OFS Capital CorpOFS
OFS Capital Corp Debt Disclosure
Borrowings
Unsecured Notes: The Company’s 4.75% notes due February 10, 2026 (“Unsecured Notes Due February 2026”), 7.50% notes due July 31, 2028 (“Unsecured Notes Due July 2028”), 4.95% notes due October 31, 2028 (“Unsecured Notes Due October 2028”) and the 8.00% note due August 8, 2029 (“Unsecured Note Due August 2029”), (together, the “Unsecured Notes”), totaled $165,000 and $180,000 in aggregate principal debt at December 31, 2025 and 2024, respectively.
Unsecured Notes Due July 2028 (Nasdaq: OFSSO): On July 23, 2025, the Company closed the public offering of $69,000 aggregate principal amount of its Unsecured Notes Due July 2028, which included $9,000 of aggregate principal amount related to the underwriters’ option to cover overallotments. The net proceeds to the Company from the Unsecured Notes Due July 2028, after deducting underwriting fees of $1,380 and offering expenses of $326, was $67,294. The Unsecured Notes Due July 2028 bear interest at a stated rate of 7.50% and will mature on July 31, 2028. The Company may redeem the Unsecured Notes Due July 2028 in whole or in part at any time, or from time to time, on or after July 31, 2026.
Unsecured Note Due August 2029: On August 8, 2025, the Company entered into an agreement with an institutional accredited investor in which the Company sold, in a private placement, a $25,000 principal amount Unsecured Note Due August 2029 (the “Securities Purchase Agreement”). The net proceeds to the Company from the Unsecured Note Due August 2029, after deducting discounts of $750 and offering expenses of $48, was $24,202. The Unsecured Note Due August 2029 bears interest at a stated rate of 8.00% and will mature on August 8, 2029. The Company may redeem the Unsecured Note Due August 2029 in whole or in part at any time. The Securities Purchase Agreement contains customary terms and conditions for unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act and minimum asset coverage ratio.
Unsecured Notes Due February 2026: On February 10, 2021, the Company closed the public offering of $100,000 aggregate principal amount of its Unsecured Notes Due February 2026, and on March 18, 2021, the Company closed an additional public offering of $25,000 aggregate principal amount of its Unsecured Notes Due February 2026.
On July 11, 2025, the Company issued notices to the holders of the Unsecured Notes Due February 2026 regarding the exercise of its option to redeem on August 11, 2025, $25,000 of the issued and outstanding amount of such notes, plus accrued interest of $3 and a make-whole premium payment of $4. The Company recognized a loss on extinguishment of debt of $86 related to the acceleration of unamortized deferred debt issuance costs and make-whole premium payment on the redeemed notes.
On July 22, 2025, the Company issued notices to the holders of the Unsecured Notes Due February 2026 regarding the exercise of its option to redeem on August 21, 2025, $69,000 of the issued and outstanding amount of such notes, plus accrued interest of $100 and a make-whole premium payment of $32. The Company recognized a loss on extinguishment of debt of $224 related to the acceleration of unamortized deferred debt issuance costs and make-whole premium payment on the redeemed notes.
On November 28, 2025, the Company issued notices to the holders of the Unsecured Notes Due February 2026 regarding the exercise of its option to redeem on December 30, 2025 $15,000 of the issued and outstanding amount of such notes, plus accrued interest of $277. The Company recognized a loss on extinguishment of debt of $12 related to the acceleration of unamortized deferred debt issuance costs on the redeemed notes.
As of December 31, 2025, the Company had $16,000 of outstanding Unsecured Notes Due February 2026, which were redeemed in full on February 9, 2026. See “Note 12—Subsequent Events” for additional information.
Unsecured Notes Due October 2028 (Nasdaq: OFSSH): On October 28, 2021 and November 1, 2021, the Company issued $55,000 in aggregate principal of unsecured notes. The Unsecured Notes Due October 2028 bear interest at a rate of 4.95% per
year payable semi-annually and mature on October 31, 2028. The Company may redeem the Unsecured Notes Due October 2028 in whole or in part at any time.
The indenture governing the Unsecured Notes Due July 2028 and Unsecured Notes Due October 2028 contain certain covenants, including: (i) prohibiting additional borrowings, including through the issuance of additional debt securities, unless the Company's asset coverage, as defined in the 1940 Act, after giving effect to any exemptive relief granted to the Company by the SEC, equals at least 150% after such borrowings; and (ii) prohibiting (a) the declaration of any cash dividend or distribution upon any class of the Company’s capital stock (except to the extent necessary for the Company to maintain its treatment as a RIC under Subchapter M of the Code), or (b) the purchase of any capital stock unless the Company’s asset coverage, as defined in the 1940 Act, is at least 150% at the time of such capital transaction and after deducting the amount of such transaction.
