Business Context and Reporting Period
This Form 8-K was filed by Oaktree Capital Group, LLC on April 5, 2022, reporting events occurring on March 30, 2022. The filing details a private placement of senior notes by Oaktree Capital I, L.P. (the Issuer), a subsidiary owned directly or indirectly by Oaktree Capital Group Holdings, L.P. and Brookfield Asset Management Inc. (Brookfield).
Key Financial Metrics and Transaction Details
The Issuer entered into a Note Agreement to sell a total of €200,000,000 in aggregate principal amount of senior notes to accredited investors. The issuance is expected to close on June 8, 2022. The notes are senior unsecured obligations guaranteed on a joint and several basis by Oaktree Capital Management, L.P., Oaktree Capital II, L.P., and Oaktree AIF Investments, L.P.
| Note Series | Principal Amount | Interest Rate | Maturity Date |
|---|---|---|---|
| Series A (2032 Notes) | €50,000,000 | 2.20% per annum | June 8, 2032 |
| Series B (2034 Notes) | €75,000,000 | 2.40% per annum | June 8, 2034 |
| Series C (2037 Notes) | €75,000,000 | 2.58% per annum | June 8, 2037 |
Interest is payable semi-annually. The filing text does not provide specific values for revenue, profit, cash flow, margins, or existing debt levels, as this is a transaction report rather than a periodic financial statement.
Material Changes and Transaction Terms
The primary material change is the execution of the Note Agreement for the €200 million issuance. Key terms include:
- Prepayment: The Issuer may prepay notes at any time. Prepayment prior to three months before maturity requires payment of a make-whole amount and swap breakage loss.
- Change of Control: Triggers a mandatory offer to prepay the notes without a make-whole amount.
- Covenants: The agreement includes financial covenants regarding the Obligors' combined leverage ratio and minimum assets under management.
- Events of Default: Include failure to pay interest, breach of covenants, failure to pay other indebtedness, and insolvency events.
Guidance, Outlook, and Risks
Use of Proceeds: The Issuer intends to use the proceeds for general corporate purposes.
Risks and Contingencies:
- Closing Conditions: The issuance and funding are subject to customary closing conditions.
- Investor Hedging: Investors may enter into forward starting cross-currency swaps to fund the purchase, introducing potential currency risk dynamics.
- Registration Status: The notes are sold in a private placement exempt from registration under Section 4(a)(2) of the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption.
Investor Verification Checklist
- Verify the final closing date of June 8, 2022, and confirmation that all customary closing conditions were met.
- Review the full text of the Note Agreement (Exhibit 4.1) for specific definitions of the leverage ratio and minimum assets under management covenants.
- Confirm the impact of the €200 million debt issuance on the company's overall leverage profile once funding occurs.
- Monitor for any subsequent filings regarding the actual funding date or changes to the transaction terms.