CION Investment Corp 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed on December 23, 2020, regarding events occurring on December 17, 2020. CION Investment Corporation (CIC) and its wholly-owned special purpose financing subsidiaries, Murray Hill Funding, LLC and Murray Hill Funding II, LLC, entered into material definitive agreements with UBS AG and U.S. Bank National Association to amend existing financing facilities and establish a new revolving credit facility.
Key Financial Metrics and Agreements
- Revolving Credit Facility: Established a new facility with an aggregate principal amount of $50,000,000, subject to a borrowing base. No drawdown occurred on the closing date.
- Financing Costs: The spread on the financing fee payable to UBS was decreased from 3.90% to 3.375% per year (over three-month LIBOR) for both existing Class A-1 Notes and new Class A-R Notes.
- Maturity Dates: The repurchase date for Class A-1 Notes was extended from December 18, 2020, to November 19, 2023. Class A-R Notes have a stated maturity date of May 19, 2027.
- Issuance Capacity: The Second Amended Indenture allows for an aggregate principal amount of $150,000,000 for Class A-1 and Class A-R Notes combined.
Material Changes Versus Prior Period
The primary material changes involve the restructuring of debt terms to extend liquidity and reduce costs:
- Extension of Maturity: The requirement to repurchase Class A-1 Notes was extended by approximately three years.
- Cost Reduction: The financing spread was reduced by 52.5 basis points (from 3.90% to 3.375%).
- New Liquidity Source: Creation of a $50 million revolving credit facility, though no funds were drawn at inception.
Outlook, Risks, and Contingencies
The filing does not provide forward-looking guidance, revenue projections, or management commentary on future market conditions. However, it outlines specific events of default under the Second Amended Indenture, including:
- Failure to make principal payments on Class A-1 or Class A-R Notes at maturity or redemption dates (uncured within three business days).
- Failure to disburse amounts according to the priority of payments (uncured within three business days).
- Occurrence of bankruptcy or insolvency events regarding Murray Hill Funding II or Murray Hill Funding.
The filing notes that customary costs and expenses were incurred in connection with these agreements.
Investor Verification Checklist
- Verify the current status of the borrowing base compliance for the new $50 million revolving facility.
- Confirm the total outstanding principal amount of Class A-1 and Class A-R Notes against the $150 million aggregate limit.
- Review the attached exhibits (10.1 through 10.5) for specific covenants and collateral requirements.
- Monitor the company's ability to meet the extended repurchase obligation of November 19, 2023.