Golub Capital BDC, Inc., et al.; Notice of Application, 52367-52368 [2011-21322]

Download as PDF jlentini on DSK4TPTVN1PROD with NOTICES Federal Register / Vol. 76, No. 162 / Monday, August 22, 2011 / Notices rolling period ending on the last trading day of each week); and b. The Fund’s annualized distribution rate for such 12-week rolling period, expressed as a percentage of NAV as of the ending date of such 12-week rolling period, is greater than the Fund’s average annual total return in relation to the change in NAV over the 2-year period ending on the last day of such 12-week rolling period; then: i. At the earlier of the next regularly scheduled meeting or within four months of the last day of such 12-week rolling period, the Board, including a majority of the Independent Directors: (1) Will request and evaluate, and the Investment Adviser will furnish, such information as may be reasonably necessary to make an informed determination of whether the Distribution Policy should be continued or continued after amendment; (2) Will determine whether continuation, or continuation after amendment, of the Distribution Policy is consistent with the Fund’s investment objective(s) and policies and is in the best interests of the Fund and its stockholders, after considering the information in condition 5.b.i.(1) above; including, without limitation: (A) Whether the Distribution Policy is accomplishing its purpose(s); (B) The reasonably foreseeable material effects of the Distribution Policy on the Fund’s long-term total return in relation to the market price and NAV of the Fund’s common stock; and (C) The Fund’s current distribution rate, as described in condition 5.b. above, compared with the Fund’s average annual taxable income or total return over the 2-year period, as described in condition 5.b., or such longer period as the Board deems appropriate; and (3) Based upon that determination, will approve or disapprove the continuation, or continuation after amendment, of the Distribution Policy; and ii. The Board will record the information considered by it, including its consideration of the factors listed in condition 5.b.i.(2) above, and the basis for its approval or disapproval of the continuation, or continuation after amendment, of the Distribution Policy in its meeting minutes, which must be made and preserved for a period of not less than six years from the date of such meeting, the first two years in an easily accessible place. 6. Public Offerings. The Fund will not make a public offering of the Fund’s common stock other than: VerDate Mar<15>2010 17:16 Aug 19, 2011 Jkt 223001 a. A rights offering below NAV to holders of the Fund’s common stock; b. An offering in connection with a dividend reinvestment plan, merger, consolidation, acquisition, spin-off or reorganization of the Fund; or c. An offering other than an offering described in conditions 6.a. and 6.b. above, provided that, with respect to such other offering: i. The Fund’s annualized distribution rate for the six months ending on the last day of the month ended immediately prior to the most recent distribution record date, expressed as a percentage of NAV per share as of such date,4 is no more than 1 percentage point greater than the Fund’s average annual total return for the 5-year period ending on such date; 5 and ii. The transmittal letter accompanying any registration statement filed with the Commission in connection with such offering discloses that the Fund has received an order under section 19(b) to permit it to make periodic distributions of long-term capital gains with respect to its common stock as frequently as twelve times each year, and as frequently as distributions are specified by or determined in accordance with the terms of any outstanding preferred stock as such Fund may issue. 7. Amendments to Rule 19b–1. The requested order will expire on the effective date of any amendment to rule 19b–1 that provides relief permitting certain closed-end investment companies to make periodic distributions of long-term capital gains with respect to their outstanding common stock as frequently as twelve times each year. For the Commission, by the Division of Investment Management, under delegated authority. Elizabeth M. Murphy, Secretary. [FR Doc. 2011–21323 Filed 8–19–11; 8:45 am] BILLING CODE 8011–01–P 4 If the Fund has been in operation fewer than six months, the measured period will begin immediately following the Fund’s first public offering. 5 If the Fund has been in operation fewer than five years, the measured period will begin immediately following the Fund’s first public offering. PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 52367 SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 29756; 812–13794] Golub Capital BDC, Inc., et al.; Notice of Application August 16, 2011. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (the ‘‘Act’’) for an exemption from sections 18(a) and 61(a) of the Act. AGENCY: Applicants: Golub Capital BDC, Inc. (the ‘‘Company’’), GC Advisors LLC (the ‘‘Investment Adviser’’), GC SBIC IV–GP, Inc. (the ‘‘GP Managing Member’’), GC SBIC IV–GP, LLC (the ‘‘General Partner’’), and GC SBIC IV, L.P. (‘‘Golub SBIC’’). SUMMARY: Summary of the Application: The Company requests an order to permit it to adhere to a modified asset coverage requirement. DATES: Filing Dates: The application was filed July 9, 2010 and amended on November 12, 2010, March 31, 2011 and June 14, 2011. Hearing or Notification of Hearing: An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission’s Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on September 12, 2011 and should be accompanied by proof of service on the Applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer’s interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549– 1090. Applicants: David B. Golub, GC Advisors LLC, 150 South Wacker Drive, Suite 800, Chicago, Illinois 60606. FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at (202) 551–6873, or Dalia Osman Blass, Branch Chief, at (202) 551–6821 (Division of Investment Management, Office of Investment Company Regulation). