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JMP Group establishes $100M credit facility

JMP Group LLC on Oct. 11 established a $100 million revolving credit facility with BNP Paribas to finance the acquisition of a portfolio of broadly syndicated corporate loans.

The credit facility was established through JMP Group affiliate JMP Credit Advisors Long-Term Warehouse Ltd. and JMP Credit unit JMP Credit Advisors CLO VI Warehouse Ltd. The facility will be primarily secured by a portfolio of broadly syndicated corporate loans eligible for acquisition. JMP Group unit JMP Credit Advisors LLC will act as collateral manager for the acquisition.

The facility will have a revolving period of up to three years ending Oct. 11, 2021, and a 12-month amortization period. It will have a market standard advance rate, and any outstanding balances will bear interest at standard market interest rates based on LIBOR.

Concurrently with entering into the credit facility, JMP Group unit JMP Capital LLC will enter into a preference share subscription agreement with JMP Credit Advisors Long-Term Warehouse to purchase the latter's mandatorily redeemable preference shares in an initial amount of $7.5 million to support the initial borrowing under the facility.

JMP Capital may purchase additional preference shares up to $33.3 million to support additional borrowing under the facility. The proceeds from the preference shares will be used to acquire portfolio assets and repay loans under the credit facility, among other things. All or a portion of the preference shares will be redeemed upon the closing of a collateralized loan obligation transaction.