Borrowings

3 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Borrowings

Borrowings

ING Credit Agreement

On March 25, 2022 (the “ING Closing Date”), the Company entered into a senior secured revolving credit agreement (the “ING Credit Agreement”) among the Company, as borrower, the lenders party thereto, and ING Capital LLC (“ING”), as administrative agent.

Effective on and as of May 25, 2022, the Company entered into an incremental commitment and assumption agreement (the “Incremental Commitment and Assumption Agreement”) among the Company, as borrower, the subsidiary guarantor party thereto (the “Subsidiary Guarantor”), ING, as administrative agent and issuing bank, Sumitomo Mitsui Banking Corporation and MUFG Bank, LTD, (together with Sumitomo Mitsui Banking Corporation, the “Assuming Lenders”). Pursuant to the Incremental Commitment and Assumption Agreement, among other things, each Assuming Lender (i) became a Lender (as defined in the ING Credit Agreement) under the ING Credit Agreement and (ii) agreed to make a Commitment (as defined in

the ING Credit Agreement) to the Company in the amount of $150 million. The Incremental Commitment and Assumption Agreement increased the aggregate amount of Commitments under the ING Credit Agreement from $150 million to $450 million (the "Maximum Commitment"), subject to the lesser of (i) a borrowing base and (ii) the Maximum Commitment, and provided that, with respect to any lender, its individual commitment is not exceeded. The revolving credit facility has a four year availability period (the “Availability Period”) during which loans may be made and the ING Credit Agreement has a stated maturity dated that is five years from the ING Closing Date (the “Maturity Date”). Following the Availability Period the Company will be required in certain circumstances to prepay loans prior to the Maturity Date. The ING Credit Agreement provides for the issuance of letters of credit during the Availability Period in an aggregate amount of $25 million. Borrowings under the ING Credit Agreement may be used for general corporate purposes, including making investments and permitted distributions.

Effective on and as of October 6, 2022, the Company entered into a subsequent incremental commitment and assumption agreement (the “Subsequent Incremental Commitment and Assumption Agreement”) among the Company, as borrower, the Subsidiary Guarantor, ING, as administrative agent and issuing bank, and Apple Bank For Savings, as an Assuming Lender. Pursuant to the Subsequent Incremental Commitment and Assumption Agreement, Apple Bank For Savings (i) became a Lender under the ING Credit Agreement and (ii) agreed to make a Commitment to the Company in the amount of $40 million. The Subsequent Incremental Commitment and Assumption Agreement increased the aggregate amount of Commitments under the ING Credit Agreement from $450 million to $490 million.

Effective on and as of June 28, 2023 (the “New Effective Date”), the Company entered into Amendment No. 1 (the “ING Credit Agreement Amendment”) to the ING Credit Agreement. As a result of the ING Credit Agreement Amendment, the ING Credit Agreement provides for a senior secured revolving credit facility of up to $1,110 million (the “Increased Maximum Commitment”), increased from $490 million, subject to the lesser of (i) a borrowing base and (ii) the Increased Maximum Commitment, and provided that, with respect to any lender, its individual commitment is not exceeded. The revolving credit facility has a four year availability period (the “New Availability Period”) commencing from the New Effective Date during which loans may be made and a stated maturity date that is five years from the New Effective Date (the “New Maturity Date”). Following the New Availability Period, the Company will be required in certain circumstances to prepay loans prior to the New Maturity Date. The ING Credit Agreement provides for the issuance of letters of credit during the New Availability Period in an aggregate amount of $25 million. Borrowings under the ING Credit Agreement may be used for general corporate purposes, including making investments and permitted distributions.

Effective on and as of August 15, 2023, the Company entered into a subsequent incremental commitment and assumption agreement (the “Second Subsequent Incremental Commitment and Assumption Agreement”) among the Company, as borrower, the Subsidiary Guarantor, ING, as administrative agent and issuing bank, and Deutsche Bank AG, New York Branch and US Bank National Association, as Assuming Lenders. Pursuant to the Subsequent Incremental Commitment and Assumption Agreement, the Assuming Lenders (i) became Lenders under the ING Credit Agreement and (ii) agreed to make a Commitment to the Company in the aggregate amount of $75 million. The Second Subsequent Incremental Commitment and Assumption Agreement increased the aggregate amount of Commitments under the ING Credit Agreement from $1,110 million to $1,185 million.

