Item 1.01 Entry into a Material Definitive Agreement.
On December 16, 2019, BC Partners Lending Corporation (the “Company”), through a wholly-owned, special-purpose, bankruptcy-remote subsidiary, Great Lakes BCPL Funding Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Subsidiary”), entered into a debt financing facility with UBS AG, London Branch (“UBS”), pursuant to which up to $50,000,000 will be made available to the Company to fund investments in loans and other corporate debt securities (together with the Initial Loans defined below, “Portfolio Assets”) and for other general corporate purposes (the “Facility”). Pricing under the Transaction is based on three-month LIBOR plus a spread of 2.65% per annum for the relevant period.
Pursuant to the Facility, loans in the Company’s portfolio having an aggregate market value of $17,249,100 were sold by the Company to the Subsidiary (the “Initial Loans”), pursuant to a Master Assumption and Assignment Agreement, dated as of December 16, 2019, between the Company and the Subsidiary (the “MPAA”). The consideration for the Subsidiary’s purchase of the Initial Loans from the Company was the Company’s initial acquisition of certain Class A Notes (defined below) issued by the Subsidiary.
The Initial Loans secure the obligations of the Subsidiary under certain Class A Notes, dated as of December 18, 2019 (the “Class A Notes”), issued pursuant to an Indenture between the Subsidiary and U.S. Bank National Association, as trustee (“U.S. Bank”), dated as of December 16, 2019 (the “Indenture”). Principal on the Class A Notes will be due and payable at maturity in December, 2029. The Class A Notes do not provide for interest payments. The Class A Notes are issued in the amount of up to $76,923,077 and were purchased by the Company under a Subscription Agreement between the Company and the Subsidiary dated as of December 16, 2019 (the “Subscription Agreement”).
Pursuant to the Indenture, the Subsidiary has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other requirements customary for similar transactions. In addition to customary events of default included in similar transactions, the Indenture also contains the following events of default: (a) the failure to make principal payments on the Class A Notes at their stated maturity or redemption date or to make payments with respect to expenses due under the Indenture within three business days of when due; (b) an event of default occurs under the Repurchase Agreement (defined below); and (c) the Subsidiary is required to register as an investment company under the Investment Company Act of 1940, as amended (“1940 Act”).
In connection with the Indenture, the Subsidiary, the Company and UBS entered into a letter agreement, dated as of December 16, 2019 (the “Valuation Agent Letter”), appointing UBS as valuation agent under the Indenture and related agreements in the event of a default by the Subsidiary under the Indenture. Under the Valuation Agent Letter, the Subsidiary and the Company agree that they shall indemnify UBS and its directors, officers, employees and agents for, and to hold them harmless against, any loss, liability or expense (including attorney’s fees and expenses) arising out of or in connection with the acceptance by UBS of the appointment, the exercise by UBS of its rights, or performance by UBS of its duties as valuation agent, including the costs and expenses of defending themselves (including attorney’s fees and costs) against any claim or liability in connection with the exercise or performance of any rights or duties of the valuation agent; provided that no damages claimed thereunder by UBS are the result of acts or omissions constituting bad faith, gross negligence, willful misconduct, fraud or material breach of its obligations under the Valuation Agent Letter or under the other agreements related to the Facility.
On December 16, 2019, the Company entered into a Confirmation in respect of Repurchase Transaction with UBS (the “Confirmation”), which supplements and is subject to the SIFMA/ICMA Global Master Repurchase Agreement (2011 version), dated as of December 12, 2019, between the Company and UBS (including any annexes thereto, the “GMRA”, and such GMRA, as supplemented and evidenced by the Confirmation, the “Repurchase Agreement”). Pursuant to the Repurchase Agreement, UBS purchased the Class A Notes held by the Company for an initial purchase price of $20,000,000, which price may increase from time to time up to an aggregate purchase price of $50,000,000, in exchange for the purchase by UBS of the increased funded outstanding principal amount of the Class A Notes held by the Company. Such increases in the purchase price under the Repurchase Agreement are conditioned upon the satisfaction of certain criteria with respect to the characteristics and total value of the Portfolio Assets held by the Subsidiary, and composition of the Portfolio Assets, in each case as set forth in the Indenture, among others, which criteria are customary for similar transactions. The scheduled Repurchase Date under the Confirmation is December 19, 2022. Pursuant to the Repurchase Agreement, the Company has made certain
