| Item 1.01 | Entry into a Material Definitive Agreement |
On July 16, 2024 (the “Closing Date”), AMG Comvest Senior Lending Fund LL1 SPV, LLC, (the “Borrower”), a Delaware limited liability company and newly formed subsidiary of AMG Comvest Senior Lending Fund, a Delaware statutory trust (the “Fund,” “our” or “us”), entered into a Loan and Servicing Agreement (the “Secured Loan Facility”), with the Borrower, the Fund, the lenders from time to time parties thereto, Sumitomo Mitsui Banking Corporation, as administrative agent and the collateral agent and Western Alliance Trust Company, N.A., as account bank, collateral custodian and collateral administrator.
From time to time, the Fund expects to sell and contribute certain investments to the Borrower pursuant to a Sale and Purchase Agreement, dated as of the Closing Date, by and between the Fund and the Borrower. No gain or loss will be recognized as a result of the contribution. Proceeds from the Secured Loan Facility will be used to finance the origination and acquisition of eligible assets by the Borrower, including the purchase of such assets from the Fund. We retain a residual interest in assets contributed to or acquired by the Borrower solely through our ownership of the Borrower. The maximum principal amount of the Secured Loan Facility as of the Closing Date is $300 million (which may be increased up to $600 million pursuant to the terms of the Secured Loan Facility). Such amounts may be drawn in U.S. Dollars subject to certain conditions, including availability under the borrowing base, which is determined on the basis of the value of the Borrower’s assets from time to time, certain concentration limits and available cash deposits.
The Secured Loan Facility provides for the ability to draw and redraw revolving loans under the Secured Loan Facility for a period of up to three years after the Closing Date unless the commitments are terminated sooner as provided in the Secured Loan Facility (the “Commitment Termination Date”). Unless otherwise terminated, the Secured Loan Facility will mature on the date which is five years after the Closing Date (the “Final Maturity Date”). Prior to the Commitment Termination Date, proceeds received by the Borrower from principal and interest, dividends, or fees on assets must be used to pay fees, expenses and interest on outstanding borrowings, and the excess may be returned to the Fund, subject to certain conditions. Following the Commitment Termination Date but prior to the Final Maturity Date, proceeds received by the Borrower from principal and interest, dividends, or fees on assets must be used to pay fees, expenses and interest on outstanding borrowings, as well as principal on outstanding borrowings in accordance with the terms of the Secured Loan Facility, and the excess may be returned to the Fund, subject to certain conditions. On the Final Maturity Date, the Borrower must pay in full all outstanding fees and expenses and all principal and interest on outstanding borrowings, and the excess may be returned to the Fund.
Under the Secured Loan Facility, the Borrower is permitted to borrow amounts in U.S. dollars. Such amounts will be used primarily to finance the purchase or origination of loans. Such amounts drawn under the Secured Loan Facility will bear interest at term secured overnight financing rate plus a spread.
The Secured Loan Facility contains customary covenants, including certain limitations on the activities of the Borrower, such as, the incurrence of indebtedness, and contains customary events of default. The Secured Loan Facility is secured by a perfected first priority security interest in the assets of the Borrower and on any payments received by the Borrower in respect of those assets. Assets pledged to the lenders under the Secured Loan Facility will not be available to pay the debts of the Fund.
Borrowings of the Borrower are considered our borrowings for purposes of complying with the asset coverage requirements under the Investment Company Act of 1940, as amended.
The description above is only a summary of the material provisions of the Secured Loan Facility and the Sale and Purchase Agreement and is qualified in its entirety by reference to the copies of the Secured Loan Facility and the Sale and Purchase Agreement which are filed as Exhibits 10.1 and 10.2 to this current report on Form 8-K and are incorporated herein by reference thereto.
