INDENTURE by and among BARINGS PRIVATE CREDIT CORPORATION CLO 2023-1 LTD. Issuer BARINGS PRIVATE CREDIT CLO 2023-1, LLC Co‑Issuer and STATE STREET BANK AND TRUST COMPANY Collateral Trustee August 23, 2023

Exhibit 10.2

 

by and among

 

BARINGS PRIVATE CREDIT CORPORATION CLO 2023-1 LTD.

Issuer

 

BARINGS PRIVATE CREDIT CLO 2023-1, LLC

Co‑Issuer

 

and

 

STATE STREET BANK AND TRUST COMPANY

Collateral Trustee

 

August 23, 2023

 

TABLE OF CONTENTS

 

INDENTURE AND SECURITY AGREEMENT, dated as of August 23, 2023, among Barings Private Credit Corporation CLO 2023-1 Ltd., an exempted company incorporated with limited liability and existing under the laws of Bermuda (the “Issuer”), Barings Private Credit CLO 2023-1, LLC, a limited liability company organized under the laws of the State of Delaware (the “Co‑Issuer”, and together with the Issuer, the “Issuers”) and State Street Bank and Trust Company, as collateral trustee (herein, together with its permitted successors and assigns in the trusts hereunder, the “Collateral Trustee”).

 

 

The Issuers are duly authorized to execute and deliver this Indenture to provide for the Notes issuable as provided in this Indenture.  Except as otherwise provided herein, all covenants and agreements made by the Issuers herein are for the benefit and security of the Secured Parties.  The Issuers are entering into this Indenture, and the Collateral Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

 

All things necessary to make this Indenture a valid agreement of the Issuers in accordance with the agreement’s terms have been done.

 

 

The Issuer hereby Grants to the Collateral Trustee, for the benefit and security of the Holders of the Secured Debt, the Collateral Trustee, the Loan Agent, the Collateral Manager, each Hedge Counterparty, the Administrator and the Collateral Administrator (collectively, the “Secured Parties”), all of its accounts, chattel paper, payment intangibles, deposit accounts, financial assets, general intangibles, instruments, investment property, letter‑of‑credit rights, securities, money, documents, commercial tort claims, goods, securities entitlements and other supporting obligations relating to the foregoing (in each case, as defined in the UCC, including for the avoidance of doubt, any subcategory thereof) and all other property of any type or nature owned by the Issuer, including, but not limited to:

 

(a)          the Collateral Obligations, Loss Mitigation Loans, Restructured Loans and Equity Securities owned by the Issuer and all payments thereon or with respect thereto;

 

(b)          the Issuer’s interest in (i) the Payment Account, (ii) the Collection Account, (iii) the Revolver Funding Account, (iv) the Expense Reserve Account, (v) the Custodial Account (vi) the Supplemental Reserve Account and (vii) the Contribution Account, and in each case any Eligible Investments purchased with funds on deposit therein, and all income from the investment of funds therein;

 

(c)          the Issuer’s interest in each Hedge Counterparty Collateral Account, any Eligible Investments purchased with funds on deposit therein, and all income from the investment of funds therein, in each case subject to the rights of the Hedge Counterparty therein;

 

(d)        the Issuer’s rights under the Class A-2 Credit Agreement, the Collateral Management Agreement, the Collateral Administration Agreement, the Securities Account Control Agreement, the Loan Sale Agreements, the Administration Agreement and the Hedge Agreements;

(e)             all Cash or Money;

 

(f)            any other property otherwise Delivered to the Collateral Trustee by or on behalf of the Issuer (whether or not constituting Collateral Obligations, Loss Mitigation Loans, Restructured Loans, Equity Securities or Eligible Investments); and

 

(g)             all proceeds (as defined in the UCC) with respect to the foregoing;

provided that such Grants shall not include (i) amounts (if any) remaining from the proceeds of issuance of the paid‑up ordinary share capital of the Issuer, (ii) amounts remaining (if any) from the transaction fee paid to the Issuer in consideration of the issuance of the Notes and the incurrence of the Class A-2 Loans, (iii) any account maintained in respect of the funds referred to in items (i) and (ii), together with any interest therein and (iv) the membership interests of the Co‑Issuer (collectively, the “Excepted Property”) (the assets referred to in (a) through (g), excluding the Excepted Property, are collectively referred to as the “Assets”).

 

The above Grant is made to secure the Secured Debt and certain other amounts payable by the Issuer as described herein.  Except as set forth in the Priority of Payments and Article XIII of this Indenture, the Secured Debt is secured by the Grant equally and ratably without prejudice, priority or distinction between any Secured Debt and any other Secured Debt by reason of difference in time of issuance or otherwise.  The Grant is made to secure, in accordance with the priorities set forth in the Priority of Payments and Article XIII of this Indenture, (i) the payment of all amounts due on the Secured Debt in accordance with their terms, (ii) the payment of all other sums (other than in respect of the Subordinated Notes) payable under this Indenture, (iii) the payment of amounts owing by the Issuer under the Collateral Management Agreement, the Securities Account Control Agreement, the Administration Agreement and the Collateral Administration Agreement and (iv) compliance with the provisions of this Indenture, all as provided in this Indenture.  The foregoing Grant shall, for the purpose of determining the property subject to the lien of this Indenture, be deemed to include any securities and any investments granted to the Collateral Trustee by or on behalf of the Issuer, whether or not such securities or investments satisfy the criteria set forth in the definitions of “Collateral Obligation”, “Eligibility Criteria” or “Eligible Investments”, as the case may be.

 

The Collateral Trustee acknowledges such ▇▇▇▇▇, accepts the trusts hereunder in accordance with the provisions hereof, and agrees to perform the duties herein in accordance with the terms hereof.

ARTICLE I

 

DEFINITIONS

 

Section 1.1       Definitions.   Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture, and the definitions of such terms are equally applicable both to the singular and plural forms of such terms and to the masculine, feminine and neuter genders of such terms.  The word “including” shall mean “including without limitation”.  All references in this Indenture to designated “Articles”, “Sections”, “subsections” and other subdivisions are to the designated articles, Sections, subsections and other subdivisions of this Indenture.  The words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular article, Section, subsection or other subdivision. All references to (i) “redemption” of Debt shall be understood to refer, in the case of the Class A-2 Loans, to the repayment or prepayment of the Class A-2 Loans by the Issuers and (ii) the “issuance” of Debt or to the “execution,” “authentication” and/or “delivery” of Debt shall be understood to refer, in the case of the Class A-2 Loans, to the incurrence or borrowing, as applicable, of the Class A-2 Loans by the Issuers, in each case pursuant to the Class A-2 Credit Agreement.

 

“17g‑5 Information”:  The meaning specified in Section 14.17(a) (17g‑5 Information).

 

“17g‑5 Website”:  A password‑protected internet website which shall initially be located at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇.  Any change of the 17g‑5 Website shall only occur after notice has been delivered by the Issuer to the Collateral Trustee, the Collateral Administrator, the Collateral Manager, the Initial Purchaser, and the Rating Agency setting the date of change and new location of the 17g‑5 Website.

 

“Accounts”: (i) The Payment Account, (ii) the Collection Account, (iii) the Revolver Funding Account, (iv) the Expense Reserve Account, (v) the Custodial Account, (vi) each Hedge Counterparty Collateral Account, (vii) the Supplemental Reserve Account and (viii) the Contribution Account, each of which shall be comprised of a securities account and a related deposit account.

 

“Accredited Investor”:  The meaning set forth in Rule 501(a) under the Securities Act.

 

“Act”:  With respect to an Act of the Holders, the meaning specified in Section 14.2(a) (Acts of Holders).

 

“Active Exchange”:  At any time, an exchange selected by the Issuer for listing any Listed Debt, but only for so long as any Listed Debt is listed on such exchange, and only for so long as the guidelines of such exchange requires the action specified therein.

 

“Active Rater”:  S&P for so long as such entity rates any Class of Secured Debt Outstanding.

“Adjusted Collateral Principal Amount”:  As of any date of determination, (a) the Aggregate Principal Balance of the Collateral Obligations (other than Defaulted Obligations, Discount Obligations, Deferring Obligations, Loss Mitigation Loans, Long‑Dated Obligations and Closing Date Participation Interests), plus (b) without duplication, Balance of the Collection Account representing Principal Proceeds, plus (c) the sum of the S&P Collateral Value of each Defaulted Obligation and Deferring Obligation, plus (d) the aggregate, for each Discount Obligation, of the purchase price, excluding accrued interest, expressed as a percentage of par and multiplied by the Principal Balance thereof, for such Discount Obligation, plus (e) with respect to Long‑Dated Obligations, the Aggregate Principal Balance of the Long‑Dated Obligations multiplied by (i) for Long-Dated Obligations maturing not more than three years after the Stated Maturity, the lesser of (a) 70% and (b) the Market Value of such Long-Date Obligation expressed as a percentage of the Aggregate Principal Balance of such Long-Dated Obligation or (ii) for Long-Dated Obligations maturing more than three years after the Stated Maturity, zero; plus (f) (i) with respect to each Loss Mitigation Qualified Loan, its S&P Collateral Value and (ii) with respect to each Loss Mitigation Loan that is not a Loss Mitigation Qualified Loan, zero; minus (g) the Excess CCC Adjustment Amount; plus (h) with respect to each Closing Date Participation Interest that has not been  elevated to an assignment, (i) on or prior to the day that is 60 days following the Closing Date, its Principal Balance, and (ii) any time thereafter, its S&P Collateral Value until such time that the applicable Closing Date Participation Interest is elevated to an assignment to the Issuer; provided that, (i) with respect to any Collateral Obligation (or portion thereof) that satisfies more than one of the definitions of Defaulted Obligation, Deferring Obligation, Discount Obligation, Long‑Dated Obligation, Loss Mitigation Loan or any asset that falls into the Excess CCC Adjustment Amount, such Collateral Obligation (or portion thereof) shall, for the purposes of this definition, be treated as belonging to the category of Collateral Obligations which results in the lowest Adjusted Collateral Principal Amount on any date of determination and (ii) the Adjusted Collateral Principal Amount will be zero for any Defaulted Obligation which the Issuer has owned for more than three years during which such Collateral Obligation was at all times a Defaulted Obligation.

