5-30-2016: This is a reprint of a Company Alert posted on BDC Reporter:
- May 30, 2016: The BDC Credit Reporter noted in the latest 10-Q for the quarter ended March 31, 2016 from WhiteHorse Finance (NASDAQ:WHF) that a Subsequent Event was a payment blockage to the second lien lenders reported on April 29, 2016. No further details were available. We used Alpha-Sense to check out the other BDC lender-Harvest Capital or HCAP-which provided the following disclosure in its filing:
On April 22, 2016, the Company received notice from the senior secured lender to Fox Rent a Car, Inc. ("Fox") that, due to Fox's violation of certain covenants under its senior secured credit facility, it was blocking the junior secured term loan lenders from receiving interest payments until the covenant breaches are cured, waived by the senior secured lenders or the blockage period expires. The loan remains on accrual status at March 31, 2016 as the Company believes its loan is within the enterprise value of the business and that it will collect 100% of the contractual cash flows owed under the credit agreement.
- Both BDCs-payment blocking notwithstanding-continue to carry the second lien debt at full value.
- The BDC Credit Reporter has added Fox Rent A Car to the Master List, with an initial rating of WATCH. Click here for the Company File, partially completed.
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in WHF over the next 72 hours.