JMP Group INC. files (8-K) Disclosing Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

December 17, 2013

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. On December 11, 2013 , JMP Group Inc. (the “Company”) established, through its affiliate JMP Credit Advisors CLO III Ltd. , a Cayman Islands vehicle (the “Borrower”), a $100 million revolving credit facility (the “Facility”) with BNP Paribas to finance the acquisition of a portfolio of assets, including certain debt obligations.

A subsidiary of the Company, JMP Credit Advisors LLC , will act as collateral manager and preferred investor, with duties including the selection of assets to be acquired by the Borrower. All borrowings under the Facility will be subject to the satisfaction of certain customary covenants, the accuracy of certain representations and warranties, concentration limitations and other restrictions.

The Facility will be primarily secured by a portfolio of collateral that includes certain debt obligations that are eligible for acquisition by the Borrower. The Borrower is subject to mandatory prepayments under the Facility upon the occurrence of certain events. In addition, the Borrower may make optional prepayments under the Facility.

The Facility was established to fund the origination and purchase of a diverse pool of loans. The Facility is structured to have a twelve-month revolving period ending December 10, 2014 , and a nine-month amortization period. The advance rate under the Facility is 80%, and any outstanding balances will bear interest at Libor plus 1.40% during the twelve month revolving period and at Libor plus 2.25% during the amortization period.

The Company will make a filing with the SEC in the event that a CLO transaction closes with the details of its material terms. Further, the Company intends to consolidate the loan portfolio until its maturity and expects to account for the transaction on its balance sheet as non-recourse debt.