 

“Administration Agreement”:  An agreement between the Administrator, Walkers Fiduciary Limited (as share trustee) and the Issuer (as amended from time to time) relating to the various corporate management functions that the Administrator will perform on behalf of the Issuer, including communications with shareholders and the general public, and the provision of certain clerical, administrative and other corporate services in Bermuda during the term of such agreement.

 

“Administrative Expense Cap”:  An amount equal on any Payment Date (when taken together with any Administrative Expenses paid during the period since the preceding Payment Date or in the case of the first Payment Date, the period since the Closing Date), to the sum of (a) 0.025% per annum (prorated for the related Interest Accrual Period on the basis of the actual number of days divided by 360 elapsed for the related Interest Accrual Period) of the Fee Basis Amount on the related Determination Date and (b) U.S.$300,000 per annum (prorated for the related Interest Accrual Period on the basis of the actual number of days divided by 360 elapsed for the related Interest Accrual Period); provided that (1) in respect of any Payment Date after the third Payment Date following the Closing Date, if the aggregate amount of Administrative Expenses paid pursuant to Section 11.1(a)(i)(A) (Disbursements of Monies from Payment Account), Section 11.1(a)(ii)(A) (Disbursements of Monies from Payment Account) and Section 11.1(a)(iv)(A) (Disbursements of Monies from Payment Account) (including any excess applied in accordance with this proviso) on the three immediately preceding Payment Dates and during the related Collection Periods is less than the stated Administrative Expense Cap (without regard to any excess applied in accordance with this proviso) in the aggregate for such three preceding Payment Dates, then the excess may be applied to the Administrative Expense Cap with respect to the then‑current Payment Date; and (2) in respect of the third Payment Date following the Closing Date, such excess amount shall be calculated based on the Payment Dates preceding such Payment Date.

“Administrative Expenses”:  The fees, expenses and other amounts due or accrued to any Person with respect to any Payment Date (including, with respect to such Payment Date, any such amounts that were due and not paid on any prior Payment Date in accordance with the Priority of Payments) and payable by the Issuer or the Co‑Issuer under, in connection with the performance of, the Transaction Documents and the business of the Issuer and the Co‑Issuer (including any costs, fees and expenses incurred in connection with satisfying the requirements under Article 6 and Article 7 of the Securitization Regulations), other than amounts that are expressly payable to any Person under the Priority of Payments in respect of an amount that is stated to be payable as an amount other than as Administrative Expenses.

 

“Administrator”:  Walkers Corporate (Bermuda) Limited, in its capacity as corporate administrator of the Issuer, and any successor thereto.

 

“Affected Class”:  Any Class of Secured Debt that, as a result of the occurrence of a Tax Event, has not received 100% of the aggregate amount of principal and interest that would otherwise be due and payable to such Class on any Payment Date.

 

“Affiliate”:  With respect to a Person, (i) any other Person who, directly or indirectly, is in control of, or controlled by, or is under common control with, such Person or (ii) any other Person who is a director, Officer, employee or general partner (a) of such Person, (b) of any subsidiary or parent company of such Person or (c) of any Person described in clause (i) above.  For the purposes of this definition, “control” of a Person shall mean the power, direct or indirect, (x) to vote more than 50% of the securities having ordinary voting power for the election of directors of such Person or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.  For purposes of this definition, no entity shall be deemed an Affiliate of the Issuer or the Co‑Issuer solely because the Administrator or any of its Affiliates acts as administrator or share trustee for such entity, and funds and accounts managed by the Collateral Manager or Affiliates of the Collateral Manager shall not be deemed Affiliates of the Collateral Manager solely because the Collateral Manager is a “manager” of such entity.

 

“Agent Members”:  Members of, or participants in, Clearstream, DTC or Euroclear.

 

“Aggregate Outstanding Amount”:  With respect to any of the Debt as of any date, the aggregate unpaid principal amount of such Debt Outstanding (including any Deferred Interest previously added to the principal amount of any Class of Secured Debt that remains unpaid).

 

“Aggregate Principal Balance”:  When used with respect to all or a portion of the Collateral Obligations or the Assets, the sum of the Principal Balances of all or of such portion of the Collateral Obligations or Assets, respectively.

 

“Alternative Reference Rate”:  The replacement rate for the Reference Rate that is the Benchmark Replacement (as determined by the Collateral Manager with written notice to the Issuer, the Collateral Trustee (who shall forward notice to the Holders of the Secured Debt and the Holders of the Subordinated Notes), the Collateral Administrator and the Calculation Agent). If the Benchmark Replacement cannot be determined by the Collateral Manager as of the Benchmark Replacement Date, then the Alternative Reference Rate will mean the first alternative set forth in the order below that the Collateral Manager determines can be determined as of the Benchmark Replacement Date:  (1) the rate proposed by the Collateral Manager and consented to by a Majority of the Controlling Class and a Majority of the Subordinated Notes; provided, that the Alternative Reference Rate for the Floating Rate Debt will be no less than zero and (2) the Fallback Rate. Notice of any such determination shall be delivered to the Issuer, the Collateral Trustee (who shall forward notice to the Holders of the Secured Debt and the Holders of the Subordinated Notes), the Collateral Administrator, the Calculation Agent and S&P.

“Applicable Issuer” or “Applicable Issuers”:  With respect to the Co-Issued Debt, the Issuers; with respect to the Issuer Only Notes, the Issuer; and with respect to any additional debt issued in accordance with Section 2.13 (Additional Issuance) and Section 3.2 (Conditions to Additional Issuance), the Issuer and, if such debt is co‑issued, the Co‑Issuer; and with respect to any additional debt incurred in accordance with the Class A-2 Credit Agreement, the Issuers.

 

“Approved Index List”:  The nationally recognized indices specified in Schedule 2 hereto as amended from time to time by the Collateral Manager with prior notice of any amendment to S&P and a copy of any such amended Approved Index List to the Collateral Administrator.

 

“Asset‑backed Commercial Paper”:  Commercial paper or other short‑term obligations of a program that primarily issues externally rated commercial paper backed by assets or exposures held in a bankruptcy‑remote, special purpose entity.

 

“Asset Replacement Percentage”:  On any date of calculation, as calculated by the Collateral Manager, a fraction (expressed as a percentage) where the numerator is the outstanding principal balance of the floating rate Collateral Obligations being indexed to a reference rate (which, for the avoidance of doubt, is not a Libor rate) identified in the definition of “Benchmark Replacement” as a potential replacement for the then-current Reference Rate and the denominator is the outstanding principal balance of all floating rate Collateral Obligations as of such date.

 

“Assets”:  The meaning assigned in the Granting Clauses hereof.

 

“Assumed Reinvestment Rate”:  The Reference Rate (as determined on the most recent Interest Determination Date relating to an Interest Accrual Period beginning on a Payment Date or the Closing Date); provided that the Assumed Reinvestment Rate shall not be less than 0.00%.

 

“Authenticating Agent”:  With respect to the Notes or a Class of the Notes, the Person designated by the Collateral Trustee to authenticate such Notes on behalf of the Collateral Trustee pursuant to Section 6.14 (Authenticating Agents) hereof.

 

“Authorized Denomination”: The meaning specified in Section 2.3(c) (Authorized Amount; Stated Maturity; Denominations).

“Authorized Officer”:  With respect to the Issuer or the Co‑Issuer, any Officer or any other Person who is authorized to act for the Issuer or the Co‑Issuer (including any duly appointed attorney‑in‑fact of the Issuer or the Co‑Issuer), as applicable, in matters relating to, and binding upon, the Issuer or the Co‑Issuer.  With respect to the Collateral Manager, any Officer, employee, member or agent of the Collateral Manager who is authorized to act for the Collateral Manager in matters relating to, and binding upon, the Collateral Manager with respect to the subject matter of the request, certificate or order in question.  With respect to the Collateral Administrator, any Officer, employee, partner or agent of the Collateral Administrator who is authorized to act for the Collateral Administrator in matters relating to, and binding upon, the Collateral Administrator with respect to the subject matter of the request, certificate or order in question.  With respect to the Collateral Trustee or any other bank or trust company acting as trustee of an express trust or as custodian, a Trust Officer. With respect to the Loan Agent, any Trust Officer. With respect to any Authenticating Agent, any Officer of such Authenticating Agent who is authorized to authenticate the Notes.  Each party may receive and accept a certification of the authority (which shall include contact information and email addresses) of any other party as conclusive evidence of the authority of any person to act, and such certification may be considered as in full force and effect until receipt by such other party of written notice to the contrary.

 

“Average Life”:  On any Measurement Date with respect to any Collateral Obligation, the quotient obtained by dividing (i) the sum of the products of (a) the number of years (rounded to the nearest one hundredth thereof) from such Measurement Date to the respective dates of each successive Scheduled Distribution of principal of such Collateral Obligation and (b) the respective amounts of principal of such Scheduled Distributions by (ii) the sum of all successive Scheduled Distributions of principal on such Collateral Obligation.

 

“Balance”:  On any date, with respect to Cash or Eligible Investments in any Account, the aggregate of the (i) current balance of any Cash, demand deposits, time deposits, certificates of deposit and federal funds; (ii) principal amount of interest‑bearing corporate and government securities and money market accounts and (iii) purchase price (but not greater than the face amount) of non‑interest‑bearing government and corporate securities and commercial paper.

 

“Bank”:  State Street Bank and Trust Company, a Massachusetts trust company (including any organization or entity succeeding to all or substantially all of its corporate trust business), in any of its roles under the Transaction Documents, and any successor thereto.

 

“Bankruptcy Code”:  The U.S. Bankruptcy Code, Title 11 of the United States Code, as amended from time to time, and any successor statute.

