Oaktree refinances with $250 million term loan at Libor plus 100 bps

By Susanna Moon

Chicago, Dec. 28 - Oaktree Capital Management, LP, Oaktree Capital II, LP, Oaktree AIF Investments, LP and Oaktree Capital I, LP refinanced a facility with a $250 million five-year unsecured term loan, according to an 8-K filing by Oaktree Capital Group, LLC with the Securities and Exchange Commission.

The companies entered into a credit agreement on Dec. 21 with Wells Fargo Bank, NA as administrative agent for a 13-bank syndicate and Wells Fargo Securities, LLC as lead arranger and bookrunner. The new credit agreement replaces the credit agreement dated Jan. 7, 2011 with Wells Fargo, which was terminated on Dec. 21.

The current term loan, which was fully funded at closing, replaces a term loan under the prior facility with a remaining balance of $247.5 million.

The new credit agreement also includes an unsecured revolving credit facility of up to $500 million, which was undrawn at closing and replaced an undrawn revolving loan of up to $250 million under the previous agreement. The current revolver includes a $20 million letter-of-credit subfacility.

The loans under the new credit agreement mature in December 2017.

Interest on the loans will be Libor plus 100 basis points, with a spread of Libor plus 87.5 bps to 175 bps based on leverage. The unused fee is initially 12.5 bps and ranges from 10 bps to 20 bps.

The companies plan to maintain an existing interest-rate swap that, based on the current credit ratings of Oaktree Capital Management, LP, fixes the term loan's annual interest rate at 2.69% through the expiration of the swap in January 2016. They may enter into an additional interest-rate swap for all or a portion of the final two years of the term.

The term loan amortizes quarterly in an amount equal to 2.5% of the original $250 million principal amount, with remaining principal and accrued interest payable upon maturity.

Proceeds will be used for working capital and general corporate purposes, including to repay the term loan outstanding under Oaktree's previous facility, to make capital contributions to investment funds, accounts or investment companies or affiliates, or to make permitted distributions or equity repurchases.

The investment management firm is based in Los Angeles.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.