Borrowings

9 Months Ended

Sep. 30, 2025

SBA Debentures: 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.

For the three and nine months ended September 30, 2025 and 2024, the components of interest expense, cash paid for interest, effective interest rates and average outstanding balances for the SBA debentures were as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Stated interest expense	$	—		$	—		$	—		$	151
Amortization of debt issuance costs	—			—			—			20
Total interest and debt financing costs	$	—		$	—		$	—		$	171
Cash paid for interest expense	$	—		$	—		$	—		$	457
Effective interest rate	—		%	—		%	—		%	3.26		%
Average outstanding balance	$	—		$	—		$	—		$	6,990

BNP Facility: On June 20, 2019, OFSCC-FS entered into the BNP Facility, which provided for borrowings in an aggregate principal amount up to $150,000 during its reinvestment period. 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 and make additional investments under the facility terminated. 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.

On August 20, 2025, OFSCC-FS elected, effective as of August 22, 2025, to reduce the maximum facility amount of the facility from $150,000 to $80,000. The reduction was made pursuant to the terms of the BNP Facility, which permits 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.

The BNP Facility is scheduled to mature on June 20, 2027 and bears interest at a variable rate of SOFR plus a variable margin (2.65% floor). As of September 30, 2025 and December 31, 2024, the BNP Facility had outstanding debt of $59,200 and $67,350, respectively. As of September 30, 2025, the unused commitment under the BNP Facility was $0, following the expiration of the reinvestment period on September 30, 2025. Additionally, principal proceeds from investments made under the facility received after the expiration of the reinvestment period will be applied to repay principal amounts outstanding under the BNP Facility.

On a stand-alone basis, as of September 30, 2025 and December 31, 2024, OFSCC-FS held $132,436 and $151,039 in total assets, respectively.

The BNP Facility is collateralized by all the assets held by OFSCC-FS. OFSCC-FS and the Company have each made customary representations and warranties and are required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities.

For the three and nine months ended September 30, 2025 and 2024, the components of interest expense, cash paid for interest, average interest rates and average outstanding balances for the BNP Facility were as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Stated interest expense(1)	$	1,205		$	1,486		$	3,752		$	4,932
Amortization of debt issuance costs	75			95			266			285
Total interest and debt financing costs	$	1,280		$	1,581		$	4,018		$	5,217
Cash paid for interest expense	$	1,235		$	1,511		$	3,815		$	5,114
Effective interest rate	8.14		%	9.15		%	8.25		%	8.91		%
Average outstanding balance	$	62,418		$	69,100		$	65,084		$	78,053

(1) Stated interest expense includes unused fees.

Banc of California Credit Facility: On March 7, 2018, the Company entered into the Banc of California Credit Facility. The Banc of California Credit Facility currently bears interest at a variable rate of the Prime 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. The Banc of California Credit Facility is scheduled to mature on February 28, 2026.

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 SBIC I LP, and the Company’s partnership interests in SBIC I LP. The Company has made customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities.

As of September 30, 2025 and December 31, 2024, the Company had $0 and $1,000, respectively, of outstanding debt under the Banc of California Credit Facility. As of September 30, 2025, the unused commitment under the Banc of California Credit Facility was $25,000, subject to the terms of the borrowing base and other covenants.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Stated interest expense	$	—	$	—	$	80	$	—
Amortization of debt issuance costs	32		31		95		94
Total interest and debt financing costs	$	32	$	31	$	175	$	94
Cash paid for interest expense	$	—	$	—	$	83	$	—
Effective interest rate(1)	n/m		n/m		n/m		n/m
Average outstanding balance	$	—	$	—	$	1,364	$	—

(1) Not meaningful due to a minimal average outstanding balance relative to the size of the total commitment and the amount of commitment fees incurred during the periods.

Unsecured Notes: As of September 30, 2025 and December 31, 2024, the Company had $180,000 of outstanding Unsecured Notes.

Unsecured Notes Due February 2026: On February 10, 2021 and March 18, 2021, the Company issued $125,000 in aggregate principal of unsecured notes. The Unsecured Notes Due February 2026 bear interest at a rate of 4.75% per year payable semi-annually and mature on February 10, 2026. The Company may redeem the Unsecured Notes Due February 2026 in whole or in part at any time.

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.

As of September 30, 2025, the Company had $31,000 of outstanding Unsecured Notes Due February 2026.

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.

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.

The indenture governing the Unsecured Notes Due February 2026, July 2028 and October 2028 contains 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.

Unsecured Note Due August 2029: On August 8, 2025, the Company entered into the Securities Purchase Agreement, pursuant to which the Company sold in a private placement a $25,000 principal amount Unsecured Note Due August 2029. 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.

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.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Stated interest expense	$	2,908		$	2,165		$	7,238		$	6,495
Amortization of debt issuance costs	322			245			811			734
Total interest and debt financing costs	$	3,230		$	2,410		$	8,049		$	7,229
Cash paid for interest expense	$	3,753		$	3,649		$	8,083		$	7,979
Effective interest rate	6.17		%	5.35		%	5.68		%	5.35		%
Average outstanding balance	$	207,815		$	180,000		$	189,374		$	180,000

The following table shows the scheduled maturities of the principal balances of the Company’s outstanding borrowings as of September 30, 2025:


	Payments due by period
	Total		Less than 1 year		1 to 3 years		3 to 5 years		After 5 years
Banc of California Credit Facility	$	—	$	—	$	—	$	—	$	—
Unsecured Notes	180,000		31,000		69,000		80,000		—

BNP Facility	59,200		—		59,200		—		—
Total	$	239,200	$	31,000	$	128,200	$	80,000	$	—

For the three and nine months ended September 30, 2025 and 2024, the average dollar borrowings and weighted average effective interest rate on the Company’s outstanding borrowings were as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Average dollar borrowings	$	270,233		$	249,100		$	255,822		$	265,043
Weighted average effective interest rate	6.67		%	6.46		%	6.40		%	6.39		%

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
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+ Details

OFS Capital Corp 10-Q