 

“Bankruptcy Exchange”:  The exchange of a Defaulted Obligation (without the payment of any additional funds other than reasonable and customary transfer costs) for another debt obligation issued by another Obligor which, but for the fact that such debt obligation is a Defaulted Obligation or a Credit Risk Obligation, would otherwise qualify as a Collateral Obligation and (i) in the Collateral Manager’s reasonable business judgment, at the time of the exchange, such debt obligation received on exchange has a better likelihood of recovery than the Defaulted Obligation to be exchanged, (ii) as determined by the Collateral Manager, at the time of the exchange, the debt obligation received on exchange is not less senior in right of payment vis‑à‑vis such ▇▇▇▇▇▇▇’s other outstanding indebtedness than the Defaulted Obligation to be exchanged vis‑à‑vis its Obligor’s other outstanding indebtedness, (iii) as determined by the Collateral Manager, both prior to and after giving effect to such exchange, each of the Coverage Tests is satisfied or, if any Coverage Test was not satisfied prior to such exchange, the coverage ratio relating to such test shall be at least as close to being satisfied after giving effect to such exchange as it was before giving effect to such exchange, (iv) the period for which the Issuer held the Defaulted Obligation to be exchanged shall be included for all purposes in this Indenture when determining the period for which the Issuer holds the debt obligation received on exchange, (v) the Bankruptcy Exchange Test is satisfied, (vi) as determined by the Collateral Manager, both prior to and after giving effect to such exchange, the Weighted Average Life Test is satisfied or, if such test was not satisfied immediately prior to such exchange, such test will be maintained or improved after giving effect to such exchange and (vii) the aggregate principal balance of the obligations received in Bankruptcy Exchanges since the Closing Date is not more than 5.0% of the Target Initial Par Amount.

“Bankruptcy Exchange Test”: A test that is satisfied if, in the Collateral Manager’s reasonable business judgment, the projected internal rate of return of the obligation obtained as a result of a Bankruptcy Exchange (such received obligation, a “Bankruptcy Exchange Obligation”) is greater than the projected internal rate of return of the Defaulted Obligation exchanged in a Bankruptcy Exchange, calculated by the Collateral Manager by aggregating all Cash and the Market Value of any Collateral Obligation subject to a Bankruptcy Exchange at the time of each Bankruptcy Exchange; provided that the foregoing calculation shall not be required for any Bankruptcy Exchange prior to and including the occurrence of the third Bankruptcy Exchange.

 

“Bankruptcy Law”:  The Bankruptcy Code or any other applicable federal or state bankruptcy law or similar law, including, without limitation, Part XIII of the Companies Act of 1981 of Bermuda and the Companies (Winding-Up) Rules 1982 of Bermuda, each as amended from time to time, and any bankruptcy, insolvency, winding‑up, reorganization or similar law enacted under the laws of Bermuda or any other applicable jurisdiction.

 

“Bankruptcy Subordination Agreement”:  The meaning specified in Section 5.4(d)(ii) (Remedies).

 

“Barings Collateral Obligations”:  The Collateral Obligations acquired by the Issuer from the Transferor.

 

“Benchmark Replacement”:  The sum of (A) the applicable Benchmark Replacement Adjustment and (B) the first alternative set forth in the order below, if any, that can be determined by the Collateral Manager as of the Benchmark Replacement Date:

 

(a)             Daily Simple SOFR;

 

(b)            the alternate rate of interest that has been selected or recommended by the Relevant Governmental Body as the replacement for the then‐current Reference Rate for the Index Maturity;

 

(c)             the ISDA Fallback Rate; and

 

(d)          the alternate rate of interest that has been selected by the Collateral Manager as the replacement for the then‐current Reference Rate for the Index Maturity giving due consideration to any industry‐accepted rate of interest as a replacement for the then‐current Reference Rate for similar Dollar‐denominated collateralized loan obligation securitization transactions at such time.

provided that any Benchmark Replacement selected above shall also be the base rate used by the largest percentage of the Aggregate Principal Balance of the Floating Rate Obligations; provided further that (1) if a Benchmark Replacement is selected pursuant to clauses (b) through (d) above, then on the first day the Collateral Manager determines that a redetermination of the Benchmark Replacement on such date would result in the selection of a Benchmark Replacement under clause (a) above (x) the Benchmark Replacement Adjustment will be re-determined on such date utilizing the Unadjusted Benchmark Replacement corresponding to the Benchmark Replacement under clause (a) above and (y) such re-determined Benchmark Replacement will become the Reference Rate on each Interest Determination Date on or after such date; and (2) if re-determination of the Benchmark Replacement on such date as described in the preceding clause (1) would not result in the selection of a Benchmark Replacement under clause (a) above, then the Reference Rate will remain the Benchmark Replacement as previously determined pursuant to clauses (b) through (d) above.

“Benchmark Replacement Adjustment”:  The first alternative set forth in the order below that can be determined by the Collateral Manager as of the Benchmark Replacement Date:

 

(a)            the spread adjustment, or method for calculating or determining such spread adjustment(which may be a positive or negative value or zero), that has been selected, endorsed or recommended by the Relevant Governmental Body for the applicable Unadjusted Benchmark Replacement;

 

(b)          if the applicable Unadjusted Benchmark Replacement is equivalent to the ISDA Fallback Rate, then the ISDA Fallback Adjustment; and

 

(c)            the spread adjustment (which may be a positive or negative value or zero) that has been selected by the Collateral Manager after giving due consideration to any industry-accepted spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the then-current Reference Rate with the applicable Unadjusted Benchmark Replacement for U.S. dollar denominated collateralized loan obligation securitization transactions at such time.

 

“Benchmark Replacement Conforming Changes”:  With respect to any Alternative Reference Rate, any technical, administrative or operational changes (including changes to the definition of “Interest Accrual Period,” timing and frequency of determining rates, including, without limitation, determination dates, and making payments of interest, and other administrative matters) that the Collateral Manager determines may be appropriate to reflect the adoption of such Alternative Reference Rate in a manner substantially consistent with market practice (or, if the Collateral Manager decides that adoption of any portion of such market practice is not administratively feasible or if the Collateral Manager determines that no market practice for use of the Alternative Reference Rate exists, in such other manner as the Collateral Manager determines is reasonably necessary).

 

“Benchmark Replacement Date”:

 

(a)          In the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (1) the date of the public statement or publication of information referenced therein and (2) the date on which the administrator of the relevant Reference Rate permanently or indefinitely ceases to provide such Reference Rate,

 

(b)             in the case of clause (c) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information or

 

(c)             in the case of clause (d) of the definition of “Benchmark Transition Event,” the following Interest Determination Date.

 

 

For the avoidance of doubt, if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination.

“Benchmark Transition Event”:  The occurrence of one or more of the following events with respect to the then-current Reference Rate:

 

(a)            a public statement or publication of information by or on behalf of the administrator of the Reference Rate announcing that the administrator has ceased or will cease to provide the Reference Rate permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Reference Rate;

 

(b)            a public statement or publication of information by the regulatory supervisor for the administrator of the Reference Rate, the central bank for the currency of the Reference Rate, an insolvency official with jurisdiction over the administrator for the Reference Rate, a resolution authority with jurisdiction over the administrator for the Reference Rate or a court or an entity with similar insolvency or resolution authority over the administrator for the Reference Rate, which states that the administrator of the Reference Rate has ceased or will cease to provide the Reference Rate permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Reference Rate;

 

(c)           a public statement or publication of information by the regulatory supervisor for the administrator of the Reference Rate announcing that the Reference Rate is no longer representative; or

 

(d)            the Asset Replacement Percentage exceeds 50%.

 

 

“Benefit Plan Investor”:  An employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to the fiduciary responsibility provisions of Title I of ERISA, a plan that is subject to Section 4975 of the Code or an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in the entity.

 

“Bermuda FATCA Legislation”:  The U.S.A. – Bermuda Tax Convention Act 1986, the International Cooperation (Tax Information Exchange Agreements) Act 2005 (each as amended) together with any implementing legislation, rules, regulations and guidance notes with respect to such laws and pertaining to the implementation of FATCA and the CRS in Bermuda.

“Board of Directors”:  With respect to the Issuer, the directors of the Issuer duly appointed by the shareholders of the Issuer or the board of directors of the Issuer.

 

“Board Resolution”:  With respect to the Issuer, a resolution of the Board of Directors of the Issuer and, with respect to the Co‑Issuer, a resolution of the managers or the member of the Co‑Issuer.

 

“Book Value”: “Book value” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(iv), adjusted (to the extent permitted under Treasury Regulations Section 1.704-1(b)(2)(iv)(f)) as necessary to reflect the relative economic interests of the beneficial owners of the Subordinated Notes (as determined for U.S. federal income tax purposes).

 

“Bridge Loan”: Any loan or other obligation that (x) is incurred in connection with a merger, acquisition, consolidation, or sale of all or substantially all of the assets of a Person or similar transaction and (y) by its terms, is required to be repaid within one year of the incurrence thereof with proceeds from additional borrowings or other refinancings (it being understood that any such Loan or debt security that has a nominal maturity date of one year or less from the incurrence thereof but has a term‑out or other provision whereby (automatically or at the sole option of the Obligor thereof) the maturity of the indebtedness thereunder may be extended to a later date is not a Bridge Loan).

 

“Broadly Syndicated Loan”: A Loan (a) that is part of a credit facility with a Facility Size on the date of origination thereof at least equal to U.S.$250,000,000 and (b) as to which, on the date of origination thereof, Moody’s or S&P has either (x) assigned a corporate family rating on an Obligor thereon or (y) assigned to such credit facility a monitored publicly available rating.

 

“Business Day”:  Any day other than (i) a Saturday or a Sunday or (ii) a day on which commercial banks are authorized or required by applicable law, regulation or executive order to close in New York, New York or in the city in which the Corporate Trust Office of the Collateral Trustee (and with respect to actions by the Loan Agent, the Corporate Trust Office of the Loan Agent) for any final payment of principal, in the relevant place of presentation.

