Lafayette Square USA, Inc. Issues $80M in Senior Notes via Private Placement

What Happened

• Lafayette Square USA, Inc. announced on September 29, 2026 that it entered into a Note Purchase Agreement to sell $2.0 million of 7.82% Series A Senior Notes and $78.0 million of 8.25% Series B Senior Notes to qualified institutional investors in a private placement.
• The Series A Notes mature on September 29, 2029 and the Series B Notes mature on September 29, 2031. Interest is fixed and payable semiannually; rates can increase by up to 2.00% if the Notes lose investment grade status and certain secured-debt thresholds are exceeded.

Key Details

• Aggregate principal: $80,000,000 (Series A $2.0M; Series B $78.0M).
• Interest rates: 7.82% (Series A) and 8.25% (Series B); semiannual payments; potential step-up up to +2.00% under specified conditions.
• Security and ranking: unsecured, general obligations of the Company, ranking at least pari passu with other unsecured, unsubordinated debt; guaranteed on a senior unsecured basis by LS BDC Holdings, LLC (a wholly owned subsidiary).
• Covenants & terms: customary covenants and defaults for private senior notes (including BDC status maintenance, minimum consolidated net worth and asset coverage ratio tests); change-of-control prepayment at 100% principal plus accrued interest. Notes were sold under Section 4(a)(2) and are not registered for public resale.

Why It Matters

• This filing creates a new direct financial obligation of $80M for Lafayette Square, increasing its debt and future interest expense—important for investors tracking leverage and cash-flow needs.
• The notes are unsecured but carry a subsidiary guarantee and pari passu ranking with other unsecured debt, so recovery in a downside scenario depends on overall unsecured creditor claims.
• The potential interest-rate step-up tied to ratings and leverage provides protection to noteholders but could raise the Company’s borrowing cost if credit metrics worsen.
• Proceeds are intended for general corporate purposes; because the offering was a private placement and the notes are unregistered, liquidity for these securities is limited.