UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
þANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20172021
OR
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to          
Commission file number 814-00733
Triangle Capital CorporationBarings BDC, Inc.
(Exact name of registrant as specified in its charter)
Maryland 06-1798488
(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer
Identification No.)
300 South Tryon Street, Suite 2500
Charlotte, North Carolina		 
(I.R.S. Employer
Identification No.)
3700 Glenwood Avenue, Suite 530
Raleigh, North Carolina
2761228202
(Zip Code)
(Address of principal executive offices) 
Registrant’s telephone number, including area code:
(919) 719-4770(704) 805-7200
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, par value $0.001 per shareThe New York Stock Exchange
6.375% Notes Due (December) 2022The New York Stock Exchange
6.375% Notes Due (March) 2022BBDCThe New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No R
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No R
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ        No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨        No¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large"large accelerated filer,” “accelerated filer”" "accelerated filer," "smaller reporting company," and “smaller reporting company”"emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer þ¨
Accelerated filer  ¨
Non-accelerated filer  ¨þ
Smaller reporting company  ¨
  (Do not check if a smaller reporting company)
Emerging growth company  ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared or issued its audit report. □
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨        No  þ
The aggregate market value of the voting common stock held by non-affiliates of the registrant (assuming solely for the purpose of this disclosure that all executive officers, directors and 10% or more stockholders of the registrant are “affiliates”) as of June 30, 2017,2021, based on the closing price on that date of $17.62$10.56 on the New York Stock Exchange, was $814,475,285.$540,334,238.
The number of shares outstanding of the registrant’s common stock on February 28, 201823, 2022 was 48,024,614.65,316,085.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’sregistrant’s definitive Proxy Statementproxy statement relating to the 2018registrant's 2022 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of the Registrant'sregistrant's fiscal year, are incorporated by reference in Part III of this Annual Report on Form 10-K as indicated herein.



TRIANGLE CAPITAL CORPORATIONBARINGS BDC, INC.
TABLE OF CONTENTS
ANNUAL REPORT ON FORM 10-K
For the Fiscal Year Ended December 31, 20172021
 
  
Page
 PART I 
Item 1.
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Item 1A.
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Item 1B.
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Item 2.
5370
Item 3.
5370
Item 4.
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PART II
Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
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PART III
Item 10.
83105
Item 11.
83105
Item 12.
83105
Item 13.
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Item 14.
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PART IV
Item 15.
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FORWARD-LOOKING STATEMENTS
ThisSome of the statements in this Annual Report on Form 10-K containsconstitute forward-looking statements regarding the plans and objectives of management forbecause they relate to future operations. Any such forward-lookingevents or our future performance or financial condition. Forward-looking statements may involve known and unknown risks, uncertainties andinclude, among other factors which may cause our actual results, performance or achievementsthings, statements as to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategiesoperating results, our business prospects and expectations, are generally identifiable by usethe prospects of our portfolio companies, the impact of the words "may," "will," "should,"investments that we expect to make, the ability of our portfolio companies to achieve their objectives, our expected financings and investments, the adequacy of our cash resources and working capital, and the timing of cash flows, if any, from the operations of our portfolio companies. Words such as "expect," "anticipate," "estimate,"target," "goals," "project," "intend," "plan," "believe," "intend,"seek," “target,” “goals,” “plan,” “forecast,” "project,"estimate," other"continue," "forecast," "may," "should," "potential," variations on theseof such words, or comparable terminology, or the negative ofand similar expressions indicate a forward-looking statement, although not all forward-looking statements include these words. TheseReaders are cautioned that the forward-looking statements contained in this Annual Report on Form 10-K are based ononly predictions, are not guarantees of future performance, and are subject to risks, events, uncertainties and assumptions that may be incorrect, and we cannot assure you that the projections included in these forward-looking statements will comeare difficult to pass.predict. Our actual results could differ materially from those implied or expressed or implied byin the forward-looking statements as a result of various factors,for any reason, including the factorsitems discussed in Item 1A entitled "Risk Factors" in Part I of this Annual Report on Form 10-K and elsewhere in this Annual ReportItem 1A entitled "Risk Factors" in Part II of our subsequently filed Quarterly Reports on Form 10-K.10-Q or in other reports we may file with the Securities and Exchange Commission (the “SEC”) from time to time. Other factors that could cause our actual results and financial condition to differ materially include, but are not limited to, changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, including with respect to changes from the impact of the Coronavirus (“COVID-19”) pandemic; the length and duration of the COVID-19 outbreak in the United States as well as worldwide and the magnitude of the economic impact of that outbreak; the effect of the COVID-19 pandemic on our business prospects and the prospects of our portfolio companies, including our and their ability to achieve our respective objectives; the effect of the disruptions caused by the COVID-19 pandemic on our ability to continue to effectively manage our business and on the availability of equity and debt capital and our use of borrowed money to finance a portion of our investments; risks associated with possible disruption due to terrorism in our operations or the economy andgenerally; future changes in laws or regulations and conditions in our operating areas.areas; and risks related to our pending acquisition of Sierra Income Corporation.
We have based theAny forward-looking statements included in this Annual Report on Form 10-K are based on our current expectations, estimates, forecasts, information available to us onand projections about the industry in which we operate and the beliefs and assumptions of our management as of the date of this Annual Report on Form 10-K, and we10-K. We assume no obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise, unless we are required to do so by applicable law. However,Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the Securities and Exchange Commission,SEC, including subsequent annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.



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PART I
Item 1.  Business.
Organization
We are a Maryland corporation formedincorporated on October 10, 2006, for the purposes of acquiring 100% of the equity interests in Triangle Mezzanine Fund LLLP (“Triangle SBIC”)2006. We currently operate as a closed-end, non-diversified investment company and its general partner, Triangle Mezzanine LLC, raising capital in our initial public offering, which was completed in February 2007 (the “IPO”), and thereafter operatinghave elected to be treated as an internally manageda business development company (“BDC”("BDC") under the Investment Company Act of 1940, as amended (the “1940 Act”"1940 Act"). On December 15, 2009, Triangle Mezzanine Fund II, LP (“Triangle SBIC II”) was organized as a limited partnership under the laws of the State of Delaware and on March 26, 2012, Triangle Mezzanine Fund III, LP (“Triangle SBIC III”) was organized as a limited partnership under the laws of the State of Delaware. Triangle SBIC’s Small Business Investment Company (“SBIC”) license from the United States Small Business Administration (the “SBA”) became effective on September 11, 2003, Triangle SBIC II’s SBIC license became effective on May 26, 2010 and Triangle SBIC III’s SBIC license became effective on January 6, 2017. Unless otherwise noted, the terms “we,” “us,” “our” and “Triangle” refer to Triangle SBIC prior to the IPO and to Triangle Capital Corporation and its subsidiaries, including Triangle SBIC, Triangle SBIC II and Triangle SBIC III, after the IPO. Both we and Triangle SBIC individually are closed-end, non-diversified investment companies thatWe have elected for federal income tax purposes to be treated, and intend to qualify annually, as BDCsa regulated investment company ("RIC") under the 1940 Act.Internal Revenue Code of 1986, as amended (the "Code"), for tax purposes.
Our headquarters are in Raleigh,Charlotte, North Carolina, and our Internet address is www.tcap.com.www.baringsbdc.com. We are not including the information contained on our website as a part of, or incorporating it by reference into, this Annual Report on Form 10-K. We make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission (the “SEC”"SEC"). Copies of this Annual Report on Form 10-K and other reports are also available without charge upon written request to us.
OverviewThe Asset Sale and Externalization Transactions
In April 2018, we entered into an asset purchase agreement (the "Asset Purchase Agreement"), with BSP Asset Acquisition I, LLC (the "Asset Buyer"), an affiliate of Benefit Street Partners L.L.C., pursuant to which we agreed to sell our December 31, 2017 investment portfolio to the Asset Buyer for gross proceeds of $981.2 million in cash, subject to certain adjustments to take into account portfolio activity and other matters occurring since December 31, 2017 (such transaction referred to herein as the "Asset Sale Transaction"). Also in April 2018, we entered into a stock purchase and transaction agreement (the "Externalization Agreement"), with Barings LLC ("Barings") through which Barings agreed to become our investment adviser in exchange for (1) a payment by Barings of $85.0 million, or approximately $1.78 per share, directly to our stockholders, (2) an investment by Barings of $100.0 million in newly issued shares of our Businesscommon stock at net asset value and (3) a commitment from Barings to purchase up to $50.0 million of shares of our common stock in the open market at prices up to and including our then-current net asset value per share for a two-year period, after which Barings agreed to use any remaining funds from the $50.0 million to purchase additional newly-issued shares of our common stock at the greater of our then-current net asset value per share or market price (collectively, the "Externalization Transaction"). The Asset Sale Transaction and the Externalization Transaction are collectively referred to as the "Transactions." The Transactions were approved by our stockholders at our July 24, 2018 special meeting of stockholders (the "2018 Special Meeting").
We are aThe Externalization Transaction closed on August 2, 2018 (the "Externalization Closing"). Effective as of the Externalization Closing, we changed our name from Triangle Capital Corporation to Barings BDC, Inc. and on August 3, 2018, began trading on the New York Stock Exchange ("NYSE") under the symbol "BBDC."
Our former wholly-owned subsidiaries, Triangle Mezzanine Fund LLLP ("Triangle SBIC"), Triangle Mezzanine Fund II LP ("Triangle SBIC II"), and Triangle Mezzanine Fund III LP ("Triangle SBIC III"), were specialty finance companylimited partnerships that provides customized financingwere formed to make investments primarily toin lower middle marketmiddle-market companies located inthroughout the United States. Each of Triangle SBIC, Triangle SBIC II and Triangle SBIC III held licenses to operate as Small Business Investment Companies ("SBICs"), under the authority of the United States Small Business Administration ("SBA"). In connection with the closing of the Asset Sale Transaction, we repaid all of our outstanding SBA-guaranteed debentures and surrendered the SBIC licenses held by Triangle SBIC, Triangle SBIC II, and Triangle SBIC III. Triangle SBIC, Triangle SBIC II, and Triangle SBIC III were dissolved during the year ended December 31, 2019.
Prior to the Externalization Transaction, we were internally managed by our executive officers under the supervision of our Board of Directors (the "Board"). During this period, we did not pay management or advisory fees, but instead incurred the operating costs associated with employing executive management and investment and portfolio management professionals. In connection with the closing of the Externalization Transaction, we entered
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into an investment advisory agreement (the "Original Advisory Agreement") and an administration agreement (the "Administration Agreement") with Barings, pursuant to which Barings serves as our investment adviser and administrator and manages our investment portfolio which initially consisted primarily of the cash proceeds received in connection with the Asset Sale Transaction.
MVC Capital, Inc. Acquisition
On December 23, 2020, we completed our acquisition of MVC Capital, Inc., a Delaware corporation (“MVC”) (the “MVC Acquisition”) pursuant to the terms and conditions of that certain Agreement and Plan of Merger (the “MVC Merger Agreement”), dated as of August 10, 2020, with MVC, Mustang Acquisition Sub, Inc., a Delaware corporation and our wholly owned subsidiary (“Acquisition Sub”), and Barings. To effect the acquisition, Acquisition Sub merged with and into MVC, with MVC surviving the merger as our wholly owned subsidiary (the “First MVC Merger”). Immediately thereafter, MVC merged with and into us, with us as the surviving company (the “Second MVC Merger” and, together with the First MVC Merger, the “MVC Merger”).
Pursuant to the MVC Merger Agreement, MVC stockholders received the right to the following merger consideration in exchange for each share of MVC common stock issued and outstanding immediately prior to the effective time of the First MVC Merger (other than shares of MVC common stock issued and outstanding immediately prior to the effective time of the First MVC Merger that were held by a subsidiary of MVC or held, directly or indirectly, by us or the Acquisition Sub), in accordance with the MVC Merger Agreement: (i) an amount in cash from Barings, without interest, equal to $0.39492, and (ii) 0.9790836 shares of our common stock, which ratio gave effect to the Euro-dollar exchange rate adjustment mechanism in the MVC Merger Agreement, plus cash in lieu of fractional shares. We defineissued approximately 17,354,332 shares of our common stock to MVC’s then-existing stockholders in connection with the MVC Merger, thereby resulting in our then-existing stockholders owning approximately 73.4% of the combined company and MVC's then-existing stockholders owning approximately 26.6% of the combined company.
In connection with the closing of the MVC Merger, the Board affirmed our commitment to open-market purchases of shares of our common stock in an aggregate amount of up to $15.0 million at then-current market prices at any time shares trade below 90% of our then most recently disclosed net asset value per share. Any repurchases pursuant to the authorized program will occur during the 12-month period that commenced upon the filing of our quarterly report on Form 10-Q for the quarter ended March 31, 2021, which occurred on May 6, 2021, and will be made in accordance with applicable legal, regulatory and contractual requirements, including covenants under our $875.0 million senior secured credit facility with ING Capital LLC initially entered into in February 2019 (as amended, restated and otherwise modified from time to time, the "February 2019 Credit Facility"). During the year ended December 31, 2021, we did not repurchase any shares under the authorized program.
In connection with the MVC Acquisition, on December 23, 2020, following the closing of the MVC Merger, we entered into an amended and restated investment advisory agreement (the “Amended and Restated Advisory Agreement”) with Barings, effective January 1, 2021, which amended the Original Advisory Agreement to, among other things, (i) reduce the annual base management fee payable to Barings from 1.375% to 1.250% of our gross assets, (ii) reset the commencement date for the rolling 12-quarter “look-back” provision used to calculate the income incentive fee and incentive fee cap to January 1, 2021 from January 1, 2020 and (iii) describe the fact that we may enter into guarantees, sureties and other credit support arrangements with respect to one or more of our investments, including the impact of these arrangements on the income incentive fee cap. See “—Management Agreements – Investment Advisory Agreement” in this Item 1 of Part I of this Annual Report on Form 10-K for more information.
In connection with the MVC Acquisition, on December 23, 2020, promptly following the closing of the MVC Merger, we entered into a Credit Support Agreement (the “MVC Credit Support Agreement”) with Barings, pursuant to which Barings has agreed to provide credit support to us in the amount of up to $23.0 million relating to the net cumulative realized and unrealized losses on the acquired MVC investment portfolio over a 10-year period. The MVC Credit Support Agreement is intended to give stockholders of the combined company downside protection from net cumulative realized and unrealized losses on the acquired MVC portfolio and insulate the combined company’s stockholders from potential value volatility and losses in MVC’s portfolio following the
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closing of the MVC Merger. There is no fee or other payment by us to Barings or any of its affiliates in connection with the MVC Credit Support Agreement. Any cash payment from Barings to us under the MVC Credit Support Agreement will be excluded from the incentive fee calculations under the Amended and Restated Advisory Agreement. See “Note 2. Agreements and Related Party Transactions” and “Note. 6 Derivative Instruments” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K for more information.
Pending Sierra Income Corporation Acquisition
On September 21, 2021, we entered into an Agreement and Plan of Merger (the “Sierra Merger Agreement”) by and among us, Mercury Acquisition Sub, Inc., a Maryland corporation and our direct wholly owned subsidiary (“Sierra Acquisition Sub”), Sierra Income Corporation, a Maryland corporation (“Sierra”), and Barings. The Sierra Merger Agreement provides that, on the terms and subject to the conditions set forth in the Sierra Merger Agreement, Sierra Acquisition Sub will merge with and into Sierra, with Sierra continuing as the surviving company and as our wholly owned subsidiary (the “First Sierra Merger”) and, immediately thereafter, Sierra will merge with and into us, with Barings BDC, Inc. continuing as the surviving company (the “Second Sierra Merger” and, together with the First Sierra Merger, the “Sierra Merger”). Both the Board and the board of directors of Sierra, including all of the respective independent directors, have approved the Sierra Merger Agreement and the transactions contemplated therein. The parties to the Sierra Merger Agreement intend the Sierra Merger to be treated as a “reorganization” within the meaning of Section 368(a) of the Code.
In the First Sierra Merger, each share of Sierra common stock issued and outstanding immediately prior to the effective time of the First Sierra Merger (excluding any shares cancelled pursuant to the Sierra Merger Agreement) will be converted into the right to receive (i) $0.9783641 per share in cash, without interest, from Barings (such amount of cash, the “Sierra Cash Consideration”) and (ii) 0.44973 (such ratio, as may be adjusted pursuant to the Sierra Merger Agreement, the “Sierra Exchange Ratio”) of a validly issued, fully paid and non-assessable share of our common stock (the “Sierra Share Consideration” and, together with the Sierra Cash Consideration, the “Sierra Merger Consideration”).
The Sierra Merger Agreement contains representations, warranties and covenants, including, among others, covenants relating to the operation of each of our and Sierra’s businesses during the period prior to the closing of the Sierra Merger. We and Sierra have agreed to convene and hold stockholder meetings for the purpose of obtaining the approvals required of our and Sierra’s stockholders, respectively, and our Board and the board of directors of Sierra have agreed to recommend that their respective stockholders approve the applicable proposals (as described below).
The Sierra Merger Agreement provides that Sierra shall not, and shall cause its subsidiaries and instruct its representatives not to, directly or indirectly, solicit proposals relating to alternative transactions, or, subject to certain exceptions, initiate or participate in discussions or negotiations regarding, or provide information with respect to, any proposal for an alternative transaction. However, the Sierra board of directors may, subject to certain conditions, change its recommendation to the Sierra stockholders or, on payment of a termination fee of $11.0 million to us and the reimbursement of up to $2.0 million in expenses incurred by us and Barings, terminate the Sierra Merger Agreement and enter into an Alternative Acquisition Agreement (as defined in the Sierra Merger Agreement) for a Superior Proposal (as defined in the Sierra Merger Agreement) if it determines in good faith, after consultation with its outside legal counsel, that failure to do so would be inconsistent with the directors’ duties under applicable law.
Consummation of the First Sierra Merger, which is currently anticipated to occur during the first quarter of fiscal year 2022, is subject to certain customary closing conditions, including (1) approval of the First Sierra Merger by the holders of at least a majority of the outstanding shares of Sierra common stock entitled to vote thereon, (2) approval of the issuance of our common stock to be issued in the First Sierra Merger by a majority of the votes cast by our stockholders on the matter at our stockholders meeting, (3) approval of the issuance of our common stock in connection with the First Sierra Merger at a price below the then-current net asset value per share of our common stock, if applicable, by the vote specified in Section 63(2)(A) of the 1940 Act, (4) the absence of certain legal impediments to the consummation of the Sierra Merger, (5) effectiveness of the registration statement for our common stock to be issued as consideration in the First Sierra Merger, (6) approval for listing on the NYSE of our common stock to be issued as consideration in the First Sierra Merger, (7) subject to certain materiality standards,
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the accuracy of the representations and warranties and compliance with the covenants of each party to the Sierra Merger Agreement, and (8) required regulatory approvals (including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or early termination thereof).
Barings, as party to the Sierra Merger Agreement, agreed to vote all shares of our common stock over which it has voting power (other than in its fiduciary capacity) in favor of the proposals to be submitted by us to our stockholders for approval relating to the Sierra Merger.
In addition, we and Sierra will take steps necessary to provide for the repayment at closing of Sierra’s existing loan agreement. The Sierra Merger Agreement also contains certain termination rights in favor of us and Sierra, including if the First Sierra Merger is not completed on or before March 31, 2022 or if the requisite approvals of our stockholders or Sierra stockholders are not obtained.
Further, we will enter into an amendment and restatement of the Amended and Restated Advisory Agreement, effective as of the closing of the Sierra Merger, to raise the annualized hurdle rate thereunder from 8.0% to 8.25%. Following the closing of the Sierra Merger, we will also enter into a credit support agreement with Barings, for the benefit of the combined company, to protect against net cumulative unrealized and realized losses of up to $100.0 million on the acquired Sierra investment portfolio over the next ten years.
Overview of Our Business
Beginning in August 2018, Barings shifted our investment focus to invest in syndicated senior secured loans, bonds and other fixed income securities. Since that time, Barings has transitioned our portfolio to primarily senior secured private debt investments in well-established middle-market businesses that operate across a wide range of industries. Barings’ existing SEC co-investment exemptive relief under the 1940 Act (the "Exemptive Relief") permits us and Barings’ affiliated private and SEC-registered funds to co-invest in Barings-originated loans, which allows Barings to efficiently implement its senior secured private debt investment strategy for us.
Barings employs fundamental credit analysis, and targets investments in businesses with relatively low levels of cyclicality and operating risk. The hold size of each position will generally be dependent upon a number of factors including total facility size, pricing and structure, and the number of other lenders in the facility. Barings has experience managing levered vehicles, both public and private, and will seek to enhance our returns through the use of leverage with a prudent approach that prioritizes capital preservation. Barings believes this strategy and approach offers attractive risk/return with lower middlevolatility given the potential for fewer defaults and greater resilience through market companies as those having annual revenues between $10.0 million and $250.0 million. cycles.
Our investment objective is to seek attractive returns by generatinggenerate current income from our debtby investing directly in privately-held middle-market companies to help these companies fund acquisitions, growth or refinancing. Barings employs fundamental credit analysis, and targets investments and capital appreciation from our equity-related investments. Our investment strategy is to partnerin businesses with low levels of cyclicality (i.e., the risk of business owners, management teams and financial sponsors to provide flexible financing solutions to fund growth, changes of control,cycles or other corporate events. We investeconomic cycles adversely affecting them) and operating risk relative to other businesses in seniorthis market segment. The holding size of each position will generally be dependent upon a number of factors including total facility size, pricing and subordinated debt securitiesstructure, and the number of privately held companies, generally securedother lenders in the facility. Barings has experience managing levered vehicles, both public and private, and seeks to enhance our returns through the use of leverage with a prudent approach that prioritizes capital preservation. Barings believes this strategy and approach offers attractive risk/return with lower volatility given the potential for fewer defaults and greater resilience through market cycles. A significant portion of our investments are expected to be rated below investment grade by security interests in portfolio company assets. In addition, we generally invest in onerating agencies or, more equity instruments of the borrower, such as direct preferred or common equity interests. We generally invest in securities thatif unrated, would be rated below investment grade if they were rated. Such belowBelow investment grade securities, which are often referred to as "high yield" or "junk."
We focus on“junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. To a lesser extent, we may make investments in syndicated loan opportunities for cash management and other purposes, which includes but is not limited to maintaining more liquid investments to manage our share repurchase program.
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Relationship with Our Adviser, Barings
Our investment adviser, Barings, a wholly-owned subsidiary of Massachusetts Mutual Life Insurance Company, is a leading global asset management firm and is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"). Barings’ primary investment capabilities include fixed income, private credit, real estate, equity, and alternative investments. Subject to the overall supervision of the Board, Barings’ Global Private Finance Group ("Barings GPFG"), manages our day-to-day operations, and provides investment advisory and management services to us. Barings GPFG is part of Barings' $305.2 billion Global Fixed Income Platform that invests in liquid, private and structured credit. Barings GPFG manages private funds and separately managed accounts, along with multiple public vehicles.
Among other things, Barings (i) determines the composition of our portfolio, the nature and timing of the changes therein and the manner of implementing such changes; (ii) identifies, evaluates and negotiates the structure of the investments made by us; (iii) executes, closes, services and monitors the investments that we make; (iv) determines the securities and other assets that we will purchase, retain or sell; (v) performs due diligence on prospective portfolio companies and (vi) provides us with historiessuch other investment advisory, research and related services as we may, from time to time, reasonably require for the investment of generating revenuesour funds.
Under the terms of the Administration Agreement, Barings performs (or oversees, or arranges for, the performance of) the administrative services necessary for our operation, including, but not limited to, office facilities, equipment, clerical, bookkeeping and positive cash flows, established market positionsrecord keeping services at such office facilities and proven management teamssuch other services as Barings, subject to review by the Board, will from time to time determine to be necessary or useful to perform its obligations under the Administration Agreement. Barings also, on our behalf and subject to the Board’s oversight, arranges for the services of, and oversees, custodians, depositories, transfer agents, dividend disbursing agents, other stockholder servicing agents, accountants, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable. Barings is responsible for the financial and other records that we are required to maintain and will prepare all reports and other materials required to be filed with strong operating discipline. Our targetthe SEC or any other regulatory authority.
Stockholder Approval of Reduced Asset Coverage Ratio
On July 24, 2018, our stockholders voted at the 2018 Special Meeting to approve a proposal to authorize us to be subject to a reduced asset coverage ratio of at least 150% under the 1940 Act. As a result of the stockholder approval at the 2018 Special Meeting, effective July 25, 2018, our applicable asset coverage ratio under the 1940 Act has been decreased to 150% from 200%. As a result, we are permitted under the 1940 Act to incur indebtedness at a level that is more consistent with a portfolio company has annual revenues between $20.0 million and $300.0 million and annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) between $5.0 million and $75.0 million. We believe that these companies have less access to capital and that the market for such capital is underserved relative to larger companies. Companies of this size are generally privately held and are less well known to traditional capital sources such as commercial and investment banks.
Our investments generally range from $5.0 to $50.0 million per portfolio company. In certain situations, we have partnered with other funds to provide larger financing commitments. We operate Triangle SBIC, Triangle SBIC II and Triangle SBIC III as SBICs and utilize the proceeds from the sale of SBA-guaranteed debentures, referred to herein as SBA leverage, to enhance returns to our stockholders.senior secured debt. As of December 31, 2017, we had investments in 89 portfolio companies, with an aggregate cost of approximately $1.1 billion.2021, our asset coverage ratio was 153.8%.

Our Business Strategy
We seek attractive returns by generating current income primarily from ourdirectly-originated debt investments and capital appreciation from our equity-relatedin middle-market companies located primarily in the United States. We also have investments by:in middle-market companies located outside the United States. Our strategy includes the following components:  
•Leveraging Barings GPFG's Origination and Portfolio Management Resources. Barings GPFG has over 75 investment professionals located in six different offices in the U.S., Europe, Australia/New Zealand and Asia. These regional investment teams have been working together in their respective regions for a number of years and have extensive experience advising, investing in and lending to companies across changing market cycles. In addition, the individual members of these teams have diverse investment backgrounds, with prior experience at investment banks, commercial banks, and privately and publicly held companies. We believe this diverse experience provides an in-depth understanding of the strategic, financial and operational challenges and opportunities of middle-market companies.
•Utilizing Long-Standing Relationships to Source Deals.Investments.    Our senior management teamBarings GPFG has worked diligently over decades to build strategic relationships with private equity firms globally. Barings GPFG's long history of providing consistent, predictable capital to middle-market sponsors, even in periods of market dislocation,
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has earned Barings and us a reputation as a reliable partner. Barings GPFG also maintains extensive personal relationships with entrepreneurs, financial sponsors, attorneys, accountants, investment bankers, commercial bankers and other non-bank providers of capital who refer prospective portfolio companies to us. These relationships historically have generated significant investment opportunities. We believe that ourthis network of relationships will continue to produce attractive investment opportunities.
•Focusing on Underserved Markets.the Middle-Market.     The lower middle market has traditionally been underserved. We believe that operating margin and growth pressures, as well as regulatory concerns, have caused financial institutions to de-emphasize services to lower middle marketprimarily invest in middle-market transactions. These companies in favor of larger corporate clients and more liquid capital market transactions. We believe these dynamics have resulted in the financing market for lower middle market companiestend to be underserved, providing us with greater investment opportunities.privately owned, often by a private equity sponsor, and are companies that typically generate annual earnings before interest, taxes, depreciation and amortization, as adjusted (“Adjusted EBITDA”), of $10.0 million to $75.0 million.
•Providing One-Stop Customized Financing Solutions.    We offerBarings GPFG's ability to commit to and originate larger hold positions (in excess of $200 million) in a given transaction is a differentiator to middle-market private equity sponsors. In today's market, it has become increasingly important to have the ability to underwrite an entire transaction, providing financial sponsors with certainty of close. Barings GPFG offers a variety of financing structures and havehas the flexibility to structure our investments to meet the needs of our portfolio companies. Typically we invest in senior and subordinated debt securities, coupled with equity interests. We believe our ability to customize financing arrangements makes us an attractive partner to lower middle market companies.
Leveraging the Experience of Our Management Team•.    Our senior management team has extensive experience advising, investing in, lending to and operating companies across changing market cycles. The members of our management team have diverse investment backgrounds, with prior experience at investment banks, commercial banks, and privately and publicly held companies in the capacity of executive officers. We believe this diverse experience provides us with an in depth understanding of the strategic, financial and operational challenges and opportunities of the lower middle market companies in which we invest. We believe this understanding allows us to select and structure better investments and to efficiently monitor and provide managerial assistance to our portfolio companies.
Applying RigorousConsistent Underwriting Policies and Active Portfolio Management.    Our senior management teamWe believe robust due diligence on each investment is paramount due to the lack of an active secondary market. With limited ability to liquidate holdings, private credit investors must take a longer-term, “originate-to-hold” investment approach. Barings GPFG has implemented rigorous underwriting policies and procedures that are followed infor each potential transaction. These policies includeThis consistent and proven fundamental underwriting process includes a thorough analysis of each potential portfolio company’s competitive position, financial performance, management team operating discipline, growth potential and industry attractiveness, which we believeBarings GPFG believes allows usit to better assess the company’s prospects. After investing in aclosing, Barings GPFG maintains ongoing access to both the sponsor and portfolio company we monitor the investment closely, typically receiving monthly, quarterly and annual financial statements. We analyze and discuss in detail the company’s financial performance with management in additionorder to participating in regular board of directors meetings. We believe that our initialclosely monitor investments and ongoing portfolio review process allows ussuggest or require remedial actions as needed to monitor effectively the performance and prospects of our portfolio companies.avoid a default.
Taking Advantage of Low Cost Debentures Guaranteed by the SBA•.    The licenses of Triangle SBIC, Triangle SBIC II and Triangle SBIC III to do business as SBICs allow them (subject to availability, SBA approval, and continued regulatory compliance) to issue fixed-rate, low interest debentures which are guaranteed by the SBA and sold in the capital markets, potentially allowing us to increase our net investment income beyond the levels achievable by other BDCs utilizing traditional leverage.
Financing Our Investment Portfolio with Long-Term Capital.   In addition to proceeds from sales of shares of our common stock and proceeds from issuance of SBA-guaranteed debentures by our SBIC subsidiaries, we have outstanding unsecured notes with original terms of seven to ten years.
Maintaining Portfolio Diversification.    While we focus our investments in lower middle marketmiddle-market companies, we seek to invest across various industries. We monitorindustries and in both United States-based and foreign-based companies. Barings GPFG monitors our investment portfolio to ensure we have acceptable industry balance, using industry and market metrics as key indicators. By monitoring our investment portfolio for industry balance, we seek to reduce the effects of economic downturns associated with any particular industry or market sector. Notwithstanding our intent to invest across a variety of industries, we may from time to time hold securities of a single portfolio company that comprise more than 5.0% of our total assets and/or more than 10.0% of the outstanding voting securities of the portfolio

company. For that reason, we are classified as a non-diversified management investment company under the 1940 Act.
Investments
Debt Investments
We tailor theThe terms of our debt investments are tailored to the facts and circumstances of each transaction and prospective portfolio company, negotiating a structure that seeks to protect ourlender rights and manage our risk while creating incentives for the portfolio company to achieve its business plan. To that end, we typically seek board observation rights with each of our portfolio companies and offer managerial assistance. We also seek to limit the downside risks of our investments by negotiating covenants that are designed to protect our investments while affording our portfolio companies as much flexibility in managing their businesses as possible. Such restrictions may include affirmative and negative covenants, default penalties, lien protections, change of control provisions, put rights and put rights. Wea pledge of the operating companies' stock which provides us with additional exit options in downside scenarios. Other lending protections may include term loan amortization, excess cash flow sweeps (effectively additional term loan amortization), limitations on a company’s ability to make acquisitions, maximums on capital expenditures and limits on allowable dividends and distributions. Further, up-front closing fees of typically 1-3% of the loan amount act effectively as pre-payment protection given the cost to a company to refinance early. Additionally, we will typically include a prepayment penalty structurecall protection provisions effective for the first six to twelve months of an investment to enhance our potential total return on our investments.return.
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We invest in predominately senior and subordinated debt securities of privately held companies, generally secured by security interests in portfolio company assets. Our senior and subordinatedprivate debt investments generallyin, well-established middle-market businesses that operate across a wide range of industries. We currently invest primarily in loans that have terms of three tobetween five and seven years, do not have scheduled amortization and are due at maturity. Our senior secured debt investments generally provide for variablebear interest at rates ranging from LIBOR (or an applicable successor rate) plus 550450 basis points to LIBOR plus 950650 basis points per annum. In addition, our subordinated debt investments generally provide for fixed interest rates between 10.0% and 15.0% per annum. Our subordinated debt investments generally are secured by a second priority security interest in the assets of the borrower and generally include an equity component, such as common stock in the portfolio company. In addition, certain loan investments may have a form of interest that is not paid currently but is accrued and added to the loan balance and paid at the end of the term, referred to as payment-in-kind ("PIK") interest. In our negotiations with potential portfolio companies, we generally seek to minimize PIK interest as such income is taxable in the year accrued, and we may have to borrow money or raise additional capital in order to meet the requirement of generally having to pay out at least 90.0% of our taxable income to continue to qualify for tax treatment as a regulated investment company ("RIC") for U.S. federal income tax purposes. At December 31, 2017, the weighted average yield on our outstanding debt investments other than non-accrual debt investments was approximately 11.0%, the weighted average yield on all of our outstanding investments (including equity and equity-linked investments but excluding non-accrual debt investments) was approximately 9.6% and the weighted average yield on all of our outstanding investments (including equity and equity-linked investments and non-accrual debt investments) was approximately 8.5%.
An SBIC may make investments in the form of loans, debt securities, which include an equity feature, or equity only securities. Loans and debt securities must be issued for a term of not less than one year (except for bridge loans in anticipation of a permanent financing in which the SBIC intends to participate, or to protect its prior investment) and must have amortization not exceeding “straight line.” The permissible interest rate on loans is the higher of (i) 19% or (ii) 11% over the higher of the SBIC’s weighted cost of debenture leverage or the current debenture rate. For debt securities, the permitted rate is the higher of (i) 14% or (ii) 6% over the higher of the SBIC’s weighted cost of debenture leverage or the current debenture rate. If a financing is in default, these maximums may increase by up to 7%. SBA regulations define an SBIC’s weighted cost of debenture leverage and describe the permitted rate when more than one SBIC participates in the financing.
Equity Investments
WeOn a limited basis, we may acquire equity interests in portfolio companies. WeIn such cases, we generally seek to structure our equity investments as non-control investments tothat provide us with minority rights and event-driven or time-driven puts. We also seek to obtain registration rights in connection with these investments, which may include demand and “piggyback” registration rights, board seats and board observation rights. Our investments have in the past and may in the future contain a synthetic equity position pursuant to a formula typically setting forth royalty rights we may exercise in accordance with such formula.

Investment Criteria
We utilize the following criteria and guidelines in evaluating investment opportunities. However, not all of these criteria and guidelines have been, or will be, met in connection with each of our investments. 
•Established Companies With Positive Cash Flow.    We seek to invest in establishedlater-stage or mature companies with a proven history of generating revenues and positive cash flows. We typically focus on companies with a history of profitability and minimum trailing twelve monthtwelve-month Adjusted EBITDA of $3.0ranging from $10.0 million to $75.0 million. We generally do not invest in start-up companies, distressed situations, “turn-around” situations or companies that we believe have unproven business plans.
•Experienced Management Teams With Meaningful Equity Ownership.Teams.    Based on our prior investment experience, we believe that a management team with significant experience with a portfolio company or relevant industry experience and meaningful equity ownership is essential to the long-term success of the portfolio company. We believe management teams with these attributes are more likely to manage the companies in a manner that protects our debt investment and enhances the value of our equity investment.
•Strong Competitive Position.    We seek to invest in companies that have developed strong positions within their respective markets, are well positioned to capitalize on growth opportunities and compete in industries with barriers to entry. We also seek to invest in companies that exhibit a competitive advantage, which may help to protect their market position and profitability.
•Varied Customer and Supplier Bases.    We prefer to invest in companies that have varied customer and supplier bases. Companies with varied customer and supplier bases are generally better able to endure economic downturns, industry consolidation and shifting customer preferences.
•Significant Invested Capital.    We believe the existence of significant underlying equity value provides important support to investments. We look forseek to identify portfolio companies that we believe have sufficient valuewell-structured capital beyond the layer of the capital structure in which we invest.
Investment CommitteesProcess
Triangle Capital CorporationOur investment origination and portfolio monitoring activities are performed by Barings GPFG. Barings GPFG has an investment committee that is responsible for all aspects of ourthe investment process. The investment process relatingis designed to investments made by Triangle Capital Corporation or any of its subsidiaries, other than investments made by Triangle SBIC, Triangle SBIC IImaximize risk-adjusted returns, minimize non-performing assets and Triangle SBIC III. The members ofavoid investment losses. In addition, the Triangle Capital Corporation investment committee are Messrs. E. Ashton Poole, Steven C. Lilly, Jeffrey A. Dombcik, Douglas A. Vaughn, Cary B. Nordan, James J. Burke and Matthew A. Young.
Triangle SBIC has an investment committee that is responsible for all aspects of our investment process relatingis also designed to investments made by Triangle SBIC. The members of Triangle SBIC’s investment committee are Messrs. E. Ashton Poole, Steven C. Lilly, Jeffrey A. Dombcik, Douglas A. Vaughn, Cary B. Nordan, James J. Burkeprovide sponsors and Matthew A. Young.prospective portfolio companies with efficient and predictable deal execution.
Triangle SBIC II has an investment committee that is responsible for all aspects of our investment process relating to investments made by Triangle SBIC II. The members of Triangle SBIC II’s investment committee are Messrs. E. Ashton Poole, Steven C. Lilly, Jeffrey A. Dombcik, Douglas A. Vaughn, Cary B. Nordan, James J. Burke, and Matthew A. Young.
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Triangle SBIC III has an investment committee that is responsible for all aspects of our investment process relating to investments made by Triangle SBIC III. The members of Triangle SBIC III’s investment committee are Messrs. E. Ashton Poole, Steven C. Lilly, Jeffrey A. Dombcik, Douglas A. Vaughn, Cary B. Nordan, James J. Burke and Matthew A. Young. For purposes of the discussion herein, any reference to the “investment committee” refers to the investment committees for each of Triangle Capital Corporation, Triangle SBIC, Triangle SBIC II and Triangle SBIC III.


Investment Process
Our investment committee meets once a week and also meets on an as needed basis depending on transaction volume. Our investment committee has organized our investment process into five distinct stages:
Origination
Due Diligence and Underwriting
Approval
Documentation and Closing
Portfolio Management and Investment Monitoring
Our investmentorigination process is summarized in the following chart:
investmentprocess2a02.jpg

OriginationInvestment Pre-Screen
The originationinvestment pre-screen process for our investmentsbegins with a review of an offering memorandum or other high-level prospect information by an investment originator. A fundamental bottoms-up credit analysis is overseen by the Company's Chief Origination Officerprepared and includes sourcing, screening, preliminary due diligence, transaction structuring and negotiation. Our investment professionals utilize their extensive relationships with various financial sponsors, entrepreneurs, attorneys, accountants, investment bankers and other non-bank providers of capital to source transactions with prospective portfolio companies.
If a transaction meets our investment criteria, we perform preliminary due diligence, taking into consideration some or all of the following factors:
a comprehensive financial model that we prepare based on quantitative analysis of historical financial performance, financial projections and pro forma financial ratios assuming investment;
the competitive landscape surrounding the potential investment;
strengths and weaknesses of the potential investment’s business strategy and industry;
results of a broad qualitative analysis of the company’s management team, products or services, market position, market dynamics and customers and suppliers; and
potential investment structures, certain financing ratios and investment pricing terms.
If the results of our preliminary due diligence are satisfactory, the origination team prepares a Summary Transaction Memorandum, whichindependent third-party research is presented to our investment committee. If our investment committee recommends moving forward, we may issue a non-binding term sheetgathered in addition to the potential portfolio company. Upon this approval, we begin our formal due diligence and underwriting process as we move towardinformation received from the sponsor. The investment approval.
Due Diligence and Underwriting
Our due diligencegroup focuses on a prospective investment's fundamentals, sponsor/source and proposed investment is completedstructure. This review may be followed by a minimumdiscussion between the investment originator and an investment group head to identify investment opportunities that should be passed on, either because they fall outside of threeBarings GPFG's stated investment professionals, which we refer to asstrategy or offer an unacceptable risk-adjusted return. If the underwriting team.originator and investment group head agree that an investment opportunity is worth pursuing, a credit analyst assists the originator with preparation of a screening memorandum. The screening memorandum is discussed internally with the investment group head and other senior members of the underwritinginvestment group, and in certain instances, the investment group head may elect to review the screening memorandum with the investment committee prior to the preliminary investment proposal.
Preliminary Investment Proposal
Following the screening memorandum discussion, if the decision is made by the investment group head to pursue an investment opportunity, key pricing and structure terms may be communicated to the prospective borrower verbally or via a non-binding standard preliminary term sheet in order to determine whether the proposed terms are competitive.
Investment Approval
Upon acceptance by a sponsor/prospective borrower of preliminary key pricing and structure terms, the investment process continues with formal due diligence. The investment team work together to conduct due diligence and to understand the relationships amongattends meetings with the prospective portfolio company’s business plan, operations and financial performance through various methods, including, among others, on-site visits with management, in-depth review ofreviews historical and projectedforecasted financial data, interviews with customersinformation and suppliers, evaluationsthird-party diligence reports, conducts research to support preparation of managementproprietary financial models including both base case and background checks, third-party accounting reports
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downside scenarios, valuation analyses, and ultimately, an underwriting memorandum for review of any material contracts.
In most circumstances, we utilize outside experts to reviewby the legal affairs and accounting systems of a prospective portfolio company. Where appropriate, we also engage specialists to investigate issues like environmental matters and general industry outlooks. During the underwriting process, significant attention is given to sensitivity analysis and how companies might be expected to perform in a protracted “downside” operating environment. In addition, we analyze key financing ratios and other industry metrics, including total debt to EBITDA, EBITDA to fixed charges, EBITDA to total interest expense, total debt to total capitalization and total senior debt to total capitalization.
Upon completion of a satisfactory due diligence review and as part of our evaluation of a proposed investment the underwriting team prepares an Investment Committee Memorandum. The Investment Committee Memorandum includes information about the potential portfolio company such as its history, business strategy, potential strengths and risks involved, analysis of key customers, contracts and suppliers, third-party consultant findings, expected returns on investment structure, anticipated sources of repayment and exit strategies, analysis of historical financial statements, and potential capitalization and ownership.
Approval
The underwriting team for the proposed investment presents the Investment Committee Memorandum to our investment committee for consideration and approval. After reviewing the Investment Committee Memorandum, memberscommittee. A majority of the investment committee may request additional due diligence or modify the proposed financing structure or terms of the proposed investment. Before we proceed with any investment, the investment committee must approve the proposed investment by the affirmative vote fromvotes cast at a meeting at which a majority of the members of the Investment Committee is present is required to approve all new investment committeedecisions.

Commitment Letter
members. In addition, all proposedFor investments that require written confirmation of commitment, commitment letters must be approved by the Company's Chief Origination Officer, or, in the case of proposed investments presentedBarings GPFG's internal legal team. Commitment letters include customary conditions as well as any conditions specified by the Chief Origination Officer,investment committee. Such conditions could include, but are not limited to, specific confirmatory due diligence, minimum pre-close Adjusted EBITDA, minimum capitalization, satisfactory documentation, satisfactory legal due diligence and absence of material adverse change. Unless specified by the Company's Chief Credit Officer. Upon receiptinvestment committee as a condition to approval, commitment letters need not include final investment committee approval as a condition precedent.
Documentation
Once an investment opportunity has been approved, negotiation of transaction approval, the underwritingdefinitive legal documents occurs, usually simultaneously with completion of any third-party confirmatory due diligence. Typically, legal documentation will be reviewed by Barings GPFG’s internal legal team proceedsor by outside legal counsel to document the transaction.
Documentationensure that our security interest can be perfected and Closing
The underwriting team is responsible forthat all documentation related to investment closings, with oversightother terms of the documentation and closing phase overseen by the Company's Chief Administrative Officer. The Chief Administrative Officer has final approval on all investment legal documentation in order to ensure consistencydefinitive loan documents are consistent with the Company's documentation practices. In addition, we rely on law firms with whom we have worked on multiple transactions to help us complete the necessary documentation associated with transaction closings. If a transaction changes materially from what was originallyterms approved by the investment committee,committee.
Closing
A closing memorandum is provided to the underwriting team requests a formal meetinginvestment committee. The closing memorandum addresses final investment structure and pricing terms, the sources and uses of funds, any variances from the original approved terms, an update related to the prospect’s financial performance and, if warranted, updates to internal financial models. The closing memorandum also addresses each of the specific conditions to the approval of the investment committee to communicateby the contemplated changes. The investment committee, hasincluding results of confirmatory due diligence with any exceptions or abnormalities highlighted, and includes an analysis of financial covenants with a comparison to the right to approve the amended transaction structure, to suggest alternative structures or not to approve the contemplated changes.financial forecast prepared by management.
Portfolio Management and Investment Monitoring
Our portfolio management and investment monitoring processes are overseen by Barings GPFG. Barings GPFG's portfolio management process is designed to maximize risk-adjusted returns and identify non-performing assets well in advance of potentially adverse events in order to mitigate investment losses. Key aspects of the Company's Chief Credit Officer. OurBarings GPFG investment professionals generally employ several methodsand portfolio management process include:
•Culture of evaluating and monitoringRisk Management.    The investment team that approves an investment monitors the investment's performance through repayment. We believe this practice encourages accountability by connecting investment team members with the long-term performance of our portfolio companies, which, depending on the particular investment, may includeinvestment. This also allows us to leverage the following specific processes, procedures and reports:
monthly and quarterly reviews of actual financial performance versusunderwriting process, namely the corresponding periodcomprehensive understanding of the prior yearrisk factors associated with the investment that an investment team develops during underwriting. In addition, we foster continuous interaction between investment teams and financial projections;
monthly and quarterly monitoringthe investment committee. This frequent communication encourages the early escalation of all financial and other covenants;
reviews of senior lender loan compliance certificates, where applicable;
quarterly reviews of operating results and general business performance, including the preparation of a portfolio monitoring report which is distributedissues to members of ourthe investment committee;committee to leverage their experience and expertise well in advance of potentially adverse events.
periodic face-to-face meetings with management teams and financial sponsors of portfolio companies; and
attendance at•Ongoing Monitoring. Each portfolio company board meetings through board seatsis assigned to an analyst who is responsible for the ongoing monitoring of the investment. Upon receipt of information (financial or observation rights.
otherwise) relating to an investment, a preliminary review is performed by the analyst in order to assess whether the information raises any issues that require increased attention. Particular consideration is given to information which may impact the value of an asset. In the event that oursomething material is identified, the analyst is responsible for notifying the relevant members of the deal team and investment committee.
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•Quarterly Portfolio Reviews. All investments are reviewed on at least a quarterly basis. The quarterly portfolio reviews provide a forum to evaluate the current status of each asset and identify any recent or long-term performance trends, either positive or negative, that may affect its current valuation.
•Focus Credit List Reviews. Certain credits are deemed to be on the “Focus Credit List” and are reviewed on a more frequent basis. These reviews typically occur monthly but can occur more or less frequently based on situational factors and the availability of updated information from the company. During these reviews, the investment team provides an update on the situation and discusses potential courses of action with the investment committee determines that an investment is underperforming, or circumstances suggest that the risk associated withto ensure any mitigating steps are taken in a particular investment has significantly increased, we undertake to monitor more closely the affected portfolio company. The level of monitoring of an investment is determinedtimely manner.
•Sponsor Relationships. We invest primarily in transactions backed by a number of factors, including, but not limited to, trends inprivate equity sponsor and when evaluating investment opportunities, we take into account the financial performancestrength of the portfolio company,sponsor (e.g., track record, sector expertise, strategy, governance, follow-on investment capacity, relationship with Barings GPFG). Having a strong relationship and staying in close contact with sponsors and management during not only the underwriting process but also throughout the life of the investment structureallows us to engage the sponsor and the type of collateral securing ourmanagement early to address potential covenant breaks or other issues.
•Robust Investment and Portfolio Management System. Barings' investment if any.
We also monitor a wide variety of key credit statistics that provide information regarding our portfolio companies to help us assess credit quality and portfolio performance. We generally require ourmanagement system serves as the central repository of data used for investment management, including both company-level metrics (e.g., probability of default, Adjusted EBITDA, geography) and asset-level metrics (e.g., price, spread/coupon, seniority). Barings GPFG portfolio companiesmanagement has established a required set of data that analysts must update quarterly, or more frequently when appropriate, in order to have annual financial audits in addition to monthly andproduce a one-page summary for each company, known as tearsheets, which are used during quarterly unaudited financial statements. Using these statements, we calculate and evaluate certain financing ratios. For purposes of analyzing the financial performance of our portfolio companies, we may make certain adjustments to their financial statements to reflect the pro forma results of the portfolio company consistent with a change of control transaction, to reflect anticipated cost savings resulting from a merger or restructuring, costs related to new product development, compensation to previous owners, and other acquisition or restructuring related items.reviews.
Valuation Process and Determination of Net Asset Value
The most significant estimate inherent in the preparation of our financial statements is the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. We have a valuation policy, as well as established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring (quarterly)(at least quarterly) basis in accordance with the 1940 Act and FASB ASC Topic 820, Fair Value Measurements and Disclosures ("ASC Topic 820"). Our current valuation policy and processes were

established by our management with the assistance of certain third-party advisorsBarings and were approved by the Board.
Under ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For our portfolio securities, fair value is generally the amount that we might reasonably expect to receive upon the current sale of the security. The fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. If no market for the security exists or if we do not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market.
Under ASC Topic 820, there are three levels of valuation inputs, as follows:
Level 1 Inputs – include quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs – include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 Inputs – include inputs that are unobservable and significant to the fair value measurement.
A financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized as Level 3 investments within the tables in the notes to our consolidated financial statements may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).
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Our investment portfolio is primarily comprised ofincludes certain debt and equity instruments of privately held companies for which quoted prices or other observable inputs falling within the categories of Level 1 and Level 2 are generally not available. Therefore,In such cases, we determine the fair value of our investments in good faith primarily using Level 3 inputs. In certain cases, quoted prices or other observable inputs may exist, and if so, we assess the appropriateness of the use of these third-party quotes in determining fair value based on (i) our understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer and (ii) the depth and consistency of broker quotes and the correlation of changes in broker quotes with underlying performance of the portfolio company.
Under ASC Topic 820, a financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized as Level 3 investments within the tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).
There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of our Level 3 investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned. For a discussion of the risks inherent in determining the value of securities for which readily available market values do not exist, see “Risk Factors — Risks Relating to Our Business and Structure — Our investment portfolio is and will continue to be recorded at fair value as determined in good faith by ourthe Board of Directors and, as a result, there is and will continue to be uncertainty as to the value of our portfolio investments” included in Item 1A of Part I of this Annual Report.Report on Form 10-K.
Our valuation process is led by our executive officers. The valuation process begins withInvestment Valuation Process
Barings has established a quarterly review of each investment in our investment portfolio by our executive officers and our investment committee. Valuations of each portfolio security are then prepared by our investment professionals, who have direct responsibility for the origination, management and monitoring of each investment. Under our valuation policy, each investment valuationpricing committee that is, subject to (i) a review by the lead investment officeroversight of the Board, responsible for the approval, implementation and oversight of the processes and methodologies that relate to the pricing and valuation of assets we hold. Barings uses independent third-party providers to price the portfolio, company investment and (ii) a peer review by a second investment officer or executive officer. Generally, any investment that is valued below cost is subjected to review by one of our executive officers. Afterbut in the peer review is complete, we engage two independent valuation firms, including Duff & Phelps, LLC, collectively referred to as the "Valuation Firms," to provide third-party reviews of certain investments, as described further below. In addition, all investment valuations are provided to our independent registered public accounting firm in connection with quarterly review procedures and the annual audit of our financial statements. Finally, the Board of Directors has the responsibility for reviewing and approving, in good faith, the fair value of our investmentsevent an acceptable price cannot be obtained from an approved external source, Barings will utilize alternative methods in accordance with internal pricing procedures established by Barings' pricing committee.
At least annually, Barings conducts reviews of the 1940 Act.primary pricing vendors to validate that the inputs used in the vendors’ pricing process are deemed to be market observable. While Barings is not provided access to proprietary models of the vendors, the reviews have included on-site walkthroughs of the pricing process, methodologies and control procedures for each asset class and level for which prices are provided. The review also includes an examination of the underlying inputs and assumptions for a sample of individual securities across asset classes, credit rating levels and various durations, a process Barings continues to perform annually. In addition, the pricing vendors have an established challenge process in place for all security valuations, which facilitates identification and resolution of prices that fall outside expected ranges. Barings believes that the prices received from the pricing vendors are representative of prices that would be received to sell the assets at the measurement date (i.e. exit prices).
TheOur money market fund investments are generally valued using Level 1 inputs and our equity investments listed on an exchange or on the NASDAQ National Market System are valued using Level 1 inputs, using the last quoted sale price of that day. Our syndicated senior secured loans and structured product investments are generally valued using Level 2 inputs, which are generally valued at the bid quotation obtained from dealers in loans by an independent pricing service. Our middle-market, private debt and equity investments are generally valued using Level 3 inputs.
Independent Valuation Firms
For the year ended December 31, 2019, we engaged an independent valuation firm to provide third-party valuation consulting services to usat the end of each fiscal quarter, which consistconsisted of certain limited procedures that we identified and requested the Valuation Firmsvaluation firm to perform which we refer(hereinafter referred to herein as the Procedures."Procedures"). The Procedures aregenerally consisted of a review of the quarterly fair values of our middle-market investments, and were generally performed with respect to each portfolio companyinvestment every quarter beginning in the quarter after the investment was made.
Beginning with the first quarter of 2020, we revised our valuation process to require that the Procedures generally be performed with respect to each middle-market investment at least once in every calendar year and for
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new portfolio companies,investments, at least once in the twelve-month period subsequent to the initial investment. In addition, the Procedures arewere generally performed with respect to a portfolio company whenan investment where there has beenwas a significant change in the fair value or performance of the investment.
Beginning with the fourth quarter of 2020, the fair value of loans and equity investments that are not syndicated or for which market quotations are not readily available, including middle-market loans, are generally submitted to independent providers to perform an independent valuation on those loans and equity investments as of the end of each quarter. In certain instances, we may determine that it is not cost-

effective,cost-effective, and as a result is not in our stockholders’the stockholders' best interest,interests, to request the Valuation Firmsan independent valuation firm to perform the Proceduresan independent valuation on one or more portfolio companies.certain investments. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio. Upon completion ofPursuant to these procedures, the Procedures, the Valuation Firms reach a conclusion as toBoard determines in good faith whether with respect to each investment reviewed by each Valuation Firm, theour investments were valued at fair value in accordance with our valuation policies and procedures and the 1940 Act based on, among other things, the input of those investments subjected toBarings, our Audit Committee and the Procedures appear reasonable. Our Board of Directors is ultimately responsible for determining the fair value of our investments in good faith. independent valuation firm.
For a further discussion of the Valuation Firms’our valuation procedures, see the section entitled “Critical Accounting Policies and Use of Estimates — Investment Valuation” included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of Part II of this Annual Report.Report on Form 10-K.
Investment Valuation InputsTechniques
Under ASC Topic 820, fair value isOur valuation techniques are based upon both observable and unobservable pricing inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For our portfolio securities, fair value is generally the amount that we might reasonably expect to receive upon the current saleCompany's market assumptions. Our assessment of the security. Under ASC Topic 820,significance of a particular input to the fair value measurement assumes thatin its entirety requires judgment and considers factors specific to the sale occursfinancial instrument. An independent pricing service provider is the preferred source of pricing a loan, however, to the extent the independent pricing service provider price is unavailable or not relevant and reliable, we will utilize alternative approaches such as broker quotes or manual prices. We attempt to maximize the use of observable inputs and minimize the use of unobservable inputs. The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including the type of security, whether the security is new and not yet established in the principal market formarketplace, the security, or in the absenceliquidity of a principal market, in the most advantageous market for the security. Under ASC Topic 820, if no market for the security exists or if we do not have accessmarkets and other characteristics particular to the principal market, the security should be valued based on the sale occurringsecurity.
Valuation of Investments in a hypothetical market. The securities in which we investJocassee, Thompson Rivers, Waccamaw River and MVC Private Equity Fund LP
As Jocassee, Thompson Rivers, Waccamaw River and MVC Private Equity Fund LP are generally only purchased and sold in merger and acquisition transactions, in which case the entire portfolio company is sold to a third-party purchaser. As a result, unless we have the ability to control such a transaction, the assumed principal market for our securities is a hypothetical secondary market. The Level 3 inputs to our valuation process reflect management’s best estimate of the assumptions that would be used by market participants in pricing the investment in a transaction in a hypothetical secondary market.
Enterprise Value Waterfall Approach
In valuing equity securities (including warrants), we estimatecompanies with no readily determinable fair value using an “Enterprise Value Waterfall” valuation model. We estimate the enterprise value of a portfolio company and then allocate the enterprise value to the portfolio company’s securities in order of their relative liquidation preference. In addition, the model assumes that any outstanding debt or other securities that are senior to our equity securities are required to be repaid at par. Additionally,values, we estimate the fair value of a limited number of our debt securitiesinvestments in these entities using the Enterprise Value Waterfall approach in cases where we do not expect to receive full repayment.
To estimate the enterprisenet asset value of the portfolioeach company we primarily useand our ownership percentage as a valuation model based on a transaction multiple, which generallypractical expedient. The net asset value is the original transaction multiple, and measures of the portfolio company’s financial performance, which generally is either EBITDA, as adjusted ("Adjusted EBITDA"), or revenues. In addition, we consider other factors, including but not limited to (i) offers from third parties to purchase the portfolio company, (ii) the implied value of recent investmentsdetermined in the equity securities of the portfolio company, (iii) publicly available information regarding recent sales of private companies in comparable transactions and (iv) when management believes there are comparable companies that are publicly traded, we perform a review of these publicly traded companies and the market multiple of their equity securities. For certain non-performing assets, we may utilize the liquidation or collateral value of the portfolio company's assets in our estimation of enterprise value.
The significant Level 3 inputs to the Enterprise Value Waterfall model are (i) an appropriate transaction multiple and (ii) a measure of the portfolio company’s financial performance, which is generally either Adjusted EBITDA or revenues. Such inputs can be based on historical operating results, projections of future operating results, or a combination thereof. The operating results of a portfolio company may be unaudited, projected or pro forma financial information and may require adjustments for certain non-recurring items. In determining the operating results input, we utilize the most recent portfolio company financial statements and forecasts available as of the valuation date. Management also consultsaccordance with the portfolio company’s senior management to obtain updates on the portfolio company’s performance, including information such as industry trends, new product development, loss of customers and other operational issues. Additionally, we consider some or all of the following factors:
financial standing of the issuer of the security;
comparison of the business and financial plan of the issuer with actual results;

the size of the security held;
pending reorganization activity affecting the issuer, such as merger or debt restructuring;
ability of the issuer to obtain needed financing;
changes in the economy affecting the issuer;
financial statements and reports from portfolio company senior management and ownership;
the type of security, the security’s cost at the date of purchase and any contractual restrictions on the disposition of the security;
information as to any transactions or offers with respect to the security and/or sales to third parties of similar securities;
the issuer’s ability to make payments and the type of collateral;
the current and forecasted earnings of the issuer;
statistical ratios compared to lending standards and to other similar securities; 
pending public offering of common stock by the issuer of the security;
special reports prepared by analysts; and
any other factors we deem pertinent with respect to a particular investment.
Fair value measurements using the Enterprise Value Waterfall model can be sensitive to changes in one or more of the inputs. Assuming all other inputs to the Enterprise Value Waterfall model remain constant, any increase (decrease) in either the transaction multiple, Adjusted EBITDA or revenuesspecialized accounting guidance for a particular equity security would result in a higher (lower) fair value for that security.
Income Approach
In valuing debt securities, we utilize an “Income Approach” model that considers factors including, but not limited to, (i) the stated yield on the debt security, (ii) the portfolio company’s current Adjusted EBITDA as compared to the portfolio company’s historical or projected Adjusted EBITDA as of the date the investment was made and the portfolio company’s anticipated Adjusted EBITDA for the next twelve months of operations, (iii) the portfolio company’s current Leverage Ratio (defined as the portfolio company’s total indebtedness divided by Adjusted EBITDA) as compared to its Leverage Ratio as of the date the investment was made, (iv) publicly available information regarding current pricing and credit metrics for similar proposed and executed investment transactions of private companies and (v) when management believes a relevant comparison exists, current pricing and credit metrics for similar proposed and executed investment transactions of publicly traded debt. In addition, we use a risk rating system to estimate the probability of default on the debt securities and the probability of loss if there is a default. This risk rating system covers both qualitative and quantitative aspects of the business and the securities held.companies.
We consider the factors above, particularly any significant changes in the portfolio company’s results of operations and leverage, and develop an expectation of the yield that a hypothetical market participant would require when purchasing the debt investment, which we refer to herein as the Required Rate of Return. The Required Rate of Return, along with the Leverage Ratio and Adjusted EBITDA are the significant Level 3 inputs to the Income Approach model. For investments where the Leverage Ratio and Adjusted EBITDA have not fluctuated significantly from the date the investment was made or have not fluctuated significantly from management’s expectations as of the date the investment was made, and where there have been no significant fluctuations in the market pricing for such investments, we may conclude that the Required Rate of Return is equal to the stated rate on the investment and therefore, the debt security is appropriately priced. In instances where we determine that the Required Rate of Return is different from the stated rate on the investment, we discount the contractual cash flows on the debt instrument using the Required Rate of Return in order to estimate the fair value of the debt security.
Fair value measurements using the Income Approach model can be sensitive to changes in one or more of the inputs. Assuming all other inputs to the Income Approach model remain constant, any increase (decrease) in the Required Rate of Return or Leverage Ratio inputs for a particular debt security would result in a lower (higher) fair value for that security. Assuming all other inputs to the Income Approach model remain constant, any increase

(decrease) in the Adjusted EBITDA input for a particular debt security would result in a higher (lower) fair value for that security.
The fair value of our royalty rights are calculated based on specific provisions contained in the pertinent operating or royalty agreements. The determination of the fair value of such royalty rights is not a significant component of our valuation process.
Determination of the fair value involves subjective judgments and estimates not susceptible to substantiation by auditing procedures. Accordingly, under current auditing standards, the notes to our financial statements will refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our financial statements. In addition, the SBA has established certain valuation guidelines for SBICs to follow when valuing portfolio investments.
Quarterly Net Asset Value Determination
We determine the net asset value per share of our common stock on at least a quarterly basis, and more frequently if we are required to do so pursuant to an equity offering or pursuant to federal laws and regulations.basis. The net asset value per share is equal to the value of our total assets minus total liabilities and any preferred stock outstanding divided by the total number of shares of common stock outstanding.
Managerial Assistance
As a BDC, we offer, and must provide upon request, managerial assistance to certain of our portfolio companies. This assistance typically involves, among other things, monitoring the operations of our portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. Our senior management team provides such services. We believe, based on our management team’s combined experience at investment banks, commercial banks, and operating in executive-level capacities in various operating companies, we offer this assistance effectively. We generally receive fees for these services.
Exit Strategies/Refinancing
While we generally exit most investments through the refinancing or repayment of our debt, and redemption of our equity securities, we typically assist our portfolio companies in developing and planning exit opportunities, including any sale or merger of our portfolio companies. We may also assist in the structure, timing, execution and transition of these exit strategies.
Competition
We compete for investments with a number of investment funds (includingincluding public funds, private equity funds, mezzanine funds and other SBICs) and BDCs, as well as traditional financial services companies such as commercial banks and other sources of financing. ManySome of these entities have greater financial and managerial resources than we do. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider
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more investments and establish more relationships than we do. Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC.
We use the expertise of the investment professionals of Barings to assess investment risks and determine appropriate pricing for our investments in portfolio companies. We believe the relationship we have with Barings enables us to learn about, and compete for financing opportunities with these entities primarily on the basiscompanies in middle-market businesses that operate across a wide range of our willingness to make smaller investments, the experience and contacts of our management team, our responsive and efficient investment analysis and decision-making processes, our comprehensive suite of customized financing solutions and the investment terms we offer.
We believe that some of our competitors make senior secured loans, junior secured loans and subordinated debt investments with interest rates that are comparable to or lower than the rates we offer. Therefore, we do not seek to compete primarily on the interest rates we offer to potential portfolio companies.
industries. For additional information concerning the competitive risks we face, see “Risk"Risk Factors — Risks Relating to Our Business and Structure — We operate in a highly competitive market for investment opportunities”opportunities, which could reduce returns and result in losses" included in Item 1A of Part I of this Annual Report.

