Star Mountain Lower Middle-Market Capital Corp Issues $25M Notes

What Happened

• Star Mountain Lower Middle‑Market Capital Corp filed an 8‑K on August 12, 2026 reporting that on August 6, 2026 it entered into a Note Purchase Agreement to issue $25,000,000 of Floating Rate Senior Unsecured Notes due January 15, 2029 (the “New Notes”) in a private placement to a qualified institutional investor. The New Notes are an additional issuance to the company’s existing $25,000,000 Floating Rate Senior Unsecured Notes due January 15, 2029 and will be fungible and treated as a single series with the existing notes.

Key Details

• Principal: $25,000,000 in new notes; combined with existing issuance the total series size is $50,000,000.
• Interest: floating rate equal to the Benchmark (based on the TSFR3M Index Screen Rate) + 3.75% (375 basis points); interest payable quarterly on Jan 15, Apr 15, Jul 15 and Oct 15, beginning Oct 15, 2026.
• Redemption and prepayment: company may redeem in whole or in part at par plus accrued interest (and, if applicable, a make‑whole premium); required offer to prepay at par upon certain change‑of‑control events.
• Credit‑rating provision & covenants: a Credit Rating Event would cause the notes to bear a fixed interest rate 0.50% above the stated rate until resolved; agreement includes customary covenants and a minimum asset coverage ratio of 1.50 to 1.00. Notes are general unsecured obligations ranking pari passu with other unsecured unsubordinated debt.

Why It Matters

• This filing records a new $25M debt issuance (creation of a direct financial obligation) that increases the company’s outstanding unsecured note liability and expands an existing note series. For investors, key implications include higher fixed charge obligations (interest payments beginning Oct 2026), potential effects on leverage and asset coverage metrics due to the required 1.50x minimum, and limited protection because the notes are unsecured and rank equally with other unsecured debt. The full Note Purchase Agreement is filed as an exhibit to the 8‑K for detailed terms.