 

“Calculation Agent”:  The meaning specified in Section 7.16(a) (Calculation Agent).

 

“Cash”:  Such funds denominated in currency of the United States as at the time shall be legal tender for payment of all public and private debts, including funds standing to the credit of an Account.

 

“CCC Collateral Obligation”:  A Collateral Obligation (other than a Defaulted Obligation or Deferring Obligation) with an S&P Rating of “CCC+” or lower.

 

“CCC Excess”:  The amount equal to the excess of the Principal Balance of all CCC Collateral Obligations over an amount equal to 17.5% of the Collateral Principal Amount as of the applicable date of determination; provided that, in determining which of the CCC Collateral Obligations will be included in the CCC Excess, the CCC Collateral Obligations with the lowest Market Value (assuming that such Market Value is expressed as a percentage of the Principal Balance of such Collateral Obligations as of such Determination Date) will be deemed to constitute such CCC Excess.

“Certificate of Authentication”:  The meaning specified in Section 2.1 (Forms Generally).

 

“Certificated Note”:  Any Certificated Secured Note and any Certificated Subordinated Note.

 

“Certificated Secured Note”:  The meaning specified in Section 2.2(b)(iii) (Forms of Notes).

 

“Certificated Security”:  The meaning specified in Section 8‑102(a)(4) of the UCC.

 

“Certificated Subordinated Note”:  The meaning specified in Section 2.2(b)(iii) (Forms of Notes).

 

“CFTC”:  The Commodity Futures Trading Commission.

 

“Class”:  In the case of (i) the Secured Debt, all of the Secured Debt having the same Interest Rate, Stated Maturity and designation and (ii) the Subordinated Notes, all of the Subordinated Notes; provided that, for purposes of calculating the Coverage Tests and for any vote, request, demand, authorization, direction, notice, consent, waiver, objection or similar action under this Indenture, the Collateral Management Agreement or any other Transaction Document, any Pari Passu Classes shall constitute a single Class.

 

“Class A Coverage Tests”:  The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied with respect to the Class A-1 Notes, the Class A-2 Loans and the Class A-2 Notes.

 

“Class A-1 Notes”:  The Class A-1 Senior Secured Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3(b) (Authorized Amount; Stated Maturity; Denominations).

 

“Class A-2 Credit Agreement”: That certain credit agreement, dated as of the date hereof, among the Issuer, as borrower, the Co-Issuer, as co-borrower, the Loan Agent, the Collateral Trustee and the lenders party thereto.

 

“Class A-2 Debt”: Collectively, the Class A-2 Notes and the Class A-2 Loans.

 

“Class A-2 Loans”: The Class A-2 Loans incurred by the Issuers under the Class A-2 Credit Agreement (including any additional Class A-2 Loans incurred in accordance with the terms of the Class A-2 Credit Agreement and this Indenture).

 

“Class A-2 Notes”:  The Class A-2 Senior Secured Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3(b) (Authorized Amount; Stated Maturity; Denominations).

“Class B Coverage Tests”:  The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied with respect to the Class B Notes.

 

“Class B Notes”:  The Class B Secured Deferrable Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3(b) (Authorized Amount; Stated Maturity; Denominations).

 

“Class C Coverage Tests”:  The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied with respect to the Class C Notes.

 

“Class C Notes”:  The Class C Secured Deferrable Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3(b) (Authorized Amount; Stated Maturity; Denominations).

 

“Clean‑up Call Redemption”:  A redemption of the Debt in accordance with Section 9.6(a) (Clean‑up Call Redemption).

 

“Clean‑up Call Redemption Date”:  The meaning specified in Section 9.6(a) (Clean‑up Call Redemption).

 

“Clearing Agency”:  An organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.

 

“Clearing Corporation”:  (i) Clearstream, (ii) DTC, (iii) Euroclear and (iv) any entity included within the meaning of “clearing corporation” under Section 8‑102(a)(5) of the UCC.

 

“Clearing Corporation Security”:  Securities which are in the custody of or maintained on the books of a Clearing Corporation or a nominee subject to the control of a Clearing Corporation and, if they are Certificated Securities in registered form, properly endorsed to or registered in the name of the Clearing Corporation or such nominee.

 

“Clearstream”:  Clearstream Banking, société anonyme, a corporation organized under the laws of the Duchy of Luxembourg (formerly known as Cedelbank, société anonyme).

 

“Closing Date”:  August 23, 2023.

 

“Closing Date Participation Interest”:  Any Participation Interest in an asset conveyed to the Issuer pursuant to the Master Participation Agreement until elevated by assignment.  For the avoidance of doubt, the failure to elevate any Closing Date Participation Interest will not result or be deemed to result in a default or Event of Default under the Indenture or any other Transaction Document.

 

“Co-Issued Debt”: The Debt designated in the table set forth in Section 2.3(b) (Authorized Amount; Stated Maturity; Denominations) listing “Issuers – Co‑Issued” in the row identified as “Applicable Issuer(s)”.

“Co‑Issuer”: The Person named as such on the first page of this Indenture, until a successor Person shall have become the Co‑Issuer pursuant to the applicable provisions of this Indenture, and thereafter “Co‑Issuer” shall mean such successor Person.

 

“Code”:  The United States Internal Revenue Code of 1986, as amended.

 

“Collateral Administration Agreement”:  An agreement dated as of the Closing Date, among the Issuer, the Collateral Manager and the Collateral Administrator, as amended from time to time in accordance with the terms hereof and thereof.

 

“Collateral Administrator”:  Virtus Group, LP, in its capacity as collateral administrator under the Collateral Administration Agreement, and any successor thereto.

 

“Collateral Interest Amount”:  As of any date of determination, without duplication, the aggregate amount of Interest Proceeds that has been received or that is expected to be received (other than Interest Proceeds expected to be received from (i) withdrawals of amounts from the Supplemental Reserve Account or (ii) Defaulted Obligations and Deferring Obligations, but including Interest Proceeds actually received from Defaulted Obligations and Deferring Obligations), in each case during the Collection Period in which such date of determination occurs (or after such Collection Period but on or prior to the related Payment Date if such Interest Proceeds would be treated as Interest Proceeds with respect to such Collection Period).

 

“Collateral Management Agreement”:  The agreement dated as of the Closing Date, between the Issuer and the Collateral Manager relating to the management of the Collateral Obligations and the other Assets by the Collateral Manager on behalf of the Issuer, as amended from time to time in accordance with the terms hereof and thereof.

 

“Collateral Management Fees”:  Collectively, the Senior Collateral Management Fee and the Subordinated Collateral Management Fee.

 

“Collateral Manager”:  Barings Private Credit Corporation, a Maryland corporation, until a successor Person shall have become the Collateral Manager pursuant to the provisions of the Collateral Management Agreement, and thereafter “Collateral Manager” shall mean such successor Person.

 

“Collateral Manager Debt”:  Debt held by the Collateral Manager, an Affiliate thereof or any funds or accounts managed by the Collateral Manager or one of its Affiliates as to which the Collateral Manager or one of its Affiliates has exclusive discretionary voting authority.

 

“Collateral Manager Standard”:  The standard of care applicable to the Collateral Manager when performing services on behalf of the Issuer as set forth in the Collateral Management Agreement.

 

“Collateral Obligation”:  The obligations listed on Schedule 4 hereto or acquired pursuant to the terms of this Indenture.

“Collateral Principal Amount”:  As of any date of determination, the sum of (a) the Aggregate Principal Balance of the Collateral Obligations (other than Defaulted Obligations) and (b) without duplication, the Balance in any Account (excluding Balance in the Revolver Funding Account to the extent of the unfunded funding obligations under all Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations included in the Assets on such date) representing Principal Proceeds.

 

“Collateral Trustee”:  The meaning specified in the first sentence of this Indenture, and any successor thereto.

 

“Collateral Trustee’s Website”:  The meaning specified in Section 10.7(f) (Accountings).

 

“Collection Account”:  The trust account established pursuant to Section 10.2 (Collection Account) which consists of the Principal Collection Subaccount and the Interest Collection Subaccount.

 

“Collection Period”:  (i) With respect to the first Payment Date, the period commencing on the Closing Date and ending at the close of business on the eighth Business Day prior to the first Payment Date; and (ii) with respect to any other Payment Date, the period commencing on the day immediately following the prior Collection Period and ending (a) in the case of the final Collection Period preceding the latest Stated Maturity of any Class of Debt, on the day of such Stated Maturity, (b) in the case of the final Collection Period preceding an Optional Redemption, Clean‑up Call Redemption or Tax Redemption in whole of the Debt, on the Redemption Date and (c) in any other case, at the close of business on the eighth Business Day prior to such Payment Date.

 

“Companies Announcement Office”: The meaning specified in Section 7.16(a) (Calculation Agent).

 

“Contribution”:  The meaning specified in Section 10.3(f) (Transaction Accounts).

 

“Contribution Account”:  The meaning specified in Section 10.3(f) (Transaction Accounts).

 

“Contributor”:  The meaning specified in Section 10.3(f) (Transaction Accounts).

 

“Controlled Portfolio Company”: Any company that (x) is controlled (through an ownership of 50% or more of the equity interests or stock) by the Collateral Manager, an Affiliate thereof, or an account, fund, client or portfolio established and controlled (through an ownership of 50% or more of the equity interests or stock) by the Collateral Manager or an Affiliate thereof and (y) with respect to which the Collateral Manager has actual knowledge of such control.

 

“Controlling Class”:  The Class A-1 Notes so long as any Class A-1 Notes are Outstanding; the Class A-2 Debt so long as any Class A-2 Debt is Outstanding; then the Class B Notes so long as any Class B Notes are Outstanding; then the Class C Notes so long as any Class C Notes are Outstanding; and then the Subordinated Notes.

