Business Context and Reporting Period
Company: Oxford Square Capital Corp.
Filing Type: Form 8-K (Current Report)
Date of Report: October 12, 2018
Event: Entry into a Material Definitive Agreement regarding a credit facility amendment.
Key Financial Metrics and Transaction Details
This filing reports a specific financing transaction rather than periodic financial performance metrics (revenue, profit, cash flow). Key transaction figures include:
- Additional Borrowing: Approximately $37.3 million.
- Total Outstanding Principal: $125.0 million.
- Interest Rate: LIBOR (3-month) + 2.25% per annum.
- Maturity Date: June 21, 2020.
- Lender: Citibank, N.A.
- Borrower: Oxford Square Funding 2018, LLC (a wholly-owned special purpose vehicle).
Material Changes and Transaction Structure
The Company amended its existing credit facility dated June 21, 2018, to permit an additional borrowing of $37.3 million. No further borrowings are permitted under this facility. The proceeds were utilized by the subsidiary to pay the purchase price for a portfolio of loans sold and contributed by the Company. The Company retains its role as collateral manager and holds a residual interest through its ownership of the subsidiary.
Outlook, Risks, and Contingencies
Repayment Terms: The facility is subject to periodic repayment prior to maturity from collections on loan assets and mandatory payment requirements. Prepayments prior to the expiration of the relevant interest period may incur prepayment fees and funding breakage fees.
Management Commentary: The filing confirms the Company continues to act as the collateral manager for the loans owned by the subsidiary.
Risks: The filing does not explicitly detail new risks beyond standard credit facility terms (interest rate exposure via LIBOR, prepayment penalties).
Investor Verification Checklist
- Verify the impact of the $37.3 million additional borrowing on the Company's overall leverage ratios.
- Review the specific terms of the "Sale, Contribution and Master Participation Agreement" (Exhibit 10.2) to understand the transfer of loan assets.
- Monitor the LIBOR rate environment given the floating interest rate structure (LIBOR + 2.25%).
- Confirm the status of the loan portfolio collections to assess the ability to meet periodic repayment requirements before the June 2020 maturity.