First Eagle Alternative Capital BDC, Inc. Enhances Capital Structure
On March 14, 2022, First Eagle Alternative Capital BDC (NASDAQ: FCRD) announced the refinancing of its joint venture capital structure into a $303.1 million middle market CLO, managed by Deutsche Bank. The CLO aims to refinance Logan JV's loan portfolio and enhance portfolio diversification. The company also amended its credit facility, increasing commitments from $150 million to $175 million, with options for further expansion. A voluntary management fee waiver for Q2 2022 will support net investment income amid one-time refinancing costs.
- Refinancing of capital structure into a $303.1 million CLO enhances portfolio management.
- Amendment to credit facility increases lender commitments, supporting investment growth.
- Voluntary management fee waiver for Q2 2022 helps maintain net investment income.
- One-time costs from CLO refinancing may reduce distributions to the Company.
BOSTON, March 14, 2022 (GLOBE NEWSWIRE) -- First Eagle Alternative Capital BDC, Inc. (NASDAQ: FCRD) (“First Eagle Alternative Capital BDC” or, the “Company”) today announced that in keeping with its strategic initiatives, the Company and its joint venture partner refinanced the capital structure at First Eagle Logan JV, LLC (“Logan JV”) into a middle market CLO arranged by Deutche Bank Securities Inc., and the Company amended its credit facility provided by ING Capital LLC. The pricing of the CLO and the amendment of the Company’s Senior Secured Revolving Credit Agreement occurred on March 10, 2022, and March 11, 2022, respectively.
“FCRD has been focused on reducing expenses to help drive NII and improve value to shareholders, and this is another step in that direction,” said Chris Flynn, President of First Eagle Alternative Credit, LLC (the “Adviser”). “These actions not only help reduce our costs, which should help drive NII growth over time, but also afford the BDC the opportunity to further improve portfolio diversification through reinvestment of capital.”
Further detail on each transaction is provided below. Additionally, an investor presentation can be found on the events and presentations section of the FCRD website at https://investor.feacbdc.com/events-presentations.
On March 10, 2022, Logan JV, a joint venture with the Company and Perspecta Trident LLC, an affiliate of Jordan Park, priced a
| Class | Par Amount ($ in millions) | Expected Rating (Moody’s) | Par Sub (%) | Coupon |
| A-1 | 111.000 | Aaa | 42.0 | SOFR+ |
| A-2 | 63.000 | Aaa | 42.0 | |
| B | 24.500 | Aa2 | 33.8 | SOFR+ |
| C-1 | 10.500 | A2 | 27.0 | SOFR+ |
| C-2 | 10.000 | A2 | 27.0 | |
| D | 23.500 | Baa3 | 19.2 | SOFR+ |
| E | 21.500 | Ba3 | 12.0 | SOFR+ |
| Subordinated | 39.135 | NR | N/A |
Logan JV will purchase
ING Amendment to Company’s Credit Facility
Additionally, on March 11, 2022, the Company entered into an amendment to its existing Third Amended and Restated Senior Secured Revolving Credit Agreement dated as of October 16, 2020, to reduce the interest rate to Adjusted Term SOFR plus 250 basis points, increase the size of the lenders’ commitments under the facility from
Voluntary Management Fee Waiver for Second Quarter 2022
In connection with the closing of the CLO, it is anticipated that there will be certain one-time costs associated with the refinancing that will reduce the distribution from Logan JV to the Company. Therefore, to partially offset the impact from these one-time charges at the Logan JV, the Adviser voluntarily has agreed to waive the management fee for the second quarter related to the Company up to such amount as is required to maintain at least a 10 cents per share net investment income for such quarter. Such waived amounts will not be subject to recoupment by the Adviser.
The Notes offered as part of the CLO have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”) or any state or foreign securities laws. Accordingly, the Notes may not be offered or sold within the United States to, or for the account or benefit of, "U.S. Persons" (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the Notes in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About First Eagle Alternative Capital BDC, Inc.
First Eagle Alternative Capital BDC, Inc. (NASDAQ: FCRD) is a closed-end management investment company that has elected to be treated as a business development company under the 1940 Act. The Company’s investment objective is to generate both current income and capital appreciation, primarily through investments in privately negotiated debt and equity securities of middle market companies. The Company is a direct lender to middle market companies and invests primarily in directly originated first lien senior secured loans, including unitranche investments. In certain instances, the Company also makes second lien secured loans and subordinated or mezzanine, debt investments, which may include an associated equity component such as warrants, preferred stock or other similar securities and direct equity co-investments. The Company targets investments primarily in middle market companies with annual EBITDA generally between
Forward-Looking Statements
Statements made in this press release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements reflect various assumptions by the Company concerning anticipated results and are not guarantees of future performance. These statements can be identified by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. These statements include but are not limited to, projected financial performance, expected development of the business, anticipated share repurchases or lack thereof, plans and expectations about future investments, plans and expectations concerning future offerings by the Company, including any tender offers, anticipated dividends and the future liquidity of the company. The accuracy of such statements involves known and unknown risks, uncertainties and other factors that, in some ways, are beyond management’s control, including the risk factors described from time to time in filings by the Company with the Securities and Exchange Commission (the “SEC”). Such factors include: the introduction, withdrawal, success and timing of business initiatives and strategies; changes in political, economic or industry conditions, the impact of COVID-19 and the availability of effective vaccines, the interest rate environment or financial and capital markets, which could result in changes in the value of our assets; the relative and absolute investment performance and operations of our investment adviser; the impact of increased competition; the impact of future acquisitions and divestitures; the unfavorable resolution of legal proceedings; our business prospects and the prospects of our portfolio companies; the impact, extent and timing of technological changes and the adequacy of intellectual property protection; the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to us or the Advisor; the ability of the Advisor to identify suitable investments for us and to monitor and administer our investments; our contractual arrangements and relationships with third parties; any future financings by us; the ability of the Advisor to attract and retain highly talented professionals; fluctuations in foreign currency exchange rates; the impact of changes to tax legislation and, generally, our tax position; our ability to exit a control investment in a timely manner; and the ability to fund Logan JV’s unfunded commitments to the extent approved by each member of the Logan JV investment committee. The Company undertakes no duty to update any forward-looking statements made herein. All forward-looking statements speak only as of the date of this press release.
Additional Information and Where to Find It
This press release is for informational purposes only, is not a recommendation to buy or sell any securities of First Eagle Alternative Capital BDC, Inc., and does not constitute an offer to buy or the solicitation to sell any securities of First Eagle Alternative Capital BDC, Inc.
Investor Contact:
First Eagle Alternative Credit, LLC
Leigh Crosby
(617) 790-6060
Leigh.Crosby@firsteagle.com
Media Contact:
Stanton Public Relations and Marketing, LLC
Charlyn Lusk
(646) 502-3549
clusk@stantonprm.com
FAQ
What is the significance of the refinancing by FCRD?
When did FCRD amend its credit facility?
How does the management fee waiver affect FCRD's financials?