All obligations under the ING Credit Agreement are secured by a first-priority security interest (subject to certain exceptions) in substantially all of the present and future property and assets of the Company and of the sole current and certain future subsidiaries of the Company and guaranteed by such subsidiaries.

Borrowings under the ING Credit Agreement shall be denominated in U.S. Dollars and bore, prior to the New Effective Date, interest at a rate per annum equal to either (1) SOFR, as adjusted, plus 1.875% per annum or (2) the alternative base rate (which is the greatest of the (a) prime rate, (b) the federal funds effective rate plus ½ of 1%, (c) the overnight bank funding rate plus ½ of 1%, (d) certain rates based on SOFR and (e) 0) (“ABR”) plus 0.875% per annum. On and after the New Effective Date, borrowings under the ING Credit Agreement bear interest at a rate per annum equal to either (1) the SOFR, as adjusted, plus 2.15% per annum, or, following the first year after the New Effective Date, plus 2.05% per annum if the Company has and maintains an investment grade credit rating or (2) the alternative base rate (which is the greatest of the (a) prime rate, (b) the federal funds effective rate plus ½ of 1%, (c) the overnight bank funding rate plus ½ of 1%, (d) certain rates based on SOFR and (e) 0) (“ABR”) plus 1.15% per annum or, following the first year after the New Effective Date, plus 1.05% per annum if the Company has and maintains investment grade credit rating. The Company may elect either an ABR or SOFR borrowing at each drawdown request, and loans may be converted from one rate to another at any time at the Company’s option, subject to certain conditions. Prior to the New Effective Date, the Company paid a commitment fee at a rate of 0.375% per annum on the daily unused portion of the aggregate commitments under the ING Credit Agreement. On and after the New Effective Date, the Company will pay a commitment fee at a rate of 0.375% per annum on the daily unused portion of the aggregate commitments

under the ING Credit Agreement, subject to increase to 1.00% per annum on the daily unused amount if the daily unused amount is greater than or equal to 65% of the aggregate commitments under the ING Credit Agreement.

At any time during the New Availability Period, the Company may propose an increase in the Increased Maximum Commitment to an amount not to exceed the greater of (a) $1,250.0 million and (b) 150% of shareholders’ equity as of the date on which such increased amount is to be effective, subject to certain conditions, including the consent of the lenders to increase their commitments and of ING.

The Company has made customary representations and warranties and is required to comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowings under the ING Credit Agreement are subject to the leverage restrictions contained in the Investment Company Act.

The ING Credit Agreement contains customary events of default for similar financing transactions. Upon the occurrence and during the continuation of an event of default, ING may terminate the commitments and declare the outstanding loans and all other obligations under the ING Credit Agreement immediately due and payable.

As of December 31, 2023 and September 30, 2023, the Company had $420.0 million and $320.0 million outstanding under the ING Credit Agreement. For the three months ended December 31, 2023, the Company’s borrowings under the ING Credit Agreement bore interest at a weighted average rate of 7.69%. For the three months ended December 31, 2022, the Company’s borrowings under the ING Facility bore interest at a weighted average rate of 5.81%. The Company recorded $9,317 of interest expense (inclusive of fees), related to the ING Credit Agreement for the three months ended December 31, 2023. The Company recorded $2,806 of interest expense (inclusive of fees) related to the ING Facility for the three months ended December 31, 2022.

