UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 25, 2014
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MCG Capital Corporation
(Exact Name of Registrant as Specified in Charter)
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Delaware | 0-33377 | 54-1889518 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
1001 19th Street North, 10th Floor, Arlington, VA | 22209 | |||
(Address of Principal Executive Offices) | (Zip Code) | |||
(703) 247-7500
(Registrant’s telephone number, including area code)
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01. | Other Events. |
On August 25, 2014, MCG Capital Corporation, a Delaware corporation (“MCG” or the “Company”), informed the Small Business Administration (“SBA”) that it will prepay in its entirety the $150.0 million of indebtedness owed to the SBA (the “SBIC Debentures”) by Solutions Capital I, L.P. (“SCI”). SCI is MCG’s wholly owned subsidiary that received a license from the SBA in 2007 to operate as a small business investment company (“SBIC”) under the Small Business Investment Act of 1958, as amended.
As of June 30, 2014, SCI had borrowed $150.0 million, the maximum amount of outstanding leverage available to single-license SBIC companies. SBA-guaranteed debentures are non-recourse, interest-only debentures with interest payable semi-annually and a ten-year maturity. The principal amount of SBA-guaranteed debentures is not required to be paid prior to maturity, but may be prepaid at any time without penalty.
Shortly after the repayment of the SBIC Debentures, SCI plans to commence steps related to the surrender of its SBIC license to the SBA’s Office of SBIC Operations. From inception through June 30, 2014, the investments made by SCI generated an IRR of approximately 13.1%.
In connection with the repayment of the SBIC Debentures, MCG expects to accelerate approximately $2.3 million of deferred financing costs in the quarter ending September 30, 2014.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K may contain forward-looking statements within the meaning of applicable securities laws. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements.
Forward-looking statements can be identified by terminology such as “anticipate,” “believe,” “could,” “could increase the likelihood,” “estimate,” “expect,” “intend,” “is planned,” “may,” “should,” “will,” “will enable,” “would be expected,” “look forward,” “may provide,” “would” or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including those risks, uncertainties and factors referred to in MCG’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission under the section “Risk Factors,” as well as other documents that may be filed by MCG from time to time with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, MCG’s actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. MCG is providing the information in this Current Report on Form 8-K as of this date and assumes no obligations to update the information included herein or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MCG CAPITAL CORPORATION | |||||
Date: | August 25, 2014 | By: | /s/ Beverly Jane Alley | ||
Beverly Jane Alley | |||||
Chief Financial Officer | |||||