Business Context and Reporting Period
This Form 8-K was filed by Oaktree Capital Group, LLC on July 11, 2014. The filing reports the entry into a Material Definitive Agreement and the creation of a Direct Financial Obligation. The registrant, Oaktree Capital Management, L.P. (the "Issuer"), along with its guarantors, entered into a Note Agreement with accredited investors to issue senior notes.
Key Financial Metrics and Debt Structure
The Issuer agreed to issue and sell a total of $250 million in aggregate principal amount of senior unsecured notes, guaranteed on a joint and several basis. The specific tranches are as follows:
- Series A Notes: $50 million principal, 3.91% interest per annum, due September 3, 2024.
- Series B Notes: $100 million principal, 4.01% interest per annum, due September 3, 2026.
- Series C Notes: $100 million principal, 4.21% interest per annum, due September 3, 2029.
Interest is payable semi-annually. The filing text does not provide current revenue, profit, cash flow, or margin data, as this is a transactional report rather than a periodic financial statement.
Material Changes and Transaction Details
The primary material change is the execution of the Note Agreement on July 11, 2014, with a closing expected on September 3, 2014. The transaction is a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933. Proceeds are intended for working capital and general corporate purposes of the Obligors and their subsidiaries.
Terms, Covenants, and Risks
The Note Agreement includes affirmative and negative covenants, specifically financial covenants relating to the Obligors' combined leverage ratio and minimum assets under management. Key terms and risks include:
- Prepayment: The Issuer may prepay notes at any time subject to a make-whole amount. A change of control triggers a mandatory offer to prepay with a make-whole amount.
- Events of Default: Includes failure to pay interest, breach of covenants, failure to pay other indebtedness, and insolvency or bankruptcy events.
- Remedies: Upon an event of default, holders of a majority of the outstanding principal may declare the notes immediately due and payable.
Investor Verification Checklist
- Verify the final closing date of September 3, 2014, and confirmation of the $250 million funding.
- Review the full text of the Note Agreement (Exhibit 4.1) for specific definitions of the leverage ratio and minimum assets under management covenants.
- Confirm the identity of the accredited investors and the specific terms of the make-whole calculation for early prepayment.
- Monitor subsequent filings for any amendments to the covenants or changes in the company's leverage ratio.