JPM SPV Facility

On February 24, 2023 (the “JPM Closing Date”), the Company entered into a loan and security agreement (as amended, the “JPM Loan and Security Agreement”) among OSCF Lending SPV, LLC (“OSCF Lending SPV”), a wholly owned subsidiary of the Company, as borrower, the Company, as parent and servicer, Citibank, N.A., as collateral agent and securities intermediary, Virtus Group, LP, as collateral administrator, the lenders party thereto, and JPMorgan Chase Bank, National Association (“JPM”), as administrative agent, pursuant to which JPM agreed to extend credit to OSCF Lending SPV in an aggregate principal amount up to $150 million at any one time outstanding. Effective on and as of July 5, 2023, the Company entered into Amendment No. 1 (the “JPM Loan and Security Agreement Amendment”) to the JPM Loan and Security Agreement, pursuant to which JPM has increased its commitment to extend credit to OSCF Lending SPV to an aggregate principal amount up to $300 million (the “JPM Maximum Commitment”).

The JPM Loan and Security Agreement provides for a senior secured revolving credit facility that has a three-year reinvestment period (the “JPM Availability Period”) and a stated maturity date that is five years after the JPM Closing Date. Subject to certain conditions, including consent of the lenders and JPM, as administrative agent, at any time during the JPM Availability Period, OSCF Lending SPV may propose one or more increases in the JPM Maximum Commitment up to an amount not to exceed $500 million. Borrowings under the JPM Loan and Security Agreement shall be denominated in U.S. Dollars and bear interest at a rate per annum equal to the forward-looking term rate with a three-month tenor, based on the secured overnight financing rate as administered by the Federal Reserve Bank of New York (or a successor administrator), and as published by CME Group Benchmark Administration Limited (or a successor administrator), plus 2.95%.

The obligations of OSCF Lending SPV under the JPM Loan and Security Agreement are secured by all of the assets held by OSCF Lending SPV, including certain loans sold or to be sold or transferred or to be transferred by the Company to OSCF Lending SPV (such loans, the “Loans”) pursuant to the terms of the Sale and Participation Agreement, dated as of the JPM Closing Date (the “JPM Sale Agreement” and, together with the JPM Loan and Security Agreement, the “JPM Agreements”), between OSCF Lending SPV, as buyer, and the Company, as seller, pursuant to which the Company will sell Loans to OSCF Lending SPV from time to time. Under the Agreements, the Company and OSCF Lending SPV, as applicable, have made representations and warranties regarding the Loans, as well as their businesses, and are required to comply with various covenants, servicing procedures, limitations on the disposition of Loans, reporting requirements and other customary requirements for similar revolving funding facilities.

Borrowings under the JPM Loan and Security Agreement are subject to various covenants under the JPM Agreements as well as the asset coverage requirement contained in the Investment Company Act.

As of December 31, 2023, OSCF Lending SPV had $150.0 million outstanding under the JPM Loan and Security Agreement. For the three months ended December 31, 2023, OSCF Lending SPV’s borrowings under the JPM Loan and Security Agreement bore interest at a weighted average rate of 8.49%. The Company recorded $3,592 of interest expense (inclusive of fees), related to the JPM Loan and Security Agreement for the three months ended December 31, 2023.

SMBC SPV Facility

Effective on and as of September 29, 2023 (the “SMBC Closing Date”), the Company entered into a loan and security agreement (as amended, the “SMBC Loan and Security Agreement”) among OSCF Lending III SPV, LLC (“OSCF Lending III SPV”), a wholly owned subsidiary of the Company, as borrower, the Company, as transferor and servicer, Citibank, N.A., as the account bank, Virtus Group, LP, as collateral custodian, the lenders party thereto, and Sumitomo Mitsui Banking Corporation (“SMBC”), as administrative agent and collateral agent, pursuant to which SMBC agreed to extend credit to OSCF Lending III SPV in an aggregate principal amount up to $150 million at any one time outstanding.

Effective on and as of December 22, 2023, the Company entered into the First Amendment to Loan and Servicing Agreement among OSCF Lending III SPV, the Company, Citibank, N.A., Virtus Group, LP and SMBC, which amended the SMBC Loan and Security Agreement to adjust the concentration limits set forth therein for certain large middle market loan assets that do not contain a maintenance covenant.

