Blackstone / GSO Secured Lending Fund — Form 8-K Summary
Business Context and Reporting Period
The Form 8-K was filed on December 28, 2018, reporting an event occurring on December 21, 2018. The registrant is a Delaware business development company. Its wholly owned subsidiary, BGSL Breckenridge Funding LLC, entered into a senior secured revolving credit facility with BNP Paribas.
Key Financial Terms and Metrics
- Maximum facility: $400 million.
- Interest rate: Three-month LIBOR plus an applicable margin of 1.50% to 2.15% per annum; the margin is 1.25% before the first payment date.
- Unused commitment fee: 0.70% per annum when more than 50% of the facility is unused, or 0.35% when more than 25% and up to 50% is unused. The fee begins six months after closing and applies through the third anniversary.
- Maturity: All outstanding amounts must be repaid five years after the facility date.
- Use of proceeds: Funding portfolio investments and advances under delayed-draw and revolving loans for which the subsidiary is a lender.
- Collateral: First-priority security interest in the subsidiary’s portfolio investments and cash.
- Recourse: The subsidiary’s obligations are non-recourse to the Company; the Company’s exposure is limited to the value of its investment in the subsidiary.
The filing does not provide revenue, net investment income, net income, cash flow, portfolio-level leverage, outstanding borrowings, liquidity balances, or margin data for a comparable reporting period.
Material Changes, Outlook, and Risks
The facility creates a new secured borrowing capacity for the subsidiary and a direct financial obligation under Item 2.03. The Company acts as servicer, while BNP Paribas is administrative agent and Wells Fargo Bank, National Association is collateral agent.
- The agreement contains customary representations, warranties, covenants, reporting requirements, and events of default.
- Events of default include a change of control of the subsidiary or the Company ceasing to serve as its servicer.
- Upon default, BNP may accelerate all outstanding advances and other obligations.
- A continuing default suspends the subsidiary’s ability to acquire or sell additional assets.
- Borrowing costs are linked to three-month LIBOR, creating interest-rate exposure; the filing does not provide a current drawn amount or expected utilization.
Important Facts to Verify
- Actual borrowings and unused capacity under the $400 million facility.
- Applicable interest-rate margin for each type of advance and the prevailing LIBOR rate.
- Collateral coverage, borrowing-base requirements, and compliance with facility covenants.
- The five-year maturity date and any amortization, renewal, or refinancing provisions in the filed agreement.
- Whether any defaults, covenant breaches, or restrictions have arisen after the filing date.
- The subsidiary’s investment exposure and the Company’s maximum economic exposure if collateral values decline.