Item 1.01. Entry into a Material Definitive Agreement
On June 5, 2014, Golub Capital BDC, Inc. (the "Company") completed its
previously announced $402 million term debt securitization (the "CLO"). The
notes offered in the CLO (the "Notes") were issued by Golub Capital BDC CLO 2014
LLC, a wholly-owned and consolidated subsidiary of the Company, and are backed
by a diversified portfolio of senior secured and second lien loans. The
transaction was executed through a private placement of approximately $191.0
million of Aaa/AAA Class A-1 Notes which bear interest at the three-month London
Interbank Offered Rate, or LIBOR, plus 1.75%; $20.0 million of Aaa/AAA Class A-2
Notes which bear interest at the three-month LIBOR plus 1.45% for the first 18
months and the three-month LIBOR plus 1.95% thereafter; and $35.0 million of
Aa2/AA Class B Notes which bear interest at the three-month LIBOR plus 2.50%.
The Company directly retained all of the Class C Notes and equity interests of
the CLO (collectively, the "Equity Interests"), which totaled approximately
$155.8 million. The Class C Notes bear interest at a rate of three-month LIBOR
plus 3.50%, and the equity interests do not bear interest. The Notes are
scheduled to mature on April 25, 2026.
A portion of the proceeds of the private placement of the Notes, net of
expenses, will be used to repay a portion of the amounts outstanding under the
Credit Facility, as defined below. As part of the CLO transaction, certain loans
were distributed by Golub Capital BDC Funding LLC, a wholly-owned subsidiary of
the Company ("Funding"), to the Company and such loans were then contributed to
the CLO. The Company entered into a loan sale agreement under which the Company
has agreed to sell or contribute certain senior secured and second lien loans to
the CLO. The Company has made customary representations, warranties and
covenants in this loan sale agreement.
In connection with the issuance and sale of the Notes, the Company has made
customary representations, warranties and covenants in the purchase agreement.
The Notes are the secured obligations of the CLO, and the indenture governing
the Notes includes customary covenants and events of default. The Notes have not
been, and will not be, registered under the Securities Act of 1933, as amended
(the "Securities Act"), or any state "blue sky" laws and may not be offered or
sold in the United States absent registration under Section 5 of the Securities
Act or an applicable exemption from such registration requirements.
GC Advisors LLC, the Company's investment adviser ("GC Advisors"), will serve as
collateral manager to the Issuer under a collateral management agreement and
will receive a fee for providing these services. Pursuant to the Company's
amended and restated investment advisory agreement with GC Advisors (the
"Investment Advisory Agreement"), the total fees paid to GC Advisors for
rendering collateral management services, which are less than the management fee
payable under the Investment Advisory Agreement, will be offset against such
On June 5, 2014, Funding entered into an amendment (the "Credit Facility
Amendment") to the documents governing Funding's senior secured revolving credit
facility (the "Credit Facility") with the Company, as transferor and as
servicer, Wells Fargo Securities, LLC, as administrative agent, and Wells Fargo
Bank, N.A., as lender. The Credit Facility Amendment is effective as of June 5,
The Credit Facility Amendment, among other things, (a) decreased the size of the
Credit Facility from $250 million to $150 million, (b) adjusted the fee that
Funding would pay on any unused portion of the Credit Facility to equal 0.50%
for any unused portion from June 5, 2014 through December 5, 2014, after which,
such fee would equal 0.50% on the unused portion of the Credit Facility up to
$60 million and 2.00% for any unused portion in excess of $60 million and (c)
provided a waiver and consent to the dividend by Funding of certain assets
securing the Credit Facility to the Company in connection with the closing of
As previously disclosed, the Credit Facility is secured by all of the assets
held by Funding, and the Company has pledged its interests in Funding as
collateral to Wells Fargo Bank, N.A., as the collateral agent, to secure the
obligations of the Company as the transferor and servicer under the Credit
Facility. Borrowing under the Credit Facility remains subject to the leverage
restrictions contained in the Investment Company Act of 1940, as amended.
The descriptions of the documentation related to the CLO and the Credit Facility
Amendment contained in this Current Report on Form 8-K do not purport to be
complete and are qualified in their entirety by reference to the underlying
agreements, attached hereto as Exhibits 10.1 through 10.5 and incorporated into
this Current Report on Form 8-K by reference.
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 in Item 1.01 is incorporated by reference into this
Item 9.01. Financial Statements and Exhibits
10.1 Twelfth Amendment to Loan and Servicing Agreement, dated June 5, 2014, by
and among Golub Capital BDC Funding LLC, as the Borrower; Golub Capital
BDC, Inc., as Transferor and Servicer; Wells Fargo Securities, LLC, as
the Administrative Agent; the lenders from time to time party thereto;
the lender agents from time to time party thereto; and Wells Fargo Bank,
N.A., as the Collateral Agent, the Account Bank, and the Collateral
Custodian (amending the Loan and Servicing Agreement, dated as of July
10.2 Purchase Agreement, dated June 5, 2014, by and among Golub Capital BDC,
Inc., Golub Capital BDC CLO 2014 LLC and Wells Fargo Securities, LLC.
10.3 Loan Sale Agreement, dated June 5, 2014, by and between Golub Capital
BDC, Inc. and Golub Capital BDC CLO 2014 LLC.
10.4 Indenture, dated June 5, 2014, by and between Golub Capital BDC CLO 2014
LLC and Wells Fargo Bank, National Association.
10.5 Collateral Management Agreement, dated June 5, 2014, by and between Golub
Capital BDC CLO 2014 LLC and GC Advisors LLC.
99.1 Press Release of Golub Capital BDC, Inc. dated June 5, 2014.