Report on Form 10-K.
Brokerage Allocation and Other Practices
We did not pay any brokerage commissions during the three years ended December 31, 20172021 in connection with the acquisition and/or disposal of our investments. We generally acquire and dispose of our investments in privately negotiated transactions; therefore, we infrequently use brokers in the normal course of our business. Our management teamBarings is primarily responsible for the execution of any publicly traded securities portion of our portfolio transactions and the allocation of brokerage commissions. We do not expect to execute transactions through any particular broker or dealer, but will seek to obtain the best net results for us, taking into account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operational facilities of the firm and the firm’s risk and skill in positioning blocks of securities. While we will generally seek reasonably competitive trade execution costs, we will not necessarily pay the lowest spread or commission available. Subject to applicable legal requirements, if we use a broker, we may select a broker based partly upon brokerage or research services provided to us. In return for such services, we may pay a higher commission than other brokers would charge if we determine in good faith that such commission is reasonable in relation to the services provided.
Dividend Reinvestment Plan
We have adopted a dividend reinvestment plan that provides for reinvestment of our distributions on behalf of our common stockholders, unless a common stockholder elects to receive cash as provided below. As a result, if ourthe Board of Directors authorizes, and we declare, a cash dividend, then our common stockholders who have not “opted out” of our dividend reinvestment plan will have their cash dividends automatically reinvested in additional shares of our common stock, rather than receiving the cash dividends.
No action will be required on the part of a registered common stockholder to have his or her cash dividend reinvested in shares of our common stock. A registered common stockholder may elect to receive an entire dividend in cash by notifying Computershare, Inc., the “Plan Administrator” and our transfer agent and registrar, in writing so that such notice is received by the Plan Administrator no later than three days prior to the recordpayment date fixed by the Board for dividends to common stockholders.the dividend. The Plan Administrator will set up an account for shares acquired through the plan for each common stockholder who has not elected to receive dividends in cash and hold such shares in non-certificated form. Upon request by a common stockholder participating in the plan, received in writing not less than 10three days prior to the recordpayment date, the Plan Administrator will, instead of crediting shares to the participant’s account, issue a certificate registered in the participant’s name for the number of whole shares of our common stock and a check for any fractional share. Those common stockholders whose shares are held by a broker or other financial intermediary may receive dividends in cash by notifying their broker or other financial intermediary of their election.
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We intend to use primarily newly issued shares to implement the plan, so long as our shares are trading at or above net asset value. If our shares are trading below net asset value, we intend to purchase shares in the open market in connection with our implementation of the plan. If we use newly issued shares to implement the plan, the number of shares to be issued to a common stockholder is determined by dividing the total dollar amount of the dividend payable to such common stockholder by the market price per share of our common stock at the close of regular trading on the New York Stock Exchange, or the NYSE on the dividend payment date. Market price per share on that date will be the closing price for such shares on the NYSE or, if no sale is reported for such day, at the average of their reported bid and asked prices. If we purchase shares in the open market to implement the plan, the number of shares to be issued toreceived by a common stockholder is determined by dividing the total dollar amount of the dividend payable to such common stockholder by the average price per share for all shares purchased by the Plan Administrator in the open market in connection with the dividend. The number of shares of our common stock to be outstanding after giving effect to payment of the dividend cannot be established until the value per share at which additional shares will be issued has been determined and elections of our common stockholders have been tabulated.
There will be no brokerage charges or other charges to common stockholders who participate in the plan. However, certain brokerage firms may charge brokerage charges or other charges to their customers. We will pay the Plan Administrator’s fees under the plan. If a participant elects by written notice to the Plan Administrator to have the Plan Administrator sell part or all of the shares held by the Plan Administrator in the participant’s account and

remit the proceeds to the participant, the Plan Administrator is authorized to deduct a $15.00 transaction fee plus a $0.10 per share brokerage commission from the proceeds.
Common stockholders who receive dividends in the form of stock generally are subject to the same federal, state and local tax consequences as are common stockholders who elect to receive their dividends in cash. A common stockholder’s basis for determining gain or loss upon the sale of stock received in a dividend from us will be equal to the total dollar amount of the dividend payable to the common stockholder. Any stock received in a dividend will have a holding period for tax purposes commencing on the day following the day on which the shares are credited to the U.S. common stockholder’s account. Stock received in a dividend may generate a wash sale if such shareholder sold out stock at a realized loss within 30 days either before or after such dividend.
Participants may terminate their accounts under the plan by notifying the Plan Administrator via its website at www.computershare.com/investor, by filling out the transaction request form located at the bottom of their statement and sending it to the Plan Administrator at Computershare, Inc., P.O. Box 505000, Louisville, Kentucky 40233 or by calling the Plan Administrator at (866) 228-7201.
We may terminate the plan upon notice in writing mailed to each participant at least 30 days prior to any record date for the payment of any dividend by us. All correspondence concerning the plan should be directed to the Plan Administrator by mail at Computershare, Inc., P.O.BoxP.O. Box 505000, Louisville, Kentucky 40233.
Employees
AsWe do not currently have any employees and do not expect to have any employees. The services necessary for our business are provided by individuals who are employees of Barings, pursuant to the terms of the Amended and Restated Advisory Agreement and our Administration Agreement. Each of our executive officers is an employee of Barings and our day-to-day investment activities are managed by Barings.
Management Agreements
On August 2, 2018, we entered into the Original Advisory Agreement and the Administration Agreement with Barings, an investment adviser registered under the Advisers Act. Our then-current board of directors unanimously approved the Original Advisory Agreement at an in-person meeting on March 22, 2018. Our stockholders approved the Original Advisory Agreement at the 2018 Special Meeting. In connection with the MVC Acquisition, we entered into the Amended and Restated Advisory Agreement on December 23, 2020, following approval of the Amended and Restated Advisory Agreement by our stockholders at our December 23, 2020 special meeting of stockholders. The Amended and Restated Advisory Agreement was approved on September 9, 2020 by the then-current Board, including a majority of the directors on the Board who are not “interested persons,” as defined in Section 2(a)(19) of
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the 1940 Act, of the Company or Barings. The terms of the Amended and Restated Advisory Agreement became effective on January 1, 2021.
Investment Advisory Agreement
Pursuant to the Amended and Restated Advisory Agreement, Barings manages our day-to-day operations and provides us with investment advisory services. Among other things, Barings (i) determines the composition of our portfolio, the nature and timing of the changes therein and the manner of implementing such changes; (ii) identifies, evaluates and negotiates the structure of our investments; (iii) executes, closes, services and monitors the investments that we make; (iv) determines the securities and other assets that we will purchase, retain or sell; (v) performs due diligence on prospective portfolio companies and (vi) provides us with such other investment advisory, research and related services we may, from time to time, reasonably require for the investment of its funds.
The Amended and Restated Advisory Agreement provides that, absent fraud, willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, Barings, and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with Barings (collectively, the "IA Indemnified Parties"), are entitled to indemnification from us for any damages, liabilities, costs, demands, charges, claims and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by the IA Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of us or our security holders) arising out of any actions or omissions or otherwise based upon the performance of any of Barings' duties or obligations under the Amended and Restated Advisory Agreement or otherwise as our investment adviser. Barings' services under the Amended and Restated Advisory Agreement are not exclusive, and Barings is generally free to furnish similar services to other entities so long as its performance under the Amended and Restated Advisory Agreement is not adversely affected.
Barings has entered into a personnel-sharing arrangement with its affiliate, Baring International Investment Limited ("BIIL"). BIIL is a wholly-owned subsidiary of Baring Asset Management Limited, which in turn is an indirect, wholly-owned subsidiary of Barings. Pursuant to this arrangement, certain employees of BIIL may serve as "associated persons" of Barings and, in this capacity, subject to the oversight and supervision of Barings, may provide research and related services, and discretionary investment management and trading services (including acting as portfolio managers) to us on behalf of Barings. This arrangement is based on no-action letters of the staff of the SEC that permit SEC-registered investment advisers to rely on and use the resources of advisory affiliates or "participating affiliates," subject to the supervision of that SEC-registered investment adviser. BIIL is a "participating affiliate" of Barings, and the BIIL employees are "associated persons" of Barings.
Under the Amended and Restated Advisory Agreement, we pay Barings (i) a base management fee (the "Base Management Fee") and (ii) an incentive fee (the "Incentive Fee") as compensation for the investment advisory and management services it provides us thereunder.
Pre-January 1, 2021 Base Management Fee
For the period from January 1, 2020 through December 31, 2017,2020, the Base Management Fee was calculated based on our gross assets, including the MVC Credit Support Agreement, assets purchased with borrowed funds or other forms of leverage and excluding cash and cash equivalents, at an annual rate of 1.375%. The annual rate of the Base Management Fee was 1.125% for the period commencing on January 1, 2019 through December 31, 2019.
The Base Management Fee was payable quarterly in arrears on a calendar quarter basis. The Base Management Fee was calculated based on the average value of our gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters prior to the quarter for which such fees are being calculated. Base Management Fees for any partial month or quarter were appropriately pro-rated.
Post-December 31, 2020 Base Management Fee
Beginning January 1, 2021, the Base Management Fee is calculated based on our gross assets, including the MVC Credit Support Agreement, assets purchased with borrowed funds or other forms of leverage and excluding cash and cash equivalents, at an annual rate of 1.25%. The Base Management Fee is payable quarterly in arrears on a
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calendar quarter basis, and is calculated based on the average value of our gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters prior to the quarter for which such fees are being calculated. Base Management Fees for any partial month or quarter will be appropriately pro-rated.
Pre-January 1, 2021 Incentive Fee
For the period from August 2, 2018 through December 31, 2020, under the Original Advisory Agreement, the Incentive Fee was comprised of two parts: (1) a portion based on our pre-incentive fee net investment income (the "Pre-2021 Income-Based Fee") and (2) a portion based on the net capital gains received on our portfolio of securities on a cumulative basis for each calendar year, net of all realized capital losses and all unrealized capital depreciation for that same calendar year (the "Pre-2021 Capital Gains Fee").
The Pre-2021 Income-Based Fee was calculated as follows:
(i)For each quarter from and after August 2, 2018 through December 31, 2019 (the "Pre-2020 Period"), the Pre-2021 Income-Based Fee was calculated and payable quarterly in arrears based on the Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter for which such fees were being calculated. In respect of the Pre-2020 Period, "Pre-Incentive Fee Net Investment Income" meant interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial assistance and consulting fees or other fees that we employed twenty-seven individuals, including investmentreceive from portfolio companies) accrued during the relevant calendar quarter, minus our operating expenses for such quarter (including the Base Management Fee, expenses payable under the Administration Agreement, any interest expense and portfolio management professionals, operations professionalsany dividends paid on any issued and administrative staff. We may expand our management team and administrative staffoutstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee Net Investment Income included, in the futurecase of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income not yet received in proportioncash. Pre-Incentive Fee Net Investment Income did not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
(ii)For each quarter beginning on and after January 1, 2020 (the "Post-2019 Period"), the Pre-2021 Income-Based Fee was calculated and payable quarterly in arrears based on the Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter and the eleven preceding calendar quarters (or such fewer number of preceding calendar quarters counting each calendar quarter beginning on or after January 1, 2020) (each such period referred to as the "Pre-2021 Trailing Twelve Quarters") for which such fees were being calculated and was payable promptly following the filing of the Company’s financial statements for such quarter. In respect of the Post-2019 Period, "Pre-Incentive Fee Net Investment Income" meant interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial assistance and consulting fees or other fees that we receive from portfolio companies) accrued during the relevant Pre-2021 Trailing Twelve Quarters, minus our operating expenses for such Pre-2021 Trailing Twelve Quarters (including the Base Management Fee, expenses payable under the Administration Agreement, any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee) divided by the number of quarters that comprise the relevant Pre-2021 Trailing Twelve Quarters. Pre-Incentive Fee Net Investment Income included, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income not yet received in cash. Pre-Incentive Fee Net Investment Income did not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
(iii)Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of our net assets (defined as total assets less senior securities constituting indebtedness and preferred stock) at the end of the calendar quarter for which such fees were being calculated, was compared to a "hurdle rate", expressed as a rate of return on the value of our net assets at the end of the most recently completed calendar quarter, of 2% per quarter (8% annualized). We paid Barings the Pre-2021 Income-Based Fee with respect to our growth.Pre-Incentive Fee Net Investment Income in each calendar quarter as follows:
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(1)(a) With respect to the Pre-2020 Period, no Pre-2021 Income-Based Fee for any calendar quarter in which our Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) did not exceed the hurdle rate;
(b) With respect to the Post-2019 Period, no Pre-2021 Income-Based Fee for any calendar quarter in which our Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) did not exceed the hurdle rate;
(2)(a) With respect to the Pre-2020 Period, 100% of our Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) for any calendar quarter with respect to that portion of the Pre-Incentive Fee Net Investment Income for such quarter, if any, that exceeded the hurdle rate but was less than 2.5% (10% annualized) (the "Pre-2020 Catch-Up Amount"). The Pre-2020 Catch-Up Amount was intended to provide Barings with an incentive fee of 20% on all of our Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) when our Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) reached 2% per quarter (8% annualized);
(b) With respect to the Post-2019 Period, 100% of our Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) with respect to that portion of the Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above), if any, that exceeded the hurdle rate but was less than 2.5% (10% annualized) (the "Post-2019 Catch-Up Amount"). The Post-2019 Catch-Up Amount was intended to provide Barings with an incentive fee of 20% on all of our Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) when our Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) reached 2% per quarter (8% annualized);
(3)(a) With respect to the Pre-2020 Period, 20% of the amount of our Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) for any calendar quarter with respect to that portion of the Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) for such quarter, if any, that exceeded the Pre-2020 Catch-Up Amount; and
(b) With respect to the Post-2019 Period, 20% of the amount of our Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) for any calendar quarter with respect to that portion of the Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above), if any, that exceeded the Post-2019 Catch-Up Amount.
However, with respect to the Post-2019 Period, the Pre-2021 Income-Based Fee paid to Barings would in no event be in excess of the Pre-2021 Incentive Fee Cap. With respect to the Post-2019 Period, the "Pre-2021 Incentive Fee Cap" for any quarter was an amount equal to (a) 20% of the Cumulative Net Return (as defined below) during the relevant Pre-2021 Trailing Twelve Quarters minus (b) the aggregate Pre-2021 Income-Based Fee that was paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Pre-2021 Trailing Twelve Quarters.
Cumulative Net Return meant (x) the aggregate net investment income in respect of the relevant Pre-2021 Trailing Twelve Quarters minus (y) any Net Capital Loss (as defined below), if any, in respect of the relevant Pre-2021 Trailing Twelve Quarters. If, in any quarter, the Pre-2021 Incentive Fee Cap was zero or a negative value, we paid no Pre-2021 Income-Based Fee to Barings for such quarter. If, in any quarter, the Pre-2021 Incentive Fee Cap for such quarter was a positive value but was less than the Pre-2021 Income-Based Fee that was payable to Barings for such quarter (before giving effect to the Pre-2021 Incentive Fee Cap) calculated as described above, we paid a Pre-2021 Income-Based Fee to Barings equal to the Pre-2021 Incentive Fee Cap for such quarter. If, in any quarter, the Pre-2021 Incentive Fee Cap for such quarter was equal to or greater than the Pre-2021Income-Based Fee that was payable to Barings for such quarter (before giving effect to the Pre-2021 Incentive Fee Cap) calculated as described above, we paid a Pre-2021 Income-Based Fee to Barings equal to the Pre-2021 Income-Based Fee calculated as described above for such quarter without regard to the Pre-2021 Incentive Fee Cap.
Net Capital Loss in respect of a particular period meant the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in such period and (ii) aggregate capital gains, whether realized or unrealized, in such period.
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The Pre-2021 Capital Gains Fee was determined and payable in arrears as of the end of each calendar year, commencing with the calendar year ended on December 31, 2018, and was calculated at the end of each applicable year by subtracting (1) the sum of our cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (2) our cumulative aggregate realized capital gains, in each case calculated from August 2, 2018. If such amount was positive at the end of such year, then the Pre-2021 Capital Gains Fee payable for such year was equal to 20% of such amount, less the cumulative aggregate amount of Pre-2021 Capital Gains Fees paid in all prior years. If such amount was negative, then there was no Pre-2021 Capital Gains Fee payable for such year.
Post-December 31, 2020 Incentive Fee
Beginning January 1, 2021, the Incentive Fee continues to consist of two components that are independent of each other, with the result that one component may be payable even if the other is not. Under the Amended and Restated Advisory Agreement, a portion of the Incentive Fee is based on our income (the “ Income-Based Fee”) and a portion is based on our capital gains (the “Capital Gains Fee ”), each as described below:
(i) The Income-Based Fee will be determined and paid quarterly in arrears based on the amount by which (x) the aggregate “Pre-Incentive Fee Net Investment Income” (as defined below) in respect of the current calendar quarter and the eleven preceding calendar quarters beginning with the calendar quarter that commences on or after January 1, 2021, as the case may be (or the appropriate portion thereof in the case of any of our first eleven calendar quarters that commences on or after January 1, 2021) (in either case, the “Trailing Twelve Quarters”) exceeds (y) the Hurdle Amount (as defined below) in respect of the Trailing Twelve Quarters. The Hurdle Amount will be determined on a quarterly basis, and will be calculated by multiplying 2.0% (8% annualized) by the aggregate of our net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. For this purpose, under the Amended and Restated Advisory Agreement, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including, without limitation, any accrued income that we have not yet received in cash and any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies) accrued during the calendar quarter, minus our operating expenses accrued during the calendar quarter (including, without limitation, the Base Management Fee, administration expenses and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the Income-Based Fee and the Capital Gains Fee). For the avoidance of doubt, Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
The calculation of the Income-Based Fee for each quarter is as follows:
(A) No Income-Based Fee will be payable to Barings in any calendar quarter in which our aggregate Pre-Incentive Fee Net Investment Income for the Trailing Twelve Quarters does not exceed the Hurdle Amount;
(B) 100% of our aggregate Pre-Incentive Fee Net Investment Income for the Trailing Twelve Quarters, if any, that exceeds the Hurdle Amount but is less than or equal to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.5% (10% annualized) by our net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide Barings with an incentive fee of 20% on all of our Pre-Incentive Fee Net Investment Income when our Pre-Incentive Fee Net Investment Income reaches the Catch-Up Amount for the Trailing Twelve Quarters; and
(C) For any quarter in which our aggregate Pre-Incentive Fee Net Investment Income for the Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income-Based Fee shall equal 20% of the amount of our Pre-Incentive Fee Net Investment Income for such Trailing Twelve Quarters, as the Hurdle Amount and Catch-Up Amount will have been achieved.
Subject to the Incentive Fee Cap described below, the amount of the Income-Based Fee that will be paid to Barings for a particular quarter will equal the excess of the aggregate Income-Based Fee so calculated less the
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aggregate Income-Based Fees that were paid to Barings in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(ii) The Income-Based Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is an amount equal to (a) 20% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less (b) the aggregate Income-Based Fee that were paid to Barings in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, we will pay no Income-Based Fee to Barings in that quarter. If, in any quarter, the Incentive Fee Cap is a positive value but is less than the Income-Based Fee calculated in accordance with paragraph (i) above, we will pay Barings the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap is equal to or greater than the Income-Based Fee calculated in accordance with paragraph (i) above, we will pay Barings the Income-Based Fee for such quarter.
“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses on our assets, whether realized or unrealized, in such period and (ii) aggregate capital gains or other gains on our assets (including, for the avoidance of doubt, the value ascribed to any credit support arrangement in our financial statements even if such value is not categorized as a gain therein), whether realized or unrealized, in such period.
(iii) The second part of the Incentive Fee (the “Capital Gains Fee”) will be determined and payable in arrears as of the end of each calendar year (or upon termination of the Amended and Restated Advisory Agreement), commencing with the calendar year ended on December 31, 2018, and is calculated at the end of each applicable year by subtracting (1) the sum of our cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (2) our cumulative aggregate realized capital gains, in each case calculated from August 2, 2018. If such amount is positive at the end of such year, then the Capital Gains Fee payable for such year is equal to 20% of such amount, less the cumulative aggregate amount of Capital Gains Fees paid in all prior years commencing with the calendar year ended on December 31, 2018. If such amount is negative, then there is no Capital Gains Fee payable for such year. If this Agreement is terminated as of a date that is not a calendar year end, the termination date will be treated as though it were a calendar year end for purposes of calculating and paying a Capital Gains Fee.
Under the Amended and Restated Advisory Agreement, the "cumulative aggregate realized capital gains" are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in our portfolio when sold and (b) the accreted or amortized cost basis of such investment.
The "cumulative aggregate realized capital losses" are calculated as the sum of the differences, if negative, between (a) the net sales price of each investment in our portfolio when sold and (b) the accreted or amortized cost basis of such investment.
The "aggregate unrealized capital depreciation" is calculated as the sum of the differences, if negative, between (a) the valuation of each investment in our portfolio as of the applicable Capital Gains Fee calculation date and (b) the accreted or amortized cost basis of such investment.
Under the Amended and Restated Advisory Agreement, the “accreted or amortized cost basis of an investment” shall mean the accreted or amortized cost basis of such investment as reflected in our financial statements.
Payment of Company Expenses
Under the Amended and Restated Advisory Agreement, all investment professionals of Barings and its staff, when and to the extent engaged in providing services required to be provided by Barings under the Amended and Restated Advisory Agreement, and the compensation and routine overhead expenses of such personnel allocable to
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such services, are provided and paid for by Barings and not by us, except that all costs and expenses relating to our operations and transactions, including, without limitation, those items listed in the Amended and Restated Advisory Agreement, will be borne by us.
Duration and Termination of Amended and Restated Advisory Agreement
The Amended and Restated Advisory Agreement has an initial term of two years, or until December 23, 2022. Thereafter, it will continue automatically for successive annual periods, so long as such continuance is specifically approved at least annually by (A) the vote of the Board, or by the vote of a majority of our outstanding voting securities and (B) the vote of a majority of our independent directors in accordance with the requirements of the 1940 Act. The Amended and Restated Advisory Agreement will automatically terminate in the event of its “assignment,” as such term is defined under the 1940 Act, and may be terminated at any time, without the payment of any penalty, upon 60 days’ written notice, (i) by the vote of a majority of our outstanding voting securities, (ii) by the vote of the Board, or (iii) by Barings.
Administration Agreement
Under the terms of the Administration Agreement, Barings performs (or oversees, or arranges for, the performance of) the administrative services necessary for our operation, including, but not limited to, office facilities, equipment, clerical, bookkeeping and record-keeping services at such office facilities and such other services as Barings, subject to review by the Board, from time to time, determines to be necessary or useful to perform its obligations under the Administration Agreement. Barings also, on our behalf and subject to oversight by the Board, arranges for the services of, and oversees, custodians, depositories, transfer agents, dividend disbursing agents, other stockholder servicing agents, accountants, attorneys, valuation experts, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable.
We will reimburse Barings for the costs and expenses incurred by it in performing its obligations and providing personnel and facilities under the Administration Agreement in an amount to be negotiated and mutually agreed to by us and Barings quarterly in arrears. In no event will the agreed-upon quarterly expense amount exceed the amount of expenses that would otherwise be reimbursable by us under the Administration Agreement for the applicable quarterly period, and Barings will not be entitled to the recoupment of any amounts in excess of the agreed-upon quarterly expense amount. The costs and expenses incurred by Barings on our behalf under the Administration Agreement include, but are not limited to:
•the allocable portion of Barings' rent for our Chief Financial Officer and Chief Compliance Officer and their respective staffs, which is based upon the allocable portion of the usage thereof by such personnel in connection with their performance of administrative services under the Administration Agreement;
•the allocable portion of the salaries, bonuses, benefits and expenses of our Chief Financial Officer and Chief Compliance Officer and their respective staffs, which is based upon the allocable portion of the time spent by such personnel in connection with performing administrative services for us under the Administration Agreement;
•the actual cost of goods and services used for us and obtained by Barings from entities not affiliated with us, which is reasonably allocated to us on the basis of assets, revenues, time records or other methods conforming with generally accepted accounting principles;
•all fees, costs and expenses associated with the engagement of a sub-administrator, if any; and
•costs associated with (a) the monitoring and preparation of regulatory reporting, including registration statements and amendments thereto, prospectus supplements, and tax reporting, (b) the coordination and oversight of service provider activities and the direct cost of such contractual matters related thereto and (c) the preparation of all financial statements and the coordination and oversight of audits, regulatory inquiries, certifications and sub-certifications.
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The Administration Agreement will continue automatically for successive annual periods so long as such continuance is specifically approved at least annually by the Board, including a majority of the independent directors. The Administration Agreement may be terminated at any time, without the payment of any penalty, by vote of the Board, or by Barings, upon 60 days’ written notice to the other party. The Administration Agreement may not be assigned by a party without the consent of the other party.
Election to be Regulated as a Business Development Company and Regulated Investment Company
Both we and Triangle SBIC individuallyWe are a closed-end, non-diversified management investment companiescompany that havehas elected to be treated as BDCsa BDC under the 1940 Act. In addition, we have elected to be treated as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).Code. Our election to be regulated as a BDC and our election to be treated as a RIC for U.S. federal income tax purposes have a significant impact on our operations. Some of the most important effects on our operations of our election to be regulated as a BDC and our election to be treated as a RIC are outlined below.
•We report our investments at market value or fair value with changes in value reported through our consolidated statements of operations.
In accordance with the requirements of Article 6 of Regulation S-X, we report all of our investments, including debt investments, at market value or, for investments that do not have a readily available market value, at their “fair value” as determined in good faith by our Board of Directors.the Board. Changes in these values are reported through our statements of operations under the caption of “net unrealized appreciation (depreciation) of investments.” See “Valuation“—Valuation Process and Determination of Net Asset Value” above.
•We intend to distribute substantially all of our income to our stockholders. We generally will be required to pay income taxes only on the portion of our taxable income we do not distribute, actually or constructively, to stockholders.
As a RIC, so long as we meet certain minimum distribution, source-of-income and asset diversification requirements, we generally are required to pay U.S. federal income taxes only on the portion of our taxable income and gains we do not distribute (actually or constructively) and certain built-in gains. We intend to distribute to our stockholders substantially all of our income. We may, however, make deemed distributions to our stockholders of any retained net long-term capital gains. If this happens, our stockholders will be treated as if they received an actual distribution of the net capital gains and reinvested the net after-tax proceeds in us. Our stockholders also may be eligible to claim a tax credit (or, in certain circumstances, a tax refund) equal to their allocable share of the corporate-level U.S. federal income tax we pay on the deemed distribution. See “Material U.S. Federal Income Tax Considerations.” We met the minimum distribution requirements for 2015, 20162019, 2020 and 20172021 and continually monitor our distribution requirements with the goal of ensuring compliance with the Code.    

In addition, we have certain wholly-owned taxable subsidiaries, or the Taxable Subsidiaries, each of which holdshold a portion of one or more of our portfolio investments that are listed on the Consolidated Schedule of Investments. The Taxable Subsidiaries are consolidated for financial reporting purposes in accordance with U.S. GAAP, so that our consolidated financial statements reflect our investments in the portfolio companies owned by the Taxable Subsidiaries. The purpose of the Taxable Subsidiaries is to permit us to hold certain interests in portfolio companies that are organized as partnerships or limited liability companies, or LLCs (or other forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90.0% of our gross income for U.S. federal income tax purposes must consist of qualifying investment income. Absent the Taxable Subsidiaries, a proportionate amount of any gross income of a partnership or LLC (or other pass-through entity) portfolio investment would flow through directly to us. To the extent that such income did not consist of investment income, it could jeopardize our ability to qualify as a RIC and therefore cause us to incur significant amounts of corporate-level U.S. federal income taxes. Where interests in partnerships or LLCs (or other pass-through entities) are owned by the Taxable Subsidiaries, however, the income from such interests is taxed to the Taxable Subsidiaries and does not flow through to us, thereby helping us preserve our RIC status and resultant tax advantages. The Taxable Subsidiaries are not consolidated for U.S. federal income tax purposes and may generate income tax expense as a result of theirits ownership of the portfolio companies. This income tax expense, if any, is reflected in our Statement of Operations.
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•Our ability to use leverage as a means of financing our portfolio of investments is limited.
As a BDC, and as a result of the stockholder vote to approve the proposal to authorize us to be subject to the reduced asset coverage ratio of at least 150% under the 1940 Act, we are required to meet a coverage ratio of total assets to total senior securities of at least 200.0%150%. For this purpose, senior securities include all borrowings (other than SBA leverage and certain other short-term borrowings) and any preferred stock we may issue in the future. Additionally, our ability to continue to utilize leverage as a means of financing our portfolio of investments may be limited by this asset coverage test. Under current SBA regulations, our SBIC subsidiaries cannot have outstanding more than an aggregate of $350.0 million of debenture leverage guaranteed by the SBA. While use of debenture leverage from the SBA may enhance returns if we meet our investment objective, our returns may be reduced or eliminated if the returns on investments by Triangle SBIC, Triangle SBIC II and Triangle SBIC III are less than the costs of operating them, including the costs of using debenture leverage.
•We are required to comply with the provisions of the 1940 Act applicable to business development companies.
As a BDC, we are required to have a majority of directors who are not “interested” persons“interested persons" under the 1940 Act. In addition, we are required to comply with other applicable provisions of the 1940 Act, including those requiring the adoption of a code of ethics, fidelity bonding and investment custody arrangements. See “Regulation of Business Development Companies” below.
Exemptive Relief
The 1940 Act prohibitsAs a BDC, we are required to comply with certain transactions between us, Triangle SBIC, Triangle SBIC II and Triangle SBIC III, as well as our and their affiliates, without first obtaining an exemptive order from the SEC. We and Triangle SBIC initially filed a joint exemptive application with the SEC in 2007 and then received exemptive relief to our amended exemptive application in 2008. In 2010,regulatory requirements. For example, we jointly filed with Triangle SBIC and Triangle SBIC II another amendment to the exemptive application requesting relief under various sections of the 1940 Act to permit us, as the BDC parent, our current SBIC subsidiaries and, to the extent applicable, any of our future wholly-owned subsidiaries, to operate effectively as one company for 1940 Act regulatory purposes. Specifically, the application requested relief to (a) engage in certain transactions with each other, (b) invest in securities in which the other is an investor and engage in transactions with portfolio companies that would not otherwise be prohibited as one company, (c) be subject to modified consolidated asset coverage requirements for senior securities issued by each of us and (d) where such reporting is required for one of Triangle Capital Corporation's current or future wholly-owned subsidiaries, allow such subsidiary to file reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on a consolidated basis with Triangle Capital Corporation. On October 22, 2010, the SEC issued an exemptive relief order approving our requests.
In addition, under current SEC rules and regulations, BDCs may not grant options or restricted stock to directors whogenerally are not officerspermitted to make loans to companies controlled by Barings or employees of the BDC. Similarly,other funds managed by Barings. We are also not permitted to make any co-investments with Barings or its affiliates (including any fund managed by Barings or an investment adviser controlling, controlled by or under the 1940 Act, BDCs cannot issue stock for

services to their executive officers and employees other than options, warrants and rights to acquire capital stock. In March 2008, we received ancommon control with Barings) without exemptive relief order from the SEC, that (a) permits ussubject to grant restricted stock to our independent directors as a part of their compensation for service on our Board and (b) permits us to grant restricted stock in exchange for or in recognition of services by our executive officers and employees. On March 21, 2013, we received an order fromcertain exceptions. The Exemptive Relief that the SEC grantinghas granted to Barings permits certain present and future funds, including us, exemptive reliefadvised by Barings (or an investment adviser controlling, controlled by or under common control with Barings) to permit an increaseco-invest in suitable negotiated investments. Co-investments made under the Exemptive Relief are subject to compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our annual grant of restricted stockability to our non-employee directors to $50,000 of restricted stock based on the closing stock price of our common stock on the date of grant. Our stockholders approved this amendment at the 2013 Annual Meeting of Stockholders.participate in a co-investment transaction.
Regulation of Business Development Companies
The following is a general summary of the material regulatory provisions affecting BDCs. It does not purport to be a complete description of all of the laws and regulations affecting BDCs.
Both we and Triangle SBIC individuallyWe have elected to be regulated as BDCsa BDC under the 1940 Act. The 1940 Act contains prohibitions and restrictions relating to transactions between BDCs and their affiliates, principal underwriters and affiliates of those affiliates or underwriters. The 1940 Act requires that a majority of the directors on a BDC's board of directors be persons other than “interested persons,” as that term is defined in the 1940 Act. In addition, the 1940 Act provides that we may not change the nature of our business so as to cease to be, or to withdraw our election as, a BDC unless approved by a majority of our outstanding voting securities.
In addition, the 1940 Act defines “a majority of the outstanding voting securities” as the lesser of (i) 67.0% or more of the voting securities present at a meeting if the holders of more than 50.0% of our outstanding voting securities are present or represented by proxy, or (ii) 50.0% of our voting securities.
Qualifying Assets
Under the 1940 Act, a BDC may not acquire any asset other than assets of the type listed in Section 55(a) of the 1940 Act, which are referred to as qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70.0% of the company’s total assets. The principal categories of qualifying assets relevant to our business are any of the following:
(1) Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined in the 1940 Act and rules adopted pursuant thereto as any issuer which:
(a) is organized under the laws of, and has its principal place of business in, the United States;
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(b) is not an investment company (other than an SBIC wholly-owned by the BDC) or a company that would be an investment company but for exclusions under the 1940 Act for certain financial companies such as banks, brokers, commercial finance companies, mortgage companies and insurance companies; and
(c) satisfies any of the following:
(i) does not have any class of securities with respect to which a broker or dealer may extend margin credit;
(ii) is controlled by a BDC or a group of companies including a BDC and the BDC has an affiliated person who is a director of the eligible portfolio company;
(iii) is a small and solvent company having total assets of not more than $4.0 million and capital and surplus of not less than $2.0 million;
(iv) does not have any class of securities listed on a national securities exchange; or
(v) has a class of securities listed on a national securities exchange, but has an aggregate market value of outstanding voting and non-voting common equity of less than $250.0 million.

(2) Securities in companies that were eligible portfolio companies when we made our initial investment if certain other requirements are satisfied.
(3) Securities of any eligible portfolio company that we control.
(4) Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities, was unable to meet its obligations as they came due without material assistance (other than conventional lending or financing arrangements).
(5) Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60.0% of the outstanding equity of the eligible portfolio company.
(6) Securities received in exchange for or distributed on or with respect to securities described in (1) through (5) above, or pursuant to the exercise of warrants or rights relating to such securities.
(7) Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.
In addition, a BDC must have been organized and have its principal place of business in the United States and must be operated for the purpose of making investments in the types of securities described in (1), (2), (3) or (4) above.
Managerial Assistance to Portfolio Companies
In order to count portfolio securities as qualifying assets for the purpose of the 70.0% test, we must either control the issuer of the securities or must offer to make available to the issuer of the securities (other than small and solvent companies described above) significant managerial assistance; except that, where we purchase such securities in conjunction with one or more other persons acting together, one of the other persons in the group may make available such managerial assistance. Making available “significant managerial assistance” means, among other things, any arrangement whereby we, through our directors, officers or employees, offer to provide, and, if accepted, do so provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio company. Barings provides such managerial assistance on our behalf to portfolio companies that request this assistance. We may receive fees for these services.
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Temporary Investments
Pending investment in other types of “qualifying assets,” as described above, our investments may consist of cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment, which we refer to, collectively, as temporary investments, so that 70.0% of our assets are qualifying assets. We may invest in U.S. Treasury bills or in repurchase agreements, provided that such agreements are fully collateralized by cash or securities issued by the U.S. Government or its agencies. A repurchase agreement involves the purchase by an investor, such as us, of a specified security and the simultaneous agreement by the seller to repurchase it at an agreed-upon future date and at a price that is greater than the purchase price by an amount that reflects an agreed-upon interest rate. There is no percentage restriction on the proportion of our assets that may be invested in such repurchase agreements. However, if more than 25.0% of our total assets constitute repurchase agreements from a single counterparty, we would not meet the asset diversification tests required to maintain our tax treatment as a RIC for U.S. federal income tax purposes. Thus, we do not intend to enter into repurchase agreements with a single counterparty in excess of this limit. Our management team will monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.
Senior Securities
WeThe Small Business Credit Availability Act (“SBCAA”), which was signed into law in March 2018, among other things, amended Section 61(a) of the 1940 Act to add a new Section 61(a)(2) that reduces the asset coverage requirement applicable BDCs from 200% to 150% so long as the BDC meets certain disclosure requirements and obtains certain approvals. On July 24, 2018, our stockholders voted at the 2018 Special Meeting to approve a proposal to authorize us to be subject to a reduced asset coverage ratio of at least 150% under the 1940 Act. As a result of the stockholder approval at the 2018 Special Meeting, effective July 25, 2018, our applicable asset coverage ratio under the 1940 Act decreased to 150% from 200%. Thus, we are permitted, under specified conditions, to issue multiple classes of debt and one class of stock senior to our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 200.0%150% immediately after each such issuance. In addition, while any senior securities remain outstanding (other than senior securities representing indebtedness issued in consideration of a privately arranged loan which is not intended to be publicly

distributed), we must make provisions to prohibit any distribution to our stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We may also borrow amounts up to 5.0% of the value of our total assets for temporary or emergency purposes without regard to asset coverage. For a discussion of the risks associated with leverage, see “Risk“Item 1A.— Risk Factors — Risks Relating to Our Business and Structure — Because we intendIncurring additional leverage may magnify our exposure to distribute substantially all of our income to our stockholders to maintain our tax treatment as a regulated investment company, we will continue to need additional capital to finance our growth and regulations governing our operation as a business development company willrisks associated with changes in leverage, including fluctuations in interest rates that could adversely affect our ability to, and the way in which we, raise additional capital and make distributions”profitability” included in Item 1A of Part I of this Annual Report.Report on Form 10-K.
Code of Business Conduct and Ethics and Corporate Governance Guidelines
We and Barings have adopted a code of ethics which we call our “Code(the “Global Code of Business Conduct and Ethics” Policy”) and corporate governance guidelines, which collectively cover ethics and business conduct. These documents apply to our and Barings' directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, and any person performing similar functions, and establish procedures for personal investments and restrict certain personal securities transactions. Personnel subject to the Global Code of Business Conduct and Ethics Policy and corporate governance guidelines may invest in securities for their personal investment accounts, including securities that may be purchased or held by us, so long as such investments are made in accordance with certainthe code's requirements. Our Global Code of Business Conduct and Ethics Policy and corporate governance guidelines are publicly available on the Investor Relations section of our website under "Corporate Governance" at http:https://ir.tcap.com/corporate-governance.ir.barings.com/governance-docs. We will report any amendments to or waivers of a required provision of our Global Code of Business Conduct and Ethics Policy and corporate governance guidelines on our website or in a Current Report on Form 8-K. You may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain information regarding the Public Reference Room by calling the SEC at 1-800-SEC-0330. Information contained on our website is not incorporated by reference into this Annual Report on Form 10-K, and you should not consider that information to be part of this Annual Report on Form 10-K.
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Compliance Policies and Procedures
We and Barings have adopted and implemented written policies and procedures reasonably designed to prevent violation of the U.S. federal securities laws, and are required to review these compliance policies and procedures annually for their adequacy and the effectiveness of their implementation, and to designate a chief compliance officer to be responsible for administering such policies and procedures. Steven C. Lillyprocedures. Michael Cowart serves as our Chief Compliance Officer.
Proxy Voting Policies and Procedures
We votedelegate our proxy voting responsibilities to Barings. Barings votes proxies relating to our portfolio securities in a manner which we believe will be in the best interest of our stockholders. We reviewBarings reviews on a case-by-case basis each proposal submitted to a stockholder vote to determine its impact on the portfolio securities held by us. Although weBarings generally votevotes against proposals that may have a negative impact on our portfolio securities, wethey may vote for such a proposal if there exists compelling long-term reasons to do so.
OurThe proxy voting decisions of Barings are made by the investment professionals who are responsible for monitoring each of ourits clients’ investments. To ensure that ourtheir vote is not the product of a conflict of interest, we requireBarings requires that: (i) anyone involved in the decision making process disclose to our chief compliance officer any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (ii) employees involved in the decision making process or vote administration are prohibited from revealing how we intend to vote on a proposal in order to reduce any attempted influence from interested parties.
Stockholders may, without charge, obtain information regarding how we voted proxies with respect to our portfolio securities by making a written request for proxy voting information to: Chief Compliance Officer, 3700 Glenwood Avenue,300 South Tryon Street, Suite 530, Raleigh,2500, Charlotte, North Carolina 2761228202 or by calling our investor relations department collect at (919) 719-4770.

888-401-1088.
Other
We may also be prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval of ourthose members of the Board of Directors who are not interested persons and, in some cases, prior approval by the SEC. The 1940 Act prohibits us from making certain negotiated co-investments with affiliates absent prior approval of the SEC. Barings' existing Exemptive Relief permits us and Barings' affiliated private funds and SEC-registered funds to co-invest in loans originated by Barings, which allows Barings to implement its senior secured private debt investment strategy for us.
We are periodically examined by the SEC for compliance with the 1940 Act.
We are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect us against larceny and embezzlement. Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person’s office.
We are required to adopt and implement written policies and procedures reasonably designed to prevent violation of the federal securities laws, review these policies and procedures annually for their adequacy and the effectiveness of their implementation, and to designate a chief compliance officer to be responsible for administering the policies and procedures. See “Compliance Policies and Procedures" above.
Small Business Administration Regulations
Triangle SBIC, Triangle SBIC II and Triangle SBIC III are licensed by the SBA to operate as SBICs under Section 301(c) of the Small Business Investment Act of 1958, as amended, (the "Small Business Investment Act"). Triangle SBIC’s license became effective on September 11, 2003, Triangle SBIC II’s license became effective on May 26, 2010 and Triangle SBIC III's license became effective on January 6, 2017.
SBICs are designed to stimulate the flow of private equity capital to eligible small businesses. Under SBA regulations, SBICs may make loans to eligible small businesses, invest in the equity securities of such businesses and provide them with consulting and advisory services. Triangle SBIC and Triangle SBIC II have typically invested in senior and subordinated debt, acquired warrants and/or made equity investments in qualifying small businesses.
Under current SBA regulations, eligible small businesses generally include businesses that (together with their affiliates) have a tangible net worth not exceeding $19.5 million and have average annual net income after U.S. federal income taxes not exceeding $6.5 million (average net income to be computed without benefit of any carryover loss) for the two most recent fiscal years. In addition, an SBIC must devote at least 25.0% of its investment activity to “smaller” enterprises as defined by the SBA. A smaller enterprise generally includes businesses that have a tangible net worth not exceeding $6.0 million and have average annual net income after U.S. federal income taxes not exceeding $2.0 million (average net income to be computed without benefit of any net carryover loss) for the two most recent fiscal years. SBA regulations also provide alternative size standard criteria to determine eligibility for designation as an eligible small business or smaller enterprise, which criteria depend on the industry in which the business is engaged and are based on such factors as the number of employees and gross revenue. However, once an SBIC has invested in a company, subject to certain limitations, it may continue to make follow-on investments in the company, regardless of the size of the portfolio company at the time of the follow-on investment, up to the time of the portfolio company’s initial public offering.
The SBA prohibits an SBIC from providing funds to small businesses for certain purposes, such as relending and investment outside the United States, to businesses engaged in certain prohibited industries, and to certain “passive” (non-operating) companies. In addition, without prior SBA approval, an SBIC may not invest an amount equal to more than 30.0% of the SBIC’s regulatory capital (as defined by the SBA) in any one portfolio company.
The SBA places certain limitations on the financing terms of investments by SBICs in portfolio companies (such as limiting the permissible interest rate on debt securities held by an SBIC in a portfolio company). The SBA regulations adopted in 2002 generally allow an SBIC to exercise control over a small business for a period of seven years from the date on which the SBIC initially acquires its control position. This control period may be extended for an additional period of time with the SBA’s prior written approval.
The SBA restricts the ability of an SBIC to lend money to any of its officers, directors and employees or to invest in affiliates thereof. The SBA also prohibits, without prior SBA approval, a “change of control” of an SBIC or

transfers that would result in any person (or a group of persons acting in concert) owning 10.0% or more of a class of capital stock of a licensed SBIC. A “change of control” is any event which would result in the transfer of the power, direct or indirect, to direct the management and policies of an SBIC, whether through ownership, contractual arrangements or otherwise.
An SBIC (or group of SBICs under common control) can currently have outstanding at any time debentures guaranteed by the SBA in amounts up to two times (and in certain cases, with SBA approval, up to three times) the amount of its regulatory capital, as such term is defined in the SBA regulations. Debentures guaranteed by the SBA have a maturity of ten years, with interest payable semi-annually. As of December 31, 2017, the maximum statutory limit on the dollar amount of outstanding SBA-guaranteed debentures that may be issued by a single SBIC was $150.0 million and by a group of SBICs under common control was $350.0 million, subject to SBA approval.
As of December 31, 2017, Triangle SBIC had issued $150.0 million of SBA-guaranteed debentures and Triangle SBIC II had issued $100.0 million of SBA-guaranteed debentures, leaving borrowing capacity of a maximum of $100.0 million of SBA-guaranteed debentures for Triangle SBIC III. The weighted average interest rate for all SBA-guaranteed debentures as of December 31, 2017 was 3.90%. As of December 31, 2017, all SBA-guaranteed debentures were pooled.
SBICs must invest idle funds that are not being used to make loans in investments permitted under SBA regulations in the following limited types of securities: (i) direct obligations of, or obligations guaranteed as to principal and interest by, the United States government, which mature within 15 months from the date of the investment; (ii) repurchase agreements with federally insured institutions with a maturity of seven days or less (and the securities underlying the repurchase obligations must be direct obligations of or guaranteed by the federal government); (iii) certificates of deposit with a maturity of one year or less, issued by a federally insured institution; (iv) a deposit account in a federally insured institution that is subject to a withdrawal restriction of one year or less; (v) a checking account in a federally insured institution; or (vi) a reasonable petty cash fund.
SBICs are regularly examined and audited by the SBA’s staff to determine their compliance with SBIC regulations and are periodically required to file certain forms with the SBA. Triangle SBIC and Triangle SBIC II were audited by the SBA during 2016, and there were no unresolved findings from the audit. There have been no examinations of Triangle SBIC III as it is a newly-licensed SBIC.
Neither the SBA nor the U.S. government or any of its agencies or officers has approved any ownership interest to be issued by us or any obligation that we or any of our subsidiaries may incur.
Securities Exchange Act of 1934 and Sarbanes-Oxley Act Compliance
We are subject to the reporting and disclosure requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including the filing of quarterly, annual and current reports, proxy statements and other required items. In addition, we are subject to the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), which imposes a wide variety of regulatory requirements on publicly-held companies and their insiders. For example:
•pursuant to Rule 13a-14 of the Exchange Act, our Chief Executive Officer and Chief Financial Officer are required to certify the accuracy of the financial statements contained in our periodic reports;
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•pursuant to Item 307 of Regulation S-K, our periodic reports are required to disclose our conclusions about the effectiveness of our disclosure controls and procedures;
•pursuant to Rule 13a-15 of the Exchange Act, our management is required to prepare a report regarding its assessment of our internal control over financial reporting, and separately, our independent registered public accounting firm audits our internal controls over financial reporting; and
•pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, our periodic reports must disclose whether there were significant changes in our internal control over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

The New York Stock Exchange Corporate Governance Regulations
The NYSE has adopted corporate governance regulations that listed companies must comply with. We believe we currently are in compliance with such corporate governance listing standards. We intend to monitor our compliance with all future listing standards and to take all necessary actions to ensure that we stay in compliance.
Material U.S. Federal Income Tax Considerations
The following discussion is a general summary of the material U.S. federal income tax considerations applicable to us and to an investment in our shares. This summary does not purport to be a complete description of the income tax considerations applicable to us or to investors in such an investment. For example, we have not described tax consequences that we assume to be generally known by investors or certain considerations that may be relevant to certain types of holders subject to special treatment under U.S. federal income tax laws, including stockholders subject to the alternative minimum tax, tax-exempt organizations, insurance companies, dealers in securities, pension plans and trusts, financial institutions, U.S. stockholders (as defined below) whose functional currency is not the U.S. dollar, persons who mark-to-market our shares and persons who hold our shares as part of a “straddle,” “hedge” or “conversion” transaction. This summary assumes that investors hold shares of our common stock as capital assets (within the meaning of the Code). The discussion is based upon the Code, Treasury regulations, and administrative and judicial interpretations, each as of the date of this Annual Report on Form 10-K and all of which are subject to change, possibly retroactively, which could affect the continuing validity of this discussion. This summary does not discuss any aspects of U.S. estate or gift tax or foreign, state or local tax. It does not discuss the special treatment under U.S. federal income tax laws that could result if we invested in tax-exempt securities or certain other investment assets.
For purposes of our discussion, a “U.S. stockholder” means a beneficial owner of shares of our common stock that is for U.S. federal income tax purposes:
•a citizen or individual resident of the United States;
•a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;
•an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
•a trust if (i) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) it has a valid election in place to be treated as a U.S. person.
For purposes of our discussion, a “Non-U.S. stockholder” means a beneficial owner of shares of our common stock that is neither a U.S. stockholder nor a partnership (including an entity treated as a partnership for U.S. federal income tax purposes).
If an entity treated as a partnership for U.S. federal income tax purposes (a “partnership”) holds shares of our common stock, the tax treatment of a partner or member of the partnership will generally depend upon the status of the partner or member and the activities of the partnership. A prospective stockholder that is a partner or member in a partnership holding shares of our common stock should consult his, her or its tax advisors with respect to the purchase, ownership and disposition of shares of our common stock.
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Tax matters are very complicated and the tax consequences to an investor of an investment in our shares will depend on the facts of his, her or its particular situation. We encourage investors to consult their own tax advisors regarding the specific consequences of such an investment, including tax reporting requirements, the applicability of U.S. federal, state, local and foreign tax laws, eligibility for the benefits of any applicable tax treaty and the effect of any changes in the tax laws.

Election to be Taxed as a RIC
We have qualified and elected to be treated as a RIC under Subchapter M of the Code commencing with our taxable year ended December 31, 2007. As a RIC, we generally are not subject to corporate-level U.S. federal income taxes on any income that we distribute to our stockholders from our tax earnings and profits. To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, in order to obtain RIC tax treatment, we must distribute to our stockholders, for each taxable year, at least 90% of our “investment"investment company taxable income,”income" ("ICTI"), which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gain over realized net long-term capital loss, or the Annual(the "Annual Distribution Requirement.Requirement"). Even if we qualify for tax treatment as a RIC, we generally will be subject to corporate-level U.S. federal income tax on our undistributed taxable income and could be subject to U.S. federal excise, state, local and foreign taxes.
Taxation as a RIC
Provided that we qualify for tax treatment as a RIC, we will not be subject to U.S. federal income tax on the portion of our investment company taxable incomeICTI and net capital gain (which we define as net long-term capital gain in excess of net short-term capital loss) that we timely distribute to stockholders. We will be subject to U.S. federal income tax at the regular corporate rates on any income or capital gain not distributed (or deemed distributed) to our stockholders.
We will be subject to a 4% nondeductible U.S. federal excise tax on certain undistributed income unless we distribute in a timely manner an amount at least equal to the sum of (i) 98.0% of our ordinary income for each calendar year, (ii) 98.2% of our capital gain net income for the calendar year and (iii) any income recognized, but not distributed, in preceding years and on which we paid no U.S. federal income tax.
In order to qualify for tax treatment as a RIC for U.S. federal income tax purposes, we must, among other things:
•meet the Annual Distribution Requirement;
•qualify to be treated as a BDC or be registered as a management investment company under the 1940 Act at all times during each taxable year;
•derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock or other securities or foreign currencies or other income derived with respect to our business of investing in such stock, securities or currencies and net income derived from an interest in a “qualified publicly traded partnership” (as defined in the Code), or the 90% Income Test; and
•diversify our holdings so that at the end of each quarter of the taxable year:
◦at least 50% of the value of our assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer (which for these purposes includes the equity securities of a “qualified publicly traded partnership”); and
◦no more than 25% of the value of our assets is invested in the securities, other than U.S. Government securities or securities of other RICs, (i) of one issuer (ii) of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or (iii) of one or more “qualified publicly traded partnerships,” or the Diversification Tests.
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To the extent that we invest in entities treated as partnerships for U.S. federal income tax purposes (other than a “qualified publicly traded partnership”), we generally must include the items of gross income derived by the partnerships for purposes of the 90% Income Test, and the income that is derived from a partnership (other than a “qualified publicly traded partnership”) will be treated as qualifying income for purposes of the 90% Income Test

only to the extent that such income is attributable to items of income of the partnership which would be qualifying income if realized by us directly. In addition, we generally must take into account our proportionate share of the assets held by partnerships (other than a “qualified publicly traded partnership”) in which we are a partner for purposes of the Diversification Tests.
In order to meet the 90% Income Test, we have established several special purpose corporations,utilize the Taxable Subsidiaries, and in the future may establish additional such corporations, to hold assets from which we do not anticipate earning dividend, interest or other qualifying income under the 90% Income Test (the "Taxable Subsidiaries").Test. Any investments held through athe Taxable SubsidiarySubsidiaries generally are subject to U.S. federal income and other taxes, and therefore we can expect to achieve a reduced after-tax yield on such investments.
We may be required to recognize taxable income in circumstances in which we do not receive a corresponding payment in cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with PIK interest or, in certain cases, increasing interest rates or issued with warrants), we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in income other amounts that we have not yet received in cash, such as deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock. We anticipate that a portion of our income may constitute original issue discount or other income required to be included in taxable income prior to receipt of cash.
Because any original issue discount or other amounts accrued will be included in our investment company taxable incomeICTI for the year of the accrual, we may be required to make a distribution to our stockholders in order to satisfy the Annual Distribution Requirement and to avoid the 4.0% U.S. federal excise tax, even though we will not have received any corresponding cash amount. As a result, we may have difficulty meeting the Annual Distribution Requirement necessary to obtain and maintain RIC tax treatment under the Code. We may have to sell some of our investments at times and/or at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus become subject to corporate-level income tax.
Furthermore, a portfolio company in which we invest may face financial difficulty that requires us to work-out, modify or otherwise restructure our investment in the portfolio company. Any such restructuring may result in unusable capital losses and future non-cash income. Any restructuring may also result in our recognition of a substantial amount of non-qualifying income for purposes of the 90% Income Test, such as cancellation of indebtedness income in connection with the work-out of a leveraged investment (which, while not free from doubt, may be treated as non-qualifying income) or the receipt of other non-qualifying income.
Gain or loss realized by us from warrants acquired by us as well as any loss attributable to the lapse of such warrants generally will be treated as capital gain or loss. Such gain or loss generally will be long-term or short-term, depending on how long we held a particular warrant.
Investments by us in non-U.S. securities may be subject to non-U.S. income, withholding and other taxes, and therefore, our yield on any such securities may be reduced by such non-U.S. taxes. Stockholders will generally not be entitled to claim a credit or deduction with respect to non-U.S. taxes paid by us.
If we purchase shares in a “passive foreign investment company,” or PFIC, we may be subject to U.S. federal income tax on a portion of any “excess distribution” or gain from the disposition of such shares even if such income is distributed as a taxable dividend by us to our stockholders. Additional charges in the nature of interest may be imposed on us in respect of deferred taxes arising from such distributions or gains. If we invest in a PFIC and elect to treat the PFIC as a “qualified electing fund” under the Code, or QEF, in lieu of the foregoing requirements, we will be required to include in income each year a portion of the ordinary earnings and net capital gain of the QEF,
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even if such income is not distributed to it. Alternatively, we can elect to mark-to-market at the end of each taxable year our shares in a PFIC; in this case, we will recognize as ordinary income any increase in the value of such shares and as ordinary loss any decrease in such value to the extent it does not exceed prior increases included in income. Under either election, we may be required to recognize in a year income in excess of our distributions from PFICs and our proceeds from dispositions of PFIC stock during that year, and such income will nevertheless be subject to

the Annual Distribution Requirement and will be taken into account for purposes of the 4% U.S. federal excise tax. In addition, under recently proposed regulations, income required to be included as a result of a QEF election would not be qualifying income for purposes of the 90% Income Test unless we receive a distribution of such income from the PFIC in the same taxable year to which the inclusion relates.
Under Section 988 of the Code, gain or loss attributable to fluctuations in exchange rates between the time we accrue income, expenses, or other liabilities denominated in a foreign currency and the time we actually collect such income or pay such expenses or liabilities are generally treated as ordinary income or loss. Similarly, gain or loss on foreign currency forward contracts and the disposition of debt denominated in a foreign currency, to the extent attributable to fluctuations in exchange rates between the acquisition and disposition dates, are also treated as ordinary income or loss.
We are authorized to borrow funds and to sell assets in order to satisfy distribution requirements. Under the 1940 Act, we are not permitted to make distributions to our stockholders while our debt obligations and other senior securities are outstanding unless certain “asset coverage” tests are met. See “Regulation of Business Development Companies — Qualifying Assets” and “Regulation of Business Development Companies — Senior Securities" above. Moreover, our ability to dispose of assets to meet our distribution requirements may be limited by (i) the illiquid nature of our portfolio and/or (ii) other requirements relating to our tax treatment as a RIC, including the Diversification Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or to avoid the excise tax, we may make such dispositions at times that, from an investment standpoint, are not advantageous.
If we fail to satisfy the Annual Distribution Requirement or otherwise fail to qualify for tax treatment as a RIC in any taxable year, we will be subject to tax in that year on all of our taxable income, regardless of whether we make any distributions to our stockholders. In that case, all of such income will be subject to corporate-level U.S. federal income tax, reducing the amount available to be distributed to our stockholders. See “Failure To Obtain RIC Tax Treatment" below.
As a RIC, we are not allowed to carry forward or carry back a net operating loss for purposes of computing our investment company taxable incomeICTI in other taxable years. U.S. federal income tax law generally permits a RIC to carry forward (i) the excess of its net short-term capital loss over its net long-term capital gain for a given year as a short-term capital loss arising on the first day of the following year and (ii) the excess of its net long-term capital loss over its net short-term capital gain for a given year as a long-term capital loss arising on the first day of the following year. Future transactions we engage in may cause our ability to use any capital loss carryforwards, and unrealized losses once realized, to be limited under Section 382 of the Code. Certain of our investment practices may be subject to special and complex U.S. federal income tax provisions that may, among other things, (i) disallow, suspend or otherwise limit the allowance of certain losses or deductions, (ii) convert lower taxed long-term capital gain and qualified dividend income into higher taxed short-term capital gain or ordinary income, (iii) convert an ordinary loss or a deduction into a capital loss (the deductibility of which is more limited), (iv) cause us to recognize income or gain without a corresponding receipt of cash, (v) adversely affect the time as to when a purchase or sale of stock or securities is deemed to occur, (vi) adversely alter the characterization of certain complex financial transactions and (vii) produce income that will not be qualifying income for purposes of the 90% Income Test. We will monitor our transactions and may make certain tax elections in order to mitigate the effect of these provisions.
As described above, to the extent that we invest in equity securities of entities that are treated as partnerships for U.S. federal income tax purposes, the effect of such investments for purposes of the 90% Income Test and the Diversification Tests will depend on whether or not the partnership is a “qualified publicly traded partnership” (as defined in the Code). If the entity is a “qualified publicly traded partnership,” the net income derived from such investments will be qualifying income for purposes of the 90% Income Test and will be “securities” for purposes of the Diversification Tests. If the entity is not treated as a “qualified publicly traded partnership,” however, the consequences of an investment in the partnership will depend upon the amount and type of income and assets of the partnership allocable to us. The income derived from such investments may not be qualifying income for purposes of the 90% Income Test and, therefore, could adversely affect our tax treatment as a RIC. We intend to monitor our
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investments in equity securities of entities that are treated as partnerships for U.S. federal income tax purposes to prevent our disqualification from tax treatment as a RIC.

We may invest in preferred securities or other securities the U.S. federal income tax treatment of which may not be clear or may be subject to recharacterization by the IRS. To the extent the tax treatment of such securities or the income from such securities differs from the expected tax treatment, it could affect the timing or character of income recognized, requiring us to purchase or sell securities, or otherwise change our portfolio, in order to comply with the tax rules applicable to RICs under the Code.
We may distribute taxable dividends that are payable in cash or shares of our common stock at the election of each stockholder. Under certain applicable provisions of the Code and the Treasury regulations, distributions payable in cash or in shares of stock at the election of stockholders are treated as taxable dividends. The Internal Revenue Service has published guidance indicating that this rule will apply even where the total amount of cash that may be distributed is limited to no more than 20% of the total distribution.distribution (10% in case of distributions through June 30, 2022). Under this guidance, if too many stockholders elect to receive their distributions in cash, the cash available for distribution must be allocated among the stockholders electing to receive cash (with the balance of the distribution paid in stock). If we decide to make any distributions consistent with this guidance that are payable in part in our stock, taxable stockholders receiving such dividends will be required to include the full amount of the dividend (whether received in cash, our stock, or a combination thereof) as ordinary income (or as long-term capital gain to the extent such distribution is properly reported as a capital gain dividend) to the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such dividends in excess of any cash received. If a U.S. stockholder sells the stock it receives in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in stock. In addition, if a significant number of our stockholders determine to sell shares of our stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our stock.
Failure to Obtain RIC Tax Treatment
If we fail to satisfy the 90% Income Test or the Diversification Tests for any taxable year, we may nevertheless continue to qualify for tax treatment as a RIC for such year if certain relief provisions are applicable (which may, among other things, require us to pay certain corporate-level federal taxes or to dispose of certain assets).
If we were unable to obtain tax treatment as a RIC, we would be subject to tax on all of our taxable income at regular corporate rates. We would not be able to deduct distributions to stockholders, nor would they be required to be made. Distributions would generally be taxable to our stockholders as dividend income to the extent of our current and accumulated earnings and profits (in the case of non-corporate U.S. stockholders, generally at a maximum U.S. federal income tax rate applicable to qualified dividend income of 20%). Subject to certain limitations under the Code, corporate distributees would be eligible for the dividends-received deduction. Distributions in excess of our current and accumulated earnings and profits would be treated first as a return of capital to the extent of the stockholder’s tax basis, and any remaining distributions would be treated as a capital gain.
If we fail to meet the RIC requirements for more than two consecutive years and then, seek to re-qualify for tax treatment as a RIC, we would be subject to corporate-level taxation on any built-in gain recognized during the succeeding five-year period unless we made a special election to recognize all such built-in gain upon our re-qualification for tax treatment as a RIC and to pay the corporate-level tax on such built-in gain.
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Possible Legislative or Other Actions Affecting Tax Considerations
Prospective investors should recognize that the present U.S. federal income tax treatment of an investment in our stock may be modified by legislative, judicial or administrative action at any time, and that any such action may affect investments and commitments previously made. The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process anyand by the IRS and the U.S. Treasury Department, resulting in revisions of regulations and revised interpretations of established concepts as well as statutory changes. Revisions in U.S. federal tax laws and interpretations thereof could affect the tax consequences of an investment in our stock. See "Risk Factors - Risk Relating to Our Business and Structure - We cannot predict how tax reform legislation will affect us, our investments, or our stockholders, and any such legislation could averselyadversely affect our business" included in Item 1A or Part I of this Annual Report.Report on Form 10-K.

Withholding
Our distributions generally will be treated as dividends for U.S. tax purposes and will be subject to U.S. income or withholding tax unless the shareholder receiving the dividend qualifies for an exemption from U.S. tax or the distribution is subject to one of the special look-through rules described below. Distributions paid out of net capital gains can qualify for a reduced rate of taxation in the hands of an individual U.S. shareholder and an exemption from U.S. tax in the hands of a non-U.S. shareholder.
Under an exemption, properly reported dividend distributions by RICs paid out of certain interest income (such distributions, “interest-related dividends”) are generally exempt from U.S. withholding tax for non-U.S. shareholders. Under such exemption, a non-U.S. shareholder generally may receive interest-related dividends free of U.S. withholding tax if the shareholder would not have been subject to U.S. withholding tax if it had received the underlying interest income directly. No assurance can be given as to whether any of our distributions will be eligible for this exemption from U.S. withholding tax or, if eligible, will be reported as such by us. In particular, the exemption does apply to distributions paid in respect of a RIC’s non-U.S. source interest income, its dividend income or its foreign currency gains. In the case shares of our stock are held through an intermediary, the intermediary may withhold U.S. federal income tax even if we report the payment as a dividend eligible for the exemption.
State and Local Tax Treatment
The state and local tax treatment may differ from U.S. federal income tax treatment.
The discussion set forth herein does not constitute tax advice, and potential investors should consult their own tax advisors concerning the tax considerations relevant to their particular situation.
Available Information
We intend to make this Annual Report on Form 10-K, as well as our quarterly reports on Form 10-Q, our current reports on Form 8-K and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act, publicly available on our website (www.tcap.com)(www.baringsbdc.com) without charge as soon as reasonably practicable following our filing of such reports with the SEC. Our SEC reports can be accessed through the investor relations section of our website. The information found on our website is not part of this or any other report we file with or furnish to the SEC. We assume no obligation to update or revise any statements in this Annual Report on Form 10-K or in other reports filed with the SEC, whether as a result of new information, future events or otherwise, unless we are required to do so by law. A copy of this Annual Report on Form 10-K and our other reports is available without charge upon written request to Investor Relations, Triangle Capital Corporation, 3700 Glenwood Avenue,Barings BDC, Inc., 300 South Tryon Street, Suite 530, Raleigh,2500 Charlotte, North Carolina 27612.
Further, a copy of this Annual Report is obtainable from the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330.28202. The SEC maintains an Internet site at www.sec.gov that contains our periodic and current reports, proxy and information statements and our other filings at www.sec.gov.filings.
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We have adopted a code of ethics, which we call our “Code of Business Conduct and Ethics,” which every director, officer and employee is expected to observe. Our Code of Business Conduct and Ethics is publicly available on the Investor Relations section of our website under “Corporate Governance” at http://ir.tcap.com/corporate-governance and is referenced in this Annual Report as Exhibit 14.1.

Item 1A. Risk Factors.
Investing in our securities involves a number of significant risks. In addition to the other information contained in this Annual Report on Form 10-K, you should consider carefully the following information before making an investment in our securities. The risks set out below are not the only risks we face. Additional risks and uncertainties not presently known to us or not presently deemed material by us might also impair our operations and performance. If any of the following events occur, our business, financial condition and results of operations could be materially and adversely affected. In such case, our net asset value, the trading price of our common stock and the value of our other securities could decline, and you may lose all or part of your investment.
The following is a summary of the principal risk factors associated with an investment in our securities. Further details regarding each risk included in the below summary list can be found further below.
•We are dependent upon Barings’ access to its investment professionals for our success.
•Our investment portfolio is and will continue to be recorded at fair value as determined in good faith by our Board of Directors and, as a result, there is and will continue to be uncertainty as to the value of our portfolio investments.
•We operate in a highly competitive market for investment opportunities, which could reduce returns and result in losses.
•There are potential conflicts of interest, including the management of other investment funds and accounts by Barings, which could impact our investment returns.
•The fee structure under the Amended and Restated Advisory Agreement may induce Barings to pursue speculative investments and incur leverage, which may not be in the best interests of our stockholders.
•Regulations governing our operation as a BDC will affect our ability to, and the way in which we, raise additional capital.
•Our financing agreements contain various covenants, which, if not complied with, could accelerate our repayment obligations thereunder, thereby materially and adversely affecting our liquidity, financial condition, results of operations and ability to pay distributions.
•Incurring additional leverage may magnify our exposure to risks associated with changes in leverage, including fluctuations in interest rates that could adversely affect our profitability.
•Prepayments of our debt investments by our portfolio companies could adversely impact our results of operations and reduce our return on equity.
•Shares of closed-end investment companies, including BDCs, frequently trade at a discount to their net asset value, and may trade at premiums that may prove to be unsustainable.
•Sales of shares of the Company’s common stock after the completion of the Sierra Merger may cause the market price of the Company’s common stock to decline.
•The Company may be unable to realize the benefits anticipated by the Sierra Merger, including estimated cost savings, or it may take longer than anticipated to realize such benefits.
Risks Relating to Our Business and Structure
We are dependent upon Barings’ access to its investment professionals for our success.
We depend on the diligence, skill and network of business contacts of Barings’ investment professionals to source appropriate investments for us. We depend on members of Barings’ investment team to appropriately analyze our investments and Barings’ investment committee to approve and monitor our portfolio investments. Barings’ investment committee, together with the other members of its investment team, evaluate, negotiate, structure, close and monitor our investments. Our future success depends on the continued availability of the members of Barings’ investment committee and the other investment professionals available to Barings. We do not have employment agreements with these individuals or other key personnel of Barings, and we cannot provide any assurance that unforeseen business, medical, personal or other circumstances would not lead any such individual to terminate his or
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her relationship with Barings. If these individuals do not maintain their existing relationships with Barings and its affiliates or do not develop new relationships with other sources of investment opportunities, we may not be able to identify appropriate replacements or grow our investment portfolio. The loss of any member of Barings’ investment committee or of other investment professionals of Barings and its affiliates would limit our ability to achieve our investment objectives and operate as we anticipate, which could have a material adverse effect on our financial condition, results of operations and cash flows.
Our financial condition and results of operations will depend on our ability to manage and deploy capital effectively.
Our ability to continue to achieve our investment objectives will depend on our ability to effectively manage and deploy our capital, which will depend, in turn, on our management team’sBarings' ability to continue to identify, evaluate, invest in and monitor companies that meet our investment criteria. We cannot assure you that we will continue to achieve our investment objectives.
Accomplishing this result on a cost-effective basis will be largely a function of our management team’sBarings' handling of the investment process, itstheir ability to provide competent, attentive and efficient services and our access to investments offering acceptable terms. In addition to monitoring the performance of our existing investments, members of our management team and ourBarings' investment professionals may also be called upon to provide managerial assistance to our portfolio companies. These demands on their time may distract them or slow the rate of investment.
Even if we are able to grow and build upon our investment operations in a manner commensurate with the increasedany capital made available to us as a result of recentour operating activities, financing activities and/or offerings of our securities, any failure to manage our growth effectively could have a material adverse effect on our business, financial condition, results of operations and prospects. The results of our operations will depend on many factors, including the availability of opportunities for investment, readily accessible shortshort- and long-term funding alternatives in the financial markets and economic conditions. Furthermore, if we cannot successfully operate our business or implement our investment policies and strategies as described in this Annual Report on Form 10-K, it could negatively impact our ability to pay distributions and cause you to lose part or all of your investment.
Capital markets may experience periods of disruption and instability. Such market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which may have a negative impact on our business and operations.
From time to time, capital markets may experience periods of disruption and instability. During such periods of market disruption and instability, we and other companies in the financial services sector may have limited access, if available, to alternative markets for debt and equity capital. Equity capital may be difficult to raise because, subject to some limited exceptions which will apply to us as a BDC, we will generally not be able to issue additional shares of our common stock at a price less than net asset value without first obtaining approval for such issuance from our stockholders and our independent directors. In addition, our ability to incur indebtedness (including by issuing preferred stock) is limited by applicable regulations such that our asset coverage, as defined in the 1940 Act, must equal at least 200% immediately after each time we incur indebtedness. The debt capital that will be available, if at all, may be at a higher cost and on less favorable terms and conditions in the future.
Market conditions may in the future make it difficult to extend the maturity of or refinance our existing indebtedness, including the final maturity of our third amended and restated senior secured credit facility, as amended on May 1, 2017 (the "Credit Facility"), in April 2022, and any failure to do so could have a material adverse effect on our business. If we are unable to raise or refinance debt, then our equity investors may not benefit from the potential for increased returns on equity resulting from leverage and we may be limited in our ability to make new commitments or to fund existing commitments to our portfolio companies. In addition, the illiquidity of

our investments may make it difficult for us to sell such investments if required. As a result, we may realize significantly less than the value at which we have recorded our investments.
Given the extreme volatility and dislocation that the capital markets have historically experienced, many BDCs have faced, and may in the future face, a challenging environment in which to raise capital. We may in the future have difficulty accessing debt and equity capital, and a severe disruption in the global financial markets or deterioration in credit and financing conditions could have a material adverse effect on our business, financial condition and results of operations. In addition, significant changes in the capital markets, including the extreme volatility and disruption, have had, and may in the future have, a negative effect on the valuations of our investments and on the potential for liquidity events involving our investments. An inability to raise capital, and any required sale of our investments for liquidity purposes, could have a material adverse impact on our business, financial condition or results of operations. We monitor developments and seek to manage our investments in a manner consistent with achieving our investment objective, but there can be no assurance that we will be successful in doing so, and we may not timely anticipate or manage existing, new or additional risks, contingencies or developments, including regulatory developments in the current or future market environment.
Economic recessions or downturns could impair our portfolio companies and harm our operating results.
Many of the portfolio companies in which we make investments may be susceptible to economic slowdowns or recessions and may be unable to repay the loans we made to them during these periods. Therefore, our non-performing assets may increase and the value of our portfolio may decrease during these periods as we are required to record our investments at their current fair value. Adverse economic conditions also may decrease the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our and our portfolio companies’ funding costs, limit our and our portfolio companies’ access to the capital markets or result in a decision by lenders not to extend credit to us or our portfolio companies. These events could prevent us from increasing investments and harm our operating results.
A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, acceleration of the time when the loans are due and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize the portfolio company’s ability to meet its obligations under the debt that we hold. We may incur additional expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company. In addition, if one of our portfolio companies were to go bankrupt, depending on the facts and circumstances, including the extent to which we will actually provide significant managerial assistance to that portfolio company, a bankruptcy court might subordinate all or a portion of our claim to that of other creditors
Uncertainty about the financial stability of the United States could have a significant adverse effect on our business, financial condition and results of operations.
Due to federal budget deficit concerns, S&P downgraded the federal government’s credit rating from AAA to AA+ for the first time in history in August 2011. Further, Moody’s and Fitch had warned that they may downgrade the federal government’s credit rating. Further downgrades or warnings by S&P or other rating agencies, and the United States government’s credit and deficit concerns in general, could cause interest rates and borrowing costs to rise, which may negatively impact both the perception of credit risk associated with our debt portfolio and our ability to access the debt markets on favorable terms. In addition, a decreased U.S. government credit rating could create broader financial turmoil and uncertainty, which may weigh heavily on our financial performance and the value of our common stock.
The Federal Reserve has raised the federal funds rate multiple times in recent quarters and has announced its intention to continue to raise the federal funds rate over time. These developments, along with domestic credit and deficit concerns and any global debt and/or economic crises, could cause interest rates to be volatile, which may negatively impact our ability to access the debt markets on favorable terms.

Our investment portfolio is and will continue to be recorded at fair value as determined in good faith by our Board of Directors and, as a result, there is and will continue to be uncertainty as to the value of our portfolio investments.
Under the 1940 Act, we are required to carry our portfolio investments at market value or, if there is no readily available market value, at fair value as determined in good faith by our Board of Directors.the Board. Typically there is not a public market for the securities of the privately held middle-market companies in which we have invested and will generally continue to invest. As a result, we value these securities quarterly at fair value as determined in good faith by ourthe Board of Directors based on input from management, a nationally recognizedBarings, independent advisor (on a rotational basis)third-party valuation firms and our audit committee. See "Item 1. Business -– Valuation Process and Determination of Net Asset Value" included in this Annual Report on Form 10-K for a detailed description of our valuation process.
The determination of fair value and consequently, the amount of unrealized appreciation and depreciation in our portfolio, is to a certain degree subjective and dependent on the judgment of our Board of Directors.the Board. Certain factors that may be considered in determining the fair value of our investments include the nature and realizable value of any collateral, the portfolio company’s earnings and its ability to make payments on its indebtedness, the markets in which the portfolio company does business, comparison to comparable publicly-traded companies, discounted cash flows and other relevant factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Due to this uncertainty, our fair value determinations may cause our net asset value on a given date to materially understate or overstate the value that we may ultimately realize upon the sale or disposition of one or more of our investments. As a result, investors purchasing our securities based on an overstated net asset value would pay a higher price than the value of our investments might warrant. Conversely, investors selling shares
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during a period in which the net asset value understates the value of our investments will receive a lower price for their shares than the value of our investments might warrant.
Volatility or a prolonged disruption in the credit markets could materially damage our business.
We are required to record our assets at fair value, as determined in good faith by our Board of Directors in accordance with our valuation policy. As a result, volatility in the capital markets may adversely affect our valuations and our net asset value, even if we intend to hold investments to maturity. Volatility or dislocation in the capital markets may depress our stock price below our net asset value per share and create a challenging environment in which to raise debt and equity capital. As a BDC, we are generally not able to issue additional shares of our common stock at a price less than net asset value without first obtaining approval for such issuance from our stockholders and our independent directors. Additionally, our ability to incur indebtedness (including by issuing preferred stock) is limited by applicable regulations such that our asset coverage under the 1940 Act must equal at least 200% of total indebtedness immediately after each time we incur indebtedness exclusive of the SBA-guaranteed debentures pursuant to our SEC exemptive relief. Shrinking portfolio values negatively impact our ability to borrow additional funds or issue additional debt securities because our net asset value is reduced for purposes of the 200% asset leverage test. If the fair value of our assets declines substantially, we may fail to maintain the asset coverage ratio stipulated by the 1940 Act, which could, in turn, cause us to lose our status as a BDC and materially impair our business operations. A protracted disruption in the credit markets could also materially decrease demand for our investments.
The significant disruption in the capital markets experienced in the past had and may in the future have a negative effect on the valuations of our investments, and on the potential for liquidity events involving our investments. The debt capital that will be available to us in the future, if at all, is likely to have a higher cost and less favorable terms and conditions. If our financing costs increase and we have no increase in interest income, then our net investment income will decrease. A prolonged inability to raise capital will require us to reduce the volume of loans we originate and could have a material adverse impact on our business, financial condition or results of operations. This may also increase the probability that other structural risks negatively impact us. These situations may arise due to circumstances that we may be unable to control, such as a protracted disruption in the credit markets, a severe decline in the value of the U.S. dollar, a sharp economic downturn or an operational problem that affects third parties or us, and could materially damage our business.

