Business Context and Reporting Period
Blackstone / GSO Secured Lending Fund filed a Form 8-K reporting events occurring on June 15, 2020. The filing concerns the entry into a new senior secured revolving credit facility and related liquidity disclosures as of June 18, 2020.
Key Financial Metrics and Financing
- Revolving facility: Initial commitments of up to $550 million, with an accordion feature that could increase total commitments to $1.2 billion, subject to conditions.
- Letters of credit: Up to $100 million in aggregate face amount.
- Interest rates: Base-rate borrowings bear the applicable alternate base rate plus 0.75% or 0.875%, depending on borrowing-base coverage. Eurocurrency borrowings bear the applicable LIBO Rate plus 1.75% or 1.875%.
- Unused commitment fee: 0.375% per annum on daily unused commitments, in addition to letter-of-credit fees.
- Maturity: Revolver availability terminates four years after closing; outstanding amounts must be repaid by five years after closing under an amortization schedule.
- Total committed debt capital: Approximately $3.2 billion as of June 18, 2020.
- Outstanding principal debt: Approximately $1.7 billion as of June 18, 2020.
- Available liquidity: Approximately $2.9 billion, consisting of approximately $94 million of cash and cash equivalents, $1.3 billion of uncalled capital commitments, and $1.5 billion of additional borrowing capacity, subject to restrictions.
The filing does not provide revenue, profit, cash-flow, or margin results for the period.
Material Changes Versus Prior Comparable Period
The filing does not provide a prior-period comparison. The material event is the establishment of the new senior secured revolving credit facility on June 15, 2020.
Guidance, Outlook, Risks, and Unusual Items
- Borrowings are subject to a borrowing base and may be used for general corporate purposes of the Company and its subsidiaries.
- The facility is secured by a first-priority security interest in substantially all of the Company’s assets.
- Financial covenants require minimum shareholders’ equity at each fiscal quarter-end and a 150% asset coverage ratio at all times.
- The agreement includes customary representations, reporting obligations, covenants, and events of default. Upon default, the administrative agent may terminate commitments and accelerate outstanding obligations.
- Liquidity estimates are subject to borrowing-base, covenant, and other restrictions; the filing does not state that all disclosed capacity was immediately available without conditions.
Investor Verification Checklist
- Verify the full terms, covenants, borrowing-base mechanics, and amortization provisions in Exhibit 10.1, the Senior Secured Credit Agreement.
- Confirm the distinction between total committed debt capital, outstanding debt, and borrowing capacity as of June 18, 2020.
- Assess compliance with the 150% asset coverage covenant and minimum shareholders’ equity requirement.
- Review subsequent filings for actual revolver borrowings, interest expense, liquidity changes, amendments, or covenant issues.
- Confirm the availability and conditions applicable to the $1.2 billion accordion feature and the stated $1.5 billion additional borrowing capacity.