Business Context and Reporting Period
This Form 8-K filing by Oaktree Capital Group, LLC (referred to as Oaktree) reports a material definitive agreement and other events dated May 10, 2018. The filing details the entry into an underwriting agreement to issue and sell Series A Preferred units.
Key Financial Metrics and Transaction Details
- Offering Size: 7,200,000 Series A Preferred units with a liquidation preference of $25.00 per unit, totaling $180 million.
- Over-Allotment Option: Underwriters have an option to purchase up to an additional 1,080,000 units.
- Interest Rate: 6.625% annual distribution rate.
- Distribution Terms: Distributions are non-cumulative and paid quarterly when and if declared.
- Use of Proceeds: Net proceeds will be used for general corporate purposes, including funding investments.
- Listing: The units are intended to be listed on the New York Stock Exchange under the ticker symbol "OAK PR A".
Material Changes and Outlook
The primary material change is the execution of the underwriting agreement with Morgan Stanley & Co. LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, and Wells Fargo Securities, LLC. The offering is expected to close on May 17, 2018. The filing contains forward-looking statements regarding the completion of the offering, noting that consummation is not assured.
Risks and Contingencies
- Completion Risk: The company cannot assure that the offering will be consummated.
- Forward-Looking Statements: Actual results may differ materially from anticipated results due to known and unknown risks and uncertainties.
- Non-Cumulative Distributions: If distributions are not declared, they are not cumulative and do not accrue.
Investor Verification Checklist
- Verify the final closing date of the offering (expected May 17, 2018).
- Confirm the listing status of the "OAK PR A" units on the New York Stock Exchange.
- Review the full Underwriting Agreement (Exhibit 1.1) for specific conditions to closing and termination provisions.
- Monitor future press releases for the declaration of quarterly distributions.