BC Partners Lending Corp. closes all-stock ACIF merger, ending interval-fund repurchases

BC Partners Lending Corp. closed its all-stock acquisition of Alternative Credit Income Fund on Sept. 29, ending the interval fund's mandatory periodic repurchases. The DI Wire reported the closing. ACIF's shareholders now hold stock in a privately offered business development company that, according to BCPL, has not run a tender offer since it launched.

The combined company reported net asset value above $223 million, based on Sept. 26 financial data; BCPL's net assets were $98.5 million, or $18.59 per share, as of June 30. The transaction was first announced in February and approved at a Sept. 10 special meeting, where about 84.6% of ACIF's voting shareholders supported it, the fund said.

The deal closed in two steps: a BCPL subsidiary merged into ACIF, then ACIF merged into BCPL, the surviving company. BCPL issued 7.07 million shares to former ACIF shareholders, at exchange ratios from 0.4567 BCPL shares per ACIF Class W share to 0.4647 per Class C share.

Before closing, ACIF ran a one-time discretionary repurchase offer for up to 15% of its outstanding shares, priced at each class's NAV as of Sept. 24. After closing, BCPL expects to begin quarterly tender offers for up to 2.5% of outstanding shares only once four full quarters have passed, subject to board approval, and it is under no obligation to conduct them.

ACIF shareholders were told to weigh "risks related to additional leverage, reduced liquidity and higher management fees," according to The DI Wire. Pro forma, the combined company's base management fee falls to 1.76% of net assets from 1.85% across ACIF's share classes, while its incentive fee rises to 1.85% from zero.

Separately on Sept. 29, BCPL subsidiary Great Lakes BCPL Funding Ltd. amended a revolving credit facility for which Deutsche Bank AG is facility agent. Commitments rose from $125 million to $200 million, with an accordion that allows growth to as much as $400 million; the revolving period now runs to Sept. 29, 2029, and maturity to Sept. 29, 2031.