UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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of the Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 3.02. Unregistered Sale of Equity Securities.
On January 2, 2024, the Company sold 21,853 unregistered common shares of beneficial interest, par value $0.001 (the “Common Shares”) (with the final number of Common Shares being determined on January 19, 2024) to investors, including feeder vehicles. The Common Shares were sold in a private placement in the United States under the exemption provided by Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder and Regulation S under the Securities Act (the “Private Offering”). The following table details the shares sold:
| Date of Unregistered Sale |
Amount of Common Shares |
Consideration | ||||||
| January 2, 2024 (number of Common Shares finalized on January 19, 2024) |
21,853 | $ | 532,335 | |||||
Item 7.01. Regulation FD Disclosure.
Portfolio and Business Commentary
(All figures as of December 31, 2023, unless otherwise noted)
For the quarter ended December 31, 2023, the Company’s net asset value (“NAV”) per share was $24.36, down 0.7% from $24.52 as of September 30, 2023. The Company’s year-to-date return through December 31, 2023 was 11.1%. The Company’s annualized distribution rate is 13.3% as of December 2023.1
As of December 31, 2023, the Company’s portfolio was $533.1 million based on fair market value across 29 portfolio companies and 14 industries. The Company’s unfunded commitments was $19.7 million at December 31, 2023. Given our focus on lower middle market borrowers and our conservative structuring approach, our portfolio remained defensively positioned with 99% first lien debt investments and 100% floating rate debt investments based on fair market value. As of December 31, 2023, there were no investments on non-accrual status.
We continue to operate around the low end of our target leverage ratio of 0.9x to 1.0x net debt to equity and remain focused on optimizing our funding sources and liquidity. As of December 31, 2023, the Company’s net leverage ratio was 0.9x2. The Company has remaining facility sizes totaling $157.0 million.3
Since inception and as of December 31, 2023, the Company has closed on 37 portfolio investments totaling over $715.0 million of commitments at the time of original closing. At the time of original closing for these 37 borrowers, the weighted average senior leverage was approximately 4.4 times, the loan-to-value ratio was approximately 38%, and the weighted average spread over reference rate to the London Interbank Offered Rate (“LIBOR”), Secured Overnight Financing Rate (“SOFR”), and Canadian Dollar Offered Rate (“CDOR”) was 660 bps. As of December 31, 2023, there were 30 borrowers in the portfolio with total outstanding commitments, including unfunded loan commitments, of approximately $559.1 million.
| 1. | The annualized distribution rate is calculated by multiplying the current quarter’s (Q4 2023) regular distribution per share by four and dividing the result by the prior quarter’s (Q3 2023) ending NAV per share plus the current quarter’s special distribution divided by the prior quarter’s NAV per share. If the calculation was based on the current quarter’s ending NAV per share, the annualized distribution rate would be 13.3% as of December 2023. The special distribution is not annualized. |
| 2. | Net leverage ratio is defined as debt outstanding less cash and cash equivalents, divided by net assets. |
| 3. | Includes borrowing facility sizes of $340.0 million under our SPV facility and $80.0 million under our revolving Onex loan. |
The information disclosed under this Item 7.01 is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise. The information in this Item 7.01 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Exchange Act, except as otherwise expressly stated in any such filing.
Item 8.01. Other Events.
Net Asset Value
The net asset value (“NAV”) per share of each class of the Company as of December 31, 2023, as determined in accordance with the Company’s valuation policy, is set forth below.
| NAV per share as of December 31, 2023 |
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| Common shares of beneficial interest, par value $0.001 |
$ | 24.36 | ||
As of December 31, 2023, the Company’s aggregate net asset value was $272.7 million and the fair value of its investment portfolio was $533.1 million.
Status of Offering
The Company has sold Common Shares as part of the Private Offering. The following table lists the Common Shares issued and total consideration for the Private Offering as of the date of this filing. The Company intends to continue selling Common Shares in the Private Offering on a quarterly basis.
| Common Shares Issued |
Total Consideration |
|||||||
| Common shares of beneficial interest, par value $0.001 |
11,218,172 | $ | 302.1 million | |||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ONEX FALCON DIRECT LENDING BDC FUND | ||||||
| Date: January 23, 2024 | By: | /s/ Edward U. Gilpin | ||||
| Name: | Edward U. Gilpin | |||||
| Title: | Chief Financial Officer and Treasurer | |||||