We operate in a highly competitive market for investment opportunities.opportunities, which could reduce returns and result in losses.
A large number of entities compete with us to make the types of investments that we make in target companies.make. We compete for investments with other BDCspublic and investmentprivate funds, (including private equity funds and mezzanine funds), as well as traditional financial services companies such as commercial and investment banks, commercial financing companies and, other sourcesto the extent they provide an alternative form of funding. Moreover, alternative investment vehicles, such asfinancing, private equity and hedge funds, also invest in lower middle market companies. As a result, competition for investment opportunities in lower middle market companies is intense.funds. Many of our competitors are substantially larger and some have considerably greater financial, technical and marketing resources than we do. For example, we believe some of our competitors may have a lower cost of capital and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, than we have. These characteristicswhich could allow our competitorsthem to consider a wider variety of investments and establish more relationships and offer better pricing and more flexible structuring than we are able to do. We may lose investment opportunities if we do not match our competitors’ pricing, terms and structure. If we are forced to match our competitors’ pricing, terms and structure, we may not be able to achieve acceptable returns on our investments or may bear substantial risk of capital loss. A significant part of our competitive advantage stems from the fact that the market for investments in lower middle market companies is underserved by traditional commercial banks and other financing sources. A significant increase in the number and/or the size of our competitors in this target market could force us to accept less attractive investment terms.us. Furthermore, many of our competitors have greater experience operating under, or are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC.
We are dependent upon our executives for our future success.
We depend onBDC or the memberssource of our senior management team, particularly executive officers E. Ashton Poole, Steven C. Lilly, Jeffrey A. Dombcik, Cary B. Nordanincome, asset diversification and Douglas A. Vaughn, for the final selection, structuring, closing and monitoring of our investments. These executive officers have critical industry experience and relationships thatdistribution requirements we rely on to implement our business plan. If we lose the services of these individuals, we may not be able to operate our business as we expect, and our ability to compete could be harmed, which could cause our operating results to suffer.
Our success depends on attracting and retaining qualified personnel in a competitive environment.
We experience competition in attracting and retaining qualified personnel, particularly investment professionals, and we may be unablemust satisfy to maintain or grow our business if we cannot attract and retain such personnel. Our ability to attract and retain personnel with the requisite credentials, experience and skills depends on several factors including, but not limited to, our ability to offer competitive wages, benefits and professional growth opportunities. Many of the entities, including investment funds (suchqualification as private equity funds and mezzanine funds) and traditional financial services companies, with which we compete for experienced personnel have greater resources than we have.
a RIC. The competitive environment for qualified personnelpressures we face may require us to take certain measures to ensure that we are able to attract and retain experienced personnel. Such measures may include increasing the attractiveness of our overall compensation packages, altering the structure of our compensation packages through the use of additional forms of compensation, utilization of employment contracts for our executive officers or other steps. The inability to attract and retain experienced personnel could have a material adverse effect on our business.business, financial condition, results of operations and cash flows. As a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we may not be able to identify and make investments that are consistent with our investment objective.
With respect to the investments we make, we do not seek to compete based primarily on the interest rates we offer, and we believe that some of our competitors may make loans with interest rates that will be lower than the rates we offer. In the secondary market for acquiring existing loans, we compete generally on the basis of pricing terms. With respect to all investments, we may lose some investment opportunities if we do not match our competitors’ pricing, terms and structure. However, if we match our competitors’ pricing, terms and structure, we may experience decreased net interest income, lower yields and increased risk of credit loss.
There are potential conflicts of interest, including the management of other investment funds and accounts by Barings, which could impact our investment returns.
Our business model depends to a significant extent upon strong referral relationships,executive officers and our inability to maintain or develop these relationships,the members of Barings' investment committee, as well as the failureother principals of these relationshipsBarings, manage other funds affiliated with Barings, including other closed-end investment companies. In addition, Barings' investment team has responsibilities for managing U.S. and global middle-market debt investments for certain other investment funds and accounts. Accordingly, they have obligations to generateinvestors in those entities, the fulfillment of which may not be in the best interests of, or may be adverse to our and our stockholders' interests. In addition, certain of the other funds and accounts managed by Barings may provide for higher management or incentive fees, greater expense reimbursements or overhead allocations, or permit Barings and its affiliates to receive higher origination and other transaction fees, all of which may contribute to this conflict of interest and create an incentive for Barings to favor such other funds or accounts. Although the professional staff of Barings will devote as much time to our management as appropriate to enable Barings to perform its duties in accordance with the Amended and Restated Advisory Agreement, the investment professionals of Barings may have conflicts in allocating their time and services among us, on the one hand, and the other investment vehicles managed by Barings or one or more of its affiliates on the other hand.
Barings may face conflicts in allocating investment opportunities between us and affiliated investment vehicles that have overlapping investment objectives with ours. Although Barings will endeavor to allocate investment opportunities in a fair and equitable manner in accordance with its allocation policies and procedures, it is possible that, in the future, we may not be given the opportunity to participate in investments made by investment funds managed by Barings or an investment manager affiliated with Barings if such investment is prohibited by the 1940 Act, and there can be no assurance that we will be able to participate in all investment opportunities that are suitable to us.
Conflicts may also arise because portfolio decisions regarding our portfolio may benefit Barings' affiliates. Barings' affiliates may pursue or enforce rights with respect to one of our portfolio companies on behalf of other funds or accounts managed by it, and those activities may have an adverse effect on us.
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Barings may exercise significant influence over us in connection with its ownership of our common stock.
As of February 23, 2022, Barings, our external investment adviser, beneficially owns approximately 20.9% of our outstanding common stock. As a result, Barings may be able to significantly influence the outcome of matters submitted for stockholder action, including the election of directors, approval of significant corporate transactions, such as amendments to our governing documents, business combinations, consolidations and mergers. Barings has substantial influence on us and could exercise its influence in a manner that conflicts with the interests of other stockholders. The presence of a significant stockholder such as Barings may also have the effect of making it more difficult for a third party to acquire us or discourage a third party from seeking to acquire us.
Barings, its investment committee, or its affiliates may, from time to time, possess material non-public information, limiting our investment discretion.
Principals of Barings and its affiliates and members of Barings’ investment committee may serve as directors of, or in a similar capacity with, companies in which we invest, the securities of which are purchased or sold on our behalf. In the event that material nonpublic information is obtained with respect to such companies, or we become subject to trading restrictions under the internal trading policies of those companies or as a result of applicable law or regulations, we could be prohibited for a period of time from purchasing or selling the securities of such companies, and this prohibition may have an adverse effect on us.
Our ability to enter into transactions with Barings and its affiliates is restricted.
BDCs generally are prohibited under the 1940 Act from knowingly participating in certain transactions with their affiliates without the prior approval of their independent directors and, in some cases, of the SEC. Those transactions include purchases and sales, and so-called “joint” transactions, in which a BDC and one or more of its affiliates engage in certain types of profit-making activities. Any person that owns, directly or indirectly, 5.0% or more of a BDC’s outstanding voting securities will be considered an affiliate of the BDC for purposes of the 1940 Act, and a BDC generally is prohibited from engaging in purchases or sales of assets or joint transactions with such affiliates, absent the prior approval of the BDC’s independent directors. Additionally, without the approval of the SEC, a BDC is prohibited from engaging in purchases or sales of assets or joint transactions with the BDC’s officers and directors, and investment adviser, including funds managed by the investment adviser and its affiliates.
BDCs may, however, invest alongside certain related parties or their respective other clients in certain circumstances where doing so is consistent with current law and SEC staff interpretations. For example, a BDC may invest alongside such accounts consistent with guidance promulgated by the SEC staff permitting the BDC and such other accounts to purchase interests in a single class of privately placed securities so long as certain conditions are met, including that the BDC’s investment adviser, acting on the BDC’s behalf and on behalf of other clients, negotiates no term other than price.
The 1940 Act generally prohibits BDCs from making certain negotiated co-investments with certain affiliates absent an order from the SEC permitting the BDC to do so. Pursuant to the Exemptive Relief, we are generally permitted to co-invest with funds affiliated with Barings if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transaction, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned and (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies. Co-investments made under the Exemptive Relief are subject to compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co-investment transaction.
In situations where co-investment with other affiliated funds or accounts is not permitted or appropriate, Barings will need to decide which account will proceed with the investment in accordance with its allocation policies and procedures. Although Barings will endeavor to allocate investment opportunities in a fair and equitable manner in accordance with its allocation policies and procedures, it is possible that, in the future, we may not be given the opportunity to participate in investments made by investment funds managed by Barings or an investment manager affiliated with Barings if such investment is prohibited by the 1940 Act. These restrictions, and similar
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restrictions that limit our ability to transact business with our officers or directors or their affiliates, including funds managed by Barings, may limit the scope of investment opportunities that would otherwise be available to us.
We are subject to risks associated with investing alongside other third parties, including our joint ventures.
We have invested in joint ventures, and may invest in additional or different joint ventures alongside third parties through partnerships, joint ventures or other entities in the future. Such investments may involve risks not present in investments where a third party is not involved, including the possibility that such third party may at any time have economic or business interests or goals which are inconsistent with ours, or may be in a position to take action contrary to our investment objectives. In addition, we may in certain circumstances be liable for actions of such third party.
More specifically, joint ventures involve a third party that has approval rights over certain activities of the joint venture. The third party may take actions that are inconsistent with our interests. For example, the third party may decline to approve an investment for the joint venture that we otherwise want the joint venture to make. A joint venture may also use investment leverage which magnifies the potential for gain or loss on amounts invested. Generally, the amount of borrowings by the joint venture is not included when calculating our total borrowings and related leverage ratios and is not subject to asset coverage requirements imposed by the 1940 Act. If the activities of the joint venture were required to be consolidated with our activities because of a change in GAAP rules or SEC staff interpretations, it is likely that we would have to reorganize any such joint venture.
The fee structure under the Amended and Restated Advisory Agreement may induce Barings to pursue speculative investments and incur leverage, which may not be in the best interests of our stockholders.
Under the Amended and Restated Advisory Agreement, the base management fee will be payable even if the value of your investment declines. The base management fee is calculated based on our gross assets, including assets purchased with borrowed funds or other forms of leverage (but excluding cash or cash equivalents ). Accordingly, the base management fee is payable regardless of whether the value of our gross assets and/or your investment has decreased during the then-current quarter and creates an incentive for Barings to incur leverage, which may not be consistent with our stockholders’ interests.
The income-based fee payable to Barings is calculated based on a percentage of our return on invested capital. The income-based fee payable to Barings may create an incentive for Barings to make investments on our behalf that are risky or more speculative than would be the case in the absence of such a compensation arrangement. Unlike the base management fee, the income-based fee is payable only if the hurdle rate is achieved. Because the portfolio earns investment income on gross assets while the hurdle rate is based on invested capital, and because the use of leverage increases gross assets without any corresponding increase in invested capital, Barings may be incentivized to incur leverage to grow the portfolio, which will tend to enhance returns where our portfolio has positive returns and increase the chances that such hurdle rate is achieved. Conversely, the use of leverage may increase losses where our portfolio has negative returns, which would impair the value of our common stock.
In addition, Barings receives the capital gains fee based, in part, upon net capital gains realized on our investments. Unlike the income-based fee, there is no hurdle rate applicable to the capital gains fee. As a result, Barings may have a tendency to invest more capital in investments that are likely to result in capital gains as compared to income producing securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which may not be in the best interests of our stockholders and could result in higher investment losses, particularly during economic downturns.
Barings' liability is limited under the Amended and Restated Advisory Agreement, and we are required to indemnify Barings against certain liabilities, which may lead Barings to act in a riskier manner on our behalf than it would when acting for its own account.
Pursuant to the Amended and Restated Advisory Agreement, Barings and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with Barings will not be liable to us, and we have agree to indemnify them, for their acts under the Amended and Restated Advisory Agreement, absent fraud, willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of
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their duties. These protections may lead Barings to act in a riskier manner when acting on our behalf than it would when acting for its own account.
Barings is able to resign as our investment adviser and/or our administrator upon 60 days’ notice, and we may not be able to find a suitable replacement within that time, or at all, resulting in a disruption in our operations that could adversely affect our business.financial condition, business and results of operations.
We expect that membersPursuant to the Amended and Restated Advisory Agreement, Barings has the right to resign as our investment adviser upon 60 days' written notice, whether a replacement has been found or not. Similarly, Barings has the right under the Administration Agreement to resign upon 60 days’ written notice, whether a replacement has been found or not. If Barings resigns, it may be difficult to find a replacement investment adviser or administrator, as applicable, or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all. If a replacement is not found quickly, our business, results of operations and financial condition as well as our ability to pay distributions are likely to be adversely affected and the value of our shares may decline. In addition, the coordination of our internal management and investment teams will maintainor administrative activities is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed by Barings. Even if a comparable service provider or individuals performing such services are retained, whether internal or external, their relationshipsintegration into our business and lack of familiarity with financial institutions, private equity and other non-bank investors, investment bankers, commercial bankers, attorneys, accountants and consultants, and we will rely to a significant extent upon these relationships to provide us with potential investment opportunities. If our management and investment teams fail to maintain their existing relationships or develop new relationships with other sponsors or sources of investment opportunities, we will not be able to grow our investment portfolio. In addition, individuals with whom membersobjective may result in additional costs and time delays that may materially adversely affect our business, results of our managementoperations and

investment teams have relationships are not obligated to provide us with investment opportunities, and, therefore, there is no assurance that such relationships will generate investment opportunities for us. financial condition.
Our long-term ability to fund new investments and make distributions to our stockholders could be limited if we are unable to renew, extend, replace or expand our credit facility,current borrowing arrangements, or if financing becomes more expensive or less available.
On May 1, 2017, we entered into an amendment to the Credit Facility, which (i) increased current commitments under the Credit Facility from $300.0 million to $435.0 million, (ii) provides for an accordion feature that allows for an increase in commitments to up to $550.0 million from new and existing lenders on the same terms and conditions as the existing commitments, and (iii) extends the maturity of the Credit Facility by two years. In July 2017, we increased our commitments under the Credit Facility by $30.0 million to $465.0 million and in September 2017, we again increased our commitments under the Credit Facility from $465.0 million to $480.0 million. If we are unable to meet the terms of the accordion feature, we will be unable to further expand the facility. The revolving period of the Credit Facility ends April 30, 2021, followed by a one-year amortization period with a final maturity date of April 30, 2022. If the facility is not renewed or extended, all principal and interest will be due and payable.
There can be no guarantee that we will be able to renew, extend, replace or replace the Credit Facility when principal payments are due and payableexpand our current borrowing arrangements on terms that are favorable to us, if at all. Our ability to expand the Credit Facility, and to obtain replacement financing when principal payments are due and payable, will be constrained by then-current economic conditions affecting the credit markets. In the event that we are not able to expand the Credit Facility, orOur inability to renew, extend, replace or replace the Credit Facility when principal payments are due and payable, thisexpand these borrowing arrangements could have a material adverse effect on our liquidity and ability to fund new investments, our ability to make distributions to our stockholders and our ability to qualify for tax treatment as a RIC under the Code.
Regulations governing our operation as a business development companyBDC will affect our ability to, and the way in which we, raise additional capital.
Our business will require capital to operate and grow. We may acquire such additional capital from the following sources:
Senior Securities.    Currently we, through our SBIC subsidiaries, have issued debt securities guaranteed by the SBA. We have also issued three classes of notes in registered public offerings, two of which are still outstanding. In the future, we may issue additional debt securities or preferred stock, and/or borrow money from banks or other financial institutions, (including borrowings under our Credit Facility), which we refer to collectively as senior"senior securities." As a result of issuing senior securities, we will be exposed to additional risks, including, but not limited to, the following:
•Under the provisions of the 1940 Act, we are permitted, as a BDC, to issue senior securities only in amounts such that our asset coverage, as defined in the 1940 Act, equals at least 200%150% after each issuance of senior securities. If the value of our assets declines, we may be unable to satisfy this test. If that happens, we may be required to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our debt at a time when such sales and/or repayments may be disadvantageous. Further we may not be permitted to declareprohibited from declaring a dividend or makemaking any distribution to stockholders or repurchaserepurchasing our shares until such time as we satisfy this test.
•Any amounts that we use to service our debt or make payments on preferred stock will not be available for distributions to our common stockholders.
It•Our current indebtedness is, and it is likely that any securities or other indebtedness we may issue will be, and our Credit Facility and our existing notes are, governed by an indenture or other instrument containing covenants restricting our operating flexibility. Additionally, some of these securities or other indebtedness may be rated by rating agencies, and in obtaining a rating for such securities and other indebtedness, we may be required to abide by operating and investment guidelines that further restrict operating and financial flexibility.

•We and, indirectly, our stockholders, will bear the cost of issuing and servicing such securities and other indebtedness.
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•Preferred stock or any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common stock, including separate voting rights and could delay or prevent a transaction or a change in control to the detriment of the holders of our common stock.
Additional Common Stock.    Under the provisions of the 1940 Act, we are not generally able to issue and sell our common stock at a price below then-current net asset value per share. We may, however, sell our common stock or warrants, options or rights to acquire our common stock, at a price below the then-current net asset value per share of our common stock if ourthe Board of Directors determines that such sale is in the best interests of us and our stockholders, and our stockholders approve such sale. At our Annual Stockholders Meeting on May 3, 2017, our stockholders voted to allow us to sell or otherwise issue common stock at a price below net asset value per share for a period of one year ending on the earlier of May 3, 2018 or the date of our 2018 annual meeting of stockholders. The proposal did not specify a maximum discount below net asset value at which we are able to sell or otherwise issue our common stock; however, we do not intend to sell or otherwise issue shares of our common stock below net asset value unless our Board of Directors determines that it would be in our stockholders’ best interests to do so. In any such case, however, the price at which shares of our common stock are to be issued and sold may not be less than a price which, in the determination of our Board of Directors, closely approximates the market value of such securities (less any distributing commission or discount). We may also make rights offerings to our stockholders at prices per share less than the net asset value per share, subject to applicable requirements of the 1940 Act. If we raise additional funds by issuing more common stock or senior securities convertible into, or exchangeable for, our common stock, the percentage ownership of our stockholders at that time would decrease, and they may experience dilution. Moreover, we can offer no assurance that we will be able to issue and sell additional equity securities in the future on favorable terms, or at all.
In additionWe generally seek approval from our stockholders so that we have the flexibility to regulatoryissue up to a specified percentage of our then-outstanding shares of our common stock at a price below net asset value. Pursuant to approval granted at an annual meeting of stockholders held on May 20, 2021, we are permitted to issue and sell shares of our common stock at a price below our then-current net asset value per share in one or more offerings, subject to certain limitations and determinations that must be made by the Board (including, without limitation, that the number of shares issued and sold pursuant to such authority does not exceed 30% of our then-outstanding common stock immediately prior to each such offering). Such stockholder approval expires on our ability to raise capital, our Credit Facility containsMay 20, 2022.
Our financing agreements contain various covenants, which, if not complied with, could accelerate our repayment obligations under the Credit Facility,thereunder, thereby materially and adversely affecting our liquidity, financial condition, results of operations and ability to pay distributions.
We will have a continuing need for capital to finance our investments. We are party to the Credit Facility,various financing agreements from time to time which provides us with a revolving credit line of up to $550.0 million, of which $480.0 million is currently committed for funding. The Credit Facility containscontain customary terms and conditions, including, without limitation, affirmative and negative covenants such as information reporting requirements, minimum consolidated tangiblestockholders' equity, minimum obligators’ net worth, minimum interestasset coverage, minimum asset coverage,liquidity and maintenance of RIC and BDC status and minimum liquidity. The Credit Facilitystatus. These financing arrangements also containscontain customary events of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to other indebtedness, bankruptcy, change of control, and material adverse effect. The Credit Facility permits us to fund additional loans and investments as long as we are within the conditions set out in the credit agreement.
Our continued compliance with the covenants under these covenantsfinancing agreements depends on many factors, some of which are beyond our control, and there can be no assurance that we will continue to comply with thesesuch covenants. Our failure to satisfy thesethe respective covenants or otherwise default under one of our financing arrangements could result in foreclosure by ourthe lenders thereunder, which would accelerate our repayment obligations under the facilityfinancing arrangement and thereby have a material adverse effect on our business, liquidity, financial condition, results of operations and ability to pay distributions to our stockholders.
Our SBIC subsidiaries are licensed by the SBA, and therefore subjectIncurring additional leverage may magnify our exposure to SBA regulations.
Our SBIC subsidiaries are licensed to act as SBICs and are regulated by the SBA. Pursuant to SBA regulations, an SBIC can provide financing in the form of debt, debt with equity features and/or equity to “eligible” small businesses. The SBA also places certain limitations on the financing terms of investments by SBICs in portfolio companies and prohibits SBICs from providing funds for certain purposes or to businesses in a few prohibited industries. See “Item 1. Business — Small Business Administration Regulations” for more discussion on these limitations. Compliance with SBA requirements may cause our SBIC subsidiaries, and us, as their parent, to forgo attractive investment opportunities that are not permitted under SBA regulations.

Further, the SBA regulations require that a licensed SBIC be examined and audited by the SBA to determine its compliance with the relevant SBA regulations. The SBA prohibits, without prior SBA approval, a “change of control” of an SBIC or transfers that would result in any person (or a group of persons acting in concert) owning 10.0% or more of a class of capital stock of a licensed SBIC. If our SBIC subsidiaries fail to comply with applicable SBA regulations, the SBA could, depending on the severity of the violation, limit or prohibit our SBIC subsidiaries’ use of debentures, declare outstanding debentures immediately due and payable, and/or limit our SBIC subsidiaries from making new investments. In addition, the SBA can remove the general partners of our SBIC subsidiaries and have a receiver appointed, or revoke or suspend a license for willful or repeated violation of, or willful or repeated failure to observe, any provision of the Small Business Investment Act or any rule or regulation promulgated thereunder. Such actions by the SBA would, in turn, negatively affect us because our SBIC subsidiaries are wholly-owned.
SBA regulations limit the outstanding dollar amount of SBA-guaranteed debentures that may be issued by an SBIC or group of SBICs under common control.
The SBA regulations currently limit the dollar amount of SBA-guaranteed debentures that can be issued by any one SBIC to $150.0 million or to a group of SBICs under common control to $350.0 million, subject to SBA approval. Moreover, an SBIC may not borrow an amount in excess of two times (and in certain cases, with SBA approval, up to three times) its regulatory capital, as such term is defined in the SBA regulations. As of December 31, 2017, Triangle SBIC had issued the statutory maximum of$150.0 million of SBA-guaranteed debentures and Triangle SBIC II had issued $100.0 million of SBA-guaranteed debentures, leaving borrowing capacity of a maximum of $100.0 million of SBA-guaranteed debentures for Triangle SBIC III. If we require additional capital, our cost of capital is likely to increase, and there is no assurance that we will be able to obtain additional financing on acceptable terms.
Moreover, the current status of our SBIC subsidiaries as SBICs does not automatically ensure that our SBIC subsidiaries will continue to receive SBA-guaranteed debenture funding. Receipt of SBA leverage funding is dependent upon our SBIC subsidiaries continuing to be in compliance with SBA regulations and policies and available SBA funding. The amount of SBA leverage funding available to SBICs is dependent upon annual Congressional authorizations and in the future may be subject to annual Congressional appropriations. There can be no assurance that there will be sufficient debenture funding available at the times desired by our SBIC subsidiaries.
The debentures guaranteed by the SBA have a maturity of ten years and require semi-annual payments of interest. Our SBIC subsidiaries will need to generate sufficient cash flow to make required interest payments on the debentures. If our SBIC subsidiaries are unable to meet their financial obligations under the debentures, the SBA, as a creditor, will have a superior claim to our SBIC subsidiaries’ assets over our stockholders in the event we liquidate our SBIC subsidiaries or the SBA exercises its remedies under such debentures as the result of a default by us.
Because we borrow money and may in the future issue additional senior securities, including preferred stock and debt securities, the potential for gain or loss on amounts invested in us is magnified and may increase the risk of investing in us.
Borrowings, also known as leverage, magnify the potential for gain or loss on invested equity capital. As we use leverage to partially finance our investments, our stockholders experience increased risks associated with investingchanges in leverage, including fluctuations in interest rates that could adversely affect our securities. We currently have the ability toprofitability.
As part of our business strategy, we borrow under our Credit Facility and have issued debt securities,financing agreements with certain banks, and in the future may borrow from, ormoney and issue additional debt securities to banks, insurance companies funds, institutional investors and other lenders and investors.lenders. Our SBIC subsidiaries have issued debt securities guaranteedobligations under these arrangements are or may be secured by the SBA and sold in the capital markets.a material portion of our assets. As a result, of its guarantee of the debt securities, the SBA has fixed dollar claims on the assets of our SBIC subsidiaries thatthese lenders are superior to the claims of our common stockholders. In addition, our Credit Facility contains financial and operating covenants that could restrict our business activities, including our ability to declare dividends if we default under certain provisions. Breach of any of those covenants could cause a default under those instruments. Such a default, if not cured or waived, could have a material adverse effect on us. The lenders party to the Credit Facility are secured primarily by our assets, excluding the assets of our SBIC subsidiaries, andmay have claims that are superior to the claims of our common stockholders. Westockholders, and have or may also borrow from banks and other lenders or issue additional securities including preferred stock and debt

securities inhave fixed-dollar claims on our assets that are superior to the future. If the valueclaims of our assets increases, then leveraging would cause the net asset value attributable to our common stock to increase more sharply than it would have had we not leveraged. Conversely,stockholders. Also, if the value of our assets decreases, leveraging wouldleverage will cause our net asset value to decline more sharply than it otherwise would have had we not leveraged.without leverage. Similarly, any increase in our income in excess of interest payable on the borrowed funds would cause our net investment income to increase more than it would without the leverage, while any decrease in our income would cause our net investment income to decline more sharply than it would have if we had we not borrowed. Such aThis decline could negatively affect our ability to make distributions todividend payments on our stockholders. Leverage is generally consideredcommon stock.
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Because we incur leverage, general interest rate fluctuations may have a speculative investment technique.
As of December 31, 2017, we had $166.8 million in aggregate principal amount outstandingmore significant negative impact on our investments than they would have absent such leverage and, accordingly, may have a material adverse effect on our operating results. A portion of our unsecured notes, $250.0 millionincome will depend upon the difference between the rate at which we borrow funds and the interest rate on the debt securities in outstanding SBA-guaranteed debentures payablewhich we invest. Because we borrow money to make investments and $156.1 million outstanding undermay issue debt securities, preferred stock or other securities, our Credit Facility. In order fornet investment income is dependent upon the difference between the rate at which we borrow funds or pay interest or dividends on such debt securities, preferred stock or other securities and the rate at which we invest these funds. As such, a significant increase in market interest rates could both reduce the value of our portfolio investments and increase our cost of capital, which would reduce our net investment income. Conversely, a decrease in interest rates may have an adverse impact on our returns by requiring us to cover our annual interest payments on this indebtedness, we must achieve annual returnsseek lower yields on our December 31, 2017 total assets ofdebt investments and by increasing the risk that our portfolio companies will prepay our debt investments, resulting in the need to redeploy capital at least 2.2%.potentially lower rates. Typically, our interest earning investments accrue and pay interest at variable rates, and our interest-bearing liabilities accrue interest at variable or potentially fixed rates. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.
Illustration.The following table illustrates the effect of leverage on returns from an investment in our common stock assuming that we employ (i) our actual asset coverage ratio as of December 31, 2021 and (ii) a hypothetical asset coverage ratio of 150%, each at various annual returns on our portfolio as of December 31, 2021, net of expenses. The purpose of this table is to assist investors in understanding the effects of leverage. The calculations in the table below are hypothetical, and actual returns may be higher or lower than those appearing in the table below.
Assumed Return on our Portfolio
(Net of Expenses)
(10.0)%(5.0)%0.0 %5.0 %10.0 %
Corresponding return to common stockholder assuming actual asset coverage as of December 31, 2021(1)(35.6)%(21.0)%(6.5)%8.1 %22.7 %
Corresponding return to common stockholder assuming 150% asset coverage as of December 31, 2021(2)(37.3)%(22.1)%(6.8)%8.4 %23.7 %
 
Assumed Return on our Portfolio
(Net of Expenses)
 (10.0)%(5.0)%0.0 %5.0%10.0%
Corresponding net return to stockholder(1)(23.9)%(14.3)%(4.8)%4.8%14.3%
(1) Assumes $1.2 billion$2,160.9 million in total assets, $572.8$1,407.0 million in principal amount of debt outstanding, $641.3$741.9 million in net assets and an average cost of funds of 5.35%3.412%, which was the weighted average borrowing cost of our outstanding borrowings at December 31, 2021. The assumed amount of debt outstanding for this example includes $655.2 million of outstanding borrowings under the February 2019 Credit Facility as of December 31, 2021, $50.0 million aggregate principal amount of August 2025 Notes (as defined below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in Item 7 of Part II of this Annual Report on Form 10-K) outstanding, $175.0 million aggregate principal amount of November Notes (as defined below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in Item 7 of Part II of this Annual Report on Form 10-K) outstanding, $150.0 million aggregate principal amount of February Notes (as defined below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in Item 7 of Part II of this Annual Report on Form 10-K) outstanding, $350.0 million aggregate principal amount of November 2026 Notes (as defined below under "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" included in Item 7 of Part II of this Annual Report on Form 10-K) outstanding, and assumed additional borrowings of $26.8 million to settle our payable from unsettled transactions as of December 31, 2021.
(2) Assumes $2,264.6 million in total assets, $1,483.9 million in debt outstanding and $741.9 million in net assets as of December 31, 2021, and an average cost of funds of 3.412%, which was the weighted average borrowing cost of our borrowings at December 31, 2017.2021.
Our abilityBased on our total outstanding indebtedness of $1,380.2 million as of December 31, 2021, assumed additional borrowings of $26.8 million to achievesettle our payable from unsettled transactions as of December 31, 2021 and an average cost of funds of 3.412%, which was the weighted average borrowing cost of our outstanding borrowings at
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December 31, 2021, our investment objective may depend in partportfolio must experience an annual return of at least 2.22% to cover annual interest payments on our abilityoutstanding indebtedness.
Based on outstanding indebtedness of $1483.9 million calculated assuming a 150% asset coverage ratio and an average cost of funds of 3.412%, which was the weighted average borrowing cost of our outstanding borrowings at December 31, 2021, our investment portfolio must experience an annual return of at least 2.24% to achieve additional leveragecover annual interest payments on favorable terms by issuing additional securities or debentures guaranteed by the SBA, by borrowing from banks or insurance companies or by expanding our line of credit, and there can be no assurance that such additional leverage can in fact be achieved.
There can be no assurance that our Board of Directors’ review of strategic alternatives will result in a transaction or, if a transaction is consummated, that we will be able to achieve some or all of the benefits anticipated from such transaction.
As initially announced in November 2017, our Board of Directors has elected to explore and evaluate a broad range of strategic alternatives to enhance long-term stockholder value and has engaged an investment banking firm as its financial advisor in connection therewith. There can be no assurance that this strategic alternatives review process will result in a transaction, or if a transaction is undertaken, as to its terms or timing. Our ability to successfully complete any strategic transaction is subject to significant risks, including, among others, the riskthat any required regulatory or governmental approvals may not be obtained and the risk that, for this or other reasons, we may be unable to achieve some or all of the benefits that we anticipated from such transaction.outstanding indebtedness.
We may in the future determine to fund a portion of our investments with preferred stock, which would magnify the potential for gain or loss and the risks of investing in us in the same way as our borrowings.
Preferred stock, which is another form of leverage, has the same risks to our common stockholders as borrowings because the dividends on any preferred stock we issue must be cumulative. Payment of such dividends and repayment of the liquidation preference of such preferred stock must take preference over any dividends or other payments to our common stockholders, and preferred stockholders are not subject to any of our expenses or losses and are not entitled to participate in any income or appreciation in excess of their stated preference.

We may experience fluctuations in our quarterly results.
We could experience fluctuations in our quarterly operating results due to a number of factors, including our ability or inability to make investments in companies that meet our investment criteria, the interest rate payable on the debt securities we acquire, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods.
Our ability to enter into and exit investment transactions with our affiliates is restricted.
Except in those instances where we have received prior exemptive relief from the SEC, we are prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval of our independent directors and, in some cases, prior approval of the SEC. Any person that owns, directly or indirectly, 5.0% or more of our outstanding voting securities is deemed our affiliate for purposes of the 1940 Act and we are generally prohibited from buying or selling any security from or to such affiliate, absent the prior approval of our independent directors. The 1940 Act also prohibits “joint” transactions with an affiliate, which could include investments in the same portfolio company (whether at the same or different times), without prior approval of our independent directors. If a person acquires more than 25.0% of our voting securities, we will be prohibited from buying or selling any security from or to such person, or entering into joint transactions with such person, absent the prior approval of the SEC. These restrictions could limit or prohibit us from making certain attractive investments that we might otherwise make absent such restrictions.
Our Board of Directors may change our investment objectives, operating policies and strategies without prior notice or stockholder approval, the effects of which may be adverse.
OurThe Board of Directors has the authority to modify or waive our current investment objectives, operating policies and strategies without prior notice and without stockholder approval (except as required by the 1940 Act). However, absent stockholder approval, we may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC. We cannot predict the effect any changes to our current operating policies, investment criteria and strategies would have on our business, net asset value, operating results and value of our stock. However, the effects might be adverse, which could negatively impact our ability to pay you distributions and cause you to lose all or part of your investment. Moreover, we will have significant flexibility in investing the net proceeds from any future offering and may use the net proceeds from such offerings in ways with which investors may not agree or for purposes other than those contemplated at the time of the offering.
We will be subject to corporate-level U.S. federal income tax if we are unable to maintain our tax treatment as a regulated investment companyRIC under Subchapter M of the Code, which will adversely affect our results of operations and financial condition.
We have elected to be treated as a RIC under the Code, which generally will allow us to avoid being subject to corporate-level U.S. federal income tax. To obtain and maintain RIC tax treatment under the Code, we must meet the following annual distribution, income source and asset diversification requirements:
•The Annual Distribution Requirement for a RIC will be satisfied if we distribute to our stockholders on an annual basis at least 90.0% of our net ordinary income and net short-term capital gain in excess of net long-term capital loss, or "investment company taxable income" or ICTI."ICTI, if any. We will be subject to a 4.0% nondeductible U.S. federal excise tax, however, to the extent that we do not satisfy certain additional minimum distribution requirements on a calendar year basis. Because we use debt financing, we are subject to certain asset coverage ratio requirements under the 1940 Act and are currently, and may in the future become, subject to certain financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the Annual Distribution Requirement. If we are unable to obtain cash from other sources, we could fail to qualify for RIC tax treatment and thus become subject to corporate-level U.S. federal income tax.
•The income source requirement will be satisfied if we obtain at least 90.0% of our income for each year from distributions, interest, gains from the sale of stock or securities or similar sources.

•The asset diversification requirement will be satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year. To satisfy this requirement, at least 50.0% of the value of our assets must consist of cash, cash equivalents, U.S. government securities, securities of other RICs, and other acceptable securities;securities, provided such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities
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of the issuer; and no more than 25.0% of the value of our assets can be invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses or of certain “qualified publicly traded partnerships.” Failure to meet these requirements may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC tax treatment. Because most of our investments will be in private companies, and therefore will be relatively illiquid, any such dispositions could be made at disadvantageous prices and could result in substantial losses.
If we fail to qualify for or maintain RIC tax treatment for any reason and are subject to corporate-level U.S. federal income tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions. We may also be subject to certain U.S. federal excise taxes, as well as state, local and foreign taxes.
We may not be able to pay distributions to our stockholders, our distributions may not grow over time, a portion of distributions paid to our stockholders may be a return of capital and investors in ourany debt securities we may issue may not receive all of the interest income to which they are entitled.
We intend to pay quarterly distributions to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. Our ability to pay distributions might be harmed by, among other things, the risk factors described in this Annual Report.Report on Form 10-K. In addition, the inability to satisfy the asset coverage test applicable to us as a BDC could, in the future, limit our ability to pay distributions. All distributions will be paid at the discretion of ourthe Board of Directors and will depend on our earnings, our financial condition, maintenance of our RIC tax treatment, compliance with applicable BDC regulations, our SBIC subsidiaries’ compliance with applicable SBIC regulations, compliance with the covenants ofunder our financing agreements and any debt securities we may issue and such other factors as ourthe Board of Directors may deem relevant from time to time. In addition, our line of credit may restrict the amount of distributions we are permitted to make. We cannot assure you that we will pay distributions to our stockholders in the future.
The above-referenced restrictions on distributionsSome of the above-described risks may also inhibit our ability to make required interest payments to holders of ourany debt securities we may issue, which may cause a default under the terms of our debt agreements. Such a default could materially increase our cost of raising capital, as well as cause us to incur penalties or trigger cross-default provisions under the terms of our debt agreements.
When we make quarterly distributions, we will be required to determine the extent to which such distributions are paid out of current or accumulated earnings and profits, recognized capital gain or capital. To the extent there is a return of capital, investors will be required to reduce their basis in our stock for U.S. federal income tax purposes, which may result in a higher tax liability when the shares are sold, even if they have not increased in value or have lost value.
We may have difficulty paying our required distributions if we recognize income before or without receiving cash representing such income.
For U.S. federal income tax purposes, we may be required to recognize taxable income in circumstances in which we do not receive a corresponding payment in cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with contractual PIK interest or in certain cases, increasing interest rates or debt instruments that were issued with warrants), we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. Investments structured with these features may represent a higher level of credit risk compared to investments generating income which must be paid in cash on a current basis. We may also have to include in income other amounts that we have not yet received in cash, such as deferred loan origination fees that are paid after origination of the loan or are paid in non-cash

compensation such as warrants or stock.PIK interest. We anticipate that a portion of our income may constitute original issue discount or other income required to be included in taxable income prior to receipt of cash. Further, we may elect to amortize market discounts and include such amounts in our taxable income in the current year, instead of upon disposition, as an election not to do so would limit our ability to deduct interest expenses for U.S. federal income tax purposes.
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Because any original issue discount or other amounts accrued will be included in our ICTI for the year of the accrual, we may be required to make a distribution to our stockholders in order to satisfy the annual distribution requirement, even though we will not have received any corresponding cash amount. As a result, we may have difficulty meeting the annual distribution requirement necessary to obtain and maintain RIC tax treatment under the Code. We may have to sell some of our investments at times and/or at prices we would not consider advantageous, raise additional debt or additional equity capital or forgoforego new investment opportunities for this purpose. If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus become subject to corporate-level U.S. federal income tax. For additional discussion regarding the tax implications of a RIC, see “Material U.S. Federal Income Tax Considerations — Taxation as a RIC” included in Item 1 of Part 1 of this Annual Report on Form 10-K.
You may have a current tax liability on distributions reinvested in our common stock pursuant to our dividend reinvestment plan but would not receive cash from such distributions to pay such tax liability.
If you participate in our dividend reinvestment plan, you will be deemed to have received, and for U.S. federal income tax purposes will be taxed on, the amount reinvested in our common stock to the extent the amount reinvested was not a tax-free return of capital. As a result, unless you are a tax-exempt entity, you may have to use funds from other sources to pay your tax liability on the value of our common stock received from the distribution.
Our SBIC subsidiaries, as SBICs, may be unable to make distributions to us that may harm our ability to meet regulated investment company requirements, which could result in the imposition of an entity-level tax.
In order for us to continue to qualify for tax treatment as a RIC, we will be required to distribute on an annual basis substantially all of our taxable income, including income from our subsidiaries, including our SBIC subsidiaries. As a significant amount of our investments are generally held by our SBIC subsidiaries, we will be substantially dependent on our SBIC subsidiaries for cash distributions to enable us to meet the RIC distribution requirements. Our SBIC subsidiaries may be limited by the Small Business Investment Act, and SBA regulations governing SBICs, from making certain distributions to us that may be necessary to enable us to qualify for tax treatment as a RIC. In this regard, SBA regulations prohibit Triangle SBIC, Triangle SBIC II, and Triangle SBIC III from making distributions to us when they have negative “retained earnings available for distribution,” which is calculated as “net retained earnings minus unrealized depreciation.” We may have to request a waiver of the SBA’s restrictions for our SBIC subsidiaries to make certain distributions to maintain our tax treatment as a RIC. We cannot assure you that the SBA will grant such waiver and if our SBIC subsidiaries are unable to obtain a waiver, compliance with the SBA regulations may result in loss of RIC tax treatment and a consequent imposition of corporate-level U.S. federal income tax on us.
Pursuant to SBA regulations, an SBIC with outstanding debenture leverage may only distribute cumulative realized profits (less unrealized losses on investments). It may not return more than 2% of its outstanding capital in any fiscal year without prior SBA approval. Historically, the SBA has permitted payment in excess of 2% only pursuant to an approved wind-up plan filed by the SBIC pursuant to which the SBA determines that repayment of outstanding debentures is adequately assured.
Because we intend to distribute substantially all of our income to our stockholders to maintain our tax treatment as a regulated investment company,RIC, we will continue to need additional capital to finance our growth, and regulations governing our operation as a business development company will affect our ability to, and the way in which we, raise additional capital and make distributions.growth.
In order to satisfy the requirements applicable to a RIC, and to avoid payment of U.S. federal excise tax, we intend to distribute to our stockholders substantially all of our net ordinary income and net capital gain income except for certain net long-term capital gains recognized after we became a RIC, some or all of which we may

retain, pay applicable U.S. federal income taxes with respect thereto and elect to treat as deemed distributions to our stockholders. As a BDC, we generally are required to meet a coverage ratio of total assets to total senior securities, which includes all of our borrowings (other than SBA leverage) and any preferred stock we may issue, in the future, of at least 200.0%150%. This requirement limits the amount that we may borrow and may prohibit us from making distributions. If the value of our assets declines, we may be unable to satisfy this test. If that happens, we may be required to sell a portion of our investments or sell additional securities and, depending on the nature of our leverage, to repay a portion of our indebtedness at a time when such sales may be disadvantageous. In addition, issuance of additional securities could dilute the percentage ownership of our current stockholders in us.
While we expect to be able to borrow and to issue additional debt and additional equity securities, we cannot assure you that debt and equity financing will be available to us on favorable terms, or at all. If additional funds are not available to us, we could be forced to curtail or cease new investment activities, and our net asset value could decline. In addition, as a BDC, we generally are not permitted to issue equity securities priced below
There is no assurance that any future share repurchase plans will result in future repurchases of our then-current net asset value per share without stockholder approval. At our Annual Stockholders Meeting on May 3, 2017, our stockholders voted to allow us to issue common stock at aor enhance long-term stockholder value, and repurchases, if any, could affect our stock price below net asset value per share for a periodand increase its volatility and will diminish our cash reserves.
On December 23, 2020, as part of one year ending on the earlierMVC Acquisition, the Board affirmed its commitment under the Merger Agreement to open-market purchases of May 3, 2018 or the date of our 2018 annual meeting of stockholders. The proposal did not specify a maximum discount below net asset value at which we are able to issue our common stock; however, we do not intend to issue shares of our common stock in an aggregate amount of up to $15.0 million at then-current market prices at any time shares trade below 90% of our then most recently disclosed net asset value unlessper share. Any repurchases pursuant to the authorized program will occur during the 12-month period that commenced upon the filing of our Board of Directors determinesquarterly report on Form 10-Q for the quarter ended March 31, 2021, which occurred on May 6, 2021, and will be made in accordance with applicable legal, regulatory and contractual requirements. During the year ended December 31, 2021, we did not repurchase any shares under the authorized program.
There can be no assurance that it would be in our stockholders’ best interests to do so.
We cannot predict how tax reform legislationany future share repurchases will affect us, our investments,occur, or, our stockholders, andif they occur, that they will enhance stockholder value. In addition, any such legislation could adversely affect our business. 
Legislative or other actions relating to taxesfuture share repurchases could have a negativematerial adverse effect on us. The rules dealingour business for the following reasons:
•Repurchases may not prove to be the best use of our cash resources.
•Repurchases will diminish our cash reserves, which could impact our ability to finance future growth and to pursue possible future strategic opportunities.
•We may incur debt in connection with U.S. federal income taxation are constantly under review by persons involvedour business in the legislative process and byevent that we use other cash resources to repurchase shares, which may affect the IRSfinancial performance of our business during future periods or our liquidity and the U.S. Treasury Department. The U.S. Houseavailability of Representativescapital for other needs of the business.
•Repurchases could affect the trading price of our common stock or increase its volatility and U.S. Senate recently passed tax reform legislation, whichmay reduce the President recently signed into law. Such legislation will make many changes tomarket liquidity for our stock.
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•Repurchases may not be made at the Internal Revenue Code, including significant changes to the taxation of business entities, the deductibility of interest expense,best possible price and the tax treatmentmarket price of capital investment. We cannot predict with certainty howour common stock may decline below the levels at which we repurchased shares of common stock.
•Any suspension, modification or discontinuance of any changesfuture share repurchase plan could result in a decrease in the tax laws might affecttrading price of our common stock.
•Repurchases may make it more difficult for us our stockholders, or our portfolio investments. New legislation and any U.S. Treasury regulations, administrative interpretations or court decisions interpreting such legislation could significantly and negatively affect our abilityto meet the diversification requirements necessary to qualify for tax treatment as a RIC or thefor U.S. federal income tax consequencespurposes; failure to us andqualify for tax treatment as a RIC would render our stockholders of such qualification, ortaxable income subject to corporate-level U.S. federal income taxes.
•Repurchases may cause our non-compliance with covenants under our financing agreements, which could have other adverse consequences. Stockholders are urged to consult with their tax advisor regarding tax legislative, regulatory, or administrative developments and proposals and their potential effect on an investment in our securities.
Changes in laws or regulations governing our operations may adversely affect our business or cause us to alter our business strategy.
We are subject to regulation at the local, state and federal level. New legislation may be enacted or new interpretations, rulings or regulations could be adopted, including those governing the types of investments we are permitted to make, any of which could harm us and our stockholders, potentially with retroactive effect. In addition, any change to the SBA’s current debenture program could have a significant impact on our ability to obtain lower-cost leverage and, therefore, any competitive advantage we may have over other finance companies.
Additionally, any changes to the laws and regulations governing our operations relating to permitted investments may cause us to alter our investment strategy in order to avail ourselves of new or different opportunities. Such changes could result in material differences to the strategies and plans set forth in this Annual Report and may result in our investment focus shifting from the areas of expertise of our management team to other types of investments in which our management team may have less expertise or little or no experience. Thus, any such changes, if they occur, could have a material adverse effect on our operating results of operations and the value of your investment.

Efforts to comply with the Sarbanes-Oxley Act involve significant expenditures, and non-compliance with the Sarbanes-Oxley Act may adversely affect us.financial condition.
We are subject to the Sarbanes-Oxley Acthighly dependent on information systems and the related rules and regulations promulgated by the SEC. Among other requirements, under Section 404 of the Sarbanes-Oxley Act and rules and regulations of the SEC thereunder,systems failures could significantly disrupt our management is required to report on our internal controls over financial reporting. We are required to review, on an annual basis, our internal controls over financial reporting, and to evaluate and disclose, on a quarterly and annual basis, significant changes in our internal controls over financial reporting. We have and expect to continue to incur significant expenses related to compliance with the Sarbanes-Oxley Act,business, which will negatively impact our financial performance and our ability to make distributions. In addition, this process results in a diversion of management’s time and attention. In the event that we are unable to maintain compliance with the Sarbanes-Oxley Act and related rules, we may be adversely affected.
The Credit Facility with potential members of the underwriting syndicate may not be as favorable to us as if it had been negotiated with unaffiliated third-parties.
Our credit facility includes lenders that have acted and may, in the future act as membersturn, negatively affect our liquidity, financial condition and results of the underwriting syndicate for securities issued pursuant to a previously filed registration statement. Consequently the terms may not be as favorable to us as if they had been negotiated with unrelated third parties.
We face cybersecurity risks.operations.
Our business operations rely upon securedepends on the communications and information technology systems forof Barings, its affiliates and our or Barings' third-party service providers. Any failure or interruption of those systems or services, including as a result of the termination or suspension of an agreement with any third-party service providers, could cause delays or other problems in our or Barings’ business activities. Our or Barings’ financial, accounting, data processing, storagebackup or other operating systems and reporting. Despite careful securityfacilities may fail to operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control and controls design, implementation and updating,adversely affect our information technology systemsbusiness. Among other things, there could become subject to cyber-attacks. Network, system, application and data breaches could result in operational disruptionsbe sudden electrical or information misappropriation,telecommunications outages, natural disasters, disease pandemics, events arising from local or larger scale political or social matters and/or cyber-attacks, any one or more of which could have a material adverse effect on our business, financial condition and operating results of operations and financial condition.
If we are unable to maintainnegatively affect the availabilitymarket price of our electronic data systemscommon stock.
Cybersecurity risks and safeguardcyber incidents may adversely affect our business or the securitybusiness of our data, our abilityportfolio companies by causing a disruption to conduct business may be compromised, which could impair our liquidity, disrupt our business, damage our reputation and cause losses.
Cybersecurity refers to the combination of technologies, processes, and procedures established to protect information technology systems and data from unauthorized access, attack or damage. We are subject to cybersecurity risks. Information cybersecurity risks have significantly increased in recent years and, while we have not experienced any material losses relating to cyber attacks or other information security breaches, we could suffer such losses in the future. Our computer systems, software and networks may be vulnerable to unauthorized access, computer viruses or other malicious code and other events that could have a security impact. If one or more of such events occur, this potentially could jeopardize confidential and other information, including nonpublic personal information and sensitive business data, processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our operations or the operations of our customersportfolio companies, a compromise or counterparties. Thiscorruption of our confidential information or the confidential information of our portfolio companies and/or damage to our business relationships or the business relationships of our portfolio companies, all of which could result in significant losses, reputational damage, litigation, regulatory fines or penalties, or otherwise adversely affect ournegatively impact the business, financial condition orand operating results of operations. Privacyus or our portfolio companies.
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of the information resources of us, Barings or our portfolio companies. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our or Barings’ information systems or those of our portfolio companies for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. Barings’ employees may be the target of fraudulent calls, emails and other forms of activities. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to business relationships. The costs related to cyber or other security lawsthreats or disruptions may not be fully insured or indemnified by other means. As our and regulation changes,our portfolio companies’ reliance on technology has increased, so have the risks posed to our information systems, both internal and compliance with those changes, may result in cost increases due to system changesprovided by Barings and third-party service providers, and the development of new administrative processes. In addition, we may be required to expend significant additional resources to modify our protective measures and to investigate and remediate vulnerabilities or other exposures arising from operational and security risks. In the future, we may be required to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are not fully insured.
Third parties with which we do business may also be sources of cybersecurity or other technological risks. We outsource certain functions, and these relationships allow for the storage and processinginformation systems of our information,portfolio companies. Barings has implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber intrusions, but these measures, as well as customer, counterparty, employeeour increased awareness of the nature and borrower information. While we engage in actionsextent of a risk of a cyber incident, do not guarantee that a cyber incident will not occur and/or that our financial results, operations or confidential information will not be negatively impacted by such an incident. In addition, cybersecurity has become a top priority for regulators around the world, and some jurisdictions have enacted laws requiring companies to reduce our exposure resulting from outsourcing, ongoing threats may result in unauthorized access, loss, exposure or destructionnotify individuals of data security breaches involving certain types of personal data. If we fail to comply with the relevant laws and regulations, we could suffer financial losses, a disruption of our business, liability to investors, regulatory intervention or other cybersecurity incidents, with increased costs and other consequences, including those described above.reputational damage.
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Our business and operations may be negatively affected by securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of our investment strategy and impact our stock price.
In the past, following periods of volatility in the market price of a company’s securities, securities class-action litigation has often been brought against that company. StockholderIn addition, stockholder activism, which could take many forms or arise in a variety of situations, including making public demands that we consider strategic alternatives, engaging in public campaigns to attempt to influence our corporate governance and/or our management, and commencing proxy contests to attempt to elect the activists' representatives or others to the Board, has been increasingincreased in the BDC space recently.in recent years. For example, we and certain of our current and former executive officers have previously been named defendants in two separatea class-action lawsuitslawsuit asserting claims under Section 10(b) and Section 20(a) of the Exchange Act, and, due to the potential volatility of our stock price and for a variety of other reasons, we may in the future become the target of further securities litigation or stockholder activism. See “Legal Proceedings” in Item 3 of Part I of this Annual Report for more information. Securities litigation and stockholder activism, including potential proxy contests, may result in substantial costs and divert management’s and our Board of Directors’the Board's attention and resources from our business. Additionally, such securities litigation and stockholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make it more difficult for Barings to attract and retain qualified personnel. Also, we may be required to incur significant legal fees and other expenses related to any securities litigation and activist stockholder matters. Further, our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism.
We could face losses and potential liability if intrusion, viruses or similar disruptions to our technology jeopardize our confidential information or that of users of our technology.
Although we have implemented, and will continue to implement, security measures, our technology platform is and will continue to be vulnerable to intrusion, computer viruses or similar disruptive problems caused by unauthorized users. The misappropriation of proprietary information could expose us to a risk of loss or litigation.
Risks Relating to Our Investments
Our investments in portfolio companies may be risky, and we could lose all or part of our investment.
Our portfolio consists primarily of senior secured private, middle-market debt and equity investments. Investing in lower middle marketprivate and middle-market companies involves a number of significant risks. Among other things, these companies:
•may have limited financial resources to meet future capital needs and thus may be unable to grow or meet their obligations under their debt instruments that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing any guarantees from subsidiaries or affiliates of our portfolio companies that we may have obtained in connection with our investment, as well as a corresponding decrease in the value of the equity components of our investments;
•may have shorter operating histories, narrower product lines, smaller market shares and/or more significant customer concentration than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns;
•are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us;
•generally have less predictable operating results, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position; and
•generally have less publicly available information about their businesses, operations and financial condition. We rely on the ability of our management team andBarings' investment professionals to obtain adequate information to evaluate the potential returns from investing in these companies. If we areBarings is unable to uncover all material information about these companies, we may not make a fully informed investment decision, and we may lose all or part of our investment.

In addition, in the course of providing significant managerial assistance to certain of our portfolio companies, certain of our officers and directors or certain of Barings' investment professionals may serve as directors on the boards of such companies. We currently are, andor Barings may in the future be subject to litigation that arises out of our investments
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in these companies, and our officers and directors or Barings and/or its investment professionals may be named as defendants in such litigation, which could result in an expenditure of funds (through our indemnification of such officers and directors) and the diversion of management'sour officers', directors' and Barings' time and resources.
The lack of liquidity in our investments may adversely affect our business.
We generally invest in companies whose securities are not publicly traded, and whose securities aremay be subject to legal and other restrictions on resale, or are otherwise less liquid than publicly traded securities. The illiquidity of these investments may make it difficult for us to sell these investments when desired. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we had previously recorded these investments.
Price declines and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our net asset value through increased net unrealized depreciation.
As a result,BDC, we do not expectare required to achieve liquidity incarry our investments at market value or, if no market value is ascertainable, at fair value as determined in good faith by the Board. As part of the valuation process, we may take into account the following types of factors, if relevant, in determining the fair value of our investments:
•a comparison of the portfolio company’s securities to publicly traded securities;
•the enterprise value of the portfolio company;
•the nature and realizable value of any collateral;
•the portfolio company’s ability to make payments and its earnings and discounted cash flow;
•the markets in which the portfolio company does business; and
•changes in the near-term. Ourinterest rate environment and the credit markets generally that may affect the price at which similar investments are usually subjectmay be made in the future and other relevant factors.
When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we use the pricing indicated by the external event to contractualcorroborate our valuation. We record decreases in the market values or legal restrictions on resale or are otherwise illiquid because there is usually no established trading market for such investments. The illiquidity of mostfair values of our investments as unrealized depreciation. Declines in prices and liquidity in the corporate debt markets may make it difficult for us to disposeresult in significant net unrealized depreciation in our portfolio. The effect of them at a favorable price,all of these factors on our portfolio may reduce our net asset value by increasing net unrealized depreciation in our portfolio. Depending on market conditions, we could incur substantial realized losses and as a result, we may suffer losses.additional unrealized losses in future periods, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We may not have the funds or abilityOur failure to make additionalfollow-on investments in our portfolio companies.companies could impair the value of our portfolio.
We may not have the funds or ability to make additional investments in our portfolio companies. After ourFollowing an initial investment in a portfolio company, we may be called upon from time to time to providemake additional funds to suchinvestments in that portfolio company as “follow-on” investments, in seeking to:
•increase or maintain in whole or in part our position as a creditor or equity ownership percentage in a portfolio company;
•exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or
•preserve or enhance the value of our investment.
We have the opportunity to increase our investment through the exercise of a warrant to purchase common stock. There is no assurance that we will make, or will have sufficient fundsdiscretion to make follow-on investments. Any decisions notinvestments, subject to make a follow-on investment or any inabilitythe availability of capital resources. Failure on our part to make such an investmentfollow-on investments may, have a negative impact onin some circumstances, jeopardize the continued viability of a portfolio company in need of such anand our initial investment, or may result in a missed opportunity for us to increase our participation in a successful operationportfolio company. Even if we have sufficient capital to make a desired follow-on investment, we may elect not to make a follow-on investment because we may not want to increase our level of risk, because we prefer other opportunities or may reduce the expected yield on the investment.because of regulatory or other considerations.
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Our portfolio companies may incur debt or issue securities that rankranks equally with, or senior to, our investments in such companies.companies and such portfolio companies may not generate sufficient cash flow to service their debt obligations to us.
We typically invest in senior debt and first lien notes, however, we have invested, and may invest in the future, a portion of our capital in second lien and subordinated debt securities generally securedloans issued by security interests inour portfolio company assets, coupled with equity interests.companies. Our portfolio companies may have, or may be permitted to incur, other debt or issue other securities that rankranks equally with, or senior to, the debt securities in which we invest. Such subordinated investments are subject to greater risk of default than senior obligations as a result of adverse changes in the financial condition of the obligor or in general economic conditions. If we make a subordinated investment in a portfolio company, the portfolio company may be highly leveraged, and its relatively high debt-to-equity ratio may create increased risks that its operations might not generate sufficient cash flow to service all of its debt obligations. By their terms, such debt instruments may entitleprovide that the holders are entitled to receive payment of dividends, interest or principal on or before the dates on which we are entitled to receive payments within respect toof the debt instrumentssecurities in which we invest. These debt instruments would usually prohibit the portfolio companies from paying interest on or repaying our investments in the event of and during the continuance of a default under such debt. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of securities ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution.distribution in respect of our investment. After repaying such holders, suchsenior creditors, the portfolio company may not have any remaining assets to use for repaying its obligation to us.us where we are junior creditor. In the case of securitiesdebt ranking equally with our investments,debt securities in which we invest, we would have to share any distributions on an equal and ratable basis any distributions with other security holderscreditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.
Additionally, certain loans that we make to portfolio companies may be secured on a second priority basis by the same collateral securing senior secured debt of such companies. The first priority liens on the collateral will secure the portfolio company’s obligations under any outstanding senior debt and may secure certain other future debt that may be permitted to be incurred by the portfolio company under the agreements governing the loans. The holders of obligations secured by first priority liens on the collateral will generally control the liquidation of, and be entitled to receive proceeds from, any realization of the collateral to repay their obligations in full before us. In addition, the value of the collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from sales of all of the collateral would be sufficient to satisfy the loan obligations secured by the second priority liens after payment in full of all obligations secured by the first priority liens on the collateral. If such proceeds were not sufficient to repay amounts outstanding under the loan obligations secured by the second priority liens, then we, to the extent not repaid from the proceeds of the sale of the collateral, will only have an unsecured claim against the portfolio company’s remaining assets, if any.
We may in the future make unsecured loans to portfolio companies, meaning that such loans will not benefit from any interest in collateral of such companies. Liens on a portfolio company’s collateral, if any, will secure the portfolio company’s obligations under its outstanding secured debt and may secure certain future debt that is permitted to be incurred by the portfolio company under its secured loan agreements. The holders of obligations secured by such liens will generally control the liquidation of, and be entitled to receive proceeds from, any realization of such collateral to repay their obligations in full before us. In addition, the value of such collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from sales of such collateral would be sufficient to satisfy our unsecured loan obligations after payment in full of all loans secured by collateral. If such proceeds were not sufficient to repay the outstanding secured loan obligations, then our unsecured claims would rank equally with the unpaid portion of such secured creditors’ claims against the portfolio company’s remaining assets, if any.
The rights we may have with respect to the collateral securing any junior priority loans we make to our portfolio companies may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of senior debt. Under such ana typical intercreditor agreement, at any time that senior obligations that have the benefit of the first priority liens are outstanding, weany of the following actions that may forfeit certain rights withbe taken in respect toof the collateral towill be at the direction of the holders of the senior obligations. These rights may includeobligations secured by the rightfirst priority liens:
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•the ability to commencecause the commencement of enforcement proceedings against the collateral, collateral;
•the rightability to control the conduct of such enforcement proceedings, proceedings;
•the right to approveapproval of amendments to collateral documents, the right to releasedocuments;
•releases of liens on the collateralcollateral; and the right to waive
•waivers of past defaults under collateral documents.
We may not have the ability to control or direct such actions, even if as a result our rights as junior lenders are adversely affected.

There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims.
Even thoughif we may have structured certain of our investmentsstructure an investment as a senior loans,loan, if one of our portfolio companies were to go bankrupt, depending on the facts and circumstances and based upon principles of equitable subordination as defined by existing case law, a bankruptcy court could subordinate all or a portion of our claim to that of other creditors and transfer any lien securing such subordinated claim to the bankruptcy estate. The principles of equitable subordination defined by case law have generally indicated that a claim may be subordinated only if its holder is guilty of misconduct or where the senior loan is re-characterized as an equity investment and the senior lender has actually provided significant managerial assistance to the bankrupt debtor. We may also be subject to lender liability claims for actions taken by us with respect to a borrower’s business or instances where we exercise control over the borrower. It is possible that we could become subject to a lender’s liability claim, including as a result of actions taken in rendering significant managerial assistance or actions to compel and collect payments from the borrower outside the ordinary course of business.
Second priority liens on collateral securing loans that we make to our portfolio companies may be subject to control by senior creditors with first priority liens. If there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and us.
Certain loans that we make are secured by a second priority security interest in the same collateral pledged by a portfolio company to secure senior debt owed by the portfolio company to commercial banks or other traditional lenders. Often the senior lender has procured covenants from the portfolio company prohibiting the incurrence of additional secured debt without the senior lender’s consent. Prior to and as a condition of permitting the portfolio company to borrow money from us secured by the same collateral pledged to the senior lender, the senior lender will require assurances that it will control the disposition of any collateral in the event of bankruptcy or other default. In many such cases, the senior lender will require us to enter into an “intercreditor agreement” prior to permitting the portfolio company to borrow from us. Typically the intercreditor agreements we are requested to execute expressly subordinate our debt instruments to those held by the senior lender and further provide that the senior lender shall control: (i) the commencement of foreclosure or other proceedings to liquidate and collect on the collateral; (ii) the nature, timing and conduct of foreclosure or other collection proceedings; (iii) the amendment of any collateral document; (iv) the release of the security interests in respect of any collateral;collateral and (v) the waiver of defaults under any security agreement. Because of the control we may cede to senior lenders under intercreditor agreements we may enter, we may be unable to realize the proceeds of any collateral securing some of our loans.
Finally, the value of the collateral securing our debt investment will ultimately depend on market and economic conditions, the availability of buyers and other factors. Therefore, there can be no assurance that the proceeds, if any, from the sale or sales of all of the collateral would be sufficient to satisfy the loan obligations secured by our second priority liens after payment in full of all obligations secured by the senior lender’s first priority liens on the collateral. There is also a risk that such collateral securing our investments may decrease in value over time, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the portfolio company and market conditions. If such proceeds are not sufficient to repay amounts outstanding under the loan obligations secured by our second priority liens, then we, to the extent not
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repaid from the proceeds from the sale of the collateral, will only have an unsecured claim against the company’s remaining assets, if any.
Covenant-Lite Loans may expose us to different risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks and less protective loan documentation, than is the case with loans that contain financial maintenance covenants.
A significant number of high yield loans in the market, in particular the broadly syndicated loan market, may consist of covenant-lite loans, or “Covenant-Lite Loans.” A significant portion of the loans in which we may invest or get exposure to through our investments may be deemed to be Covenant-Lite Loans and it is possible that such loans may comprise a majority of our portfolio. Such loans do not require the borrower to maintain debt service or other financial ratios and do not include terms which allow the lender to monitor the performance of the borrower and declare a default if certain criteria are breached. Ownership of Covenant-Lite Loans may expose us to different risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks and less protective loan documentation, than is the case with loans that contain financial maintenance covenants.
Our investments in foreign companies may involve significant risks in addition to the risks inherent in U.S. investments.
Our investment strategy contemplates potentialincludes investments in foreign companies. Investing in foreign companies may expose us to additional risk not typically associated with investing in U.S. companies. These risks include changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes (potentially at confiscatory levels), less liquid markets, less available information than is generally the case in the United States, higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility.

