Business Context and Reporting Period
Company: Great Elm Capital Corp.
Filing Type: Form 8-K (Current Report)
Date of Report: June 18, 2019
Event: Entry into a Material Definitive Agreement regarding the issuance of new debt securities.
Key Financial Metrics
- New Debt Issuance: $42.5 million aggregate principal amount of 6.50% Notes due 2024.
- Over-Allotment: Includes $2.5 million from a partial exercise of the underwriters' over-allotment option; up to an additional $3.5 million remains available.
- Net Proceeds: Approximately $40.6 million (after underwriting discounts, commissions, and estimated offering expenses).
- Interest Rate: 6.50% per annum, payable quarterly.
- Maturity Date: June 30, 2024.
- Redemption Terms: Redeemable at the Company's option on or after June 30, 2021, at 100% of principal plus accrued interest.
Material Changes
The filing reports the creation of a new direct financial obligation. The Company entered into a Third Supplemental Indenture to facilitate the Offering. This transaction increases the Company's debt load by $42.5 million in principal, with net cash inflows of approximately $40.6 million. The filing does not provide comparative financial metrics (e.g., revenue, profit, or prior period debt levels) as this is a current event report rather than a periodic financial statement.
Outlook, Management Commentary, and Risks
- Use of Proceeds: The Company intends to use net proceeds to make investments consistent with its investment objectives and for general corporate purposes.
- Covenants: The Indenture requires compliance with specific sections of the Investment Company Act of 1940 and mandates the provision of financial information to Note holders if the Company ceases to be subject to Exchange Act reporting requirements.
- Restrictions: The Company is restricted from consolidating, merging, or transferring substantially all assets unless specific conditions in Section 801 of the Indenture are met.
- Unusual Items: None reported in this filing.
Investor Verification Checklist
- Verify the final exercise of the remaining $3.5 million over-allotment option.
- Confirm the actual net proceeds received versus the estimated $40.6 million.
- Review the Company's updated leverage ratios and liquidity position post-issuance.
- Monitor the deployment of proceeds to ensure alignment with stated investment objectives.
- Check for any subsequent filings regarding the redemption of the Notes prior to the June 30, 2021 call date.