UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 21, 2023 (September 15, 2023)
Monroe Capital Income Plus Corporation
(Exact name of registrant as specified in its charter)
| Maryland | | 814-01301 | | 83-0711022 |
(State or Other Jurisdiction
of Incorporation) | | (Commission
File Number) | | (IRS Employer
Identification No.) |
| 311 South Wacker Drive, Suite 6400 | | |
| Chicago, Illinois | | 60606 |
| (Address of Principal Executive Offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (312) 258-8300
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| None | | N/A | | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
| Item 1.01. | Entry into a Material Definitive Agreement |
On September 15, 2023 (the “Closing Date”), Monroe Capital Income Plus ABS Funding II, LLC (the “2023 Issuer”), an indirect, wholly owned, consolidated subsidiary of Monroe Capital Income Plus Corporation (the “Company”) completed a $251,169,000 asset-backed securitization (the “2023 Asset-Backed Securitization”). The 2023 Asset-Backed Securitization is a secured financing incurred by the 2023 Issuer, a subsidiary of the Company, which is consolidated by the Company and subject to its overall asset coverage requirement.
On the Closing Date and in connection with the 2023 Asset-Backed Securitization, the 2023 Issuer entered into a Note Purchase Agreement (the “Purchase Agreement”) with Jefferies LLC, as the initial purchaser (the “Initial Purchaser”) and NatWest Markets Securities Inc., as the placement agent (the “Placement Agent”), pursuant to which the 2023 Issuer agreed to sell to the Initial Purchaser certain of the notes to be issued pursuant to an indenture as part of the 2023 Asset-Backed Securitization.
The notes offered in the 2023 Asset-Backed Securitization consist of $160,750,000 of Class A Senior Secured Notes, which bear an interest at the benchmark plus 3.50% (the “Class A Notes”) and $25,100,000 of Class B Senior Secured Notes, which bear interest at 11.16% (the “Class B Notes” and collectively with “Class A Notes”, the “Secured 2023 Notes”). The 2023 Issuer also issued $65,319,000 of Subordinated Notes, which do not bear interest (the “Subordinated 2023 Notes” and together with the Secured 2023 Notes, the “2023 Notes”). The 2023 Notes are due on September 22, 2033. The Secured 2023 Notes were issued through a private placement through the Initial Purchaser and Placement Agent. The Company retained all of the Subordinated Notes. The 2023 Notes were retained for the purpose of satisfying the risk retention requirements pursuant to a subordinated note purchase agreement entered into as of the Closing Date.
The 2023 Asset-Backed Securitization is secured by a diversified portfolio consisting primarily of middle market loans, recurring revenue loans and participation interests managed by Monroe Capital BDC Advisors, LLC (“Monroe BDC Advisors”). Through October 22, 2025, all principal collections received on the underlying collateral may be used by the 2023 Issuer to purchase new collateral under the direction of Monroe BDC Advisors, in its capacity as collateral manager of the 2023 Issuer, in accordance with the Company’s investment strategy and subject to customary conditions set forth in the documents governing the 2023 Asset-Backed Securitization, allowing the Company to maintain the initial leverage in the 2023 Asset-Backed Securitization.
The 2023 Issuer used the proceeds from the 2023 Asset-Backed Securitization to, among other things, purchase certain portfolio company investments (“Collateral Obligations”) from the Company and, at the Company’s direction, MC Income Plus Financing SPV LLC, a wholly-owned subsidiary of the Company (the “Warehouse Borrower”) pursuant to a loan sale agreement entered into on the Closing Date (the “Loan Sale Agreement”). In connection therewith, the Warehouse Borrower repaid certain outstanding indebtedness under the documents governing the credit facility entered into by the Warehouse Borrower.
Under the terms of the Loan Sale Agreement, the Company sold and/or contributed, and from time to time thereafter the Company will sell and/or contribute, its ownership interest in the portfolio company investments securing the 2023 Asset-Backed Securitization and participations in return for a purchase price equal to the market value of such portfolio company investments. Following these transfers, the 2023 Issuer holds all of the ownership interest in such portfolio company investments and participations. The Company made customary representations, warranties and covenants in the Loan Sale Agreement.
The Secured 2023 Notes are the secured obligation of the 2023 Issuer, and the indenture governing the Secured 2023 Notes includes customary covenants and events of default. The 2023 Notes have not been and will not be, registered under the Securities Act of 1933, as amended, or any state “blue sky” laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from registration.
Monroe BDC Advisors serves as collateral manager to the 2023 Issuer under a collateral management agreement entered into on the Closing Date (the “Collateral Management Agreement”) and is entitled to receive a fee for providing these services; however Monroe BDC Advisors has elected to waive such fee.
| Item 2.03 | Creation of a Direct Financial Obligation |
The information set forth under Item 1.01 above is incorporated by reference into this Item 2.03.
| Item 9.01 | Financial Statements and Exhibits |
| 10.1 | Indenture dated as of September 15, 2023, by and between Monroe Capital Income Plus ABS Funding II, LLC, as Issuer, and U.S. Bank Trust Company, National Association, as Trustee. |
| | |
| 10.2 | Collateral Management Agreement, dated as of September 15, 2023, by and between Monroe Capital Income Plus ABS Funding II, LLC, as Issuer and Monroe Capital BDC Advisors, LLC, as Collateral Manager. |
| | |
| 10.3 | Loan Sale Agreement, dated as of September 15, 2023, by and between Monroe Capital Income Plus Corporation, as Seller and Monroe Capital Income Plus ABD Founding II, LLC, as Buyer. |
| | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | Monroe Capital Income Plus Corporation |
| | | |
| Date: September 21, 2023 | | By: | /s/ Lewis W. Solimene, Jr. |
| | | | Lewis W. Solimene, Jr. |
| | | | Chief Financial Officer, Treasurer and Corporate Secretary |