Although mostthe majority of our investments willare currently and are expected to be U.S.-dollar denominated, our investments that are denominated in a foreign currency will be subject to the risk that the value of a particular currency will change in relation to one or more other currencies. Among the factors that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation and political developments. We may employ hedging techniques to minimize these risks, but we cannot assure you that such strategies will be effective or without risk to us.
We may expose ourselves to risks if we engage in hedging transactions.
We have and may in the future enter into hedging transactions, which may expose us to risks associated with such transactions. We have and may continue to utilize instruments such as forward contracts, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates and market interest rates. Use of these hedging instruments may include counter-party credit risk. Hedging against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of such positions decline. However, such hedging can establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transactions may also limit the opportunity for gain if the values of the underlying portfolio positions should increase. Moreover, it may not be possible to hedge against an exchange rate or interest rate fluctuation that is so generally anticipated that we are not able to enter into a hedging transaction at an acceptable price. The success of our hedging transactions will depend on our ability to correctly predict movements in currencies and interest rates. Therefore, while we may enter into such transactions to seek to reduce currency exchange rate and interest rate risks, unanticipated changes in currency exchange rates or interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may vary. Moreover, for a variety of reasons, we may not seek to (or be able to) establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from
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achieving the intended hedge and expose us to risk of loss. In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result of factors not related to currency fluctuations.
If we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a business development companyBDC or be precluded from investing according to our current business strategy.
As a BDC, we may not acquire any assets other than “qualifying assets” unless, at the time of and after giving effect to such acquisition, at least 70.0% of our total assets are qualifying assets. For further detail, see “Regulation“Item 1. —
Business — Regulation of Business Development Companies” included in Item 1 of Part I of this Annual Report on Form 10-K.
We believe that substantially all of our investments are qualifying assets. However, we may be precluded from investing in what we believe are attractive investments if such investments are not qualifying assets for purposes of the 1940 Act. If we do not invest a sufficient portion of our assets in qualifying assets, we could lose our status as a BDC. If we fail to maintain our status as a BDC, we might be regulated as a closed-end investment company that is required to register under the 1940 Act, which would subject us to additional regulatory restrictions and significantly decrease our operating flexibility. In addition, any such failure could cause an event of default under our outstanding indebtedness. For these reasons, loss of BDC status likely would have a material adverse effect on our business, financial condition and results of operations. Similarly, these rules could prevent us from making follow-on investments in existing portfolio companies (which could result in the dilution of our position).
We are a non-diversified investment company within the meaning of the 1940 Act, and therefore we are not limited with respect to the proportion of our assets that may be invested in securities of a single issuer.
We are classified as a non-diversified investment company within the meaning of the 1940 Act, which means that we are not limited by the 1940 Act with respect to the proportion of our assets that we may invest in securities of a single issuer. To the extent that we assume large positions in the securities of a small number of issuers, our net asset value may fluctuate to a greater extent than that of a diversified investment company as a result of changes in the financial condition or the market’s assessment of the issuer.issuer or industry in which it operates. We may also be more susceptible to any single economic or regulatory occurrence than a diversified investment company. Beyond our RIC asset diversification requirements under the Code and certain SBAinvestment diversification requirements forunder our investments held by our three wholly-owned SBIC subsidiaries,financial agreements, we do not have fixed guidelines for diversification, and our investments could be concentrated in relatively few portfolio companies.
We generally will not control our portfolio companies.
We do not, and do not expect to, control most of our portfolio companies, even though we or Barings may have board representation or board observation rights, and our debt agreements with such portfolio companies may contain certain restrictive covenants. As a result, we are subject to the risk that a portfolio company in which we invest may make business decisions with which we disagree, and the management of such company, as representatives of the holders of their common equity, may take risks or otherwise act in ways that do not serve our interests as debt investors. Due to the lack of liquidity for our investments in non-traded companies, we may not be able to dispose of our interests in our portfolio companies as readily as we would like or at an appropriate valuation. As a result, a portfolio company may make decisions that could decrease the value of our portfolio holdings.
Economic recessions or downturns could impairPrepayments of our debt investments by our portfolio companies could adversely impact our results of operations and harmreduce our operating results.return on equity.
Many ofWe are subject to the risk that the investments we make in our portfolio companies may be susceptiblerepaid prior to economic downturns or recessionsmaturity. When this occurs, we will generally reinvest these proceeds in temporary investments, pending their future investment in new portfolio companies. These temporary investments will typically have substantially lower yields than the debt being prepaid and may be unable to repay our loans duringwe could experience significant delays in reinvesting these periods. Therefore, during these periods our non-performing assets may increase and the value of these assets may decrease. Adverse economic conditionsamounts. Any future investment in a new portfolio company may also decreasebe at lower yields than the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by

lenders not to extend credit to us. These events could prevent us from increasing investments and harm our operating results. We experienced to some extent such effects asdebt that was repaid. As a result, of the economic downturn that occurred from 2008 through 2009 and may experience such effects again in any future downturn or recession.
The recent volatility of oil and natural gas prices could impair certain of our portfolio companies' operations and ability to satisfy obligations to their respective lenders and investors, including us, which could negatively impact our financial condition.
Some of our portfolio companies' businesses are dependent upon the prices of, and demand for, oil and natural gas, which have recently declined and such volatility could continue in the future. A substantial or extended decline in oil and natural gas demand or prices may adversely affect the business, financial condition, cash flow, liquidity or results of operations of these portfolio companies and might impair their ability to meet capital expenditure obligations and financial commitments.
Financial results maycould be materially adversely affected adversely if one or more of our portfolio investments defaultscompanies elect to prepay amounts owed to us. Additionally, prepayments could negatively impact our return on its loans or fails to perform as we expect.
Our portfolio consists primarily of debt and equity, investments in privately owned lower middle market businesses. Compared to larger publicly owned companies, these lower middle market companies may bewhich could result in a weaker financial position and experience wider variationsdecline in their operating results, which may make them more vulnerable to economic downturns. Typically, these companies need more capital to compete; however, their access to capital is limited and their cost of capital is often higher than that of their competitors. Our portfolio companies face intense competition from larger companies with greater financial, technical and marketing resources and their success typically depends on the management talents and efforts of an individual or a small group of persons. The loss of any of their key employees could affect their ability to compete effectively and harm their financial condition. Further, some of these companies conduct business in regulated industries that are susceptible to regulatory changes. These factors could impair the cash flowmarket price of our portfolio companies and result in other events, such as bankruptcy. These events could limit a portfolio company’s ability to repay their obligations to us, which may have an adverse effect on the return on, or the recovery of, our investment in these businesses. Deterioration in a borrower’s financial condition and prospects may be accompanied by deterioration in the value of the loan’s collateral.securities.
Some of these companies cannot obtain financing from public capital markets or from traditional credit sources, such as commercial banks. Accordingly, loans made to these types of companies pose a higher default risk than loans made to companies who have access to traditional credit sources.
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Generally, little, if any, public information is available about such companies. Therefore, we must rely on our employees’ diligence to obtain the information needed, such as the financial information of these companies, to make well-informed investment decisions. If we do not uncover material information about these companies, we may not make a fully informed investment decision, which could, in turn cause us to lose money on our investments.
Potential writedowns or losses with respect to portfolio investments existing and to be made in the future could adversely affect our results of operations, cash flows, dividend level, net asset value and stock price.
As of December 31, 2017, the fair value of our non-accrual assets was approximately $15.8 million, which comprised approximately 1.6% of the total fair value of our portfolio. The cost of these non-accrual assets as of December 31, 2017 was approximately $120.1 million, which comprised approximately 10.7% of the total cost of our portfolio.
In addition to our non-accrual assets, as of December 31, 2017, we had, on a fair value basis, approximately $133.2 million of debt investments, or 13.1% of the total fair value of our portfolio, which were current with respect to scheduled interest and principal payments, but which were carried at less than cost due to company-specific fair value adjustments. In light of current economic conditions, certain of our portfolio companies may be unable to service our debt investments on a timely basis. These conditions may also decrease the value of collateral securing some of our debt investments, as well as the value of our equity investments. As a result, the number of non-performing assets in our portfolio may increase, and the overall value of our portfolio may decrease, which could

lead to financial losses in our portfolio and a decrease in our investment income, net investment income, dividends and assets.
Any unrealized losses we experience on our loan portfolio may be an indication of future realized losses, which could reduce our income available for distribution.
As a BDC, we are required to carry our investments at market value or, if no market value is ascertainable, at the fair value as determined in good faith by our Board of Directors.the Board. Decreases in the market values or fair values of our investments will be recorded as unrealized depreciation. Any unrealized losses in our loan portfolio could be an indication of a portfolio company’s inability to meet its repayment obligations to us with respect to the affected loans. This could result in realized losses in the future and ultimately in reductions of our income available for distribution in future periods.
Defaults by our portfolio companies may harm our operating results.
A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize a portfolio company’s ability to meet its obligations under the debt or equity securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms, which may include the waiver of certain financial covenants, with a defaulting portfolio company.
Prepayments of our debt investments by our portfolio companies could adversely impact our results of operations and reduce our return on equity.
We are subject to the risk that the investments we make in our portfolio companies may be repaid prior to maturity. When this occurs, we will generally reinvest these proceeds in temporary investments, pending their future investment in new portfolio companies. These temporary investments will typically have substantially lower yields than the debt being prepaid and we could experience significant delays in reinvesting these amounts. Any future investment in a new portfolio company may also be at lower yields than the debt that was repaid. As a result, our results of operations could be materially adversely affected if one or more of our portfolio companies elect to prepay amounts owed to us. Additionally, prepayments could negatively impact our return on equity, which could result in a decline in the market price of our securities.
Changes in interest rates may affect our cost of capital, the value of our investments and results of operations.
A significant portion of our debt investments bear interest at fixed rates and the value of these investments could be negatively affected by increases in market interest rates. In addition, an increase in interest rates would make it more expensive to use debt to finance our investments. As a result, a significant increase in market interest rates could both reduce the value of our portfolio investments and increase our cost of capital, which would reduce our net investment income. Also, an increase in interest rates available to investors could make an investment in our common stock less attractive if we are not able to increase our distribution rate, a situation which could reduce the value of our common stock. Conversely, a decrease in interest rates may have an adverse impact on our returns by requiring us to seek lower yields on our debt investments and by increasing the risk that our portfolio companies will prepay our debt investments, resulting in the need to redeploy capital at potentially lower rates.
We may not realize gains from our equity investments.
Certain investments that we have made in the past and may make in the future include warrants or other equity securities. Investments in equity securities involve a number of significant risks, including the risk of further dilution as a result of additional issuances, inability to access additional capital and failure to pay current distributions. Investments in preferred securities involve special risks, such as the risk of deferred distributions, credit risk, illiquidity and limited voting rights. In addition, we may from time to time make non-control, equity co-investments in companies in conjunction with private equity sponsors. Our goal is ultimately to realize gains upon our disposition of such equity interests. However, the equity interests we receive may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests, and any gains

that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience. We also may be unable to realize any value if a portfolio company does not have a liquidity event, such as a sale of the business, recapitalization or public offering, which would allow us to sell the underlying equity interests. We
Our investments in asset-backed securities are subject to additional risks.
Asset-backed securities often seek putsinvolve risks that are different from or similar rightsmore acute than risks associated with other types of debt instruments. For instance, asset-backed securities may be particularly sensitive to changes in prevailing interest rates. In addition, the underlying assets may be subject to prepayments that shorten the securities' weighted average maturity and may lower their return. Asset-backed securities are also subject to risks associated with their structure and the nature of the assets underlying the security and the servicing of those assets. Payment of interest and repayment of principal on asset-backed securities is largely dependent upon the cash flows generated by the assets backing the securities. Certain asset-backed securities are supported by letters of credit, surety bonds or other credit enhancements. However, if many borrowers on the underlying assets default, losses could exceed the credit enhancement level and result in losses to investors, such as the Company. The values of asset-backed securities may be substantially dependent on the servicing of the underlying asset pools, and are therefore subject to risks associated with the negligence by, or defalcation of, their servicers. Furthermore, debtors may be entitled to the protection of a number of state and federal consumer credit laws with respect to the assets underlying these securities, which may give usthe debtor the right to sellavoid or reduce payment.
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Our investments in collateralized loan obligation vehicles are subject to additional risks.
We may invest in debt and equity interests of collateralized loan obligation (“CLO”) vehicles. Generally, there may be less information available to us regarding the underlying debt investments held by such CLOs than if we had invested directly in the debt of the underlying companies. As a result, we and our stockholders may not know the details of the underlying holdings of the CLO vehicles in which we may invest.
As a BDC, we may not acquire equity and junior debt investments in CLO vehicles unless, at the time of and after giving effect to such acquisition, at least 70% of our total assets are “qualifying assets.” CLO vehicles that we expect to invest in are typically very highly leveraged, and therefore, the junior debt and equity tranches that we expect to invest in are subject to a higher degree of risk of total loss. In particular, investors in CLO vehicles indirectly bear risks of the underlying debt investments held by such CLO vehicles. We will generally have the right to receive payments only from the CLO vehicles, and will generally not have direct rights against the underlying borrowers or the entity that sponsored the CLO vehicle. While the CLO vehicles we intend to target generally enable the investor to acquire interests in a pool of leveraged corporate loans without the expenses associated with directly holding the same investments, we will generally pay a proportionate share of the CLO vehicles’ administrative and other expenses. Although it is difficult to predict whether the prices of indices and securities backunderlying CLO vehicles will rise or fall, these prices (and, therefore, the prices of the CLO vehicles) will be influenced by the same types of political and economic events that affect issuers of securities and capital markets generally. The failure by a CLO vehicle in which we invest to satisfy certain financial covenants, specifically those with respect to adequate collateralization and/or interest coverage tests, could lead to a reduction in its payments to us. In the event that a CLO vehicle failed those tests, holders of debt senior to us may be entitled to additional payments that would, in turn, reduce the payments we would otherwise be entitled to receive. If any of these occur, it could materially and adversely affect our operating results and cash flows.
In addition to the portfolio company issuer. general risks associated with investing in debt securities, CLO vehicles carry additional risks, including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the quality of the collateral may decline in value or default;(iii) the fact that our investments in CLO tranches will likely be subordinate to other senior classes of note tranches thereof; and (iv) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the CLO vehicle or unexpected investment results. Our net asset value may also decline over time if our principal recovery with respect to CLO equity investments is less than the price we paid for those investments.
Investments in structured vehicles, including equity and junior debt instruments issued by CLO vehicles, involve risks, including credit risk and market risk. Changes in interest rates and credit quality may cause significant price fluctuations. Additionally, changes in the underlying leveraged corporate loans held by a CLO vehicle may cause payments on the instruments we hold to be reduced, either temporarily or permanently. Structured investments, particularly the subordinated interests in which we intend to invest, may be less liquid than many other types of securities and may be more volatile than the leveraged corporate loans underlying the CLO vehicles we intend to target. Fluctuations in interest rates may also cause payments on the tranches of CLO vehicles that we hold to be reduced, either temporarily or permanently.
Any interests we acquire in CLO vehicles will likely be thinly traded or have only a limited trading market and may be subject to restrictions on resale. Securities issued by CLO vehicles are generally not listed on any U.S. national securities exchange and no active trading market may exist for the securities of CLO vehicles in which we may invest. Although a secondary market may exist for our investments in CLO vehicles, the market for our investments in CLO vehicles may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods. As a result, these types of investments may be more difficult to value. In addition, our investments in CLO warehouse facilities are short term investments and therefore may be subject to a greater risk relating to market conditions and economic recession or downturns.
We may be subject to risks associated with syndicated loans.
From time to time, we may acquire interests in syndicated loans. Under the documentation for syndicated loans, a financial institution or other entity typically is designated as the administrative agent and/or collateral agent.
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This agent is granted a lien on any collateral on behalf of the other lenders and distributes payments on the indebtedness as they are received. The agent is the party responsible for administering and enforcing the loan and generally may take actions only in accordance with the instructions of a majority or two-thirds in commitments and/or principal amount of the associated indebtedness. In most cases, we do not expect to hold a sufficient amount of the indebtedness to be able to compel any actions by the agent. Consequently, we would only be able to direct such actions if instructions from us were made in conjunction with other holders of associated indebtedness that together with us compose the requisite percentage of the related indebtedness then entitled to take action. Conversely, if holders of the required amount of the associated indebtedness other than us desire to take certain actions, such actions may be taken even if we did not support such actions. Furthermore, if an investment is subordinated to one or more senior loans made to the applicable obligor, our ability to exercise such rights may be subordinated to the exercise of such rights by the senior lenders. Accordingly, we may be precluded from directing such actions unless we act together with other holders of the indebtedness. If we are unable to direct such actions, we cannot assure you that the actions taken will be in our best interests.
If an investment is a syndicated revolving loan or delayed drawdown loan, other lenders may fail to satisfy their full contractual funding commitments for such loan, which could create a breach of contract, result in a lawsuit by the obligor against the lenders and adversely affect the fair market value of our investment.
There is a risk that a loan agent in respect of one of our loans may become bankrupt or insolvent. Such an event would delay, and possibly impair, any enforcement actions undertaken by holders of the associated indebtedness, including attempts to realize upon the collateral securing the associated indebtedness and/or direct the agent to take actions against the related obligor or the collateral securing the associated indebtedness and actions to realize on proceeds of payments made by obligors that are in the possession or control of any other financial institution. In addition, we may be unable to exercise these puts rightsremove the agent in circumstances in which removal would be in our best interests. Moreover, agented loans typically allow for the consideration providedagent to resign with certain advance notice.
Our special situations investments involve a high degree of credit and market risk.
Our special situations investments, which consist of investments in ourthe securities and debt of financially troubled issuers or borrowers and operationally troubled issuers or borrowers, involve a high degree of credit and market risk. Although the Company may invest in select companies that, in the view of Barings, have the potential over the long-term for capital growth, there can be no assurance that such financially troubled issuers or operationally troubled issuers can be successfully transformed into profitable operating companies. There is a possibility that the Company may incur substantial or total losses on investments or that such investments may not show any return for a considerable period of time. Under such circumstances, the returns generated from the investments may not compensate investors adequately for the risks assumed.
The level of analytical sophistication, both financial and legal, necessary for successful investment documents ifin companies experiencing significant business and financial difficulties is unusually high. There can be no assurance that Barings will correctly evaluate the value of a company’s assets or the prospects for a successful reorganization or similar action. During an economic downturn or recession, securities of financially troubled or operationally troubled issuers and borrowers are more likely to go into default than securities of other issuers. In addition, it may be difficult to obtain information about such issuers and borrowers.
Securities and debt of financially troubled issuers or borrowers and operationally troubled issuers or borrowers are less liquid and more volatile than securities of companies not experiencing financial or operational difficulties. The market prices of such securities are subject to erratic and abrupt market movements, and the spread between bid and asked prices may be greater than normally expected. In addition, it is anticipated that many investments may not be widely traded and that the Company’s investment in such securities may be substantial relative to the market for such securities. As a result, the Company may experience delays and incur losses and other costs in connection with the sale of investments.
Troubled company and other asset-based investments require active monitoring and may, at times, require participation in business strategy or reorganization proceedings by Barings. To the extent that Barings becomes involved in such proceedings, the Company may have a more active participation in the affairs of the issuer isthan that
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assumed generally by an investor. In addition, involvement by Barings in financial distress.
We are dependent on information systems and systems failuresan issuer’s reorganization proceedings could significantly disrupt our business, which may,result in turn, negatively affect our liquidity, financial conditionthe imposition of restrictions limiting the Company’s ability to liquidate its position in the issuer or results of operations.
Our business is dependent on our and third parties' communications and information systems. Any failure or interruption of those systems, including as a resultincrease the likelihood of the termination of an agreement with any third-party service providers, could cause delays or other problemsCompany being involved in our activities. Our financial, accounting, data processing, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control and adversely affect our business. There could be:litigation.
•sudden electrical or telecommunications outages;
•natural disasters such as earthquakes, tornadoes and hurricanes;
•disease pandemics;
•events arising from local or larger scale political or social matters, including terrorist acts; and
•cyber attacks.
These events, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our common stock and our ability to pay dividends to our stockholders.
Risks Relating to Our Securities
Shares of closed-end investment companies, including business development companies,BDCs, frequently trade at a discount to their net asset value, and may trade aat premiums that may prove to be unsustainable.
Shares of closed-end investment companies, including BDCs, frequently trade at a discount from net asset value, and may trade at premiums that may prove to be unsustainable. This characteristic of closed-end investment companies and BDCs is separate and distinct from the risk that our net asset value per share may decline. We cannot predict whether our common stock will trade at, above or below net asset value. The risk of purchasing shares of a BDC that might trade at a discount or unsustainable premium is more pronounced for investors who wish to sell their shares in a relatively short period of time because, for those investors, realization of a gain or loss on their investments is likely to be more dependent upon changes in premium or discount levels than upon increases or decreases in net asset value per share. As of December 29, 2017,31, 2021, the closing price of our common stock on the NYSE was $9.49$11.02 per share, an approximately 29.3%3.0% discount to our net asset value per share as of December 31, 2017.2021.
In addition, ifat times when our common stock trades below net asset value, we will generally not be able to issue additional common stock at the market price without first obtaining the approval of our stockholders and our independent directors. On May 3, 2017,We may, however, sell our stockholders votedcommon stock, or warrants, options or rights to allow us to sell or otherwise issueacquire our common stock, at a price below the current net asset value per share for a period of one year ending on the earlier of May 3, 2018 or the date of our 2018common stock if our board of directors determines that such sale is in our best interests and the best interests of our stockholders, and our stockholders approve such sale. Any such sale would be dilutive to the net asset value per share of our common stock. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our board of directors, closely approximates the market value of such securities (less any commission or discount). If our common stock trades at a discount to net asset value, this restriction could adversely affect our ability to raise capital. Pursuant to approval granted at an annual meeting of stockholders. The proposal did not specify a maximum discount below net asset value at whichstockholders held on May 20, 2021, we are ablepermitted to sell or otherwise issue our common stock; however, we do not intend toand sell or otherwise issue shares of our common stock at a price below our then-current net asset value unlessper share in one or more offerings, subject to certain limitations and determinations that must be made by the Board (including, without limitation, that the number of shares issued and sold pursuant to such authority does not exceed 30% of our Board of Directors determines that it would be in our stockholders’ best intereststhen-outstanding common stock immediately prior to do so.

each such offering). Such stockholder approval expires on May 20, 2022.
Investing in our securities may involve an above average degree of risk.
The investments we make in accordance with our investment objective may result in a higher amount of risk than alternative investment options and a higher risk of volatility or loss of principal. Our investments in portfolio companies may be highly speculative, and therefore, an investment in our shares may not be suitable for someone with lower risk tolerance.
The market price of our securities may be volatile and fluctuate significantly.
Fluctuations in the trading prices of our shares may adversely affect the liquidity of the trading market for our shares and, if we seek to raise capital through future equity financings, our ability to raise such equity capital. The market price and liquidity of the market for our securities may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include:
•significant volatility in the market price and trading volume of securities of BDCs or other companies in our sector, which are not necessarily related to the operating performance of these companies;
•changes in regulatory policies or tax guidelines, particularly with respect to RICs or BDCs or SBICs;;
•inability to obtain certain exemptive relief from the SEC;
•loss of RIC tax treatment or either of our SBIC subsidiaries’ status as an SBIC;treatment;
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•changes in earnings or variations in operating results;
•changes in the value of our portfolio of investments;
•any shortfall in investment income or net investment income or any increase in losses from levels expected by investors or securities analysts;
•conversion features of subscription rights, warrants or convertible debt;
•loss of a major funding source;
•fluctuations in interest rates;
•the operating performance of companies comparable to us;
•departure of ourBarings' or any of its affiliates' key personnel;
•proposed, or completed, offerings of our securities, including classes other than our common stock;
•global or national credit market changes; and
•general economic trends and other external factors.
The market for any security is subject to volatility. The loans and securities purchased by us and issued by us are no exception to this fundamental investment truism that prices will fluctuate.
We may be unable to invest a significant portion of the net proceeds raised from our offerings on acceptable terms, which would harm our financial condition and operating results.
Delays in investing the net proceeds raised in our offerings may cause our performance to be worse than that of other fully invested BDCs or other lenders or investors pursuing comparable investment strategies. We cannot assure you that we will be able to identify any investments that meet our investment objective or that any investment that we make will produce a positive return. We may be unable to invest the net proceeds from any offering on acceptable terms within the time period that we anticipate or at all, which could harm our financial condition and operating results.
We anticipate that, depending on market conditions, it may take a substantial period of time to invest substantially all of the net proceeds from any offering in securities meeting our investment objective. During such a period, we have and will continue to invest the net proceeds from any offering primarily in cash, cash equivalents, U.S. government securities, repurchase agreements and high-quality debt instruments maturing in one year or less

from the time of investment, which may produce returns that are significantly lower than the returns which we expect to achieve when our portfolio is fully invested in securities meeting our investment objective, and given our expense ratio and the prevailing interest rate climate, there is a possible risk of losing money on the offering proceeds from certain securities, such as debt securities during this interval. As a result, any dividends or distributions that we pay during such period may be substantially lower than the dividends or distributions that we may be able to pay when our portfolio is fully invested in securities meeting our investment objective. In addition, until such time as the net proceeds from any offering are invested in securities meeting our investment objective, the market price for our securities may decline. Thus, the return on your investment may be lower than when, if ever, our portfolio is fully invested in securities meeting our investment objective.
In addition, the SBA limitsSales of substantial amounts of our SBIC subsidiaries, Triangle SBIC, Triangle SBIC II and Triangle SBIC III, to investing idle fundscommon stock in the following typespublic market may have an adverse effect on the market price of securities:our common stock.
direct obligationsSales of substantial amounts of our common stock, or obligations guaranteed asthe availability of such common stock for sale, could adversely affect the prevailing market prices for our common stock. If this occurs and continues, it could impair our ability to principal and interest by,raise additional capital through the United States government, which mature within 15 months from the datesale of the investment;securities should we desire to do so.
repurchase agreements with federally insured institutions with a maturity of seven days or less (and the securities underlying the repurchase obligations must be direct obligations of, or guaranteed by, the federal government);
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certificates of deposit with a maturity of one year or less, issued by a federally insured institution;

a deposit account in a federally insured institution that is subject to withdrawal restriction of one year or less;
a checking account in a federally insured institution; and
a reasonable petty cash fund.
If we sell common stock at a discount to our net asset value per share, stockholders who do not participate in such sale will experience immediate dilution in an amount that may be material.
On May 3, 2017, ourAny sale of common stock at a price below net asset value would result in an immediate dilution to existing common stockholders. During periods of time in which we have authority from stockholders approved our ability to sell or otherwise issue shares of our common stock at any levela price below net asset value, such shares of discount fromcommon stock could be issued at a price that is substantially below the net asset value per share, for a period of one year ending onand the earlier of May 3, 2018 orresulting dilution could be substantial. This dilution would include reduction in the date of our 2018 annual meeting of stockholders. If we sell or otherwise issue shares of our common stock at a discount to net asset value, it will pose a risk of dilution to our stockholders. In particular, stockholders who do not purchase additional shares at or below the discounted price in proportion to their current ownership will experience an immediate decrease in net asset value per share (as well as ina result of the aggregateissuance of shares at a price below the net asset value of their shares if they do not participate at all). These stockholders will also experienceper share and a disproportionatelyproportionately greater decrease in their participationa stockholder’s interest in ourthe earnings and assets of the Company and their voting powerinterest in the Company than the increase we experience in ourthe assets, potential earning powerearnings and voting interests of the Company resulting from such issuances or sale.issuance. In addition, such issuances or sales may adversely affect the price at which our common stock trades.
Pursuant to approval granted at an annual meeting of stockholders held on May 20, 2021, we are permitted to issue and sell shares of our common stock at a price below our then-current net asset value per share in one or more offerings, subject to certain limitations and determinations that must be made by the Board (including, without limitation, that the number of shares issued and sold pursuant to such authority does not exceed 30% of our then-outstanding common stock immediately prior to each such offering). Such stockholder approval expires on May 20, 2022.
Provisions of the Maryland General Corporation Law and our charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.
The Maryland General Corporation Law and our charter and bylaws contain provisions that may have the effect of discouraging, delaying or making difficult a change in control of our Company or the removal of our incumbent directors. Specifically, ourthe Board of Directors has adopted a resolution explicitly subjecting us to the Maryland Business Combination Act under the Maryland General Corporation Law, which, subject to limitations, prohibits certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding voting stock) or an affiliate thereof for five years after the most recent date on which the stockholder becomes an interested stockholder and thereafter imposes fair price and/or supermajority voting requirements on these combinations. In addition, our Board of Directors may adopt resolutions to classifycharter classifies the Board so that stockholders do not elect every director on an annual basis. Also, our charterin three classes serving staggered three-year terms and provides that a director may be removed only for cause by the vote of at least two-thirds of the votes entitled to be cast for the election of directors generally. In addition, our bylaws provide that, subject to the satisfaction of certain procedural and informational requirements by the stockholders requesting the meeting, a

special meeting of stockholders will be called by our secretary to act upon any matter that may properly be considered at a meeting of stockholders only upon the written request of the stockholders entitled to cast at least a majority of all the votes entitled to be cast on such matter at the meeting.
In addition, subject to the provisions of the 1940 Act, our charter permits ourthe Board, of Directors, without stockholder action, to authorize the issuance of shares of stock in one or more classes or series, including preferred stock. Subject to compliance with the 1940 Act, ourthe Board of Directors may, without stockholder action, amend our charter from time to time to increase or decrease the number of shares of stock of any class or series that we have authority to issue. The existence of these provisions, among others, may have a negative impact on the price of our common stock and may discourage third-party bids for ownership of our company. These provisions may prevent any premiums being offered to you for shares of our common stock.
If we issue preferred stock and/or additional debt securities, the net asset value and market value of our common stock may become more volatile.
We cannot assure you that the issuance of preferred stock and/or additional debt securities would result in a higher yield or return to the holders of our common stock. The issuance of preferred stock and/or additional debt securities would likely cause the net asset value and market value of our common stock to become more volatile. If the dividend rate on the preferred stock, or the interest rate on the debt securities, were to approach the net rate of return on our investment portfolio, the benefit of leverage to the holders of our common stock would be reduced. If the dividend rate on the preferred stock, or the interest rate on the debt securities, were to exceed the net rate of return on our portfolio, the
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use of leverage would result in a lower rate of return to the holders of common stock than if we had not issued the preferred stock or debt securities. Any decline in the net asset value of our investment would be borne entirely by the holders of our common stock. Therefore, if the market value of our portfolio were to decline, the leverage would result in a greater decrease in net asset value to the holders of our common stock than if we were not leveraged through the issuance of preferred stock.stock or debt securities. This decline in net asset value would also tend to cause a greater decline in the market price for our common stock.
There is also a risk that, in the event of a sharp decline in the value of our net assets, we would be in danger of failing to maintain required asset coverage ratios which may be required by the preferred stock and/or debt securities or of a downgrade in the ratings of the preferred stock and/or debt securities or our current investment income might not be sufficient to meet the dividend requirements on the preferred stock or the interest payments on the debt securities. In order to counteract such an event, we might need to liquidate investments in order to fund redemption of some or all of the preferred stock and/or debt securities. In addition, we would pay (and the holders of our common stock would bear) all costs and expenses relating to the issuance and ongoing maintenance of the preferred stock and/or debt securities. Holders of preferred stock and/or debt securities may have different interests than holders of common stock and may at times have disproportionate influence over our affairs.
The trading market or market value of our publicly issued debt securities may be volatile.
Many factors may materially adversely affect the trading market for, and market value of, our publicly issued debt securities. These factors include, but are not limited to, the following:
the time remaining to the maturity of these debt securities;
the outstanding principal amount of debt securities with terms identical to these debt securities;
the general economic environment;
the supply of debt securities trading in the secondary market, if any;
the redemption or repayment, if any, of these debt securities;
the level, direction and volatility of market interest rates generally; and
market rates of interest higher or lower than rates borne by the debt securities.
There also may be a limited number of buyers for our debt securities. This too may materially adversely affect the market value of the debt securities or the trading market for the debt securities.

Our credit ratings, if any, may not reflect all risks of an investment in our debt securities.
Credit ratings are an assessment by third parties of our ability to pay our obligations. If our debt securities become rated, real or anticipated changes in our credit ratings will generally affect the market value of our debt securities. These credit ratings, however, may not reflect the potential impact of risks related to market conditions generally or other factors discussed herein about the market value of, or trading market for, the publicly issued debt securities.
Terms relating to redemption may materially adversely affect the return on our debt securities.
If our debt securities are redeemable at our option, we may choose to redeem the debt securities at times when prevailing interest rates are lower than the interest rate paid on the debt securities. In addition, if the debt securities are subject to mandatory redemption, we may be required to redeem the debt securities at times when prevailing interest rates are lower than the interest rate paid on the debt securities. In this circumstance, a holder of our debt securities may not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as the debt securities being redeemed. As of December 31, 2017, our December 2022 Notes were redeemable at our option. In addition, our March 2022 Notes will become redeemable, at our option, on March 15, 2018.
There is a risk that investors in our common stock may not receive a specified level of dividends or that our dividends may not grow over time and that investors in ourany debt securities we may issue may not receive all of the interest income to which they are entitled.
We intend to make distributions on a quarterly basis to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. If we declare a dividend and if more stockholders opt to receive cash distributions rather than participate in our dividend reinvestment plan, we may be forced to sell some of our investments in order to make cash dividend payments.
In addition, due to the asset coverage testand net asset value tests applicable to us as a BDC and under our notes indenture and covenants under our Credit Facility,financing agreements, we may be limited in our ability to make distributions. Further, if we invest a greater amount of assets in equity securities that do not pay current dividends, it could reduce the amount available for distribution. See “Item 5. — Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Distribution Policy” of this Annual Report on Form 10-K for further discussion of distributions.
The above-referenced restrictions on distributions may also inhibit our ability to make required interest payments to holders of our current debt including the August 2025 Notes, the November Notes, the February Notes and the November 2026 Notes (each as defined below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments” included in Item 7 of Part II of this Annual Report on Form 10-K), and any future debt we may issue, which may cause a default under the terms of ourthe relevant debt agreements. Such a default could materially increase our cost of raising capital, as well as cause us to incur penalties under the terms of our debt agreements.
Our stockholdersTerms relating to redemption may materially adversely affect your return on any debt securities that we may issue.
If you are holding debt securities issued by us and such securities are redeemable at our option, we may choose to redeem your debt securities at times when prevailing interest rates are lower than the interest rate paid on your debt securities. In addition, if you are holding debt securities issued by us and such securities are subject to mandatory redemption, we may be required to redeem your debt securities at times when prevailing interest rates are lower than the interest rate paid on your debt securities. In this circumstance, you may not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as your debt securities being redeemed.
Subject to the terms of the August 2020 NPA (as defined below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in Item 7 of Part II of this Annual Report on Form 10-K), we may redeem the August 2025 Notes in whole or in part at any time
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or from time to time at our option at par plus accrued interest to the prepayment date and, if redeemed on or before November 3, 2024, a make-whole premium. Subject to the terms of the November 2020 NPA (as defined below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in Item 7 of Part II of this Annual Report on Form 10-K), we may redeem the Series B Notes and the Series C Notes in whole or in part at any time or from time to time at our option at par plus accrued interest to the prepayment date and, if redeemed on or before May 4, 2025, with respect to the Series B Notes, or on or before May 4, 2027, with respect to the Series C Notes, a make-whole premium.Subject to the terms of the February 2021 NPA (as defined below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments” included in Item 7 of Part II of this Annual Report on Form 10-K), we may redeem the Series D Notes and the Series E Notes in whole or in part at any time or from time to time at our option at par plus accrued interest to the prepayment date and, if redeemed on or before August 26, 2025, with respect to the Series D Notes, or on or before August 26, 2027, with respect to the Series E Notes, a make-whole premium. Subject to the terms of the indenture governing the November 2026 Notes (as defined below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in Item 7 of Part II of this Annual Report on Form 10-K), we may redeem the November 2026 Notes in whole or in part at our option at any time or from time to time at the redemption prices set forth in the indenture.
If we choose to redeem any of the August 2025 Notes, the November Notes, the February Notes or the November 2026 Notes when the fair market value of the August 2025 Notes, the November Notes, the February Notes or the November 2026 Notes is above par value, you would experience dilutiona loss of any potential premium.
We may not be able to prepay the August 2025 Notes, the November Notes, the February Notes or the November 2026 Notes upon a change in their ownership percentage if they opt outcontrol.
The note purchase agreements governing the August 2025 Notes, the November Notes and the February Notes, and the indenture governing the November 2026 Notes, require us to offer to prepay all of the respective issued and outstanding notes upon the occurrence of certain change in control events, which could have a material adverse effect on our dividend reinvestment plan.
All dividends declaredbusiness, financial condition and results of operations. Upon a change in control event, holders of the notes may require us to prepay for cash payablesome or all of the notes at a prepayment price equal to stockholders that are participants100% of the aggregate principal amount of the notes being prepaid, plus accrued and unpaid interest to, but not including, the date of prepayment. If a change in our dividend reinvestment plan are automatically reinvested in shares of our common stock. As a result, our stockholders that opt out of our dividend reinvestment plancontrol were to occur, we may experience dilution in their ownership percentage of our common stock over time.not have sufficient funds to prepay any such accelerated indebtedness.
Future offerings of additional debt securities, which would be senior to our common stock upon liquidation, or equity securities, which could dilute our existing stockholders and may be senior to our common stock for the purposes of distributions, may harm the value of our common stock.
In the future, we may attempt to increase our capital resources by making additional offerings of additional debt securities or additional equity securities, including commercial paper, medium-term notes, senior or subordinated notes and classes of preferred stock or common stock subject to the restrictions of the 1940 Act. Upon a liquidation of our company, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings would receive a distribution of our available assets prior to the holders of our common stock. Additional equity offerings by us may dilute the holdings of our existing stockholders or reduce the value of our common stock, or both. Any preferred

stock we may issue would have a preference on distributions that could limit our ability to make distributions to the holders of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future offerings reducing the market price of our common stock and diluting their stock holdings in us. In addition, proceeds from a sale of common stock will likely be used to increase our total assets or to pay down our borrowings, among other uses. This would increase our asset coverage ratio and permit us to incur additional leverage under rules pertaining to BDCs by increasing our borrowings or issuing senior securities such as preferred stock or additional debt securities.
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You may have a current tax liability on distributions reinvested in our common stock pursuant to our dividend reinvestment plan or otherwise but would not receive cash from such distributions to pay such tax liability.
If you participate in our dividend reinvestment plan, you will be deemed to have received, and for U.S. federal income tax purposes will be taxed on, the amount reinvested in our common stock to the extent the amount reinvested was not a tax-free return of capital. As a result, unless you are a tax-exempt entity, you may have to use funds from other sources to pay your tax liability on the value of our common stock received from the distribution.
In addition, in order to satisfy the annual distribution requirement applicable to RICs, we have the ability to declare a large portion of a dividend in shares of our common stock instead of in cash. As long as a portion of such dividend is paid in cash (which portion may be as low as 20% of the declared dividend, and 10% of the declared dividend through June 30, 2022) and certain requirements are met, the entire distribution will be treated as a dividend for U.S. federal income tax purposes. As a result, a stockholder generally would be subject to tax on 100% of the fair market value of the dividend on the date the dividend is received by the stockholder in the same manner as a cash dividend, even though most of the dividend was paid in shares of our common stock. We currently do not intend to pay dividends in shares of our common stock other than in connection with our dividend reinvestment plan.
A downgrade, suspension or withdrawal of the credit rating, if any, assigned by a rating agency to us or any of our outstanding unsecured notes, or change in the debt markets could cause the liquidity or market value of our securities to decline significantly.
Our credit ratings are an assessment by rating agencies of our ability to pay our debts when due. Consequently, real or anticipated changes in our credit ratings will generally affect the value and trading prices, if any, of our outstanding unsecured notes. These credit ratings may not reflect the potential impact of risks relating to the structure or marketing of the notes. Credit ratings are not a recommendation to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization in its sole discretion. We undertake no obligation to maintain our credit ratings or to advise any holders of our unsecured notes of any changes in our credit ratings, except as may be required under the terms of any applicable indenture or other governing document, including the August 2020 NPA, the November 2020 NPA, the February 2021 NPA and the indenture governing the November 2026 Notes. There can be no assurance that our credit ratings will remain for any given period of time or that such credit ratings will not be lowered or withdrawn entirely by the rating agency if in their judgment future circumstances relating to the basis of the credit ratings, such as adverse changes in our business or operations, so warrant. Any downgrades to us or our securities could increase our cost of capital or otherwise have a negative effect on our results of operations and financial condition. In this regard, the fixed rates of the November Notes and the February Notes are subject to increase in the event that a Below Investment Grade Event (as defined in relevant note purchase agreement) occurs. The conditions of the financial markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future, which could have an adverse effect on the market prices and value of our unsecured notes.
Risks Relating to the Sierra Merger
Sales of shares of the Company’s common stock after the completion of the Sierra Merger may cause the market price of the Company’s common stock to decline.
Based on the number of outstanding shares of Sierra’s common stock as of the close of business on September 20, 2021, the Company would issue approximately 46.0 million shares of the Company’s common stock pursuant to the Sierra Merger Agreement. Former Sierra stockholders may decide not to hold the shares of the Company’s common stock that they receive pursuant to the Sierra Merger Agreement. In addition, the Company’s stockholders may decide not to hold their shares of the Company’s common stock after completion of the Sierra Merger. In each case, such sales of the Company’s common stock could have the effect of depressing the market price for the Company’s common stock and may take place promptly following the completion of the Sierra Merger.
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The Company’s stockholders will experience a reduction in percentage ownership and voting power in the combined company as a result of the Sierra Merger.
The Company’s stockholders will experience a substantial reduction in their respective percentage ownership interests and effective voting power in respect of the combined company relative to their respective ownership interests in the Company prior to the Sierra Merger. Consequently, the Company’s stockholders should expect to exercise less influence over the management and policies of the combined company following the Sierra Merger than they currently exercise over the management and policies of the Company.
If the Sierra Merger is consummated, based on the number of shares of the Company’s common stock and Sierra’s common stock issued and outstanding on September 20, 2021, it is expected that current stockholders of the Company will own approximately 58.7% of the Company’s outstanding common stock and former Sierra stockholders will own approximately 41.3% of the Company’s outstanding common stock. In addition, both prior to and after completion of the Sierra Merger, subject to certain restrictions in the Sierra Merger Agreement and the approval of the Company’s stockholders, the Company may issue additional shares of its common stock (including, subject to certain restrictions under the 1940 Act, at prices below the Company’s then-current net asset value (“NAV”) per share), all of which would further reduce the percentage ownership of the combined company held by current stockholders. In addition, the issuance or sale by the Company of shares of its common stock at a discount to NAV poses a risk of economic dilution to stockholders.
The NAV per share of the Company’s common stock will be diluted if the Company issues shares at a price below the then-current NAV per share in connection with the Sierra Merger.
At the special meeting of the Company’s stockholders to be held in connection with the Sierra Merger and subject to certain determinations required to be made by the Company’s board of directors, the Company’s stockholders will be asked to approve the Company’s ability to issue shares of its common stock at a price below the then-current NAV per share in connection with the Sierra Merger in the event that at the time of such issuance, the Company’s then-current NAV per share is greater than the value of the shares of Sierra’s common stock being exchanged.
Under the Sierra Merger Agreement, the Sierra Exchange Ratio was fixed on September 21, 2021, at the signing of the Sierra Merger Agreement, subject to certain adjustments pursuant to the Sierra Merger Agreement. The Sierra Exchange Ratio was determined taking into account the NAV per share of each of the Company’s common stock and Sierra’s common stock as of June 30, 2021 and is not subject to adjustment based on changes in the NAV per share of the Company’s common stock or Sierra’s common stock. In that regard, regardless of the date on which the Sierra Merger is consummated and the resulting date on which the shares of the Company’s common stock are issued, the Sierra Exchange Ratio upon which the shares of the Company’s common stock will be issued will not change (except for certain customary anti-dilution adjustments). Consequently, if, on the date that the Company’s common stock is issued in connection with the Sierra Merger, the per share value of Sierra’s common stock were to decrease from its per share value as of June 30, 2021 and the NAV of the Company’s common stock were to remain the same, then the Company could be deemed to be issuing shares at a price below its then-current NAV per share. As a result, it is not known at this time whether the Company will be issuing shares of its common stock at a price below the then-current NAV per share to Sierra stockholders in connection with the Sierra Merger. The determination of whether the Company is issuing shares of its common stock at a price below the then-current NAV per share will be made at or around the time of the closing of the Sierra Merger.
If the Company were to issue shares of its common stock below its then-current NAV per share in connection with the Sierra Merger, such sales would result in an immediate dilution to the NAV per share of the Company’s common stock. This dilution would occur as a result of the issuance of shares at a price below the then-current NAV per share of the Company’s common stock and a proportionately greater decrease in the stockholders’ interest in the Company’s earnings and assets and their voting interest in the Company than the increase in the Company’s assets resulting from such issuance. Because the NAV of shares of the Company’s common stock at or around the time of the Sierra Merger is not currently known, the actual dilutive effect cannot be predicted.
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The Company may be unable to realize the benefits anticipated by the Sierra Merger, including estimated cost savings, or it may take longer than anticipated to realize such benefits.
The realization of certain benefits anticipated as a result of the Sierra Merger will depend in part on the integration of Sierra’s investment portfolio with the Company’s and the integration of Sierra’s business with the Company’s. There can be no assurance that Sierra’s investment portfolio or business can be operated profitably or integrated successfully into the Company’s operations in a timely fashion or at all. The dedication of management resources to such integration may divert attention from the day-to-day business of the combined company and there can be no assurance that there will not be substantial costs associated with the transition process or there will not be other material adverse effects as a result of these integration efforts. Such effects, including incurring unexpected costs or delays in connection with such integration and failure of Sierra’s investment portfolio to perform as expected, could have a material adverse effect on the financial results of the combined company.
The Company also expects to achieve certain cost savings from the Sierra Merger when the two companies have fully integrated their portfolios. It is possible that the estimates of the potential cost savings could ultimately be incorrect. The cost savings estimates also assume the Company will be able to combine the operations of the Company and Sierra in a manner that permits those cost savings to be fully realized. If the estimates turn out to be incorrect or if the Company is not able to successfully combine Sierra’s investment portfolio or business with the operations of the Company, the anticipated cost savings may not be fully realized, or realized at all, or may take longer to realize than expected.
The announcement and pendency of the proposed Sierra Merger could adversely affect both the Company’s and Sierra’s business, financial results and operations.
The announcement and pendency of the proposed Sierra Merger could cause disruptions in and create uncertainty surrounding both the Company’s and Sierra’s business, including affecting relationships with their respective borrowers and future borrowers, which could have a significant negative impact on the Company’s future revenues and results of operations, regardless of whether the Sierra Merger is completed. In addition, the Company and Sierra have diverted, and will continue to divert, significant management resources towards the completion of the Sierra Merger, which could have a significant negative impact on each of their future revenues and results of operations.
Sierra and the Company are also subject to restrictions on the conduct of each of their businesses prior to the completion of the Sierra Merger as provided in the Sierra Merger Agreement, generally requiring Sierra and the Company to conduct their business only in the ordinary course and subject to specific limitations, including, among other things, certain restrictions on their respective ability to make certain investments and acquisitions, sell, transfer or dispose of their respective assets, amend their respective organizational documents and, in the case of Sierra, enter into or modify certain material contracts. These restrictions could prevent Sierra or the Company from pursuing otherwise attractive business opportunities, industry developments and future opportunities and may otherwise have a significant negative impact on the Company’s future investment income and results of operations.
If the Sierra Merger does not close, neither the Company nor Sierra will benefit from the expenses incurred in their pursuit of the Sierra Merger and, under certain circumstances, Sierra may be required to pay an $11.0 million termination fee and to reimburse expenses incurred in connection with the Sierra Merger by the Company and Barings, subject to a maximum expense reimbursement payment of $2.0 million.
For various reasons, the Sierra Merger may not be completed. If the Sierra Merger is not completed, Sierra and the Company will have incurred substantial expenses for which no ultimate benefit will have been received. Both companies have incurred out-of-pocket expenses in connection with the Sierra Merger for investment banking, legal and accounting fees and financial printing and other related charges, much of which will be incurred even if the Sierra Merger is not completed. The Sierra Merger Agreement provides that, upon the valid termination of the Sierra Merger Agreement under certain circumstances, Sierra may be required to pay or cause to be paid to the Company a termination fee of $11.0 million and to pay the Company’s and Barings’ expenses incurred in connection with the Sierra Merger, subject to a maximum reimbursement payment of $2.0 million.
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The termination of the Sierra Merger Agreement could negatively impact the Company.
The Sierra Merger may not be completed. For example, either Sierra or the Company may terminate the Sierra Merger Agreement if the Sierra Merger is not completed by March 31, 2022 (so long as the party seeking termination has not been the primary cause of the delay). If the Sierra Merger Agreement is terminated, there may be various consequences, including:
•the Company’s businesses may have been adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the Sierra Merger, without realizing any of the anticipated benefits of completing the Sierra Merger; and
•the market price of the Company's common stock might decline to the extent that the market price prior to termination reflects a market assumption that the Sierra Merger will be completed.
Except in specified circumstances, if the Sierra Merger is not completed by March 31, 2022, either Sierra or the Company may choose not to proceed with the Sierra Merger.
Either Sierra or the Company may terminate the Sierra Merger Agreement if the effective time of the First Sierra Merger has not occurred by March 31, 2022. However, this right to terminate the Sierra Merger Agreement will not be available to Sierra or the Company if the failure of such party to perform any of its obligations under the Sierra Merger Agreement has been the primary cause of or resulted in the failure of the Sierra Merger to be complete on or before such date.
The Sierra Merger is subject to closing conditions, including stockholder approvals, that, if not satisfied or waived, will result in the Sierra Merger not being completed, which may result in material adverse consequences to the Company’s business and operations.
While there can be no assurances as to the exact timing, or that the Sierra Merger will be completed at all, the Company and Sierra are working to complete the Sierra Merger in the first quarter of 2022. The Sierra Merger is subject to closing conditions, including required regulatory approvals (including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder) and certain approvals of the Company’s and Sierra’s respective stockholders that, if not satisfied, will prevent the Sierra Merger from being completed. The closing condition that the Company’s stockholders approve the issuance of shares of the Company’s common stock in connection with the Sierra Merger and the issuance of shares of the Company’s common stock in connection with the Sierra Merger at a price below its then-current NAV may not be waived and must be satisfied for the Sierra Merger to be completed. The Company currently expects that all directors and executive officers of the Company will vote their shares of the Company’s common stock in favor of the proposals presented at the special meeting of the Company’s stockholders to be held in connection with the Sierra Merger. Additionally, Barings, as a party to the Sierra Merger Agreement, agreed to vote all shares of the Company’s common stock over which it has voting power (other than in its fiduciary capacity) in favor of the proposals presented at the Company’s special meeting of stockholders. Furthermore, the closing condition that Sierra stockholders approve the Sierra Merger may not be waived and must also be satisfied for the Sierra Merger to be completed. If the closing conditions to the Sierra Merger are not satisfied, including receipt of the required approvals by the stockholders of the Company and of Sierra, and the Sierra Merger is not completed, the resulting failure to complete the Sierra Merger could have a material adverse impact on the Company’s business and operations.
Sierra and the Company will be subject to contractual restrictions while the Sierra Merger is pending, including restrictions on pursuing alternatives to the Sierra Merger.
Uncertainty about the effect of the Sierra Merger may have an adverse effect on the Company and Sierra and, consequently, on the combined company following completion of the Sierra Merger. These uncertainties may impair the Company’s and Sierra’s abilities to motivate key personnel until the Sierra Merger is consummated and could cause those who deal with the Company and Sierra to seek to change their existing business relationships with the Company and Sierra, respectively. In addition, the Sierra Merger Agreement restricts the Company and Sierra from taking actions that they might otherwise consider to be in their best interests without the consent of the other party. These restrictions may prevent the Company and Sierra from pursuing certain business opportunities that may arise
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prior to the completion of the Sierra Merger, including restrictions on them pursuing alternatives to the Sierra Merger.
Subject to applicable law, each party may waive one or more conditions to the Sierra Merger without resoliciting approval from its respective stockholders.
Certain conditions to the Company’s and Sierra’s obligations to complete the Sierra Merger may be waived, in whole or in part, to the extent legally allowed, either unilaterally or by agreement of the Company and Sierra. In the event that any such waiver does not require resolicitation of stockholders, the parties to the Sierra Merger Agreement will have the discretion to complete the Sierra Merger without seeking further stockholder approval. Accordingly, the terms and conditions as set forth in the Sierra Merger Agreement and described herein, including certain protections to the Company and Sierra, may be waived. The conditions requiring the approval of the Company’s stockholders and approval of Sierra’s stockholders, however, cannot be waived.
The market price of the Company’s common stock after the Sierra Merger may be affected by factors different from those affecting the Company’s common stock or Sierra’s common stock currently.
The businesses of the Company and Sierra differ in some respects and, accordingly, the results of operations of the combined company and the market price of the Company’s common stock after the Sierra Merger may be affected by factors different from those currently affecting the independent results of operations of each of the Company and Sierra. These factors include:
•a larger stockholder base;
•a different portfolio composition; and
•a different capital structure
Accordingly, the historical trading prices and financial results of the Company may not be indicative of these matters for the combined company following the Sierra Merger.
The Sierra Merger may trigger certain “change of control” provisions and other restrictions in certain of the Company’s and Sierra’s contracts and the failure to obtain any required consents or waivers could adversely impact the combined company.
Certain agreements of the Company and Sierra or their controlled affiliates will or may require the consent of one or more counterparties in connection with the Sierra Merger. The failure to obtain any such consent may permit such counter-parties to terminate, or otherwise increase their rights or the Company’s or Sierra’s obligations under, any such agreement because the Sierra Merger may violate an anti-assignment, change of control or similar provision. If this happens, the Company or Sierra may have to seek to replace that agreement with a new agreement or seek a waiver or amendment to such agreement. The Company cannot assure you that it or Sierra will be able to replace, amend or obtain a waiver under any such agreement on comparable terms or at all.
If any such agreement is material, the failure to obtain consents, amendments or waivers under, or to replace on similar terms or at all, any of these agreements could adversely affect the financial performance or results of operations of the combined company following the Sierra Merger, including preventing the Company from operating a material part of Sierra’s business.
In addition, the consummation of the Sierra Merger may violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event that, with or without notice or lapse of time or both, would constitute a default) under, or result in the termination, cancellation, acceleration or other change of any right or obligation (including any payment obligation) under the Company’s or Sierra’s agreements. Any such violation, conflict, breach, loss, default or other effect could, either individually or in the aggregate, have a material adverse effect on the financial condition, results of operations, assets or business of the combined company following completion of the Sierra Merger.
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The combined company may not be able to obtain financing for additional capital requirements.
Following completion of the Sierra Merger, the combined company may seek significant ongoing capital funding and, although the Company anticipates that the combined company will be able to obtain such funding through cash generated from operations and subsequent debt, equity or hybrid offerings, there can be no assurances that the combined company will be able to obtain financing on acceptable terms or at all.
The Company has incurred and expects to incur substantial transaction fees and costs in connection with the Sierra Merger, whether or not the Sierra Merger is completed.
The Company has incurred and expects to incur additional material non-recurring expenses in connection with the Sierra Merger and completion of the transactions contemplated by the Sierra Merger Agreement. The Company has incurred significant legal, advisory and financial services fees in connection with the process of negotiating and evaluating the terms of the Sierra Merger. Additional significant unanticipated costs may be incurred in the course of coordinating the businesses of Sierra and the Company after completion of the Sierra Merger.
Even if the Sierra Merger is not completed, the Company will need to pay certain costs relating to the Sierra Merger incurred prior to the date the Sierra Merger was abandoned, such as legal, accounting, financial advisory, filing and printing fees. Such costs may be significant and could have an adverse effect on the Company’s future results of operations, cash flows and financial condition.
Litigation filed against Sierra or the Company in connection with the Sierra Merger could result in substantial costs and could delay or prevent the Sierra Merger from being completed.
From time to time, Sierra and the Company may be subject to legal actions, including securities class action lawsuits and derivative lawsuits, as well as various regulatory, governmental and law enforcement inquiries, investigations and subpoenas in connection with the Sierra Merger. These or any similar securities class action lawsuits and derivative lawsuits, regardless of their merits, may result in substantial costs and divert management time and resources. An adverse judgment in such cases could have a negative impact on the Company’s liquidity and financial condition or could prevent the Sierra Merger from being completed.
General Risk Factors
Global capital markets could enter a period of severe disruption and instability or an economic recession. These conditions have historically affected and could again materially and adversely affect debt and equity capital markets in the United States and around the world and could impair our portfolio companies and harm our operating results.
The U.S. and global capital markets have from time to time experienced periods of disruption characterized by the freezing of available credit, a lack of liquidity in the debt capital markets, significant losses in the principal value of investments, the re-pricing of credit risk in the broadly syndicated credit market, the failure of major financial institutions and general volatility in the financial markets. During these periods of disruption, general economic conditions deteriorated with material and adverse consequences for the broader financial and credit markets, and the availability of debt and equity capital for the market as a whole, and financial services firms in particular, was reduced significantly. These conditions may reoccur for a prolonged period of time or materially worsen in the future.
The United Kingdom (the “UK”) formally left the European Union (the “EU”) on January 31, 2020 (commonly known as “Brexit”), followed by an implementation period, during which EU law continued to apply in the UK and the UK maintained its EU single market access rights and EU customs union membership. The implementation period expired on December 31, 2020. Consequently, the UK has become a third country vis-à-vis the EU, without access to the single market or membership of the EU customs union. During the implementation period, on December 30, 2020, the UK and the EU signed a trade and cooperation agreement (the “TCA”) to govern their ongoing relationship. The TCA was officially ratified by the UK Parliament on December 30, 2020, and was ratified by the EU Parliament and Council on April 27, 2021. It is anticipated that further details of the relationship between the UK and the EU will continue to be negotiated even after formal ratification of the TCA.Over time, UK
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regulated firms and other UK businesses may be adversely affected by the terms of the TCA (assuming it is formally ratified by the EU), as compared with the position prior to the expiration of the implementation period on December 31, 2020. For example, the TCA introduces new customs checks, as well as new restrictions on the provision of cross-border services and on the free movement of employees. These changes have the potential to materially impair the profitability of a business, and to require it to adapt or even relocate. Although it is probable that any adverse effects flowing from the UK’s withdrawal from the EU will principally affect the UK (and those having an economic interest in, or connected to, the UK), given the size and global significance of the UK’s economy, the impact of the withdrawal is unpredictable and likely to be an ongoing source of instability, produce significant currency fluctuations, and/or have other adverse effects on international markets, international trade agreements and/or other existing cross-border cooperation arrangements (whether economic, tax, fiscal, legal, regulatory or otherwise). The withdrawal of the UK from the EU could therefore adversely affect us. In addition, although it seems less likely following the expiration of the transition period than at the time of the UK’s referendum, the withdrawal of the UK from the EU could have a further destabilizing effect if any other member states were to consider withdrawing from the EU, presenting similar and/or additional potential risks and consequences to our business and financial results.
Market conditions may in the future make it difficult to extend the maturity of or refinance our existing indebtedness and any failure to do so could have a material adverse effect on our business. If we are unable to raise or refinance debt, then our equity investors may not benefit from the potential for increased returns on equity resulting from leverage and we may be limited in our ability to make new commitments or to fund existing commitments to our portfolio companies.
Given the volatility and dislocation that the capital markets have historically experienced, many BDCs have faced, and may in the future face, a challenging environment in which to raise capital. We may in the future have difficulty accessing debt and equity capital on attractive terms, or at all, and a severe disruption or instability in the global financial markets or deteriorations in credit and financing conditions may cause us to reduce the volume of the loans we originate and/or fund, which may adversely affect the value of our portfolio investments or otherwise have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, significant changes in the capital markets, including instances of extreme volatility and disruption, have had, and may in the future have, a negative effect on the valuations of our investments and on the potential for liquidity events involving our investments. We monitor developments and seek to manage our investments in a manner consistent with achieving our investment objective, but there can be no assurance that we will be successful in doing so, and we may not timely anticipate or manage existing, new or additional risks, contingencies or developments, including regulatory developments in the current or future market environment.
An inability to raise capital, and any required sale of our investments for liquidity purposes, could have a material adverse impact on our business, financial condition or results of operations. The debt capital that will be available to us in the future, if at all, may be at a higher cost and on less favorable terms and conditions than what we currently experience, including being at a higher cost in rising rate environments. If we are unable to raise or refinance debt, then our equity investors may not benefit from the potential for increased returns on equity resulting from leverage and we may be limited in our ability to make new commitments or to fund existing commitments to our portfolio companies. In addition, equity capital may be difficult to raise during periods of adverse or volatile market conditions because, subject to some limited exceptions, as a BDC, we are generally not able to issue additional shares of our common stock at a price less than net asset value without first obtaining approval for such issuance from our stockholders and our independent directors. We generally seek approval from our stockholders so that we have the flexibility to issue up to a specified percentage of our then-outstanding shares of our common stock at a price below net asset value. Pursuant to approval granted at an annual meeting of stockholders held on May 20, 2021, we are permitted to issue and sell shares of our common stock at a price below our then-current net asset value per share in one or more offerings, subject to certain limitations and determinations that must be made by the Board (including, without limitation, that the number of shares issued and sold pursuant to such authority does not exceed 30% of our then-outstanding common stock immediately prior to each such offering). Such stockholder approval expires on May 20, 2022.
Many of the portfolio companies in which we make investments may be susceptible to economic slowdowns or recessions and may be unable to repay the loans we made to them during these periods. Therefore, our non-
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performing assets may increase and the value of our portfolio may decrease during these periods as we are required to record our investments at their current fair value. Adverse economic conditions also may decrease the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our and our portfolio companies’ funding costs, limit our and our portfolio companies’ access to the capital markets or result in a decision by lenders not to extend credit to us or our portfolio companies. These events could prevent us from increasing investments and harm our operating results.
A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, acceleration of the time when the loans are due and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize the portfolio company’s ability to meet its obligations under the debt that we hold. We may incur additional expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company. In addition, if one of our portfolio companies were to go bankrupt, depending on the facts and circumstances, including the extent to which we will actually provide significant managerial assistance to that portfolio company, a bankruptcy court might subordinate all or a portion of our claim to that of other creditors.
Terrorist attacks, acts of war, or national disasters, outbreaks or pandemics may affect any market for our securities, impact the businesses in which we invest and harm our business, operating results and financial condition.
Terrorist acts, acts of war, or national disasters, outbreaks or pandemics may disrupt our operations, as well as the operations of the businesses in which we invest. Such acts have created, and continue to create, economic and political uncertainties and have contributed to global economic instability. Future terrorist activities, militaryFor example, many countries have experienced outbreaks of infectious illnesses in recent decades, including swine flu, avian influenza, SARS and COVID-19. Since the initial outbreak of COVID-19, a large and growing number of cases have been confirmed around the world. The COVID-19 outbreak has resulted in numerous deaths and the imposition of both local and more widespread “work from home” and other quarantine measures, border closures and other travel restrictions, causing social unrest and commercial disruption on a global scale.
The spread of COVID-19, including the multiple variants thereof, has had, and will continue to have, a material adverse impact on local economies in the affected jurisdictions and also on the global economy, as cross-border commercial activity and market sentiment are increasingly impacted by the outbreak and government and other measures seeking to contain its spread. With respect to U.S. and global credit markets and the economy in general, this outbreak has resulted in, and until fully resolved is likely to continue to result in, the following (among other things): (i) restrictions on travel and the temporary closure of many corporate offices, retail stores, and manufacturing facilities and factories, resulting in significant disruption to the business of many companies, including supply chains and demand, as well as layoffs of employees; (ii) increased draws by borrowers on revolving lines of credit; (iii) increased requests by borrowers for amendments or security operations, waivers of their credit agreements to avoid default, increased defaults by borrowers and/or natural disasters could further weakenincreased difficulty in obtaining refinancing; (iv) volatility in credit markets, including greater volatility in pricing and spreads; and (v) rapidly evolving proposals and actions by state and federal governments to address the domestic/global economiesproblems being experienced by markets, businesses and create additional uncertainties,the economy in general, which may negatively impactnot adequately address the underlying problems. In addition to these developments having adverse consequences in the businesses in which we invest, directlythe operations of Barings (including those relating to the Company) have been, and could continue to be, adversely impacted, including through quarantine measures and travel restrictions imposed on Barings personnel or indirectlyservice providers based or temporarily located in affected countries, or any related health issues of such personnel or service providers. Any of the foregoing events could materially and adversely affect our ability to source, manage and divest its investments and its ability to fulfill its investment objectives. Similar consequences could arise with respect to other comparable infectious diseases. Although it is impossible to predict the precise nature and consequences of these events, or of any political or policy decisions and regulatory changes occasioned by emerging events or uncertainty on applicable laws or regulations that impact us and our portfolio companies and investments, it is clear that these types of events are impacting and will, for at least some time, continue to impact us and our portfolio companies. Any potential impact to our results of operations will depend to a large extent on future developments and new information that could emerge regarding the duration and severity of the COVID-19 pandemic and the actions taken by authorities and other entities to
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contain the spread or treat its impact, all of which are beyond our control. These potential impacts, while uncertain, could adversely affect our and our portfolio companies' operating results.
We may experience fluctuations in our quarterly results.
We could experience fluctuations in our quarterly operating results due to a number of factors, including our ability or inability to make investments in companies that meet our investment criteria, the interest rate payable on the debt securities we acquire, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods.
Economic recessions or downturns could impair our portfolio companies and harm our operating results.
Many of our portfolio companies may be susceptible to economic downturns or recessions and may be unable to repay our loans during these periods. Therefore, during these periods our non-performing assets may increase and the value of these assets may decrease. Adverse economic conditions may also decrease the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could prevent us from increasing investments and harm our operating results.
A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its assets, which could trigger cross-defaults under other agreements and jeopardize our portfolio company’s ability to meet its obligations under the debt securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company.
Changes to U.S. tariff and import/export regulations may have a negative effect on our portfolio companies and, in turn, harm us.
There have been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs, creating significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, treaties and tariffs. These developments, or the perception that more of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors could depress economic activity and restrict our portfolio companies’ access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact us.
Changes in laws or regulations governing our operations may adversely affect our business or cause us to alter our business strategy.
We, our subsidiaries and our portfolio companies are subject to regulation at the local, state and federal level. New legislation may be enacted or new interpretations, rulings or regulations could be adopted, including those governing the types of investments we are permitted to make, any of which could harm us and our stockholders, potentially with retroactive effect. Additionally, new regulatory initiatives related to ESG could adversely affect our business.
Additionally, any changes to the laws and regulations governing our operations relating to permitted investments may cause us to alter our investment strategy in order to avail ourselves of new or different opportunities. Such changes could result in material differences to the strategies and plans set forth in this Annual Report on Form 10-K and may result in our investment focus shifting from the areas of expertise of our management team to other types of investments in which our management team may have less expertise or little or no experience.
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Thus, any such changes, if they occur, could have a material adverse impacteffect on our business, operating results of operations and financial condition. Losses from terrorist attacks and natural disasters are generally uninsurable.the value of your investment.
Item 1B. Unresolved Staff Comments.
Not applicable.None.
Item 2. Properties.
We do not own any real estate or other physical properties materially important to our operation or any of our subsidiaries. Currently,Our headquarters are currently located at 300 South Tryon Street, Suite 2500 Charlotte, North Carolina 28202, where we lease approximately 14,328 square feet ofoccupy office space located at 3700 Glenwood Avenue, Suite 530, Raleigh, North Carolina 27612.pursuant to the Administration Agreement with Barings. We believe that our current office facilities are adequate to meet our needs.
Item 3. Legal Proceedings.
We and certain of our current and former executive officers have been named as defendants in two putative securities class action lawsuits, each filed in the United States District Court for the Southern District of New York (and then transferred to the United States District Court for the Eastern District of North Carolina) on behalf of all persons who purchased or otherwise acquired our common stock between May 7, 2014 and November 1, 2017. The first lawsuit was filed on November 21, 2017, and is currently captioned Elias Dagher, et al., v. Triangle Capital Corporation, et al., Case No. 5:18-cv-00015-FL (the “Dagher Action”). The second lawsuit was filed on November 28, 2017, and is currently captioned Gary W. Holden, et al., v. Triangle Capital Corporation, et al., Case No. 5:18-cv-00010-FL (the “Holden Action”).
The complaints in the Dagher Action and the Holden Action allege certain violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions regarding the Company’s business, operations and prospects between May 7, 2014 and November 1, 2017. The plaintiffs seek compensatory damages and attorneys’ fees and costs, among other relief, but did not specify the amount of damages being sought.
On January 22, 2018, five applications for appointment as lead plaintiff and motions to consolidate the Dagher Action and the Holden Action were filed. The applications for appointment as lead plaintiff and motions to consolidate are currently pending before the Court.
We intend to defend ourselves vigorously against the allegations in the aforementioned actions. Neither the outcome of the lawsuits nor an estimate of any reasonably possible losses is determinable at this time. An adverse judgment for monetary damages could have a material adverse effect on our operations and liquidity.  Except as discussed above, neither we, Barings, nor our subsidiaries are currently subject to any material pending legal proceedings, other than ordinary routine litigation incidental to our business.respective businesses. We, Barings, and our subsidiaries may from time to time, however, be involved in litigation arising out of operations in the normal course of business or otherwise, including in connection with strategic transactions. Furthermore, third parties may seek to impose liability on us in connection with the activities of our portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, we do not expect any current matters will materially affect our financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on our financial condition or results of operations in any future reporting period.

Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Common Stock and Holders
Our common stock is traded on the New York Stock Exchange, or NYSE, under the ticker symbol “TCAP.“BBDC.” The following table sets forth the range of high and low intraday sales prices per share of our common stock as reported on the NYSE for the periods indicated:
  High Low
Fiscal Year 2016:    
First Quarter $20.85 $14.91
Second Quarter $21.35 $16.00
Third Quarter $20.60 $18.56
Fourth Quarter $19.95 $16.40
Fiscal Year 2017:    
First Quarter $20.35 $18.12
Second Quarter $19.15 $17.28
Third Quarter $17.83 $12.84
Fourth Quarter $14.35 $8.91
As of February 28, 2018,23, 2022, there were approximately 5297 holders of record of our common stock. This number does not include stockholders for whom shares are held in “nominee” or “street name.”
Distributions Declared
We intend to make distributions on a quarterly basis to our stockholders of substantially allThe table below shows the detail of our income. We may make deemed distributions of certain net capital gains to our stockholders.
The following table summarizes our distributions declared duringfor the years ended December 31, 20162021 and 2017:2020: 
Date Declared
Record
Date
Payment
Date
Amount
February 24, 2016March 9, 2016March 23, 2016$0.54
May 4, 2016June 8, 2016June 22, 2016$0.45
August 24, 2016September 7, 2016September 21, 2016$0.45
November 23, 2016December 7, 2016December 21, 2016$0.45
February 22, 2017March 8, 2017March 22, 2017$0.45
May 3, 2017June 7, 2017June 21, 2017$0.45
August 2, 2017September 6, 2017September 20, 2017$0.45
November 1, 2017December 6, 2017December 20, 2017$0.30
 Year Ended December 31,
 20212020
 Amount% of TotalAmount% of Total
Ordinary income$0.79 96.3 %$0.65 100.0 %
Tax return of capital0.03 3.7 — — 
Total reported on IRS Form 1099-DIV$0.82 100.0 %$0.65 100.0 %
Each year, a statement on IRS Form 1099-DIV identifying the source(s) of the distribution (i.e., paid from ordinary income, paid from net capital gains on the sale of securities, and/or a return of paid in capital surplus which is a nontaxable distribution) is mailed to our stockholders. To the extent that our distributions for a fiscal year exceed current and accumulated earnings and profits, a portion of those distributions may be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our taxable ordinary income or capital gains. Stockholders should read any written disclosure accompanying a dividend payment carefully and should not assume that any distribution is taxable as ordinary income or capital gains.

The table below shows the detail of our distributions for the years ended December 31, 2017 and 2016:
  Year Ended December 31,
  2017 2016
  Amount % of Total Amount % of Total
Ordinary income $1.65
 100.0% $1.89
 100.0%
Long-term capital gains —
 —
 —
 —
Total reported on IRS Form 1099-DIV $1.65
 100.0% $1.89
 100.0%
Ordinary income is reported on IRS Form 1099-DIV as either qualified or non-qualified and capital gain distributions are reported on IRS Form 1099-DIV in various subcategories which have differing tax treatments to stockholders. Those subcategories are not presented herein.
We estimate the source of our distributions as required by Section 19(a) of the 1940 Act to determine whether payment of dividends are expected to be paid from any other source other than net investment income accrued for current period or certain cumulative periods, but we will not be able to determine whether any specific distribution will be treated as made out of our taxable earnings or as a return of capital until after the end of our taxable year. Any amount treated as a return of capital will reduce a stockholder’s adjusted tax basis in his or her common stock, thereby increasing his or her potential gain or reducing his or her potential loss on the subsequent sale or other disposition of his or her common stock. On a quarterly basis, for any payment of dividends estimated to be paid from any other source other than net investment income accrued for current period or certain cumulative periods based on the Section 19(a) requirement, we post a Section 19(a) notice through the Depository Trust Company’s Legal Notice System and our website, as well as send our registered stockholders a printed copy of such notice along with the dividend payment. The estimates of the source of the distribution are interim estimates based on GAAP that are subject to revision, and the exact character of the distributions for tax purposes cannot be determined until the final books and records are finalized for the calendar year. Therefore, these estimates are made solely in order to comply with the requirements of Section 19(a) of the 1940 Act and should not be relied upon for tax reporting or any other purposes and could differ significantly from the actual character of distributions for tax purposes.
Distribution Policy
We generally intend to make distributions on a quarterly basis to our stockholders of substantially all of our income. In order to avoid certain excise taxes imposed on RICs, we must distribute during each calendar year an amount at least equal to the sum of (i) 98.0% of our ordinary income for the calendar year, (ii) 98.2% of our capital
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gains in excess of capital losses for the calendar year, and (iii) any ordinary income and net capital gains for the preceding year that were not distributed during such year. We will not be subject to excise taxes on amounts on which we are required to pay corporate income tax (such as retained net capital gains). In order to obtain the tax benefits applicable to RICs, we will be required to distribute to our stockholders with respect to each taxable year at least 90.0% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses. We may retain for investment realized net long-term capital gains in excess of realized net short-term capital losses. We may make deemed distributions to our stockholders of any retained net capital gains. If this happens, our stockholders will be treated as if they received an actual distribution of the capital gains we retain and then reinvested the net after-tax proceeds in our common stock. Our stockholders also may be eligible to claim a tax credit (or, in certain circumstances, a tax refund) equal to their allocable share of the tax we paid on the capital gains deemed distributed to them. Please refer to “Business — Material U.S. Federal Income Tax Considerations” included in Item 1 of Part I of this Annual Report on Form 10-K for further information regarding the consequences of our retention of net capital gains. We may, in the future, make actual distributions to our stockholders of some or all realized net long-term capital gains in excess of realized net short-term capital losses. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, if we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratio and related requirements stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings.borrowings or financing arrangements. See “Business — Regulation of Business Development Companies” included in Item 1 of Part I of this Annual Report.Report on Form 10-K.
We have adopted a dividend reinvestment plan or DRIP, that provides for reinvestment of our distributions on behalf of our common stockholders, unless a common stockholder elects to receive cash as provided in “Business — Dividend Reinvestment Plan” included in Item I of Part I of this Annual Report on Form 10-K.
Stockholders who receive dividends in the form of stock generally are subject to the same federal, state and local tax consequences as are stockholders who elect to receive their dividends in cash. A stockholder’s basis for determining gain or loss upon the sale of stock received in a dividend from us will be equal to the total dollar amount of the dividend payable to the stockholder. Any stock received in a dividend will have a holding period for tax purposes commencing on the day following the day on which the shares are credited to the U.S. stockholder’s account.
Our ability to make distributions will be limited by the asset coverage requirement and related provisions under the 1940 Act and contained in the indenture and related supplements governing the December 2022 Notes and the March 2022 Notes. For a more detailed discussion, see “Business — Regulation of Business Development Companies” included in Item 1 of Part I of this Annual Report.

