Fidelity Merges Nontraded BDCs, Assumes $840 Million in Fund Debt

Fidelity Private Credit Company II LLC completed its acquisition of affiliated nontraded business development company Fidelity Private Credit Company LLC on July 31, assuming more than $840 million in credit facility borrowings and then taking the acquired fund’s name. The two funds agreed to the consolidation in a merger agreement first reported in April.

Under the terms of the deal, Fidelity Private Credit Company LLC — the smaller of the two nontraded BDCs — merged into Fidelity Private Credit Company II LLC, with the latter surviving. Immediately after the merger closed, the surviving fund changed its name to Fidelity Private Credit Company LLC, adopting the name of the fund it had just absorbed.

Outstanding units of the acquired fund converted into newly issued units of the surviving fund at an exchange ratio based on each fund’s closing net asset value per unit as of the closing date, Fidelity said. The company did not disclose the resulting ratio.

As part of the merger, the surviving fund assumed the acquired fund’s obligations under two credit facilities. The first, a senior secured revolving credit agreement with Truist Bank as administrative agent, had $266 million outstanding on a $430 million facility. The second, a loan and security agreement tied to Fidelity Direct Lending Fund I JSPV LLC with JPMorgan Chase Bank as administrative agent, had $575 million outstanding on an initial $700 million facility that can expand to $1.5 billion.

Previously reported by AltsWire, the deal did not require approval from the acquired fund’s members and was contingent on regulatory clearance and the effectiveness of a corresponding U.S. Securities and Exchange Commission registration statement for the surviving fund, Fidelity said.

Both funds are managed by Fidelity Diversifying Solutions LLC and are distinct from Fidelity Private Credit Fund, a separate, larger nontraded BDC not involved in this transaction.

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