BNP Paribas acted as administrative agent and The Bank of New York Mellon Trust as collateral agent on a $250 million revolving credit facility for PennantPark Investment. PennantPark borrowed the funds under its subsidiary PennantPark Investment Funding I.
The revolver, along with other existing debt sources, will enable the company to use the flexibility and incremental leverage provided by the Small Business Credit Availability Act (SBCAA) in the future.
The revolver has a five-year term with a three-year reinvestment period, during which pricing is at LIBOR plus 2.6%. The key terms will allow the SBCAA to reduce the asset coverage covenant from 200% to 150%.
“We are pleased to have expanded our borrowing relationships through closing on an additional credit facility that will enable us to have the flexibility to obtain the benefits provided by the SBCAA. We believe this will result in enhanced profitability while maintaining our conservative and prudent debt profile,” said Art Penn, PennantPark chairman and CEO. “This long-term credit facility, along with our other sources of debt financing, nicely complements our permanent equity capital base.”
The credit facility is secured by all of the assets held by Funding I and includes customary covenants, including minimum asset coverage and minimum equity requirements.
PennantPark Investment is a business development company which principally invests in U.S. middle-market private companies in the form of first lien secured debt, second lien secured debt, subordinated debt and equity investments. It is managed by PennantPark Investment Advisers.