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission’s E:\FR\FM\22AUN1.SGM 22AUN1 52368 Federal Register / Vol. 76, No. 162 / Monday, August 22, 2011 / Notices Web site by searching for the file number, or an applicant using the Company name box, at https:// www.sec.gov/search/search.htm or by calling (202) 551–8090. Applicants’ Representations 1. The Company, a Delaware corporation, is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company (‘‘BDC’’) under the Act.1 The Company seeks to maximize the total return to its stockholders through both current income and capital appreciation through debt and minority equity investments. The Investment Adviser, a Delaware limited liability company, is the investment adviser to the Company. The Investment Adviser is registered under the Investment Advisers Act of 1940. 2. Golub SBIC, a Delaware limited partnership, is a small business investment company (‘‘SBIC’’) licensed by the Small Business Administration (‘‘SBA’’) to operate under the Small Business Investment Act of 1958 (‘‘SBIA’’). Golub SBIC is excluded from the definition of investment company by section 3(c)(7) of the Act. The Company directly owns 99% of Golub SBIC in the form of a limited partner interest. The General Partner owns 1% of Golub SBIC in the form of a general partner interest. The GP Managing Member, a Delaware corporation, is a wholly-owned subsidiary of the Company and serves as the managing member of the General Partner. The GP Managing Member and the Company are the sole members of the General Partner. Applicants’ Legal Analysis jlentini on DSK4TPTVN1PROD with NOTICES 1. The Company requests an exemption pursuant to section 6(c) of the Act from the provisions of sections 18(a) and 61(a) of the Act to permit it to adhere to a modified asset coverage requirement with respect to any direct or indirect wholly owned subsidiary of the Company that is licensed by the SBA to operate under the SBIA as a SBIC and relies on Section 3(c)(7) for an exemption from the definition of ‘‘investment company’’ under the 1940 Act (each, a ‘‘SBIC Subsidiary’’).2 1 Section 2(a)(48) defines a BDC to be any closedend investment company that operates for the purpose of making investments in securities described in section 55(a)(1) through 55(a)(3) of the Act and makes available significant managerial assistance with respect to the issuers of such securities. 2 All existing entities that currently intend to rely on the order are named as applicants. Any other existing or future entity that may rely on the order VerDate Mar<15>2010 17:16 Aug 19, 2011 Jkt 223001 Applicants state that companies operating under the SBIA, such as the SBIC Subsidiary, will be subject to the SBA’s substantial regulation of permissible leverage in their capital structure. 2. Section 18(a) of the Act prohibits a registered closed-end investment company from issuing any class of senior security or selling any such security of which it is the issuer unless the company complies with the asset coverage requirements set forth in that section. Section 61(a) of the Act makes section 18 applicable to BDCs, with certain modifications. Section 18(k) exempts an investment company operating as an SBIC from the asset coverage requirements for senior securities representing indebtedness that are contained in section 18(a)(1)(A) and (B). 3. Applicants state that the Company may be required to comply with the asset coverage requirements of section 18(a) (as modified by section 61(a)) on a consolidated basis because the Company may be deemed to be an indirect issuer of any class of senior security issued by Golub SBIC or another SBIC Subsidiary. Applicants state that applying section 18(a) (as modified by section 61(a)) on a consolidated basis generally would require that the Company treat as its own all assets and any liabilities held directly either by itself, by Golub SBIC, or by another SBIC Subsidiary. Accordingly, the Company requests an order under section 6(c) of the Act exempting the Company from the provisions of section 18(a) (as modified by section 61(a)), such that senior securities issued by each SBIC Subsidiary that would be excluded from the SBIC Subsidiary’s asset coverage ratio by section 18(k) if it were itself a BDC would also be excluded from the Company’s consolidated asset coverage ratio. 4. Section 6(c) of the Act, in relevant part, permits the Commission to exempt any transaction or class of transactions from any provision of the Act if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants state that the requested relief satisfies the section 6(c) standard. Applicants contend that, because the SBIC Subsidiary would be entitled to rely on section 18(k) if it were a BDC itself, there is no policy reason to deny the in the future will comply with the terms and condition of the order. PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 benefit of that exemption to the Company. Applicants’ Condition Applicants agree that any order granting the requested relief will be subject to the following condition: The Company shall not issue or sell any senior security, and the Company shall not cause or permit Golub SBIC or any other SBIC Subsidiary to issue or sell any senior security of which the Company, Golub SBIC or any other SBIC Subsidiary is the issuer except to the extent permitted by section 18 (as modified for BDCs by section 61) of the Act; provided that, immediately after the issuance or sale by any of the Company, Golub SBIC or any other SBIC Subsidiary of any such senior security, the Company, individually and on a consolidated basis, shall have the asset coverage required by section 18(a) of the Act (as modified by section 61(a)). In determining whether the Company has the asset coverage on a consolidated basis required by section 18(a) of the Act (as modified by section 61(a)), any senior securities representing indebtedness of Golub SBIC or another SBIC Subsidiary shall not be considered senior securities and, for purposes of the definition of ‘‘asset coverage’’ in section 18(h), shall be treated as indebtedness not represented by senior securities. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Elizabeth M. Murphy, Secretary. [FR Doc. 2011–21322 Filed 8–19–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold an Open Meeting on August 24, 2011 at 10 a.m., in the Auditorium, Room L–002, to hear oral argument in an appeal by Eric J. Brown, Matthew J. Collins, Kevin J. Walsh, and Mark W. Wells (collectively, ‘‘Respondents’’) and a cross-appeal by the Division of Enforcement from an initial decision of an administrative law judge. Brown and Walsh were formerly associated with registered broker-dealer Prime Capital Services, Inc. (‘‘Prime Capital’’), and Collins and Wells are currently associated with Prime Capital. E:\FR\FM\22AUN1.SGM 22AUN1

