Item 1.01. Entry into a Material Definitive Agreement.
On May 20, 2021, in connection with a previously announced public offering (the
"Offering"), Oxford Square Capital Corp. (the "Company") and U.S. Bank National
Association, as trustee (the "Trustee"), entered into a supplemental indenture
(the "Third Supplemental Indenture") between the Company and the Trustee, which
supplements a base indenture entered into on April 12, 2017 between the Company
and the Trustee (the "Base Indenture," and, together with the Third Supplemental
Indenture, the "Indenture"). The Third Supplemental Indenture relates to the
Company's issuance of $70.0 million aggregate principal amount of its 5.50%
Notes due 2028 (the "Notes"). The representative of the underwriters in the
Offering may exercise an option to purchase up to an additional $10,500,000
aggregate principal amount of Notes within 30 days of May 13, 2021.
The Notes are expected to be listed on the NASDAQ Global Select Market and to
trade thereon beginning on May 21, 2021 under the trading symbol "OXSQG".
The Company expects to use the net proceeds from this Offering to primarily fund
investments in debt securities and CLO investments in accordance with its
investment objective and for other general corporate purposes.
The Notes will mature on July 31, 2028. The principal payable at maturity will
be 100% of the aggregate principal amount. The interest rate of the Notes is
5.50% per year and will be paid every January 31, April 30, July 31, and October
31, beginning July 31, 2021, and the regular record dates for interest payments
will be every January 15, April 15, July 15 and October 15, beginning July 15,
2021. If an interest payment date falls on a non-business day, the applicable
interest payment will be made on the next business day and no additional
interest will accrue as a result of such delayed payment. The initial interest
period will be the period from and including May 20, 2021, to, but excluding,
the initial interest payment date, and the subsequent interest periods will be
the periods from and including an interest payment date to, but excluding, the
next interest payment date or the stated maturity date, as the case may be.
The Company is issuing the Notes in denominations of $25 and integral multiples
of $25 in excess thereof. The Notes will not be subject to any sinking fund and
holders of the Notes will not have the option to have the Notes repaid prior to
the stated maturity date.
The Notes may be redeemed in whole or in part at any time or from time to time
at the Company's option on or after May 31, 2024 upon not less than 30 days nor
more than 60 days written notice by mail prior to the date fixed for redemption
thereof, at a redemption price of 100% of the outstanding principal amount of
the Notes to be redeemed plus accrued and unpaid interest payments otherwise
payable thereon for the then-current quarterly interest period accrued to, but
excluding, the date fixed for redemption. Any exercise of the Company's option
to redeem the Notes will be done in compliance with the 1940 Act.
If the Company redeems only some of the Notes, the trustee or, with respect to
global securities, DTC, will determine the method for selection of the
particular Notes to be redeemed, in accordance with the Indenture and the 1940
Act and in accordance with the rules of any national securities exchange or
quotation system on which the Notes are listed. Unless the Company defaults in
payment of the redemption price, on and after the date of redemption, interest
will cease to accrue on the Notes called for redemption.
The Company has the ability to issue Indenture securities with terms different
from those of Indenture securities previously issued and, without the consent of
the holders thereof, to reopen a previous issue of a series of Indenture
securities and issue additional Indenture securities of that series unless the
reopening was restricted when that series was created.
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The Indenture contains certain covenants, including a covenant requiring the
Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(1) and
(2) of the of the Investment Company Act of 1940, as amended, or any successor
provision thereto, but giving effect in either case to any exemptive relief
granted to the Company by the Securities and Exchange Commission (the "SEC"),
and to provide certain financial information to the holders of the Notes and the
Trustee if the Company should no longer be subject to the reporting requirements
under the Securities Exchange Act of 1934, as amended. These covenants are
subject to important limitations and exceptions that are set forth in the
Indenture.
The Notes were offered and sold pursuant to the Company's effective shelf
registration statement on Form N-2 (File No. 333-229337) previously filed with
the SEC, as supplemented by a preliminary prospectus supplement dated May 13,
2021, a final prospectus supplement dated May 13, 2021 and the pricing term
sheet, dated May 13, 2021. This Current Report on Form 8-K shall not constitute
an offer to sell or a solicitation of an offer to buy any securities, nor shall
there be any sale of these securities in any state or jurisdiction in which such
an offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or other jurisdiction.
The transaction closed on May 20, 2021.
The description above is only a summary of the material provisions of the
Indenture and the Notes and is qualified in its entirety by reference to copies
of the Indenture and the Notes, respectively, each filed as exhibits to this
Current Report on Form 8-K and 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 Form 8-K is incorporated
herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
EXHIBIT
NUMBER DESCRIPTION
4.1 Third Supplemental Indenture, dated as of May 20, 2021, relating to
the 5.50% Notes due 2028, by and between Oxford Square Capital Corp.
and U.S. Bank National Association, as trustee.
4.2 Form of 5.50% Notes due 2028 (included in Exhibit 4.1 hereto).
5.1 Opinion of Eversheds Sutherland (US) LLP
23.1 Consent of Eversheds Sutherland (US) LLP (contained in the opinion
filed as Exhibit 5.1 hereto)
23.2 Consent of Egan-Jones Ratings Company
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