CION Investment Corp: Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K, dated May 21, 2020, covers events occurring on May 15 and May 19, 2020. CION Investment Corporation (CIC) executed a comprehensive restructuring of its financing arrangements through its wholly-owned special purpose financing subsidiaries, 34th Street Funding, LLC and Murray Hill Funding, LLC.
Key Financial Metrics and Debt Restructuring
The filing details significant changes to CIC's credit facilities and debt obligations:
- JPMorgan Credit Facility: The aggregate principal amount available for borrowings was increased from $275,000,000 to $700,000,000. This includes a $75,000,000 revolving credit facility available during the reinvestment period.
- Interest Rates: The spread on the JPM facility increased from 3.00% to 3.25% per year over the three-month LIBOR. The UBS facility spread increased from 3.50% to 3.90% per year.
- Borrowings and Repayments: On May 15, 2020, 34th Street drew down $358,877,826 under the new JPM agreement. Proceeds were used to fully repay the Citibank Credit Facility ($230,640,224) and the MS Credit Facility ($128,237,602).
- UBS Facility: On May 19, 2020, Murray Hill Funding repurchased $133,333,333 in principal amount of Notes from UBS for $100,000,000, repaying one-half of the outstanding borrowings under the UBS Facility. The remaining outstanding principal under the UBS Facility is $133,333,333.
Material Changes Versus Prior Period
The primary material changes involve the extension of maturity dates and the consolidation of lenders:
- JPM Facility Extensions: The reinvestment period was extended from August 24, 2020, to May 15, 2022. The maturity date was extended from August 24, 2021, to May 15, 2023.
- UBS Facility Extension: The repurchase date for Class A Notes sold to UBS was extended from May 19, 2020, to November 19, 2020.
- Lender Consolidation: CIC exited its credit facilities with Citibank and Morgan Stanley, consolidating its primary financing relationships with JPMorgan Chase and UBS.
Outlook, Risks, and Management Commentary
Management announced these amendments to restructure financing arrangements. The filing notes that customary costs and expenses were incurred in connection with the new agreements. No other material terms of the JPM or UBS facilities were revised aside from the specific changes noted above. The filing does not provide specific forward-looking guidance on revenue or profit margins, as the report focuses exclusively on debt restructuring.
Key Facts for Investor Verification
- Verify the total available borrowing capacity under the new JPM agreement is $700,000,000.
- Confirm the new maturity date of May 15, 2023, for the JPM facility.
- Note the increase in interest rate spreads: JPM (3.25%) and UBS (3.90%).
- Confirm the full repayment of Citibank and MS Credit Facilities totaling approximately $358.9 million.
- Review the remaining outstanding principal under the UBS Facility ($133,333,333) and its new repurchase date of November 19, 2020.