[8-K] OFS Capital Corporation Reports Material Event

Rhea-AI Filing Summary

OFS Capital Corporation entered into a private placement to sell an unsecured $25,000,000 note carrying an 8.00% fixed interest rate and maturing on August 8, 2029. The purchase price was $24,250,000 after an offering discount and interest is payable quarterly. The Note ranks pari passu with other unsecured, unsubordinated indebtedness and includes customary affirmative and negative covenants, including maintenance of the company’s status as a business development company and a minimum asset coverage ratio; if breached, the holder may require redemption at 100% of principal plus accrued interest. The Company intends to use net proceeds to partially redeem its 4.75% Notes due 2026. The Note was issued in reliance on Section 4(a)(2) and is not registered under the Securities Act.

Positive

• Raised $25,000,000 of unsecured financing via private placement, providing immediate liquidity.
• Proceeds designated to partially redeem outstanding 4.75% Notes due 2026, altering near-term debt maturities.
• Note ranks pari passu with other unsecured unsubordinated indebtedness, avoiding subordination.

Negative

• High fixed coupon of 8.00%, which increases the company's cost of debt relative to the 4.75% notes being redeemed.
• Issued at a discount (purchase price $24,250,000), reducing net proceeds and increasing effective financing cost.
• Covenant breach remedy allows holder to demand redemption at 100% of principal plus accrued interest, creating potential acceleration risk.
• New unsecured obligation increases leverage without collateral protection for creditors.

Insights

Financial Analyst

TL;DR: Raised $25M unsecured financing provides cash but increases interest cost and leverages covenants.

The private placement supplies immediate liquidity and is explicitly earmarked to partially redeem existing 4.75% notes due 2026, which alters the company's near-term debt schedule. However, the new note carries an 8.00% coupon and was issued at a discount, which increases effective financing cost. Covenants include minimum asset coverage and business development company maintenance; covenant breaches allow the holder to demand full redemption, creating potential short-term operational constraints. Overall, mixed impact: improved liquidity and liability management flexibility versus higher recurring interest expense and covenant risk.

Risk & Capital Structure Specialist

TL;DR: Material from a capital-structure risk perspective—adds unsecured leverage and covenant-triggered redemption risk.

The transaction increases the company's unsecured indebtedness and introduces a note with explicit covenant remedies that can accelerate cash obligations if breached. Issuance at a discount reduces net proceeds and the 8.00% fixed rate is materially higher than the 4.75% notes being partially redeemed, raising interest burden on a go-forward basis. The private placement and pari passu ranking avoid subordination but maintain creditor parity, limiting structural protections for equity holders. Impact is negative from a risk-structure standpoint.

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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

Date of Report (Date of earliest event reported): August 8, 2025

OFS Capital Corporation

(Exact name of Registrant as specified in its charter)

Delaware			814-00813			46-1339639
(State or other jurisdiction of incorporation)			(Commission File Number)			(I.R.S. Employer Identification No.)

 

222 W. Adams Street, Suite 1850 Chicago, Illinois			60606
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (847) 734-2000

Not applicable

(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:

¨ 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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value per share

OFS

The Nasdaq Global Select Market

4.95% Notes due 2028

OFSSH

The Nasdaq Global Select Market

7.50% Notes due 2028

OFSSO

The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 1.01.    Entry into a Material Definitive Agreement.

On August 8, 2025, OFS Capital Corporation, a Delaware corporation (the “Company”), entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with an institutional accredited investor (the “Purchaser”), pursuant to which the Company sold to the Purchaser in a private placement an unsecured note in an aggregate principal amount of $25,000,000 (the “Note”). The purchase price of the Note was $24,250,000 after deducting the offering price discount. The Note has a fixed interest rate of 8.00% and is due on August 8, 2029, unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with its terms. Interest on the Note will be due quarterly. The Note is a general unsecured obligation that ranks pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

The Company intends to use the net proceeds to partially redeem its 4.75% Notes due 2026.

The Securities Purchase Agreement contains customary terms and conditions for unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a business development company within the meaning of the Investment Company Act of 1940, as amended, and minimum asset coverage ratio. In the event of breach of these covenants, the holder of the Note may elect to require the Company to redeem the Note at a price equal to 100% of the principal amount, plus accrued and unpaid interest.

The Note was offered in reliance on Section 4(a)(2) of Securities Act of 1933, as amended (the “Securities Act”). The Note was not, and will not be, registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.

The information on this Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to purchase the Note 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.

The description above is only a summary of the material provisions of the Securities Purchase Agreement and is qualified in its entirety by reference to the copy of the Securities Purchase Agreement which is filed as Exhibit 10.1 to this current report on Form 8-K and is incorporated herein by reference thereto.

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

The information set forth in Item 1.01 of this Form 8-K is incorporated herein by reference.

Item 9.01.    Financial Statements and Exhibits.    

(d)    Exhibit.

Exhibit No.						Description
10.1						Securities Purchase Agreement dated August 8, 2025 by and between OFS Capital Corporation and the Purchaser party thereto.

* * * * *

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.

			OFS CAPITAL CORPORATION
Date: August 8, 2025			By:			/s/ Bilal Rashid
						Chief Executive Officer

FAQ

What did OFS (OFS) issue in this 8-K?

OFS issued an unsecured note in a private placement with an aggregate principal amount of $25,000,000.

What are the key economic terms of the note?

The Note carries a fixed 8.00% interest rate, is due on August 8, 2029, and was sold for a purchase price of $24,250,000 after the offering discount.

How will OFS use the proceeds from the private placement?

The Company intends to use the net proceeds to partially redeem its 4.75% Notes due 2026.

Does the note have covenants or special remedies?

Yes. The Securities Purchase Agreement includes customary covenants, including maintaining BDC status and a minimum asset coverage ratio; on breach the holder may require redemption at 100% of principal plus accrued interest.

Was the note registered under the Securities Act?

No. The Note was offered in reliance on Section 4(a)(2) of the Securities Act and was not registered.