The SMBC Loan and Security Agreement provides for a senior secured revolving credit facility that has a three-year reinvestment period (the “SMBC Availability Period”) and a stated maturity date that is five years after the SMBC Closing Date. Borrowings under the SMBC Loan and Servicing Agreement shall be denominated in U.S. Dollars and bear interest at a rate per annum equal to, at the request of OSCF Lending III SPV, either (1) SOFR plus 2.45% up to and including 3.00% depending on the collateral securing the facility or (2) the base rate (which is the greatest of the (a) prime rate, (b) federal funds effective rate plus 1/2 of 1%, (c) zero (0%) and (d) one month SOFR plus 1%) plus 1.45% up to and including 2.00% depending on the collateral securing the facility. The Company is required to pay a non-usage fee of 0.50% on undrawn borrowings during the first three months of the facility and thereafter 0.50% or 0.75% during the remainder of the SMBC Availability Period depending on amounts borrowed by the Company under the facility.

The obligations of OSCF Lending III SPV under the SMBC Loan and Security Agreement are secured by all of the assets held by OSCF Lending III SPV, including certain loans sold or to be sold or transferred or to be transferred by the Company to OSCF Lending SPV (such loans, the “SMBC Transferred Loans”) pursuant to the terms of the Sale and Participation Agreement, dated as of the SMBC Closing Date (the “SMBC Sale Agreement” and, together with the SMBC Loan and Security Agreement, the “SMBC Agreements”), between OSCF Lending III SPV, as buyer, and the Company, as seller, pursuant to which the Company will sell SMBC Transferred Loans to OSCF Lending III SPV from time to time. Under the SMBC Agreements, the Company and OSCF Lending SPV, as applicable, have made representations and warranties regarding the SMBC Transferred Loans, as well as their businesses, and are required to comply with various covenants, servicing procedures, limitations on the disposition of SMBC Transferred Loans, reporting requirements and other customary requirements for similar revolving funding facilities.

Borrowings under the SMBC Loan and Security Agreement are subject to various covenants under the SMBC Agreements as well as the asset coverage requirement contained in the Investment Company Act.

As of December 31, 2023, there were no borrowings outstanding under the SMBC Loan and Security Agreement. The Company recorded $287 of interest expense (inclusive of fees) related to the SMBC Loan and Security Agreement for the three months ended December 31, 2023.

CIBC SPV Facility

Effective on and as of November 21, 2023 (the “CIBC Closing Date”), the Company entered into a loan and servicing agreement (as amended, the “CIBC Loan and Servicing Agreement”) among OSCF Lending V SPV, LLC (“OSCF Lending V SPV”), a wholly owned subsidiary of the Company, as borrower, the Company, as transferor and servicer, Computershare Trust Company, N.A., as securities intermediary, collateral custodian, collateral agent and collateral administrator, the lenders party thereto, and Canadian Imperial Bank of Commerce (“CIBC”), as administrative agent, pursuant to which CIBC agreed to extend credit to OSCF Lending V SPV in an aggregate principal amount up to $150 million (the “ CIBC Maximum Commitment”) at any one time outstanding.

The CIBC Loan and Servicing Agreement provides for a senior secured revolving credit facility that has a two-year reinvestment period (the “CIBC Availability Period”) and a stated maturity date that is two years after the CIBC Closing Date. Subject to certain conditions, including consent of the lenders and CIBC as administrative agent, during the CIBC Availability Period, OSCF Lending V SPV may propose up to four increases in the CIBC Maximum Commitment up to an amount not to exceed $500 million in the aggregate.

Borrowings under the CIBC Loan and Servicing Agreement shall be denominated in U.S. Dollars and bear interest at a rate per annum equal to, at the request of OSCF Lending V SPV, as borrower, either (1) the SOFR, plus 1.95% or (2) the base rate (which is the greatest of the (a) prime rate, (b) federal funds effective rate plus 1/2 of 1%, (c) zero (0%) and (d) one month SOFR plus 1%) plus 0.95%. The applicable spread otherwise in effect shall be increased by 2% per annum after the stated maturity date or when an event of default has occurred and is continuing. The Company is required to pay a non-usage fee of 0.50% on undrawn borrowings beginning six months after the CIBC Closing Date.

