WHF

Business Context and Reporting Period

Company: WhiteHorse Finance, Inc. (WHF)
Filing Type: Form 8-K (Current Report)
Date of Report: June 10, 2025
Event: Completion of a $298.15 million Collateralized Loan Obligation (CLO) transaction by the Company's consolidated subsidiary, WhiteHorse Finance CLO I, LLC.

Key Financial Metrics

Transaction Size: $298.15 million total debt issuance.
Debt Structure:

• Secured Notes: $218 million total ($164 million Class A, $30 million Class B, $24 million Class C).
• Subordinated Notes: $70.15 million (retained by the Company).
• Class A-L Loans: $10.0 million convertible loans.

Interest Rates (SOFR + Spread):

• Class A-L Loans & Class A Notes: SOFR + 1.70%
• Class B Notes: SOFR + 2.15%
• Class C Notes: SOFR + 2.80%

Maturity Date: May 25, 2037.
Collateral: Portfolio of middle market loans and participation interests.
Revenue/Profit/Cash Flow: The filing text does not provide specific revenue, profit, or cash flow figures for the reporting period.

Material Changes

The primary material change is the entry into a definitive agreement to incur $298.15 million in secured financing. This transaction expands the Company's debt obligations and asset base through the acquisition of middle market loans. The Company retains the $70.15 million subordinated tranche, which typically represents the equity-like portion of the CLO structure.

Outlook, Risks, and Management Commentary

Investment Strategy: Proceeds may be used to purchase additional middle market loans through May 25, 2029, under the direction of H.I.G. Capital, LLC (Investment Manager).
Risks and Contingencies:

• The transaction involves forward-looking statements subject to risks and uncertainties; actual results may differ materially.
• The Secured Notes and Subordinated Notes are unregistered securities and cannot be offered or sold in the U.S. absent registration or an exemption.
• The debt is secured by below investment-grade middle market loans, exposing the Issuer to credit risk associated with these assets.
• Covenants and events of default are customary but binding under the Indenture and Loan Agreement.

Unusual Items: None reported beyond the standard CLO transaction mechanics.

Investor Verification Checklist

• Verify the specific composition and credit quality of the initial collateral portfolio backing the $298.15 million transaction.
• Review the full text of the Indenture (Exhibit 99.1) and Loan Agreement (Exhibit 99.2) for specific covenant restrictions and default triggers.
• Confirm the Company's ability to service the new debt obligations given the variable interest rate structure tied to SOFR.
• Assess the track record and strategy of H.I.G. Capital, LLC as the Investment Manager for future loan acquisitions.
• Monitor the Company's liquidity position post-transaction, noting that the subordinated notes are retained internally.