| Item 1.01 | Entry Into a Material Definitive Agreement. On November 15, 2021, in connection with a previously announced public offering, PhenixFIN Corporation (the “Company”) and U.S. Bank National Association, as trustee (the “Trustee”), entered into a Fourth Supplemental Indenture (the “Fourth Supplemental Indenture”) to the Indenture, dated February 7, 2012, between the Company and the Trustee (together with the Fourth Supplemental Indenture, the “Indenture”). The Fourth Supplemental Indenture relates to the Company’s issuance, offer and sale of $57,500,000 (including the underwriters’ option to purchase up to $7,500,000 aggregate principal amount of the 2028 Notes (as defined below)) aggregate principal amount of its 5.25% Notes due 2028 (the “2028 Notes”). The 2028 Notes will mature on November 1, 2028, unless previously redeemed or repurchased in accordance with their terms. The interest rate of the 2028 Notes is 5.25% per year, and interest on the 2028 Notes will be paid on February 1, May 1, August 1 and November 1 of each year, beginning on February 1, 2022. The 2028 Notes are the Company’s direct unsecured obligations and rank pari passu with the Company’s existing and future unsecured, unsubordinated indebtedness, including its 6.125% Notes due 2023 (the “2023 Notes”); senior to any series of preferred stock that the Company may issue in the future; senior to any of the Company’s future indebtedness that expressly provides it is subordinated to the 2028 Notes; effectively subordinated to any future secured indebtedness of the Company (including indebtedness that is initially unsecured to which the Company subsequently grants 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 existing or future subsidiaries. The 2028 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after November 1, 2023, upon not less than 30 days nor more than 60 days written notice by mail prior to the date fixed for redemption thereof, at a redemption price of 100% of the outstanding principal amount of the 2028 Notes to be redeemed plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to, but not including, the date fixed for redemption. The Indenture contains certain covenants, including covenants requiring the Company, for the period of time during which the 2028 Notes are outstanding, to not incur additional indebtedness, including through the issuance of additional debt securities, or issue preferred stock unless its asset coverage, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”), equals at least 200%, whether or not the Company continues to be subject to the 1940 Act, after giving effect to such borrowings and/or issuances; to not, for the period of time during which the 2028 Notes are outstanding, declare any dividend (except a dividend payable in its stock), or declare any other distribution, upon a class of its capital stock, or purchase any such capital stock, unless, in every such case, at the time of the declaration of any such dividend or distribution, or at the time of any such purchase, the Company has an asset coverage, as defined in the 1940 Act, of at least 200%, whether or not the Company continues to be subject to the 1940 Act and after deducting the amount of such dividend, distribution or purchase price, as the case may be, and except that the Company will be permitted to declare dividends or distributions on its capital stock to the extent necessary to maintain its status as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended; and to provide certain financial information to the holders of the 2028 Notes and the Trustee if the Company should no longer be 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 set forth in the Indenture. |
