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): November 5, 2013
HORIZON TECHNOLOGY FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 814-00802 | 27-2114934 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
312 Farmington Avenue
Farmington, CT 06032
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (860) 676-8654
Check the appropriate box below if the Form 8-K 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)) |
| Section 1 | Registrant’s Business and Operations |
| Item 1.01 | Entry into a Material Definitive Agreement. |
On November 4, 2013, Horizon Technology Finance Corporation (the “Company”) renewed and amended its revolving credit facility (the “Credit Facility”) previously administered by Wells Fargo Capital Finance, LLC (“Wells Fargo”) and facilitated the assignment of all rights and obligations of Wells Fargo under the Credit Facility to Key Equipment Finance, Inc. (“Key”).
The Credit Facility, as amended, provides the Company’s wholly owned subsidiary, Horizon Credit II LLC (“Credit II”), with a $50 million commitment from Key and contains an “accordion” feature allowing additional lenders to make additional commitments under the Credit Facility up to an aggregate commitment of $150 million. There can be no assurance that additional lenders will make any commitments under the Credit Facility.
Effective November 4, 2013, the Credit Facility has a LIBOR floor of 0.75%, compared to a previous LIBOR floor of 1.00%. The stated interest rate under the Credit Facility is one-month LIBOR plus 3.25%, for a current interest rate applied on outstanding balances of 4.00%, as compared to a previous interest rate of 4.25%. The amended Credit Facility has a three-year draw period beginning November 4, 2013 followed by a two-year term out option. The Credit Facility allows for a maximum advance rate of 50% against eligible loans and will be secured by all of the assets of Credit II.
The descriptions of the documentation related to the securitization contained in this current report on Form 8-K do not purport to be complete and are qualified in their entirety by reference to the underlying agreements.
On November 5, 2013, the Company issued a press release announcing its amendment of the Credit Facility, a copy of which is attached hereto as Exhibit 99.1.
| Section 9 | Financial Statements and Exhibits |
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibit.
| 99.1 | Press release of the Company dated November 5, 2013. |
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.
| Date: November 5, 2013 | HORIZON TECHNOLOGY FINANCE CORPORATION | |
| By: | /s/ Robert D. Pomeroy, Jr. | |
| Robert D. Pomeroy, Jr. | ||
| Chief Executive Officer and Chairman of the Board | ||
Exhibit Index
| Exhibit No. | Description | |
| 99.1 | Press release of the Company dated November 5, 2013 |
Horizon Technology Finance Announces
Renewal and Assignment of Credit Facility with Improved Terms
Company Partners with New Lender to Secure a Lower Interest Rate,
Extended Term and Improved Structure
FARMINGTON, Conn., November 5, 2013 – Horizon Technology Finance Corporation (NASDAQ: HRZN) (the “Company” or “Horizon”), a leading specialty finance company that provides secured loans to venture capital and private equity backed development-stage companies in the technology, life science, healthcare information and services, and clean-tech industries, today announced that it has renewed and amended its revolving credit facility (“Credit Facility”) previously administered by Wells Fargo Capital Finance (“Wells Fargo”) and facilitated the assignment of all rights and obligations of Wells Fargo under the Credit Facility to Key Equipment Finance, Inc. (“Key”).
The Credit Facility, as amended, provides the Company’s wholly owned subsidiary, Horizon Credit II LLC, with a $50 million commitment from Key and contains an “accordion” feature allowing additional lenders to make commitments under the Credit Facility up to an aggregate commitment of $150 million. There can be no assurance that additional lenders will make any commitments under the Credit Facility.
Effective November 4, 2013, the Credit Facility will have a LIBOR floor of 0.75%, compared to a previous LIBOR floor of 1.00%. The stated interest rate under the Credit Facility is one-month LIBOR plus 3.25%, for a current interest rate applied on outstanding balances of 4.00%, as compared to a previous interest rate of 4.25%. The amended Credit Facility has a three-year draw period beginning November 4, 2013 followed by a two-year term out option. The Company may borrow under the Credit Facility at an advance rate of 50% against eligible loans. The Credit Facility, as amended, now allows the Company to borrow against a higher percentage of eligible loans secured by a second lien.
Horizon intends to use the Credit Facility to leverage its existing investments, as well as deploy additional capital for new investments. The amended Credit Facility with Key complements the Company's existing term loan credit facility.
“We are pleased with the significantly improved terms of our revolving credit facility,” said Christopher M. Mathieu, Senior Vice President and Chief Financial Officer. “Our new relationship with Key Equipment Finance provides Horizon with more favorable asset eligibility, a reduction in the credit facility interest rate, and an extension in the remaining revolving period by more than two years. With Key’s new commitment, we have obtained improvements in our borrowing capacity which we expect will drive net investment income as we utilize the facility.”
“We are excited to partner with one of the leading venture lenders in the market. With Key Equipment Finance’s strong financial backing combined with the substantial market expertise of the Horizon team, this facility considerably enhances Horizon’s future prospects”, said Rian W. Emmett, managing director of Key Equipment Finance. “We pride ourselves on partnering with distinguished market leaders such as Horizon and look forward to a mutually rewarding relationship for years to come.”
About Horizon Technology Finance
Horizon Technology Finance Corporation is a business development company that provides secured loans to development-stage companies backed by established venture capital and private equity firms within the technology, life science, healthcare information and services, and clean-tech industries. The investment objective of Horizon is to maximize total risk-adjusted returns by generating current income from a portfolio of directly originated secured loans as well as capital appreciation from warrants to purchase the equity of portfolio companies. Headquartered in Farmington, Connecticut, with regional offices in Walnut Creek, California and Reston, Virginia, Horizon is externally managed by its investment advisor, Horizon Technology Finance Management LLC. Horizon’s common stock trades on the NASDAQ Global Select Market under the ticker symbol “HRZN”. In addition, Horizon’s 7.375% Senior Notes due 2019 trade on the New York Stock Exchange under the ticker symbol “HTF.” To learn more, please visit www.horizontechnologyfinancecorp.com.
About Key Equipment Finance
Key Equipment Finance is one of the largest bank-based equipment finance providers in the U.S. The company provides tailored equipment lease and finance solutions for commercial clients and government entities. Through its vendor services unit, equipment finance programs are developed for manufacturers, distributors and resellers in the U.S., Canada and Europe. Key Equipment Finance also provides lease capital markets support for corporations looking to optimize risk and revenue. Through its lender finance unit, the company provides structured facilities to various sectors of the specialty finance market, including but not limited to: equipment finance and leasing companies, asset based lenders, transportation lessors and small business and middle market lenders and finance companies. Headquartered outside Denver, Colorado, Key Equipment Finance manages $8.5 billion in assets and originates nearly $4 billion of equipment financing annually. The company has management and operations bases in Albany, New York; London, England; Frankfurt, Germany; Madrid, Spain; Milan, Italy; Paris, France and Toronto, Canada. The company, which supports clients in 17 countries, employs approximately 500 people worldwide and has been in the equipment financing business for 40 years. For more information, visit www.KEFonline.com.
Forward-Looking Statements
Statements included herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the Securities and Exchange Commission. Horizon undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
| Contacts: | ||
| Horizon Technology Finance Corporation | Investor Relations and Media Contacts: | |
| Christopher M. Mathieu | The IGB Group | |
| Chief Financial Officer | Michael Cimini / Leon Berman | |
| (860) 676-8653 | (212) 477-8261 / (212) 477-8438 | |
| chris@horizontechfinance.com | mcimini@igbir.com / lberman@igbir.com |