Securities Authorized for Issuance Under our Omnibus Incentive Plan
The following table provides information regarding the number of shares of restricted stock authorized and available under the Triangle Capital Corporation Omnibus Incentive Plan, or the Omnibus Plan, as of December 31, 2017:
Plan Category 
Number of
securities to be
issued upon
exercise of outstanding
options, warrants
and rights
 
Weighted average
exercise price of
outstanding
options, warrants
and rights
 
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column(a))
 
  (a) (b) (c) 
Equity compensation plans approved by security holders(1) —
 —
 2,269,467
(2)
Equity compensation plans not approved by security holders —
 —
 —
 
Total —
 —
 2,269,467
 
(1)The Omnibus Plan is the only equity compensation plan currently utilized by us.
(2)The Omnibus Plan has an aggregate of 4,000,000 shares of common stock reserved for issuance.
Sales of Unregistered Equity Securities
While weWe did not engage insell any sales of unregisteredequity securities during the year ended December 31, 2017, we issued a total of 91,366 shares of our common stockperiod covered by this report that were not registered under our DRIP. This issuance was not subject to the registration requirements of the Securities Act of 1933, as amended. The aggregate value of the shares of common stock issued under our DRIP during the year ended December 31, 2017 was approximately $1.6 millionamended (the “Securities Act”).
Issuer Purchases of Equity Securities
During the three months ended December 31, 2017,2021, in connection with our DRIPdividend reinvestment plan for our common stockholders, we directed the plan administratorPlan Administrator to purchase 69,882 shares56,343 shares of our common stock for $679,253.04an aggregate of $625,097 in the open market in order to satisfy our obligationsobligations to deliver shares of common stock to our stockholders with respect to our dividend declared on November 1, 2017. The following chart summarizes repurchases of our common stock for the three months ended December 31, 2017:
PeriodTotal number of shares purchased Average price paid per share 
Total number of
shares purchased
as part of publicly
announced plans
or programs
 
Maximum number
of shares that
may yet be
purchased under the plans or programs
October 1 through October 31, 2017—
 —
 —
 —
November 1 through November 30, 2017—
 —
 —
 —
December 1 through December 31, 201769,882
(1)$9.72
 —
 —
(1) These shares were purchased in the open market pursuant to the terms of our DRIP.9, 2021.
Performance Graph
The following graph compares the cumulative total return on our common stock with the cumulative total return of the Triangle Capital Corporation Peer GroupNasdaq Composite Index, the NasdaqNYSE Composite Index and the NYSE CompositeWells Fargo Business Development Company Index for the five years ended December 31, 2017.2021. This comparison assumes $100.00 was invested in our common stock (or that of Triangle Capital Corporation ("TCAP"), prior to the Transactions) at the closing price of our common stock on December 31, 20122016 and in the comparison groups and assumes the reinvestment of all cash dividends on the ex-dividend date prior to any tax effect. The stock price performance shown on the graph below is not necessarily indicative of future price performance.
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Comparison of Annual Cumulative Total Return(1)
among Triangle Capital Corporation, the Triangle Capital Corporation
Peer Group Index,Barings BDC, Inc., the Nasdaq Composite Index, and the NYSE Composite Index
and the Wells Fargo Business Development Company Index
chart-8be50dd7f6384feea57.jpg
12/31/163/31/176/30/179/30/1712/31/173/31/186/30/189/30/1812/31/18
Barings BDC, Inc.100.00 107.01 101.71 85.67 59.06 71.33 73.70 88.01 80.03 
NASDAQ Composite Index100.00 110.13 114.71 121.67 129.64 132.99 141.79 152.29 125.96 
NYSE Composite Index100.00 104.58 107.78 112.54 118.73 116.09 117.41 123.58 108.10 
Wells Fargo Business Development Company Index100.00 106.09 102.97 103.43 102.56 101.32 106.45 113.61 98.42 
3/31/196/30/199/30/1912/31/193/31/206/30/209/30/2012/31/20
Barings BDC, Inc.88.20 89.64 93.76 96.35 71.31 77.19 79.30 92.97 
NASDAQ Composite Index147.13 152.82 153.09 172.17 148.15 193.99 215.80 249.51 
NYSE Composite Index121.47 125.72 126.09 135.68 101.15 117.55 126.26 145.16��
Wells Fargo Business Development Company Index115.57 121.56 125.62 139.16 87.93 111.79 116.58 137.01 
3/31/216/30/219/30/2112/31/21
Barings BDC, Inc.102.80 110.86 117.96 120.31 
NASDAQ Composite Index256.88 281.74 281.10 304.85 
NYSE Composite Index156.84 167.21 164.00 175.18 
Wells Fargo Business Development Company Index162.68 179.72 190.81 203.45 
(1)From December 31, 2016 to December 31, 2021.
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  12/31/12 3/31/13 6/30/13 9/30/13 12/31/13 3/31/14 6/30/14 9/30/14 12/31/14
Triangle Capital Corporation 100.00
 111.83
 111.99
 121.76
 116.79
 112.15
 126.13
 115.02
 94.92
NASDAQ Composite Index 100.00
 109.07
 114.09
 127.38
 141.63
 143.01
 150.74
 153.77
 162.09
NYSE Composite Index 100.00
 108.55
 109.99
 116.19
 126.28
 128.60
 135.01
 132.36
 134.81
Triangle Capital Corporation Peer Group Index(2) 100.00
 105.20
 103.93
 108.16
 113.67
 113.01
 117.35
 110.81
 105.74
Senior Securities Table of Barings BDC, Inc.
(dollar amounts in thousands, except per unit data)
Information about our senior securities is shown as of the dates indicated in the below table. The report of our independent registered public accounting firm, KPMG LLP, on the senior securities table as of December 31, 2021, is attached as an exhibit to this annual report on Form 10-K.
Class and Year(1)Total Amount
Outstanding
Exclusive of
Treasury
Securities(2)		Asset
Coverage per
Unit(3)		Involuntary
Liquidating
Preference per
Unit(4)		Average Market
Value per
Unit(5)
2019 Notes
2012$69,000 $1,580 —$25.92 
201369,000 2,259 —25.99 
201469,000 2,215 —25.74 
December 2022 Notes
201280,500 1,580 —25.03 
201380,500 2,259 —24.94 
201480,500 2,215 —25.05 
201580,500 1,972 —25.23 
201680,500 2,124 —25.15 
201780,500 2,120 —25.51 
March 2022 Notes
201586,250 1,972 —25.46 
201686,250 2,124 —25.58 
201786,250 2,120 —25.85 
SBA-guaranteed debentures payable(6)
2012213,605 1,580 —N/A
2013193,285 2,259 —N/A
2014224,780 2,215 —N/A
2015224,968 1,972 —N/A
2016250,000 2,124 —N/A
2017250,000 2,120 —N/A
May 2011 Credit Facility
2012— 1,580 —N/A
201311,221 2,259 —N/A
201462,620 2,215 —N/A
2015131,257 1,972 —N/A
2016127,011 2,124 —N/A
2017125,315 2,120 —N/A
August 2018 Credit Facility(7)
2018570,000 1,988 —N/A
2019107,200 1,851 —N/A
February 2019 Credit Facility(8)
2019245,288 1,851 —N/A
2020719,661 1,760 —N/A
2021655,189 1,538 —N/A
Debt Securitization
2019318,210 1,851 —N/A
August 2025 Notes
202050,000 1,760—N/A
202150,000 1,538 —N/A
74

    3/31/15 6/30/15 9/30/15 12/31/15 3/31/16 6/30/16 9/30/16 12/31/16
Triangle Capital Corporation   109.33
 115.15
 83.52
 99.64
 110.33
 106.41
 110.61
 105.48
NASDAQ Composite Index   167.90
 171.68
 159.69
 173.33
 169.25
 168.76
 185.06
 187.19
NYSE Composite Index   136.35
 136.08
 124.19
 129.29
 131.01
 135.62
 139.52
 144.73
Triangle Capital Corporation Peer Group Index(2)   111.95
 107.79
 98.12
 102.09
 106.70
 110.93
 121.82
 127.89


            3/31/17 6/30/17 9/30/17 12/31/17
Triangle Capital Corporation           112.42
 106.41
 89.13
 61.13
NASDAQ Composite Index           206.25
 214.78
 227.44
 242.29
NYSE Composite Index           151.36
 155.99
 162.88
 171.83
Triangle Capital Corporation Peer Group Index(2)           138.33
 134.23
 133.96
 132.22
(1)
From December 31, 2012 to December 31, 2017.
(2)The Triangle Capital Corporation Peer Group consists of the following companies: Apollo Investment Corporation, Ares Capital Corporation, BlackRock Capital Investment Corporation, Fidus Investment Corporation, Gladstone Investment Corporation, Gladstone Capital Corporation, Golub Capital BDC, Inc., Horizon Technology Finance Corporation, Hercules Capital, Inc., KCAP Financial, Inc., Main Street Capital Corporation, Medley Capital Corporation, New Mountain Finance Corporation, Oaktree Specialty Lending Corporation, PennantPark Investment Corporation, Prospect Capital Corporation, Solar Capital Ltd. and THL Credit, Inc.

Class and Year(1)Total Amount
Outstanding
Exclusive of
Treasury
Securities(2)		Asset
Coverage per
Unit(3)		Involuntary
Liquidating
Preference per
Unit(4)		Average Market
Value per
Unit(5)
Series B Notes
202062,500 1,760—N/A
202162,500 1,538 —N/A
Series C Notes
2020112,500 1,760—N/A
2021112,500 1,538 —N/A
Series D Notes
202180,000 1,538 —N/A
Series E Notes
202170,000 1,538 —N/A
November 2026 Notes
2021350,000 1,538 —N/A
Total Senior Securities
2012363,105 1,580 —N/A
2013354,006 2,259 —N/A
2014436,900 2,215 —N/A
2015522,975 1,972 —N/A
2016543,761 2,124 —N/A
2017572,820 2,120 —N/A
2018570,000 1,988 —N/A
2019670,698 1,851 —N/A
2020944,661 1,760—N/A
20211,380,189 1,538 —N/A
Item 6. (1)Selected Financial Data.The information in the senior securities tables for 2017 - 2019 and for years prior to 2016 is unaudited. An independent registered public accounting firm has performed agreed-upon procedures related to the accuracy of the total amount outstanding exclusive of treasury securities as of December 31, 2017, 2018 and 2019 and the asset coverage per unit as of December 31, 2017, 2018 and 2019.
(2)Total amount of each class of senior securities outstanding at the end of the period presented.
(3)Asset coverage per unit is the ratio of the carrying value of our total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness. All prior period ratios have been conformed with this current presentation.
(4)The selected financial data atamount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in preference to any security junior to it. The “—” indicates information which the SEC expressly does not require to be disclosed for certain types of senior securities.
(5)Average market value per unit for our unsecured notes issued in March 2012 due 2019 (the “2019 Notes”), our unsecured notes issued in October 2012 and November 2012 due 2022 (the “December 2022 Notes”) and our unsecured notes issued in February 2015 due 2022 (the “March 2022 Notes”) represent the average of the daily closing prices as reported on the NYSE for the fiscal years ended December 31,each security during 2012, 2013, 2014, 2015, 2016 and 2017, have been derived fromas applicable. Average market value per unit for our financial statements that have been audited by Ernst & Young LLP, an independent registered public accounting firm. You should read this selected financial and other dataSBA-guaranteed debentures payable, our terminated credit facility initially entered into in conjunctionMay 2011 (the “May 2011 Credit Facility”), Barings BDC Senior Funding I, LLC's terminated credit facility initially entered into in August 2018 with Bank of America, N.A. (the "August 2018 Credit Facility"), the February 2019 Credit Facility, our “Management’s Discussion and Analysis of Financial Condition and Results of Operations”$449.3 million term debt securitization in May 2019 (the “Debt Securitization”), the August 2025 Notes, the November Notes, the February Notes and the financial statements andNovember 2026 Notes are not applicable because these senior securities are not registered for public trading.
(6)We have obtained exemptive relief from the SEC to permit us to exclude the SBA-guaranteed debentures payable from the 200% asset coverage test under the Investment Company Act.
(7)The August 2018 Credit Facility was terminated at our election in June 2020.
(8)The remaining notes thereto.issued in connection with the Debt Securitization were repaid in full in October 2020.

75
  Year Ended December 31,
  2013 2014 2015 2016 2017
  (Dollars and share amounts in thousands, except per share data)
Income statement data:          
Investment income:          
Total loan interest, fee and dividend income $100,755
 $104,273
 $121,062
 $113,332
 $122,290
Interest income from cash and cash equivalent investments 273
 238
 225
 348
 715
Total investment income 101,028
 104,511
 121,287
 113,680
 123,005
Operating expenses:         
Interest and other debt financing fees 20,234
 21,180
 26,754
 26,721
 29,261
Compensation expenses 15,831
 17,562
 19,009
 23,676
 16,136
General and administrative expenses 3,434
 3,753
 3,895
 4,406
 5,370
Total operating expenses 39,499
 42,495
 49,658

54,803
 50,767
Net investment income 61,529
 62,016
 71,629
 58,877
 72,238
Net realized gains (losses):         
   Non-Control/Non-Affiliate investments 15,882
 7,396
 9,003
 (2,414) (3,683)
   Affiliate investments 4,828
 7,733
 2,315
 4,399
 (3,980)
   Control investments (2,290) (1,498) (38,807) —
 (45,206)
Net realized gains (losses) on investments 18,420
 13,631
 (27,489) 1,985
 (52,869)
    Foreign currency borrowings —
 —
 —
 —
 1,269
Net realized gains (losses) 18,420
 13,631
 (27,489) 1,985
 (51,600)
Net unrealized appreciation (depreciation):          
   Non-Control/Non-Affiliate investments 390
 (38,467) (23,583) (9,080) (65,786)
   Affiliate investments (1,427) (3,213) 2,839
 (5,473) (7,356)
   Control investments 2,848
 (3,554) 23,876
 (11,464) 27,547
Net unrealized appreciation (depreciation) on investments 1,811
 (45,234) 3,132
 (26,017)
(45,595)
    Foreign currency borrowings 404
 1,071
 2,363
 (153) (2,822)
Net unrealized appreciation (depreciation) 2,215
 (44,163) 5,495
 (26,170) (48,417)
Net realized and unrealized gains (losses) on investments and foreign currency borrowings 20,635
 (30,532) (21,994) (24,185) (100,017)
Loss on extinguishment of debt (413) —
 (1,394) —
 —
Provision for taxes (539) (3,122) (384) (436) (871)
Net increase in net assets resulting from operations $81,212
 $28,362
 $47,857
 $34,256
 $(28,650)
Net investment income per share — basic and diluted $2.23
 $2.08
 $2.16
 $1.62
 $1.55
Net increase in net assets resulting from operations per share — basic and diluted $2.94
 $0.95
 $1.44
 $0.94
 $(0.62)
Net asset value per common share $16.10
 $16.11
 $15.23
 $15.13
 $13.43
Regular quarterly dividends/distributions per share $2.16
 $2.16
 $2.16
 $1.89
 $1.65
Supplemental dividends/distributions per share —
 0.40
 0.20
 —
 —
Total dividends/distributions declared per common share $2.16
 $2.56 $2.36 $1.89 $1.65
Weighted average number of shares outstanding — basic and diluted 27,576
 29,775
 33,234
 36,405
 46,498


Item 6. [Reserved].
  Year Ended December 31,
  2013 2014 2015 2016 2017
  (Dollars in thousands)
Balance sheet data:          
Assets:          
Investments at fair value $664,373
 $887,223
 $977,277
 $1,037,907
 $1,016,284
Cash and cash equivalents 133,304
 78,759
 52,615
 107,088
 191,850
Interest and fees receivable 5,256
 7,409
 4,892
 10,190
 7,807
Prepaid expenses and other current assets 832
 439
 947
 1,660
 1,855
Deferred financing fees 1,654
 1,231
 3,480
 2,700
 5,186
Property and equipment, net 60
 109
 106
 106
 81
Total assets $805,479
 $975,170
 $1,039,317
 $1,159,651
 $1,223,063
Liabilities:          
Accounts payable and accrued liabilities $7,494
 $7,145
 $7,464
 $6,797
 $9,863
Interest payable 3,018
 3,365
 3,714
 3,997
 3,997
Taxes payable 1,065
 2,506
 735
 490
 796
Deferred income taxes 3,514
 3,364
 4,988
 2,054
 1,332
Borrowings under credit facility 11,221
 62,620
 131,257
 127,012
 156,071
Notes 145,120
 145,646
 162,142
 162,755
 163,408
SBA-guaranteed debentures payable 188,255
 219,697
 220,649
 245,390
 246,321
Total liabilities 359,687
 444,343
 530,949
 548,495
 581,788
Net assets 445,792
 530,827
 508,368
 611,156
 641,275
Total liabilities and net assets $805,479
 $975,170
 $1,039,317
 $1,159,651
 $1,223,063
Other data:          
Weighted average yield on total investments(1) 12.8% 11.6% 10.6% 10.2% 9.6%
Number of portfolio companies 79
 91
 92
 88
 89
Expense ratios (as percentage of average net assets):          
Compensation and general and administrative expenses 4.4% 4.4% 4.4% 5.0% 3.2%
Interest and other financing fees 4.7
 4.4
 5.1
 4.8
 4.4
Total expenses 9.1% 8.8% 9.5% 9.8% 7.6%
Total expenses, including loss on extinguishment of debt and provision for taxes 9.3% 9.5% 9.8% 9.9% 7.7%
(1)Excludes non-accrual debt investments.

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The information in this section contains forward-looking statements that involve risks and uncertainties. Please see “Risk Factors” and “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements. You should read the following discussion in conjunction with the combined financial statements and related notes and other financial information appearing elsewhere in this Annual Report.Report on Form 10-K.
The following discussion is designed to provide a better understanding of our financial statements, including a brief discussion of our business, key factors that impacted our performance and a summary of our operating results. The following discussion should be read in conjunction with the Financial Statementsconsolidated financial statements and the notes thereto included or incorporated by reference in Item 8 of this Annual Report on Form 10-K. Historical results and percentage relationships among any amounts in the financial statements are not necessarily indicative of trends in operating results for any future periods.
OverviewMVC Capital, Inc. Acquisition
On December 23, 2020, we completed our acquisition of MVC Capital, Inc., a Delaware corporation (“MVC”) (the “MVC Acquisition”) pursuant to the terms and conditions of that certain Agreement and Plan of Merger (the “MVC Merger Agreement”), dated as of August 10, 2020, with MVC, Mustang Acquisition Sub, Inc., a Delaware corporation and our wholly owned subsidiary (“Acquisition Sub”), and Barings LLC, our external investment adviser and our administrator (“Barings”). To effect the acquisition, Acquisition Sub merged with and into MVC, with MVC surviving the merger as our wholly owned subsidiary (the “First MVC Merger”). Immediately thereafter, MVC merged with and into us, with us as the surviving company (the “Second MVC Merger” and, together with the First MVC Merger, the “MVC Merger”).
Pursuant to the MVC Merger Agreement, MVC stockholders received the right to the following merger consideration in exchange for each share of MVC common stock issued and outstanding immediately prior to the effective time of the First MVC Merger (other than shares of MVC common stock issued and outstanding immediately prior to the effective time of the First MVC Merger that were held by a subsidiary of MVC or held, directly or indirectly, by us or the Acquisition Sub), in accordance with the MVC Merger Agreement: (i) an amount in cash from Barings, without interest, equal to $0.39492, and (ii) 0.9790836 shares of our Businesscommon stock, which ratio gave effect to the Euro-dollar exchange rate adjustment mechanism in the MVC Merger Agreement, plus cash in lieu of fractional shares. We issued approximately 17,354,332 shares of our common stock to MVC’s then-existing stockholders in connection with the MVC Merger, thereby resulting in our then-existing stockholders owning approximately 73.4% of the combined company and MVC's then-existing stockholders owning approximately 26.6% of the combined company.
We areIn connection with the MVC Acquisition, on December 23, 2020, following the closing of the MVC Merger, we entered into (1) an amended and restated investment advisory agreement (the “Amended and Restated Advisory Agreement”) with Barings, effective January 1, 2021, and (2) a credit support agreement (the “MVC Credit Support Agreement”) with Barings, pursuant to which Barings has agreed to provide credit support to us in the amount of up to $23.0 million relating to the net cumulative realized and unrealized losses on the acquired MVC investment portfolio over a 10-year period. See “Business—MVC Capital, Inc. Acquisition” and “Business—Management Agreements – Investment Advisory Agreement” in Item 1 of Part I of this Annual Report on Form 10-K, as well as “Note 2. Agreements and Related Party Transactions” and “Note. 6 Derivative Instruments” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K for more information.
In addition, in connection with the closing of the MVC Merger, our board of directors (the “Board”) affirmed our commitment to open-market purchases of shares of our common stock in an aggregate amount of up to $15.0 million at then-current market prices at any time shares trade below 90% of our then most recently disclosed net asset value per share. Any repurchases pursuant to the authorized program will occur during the 12-month period that commenced upon the filing of our quarterly report on Form 10-Q for the quarter ended March 31, 2021, which occurred on May 6, 2021, and will be made in accordance with applicable legal, regulatory and contractual
76

requirements, including covenants under our $875 million senior secured revolving credit facility with ING Capital LLC (as amended, restated and otherwise modified from time to time, the "February 2019 Credit Facility").
Pending Sierra Income Corporation Acquisition
On September 21, 2021, we entered into an Agreement and Plan of Merger (the “Sierra Merger Agreement”) by and among us, Mercury Acquisition Sub, Inc., a Maryland corporation which has electedand our direct wholly owned subsidiary (“Sierra Acquisition Sub”), Sierra Income Corporation, a Maryland corporation (“Sierra”), and Barings. The Sierra Merger Agreement provides that, on the terms and subject to the conditions set forth in the Sierra Merger Agreement, Sierra Acquisition Sub will merge with and into Sierra, with Sierra continuing as the surviving company and as our wholly owned subsidiary (the “First Sierra Merger”) and, immediately thereafter, Sierra will merge with and into us, with Barings BDC, Inc. continuing as the surviving company (the “Second Sierra Merger” and, together with the First Sierra Merger, the “Sierra Merger”). Both the Board and the board of directors of Sierra, including all of the respective independent directors, have approved the Sierra Merger Agreement and the transactions contemplated therein. The parties to the Sierra Merger Agreement intend the Sierra Merger to be treated as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”).
In the First Sierra Merger, each share of Sierra common stock issued and operates asoutstanding immediately prior to the effective time of the First Sierra Merger (excluding any shares cancelled pursuant to the Sierra Merger Agreement) will be converted into the right to receive (i) $0.9783641 per share in cash, without interest, from Barings (such amount of cash, the “Sierra Cash Consideration”) and (ii) 0.44973 of a validly issued, fully paid and non-assessable share of our common stock (the “Sierra Share Consideration” and, together with the Sierra Cash Consideration, the “Sierra Merger Consideration”).
The Sierra Merger Agreement contains representations, warranties and covenants, including, among others, covenants relating to the operation of each of our and Sierra’s businesses during the period prior to the closing of the Sierra Merger. We and Sierra have agreed to convene and hold stockholder meetings for the purpose of obtaining the approvals required of our and Sierra’s stockholders, respectively, and our Board and the board of directors of Sierra have agreed to recommend that their respective stockholders approve the applicable proposals (as described below).
The Sierra Merger Agreement provides that Sierra shall not, and shall cause its subsidiaries and instruct its representatives not to, directly or indirectly, solicit proposals relating to alternative transactions, or, subject to certain exceptions, initiate or participate in discussions or negotiations regarding, or provide information with respect to, any proposal for an internally managed business development company,alternative transaction. However, the Sierra board of directors may, subject to certain conditions, change its recommendation to the Sierra stockholders or, BDC,on payment of a termination fee of $11.0 million to us and the reimbursement of up to $2.0 million in expenses incurred by us and Barings, terminate the Sierra Merger Agreement and enter into an Alternative Acquisition Agreement (as defined in the Sierra Merger Agreement) for a Superior Proposal (as defined in the Sierra Merger Agreement) if it determines in good faith, after consultation with its outside legal counsel, that failure to do so would be inconsistent with the directors’ duties under applicable law.
Consummation of the First Sierra Merger, which is currently anticipated to occur during the first quarter of fiscal year 2022, is subject to certain customary closing conditions, including (1) approval of the First Sierra Merger by the holders of at least a majority of the outstanding shares of Sierra common stock entitled to vote thereon, (2) approval of the issuance of our common stock to be issued in the First Sierra Merger by a majority of the votes cast by our stockholders on the matter at our stockholders meeting, (3) approval of the issuance of our common stock in connection with the First Sierra Merger at a price below the then-current net asset value per share of our common stock, if applicable, by the vote specified in Section 63(2)(A) of the Investment Company Act of 1940, as amended (the “1940 Act”), (4) the absence of certain legal impediments to the consummation of the Sierra Merger, (5) effectiveness of the registration statement for our common stock to be issued as consideration in the First Sierra Merger, (6) approval for listing on the NYSE of our common stock to be issued as consideration in the First Sierra Merger, (7) subject to certain materiality standards, the accuracy of the representations and warranties and compliance with the covenants of each party to the Sierra Merger Agreement, and (8) required regulatory approvals
77

(including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or 1940 Act. Our wholly-owned subsidiaries, Triangle Mezzanine Fund LLLP, or Triangle SBIC, Triangle Mezzanine Fund II LP, or Triangle SBIC II and Triangle Mezzanine Fund III LP, or Triangle SBIC III, are licensedearly termination thereof).
Barings, as small business investment companies, or SBICs,party to the Sierra Merger Agreement, agreed to vote all shares of our common stock over which it has voting power (other than in its fiduciary capacity) in favor of the proposals to be submitted by us to our stockholders for approval relating to the United States Small Business Administration, or SBA. Sierra Merger.
In addition, Triangle SBIC haswe and Sierra will take steps necessary to provide for the repayment at closing of Sierra’s existing loan agreement. The Sierra Merger Agreement also electedcontains certain termination rights in favor of us and Sierra, including if the First Sierra Merger is not completed on or before March 31, 2022 or if the requisite approvals of our stockholders or Sierra stockholders are not obtained.
Further, we will enter into an amendment and restatement of the Amended and Restated Advisory Agreement, effective as of the closing of the Sierra Merger, to raise the annualized hurdle rate thereunder from 8.0% to 8.25%. Following the closing of the Sierra Merger, we will also enter into a credit support agreement with Barings, for the benefit of the combined company, to protect against net cumulative unrealized and realized losses of up to $100.0 million on the acquired Sierra investment portfolio over the next ten years.
Overview of Our Business
We are a Maryland corporation incorporated on October 10, 2006. In August 2018, in connection with the closing of an externalization transaction through which Barings agreed to become our external investment adviser, we entered into an investment advisory agreement (the "Original Advisory Agreement") and an administration agreement (the "Administration Agreement") with Barings. In connection with the completion of our MVC Acquisition, we entered into the Amended and Restated Advisory Agreement with Barings on December 23, 2020, following approval of the Amended and Restated Advisory Agreement by our stockholders at our December 23, 2020 special meeting of stockholders. The terms of the Amended and Restated Advisory Agreement became effective on January 1, 2021. Under the terms of the Amended and Restated Advisory Agreement and the Administration Agreement, Barings serves as our investment adviser and administrator and manages our investment portfolio and performs (or oversees, or arranges for, the performance of) the administrative services necessary for our operation.
An externally-managed BDC generally does not have any employees, and its investment and management functions are provided by an outside investment adviser and administrator under an advisory agreement and administration agreement. Instead of directly compensating employees, we pay Barings for investment and management services pursuant to the terms of the Amended and Restated Advisory Agreement (and, prior to January 1, 2021, pursuant to the terms of the Original Advisory Agreement) and the Administration Agreement. Under the terms of the Amended and Restated Advisory Agreement (and, prior to January 1, 2021, under the terms of the Original Advisory Agreement), the fees paid to Barings for managing our affairs are determined based upon an objective and fixed formula, as compared with the subjective and variable nature of the costs associated with employing management and employees in an internally-managed BDC structure, which include bonuses that cannot be treated as a BDCdirectly tied to Company performance because of restrictions on incentive compensation under the 1940 Act. We, Triangle SBIC, Triangle SBIC II and Triangle SBIC III
Beginning in August 2018, Barings shifted our investment focus to invest primarily in debt instruments, equity investments, warrantssyndicated senior secured loans, bonds and other securitiesfixed income securities. Since that time, Barings has transitioned our portfolio to primarily senior secured private debt investments in well-established middle-market businesses that operate across a wide range of lower middle market privately-held companies located primarilyindustries. Barings’ existing SEC co-investment exemptive relief under the 1940 Act (the “Exemptive Relief”) permits us and Barings’ affiliated private and SEC-registered funds to co-invest in Barings-originated loans, which allows Barings to efficiently implement its senior secured private debt investment strategy for us.
Barings employs fundamental credit analysis, and targets investments in businesses with relatively low levels of cyclicality and operating risk. The holding size of each position will generally be dependent upon a number of factors including total facility size, pricing and structure, and the number of other lenders in the United States.
Our business isfacility. Barings has experience managing levered vehicles, both public and private, and will seek to provide capital to lower middle market companies inenhance our returns through the United States. We focus on investments in companiesuse of leverage with a history of generating revenuesprudent approach that prioritizes capital preservation. Barings believes this strategy and positive cash flows, an establishedapproach
78

offers attractive risk/return with lower volatility given the potential for fewer defaults and greater resilience through market position and a proven management team with a strong operating discipline. Our target portfolio company has annual revenues between $20.0 million and $300.0 million and annual earnings before interest, taxes, depreciation and amortization, or EBITDA, between $5.0 million and $75.0 million.
We invest primarily in senior and subordinated debt securities of privately held companies, generally secured by security interests in portfolio company assets. In addition, we generally invest in one or more equity instruments of the borrower, such as direct preferred or common equity interests. Our investments generally range from $5.0 million to $50.0 million per portfolio company. In certain situations, we have partnered with other funds to provide larger financing commitments.cycles.
We generate revenues in the form of interest income, primarily from our investments in debt securities, loan origination and other fees and dividend income. Fees generated in connection with our debt investments are recognized over the life of the loan using the effective interest method or, in some cases, recognized as earned. In addition, we generate revenue in the form of capital gains, if any, on warrants or other equity-related securities that we acquire from our portfolio companies. Our senior secured, middle-market, private debt investments generally have a termterms of between threefive and seven years. In addition, our fixed debt investments typically bear interest between 10.0% and 15.0% per annum and our variableOur senior secured, middle-market, first lien private debt investments generally bear interest between LIBOR (or the applicable currency rate for investments in foreign currencies) plus 550450 basis points and LIBOR plus 950650 basis points per annum. CertainOur subordinated middle-market, private debt investments generally bear interest between LIBOR (or the applicable currency rate for investments in foreign currencies) plus 700 basis points and LIBOR plus 900 basis points per annum if floating rate, and between 8% and 15% if fixed rate. From time to time, certain of our debt investments may have a form of interest, referred to as payment-in-kind, or PIK, interest, thatwhich is not paid currently but is instead accrued and added to the loan balance and paid at the end of the term. In our negotiations with potential portfolio companies, we generally seek to minimize PIK interest. Cash interest on our debt investments is generally payable quarterly; however, some of our debt investments pay cash interest on a monthly basis.
As of December 31, 20172021 and December 31, 2016,2020, the weighted average yield on the principal amount of our outstanding debt investments other than non-accrual debt investments was approximately 11.0%7.2% and 11.7%7.1%, respectively. The weighted average yield on allthe principal amount of our outstanding investments (including equity and equity-linked investments but excluding non-accrual debt investments) was approximately 9.6% and 10.2% as of December 31, 2017 and December 31, 2016, respectively. The weighted average yield on all of our outstanding investments (including equity and equity-linked investments and short-term investments but excluding non-accrual debt investments) was approximately 8.5%6.1% and 9.7%6.4% as of

December 31, 20172021 and December 31, 2016,2020, respectively. The weighted average yields across our investment portfolio dependyield on the relative seniorityprincipal amount of all of our outstanding investments within(including equity and equity-linked investments, short-term investments and non-accrual debt investments) was approximately 6.4% and 6.5% as of December 31, 2021 and December 31, 2020, respectively.
COVID-19 Developments
The spread of the capital structuresCoronavirus and the COVID-19 pandemic, and the related effect on the U.S. and global economies, has had adverse consequences for the business operations of some of our portfolio companies and has adversely affected, and threatens to continue to adversely affect, our operations and the operations of Barings, including with respect to us. Barings has taken proactive steps around COVID-19 to address the potential impacts on their people, clients, communities and everyone they come in contact with, directly or through their premises. Protecting their employees and supporting the communities in which they live and work is a priority. Barings continues to operate with the majority of employees in the United States working remotely while maintaining service levels to our partners and clients. In the United States, Barings offices remained accessible throughout the fourth quarter of 2021 for employees who had a business need to work from an office location. All US-based employees have adopted a hybrid working pattern and started returning to office locations effective January 2022. In Europe, the majority of employees shifted to working remotely in the fourth quarter of 2021. In Asia-Pac, the majority of employees are working from office locations on average 2-3 days per week. Barings’ return-to-office taskforce continues to monitor the COVID-19 situation globally and are prepared to adapt office working patterns as required to ensure the safety of their employees and clients who visit Barings office locations. Barings’ cybersecurity policies are applied consistently when working remotely or in the office.
While we have been carefully monitoring the COVID-19 pandemic and its impact on our security interests inbusiness and the business of our portfolio company assets. Historically, since our IPO in 2007,companies, we have primarily focused on investmentscontinued to fund our existing debt commitments. In addition, we have continued to make and originate, and expect to continue to make and originate, new loans.
We cannot predict the full impact of the COVID-19 pandemic, including its duration in subordinated debt securities, which generally produce higher yields than more senior securities duethe United States and worldwide and the magnitude of the economic impact of the outbreak, including with respect to the risks inherent in investing in less senior positions. Beginning in 2016, we begantravel restrictions, business closures and other quarantine measures imposed on service providers and other individuals by various local, state, and federal governmental authorities, as well as non-U.S. governmental authorities. We are unable to shiftpredict the extent and duration of any business and supply-chain disruptions, the extent to which COVID-19 will negatively affect our focus toward largerportfolio companies’ operating results or the impact that such disruptions may have on our results of operations and less cyclicalfinancial condition. Depending on the duration and extent of the disruption to the operations of our portfolio companies, certain portfolio companies could experience financial distress and began steeringpossibly default on their financial obligations to us and their other capital providers. Some of our portfolio composition with a focus
79

companies may significantly curtail business operations, furlough or lay off employees and terminate service providers, and defer capital expenditures if subjected to prolonged and severe financial distress, which would likely impair their business on a balance between senior and subordinated securities. This shift toward more senior securities is intended to reduce our credit risks in exchange for lower-yielding investments, which in turn has resultedpermanent basis. These developments would likely result in a decrease in the weighted average yield on our investment portfolio. As we continue this balanced strategy, and as the percentagevalue of our investment in any such portfolio that is comprisedcompany.
We will continue to monitor the situation relating to the COVID-19 pandemic and guidance from U.S. and international authorities, including federal, state and local public health authorities and may take additional actions based on their recommendations. In these circumstances, there may be developments outside our control requiring us to adjust our plan of senior debt investments increases,operation. As such, given the dynamic nature of this situation, we expect our investment-related risks to be mitigated to an extent, but we also expectcannot reasonably estimate the weighted average yieldsimpacts of COVID-19 on our portfolio to continue to decrease.
Triangle SBIC, Triangle SBIC II and Triangle SBIC III are eligible to issue debenturesfinancial condition, results of operations or cash flows in the future. However, to the SBA, which pools these with debentures of other SBICs and sells them inextent our portfolio companies are adversely impacted by the capital markets at favorable interest rates, in part as a resulteffects of the guaranteeCOVID-19 pandemic, it may have a material adverse impact on our future net investment income, the fair value of payment fromour portfolio investments, our financial condition and the SBA. Triangle SBIC, Triangle SBIC IIresults of operations and Triangle SBIC III invest these funds infinancial condition of our portfolio companies. We intend to continue to operate Triangle SBIC, Triangle SBIC II and Triangle SBIC III as SBICs, subject to SBA approval, and to utilize the proceeds from the issuance of SBA-guaranteed debentures, referred to herein as SBA leverage, to enhance returns to our stockholders.
Review of Strategic Alternatives
In November 2017, our Board of Directors announced that it was exploring and evaluating a broad range of strategic alternatives to enhance long-term stockholder value and has engaged an investment banking firm as its financial advisor in connection therewith. The strategic alternatives review process is ongoing, and there can be no assurance that it will result in a transaction, or if a transaction is undertaken, as to its terms or timing.
Portfolio Composition
The total value of our investment portfolio was $1,016.3$1,800.6 million as of December 31, 2017,2021, as compared to $1,037.9$1,495.8 million as of December 31, 2016.2020. As of December 31, 2017,2021, we had investments in 89212 portfolio companies with an aggregate cost of $1,121.6$1,787.8 million. As of December 31, 2016,2020, we had investments in 88146 portfolio companies and two money market fund with an aggregate cost of $1,096.9$1,486.1 million. As of both December 31, 20172021 and 2016,2020, none of our portfolio investments represented greater than 10% of the total fair value of our investment portfolio.
As of December 31, 20172021 and December 31, 2016,2020, our investment portfolio consisted of the following investments: 
CostPercentage of
Total Portfolio		Fair ValuePercentage of
Total Portfolio
December 31, 2021:
Senior debt and 1st lien notes$1,217,899,217 68 %$1,221,597,953 68 %
Subordinated debt and 2nd lien notes253,550,848 14 240,036,80813 
Structured products37,054,829 2 40,270,659 2 
Equity shares145,790,765 8 154,476,6579 
Equity warrants1,111,602 — 1,107,543 — 
Investments in joint ventures/PE fund132,416,803 8 143,104,3328 
Short-term investments— — — — 
$1,787,824,064 100 %$1,800,593,952 100 %
December 31, 2020:
Senior debt and 1st lien notes$1,167,436,742 79 %$1,171,250,512 79 %
Subordinated debt and 2nd lien notes137,776,808 9 138,767,120 9 
Structured products30,071,808 2 32,508,845 2 
Equity shares44,693,645 3 44,651,114 3 
Equity warrants1,235,383 — 1,300,197 — 
Investments in joint ventures/PE fund39,282,532 3 41,759,922 3 
Short-term investments65,558,227 4 65,558,227 4 
$1,486,055,145 100 %$1,495,795,937 100 %
80
  Cost 
Percentage of
Total Portfolio
 Fair Value 
Percentage of
Total Portfolio
December 31, 2017:        
Subordinated debt and 2nd lien notes
 $710,543,854
 63% $589,548,358
 58%
Senior debt and 1st lien notes
 275,088,787
 25
 262,803,297
 26
Equity shares 134,301,587
 12
 162,543,691
 16
Equity warrants 1,691,617
 —
 1,389,000
 —
  $1,121,625,845
 100% $1,016,284,346
 100%
December 31, 2016:        
Subordinated debt and 2nd lien notes
 $753,635,857
 69% $690,159,367
 67%
Senior debt and 1st lien notes
 198,616,110
 18
 191,643,157
 18
Equity shares 140,524,807
 13
 154,216,657
 15
Equity warrants 4,154,717
 —
 1,888,000
 —
  $1,096,931,491
 100% $1,037,907,181
 100%


Investment Activity
During the year ended December 31, 2017, we made twenty-nine new investments, including recapitalizations of existing portfolio companies, totaling $408.9 million, additional debt investments in eighteen existing portfolio companies totaling $70.4 million and additional equity investments in eleven existing portfolio companies totaling $4.4 million. We had twenty-one portfolio company loans repaid at par totaling $332.5 million and received normal principal repayments, partial loan prepayments and PIK interest repayments totaling $54.5 million. We recognized $25.6 million of realized losses related to two portfolio company restructurings. We wrote off equity investments in eight portfolio companies and recognized realized losses on the write-offs of $15.1 million and wrote off or sold debt investments in six portfolio companies and recognized realized losses of $31.6 million. In addition, we received proceeds related to the sales of certain equity securities totaling $29.6 million and recognized net realized gains on such sales totaling $20.9 million in the year ended December 31, 2017.
During the year ended December 31, 2016,2021, we made sixteen112 new investments including recapitalizations oftotaling $1,069.4 million, made investments in existing portfolio companies totaling $274.1$234.0 million, made a new joint venture equity investment totaling $13.7 million, made additional debt investments in eleven existing joint venture equity portfolio companies totaling $37.8$79.4 million and additionalmade an $89.8 million equity investmentsco-investment alongside certain affiliates in ten existinga portfolio companies totaling $7.5 million.company focused on directly originated, senior-secured asset-based loans to middle-market companies. We had fourteen portfolio company34 loans repaid at par totaling $170.8 million, which resulted in realized gains totaling $1.4total $282.8 million and received normal principal repayments, partial loan prepayments and PIK interest repayments totaling $41.1 million. We converted subordinated debt investments in one$36.1 million of portfolio company into an equity investmentprincipal payments. In addition, we sold $252.9 million of loans, recognizing a net realized gain on these transactions of $2.5 million, and recognizedsold $536.4 million of investments to our joint venture, realizing a realized loss on such conversion totaling $1.6these transactions of $1.4 million. We wrote off debt and equity investments in two portfolio companies and recognized realized losses on the write-offs of $18.7 million. In addition,Lastly, we received proceeds related to the salessale of certain equity securities of our portfolio companiesinvestments totaling $34.4$8.6 million and recognized a net realized gainsgain on such sales totaling $20.9 million in$1.6 million.
During the year ended December 31, 2016.2020, we made 76 new investments totaling $743.2 million, purchased $185.0 million of investments as part of the MVC Acquisition, made investments in existing portfolio companies totaling $114.6 million, made a new joint venture equity investment totaling $10.0 million and made an additional investment in one existing joint venture equity portfolio company totaling $10.0 million. We had 18 loans repaid at par totaling total $76.4 million and received $15.3 million of portfolio company principal payments. In addition, we sold $468.4 million of loans, recognizing a net realized loss on these transactions of $39.5 million, and sold $126.1 million of middle-market portfolio company debt investments to our joint venture realizing a loss on these transactions of $1.4 million. In addition, one loan investment was restructured. Under U.S. GAAP, this restructuring was considered a material modification and as a result, we recognized a loss of approximately $0.6 million related to this restructuring. Lastly, we received $0.8 million in escrow distributions from legacy portfolio companies, which were recognized as realized gains and recognized a realized loss of $1.1 million relating to indemnification claims for a legacy Triangle Capital Corporation portfolio company.
Total portfolio investment activity for the years ended December 31, 20172021 and 20162020 was as follows:
December 31, 2021
Senior Debt
and 1st Lien
Notes
Subordinated Debt and 2nd Lien Notes
Structured ProductsEquity
Shares		Equity WarrantsInvestments
 in Joint Ventures/
PE Fund		Short-term
Investments		Total
Fair value, beginning of period$1,171,250,512 $138,767,120 $32,508,845 $44,651,114 $1,300,197 $41,759,922 $65,558,227 $1,495,795,937 
New investments1,104,331,866 160,737,734 19,815,398 108,111,475 163,000 93,134,271 297,560,982 1,783,854,726 
Proceeds from sales of investments(765,417,430)(13,683,500)(10,068,420)(8,269,168)(450,000)— (363,118,408)(1,161,006,926)
Loan origination fees received(26,844,600)(3,659,741)— — — — — (30,504,341)
Principal repayments received(275,645,832)(39,272,993)(4,007,677)— — — — (318,926,502)
Payment in kind interest3,112,247 8,503,991 — — — — — 11,616,238 
Accretion of loan premium/discount2,032,636 2,582,431 31,218 — — — — 4,646,285 
Accretion of deferred loan origination revenue8,841,329 602,604 — — — — — 9,443,933 
Realized gain (loss)52,258 (36,487)1,212,504 1,254,812 163,219 — (801)2,645,505 
Unrealized appreciation (depreciation)(115,033)(14,504,351)778,791 8,728,424 (68,873)8,210,139 — 3,029,097 
Fair value, end of period$1,221,597,953 $240,036,808 $40,270,659 $154,476,657 $1,107,543 $143,104,332 $— $1,800,593,952 
81

December 31, 2017
Subordinated
Debt and 2nd
Lien Notes
 
Senior Debt
and 1st Lien
Notes
 
Equity
Shares
 
Equity
Warrants
 Total
Fair value, beginning of period$690,159,367
 $191,643,157
 $154,216,657
 $1,888,000
 $1,037,907,181
New investments262,333,868
 205,493,670
 15,915,860
 —
 483,743,398
Investment reclass33,614,656
 (42,014,656) 8,400,000
 —
 —
Proceeds from sales of investments—
 —
 (29,065,946) (550,863) (29,616,809)
Loan origination fees received(4,355,181) (2,938,834) —
 —
 (7,294,015)
Principal repayments received(302,112,732) (71,949,131) —
 —
 (374,061,863)
PIK interest earned9,916,389
 1,001,142
 —
 —
 10,917,531
PIK interest payments received(12,431,539) (507,979) —
 —
 (12,939,518)
Accretion of loan discounts419,114
 57,778
 —
 —
 476,892
Accretion of deferred loan origination revenue4,846,747
 1,490,694
 —
 —
 6,337,441
Realized loss(35,323,325) (14,160,007) (1,473,134) (1,912,237) (52,868,703)
Unrealized appreciation (depreciation)(57,519,006) (5,312,537) 14,550,254
 1,964,100
 (46,317,189)
Fair value, end of period$589,548,358
 $262,803,297
 $162,543,691
 $1,389,000
 $1,016,284,346
Weighted average yield on debt investments at end of period(1)11.0%
Weighted average yield on total investments at end of period(1)9.6%
Weighted average yield on total investments at end of period8.5%
(1)Excludes non-accrual debt investments.

December 31, 2016
Subordinated
Debt and 2nd
Lien Notes
 
Senior Debt
and 1st Lien
Notes
 
Equity
Shares
 
Equity
Warrants
 Total
Fair value, beginning of period$699,125,083
 $132,929,264
 $141,555,369
 $3,667,000
 $977,276,716
New investments220,825,664
 71,620,633
 26,370,669
 650,000
 319,466,966
Investment reclass4,020,247
 (4,020,247) —
 —
 —
Proceeds from sales of investments���
 —
 (28,340,004) (5,742,355) (34,082,359)
Loan origination fees received(4,613,831) (1,200,160) —
 —
 (5,813,991)
Principal repayments received(194,883,407) (7,727,099) —
 —
 (202,610,506)
PIK interest earned13,784,921
 1,449,498
 —
 —
 15,234,419
PIK interest payments received(9,326,564) (236,150) —
 —
 (9,562,714)
Accretion of loan discounts193,801
 203,303
 —
 —
 397,104
Accretion of deferred loan origination revenue4,012,181
 556,218
 —
 —
 4,568,399
Realized gain (loss)(14,752,679) (1,560,322) 15,029,594
 3,268,455
 1,985,048
Unrealized appreciation (depreciation)(28,226,049) (371,781) (398,971) 44,900
 (28,951,901)
Fair value, end of period$690,159,367
 $191,643,157
 $154,216,657
 $1,888,000
 $1,037,907,181
Weighted average yield on debt investments at end of period(1)11.7%
Weighted average yield on total investments at end of period(1)10.2%
Weighted average yield on total investments at end of period9.7%
(1)Excludes non-accrual debt investments.
December 31, 2020
Senior Debt
and 1st Lien
Notes
Subordinated
Debt and 2nd
Lien Notes
Structured ProductsEquity
Shares		Equity WarrantsInvestment in Joint VentureShort-term InvestmentsTotal
Fair value, beginning of period$1,050,863,369 $15,220,969 $— $760,716 $— $10,229,813 $96,568,940 $1,173,643,807 
New investments815,145,050 8,244,226 33,018,233 1,286,365 101,602 20,000,000 1,182,185,606 2,059,981,082 
Investments acquired in MVC merger9,720,000 122,082,933 — 42,980,466 1,133,781 9,124,262 — 185,041,442 
Proceeds from sales of investments(588,450,883)(2,940,255)(3,000,000)221,094 — — (1,213,197,945)(1,807,367,989)
Loan origination fees received(19,013,021)(180,224)— — — — — (19,193,245)
Principal repayments received(86,295,211)(5,104,857)(336,069)— — — — (91,736,137)
Payment in kind interest453,896 41,753 — — — — — 495,649 
Accretion of loan premium/discount1,635,917 111,923 58,132 — — — — 1,805,972 
Accretion of deferred loan origination revenue2,672,194 44,571 — — — — — 2,716,765 
Realized gain (loss)(38,462,897)137,542 331,511 (310,105)— — 1,626 (38,302,323)
Unrealized appreciation (depreciation)22,982,098 1,108,539 2,437,038 (287,422)64,814 2,405,847 — 28,710,914 
Fair value, end of period$1,171,250,512 $138,767,120 $32,508,845 $44,651,114 $1,300,197 $41,759,922 $65,558,227 $1,495,795,937 
Non-Accrual Assets
Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. As of December 31, 2017,2021, we had two assets on non-accrual, the fair value of our non-accrual assetswhich was $15.8$36.0 million, which comprised 1.6%2.0% of the total fair value of our portfolio, and the cost of our non-accrual assetswhich was $120.1$50.9 million, which comprised 10.7%2.9% of the total cost of our portfolio. As of December 31, 2016,2020, we had one asset on non-accrual, the fair value of our non-accrual assetswhich was $15.9$3.0 million, which comprised 1.5%0.2% of the total fair value of our portfolio, and the cost of our non-accrual assetswhich was $38.4$3.0 million, which comprised 3.5%0.2% of the total cost of our portfolio.
OurA summary of our non-accrual assets as of December 31, 2017 were as follows:2021 is provided below:
Cafe Enterprises, Inc.Legal Solutions Holdings
DuringIn connection with the three months ended June 30, 2017,MVC Acquisition, we placedpurchased our subordinated debt investment in Cafe Enterprises, Inc.,Legal Solutions Holdings, or Cafe, on PIK non-accrual status. InLegal Solutions. During the quarter ended September 2017,30, 2021, we placed our debt investmentsinvestment in CafeLegal Solutions on non-accrual status effective with the quarterly payments due September 30, 2017.status. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investments in Cafe for financial reporting purposes. During the year ended December 31, 2017, we recorded unrealized depreciation of $12.3 million on our debt investments in Cafe. As of December 31, 2017, the cost of our debt investments in Cafe was $15.7 million and the fair value of such investments was zero.
Community Intervention Services, Inc.
In June 2017, we placed our debt investment in Community Intervention Services, Inc., or Community, on non-accrual status effective with the quarterly payment due June 30, 2017. As a result, under U.S. GAAP, we no longerwill not recognize interest income on our debt investment in CommunityLegal Solutions for financial reporting purposes. During the

year ended December 31, 2017, we recorded unrealized depreciation of $14.1 million on our debt investment in Community. As of December 31, 2017,2021, the cost of our debt investment in CommunityLegal Solutions was $17.7$10.1 million and the fair value of such investment was zero.$5.9 million.
Eckler's Holdings, Inc.
82

DuringCustom Alloy Corporation
In connection with the three months ended June 30, 2017,MVC Acquisition, we placedpurchased our subordinated debt investment in Eckler's Holdings, Inc.,Custom Alloy Corporation, or Eckler's, on PIK non-accrual status. In September 2017,Custom Alloy. During the quarter ended December 31, 2021, we placed our debt investment in Eckler'sCustom Alloy on non-accrual status effective with the quarterly payment due September 30, 2017.status. As a result, under U.S. GAAP, we no longerwill not recognize interest income on our debt investment in Eckler'sCustom Alloy for financial reporting purposes. During the year ended December 31, 2017, we recorded unrealized depreciation of $11.8 million on our debt investment in Eckler's. As of December 31, 2017,2021, the cost of our debt investment in Eckler'sCustom Alloy was $13.2$40.8 million and the fair value of such investment was zero.$30.0 million.
Frank Entertainment Group, LLCDiscussion and Analysis of Financial Condition and Results of Operations
In September 2017, we placedSet forth below is a comparison of the results of operations and changes in financial condition for the years ended December 31, 2021 and 2020. The comparison of, and changes between, the fiscal years ended December 31, 2020 and 2019 can be found within “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” included in Part II of our debt investments in Frank Entertainment Group, LLC, or Frank,annual report on non-accrual status effective withForm 10-K for the monthly payments due July 31, 2017. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investments in Frank for financial reporting purposes. During thefiscal year ended December 31, 2017, we recorded unrealized depreciation of $7.1 million on our debt investments in Frank. As of December 31, 2017, the cost of our debt investments in Frank was $13.6 million and the fair value of such investments was $6.5 million.
FrontStream Holdings, LLC2020, which is incorporated herein by reference.
In September 2017, we placed our debt investment in FrontStream Holdings, LLC, or Frontstream, on non-accrual status effective with the quarterly payment due September 30, 2017. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investment in Frontstream for financial reporting purposes. During the year ended December 31, 2017, we recorded unrealized depreciation of $6.0 million on our debt investment in Frontstream. As of December 31, 2017, the cost of our debt investment in Frontstream was $14.0 million and the fair value of such investment was $7.4 million.
GST AutoLeather, Inc.
On October 3, 2017, GST AutoLeather, Inc., or GST, filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. As a result, we placed our debt investment in GST on non-accrual status effective with the quarterly payment due September 30, 2017 and under U.S. GAAP, we no longer recognize interest income on our debt investment in GST for financial reporting purposes. During the year ended December 31, 2017, we recorded unrealized depreciation of $22.9 million on our debt investment in GST. As of December 31, 2017, the cost of our debt investment in GST was $23.1 million and the fair value of such investment was $0.2 million.
Media Storm, LLC.
In September 2017, we placed our debt investment in Media Storm, LLC, or Media Storm, on non-accrual status effective with the quarterly payment due September 30, 2017. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investment in Media Storm for financial reporting purposes. During the year ended December 31, 2017, we recorded unrealized depreciation of $3.4 million on our debt investment in Media Storm. As of December 31, 2017, the cost of our debt investment in Media Storm was $6.5 million and the fair value of such investment was $1.6 million.
Women's Marketing, Inc.
In December 2016, we placed our debt investment in Women's Marketing, Inc., or Women's Marketing, on non-accrual status effective with the monthly payment due November 30, 2016. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investment in Women's Marketing for financial reporting purposes. During the year ended December 31, 2017, we recorded unrealized depreciation of $11.1 million on our debt

investment in Women's Marketing. As of December 31, 2017, the cost of our debt investment in Women's Marketing was $16.1 million and the fair value of such investment was zero.
Results of Operations
Comparison of years ended December 31, 20172021 and2020
Operating results for the years ended December 31, 20162021 and 2020:
 Year Ended December 31,
 20212020
Total investment income$135,335,374 $71,031,068 
Net operating expenses76,367,540 39,972,665 
    Net investment income before taxes58,967,834 31,058,403 
Income taxes, including excise tax expense7,495 70,599 
Net investment income after taxes58,960,339 30,987,804 
Net realized losses(3,379,062)(38,289,580)
Net unrealized appreciation22,104,996 18,549,588 
Loss on extinguishment of debt— (3,088,728)
Benefit from (provision) for taxes(844)17,709 
    Net increase in net assets resulting from operations$77,685,429 $8,176,793 
Net increases or decreases in net assets resulting from operations vary substantially from period to period due to various factors. As a result, yearly comparisons of net increases or decreases in net assets resulting from operations may not be meaningful.
Investment Income
For the year ended December 31, 2017, total investment income was $123.0 million, an 8.2% increase from $113.7 million of
 Year Ended December 31,
 20212020
Total interest income$102,439,082 $65,620,891 
Total dividend income8,879,156 2,603 
Total fee and other income13,020,244 4,080,636 
Total payment-in-kind interest income10,996,305 1,326,307 
Interest income from cash587 631 
    Total investment income$135,335,374 $71,031,068 
The change in total investment income for the year ended December 31, 2016. This increase2021, as compared to the year ended December 31, 2020, was primarily attributeddue to an increase in the average size of our portfolio, debt investments from December 31, 2016 to December 31, 2017, a $2.1 millionacceleration of unamortized OID and unamortized loan origination fee income associated with repayments of loans, an increase in non-recurring feepayment-in-kind (“PIK”) interest income and a $0.7 million increase in non-recurring dividend income, partially offset by a decrease in PIK interest income due to a decrease in PIK yielding investmentsincreased dividends from December 31, 2016 to December 31, 2017portfolio companies and a $7.6 million decrease in investment income relating to non-accrual assets. Non-recurring fee income was $7.3 million forjoint venture investments. For the year ended December 31, 2017,2021, acceleration of unamortized OID income and unamortized loan origination fees totaled $6.2 million, as compared to $5.2 million for the year ended December 31, 2016, and non-recurring dividend income was $2.7$0.5 million for the year ended December 31, 2017,2020. For the year ended December 31, 2021, PIK interest income was $11.0 million, as compared to $2.0$1.3 million for the year ended December 31, 2016. Our non-recurring dividend income2020. For the year ended December 31, 2021, dividends from portfolio companies and joint venture investments were $8.9 million, as compared to $2,603 for the year ended December 31, 2020. The amount
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of our outstanding debt investments was $1,554.5 million as of December 31, 2021, as compared to $1,399.9 million as of December 31, 2020. The weighted average yield on the principal amount of our outstanding debt investments, other than non-accrual debt investments was 7.2% as of December 31, 2021, as compared to 7.1% as of December 31, 2020.
Operating Expenses
 Year Ended December 31,
 20212020
Interest and other financing fees$33,013,665 $19,812,711 
Base management fee19,516,741 14,317,693 
Incentive management fees14,741,949 — 
Compensation expenses— 48,381 
General and administrative expenses9,095,185 5,793,880 
    Total operating expenses$76,367,540 $39,972,665 
Interest and Other Financing Fees
Interest and other financing fees during the year ended December 31, 2016 consisted of non-recurring dividend income of approximately $3.3 million and a negative true-up adjustment of $1.3 million related2021 were attributable to a portfolio company distribution that was received in 2015. In 2015, we received information that indicated thatborrowings under the tax character ofFebruary 2019 Credit Facility, the distribution was 100% dividend income, but received updated information in 2016 indicating that only 14% ofAugust 2025 Notes, the distribution was dividend incomeNovember Notes, the February Notes and the remainder was a return of capital, which necessitated the adjustment.
Operating Expenses
For the year ended December 31, 2017, operating expenses decreased by 7.4% to $50.8 million from $54.8 million forNovember 2026 Notes (each as defined below under “Liquidity and Capital Resources”). Interest and other financing fees during the year ended December 31, 2016. Our operating expenses consist2020 were attributable to borrowings under Barings BDC Senior Funding I, LLC's (“BSF”) credit facility initially entered into in August 2018 with Bank of interestAmerica, N.A. (the “August 2018 Credit Facility”), the February 2019 Credit Facility, our May 2019 $449.3 million term debt securitization (the “Debt Securitization”), the August 2025 Notes and other financing fees, compensation expensesthe November Notes (each as defined below under “Liquidity and general and administrative expenses.
For the year ended December 31, 2017, interest and other financing fees were $29.3 million as compared to $26.7 million for the year ended December 31, 2016.Capital Resources”). The increase in interest and other financing fees for the year ended December 31, 2021 as compared to the year ended December 31, 2020, was related primarily attributable to an increasethe issuance of $2.0 million related tothe February Notes and the November 2026 Notes and increased borrowings under ourthe February 2019 Credit Facility, partially offset by the repayment of the Debt Securitization and the repayment of the borrowings under the August 2018 Credit Facility.
Base Management Fees
Under the terms of the Amended and Restated Advisory Agreement (and, prior to interestJanuary 1, 2021, under the terms of the Original Advisory Agreement), we pay Barings a base management fee (the “Base Management Fee"), quarterly in arrears on a calendar quarter basis. The Base Management Fee is calculated based on the average value of our gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters prior to the quarter for which such fees are being calculated. Base Management Fees for any partial month or quarter are appropriately pro-rated. See Note 2 to our Consolidated Financial Statements for the year ended December 31, 2021 for additional information regarding the terms of the Amended and Restated Advisory Agreement (and, prior to January 1, 2021, the terms of the Original Advisory Agreement) and the fee amortizationarrangement thereunder. For the years ended December 31, 2021 and December 31, 2020, the Base Management Fee was approximately $19.5 million and $14.3 million, respectively. The increase between periods was primarily due to the increase in our average gross assets, partially offset by a decrease in the Base Management Fee rate. The Base Management Fee rate was 1.250% for the year ended December 31, 2021, as compared to 1.375% for the year ended December 31, 2020.
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Incentive Fee (and, prior to January 1, 2021, under the terms of $0.5 millionthe Original Advisory Agreement)
Under the Amended and Restated Advisory Agreement (and, prior to January 1, 2021, under the terms of the Original Advisory Agreement), we pay Barings an incentive fee. A portion of the incentive fee is based on incremental borrowingsour income and a portion is based on our capital gains. The income-based fee will be determined and paid quarterly in arrears based on the amount by which (x) the aggregate pre-incentive fee net investment income in respect of $25.0 million underthe current calendar quarter and the eleven preceding calendar quarters beginning with the calendar quarter that commences on or after January 1, 2021, as the case may be (or the appropriate portion thereof in the case of any of our SBA-guaranteed debentures.first eleven calendar quarters that commences on or after January 1, 2021) exceeds (y) the hurdle amount as calculated for the same period. See Note 2 to our Consolidated Financial Statements for additional information regarding the terms of the Amended and Restated Advisory Agreement and the fee arrangements thereunder. For the year ended December 31, 2021, the amount of income-based fee incurred was $14.7 million. We did not incur any income-based fee for the year ended December 31, 2020.
Compensation Expenses
Prior to the externalization transaction with Barings in August 2018, compensation expenses arewere primarily influenced by headcount and levels of business activity. Our compensation expenses includeincluded salaries, discretionary compensation, equity-based compensation and benefits. Discretionary compensation iswas significantly impacted by our level of total investment income, our investment results, including investment realizations, prevailing labor markets and the external environment. As a resultIn connection with the externalization transactions, all but two employees were terminated and remained employees until February 2020.
General and Administrative Expenses
We entered into the Administration Agreement with Barings in August 2018. Under the terms of thesethe Administration Agreement, Barings performs (or oversees, or arranges for, the performance of) the administrative services necessary for our operations. We will reimburse Barings for the costs and other factors, our compensation expenses can fluctuate materially from periodincurred by it in performing its obligations and providing personnel and facilities under the Administration Agreement in an amount to period. Accordingly,be negotiated and mutually agreed to by us and Barings quarterly in arrears; provided that the agreed-upon quarterly expense amount will not exceed the amount of compensation expenses recognized in any particularthat would otherwise be reimbursable by us under the Administration Agreement for the applicable quarterly period, mayand Barings will not be indicativeentitled to the recoupment of compensationany amounts in excess of the agreed-upon quarterly expense amount. See Note 2 to our Consolidated Financial Statements for additional information regarding the Administration Agreement.
For the years ended December 31, 2021 and 2020, the amount of administration expense incurred and invoiced by Barings for expenses in a future period.was approximately $2.5 million and $1.6 million, respectively. In addition to expenses incurred under the Administration Agreement, general and administrative expenses include Board fees, D&O insurance costs, as well as legal and accounting expenses.
ForNet Realized Gains (Losses)
Net realized gains (losses) during the years ended December 31, 2021 and 2020 were as follows:
 Year Ended December 31,
 20212020
Non-Control / Non-Affiliate investments$2,746,436 $(38,302,323)
Affiliate investments(100,931)— 
Net realized gains (losses) on investments2,645,505 (38,302,323)
Foreign currency transactions(6,024,567)12,743 
Net realized losses$(3,379,062)$(38,289,580)
In the year ended December 31, 2017, compensation expenses decreased2021, we recognized a net realized loss totaling $3.4 million, which consisted primarily of a net loss on foreign currency transactions of $6.0 million, partially offset by 31.8% to $16.1 million from $23.7 million for the year ended December 31, 2016. The decrease in compensation expenses in the year ended December 31, 2017 was primarily related to one-time expenses associated with the retirementa net gains on our loan portfolio of our former Chief Executive Officer, Garland S. Tucker, III, from his officer positions in February 2016 and the resignation of Brent P.W. Burgess as the Company's Chief Investment Officer in October 2016. Our Board of Directors awarded Mr. Tucker a $2.5 million cash bonus and accelerated the $2.6 million.
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vesting of his outstanding shares of restricted stock, including 47,000 shares of restricted stock awarded to him in February 2016 based on his performance during 2015, and certain other compensation in connection with his retirement and in recognition of his long service. We recognized $5.5 million in one-time compensation expenses for the year ended December 31, 2016 associated with Mr. Tucker's retirement. In connection with Mr. Burgess’s resignation, we entered into an agreement with Mr. Burgess, pursuant to which he received his unpaid salary and accrued but unused vacation leave through October 14, 2016, cash payments totaling $250,000, accelerated vesting of the 93,284 shares of the Company’s restricted stock held by him and certain other benefits. We recognized $1.5 million in one-time compensation expenses for the year ended

December 31, 2016 in connection with Mr. Burgess' resignation. In addition, compensation expenses decreased by $0.6 million related to decreased discretionary compensation expenses.
For the year ended December 31, 2017, general2020, we recognized a net realized loss totaling $38.3 million, which consisted primarily of a net loss on our loan portfolio of $38.0 million and administrative expenses increaseda net loss of $1.1 million related to an indemnification claim in connection with a legacy Triangle Capital Corporation portfolio company, partially offset by 21.9% to $5.4$0.8 million in escrow distributions we received from $4.4 million forportfolio companies, which were recognized as realized gains.
Net Unrealized Appreciation and Depreciation
Net unrealized appreciation and depreciation during the years ended December 31, 2021 and 2020 was as follows:
 Year Ended December 31,
 20212020
Non-Control / Non-Affiliate investments$(11,086,729)$26,210,329 
Affiliate investments17,584,892 2,471,217 
Control investments(3,469,066)29,368 
Net unrealized appreciation on investments3,029,097 28,710,914 
Credit support agreement1,800,000 — 
Foreign currency transactions17,275,899 (10,161,326)
Net unrealized appreciation$22,104,996 $18,549,588 
For the year ended December 31, 2016, primarily2021, we recorded net unrealized appreciation totaling $22.1 million consisting of net unrealized appreciation on our current portfolio of $11.4 million, net unrealized appreciation related to increased legalforeign currency transactions of $17.3 million and other professional fees incurred in connectionunrealized appreciation of $1.8 million on the credit support agreement with previously disclosed litigationBarings, net of unrealized depreciation reclassification adjustments of $8.4 million related to realized gains and losses recognized during the year. The net unrealized appreciation on our current portfolio of $11.4 million was driven primarily by broad market moves for investments of $31.5 million partially offset by the credit or fundamental performance of investments of $5.9 million and the strategic alternatives review process discussed above. See Item 3impact of Part Iforeign currency exchange rates on investments of this Annual Report entitled “Legal Proceedings” for additional information.$14.2 million.
In addition, our efficiency ratio (defined as compensation and general and administrative expenses as a percentage of total investment income) decreased to 17.5% forFor the year ended December 31, 2017 from 24.7% for the year ended December 31, 2016.
Net Investment Income
As a result of the $9.3 million increase in total investment income and the $4.0 million decrease in operating expenses, net investment income for the year ended December 31, 2017 was $72.2 million compared to net investment income of $58.9 million during the year ended December 31, 2016.
Net Increase in Net Assets Resulting From Operations
For the year ended December 31, 2017, we recognized net realized losses on investments totaling $51.6 million, which consisted primarily of net losses on the write-offs of three control investments totaling $19.9 million, a net loss on the restructuring of one control investment totaling $25.3 million, net losses on the write-off of two affiliate investments totaling $9.5 million and net losses on the restructurings/write-offs of five non-control/non-affiliate investments totaling $17.7 million, partially offset by net gains on the sales of sixteen non-control/non-affiliate investments totaling $14.0 million, net gains on the sales of six affiliate investments totaling $5.5 million and a gain on foreign currency borrowings of $1.3 million. In addition, for the year ended December 31, 2017,2020, we recorded net unrealized depreciation of investmentsappreciation totaling $48.4$18.5 million consisting of net unrealized depreciation on our current portfolio of $102.8$27.9 million, net unrealized depreciation related to foreign currency transactions of $10.2 million and net unrealized appreciation reclassification adjustments of $54.4$56.6 million related to the realized gains and losses noted above.
Forrecognized during the year ended December 31, 2016, we recognized net realized gains totaling $2.0 million, which consisted primarily of net gains on the sales/repayments of seventeen non-control/non-affiliate investments totaling $15.3 million and net gains on the sales/write-off of seven affiliate investments totaling $4.4 million, partially off-set by a loss on the restructuring of one non-control/non-affiliate investment totaling $1.6 million and a loss on the write-off of one non-control/non-affiliate investment totaling $16.1 million. In addition, for the year ended December 31, 2016, we recorded net unrealized depreciation of investments totaling $26.2 million, consisting ofyear. The net unrealized depreciation on our current portfolio of $26.8$27.9 million was driven primarily by the credit or fundamental performance of middle-market debt investments of $6.1 million and net unrealized appreciation reclassification adjustments of $0.6 million related to the realized gains and losses noted above.
As a result of these events, our net decrease in net assets from operations during the year ended December 31, 2017 was $28.7 million as compared to a net increase in net assets resulting from operations of $34.3 millionbroad market moves for the year ended December 31, 2016.
Comparison of years ended December 31, 2016 and December 31, 2015
Investment Income
For the year ended December 31, 2016, totalentire investment income was $113.7 million, a 6.3% decrease from $121.3 million of total investment income for the year ended December 31, 2015. This decrease was primarily attributed to a $4.7 million decrease in non-recurring fee income and a $3.0 million decrease in non-recurring dividend income. Non-recurring fee income was $5.2 million for the year ended December 31, 2016, as compared to $9.9 million for the year ended December 31, 2015, and non-recurring dividend income was $2.0 million for the year ended December 31, 2016, as compared to $5.0 million for the year ended December 31, 2015. Our non-recurring dividend income during the year ended December 31, 2016 consisted of non-recurring dividend income of approximately $3.3 million and a negative true-up adjustment of $1.3 million related to a portfolio company

distribution that was received in 2015. In 2015, we received information that indicated that the tax character of the distribution was 100% dividend income, but received updated information in 2016 indicating that only 14% of the distribution was dividend income and the remainder was a return of capital, which necessitated the adjustment.
Operating Expenses
For the year ended December 31, 2016, operating expenses increased by 10.4% to $54.8 million from $49.7 million for the year ended December 31, 2015. Our operating expenses consist of interest and other financing fees, compensation expenses and general and administrative expenses.
For the year ended December 31, 2016, interest and other financing fees were $26.7 million as compared to $26.8 million for the year ended December 31, 2015. The decrease in interest and other financing fees was related to $2.4 million of interest savings related to the redemption of our unsecured notes due in March 2019, or the 2019 Notes, partially offset by an increase in interest and other financing fees of $0.3 million on the $25.0 million of incremental outstanding borrowings under our SBA-guaranteed debentures, an increase in interest and other financing fees of $1.5 million related to increased borrowings under the Credit Facility, and an increase of $0.5 million in interest and other financing fees from the February 2015 issuance of our unsecured notes due in March 2022, or the March 2022 Notes.
For the year ended December 31, 2016, compensation expenses increased by 24.5% to $23.7 million from $19.0 million for the year ended December 31, 2015. The increase in compensation expenses in the year ended December 31, 2016 was primarily related to one-time expenses associated with the retirement of our former Chief Executive Officer and the resignation of Brent P.W. Burgess as the Company's Chief Investment Officer in 2016, as noted above. The increases related to Mr. Tucker and Mr. Burgess were partially offset by decreased discretionary compensation expenses.
For the year ended December 31, 2016, general and administrative expenses increased by 13.1% to $4.4 million from $3.9 million for the year ended December 31, 2015.
In addition, our efficiency ratio (defined as compensation and general and administrative expenses as a percentage of total investment income) increased to 24.7% for the year ended December 31, 2016 from 18.9% for the year ended December 31, 2015.
Net Investment Income
As a result of the $7.6 million decrease in total investment income and the $5.1 million increase in operating expenses, net investment income for the year ended December 31, 2016 was $58.9 million compared to net investment income of $71.6 million during the year ended December 31, 2015.
Net Increase in Net Assets Resulting From Operations
For the year ended December 31, 2016, we recognized net realized gains totaling $2.0 million, which consisted primarily of net gains on the sales/repayments of seventeen non-control/non-affiliate investments totaling $15.3 million and net gains on the sales/write-off of seven affiliate investments totaling $4.4 million, partially off-set by a loss on the restructuring of one non-control/non-affiliate investment totaling $1.6 million and a loss on the write-off of one non-control/non-affiliate investment totaling $16.1 million. In addition, for the year ended December 31, 2016, we recorded net unrealized depreciation of investments totaling $26.2 million, consisting of net unrealized depreciation on our current portfolio of $26.8 million and net unrealized appreciation reclassification adjustments of $0.6 million related to the realized gains and losses noted above.
For the year ended December 31, 2015, we recognized net realized losses totaling $27.5 million, which consisted of losses on the restructuring/write-off of two control investments totaling $38.8 million and a loss on the write-off of one affiliate investment totaling $0.5$29.5 million, partially offset by net gains related to the sales/repaymentspositive impact of seven affiliateforeign currency exchange rates on middle-market debt investments of $2.8 million and net gains on the sales/repayments of fourteen non-control/non-affiliate investments totaling $9.0$7.7 million. In addition, for the year ended December 31, 2015, we recorded net unrealized appreciation of investments totaling $5.5 million, consisting of net unrealized depreciation on our current

portfolio of $21.6 million and net unrealized appreciation reclassification adjustments of $27.1 million related to the realized gains and losses noted above.
As a result of these events, our net increase in net assets from operations during the year ended December 31, 2016 was $34.3 million as compared to $47.9 million for the year ended December 31, 2015.
Liquidity and Capital Resources
We believe that our current cash and cash equivalentsforeign currencies on hand, our available borrowing capacity under the February 2019 Credit Facility and our anticipated cash flows from operations will be adequate to meet our cash needs for our daily operations for at least the next twelve months.
In This "Liquidity and Capital Resources" section should be read in conjunction with "COVID-19 Developments" above, as well as with the future, depending on the valuation of Triangle SBIC’s assets, Triangle SBIC II's assets and Triangle SBIC III’s assets pursuantnotes to SBA guidelines, Triangle SBIC, Triangle SBIC II and Triangle SBIC III may be limited by provisions of the Small Business Investment Act of 1958, as amended, or the Small Business Investment Act, and SBA regulations governing SBICs, from making certain distributions to Triangle Capital Corporation that may be necessary to enable Triangle Capital Corporation to make the minimum required distributions to its stockholders and qualify for tax treatment as a regulated investment company, or RIC.our Consolidated Financial Statements.
Cash Flows
For the year ended December 31, 2017,2021, we experienced a net increasedecrease in cash and cash equivalents in the amount of $84.8$8.2 million. During that period, our operating activities provided $8.0used $396.6 million in cash, consisting primarily of purchases of portfolio investments of $1,461.1 million and purchases of short-term investments of $297.6 million, partially offset by proceeds from sales or repayments received fromof portfolio companiesinvestments totaling $943.9 million and proceeds from the sales of investments totaling $403.7 million, which in addition to the cash provided by other operating activities, was partially offset by new portfolioshort-term investments of $483.7$363.1 million. In addition, our financing activities provided net cash of $76.8$388.3 million, consisting primarily of net proceeds of $343.1 million from the public stock offeringissuance of $132.0the November 2026 Notes and $149.8 million andfrom the issuance of the February Notes (both as defined below under “Financing Transactions”), partially
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offset by net borrowingsrepayments under the February 2019 Credit Facility of $27.5$50.8 million partially offset by cashand dividends paid in the amount of $77.1$53.6 million. At December 31, 2017,2021, we had $191.8$84.3 million of cash and cash equivalentsforeign currencies on hand.
For the year ended December 31, 2016,2020, we experienced a net increase in cash and cash equivalents in the amount of $54.5$70.5 million. During that period, our operating activities used $23.1$218.1 million in cash, consisting primarily of newpurchases of portfolio investments of $319.5$881.2 million, the acquisition of MVC (net of cash received) of $96.7 million and purchases of short-term investments of $1,182.2 million, partially offset by repayments receivedproceeds from portfolio companiessales of investments totaling $684.5 million and proceeds from the sales of short-term investments totaling $236.7of $1,213.2 million. In addition, financing activities provided net cash of $77.7 million, consisting primarily of proceeds from the public stock offering of $129.1 million and borrowings under SBA-guaranteed debentures of $32.8 million, partially offset by cash dividends paid in the amount of $66.5 million, the repayment of our SBA-guaranteed Low or Moderate Income, or LMI, debenture of $7.8 million and net repayments under the Credit Facility of $4.4 million. At December 31, 2016, we had $107.1 million of cash and cash equivalents on hand.
For the year ended December 31, 2015, we experienced a net decrease in cash and cash equivalents in the amount of $26.1 million. During that period, our operating activities used $31.2 million in cash, consisting primarily of new portfolio investments of $453.9 million, partially offset by repayments received from portfolio companies and proceeds from the sales of investments totaling $343.3 million. In addition, financing activities provided cash of $5.1$288.6 million, consisting primarily of net borrowings under our credit facilitythe August 2018 Credit Facility and the February 2019 Credit Facility of $71.0$356.2 million, andnet proceeds from the March 2022August 2025 Notes offeringand the November Notes issuances of $83.4$224.3, net proceeds from the issuance of common stock as part of the acquisition of MVC of $160.4 million, partially offset by redemptionrepayments of the 2019 NotesDebt Securitization of $69.0$318.2 million, purchases of shares under the share repurchase plan of $7.1 million, repayment of the notes acquired as part of the acquisition of MVC of $95.5 million and cash dividends paid in the amount of $74.8$31.3 million. At December 31, 2015,2021, we had $52.6$92.5 million of cash and cash equivalents on hand.

