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): February 22, 2022
Barings Capital Investment Corporation
(Exact name of registrant as specified in its charter)
| Maryland | 814-01348 | 85-0654007 |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
300 South Tryon Street, Suite 2500 Charlotte, North Carolina | | 28202 |
| (Address of Principal Executive Offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (704) 805-7200
Not Applicable
(Former name or former address, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered |
| None | N/A | N/A |
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)) |
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 ☒
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 February 22, 2022, Barings Capital Investment Corporation (the “Company”) entered into a Note Purchase Agreement (the “February 2022 NPA”) governing the issuance of $100.0 million in aggregate principal amount of senior unsecured notes due February 22, 2027 (the “February 2027 Notes”), in each case, to qualified institutional investors in a private placement. The February 2027 Notes were delivered and paid for on February 22, 2022.
The February 2027 Notes, for which the Company is required to obtain an initial rating by June 30, 2022, have a fixed interest rate of 4.75% per year, subject to a step up of (x) 1.25% per year, to the extent that the initial rating for the February 2027 Notes does not satisfy certain investment grade rating conditions, and (y) at any time after the Company has received an investment grade rating for the February 2027 Notes, 0.75% per year, to the extent the February 2027 Notes thereafter fail to satisfy certain investment grade rating conditions. The Company intends to use the net proceeds from the offering of the February 2027 Notes for general corporate purposes, including to make investments and make distributions permitted by the February 2027 NPA.
The February 2027 Notes will mature on February 22, 2027 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with the terms of the February 2022 NPA. Interest on the February 2027 Notes will be due semiannually in February and August of each year, beginning in August 2022. In addition, the Company is obligated to offer to repay the February 2027 Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the February 2022 NPA, the Company may redeem the February 2027 Notes 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 redeemed on or before August 22, 2026, a make-whole premium.
The February 2022 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for agreements of this type, including, without limitation, information reporting, maintenance of the Company’s status as a BDC within the meaning of the Investment Company Act of 1940, as amended (the “1940 Act”), and certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, liens, restricted payments, and investments. In addition, the February 2022 NPA contains the following financial covenants: (a) maintaining a minimum obligors’ net worth, measured as of each fiscal quarter-end; (b) not permitting the Company’s asset coverage ratio, as of the date of the incurrence of any debt for borrowed money or the making of any cash dividend to shareholders, to be less than the statutory minimum then applicable to the Company under the 1940 Act; and (c) not permitting the Company’s net debt to equity ratio to exceed 2.0x, measured as of each fiscal quarter-end.
The February 2022 NPA 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 or that of the Company’s subsidiary guarantors, if any, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of certain events of default, the holders of at least 66-2/3% in principal amount of the February 2027 Notes at the time outstanding may declare all February 2027 Notes then outstanding to be immediately due and payable.
The Company’s obligations under the February 2022 NPA are general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.
The February 2027 Notes were offered in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The February 2027 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 February 2022 NPA and is qualified in its entirety by reference to the copy of the February 2022 NPA which is filed as Exhibit 10.1 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 in this Current Report on Form 8-K set forth under Item 1.01 is incorporated by reference into this Item 2.03.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
Exhibit No. | | Description |
| | | |
| | Note Purchase Agreement by and between the Company and the purchasers party thereto, dated February 22, 2022 |
*Schedules to this Exhibit have been omitted in accordance with Item 601 of Regulation S-K. The registrant agrees to furnish supplementally a copy of all omitted schedules to the SEC upon its request.
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.
| | Barings Capital Investment Corporation |
| | | |
| Date: March 1, 2022 | By: | /s/ Jonathan Bock | |
| | | Jonathan Bock |
| | | Chief Financial Officer |
