Agreement, dated as of June 12, 2019, to the Committed Facility Agreement, dated as of October 17, 2014, between BNP Paribas Prime Brokerage International, Ltd. and Burholme Funding LLC. | |||
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: June 17, 2019 | By: | /s/ Stephen S. Sypherd |
| Stephen S. Sypherd | ||
| General Counsel and Secretary | ||
EXHIBIT INDEX
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EXHIBIT
NUMBER |
DESCRIPTION | |
| 10.1 | Seventh Amendment Agreement, dated as of June 12, 2019, to the Committed Facility Agreement, dated as of October 17, 2014, between BNP Paribas Prime Brokerage International, Ltd. and Burholme Funding LLC. |
FS Investment Corporation III 8-K
Exhibit 10.1
SEVENTH AMENDMENT AGREEMENT
AMENDMENT AGREEMENT (“ Amendment ”) dated as of June 12, 2019 to the Committed Facility Agreement dated as of October 17, 2014 between BNP Paribas Prime Brokerage International, Ltd. (“ BNPP PB ”) and Burholme Funding LLC (“ Customer ”).
WHEREAS, BNP Paribas Securities Corp. (formerly BNP Paribas Prime Brokerage, Inc.) (“ BNPP PB, Inc. ”) and Customer previously entered into a Committed Facility Agreement dated as of October 17, 2014 (as amended from time to time, the “ Agreement ”);
WHEREAS, the Agreement was assigned to BNPP PB, Inc.’s affiliate, BNPP PB;
WHEREAS, the parties hereto desire to amend the Agreement as provided herein;
NOW THEREFORE, in consideration of the mutual agreements provided herein, the parties agree to amend the Agreement as follows:
| 1. | Amendment to Section 1 of the Agreement (‘Definitions’) |
The definition of “ Maximum Commitment Financing ” in Section 1 of the Agreement is hereby replaced in its entirety with the following:
““ Maximum Commitment Financing ” means an amount equal to the average amount of Outstanding Debit Financing held by Customer over the ten (10) Business Days immediately preceding such date.”
| 2. | Amendment to Section 6 of the Agreement (‘Scope of Committed Facility’) |
| (a) | Section 6 of the Agreement is hereby amended by replacing the words “270” wherever appearing therein with the words “179”. |
| (b) | Section 6 of the Agreement is hereby amended by replacing the following paragraph currently appearing at the end thereof: |
“Notwithstanding the foregoing or anything to the contrary herein, on or at any time after the occurrence of a Funding Event, BNPP PB. Inc. shall have the option to terminate the Agreement immediately upon notice. Upon termination resulting from the exercise of such option, BNPP PB, Inc. shall pay to Customer a fee equal to 50 bps on the amount of Maximum Commitment Financing. BNPP PB, Inc. shall provide notice to Customer of any downgrade of BNP Paribas’ long-term credit rating by any of Standard & Poor’s Ratings Services, Moody’s Investor Service, Inc. or Fitch Ratings, Ltd.”
With the following paragraph:
“Notwithstanding the foregoing or anything to the contrary herein, upon the occurrence of a Funding Event, this Agreement shall terminate and all outstanding cash financing shall be governed in accordance with the terms of the U.S. PB Agreement. BNPP PB shall endeavor to provide prompt notice to Customer of: (i) the occurrence of a Funding Event and (ii) any downgrade of BNP Paribas’ long-term credit rating by any of Standard & Poor’s Ratings Services, Moody’s Investor Service, Inc. or Fitch Ratings, Ltd.”
| 3. | Amendment to Section 13 of the Agreement (‘Termination’) |
Section 13(e) of the Agreement is hereby replaced in its entirety with the following:
(e)
Customer may terminate this Agreement at any time upon written notice to BNPP PB, specifying the date of such termination, which shall be at least two Business Days after the date of such notice.
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| 4. | Amendment to the Financing Rate set forth in Appendix B of the Agreement |
The section titled “Financing Rate” in Appendix B to the Agreement is hereby amended by replacing the words “3 Month Libor” wherever it appears under the Customer Debit Rate with the words “1 Month Libor”.
| 5. | Amendment to the Commitment Fee set forth in Appendix B of the Agreement |
The section titled “Commitment Fee” in Appendix B to the Agreement is hereby amended by replacing the paragraph appearing therein in its entirety with the following words “N/A”.
| 6. | Representations |
Each party represents to the other party that all representations contained in the Agreement are true and accurate as of the date of this Amendment and that such representations are deemed to be given or repeated by each party, as the case may be, on the date of this Amendment, in each case, however, except for any representation that refers to a specific date, as to which each party represents to the other party that such representation is true and accurate as of such specific date and is deemed to be given or repeated by each party, as the case may be, as of such specific date.
| 7. | Miscellaneous |
| (a) | Definitions. Capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings specified for such terms in the Agreement. |
| (b) | Entire Agreement. The Agreement as amended and supplemented by this Amendment constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communications and prior writings (except as otherwise provided herein) with respect thereto. Except as expressly set forth herein, the terms and conditions of the Agreement remain in full force and effect. |
| (c) | Counterparts. This Amendment may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original. |
| (d) | Headings. The headings used in this Amendment are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Amendment. |
| (e) | Governing Law. This Amendment will be governed by and construed in accordance with the laws of the State of New York (without reference to choice of law doctrine). |
(Signature page follows)
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IN WITNESS WHEREOF the parties have executed this Amendment with effect from the first date specified on the first page of this Amendment.
| BNP PARIBAS PRIME BROKERAGE | BURHOLME FUNDING LLC | |
| INTERNATIONAL, LTD. | ||
| /s/ Robert Luzzo | /s/ William Goebel | |
| Name: Robert Luzzo | Name: William Goebel | |
| Title: Managing Director | Title: Chief Financial Officer | |
| /s/ Jeffrey Lowe | ||
| Name: Jeffrey Lowe | ||
| Title: Managing Director |
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