RCS Capital amends first-, second-lien credit facilities to allow debt

By Marisa Wong

Morgantown, W.Va., Nov. 12 – RCS Capital Corp. entered into amendments to its first-lien credit agreement dated as of April 29, 2014 with Barclays Bank plc as administrative agent and its second-lien credit agreement dated April 29, 2014 with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

Completed on Nov. 8, the amendments allow the company to, among other things, incur $15 million of senior promissory notes issued to Luxor Capital Partners, LP; incur a $12 million senior promissory sold to RCAP Holdings, LLC; repay the RCAP Holdings note from proceeds of a future financing; and repurchase class B shares under an agreement with RCAP Holdings.

In addition, the amendments provide that the fixed-charge coverage ratio and the secured leverage ratio will not be tested for the test period ended Sept. 30; subject to some conditions, the company may incur additional subordinated debt not exceeding $75 million, inclusive of the RCAP Holdings note and the Luxor notes; and subject to some conditions, the company may sell or dispose of Hatteras Funds, LLC, Docupace Technologies, LLC and DirectVest LLC without satisfying cash consideration and fair-market-value conditions.

RCS Capital is a New York-based investment firm focused on the individual retail investor.

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