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OFS Capital Corporation Advances Drop-Down Plan For SBIC Fund

OFS Capital Corporation (NASDAQ:OFS), a business development company (BDC), announced today that it has submitted documentation to the U.S. Small Business Administration (SBA) in connection with the Company’s plan to convert its investment in Tamarix Capital Partners, L.P., a small business investment company fund (SBIC Fund), into a wholly-owned subsidiary of OFS Capital.

“This submission is a crucial step in our process of converting the SBIC Fund into a wholly-owned subsidiary,” stated Glenn Pittson, Chairman and Chief Executive Officer for OFS Capital. “We intend to scale the SBIC Fund’s size to the statutory maximum of $225 million, which includes $75 million of equity capital and access to up to $150 million of SBA debentures, in order to meet the continued demand for capital by small businesses.”

Currently, OFS Capital owns approximately 67.5% of the limited partnership interests of the SBIC Fund and has reached an agreement to acquire all of the remaining limited partnership interests. Third-party commitments total approximately $11 million, with less than half of those commitments presently funded. OFS Capital also intends to acquire all of the membership interests in Tamarix Capital G.P. LLC, the SBIC Fund’s general partner, as well as retain the services of the entire Tamarix investment team. Acquiring the limited partnership interests in the SBIC Fund and the membership interests in the General Partner requires SBA approval. There can be no assurance as to whether, or when, the SBA will grant this approval.

Additionally, OFS Capital has filed an application for exemptive relief with the U.S. Securities and Exchange Commission (SEC) which, if granted, would provide additional flexibility by allowing OFS Capital to exclude all SBA debentures held at the SBIC Fund from its asset coverage ratio. There can be no assurance as to whether, or when, the SEC will grant the exemptive relief requested.

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