Business Context and Reporting Period
Blackstone / GSO Secured Lending Fund filed a Current Report on Form 8-K dated November 21, 2018, reporting an agreement entered into on November 16, 2018. The transaction was undertaken by BGSL Jackson Hole Funding LLC, a wholly owned subsidiary, with the Company serving as portfolio manager.
Key Financial Terms and Metrics
- Facility: Senior secured revolving credit facility with JPMorgan Chase Bank, N.A.
- Initial commitments: $300 million, with an accordion feature that could increase commitments to up to $600 million, subject to conditions.
- Interest rate: Three-month LIBOR plus a 2.50% annual margin.
- Unused commitment fee: 0.375% annually until nine months after closing, increasing to 0.60% annually thereafter until the third anniversary; fees commence 60 days after closing.
- Maturity: All outstanding amounts are due four years and six months after November 16, 2018.
- Use of proceeds: Funding portfolio investments and advances under delayed-draw term loans for which the subsidiary is a lender.
- Collateral: First-priority security interest in the subsidiary’s portfolio investments and cash.
- Recourse: The facility is 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, earnings, cash flow, margin, debt-balance, liquidity, or utilization figures for the reporting period.
Material Changes, Outlook, and Risks
- This filing reports the creation of a material financing arrangement; no prior-period operating results or comparable-period changes are presented.
- The facility is subject to customary covenants, reporting requirements, representations, warranties, and events of default.
- Events of default include a change of control of the subsidiary or the Company ceasing to be its portfolio manager. JPMorgan may then accelerate outstanding obligations.
- A market value event or event of default can restrict portfolio-asset sales or dispositions. A market value event also permits JPMorgan to direct the subsidiary to sell or dispose of portfolio assets.
- Borrowings expose the subsidiary to variable-rate interest costs based on three-month LIBOR and create commitment fees on unused capacity.
- No management guidance, financial outlook, unusual accounting item, contingency reserve, or liquidity forecast is provided.
Investor Verification Items
- Verify actual borrowings, unused commitments, and compliance with facility covenants in subsequent filings.
- Assess the subsidiary’s collateral coverage and any market value events or asset-sale restrictions.
- Monitor the impact of LIBOR-based borrowing costs and commitment fees on net investment income.
- Confirm whether the accordion feature was exercised and whether the facility was amended or refinanced.
- Review Exhibit 10.1 for the complete loan, collateral, default, and acceleration provisions.