The Unsecured Notes are direct unsecured obligations and rank equal in right of payment with all current and future unsecured indebtedness of the Company. Because the Unsecured Notes are not secured by any of the Company’s assets, they are effectively subordinated to all existing and future secured unsubordinated indebtedness (or any indebtedness that is initially unsecured as to which the Company subsequently grants a security interest), to the extent of the value of the assets securing such indebtedness, including, without limitation, borrowings under the Banc of California Credit Facility.
As of December 31, 2025, the Unsecured Notes had the following terms and balances:
| Unsecured Notes | Principal | Unamortized Debt Issuance Costs | Stated Interest Rate(1) | Effective Interest Rate(2) | Optional Redemption Date | Maturity Date | ||||||||||||||||||||||||||||||||
Unsecured Notes Due February 2026(3) | $ | 16,000 | $ | 12 | 4.75 | % | 5.44 | % | Callable | February 10, 2026 | ||||||||||||||||||||||||||||
| Unsecured Notes Due July 2028 | 69,000 | 1,502 | 7.50 | % | 8.34 | % | July 31, 2026 | July 31, 2028 | ||||||||||||||||||||||||||||||
| Unsecured Notes Due October 2028 | 55,000 | 580 | 4.95 | % | 5.32 | % | Callable | October 31, 2028 | ||||||||||||||||||||||||||||||
| Unsecured Note Due August 2029 | 25,000 | 718 | 8.00 | % | 8.80 | % | Callable | August 8, 2029 | ||||||||||||||||||||||||||||||
| Total | $ | 165,000 | $ | 2,812 | ||||||||||||||||||||||||||||||||||
(1) The weighted-average fixed cash interest rate on the Unsecured Notes as of December 31, 2025 was 6.46%.
(2) The effective interest rate on the Unsecured Notes includes deferred debt issuance cost amortization.
(3) On February 9, 2026, the Company redeemed the remaining $16,000 in aggregate principal amount of its Unsecured Notes Due February 2026.
For the years ended December 31, 2025, 2024 and 2023, the components of interest expense, cash paid for interest, effective interest rates and average outstanding balances for the Unsecured Notes were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Stated interest expense | $ | 10,078 | $ | 8,660 | $ | 8,660 | |||||||||||
| Amortization of debt issuance costs | 1,111 | 979 | 981 | ||||||||||||||
| Total interest and debt financing costs | $ | 11,189 | $ | 9,639 | $ | 9,641 | |||||||||||
| Cash paid for interest expense | $ | 10,911 | $ | 8,660 | $ | 8,660 | |||||||||||
| Effective interest rate | 5.99 | % | 5.35 | % | 5.36 | % | |||||||||||
| Average outstanding balance | $ | 186,929 | $ | 180,000 | $ | 180,000 | |||||||||||
Banc of California Credit Facility: The Company is party to a business loan agreement (“BLA”) with Banc of California, as lender, to provide the Company with a $25,000 senior secured revolving credit facility. The Banc of California Credit Facility is available for general corporate purposes including investment funding. The maximum availability of the Banc of California Credit Facility is equal to 50% of the aggregate outstanding principal amount of eligible loans included in the borrowing base, which typically excludes Structured Finance Securities and non-performing loans, and as otherwise specified in the BLA. The Banc of California Credit Facility is guaranteed by OFSCC-MB and secured by all of our and OFSCC-MB’s current and future assets, excluding assets held by OFSCC-FS and the Company’s partnership interests in SBIC I LP.
The Banc of California Credit Facility bears interest at a variable rate of the United States Prime interest rate plus a 0.25% margin, with a 5.00% floor, and includes an annual commitment fee of 0.50% of the maximum commitment amount of $25,000. As of December 31, 2025, the stated interest rate of the Banc of California Credit Facility was 7.00%. As of December 31, 2025, the Banc of California Credit Facility’s effective interest rate, including deferred financing cost amortization and commitment fees, was 9.78%.
Unamortized debt issuance costs included in prepaid expenses and other assets on the consolidated statements of assets and liabilities as of December 31, 2025 and 2024, were $0 and $121, respectively.
As of December 31, 2025 and 2024, the Company had $4,500 and $1,000 outstanding debt under the Banc of California Credit Facility, respectively, and $20,500 and $24,000 of unused commitments, respectively, subject to a borrowing base and other covenants.
On December 15, 2023, the Company amended the Banc of California Credit Facility to: (i) extend the maturity date from February 28, 2024 to February 28, 2026; (ii) increase the interest rate floor from 4.00% to 5.00%; and (iii) eliminate the 0.50% unused line fee and replace it with an annual commitment fee of 0.50%.
On January 9, 2026, the Company amended the Banc of California Credit Facility to extend the maturity date from February 28, 2026 to February 28, 2028.
