Lafayette Square USA, a business development company, has entered into a new hybrid credit facility with ING Capital. The facility will be secured by a combination of Lafayette Square’s portfolio and the unused capital commitments of its investors and will support Lafayette Square’s direct lending activities, with a primary focus on first lien senior secured loans._x000D_
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The credit facility, which matures in June 2029, will provide Lafayette Square with access to a revolving line of credit, initially committed by ING and expected to grow through an uncommitted accordion feature through which existing and new lenders may agree to provide additional financing up to $250 million. The annual interest rate applicable to borrowings under the facility will be based on a range of alternative rates, including term SOFR plus a margin of 2.70%._x000D_
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In addition, the annual interest rate will be adjustable based on an innovative sustainability linked loan pricing structure, with ING acting as the sole sustainability structuring agent. The sustainability linked loan’s key performance indicators directly reference Lafayette Square’s 2030 goals to1) support 100,000 working-class jobs, 2) invest 50% of capital to support working-class communities and 3) curate benefits for 50% of its portfolio companies through its worker solutions platform._x000D_
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“We look forward to partnering with ING as we pursue our 2030 goals regarding working-class people and places,” Damien Dwin, founder and CEO of Lafayette Square’s parent company, said. “On behalf of the shareholders at Lafayette Square USA, I thank ING for creating this innovative structure aligned with our mission to stimulate economic activity in working-class places while creating economic benefits for our shareholders.”_x000D_
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“Lafayette Square’s credit strategy is very well aligned with our worldview and approach,” Grace Fu, head of fund finance Americas at ING, said. “By simultaneously providing middle market companies liquidity and credit, alongside resources to improve the financial resiliency of their workforces, Damien and his team are creating stronger, more productive businesses in local communities.”_x000D_
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“This SLL marks a significant milestone in the BDC market, driving credit to companies that create positive social impact,” Cindy Jia, director, sustainable finance, Americas at ING, said.
Forward for Specialty Finance