“Controlling Person”: A Person (other than a Benefit Plan Investor) who has discretionary authority or control with respect to the assets of the Issuer or any Person who provides investment advice for a fee (direct or indirect) with respect to such assets or an affiliate of any such Person.  For this purpose, an “affiliate” of a person includes any person, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the person.  “Control”, with respect to a person other than an individual, means the power to exercise a controlling influence over the management or policies of such person.

 

“Corporate Trust Office”:  With respect to the Collateral Trustee, the principal corporate trust office of the Collateral Trustee at which this Indenture is administered, initially located at (a) for Note transfer purposes and presentment for final payment thereon, State Street Bank and Trust Company, Attention: Transfer Agent, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Mail Stop: JAB0321, North Quincy, MA 02171, Ref: Barings Private Credit Corporation CLO 2023-1 Ltd., and (b) for all other purposes, State Street Bank and Trust Company, Attention: Structured Trust & Analytics, Mail Stop: JAB0527, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Ref: Barings Private Credit Corporation CLO 2023-1 Ltd., or such other address as the Collateral Trustee may designate from time to time by notice to the Holders, the Collateral Manager and the Issuer or the principal corporate trust office of any successor Collateral Trustee. With respect to the Loan Agent, State Street Bank and Trust Company, Attention: Structured Trust & Analytics, Mail Stop: JAB0527, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Ref: Barings Private Credit Corporation CLO 2023-1 Ltd., or such other address as the Loan Agent may designate from time to time by notice to the Holders, the Collateral Manager and the Issuer.

 

“Cov‑Lite Loan”:  A Collateral Obligation that is an interest in any Loan, the Underlying Instruments for which (i) do not contain any financial covenants or (ii) require the borrower to comply with an Incurrence Covenant, but do not require the borrower to comply with a Maintenance Covenant; provided that, except for purposes of determining the S&P Recovery Rate of the applicable Loan, a Loan described in clause (i) or (ii) above which either contains a cross‑default or cross‑acceleration provision to, or is pari passu with, another Loan of the same Obligor that requires the underlying obligor to comply with a Maintenance Covenant shall be deemed not to be a Cov‑Lite Loan.

 

“Coverage Ratio Event of Default”:  The meaning specified in Section 5.1(g) (Events of Default).

 

“Coverage Tests”:  Collectively, the Overcollateralization Ratio Test and the Interest Coverage Test, each as applied to each specified Class or Classes of Secured Debt, if applicable.

 

“Credit Improved Obligation”:  Any Collateral Obligation that in the Collateral Manager’s commercially reasonable business judgment has significantly improved in credit quality from the condition of its credit at the time of purchase which judgment may (but need not) be based on one or more of the following facts:

 

(a)           it has a market price that is greater than the price that is warranted by its terms and credit characteristics, or improved in credit quality since its acquisition by the Issuer;

(b)           the Obligor of such Collateral Obligation has shown improved financial results since the published financial reports first produced after it was purchased by the Issuer;

 

(c)            the Obligor of such Collateral Obligation since the date on which such Collateral Obligation was purchased by the Issuer has raised significant equity capital or has raised other capital that has improved the liquidity or credit standing of such Obligor; or

 

(d)            with respect to which one or more of the following criteria applies:

 

(i)             such Collateral Obligation has been upgraded or put on a watch list for possible upgrade by any of the Rating Agencies since the date on which such Collateral Obligation was acquired by the Issuer;

 

(ii)           the Sale Proceeds (excluding Sale Proceeds that constitute Interest Proceeds) of such Collateral Obligation would be at least 101% of its purchase price;

 

(iii)           the price of such Collateral Obligation has changed during the period from the date on which it was acquired by the Issuer to the proposed sale date by a percentage either at least 0.25% more positive, or 0.25% less negative, as the case may be, than the percentage change in the average price of the applicable index from the Approved Index List over the same period;

 

(iv)        the spread over the applicable reference rate for such Collateral Obligation has been decreased in accordance with the Underlying Instrument since the date of acquisition by (1) 0.25% or more (in the case of a Collateral Obligation with a spread (prior to such decrease) less than or equal to 2.00%), (2) 0.375% or more (in the case of a Collateral Obligation with a spread (prior to such decrease) greater than 2.00% but less than or equal to 4.00%) or (3) 0.50% or more (in the case of a Collateral Obligation with a spread (prior to such decrease) greater than 4.00%) due, in each case, to an improvement in the related borrower’s financial ratios or financial results;

 

(v)            with respect to fixed rate Collateral Obligations, there has been a decrease in the difference between its yield compared to the yield on the relevant United States Treasury security of more than 7.5% since the date of purchase; or

 

(vi)          it has a projected cash flow interest coverage ratio (earnings before interest and taxes divided by cash interest expense as estimated by the Collateral Manager) of the Obligor of such Collateral Obligation that is expected to be more than 1.15 times the current year’s projected cash flow interest coverage ratio.

“Credit Risk Obligation”:  Any Collateral Obligation,

 

(i)           that in the Collateral Manager’s commercially reasonable business judgment has a significant risk of declining in credit quality or market value which judgment may (but need not) be based on one or more of the following facts:

 

(A)          such Collateral Obligation has been downgraded or put on a watch list for possible downgrade by any of the Rating Agencies since the date on which such Collateral Obligation was acquired by the Issuer;

 

(B)          the price of such Collateral Obligation has changed during the period from the date on which it was acquired by the Issuer to the proposed sale date by a percentage either at least 0.25% more negative, or at least 0.25% less positive, as the case may be, than the percentage change in the average price of an index from the Approved Index List;

 

(C)          the Market Value of such Collateral Obligation has decreased by at least 1.00% of the price paid by the Issuer for such Collateral Obligation;

 

(D)          the spread over the applicable reference rate for such Collateral Obligation has been increased in accordance with the underlying Collateral Obligation since the date of acquisition by (1) 0.25% or more (in the case of a Collateral Obligation with a spread (prior to such increase) less than or equal to 2.00%), (2) 0.375% or more (in the case of a Collateral Obligation with a spread (prior to such increase) greater than 2.00% but less than or equal to 4.00%) or (3) 0.50% or more (in the case of a Collateral Obligation with a spread (prior to such increase) greater than 4.00%) due, in each case, to a deterioration in the related borrower’s financial ratios or financial results;

 

(E)          such Collateral Obligation has a projected cash flow interest coverage ratio (earnings before interest and taxes divided by cash interest expense as estimated by the Collateral Manager) of the Obligor of such Collateral Obligation of less than 1.00 or that is expected to be less than 0.85 times the current year’s projected cash flow interest coverage ratio; or

 

(F)          with respect to fixed rate Collateral Obligations, an increase since the date of purchase of more than 7.5% in the difference between the yield on such Collateral Obligation and the yield on the relevant United States Treasury security; or

 

(ii)         with respect to which a Majority of the Controlling Class consents to treat such Collateral Obligation as a Credit Risk Obligation.

 

“CRS”: The OECD Standard for Automatic Exchange of Financial Account Information – Common Reporting Standard.

“Cumulative Deferred Senior Collateral Management Fee”:  The meaning specified in the Collateral Management Agreement.

 

“Cumulative Deferred Subordinated Collateral Management Fee”:  The meaning specified in the Collateral Management Agreement.

 

“Current Deferred Collateral Management Fees”:  The Current Deferred Senior Collateral Management Fee and the Current Deferred Subordinated Collateral Management Fee.

 

“Current Deferred Senior Collateral Management Fee”:  The meaning specified in the Collateral Management Agreement.

 

“Current Deferred Subordinated Collateral Management Fee”:  The meaning specified in the Collateral Management Agreement.

 

“Current Pay Obligation”:  Any Collateral Obligation (other than a DIP Collateral Obligation) that would otherwise be treated as a Defaulted Obligation but as to which no payments are due and payable that are unpaid and with respect to which the Collateral Manager has certified to the Collateral Trustee (with a copy to the Collateral Administrator) in writing that it believes, in its reasonable business judgment, that the Obligor or issuer of such Collateral Obligation (a) is current on all interest payments, principal payments and other amounts due and payable thereunder and will continue to make scheduled payments of interest thereon and will pay the principal thereof and all other amounts due and payable thereunder by maturity or as otherwise contractually due, (b) if the Obligor or issuer is subject to a bankruptcy proceeding, it has been the subject of an order of a bankruptcy court that permits it to make the scheduled payments on such Collateral Obligation and all interest payments, principal payments and other amounts due and payable thereunder have been paid in cash when due, (c) the Collateral Obligation has a Market Value of at least 80% of its par value and (d) satisfies the S&P Additional Current Pay Criteria.

 

“Custodial Account”:  The custodial account established pursuant to Section 10.3(b) (Transaction Accounts).

 

“Custodian”: The meaning specified in the first sentence of Section 3.3(a) (Custodianship; Delivery of Collateral Obligations and Eligible Investments) with respect to items of collateral referred to therein, and each entity with which an Account is maintained, as the context may require, each of which shall be a Securities Intermediary.

 

“Cut‑Off Date”:  Each date on or after the Closing Date on which either (a) a Collateral Obligation is transferred to the Issuer or (b) a Collateral Obligation is transferred by the Issuer.

 

“Daily Simple SOFR”:  For any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Collateral Manager in accordance with the conventions for such rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Collateral Manager decides that any such convention is not administratively feasible, then the Collateral Manager may establish another convention in its reasonable discretion.

“Daisy Chain Letter”: A certificate substantially in the form of Exhibit B-6.

 

“Debt”: Collectively, the Notes and the Class A-2 Loans.

 

“Debt Interest Amount”: With respect to any Class of Secured Debt and any Payment Date, the amount of interest for the related Interest Accrual Period payable in respect of each U.S.$100,000 Outstanding principal amount of such Class of Secured Debt.

