Business Development Corporation of America, a non-traded business development company sponsored by AR Capital, has priced $100 million aggregate principal amount of 6.00 percent senior unsecured notes.
The notes will mature on September 1, 2020, unless repurchased or redeemed prior to such date, and will bear interest at a rate of 6.00 percent per year payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2016.
The notes will be general unsecured obligations of the company that rank senior in right of payment to all of its existing and future indebtedness that is expressly subordinated in right of payment to the notes. The notes will rank equally in right of payment with all of the company’s existing and future senior liabilities that are not so subordinated, effectively junior to any of its secured indebtedness including unsecured indebtedness that it later secures, to the extent of the value of the assets securing such debt, and structurally junior to all existing and future indebtedness incurred by its subsidiaries, financing vehicles or similar facilities.
Upon the occurrence of certain change of control events, holders of the notes can require the company to repurchase the notes at a price equal to 100 percent of the principal amount plus accrued but unpaid interest to the repurchase date. The notes will be issued in denominations of $1,000 and have no sinking fund provisions. The company estimates that the net proceeds from the offering will be approximately $97.9 million, after deducting the initial purchasers’ discount and estimated offering expenses payable by the company. The proceeds from the offering may be used to make investments in portfolio companies in accordance with its investment objectives and for general corporate purposes.
The notes will be sold to qualified institutional buyers. The offering is expected to close on August 31, 2015, subject to customary closing conditions.
Business Development Corporation of America is a non-traded business development company that invests in both the debt and equity of private middle market companies. The company is closed to new investments.