Agencies

[Federal Register Volume 76, Number 162 (Monday, August 22, 2011)]
[Notices]
[Pages 52367-52368]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-21322]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29756; 812-13794]


Golub Capital BDC, Inc., et al.; Notice of Application

August 16, 2011.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under section 6(c) of the 
Investment Company Act of 1940 (the ``Act'') for an exemption from 
sections 18(a) and 61(a) of the Act.

-----------------------------------------------------------------------

    Applicants: Golub Capital BDC, Inc. (the ``Company''), GC Advisors 
LLC (the ``Investment Adviser''), GC SBIC IV-GP, Inc. (the ``GP 
Managing Member''), GC SBIC IV-GP, LLC (the ``General Partner''), and 
GC SBIC IV, L.P. (``Golub SBIC'').
SUMMARY:  Summary of the Application: The Company requests an order to 
permit it to adhere to a modified asset coverage requirement.

DATES: Filing Dates: The application was filed July 9, 2010 and amended 
on November 12, 2010, March 31, 2011 and June 14, 2011.
    Hearing or Notification of Hearing: An order granting the 
application will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary and serving applicants with a copy of the request, personally 
or by mail. Hearing requests should be received by the Commission by 
5:30 p.m. on September 12, 2011 and should be accompanied by proof of 
service on the Applicants, in the form of an affidavit or, for lawyers, 
a certificate of service. Hearing requests should state the nature of 
the writer's interest, the reason for the request, and the issues 
contested. Persons who wish to be notified of a hearing may request 
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090. Applicants: David B. Golub, GC 
Advisors LLC, 150 South Wacker Drive, Suite 800, Chicago, Illinois 
60606.

FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at 
(202) 551-6873, or Dalia Osman Blass, Branch Chief, at (202) 551-6821 
(Division of Investment Management, Office of Investment Company 
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's

[[Page 52368]]

Web site by searching for the file number, or an applicant using the 
Company name box, at https://www.sec.gov/search/search.htm or by calling 
(202) 551-8090.

Applicants' Representations

    1. The Company, a Delaware corporation, is an externally managed, 
non-diversified, closed-end management investment company that has 
elected to be regulated as a business development company (``BDC'') 
under the Act.\1\ The Company seeks to maximize the total return to its 
stockholders through both current income and capital appreciation 
through debt and minority equity investments. The Investment Adviser, a 
Delaware limited liability company, is the investment adviser to the 
Company. The Investment Adviser is registered under the Investment 
Advisers Act of 1940.
---------------------------------------------------------------------------

    \1\ Section 2(a)(48) defines a BDC to be any closed-end 
investment company that operates for the purpose of making 
investments in securities described in section 55(a)(1) through 
55(a)(3) of the Act and makes available significant managerial 
assistance with respect to the issuers of such securities.
---------------------------------------------------------------------------

    2. Golub SBIC, a Delaware limited partnership, is a small business 
investment company (``SBIC'') licensed by the Small Business 
Administration (``SBA'') to operate under the Small Business Investment 
Act of 1958 (``SBIA''). Golub SBIC is excluded from the definition of 
investment company by section 3(c)(7) of the Act. The Company directly 
owns 99% of Golub SBIC in the form of a limited partner interest. The 
General Partner owns 1% of Golub SBIC in the form of a general partner 
interest. The GP Managing Member, a Delaware corporation, is a wholly-
owned subsidiary of the Company and serves as the managing member of 
the General Partner. The GP Managing Member and the Company are the 
sole members of the General Partner.

