Business Context and Reporting Period
This Form 8-K filing by Prospect Capital Corporation reports on a material definitive agreement entered into on June 25, 2009. The report was signed on June 26, 2009. The filing details the completion of the first closing on an expanded revolving credit facility.
Key Financial Metrics
The filing focuses on debt financing terms rather than operational performance metrics such as revenue or profit.
- Facility Size: Expanded revolving credit facility with a total commitment capacity of $250 million.
- Drawn Amount: $175 million closed to date.
- Interest Rate: One-month Libor plus 4%, subject to a 2% Libor floor.
- Credit Rating: Investment grade Moody's rating of A2.
- Maturity: June 2020.
- Revolving Period: Extends through June 2010, followed by a one-year amortization period.
Material Changes
The primary material change is the execution of an Amended and Restated Loan and Servicing Agreement. This agreement establishes an accordion feature allowing the facility to accept up to the aggregate $250 million limit with additional lenders. The filing does not provide comparative financial data against prior periods.
Outlook, Risks, and Management Commentary
Management indicates an expectation to reach the "hard cap" of $250 million through the addition of new lenders. The filing does not contain specific forward-looking guidance on revenue or earnings, nor does it detail specific risk factors beyond the standard terms of the credit agreement. No pro forma financial information or unusual items were reported in this filing.
Investor Verification Checklist
- Verify the identity of the additional lenders required to reach the $250 million "hard cap."
- Confirm the current Libor rate to calculate the effective interest cost given the 2% floor.
- Review the full Amended and Restated Loan and Servicing Agreement (Exhibit 99.1) for covenants and prepayment penalties.
- Monitor the company's liquidity position to ensure compliance with the one-year amortization period starting after June 2010.