BORROWINGS

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

BORROWINGS

BORROWINGS

The Company had the following borrowings outstanding as of March 31, 2024 and December 31, 2023: 

Issuance Date ($ in thousands)	Maturity Date	Interest Rate as of March 31, 2024	March 31, 2024		December 31, 2023
Credit Facility:
January 15, 2021	April 30, 2026	7.398%	642,422		$	644,463
Total Credit Facility			$	642,422	$	644,463
Notes:
February 22, 2022	February 22, 2027	4.750%	$	100,000	$	100,000
(Less: Deferred financing fees)			(145)		(157)
Total Notes			$	99,855	$	99,843

The Company is required to meet an asset coverage ratio, defined under the 1940 Act as the ratio of the Company’s total assets (less all liabilities and indebtedness not represented by senior securities) to its outstanding senior securities, of at least 150% after each issuance of senior securities. The Company’s asset coverage ratio was 189.8% as of March 31, 2024.

ING Capital Credit Facility

On January 15, 2021, the Company entered into the ING Credit Facility with ING Capital LLC (“ING”), as administrative agent, and the lenders party thereto. The initial commitments under the ING Credit Facility totaled $65.0 million.

On April 30, 2021, the Company amended and restated the credit agreement governing the ING Credit Facility to increase the total commitments under the facility to $325.0 million and include a $25.0 million letter of credit sub-facility. On July 22, 2021, the Company entered into an incremental commitment and assumption agreement to increase the aggregate commitments under the ING Credit Facility to $500.0 million. As amended as of March 31, 2022, the Company had aggregate commitments from lenders of $500.0 million under the ING Credit Facility, the maximum commitment then allowed under the ING Credit Facility. On April 25, 2022, the Company amended the ING Credit Facility to, among other things, (i) increase total commitments from lenders to $625.0 million from $500.0 million, (ii) upsize the accordion feature under the ING Credit Facility to allow for an increase in aggregate commitments thereunder from new and existing lenders on the same terms and conditions as the existing commitments up to a total of $800.0 million, subject to certain conditions and the satisfaction of specified financial covenants, and (iii) replace the LIBOR benchmark provisions under the ING Credit Facility with SOFR benchmark provisions. On October 13, 2022, the Company amended the ING Credit Facility to increase total commitments from lenders to $710.0 million from $625.0 million.

The Company can borrow foreign currencies directly under the ING Credit Facility. The ING Credit Facility is secured primarily by a material portion of the Company’s present and future property and assets and is guaranteed by certain of the Company’s subsidiaries. The revolving period under the ING Credit Facility terminates on April 30, 2025, and the final maturity date of the ING Credit Facility is scheduled for April 30, 2026.

Borrowings under the ING Credit Facility bear interest on a per annum basis equal to (i) for borrowings denominated in U.S. Dollars, subject to the Company’s election, (a) the alternate base rate plus 1.15% or (b) the term SOFR plus 2.15% plus a credit spread adjustment of 0.10% for borrowings with an interest period of one month, 0.15% for borrowings with and interest period of three months or 0.25% for borrowings with an interest period of six months, with the term SOFR plus credit spread adjustment subject to a 0.00% floor, (ii) for borrowings denominated in Pounds Sterling, Swiss Francs, Euros, Canadian Dollars, Danish Kroner, Norwegian Kroner or Swedish Kronor, the adjusted eurocurrency rate plus 2.15%, (iii) for borrowings denominated in Australian Dollars, the adjusted eurocurrency rate plus 2.35%, or (iv) for borrowings denominated in New Zealand Dollars, the adjusted eurocurrency rate plus 2.45%. The alternate base rate is equal to the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50%, (iii) the overnight bank funding rate plus 0.50%, (iv) one-month term SOFR plus 1.00% plus a credit spread adjustment of 0.10% and (v) 1.00%. The adjusted eurocurrency rate is equal to the eurocurrency rate for the applicable interest period plus any applicable statutory reserve rate for such interest period, subject to a 0.00% floor. The Company pays a commitment fee on undrawn amounts under the ING Credit Facility.

The ING Credit Facility contains certain affirmative and negative covenants, including but not limited to (i) maintaining minimum stockholders’ equity, (ii) maintaining a minimum asset coverage ratio of (a) 150% at any time that more than 70% of the total fair value of the Company’s portfolio comprises cash, cash equivalents, long-term U.S. government securities or first lien loans to portfolio companies, or (b) 167% or 200% at specified concentrations of such assets at amounts less than or equal

to 70% of the total fair value of the Company’s portfolio, (iii) meeting a minimum liquidity test, (iv) meeting a minimum net worth test, and (v) maintaining the Company’s status as a RIC under the Code and as a BDC under the 1940 Act. The ING Credit Facility also contains customary events of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to other indebtedness, bankruptcy, certain change of control events, and the occurrence of a material adverse effect. The ING Credit Facility also permits the administrative agent to select an independent third-party valuation firm to determine valuations of certain portfolio investments for purposes of borrowing base provisions. ING and other lenders under the ING Credit Facility, and their respective affiliates, may from time to time receive customary fees and expenses in the performance of investment banking, financial advisory or other services for the Company. As of March 31, 2024, the Company was in compliance with all covenants of the ING Credit Facility.

