FS Investment gets $300 million four-year revolver with ING Capital

By Angela McDaniels

Tacoma, Wash., April 4 - FS Investment Corp. entered into a $300 million four-year multicurrency revolving credit facility on Thursday, according to an 8-K filing with the Securities and Exchange Commission.

Borrowings are subject to compliance with a borrowing base.

The revolver has a $100 million accordion feature and a $25 million sublimit for letters of credit.

The interest rate is Libor plus 250 basis points.

The revolver is subject to a non-usage fee of (a) 100 bps per year on the unused portion of the commitment for each day that unused portion exceeds 65% of the commitments and (b) 37.5 bps per year on the unused portion of the commitments for each day the unused portion is 35% or less.

Prior to the three-year anniversary of closing, the company can request that the revolver be increased by up to $100 million

ING Capital LLC is the administrative agent, arranger and bookrunner.

The company's obligations under the revolver are guaranteed by all of its subsidiaries other than its special-purpose financing subsidiaries and secured by a first-priority security interest in substantially all of the assets of the company and the subsidiary guarantors.

The company must comply with the following financial covenants:

• Its minimum stockholders' equity as of the last day of each fiscal quarter must be greater than or equal to the greater of (i) 40% of assets of the company and its subsidiaries and (ii) $1,980,744,000 (less amounts paid to purchase common stock in the company's tender offer), plus 50% of the net proceeds of any post-closing equity offerings;

• It must maintain at all times a 200% asset coverage ratio;

• The sum of the company and the guarantors' net worth and 30% of the equity value of any special-purpose financing subsidiaries must at all times be at least equal to the sum of any unsecured longer-term debt of the company and accrued but unpaid base management fees and incentive fees at the time of measurement; and

• The aggregate value of eligible portfolio investments that can be converted to cash in fewer than 20 business days without more than a 5% change in price must not be less than 10% of the covered debt amount for more than 30 business days during any period during which the covered debt amount (less cash and cash equivalents included in the borrowing base) is greater than 90% of the borrowing base (less cash and cash equivalents included therein).

Amendment to Arch facility

On March 31, Arch Street Funding LLC, a wholly owned special-purpose financing subsidiary of the company, amended and restated its revolving credit facility with Citibank, NA as the lender and administrative agent.

The interest rate was increased to Libor plus 205 bps during the drawdown period and Libor plus 230 bps after that.

The final maturity date was extended to Aug. 29, 2016.

The maximum commitments were decreased to $350 million.

A financial covenant was added that requires the company to maintain its net asset value at more than $200 million.

FS Investment is a business development company based in Philadelphia.

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