Oaktree BDC Expands Borrowing Capacity, Optimizes Loan Terms

Oaktree Strategic Credit Fund, a non-traded business development company advised by Oaktree Fund Advisors, has amended and expanded its credit facilities with JPMorgan Chase Bank, National Association and Morgan Stanley Asset Funding Inc., while simultaneously repaying and terminating a separate loan agreement with Canadian Imperial Bank of Commerce.

The BDC entered into Amendment No. 3 to its existing loan and security agreement with JPMorgan Chase Bank, National Association, among other parties. This amendment delivers several key benefits:

• Increased commitment: The total commitment under the loan and security agreement has been raised from $500 million to $700 million;
• Reduced interest rate margin: The interest rate margin on secured overnight financing rate loans has been reduced. Borrowings used to acquire broadly syndicated loans and other liquid debt securities will now incur a margin of 1.5%, down from 2.5%), while all other borrowings will see a margin of 1.9%, also down from 2.5%;
• Extended reinvestment period: The period during which the company can reinvest proceeds from its investments has been extended from May 29, 2027, to July 3, 2029; and
• Extended Final Maturity: The final maturity date of the agreement has been pushed back from May 29, 2029, to July 3, 2030.

Concurrently, Oaktree Strategic Credit Fund also executed the first amendment to its loan and servicing agreement with Morgan Stanley Asset Funding Inc., and other participants. This amendment also brings favorable terms:

• Increased commitment: The commitment under the loan and servicing agreement has been doubled from $200 million to $400 million;
• New “accordion” feature: Providing scalability, the added “accordion” feature allows OSCF Lending II SPV, LLC, as the borrower, to propose one or more increases in the maximum commitment up to an additional $600 million;
• Reduced interest rate margin: The interest rate margin on SOFR loans during the reinvestment period has been reduced from 2.35%. Borrowings for broadly syndicated loans will now be at 1.60%, and all other borrowings at 1.85%;
• Extended reinvestment period: The reinvestment period has been extended from Feb. 23, 2027, to July 3, 2028; and
• Extended final maturity: The final maturity date has been extended from Feb. 23, 2029, to July 3, 2029.

Also, the fund reported that it had repaid all outstanding borrowings under its loan and servicing agreement with Canadian Imperial Bank of Commerce. Following this repayment, that agreement was formally terminated. This facility would have otherwise matured on Nov. 21 of this year.

The BDC aims to invest in a diversified portfolio of income-generating private credit opportunities, with the flexibility to invest in high-quality public debt, and enhance total return and provide liquidity during periods of market dislocation.

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