SecProbe.io

CORRESP
1
filename1.htm

Document

 Eversheds Sutherland (US) LLP

700 Sixth Street, NW, Suite 700

Washington, DC 20001-3980

D: +1 202.383.0218

F: +1 202.637.3593

cynthiakrus@eversheds-sutherland.com

April 24, 2024

Via EDGAR

U.S. Securities and Exchange Commission

Division of Investment Management

Attention: Ms. Anu Dubey

100 F St N.E.

Washington, DC 20549

Re: OFS Credit Company, Inc. – Registration Statement on Form N-2

(File Nos. 333-277773; 811-23299)

Dear Ms. Dubey:

On behalf of OFS Credit Company, Inc. (the “Company”), set forth below are the Company’s responses to the oral comments provided by the Staff of the Division of Investment Management (the “Staff”) of the Securities and Exchange Commission (the “SEC”) on April 16, 2024 regarding the Company’s Registration Statement on Form N-2 (File Nos. 333-277773 and 811-23299), the prospectus contained therein (the “Prospectus”), and certain documents that have been incorporated into the Company’s registration statement by reference. The Staff’s comments are set forth below in bold italics and are followed by the Company’s responses.

1.Regarding the Company’s previous response to Staff comment #2, please either delete the references to preferred stock and debt securities from the previously identified sentence or remove this language from the cover page and place it further back in the Prospectus. If the Company moves the disclosure further back in the Prospectus, please clarify whether the word “may” means that the securities are automatically convertible into the Company’s common stock, or whether it means that the conversion is permissible.

Response: The Company has removed the identified language from the cover page, but has maintained such language in the sections of the Prospectus entitled “Prospectus Summary – Offerings” and “Plan of Distribution.”

While, at the present time, the Company has not determined the specific terms of any future issuance of convertible preferred securities, if any, the Company believes that the term “may” would allow the Company to issue securities that are either automatically or optionally convertible. The Company notes that it is aware of registered closed-end funds that have issued convertible preferred securities with automatic and optional conversion features. These conversion features include, but are not necessarily limited to, conversions

Eversheds Sutherland (US) LLP is part of a global legal practice, operating through various separate and distinct legal entities, under Eversheds Sutherland.  For a full description of the structure and a list of offices, please visit www.eversheds-sutherland.com.

Page 2

that occur (1) at the option of the holder, (2) at the option of the issuer, and (3) mandatorily upon the failure of the issuer to meet the minimum asset coverage requirements under the 1940 Act. See Prospectus Supplement, dated March 22, 2024, filed by Eagle Point Credit Company, Inc.; Form 8-K, dated November 7, 2023, filed by XAI Octagon Floating Rate & Alternative Income Term Trust. The Company notes that each of the conversion features listed above are subject to all applicable laws, regulations, and rules including the rules and regulations under 1940 Act. As a result, subject to applicable law, the Company believes that it may issue convertible preferred securities that are either automatically or optionally convertible into shares of the Company’s common stock.

2.Regarding the Company’s previous response to Staff comment #9, please describe how Section 18, which requires 300% asset coverage for debt, and 200% asset coverage for equity senior securities, permits the Company to incur leverage exceeding 50% of total or net assets.

Response: The Company has clarified that it anticipates incurring leverage between 33% and 40% of total assets. The Company’s previous disclosure and example excluded the assets purchased with leverage from the denominator of the asset coverage calculation. The range above includes such assets in the denominator, consistent with the calculation required by Section 18 of the 1940 Act.

3.Regarding the Company’s previous response to Staff comment #10, please disclose the approximate amount of proceeds that will be used for each of (1) acquiring investments in accordance with the Company’s objectives and strategies and (2) general working capital purposes.

Response: The Company has revised the disclosure to delete the reference to general working capital.

4.Regarding the Company’s previous response to Staff comment #13, please provide a copy of the referenced staffing agreement.

Response: The Company has attached a copy of the staffing agreement hereto as Exhibit A.

5.Regarding the Company’s previous response to Staff comment #14, please confirm that the Company does not currently intend to invest through SPVs.

Response: The Company confirms that it does not currently intend to invest through SPVs.

*                      *                      *

            Please do not hesitate to contact me at (202) 383-0218 or Dwaune Dupree at (202) 383-0206 if you should need further information or clarification.