Applicants' Legal Analysis

    1. The Company requests an exemption pursuant to section 6(c) of 
the Act from the provisions of sections 18(a) and 61(a) of the Act to 
permit it to adhere to a modified asset coverage requirement with 
respect to any direct or indirect wholly owned subsidiary of the 
Company that is licensed by the SBA to operate under the SBIA as a SBIC 
and relies on Section 3(c)(7) for an exemption from the definition of 
``investment company'' under the 1940 Act (each, a ``SBIC 
Subsidiary'').\2\ Applicants state that companies operating under the 
SBIA, such as the SBIC Subsidiary, will be subject to the SBA's 
substantial regulation of permissible leverage in their capital 
structure.
---------------------------------------------------------------------------

    \2\ All existing entities that currently intend to rely on the 
order are named as applicants. Any other existing or future entity 
that may rely on the order in the future will comply with the terms 
and condition of the order.
---------------------------------------------------------------------------

    2. Section 18(a) of the Act prohibits a registered closed-end 
investment company from issuing any class of senior security or selling 
any such security of which it is the issuer unless the company complies 
with the asset coverage requirements set forth in that section. Section 
61(a) of the Act makes section 18 applicable to BDCs, with certain 
modifications. Section 18(k) exempts an investment company operating as 
an SBIC from the asset coverage requirements for senior securities 
representing indebtedness that are contained in section 18(a)(1)(A) and 
(B).
    3. Applicants state that the Company may be required to comply with 
the asset coverage requirements of section 18(a) (as modified by 
section 61(a)) on a consolidated basis because the Company may be 
deemed to be an indirect issuer of any class of senior security issued 
by Golub SBIC or another SBIC Subsidiary. Applicants state that 
applying section 18(a) (as modified by section 61(a)) on a consolidated 
basis generally would require that the Company treat as its own all 
assets and any liabilities held directly either by itself, by Golub 
SBIC, or by another SBIC Subsidiary. Accordingly, the Company requests 
an order under section 6(c) of the Act exempting the Company from the 
provisions of section 18(a) (as modified by section 61(a)), such that 
senior securities issued by each SBIC Subsidiary that would be excluded 
from the SBIC Subsidiary's asset coverage ratio by section 18(k) if it 
were itself a BDC would also be excluded from the Company's 
consolidated asset coverage ratio.
    4. Section 6(c) of the Act, in relevant part, permits the 
Commission to exempt any transaction or class of transactions from any 
provision of the Act if and to the extent that such exemption is 
necessary or appropriate in the public interest and consistent with the 
protection of investors and the purposes fairly intended by the policy 
and provisions of the Act. Applicants state that the requested relief 
satisfies the section 6(c) standard. Applicants contend that, because 
the SBIC Subsidiary would be entitled to rely on section 18(k) if it 
were a BDC itself, there is no policy reason to deny the benefit of 
that exemption to the Company.

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    The Company shall not issue or sell any senior security, and the 
Company shall not cause or permit Golub SBIC or any other SBIC 
Subsidiary to issue or sell any senior security of which the Company, 
Golub SBIC or any other SBIC Subsidiary is the issuer except to the 
extent permitted by section 18 (as modified for BDCs by section 61) of 
the Act; provided that, immediately after the issuance or sale by any 
of the Company, Golub SBIC or any other SBIC Subsidiary of any such 
senior security, the Company, individually and on a consolidated basis, 
shall have the asset coverage required by section 18(a) of the Act (as 
modified by section 61(a)). In determining whether the Company has the 
asset coverage on a consolidated basis required by section 18(a) of the 
Act (as modified by section 61(a)), any senior securities representing 
indebtedness of Golub SBIC or another SBIC Subsidiary shall not be 
considered senior securities and, for purposes of the definition of 
``asset coverage'' in section 18(h), shall be treated as indebtedness 
not represented by senior securities.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-21322 Filed 8-19-11; 8:45 am]
BILLING CODE 8011-01-P
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