Fees and legal costs incurred in connection with the Banc of California Credit Facility are deferred and amortized over the life of the facility.
The BLA contains customary terms and conditions, including, without limitation, affirmative and negative covenants such as information reporting requirements, a minimum tangible net asset value, a minimum quarterly net investment income after incentive fees, and a ratio of total liabilities divided by NAV. The BLA also contains customary events of default, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to other indebtedness, bankruptcy, change in investment advisor, and the occurrence of a material adverse change in our financial condition.
For the years ended December 31, 2025, 2024 and 2023, the components of interest expense, cash paid for interest, effective interest rates and average outstanding balances for the Banc of California Credit Facility were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Stated interest expense(1) | $ | 114 | $ | 3 | $ | 147 | |||||||||||
Amortization of debt issuance costs(1) | 121 | 125 | 5 | ||||||||||||||
| Total interest and debt financing costs | $ | 235 | $ | 128 | $ | 152 | |||||||||||
| Cash paid for interest expense | $ | 111 | $ | — | $ | 145 | |||||||||||
Effective interest rate(2) | n/m | n/m | n/m | ||||||||||||||
| Average outstanding balance | $ | 1,482 | $ | 39 | $ | 1,249 | |||||||||||
(1) For the year ended December 31, 2023, stated interest expense includes unused fees. Effective December 15, 2023, the 0.50% unused line fee was replaced with an annual commitment fee of 0.50%, which is included in amortization of debt issuance costs for the years ended December 31, 2025 and 2024.
(2) Not meaningful due to a minimal average outstanding balance relative to the size of the total commitment and the amount of unused or commitment fees incurred during the periods.
BNP Facility: OFSCC-FS was party to the BNP Facility, which provided for borrowings in an aggregate principal amount up to $80,000 during its reinvestment period. Borrowings under the BNP Facility bore interest at a variable rate of SOFR plus a variable margin (2.65% floor), which was determined on the basis of industry-recognized portfolio company metrics at the time of funding. On February 18, 2026, in connection with the closing of the Natixis Facility, OFSCC-FS repaid in full all outstanding obligations due, and terminated all commitments, under the BNP Facility. All liens securing the BNP Facility were released upon such repayment.
Amendments during the years ended December 31, 2025, 2024 and 2023
On June 18, 2025, OFSCC-FS executed an amendment to the BNP Facility to extend the reinvestment period under the facility from June 20, 2025 to August 31, 2025. On August 25, 2025, OFSCC-FS executed an amendment to the BNP Facility to extend the reinvestment period under the facility from August 31, 2025 to September 30, 2025. The reinvestment period of the BNP Facility expired on September 30, 2025, after which the ability to access the unused commitment of the facility terminated.
On August 20, 2025, OFSCC-FS elected to reduce the maximum facility amount from $150,000 to $80,000 under its revolving credit and security agreement. The reduction was made pursuant to the terms of the BNP Facility, which permitted OFSCC-FS to voluntarily reduce the unused amount of the facility upon notice to the administrative agent and other applicable parties. The Company recognized a loss on extinguishment of debt of $147 related to the acceleration of deferred borrowing costs on the commitment reduction.
On November 20, 2025, OFSCC-FS amended the BNP Facility to, among other things: (i) amend and restate the definition of “Portfolio Advance Rate Adjustment” to reflect updated percentages based on the Diversity Score, with different tables applicable across the following periods: (A) from the Closing Date to but excluding the effective date of the Amendment; (B) from the effective date of the Amendment to and including December 15, 2025; and (C) after December 15, 2025; (ii) permit the Borrower to purchase additional Collateral Loans during and after the Reinvestment Period, subject to certain conditions; and (iii) permit the Equityholder, with the consent of the Administrative Agent, to contribute certain Eligible Collateral Loans to the Borrower.
As of December 31, 2025 and 2024, the Company had $50,950 and $67,350, respectively, outstanding debt under the BNP Facility. As of December 31, 2025, the unused commitment under the BNP Facility was $0, following the expiration of the reinvestment period on September 30, 2025.
Borrowings under the BNP Facility were secured by substantially all of the assets held by OFSCC-FS, which were $125,004 and $151,039, or 36% and 35% of the Company’s total consolidated assets at December 31, 2025 and 2024, respectively.
At December 31, 2025, the stated interest rate on the BNP Facility was 6.47%.
OFSCC-FS incurred fees to the lenders as well as legal costs to establish and amend the BNP Facility, which were deferred and amortized over the expected life of the facility. Unamortized debt issuance costs included in prepaid expenses and other assets on the consolidated statements of assets and liabilities as of December 31, 2025 and 2024 were $125 and $560, respectively.
