Business Context and Reporting Period
This Form 8-K was filed by TICC Capital Corp. (not Oxford Square Capital Corp.) on August 11, 2011, reporting events occurring on August 10, 2011. The filing details the completion of a $225,000,000 collateralized loan obligation (CLO) transaction.
Key Financial Metrics and Transaction Details
- Total Transaction Size: $225,000,000
- Secured Notes (Senior): $101,250,000 face amount; rated AAA/Aaa; interest rate of LIBOR + 2.25%.
- Subordinated Notes: $123,750,000 face amount; retained by the Depositor; no interest; unrated.
- Maturity: July 25, 2021.
- Reinvestment Period: Three years.
- Call Protection: Three-year non-call period.
- Management Fee: 0.50% per annum of the principal amount of loans owned by the Issuer (accrued, not paid until Secured Notes are repaid).
Material Changes and Agreements
The Company entered into a master loan sale agreement to sell or contribute middle market loans to a wholly-owned subsidiary (the Depositor), which in turn contributed them to the Issuer (TICC CLO LLC). The Company also entered into a collateral management agreement to supervise the Issuer's assets. No compensation is paid under the management agreement itself, but a fee is due under the Issuer's operating agreement.
Outlook, Risks, and Contingencies
The Secured Notes were sold in a private placement and are not registered under the Securities Act of 1933. The filing notes customary representations, warranties, and covenants in the purchase agreement, indenture, and management agreements. The Company serves as collateral manager, and The Bank of New York Mellon Trust Company, N.A. serves as collateral administrator.
Investor Verification Checklist
- Verify the distinction between the registrant (TICC Capital Corp.) and the entity mentioned in the request metadata (Oxford Square Capital Corp.).
- Confirm the credit ratings (AAA/Aaa) of the Secured Notes with Standard & Poor's and Moody's.
- Review the attached exhibits (10.1 through 10.5) for specific covenants and events of default.
- Assess the impact of the 0.50% accrued management fee on future cash flows.
- Confirm the composition of the diversified portfolio of middle market loans backing the notes.