Barings Private Credit Corp.
05/27/2026 | Press release | Distributed by Public on 05/27/2026 13:01
Material Agreement, Financial Obligation (Form 8-K)
Item 1.01. Entry into a Material Definitive Agreement.
On May 22, 2026 (the "CLO Closing Date"), Barings Private Credit Corporation (the "Company") completed a $499,000,000 term debt securitization (the "2026 Debt Securitization"). Term debt securitizations are also known as collateralized loan obligations and are a form of secured financing incurred by a subsidiary of the Company, which is consolidated by the Company and subject to the Company's overall asset coverage requirements.
On the CLO Closing Date and in connection with the 2026 Debt Securitization, Barings Private Credit Corporation CLO 2026-1 (the "CLO Issuer") and Barings Private Credit CLO 2026-1, LLC (the "CLO Co-Issuer" and together with the CLO Issuer, the "CLO Issuers"), both indirect, wholly-owned, consolidated subsidiaries of the Company, entered into a note purchase agreement (the "CLO Purchase Agreement") with BNP Paribas Securities Corp., as the initial purchaser (the "Initial Purchaser"), pursuant to which the CLO Issuers agreed to sell certain of the notes to the Initial Purchaser as part of the 2026 Debt Securitization, issued pursuant to an indenture entered into on the CLO Closing Date (the "CLO Indenture") among the CLO Issuers and State Street Bank and Trust Company, as trustee.
The notes offered in the 2026 Debt Securitization consist of $275,000,000 of AAA(sf) Class A Senior Secured Floating Rate Notes due 2034, which bear interest at the three-month secured overnight financing rate published by the Federal Reserve Bank of New York ("SOFR") plus 1.45% (the "Class A Notes"); $65,000,000 of AA(sf) Class B Senior Secured Floating Rate Notes due 2034, which bear interest at the three-month SOFR plus 2.00% (the "Class B Notes"); $30,000,000 of A(sf) Class C Secured Deferrable Floating Rate Notes due 2034, which bear interest at the three-month SOFR plus 2.50% (the "Class C Notes", and, together with the Class A Notes and the Class B Notes, the "Secured Notes"). Additionally, on the CLO Closing Date, the CLO Issuers will issue $129,000,000 Subordinated Notes due 2034 (the "Subordinated Notes"), which do not bear interest. The Secured Notes together with the Subordinated Notes are collectively referred to herein as the "Notes".
The 2026 Debt Securitization is backed by a diversified portfolio of middle-market commercial loans. The Notes are scheduled to mature on May 22, 2034; however the Notes may be redeemed by the CLO Issuers, at the direction of the Company as holder of a majority of the Subordinated Notes, on any business day after May 22, 2027. The Company acts as retention holder in connection with the 2026 Debt Securitization for the purposes of satisfying certain U.S., U.K. and European Union regulations requiring sponsors of securitization transactions to retain exposure to the performance of the securitized assets and as such is required to retain a portion of the Subordinated Notes. The Company retained all of the Subordinated Notes issued in the 2026 Debt Securitization.
The CLO Issuer used the proceeds from the 2026 Debt Securitization to, among other things, purchase certain loans and participation interests in loans ("Collateral Obligations") from BPC Funding LLC, a wholly-owned subsidiary of the Company ("BPC Funding") pursuant to the master participation agreement and loan sale agreement described below on the CLO Closing Date. In connection therewith, BPC Funding intends to use the proceeds of such sale to reduce certain outstanding indebtedness under the documents governing the senior secured revolving credit facility entered into by BPC Funding, as borrower, the Company, as equity holder and as servicer, the lenders from time to time party thereto, a financing provider and the other agents party thereto.
Under the terms of the master loan sale agreement entered into upon closing on the CLO Closing Date (the "Loan Sale Agreement") that provided for the sale of Collateral Obligations to the CLO Issuer, the Company transferred to the CLO Issuer a portion of its ownership interest in the Collateral Obligations securing the 2026 Debt Securitization for the purchase price and other consideration set forth in the Loan Sale Agreement. Under the terms of the master participation agreement entered into upon the CLO Closing Date (the "Participation Agreement"), pending the settlement of the Collateral Obligations transferred to the CLO Issuer under the Loan Sale Agreement, BPC Funding granted participation interests therein to the CLO Issuer until such Collateral Obligations are elevated to assignment. Following these transfers, CLO Issuer, and not BPC Funding or the Company, holds all of the ownership interest in such Collateral Obligations. The Company made customary representations, warranties and covenants in the Loan Sale Agreement.
The Secured Notes are the secured obligation of the CLO Issuers, the Subordinated Notes are the unsecured obligations of the CLO Issuer, and the CLO Indenture governing the Notes include customary covenants and events of default. The Notes have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state securities or "blue sky" laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from registration.
The Company serves as collateral manager to the CLO Issuer under a collateral management agreement entered into on the CLO Closing Date (the "Collateral Management Agreement") and has agreed to irrevocably waive all collateral management fees payable pursuant to the Collateral Management Agreement.
The above description of the documentation related to the 2026 Debt Securitization and other arrangements entered into on the CLO Closing Date contained in this Current Report on Form 8-K do not purport to be complete and are qualified in their entirety by reference to the underlying agreements, including the CLO Purchase Agreement, the CLO Indenture, the Collateral Management Agreement, the Loan Sale Agreement and the Participation Agreement, attached hereto as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, and each incorporated into this Current Report on Form 8-K by reference.
Item 2.03. Creation of Direct Financial Obligation.
The information included under Item 1.01 above is incorporated by reference into this Item 2.03.
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