Financing Transactions
Due to Triangle SBIC’s, Triangle SBIC II's and Triangle SBIC III’s status as licensed SBICs, Triangle SBIC, Triangle SBIC II and Triangle SBIC III have the ability to issue debentures guaranteed by the SBA at favorable interest rates. Under the Small Business Investment Act and the SBA rules applicable to SBICs, an SBIC (or group of SBICs under common control) can have outstanding at any time debentures guaranteed by the SBA up to two times (and in certain cases, with SBA approval, up to three times) the amount of its regulatory capital, as such term is defined in the SBA regulations. The maximum statutory limit on the dollar amount of outstanding debentures guaranteed by the SBA issued by a single SBIC is currently $150.0 million and by a group of SBICs under common control is $350.0 million, subject to SBA approval. Debentures guaranteed by the SBA have a maturity of ten years, with interest payable semi-annually. The principal amount of the debentures is not required to be paid before maturity but may be prepaid at any time, without penalty. As a result of its guarantee of our SBA-guaranteed debentures, the SBA has fixed-dollar claims on the assets of Triangle SBIC, Triangle SBIC II and Triangle SBIC III that are superior to the claims of our security holders.February 2019 Credit Facility
As of December 31, 2017, Triangle SBIC had issued the maximum $150.0 million of SBA-guaranteed debentures and Triangle SBIC II had issued $100.0 million of SBA-guaranteed debentures, leaving borrowing capacity of a maximum of $100.0 million of SBA-guaranteed debentures for Triangle SBIC III. In addition to the one-time 1.0% fee on the total commitment from the SBA, we also pay a one–time fee of 2.425% on the amount of each debenture issued. These fees are capitalized as deferred financing costs and are amortized over the term of the debt agreements using the effective interest method. The weighted average interest rate for all SBA-guaranteed debentures as of December 31, 2017 was 3.90%. As of December 31, 2017, all SBA-guaranteed debentures were pooled.
In May 2015,On February 21, 2019, we entered into the February 2019 Credit Facility which was(as subsequently amended in May 2017.December 2019), with ING Capital LLC ("ING"), as administrative agent, and the lenders party thereto. The amendment, among other things, increasedinitial commitments from $300.0 million to $435.0 million and extendedunder the maturity by two years. The revolving period of theFebruary 2019 Credit Facility ends April 30,total $800.0 million. Effective on November 4, 2021, followed by a one-year amortization period with a final maturity date of April 30, 2022. We have the ability to borrow in both United States dollars as well as foreign currencieswe increased aggregate commitments under the Credit Facility. TheFebruary 2019 Credit Facility which is structured to operate like a revolving credit facility, is secured primarily by our assets, excluding$875.0 million from $800.0 million pursuant to the assets of our wholly-owned SBIC subsidiaries. Theaccordion feature under the February 2019 Credit Facility, has an accordion feature thatwhich allows for an increase in the total borrowing size upcommitments to $550.0 million,an aggregate of $1.2 billion subject to certain conditions and the satisfaction of specified financial covenants. Using this accordion feature, in July 2017, we increased our commitmentsWe can borrow foreign currencies directly under the February 2019 Credit Facility. The February 2019 Credit Facility, from $435.0 million to $465.0 million,which is structured as a revolving credit facility, is secured primarily by a material portion of our assets and in September 2017, we again increasedguaranteed by certain of our commitments undersubsidiaries. Following the termination of the August 2018 Credit Facility from $465.0 million to $480.0 million.on June 30, 2020, BSF became a subsidiary guarantor and its assets will secure the February 2019 Credit Facility. The revolving period of the February 2019 Credit Facility ends on February 21, 2023, followed by a one-year repayment period with a final maturity date of February 21, 2024.
Borrowings under the February 2019 Credit Facility bear interest, subject to our election, on a per annum basis equal to (i) the applicable base rate plus 1.75%1.00% (or 1.50%1.25% if we receiveno longer maintain an investment grade credit rating), (ii) the applicable LIBOR rate plus 2.75%2.00% (or 2.50%2.25% if we receiveno longer maintain an investment grade credit rating) or, (iii) for borrowings denominated in Canadiancertain foreign currencies other than Australian dollars, the applicable Canadian Dealer Offeredcurrency rate for the foreign currency as defined in the credit agreement plus 2.00% (or 2.25% if we no longer maintain an investment grade credit rating), or (iv) for borrowings denominated in Australian dollars, the applicable Australian dollars Screen Rate, plus 2.75%2.20% (or 2.50%2.45% if we receiveno longer maintain an investment grade credit rating). The applicable base rate is equal to the greatergreatest of (i) the prime rate, (ii) the federal funds rate plus 0.5% or, (iii) the Overnight Bank Funding Rate plus 0.5%, (iv) the adjusted one-month LIBORthree-month applicable currency rate plus 2.0%1.0% and (v) 1.0%. The applicable LIBOR rate dependsand currency rates depend on the currency and term of the draw under the February 2019 Credit Facility. WeFacility, and cannot be less than zero.
In addition, we (i) paid a commitment fee of 0.375% per annum on undrawn amounts for the period beginning on the closing date of the February 2019 Credit Facility to and including the date that was six months after the closing date of the February 2019 Credit Facility, and (ii) thereafter pay a commitment fee of 1.00%(x) 0.5% per annum on undrawn amounts if the usedunused portion of the February 2019 Credit Facility is lessgreater than or equal to 25.0%two-thirds of total commitments or (y) 0.375% per annum on undrawn amounts if the usedunused portion of the February 2019 Credit Facility is greaterequal to or less than 25.0%two-thirds of total commitments. In connection with entering into the February 2019 Credit Facility, we incurred financing fees of approximately $6.4 million, which will be amortized over the life of the February 2019 Credit Facility.
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As of December 31, 2017,2021, we were in compliance with all covenants under the February 2019 Credit Facility and we had United StatesU.S. dollar borrowings of $139.3$377.0 million outstanding under the Credit Facility with an interest rate of 4.12% and non-United States dollar borrowings denominated in Canadian dollars of $21.0 million ($16.8 million in United States dollars) outstanding under theFebruary 2019 Credit Facility with a weighted average interest rate of 4.16%2.125% (weighted average one month LIBOR of 0.125%), borrowings denominated in Swedish kronas of 12.8kr million ($1.4 million U.S. dollars) with an interest rate of 2.000% (one month STIBOR of 0.000%), borrowings denominated in British pounds sterling of £68.3 million ($92.5 million U.S. dollars) with a weighted average interest rate of 2.125% (weighted average one month GBP LIBOR of 0.125%), borrowings denominated in Australian dollars of A$36.6 million ($26.6 million U.S. dollars) with a weighted average interest rate of 2.250% (weighted average one month AUD Screen Rate of 0.250%) and borrowings denominated in Euros of €138.6 million ($157.6 million U.S. dollars) with a weighted average interest rate of 2.00% (weighted average one month EURIBOR of 0.000%). The borrowings denominated in Canadian dollars areforeign currencies were translated into United StatesU.S. dollars based on the spot rate at eachthe relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the February 2019 Credit Facility borrowings is included in "Net unrealized appreciation (depreciation) on- foreign currency borrowingstransactions" in our Consolidated Statements of Operations.
The fair values of the borrowings denominated in Canadian dollars may be positively or negatively affected by movementsoutstanding under the February 2019 Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. As of December 31, 2021, the total fair value of the borrowings outstanding under the February 2019 Credit Facility was $655.2 million. See Note 4 to our Consolidated Financial Statements for additional information regarding the February 2019 Credit Facility.
Term Debt Securitization
On May 9, 2019, we completed the Debt Securitization. Term debt securitizations are also known as collateralized loan obligations and are a form of secured financing, which is consolidated for financial reporting purposes and subject to our overall asset coverage requirement. The notes offered in the rateDebt Securitization (collectively, the "2019 Notes"), were issued by Barings BDC Static CLO Ltd. 2019-I, ("BBDC Static CLO Ltd.") and Barings BDC Static CLO 2019-I, LLC, our wholly-owned and consolidated subsidiaries. BBDC Static CLO Ltd. and Barings BDC Static CLO 2019-I, LLC are collectively referred to herein as the Issuers. The 2019 Notes were secured by a diversified portfolio of senior secured loans and participation interests therein. The Debt Securitization was executed through a private placement of approximately $296.8 million of AAA(sf) Class A-1 Senior Secured Floating Rate 2019 Notes (the "Class A-1 2019 Notes"), which bore interest at the three-month LIBOR plus 1.02%; $51.5 million of AA(sf) Class A-2 Senior Secured Floating Rate 2019 Notes (the "Class A-2 2019 Notes"), which bore interest at the three-month LIBOR plus 1.65%; and $101.0 million of Subordinated 2019 Notes which did not bear interest and were not rated. We retained all of the Subordinated 2019 Notes issued in the Debt Securitization in exchange betweenfor our sale and contribution to BBDC Static CLO Ltd. of the United States dollarinitial closing date portfolio, which included senior secured loans and participation interests. The 2019 Notes were scheduled to mature on April 15, 2027; however the Canadian dollar. This movement is beyond2019 Notes could be redeemed by the Issuers, at our control and cannot be predicted.

The Credit Facility contains certain affirmative and negative covenants, including but not limited to (i) maintaining a minimum interest coverage ratio, (ii) maintaining a minimum consolidated tangible net worth, (iii) maintaining a minimum asset coverage ratio and (iv) maintaining our tax treatmentdirection as a RIC and as a BDC. The Credit Facility also contains customary eventsholder of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to other indebtedness, bankruptcy, change of control, and material adverse effect. The Credit Facility also permits Branch Banking and Trust Company, the administrative agent, to select an independent third-party valuation firm to determine valuations of certain portfolio investments for purposes of borrowing base provisions.Subordinated 2019 Notes, on any business day after May 9, 2020. In connection with the Credit Facility,sale and contribution, we alsomade customary representations, warranties and covenants to the Issuers.
The Class A-1 2019 Notes and Class A-2 2019 Notes were the secured obligations of the Issuers, the Subordinated 2019 Notes were the unsecured obligations of BBDC Static CLO Ltd., and the indenture governing the 2019 Notes included customary covenants and events of default. The 2019 Notes were not registered under the Securities Act or any state securities or “blue sky” laws and could not be offered or sold in the United States absent registration with the Securities and Exchange Commission (the "SEC") or an applicable exemption from registration.
We served as collateral manager to BBDC Static CLO Ltd. under a collateral management agreement and we agreed to irrevocably waive all collateral management fees payable pursuant to the collateral management agreement.
The Class A-1 2019 Notes and the Class A-2 2019 Notes issued in connection with the Debt Securitization had floating rate interest provisions based on the three-month LIBOR that reset quarterly, except that LIBOR for the first interest accrual period was calculated by reference to an interpolation between the rate for deposits with a term equal to the next shorter period of time for which rates were available and the rate appearing for deposits with a term equal to the next longer period of time for which rates were available.
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During the year ended December 31, 2019, $30.0 million of Class A-1 2019 Notes were repaid. During the year ended December 31, 2020, the remaining 2019 Notes were repaid in full, with the final repayment on October 15, 2020. See Note 4 to our Consolidated Financial Statements for additional information regarding the Debt Securitization.
August 2025 Notes
On August 3, 2020, we entered into collateral documents. Asa Note Purchase Agreement (the “August 2020 NPA”) with Massachusetts Mutual Life Insurance Company governing the issuance of December 31, 2017, we were(1) $50.0 million in compliance with all covenantsaggregate principal amount of the Credit Facility.
In October 2012, we issued $70.0 million ofSeries A senior unsecured notes due August 2025 (the “Series A Notes due 2025”) with a fixed interest rate of 4.66% per year, and (2) up to $50.0 million in December 2022, oraggregate principal amount of additional senior unsecured notes due August 2025 with a fixed interest rate per year to be determined (the “Additional Notes” and, collectively with the December 2022Series A Notes anddue 2025, the “August 2025 Notes”), in November 2012, we issued $10.5each case, to qualified institutional investors in a private placement. An aggregate principal amount of $25.0 million of the December 2022Series A Notes pursuant to the exercisedue 2025 was issued on September 24, 2020 and an aggregate principal amount of an over-allotment option. The December 2022 Notes mature on December 15, 2022, and may be redeemed in whole or in part at any time or from time to time at our option. The December 2022 Notes bear interest at a rate of 6.375% per year payable quarterly on March 15, June 15, September 15 and December 15 of each year, beginning December 15, 2012.
In February 2015, we issued $86.3$25.0 million of the March 2022 Notes. The March 2022Series A Notes due 2025 was issued on September 29, 2020, both of which will mature on August 4, 2025 unless redeemed, purchased or prepaid prior to such date by us in accordance with their terms. Interest on the August 2025 Notes is due semiannually in March 15, 2022 and September, beginning in March 2021. In addition, we are obligated to offer to repay the August 2025 Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the August 2020 NPA, we may be redeemedredeem the August 2025 Notes in whole or in part at any time or from time to time at our option at par plus accrued interest to the prepayment date and, if redeemed on or after March 15, 2018.before November 3, 2024, a make-whole premium. The March 2022August 2025 Notes are guaranteed by certain of our subsidiaries, and are our general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.
On November 4, 2020, we amended the August 2020 NPA to reduce the aggregate principal amount of unissued Additional Notes from $50.0 million to $25.0 million.
The August 2020 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of our status as a BDC within the meaning of the 1940 Act, certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments, minimum shareholders’ equity, maximum net debt to equity ratio and minimum asset coverage ratio. The August 2020 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the August 2025 Notes at the time outstanding may declare all August 2025 Notes then outstanding to be immediately due and payable. As of December 31, 2021, we were in compliance with all covenants under the August 2020 NPA.
The August 2025 Notes were offered in reliance on Section 4(a)(2) of the Securities Act. The August 2025 Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.
As of December 31, 2021, the fair value of the outstanding August 2025 Notes was $52.2 million. The fair value determination of the August 2025 Notes was based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.
November Notes
On November 4, 2020, we entered into a Note Purchase Agreement (the “November 2020 NPA”) governing the issuance of (1) $62.5 million in aggregate principal amount of Series B senior unsecured notes due November 2025 (the “Series B Notes”) with a fixed interest rate of 4.25% per year and (2) $112.5 million in aggregate principal amount of Series C senior unsecured notes due November 2027 (the “Series C Notes,” and, collectively with the
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Series B Notes, the “November Notes”) with a fixed interest rate of 4.75% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable November Notes do not satisfy certain investment grade conditions and/or (y) 1.50% per year, to the extent the ratio of our secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The November Notes were delivered and paid for on November 5, 2020. The Series B Notes will mature on November 4, 2025, and the Series C Notes will mature on November 4, 2027 unless redeemed, purchased or prepaid prior to such date by us in accordance with their terms. Interest on the November Notes is due semiannually in May and November, beginning in May 2021. In addition, we are obligated to offer to repay the November Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the November 2020 NPA, we may redeem the Series B Notes and the Series C Notes in whole or in part at any time or from time to time at our option at par plus accrued interest to the prepayment date and, if redeemed on or before May 4, 2025, with respect to the Series B Notes, or on or before May 4, 2027, with respect to the Series C Notes, a make-whole premium. The November Notes are guaranteed by certain of our subsidiaries, and are our general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.
The November 2020 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of our status as a BDC within the meaning of the 1940 Act, certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments, minimum shareholders’ equity, maximum net debt to equity ratio and minimum asset coverage ratio. The November 2020 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the November Notes at the time outstanding may declare all November Notes then outstanding to be immediately due and payable. As of December 31, 2021, we were in compliance with all covenants under the November 2020 NPA.
The November Notes were offered in reliance on Section 4(a)(2) of the Securities Act. The November Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.
As of December 31, 2021, the fair value of the outstanding Series B Notes and the Series C Notes was $64.1 million and $115.3 million, respectively. The fair value determinations of the Series B Notes and Series C Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.
February Notes
On February 25, 2021, we entered into a Note Purchase Agreement (the “February 2021 NPA”) governing the issuance of (1) $80.0 million in aggregate principal amount of Series D senior unsecured notes due February 26, 2026 (the “Series D Notes”) with a fixed interest rate of 3.41% per year and (2) $70.0 million in aggregate principal amount of Series E senior unsecured notes due February 26, 2028 (the “Series E Notes” and, collectively with the Series D Notes, the “February Notes”) with a fixed interest rate of 4.06% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable February Notes do not satisfy certain investment grade rating conditions and/or (y) 1.50% per year, to the extent the ratio of our secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The February Notes were delivered and paid for on February 26, 2021.
The Series D Notes will mature on February 26, 2026, and the Series E Notes will mature on February 26, 2028 unless redeemed, purchased or prepaid prior to such date by us in accordance with the terms of the February 2021 NPA. Interest on the February Notes is due semiannually in February and August of each year, beginning in August 2021. In addition, we are obligated to offer to repay the February Notes at par (plus accrued and unpaid
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interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the February 2021 NPA, we may redeem the Series D Notes and the Series E Notes in whole or in part at any time or from time to time at our option at par plus accrued interest to the prepayment date and, if redeemed on or before August 26, 2025, with respect to the Series D Notes, or on or before August 26, 2027, with respect to the Series E Notes, a make-whole premium. The February Notes are guaranteed by certain of our subsidiaries, and are our general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.
The February 2021 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, information reporting, maintenance of our status as a BDC within the meaning of the 1940 Act, and certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments. In addition, the February 2021 NPA contains the following financial covenants: (a) maintaining a minimum obligors’ net worth, measured as of each fiscal quarter end; (b) not permitting our asset coverage ratio, as of the date of the incurrence of any debt for borrowed money or the making of any cash dividend to shareholders, to be less than the statutory minimum then applicable to us under the 1940 Act; and (c) not permitting our net debt to equity ratio to exceed 2.0x, measured as of each fiscal quarter end.
The February 2021 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of certain events of default, the holders of at least 66-2/3% in principal amount of the February Notes at the time outstanding may declare all February Notes then outstanding to be immediately due and payable. As of December 31, 2021, we were in compliance with all covenants under the February 2021 NPA.
The February Notes were offered in reliance on Section 4(a)(2) of the Securities Act. The February Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.
As of December 31, 2021, the fair value of the outstanding Series D Notes and the Series E Notes was $79.2 million and $68.7 million, respectively. The fair value determinations of the Series D Notes and Series E Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.
November 2026 Notes
On November 23, 2021, we entered into an Indenture (the “Base Indenture”) and a Supplemental Indenture (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”) with U.S. Bank National Association (the “Trustee”). The First Supplemental Indenture relates to our issuance of $350.0 million aggregate principal amount of its 3.300% notes due 2026 (the “November 2026 Notes”).
The November 2026 Notes will mature on November 23, 2026 and may be redeemed in whole or in part at our option at any time or from time to time at the redemption prices set forth in the Indenture. The November 2026 Notes bear interest at a rate of 6.375%3.300% per year payable quarterlysemi-annually on March 15, June 15, September 15May 23 and December 15November 23 of each year, beginning March 15, 2015.commencing on May 23, 2022. The net proceeds fromNovember 2026 Notes are our general unsecured obligations that rank senior in right of payment to all of our existing and future indebtedness that is expressly subordinated in right of payment to the saleNovember 2026 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by us, rank effectively junior to any of our secured indebtedness (including unsecured indebtedness that we later secure) to the extent of the March 2022 Notes, after underwriting discountsvalue of the assets securing such indebtedness, and offering expenses, were $83.4 million.rank structurally junior to all existing and future indebtedness (including trade payables) incurred by our subsidiaries, financing vehicles or similar facilities.
The indenture and related supplements thereto relating to the December 2022 Notes and the March 2022 Notes containIndenture contains certain covenants, including but not limitedcovenants requiring us to (i) a requirement that we comply with the asset coverage requirementrequirements of Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the 1940 Act, whether or any successor provisions, after giving effectnot it is subject to any exemptive relief grantedthose requirements, and to us by the SEC, (ii) a requirement that we will not declare any cash dividend, or declare any other cash distribution, upon a class of our capital stock, or purchase any such capital stock, unless, in every such case, at the time of the declaration of any such dividend or distribution, or at the time of any such purchase, we have an asset coverage (as defined in the 1940 Act) of at least 200% after deducting the amount of such dividend, distribution or purchase price, as the case may be, giving effect to any exemptive relief granted to us by the SEC and (iii) a requirement that we provide financial information to the holders of the notesNovember 2026 Notes and
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the trustee under the indentureTrustee if we shouldare no longer be subject to the reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These covenants are subject to important limitations and exceptions that are described in the Indenture.
In addition, on the occurrence of a “change of control repurchase event,” as defined in the Indenture, we will generally be required to make an offer to purchase the outstanding November 2026 Notes at a price equal to 100% of the principal amount of such November 2026 Notes plus accrued and unpaid interest to the repurchase date.
The November 2026 Notes were offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act. The November 2026 Notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the Exchange Act. United States absent registration or an applicable exemption from such registration requirements.
As of December 31, 20172021, the fair value of the outstanding November 2026 Notes was $346.8 million. The fair value determinations of the November 2026 Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.
Share Repurchase Plan
On February 27, 2020, the Board approved an open-market share repurchase program for the 2020 fiscal year (the “2020 Share Repurchase Program”). Under the 2020 Share Repurchase Program, we were authorized during fiscal year 2020 to repurchase up to a maximum of 5.0% of the amount of shares outstanding as of February 27, 2020 if shares traded below NAV per share, subject to liquidity and regulatory constraints.
Purchases under the 2020 Share Repurchase Program were made in open-market transactions and included transactions being executed by a broker selected us that had been delegated the authority to repurchase shares on our behalf in the open market in accordance with applicable rules under the Exchange Act, including Rules 10b5-1 and 10b-18 thereunder, and pursuant to, and under the terms and limitations of, the 2020 Share Repurchase Program. During the year ended December 31, 2016,2020, we wererepurchased a total of 989,050 shares of our common stock in compliancethe open market under the 2020 Share Repurchase Program at an average price of $7.21 per share, including broker commissions.
In addition, in connection with all covenantsthe closing of the MVC Acquisition on December 2022 Notes23, 2020, we committed to make open-market purchases of shares of our common stock in an aggregate amount of up to $15.0 million at then-current market prices at any time shares trade below 90% of our then most recently disclosed NAV per share. Any repurchases pursuant to the authorized program will occur during the 12-month period that commenced upon the filing of our quarterly report on Form 10-Q for the quarter ended March 31, 2021, which occurred on May 6, 2021, and will be made in accordance with applicable legal, contractual and regulatory requirements. During the March 2022 Notes.year ended December 31, 2021, we did not repurchase any shares under the authorized program.
Distributions to Stockholders
We intend to pay quarterly distributions to our stockholders out of assets legally available for distribution. We have adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of dividends on behalf of our stockholders, unless a stockholder elects to receive cash. As a result, when we declare a dividend, stockholders who have not opted out of the DRIP will have their dividends automatically reinvested in shares of our common stock, rather than receiving cash dividends.
We have elected to be treated as a RIC under the Internal Revenue Code of 1986, as amended, or the Code, and intend to make the required distributions to our stockholders as specified therein. In order to maintain our tax treatment as a RIC and to obtain RIC tax benefits, we must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then we are generally required to pay income taxes only on the portion of our taxable income and gains we do not distribute (actually or constructively) and certain built-in gains. We have historically met our minimum distribution requirements and continually monitor our distribution requirements with the goal of ensuring compliance with the Code. We can offer no assurance that we will achieve results that will permit the payment of any level of cash distributions and our ability to make distributions will be limited by the asset coverage requirement
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and related provisions under the 1940 Act and contained in theany applicable indenture or financing agreement and related supplements governingsupplements. In addition, in order to satisfy the December 2022 Notesannual distribution requirement applicable to RICs, we may declare a significant portion of our dividends in shares of our common stock instead of in cash. As long as a portion of such dividend is paid in cash (which portion may be as low as 20% of such dividend (and 10% of the dividend declared through June 30, 2022) under published guidance from the Internal Revenue Service) and certain requirements are met, the March 2022 Notes.entire distribution will be treated as a dividend for U.S. federal income tax purposes. As a result, a stockholder generally would be subject to tax on 100% of the fair market value of the dividend on the date the dividend is received by the stockholder in the same manner as a cash dividend, even though most of the dividend was paid in shares of our common stock.
The minimum distribution requirements applicable to RICs require us to distribute to our stockholders each year at least 90% of our investment company taxable income, or ICTI, as defined by the Code. Depending on the level of ICTI and net capital gain, if any, earned in a tax year, we may choose to carry forward ICTI in excess of current year distributions into the next tax year and pay a 4% U.S. federal excise tax on such excess. Any such carryover ICTI must be distributed before the end of the next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.

ICTI generally differs from net investment income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. We may be required to recognize ICTI in certain circumstances in which we do not receive cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments issued with warrants), we must include in ICTI each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in ICTI other amounts that we have not yet received in cash, such as (i) PIK interest income and (ii) interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. Because any original issue discount or other amounts accrued will be included in our ICTI for the year of accrual, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements, even though we will not have received and may not ever receive any corresponding cash amount. ICTI also excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.
Critical Accounting Policies and Use of Estimates
The preparation of our financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods covered by such financial statements. We have identified investment valuation and revenue recognition as our most critical accounting estimates. On an on-going basis, we evaluate our estimates, including those related to the matters described below. These estimates are based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from those estimates under different assumptions or conditions. A discussion of our critical accounting policies follows. We describe our most significant accounting policies in Note 1 to our Consolidated Financial Statements.
Investment Valuation
The most significant estimate inherent in the preparation of our financial statements is the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. We have a valuation policy, as well as established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring (quarterly)(at least quarterly) basis in accordance with the 1940 Act and
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FASB ASC Topic 820, Fair Value Measurements and Disclosures, or ASC Topic 820. Our current valuation policy and processes were established by our management with the assistance of certain third-party advisorsBarings and were approved by the Board.
As of December 31, 2021, our investment portfolio, valued at fair value in accordance with the Board-approved valuation policies, represented approximately 243% of our total net assets, as compared to approximately 208% of our total net assets as of December 31, 2020.
Under ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For our portfolio securities, fair value is generally the amount that we might reasonably expect to receive upon the current sale of the security. The fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. If no market for the security exists or if we do not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market.
Under ASC Topic 820, there are three levels of valuation inputs, as follows:
Level 1 Inputs – include quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs – include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 Inputs – include inputs that are unobservable and significant to the fair value measurement.
A financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized as Level 3 investments within the tables in the notes to our consolidated financial statements may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).
Our investment portfolio is primarily comprised ofincludes certain debt and equity instruments of privately held companies for which quoted prices or other observable inputs falling within the categories of Level 1 and Level 2 are generally not available. Therefore,In such cases, we determine the fair value of our investments in good faith primarily using Level 3 inputs. In certain cases, quoted prices or other observable inputs may exist, and if so, we assess the appropriateness of the use of these third-party quotes in determining fair value based on (i) our understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer and (ii) the depth and consistency of broker quotes and the correlation of changes in broker quotes with underlying performance of the portfolio company.
Under ASC Topic 820, a financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized

as Level 3 investments within the tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).
There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of our Level 3 investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.
Our valuation process is led by our executive officers. The valuation process begins withInvestment Valuation Process
Barings has established a quarterly review of each investment in our investment portfolio by our executive officers and our investment committee. Valuations of each portfolio security are then prepared by our investment professionals, who have direct responsibility for the origination, management and monitoring of each investment. Under our valuation policy, each investment valuationpricing committee that is, subject to (i) a review by the lead investment officeroversight of the Board, responsible for the approval, implementation and oversight of the processes and methodologies that relate to the pricing and valuation of assets we hold. Barings uses independent third-party providers to price the portfolio, company investmentbut in the event an acceptable price cannot be obtained from an approved external source, Barings will utilize alternative methods in accordance with internal pricing procedures established by Barings' pricing committee.
At least annually, Barings conducts reviews of the primary pricing vendors to validate that the inputs used in the vendors’ pricing process are deemed to be market observable. While Barings is not provided access to
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proprietary models of the vendors, the reviews have included on-site walkthroughs of the pricing process, methodologies and (ii)control procedures for each asset class and level for which prices are provided. The review also includes an examination of the underlying inputs and assumptions for a peer reviewsample of individual securities across asset classes, credit rating levels and various durations, a process Barings continues to perform annually. In addition, the pricing vendors have an established challenge process in place for all security valuations, which facilitates identification and resolution of prices that fall outside expected ranges. Barings believes that the prices received from the pricing vendors are representative of prices that would be received to sell the assets at the measurement date (i.e. exit prices).
Our money market fund investments are generally valued using Level 1 inputs and our equity investments listed on an exchange or on the NASDAQ National Market System are valued using Level 1 inputs, using the last quoted sale price of that day. Our syndicated senior secured loans and structured products are generally valued using Level 2 inputs, which are generally valued at the bid quotation obtained from dealers in loans by a second investment officeran independent pricing service. Our middle-market, private debt and equity investments and are generally valued using Level 3 inputs.
Independent Valuation
The fair value of loans and equity investments that are not syndicated or executive officer. Generally, any investmentfor which market quotations are not readily available, including middle-market loans, are generally submitted to independent providers to perform an independent valuation on those loans and equity investments as of the end of each quarter. Such loans and equity investments are initially held at cost, as that is valued below cost is subjecteda reasonable approximation of fair value on the acquisition date, and monitored for material changes that could affect the valuation (for example, changes in interest rates or the credit quality of the borrower). At the quarter end following the initial acquisition, such loans and equity investments are generally sent to review by one of our executive officers. After the peer review is complete, we engage two independenta valuation firms, including Duff & Phelps, LLC, collectively referred to as the Valuation Firms, to provide third-party reviews of certain investments, as described further below. Finally, the Board has the responsibility for reviewing and approving, in good faith,provider which will determine the fair value of our investmentseach investment. The independent valuation providers apply various methods (synthetic rating analysis, discounting cash flows, and re-underwriting analysis) to establish the rate of return a market participant would require (the “discount rate”) as of the valuation date, given market conditions, prevailing lending standards and the perceived credit quality of the issuer. Future expected cash flows for each investment are discounted back to present value using these discount rates in accordancethe discounted cash flow analysis. A range of values will be provided by the valuation provider and Barings will determine the point within that range that it will use in making valuation recommendations to the Board, and will report to the Board on its rationale for each such determination. Barings uses its internal valuation model as a comparison point to validate the price range provided by the valuation provider and, where applicable, in determining the point within that range that it will use in making valuation recommendations to the Board. If Barings’ pricing committee disagrees with the 1940 Act.
The Valuation Firms provide third-party valuation consulting services to us which consist of certain limited procedures that we identified and requested the Valuation Firms to perform, which we refer to herein as the Procedures. The Procedures are performed with respect to each portfolio company at least once in every calendar year and for new portfolio companies, at least once in the twelve-month period subsequentprice range provided, it may make a fair value recommendation to the initial investment. In addition, the Procedures are generally performed with respect to a portfolio company when there has been a significant change in the fair valueBoard that is outside of the investment.range provided by the independent valuation provider, and will notify the Board of any such override and the reasons therefore. In certain instances, we may determine that it is not cost-effective, and as a result is not in our stockholders’the stockholders' best interest,interests, to request the Valuation Firmsan independent valuation firm to perform the Proceduresan independent valuation on one or more portfolio companies.certain investments. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio.
The total number of Pursuant to these procedures, the Board determines in good faith whether our investments were valued at fair value in accordance with our valuation policies and procedures and the percentage1940 Act based on, among other things, the input of Barings, our investment portfolio on whichAudit Committee and the Procedures were performed are summarized below by period:
independent valuation firm.
For the quarter ended: 
Total
companies
 
Percent of total
investments at
fair value(1)
March 31, 2015 16 28%
June 30, 2015 15 26%
September 30, 2015 22 34%
December 31, 2015 17 28%
March 31, 2016 18 27%
June 30, 2016 19 30%
September 30, 2016 19 33%
December 31, 2016 20 33%
March 31, 2017 18 30%
June 30, 2017 20 29%
September 30, 2017 22 25%
December 31, 2017 21 35%
(1)Exclusive of the fair value of new investments made during the quarter.

Upon completionThe SEC has adopted new Rule 2a-5 under the 1940 Act. This rule establishes requirements for determining fair value in good faith for purposes of the Procedures,1940 Act. We will comply with the new rule’s valuation requirements on or before the SEC’s compliance date in 2022.
Valuation Firms concluded that, with respectTechniques
Our valuation techniques are based upon both observable and unobservable pricing inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Our assessment of the significance of a particular input to each investment reviewed by each Valuation Firm, the fair value of those investments subjectedmeasurement in its entirety requires judgment and considers factors specific to the Procedures appeared reasonable.financial instrument. An independent pricing service provider is the preferred source of pricing a loan, however, to the extent the independent pricing service provider price is
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unavailable or not relevant and reliable, we will utilize alternative approaches such as broker quotes or manual prices. We attempt to maximize the use of observable inputs and minimize the use of unobservable inputs. The Boardavailability of observable inputs can vary from investment to investment and is ultimately responsible for determiningaffected by a wide variety of factors, including the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security.
Valuation of Investments in Jocassee, Thompson Rivers, Waccamaw River and MVC Private Equity Fund LP
As Jocassee, Thompson Rivers, Waccamaw River and MVC Private Equity Fund LP are investment companies with no readily determinable fair values, we estimate the fair value of our investments in good faith.
Investment Valuation Inputs
Under ASC Topic 820, fairthese entities using net asset value of each company and our ownership percentage as a practical expedient. The net asset value is the price that would be received to sell an asset or paid to transfer a liabilitydetermined in an orderly transaction between a willing buyer and a willing seller at the measurement date. For our portfolio securities, fair value is generally the amount that we might reasonably expect to receive upon the current sale of the security. Under ASC Topic 820, the fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. Under ASC Topic 820, if no market for the security exists or if we do not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market. The securities in which we invest are generally only purchased and sold in merger and acquisition transactions, in which case the entire portfolio company is sold to a third-party purchaser. As a result, unless we have the ability to control such a transaction, the assumed principal market for our securities is a hypothetical secondary market. The Level 3 inputs to our valuation process reflect management’s best estimate of the assumptions that would be used by market participants in pricing the investment in a transaction in a hypothetical secondary market.
Enterprise Value Waterfall Approach
In valuing equity securities (including warrants), we estimate fair value using an “Enterprise Value Waterfall” valuation model. We estimate the enterprise value of a portfolio company and then allocate the enterprise value to the portfolio company’s securities in order of their relative liquidation preference. In addition, the model assumes that any outstanding debt or other securities that are senior to our equity securities are required to be repaid at par. Additionally, we estimate the fair value of a limited number of our debt securities using the Enterprise Value Waterfall approach in cases where we do not expect to receive full repayment.
To estimate the enterprise value of the portfolio company, we primarily use a valuation model based on a transaction multiple, which generally is the original transaction multiple, and measures of the portfolio company’s financial performance. In addition, we consider other factors, including but not limited to (i) offers from third parties to purchase the portfolio company, (ii) the implied value of recent investments in the equity securities of the portfolio company, (iii) publicly available information regarding recent sales of private companies in comparable transactions and (iv) when management believes there are comparable companies that are publicly traded, we perform a review of these publicly traded companies and the market multiple of their equity securities. For certain non-performing assets, we may utilize the liquidation or collateral value of the portfolio company's assets in our estimation of enterprise value.
The significant Level 3 inputs to the Enterprise Value Waterfall model are (i) an appropriate transaction multiple and (ii) a measure of the portfolio company’s financial performance, which generally is either earnings before interest, taxes, depreciation and amortization, as adjusted, or Adjusted EBITDA, or revenues. Such inputs can be based on historical operating results, projections of future operating results or a combination thereof. The operating results of a portfolio company may be unaudited, projected or pro forma financial information and may require adjustments for certain non-recurring items. In determining the operating results input, we utilize the most recent portfolio company financial statements and forecasts available as of the valuation date. Management also consultsaccordance with the portfolio company’s senior management to obtain updates on the portfolio company’s performance, including information such as industry trends, new product development, loss of customers and other operational issues. Additionally, we consider some or all of the following factors:
financial standing of the issuer of the security;
comparison of the business and financial plan of the issuer with actual results;
the size of the security held;
pending reorganization activity affecting the issuer, such as merger or debt restructuring;
ability of the issuer to obtain needed financing;

changes in the economy affecting the issuer;
financial statements and reports from portfolio company senior management and ownership;
the type of security, the security’s cost at the date of purchase and any contractual restrictions on the disposition of the security;
information as to any transactions or offers with respect to the security and/or sales to third parties of similar securities;
the issuer’s ability to make payments and the type of collateral;
the current and forecasted earnings of the issuer;
statistical ratios compared to lending standards and to other similar securities; 
pending public offering of common stock by the issuer of the security;
special reports prepared by analysts; and
any other factors we deem pertinent with respect to a particular investment.
Fair value measurements using the Enterprise Value Waterfall model can be sensitive to changes in one or more of the inputs. Assuming all other inputs to the Enterprise Value Waterfall model remain constant, any increase (decrease) in either the transaction multiple, Adjusted EBITDA or revenuesspecialized accounting guidance for a particular equity security would result in a higher (lower) fair value for that security.
Income Approach
In valuing debt securities, we utilize an “Income Approach” model that considers factors including, but not limited to, (i) the stated yield on the debt security, (ii) the portfolio company’s current Adjusted EBITDA as compared to the portfolio company’s historical or projected Adjusted EBITDA as of the date the investment was made and the portfolio company’s anticipated Adjusted EBITDA for the next twelve months of operations, (iii) the portfolio company’s current Leverage Ratio (defined as the portfolio company’s total indebtedness divided by Adjusted EBITDA) as compared to its Leverage Ratio as of the date the investment was made, (iv) publicly available information regarding current pricing and credit metrics for similar proposed and executed investment transactions of private companies and (v) when management believes a relevant comparison exists, current pricing and credit metrics for similar proposed and executed investment transactions of publicly traded debt. In addition, we use a risk rating system to estimate the probability of default on the debt securities and the probability of loss if there is a default. This risk rating system covers both qualitative and quantitative aspects of the business and the securities held.companies.
We consider the factors above, particularly any significant changes in the portfolio company’s results of operations and leverage, and develop an expectation of the yield that a hypothetical market participant would require when purchasing the debt investment, which we refer to herein as the Required Rate of Return. The Required Rate of Return, along with the Leverage Ratio and Adjusted EBITDA, are the significant Level 3 inputs to the Income Approach model. For investments where the Leverage Ratio and Adjusted EBITDA have not fluctuated significantly from the date the investment was made or have not fluctuated significantly from management’s expectations as of the date the investment was made, and where there have been no significant fluctuations in the market pricing for such investments, we may conclude that the Required Rate of Return is equal to the stated rate on the investment and therefore, the debt security is appropriately priced. In instances where we determine that the Required Rate of Return is different from the stated rate on the investment, we discount the contractual cash flows on the debt instrument using the Required Rate of Return in order to estimate the fair value of the debt security.
Fair value measurements using the Income Approach model can be sensitive to changes in one or more of the inputs. Assuming all other inputs to the Income Approach model remain constant, any increase (decrease) in the Required Rate of Return or Leverage Ratio inputs for a particular debt security would result in a lower (higher) fair value for that security. Assuming all other inputs to the Income Approach model remain constant, any increase (decrease) in the Adjusted EBITDA input for a particular debt security would result in a higher (lower) fair value for that security.

The fair value of our royalty rights are calculated based on specific provisions contained in the pertinent operating or royalty agreements. The determination of the fair value of such royalty rights is not a significant component of our valuation process.
Revenue Recognition
Interest and Dividend Income
Interest income, adjusted forincluding amortization of premium and accretion of original issue discount, is recorded on the accrual basis to the extent that such amounts are expected to be collected. Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The cessation of recognition of such interest will negatively impact the reported fair value of the investment. We write off any previously accrued and uncollected interest when it is determined that interest is no longer considered collectible. Dividend income is recorded on the ex-dividend date.
We may have to include interest income in our ICTI, interest income, including original issue discount income, from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. As a result, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements to maintain our RIC tax treatment, even though we will not have received and may not ever receive any corresponding cash amount. Additionally, any loss recognized by us for U.S. federal income tax purposes on previously accrued interest income will be treated as a capital loss.
Fee Income
Origination, facility, commitment, consent and other advance fees received in connection with the origination of a loan, or Loan Origination Fees, are recorded as deferred income and recognized as investment income over the term of the loan. Upon prepayment of a loan, any unamortized Loan Origination Fees are recorded as investment income. In the general course of our business, we receive certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring feesadvisory, loan amendment and loan waiver and amendmentother fees, and are recorded as investment income when earned.
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Fee income for the years ended December 31, 2017, 20162021, 2020 and 20152019 was as follows:
Years Ended December 31,Year Ended December 31,
2017 2016 2015202120202019
Recurring Fee Income:     Recurring Fee Income:
Amortization of loan origination fees$2,445,485
 $2,161,711
 $2,061,004
Amortization of loan origination fees$4,620,259 $2,179,859 $914,197 
Management, valuation and other fees940,361
 1,024,213
 895,677
Management, valuation and other fees2,185,600 867,465 275,510 
Total Recurring Fee Income3,385,846
 3,185,924
 2,956,681
Total Recurring Fee Income6,805,859 3,047,324 1,189,707 
Non-Recurring Fee Income:     Non-Recurring Fee Income:
Prepayment fees2,688,814
 1,903,251
 4,344,705
Prepayment fees474,499 84,151 59,617 
Acceleration of unamortized loan origination fees4,202,078
 2,406,688
 4,104,485
Acceleration of unamortized loan origination fees4,823,674 536,906 694,971 
Advisory and structuring fees230,000
 200,000
 578,162
Loan amendment fees132,278
 277,396
 469,357
Other fees9,000
 412,606
 391,538
Advisory, loan amendment and other feesAdvisory, loan amendment and other fees916,212 412,255 172,525 
Total Non-Recurring Fee Income7,262,170
 5,199,941

9,888,247
Total Non-Recurring Fee Income6,214,385 1,033,312 927,113 
Total Fee Income$10,648,016
 $8,385,865

$12,844,928
Total Fee Income$13,020,244 $4,080,636 $2,116,820 
Payment-in-Kind (PIK) Interest Income
We currently hold, and we expect to hold in the future, some loans in our portfolio that contain PIK interest provisions. The PIK interest, computed at the contractual rate specified in each loan agreement, is periodically added to the principal balance of the loan, rather than being paid to us in cash, and is recorded as interest income. Thus, the actual collection of PIK interest may be deferred until the time of debt principal repayment.
PIK interest, which is a non-cash source of income at the time of recognition, is included in our taxable income and therefore affects the amount we are required to distribute to our stockholders to maintain our tax treatment as a RIC for U.S. federal income tax purposes, even though we have not yet collected the cash. Generally, when current cash interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing PIK interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. We write off any previously accrued and uncollected PIK interest when it is determined that the PIK interest is no longer collectible.
We may have to include in our ICTI, PIK interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. As a result, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements, even though we will not have received and may not ever receive any corresponding cash amount.
Quantitative and Qualitative Disclosures About Market Risk
We are subject to market risk. Market risk includes risks that arise from changes in interest rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. The prices of securities held by us may decline in response to certain events, including those directly involving the companies we invest in; conditions affecting the general economy; overall market changes; global pandemics; legislative reform; local, regional, national or global political, social or economic instability; and interest rate fluctuations.
In addition, we are subject to interest rate risk. Interest rate risk is defined as the sensitivity of our current and future earnings to interest rate volatility, variability of spread relationships, the difference in re-pricing intervals between our assets and liabilities and the effect that interest rates may have on our cash flows. Changes in the general level of interest rates can affect our net interest income, which is the difference between the interest income earned on interest earning assets and our interest expense incurred in connection with our interest bearing debt and liabilities. Changes in interest rates can also affect, among other things, our ability to acquire and originate loans and securities and the value of our investment portfolio. Our net investment income is affected by fluctuations in various
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interest rates, including LIBOR, Canadian Dealer Offered RateEURIBOR, GBP LIBOR, BBSY, STIBOR, CDOR, and prime rates.SONIA. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks. We regularly measure exposure to interest rate risk and determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates. As of December 31, 2017,2021, we were not a party to any interest rate hedging arrangements.
In connection with the COVID-19 pandemic, the U.S. Federal Reserve and other central banks reduced certain interest rates and LIBOR decreased. A continuation in the reduced level of interest rates will depress our gross investment income and could result in a decrease in our net investment income if such decreases in LIBOR are not offset by a corresponding increase in the spread over LIBOR that we earn on any portfolio investments, a decrease in in our operating expenses, including with respect to our income incentive fee, or a decrease in the interest rate of our floating interest rate liabilities tied to LIBOR.
As of December 31, 2017, 51.9%, or $511.92021, approximately $1,307.5 million (at cost) of our debt portfolio investments bore interest at fixed rates and 48.1%, or $473.7 million (at cost)(principal amount) of our debt portfolio investments bore interest at variable rates, which generally are either prime-based or LIBOR-based (or based on an equivalent applicable currency rate), and many of which are subject to certain floors. A hypothetical 200 basis point increase or decrease in the interest rates on our variable-rate debt investments could increase or decrease, as applicable, our investment income by a maximum of $9.5$26.2 million on an annual basis. All of our SBA-guaranteed debentures, our December 2022 Notes and our March 2022 Notes bear interest at fixed rates. Our
Borrowings under the February 2019 Credit Facility bearsbear interest, subject to our election, on a per annum basis equal to (i) the applicable base rate plus 1.75%1.00% (or 1.50%1.25% if we receiveno longer maintain an investment grade credit rating), (ii) the applicable LIBOR rate plus 2.75%2.00% (or 2.50%2.25% if we receiveno longer maintain an investment grade credit rating), or (iii) for borrowings denominated in Canadiancertain foreign currencies other than Australian dollars, the applicable Canadian Dealer Offeredcurrency rate for the foreign currency as defined in the credit agreement plus 2.00% (or 2.25% if we no longer maintain an investment grade credit rating) or (iv) for borrowings denominated in Australian dollars, the applicable Australian dollars Screen Rate, plus 2.75%2.20% (or 2.50%2.45% if we receiveno longer maintain an investment grade credit rating). The applicable base rate is equal to the greatergreatest of (i) the prime rate, (ii) the federal funds rate plus 0.5% or, (iii) the Overnight Bank Funding Rate plus 0.5%, (iv) the adjusted one-month LIBORthree-month applicable currency rate plus 2.0%1.0% and (v) 1.0%. The applicable LIBOR rate dependsand currency rates depend on the currency and term of the draw under the February 2019 Credit

Facility. Facility, and cannot be less than zero. A hypothetical 200 basis point increase or decrease in the interest rates on the February 2019 Credit Facility could increase or decrease, as applicable, our interest expense by a maximum of $13.1 million on an annual basis (based on the amount of outstanding borrowings under the February 2019 Credit Facility as of December 31, 2021). We pay a commitment fee of 1.00%(x) 0.5% per annum on undrawn amounts if the usedunused portion of the facilityFebruary 2019 Credit Facility is lessgreater than or equal to 25.0%two-thirds of total commitments or (y) 0.375% per annum on undrawn amounts if the usedunused portion of the facilityFebruary 2019 Credit Facility is greaterequal to or less than 25.0%two-thirds of total commitments.
In July 2017, the head of the U.K. Financial Conduct Authority (the “FCA”), announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021. In March 2021, the FCA confirmed that all LIBOR settings will either cease to be provided by any administrator or no longer be representative: (a) immediately after December 31, 2021, in the case of sterling, euro, Swiss franc, and Japanese yen, and the one week and two month U.S. dollar settings; and (b) immediately after June 30, 2023, in the case of the remaining U.S. dollar settings. In addition, as a result of supervisory guidance from U.S. regulators, some U.S. regulated entities will cease to enter into new LIBOR contracts after January 1, 2022. At this time, no consensus exists as to what rate or rates will become accepted alternatives to LIBOR, although the Alternative Reference Rates Committee, a steering committee convened by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York and comprised of large U.S. financial institutions, has recommended the use of the Secured Overnight Financing Rate, SOFR. There are many uncertainties regarding a transition from LIBOR to SOFR or any other alternative benchmark rate that may be established, including, but not limited to, the timing of any such transition, the need to amend all contracts with LIBOR as the referenced rate and, given the inherent differences between LIBOR and SOFR or any other alternative benchmark rate, how any transition may impact the cost and performance of impacted securities, variable rate debt and derivative financial instruments. In addition, SOFR or another alternative benchmark rate may fail to gain market acceptance, which could adversely affect the return on, value of and market for securities, variable rate debt and derivative financial instruments linked to such rates. The effects of a transition from LIBOR to SOFR or any other alternative benchmark rate on our cost of capital
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and net investment income cannot yet be determined definitively. All of our loan agreements with our portfolio companies include fallback language in the event that LIBOR becomes unavailable. This language generally either includes a clearly defined alternative reference rate after LIBOR’s discontinuation or provides that the administrative agent may identify a replacement reference rate, typically with the consent of (or prior consultation with) the borrower. In certain cases, the administrative agent will be required to obtain the consent of either a majority of the lenders under the facility, or the consent of each lender, prior to identifying a replacement reference rate. In addition, any further changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market value for or value of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us and could have a material adverse effect on our business, financial condition and results of operations.
Because we currently borrow,have previously borrowed, and plan to borrow in the future, money to make investments, our net investment income iswill be dependent upon the difference between the rate at which we borrow funds and the rate at which we invest the funds borrowed. Accordingly, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. In periods of rising interest rates, our cost of funds would increase, which could reduce our net investment income if there is not a corresponding increase in interest income generated by our investment portfolio.
We may also have exposure to foreign currencies (currently the Canadian dollar) related to certain investments. Such investments are translated into United StatesU.S. dollars based on the spot rate at eachthe relevant balance sheet date, exposing us to movements in the exchange rate. In order to reduce our exposure to fluctuations in exchange rates, we generally borrow in Canadian dollarslocal foreign currencies under ourthe February 2019 Credit Facility to finance such investments. As of December 31, 2017,2021, we had non-United States dollar borrowings denominated in Canadian dollarsSwedish kronas of $21.012.8kr million ($16.81.4 million United StatesU.S. dollars) outstanding under the Credit Facilitywith an interest rate of 2.000%, borrowings denominated in British pounds sterling of £68.3 million ($92.5 million U.S. dollars) with a weighted average interest rate of 4.16%2.125%, borrowings denominated in Australian dollars A$36.6 million ($26.6 million U.S. dollars) with a weighted average interest rate of 2.250% and borrowings denominated in Euros of €138.6 million ($157.6 million U.S. dollars) with a weighted interest rate of 2.000%.
Related Party TransactionsUnused Commitments
As a BDC, we are obligated under the 1940 Act to make available to certain of our portfolio companies significant managerial assistance. "Making available significant managerial assistance" refers to any arrangement whereby we provide significant guidance and counsel concerning the management, operations, or business objectives and policies of a portfolio company. We are also deemed to be providing managerial assistance to all portfolio companies that we control, either by ourselves or in conjunction with others. The nature and extent of significant managerial assistance provided by us will vary according to the particular needs of each portfolio company. During each of the years ended December 31, 2017, 2016 and 2015, we received management and other fees totaling $0.4 million from SRC Worldwide, Inc., a subsidiary of CRS-SPV, Inc., a 100%-owned control investment. These fees were recognized as fee income on the Consolidated Statements of Operations. In addition, during the year ended December 31, 2016, we recognized $0.3 million as dividend income from SRC Worldwide, Inc.


Off-Balance Sheet Arrangements
In the normal course of business, we are party to financial instruments with off-balance sheet risk, consisting primarily of unused commitments to extend financing to our portfolio companies. Since commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The balance of unused commitments to extend financing as of December 31, 20172021 was as follows:
Portfolio CompanyInvestment TypeDecember 31, 2017
Deva Holdings, Inc.Revolver$2,500,000
DLC Acquisition, LLCRevolver1,800,000
Frank Entertainment Group, LLC(1)Delayed Draw Senior130,212
Frank Entertainment Group, LLC(1)Delayed Draw Second Lien303,827
HKW Capital Partners IV, L.P.Private Equity214,823
ICP Industries Inc.Delayed Draw Term Loan5,000,000
Lakeview Health Acquisition Company(1)Revolver1,387,367
Micross Solutions, LLCDelayed Draw Term Loan3,000,000
Nautic Partners VII, LPPrivate Equity509,080
Nomacorc, LLC(1)Equity Investment838,813
Orchid Underwriters Agency, LLCDelayed Draw Term Loan649,143
Schweiger Dermatology Group, LLCDelayed Draw Term Loan4,500,000
SCUF Gaming, Inc.Revolver2,000,000
Smile Brands, Inc.Equity Investment1,000,000
Smile Brands, Inc.Delayed Draw Term Loan18,826,531
SPC Partners V, LPPrivate Equity185,297
SPC Partners VI, LPPrivate Equity2,792,172
Tate's Bake ShopRevolver550,000
TGaS Advisors, LLCRevolver2,000,000
Total Unused Commitments $48,187,265
(1)Portfolio CompanyRepresents a commitment to extend financing to a portfolio company where one or more of our current investments in the portfolio company are carried at less than cost. Our estimate of the fair value of the current investments in this portfolio company includes an analysis of the value of any unfunded commitments.Investment Type


Contractual Obligations
As of December 31, 2017, our future fixed commitments for cash payments were as follows:
  Total 2018 2019-2020 2021-2022 2023-Future
SBA-guaranteed debentures payable $250,000,000
 $—
 $61,390,000
 $94,500,000
 $94,110,000
Interest due on SBA-guaranteed debentures payable 42,140,128
 9,751,246
 17,594,557
 8,373,273
 6,421,052
Credit Facility borrowings 156,070,484
 —
 —
 156,070,484
 —
Interest and fees on Credit Facility(1) 30,727,452
 7,817,175
 15,655,602
 7,254,675
 —
Unused commitments to extend financing 48,187,265
 48,187,265
 —
 —
 —
Notes 166,750,000
 —
 —
 166,750,000
 —
Interest on Notes 49,027,735
 10,630,313
 21,260,625
 17,136,797
 —
Operating lease payments(2) 623,208
 435,571
 187,637
 —
 —
Total $743,526,272
 $76,821,570
 $116,088,421
 $450,085,229
 $100,531,052
December 31, 2021
(1)Acclime Holdings HK Limited(1)Amounts represent (i) unused Credit Facility fees calculated at a rate of 0.375% of the unused amount, which was $323.9 million as of December 31, 2017, (ii) interest expense calculated at a rate of 4.124% of outstanding Credit Facility borrowings, which were approximately $156.1 million as of December 31, 2017 and (iii) annual fees of the Credit Facility administrative agent.Delayed Draw Term Loan
$1,178,571 
Acclime Holdings HK Limited(1)Delayed Draw Term Loan110,119 
Air Comm Corporation, LLC(1)Delayed Draw Term Loan10,801 
Air Comm Corporation, LLC(1)Delayed Draw Term Loan1,448,107 
Amtech Software(1)(2)We lease our corporate office facility under an operating lease that terminates on MayDelayed Draw Term Loan2,727,273 
Amtech Software(1)(2)Revolver681,818 
AnalytiChem Holding GmbH(1)(2)(3)Delayed Draw Term Loan6,207,333 
Aquavista Watersides 2 LTD(1)(4)Bridge Revolver503,472 
Aquavista Watersides 2 LTD(1)(4)Acquisition Facility3,146,698 
Arch Global Precision, LLC(1)Delayed Draw Term Loan— 
Astra Bidco Limited(1)(2)(4)Delayed Draw Term Loan2,571,405 
Avance Clinical Bidco Pty Ltd(1)(5)Delayed Draw Term Loan3,497,352 
Azalea Buyer, Inc.(1)(2)Delayed Draw Term Loan961,538 
Azalea Buyer, Inc.(1)(2)Revolver480,769 
Bariacum S.A(1)(3)Acquisition Facility2,160,679 
99

Portfolio CompanyInvestment TypeDecember 31, 2019. We believe that our existing facilities will be adequate2021
Beyond Risk Management, Inc.(1)(2)Delayed Draw Term Loan2,573,333 
BigHand UK Bidco Limited(1)(2)(4)Acquisition Facility378,348 
Bounteous, Inc.(1)Delayed Draw Term Loan2,840,367 
Brightpay Limited(1)(2)(3)Delayed Draw Term Loan431,799 
Brightpay Limited(1)(2)(3)Delayed Draw Term Loan143,933 
BrightSign LLC(1)Revolver1,328,991 
British Engineering Services Holdco Limited(1)(4)Bridge Revolver612,525 
CAi Software, LLC(1)(2)Revolver942,986 
Canadian Orthodontic Partners Corp.(1)(2)(6)Acquisition Facility166,685 
Centralis Finco S.a.r.l.(1)(3)Acquisition Facility460,949 
Ceres Pharma NV(1)(3)Delayed Draw Term Loan2,148,974 
Classic Collision (Summit Buyer, LLC)(1)Delayed Draw Term Loan392,619 
Coastal Marina Holdings, LLC(1)PIK Tranche B Term Loan1,311,220 
Coastal Marina Holdings, LLC(1)Tranche A Term Loan3,575,892 
Command Alkon (Project Potter Buyer, LLC)(1)Delayed Draw Term Loan6,018,078 
Coyo Uprising GmbH(1)(3)Delayed Draw Term Loan893,523 
Crash Champions, LLC(1)(2)Delayed Draw Term Loan5,420,303 
CSL Dualcom(1)(4)Acquisition Term Loan997,972 
Dart Buyer, Inc.(1)(2)Delayed Draw Term Loan2,430,569 
DecksDirect, LLC(1)(2)Revolver218,182 
DreamStart Bidco SAS(1)(3)Acquisition Facility616,916 
Dune Group(1)(3)Delayed Draw Term Loan664,587 
Dwyer Instruments, Inc.(1)Delayed Draw Term Loan691,712 
Eclipse Business Capital, LLC(1)Revolver11,818,182 
EMI Porta Holdco LLC(1)(2)Delayed Draw Term Loan12,457,627 
EMI Porta Holdco LLC(1)(2)Revolver2,966,102 
EPS NASS Parent, Inc.(1)Delayed Draw Term Loan583,051 
eShipping, LLC(1)(2)Delayed Draw Term Loan2,548,131 
eShipping, LLC(1)(2)Revolver1,231,597 
F24 (Stairway BidCo GmbH)(1)(2)(3)Delayed Draw Term Loan405,130 
Fineline Technologies, Inc.(1)Delayed Draw Term Loan180,000 
FragilePak LLC(1)Delayed Draw Term Loan2,354,167 
Heartland Veterinary Partners, LLC(1)(2)Delayed Draw Term Loan657,143 
Heavy Construction Systems Specialists, LLC(1)Revolver2,631,772 
HW Holdco, LLC (Hanley Wood LLC)(1)(2)Delayed Draw Term Loan1,563,022 
IGL Holdings III Corp.(1)Delayed Draw Term Loan1,217,221 
Innovad Group II BV(1)(2)(3)Delayed Draw Term Loan1,824,551 
INOS 19-090 GmbH(1)(2)(3)Acquisition Facility2,535,457 
Jocassee Partners LLCJoint Venture20,000,000 
ITI Intermodal, Inc.(1)(2)Delayed Draw Term Loan103,058 
ITI Intermodal, Inc.(1)(2)Revolver124,006 
Jaguar Merger Sub Inc.(1)(2)Delayed Draw Term Loan1,960,784 
Jaguar Merger Sub Inc.(1)(2)Revolver490,196 
Kano Laboratories LLC(1)(2)Delayed Draw Term Loan153,064 
100

Portfolio CompanyInvestment TypeDecember 31, 2021
Kano Laboratories LLC(1)(2)Delayed Draw Term Loan4,543,950 
LAF International(1)(2)(3)Acquisition Facility341,160 
Lambir Bidco Limited(1)(3)Bridge Revolver940,651 
Lambir Bidco Limited(1)(3)Delayed Draw Term Loan1,881,303 
LivTech Purchaser, Inc.(1)Delayed Draw Term Loan81,977 
Marmoutier Holding B.V.(1)(3)Delayed Draw Term Loan405,082 
Marmoutier Holding B.V.(1)(3)Revolver162,033 
MC Group Ventures Corporation(1)Delayed Draw Term Loan817,250 
Modern Star Holdings Bidco Pty Limited(1)(5)Capex Term Loan1,038,302 
Murphy Midco Limited(1)(4)Delayed Draw Term Loan2,617,027 
Narda Acquisitionco., Inc.(1)(2)Revolver1,310,680 
Navia Benefit Solutions, Inc.(1)Delayed Draw Term Loan1,260,800 
Nexus Underwriting Management Limited(1)(4)Revolver103,483 
Nexus Underwriting Management Limited(1)(4)Acquisition Facility540,919 
OA Buyer, Inc.(1)(2)Revolver1,331,244 
OG III B.V.(1)(2)(3)Acquisition CapEx Facility686,294 
Omni Intermediate Holdings, LLC(1)Delayed Draw Term Loan816,892 
Omni Intermediate Holdings, LLC(1)Delayed Draw Term Loan4,356,757 
OSP Hamilton Purchaser, LLC(1)(2)Revolver186,567 
Pacific Health Supplies Bidco Pty Limited(1)(2)(5)CapEx Term Loan1,282,566 
PDQ.Com Corporation(1)(2)Delayed Draw Term Loan289,389 
PDQ.Com Corporation(1)(2)Delayed Draw Term Loan10,947,692 
Polara Enterprises, L.L.C.(1)(2)Revolver545,234 
Policy Services Company, LLC(1)(2)Delayed Draw Term Loan6,944,079 
Premium Invest(1)(2)(3)Acquisition Facility1,933,240 
Protego Bidco B.V.(1)(2)(3)Delayed Draw Term Loan844,265 
QPE7 SPV1 BidCo Pty Ltd(1)(5)Acquisition Term Loan373,449 
Rep Seko Merger Sub LLC(1)Delayed Draw Term Loan1,454,545 
Reward Gateway (UK) Ltd(1)(2)(4)Acquisition Facility1,061,336 
Riedel Beheer B.V.(1)(3)Revolver229,711 
Riedel Beheer B.V.(1)(3)Delayed Draw Term Loan153,141 
Scaled Agile, Inc.(1)(2)Delayed Draw Term Loan416,188 
Scaled Agile, Inc.(1)(2)Revolver335,821 
Security Holdings B.V.(1)(3)Delayed Draw Term Loan2,274,399 
Security Holdings B.V.(1)(3)Revolver1,137,200 
Smartling, Inc.(1)(2)Delayed Draw Term Loan2,352,941 
Smartling, Inc.(1)(2)Revolver1,176,471 
Smile Brands Group, Inc.(1)(2)Delayed Draw Term Loan654,691 
Springbrook Software (SBRK Intermediate, Inc.)(1)Delayed Draw Term Loan2,372,538 
SSCP Pegasus Midco Limited(1)(4)Delayed Draw Term Loan5,251,478 
Superjet Buyer, LLC(1)Revolver1,825,293 
Syntax Systems Ltd(1)(2)Revolver568,965 
Syntax Systems Ltd(1)(2)Delayed Draw Term Loan1,933,077 
Techone B.V.(1)(3)Delayed Draw Term Loan1,620,901 
101

Portfolio CompanyInvestment TypeDecember 31, 2021
Techone B.V.(1)(3)Revolver432,240 
Tencarva Machinery Company, LLC(1)(2)Delayed Draw Term Loan885,903 
Tencarva Machinery Company, LLC(1)(2)Revolver1,128,585 
The Caprock Group, Inc. (aka TA/TCG Holdings, LLC)(1)(2)Delayed Draw Term Loan2,811,186 
The Caprock Group, Inc. (aka TA/TCG Holdings, LLC)(1)(2)Revolver826,620 
The Hilb Group, LLC(1)(2)Delayed Draw Term Loan2,773,208 
Transit Technologies LLC(1)(2)Delayed Draw Term Loan1,857,017 
Truck-Lite Co., LLC(1)(2)Delayed Draw Term Loan4,539,745 
Turbo Buyer, Inc.(1)(2)Delayed Draw Term Loan2,070,000 
Waccamaw River(2)Joint Venture11,280,000 
W2O Holdings, Inc.(1)Delayed Draw Term Loan3,831,517 
Woodland Foods, Inc.(1)(2)Revolver2,069,868 
Total unused commitments to meet our needs through 2018, and that we will be able to obtain additional space when, where and as needed on acceptable terms.extend financing$234,657,529 
(1)Our estimate of the fair value of the current investments in these portfolio companies includes an analysis of the fair value of any unfunded commitments.
(2)Represents a commitment to extend financing to a portfolio company where one or more of our current investments in the portfolio company are carried at less than cost.
(3)Actual commitment amount is denominated in Euros. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.
(4)Actual commitment amount is denominated in British pounds sterling. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.
(5)Actual commitment amount is denominated in Australian dollars. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.
(6)Actual commitment amount is denominated in Canadian dollars. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.
In the normal course of business, we guarantee certain obligations in connection with our portfolio companies (in particular, certain controlled portfolio companies). Under these guarantee arrangements, payments may be required to be made to third parties if such guarantees are called upon or if the portfolio companies were to default on their related obligations, as applicable. As of December 31, 2021 and 2020, we had guaranteed €9.9 million ($11.3 million U.S. dollars and $12.1 million U.S. dollars, respectively) relating to credit facilities among Erste Bank and MVC Automotive Group Gmbh, or MVC Auto. We would be required to make payments to Erste Bank if MVC Auto were to default on their related payment obligations. None of the credit facility guarantees are recorded as a liability on our Consolidated Balance Sheets. As such, the credit facility liabilities are considered in the valuation of our investments in MVC Auto. The guarantees denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date.
In addition, as of December 31, 2020, we agreed to cash collateralize a $3.5 million letter of credit for Security Holdings B.V. The $3.5 million cash collateralization is reflected as "Restricted cash" on the accompanying Consolidated Balance Sheets as of December 31, 2020. The letter of credit expired on April 30, 2021, and as of December 31, 2021, none of the Company’s cash was restricted.
Recent Developments
Subsequent to December 31, 2021, we made approximately $126.3 million of new commitments, of which $104.8 million closed and funded. The $104.8 million of investments consists of $75.8 million of first lien senior secured debt investments and $28.9 million of equity and joint venture investments. The weighted average yield of the debt investments was 6.3%. In addition, we funded $7.9 million of previously committed revolvers and delayed draw term loans.
On February 2018, our1, 2022, the Board granted 409,000 restricted sharesdeclared a quarterly distribution of our common stock$0.23 per share payable on February 23, 2022 to certain employees. These restricted shares had a total grant date fair valueholders of approximately $4.4 million, which will be expensed on a straight-line basis over a four-year vesting period.record as of February 16, 2022.
102


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.
See the section entitled “Quantitative and Qualitative Disclosures About Market Risk” included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which is included in Item 7 of Part II of this Annual Report on Form 10-K and is incorporated by reference herein.
Item 8.  Financial Statements and Supplementary Data.
See our Financial Statements included herein and listed in Item 15(a) of this Annual Report.Report on Form 10-K.
Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable.
Item 9A.  Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective.effective as of December 31, 2021. It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
Management’s Report on Internal Control over Financial Reporting
Our management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. GAAP. Internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.
Management (with the participation of our Chief Executive Officer and Chief Financial Officer) conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2017.2021.

