Allied Capital obtains $250 million term loan led by JPMorgan

By Sara Rosenberg

New York, Feb. 1 - Allied Capital Corp. closed on a new $250 million term loan due Feb. 28, 2011, according to an 8-K filed with the Securities and Exchange Commission on Monday.

JPMorgan acted as the lead bank on the deal.

Pricing on the loan is Libor plus 450 basis points.

The term loan generally becomes due and payable upon a change of control or merger, except that, in certain circumstances, it may be assumed by Ares Capital Corp. in connection with the consummation of a pending merger.

Proceeds were used to help repay in full the company's existing senior secured private debt.

Other funds for the refinancing came from cash generated by asset sales and repayments. This cash and repayments allowed Allied Capital to reduce its total debt under its private notes and secured bank facility to $407.5 million as of the time of this refinancing from $891 million as of Aug. 28, 2009.

Under the terms of the private notes, the company was able to recover and apply towards principal a $50 million restructuring fee paid to the private noteholders in August 2009 because the debt was repaid prior to Jan. 31.

On Jan. 29, after giving effect to the refinancing and the full repayment of the private debt, the company had total outstanding debt of $995.5 million, and cash and investments in money market and other securities of roughly $128 million.

Allied Capital is a Washington D.C.-based business development company.

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