58276 Federal Register / Vol. 73, No. 194 / Monday, October 6, 2008 / Notices 

Partnership and the sole owner of such 

Subsidiary’s general partner. Applicants 

also state that since MCG, directly or 

indirectly through another Subsidiary, 

owns or would own the entire equity 

interest in any current and future 

Subsidiaries, any activity carried on by 

them will, in all material respects, have 

the same economic effect on MCG’s 

stockholders as if carried on directly by 

MCG. 

B. Relief for the Company To Adhere to 

a Modified Asset Coverage Requirement 

1. Applicants request 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 MCG to 

adhere to a modified asset coverage 

requirement. 

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 a question 

exists as to whether MCG must comply 

with the asset coverage requirements of 

section 18(a) (as modified by section 

61(a)) solely on an individual basis or 

whether MCG must also comply with 

the asset coverage requirements on a 

consolidated basis because MCG may be 

deemed to be an indirect issuer of any 

class of senior security issued by the 

SBIC Subsidiary. Applicants state that 

they wish to treat the SBIC Subsidiary 

as if it were a BDC subject to sections 

18 and 61 of the Act. 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 its 

capital structure. 

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, since the SBIC Subsidiary 

would be entitled to rely on section 

18(k) if it was a BDC itself, there is no 

policy reason to deny the benefit of that 

exemption to MCG. 

Applicants’ Conditions 

Applicants agree that the order 

granting the requested relief will be 

subject to the following conditions: 

Relief From Section 55(a) 

1. Each Subsidiary will be formed as 

a limited liability company (‘‘LLC’’), a 

corporation (‘‘Corporation ‘‘) or a 

partnership (‘‘Partnership’’). MCG and/ 

or one or more other Subsidiaries at all 

times will be the only members of each 

Subsidiary that is an LLC and will 

collectively hold all of the ownership 

interests in the LLC Subsidiary. No LLC 

Subsidiary will admit any person other 

than MCG or another Subsidiary as a 

member, and no LLC Subsidiary will 

issue interests other than to MCG or 

another Subsidiary. MCG and/or one or 

more other Subsidiaries at all times will 

own and hold all of the outstanding 

equity interests in each Subsidiary that 

is formed as a Corporation. MCG and/ 

or one or more other Subsidiaries will 

at all times be the sole limited partner 

of any Subsidiary that is formed as a 

Partnership and the sole owner of such 

Subsidiary’s general partner. 

2. The Subsidiaries, and any future 

Subsidiaries, may not acquire any asset 

if the acquisition would cause MCG to 

violate section 55(a). 

3. No person shall serve or act as 

investment adviser to a Subsidiary 

unless the Board and stockholders of 

MCG shall have taken the action with 

respect thereto also required to be taken 

by the board of directors of the 

Subsidiary and stockholders of the 

Subsidiary as if the Subsidiary were a 

BDC. 

Relief From Section 18(a) 

4. MCG will not issue or sell any 

senior security and MCG will not cause 

or permit the SBIC Subsidiary to issue 

or sell any senior security of which 

MCG or the SBIC Subsidiary is the 

issuer except to the extent permitted by 

section 18 (as modified for BDCs by 

section 61); provided that immediately 

after issuance or sale by any of MCG or 

the SBIC Subsidiary of any such senior 

security, MCG individually and on a 

consolidated basis, shall have the asset 

coverage required by section 18(a) (as 

modified by section 61(a)), except that, 

in determining whether MCG on a 

consolidated basis has the asset 

coverage required by section 18(a) (as 

modified by section 61(a)), any senior 

securities representing indebtedness of 

the SBIC Subsidiary shall not be 

considered senior securities and, for 

purposes of the definition of ‘‘asset 

coverage’’ in section 18(h), will be 

treated as indebtedness not represented 

by senior securities. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23492 Filed 10–3–08; 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 a Closed Meeting 

on Wednesday, October 1, 2008, at 2 

p.m. 

Commissioners, Counsels to the 

Commissioners, the Secretary to the 

Commission, and certain staff members 

who have an interest in the matter will 

attend the Closed Meeting. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions as set forth in 

5 U.S.C. 552b(c)(8) and (9) and 17 CFR 

200.402(a)(8) and (9), permit 

consideration of the scheduled matter at 

the Closed Meeting. 

Commissioner Aguilar, as duty 

officer, voted to consider the item listed 

for the closed meeting in closed session, 

and determined that no earlier notice 

thereof was possible. 

The subject matter of the Closed 

Meeting scheduled for Wednesday, 

October 1, 2008, will be: Matters Related 

to the Financial Markets. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. For further 

information and to ascertain what, if 

any, matters have been added, deleted 

or postponed, please contact: The Office 

of the Secretary at (202) 551–5400. 

Dated: October 1, 2008. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. E8–23498 Filed 10–3–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

FEDERAL REGISTER CITATION OF PREVIOUS

ANNOUNCEMENT: [73 FR 55571, 

September 25, 2008]. 


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