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Capital Southwest, Main Street fund to invest in senior secured loans
By Wendy Van Sickle
Columbus, Ohio, Sept. 10 – Capital Southwest Corp. and Main Street Capital Corp. have partnered in a senior loan fund that will invest primarily in syndicated senior secured loans in the upper middle market, according to a Thursday press release from Capital Southwest.
The joint venture is called I-45 SLF LLC.
The initial equity capital commitment to I-45 SLF will total $85 million, consisting of $68 million from Capital Southwest and $17 million from Main Street.
Capital Southwest will own 80% of I-45 SLF and have a profits interest of 75.6%, while Main Street will own 20% and have a profits interest of 24.4%.
The fund’s board of managers will make all investment and operational decisions and will consist of equal representation from Capital Southwest and Main Street.
It is anticipated that the fund will enter into a senior credit facility to fund the purchase of senior secured loan assets and that the venture will begin funding loans later this month, according to the release.
“We are very pleased with the interest from the senior lender community in the credit facility for I-45 SLF,” said Michael Sarner, senior vice president of Capital Southwest who is to be named chief financial officer after the completion of the spinoff of CSW Industrials, Inc., in the news release. “We are currently in discussions on final terms of the I-45 SLF credit facility with a lending partner that we believe will give I-45 SLF the ability to effectively execute its investment plan.”
Capital Southwest is a Dallas-based publicly traded business development company. Houston-based Main Street provides long-term debt and equity capital to lower middle-market companies and debt capital to middle-market companies.
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