 

“Debt Payment Sequence”: The application, in accordance with the Priority of Payments, of Interest Proceeds or Principal Proceeds, as applicable, in the following order:

 

(i)            to the payment of any accrued and unpaid interest (including, without limitation, past due interest, if any) on the Class A-1 Notes, until such amounts have been paid in full;

 

(ii)            to the payment of principal of the Class A-1 Notes, until each such Class has been paid in full;

 

(iii)          to the payment pari passu and pro rata based on amounts due, of any accrued and unpaid interest on the Class A-2 Notes and the Class A-2 Loans (including, without limitation, past due interest, if any);

 

(iv)           to the payment of principal pari passu and pro rata based on their respective Aggregate Outstanding Amounts, of the Class A-2 Notes and the Class A-2 Loans until the Class A-2 Notes and the Class A-2 Loans have been paid in full;

 

(v)            to the payment of any accrued and unpaid interest and any Deferred Interest on the Class B Notes until such amounts have been paid in full;

 

(vi)            to the payment of principal of the Class B Notes until the Class B Notes have been paid in full;

 

(vii)          to the payment of any accrued and unpaid interest and any Deferred Interest on the Class C Notes until such amounts have been paid in full; and

 

(viii)         to the payment of principal of the Class C Notes until the Class C Notes have been paid in full.

 

“Default”:  Any Event of Default or any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

 

“Defaulted Obligation”:  Any Collateral Obligation included in the Assets as to which:

 

(a)          a default as to the payment of principal and/or interest has occurred and is continuing with respect to such Collateral Obligation (without regard to any grace period applicable thereto, or waiver thereof, after the passage of five (5) Business Days or seven (7) calendar days, whichever is greater, but in no case beyond the passage of any grace period applicable thereto);

(b)          a default known to the Collateral Manager as to the payment of principal and/or interest has occurred and is continuing on another debt obligation of the same issuer which is senior or pari passu in right of payment to such Collateral Obligation and holders of such other debt obligation of the same issuer have accelerated the maturity of all or a portion of such other debt obligation; provided that both the Collateral Obligation and such other debt obligation are full recourse obligations of the applicable issuer or secured by the same collateral;

 

(c)          the Obligor or others have instituted proceedings to have the Obligor adjudicated as bankrupt or insolvent or placed into receivership and such proceedings have not been stayed or dismissed within the timeframe specified in the Underlying Instrument or such Obligor has filed for protection under the Bankruptcy Code;

 

(d)          such Collateral Obligation has an S&P Rating of “SD” or “CC” or lower or had such rating before such rating was withdrawn;

 

(e)          such Collateral Obligation is pari passu in right of payment as to the payment of principal and/or interest to another debt obligation of the same Obligor which has an S&P Rating of “SD” or “CC” or lower or had such rating before such rating was withdrawn; provided that both the Collateral Obligation and such other debt obligation are full recourse obligations of the applicable Obligor or secured by the same collateral;

 

(f)            a default with respect to which the Collateral Manager has received notice or an Officer has actual knowledge that a default has occurred and is continuing under the Underlying Instruments and any applicable grace period has expired and the holders of such Collateral Obligation have accelerated the repayment of the Collateral Obligation (but only until such acceleration has been rescinded) in the manner provided in the Underlying Instrument;

 

(g)           the Collateral Manager has in its reasonable commercial judgment otherwise declared such debt obligation to be a “Defaulted Obligation” and such declaration remains in effect;

 

(h)            such Collateral Obligation is a Participation Interest with respect to which the Selling Institution has defaulted in any respect in the performance of any of its payment obligations under the Participation Interest;

 

(i)          such Collateral Obligation is a Participation Interest in a Loan that would, if such Loan were a Collateral Obligation, constitute a “Defaulted Obligation” or with respect to which the Selling Institution has an S&P Rating of “SD” or “CC” or lower or had such rating before such rating was withdrawn; or

 

(j)          such Collateral Obligation has, since the date it was acquired by the Issuer, become subject to an amendment, waiver or modification that had the effect of reducing the principal amount of such Collateral Obligation;

 

Notwithstanding anything in this Indenture to the contrary, the Collateral Manager shall give the Collateral Trustee and the Collateral Administrator prompt written notice upon obtaining knowledge that a Collateral Obligation has become a Defaulted Obligation.  Until so notified or until an Authorized Officer of the Collateral Trustee or the Collateral Administrator obtains actual knowledge that a Collateral Obligation has become a Defaulted Obligation, neither the Collateral Trustee nor the Collateral Administrator shall not be deemed to have any notice or knowledge that a Collateral Obligation has become a Defaulted Obligation.

 

“Deferrable Class”: With respect to any specified Class of Debt, each Class of Debt for which interest is deferrable, as indicated in Section 2.3(b) (Authorized Amount; Stated Maturity; Denominations).

 

“Deferrable Obligation”:  A Collateral Obligation (including any Permitted Deferrable Obligation) that by its terms permits the deferral or capitalization of payment of accrued, unpaid interest.

 

“Deferred Interest”:  With respect to each Deferrable Class, the meaning specified in Section 2.7(a) (Payment of Principal and Interest and Other Amounts; Principal and Interest Rights Preserved).

 

“Deferring Obligation”:  A Deferrable Obligation (excluding any Permitted Deferrable Obligation) that is deferring the payment of interest due thereon and has been so deferring the payment of interest due thereon (i) with respect to Collateral Obligations that have an S&P Rating of at least “BBB-”, for the shorter of two consecutive accrual periods or one year, and (ii) with respect to Collateral Obligations that have an S&P Rating of “BB+” or below, for the shorter of one accrual period or six consecutive months, which deferred capitalized interest has not, as of the date of determination, been paid in Cash.

 

“Delayed Drawdown Collateral Obligation”:  Any Collateral Obligation or Loss Mitigation Loan that (a) requires the Issuer to make one or more future advances to the borrower under the Underlying Instruments relating thereto, (b) specifies a maximum amount that can be borrowed on one or more fixed borrowing dates, and (c) does not permit the re‑borrowing of any amount previously repaid by the borrower thereunder; but any such Collateral Obligation or Loss Mitigation Loan will be a Delayed Drawdown Collateral Obligation only to the extent of the Issuer’s unfunded commitment thereunder and only until all commitments by the Issuer to make advances to the borrower expire or are terminated or are reduced to zero.

“Deliver” or “Delivered” or “Delivery”:  The taking of the following steps:

 

(a)            in the case of each Certificated Security (other than a Clearing Corporation Security), Instrument and Participation Interest in which the underlying Loan is represented by an Instrument,

 

(i)            causing the delivery of such Certificated Security or Instrument to the Custodian by registering the same in the name of the Custodian or its affiliated nominee or by endorsing the same to the Custodian or in blank;

 

(ii)          causing the Custodian to indicate continuously on its books and records that such Certificated Security or Instrument is credited to the applicable Account; and

 

(iii)           causing the Custodian to maintain continuous possession of such Certificated Security or Instrument;

 

(b)             in the case of each Uncertificated Security (other than a Clearing Corporation Security),

 

(i)              causing such Uncertificated Security to be continuously registered on the books of the issuer thereof to the Custodian; and

 

(ii)           causing the Custodian to indicate continuously on its books and records that such Uncertificated Security is credited to the applicable Account;

 

(c)             in the case of each Clearing Corporation Security,

 

(i)          causing the relevant Clearing Corporation to credit such Clearing Corporation Security to the securities account of the Custodian, and

 

(ii)          causing the Custodian to indicate continuously on its books and records that such Clearing Corporation Security is credited to the applicable Account;

 

(d)          in the case of each security issued or guaranteed by the United States or any agency or instrumentality thereof and that is maintained in book‑entry records of a Federal Reserve Bank (“FRB”) (each such security, a “Government Security”),

 

(i)             causing the creation of a Security Entitlement to such Government Security by the credit of such Government Security to the securities account of the Custodian at such FRB, and

 

(ii)          causing the Custodian to indicate continuously on its books and records that such Government Security is credited to the applicable Account;

(e)             in the case of each Security Entitlement not governed by clauses (a) through (d) above,

 

(i)           causing a Securities Intermediary (x) to indicate on its books and records that the underlying Financial Asset has been credited to the Custodian’s securities account or the related deposit account, (y) to receive a Financial Asset from a Securities Intermediary or acquiring the underlying Financial Asset for a Securities Intermediary, and in either case, accepting it for credit to the Custodian’s securities account or the related deposit account or (z) to become obligated under other law, regulation or rule to credit the underlying Financial Asset to a Securities Intermediary’s securities account,

 

(ii)        causing such Securities Intermediary to make entries on its books and records continuously identifying such Security Entitlement as belonging to the Custodian and continuously indicating on its books and records that such Security Entitlement is credited to the Custodian’s securities account, and

 

(iii)         causing the Custodian to indicate continuously on its books and records that such Security Entitlement (or all rights and property of the Custodian representing such Security Entitlement) is credited to the applicable Account;

 

(f)             in the case of Cash or Money,

 

(i)            causing the delivery of such Cash or Money to the Collateral Trustee for credit to the applicable Account or to the Custodian,

 

(ii)           if delivered to the Custodian, causing the Custodian to treat such Cash or Money as a Financial Asset maintained by such Custodian for credit to the applicable Account in accordance with the provisions of Article 8 of the UCC or causing the Custodian to deposit such Cash or Money to a deposit account over which the Custodian has control (within the meaning of Section 9‑104 of the UCC), and

 

(iii)          causing the Custodian to indicate continuously on its books and records that such Cash or Money is credited to the applicable Account; and

 

(g)           in the case of each general intangible (including any Participation Interest in which neither the Participation Interest nor the underlying Loan is represented by an Instrument), causing the filing of a Financing Statement in the office of the Recorder of Deeds of the District of Columbia, Washington, D.C.

 

In addition, the Collateral Manager on behalf of the Issuer will obtain any and all consents required by the Underlying Instruments relating to any general intangibles for the transfer of ownership and/or pledge hereunder (except to the extent that the requirement for such consent is rendered ineffective under Section 9‑406 of the UCC).

 

“Deposit Order”: The Issuer Order referenced in Section 3.1(a)(x) (Conditions to Issuance of Notes on Closing Date).