The Company, one of its subsidiaries, BCIC Holdings, Inc., ING, as administrative agent, the financing agents and designated indebtedness holders that become parties thereto and ING, as collateral agent, also entered into a guarantee, pledge and security agreement, dated as of January 15, 2021, pursuant to which the Company’s obligations under the ING Credit Facility are secured by a first-priority security interest (subject to certain exceptions) in substantially all of the Company’s and its subsidiary guarantors’ present and future property and assets.

As of March 31, 2024, the Company had U.S. dollar borrowings of $533.0 million under the ING Credit Facility with an interest rate of 7.569% (with Term SOFR borrowings subject to one month SOFR of 5.319%), borrowings denominated in British pounds sterling of £31.2 million ($39.4 million U.S. dollars) with an interest rate of 7.371% (one month SONIA of 5.221%), borrowings denominated in Euros of €61.5 million ($66.4 million U.S. dollars) with an interest rate of 6.088% (one month EURIBOR of 3.938%) and borrowings denominated in Australian Dollars of A$5.5 million ($3.6 million U.S. dollars) with an interest rate of 6.650% (one month AUD Screen Rate of 4.300%). The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the ING Credit Facility borrowings is included in “Net unrealized appreciation (depreciation) - foreign currency transactions” in the Company’s Unaudited Consolidated Statements of Operations.

As of December 31, 2023, the Company had U.S. dollar borrowings of $533.0 million under the ING Credit Facility with an interest rate of 7.584% (with Term SOFR borrowings subject to one month SOFR of 5.334%), borrowings denominated in British pounds sterling of £31.2 million ($39.8 million U.S. dollars) with an interest rate of 7.370% (one month SONIA of 5.220%), borrowings denominated in Euros of €61.5 million ($67.9 million U.S. dollars) with an interest rate of 6.025% (one month EURIBOR of 3.875%) and borrowings denominated in Australian Dollars of A$5.5 million ($3.8 million U.S. dollars) with an interest rate of 6.650% (one month AUD Screen Rate of 4.300%). The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

As of March 31, 2024 and December 31, 2023, the fair values of the borrowings outstanding under the ING Credit Facility were $642.4 million and $644.5 million, respectively. The fair values of the borrowings outstanding under the ING Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

February 2027 Notes

On February 22, 2022, the Company entered into a Note Purchase Agreement (the “February 2022 NPA”) governing the issuance of $100.0 million in aggregate principal amount of senior unsecured notes due February 22, 2027 (the “February 2027 Notes”), in each case, to qualified institutional investors in a private placement. The February 2027 Notes were delivered and paid for on February 22, 2022.

The February 2027 Notes, for which the Company was required to obtain an initial rating by June 30, 2022, have a fixed interest rate of 4.75% per year, subject to a step up of 0.75% per year, to the extent the February 2027 Notes fail to satisfy certain investment grade rating conditions.

The February 2027 Notes will mature on February 22, 2027 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with the terms of the February 2022 NPA. Interest on the February 2027 Notes will be due semiannually in February and August of each year, beginning in August 2022. In addition, the Company is obligated to offer to repay the February 2027 Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the February 2022 NPA, the Company may redeem the February 2027 Notes in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if redeemed on or before August 22, 2026, a make-whole premium.

The February 2022 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for agreements of this type, including, without limitation, information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, and certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, liens, restricted payments, and investments. In addition, the February 2022 NPA contains the following financial covenants: (a) maintaining a minimum obligors’ net worth, measured as of each fiscal quarter-end; (b) not permitting the Company’s asset coverage ratio, as of the date of the incurrence of any debt for borrowed money or the making of any cash dividend to stockholders, to be less than the statutory minimum then applicable to the Company under the 1940 Act; and (c) not permitting the Company’s net debt to equity ratio to exceed 2.0x, measured as of each fiscal quarter-end.

The February 2022 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness or that of the Company’s subsidiary guarantors, if any, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of certain events of default, the holders of at least 66-2/3% in principal amount of the February 2027 Notes at the time outstanding may declare all February 2027 Notes then outstanding to be immediately due and payable.

The Company’s obligations under the February 2022 NPA are general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. As of March 31, 2024, the Company was in compliance with all covenants under the February 2022 NPA.

The February 2027 Notes were offered in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The February 2027 Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.

As of March 31, 2024 and December 31, 2023, the fair values of the February 2027 Notes were $92.1 million and $90.2 million, respectively. The fair value determinations of the February 2027 Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.