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EX-4.2 - EX-4.2 - Newtek Business Services Corp.newtek-fifthsupplemental.htm

Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

November 27, 2020 (November 27, 2020)
Date of Report (date of Earliest Event Reported)

(Exact Name of Company as Specified in its Charter)

(State or Other Jurisdiction of Incorporation or Organization)(Commission File No.)(I.R.S. Employer Identification No.)

4800 T-Rex Avenue, Suite 120, Boca Raton, FL 33431
(Address of principal executive offices and zip code)

(212) 356-9500
(Company’s telephone number, including area code)

(Former name or former address, if changed from last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.02 per shareNEWTNasdaq Global Market LLC
6.25% Notes due 2023NEWTINasdaq Global Market LLC
5.75% Notes due 2024NEWTLNasdaq Global Market LLC

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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     o

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. o

Item 1.01.    Entry Into a Material Definitive Agreement.

On November 27, 2020 Newtek Business Services Corp. (the “Company”) completed an exempt offering of $5 million aggregate principal amount of its 6.85% notes due 2025 (the “Notes”). The offering was consummated pursuant to the terms of a purchase agreement (the “Purchase Agreement”) dated November 27, 2020 among the Company and an accredited investor (the “Purchaser”). The Purchase Agreement provided for the Notes to be issued to the Purchaser in a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Company relied upon this exemption from registration based in part on representations made by the Purchaser. The Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration. The net proceeds from the sale of the Notes were approximately $4.8 million, after deducting structuring fees and estimated offering expenses, each payable by the Company. The Company intends to use the net proceeds from the sale of the Notes to fund investments in debt and equity in accordance with its investment objectives and strategies. Under the Purchase Agreement, the Company may issue additional Notes in aggregate principal amount of up to $10 million to the Purchaser by placement notice delivered to the Purchaser on or before March 31, 2021, and, by mutual agreement of the parties, of up to $15 million in aggregate principal amount of additional Notes by placement notice delivered to the Purchaser after March 31, 2021 and before November 30, 2022.

The Notes were issued under the Indenture dated as of September 23, 2015 (the “Base Indenture”), between the Company and U.S. Bank, National Association, trustee (the “Trustee”), and a Fifth Supplemental Indenture, dated as of November 27, 2020 (the “Fifth Supplemental Indenture” and together with the Base Indenture, the “Indenture”). The Notes will mature on November 30, 2025. The Notes bear interest at a rate of 6.85% per year payable quarterly on February 28, May 31, August 31 and November 30 each year, commencing on February 28, 2021. Under the terms of the Indenture, the Notes are redeemable at any time, at the option of the Company, at a redemption price of 100% of the outstanding principal amount thereof; provided, however, that Company will pay a fee of (i) 1.00% of the principal amount of any Note redeemed before the one year anniversary of the issuance of such Note, and (i) 0.50% of the principal amount of any Note redeemed after the one year anniversary, but before the three year anniversary, of the issuance of such Note. The holder of the Notes may waive the 1.00% or 0.05% fee, as applicable, in its sole discretion.

The Notes will be the Company’s direct unsecured obligations and rank pari passu, or equal, with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. The Notes will be effectively subordinated to the Company’s existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s subsidiaries.

The Indenture contains certain covenants, including covenants requiring the Company to (i) comply with the asset coverage requirements of the Investment Company Act of 1940, whether or not it is subject to those requirements, and (ii) provide financial information to the holders of the Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the Indenture.

A copy of the Base Indenture and Fifth Supplemental Indenture are attached hereto as Exhibits 4.1 and 4.2, respectively and are incorporated herein by reference. The description of the Notes contained in this Form 8-K is qualified in its entirety by reference to the foregoing.

Item 2.03.    Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information required by Item 2.03 is contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.

Item 9.01.      Financial Statements and Exhibits.
(d)  Exhibits.


In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 27, 2020By:
/S/    BARRY SLOANE        
Barry Sloane
Chief Executive Officer, President and Chairman of the Board