UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

FS Investment Corporation IV 

(Exact name of Registrant as specified in its charter)

None

(Former name or former address, if changed since last report)

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:

Item 1.01. Entry into a Material Definitive Agreement.

On February 10, 2017, Broomall Funding LLC (“Broomall Funding”), a wholly-owned subsidiary of FS Investment Corporation IV (the “Company”), entered into a committed facility arrangement, effective as of March 1, 2017, (the “Financing Arrangement”) with BNP Paribas Prime Brokerage International, Ltd. (“BNPP”) pursuant to which Broomall Funding may borrow, from time to time, up to $50 million from BNPP. The Financing Arrangement was effected through a Committed Facility Agreement by and between Broomall Funding and BNPP (the “Committed Facility Agreement”), a U.S. PB Agreement by and between Broomall Funding and BNPP, on behalf of itself and as agent for BNP Paribas and BNP Paribas Prime Brokerage, Inc. (collectively, the “BNPP Entities”) and a Special Custody and Pledge Agreement by and among Broomall Funding, BNPP and State Street Bank and Trust Company, as custodian (the “Custodian”), each dated and effective as of March 1, 2017 (collectively, the “Financing Agreements”).

The Company may contribute securities to Broomall Funding from time to time, subject to certain restrictions set forth in the Financing Agreements, and will retain a residual interest in any securities contributed through its ownership of Broomall Funding or will receive fair market value for any securities sold to Broomall Funding. Broomall Funding may purchase additional securities from various sources. Broomall Funding has appointed the Company to manage its portfolio of securities pursuant to the terms of an investment management agreement. Broomall Funding’s obligations to BNPP under the Financing Arrangement are secured by a first priority security interest in substantially all of the assets of Broomall Funding, including its portfolio of securities. Such pledged portfolio of securities will be held in a segregated custody account with the Custodian. The value of securities required to be pledged by Broomall Funding is determined in accordance with the margin requirements described in the Financing Agreements. The obligations of Broomall Funding under the Financing Arrangement are non-recourse to the Company.

Borrowings under the Financing Arrangement accrue interest at a rate equal to the three-month London Interbank Offered Rate plus 1.25% per annum. Interest is payable monthly in arrears. Broomall Funding will be required to pay a non-usage fee to the extent the aggregate principal amount available under the Financing Arrangement has not been utilized. Broomall Funding may terminate the Committed Facility Agreement upon 270 days’ notice. Absent a default or facility termination event or the ratings decline described in the following sentence, BNPP is required to provide Broomall Funding with 270 days’ notice prior to terminating or materially amending the Committed Facility Agreement. BNPP has a cancellation right if BNP Paribas’ long-term credit rating declines three or more notches below its highest rating by any of Standard & Poor’s Financial Services LLC, Moody’s Investors Service, Inc. or Fitch Ratings, Inc., during the period commencing on the closing date of the Committed Facility Agreement (March 1, 2017) and ending on the date of such long-term credit rating decline. Upon any such termination, BNPP shall pay Broomall Funding a fee equal to 0.50% of the maximum amount of financing available on the termination date. Broomall Funding will pay an arrangement fee and incur certain other customary costs and expenses in connection with obtaining the Financing Arrangement.

In connection with the Financing Arrangement, Broomall Funding has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The Financing Agreements contain the following customary events of default and termination events, among others: (a) the occurrence of a default or similar condition under certain third-party contracts of the Company and Broomall Funding; (b) any change in BNPP’s interpretation of applicable law that, in the reasonable opinion of counsel to BNPP, has the effect of impeding or prohibiting the Financing Arrangement; (c) certain events of insolvency or bankruptcy of the Company or Broomall Funding; (d) specified material reductions in the Company’s or Broomall Funding’s net asset value; (e) any change in the Company’s fundamental or material investment policies; and (f) the termination of the investment advisory and administrative services agreement between the Company and FSIC IV Advisor, LLC or if FSIC IV Advisor, LLC otherwise ceases to act as investment adviser to the Company and is not immediately replaced by an affiliate or other investment adviser acceptable to BNPP.

Under the terms of the Financing Agreements, BNPP has the ability to borrow a portion of the pledged collateral (collectively, the “Rehypothecated Securities”), subject to certain limits. Broomall Funding receives a fee from BNPP in connection with any Rehypothecated Securities. Broomall Funding may designate any security within the pledged collateral as ineligible to be a Rehypothecated Security, provided there are eligible securities within the segregated custody account in an amount at least equal to the outstanding borrowings owed by Broomall Funding to BNPP. Broomall Funding may recall any Rehypothecated Security at any time and BNPP must return such security or equivalent security within a commercially reasonable period. In the event BNPP does not return the security, Broomall Funding will have the right to, among other things, apply and set off an amount equal to 100% of the then-current fair market value of such Rehypothecated Securities against any outstanding borrowings owed to BNPP under the Financing Agreements. Rehypothecated Securities are marked-to-market daily and if the value of all Rehypothecated Securities exceeds 100% of the outstanding borrowings owed by Broomall Funding under the Financing Agreements, BNPP may either reduce the amount of Rehypothecated Securities to eliminate such excess or deposit into the segregated custody account an amount of cash equal to such excess. Broomall Funding will continue to receive interest and the scheduled repayment of principal balances on Rehypothecated Securities.

The foregoing descriptions of the Financing Arrangement and related agreements as set forth in this Item 1.01 are summaries only and are each qualified in all respects by the provisions of such agreements, copies of which are attached hereto as Exhibits 10.1 through 10.4 and are incorporated by reference herein.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Forward-Looking Statements

This Current Report on Form 8-K may contain certain forward-looking statements, including statements with regard to the future performance and operation of the Company. Words such as “believes,” “expects,” “projects” and “future” or similar expressions are intended to identify forward-looking statements.  These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions.  Certain factors could cause actual results to differ materially from those projected in these forward-looking statements, and some of these factors are enumerated in the filings the Company makes with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.