80 FR 35416 - TCP Capital Corp., et al.; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 118 (June 19, 2015)

Page Range		35416-35417
FR Document		2015-15046

Federal Register, Volume 80 Issue 118 (Friday, June 19, 2015)

[Federal Register Volume 80, Number 118 (Friday, June 19, 2015)]
[Notices]
[Pages 35416-35417]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-15046]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31670; 812-14275]

TCP Capital Corp., et al.; Notice of Application

June 15, 2015.
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.

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Applicants: TCP Capital Corp. (the ``Holding Company''), Special Value
Continuation Partners, LP (the ``Operating Company'' and, together with
the Holding Company, the ``Company''), Tennenbaum Capital Partners, LLC
(``TCPC Advisor''), TCPC SBIC, LP (``TCPC SBIC'') and TCPC SBIC GP, LLC
(``General Partner'').

Summary of the Application: The Company requests an order to permit it
to adhere to a modified asset coverage requirement.

Filing Dates: The application was filed February 7, 2014, and amended
on July 7, 2014, December 4, 2014, March 4, 2015, May 7, 2015, and June
5, 2015.

Hearing or Notification of Hearing: An order granting the requested
relief 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 July 10, 2015, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Pursuant to rule 0-5 under the Act, hearing
requests should state the nature of the writer's interest, any facts
bearing upon the desirability of a hearing on the matter, 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: Howard M. Levkowitz,
Chief Executive Officer, TCP Capital Corp., 2951 28th Street, Suite
1000, Santa Monica, California 90405.

FOR FURTHER INFORMATION CONTACT: Kieran G. Brown, Senior Counsel, at
(202) 551-6773, or Daniele Marchesani, Branch Chief, at (202) 551-6821
(Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling (202) 551-8090.

Applicants' Representations

1. The Holding Company is a Delaware corporation. The Operating
Company is a Delaware limited partnership. Each is an externally
managed, non-diversified, closed-end management investment company that
has elected to be treated as a business development company (``BDC'')
under the Act.\1\ The Holding Company is a holding company with no
direct operations, and currently its only business and sole asset is
its ownership of all of the common limited partner interests in the
Operating Company, which represents approximately 100% of the common
equity and 86.1% of the combined common and preferred equity interests
of the Operating Company as of December 31, 2014.\2\ The Holding
Company's ownership percentage of the Operating Company will not
decrease from its current level.\3\ The investment objective of the
Company is to achieve high total returns through current income and
capital appreciation, with an emphasis on principal protection.
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\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\ In addition to common limited partnership interests, at
December 31, 2014, the Operating Company had 6,700 Series A
preferred limited partner interests (``Preferred Interests'') issued
and outstanding with a liquidation preference of $20,000 per
Preferred Interest. Per a conversation between the Holding Company's
counsel and the staff of the Division of Investment Management on or
about April 27, 2011, the Applicants are relying on New Mountain
Finance Corporation, SEC No-Action Letter (April 27, 2011) for the
Holding Company and the Operating Company to operate as BDCs under
the two-tier structure described above.
\3\ There are no significant ways compliance with the Act
differs under this structure wherein the Holding Company owns 86.1%
of the Operating Company, than a structure wherein the Operating
Company were a wholly-owned subsidiary of the Holding Company. The
Preferred Interests will be subject to mandatory redemption on July
31, 2016. Once the Preferred Interests are redeemed, the Operating
Company will be a wholly-owned subsidiary of the Holding Company.
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2. TCPC 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''). TCPC SBIC is excluded from the definition of
investment company by section 3(c)(7) of the Act. The Operating Company
is the sole limited partner of TCPC SBIC and owns more than 95% of the
outstanding voting securities of TCPC SBIC consistent with the
definition of ``wholly-owned subsidiary'' contained in section 2(a)(43)
of the Act. The General Partner, a Delaware limited liability company,
is the sole general partner of TCPC SBIC. The Operating Company is the
sole member of the General Partner.
3. TCPC Advisor, a Delaware limited liability company, is the
investment adviser to the Company. TCPC Advisor is registered under the
Investment Advisers Act of 1940. Subject to the overall supervision of
the General Partner, TCPC Advisor will also serve as the investment
manager to TCPC SBIC and to any other SBIC Subsidiaries (as defined
below).

