Oaktree Announces Definitive Agreement for $250 Million Senior Notes Offering
November 16 2017 - 10:32PM
Business Wire
Refinancing and Swap Transaction to Generate Approximately $12
Million Annual Interest Cost Savings
Oaktree Capital Group, LLC (NYSE: OAK) today announced the
execution of a definitive purchase agreement with certain
accredited investors to purchase its previously
announced $250 million of 3.78% senior notes due
2032 (the “Notes”) issued by its indirect subsidiary, Oaktree
Capital Management, L.P. (the “Issuer”), and guaranteed
by its indirect subsidiaries, Oaktree Capital I,
L.P., Oaktree Capital II, L.P. and Oaktree AIF
Investments, L.P. (the “Guarantors”). The Notes are senior
unsecured obligations of the Issuer, jointly and severally
guaranteed by the Guarantors. Funding of the Notes is anticipated
to occur on December 18, 2017.
In connection with the Notes offering, the Issuer entered into a
cross-currency swap agreement to Euros, reducing the interest cost
to 1.95% per year. The proceeds from the sale of the Notes and cash
on hand will be used to redeem the $250 million of 6.75%
Senior Notes due 2019 (the “2019 Notes”) and to pay the related
make-whole premium to holders thereof.
The redemption of the 2019 Notes is expected to result in a
one-time, pre-tax charge of approximately $23 million to adjusted
net income in the fourth quarter of 2017. For distributable
earnings, the charge will be amortized through the original
maturity date of December 2019.
Dan Levin, Chief Financial Officer, said, “With the completion
of this refinancing and Euro swap, we will reduce our interest cost
by over 475 basis points to less than 2% and extend the maturity of
this principal amount by 13 years, generating approximately $12
million in annual interest cost savings. Many of the existing
holders of our outstanding private notes participated in this
transaction, and we appreciate their ongoing support.”
The offer and sale of the Notes were and will be made solely in
private placement transactions exempt from registration pursuant to
Section 4(a)(2) of the Securities Act of 1933, as amended (the
“Securities Act”). The Notes have not been registered under the
Securities Act or any state securities laws and may not be offered
or sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act
and applicable state laws. This press release shall not constitute
an offer to sell or a solicitation of an offer to purchase the
Notes or any other securities, and shall not constitute an offer,
solicitation or sale in any state or jurisdiction in which such an
offer, solicitation or sale would be unlawful.
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version on businesswire.com: http://www.businesswire.com/news/home/20171116006600/en/
Investor Relations:Oaktree Capital Group, LLCAndrea D. Williams,
213-830-6483investorrelations@oaktreecapital.com
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