The obligations of OSCF Lending V SPV under the CIBC Loan and Security Agreement are secured by all of the assets held by OSCF Lending V SPV, including loans it has made or acquired (the “OSCF Lending V SPV Loans”). Under the Loan and Servicing Agreement, OSCF Lending V SPV, as borrower, and the Company, as servicer, have made representations and warranties regarding the OSCF Lending V SPV Loans, as well as the borrower’s and servicer’s businesses, and are required to comply with various covenants, servicing procedures, limitations on the disposition of the OSCF Lending V SPV Loans, reporting requirements and other customary requirements for similar revolving funding facilities.

The CIBC Loan and Servicing Agreement contains customary events of default for similar financing transactions. Upon the occurrence and during the continuation of an event of default, CIBC, as administrative agent, may terminate the commitments and declare the outstanding borrowings and all other obligations under the CIBC Loan and Servicing Agreement immediately due and payable.

Borrowings under the CIBC Loan and Servicing Agreement are subject to various covenants as well as the asset coverage requirement contained in the Investment Company Act.

As of December 31, 2023, there were no borrowings outstanding under the CIBC Loan and Servicing Agreement. The Company recorded $75 of interest expense (inclusive of fees) related to the CIBC Loan and Servicing Agreement for the three months ended December 31, 2023.

2028 Unsecured Notes

On November 14, 2023, the Company issued $350 million aggregate principal amount of its 8.400% Notes due 2028 (the “2028 Unsecured Notes”) in a transaction exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act pursuant to an indenture, dated as of November 14, 2023 (the “Base Indenture”), between the Company and Deutsche Bank Trust Company Americas, as trustee (the “Notes Trustee”), and (2) a first supplemental indenture (the “First Supplemental Indenture” and together with the Base Indenture, the “Indenture”) to the Base Indenture.

The 2028 Unsecured Notes mature on November 14, 2028, unless previously redeemed or repurchased in accordance with their terms. The 2028 Unsecured Notes bear interest at a rate of 8.400% per year payable semi-annually in arrears on May 14 and November 14 of each year, commencing on May 14, 2024. The 2028 Unsecured Notes are the Company’s direct, unsecured obligations and rank senior in right of payment to its future indebtedness that is expressly subordinated in right of payment to the 2028 Unsecured Notes; equal in right of payment to its existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of its secured indebtedness (including existing unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by its subsidiaries, financing vehicles or similar facilities.

The Indenture contains certain covenants, including a covenant requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act, or any successor provisions, but giving effect to any exemptive relief granted to the Company by the SEC and to provide financial information to the holders of the 2028 Unsecured Notes and the Notes Trustee if the Company should no longer be subject to the reporting requirements under the Exchange Act. These covenants are subject to important limitations and exceptions that are set forth in the Indenture.

In connection with the 2028 Unsecured Notes, the Company entered into an interest rate swap to more closely align the interest rate payable on the 2028 Unsecured Notes with its investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.400% and pays a floating interest rate of the three-month SOFR plus 4.0405% on a notional amount of $350 million.

The below table presents the components of the carrying value of the 2028 Notes as of December 31, 2023:

($ in millions)
Principal	$	350.0
Unamortized financing costs	(4.2)
Unaccreted discount	(1.7)
Interest rate swap fair value adjustment	10.6
Net carrying value	$	354.7
Fair Value	$	369.2

Market quotes are utilized as of the valuation date to estimate the fair value of the 2028 Notes, which are included in Level 2 of the hierarchy.

The below table presents the components of interest and other debt expenses related to the 2028 Notes for the three months ended December 31, 2023:

($ in millions)
Coupon interest	$	3.8
Amortization of financing costs and discount	0.1
Effect of interest rate swap	0.6
Total interest expense	$	4.5
Coupon interest rate (net of effect of interest rate swaps)	9.450		%