ITEM 2.03.
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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On January 29, 2019, MVC Capital, Inc. (the "Fund"), together with its affiliates MVC Financial Services, Inc., MVC Cayman, MVC GP II, LLC and MVC Partners
LLC, entered into a three year, $35 million revolving credit facility (the "Credit Facility") with People’s United Bank, National Association (“People’s”) as a lender and lead agent. The Credit Facility can, under certain conditions, be increased
up to $85 million. The Credit Facility will expire on January 29, 2022, at which time all outstanding amounts under the Credit Facility will be due and payable.
Borrowings under the Credit Facility bear interest at a rate of LIBOR plus 2.85%, or the prime rate plus 0.5% (at the Fund’s discretion). In addition, the
Fund is subject to (i) a closing fee of 1% of the commitment amount paid at closing, (ii) a one-time structuring fee in the amount of $100,000 paid at closing, (iii) an unused line fee, which is payable monthly, of 0.75% if the Fund draws less
than $25 million on the Credit Facility or 0.60% if the Fund draws more than $25 million on the Credit Facility, and (iv) an annual administrative agent fee in the amount of $100,000 in 2019 and $200,000 in each year thereafter.
Borrowings under the Credit Facility are subject to certain collateral requirements, which include a first position security lien on substantially all of
the Fund’s senior and subordinated promissory note investments and certain equity investments.
The Credit Facility contains customary representations and warranties, and affirmative and negative covenants. The Credit Facility also contains customary
events of default for credit facilities of this type, including (without limitation): nonpayment of principal, interest, fees or other amounts after a stated grace period; inaccuracy of material representations and warranties; violations of
covenants, subject in certain cases to stated cure periods; and bankruptcy and insolvency
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If an event
of default occurs and is continuing, the Fund may be required to repay all amounts outstanding under the Credit Facility.
In addition, the Fund has entered into a Custodial Agreement with People’s pursuant to which the Fund has pledged certain assets to be held in custodial
accounts as collateral for borrowings made by the Fund pursuant to the Credit Facility. People’s has the typical rights and remedies of a secured lender under the Uniform Commercial Code, including the right to foreclose on the collateral pledged
by the Fund.