Sincerely,

/s/ Cynthia M. Krus

Cynthia M. Krus

Exhibit A

EXECUTION VERSION

STAFFING AND CORPORATE SERVICES AGREEMENT

dated as of November 7, 2012 by and between

OFS CAPITAL MANAGEMENT, LLC

as Company and

ORCHARD FIRST SOURCE CAPITAL, INC.

as Service Provider

STAFFING AND CORPORATE SERVICES AGREEMENT

This STAFFING AND CORPORATE SERVICES AGREEMENT (as amended, modified or supplemented from time to time, this “Agreement”) dated as of November 7, 2012, is entered into by and between OFS CAPITAL MANAGEMENT, LLC, a Delaware limited liability company with offices located at 2850 West Golf Road, Suite 520, Rolling Meadows, IL 60008, as the company (together with its successors and assigns permitted hereunder, the “Company”), and ORCHARD FIRST SOURCE CAPITAL, INC., a Delaware corporation, with offices located at 2850 West Golf Road, Suite 520, Rolling Meadows, IL 60008, as service provider (together with its successors and assigns permitted hereunder, “Service Provider”).

W I T N E S S E T H:

WHEREAS, the Company is an investment adviser that has registered under the Investment Advisers Act of 1940, as amended (the “Advisers Act”);

WHEREAS, the Company and its Affiliates are in the business of furnishing investment advisory services, including sourcing potential investments, conducting research and diligence on potential investments and equity sponsors, analyzing investment opportunities, and structuring and monitoring investments and portfolio companies on an ongoing basis;

WHEREAS, the Company desires to retain Service Provider to provide certain services to the Company and/or its Affiliates as more fully set forth herein and which may include financial services, legal services, personnel services and other similar human resources support; and

WHEREAS, Service Provider has the capacity to provide the services required hereby and is prepared to perform such services upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual agreements herein set forth, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Company and Service Provider agree as follows:

Section 1.    Definitions and Interpretation.

“Affiliate” means any other Person that, directly or indirectly, Controls, is Controlled by or under common Control with such Person, or is a director or officer of such Person.

“Business Day” means a day, other than a Saturday or a Sunday, on which banks are generally open for business in New York, New York and Rolling Meadows, Illinois.

“Control,” and the correlative term “Controlled,” means the possession, direct or indirect, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Fees” means the charges for the provision of the Services as set out in the applicable Services Schedules.

“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, sole proprietorship, joint venture, government (or any agency or political subdivision thereof) or other entity.

“Service Schedules” means the Schedule attached to this Agreement that sets forth the Services to be provided by Service Provider to the Company and/or its Affiliates and any future schedules setting forth the additional services as agreed upon between the parties hereto.

The use of the terms “include” or “including” shall be construed without limitation to the words following; words denoting the singular number only include the plural and vice versa; words denoting any gender include all genders and words denoting persons include firms and corporations and vice versa.

Section 2.    Appointment and Authority of Service Provider; Provision of Services.

(a)The Company hereby appoints Orchard First Source Capital, Inc. (“OFSC”) as Service Provider and directs Service Provider to perform such duties as are described in the Service Schedules (collectively, the “Services”). OFSC hereby accepts such appointment, and, subject to and in accordance with the applicable terms and provisions of this Agreement, agrees to perform the Services during the applicable term set forth herein or in the applicable Service Schedule to and for the benefit of the Company and any of its Affiliates identified in the applicable Service Schedule.

(b)If the Company desires Service Provider to provide the Company and/or an Affiliate with additional services not set forth on a Service Schedule, the Company and Service Provider shall discuss in good faith the addition of such additional services to a new or existing Service Schedule and, upon the parties’ written agreement on such new or amended Service Schedule, such additional services shall be deemed “Services” for all purposes in this Agreement.

(c)Service Provider shall, and is hereby authorized by the Company to, perform the Services in a manner consistent with applicable law and in accordance with the applicable terms and provisions hereof. Service Provider shall use all reasonable skill, care and diligence in the performance of the Services. Service Provider shall follow the customary standards, policies and procedures currently used by it in the performance of such Services for itself and for other Persons.