“Designated Amendment”: Any proposed supplement to or amendment of this Indenture that (a) with respect to any provision hereof that requires the vote, consent, direction, waiver, objection or similar action of the Holders of more than 66⅔% of the Aggregate Outstanding Amount of the Subordinated Notes or of every Holder of Subordinated Notes, reduces the required percentage of the Holders of the Subordinated Notes whose vote, consent, direction, waiver, objection or similar action is required under such provision, (b) creates different classes or sub-classes of the Subordinated Notes with different rights or (c) imposes any penalty or similarly adversely affects Holders of Subordinated Notes not consenting to such amendment relative to Holders of Subordinated Notes consenting to such amendment.

 

“Determination Date”:  The last day of each Collection Period.

 

“DIP Collateral Obligation”:  A Loan made to a debtor‑in‑possession pursuant to Section 364 of the Bankruptcy Code having the priority allowed by either Section 364(c) or 364(d) of the Bankruptcy Code and fully secured by senior liens.

 

“Discount Obligation” Any Collateral Obligation (that was not received in a Distressed Exchange) forming part of the Assets which was purchased (as determined without averaging prices of purchases) for less than (i) 85% of its principal balance, if such Collateral Obligation has an S&P Rating lower than “B-” or (ii) 80% of its principal balance, if such Collateral Obligation has an S&P Rating of “B-” or higher; provided that in each case:

 

(v)           such Collateral Obligation shall cease to be a Discount Obligation at such time as the Market Value (expressed as a percentage of the par amount of such Collateral Obligation) determined by the Collateral Manager, for such Collateral Obligation on each day during any period of 30 consecutive days since the acquisition by the Issuer of such Collateral Obligation, equals or exceeds 90% on each such day;

 

(w)            any Collateral Obligation that would otherwise be considered a Discount Obligation, but that is purchased with the proceeds of the sale of a Collateral Obligation that was not a Discount Obligation at the time of its purchase and that is not a CCC Collateral Obligation or a Defaulted Obligation at the time of its sale, will not be considered a Discount Obligation so long as such purchased Collateral Obligation (A) is purchased at a purchase price (expressed as a percentage of the par amount of such Collateral Obligation) not less than 65% of the principal balance thereof, (B) is purchased (or committed to be purchased) within ten Business Days of such sale, (C) has an S&P Rating equal to or greater than the S&P Rating of the sold Collateral Obligation and (D) does not mature later than the sold Collateral Obligation;

 

(x)            clause (w) above in this proviso shall not apply to any such Collateral Obligation at any time on or after the acquisition by the Issuer of such Collateral Obligation if, as determined at the time of such acquisition, such application would result in more than 5.0% of the Collateral Principal Amount consisting of Collateral Obligations to which such clause (w) applies; provided that if such obligation would no longer be considered a Discount Obligation as a result of clause (w) above, such obligation shall no longer be included in the calculation of this clause (x);

(y)            clause (w) above in this proviso shall not apply to any such Collateral Obligation at any time on or after the acquisition by the Issuer of such Collateral Obligation if, as determined at the time of such acquisition, such application would result in the Principal Balance of all Discount Obligations to which such clause (w) has applied since the Closing Date to exceed 10.0% of the Target Initial Par Amount; provided that if an obligation would no longer be considered a Discount Obligation as a result of clause (w) above, such obligation shall no longer be included in the calculation of this clause (y); and

 

(z)            clause (w) above in this proviso shall not apply if any Class of Secured Debt has been downgraded or placed on watch for possible downgrade by the Rating Agency.

 

“Distressed Exchange”:  In connection with any Collateral Obligation, a distressed exchange or other debt restructuring has occurred, as reasonably determined by the Collateral Manager, pursuant to which the issuer or Obligor of such Collateral Obligation or any affiliate thereof has issued to the holders of such Collateral Obligation a new security or obligation or package of securities or obligations that, in the sole judgment of the Collateral Manager, amounts to a diminished financial obligation or has the purpose of helping the issuer or Obligor of such Collateral Obligation avoid the occurrence or continuance of a default; provided that each security or obligation received (i) shall not be considered received in a “Distressed Exchange” and shall be treated as a Collateral Obligation that is not a Defaulted Obligation only if (x) such security or obligation received satisfies the definition of Collateral Obligation and (y) the cumulative amount of all the Aggregate Principal Balances of all securities and obligations to which this clause (i) applies or has applied, measured cumulatively from the Closing Date onward, does not exceed 15.0% of the Target Initial Par Amount and (ii) in all other cases, such security or obligation shall be treated as a Collateral Obligation that is a Defaulted Obligation.

 

“Distribution Report”:  The meaning specified in Section 10.7(b) (Accountings).

 

“▇▇▇▇‑▇▇▇▇▇ Act”:  The ▇▇▇▇‑▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act.

 

“Dollar”, “U.S. Dollar” or “U.S.$”:  A dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for all debts, public and private.

 

“Domicile” or “Domiciled”:  With respect to an issuer of, or Obligor with respect to, a Collateral Obligation:

 

(a)             except as provided in clause (b) below, its country of organization; or

 

(b)            if it is organized in a Tax Jurisdiction, each of such jurisdiction and the country in which, in the Collateral Manager’s good faith estimate, a substantial portion of its operations are located or from which a substantial portion of its revenue is derived, in each case directly or through subsidiaries (which shall be any jurisdiction and country known at the time of designation by the Collateral Manager to be the source of the majority of revenues, if any, of such issuer or Obligor).

 

“DTC”:  The Depository Trust Company, its nominees, and their respective successors.

“Due Date”:  Each date on which any payment is due on an Asset in accordance with its terms.

 

“EBITDA”:  With respect to any period and any Collateral Obligation, the meaning of “EBITDA,” “Adjusted EBITDA” or any comparable term as then most recently reported pursuant to the Underlying Instruments for each such Collateral Obligation or alternatively, if not reported, “EBITDA”, “Adjusted EBITDA” or such comparable term, shall mean an amount, for the related Obligor and any of its parents or subsidiaries that are obligated with respect to such Collateral Obligation (in any event determined by the Issuer (or the Collateral Manager on behalf of the Issuer) in good faith, on a consolidated basis without duplication and, in its discretion, if applicable, on a pro forma basis) equal to earnings from continuing operations for such period plus interest expense, income taxes, depreciation, amortization and other customary add‑backs for similarly situated obligors that the Issuer deems appropriate.

 

“Eligibility Criteria”:  On the Closing Date, the Issuer will have purchased the collateral obligations (the “Collateral Obligations”) identified on Schedule 4 hereto. Each Collateral Obligation owned (or participated in) or for which the Issuer has entered a binding commitment to acquire (and participate in, as applicable) on the Closing Date or acquired thereafter pursuant to the terms of this Indenture will be (A) a Senior Secured Loan, a First Lien Last Out Loan or a Second Lien Loan (in each case, including, but not limited to, interests in Middle‑Market Loans or Broadly Syndicated Loans by way of a purchase or assignment) or (B) in the case of any Loan described in clause (A), a Participation Interest therein that, in each case, as of the date of the commitment to purchase by the Issuer satisfies the following criteria:

 

(i)              is U.S. Dollar denominated and is neither convertible by the issuer thereof into, nor payable in, any other currency;

 

(ii)           is not (a) a Defaulted Obligation or (b) a Credit Risk Obligation (in each case, unless such obligation is being acquired in connection with a Bankruptcy Exchange or is a Loss Mitigation Loan);

 

(iii)           is not a lease (including a finance lease);

 

(iv)           if it is a Deferrable Obligation, (a) is a Permitted Deferrable Obligation and (b) is not deferring or capitalizing the payment of current cash pay interest thereon, paying current cash pay interest “in kind” or otherwise have an interest “in kind” balance outstanding with respect to cash pay interest (in each case, unless such obligation is being acquired in connection with a Bankruptcy Exchange);

 

(v)           provides for a fixed amount of principal payable in Cash on scheduled payment dates and/or at maturity and does not by its terms provide for earlier amortization or prepayment at a price of less than par;

 

(vi)           does not constitute Margin Stock;

(vii)          gives rise only to payments that do not and will not subject the Issuer to withholding tax (other than withholding in respect of (x) late payment fees, prepayment fees or other similar fees, (y) amendment, waiver, consent and extension fees and (z) commitment fees and other similar fees in respect of Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations or withholding imposed under or in respect of FATCA) unless the obligor is required to make “gross‑up” payments that ensure that the net amount actually received by the Issuer (after payment of all taxes, whether imposed on such obligor or the Issuer) will equal the full amount that the Issuer would have received had no such taxes been imposed;

 

(viii)         has an S&P Rating;

 

(ix)          is not an obligation whose repayment is subject to substantial non‑credit related risk as determined by the Collateral Manager;

 

(x)            except for Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations, is not an obligation pursuant to which any future advances or payments to the borrower or the Obligor thereof may be required to be made by the Issuer;

 

(xi)            is not a Bridge Loan, a Step‑Up Obligation, a Step‑Down Obligation, a Real Estate Loan, a Structured Finance Obligation, a commodity forward contract, or another debt security not constituting a loan;

 

(xii)        will not require the Issuer, the Co‑Issuer or the pool of Assets to be registered as an investment company under the Investment Company Act;

 

(xiii)         is not an Equity Security or a warrant or by its terms convertible into or exchangeable for an Equity Security, does not have Equity Securities attached thereto as part of a unit or otherwise includes a warrant to purchase Equity Securities;

 

(xiv)         is not the subject of an Offer of exchange, or tender by its issuer, for Cash, securities or any other type of consideration other than a Permitted Offer;

 

(xv)           does not mature after the earliest Stated Maturity of the Secured Debt;

 

(xvi)         other than in the case of a Fixed Rate Obligation, accrues interest at a floating rate determined by reference to (a) the Dollar prime rate, federal funds rate or the Reference Rate or (b) a similar interbank offered rate, commercial deposit rate or any other index;

 

(xvii)         if it is “registration required”, is Registered;

 

(xviii)        is not a Synthetic Security;

 

(xix)          does not pay interest less frequently than semi‑annually;

