Business Context and Reporting Period
This Form 8-K filing by TICC Capital Corp. (noted as Oxford Square Capital Corp. in metadata) reports a material definitive agreement dated May 28, 2013. The Company completed an $80,000,000 increase to its existing collateralized loan obligation (CLO) transaction, TICC CLO 2012-1 LLC, which is a wholly-owned subsidiary.
Key Financial Metrics and Transaction Details
The transaction involved the issuance of $80,000,000 in new notes (Second Additional Issuance Notes) backed by a diversified portfolio of bank loans. The capital structure is as follows:
- Class A-1 Senior Secured Notes: $44,000,000 face amount; Rated AAA/Aaa; Interest at 3-month LIBOR + 1.75%.
- Class B-1 Senior Secured Notes: $5,000,000 face amount; Rated AA/Aa2; Interest at 3-month LIBOR + 3.50%.
- Class C-1 Secured Deferrable Notes: $5,750,000 face amount; Rated A/A2; Interest at 3-month LIBOR + 4.75%.
- Class D-1 Secured Deferrable Notes: $5,250,000 face amount; Rated BBB/Baa2; Interest at 3-month LIBOR + 5.75%.
- Subordinated Notes: $20,000,000 face amount; Purchased entirely by the Company; Unrated; Non-interest bearing.
The notes have a stated maturity date of August 25, 2023, with a non-call period until August 2014 and a reinvestment period through August 2016. Proceeds are designated for purchasing additional collateral obligations or eligible investments.
Material Changes
This filing represents a "Second Upsize" to the CLO transaction originally closed on August 23, 2012, and previously increased by $80,000,000 on February 25, 2013. The issuance of additional notes was proportional across all existing classes of notes from the original and first upsize closings.
Outlook, Risks, and Management Commentary
The filing does not provide specific forward-looking guidance, revenue projections, or management commentary beyond the transaction mechanics. The notes were sold in a private placement and are not registered under the Securities Act of 1933. The transaction includes customary representations, warranties, and covenants with Guggenheim Securities, LLC as the initial purchaser of the secured notes.
Investor Verification Checklist
- Verify the total outstanding debt load of the TICC CLO 2012-1 LLC post-upsize.
- Confirm the composition and credit quality of the underlying collateral portfolio used to back the new $80,000,000 issuance.
- Review the attached Exhibits 10.1 through 10.3 for specific covenants and events of default.
- Assess the impact of the $20,000,000 subordinated note purchase on the Company's balance sheet and liquidity.