Business Context and Reporting Period
Company: GSC Investment Corp. (Saratoga Investment Corp.)
Filing Type: Form 8-K (Current Report)
Date of Report: April 11, 2007 (Event Date); Signed April 16, 2007
Business Context: The Company is engaged in originating and purchasing securities and loans. This filing reports the entry into material definitive agreements to facilitate the sale of these assets and secure funding.
Key Financial Metrics and Agreements
- Revolving Credit Facility: Established a $85,000,000 facility with an accordion feature to increase up to $130,000,000 subject to conditions.
- Borrowing Rate: Underlying commercial paper rate plus 70 basis points.
- Counterparties: Deutsche Bank AG (Administrative Agent), U.S. Bank National Association (Trustee/Back-up Servicer), and commercial paper lenders.
- Asset Sale: Entered a Purchase and Sale Agreement with GSC Investment Funding LLC to sell originated/purchased securities and loans.
- Financial Statements: This 8-K does not contain revenue, profit, cash flow, or margin data. It focuses on the establishment of the credit facility.
Material Changes
The primary material change is the execution of the Credit Agreement and Purchase and Sale Agreement on April 11, 2007. These agreements alter the Company's liquidity position by providing access to a significant revolving credit line and establishing a mechanism to sell assets to GSC Funding. The filing does not provide comparative financial data against prior periods.
Guidance, Risks, and Contingencies
- Covenants: The Credit Agreement includes negative covenants, affirmative covenants, customary representations and warranties, and defined events of default.
- Conditions: The increase of the credit facility from $85 million to $130 million is subject to the satisfaction of certain conditions.
- Disclosure: A press release regarding the credit facility was issued on April 16, 2007, under Regulation FD.
- Outlook: No specific forward-looking financial guidance or earnings outlook is provided in this filing.
Investor Verification Checklist
- Verify the full terms of the Purchase and Sale Agreement (Exhibit 10.1) to understand the assets being sold and the consideration received.
- Review the Credit Agreement (Exhibit 10.2) for specific details on negative covenants and events of default that could restrict operations.
- Confirm the conditions required to exercise the accordion feature to increase the facility to $130,000,000.
- Check subsequent filings for the actual utilization of the credit facility and the volume of assets sold under the new agreement.