OFS Terminates Madison Capital Revolver to Reduce Costs
OFS Capital announced its wholly owned subsidiary, OFS Capital WM, held approximately $234.6 million in debt investments at par value as of December 31, 2012, compared with approximately $213.8 million as of September 30, 2012. The OFS WM credit facility with Wells Fargo Bank and Madison Capital Funding amounted to $180 million.
As of December 31, 2012, there was approximately $99.2 million outstanding, and $34.9 million in availability, on the $135 million Wells Fargo Class A revolving credit facility, borrowings under which are priced at LIBOR + 2.75%. There was no outstanding balance on the $45 million Madison Capital Class B revolving credit facility, borrowings under which are priced at LIBOR + 6.50%.
During 2013, owing largely to regulatory leverage restrictions, OFS does not anticipate accessing the Madison Capital Class B revolving credit facility. As a consequence, OFS has elected to terminate the $45 million Madison Capital Class B revolving loan commitment, via execution of the fourth amendment to the loan and security agreement, which is effective as of January 22, 2013. In terminating the Class B commitment, OFS expects to realize annual savings of $225,000 by eliminating OFS WM’s cost of non-usage fees that would otherwise be due to Madison Capital. No cancellation fees were required by Madison Capital. The Wells Fargo Class A revolving facility will remain in effect, and OFS WM expects to continue to utilize that facility to meet its funding needs.
OFS Capital is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940.