[[Page 35417]]

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
Operating Company or the Holding Company that is licensed by the SBA to
operate under the SBIA as an SBIC and relies on section 3(c)(7) for an
exemption from the definition of ``investment company'' under the Act
(each, an ``SBIC Subsidiary'').\4\ Applicants state that companies
operating under the SBIA, such as an SBIC Subsidiary, are subject to
the SBA's substantial regulation of permissible leverage in their
capital structure.
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\4\ 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.
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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 TCPC 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 TCPC 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 will not itself issue or sell any senior security and
the Company will not cause or permit TCPC SBIC or any other SBIC
Subsidiary to issue or sell any senior security of which the Company,
TCPC SBIC or any other SBIC Subsidiary is the issuer except to the
extent permitted by section 18 (as modified for BDCs by section 61);
provided that, immediately after the issuance or sale of any such
senior security by any of the Company, TCPC SBIC or any other SBIC
Subsidiary, the Company, individually and on a consolidated basis,
shall have the asset coverage required by section 18(a) (as modified by
section 61(a)). In determining whether the Company, TCPC SBIC and any
other SBIC Subsidiary on a consolidated basis have the asset coverage
required by section 18(a) (as modified by section 61(a)), any senior
securities representing indebtedness of an 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 but only if that SBIC Subsidiary
has issued indebtedness that is held or guaranteed by the SBA.

For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-15046 Filed 6-18-15; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 118 / Friday, June 19, 2015 / Notices 35417