For the years ended December 31, 2025, 2024 and 2023, the components of interest expense, cash paid for interest, effective interest rates and average outstanding balances for the BNP Facility were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Stated interest expense(1) | $ | 4,747 | $ | 6,329 | $ | 7,911 | |||||||||||
| Amortization of debt issuance costs | 339 | 381 | 380 | ||||||||||||||
| Total interest and debt financing costs | $ | 5,086 | $ | 6,710 | $ | 8,291 | |||||||||||
| Cash paid for interest expense | $ | 4,843 | $ | 6,543 | $ | 7,966 | |||||||||||
| Effective interest rate | 8.04 | % | 8.88 | % | 8.29 | % | |||||||||||
| Average outstanding balance | $ | 63,285 | $ | 75,520 | $ | 100,062 | |||||||||||
(1) Stated interest expense includes unused commitment fees. In connection with the expiration of the reinvestment period, and effective September 30, 2025, the Company is no longer subject to an unused commitment fee on the facility.
SBA Debentures: The SBIC Program enabled SBIC I LP to obtain leverage by issuing SBA-guaranteed debentures, subject to issuance of a capital commitment by the SBA and customary procedures. These debentures were non-recourse to the Company, had a ten-year maturity and a fixed interest rate at a market-driven spread over ten-year U.S. Treasury Notes.
As of December 31, 2025 and 2024, SBIC I LP had no outstanding SBA debentures.
Redemptions during the years ended December 31, 2024, and 2023
On March 1, 2024, SBIC I LP fully repaid its outstanding SBA debentures totaling $31,920 that were contractually due March 1, 2025, and, on April 17, 2024, surrendered its license to operate as a SBIC.
During the year ended December 31, 2023, SBIC I LP redeemed $19,000 of SBA debentures that were contractually due March 1, 2025. The Company recognized a loss on extinguishment of debt of $213 related to the acceleration of unamortized deferred borrowing costs and prepaid (or breakage) interest on the redeemed debentures.
For the years ended December 31, 2025, 2024, and 2023, the components of interest expense, cash paid for interest, effective interest rates and average outstanding balances for the SBA debentures were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Stated interest expense | $ | — | $ | 151 | $ | 1,236 | |||||||||||
| Amortization of debt issuance costs | — | 20 | 162 | ||||||||||||||
| Total interest and debt financing costs | $ | — | $ | 171 | $ | 1,398 | |||||||||||
| Cash paid for interest expense | $ | — | $ | 457 | $ | 1,418 | |||||||||||
| Effective interest rate | — | % | 3.26 | % | 3.25 | % | |||||||||||
| Average outstanding balance | $ | — | $ | 5,233 | $ | 43,046 | |||||||||||
The average dollar borrowings and average interest rate for all Company debt during the years ended December 31, 2025, 2024 and 2023, were as follows:
| Year ended | Average Dollar Borrowings | Weighted-Average Effective Interest Rate | ||||||||||||
| December 31, 2025 | $ | 251,696 | 6.56 | % | ||||||||||
| December 31, 2024 | 260,792 | 6.38 | ||||||||||||
| December 31, 2023 | 324,357 | 6.01 | ||||||||||||
The following table shows the scheduled maturities of the principal balances of the Company’s outstanding borrowings as of December 31, 2025:
| Principal Due by Year | |||||||||||||||||||||||||||||||||||
| Debt liabilities | Total | 2026 | 2027 | 2028 | 2029 | Thereafter | |||||||||||||||||||||||||||||
Banc of California Credit Facility(1) | $ | 4,500 | $ | 4,500 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||
BNP Facility(2) | 50,950 | — | 50,950 | — | — | — | |||||||||||||||||||||||||||||
Unsecured Notes(3) | 165,000 | 16,000 | — | 124,000 | 25,000 | — | |||||||||||||||||||||||||||||
| Total | $ | 220,450 | $ | 20,500 | $ | 50,950 | $ | 124,000 | $ | 25,000 | $ | — | |||||||||||||||||||||||
(1) On January 9, 2026, the Company amended the Banc of California Credit Facility to extend the maturity date from February 28, 2026 to February 28, 2028.
(2) On February 18, 2026, in connection with the closing of the Natixis Facility, OFSCC-FS repaid in full all outstanding obligations due, and terminated all commitments, under the BNP Facility. The Natixis Facility has a maturity date of February 18, 2031, subject to the occurrence of certain other events that result in accelerated maturity under the Natixis Facility.
(3) On February 9, 2026, the Company redeemed the remaining $16,000 in aggregate principal amount of its Unsecured Notes Due February 2026. See “Note 12—Subsequent Events” for additional information.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 3, 2026 | Showing above |
| 2024 | Mar 4, 2025 | |
| 2023 | Mar 5, 2024 | |
| 2022 | Mar 3, 2023 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.