(xx)          is not a letter of credit or an interest or participation in a letter of credit;

 

(xxi)          is not an interest in a grantor trust;

 

(xxii)        is issued by a Non‑Emerging Market Obligor that is Domiciled in the United States, Canada, the United Kingdom, a Group I Country, a Group II Country, a Group III Country or a Tax Jurisdiction;

 

(xxiii)       if it is a Participation Interest (other than a Closing Date Participation Interest), the Third Party Credit Exposure Limits are satisfied with respect to the acquisition thereof;

 

(xxiv)        does not have an “f,” “p,” “t” or “sf” subscript assigned by S&P or an “sf” subscript assigned by ▇▇▇▇▇’▇;

 

(xxv)        has an S&P Rating of at least “CCC‑” (unless such obligation is being acquired in connection with a Bankruptcy Exchange or is a Loss Mitigation Loan);

 

(xxvi)       is purchased at a price at least equal to (a) if such obligation is being acquired in connection with a Bankruptcy Exchange, 50% and (b) otherwise, 65%;

 

(xxvii)      is able to be pledged to the Collateral Trustee pursuant to its Underlying Instruments;

 

(xxviii)     is not a bond or an Unsecured Loan;

 

(xxix)       is not issued by an Obligor with an EBITDA of less than $10,000,000 at the time of acquisition;

 

(xxx)        is not an Interest Only Obligation;

 

(xxxi)        is not a Zero Coupon Bond;

 

(xxxii)      is not issued by a sovereign, or by a corporate issuer located in a country, which sovereign or country on the date on which the obligation is acquired by the Issuer imposes foreign exchange controls that effectively limit the availability or use of U.S. Dollars to make when due the scheduled payments of principal thereof and interest thereon;

 

(xxxiii)     is not an obligation of a Controlled Portfolio Company; and

 

(xxxiv)     is not an ESG Prohibited Obligation.

For the avoidance of doubt, (i) in circumstances in which a portion of proceeds with respect to the repayment of a Collateral Obligation are rolled as consideration for a new obligation (including by way of a “cashless roll”) that meets the criteria for being a Collateral Obligation as of such date, such applicable portion will be treated as a Collateral Obligation hereunder and (ii) any Loss Mitigation Loan or Restructured Loan designated as a Collateral Obligation by the Collateral Manager in accordance with the terms specified in the definition of “Loss Mitigation Loan” or “Restructured Loan,” as applicable, shall constitute a Collateral Obligation (and not a Loss Mitigation Loan or Restructured Loan) following such designation.

 

“Eligible Institution”:  The meaning specified in Section 10.1 (Collection of Money).

 

“Eligible Investment Required Ratings”:  Requirements that are met if such obligation or security has a short‑term credit rating of at least “A‑1” from S&P and, in the case of any obligation or security with a maturity of greater than sixty (60) calendar days, a long‑term credit rating of at least “AA-” by S&P.

 

“Eligible Investments”:  Either Cash or any Dollar investment that, at the time it is Delivered (directly or through an intermediary or bailee), (x) other than those referred to in clause (iv) below, matures (or are putable at par to the issuer thereof) not later than the earlier of (A) the date that is sixty (60) calendar days after the date of Delivery thereof and (B) the Business Day immediately preceding the Payment Date immediately following the date of Delivery thereof, and (y) is both determined by the Issuer to be a “cash equivalent” under the ▇▇▇▇▇▇▇ Rule and one or more of the following obligations or securities:

 

(i)             direct Registered obligations of, and Registered obligations the timely payment of principal and interest on which is fully and expressly guaranteed by, the United States or any agency or instrumentality of the United States the obligations of which are expressly backed by the full faith and credit of the United States, in each case, with the Eligible Investment Required Ratings;

 

(ii)           demand and time deposits in, certificates of deposit of, bank deposit products of, trust accounts with, bankers’ acceptances issued by, or federal funds sold by any depository institution or trust company incorporated under the laws of the United States (including State Street Bank and Trust Company or any of its Affiliates) or any state thereof and subject to supervision and examination by federal and/or state banking authorities, in each case payable within sixty (60) days after issuance, so long as the commercial paper and/or the debt obligations of such depository institution or trust company (or, in the case of the principal depository institution in a holding company system, the commercial paper or debt obligations of such holding company) at the time of such investment or contractual commitment providing for such investment have the Eligible Investment Required Ratings;

 

(iii)           commercial paper or other short‑term obligations (other than Asset‑backed Commercial Paper) with the Eligible Investment Required Ratings and that either bear interest or are sold at a discount from the face amount thereof and have a maturity of not more than sixty (60) calendar days from their date of issuance; and

(iv)          registered money market funds that have, at all times, credit ratings of “AAAm” by S&P or the highest equivalent rating at such time;

provided that (1) Eligible Investments purchased with funds in the Collection Account shall be held until maturity except as otherwise specifically provided herein; and (2) none of the foregoing obligations or securities shall constitute Eligible Investments if (a) all, or substantially all, of the remaining amounts payable thereunder consist of interest and not principal payments, (b) payments with respect to such obligations or securities or proceeds of disposition are subject to withholding taxes by any jurisdiction unless (i) the payor is required to make “gross‑up payments” that cover the full amount of any such withholding tax on an after‑tax basis or (ii) such withholding is imposed under or in respect of FATCA, (c) such obligation or security is secured by real property, (d) such obligation or security is purchased at a price greater than 100% of the principal or face amount thereof, (e) such obligation or security is subject of a tender offer, voluntary redemption, exchange offer, conversion or other similar action, (f) in the Collateral Manager’s judgment, such obligation or security is subject to material non‑credit related risks, (g) such obligation is a Structured Finance Obligation, (h) such obligation or security is represented by a certificate of interest in a grantor trust, (i) such obligation or security has an “f,” “p,” “t” or “sf” subscript assigned by S&P or an “sf” subscript from ▇▇▇▇▇’▇ or (j) such obligation or security would not, as determined by the Issuer (or the Collateral Manager on its behalf) be treated as “cash equivalents” for the purposes of Section __.10(c)(8)(iii)(A) of the regulations implementing the ▇▇▇▇▇▇▇ Rule.  Eligible Investments may include, without limitation, those investments issued by or made with the Collateral Trustee or for which State Street Bank and Trust Company or the Collateral Trustee or an Affiliate of State Street Bank and Trust Company or the Collateral Trustee provides services and receives compensation.

S&P’s credit rating of Selling Institution		Aggregate Percentage Limit		Individual Percentage Limit
AAA		20%		20%
AA+		10%		10%
AA		10%		10%
AA‑		10%		10%
A+		5%		5%
A		5%		5%
A‑ or below		0%		0%

Payment Date in (or Closing Date)	Weighted Average Life Value
Closing Date	6.00
Payment Date in January 2024	5.50
Payment Date in April 2024	5.25
Payment Date in July 2024	5.00
Payment Date in October 2024	4.75
Payment Date in January 2025	4.50
Payment Date in April 2025	4.25
Payment Date in July 2025	4.00
Payment Date in October 2025	3.75
Payment Date in January 2026	3.50
Payment Date in April 2026	3.25
Payment Date in July 2026	3.00
Payment Date in October 2026	2.75
Payment Date in January 2027	2.50
Payment Date in April 2027	2.25
Payment Date in July 2027	2.00
Payment Date in October 2027	1.75
Payment Date in January 2028	1.50
Payment Date in April 2028	1.25
Payment Date in July 2028	1.00
Payment Date in October 2028	0.75
Payment Date in January 2029	0.50
Payment Date in April 2029	0.25
Payment Date in July 2029 and thereafter	0.00

Class A-1 Notes

Class A-2 Notes

Class A-2 Loans

Class B Notes

Class C Notes

Subordinated Notes

Class Designation

Original Principal Amount1

$

300,000,000

$

35,000,000

$

20,000,000

$

25,000,000

$

22,500,000

$

94,000,000

Stated Maturity2

July 15, 2031

July 15, 2031

July 15, 2031

July 15, 2031

July 15, 2031

July 15, 2031

Fixed Rate Debt

No

No

No

No

No

N/A

Interest Rate

Fixed Interest Rate

N/A

N/A

N/A

N/A

N/A

N/A

Floating Rate Debt

Yes

Yes

Yes

Yes

Yes

N/A

Index3

Reference Rate

Reference Rate

Reference Rate

Reference Rate

Reference Rate

N/A

Spread

2.40

%

3.35

%

3.35

%

4.15

%

6.35

%

N/A

Initial Rating(s)

S&P

“AAA(sf)”

“AA(sf) ”

“AA(sf) ”

“A(sf)”

“BBB(sf)”

NR

Priority Classes

None

A-1

A-1

A-1, A-2 Notes, A-2 Loans

A-1, A-2 Notes, A-2 Loans, B

A-1, A-2 Notes, A-2 Loans, B, C

Pari Passu Classes

None

A-2 Loans

A-2 Notes

None

None

None

Junior Classes

A-2 Notes, A-2 Loans, B, C, Subordinated

B, C, Subordinated

B, C, Subordinated

C, Subordinated

Subordinated

None

Interest deferrable

No

No

No

Yes

Yes

N/A

Applicable Issuer(s)

Issuers – Co – Issued

Issuers – Co – Issued

N/A

Issuers – Co – Issued

Issuers – Co – Issued

Issuer – Issuer Only

ERISA Restricted

No

No

No

No

No

Yes

Listed Debt

No

No

No

No

No

No

Secured Debt

Yes

Yes

Yes

Yes

Yes

No

Re-Pricing Eligible Debt

Yes

No

No

Yes

Yes

N/A

1	As of the Closing Date.

2	If such date is not a Business Day, the Notes will mature on the next Business Day.

3	The Reference Rate initially will be Term SOFR, and Term SOFR will be determined as described in the definition of “Term SOFR”.  The Issuer may replace Term SOFR for a Benchmark Replacement as described herein. The Reference Rate applicable to the Secured Debt is subject to a floor of 0.00%.