FS Investment Corporation (FSIC) has entered into an agreement that would let it access up to $350 million of debt in an agreement with HSBC Bank and US Bank, according to a regulatory filing
with the US Securities and Exchange Commision.
The loan, borrowed by FSIC special purpose financing subsidiary Hamilton Street Funding to pay off existing debt, consists of a five-year $150 million credit facility under which the lenders can offer between $50 million to $200 million in additional borrowings. The loan carries a four-year revolving period after which the outstanding amount must be repaid 5 percent until the facility comes due.
The loan is priced at LIBOR, which does not have a floor, plus 2.5 percent. FSIC will also pay an undrawn fee of 0.5 percent on the first 35 percent of the commitments and 1.65 percent on any money after the first 35 percent of the borrowings.
A representative for the firm could not be reached for comment.
In FSIC’s most recent quarterly report, the firm recorded $1.73 billion in outstanding debt, though it issued another $80 million in 4.25 percent unsecured notes due 2020. It was not clear what portion of debt FSIC might extinguish.
In the third quarter, FSIC posted a net asset value of $9.42 per share, its third quarter of growth this year but a year-on-year decline from $9.64 the end of the third quarter last year.
The firm made commitments totaling $144.23 million for the three months ending 30 September, while it exited investments totaling $198.01 million, meaning it was a net seller of assets at $53.78 million. The company’s net investment income stood at $49 million, a year-on-year decline from $63.77 million at the same time last year.