Logan Ridge Finance Corporation Amends and Extends its Existing Senior Secured Revolving Credit Facility

Rhea-AI Summary

Logan Ridge Finance (Nasdaq: LRFC) has announced significant amendments to its senior secured revolving credit facility with KeyBank National Association. The changes include:

1. Reduced interest rates: The applicable margin during the reinvestment period decreased from 2.90% to 2.80% per annum, and from 3.25% to 3.20% per annum during the amortization period.

2. Extended timelines: The reinvestment period is now extended to August 2027 (from May 2025), and the maturity date to August 2029 (from May 2027).

3. Revised terms: Advance rates and concentration limits have been adjusted, potentially increasing the company's borrowing capacity.

4. Maintained features: The facility still allows borrowing up to $75.0 million, with an uncommitted accordion feature for an additional $125.0 million.

Positive

• Reduced interest rate margin during reinvestment period from 2.90% to 2.80%
• Extended reinvestment period by 27 months to August 2027
• Extended maturity date by 27 months to August 2029
• Revised advance rates and concentration limits, potentially increasing borrowing capacity
• Maintained $75.0 million borrowing limit with $125.0 million accordion feature

Negative

• None.

Financial Analyst

The amendment to Logan Ridge Finance 's credit facility brings several positive changes. The reduction in interest rate margins (2.80% from 2.90% during reinvestment, 3.20% from 3.25% during amortization) will lead to lower borrowing costs, potentially improving profitability. The extension of the reinvestment period (to August 2027) and maturity date (to August 2029) provides LRFC with enhanced financial flexibility and stability.

The revision of advance rates and concentration limits is particularly noteworthy, as it's expected to create significant additional borrowing capacity. This could allow LRFC to pursue more investment opportunities or manage its capital structure more efficiently. The maintained $75 million borrowing limit with a $125 million accordion feature further reinforces the company's access to capital.

Overall, these amendments strengthen LRFC's financial position and could potentially lead to improved returns for shareholders in the medium to long term.

Market Research Analyst

This credit facility amendment signals positive market sentiment towards Logan Ridge Finance The willingness of KeyBank to offer more favorable terms suggests confidence in LRFC's business model and future prospects. The extended reinvestment period (now until August 2027) gives LRFC a longer runway to capitalize on market opportunities, which could be important in the current dynamic economic environment.

The revised advance rates and concentration limits are particularly intriguing. This change could allow LRFC to diversify its portfolio more effectively or increase its exposure to high-performing sectors. Investors should watch for any shifts in LRFC's investment strategy that might result from this increased flexibility.

While the immediate market reaction might be muted due to the technical nature of this news, it sets a solid foundation for LRFC's future growth and could positively influence investor perception in the long run.

Reduces Interest Rate Margin During the Reinvestment Period to 2.80% from 2.90%

Extends Reinvestment Period and Maturity Date to August 2027 and August 2029, Respectively

Revises Advance Rates and Concentration Limits

NEW YORK, Aug. 21, 2024 (GLOBE NEWSWIRE) -- Logan Ridge Finance Corporation (Nasdaq: LRFC) (the “Company”) today announced that it has amended and extended its existing senior secured revolving credit facility (as amended, the “Credit Facility”) with KeyBank National Association.

Under the terms of the amendment, the applicable margin during the reinvestment period was reduced from 2.90% per annum to 2.80% per annum, and the applicable margin during the amortization period was reduced from 3.25% per annum to 3.20% per annum. The reinvestment period was also extended from May 2025 to August 2027, and the maturity date was extended from May 2027 to August 2029. Of note, the Credit Facility continues to provide for borrowing of up to $75.0 million, and an uncommitted accordion feature that allows the Company to borrow up to an additional $125.0 million.

Furthermore, under the terms of the amendment, the advance rates and concentration limits were revised, which should create meaningful additional borrowing capacity for the Company.

About Logan Ridge Finance Corporation
Logan Ridge Finance Corporation (Nasdaq: LRFC) is a business development company that invests primarily in first lien loans and, to a lesser extent, second lien loans and equity securities issued by lower middle-market companies. The Company invests in performing, well-established middle-market businesses that operate across a wide range of industries. It employs fundamental credit analysis, targeting investments in businesses with relatively low levels of cyclicality and operating risk. For more information, visit www.loganridgefinance.com.

Cautionary Statement Regarding Forward-Looking Statements
This communication contains “forward-looking” statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue,” “target” or other similar words or expressions. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include those risk factors detailed in the Company’s reports filed with the Securities and Exchange Commission (“SEC”), including the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed with the SEC.

Any forward-looking statements speak only as of the date of this communication. The Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information or developments, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

For additional information, contact:

Logan Ridge Finance Corporation
650 Madison Avenue, 3rd Floor
New York, NY 10022

Brandon Satoren
Chief Financial Officer
Brandon.Satoren@bcpartners.com
(212) 891-2880

Lena Cati
The Equity Group Inc.
lcati@equityny.com
(212) 836-9611

Val Ferraro
The Equity Group Inc.
vferraro@equityny.com
(212) 836-9633

FAQ

What changes were made to LRFC's credit facility with KeyBank on August 21, 2024?

LRFC amended its credit facility, reducing interest rates, extending the reinvestment period to August 2027 and maturity date to August 2029, and revising advance rates and concentration limits to potentially increase borrowing capacity.

How much did LRFC reduce its interest rate margin in the August 2024 credit facility amendment?

LRFC reduced its interest rate margin by 0.10% during the reinvestment period (from 2.90% to 2.80%) and by 0.05% during the amortization period (from 3.25% to 3.20%).

What is the new maturity date for LRFC's amended credit facility as of August 2024?

The new maturity date for LRFC's amended credit facility is August 2029, extended from the previous May 2027 date.

Did LRFC's borrowing limit change in the August 2024 credit facility amendment?

No, LRFC's borrowing limit remained unchanged at $75.0 million, with an additional $125.0 million available through an uncommitted accordion feature.