Business Context and Reporting Period
Company: Capital Southwest Corporation (CSWC)
Filing Type: Form 8-K (Current Report)
Date of Report: March 12, 2021
Event Date: March 11, 2021
Context: The Company entered into a Second Amended and Restated Limited Liability Company Operating Agreement regarding its joint venture, I-45 SLF LLC, with Main Street Capital Corporation.
Key Financial Metrics
This filing does not contain consolidated financial statements, revenue, profit, cash flow, or liquidity metrics for Capital Southwest Corporation. The document focuses exclusively on the terms of a specific joint venture agreement.
Material Changes
The filing details two primary amendments to the I-45 SLF LLC Operating Agreement:
- Profit Distribution Increase: The Company's pro rata profit percentage was increased from 75.6% to a stepped schedule:
- 76.26250% for the quarter ended March 31, 2021.
- 76.9250% for the quarter ended June 30, 2021.
- 77.58750% for the quarter ended September 30, 2021.
- 78.250% for the quarter ended December 31, 2021, and thereafter.
- Dissolution Notice Period: The earliest date for a member to provide written notice to dissolve the joint venture was extended from March 8, 2017, to March 31, 2023. The required notice period was reduced from 90 days to 30 days.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management commentary on general outlook, or discussion of risks and contingencies beyond the specific terms of the amended agreement. The text notes that the description of the Amendment is qualified by reference to the full text filed as an exhibit.
Investor Verification Checklist
- Verify the full text of the Second Amended and Restated Limited Liability Company Operating Agreement (Exhibit 1.1) for additional covenants or conditions not summarized in the 8-K.
- Confirm the impact of the increased profit percentage on future earnings per share (EPS) relative to the joint venture's performance.
- Review the financial health of the joint venture partner, Main Street Capital Corporation, as the dissolution terms now extend to 2023.