| Item 1.01 | Entry into a Material Definitive Agreement. |
On March 19, 2020, TriplePoint Venture Growth BDC Corp. (the “Company”) entered into a Master Note Purchase Agreement (the “Note Purchase Agreement”) governing the issuance of $70,000,000 in aggregate principal amount of senior unsecured notes due March 2025 with a fixed interest rate of 4.50% per year (the “Notes”) to qualified institutional investors in a private placement. The Notes were issued on March 19, 2020 and will mature on March 19, 2025, unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms.
Interest on the Notes will be due semiannually on March 19 and September 19 each year, beginning on September 19, 2020. The Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if applicable, a make-whole premium. In addition, the Company is obligated to offer to prepay the Notes at par plus accrued and unpaid interest up to, but excluding, the date of prepayment, if certain change in control events occur. The Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company; provided however, in the event that the Company or a subsidiary guarantor (which excludes financing subsidiaries) creates, incurs, assumes or permits to exist liens of more than an aggregate principal amount of $25 million on or with respect to any of their property or assets in connection with future secured indebtedness, the Notes will generally become secured concurrently therewith, equally and ratably with such indebtedness.
The Company intends to use the net proceeds from this offering (i) to fund investments in debt and equity securities in accordance with the Company’s investment objective, (ii) to repay outstanding indebtedness, and (iii) for other general corporate purposes.
The Note Purchase Agreement contains customary terms and conditions for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a business development company within the meaning of the Investment Company Act of 1940, as amended, a minimum asset coverage ratio of 1.50 to 1.00, a minimum interest coverage ratio of 1.25 to 1.00, and minimum stockholders’ equity of $216,129,000, as adjusted upward by an amount equal to 65% of the net proceeds from the issuance of shares of the Company’s common stock subsequent to December 31, 2019. In addition, in the event that a Below Investment Grade Event (as defined in the Note Purchase Agreement) occurs, the Notes will bear interest at a fixed rate of 5.50% per year from the date of the occurrence of the Below Investment Grade Event to and until the date on which the Below Investment Grade Event is no longer continuing.
The Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness of the Company or subsidiary guarantors, certain judgements and orders, certain events of bankruptcy, and breach of a key man clause relating to the Company’s Chief Executive Officer, James P. Labe, and the Company’s President and Chief Investment Officer, Sajal K. Srivastava.
The Notes were offered in reliance on Section 4(a)(2) of Securities Act of 1933, as amended (the “Securities Act”). The Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.
The description above is only a summary of the material provisions of the Note Purchase Agreement and is qualified in its entirety by reference to the copy of the Note Purchase Agreement which is filed as Exhibit 10.1 to this Current Report on Form8-K and is incorporated herein by reference.
The Company issued a press release on March 19, 2020 to announce the signing of the Note Purchase Agreement, a copy of which is attached hereto as Exhibit 99.1.
