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): December 6, 2006
BLACKROCK KELSO CAPITAL CORPORATION
-----------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 000-51327 20-2725151
-------- ----------------- ------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
40 East 52nd Street, New York, New York 10022
--------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 810-5800
--------------
------------------------------------------------------------------------------
(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 (see General Instruction A.2. below):
[ ] 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))
Item 1.01. Entry into a Material Definitive Agreement.
On December 6, 2006, BlackRock Kelso Capital Corporation ("BlackRock Kelso")
entered into a Senior Secured Revolving Credit Agreement (the "Credit
Agreement") among BlackRock Kelso, the lenders party thereto and Citibank,
N.A., as administrative agent for the lenders.
Under the Credit Agreement, the lenders have agreed to extend credit to
BlackRock Kelso in an aggregate principal amount not to exceed $225 million at
any one time outstanding. The Credit Agreement also provides for issuing
Letters of Credit. The Credit Agreement is a four-year revolving facility (with
a stated maturity date of December 6, 2010) and is secured by substantially
all of the assets in BlackRock Kelso's portfolio.
Subject to certain exceptions, the interest rate payable under the Credit
Agreement is 87.5 basis points over LIBOR. BlackRock Kelso has made certain
representations and warranties and is required to comply with various
covenants, reporting requirements and other customary requirements for similar
revolving credit facilities, including, without limitation, covenants related
to: (a) limitations on the incurrence of additional indebtedness and liens, (b)
limitations on certain investments, (c) limitations on certain restricted
payments, (d) maintaining a certain minimum stockholders' equity, (e)
maintaining a ratio of total assets (less total liabilities) to total
indebtedness, of BlackRock Kelso and its subsidiaries, of not less than
2.0:1.0, (f) maintaining minimum liquidity, and (g) limitations on the creation
or existence of agreements that prohibit liens on certain properties of
BlackRock Kelso and its subsidiaries.
In addition to the asset coverage ratio described above, borrowings under the
Credit Agreement (and the incurrence of certain other permitted debt) are
subject to compliance with a borrowing base that will apply different advance
rates to different types of assets in BlackRock Kelso's portfolio. The Credit
Agreement also includes an "accordion" feature that allows BlackRock Kelso to
increase the size of the Credit Agreement to a maximum of $500 million under
certain circumstances. The Credit Agreement also includes usual and customary
events of default for senior secured revolving credit facilities of this
nature.
The Credit Agreement will be used to supplement BlackRock Kelso's equity
capital to make additional portfolio investments and for other general
corporate purposes. BlackRock Kelso has employed a significant portion of its
equity capital and expects to begin using the Credit Agreement in the coming
months to support additions to the portfolio. BlackRock Kelso has not yet
borrowed any amounts under the Credit Agreement.
The description in this current report on Form 8-K of the Credit Agreement is
qualified in its entirety by reference to the copy of such document that is
filed as Exhibit 10.1, and is incorporated by reference herein.
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 under Item 1.01 of this current report on Form 8-K is
hereby incorporated in this Item 2.03 by reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits:
Exhibit Number Description
10.1 Senior Secured Revolving Credit Agreement, dated as of
December 6, 2006, between BlackRock Kelso Capital
Corporation, the lenders party thereto and Citibank, N.A.,
as Administrative Agent
Forward-Looking Statements
Statements included herein may constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are not guarantees of future performance or results and involve a
number of risks and uncertainties. Actual results may differ materially from
those in the forward-looking statements as a result of a number of factors,
including those described from time to time in our filings with the Securities
and Exchange Commission. BlackRock Kelso undertakes no duty to update any
forward-looking statements made herein.
[Signature page follows]
SIGNATURE
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.
BlackRock Kelso Capital Corporation
(Registrant)
By: /s/ Frank D. Gordon
-------------------------------
Date: December 7, 2006 Frank D. Gordon
Chief Financial Officer