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FS Investment's Arch Street gets $550 million revolver due 2015
By Angela McDaniels
Tacoma, Wash., Aug. 31 - FS Investment Corp.'s new special-purpose financing subsidiary, Arch Street Funding LLC, entered into a $550 million revolving credit facility due Aug. 29, 2015 on Wednesday, according to an 8-K filing with the Securities and Exchange Commission.
The interest rate is Libor plus 175 basis points for the first two years. After that, the margin over Libor will increase to 200 bps. Interest is payable quarterly. Arch Street will be subject to a commitment fee beginning Nov. 27.
Outstanding borrowings will be amortized beginning nine months prior to maturity.
Citibank, NA is the administrative agent.
FS Investment may contribute cash or debt securities to Arch Street from time to time and will retain a residual interest in any assets contributed through its ownership of Arch Street or will receive fair market value for any debt securities sold to Arch Street. Arch Street may purchase additional debt securities from various sources.
Arch Street has appointed FS Investment to manage its portfolio of debt securities under an investment management agreement. Arch Street's obligations to Citibank under the credit facility are secured by a first-priority security interest in substantially all of its assets, including its portfolio of debt securities. The obligations of Arch Street under the credit facility are non-recourse to FS Investment.
FS Investment contributed debt securities with a fair market value of $132.4 million to Arch Street.
Arch Street used about $447.7 million of borrowings under the credit facility, together with cash on hand, to fund its $549.3 million acquisition of a portfolio of debt securities held by Benjamin Loan Funding LLC and Benjamin 2 Loan Funding LLC, each affiliates of Citibank.
FS Investment is a business development company based in Philadelphia.
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