(d)Service Provider may perform any Services directly or by or through agents, accountants, experts, attorneys or Affiliates. Service Provider shall exercise reasonable care in the selection of any such third parties. Service Provider shall remain fully responsible and liable for the performance of the Services notwithstanding any delegation to any such third party. Performance by any such third party of any Services shall be deemed to be performance thereof by Service Provider.

-2-

Section 3.    Fees.

(a)In consideration of and subject to the supply of the Services in accordance with the terms of this Agreement, the Company shall pay to Service Provider the Fees.

(b)Service Provider will invoice the Company quarterly in arrears for all Services provided during the preceding quarter. The Company shall pay such invoice within fifteen (15) Business Days of receipt thereof.

(c)For any Services for which the Fees are based on a cost or cost-plus methodology, Service Provider shall provide the Company with reasonable detail of the cost of its provision of the Services in conjunction with its invoices.

(d)Except to the extent set forth in the applicable Service Schedule, each of the Company and Service Provider shall bear its own costs and expenses with respect to the provision of Services. In the event so indicated in the applicable Service Schedule, the Company shall, at the direction of Service Provider, either reimburse Service Provider from time to time for, or pay directly, the out-of-pocket expenses incurred in providing the Services, including travel, communication and similar expenses.

Section 4.    Limitation of Liability.

(a)Except as otherwise expressly provided in this Section 4, Service Provider shall in no event have any liability to the Company under or as a result of this Agreement or the performance of the Services, except to the extent such liability results from the gross negligence or willful misconduct of Service Provider (or that of any agent, accountant, expert, attorney or Affiliate performing the Services as contemplated by Section 2(d)).

(b)Without limiting the generality of the foregoing, Service Provider will not be liable to the Company for: (i) any loss of profits, loss of revenue, loss of reputation or goodwill; (ii) any indirect, special or consequential loss; or (iii) any exemplary or punitive damages, whether arising in contract, tort, negligence, misrepresentation, for breach of duty (including without limitation statutory duty) or otherwise.

(c)Other than pursuant to Section 4(a) above, the maximum aggregate liability of Service Provider to the Company, whether in contract, tort (including without limitation negligence) or breach of duty (including without limitation statutory duty) or otherwise, shall not exceed the Fees paid to Service Provider by the Company in the twelve (12) months immediately preceding the relevant event, occurrence or omission and any amount recoverable under any insurance policies; provided that, with respect to liability of Service Provider to the Company related to the performance of a particular Service, the maximum liability of Service Provider shall be the aggregate fees paid to Service Provider by the Company with respect to such Service.

-3-

Section 5.    Indemnification.

(a)The Company shall indemnify Service Provider and its Affiliates and each of their respective officers, directors, employees, stockholders, members, partners, agents and representatives (each, an “Indemnified Person”) and hold them harmless from and against any and all claims, losses, damages, liabilities, obligations and out-of-pocket costs or expenses, including reasonable attorneys’ fees and expenses and costs and expenses of investigations (collectively, “Losses”), arising out of or resulting from this Agreement or Service Provider’s performance of the Services (including through any agent, accountant, expert, attorney or Affiliate as contemplated by Section 2(d)), except to the extent such Losses result from Service Provider’s gross negligence or willful misconduct in performing the Services (or that of any agent, accountant, expert, attorney or Affiliate performing the Services as contemplated by Section 2(d)).

(b)The Company shall promptly reimburse each Indemnified Person for all fees and expenses (including reasonable attorneys’ fees and expenses) as such fees and expenses are incurred in connection with investigating, preparing, pursuing or defending any action, claim, suit, investigation or proceeding (each, a “Proceeding”) arising out of or resulting from this Agreement or Service Provider’s performance of the Services; provided that such Indemnified Person shall promptly repay to the Company any such amount to the extent judicially determined by judgment or order not subject to further appeal or discretionary review that such fees and expenses were not Losses subject to the indemnity provided by this Section 5 (such Losses, “Indemnifiable Losses”). If for any reason (other than that the Losses sustained are not Indemnifiable Losses) the indemnification provided by this Section 5 is unavailable to any Indemnified Person or insufficient to hold it harmless, then the Company shall contribute to the amount paid or payable by such Indemnified Person as a result of such Losses in such proportion as is appropriate to reflect the relative benefits received by the Company, on t