Item 1.01. Entry into a Material Definitive Agreement.
On April 21, 2021, PennantPark Investment Corporation (the “Company”) and American Stock Transfer & Trust Company, LLC (the “Trustee”) entered into the Fourth Supplemental Indenture (the “Fourth Supplemental Indenture”) to the Indenture, dated January 22, 2013, by and between the Company and the Trustee (the “Base Indenture” and, together with the Fourth Supplemental Indenture, the “Indenture”). The Fourth Supplemental Indenture relates to the Company’s issuance and sale of $150,000,000 aggregate principal amount of the Company’s 4.50% Notes due 2026 (the “Offering”). The Offering was made pursuant to the Company’s effective shelf registration statement on Form N-2 (Registration No. 333-230014) previously filed with the Securities and Exchange Commission (the “Registration Statement”), as supplemented by a preliminary prospectus supplement dated April 14, 2021 (the “Preliminary Prospectus Supplement”) and a final prospectus supplement dated April 14, 2021 (the “Final Prospectus Supplement”).
The Company’s 4.50% notes due 2026 (the “Notes”) will mature on May 1, 2026 and may be redeemed in whole or in part at the Company’s option. The Notes bear interest at a rate of 4.50% per year payable semi-annually on May 1 and November 1 of each year, commencing November 1, 2021. The Notes will be the Company’s direct unsecured obligations and will rank pari passu in right of payment with the Company’s current and future unsecured unsubordinated indebtedness, senior to any of the Company’s future indebtedness that expressly states it is subordinated in right of payment to the Notes, effectively subordinated in right of payment to all of the Company’s existing and future secured indebtedness (including indebtedness that is initially unsecured, but to which the Company subsequently grant security) to the extent of the value of the assets securing such indebtedness, and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s subsidiaries, financing vehicles, or similar facilities.
The Indenture contains certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of Section 18(a)(1)(A) as modified by Section 61(a) of the Investment Company Act of 1940, as amended, and to provide financial information to the holders of the Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the Indenture.
The Notes were offered and sold in an offering registered under the Securities Act of 1933, as amended, pursuant to the Registration Statement, the Preliminary Prospectus Supplement, and the Final Prospectus Supplement. The transaction closed on April 21, 2021. The net proceeds to the Company were approximately $145.5 million, based on the public offering price per Note of 99.443% of the aggregate principal amount thereof, after deducting the underwriting discounts and commissions of $3.0 million payable by the Company and estimated offering expenses of approximately $700,000 payable by the Company. The Company intends to use the net proceeds to reduce outstanding obligations under its credit facility, to invest in new or existing portfolio companies or for other general corporate or strategic purposes.
The foregoing descriptions of the Fourth Supplemental Indenture and the Notes do not purport to be complete and are qualified in their entirety by reference to the full text of the Fourth Supplemental Indenture and the Notes, respectively, each filed as exhibits hereto and incorporated by reference herein.
