Item 1.01. Entry into a Material Definitive Agreement.
SPV Facility Amendment
On March 31, 2021 (the “Closing Date”), OSI 2 Senior Lending SPV, LLC (“OSI 2 SPV”), a wholly-owned and consolidated subsidiary of Oaktree Strategic Income II, Inc. (the “Company”), entered into a fourth amendment (the “SPV Facility Amendment”) to the July 26, 2019 loan and security agreement (as amended, the “SPV Loan Agreement”) by and among the Company, as collateral manager and seller, OSI 2 SPV, as borrower, the lenders from time to time party thereto, Citibank, N.A., as administrative agent, and Deutsche Bank Trust Company Americas, as collateral agent, which provides for a senior secured revolving credit facility (the “SPV Facility”).
The SPV Facility Amendment, among other things, (a) increases the maximum permissible borrowings under the SPV Loan Agreement from $200 million to $250 million, (b) extends by six (6) months each of (i) the reinvestment period during which advances may be made (the “Reinvestment Period”) and (ii) the SPV Facility maturity date, such that the Reinvestment Period will end on January 26, 2023 and the SPV Facility will mature on January 26, 2025, (c) increases the advance rates assigned to certain classes of assets and (d) modifies certain concentration limits. In connection with the SPV Facility Amendment, the applicable spread has been amended such that, with respect to any borrowings during the Reinvestment Period, the applicable spread is the greater of (i) a weighted average rate of (x) 1.65% per year for broadly syndicated loans and (y) 2.25% per year for all other eligible loans and (ii) 1.85%. The other material terms of the SPV Loan Agreement were unchanged.
The foregoing description is only a summary of the material provisions of the SPV Facility Amendment and is qualified in its entirety by reference to the SPV Facility Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
CNB Facility Amendment
On the Closing Date, the Company also entered into a first amendment (the “CNB Amendment”) to the June 9, 2020 loan and security agreement (as amended, the “CNB Credit Agreement”) between the Company, as borrower, and City National Bank, as lender, which provides for a senior secured revolving credit facility (the “CNB Facility”).
The CNB Amendment, among other things, (a) increases the maximum permissible borrowings under the CNB Credit Agreement from $50 million to $60 million, (b) increases the advance rates assigned to certain classes of assets and (c) modifies certain concentration limits. In connection with the CNB Amendment, the interest rate has been modified such that borrowings under the CNB Facility bear interest at a rate equal to the London Interbank Offered Rate for the selected period (subject to a floor of 0.25%) plus 2.50%. The other material terms of the CNB Credit Agreement were unchanged.
The foregoing description is only a summary of the material provisions of the CNB Amendment and is qualified in its entirety by reference to the CNB Amendment, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 is hereby incorporated by reference to this Item 2.03.