Applicants’ Legal Analysis Company’s consolidated asset coverage SECURITIES AND EXCHANGE
1. The Company requests an ratio. COMMISSION
exemption pursuant to section 6(c) of 4. Section 6(c) of the Act, in relevant [File No. 500–1]
the Act from the provisions of sections part, permits the Commission to exempt
18(a) and 61(a) of the Act to permit it any transaction or class of transactions In The Matter of Revolutionary
to adhere to a modified asset coverage from any provision of the Act if and to Concepts, Inc.; Order of Suspension of
requirement with respect to any direct the extent that such exemption is Trading
or indirect wholly-owned subsidiary of necessary or appropriate in the public
the Operating Company or the Holding June 17, 2015.
interest and consistent with the
Company that is licensed by the SBA to protection of investors and the purposes It appears to the Securities and
operate under the SBIA as an SBIC and Exchange Commission (‘‘Commission’’)
fairly intended by the policy and
relies on section 3(c)(7) for an that there is a lack of current and
provisions of the Act. Applicants state
exemption from the definition of accurate information concerning the
that the requested relief satisfies the securities of Revolutionary Concepts,
‘‘investment company’’ under the Act
(each, an ‘‘SBIC Subsidiary’’).4 section 6(c) standard. Applicants Inc. (‘‘REVO’’) because, among other
Applicants state that companies contend that, because the SBIC things, of questions regarding the
operating under the SBIA, such as an Subsidiary would be entitled to rely on accuracy and completeness of REVO’s
SBIC Subsidiary, are subject to the section 18(k) if it were a BDC itself, representations to investors and
SBA’s substantial regulation of there is no policy reason to deny the prospective investors in REVO’s public
permissible leverage in their capital benefit of that exemption to the filings with the Commission and
structure. Company. REVO’s publicly-available press releases
2. Section 18(a) of the Act prohibits a and other public statements.
Applicants’ Condition
registered closed-end investment In particular, there are questions
company from issuing any class of Applicants agree that any order regarding the accuracy and
senior security or selling any such granting the requested relief will be completeness of REVO’s public
security of which it is the issuer unless subject to the following condition: assertions relating to, among other
the company complies with the asset things: (1) REVO’s license of certain
coverage requirements set forth in that The Company will not itself issue or
patents to Eyetalk365, LLC (‘‘Eyetalk’’),
section. Section 61(a) of the Act makes sell any senior security and the including a $900,000 ‘‘in consideration’’
section 18 applicable to BDCs, with Company will not cause or permit TCPC fee paid by Eyetalk to REVO and related
certain modifications. Section 18(k) SBIC or any other SBIC Subsidiary to net income received by REVO; (2) a line
exempts an investment company issue or sell any senior security of of credit of up to $10 million obtained
operating as an SBIC from the asset which the Company, TCPC SBIC or any by REVO’s wholly-owned subsidiary,
coverage requirements for senior other SBIC Subsidiary is the issuer Greenwood Finance Group, LLC
securities representing indebtedness except to the extent permitted by (‘‘Greenwood’’); (3) Greenwood’s
that are contained in section 18(a)(1)(A) section 18 (as modified for BDCs by ownership of $7 million of promissory
and (B). section 61); provided that, immediately notes, and interest payments made to
3. Applicants state that the Company after the issuance or sale of any such Greenwood in connection with such
may be required to comply with the senior security by any of the Company, promissory notes with a projected
asset coverage requirements of section TCPC SBIC or any other SBIC possible cash value exceeding $1
18(a) (as modified by section 61(a)) on Subsidiary, the Company, individually million; and (4) REVO’s possible plans
a consolidated basis because the and on a consolidated basis, shall have to issue dividends and buy back shares
Company may be deemed to be an the asset coverage required by section of its common stock. In addition, REVO
indirect issuer of any class of senior 18(a) (as modified by section 61(a)). In currently is delinquent in filing its Form
security issued by TCPC SBIC or determining whether the Company, 10–K annual report for its fiscal year
another SBIC Subsidiary. Applicants TCPC SBIC and any other SBIC ended December 31, 2014, and its Form
state that applying section 18(a) (as Subsidiary on a consolidated basis have 10–Q quarterly report for its first quarter
modified by section 61(a)) on a ended March 31, 2015.
the asset coverage required by section
consolidated basis generally would Based on REVO’s most recent Form
18(a) (as modified by section 61(a)), any
require that the Company treat as its 10–K annual report filed for its fiscal
own all assets and any liabilities held senior securities representing
year ended December 31, 2013, REVO is
directly either by itself, by TCPC SBIC, indebtedness of an SBIC Subsidiary
a Nevada corporation based in
or by another SBIC Subsidiary. shall not be considered senior securities
Charlotte, North Carolina. The
Accordingly, the Company requests an and, for purposes of the definition of
company’s common stock is quoted on
order under section 6(c) of the Act ‘‘asset coverage’’ in section 18(h), shall OTC Link operated by OTC Markets
exempting the Company from the be treated as indebtedness not Group, Inc. under the symbol ‘‘REVO.’’
provisions of section 18(a) (as modified represented by senior securities but only As of June 5, 2015, the company’s stock
by section 61(a)), such that senior if that SBIC Subsidiary has issued had 10 market makers and was eligible
securities issued by each SBIC indebtedness that is held or guaranteed for the ‘‘piggyback’’ exception of Rule
Subsidiary that would be excluded from by the SBA. 15c2–11(f)(3).
asabaliauskas on DSK5VPTVN1PROD with NOTICES

the SBIC Subsidiary’s asset coverage For the Commission, by the Division of The Commission is of the opinion that
ratio by section 18(k) if it were itself a Investment Management, pursuant to the public interest and the protection of
BDC would also be excluded from the delegated authority. investors require a suspension of trading
Robert W. Errett, in the securities of REVO.
4 All existing entities that currently intend to rely
Therefore, it is ordered, pursuant to
on the order are named as applicants. Any other Deputy Secretary.
existing or future entity that may rely on the order
Section 12(k) of the Securities Exchange
[FR Doc. 2015–15046 Filed 6–18–15; 8:45 am]
in the future will comply with the terms and Act of 1934, that trading in the
condition of the order. BILLING CODE 8011–01–P securities of REVO is suspended for the

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Document Created: 2018-02-22 11:10:31
Document Modified: 2018-02-22 11:10:31

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
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.
Dates		The application was filed February 7, 2014, and amended on July 7, 2014, December 4, 2014, March 4, 2015, May 7, 2015, and June 5, 2015.
Contact		Kieran G. Brown, Senior Counsel, at (202) 551-6773, or Daniele Marchesani, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
FR Citation		80 FR 35416