Horizon Funding II (HFII), the wholly-owned subsidiary of Horizon Technology Finance, an affiliate of Monroe Capital, closed a $100 million senior secured credit facility led by a U.S.-based insurance company pursuant to which HFII may issue up to $100 million of secured notes. The capacity under the credit facility may be increased to $200 million with the mutual agreement of Horizon and the lenders.
Horizon intends to use the credit facility to leverage its existing investments, as well as deploy additional capital for new investments. The new credit facility complements the company’s existing credit facilities.
The new credit facility has a one-year funding period, during which time HFII may make additional borrowings under the credit facility, and a three-year investment period, during which time HFII may make additional loans. The credit facility has a maximum advance rate of 67.5% based on the number of distinct obligors whose loans serve as collateral for the credit facility. Borrowings bear interest, payable monthly, determined at a rate per annum equal to the greater of (i) the yield for the United States Treasury constant maturity 3-year and 5-year in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily) – H.15” interpolated to a 4.88-year weighted average life plus 3.15% and (ii) 5.00%. The credit facility is collateralized by certain of the Company’s assets and matures in June 2033.
“We are pleased to close our new credit facility, further expanding the borrowing capacity on our balance sheet and bolstering our ability to offer venture debt solutions to high-quality companies,” Daniel R. Trolio, executive vice president and chief financial officer of Horizon, said. “Along with underscoring the continued support of Horizon from the debt markets, we believe this additional facility will enable Horizon to prudently grow its venture debt portfolio and generate further shareholder value.”