103
Our internal control over financial reporting as of
December 31, 2017 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report, which is included in Item 15 of Part III of this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the fourth quarter of 20172021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B.  Other Information.
Not applicable.
Item 9C.  Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.

104

PART III
Item 10.  Directors, Executive Officers and Corporate Governance.
We have adopted a code of ethics, (which we call our “Code of Business Conduct and Ethics”), which every director, officer and employee is expected to observe. Thethe Global Code of Business ConductEthics Policy, which applies to, among others, our executive officers, including our Chief Executive Officer and Chief Financial Officer, as well as Barings' officers, directors and employees. The Global Code of Ethics Policy is publicly available on our website under “Corporate Governance” at the following URL: http:https://ir.tcap.com/corporate-governance and is referenced in this Annual Report as Exhibit 14.1.ir.barings.com/governance-docs.
We will provide any person, without charge, upon request, a copy of our Global Code of Business Conduct and Ethics.Ethics Policy. To receive a copy, please provide a written request to: Triangle Capital Corporation;Barings BDC, Inc., Attn: Chief Compliance Officer, 3700 Glenwood Avenue,300 South Tryon Street, Suite 530, Raleigh,2500 Charlotte, North Carolina, 27612.28202. There have been no material changes to the procedures by which stockholders may recommend nominees to ourthe Board of Directors.that have been implemented since the date the Company last filed a periodic report with the SEC.
Except as set forth above, the information required by this Item with respect to our directors, executive officers and corporate governance matters is contained under the headings "Proposal No. 1: Election of Directors," "Executive Officers," "Section 16(a) Beneficial Ownership Reporting Compliance," and "Corporate Governance" inincorporated by reference from our definitive Proxy Statement for our 20182022 Annual Meeting of Stockholders, to be filed with the SEC pursuant to Regulation 14A under the Exchange Act, and is incorporated in this Annual Report by reference in response to this Item.Act. Our definitive Proxy Statement will be filed with the SEC within 120 days after the date of our fiscal year-end, which was December 31, 2017.2021.
Item 11.  Executive Compensation.
The information required by this Item with respect to compensation of executive officers and directors is contained under the headings "Compensation Discussion and Analysis," "Executive Officer Compensation," "Compensation Committee Interlocks and Insider Participation" and "Compensation Committee Report" inincorporated by reference from our definitive Proxy Statement for our 20182022 Annual Meeting of Stockholders, to be filed with the SEC pursuant to Regulation 14A under the Exchange Act, and is incorporated in this Annual Report by reference in response to this Item.Act. Our definitive Proxy Statement will be filed with the SEC within 120 days after the date of our fiscal year-end, which was December 31, 2017.2021.
Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this Item with respect to security ownership of certain beneficial owners and management and equity compensation plans is contained in Item 5 of Part II of this Annual Report, under the heading "Securities Authorized for Issuance Under our Omnibus Incentive Plan," and under the heading "Security Ownership of Certain Beneficial Owners and Management" inincorporated by reference from our definitive Proxy Statement for our 20182022 Annual Meeting of Stockholders, to be filed with the SEC pursuant to Regulation 14A under the Exchange Act, and is incorporated in this Annual Report by reference in response to this Item.Act. Our definitive Proxy Statement will be filed with the SEC within 120 days after the date of our fiscal year-end, which was December 31, 2017.2021.

Item 13.  Certain Relationships and Related Transactions, and Director Independence.
The information required by this Item with respect to certain relationships and related transactions and director independence is contained under the headings "Certain Relationships and Related Party Transactions," "Proposal No. 1: Election of Directors" and "Corporate Governance" inincorporated by reference from our definitive Proxy Statement for our 20182022 Annual Meeting of Stockholders, to be filed with the SEC pursuant to Regulation 14A under the Exchange Act, and is incorporated in this Annual Report by reference in response to this Item.Act. Our definitive Proxy Statement will be filed with the SEC within 120 days after the date of our fiscal year-end, which was December 31, 2017.2021.
Item 14.  Principal Accountant Fees and Services.
The information required by this Item with respect to principal accountant fees and services is contained under the heading "Independent Registered Public Accounting Firm" inincorporated by reference from our definitive Proxy Statement for our 20182022 Annual Meeting of Stockholders, to be filed with the SEC pursuant to Regulation 14A under the Exchange Act, and is incorporated in this Annual Report by reference in response to this Item.Act. Our definitive Proxy Statement will be filed with the SEC within 120 days after the date of our fiscal year-end, which was December 31, 20172021.
105
.

PART IV
Item 15.  Exhibits and Financial Statement Schedules.
(a) The following documents are filed as part of this Report:
(1) Financial Statements
Triangle Capital CorporationBarings BDC, Inc. Financial Statements: 
 Page
F-F-11
F-F-44
F-F-55
F-F-67
F-F-78
F-F-89
F-F-1527
F-F-2240
(2) Financial Statement Schedules
None.
Schedules that are not listed herein have been omitted because they are not applicable or the information required to be set forth therein is included in the Consolidated Financial Statements or notes thereto.
(3) List of Exhibits
The exhibits required by Item 601 of Regulation S-K, except as otherwise noted, have been filed with previous reports by the Registrant and are herein incorporated by reference.
NumberExhibit
Number2.1
2.2
2.3
2.4
Agreement and Plan of Merger, by and among the Registrant, Mercury Acquisition Sub, Inc., Sierra Income Corporation and Barings LLC, dated as of September 21, 2021 (Filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 22, 2021 and incorporated herein by reference).
3.1
3.2
3.3
106

NumberExhibit
3.4
4.1
4.2
4.3

NumberExhibit
4.4
4.5
4.6
4.7Form of 3.300% Notes due 2026 (incorporated by reference to Exhibit 4.6 hereto).
10.1
4.810.2
10.1†
Form ofbetween Triangle Capital Corporation Non-employee Director Restricted Share Award Agreementand Barings LLC (Filed as Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 9, 2008August 2, 2018 and incorporated herein by reference).
10.2†10.3
10.310.4
10.410.5
10.6
10.510.7†
107

10.6†NumberExhibit
10.8
10.7†10.9
10.10
Amendment No. 1 to the Senior Secured Revolving Credit Agreement dated as of December 3, 2019, by and among the Company, as borrower, the lenders party thereto, ING Capital LLC, as administrative agent, and the other parties signatory thereto (Filed as Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on February 27, 2020 and incorporated herein by reference).
10.11
10.8†10.12
10.9
First Amendment to Office Lease Agreement between 3700 Glenwood LLC and the Registrant dated August 29, 2013 (Filed as Exhibit 10.17 to the Registrant's Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2014 and incorporated herein by reference).

Number10.13Exhibit
10.10
10.11
Custody Agreement between the Registrant and Branch Banking and Trust Company dated June 20, 2014 (Filed as Exhibit (j)(1) to the Registrant's Registration Statement on Form N-2 filed with the Securities and Exchange Commission on October 1, 2014 and incorporated herein by reference).
10.12
Third Amended and Restated Credit Agreement, dated May 4, 2015, among the Registrant, Branch Banking and Trust Company, ING Capital LLC, Fifth Third Bank, Morgan Stanley Bank, N.A., Bank of North Carolina, EverBank Commercial Finance, Inc., First Tennessee Bank National Association, Newbridge Bank, Yadkin Bank, CommunityOne Bank, NA, Park Sterling Bank, Paragon Commercial Bank, Raymond James Bank, N.A. and Stifel Bank & Trust (Filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 6, 2015 and incorporated herein by reference).
10.13
Second Amended and Restated Equity Pledge Agreement, dated May 4, 2015, between the Registrant, ARC Industries Holdings, Inc., Brantley Holdings, Inc., Energy Hardware Holdings, Inc., Minco Holdings, Inc., Peaden Holdings, Inc., Technology Crops Holdings, Inc. and Branch Banking and Trust Company2020 (Filed as Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 6, 2015November 4, 2020 and incorporated herein by reference).
10.14
10.15
Agreement between Brent P.W. Burgess and the Company (Filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 18, 2016 and incorporated herein by reference).
10.16
First Amendment to Third Amended and Restated Credit Agreement,purchasers party thereto, dated May 1, 2017, among the Company, Branch Banking and Trust Company, ING Capital LLC, Fifth Third Bank, Morgan Stanley Bank, N.A., Bank of North Carolina, EverBank Commercial Finance, Inc., First Tennessee Bank National Association, First National Bank of Pennsylvania, Capital Bank Corporation, Park Sterling Bank, Paragon Commercial Bank, Raymond James Bank, N.A. and Stifel Bank & Trust (Filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 3, 2017 and incorporated herein by reference).
10.17†
Triangle Capital Corporation Omnibus Incentive Plan (Filed as Exhibit 10.1 to the Registrant's Registration Statement on Form S-8 (File No. 333-218459) filed with the Securities and Exchange Commission on June 2, 2017 and incorporated herein by reference).
10.18
Supplement and Joinder Agreement for Triangle Capital Corporation Credit Agreement dated July 31, 2017 (Filed as Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 2, 2017 and incorporated herein by reference).
10.19†
Form of Triangle Capital Corporation Executive Officer Restricted Share Award Agreement (Filed as Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 2, 2017 and incorporated herein by reference).
10.20†
Form of Triangle Capital Corporation Non-employee Director Restricted Share Award Agreement (Filed as Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 2, 2017 and incorporated herein by reference).
10.21
Supplement and Joinder Agreement for Triangle Capital Corporation Credit Agreement dated September 29, 2017 (Filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 3, 2017 and incorporated herein by reference).
10.22†
Form of Executive Retention AgreementNovember 4, 2020 (Filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 17, 20174, 2020 and incorporated herein by reference).

10.15
NumberExhibit
10.23†
10.24†
Form of Amendment to Executive Retention Agreement.*
10.25†
Triangle Capital Corporation AmendedNote Purchase Agreement by and Restated Change in Control Retention Policy.*
11
Statement re computation of per share earnings (Included inbetween the consolidated financial statements filed with this report).*
14.1
Code of Business ConductCompany and Ethicsthe purchasers party thereto, dated February 25, 2021 (Filed as Exhibit 14.110.1 to the Registrant's AnnualCurrent Report on Form 10-K8-K filed with the Securities and Exchange Commission on March 9, 2011February 25, 2021 and incorporated herein by reference).
10.16
10.17
21.1
23.1
Consent of Ernst & Young LLP.*
31.1
31.2
32.1
32.2
99.1
108

†Management contract or compensatory plan or arrangement.
*Filed herewith.
**Furnished herewith.
^ Exhibits and/or schedules to this Exhibit have been omitted in accordance with Item 601 of Regulation S-K. The registrant agrees to furnish supplementally a copy of all omitted exhibits and/or schedules to the SEC upon its request.
(b) Exhibits
See Item 15(a)(3) above.
(c) Financial Statement Schedules
See Item 15(a)(2) above.
109

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 28, 201823, 2022
 
BARINGS BDC, INC.
 TRIANGLE CAPITAL CORPORATIONBy:/s/    Eric Lloyd
   By:/s/    E. Ashton Poole
 Name: E. Ashton PooleEric Lloyd
  Title: Chief Executive Officer and Chairman of the Board of Directors
110

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
SignatureTitleDate
/s/    Eric LloydChief Executive Officer and Chairman of the Board
(Principal Executive Officer)		February 23, 2022
Eric Lloyd
Signature/s/    Ian FowlerPresident TitleFebruary 23, 2022
Ian FowlerDate
/s/    E. Ashton PooleJonathan BockChief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)February 28, 2018
E. Ashton Poole
/s/    Steven C. LillyChief Financial Officer Secretary and Director (Principal
(Principal Financial Officer)		 February 28, 201823, 2022
Steven C. LillyJonathan Bock
/s/    C. Robert Knox, Jr.Elizabeth A. MurrayController (Principal Accounting Officer)February 28, 201823, 2022
C. Robert Knox, Jr.Elizabeth A. Murray
/s/    W. McComb DunwoodyBernard A. HarrisDirector February 28, 201823, 2022
W. McComb DunwoodyBernard Harris
/s/    Mark M. GambillRobert C. KnappDirectorFebruary 23, 2022
Robert C. Knapp
/s/    David MihalickDirector February 28, 201823, 2022
Mark M. GambillDavid Mihalick
/s/    Benjamin S. GoldsteinDirectorFebruary 28, 2018
Benjamin S. Goldstein
/s/    Mark F. MulhernDirector February 28, 201823, 2022
Mark F. Mulhern
/s/    Simon B. Rich, Jr.Thomas W. OkelDirector February 28, 201823, 2022
Simon B. Rich, Jr.Thomas W. Okel
/s/    Garland S. Tucker, IIIJill OlmsteadDirector February 28, 201823, 2022
Garland S. Tucker, IIIJill Olmstead
/s/    John A. SwitzerDirector February 23, 2022
John A. Switzer


Triangle Capital CorporationBarings BDC, Inc.
Index to Financial Statements and Financial Statement Schedules
 Page
F-F-11
F-F-44
F-F-55
F-F-67
F-F-78
F-F-89
F-F-1527
F-40
F-22



Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Barings BDC, Inc.:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Barings BDC, Inc. and subsidiaries (the Company), including the consolidated schedules of investments, as of December 31, 2021 and 2020, the related consolidated statements of operations, changes in net assets, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations, changes in its net assets and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Such procedures also included confirmation of securities owned as of December 31, 2021 and 2020, by correspondence with custodians, portfolio companies or agent banks or by other appropriate auditing procedures where replies were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of the fair value of investments
As discussed in Notes 1 and 3 to the consolidated financial statements, the Company measures its investments at fair value. In determining the fair value of investments that are not publicly traded and whose market quotations are not readily available, the Company makes subjective judgments and estimates using unobservable inputs.
F-1

We identified the assessment of the fair value of investments that are not publicly traded and whose market quotations are not readily available as a critical audit matter. The evaluation of certain assumptions used to estimate the fair value of such investments involved a high degree of auditor judgment and specialized skills and knowledge. Specifically, assessing the market yields for investments with similar terms and credit risks used in an income approach and the selection of comparable companies and financial performance multiples of such comparable companies used in a market approach required subjective auditor judgment as changes in these assumptions could have a significant impact on the estimate of the fair value of investments.
The following are the procedures we performed to address this critical audit matter. We evaluated the design of certain internal controls over the process to measure the fair value of investments that are not publicly traded and whose market quotations are not readily available, including controls related to the determination of market yields, credit risk, selection of comparable companies, and financial performance multiple assumptions. We evaluated the Company’s ability to estimate fair value by comparing prior period fair values for a selection of investments to transaction prices of transactions occurring subsequent to the valuation date. We involved valuation professionals with specialized skills and knowledge who, for a selection of the Company’s investments, assisted in evaluating the Company’s estimate of fair value by developing:
•a market yield, for investments fair valued using an income approach, by assessing available market information, such as market yields of comparable companies of similar credit risk
•a market multiple, for investments fair valued using a market approach, by assessing market information from third-party sources, including financial performance multiples of comparable companies
•estimates of fair value for the selected investments and comparing the results to the Company’s fair value estimates.
We have served as the Company’s auditor since 2020.
/s/ KPMG LLP
Charlotte, North Carolina
February 23, 2022


F-2

Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Triangle Capital CorporationBarings BDC, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Triangle Capital Corporation (the Company), including the consolidated schedules of investments, as of December 31, 2017 and 2016, the related consolidated statements of operations, changes in net assets, and cash flows of Barings BDC, Inc. (the “Company”) for each of the three years in the periodyear ended December 31, 2017,2019, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of Triangle Capital Corporation at December 31, 2017 and 2016, and the consolidated results of its operations, changes in its net assets, and its cash flows for each of the three years in the periodyear ended December 31, 2017,2019, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2018 expressed an unqualified opinion thereon.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our procedures included confirmation of securities owned as of December 31, 2017 and 2016 by correspondence with the custodian and directly with management or designees of the portfolio companies, as applicable. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
We have served as the Company'sCompany’s auditor since 2006.from 2006 to 2020.
Raleigh,/s/ ERNST & YOUNG LLP
Charlotte, North Carolina
February 28, 201827, 2020


Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Triangle Capital Corporation
Opinion on Internal Control over Financial Reporting
We have audited Triangle Capital Corporation’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Triangle Capital Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company, including the consolidated schedules of investments, as of December 31, 2017 and 2016, and the related consolidated statements of operations, changes in net assets, and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and our report dated February 28, 2018 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Raleigh, North Carolina
February 28, 2018

F-3


Triangle Capital CorporationBarings BDC, Inc.
Consolidated Balance Sheets
 December 31,
 20212020
Assets:
Investments at fair value:
Non-Control / Non-Affiliate investments (cost of $1,494,030,725 and $1,318,614,617 as of December 31, 2021 and 2020, respectively)$1,490,112,663 $1,325,783,281 
Affiliate investments (cost of $267,966,911 and $76,055,873 as of December 31, 2021 and December 31, 2020, respectively)288,068,788 78,598,633 
Control investments (cost of $25,826,428 and $25,826,428 as of December 31, 2021 and 2020, respectively)22,412,501 25,855,796 
Short-term investments (cost of $0 and $65,558,227 as of December 31, 2021 and 2020, respectively)— 65,558,227 
Total investments at fair value1,800,593,952 1,495,795,937 
Cash (restricted cash of $0 and $3,488,336 at December 31, 2021 and 2020, respectively)49,987,222 62,651,340 
Foreign currencies (cost of $34,068,609 and $29,555,465 as of December 31, 2021 and December 31, 2020, respectively)34,266,378 29,836,121 
Interest and fees receivable33,644,942 21,617,843 
Prepaid expenses and other assets4,297,383 2,014,558 
Credit support agreement (cost of $13,600,000 as of both December 31, 2021 and December 31, 2020)15,400,000 13,600,000 
Deferred financing fees2,984,872 4,110,564 
Receivable from unsettled transactions219,731,592 47,412,382 
Total assets$2,160,906,341 $1,677,038,745 
Liabilities:
Accounts payable and accrued liabilities$2,340,624 $6,045,443 
Interest payable5,704,470 2,219,274 
Administrative fees payable750,000 675,000 
Base management fees payable5,422,322 3,413,270 
Incentive management fees payable4,067,256 — 
Derivatives liabilities1,159,788 1,336,283 
Payable from unsettled transactions26,785,566 1,548,578 
Borrowings under credit facilities655,189,256 719,660,707 
Notes payable (net of deferred financing fees)717,556,296 224,335,666 
Total liabilities1,418,975,578 959,234,221 
Commitments and contingencies (Note 8)
Net Assets:
Common stock, $0.001 par value per share (150,000,000 shares authorized, 65,316,085 shares issued and outstanding as of both December 31, 2021 and 2020)65,316 65,316 
Additional paid-in capital1,027,686,768 1,027,707,047 
Total distributable loss(285,821,321)(309,967,839)
Total net assets741,930,763 717,804,524 
Total liabilities and net assets$2,160,906,341 $1,677,038,745 
Net asset value per share$11.36 $10.99 
    See accompanying notes.
F-4
  December 31,
  2017 2016
Assets:    
Investments at fair value:    
Non-Control / Non-Affiliate investments (cost of $910,150,765 and $888,974,154 at December 31, 2017 and 2016, respectively) $831,194,397
 $857,604,639
Affiliate investments (cost of $149,099,548 and $162,539,224 at December 31, 2017 and 2016, respectively) 147,101,949
 161,510,773
Control investments (cost of $62,375,532 and $45,418,113 at December 31, 2017 and 2016, respectively) 37,988,000
 18,791,769
Total investments at fair value 1,016,284,346
 1,037,907,181
Cash and cash equivalents 191,849,697
 107,087,663
Interest and fees receivable 7,806,887
 10,189,788
Prepaid expenses and other current assets 1,854,861
 1,659,570
Deferred financing fees 5,186,672
 2,699,960
Property and equipment, net 81,149
 106,494
Total assets $1,223,063,612
 $1,159,650,656
Liabilities:    
Accounts payable and accrued liabilities $9,863,209
 $6,797,244
Interest payable 3,997,480
 3,996,940
Taxes payable 796,111
 489,691
Deferred income taxes 1,331,528
 2,053,701
Borrowings under credit facility 156,070,484
 127,011,475
Notes, net of deferred financing fees 163,408,301
 162,755,381
SBA-guaranteed debentures payable, net of deferred financing fees 246,321,125
 245,389,966
Total liabilities 581,788,238
 548,494,398
Commitments and contingencies (Note 8)    
Net Assets:    
Common stock, $0.001 par value per share (150,000,000 shares authorized, 47,740,832 and 40,401,292 shares issued and outstanding as of December 31, 2017 and 2016, respectively) 47,741
 40,401
Additional paid in capital 823,614,881
 686,835,054
Net investment income in excess of distributions 8,305,431
 5,884,512
Net accumulated realized losses (84,883,623) (24,211,594)
Net unrealized depreciation (105,809,056) (57,392,115)
Total net assets 641,275,374
 611,156,258
Total liabilities and net assets $1,223,063,612
 $1,159,650,656
Net asset value per share $13.43
 $15.13

Barings BDC, Inc.
Consolidated Statements of Operations
 Year Ended December 31,
 202120202019
Investment income:
Interest income:
Non-Control / Non-Affiliate investments$101,467,891 $65,267,782 $72,486,107 
Affiliate investments519,518 — — 
Control investments434,908 — — 
Short-term investments16,765 353,109 985,286 
Total interest income102,439,082 65,620,891 73,471,393 
Dividend income:
Non-Control / Non-Affiliate investments169,687 2,603 44,744 
Affiliate investments8,709,469 — — 
Total dividend income8,879,156 2,603 44,744 
Fee and other income:
Non-Control / Non-Affiliate investments12,337,365 4,075,344 2,116,820 
Affiliate investments40,270 — — 
Control investments642,609 5,292 — 
Total fee and other income13,020,244 4,080,636 2,116,820 
Payment-in-kind interest income:
Non-Control / Non-Affiliate investments9,951,959 1,304,986 5,413 
Affiliate investments1,044,346 11,789 — 
Control investments— 9,532 — 
Total payment-in-kind interest income10,996,305 1,326,307 5,413 
Interest income from cash587 631 9,975 
Total investment income135,335,374 71,031,068 75,648,345 
Operating expenses:
Interest and other financing fees33,013,665 19,812,711 26,100,941 
Base management fee (Note 2)19,516,741 14,317,693 12,112,475 
Incentive management fees (Note 2)14,741,949 — — 
Compensation expenses— 48,381 442,238 
General and administrative expenses (Note 2)9,095,185 5,793,880 6,441,095 
Total operating expenses76,367,540 39,972,665 45,096,749 
Net investment income before taxes58,967,834 31,058,403 30,551,596 
Income taxes, including excise tax expense7,495 70,599 — 
Net investment income after taxes$58,960,339 $30,987,804 $30,551,596 
F-5

Barings BDC, Inc.
Consolidated Statements of Operations - (Continued)
 Year Ended December 31,
 202120202019
Realized gains (losses) and unrealized appreciation (depreciation) on investments, credit support agreement and foreign currency transactions:
Net realized gains (losses):
Non-Control / Non-Affiliate investments$2,746,436 $(38,302,323)$(3,798,263)
Affiliate investments(100,931)— — 
Net realized gains (losses) on investments2,645,505 (38,302,323)(3,798,263)
Foreign currency transactions(6,024,567)12,743 (12,185)
Net realized losses(3,379,062)(38,289,580)(3,810,448)
Net unrealized appreciation (depreciation):
Non-Control / Non-Affiliate investments(11,086,729)26,210,329 33,021,249 
Affiliate investments17,584,892 2,471,217 71,543 
Control investments(3,469,066)29,368 — 
Net unrealized appreciation on investments3,029,097 28,710,914 33,092,792 
Credit support agreement1,800,000 — — 
Foreign currency transactions17,275,899 (10,161,326)(1,004,788)
Net unrealized appreciation22,104,996 18,549,588 32,088,004 
Net realized gains (losses) and unrealized appreciation (depreciation) on investments, credit support agreement and foreign currency transactions18,725,934 (19,739,992)28,277,556 
Loss on extinguishment of debt— (3,088,728)(297,188)
Benefit from (provision for) taxes(844)17,709 (340,330)
Net increase in net assets resulting from operations$77,685,429 $8,176,793 $58,191,634 
Net investment income per share — basic and diluted$0.90 $0.64 $0.61 
Net increase in net assets resulting from operations per share — basic and diluted$1.19 $0.17 $1.16 
Dividends / distributions per share:
Total dividends / distributions$0.82 $0.65 $0.54 
Weighted average number of shares outstanding — basic and diluted65,316,085 48,575,139 50,185,300 

See accompanying notes.

F-6
Triangle Capital Corporation
Consolidated Statements of Operations
  Year Ended December 31,
  2017 2016 2015
Investment income:      
Interest income:      
Non-Control / Non-Affiliate investments $83,421,527
 $73,110,821
 $69,880,678
Affiliate investments 13,462,551
 13,262,066
 16,812,432
Control investments 1,155,791
 1,017,716
 446,301
Total interest income 98,039,869
 87,390,603
 87,139,411
Dividend income:      
Non-Control / Non-Affiliate investments 2,364,569
 912,304
 4,373,803
Affiliate investments 319,619
 1,107,920
 1,122,125
Control investments —
 300,333
 79
Total dividend income 2,684,188
 2,320,557
 5,496,007
Fee and other income:      
Non-Control / Non-Affiliate investments 9,134,573
 6,735,108
 9,084,933
Affiliate investments 1,106,151
 1,250,757
 3,359,995
Control investments 407,292
 400,000
 400,000
Total fee and other income 10,648,016
 8,385,865
 12,844,928
Payment-in-kind interest income: 
 
 
Non-Control / Non-Affiliate investments 8,367,457
 11,113,845
 10,911,656
Affiliate investments 2,550,074
 4,120,574
 4,669,868
Total payment-in-kind interest income 10,917,531
 15,234,419
 15,581,524
Interest income from cash and cash equivalent investments 715,028
 348,113
 224,743
Total investment income 123,004,632
 113,679,557
 121,286,613
Operating expenses:      
Interest and other financing fees 29,261,030
 26,720,572
 26,754,001
Compensation expenses 16,135,739
 23,675,809
 19,009,256
General and administrative expenses 5,370,046
 4,406,303
 3,894,253
Total operating expenses 50,766,815
 54,802,684
 49,657,510
Net investment income 72,237,817
 58,876,873
 71,629,103
Realized and unrealized gains (losses) on investments and foreign currency borrowings:      
Net realized gains (losses):      
Non-Control / Non-Affiliate investments (3,683,168) (2,413,750) 9,002,793
Affiliate investments (3,979,667) 4,398,798
 2,314,896
Control investments (45,205,868) —
 (38,807,152)
Net realized gains (losses) on investments (52,868,703) 1,985,048
 (27,489,463)
Foreign currency borrowings 1,268,776
 —
 —
Net realized gains (losses) (51,599,927) 1,985,048
 (27,489,463)
Net unrealized appreciation (depreciation):      
Non-Control / Non-Affiliate investments (65,786,245) (9,079,811) (23,583,035)
Affiliate investments (7,356,046) (5,473,012) 2,839,512
Control investments 27,547,274
 (11,464,464) 23,875,966
Net unrealized appreciation (depreciation) on investments (45,595,017) (26,017,287) 3,132,443
Foreign currency borrowings (2,821,924) (152,957) 2,363,214
Net unrealized appreciation (depreciation) (48,416,941) (26,170,244) 5,495,657
Net realized and unrealized losses on investments and foreign currency borrowings (100,016,868) (24,185,196) (21,993,806)
Loss on extinguishment of debt —
 —
 (1,394,017)
Provision for taxes (871,410) (435,245) (384,028)
Net increase (decrease) in net assets resulting from operations $(28,650,461) $34,256,432
 $47,857,252
Net investment income per share — basic and diluted $1.55
 $1.62
 $2.16
Net increase (decrease) in net assets resulting from operations per share — basic and diluted $(0.62) $0.94
 $1.44
Dividends/distributions per share: 

 

 

Regular quarterly dividends/distributions $1.65
 $1.89
 $2.16
Supplemental dividends/distributions —
 —
 0.20
Total dividends/distributions $1.65
 $1.89
 $2.36
Weighted average number of shares outstanding — basic and diluted 46,497,977
 36,405,024
 33,234,319

See accompanying notes.

Triangle Capital CorporationBarings BDC, Inc.
Consolidated Statements of Changes in Net Assets 
Common StockAdditional
Paid-In
Capital		Total Distributable Earnings (Loss)
 Number
of Shares		Par
Value		Total
Net Assets
Balance, January 1, 201951,284,064 $51,284 $884,894,249 $(321,978,246)$562,967,287 
Net investment income— — — 30,551,596 30,551,596 
Net realized loss on investments / foreign currency transactions— — — (3,810,448)(3,810,448)
Net unrealized appreciation on investments / foreign currency transactions— — — 32,088,004 32,088,004 
Loss on extinguishment of debt— — — (297,188)(297,188)
Provision for taxes— — — (340,330)(340,330)
Return of capital and other tax related adjustments— — (7,773,706)7,773,706 — 
Distributions of net investment income— — (26,927,706)(26,927,706)
Purchases of shares in repurchase plan(2,333,261)(2,333)(23,354,173)— (23,356,506)
Balance, December 31, 201948,950,803 $48,951 $853,766,370 $(282,940,612)$570,874,709 
Net investment income— — — 30,987,804 30,987,804 
Net realized loss on investments / foreign currency transactions— — — (38,289,580)(38,289,580)
Net unrealized appreciation on investments / foreign currency transactions— — — 18,549,588 18,549,588 
Loss on extinguishment of debt— — — (3,088,728)(3,088,728)
Provision for taxes— — — 17,709 17,709 
Return of capital and other tax related adjustments— — 3,878,798 (3,878,798)— 
Distributions of net investment income— (31,325,222)(31,325,222)
Deemed contribution - CSA (See Note 2)— — 13,600,000 — 13,600,000 
Deemed contribution - from Adviser (See Note 10)— — 3,254,849 — 3,254,849 
Issuance of common stock in connection with acquisition of MVC Capital17,354,332 17,354 160,336,673 — 160,354,027 
Purchase of shares in repurchase plan(989,050)(989)(7,129,643)— (7,130,632)
Balance, December 31, 202065,316,085 $65,316 $1,027,707,047 $(309,967,839)$717,804,524 
Net investment income— — — 58,960,339 58,960,339 
Net realized loss on investments / foreign currency transactions— — — (3,379,062)(3,379,062)
Net unrealized appreciation on investments / CSA / foreign currency transactions— — — 22,104,996 22,104,996 
Provision for taxes— — — (844)(844)
Return of capital and other tax related adjustments— — 1,628,875 (1,628,875)— 
Distributions of net investment income— — — (51,910,036)(51,910,036)
Return of capital distributions— — (1,649,154)— (1,649,154)
Balance, December 31, 202165,316,085 $65,316 $1,027,686,768 $(285,821,321)$741,930,763 
  Common Stock 
Additional
Paid In
Capital
 
Investment
Income
in Excess of
Distributions
 
Accumulated
Realized
Gains
(Losses) on
Investments
 
Net
Unrealized
Appreciation
(Depreciation)
  
  
Number
of Shares
 
Par
Value
     
Total
Net Assets
Balance, January 1, 2015 32,950,288
 $32,950
 $542,119,994
 $12,926,514
 $12,464,699
 $(36,717,528) $530,826,629
Net investment income —
 —
 —
 71,629,103
 —
 —
 71,629,103
Stock-based compensation —
 —
 6,989,341
 —
 —
 —
 6,989,341
Net realized gain (loss) on investments / foreign currency —
 —
 —
 —
 (27,489,463) 27,062,153
 (427,310)
Net unrealized depreciation on investments / foreign currency —
 —
 —
 —
 —
 (21,566,496) (21,566,496)
Loss on extinguishment of debt —
 —
 —
 (1,394,017) —
 —
 (1,394,017)
Provision for taxes —
 —
 —
 (384,028) —
 —
 (384,028)
Return of capital and other tax related adjustments —
 —
 (1,039,969) 3,585,623
 (2,545,654) —
 —
Dividends/distributions declared 179,075
 179
 3,725,998
 (70,236,054) (8,242,911) —
 (74,752,788)
Expenses related to public offering of common stock —
 —
 (54,967) —
 —
 —
 (54,967)
Issuance of restricted stock 360,840
 361
 (361) —
 —
 —
 —
Common stock withheld for payroll taxes upon vesting of restricted stock (115,077) (115) (2,497,597) —
 —
 —
 (2,497,712)
Balance, December 31, 2015 33,375,126
 $33,375
 $549,242,439
 $16,127,141
 $(25,813,329) $(31,221,871) $508,367,755
Net investment income —
 —
 —
 58,876,873
 —
 —
 58,876,873
Stock-based compensation —
 —
 10,331,464
 —
 —
 —
 10,331,464
Net realized gain (loss) on investments / foreign currency —
 —
 —
 —
 1,985,048
 600,222
 2,585,270
Net unrealized depreciation on investments / foreign currency —
 —
 —
 —
 —
 (26,770,466) (26,770,466)
Provision for taxes —
 —
 —
 (435,245) —
 —
 (435,245)
Return of capital and other tax related adjustments —
 —
 (484,037) 867,350
 (383,313) —
 —
Dividends/distributions declared 160,948
 160
 3,075,393
 (69,551,607) —
 —
 (66,476,054)
Public offering of common stock 6,742,362
 6,742
 129,119,482
 —
 —
 —
 129,126,224
Issuance of restricted stock 364,605
 365
 (365) —
 —
 —
 —
Common stock withheld for payroll taxes upon vesting of restricted stock (241,749) (241) (4,449,322) —
 —
 —
 (4,449,563)
Balance, December 31, 2016 40,401,292
 $40,401
 $686,835,054
 $5,884,512
 $(24,211,594) $(57,392,115) $611,156,258
Net investment income —
 —
 —
 72,237,817
 —
 —
 72,237,817
Stock-based compensation —
 —
 6,022,861
 —
 —
 —
 6,022,861
Net realized gain (loss) on investments / foreign currency —
 —
 —
 —
 (51,599,927) 54,405,862
 2,805,935
Net unrealized depreciation on investments / foreign currency —
 —
 —
 —
 —
 (102,822,803) (102,822,803)
Provision for taxes —
 —
 —
 (871,410) —
 —
 (871,410)
Return of capital and other tax related adjustments —
 —
 (689,101) 9,761,203
 (9,072,102) —
 —
Dividends/distributions declared 91,366
 91
 1,637,467
 (78,706,691) —
 —
 (77,069,133)
Public offering of common stock 7,000,000
 7,000
 131,989,144
 —
 —
 —
 131,996,144
Issuance of restricted stock 360,470
 361
 (361) —
 —
 —
 —
Common stock withheld for payroll taxes upon vesting of restricted stock (112,296) (112) (2,180,183) —
 —
 —
 (2,180,295)
Balance, December 31, 2017 47,740,832
 $47,741
 $823,614,881
 $8,305,431
 $(84,883,623) $(105,809,056) $641,275,374

See accompanying notes.

F-7
Triangle Capital Corporation

Barings BDC, Inc.
Consolidated Statements of Cash Flows 
  Year Ended December 31,
  2017 2016 2015
Cash flows from operating activities:      
Net increase (decrease) in net assets resulting from operations $(28,650,461) $34,256,432
 $47,857,252
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:      
Purchases of portfolio investments (483,743,398) (319,466,966) (453,928,052)
Repayments received/sales of portfolio investments 403,678,672
 236,692,865
 343,268,967
Loan origination and other fees received 7,294,015
 5,813,991
 7,099,587
Net realized (gains) losses on investments 52,868,703
 (1,985,048) 27,489,463
Net realized gain on foreign currency borrowings (1,268,776) —
 —
Net unrealized (appreciation) depreciation on investments 46,317,189
 28,951,901
 (4,757,093)
Net unrealized (appreciation) depreciation on foreign currency borrowings 2,821,924
 152,957
 (2,363,214)
Deferred income taxes (722,173) (2,934,616) 1,624,648
Payment-in-kind interest accrued, net of payments received 2,021,987
 (5,671,705) (2,573,814)
Amortization of deferred financing fees 2,514,459
 2,226,066
 2,162,562
Loss on extinguishment of debt —
 —
 1,394,017
Accretion of loan origination and other fees (6,337,441) (4,568,399) (6,165,489)
Accretion of loan discounts (476,892) (397,104) (487,163)
Accretion of discount on SBA-guaranteed debentures payable —
 31,899
 188,295
Depreciation expense 65,857
 70,108
 60,244
Stock-based compensation 6,022,861
 10,331,464
 6,989,341
Changes in operating assets and liabilities:      
Interest and fees receivable 2,382,901
 (5,297,642) 2,516,959
Prepaid expenses and other current assets (195,291) (712,502) (508,207)
Accounts payable and accrued liabilities 3,065,965
 (666,270) 318,841
Interest payable 540
 282,470
 349,233
Taxes payable 306,420
 (245,807) (1,770,533)
Net cash provided by (used) in operating activities 7,967,061
 (23,135,906) (31,234,156)
Cash flows from investing activities:      
Purchases of property and equipment (40,512) (70,904) (57,189)
Net cash used in investing activities (40,512) (70,904) (57,189)
Cash flows from financing activities:      
Borrowings under SBA-guaranteed debentures payable —
 32,800,000
 —
Repayments of SBA-guaranteed debentures payable —
 (7,800,000) —
Borrowings under credit facility 141,700,000
 104,901,849
 215,000,000
Repayments of borrowings under credit facility (114,194,139) (109,300,000) (144,000,000)
Proceeds from notes —
 —
 83,372,640
Redemption of notes —
 —
 (69,000,000)
Financing fees paid (3,417,092) (1,123,401) (2,919,436)
Net proceeds (expenses) related to public offerings of common stock 131,996,144
 129,126,224
 (54,967)
Common stock withheld for taxes upon vesting of restricted stock (2,180,295) (4,449,563) (2,497,712)
Cash dividends/distributions paid (77,069,133) (66,476,054) (74,752,788)
Net cash provided by financing activities 76,835,485
 77,679,055
 5,147,737
Net increase (decrease) in cash and cash equivalents 84,762,034
 54,472,245
 (26,143,608)
Cash and cash equivalents, beginning of year 107,087,663
 52,615,418
 78,759,026
Cash and cash equivalents, end of year $191,849,697
 $107,087,663
 $52,615,418
Supplemental disclosure of cash flow information:      
Cash paid for interest $25,587,590
 $23,366,963
 $23,021,114
Summary of non-cash financing transactions:      
Dividends paid through DRIP share issuances $1,637,558
 $3,075,553
 $3,726,177
 Year Ended December 31,
 202120202019
Cash flows from operating activities:
Net increase in net assets resulting from operations$77,685,429 $8,176,793 $58,191,634 
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of portfolio investments(1,461,056,755)(881,171,047)(473,701,786)
Acquisition of MVC Capital, net of cash acquired (See Note 10)— (96,719,967)— 
Repayments received / sales of portfolio investments943,867,143 684,530,539 449,882,092 
Purchases of short-term investments(297,560,982)(1,182,185,606)(913,641,727)
Sales of short-term investments363,118,408 1,213,197,945 862,296,728 
Loan origination and other fees received30,504,341 19,193,244 8,606,347 
Net realized (gain) loss on investments(2,645,505)38,302,323 3,798,263 
Net realized (gain) loss on foreign currency transactions6,024,567 (12,743)12,185 
Net unrealized appreciation on investments(3,029,097)(28,710,914)(33,092,792)
Net unrealized appreciation of CSA(1,800,000)— — 
Net unrealized (appreciation) depreciation on foreign currency transactions(17,275,899)10,161,326 1,004,788 
Payment-in-kind interest(10,795,470)(1,348,204)(5,413)
Amortization of deferred financing fees1,620,170 1,478,364 1,336,181 
Loss on extinguishment of debt— 3,088,728 297,188 
Accretion of loan origination and other fees(9,443,933)(2,716,765)(1,609,167)
Amortization / accretion of purchased loan premium / discount(4,646,285)(1,805,972)(279,694)
Changes in operating assets and liabilities:
Interest and fees receivable(14,472,228)(4,022,690)747,340 
Prepaid expenses and other assets(214,259)(44,607)3,007,347 
Accounts payable and accrued liabilities84,463 3,890,759 (159,256)
Interest payable3,483,456 (1,411,993)1,805,266 
Net cash used in operating activities(396,552,436)(218,130,487)(31,504,476)
Cash flows from financing activities:
Borrowings under credit facilities455,731,649 636,707,505 320,777,502 
Repayments of credit facilities(506,580,035)(280,523,363)(539,341,125)
Proceeds from debt securitization— — 348,250,000 
Repayments of debt securitization— (318,210,176)(30,039,824)
Proceeds from notes500,000,000 225,000,000 — 
Redemption of notes— (95,471,804)— 
Financing fees paid(7,273,849)(773,952)(8,293,282)
Net proceeds related to issuance of common stock for MVC acquisition— 160,354,027 — 
Purchases of shares in repurchase plan— (7,130,632)(23,356,506)
Cash dividends / distributions paid(53,559,190)(31,325,222)(26,927,706)
Net cash provided by financing activities388,318,575 288,626,383 41,069,059 
Net increase (decrease) in cash and foreign currencies(8,233,861)70,495,896 9,564,583 
Cash and foreign currencies, beginning of year92,487,461 21,991,565 12,426,982 
Cash and foreign currencies, end of year$84,253,600 $92,487,461 $21,991,565 
Supplemental Information:
Cash paid for interest$27,203,144 $16,697,097 $20,063,847 
Excise taxes paid during the period$70,533 $85,505 $— 
See accompanying notes.
F-8


Barings BDC, Inc.
Consolidated Schedule of Investments
December 31, 2021
Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
Non–Control / Non–Affiliate Investments:
1WorldSync, Inc. (2.2%)*(7) (8) (10)
IT Consulting & Other ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 07/19, Due 07/25)$16,434,014 $16,184,672 $16,434,014 
16,434,014 16,184,672 16,434,014 
Accelerate Learning, Inc.
(1.0%)*(7) (8) (10)
Education ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/18, Due 12/24)7,567,965 7,485,604 7,429,314 
7,567,965 7,485,604 7,429,314 
Acclime Holdings HK Limited
(0.2%)*(3) (7) (8) (10)
Business ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.5%, 7.0% Cash, Acquired 08/21, Due 07/27)1,211,310 1,137,872 1,146,517 
1,211,310 1,137,872 1,146,517 
Accurus Aerospace Corporation (3.2%)*(7) (8) (11)
Aerospace & DefenseFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, 1.50% PIK, Acquired 10/18, Due 10/24)24,873,702 24,684,100 24,015,559 
24,873,702 24,684,100 24,015,559 
ADB Safegate (0.7%)*(3) (8) (10)
Aerospace & DefenseSecond Lien Senior Secured Term Loan (LIBOR + 7.75%, 8.8% Cash, Acquired 08/21, Due 07/25)5,500,000 5,091,328 5,105,815 
5,500,000 5,091,328 5,105,815 
Advantage Software Company (The), LLC (0.0%)*(7)
Advertising, Printing & PublishingClass A1 Partnership Units (8,717.76 units, Acquired 12/21)280,379 280,379 
Class A2 Partnership Units (2,248.46 units, Acquired 12/21)72,350 72,350 
Class B1 Partnership Units (8,717.76 units, Acquired 12/21)9,006 9,006 
Class B2 Partnership Units (2,248.46 units, Acquired 12/21)2,322 2,322 
364,057 364,057 
Aftermath Bidco Corporation (1.3%)* (7) (8) (10)
Professional ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 04/19, Due 04/25)9,425,284 9,298,664 9,302,756 
9,425,284 9,298,664 9,302,756 
Air Canada 2020-2 Class B Pass Through Trust (0.9%)*AirlinesStructured Secured Note - Class B (9.0% Cash, Acquired 09/20, Due 10/25)6,170,321 6,170,321 6,822,282 
6,170,321 6,170,321 6,822,282 
Air Comm Corporation, LLC (1.5%)* (7) (8) (10)
Aerospace & DefenseFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 06/21, Due 07/27)11,539,605 11,265,477 11,279,635 
11,539,605 11,265,477 11,279,635 
AIT Worldwide Logistics Holdings, Inc. (1.0%)*(7)
Transportation Services
Second Lien Senior Secured Term Loan (LIBOR + 7.75%, 8.5% Cash, Acquired 04/21, Due 04/29)(8) (10)
6,460,345 6,324,652 6,460,345 
 Partnership Units (348.68 units, Acquired 04/21)348,678 688,918 
6,460,345 6,673,330 7,149,263 
Alpine US Bidco LLC (2.4%)*(7) (8) (10)
Agricultural ProductsSecond Lien Senior Secured Term Loan (LIBOR + 9.0%, 9.8% Cash, Acquired 05/21, Due 05/29)18,156,509 17,642,081 17,974,944 
18,156,509 17,642,081 17,974,944 
Amtech LLC (0.5%)*(7) (8)
Technology
First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 11/21, Due 11/27)(9)
4,090,909 3,957,893 3,954,545 
Revolver (LIBOR + 5.5%, 6.3% Cash, Acquired 11/21, Due 11/27)(10)
(13,268)(13,636)
4,090,909 3,944,625 3,940,909 
Anagram Holdings, LLC
(2.2%)*(3)
Chemicals, Plastics, & RubberFirst Lien Senior Secured Note (10.0% Cash, 5.0% PIK, Acquired 08/20, Due 08/25)14,395,213 13,459,291 16,050,670 
14,395,213 13,459,291 16,050,670 
AnalytiChem Holding Gmbh (0.3%)* (3) (7) (8) (14)
ChemicalsFirst Lien Senior Secured Term Loan (EURIBOR + 6.25%, 6.3% Cash, Acquired 11/21, Due 11/28)2,800,958 2,580,095 2,575,751 
2,800,958 2,580,095 2,575,751 
Anju Software, Inc. (1.8%)*(7) (8) (9)
Application SoftwareFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 6.3% Cash, Acquired 02/19, Due 02/25)13,527,812 13,355,243 13,284,312 
13,527,812 13,355,243 13,284,312 
F-9


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2017
Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
Non–Control / Non–Affiliate Investments:      
           
Access Medical Acquisition, Inc. (3%)* Operator of Primary Care Clinics Subordinated Notes (10% Cash, 2% PIK, Due 01/22) $13,819,514
 $13,630,067
 $13,630,067
  Class A Units (1,500,000 units)   901,026
 3,610,000
    13,819,514
 14,531,093
 17,240,067
           
Aden & Anais Holdings, Inc. (0%)* Baby Products Common Stock (20,000 shares)   2,000,000
 601,000
      2,000,000
 601,000
           
AKKR-MVSC Member, LLC (F/K/A Motor Vehicle Software Corporation) (0%)* Provider of EVR Services Class A Units (1,000,000 units)   1,092,964
 1,413,000
      1,092,964
 1,413,000
           
AM General, LLC (4%)* Defense Manufacturing 
Senior Note (LIBOR + 7.25%, 8.6% Cash,
Due 12/21)(8)
 9,000,000
 8,875,311
 8,886,000
  
Second Lien Term Note (LIBOR +11.75%, 13.1% Cash, Due 06/22)(8)
 20,000,000
 19,480,694
 19,593,000
    29,000,000
 28,356,005
 28,479,000
           
Avantor, Inc. (0%)* Life Sciences and Advanced Technologies Subordinated Note (9.0% Cash, Due 10/25) 500,000
 500,000
 500,000
    500,000
 500,000
 500,000
           
AVL Holdings, Inc. (0%)* Manufacturer and Distributor for Independent Artists and Authors Common Stock (138 shares)   1,300,000
 2,824,000
      1,300,000
 2,824,000
           
Baker Hill Acquisition, LLC (2%)* Loan Origination Software Solutions Provider 
Second Lien Term Notes (LIBOR + 11.0%, 12.3% Cash, Due 03/21)(8)
 13,500,000
 13,367,659
 11,130,000
  
Delayed Draw Term Note (LIBOR + 11.0%, 12.3% Cash, Due 03/21)(8)
 2,000,000
 1,982,177
 1,982,177
  Limited Partnership Interest   1,498,500
 105,000
    15,500,000
 16,848,336
 13,217,177
           
Cafe Enterprises, Inc. (0%)* Restaurant 
Second Lien Term Note (Prime + 5.75%, 10.3% Cash, Due 03/19)(6)(8)
 2,019,425
 1,956,096
 —
  
Subordinated Note (7% Cash, 7% PIK, Due 09/19)(6)
 15,190,538
 13,745,570
 —
  Series C Preferred Stock (10,000 shares)   1,000,000
 —
    17,209,963
 16,701,666
 —
           
Captek Softgel International, Inc.
(5%)*
 Nutraceuticals Manufacturer Subordinated Note (10% Cash, 1.5% PIK, Due 01/23) 30,813,099
 30,534,147
 30,534,147
Common Stock (38,023 shares)   3,957,697
 4,137,000
   30,813,099
 34,491,844
 34,671,147
           
Carolina Beverage Group, LLC (0%)* Beverage Manufacturing and Packaging Class B Units (11,974 units)   119,735
 1,873,000
     119,735
 1,873,000
           
Centerfield Media Holding Company (0%)* Digital Marketing Common Shares (500 shares)   500,000
 1,129,000
      500,000
 1,129,000
           
CIBT Global, Inc. (2%)* Provider of Mobility Services 
Second Lien Term Note (LIBOR + 7.75%, 9.1% Cash, Due 06/25)(8)
 10,000,000
 9,904,429
 9,815,000
    10,000,000
 9,904,429
 9,815,000
           
CIS Acquisition, LLC (0%)* Secure Communications and Computing Solutions Provider Units (1.09 units)   277,538
 277,538
      277,538
 277,538
           
Community Intervention Services, Inc. (0%)* Provider of Behavioral Health Services 
Subordinated Note (7% Cash, 6% PIK, Due 01/21) (6)
 20,969,036
 17,732,558
 —
    20,969,036
 17,732,558
 —
           
Constellis Holdings, LLC (1%)* Provider of Security and Risk Management Services 
Second Lien Term Note (LIBOR + 9.0%, 10.3% Cash, Due 04/25)(8)
 5,000,000
 4,929,791
 4,894,000
    5,000,000
 4,929,791
 4,894,000
           
CPower Ultimate HoldCo, LLC (0%)* Demand Response Business Units (345,542 units)   345,542
 1,988,000
      345,542
 1,988,000
           

Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
AP Aristotle Holdings, LLC (0.2)*(7)
Oil Field ServicesSubordinated Term Loan (19.8% Cash, Acquired 12/21, Due 06/25)$1,883,461 $1,890,302 $1,853,945 
1,883,461 1,890,302 1,853,945 
Apex Bidco Limited (0.3%)*(3) (7)
Business Equipment & Services
First Lien Senior Secured Term Loan (GBP LIBOR + 6.25%, 6.8% Cash, Acquired 01/20, Due 01/27)(8) (12)
1,973,818 1,868,706 1,969,871 
Subordinated Senior Unsecured Term Loan (8.0% PIK, Acquired 01/20, Due 07/27)277,738 264,032 277,738 
2,251,556 2,132,738 2,247,609 
Aptus 1829. GmbH (0.6%)*(3) (7)
Chemicals, Plastics, & Rubber
First Lien Senior Secured Term Loan (EURIBOR + 6.5%, 6.5% Cash, Acquired 09/21, Due 09/27)(8) (14)
4,655,991 4,716,681 4,552,419 
Preferred Stock (13 shares, Acquired 09/21)119,828 111,378 
Common Stock (48 shares, Acquired 09/21)11,983 11,434 
4,655,991 4,848,492 4,675,231 
Apus Bidco Limited (0.5%)*(3) (7) (8) (17)
Banking, Finance, Insurance & Real EstateFirst Lien Senior Secured Term Loan (SONIA + 5.5%, 5.5% Cash, Acquired 02/21, Due 03/28)3,901,705 3,873,560 3,822,621 
3,901,705 3,873,560 3,822,621 
AQA Acquisition Holding, Inc. (2.7%)*(7) (8) (10)
High Tech IndustriesSecond Lien Senior Secured Term Loan (LIBOR + 7.5%, 8.0% Cash, Acquired 03/21, Due 03/29)20,000,000 19,510,261 20,000,000 
20,000,000 19,510,261 20,000,000 
Aquavista Watersides 2 LTD (1.0%)*(3) (7) (8) (17)
Transportation ServicesFirst Lien Senior Secured Term Loan (SONIA + 6.0%, 6.1% Cash, Acquired 12/21, Due 12/28)6,041,660 5,696,275 5,766,009 
Second Lien Senior Secured Term Loan (SONIA + 10.5% PIK, Acquired 12/21, Due 12/28)1,510,415 1,446,466 1,465,103 
Revolver (SONIA + 6.0%, 6.1% Cash, Acquired 12/21, Due 12/22)(4,252)(5,035)
7,552,075 7,138,489 7,226,077 
Arch Global Precision LLC (1.2%)*(7) (8) (10)
Industrial MachineryFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.8% Cash, Acquired 04/19, Due 04/26)9,247,611 9,243,613 9,247,611 
9,247,611 9,243,613 9,247,611 
Archimede (1.1%)*(3) (7) (8) (14)
Consumer ServicesFirst Lien Senior Secured Term Loan (EURIBOR + 6.0%, 6.0% Cash, Acquired 10/20, Due 10/27)8,415,278 8,760,514 8,254,959 
8,415,278 8,760,514 8,254,959 
Argus Bidco Limited (0.5%)*(3) (7) (8)
High Tech Industries
First Lien Senior Secured Term Loan (SONIA + 5.5%, 5.8% Cash, Acquired 12/20, Due 12/27)(16)
2,682,222 2,559,483 2,682,222 
First Lien Senior Secured Term Loan (LIBOR + 5.5%, 5.8% Cash, Acquired 05/21, Due 12/27)(10)
671,922 653,387 671,922 
3,354,144 3,212,870 3,354,144 
Armstrong Transport Group (Pele Buyer, LLC ) (0.5%)*(7) (8) (10)
Air Freight & LogisticsFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 06/19, Due 06/24)4,019,862 3,961,175 3,939,465 
4,019,862 3,961,175 3,939,465 
ASPEQ Heating Group LLC (1.1%)* (7) (8) (9)
Building Products, Air & HeatingFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 11/19, Due 11/25)8,463,895 8,377,060 8,463,895 
8,463,895 8,377,060 8,463,895 
Astra Bidco Limited (0.7%)*(3) (7) (8) (16)
HealthcareFirst Lien Senior Secured Term Loan (SONIA + 5.75%, 5.8% Cash, Acquired 11/21, Due 11/28)5,785,660 5,478,502 5,534,948 
5,785,660 5,478,502 5,534,948 
Auxi International (0.3%)*(3) (7) (8)
Commercial Finance
First Lien Senior Secured Term Loan (EURIBOR + 6.25%, 6.3% Cash, Acquired 12/19, Due 12/26)(15)
1,592,080 1,520,648 1,439,240 
First Lien Senior Secured Term Loan (SONIA + 6.25%, 6.3% Cash, Acquired 04/21, Due 12/26)(17)
907,482 897,284 820,363 
2,499,562 2,417,932 2,259,603 
Avance Clinical Bidco Pty Ltd (0.8%)*(3) (7) (8) (20)
HealthcareFirst Lien Senior Secured Term Loan (BBSY + 5.5%, 6.0% Cash, Acquired 11/21, Due 11/27)6,456,649 6,039,823 6,158,029 
6,456,649 6,039,823 6,158,029 
F-10


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments — (Continued)
December 31, 2017
Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
CWS Holding Company, LLC (0%)* Manufacturer of Custom Windows and Sliding Doors Class A Units (1,500,000 units)   $1,500,000
 $1,546,000
     1,500,000
 1,546,000
           
Data Source Holdings, LLC (0%)* Print Supply Chain Management Services Common Units (47,503 units)   1,000,000
 813,000
     1,000,000
 813,000
           
Del Real, LLC (3%)* Hispanic Refrigerated Foods Company Subordinated Note (11% Cash, Due 04/23) $14,000,000
 13,759,702
 13,759,702
  Class A Units (3,000,000 units)   3,000,000
 3,368,000
    14,000,000
 16,759,702
 17,127,702
           
Deva Holdings, Inc. (5%)* Hair Products 
Senior Note (LIBOR + 6.75%, 8.1% Cash, Due 10/23)(8)
 32,500,000
 31,823,379
 31,823,379
    32,500,000
 31,823,379
 31,823,379
           
Dimora Brands, Inc. (3%)* Hardware Designer and Distributor 
Second Lien Term Note (LIBOR + 8.5%, 9.9% Cash, Due 08/25)(8)
 20,000,000
 19,608,400
 19,615,000
    20,000,000
 19,608,400
 19,615,000
           
DLC Acquisition, LLC (6%)* Staffing Firm 
Senior Notes (LIBOR + 8.0%, 10% Cash, Due 12/20)(8)
 21,706,250
 21,539,521
 21,539,521
 Senior Note (10% Cash, 2% PIK, Due 12/20) 17,275,680
 17,123,271
 17,123,271
   38,981,930
 38,662,792
 38,662,792
           
Dyno Acquiror, Inc. (1%)* Sewing Products and Seasonal Decorative Products Supplier Subordinated Note (10.5% Cash, 1.5% PIK, Due 08/20) 4,663,527
 4,646,697
 4,646,697
 Series A Units (600,000 units)   600,000
 504,000
   4,663,527
 5,246,697
 5,150,697
           
Eckler's Holdings, Inc. (0%)* Restoration Parts and Accessories for Classic Cars and Trucks 
Subordinated Note (17.5% Cash, Due 06/19)(6)
 14,385,439
 13,242,814
 —
 Common Stock (18,029 shares)   183,562
 —
 Series A Preferred Stock (1,596 shares)   1,596,126
 —
 Series B Preferred Stock (702 shares)   435,127
 —
   14,385,439
 15,457,629
 —
           
Frozen Specialties, Inc. (2%)* Frozen Foods Manufacturer Subordinated Note (10% Cash, 4% PIK, Due 05/18) 14,238,457
 14,238,457
 14,238,457
  14,238,457
 14,238,457
 14,238,457
           
GST AutoLeather, Inc. (0%)* Supplier of Automotive Interior Leather 
Subordinated Note (0% Cash, Due 01/21)(6)
 24,166,324
 23,073,507
 200,000
    24,166,324
 23,073,507
 200,000
           
Halo Branded Solutions, Inc. (3%)* Promotional Product Supply Chain Services Subordinated Notes (11% Cash, 1% PIK, Due 10/22) 13,766,530
 13,543,628
 13,543,628
  Class A1 Units (2,600 units)   2,600,000
 5,857,000
    13,766,530
 16,143,628
 19,400,628
           
HemaSource, Inc. (2%)* Medical Products Distributor Subordinated Note (9.5% Cash, 1.5% PIK, Due 01/24) 10,069,284
 9,880,715
 9,880,715
  Class A Units (1,000,000 units)   1,000,000
 1,023,000
    10,069,284
 10,880,715
 10,903,715
           
HKW Capital Partners IV, L.P.
(0%)*(4)
 Multi-Sector Holdings 0.6% Limited Partnership Interest   894,476
 1,671,000
      894,476
 1,671,000
           
HTC Borrower, LLC (4%)* Hunting and Outdoor Products Subordinated Notes (10% Cash, 3% PIK, Due 09/20) 26,935,658
 26,722,850
 25,759,000
    26,935,658
 26,722,850
 25,759,000
           
ICP Industrial, Inc. (3%)* Coatings Formulator and Manufacturer 
Second Lien Term Notes (LIBOR + 8.25%, 9.6% Cash, Due 05/24)(8)
 20,000,000
 19,392,800
 19,392,800
  Class A Units (1,289 units)   1,751,483
 1,650,000
    20,000,000
 21,144,283
 21,042,800
           
IDERA, Inc. (2%)* Software Provider 
Second Lien Term Note (LIBOR + 9.0%, 10.4% Cash, Due 06/25)(8)
 10,000,000
 9,856,308
 9,866,000
    10,000,000
 9,856,308
 9,866,000
           
Inland Pipe Rehabilitation Holding Company LLC (0%)* Cleaning and Repair Services Membership Interest Purchase Warrant (3%)   853,500
 1,101,000
    853,500
 1,101,000
           
           

Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
AVSC Holding Corp. (1.6%)*Advertising
First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, 0.25% PIK, Acquired 08/18, Due 03/25)(8) (10)
$4,866,634 $4,405,273 $4,457,837 
First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, 1.0% PIK, Acquired 08/18, Due 10/26)(8) (10)
748,248 692,634 692,930 
First Lien Senior Secured Term Loan (5.0% Cash, 10.0% PIK, Acquired 11/20, Due 10/26)5,513,525 5,399,114 6,403,959 
11,128,407 10,497,021 11,554,726 
Azalea Buyer, Inc. (0.8%)*(7)
Technology
First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 11/21, Due 11/27)(10)
4,605,769 4,495,830 4,494,423 
Subordinated Term Loan (12.0% PIK, Acquired 11/21, Due 05/28)1,259,615 1,234,657 1,234,423 
Common Stock (192,307.7 shares, Acquired 11/21)192,308 192,308 
Revolver (LIBOR + 5.25%, 6.3% Cash, Acquired 11/21, Due 11/27)(10)
(9,476)(9,615)
5,865,384 5,913,319 5,911,539 
Bariacum S.A. (0.8%)*(3) (7) (8) (14)
Consumer ProductsFirst Lien Senior Secured Term Loan (EURIBOR + 5.5%, 5.5% Cash, Acquired 11/21, Due 11/28)6,482,038 6,236,161 6,244,364 
6,482,038 6,236,161 6,244,364 
BDP International, Inc. (f/k/a BDP Buyer, LLC) (2.0%)*(7) (8) (9)
Air Freight & LogisticsFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/18, Due 12/24)14,849,238 14,642,747 14,626,499 
14,849,238 14,642,747 14,626,499 
Benify (Bennevis AB)
(0.2%)*(3) (7) (8) (18)
High Tech IndustriesFirst Lien Senior Secured Term Loan (STIBOR + 5.25%, 5.3% Cash, Acquired 07/19, Due 07/26)1,286,109 1,222,031 1,286,109 
1,286,109 1,222,031 1,286,109 
Beyond Risk Management, Inc.
(0.3%)*(7) (8) (10)
Other FinancialFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.3% Cash, Acquired 10/21, Due 09/27)2,426,667 2,335,532 2,326,667 
2,426,667 2,335,532 2,326,667 
Bidwax (1.0%)*(3) (7) (8) (14)
Non-durable Consumer GoodsFirst Lien Senior Secured Term Loan (EURIBOR + 6.5%, 6.5% Cash, Acquired 02/21, Due 02/28)7,960,398 8,062,475 7,741,487 
7,960,398 8,062,475 7,741,487 
BigHand UK Bidco Limited (0.1%)*(3) (7) (8) (13)
High Tech IndustriesFirst Lien Senior Secured Term Loan (GBP LIBOR + 5.25%, 5.4% Cash, Acquired 01/21, Due 01/28)908,791 879,693 878,365 
908,791 879,693 878,365 
Black Diamond Equipment Rentals LLC (1.5%)*(7) (25)
Equipment RentalSecond Lien Loan (12.5% Cash, Acquired 12/20, Due 06/22)10,000,000 10,000,000 10,000,000 
Warrant (4.17 units, Acquired 12/20)1,010,000 863,949 
10,000,000 11,010,000 10,863,949 
Bounteous, Inc. (0.6%)*(7) (8) (10)
TechnologyFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 08/21, Due 08/27)4,911,434 4,751,788 4,756,398 
4,911,434 4,751,788 4,756,398 
Brightline Trains Florida LLC (0.7%)*(7)
TransportationSenior Secured Note (8.0% Cash, Acquired 08/21, Due 01/28)5,000,000 5,000,000 5,005,000 
5,000,000 5,000,000 5,005,000 
Brightpay Limited (0.3%)*(3) (7) (8) (14)
TechnologyFirst Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 10/21, Due 10/28)1,917,970 1,883,003 1,861,862 
1,917,970 1,883,003 1,861,862 
BrightSign LLC (1.9%)*(7)
Media & Entertainment
First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/21, Due 10/27)(8) (10)
12,811,105 12,686,575 12,682,994 
LLC units (1,107,492.71 units, Acquired 10/21)1,107,493 1,135,180 
Revolver (LIBOR + 5.75%, 6.8% Cash, Acquired 11/21, Due 10/27)(8) (10)
(12,847)(13,290)
12,811,105 13,781,221 13,804,884 
British Airways 2020-1 Class B Pass Through Trust (0.1%)*AirlinesStructured Secured Note - Class B (8.4% Cash, Acquired 11/20, Due 11/28)809,722 809,722 915,587 
809,722 809,722 915,587 
F-11


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments — (Continued)
December 31, 2017
Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
Integrated Efficiency Solutions, Inc. (3%)* Energy Services Contracting Firm 
Senior Secured Term Note (LIBOR + 9.25%, 10.6% Cash, Due 06/22)(8)
 $18,268,750
 $17,970,511
 $17,970,511
Series B Preferred Units (238,095 units)   300,000
 243,000
  18,268,750
 18,270,511
 18,213,511
           
Keystone Peer Review Organization, Inc. (0%)* Healthcare - Managed Care 
Second Lien Term Note (LIBOR + 9.25%, 10.6% Cash, Due 05/25)(8)
 3,000,000
 2,943,794
 2,922,000
    3,000,000
 2,943,794
 2,922,000
           
KidKraft, Inc. (4%)* Children's Toy Manufacturer and Distributor Second Lien Term Note (11% Cash, 1% PIK, Due 03/22) 27,945,580
 27,491,811
 27,491,811
    27,945,580
 27,491,811
 27,491,811
           
K-Square Restaurant Partners, LP (0%)* Restaurant Class A Units of Limited Partnership (2,000 units)   638,260
 1,588,000
      638,260
 1,588,000
           
Lakeview Health Holdings, Inc. (3%)* Substance Abuse Treatment Service Provider 
Senior Note (LIBOR + 7.0%, 8.5% Cash, Due 12/21)(8)
 18,426,505
 18,260,612
 17,916,000
  Common Stock (2,000 shares)   2,000,000
 853,000
    18,426,505
 20,260,612
 18,769,000
           
Media Storm, LLC (0%)* Marketing Services 
Subordinated Note (10% Cash, Due 08/19)(6)
 6,876,818
 6,541,519
 1,617,000
Membership Units (1,216,204 units)   1,176,957
 —
  6,876,818
 7,718,476
 1,617,000
           
MIC Holding LLC (1%)* Firearm Accessories Manufacturer and Distributor Preferred Units (1,470 units)   1,470,000
 3,449,000
  Common Units (30,000 units)   30,000
 4,918,000
      1,500,000
 8,367,000
           
Micross Solutions LLC (3%)* Provider of Semiconductor Products and Services 
Senior Note (LIBOR + 5.5%, 6.8% Cash,
Due 08/23)(8)
 14,962,500
 14,788,973
 14,788,973
Class A-2 Common Units (1,979,524 units)   2,019,693
 1,571,000
  14,962,500
 16,808,666
 16,359,973
           
Nautic Partners VII, LP (0%)*(4)
 Multi-Sector Holdings 0.4% Limited Partnership Interest   907,332
 1,175,000
      907,332
 1,175,000
           
Navicure, Inc. (1%)* Healthcare Revenue Cycle Management Software 
Second Lien Term Note (LIBOR + 7.5%, 8.9% Cash, Due 11/25)(8)
 6,000,000
 5,941,328
 5,941,328
    6,000,000
 5,941,328
 5,941,328
           
Nomacorc, LLC (4%)* Synthetic Wine Cork Producer Subordinated Note (10% Cash, 2.3% PIK, Due 07/21) 21,356,210
 21,109,445
 21,109,445
  Limited Partnership Interest   2,161,185
 1,438,000
    21,356,210
 23,270,630
 22,547,445
           
OEConnection, LLC (0%)* Automotive Parts Supply Chain Software 
Second Lien Term Note (LIBOR + 8.0%, 9.3% Cash, Due 11/25)(8)
 3,000,000
 2,970,000
 2,970,000
    3,000,000
 2,970,000
 2,970,000
           
Orchid Underwriters Agency, LLC (1%)* Insurance Underwriter Subordinated Note (10% Cash, 1.5% PIK, Due 03/23) 2,135,226
 2,095,654
 2,095,654
Subordinated Note (13.5% PIK, Due 03/24) 812,457
 797,991
 797,991
Class A Preferred Units (15,000 units)   338,158
 957,000
Class A Common Units (15,000 units)   —
 1,132,000
  2,947,683
 3,231,803
 4,982,645
           
ProAmpac PG Borrower LLC (2%)* Manufacturer of Flexible Packaging Products 
Second Lien Term Note (LIBOR + 8.5%, 9.9% Cash, Due 11/24)(8)
 15,000,000
 14,794,786
 14,988,000
    15,000,000
 14,794,786
 14,988,000
           
Q International Courier, LLC (2%)* Third-Party Logistics Provider 
Second Lien Term Note (LIBOR + 8.25%, 9.7% Cash, Due 09/25)(8)
 14,000,000
 13,725,941
 13,725,941
    14,000,000
 13,725,941
 13,725,941
           
REP WWEX Acquisition Parent, LLC (2%)* Third-Party Logistics Provider 
Second Lien Term Note (LIBOR + 8.75%, 10.2% Cash, Due 02/25)(8)
 15,000,000
 14,794,594
 14,861,000
    15,000,000
 14,794,594
 14,861,000
           

Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
British Engineering Services Holdco Limited (2.1%)*(3) (7) (8) (17)
Commercial Services & SuppliesFirst Lien Senior Secured Term Loan (SONIA + 6.75%, 7.0% Cash, Acquired 12/20, Due 12/27)$15,530,143 $15,080,745 $15,405,902 
Revolver (SONIA + 6.75%, 7.0% Cash, Acquired 12/20, Due 06/22)(1,565)(4,900)
15,530,143 15,079,180 15,401,002 
Brown Machine Group Holdings, LLC (0.9%)*(7) (8) (9)
Industrial EquipmentFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/18, Due 10/24)6,633,915 6,587,022 6,633,915 
6,633,915 6,587,022 6,633,915 
Cadent, LLC (f/k/a Cross MediaWorks) (0.9%)*(7) (8) (9)
Media & EntertainmentFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 09/18, Due 09/23)6,913,258 6,888,254 6,913,258 
6,913,258 6,888,254 6,913,258 
CAi Software, LLC (1.2%)*(7) (8) (10)
TechnologyFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/21, Due 12/28)9,057,014 8,876,923 8,875,874 
Revolver (LIBOR + 6.25%, 7.3% Cash, Acquired 12/21, Due 12/28)— (18,723)(18,860)
9,057,014 8,858,200 8,857,014 
Canadian Orthodontic Partners Corp.(0.2%)*(3) (7) (8) (21)
HealthcareFirst Lien Senior Secured Term Loan (CDOR + 6.5%, 7.5% Cash, Acquired 06/21, Due 03/26)1,640,011 1,696,743 1,625,340 
1,640,011 1,696,743 1,625,340 
Carlson Travel, Inc (1.2%)*Business Travel ManagementFirst Lien Senior Secured Note (8.5% Cash, Acquired 11/21, Due 11/26)6,050,181 5,654,462 6,161,383 
Common Stock (94,155 shares, Acquired 11/21)1,655,434 3,083,576 
6,050,181 7,309,896 9,244,959 
Centralis Finco S.a.r.l. (0.1%)*(3) (7) (8) (14)
Diversified Financial ServicesFirst Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 05/20, Due 05/27)806,661 738,691 806,661 
806,661 738,691 806,661 
Ceres Pharma NV (0.6%)*(3) (7) (8) (15)
PharmaceuticalsFirst Lien Senior Secured Term Loan (EURIBOR + 5.5%, 5.5% Cash, Acquired 10/21, Due 10/28)4,555,832 4,443,959 4,354,688 
4,555,832 4,443,959 4,354,688 
Cineworld Group PLC
(0.5%)*(3)
Leisure ProductsSuper Senior Secured Term Loan (7.0% Cash, 8.3% PIK, Acquired 11/20, Due 05/24)1,786,456 1,591,243 2,127,562 
Super Senior Secured Term Loan (LIBOR + 8.25%, 9.3% Cash, Acquired 07/21, Due 05/24)(8) (11)
993,503 960,951 1,054,356 
Warrants (553,375 units, Acquired 12/20)101,602 243,594 
2,779,959 2,653,796 3,425,512 
Classic Collision (Summit Buyer, LLC) (1.7%)*(7) (8) (10)
Auto Collision Repair CentersFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 01/20, Due 01/26)12,586,816 12,383,725 12,448,217 
12,586,816 12,383,725 12,448,217 
CM Acquisitions Holdings Inc. (2.6%)*(7) (8) (10)
Internet & Direct MarketingFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 05/19, Due 05/25)19,105,620 18,896,879 19,105,620 
19,105,620 18,896,879 19,105,620 
CMT Opco Holding, LLC (Concept Machine) (0.6%)*(7)
Distributors
First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 01/20, Due 01/25)(8) (10)
4,144,368 4,090,219 3,999,315 
LLC Units (8,782 units, Acquired 01/20)351,709 227,366 
4,144,368 4,441,928 4,226,681 
Coastal Marina Holdings, LLC (2.4%)*(7)
Other FinancialSubordinated Term Loan (10.0% PIK, Acquired 11/21, Due 11/31)17,607,836 15,965,060 15,965,704 
LLC Units (547,591 units, Acquired 11/21)1,642,774 1,642,773 
17,607,836 17,607,834 17,608,477 
Cobham Slip Rings SAS (0.6%)*(3) (7) (8) (10)
Diversified ManufacturingFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 6.4% Cash, Acquired 11/21, Due 11/28)4,303,474 4,199,148 4,195,887 
4,303,474 4,199,148 4,195,887 
F-12


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments — (Continued)
December 31, 2017
Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
RMP Group, Inc. (2%)* Healthcare Revenue Cycle Management Services Subordinated Note (10.5% Cash, 1% PIK, Due 09/22) $10,083,813
 $9,904,854
 $9,904,854
  Units (1,000 units)   1,000,000
 723,000
    10,083,813
 10,904,854
 10,627,854
           
RockYou, Inc. (0%)* Mobile Game Advertising Network Common Stock (67,585 shares)   111,000
 111,000
      111,000
 111,000
           
Rotolo Consultants, Inc. (3%)* Landscape Services Subordinated Note (11% Cash, 3% PIK, Due 08/21) 7,632,930
 7,531,194
 7,531,194
  Series A Preferred Units (39 units)   3,654,253
 8,504,000
    7,632,930
 11,185,447
 16,035,194
           
SCA Pharmaceuticals, LLC (2%)* Provider of Pharmaceutical Products 
Subordinated Note (LIBOR + 9.0%, 10.5% Cash, Due 12/20)(8)
 10,000,000
 9,832,455
 9,832,455
    10,000,000
 9,832,455
 9,832,455
           
Schweiger Dermatology Group, LLC (4%)* Provider of Dermatology Services 
Senior Notes (LIBOR + 8.5%, 10.0% Cash,
Due 06/22)(8)
 25,500,000
 25,113,677
 25,113,677
  Class A-5 Units (1,976,284 units)   1,000,000
 1,000,000
    25,500,000
 26,113,677
 26,113,677
           
SCUF Gaming, Inc. (4%)* Gaming Controller Manufacturer 
Senior Notes (LIBOR + 8.5%, 9.9% Cash,
Due 12/21)(8)
 24,757,920
 24,339,939
 24,339,939
  
Revolver Loan (LIBOR + 8.5%, 9.9% Cash,
Due 06/18)(8)
 1,500,000
 1,487,760
 1,487,760
  Common Stock (27,112 shares)   742,000
 378,000
    26,257,920
 26,569,699
 26,205,699
           
Smile Brands, Inc. (4%)* Dental Service Organization Subordinated Notes (10% Cash, 2% PIK, Due 02/23) 22,796,512
 22,417,773
 22,417,773
  Class A Units (3,000 units)   3,000,000
 3,353,000
    22,796,512
 25,417,773
 25,770,773
           
SPC Partners V, LP (0%)*(4)
 Multi-Sector Holdings 0.7% Limited Partnership Interest   2,260,450
 2,412,000
      2,260,450
 2,412,000
           
SPC Partners VI, LP (0%)*(4)
 Multi-Sector Holdings 0.6% Limited Partnership Interest   207,828
 207,828
      207,828
 207,828
           
Specialized Desanders, Inc. (2%)*(4)
 Sand and Particulate Removal Equipment Provider for Oil and Gas Companies Subordinated Note (11% Cash, 2% PIK, Due 10/20) 10,117,769
 8,692,122
 7,451,070
Class C Partnership Units (2,000,000 units)   1,937,421
 3,993,000
   10,117,769
 10,629,543
 11,444,070
           
St. Croix Hospice Acquisition Corp. (1%)* Hospice Services Provider 
Second Lien Term Note (LIBOR + 8.75%, 10.1% Cash, Due 03/24)(8)
 9,200,000
 9,065,834
 9,065,834
  Series A Preferred Units (500 units)   500,000
 359,000
  Class B Common Units (500 units)   —
 —
    9,200,000
 9,565,834
 9,424,834
           
Tate's Bake Shop (2%)* Producer of Baked Goods 
Senior Note (LIBOR + 6.25%, 7.6% Cash, Due 08/19)(8)
 9,975,000
 9,951,709
 9,951,709
  Limited Partnership Interest   534,280
 1,845,000
    9,975,000
 10,485,989
 11,796,709
           
Tax Advisors Group, LLC (2%)* Tax Advisory Services Subordinated Note (10% Cash, 2% PIK, Due 12/22) 12,400,000
 12,169,399
 12,169,399
  Class A Units (386 units)   1,458,824
 2,295,000
    12,400,000
 13,628,223
 14,464,399
           
TCFI Merlin LLC ("Merlin") and TCFI CSG LLC ("CSG") (2%)* Specialty Staffing Service Provider 
Subordinated Notes (11.6% Cash, Due 09/19)(8)
 14,184,192
 13,970,730
 13,970,730
  Limited Partnership Units - Merlin (500,500 units)   285,485
 1,595,000
  Class A Units - CSG (100,000 units)   100,000
 230,000
    14,184,192
 14,356,215
 15,795,730
           
The Cook & Boardman Group, LLC (1%)* Distributor of Doors and Related Products Class A Units (1,400,000 units)   1,400,000
 3,490,000
    
 1,400,000
 3,490,000
           

Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
Command Alkon (Project Potter Buyer, LLC) (1.9%)*(7)
Software
First Lien Senior Secured Term Loan (LIBOR + 8.25%, 9.3% Cash, Acquired 04/20, Due 04/27)(8) (9)
$13,778,715 $13,290,020 $13,658,353 
Class A Units (90.384 units, Acquired 04/20)90,384 100,961 
Class B Units (33,324.69 units, Acquired 04/20)— 185,852 
13,778,715 13,380,404 13,945,166 
Contabo Finco S.À R.L (0.8%)*(3) (7) (8) (16)
Internet Software & ServicesFirst Lien Senior Secured Term Loan (SONIA + 5.25%, 5.3% Cash, Acquired 11/21, Due 10/26)5,949,094 5,818,536 5,830,113 
5,949,094 5,818,536 5,830,113 
Coyo Uprising GmbH (0.6%)*(3) (7)
Technology
First Lien Senior Secured Term Loan (EURIBOR + 6.5%, 6.5% Cash, Acquired 09/21, Due 09/28)(8) (14)
4,061,503 4,050,409 3,937,732 
Class A Units (440.0 units, Acquired 09/21)205,333 586,704 
Class B Units (191.0 units, Acquired 09/21)445,883 252,276 
4,061,503 4,701,625 4,776,712 
Crash Champions (1.9%)*(7) (8) (10)
AutomotiveFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 05/21, Due 08/25)14,567,197 14,040,003 13,967,572 
14,567,197 14,040,003 13,967,572 
CSL DualCom (0.2%)*(3) (7) (8) (13)
Tele-communicationsFirst Lien Senior Secured Term Loan (GBP LIBOR + 5.5%, 5.5% Cash, Acquired 09/20, Due 09/27)1,341,450 1,203,183 1,300,964 
1,341,450 1,203,183 1,300,964 
Custom Alloy Corporation (4.0%)*(7) (24) (25)
Manufacturer of Pipe Fittings & ForgingsSecond Lien Loan (15.0% PIK, Acquired 12/20, Due 04/22)45,000,185 37,043,142 27,450,113 
Revolver (15.0% PIK, Acquired 12/20, Due 04/22)4,255,152 3,737,652 2,595,643 
49,255,337 40,780,794 30,045,756 
CVL 3 (1.3%)*(3) (7) (8)
Capital Equipment
First Lien Senior Secured Term Loan (EURIBOR + 5.5%, 5.5% Cash, Acquired 12/21, Due 12/28)(14)
5,913,439 5,724,352 5,765,603 
First Lien Senior Secured Term Loan (SOFR + 5.5%, 5.5% Cash, Acquired 12/21, Due 12/28)(22)
3,382,200 3,297,974 3,297,645 
6-Month Bridge Term Loan (EURIBOR + 5.5%, 5.5% Cash, Acquired 12/21, Due 06/22)(14)
796,040 771,808 788,079 
10,091,679 9,794,134 9,851,327 
CW Group Holdings, LLC (0.4%)*(7)
High Tech Industries
First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 01/21, Due 01/27)(8) (10)
2,817,419 2,762,181 2,773,516 
LLC Units (161,290.32 units, Acquired 01/21)161,290 112,097 
2,817,419 2,923,471 2,885,613 
Dart Buyer, Inc. (1.6%)*(3) (7) (8) (10)
Aerospace & DefenseFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 04/19, Due 04/25)12,217,300 12,047,482 11,733,921 
12,217,300 12,047,482 11,733,921 
DecksDirect, LLC (0.1%)*(7)
Building Materials
First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 12/21, Due 12/26)(8) (9)
727,273 712,749 712,727 
Revolver (LIBOR + 6.0%, 7.0% Cash, Acquired 12/21, Due 12/26)(8) (10)
(4,357)(4,364)
LLC Units (1,280.8 units, Acquired 12/21)54,545 54,549 
727,273 762,937 762,912 
Discovery Education, Inc. (1.6%)*(7) (8) (10)
PublishingFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 10/20, Due 10/26)11,815,226 11,625,619 11,815,226 
11,815,226 11,625,619 11,815,226 
Distinct Holdings, Inc. (0.9%)*(7) (8) (9)
Systems SoftwareFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 04/19, Due 12/23)6,880,088 6,840,597 6,714,966 
6,880,088 6,840,597 6,714,966 
Dragon Bidco (0.4%)*(3) (7) (8) (15)
TechnologyFirst Lien Senior Secured Term Loan (EURIBOR + 6.75%, 6.8% Cash, Acquired 04/21, Due 04/28)2,729,279 2,811,548 2,676,462 
2,729,279 2,811,548 2,676,462 
DreamStart Bidco SAS (d/b/a SmartTrade) (0.3%)*(3) (7) (8) (15)
Diversified Financial ServicesFirst Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 03/20, Due 03/27)2,418,426 2,294,573 2,385,347 
2,418,426 2,294,573 2,385,347 
F-13


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments — (Continued)
December 31, 2017
Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
Trademark Global LLC (3%)* Supplier to Mass Market Internet Retail Subordinated Note (10% Cash, 1.3% PIK, Due 04/23) $14,800,000
 $14,610,405
 $14,610,405
  Class A Units (1,500,000 units)   1,500,000
 1,500,000
  Class B Units (1,500,000 units)   —
 894,000
    14,800,000
 16,110,405
 17,004,405
           
Travelpro Products, Inc. ("Travelpro") and TP - Holiday Group Limited ("TP") (3%)* Luggage and Travel Bag Supplier Second Lien Term Note - Travelpro (11% Cash, 2% PIK, Due 11/22) 10,332,955
 10,153,881
 10,153,881
  
Second Lien Term Note - TP (11% Cash, 2% PIK, Due 11/22)(4)
 9,152,950
 8,991,783
 9,403,477
  Common Units - Travelpro (2,000,000 units)   2,000,000
 2,270,000
    19,485,905
 21,145,664
 21,827,358
           
United Biologics, LLC (2%)* Allergy Immunotherapy Senior Note (12% Cash, 2% PIK, Due 04/18) 13,022,543
 13,022,542
 13,022,542
 Class A-1 Common Units (18,818 units)   137,324
 137,325
 Class A Common Units (177,935 units)   1,999,989
 1,351,000
 Class A-2 Common Kicker Units (444,003 units)   —
 —
 Class A-1 Common Kicker Units (14,114 units)   —
 —
 Class A, Class A-1, Class A-1 Kicker & Class B Unit Purchase Warrants   838,117
 288,000
    13,022,543
 15,997,972
 14,798,867
           
Vantage Mobility International, LLC (5%)* Wheelchair Accessible Vehicle Manufacturer 
Subordinated Notes (10.6% Cash, Due 09/21)(8)
 30,708,796
 30,216,432
 30,216,432
  Class A Units (1,750,000 units)   1,750,000
 719,000
    30,708,796
 31,966,432
 30,935,432
           
Wheel Pros Holdings, Inc. (3%)* Wheel/Rim and Performance Tire Distributor 
Subordinated Note (LIBOR + 7.0%, 11% Cash, Due 06/20)(8)
 16,435,000
 16,217,360
 16,217,360
  Class A Units (2,000 units)   1,954,144
 3,508,000
    16,435,000
 18,171,504
 19,725,360
           
Women's Marketing, Inc. (0%)* Full-Service Media Organization 
Subordinated Note (11% Cash, 1.5% PIK, Due 06/21)(6)
 19,136,331
 16,141,439
 —
  Class A Common Units (16,300 units)   1,630,000
 —
    19,136,331
 17,771,439
 —
           
WSO Holdings, LP (0%)* Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer Common Points (3,121 points)   3,089,581
 2,612,000
     3,089,581
 2,612,000
       
YummyEarth Inc. (4%)* Organic Candy Manufacturer 
Senior Notes (LIBOR + 8.5%, 10.0% Cash,
Due 08/20)(8)
 31,250,000
 30,965,913
 26,196,000
  Limited Partnership Interest   3,496,500
 —
    31,250,000
 34,462,413
 26,196,000
       
Subtotal Non–Control / Non–Affiliate Investments 856,289,518
 910,150,765
 831,194,397
           
Affiliate Investments:          
All Metals Holding, LLC (1%)* Steel Processor and Distributor Subordinated Note (12% Cash, 1% PIK, Due 12/21) 6,434,351
 6,278,902
 6,434,000
  Units (318,977 units)   793,331
 266,000
    6,434,351
 7,072,233
 6,700,000
           
Consolidated Lumber Holdings, LLC (1%)* Lumber Yard Operator Class A Units (15,000 units)   1,500,000
 4,500,000
      1,500,000
 4,500,000
           
FCL Holding SPV, LLC (0%)* Commercial Printing Services Class A Interest (24,873 units)   292,000
 570,000
  Class B Interest (48,427 units)   —
 —
  Class C Interest (3,746 units)   —
 —
      292,000
 570,000
           
Mac Land Holdings, Inc. (0%)* Environmental and Facilities Services Common Stock (139 shares)   369,000
 —
      369,000
 —
           

Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
Dune Group (0.2%)*(3) (7) (8)
Health Care Equipment
First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.0% Cash, Acquired 09/21, Due 09/28)(10)
$1,230,280 $1,204,767 $1,202,086 
First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 09/21, Due 09/28)(14)
131,453 104,801 113,210 
1,361,733 1,309,568 1,315,296 
Dwyer Instruments, Inc. (0.6%)*(7) (8) (10)
Electric
First Lien Senior Secured Term Loan (LIBOR + 5.50%, 6.3% Cash, Acquired 07/21, Due 07/27)4,562,902 4,451,732 4,515,611 
4,562,902 4,451,732 4,515,611 
Echo Global Logistics, Inc. (2.0%)*(7)
Air Transportation
Second Lien Senior Secured Term Loan (LIBOR + 7.25%, 8.0% Cash, Acquired 11/21, Due 11/29)(8) (10)
14,469,027 14,210,471 14,215,819 
Partnership Equity (530.92 units, Acquired 11/21)530,973 530,970 
14,469,027 14,741,444 14,746,789 
Ellkay, LLC (0.7%)*(7) (8) (10)
Healthcare & PharmaceuticalsFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 09/21, Due 09/27)4,987,500 4,891,525 4,897,630 
4,987,500 4,891,525 4,897,630 
EMI Porta Holdco LLC (1.2%)*(7) (8) (10)
Diversified ManufacturingFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.5% Cash, Acquired 12/21, Due 12/27)9,576,271 9,140,733 9,135,593 
Revolver (LIBOR + 5.75%, 6.5% Cash, Acquired 12/21, Due 12/27)(58,526)(59,322)
9,576,271 9,082,207 9,076,271 
Entact Environmental Services, Inc. (0.8%)*(7) (8) (10)
Environmental IndustriesFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 02/21, Due 12/25)5,704,863 5,656,971 5,630,699 
5,704,863 5,656,971 5,630,699 
EPS NASS Parent, Inc. (0.8%)*(7) (8) (10)
Electrical Components & EquipmentFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 04/21, Due 04/28)5,812,941 5,695,455 5,714,871 
5,812,941 5,695,455 5,714,871 
Eshipping, LLC (0.8%)*(7) (8)
Transportation Services
First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/21, Due 11/27)(9)
5,965,459 5,799,040 5,795,187 
Revolver (LIBOR + 5.75%, 6.8% Cash, Acquired 11/21, Due 12/27)(10)
254,813 225,848 225,085 
6,220,272 6,024,888 6,020,272 
F24 (Stairway BidCo Gmbh) (0.2%)*(3) (7) (8) (14)
Software ServicesFirst Lien Senior Secured Term Loan (EURIBOR + 6.0%, 6.0% Cash, Acquired 08/20, Due 08/27)1,620,521 1,648,879 1,620,521 
1,620,521 1,648,879 1,620,521 
Ferrellgas L.P. (0.4%)*(3) (7)
Oil & Gas Equipment & ServicesOpCo Preferred Units (2,886 units, Acquired 03/21)2,799,420 3,145,740 
2,799,420 3,145,740 
Fineline Technologies, Inc. (0.2%)*(7) (8) (10)
Consumer ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 02/21, Due 02/28)1,305,719 1,282,956 1,305,719 
1,305,719 1,282,956 1,305,719 
FitzMark Buyer, LLC (0.6%)*(7) (8) (10)
Cargo & TransportationFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 12/20, Due 12/26)4,269,265 4,196,714 4,183,880 
4,269,265 4,196,714 4,183,880 
Flexential Issuer, LLC (2.1%)*Information TechnologyStructured Secured Note - Class C (6.9% Cash, Acquired 11/21, Due 11/51)16,000,000 14,817,114 15,608,750 
16,000,000 14,817,114 15,608,750 
FragilePak LLC (0.7%)*(7)
Transportation Services
First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 05/21, Due 05/27)(8) (9)
4,696,562 4,519,341 4,540,910 
Partnership Units (937.5 units, Acquired 05/21)937,500 925,895 
4,696,562 5,456,841 5,466,805 
Front Line Power Construction LLC (0.5%)*Construction Machinery
First Lien Senior Secured Term Loan (LIBOR + 12.5%, 13.5% Cash, Acquired 11/21, Due 11/28)(7) (8) (10)
4,000,000 3,872,045 3,880,000 
Common Stock (50,848 shares, Acquired 11/21)130,171 111,357 
4,000,000 4,002,216 3,991,357 
F-14


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments — (Continued)
December 31, 2017
Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
NB Products, Inc. (9%)* Distributor of Work Apparel and Accessories Subordinated Note (12% Cash, 2% PIK, Due 02/20) $23,570,899
 $23,308,085
 $23,308,085
 Jr. Subordinated Note (10% PIK, Due 02/20) 5,194,357
 5,114,592
 5,114,592
 Jr. Subordinated Bridge Note (20% PIK, Due 05/21) 2,434,156
 2,412,295
 2,412,295
 Series A Redeemable Senior Preferred Stock (7,839 shares)   7,621,648
 10,390,000
 Common Stock (1,668,691 shares)   333,738
 16,044,000
   31,199,412
 38,790,358
 57,268,972
           
Passport Food Group, LLC (3%)* Manufacturer of Ethnic Food Products 
Senior Notes (LIBOR + 9.0%, 10.3% Cash,
 Due 03/22)(8)
 20,000,000
 19,648,160
 16,672,000
  Common Stock (20,000 shares)   2,000,000
 357,000
    20,000,000
 21,648,160
 17,029,000
           
PCX Aerostructures, LLC (4%)* Aerospace Components Manufacturer 
Subordinated Note (10.5% Cash, Due 10/19)(9)
 31,647,359
 31,244,000
 22,574,000
 
Subordinated Note (6% PIK, Due 10/20)(9)
 759,286
 759,286
 548,000
 Series A Preferred Stock (6,066 shares)   6,065,621
 —
Series B Preferred Stock (411 shares)   410,514
 —
Class A Common Stock (121,922 shares)   30,480
 —
   32,406,645
 38,509,901
 23,122,000
           
Team Waste, LLC (2%)* Environmental and Facilities Services Subordinated Note (10% Cash, 2% PIK, Due 08/23) 5,028,180
 4,930,962
 4,930,962
  Preferred Units (500,000 units)   10,000,000
 10,000,000
    5,028,180
 14,930,962
 14,930,962
           
Technology Crops, LLC (1%)* Supply Chain Management Services Subordinated Notes (12% Cash, Due 02/18) 12,294,102
 12,294,102
 8,617,000
Common Units (50 units)   500,000
 —
   12,294,102
 12,794,102
 8,617,000
           
TGaS Advisors, LLC (2%)* Advisory Solutions to Pharmaceutical Companies Senior Note (10% Cash, 1% PIK, Due 11/19) 9,522,893
 9,431,015
 9,431,015
 Preferred Units (1,685,357 units)   1,556,069
 1,524,000
   9,522,893
 10,987,084
 10,955,015
           
Tulcan Fund IV, L.P. (0%)* Custom Forging and Fastener Supplies Common Units (1,000,000 units)   1,000,000
 —
      1,000,000
 —
           
United Retirement Plan Consultants, Inc. (0%)* Retirement Plan Administrator Series A Preferred Shares (9,400 shares)   205,748
 302,000
  Common Shares (100,000 shares)   1,000,000
 419,000
      1,205,748
 721,000
           
Wythe Will Tzetzo, LLC (0%)* Confectionery Goods Distributor Series A Preferred Units (99,829 units)   —
 2,688,000
      —
 2,688,000
           
Subtotal Affiliate Investments   116,885,583
 149,099,548
 147,101,949
           
Control Investments:          
CRS-SPV, Inc. (3%)* Fluid
Reprocessing
Services		 Common Stock (1,100 shares)   18,428,000
 20,283,000
    

 18,428,000
 20,283,000
           
Frank Entertainment Group, LLC
(1%)*		 Movie Theatre and Family Entertainment Operator 
Senior Note (6% Cash, Due 06/19)(6)
 11,330,010
 10,746,494
 6,541,000
  
Second Lien Term Note (2.5% Cash, Due 09/19)(6)
 2,923,484
 2,879,479
 —
  Redeemable Preferred Units (2,800,000 units)   2,800,000
 —
  Class B Redeemable Preferred Units (2,800,000 units)   2,800,000
 —
  Class A Common Units (606,552 units)   1,000,000
 —
    14,253,494
 20,225,973
 6,541,000
           
FrontStream Holdings, LLC (1%)* Payment and Donation Management Product Service Provider 
Subordinated Note (LIBOR + 6.0%, 7.3% Cash, Due 12/20)(6)(8)
 14,644,622
 14,023,389
 7,414,000
  Common Stock (1,000 shares)   500,000
 —
    14,644,622
 14,523,389
 7,414,000
           

Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
FSS Buyer LLC (0.9%)*(7)
Technology
First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.5% Cash, Acquired 08/21, Due 08/28)(8) (10)
$6,912,504 $6,772,675 $6,789,614 
LP Interest (1,160.9 units, Acquired 08/21)11,609 29,998 
LP Units (5,104.32 units, Acquired 08/21)51,043 131,891 
6,912,504 6,835,327 6,951,503 
GTM Intermediate Holdings, Inc. (2.0%)*(7) (25)
Medical Equipment ManufacturerSecond Lien Loan (11.0% Cash, 1.0% PIK, Acquired 12/20, Due 12/24)11,500,057 11,448,900 11,500,057 
Series A Preferred Units (1,434,472.41 units)2,166,331 2,290,223 
Series C Preferred Units (715,649.59 units)1,080,770 1,184,037 
11,500,057 14,696,001 14,974,317 
Gulf Finance, LLC (0.1%)*(8) (9)
Oil & Gas Exploration & ProductionFirst Lien Senior Secured Term Loan (LIBOR + 6.75%, 7.8% Cash, Acquired 11/21, Due 08/26)831,512 798,761 774,345 
831,512 798,761 774,345 
Hawaiian Airlines 2020-1 Class B Pass Through Certificates (1.0%)*AirlinesStructured Secured Note - Class B (11.3% Cash, Acquired 08/20, Due 09/25)6,092,593 6,092,593 7,213,140 
6,092,593 6,092,593 7,213,140 
Heartland Veterinary Partners, LLC (1.2%)*(7)
HealthcareSubordinated Term Loan (11.0% PIK, Acquired 11/21, Due 11/28)9,342,857 9,096,286 9,092,857 
9,342,857 9,096,286 9,092,857 
Heartland, LLC (1.9%)*(7) (8) (10)
Business ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 08/19, Due 08/25)14,075,213 13,976,486 13,793,708 
14,075,213 13,976,486 13,793,708 
Heavy Construction Systems Specialists, LLC (1.0%)*(7) (8) (10)
TechnologyFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.5% Cash, Acquired 11/21, Due 11/27)7,368,228 7,198,830 7,220,864 
Revolver (LIBOR + 5.75%, 6.5% Cash, Acquired 11/21, Due 11/27)(54,310)(52,635)
7,368,228 7,144,520 7,168,229 
Heilbron (f/k/a Sucsez (Bolt Bidco B.V.)) (1.2%)*(3) (7) (8) (15)
InsuranceFirst Lien Senior Secured Term Loan (EURIBOR + 5.0%, 5.0% Cash, Acquired 09/19, Due 09/26)8,789,013 9,380,255 8,611,809 
8,789,013 9,380,255 8,611,809 
Highpoint Global LLC (0.7%)*(7) (25)
Government ServicesSecond Lien Note (12.0% Cash, 2.0% PIK, Acquired 12/20, Due 09/22)5,416,251 5,395,020 5,416,251 
5,416,251 5,395,020 5,416,251 
Home Care Assistance, LLC (0.5%)*(7) (8) (10)
Healthcare & PharmaceuticalsFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 03/21, Due 03/27)3,829,723 3,761,710 3,753,128 
3,829,723 3,761,710 3,753,128 
HTI Technology & Industries (3.0%)* (7) (25)
Electronic Component ManufacturingSecond Lien Note (12.0% Cash, 4.8% PIK, Acquired 12/20, Due 09/24)22,746,455 22,095,749 22,215,294 
22,746,455 22,095,749 22,215,294 
HW Holdco, LLC (Hanley Wood LLC) (1.8%)*(7) (8) (9)
AdvertisingFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/18, Due 12/24)13,436,978 13,189,273 13,136,978 
13,436,978 13,189,273 13,136,978 
IGL Holdings III Corp. (0.6%)*(7) (8) (10)
Commercial PrintingFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/20, Due 11/26)4,323,538 4,230,531 4,268,131 
4,323,538 4,230,531 4,268,131 
IM Analytics Holding, LLC (d/b/a NVT) (0.9%)*(7) (8)
Electronic Instruments & Components
First Lien Senior Secured Term Loan (LIBOR + 7.0%, 8.0% Cash, Acquired 11/19, Due 11/23)(10)
8,126,270 8,084,935 6,602,594 
Warrant (68,950 units, Acquired 11/19)— — 
8,126,270 8,084,935 6,602,594 
IM Square (0.9%)*(3) (7) (8) (15)
Banking, Finance, Insurance & Real EstateFirst Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 05/21, Due 04/28)7,050,638 7,231,653 6,937,828 
7,050,638 7,231,653 6,937,828 
F-15


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments — (Continued)
December 31, 2017
Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
Frontstreet Facility Solutions, Inc. (1%)* Retail, Restaurant and Commercial Facilities Maintenance Subordinated Note (13% Cash, Due 03/21) $8,462,629
 $8,447,172
 $3,750,000
  Series A Convertible Preferred Stock (60,000 shares)   250,575
 —
  Series B Convertible Preferred Stock (20,000 shares)   500,144
 —
  Common Stock (27,890 shares)   279
 —
    8,462,629
 9,198,170
 3,750,000
           
           
Subtotal Control Investments   37,360,745
 62,375,532
 37,988,000
         
Total Investments, December 31, 2017 (158%)*   $1,010,535,846
 $1,121,625,845
 $1,016,284,346
Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
Infoniqa Holdings GmbH (1.2%)*(3) (7) (8) (14)
TechnologyFirst Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 11/21, Due 11/28)$9,243,120 $8,946,900 $8,988,934 
9,243,120 8,946,900 8,988,934 
Innovad Group II BV (0.8%)*(3) (7) (8) (14)
Beverage, Food & TobaccoFirst Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 04/21, Due 04/28)6,255,611 6,320,818 5,875,843 
6,255,611 6,320,818 5,875,843 
INOS 19-090 GmbH (0.7%)*(3) (7) (8) (14)
Aerospace & DefenseFirst Lien Senior Secured Term Loan (EURIBOR + 6.13%, 6.1% Cash, Acquired 12/20, Due 12/27)5,271,103 5,495,469 5,263,297 
5,271,103 5,495,469 5,263,297 
ISS#2, LLC (d/b/a Industrial Services Solutions) (0.9%)*(7) (8) (10)
Commercial Services & SuppliesFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 02/20, Due 02/26)6,736,785 6,639,355 6,406,683 
6,736,785 6,639,355 6,406,683 
ITI Intermodal, Inc. (0.1%)*(7) (8)
Transportation Services
First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/21, Due 12/27)(9)
721,407 704,989 704,918 
Revolver (LIBOR + 4.75%, 5.8% Cash, Acquired 12/21, Due 12/27)(10)
(2,468)(2,480)
721,407 702,521 702,438 
Jade Bidco Limited (Jane's)
(0.3%)*(3) (7) (8) (11)
Aerospace & DefenseFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.5% Cash, 2.0% PIK, Acquired 11/19, Due 12/26)2,315,363 2,257,104 2,315,363 
2,315,363 2,257,104 2,315,363 
Jaguar Merger Sub Inc. (0.3%)*(7) (8) (10)
Other FinancialFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 12/21, Due 09/24)2,542,556 2,486,904 2,486,264 
Revolver (LIBOR + 5.25%, 6.3% Cash, Acquired 12/21, Due 09/24)(6,055)(6,127)
2,542,556 2,480,849 2,480,137 
Jedson Engineering, Inc. (0.4%)*(7) (25)
Engineering & Construction ManagementFirst Lien Loan (12.0% Cash, Acquired 12/20, Due 06/24)2,650,000 2,650,000 2,650,000 
2,650,000 2,650,000 2,650,000 
JetBlue 2019-1 Class B Pass Through Trust (0.6%)*AirlinesStructured Secured Note - Class B (8.0% Cash, Acquired 08/20, Due 11/27)4,165,079 4,165,079 4,805,415 
4,165,079 4,165,079 4,805,415 
JF Acquisition, LLC (0.5%)*(7) (8) (10)
AutomotiveFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 05/21, Due 07/24)3,865,876 3,763,334 3,711,241 
3,865,876 3,763,334 3,711,241 
Kano Laboratories LLC (1.2%)*(7)
Chemicals, Plastics & Rubber
First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 11/20, Due 11/26)(8) (11)
9,001,571 8,773,232 8,727,599 
Partnership Equity (203.2 units, Acquired 11/20)203,198 205,053 
9,001,571 8,976,430 8,932,652 
Kene Acquisition, Inc. (En Engineering) (1.0%)*(7) (8) (9)
Oil & Gas Equipment & ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 08/19, Due 08/26)7,224,659 7,124,765 7,080,166 
7,224,659 7,124,765 7,080,166 
Kid Distro Holdings, LLC (1.3%)*(7)
Media & Entertainment
First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 10/21, Due 10/27)(8) (10)
9,361,702 9,167,507 9,174,468 
Partnership Equity (637,677.11 units, Acquired 10/21)638,298 637,677 
9,361,702 9,805,805 9,812,145 
Kona Buyer, LLC (1.2%)*(7) (8) (10)
High Tech IndustriesFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 12/20, Due 12/27)8,993,949 8,785,068 8,993,949 
8,993,949 8,785,068 8,993,949 
LAF International (0.2%)*(3) (7) (8) (15)
Healthcare & PharmaceuticalsFirst Lien Senior Secured Term Loan (EURIBOR + 6.0%, 6.0% Cash, Acquired 03/21, Due 03/28)1,478,360 1,543,254 1,446,412 
1,478,360 1,543,254 1,446,412 
F-16


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
Lambir Bidco Limited (0.9%)*(3) (7)
Healthcare
First Lien Senior Secured Term Loan (EURIBOR + 6.0%, 6.0% Cash, Acquired 12/21, Due 12/28)(8) (14)
$5,016,807 $4,770,361 $4,809,863 
Second Lien Senior Secured Term Loan (12.0% PIK, Acquired 12/21, Due 06/29)1,417,248 1,363,346 1,374,730 
Revolver (EURIBOR + 6.0%, 6.0% Cash, Acquired 12/21, Due 12/24)(8) (14)
313,550 292,375 294,737 
6,747,605 6,426,082 6,479,330 
Learfield Communications, LLC (1.1%)*Broadcasting
First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, Acquired 08/20, Due 12/23)(8) (9)
135,377 95,441 127,861 
First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.0% Cash, 10.2% PIK, Acquired 08/20, Due 12/23)(10)
7,953,923 7,909,077 7,958,934 
8,089,300 8,004,518 8,086,795 
Legal Solutions Holdings (0.8%)*(7) (24) (25)
Business ServicesSenior Subordinated Loan (16.0% PIK, Acquired 12/20, Due 03/22)11,835,622 10,129,207 5,917,811 
11,835,622 10,129,207 5,917,811 
LivTech Purchaser, Inc. (0.1%)*(7) (8) (10)
Business ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 01/21, Due 12/25)918,023 907,776 910,023 
918,023 907,776 910,023 
Marmoutier Holding B.V. (0.3%)*(3) (7) (8) (14)
Consumer ProductsFirst Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 12/21, Due 12/28)1,944,392 1,872,008 1,879,782 
Revolver (EURIBOR + 5.0%, 5.0% Cash, Acquired 12/21, Due 06/27)(4,417)(4,456)
1,944,392 1,867,591 1,875,326 
MC Group Ventures Corporation (0.6%)*(7)
Business Services
First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 07/21, Due 06/27)(8) (10)
3,687,290 3,598,064 3,655,758 
Partnership Units (746.66 units, Acquired 06/21)746,662 761,119 
3,687,290 4,344,726 4,416,877 
Media Recovery, Inc. (SpotSee) (1.0%)*(7) (8)
Containers, Packaging & Glass
First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 11/19, Due 11/25)(10)
2,933,019 2,892,443 2,933,019 
First Lien Senior Secured Term Loan (GBP LIBOR + 6.0%, 7.0% Cash, Acquired 12/20, Due 11/25)(12)
4,442,371 4,302,804 4,442,371 
7,375,390 7,195,247 7,375,390 
Medical Solutions Parent Holdings, Inc. (0.6%)*(8) (10)
HealthcareSecond Lien Senior Secured Term Loan (LIBOR + 7.0%, 7.5% Cash, Acquired 11/21, Due 11/29)4,421,053 4,377,383 4,362,120 
4,421,053 4,377,383 4,362,120 
MNS Buyer, Inc. (0.1%)*(7)
Construction & Building
First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 08/21, Due 08/27)(8) (9)
920,769 903,330 904,707 
Partnership Units (76.92 Units, Acquired 08/21)— 76,923 78,462 
920,769 980,253 983,169 
Modern Star Holdings Bidco Pty Limited. (1.1%)*(3) (7) (8) (19)
Non-durable Consumer GoodsFirst Lien Senior Secured Term Loan (BBSY + 6.25%, 6.8% Cash, Acquired 12/20, Due 12/26)8,368,295 8,280,623 8,299,196 
8,368,295 8,280,623 8,299,196 
MSG National Properties (0.3%)*(3) (7) (8) (10)
Hotel, Gaming, & LeisureFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.0% Cash, Acquired 11/20, Due 11/25)2,437,141 2,378,186 2,485,884 
2,437,141 2,378,186 2,485,884 
Murphy Midco Limited (0.7%)*(3) (7) (8) (13)
Media, Diversified & ProductionFirst Lien Senior Secured Term Loan (GBP LIBOR + 4.75%, 4.8% Cash, Acquired 11/20, Due 11/27)5,252,188 4,951,281 5,104,200 
5,252,188 4,951,281 5,104,200 
Music Reports, Inc. (1.0%)*(7) (8) (10)
Media & EntertainmentFirst Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 08/20, Due 08/26)7,462,000 7,287,999 7,312,760 
7,462,000 7,287,999 7,312,760 
F-17


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
Narda Acquisitionco., Inc. (0.8%)*(7)
Aerospace & Defense
First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 12/21, Due 12/27)(8) (10)
$5,679,612 $5,581,205 $5,580,218 
Revolver (LIBOR + 5.25%, 6.3% Cash, Acquired 12/21, Due 12/27)(8) (10)
(22,669)(22,937)
Class A Preferred Stock (4,587.38 shares, Acquired 12/21)458,738 458,738 
Class B Common Stock (509.71 shares, Acquired 12/21)50,971 50,971 
5,679,612 6,068,245 6,066,990 
Navia Benefit Solutions, Inc. (0.4%)* (7) (8) (10)
Healthcare & PharmaceuticalsFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 02/21, Due 02/27)2,727,200 2,668,002 2,703,272 
2,727,200 2,668,002 2,703,272 
Nexus Underwriting Management Limited (0.2%)*(3) (7) (8) (17)
Other FinancialFirst Lien Senior Secured Term Loan (SONIA + 5.25%, 5.3% Cash, Acquired 12/21, Due 10/28)1,691,418 1,619,658 1,630,029 
First Lien Senior Secured Term Loan (SONIA + 5.25%, 5.3% Cash, Acquired 12/21, Due 04/22)103,483 102,210 100,896 
1,794,901 1,721,868 1,730,925 
NGS US Finco, LLC (f/k/a Dresser Natural Gas Solutions) (0.6%)*(7) (8) (9)
Energy Equipment & ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 10/18, Due 10/25)4,752,671 4,734,086 4,676,629 
4,752,671 4,734,086 4,676,629 
Northstar Recycling, LLC (0.3%)*(7) (8) (10)
Environmental IndustriesFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 10/21, Due 09/27)2,500,000 2,451,774 2,450,000 
2,500,000 2,451,774 2,450,000 
OA Buyer, Inc. (1.1%)*(7)
Healthcare
First Lien Senior Secured Term Loan (LIBOR + 6.0%, 6.8% Cash, Acquired 12/21, Due 12/28)(8) (10)
8,500,512 8,331,137 8,330,502 
Revolver (LIBOR + 6.0%, 6.8% Cash, Acquired 12/21, Due 12/28)(8) (10)
(26,502)(26,625)
Partnership Units (210,920.11 units, Acquired 12/21)210,920 210,920 
8,500,512 8,515,555 8,514,797 
Odeon Cinemas Group Limited (0.5%)*(3) (7)
Hotel, Gaming, & LeisureFirst Lien Senior Secured Term Loan (10.8% Cash, Acquired 02/21, Due 08/23)3,953,779 4,054,629 4,032,855 
3,953,779 4,054,629 4,032,855 
OG III B.V. (0.4%)*(3) (7) (8) (14)
Containers & Glass ProductsFirst Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 06/21, Due 06/28)2,916,043 2,996,732 2,842,746 
2,916,043 2,996,732 2,842,746 
Omni Intermediate Holdings, LLC (1.5%)*(7) (8) (9)
TransportationFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/20, Due 12/26)11,831,351 11,460,888 11,491,251 
11,831,351 11,460,888 11,491,251 
Options Technology Ltd.
(0.3%)*(3) (7) (8) (10)
Computer ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 12/19, Due 12/25)2,313,396 2,281,827 2,267,128 
2,313,396 2,281,827 2,267,128 
Oracle Vision Bidco Limited (0.4%)*(3) (7) (8) (17)
HealthcareFirst Lien Senior Secured Term Loan (SONIA + 5.25%, 5.3% Cash, Acquired 06/21, Due 05/28)3,100,064 3,140,808 3,027,730 
3,100,064 3,140,808 3,027,730 
Origin Bidco Limited (0.1%)*(3) (7) (8)
Technology
First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 06/21, Due 06/28)(10)
597,094 581,734 583,730 
First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 06/21, Due 06/28)(14)
377,231 393,795 368,788 
974,325 975,529 952,518 
OSP Hamilton Purchaser, LLC (0.3%)*(7) (8)
Technology
First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/21, Due 12/27)(9)
2,280,849 2,235,301 2,235,232 
Revolver (LIBOR + 5.75%, 6.8% Cash, Acquired 12/21, Due 12/27)(10)
(3,725)(3,731)
2,280,849 2,231,576 2,231,501 
Pacific Health Supplies Bidco Pty Limited (1.1%)*(3) (7) (8) (20)
Healthcare & PharmaceuticalsFirst Lien Senior Secured Term Loan (BBSY + 6.0%, 6.5% Cash, Acquired 12/20, Due 12/25)8,778,969 8,730,244 8,529,382 
8,778,969 8,730,244 8,529,382 
F-18


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
Pare SAS (SAS Maurice MARLE) (0.6%)*(3) (7) (14)
Health Care EquipmentFirst Lien Senior Secured Term Loan (EURIBOR + 6.75%, 6.8% Cash, Acquired 12/19, Due 12/26)$4,637,501 $4,477,701 $4,637,501 
4,637,501 4,477,701 4,637,501 
Patriot New Midco 1 Limited (Forensic Risk Alliance) (0.9%)*(3) (7) (8)
Diversified Financial Services
First Lien Senior Secured Term Loan (LIBOR + 6.75%, 7.8% Cash, Acquired 02/20, Due 02/27)(10)
3,764,151 3,685,238 3,591,000 
First Lien Senior Secured Term Loan (EURIBOR + 6.75%, 6.8% Cash, Acquired 02/20, Due 02/27)(14)
3,215,992 3,016,760 3,068,057 
6,980,143 6,701,998 6,659,057 
PDQ.Com Corporation (1.2%)*(7)
Business Equipment & Services
First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 08/21, Due 08/27)(8) (10)
9,061,874 8,710,392 8,706,642 
Class A-2 Partnership Units (26.32 units, Acquired 08/21)28,795 29,003 
9,061,874 8,739,187 8,735,645 
Permaconn Bidco Ltd (2.0%)*(3) (7) (8) (19)
Tele-communicationsFirst Lien Senior Secured Term Loan (BBSY + 6.5%, 6.5% Cash, Acquired 12/21, Due 12/27)15,011,565 14,385,637 14,598,747 
15,011,565 14,385,637 14,598,747 
Polara Enterprises, LLC (0.6%)*(7)
Capital Equipment
First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/21, Due 12/27)(8) (10)
4,242,634 4,158,730 4,157,781 
Revolver (LIBOR + 4.75%, 5.8% Cash, Acquired 12/21, Due 12/27)(8) (10)
(10,763)(10,905)
Partnership Units (3,820.44 units, Acquired 12/21)382,044 382,044 
4,242,634 4,530,011 4,528,920 
Policy Services Company, LLC (5.9%)*(7)
Property & Casualty Insurance
First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, 4.0% PIK, Acquired 12/21, Due 06/26)(8) (10)
45,830,921 44,017,961 44,007,782 
Warrants - Class A (28,260 units, Acquired 12/21)— — 
Warrants - Class B (9,537 units, Acquired 12/21)— — 
Warrants - Class CC (980 units, Acquired 12/21)— — 
Warrants - Class D (2,520 units, Acquired 12/21)— — 
45,830,921 44,017,961 44,007,782 
Premium Franchise Brands, LLC (2.0%)*(7) (8) (10)
Research & Consulting ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/20, Due 12/26)14,852,588 14,597,414 14,555,536 
14,852,588 14,597,414 14,555,536 
Premium Invest (0.5%)*(3) (7) (8) (14)
Brokerage, Asset Managers & ExchangesFirst Lien Senior Secured Term Loan (EURIBOR + 6.0%, 6.0% Cash, Acquired 06/21, Due 06/28)4,093,919 4,113,303 4,009,539 
4,093,919 4,113,303 4,009,539 
Preqin MC Limited (0.4%)*(3) (7) (8) (23)
Banking, Finance, Insurance & Real EstateFirst Lien Senior Secured Term Loan (SOFR + 5.5%, 5.5% Cash, Acquired 08/21, Due 07/28)2,789,005 2,695,392 2,763,904 
2,789,005 2,695,392 2,763,904 
Process Equipment, Inc. (ProcessBarron) (0.8%)*(7) (8) (10)
Industrial Air & Material Handling EquipmentFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 03/19, Due 03/25)6,173,594 6,115,253 5,945,171 
6,173,594 6,115,253 5,945,171 
Professional Datasolutions, Inc. (PDI) (0.2%)*(7) (8) (10)
Application SoftwareFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 03/19, Due 10/24)1,836,485 1,833,488 1,808,938 
1,836,485 1,833,488 1,808,938 
Protego Bidco B.V. (0.5%)*(3) (7) (8) (14)
Aerospace & DefenseFirst Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 03/21, Due 03/27)2,227,493 2,268,899 2,194,658 
First Lien Senior Secured Term Loan (EURIBOR + 6.0%, 6.0% Cash, Acquired 03/21, Due 03/28)1,547,820 1,560,666 1,494,928 
3,775,313 3,829,565 3,689,586 
QPE7 SPV1 BidCo Pty Ltd (0.2%)*(3) (7) (8) (20)
Consumer CyclicalFirst Lien Senior Secured Term Loan (BBSY + 5.5%, 6.0% Cash, Acquired 09/21, Due 09/26)1,631,514 1,563,925 1,604,782 
1,631,514 1,563,925 1,604,782 
Questel Unite (0.9%)*(3) (7) (8) (10)
Business ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 6.8% Cash, Acquired 12/20, Due 12/27)6,892,270 6,802,056 6,850,916 
6,892,270 6,802,056 6,850,916 
F-19


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
Recovery Point Systems, Inc.
(1.6%)*(7)
Technology
First Lien Senior Secured Term Loan (LIBOR + 6.5%, 7.5% Cash, Acquired 08/20, Due 08/26)(8) (10)
$11,648,329 $11,460,318 $11,648,329 
Partnership Equity (187,235 units, Acquired 03/21)187,235 149,788 
11,648,329 11,647,553 11,798,117 
Renovation Parent Holdings, LLC
(0.7%)*(7)
Home Furnishings
First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 11/21, Due 11/27)(8) (11)
4,854,369 4,735,241 4,733,010 
Partnership Equity (197,368.42 units, Acquired 11/21)197,368 203,289 
4,854,369 4,932,609 4,936,299 
REP SEKO MERGER SUB LLC
(1.0%)* (7) (8) (10)
Air Freight & LogisticsFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/20, Due 12/26)7,614,000 7,416,155 7,477,972 
7,614,000 7,416,155 7,477,972 
Resonetics, LLC (0.5%)*(7) (8) (10)
Health Care EquipmentSecond Lien Senior Secured Term Loan (LIBOR + 7.0%, 7.8% Cash, Acquired 04/21, Due 04/29)4,010,677 3,933,633 3,930,463 
4,010,677 3,933,633 3,930,463 
Reward Gateway (UK) Ltd (0.4%)*(3) (7) (8) (17)
Precious Metals & MineralsFirst Lien Senior Secured Term Loan (SONIA + 6.75%, 6.8% Cash, Acquired 08/21, Due 06/28)2,869,039 2,806,803 2,775,848 
2,869,039 2,806,803 2,775,848 
Riedel Beheer B.V. (0.3%)*(3) (7) (8) (14)
Food & BeverageFirst Lien Senior Secured Term Loan (EURIBOR + 5.5%, 5.5% Cash, Acquired 12/21, Due 12/28)1,898,944 1,834,819 1,842,512 
Revolver (EURIBOR + 5.5%, 5.5% Cash, Acquired 12/21, Due 06/28)(4,558)(4,594)
Super Senior Secured Term Loan (EURIBOR + 5.5%, 5.5% Cash, Acquired 12/21, Due 12/28)229,711 222,459 223,394 
2,128,655 2,052,720 2,061,312 
RPX Corporation (1.0%)*(7) (8) (10)
Research & Consulting ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 10/20, Due 10/25)7,611,875 7,425,686 7,455,360 
7,611,875 7,425,686 7,455,360 
Ruffalo Noel Levitz, LLC
(1.3%)*(7) (8) (10)
Media ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 01/19, Due 05/24)9,543,326 9,524,259 9,543,326 
9,543,326 9,524,259 9,543,326 
Safety Products Holdings, LLC (1.6%)*(7)
Non-durable Consumer Goods
First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 12/20, Due 12/26)(8) (9)
12,025,850 11,797,759 11,755,269 
Preferred Stock (372.1 shares, Acquired 12/20)372,088 509,836 
12,025,850 12,169,847 12,265,105 
Scaled Agile, Inc. (0.2%)*(7) (8) (10)
Research & Consulting ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 12/21, Due 12/28)1,747,991 1,705,099 1,704,707 
Revolver (LIBOR + 5.5%, 6.3% Cash, Acquired 12/21, Due 12/28)(6,668)(6,716)
1,747,991 1,698,431 1,697,991 
Serta Simmons Bedding LLC
(1.4%)*(8) (9)
Home FurnishingsSuper Priority First Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23)7,350,068 7,228,566 7,409,162 
Super Priority Second Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23)3,607,287 3,374,478 3,364,805 
10,957,355 10,603,044 10,773,967 
SISU ACQUISITIONCO., INC. (0.9%)*(7) (8) (10)
Aerospace & DefenseFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 12/20, Due 12/26)7,009,139 6,869,135 6,770,828 
7,009,139 6,869,135 6,770,828 
Smartling, Inc. (2.2%)*(7) (8) (10)
TechnologyFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/21, Due 11/27)16,470,588 16,102,057 16,094,118 
Revolver (LIBOR + 5.75%, 6.8% Cash, Acquired 11/21, Due 11/27)(22,958)(23,529)
16,470,588 16,079,099 16,070,589 
Smile Brands Group Inc.
(0.6%)*(7) (8) (10)
Health Care ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.3% Cash, Acquired 10/18, Due 10/25)4,593,488 4,570,887 4,553,465 
First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.3% Cash, Acquired 12/20, Due 10/25)(11,854)(5,704)
4,593,488 4,559,033 4,547,761 
F-20


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
SN BUYER, LLC (2.5%)*(7) (8) (9)
Health Care ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/20, Due 12/26)$18,394,134 $18,079,537 $18,394,134 
18,394,134 18,079,537 18,394,134 
Springbrook Software (SBRK Intermediate, Inc.) (1.4%)*(7) (8) (10)
Enterprise Software & ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 12/19, Due 12/26)10,345,662 10,179,244 10,345,662 
10,345,662 10,179,244 10,345,662 
SPT Acquico Limited (0.1%)*(3) (7) (8) (10)
High Tech IndustriesFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 01/21, Due 12/27)658,312 643,744 658,312 
658,312 643,744 658,312 
SSCP Pegasus Midco Limited (0.4%)*(3) (7) (8) (12)
Healthcare & PharmaceuticalsFirst Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 6.8% Cash, Acquired 12/20, Due 11/27)2,754,170 2,487,755 2,722,148 
2,754,170 2,487,755 2,722,148 
Starnmeer B.V. (1.0%)*(3) (7) (8) (10)
TechnologyFirst Lien Senior Secured Term Loan (LIBOR + 6.4%, 6.9% Cash, Acquired 10/21, Due 04/27)7,500,000 7,390,652 7,387,500 
7,500,000 7,390,652 7,387,500 
Superjet Buyer, LLC (3.0%)*(7) (8) (10)
TechnologyFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.5% Cash, Acquired 12/21, Due 12/27)23,174,707 22,711,214 22,711,213 
Revolver (LIBOR + 5.75%, 6.5% Cash, Acquired 12/21, Due 12/27)(36,506)(36,506)
23,174,707 22,674,708 22,674,707 
Syniverse Holdings, Inc. (2.3%)*(8) (10)
Technology DistributorsFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 08/18, Due 03/23)17,314,396 16,493,137 17,191,810 
17,314,396 16,493,137 17,191,810 
Syntax Systems Ltd (0.3%)*(3) (7) (8) (9)
TechnologyFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 11/21, Due 10/28)2,055,730 2,018,017 2,015,842 
Revolver (LIBOR + 5.5%, 6.3% Cash, Acquired 11/21, Due 10/26)442,229 432,475 432,117 
2,497,959 2,450,492 2,447,959 
TA SL Cayman Aggregator Corp.
(0.3%)*(7)
TechnologySubordinated Term Loan (8.8% PIK, Acquired 07/21, Due 07/28)1,994,681 1,957,088 1,960,329 
Common Stock (1,227.79 shares, Acquired 07/21)49,876 64,911 
1,994,681 2,006,964 2,025,240 
Techone B.V. (1.1%)*(3) (7) (8) (14)
TechnologyFirst Lien Senior Secured Term Loan (EURIBOR + 5.5%, 5.5% Cash, Acquired 11/21, Due 11/28)8,725,849 8,427,621 8,441,314 
Revolver (EURIBOR + 5.5%, 5.5% Cash, Acquired 11/21, Due 05/28)108,060 96,551 97,254 
8,833,909 8,524,172 8,538,568 
Tencarva Machinery Company, LLC (0.7%)*(7) (8) (10)
Capital EquipmentFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 12/21, Due 12/27)5,485,512 5,374,529 5,374,012 
Revolver (LIBOR + 5.5%, 6.5% Cash, Acquired 12/21, Due 12/27)(19,644)(19,750)
5,485,512 5,354,885 5,354,262 
The Caprock Group, Inc. (aka TA/TCG Holdings, LLC) (0.5%)*(7)
Brokerage, Asset Managers & Exchanges
First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 10/21, Due 12/27)(8) (10)
847,007 776,281 775,960 
Revolver (LIBOR + 4.25%, 5.3% Cash, Acquired 10/21, Due 12/27)(8) (10)
(14,394)(14,466)
Subordinated Term Loan (7.8% PIK, Acquired 10/21, Due 10/28)3,333,333 3,267,904 3,266,667 
4,180,340 4,029,791 4,028,161 
The Hilb Group, LLC
(2.7%)*(7) (8) (10)
Insurance BrokerageFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/19, Due 12/26)20,279,107 19,879,692 19,873,525 
First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 12/19, Due 12/26)54,535 (1,347)(2,020)
20,333,642 19,878,345 19,871,505 
Total Safety U.S. Inc. (0.9%)*(8) (11)
Diversified Support ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 11/19, Due 08/25)6,583,183 6,393,013 6,482,394 
6,583,183 6,393,013 6,482,394 
F-21


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
Transit Technologies LLC
(0.8%)*(7) (8) (10)
SoftwareFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 02/20, Due 02/25)$6,035,305 $5,945,913 $5,845,889 
6,035,305 5,945,913 5,845,889 
Transportation Insight, LLC (1.5%)*(7) (8) (9)
Air Freight & LogisticsFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.6% Cash, Acquired 08/18, Due 12/24)11,329,748 11,260,323 11,159,802 
11,329,748 11,260,323 11,159,802 
Trident Maritime Systems, Inc. (2.0%)*(7) (8) (10)
Aerospace & DefenseFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 02/21, Due 02/27)14,887,500 14,665,396 14,887,500 
14,887,500 14,665,396 14,887,500 
Truck-Lite Co., LLC (2.0%)*(7) (8) (10)
Automotive Parts & EquipmentFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/19, Due 12/26)15,001,601 14,622,710 14,610,774 
15,001,601 14,622,710 14,610,774 
Trystar, LLC (1.6%)*(7)
Power Distribution Solutions
First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 09/18, Due 09/23)(8) (10)
11,987,848 11,777,295 11,778,060 
Class A LLC Units (440.97 units, Acquired 09/18)480,874 412,027 
11,987,848 12,258,169 12,190,087 
Turbo Buyer, Inc. (1.1%)*(7) (8) (10)
Finance CompaniesFirst Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 11/21, Due 12/25)8,430,000 8,226,186 8,220,000 
8,430,000 8,226,186 8,220,000 
Turf Products, LLC (1.2%)*(7) (25)
Landscaping & Irrigation Equipment DistributorSenior Subordinated Debt (10.0% Cash, Acquired 12/20, Due 10/23)8,697,056 8,383,962 8,627,480 
8,697,056 8,383,962 8,627,480 
Turnberry Solutions, Inc. (0.6%)*(7) (8) (10)
Consumer CyclicalFirst Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 07/21, Due 09/26)4,500,000 4,406,122 4,422,501 
4,500,000 4,406,122 4,422,501 
U.S. Gas & Electric, Inc. (0.2%)*(7) (25)
Energy ServicesSecond Lien Loan (9.5% Cash, Acquired 12/20, Due 07/25)2,285,250 1,785,250 1,785,250 
Second Lien Loan (9.5% Cash, Acquired 12/20, Due 07/25)(26)
2,485,469 — — 
4,770,719 1,785,250 1,785,250 
U.S. Silica Company (0.2%)*(3) (8) (9)
Metal & Glass ContainersFirst Lien Senior Secured Term Loan (LIBOR + 4.0%, 5.0% Cash, Acquired 08/18, Due 05/25)1,472,106 1,474,267 1,436,687 
1,472,106 1,474,267 1,436,687 
UKFast Leaders Limited (1.6%)*(3) (7) (8) (16)
TechnologyFirst Lien Senior Secured Term Loan (SONIA + 7.0%, 7.1% Cash, Acquired 09/20, Due 9/27)12,311,660 11,399,095 12,090,050 
12,311,660 11,399,095 12,090,050 
USLS Acquisition, Inc. (f/k/a US Legal Support, Inc.) (2.2%)*(7) (8) (10)
Legal ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/18, Due 11/24)16,221,755 16,065,447 16,221,755 
16,221,755 16,065,447 16,221,755 
Utac Ceram (0.7%)*(3) (7) (8)
Business Services
First Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 09/20, Due 09/27)(14)
1,705,800 1,706,086 1,673,224 
First Lien Senior Secured Term Loan (LIBOR + 5.25%, 5.5% Cash, Acquired 02/21, Due 09/27)(10)
3,517,700 3,455,739 3,450,522 
5,223,500 5,161,825 5,123,746 
Validity, Inc. (0.6%)*(7) (8) (9)
IT Consulting & Other ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.8% Cash, Acquired 07/19, Due 05/25)4,783,146 4,686,773 4,764,014 
4,783,146 4,686,773 4,764,014 
VistaJet Pass Through Trust 2021-1B (0.7%)*AirlinesStructured Secured Note - Class B (6.3% Cash, Acquired 11/21, Due 02/29)5,000,000 5,000,000 4,905,485 
5,000,000 5,000,000 4,905,485 
Vital Buyer, LLC (1.1%)*(7)
Technology
First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 06/21, Due 06/28)(8) (10)
7,802,143 7,656,443 7,676,443 
Partnership Units (16,442.9 units, Acquired 06/21)164,429 170,924 
7,802,143 7,820,872 7,847,367 
F-22


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
Portfolio Company(6)
Industry
Type of Investment(1) (2)
Principal
Amount		CostFair
Value
W2O Holdings, Inc. (0.3%)*(7) (8) (10)
Healthcare TechnologyFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 10/20, Due 06/25)$2,152,276 $2,090,468 $2,152,276 
2,152,276 2,090,468 2,152,276 
Woodland Foods, LLC (1.8%)*(7)
Food & Beverage
First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 12/21, Due 12/27)(8) (10)
11,512,234 11,284,684 11,281,989 
Revolver (LIBOR + 5.5%, 6.5% Cash, Acquired 12/21, Due 12/27)(8) (10)
172,203 127,886 127,362 
Common Stock (1,663,307.18 shares, Acquired 12/21)1,663,307 1,663,307 
11,684,437 13,075,877 13,072,658 
World 50, Inc. (1.6%)*(7) (8) (9)
Professional ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 01/20, Due 01/26)3,279,976 3,202,135 3,279,976 
First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 09/20, Due 01/26)9,008,913 8,849,217 8,873,780 
12,288,889 12,051,352 12,153,756 
Subtotal Non–Control / Non–Affiliate Investments (200.9%)1,518,707,323 1,494,030,725 1,490,112,663 
Affiliate Investments: (4)
Eclipse Business Capital, LLC (13.4%)*(7)
Banking, Finance, Insurance, & Real Estate
Second Lien Senior Secured Term Loan (7.5% Cash, Acquired 07/21, Due 07/28)4,545,455 4,502,418 4,738,230 
Revolver (LIBOR + 7.25%, Acquired 07/21, Due 07/28)(10)
1,818,182 1,690,996 1,818,182 
LLC Units (89,447,396 units, Acquired 07/21)89,849,519 92,667,503 
6,363,637 96,042,933 99,223,915 
Jocassee Partners LLC (5.1%)*(3)
Investment Funds & Vehicles9.1% Member Interest, Acquired 06/1930,158,270 37,601,490 
30,158,270 37,601,490 
JSC Tekers Holdings (0.8%)*(3) (7) (25)
Real Estate ManagementPreferred Stock (9,159,085 shares, Acquired 12/20)4,753,000 6,197,037 
Common Stock (3,201 shares, Acquired 12/20)— — 
4,753,000 6,197,037 
Security Holdings B.V. (6.3%)*(3) (7) (25)
Electrical EngineeringBridge Loan (5.0% PIK, Acquired 12/20, Due 02/27)5,451,205 5,451,207 5,451,205 
Senior Subordinated Loan (3.1% PIK, Acquired 12/20, Due 05/22)9,524,617 9,524,617 9,524,617 
Senior Unsecured Term Loan (6.0% Cash, 9.0% PIK, Acquired 04/21, Due 04/25)7,306,508 7,638,612 7,306,507 
Common Stock (900 shares, Acquired 12/20)21,264,000 24,825,075 
22,282,330 43,878,436 47,107,404 
Thompson Rivers LLC (11.3%)*(3)
Investment Funds & Vehicles15.90% Member Interest, Acquired 06/2079,414,272 84,438,256 
79,414,272 84,438,256 
Waccamaw River LLC (1.8%)*(3)
Investment Funds & Vehicles20% Member Interest, Acquired 02/2113,720,000 13,500,686 
13,720,000 13,500,686 
Subtotal Affiliate Investments (38.8%)28,645,967 267,966,911 288,068,788 
Control Investments:(5)
MVC Automotive Group Gmbh (2.0%)*(3) (7) (25)
AutomotiveBridge Loan (6.0% Cash, Acquired 12/20, Due 06/26)7,149,166 7,149,166 7,149,166 
Common Equity Interest (18,000 shares, Acquired 12/20)9,553,000 7,699,434 
7,149,166 16,702,166 14,848,600 
MVC Private Equity Fund LP (1.0%)*(3) (25)
Investment Funds & VehiclesGeneral Partnership Interest224,978 187,513 
Limited Partnership Interest8,899,284 7,376,388 
9,124,262 7,563,901 
Subtotal Control Investments (3.0%)7,149,166 25,826,428 22,412,501 
Total Investments, December 31, 2021 (242.7%)*$1,554,502,456 $1,787,824,064 $1,800,593,952 
F-23


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
Derivative Instruments
Credit Support Agreement(a)(b)(d)
DescriptionCounter PartySettlement Date(c)Notional AmountValueUnrealized Appreciation (Depreciation)
Credit Support AgreementBarings LLC01/01/31$23,000,000 $15,400,000 $1,800,000 
Total Credit Support Agreement, December 31, 2021$1,800,000 
(a) The MVC Credit Support Agreement covers all of the investments acquired by Barings BDC, Inc. (“the Company”) from MVC Capital, Inc. ("MVC") in connection with the MVC Acquisition (as defined in “Note 1 – Organization, Business and Basis of Presentation”) and any investments received by the Company in connection with the restructuring, amendment, extension or other modification (including the issuance of new securities) of any of the investments acquired by the Company from MVC in connection with the MVC Acquisition (collectively, the “Reference Portfolio”). Each investment that is included in the Reference Portfolio is denoted in the above Schedule of Investments with footnote (25).
(b)      The Company and Barings LLC entered into a Credit Support Agreement pursuant to which Barings LLC agreed to provide credit support to the Company in the amount of up to $23.0 million.
(c) Settlement Date means the earlier of (1) January 1, 2031 or (2) the date on which the entire Reference Portfolio has been realized or written off.
(d) See “Note 2 – Agreements and Related Party Transactions” for additional information regarding the MVC Credit Support Agreement.
Foreign Currency Forward Contracts:
DescriptionNotional Amount to be PurchasedNotional Amount to be SoldCounterpartySettlement DateUnrealized Appreciation (Depreciation)
Foreign currency forward contract (AUD)A$31,601,341$22,849,503Bank of America, N.A.01/06/22$126,319 
Foreign currency forward contract (AUD)A$2,098,659$1,507,742HSBC Bank USA01/06/2218,092 
Foreign currency forward contract (AUD)$20,727,370A$28,700,000Citibank N.A.01/06/22(139,026)
Foreign currency forward contract (AUD)$3,579,961A$5,000,000HSBC Bank USA04/08/22(55,300)
Foreign currency forward contract (AUD)$18,247,151A$25,385,697Bank of America, N.A.04/08/22(214,805)
Foreign currency forward contract (CAD)C$3,229,673$2,527,527Bank of America, N.A.01/06/2229,309 
Foreign currency forward contract (CAD)C$3,000,000$2,425,209HSBC Bank USA01/06/22(50,198)
Foreign currency forward contract (CAD)$4,881,155C$6,229,673HSBC Bank USA01/06/22(50,693)
Foreign currency forward contract (CAD)$2,506,088C$3,203,161Bank of America, N.A.04/08/22(28,983)
Foreign currency forward contract (DKK)2,142,838kr.$326,309Bank of America, N.A.01/06/221,343 
Foreign currency forward contract (DKK)$335,1072,142,838kr.Bank of America, N.A.01/06/227,455 
Foreign currency forward contract (DKK)$322,7262,115,990kr.Bank of America, N.A.04/08/22(1,490)
Foreign currency forward contract (EUR)€52,582,593$59,524,358Bank of America, N.A.01/06/22274,882 
Foreign currency forward contract (EUR)€5,019,529$5,701,273.9HSBC Bank USA04/08/2218,430 
Foreign currency forward contract (EUR)$24,721,638€21,500,000Bank of America, N.A.01/06/22270,891 
Foreign currency forward contract (EUR)$14,562,667€12,900,000HSBC Bank USA01/06/22(107,781)
Foreign currency forward contract (EUR)$20,655,383€18,182,593BNP Paribas SA01/06/22(22,663)
Foreign currency forward contract (EUR)$60,413,175€53,264,857Bank of America, N.A.04/08/22(281,606)
Foreign currency forward contract (EUR)$1,129,597€1,000,000HSBC Bank USA04/08/22(9,893)
Foreign currency forward contract (EUR)$8,513,639€7,500,000BNP Paribas SA04/08/22(32,537)
Foreign currency forward contract (GBP)£9,900,000$13,219,519Bank of America, N.A.01/06/22189,513 
Foreign currency forward contract (GBP)$13,348,815£9,900,000BNP Paribas SA01/06/22(60,217)
Foreign currency forward contract (GBP)$6,121,622£4,598,707Bank of America, N.A.04/08/22(104,366)
Foreign currency forward contract (SEK)1,791,942kr$198,154HSBC Bank USA01/07/22(230)
Foreign currency forward contract (SEK)$203,8531,791,942krBank of America, N.A.01/07/225,928 
Foreign currency forward contract (SEK)$207,4831,874,724krHSBC Bank USA04/08/22244 
Total Foreign Currency Forward Contracts, December 31, 2021$(217,382)

*    Fair value as a percentpercentage of net assets.
(1)All debt investments are income producing, unless otherwise noted. Eclipse Business Capital, LLC, Ferrellgas L.P., Kano Laboratories LLC, Thompson Rivers LLC and Waccamaw River LLC equity investments are income producing. All other equity and any equity-linked investments are non-income producing. The Company's Board of Directors (the "Board") determined in good faith that all investments were valued at fair value in accordance with the Company's valuation policies and procedures and the Investment Company Act of 1940, as amended (the “1940 Act”), based on, among other things, the input of the Company's external investment adviser, Barings LLC (“Barings”), the Company’s Audit Committee and independent valuation firms that have been engaged to assist in the valuation of the Company's middle-market investments. In addition, all debt investments are variable rate investments unless otherwise noted. Index-based floating interest rates are generally subject to a contractual minimum interest rate. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference
F-24


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
to LIBOR, EURIBOR, GBP LIBOR, BBSY, STIBOR, CDOR, SOFR, SONIA or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically reset semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan.
(2)All of the Company’s portfolio company investments (including joint venture investments), which as of December 31, 2021 represented 242.0% of the Company’s net assets, are subject to legal restrictions on sales. The acquisition date represents the date of the Company's initial investment in the relevant portfolio company.
(1)All debt investments are income producing, unless otherwise noted. Equity and equity-linked investments are non-income producing, unless otherwise noted. The fair values of all investments were determined using significant unobservable inputs.
(2)Disclosures of interest rates on notes include cash interest rates and payment-in-kind (“PIK”) interest rates.
(3)All investments are restricted as to resale and were valued at fair value as determined in good faith by the Board of Directors.
(4)Investment is not a qualifying investment as defined under Section 55(a) of the Investment Company Act of 1940, as amended. Non-qualifying assets represent 2.6% of total investments at fair value as of December 31, 2017. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. If at any time qualifying assets do not represent at least 70% of the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a).
(5)PIK non-accrual investment
(6)Non-accrual investment
(7)All of the Company's investments, unless otherwise noted, are encumbered either as security for the Company's senior secured credit facility or in support of the SBA-guaranteed debentures issued by Triangle Mezzanine Fund LLLP and Triangle Mezzanine Fund II LP.
(8)Index-based floating interest rate is subject to contractual minimum interest rate. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference to either LIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan.
(9)Effective February 9, 2018, the Company's debt investments in PCX Aerostructures, LLC were amended to provide for cash interest at all-in rate of 6% per annum.
(3)Investment is not a qualifying investment as defined under Section 55(a) of the 1940 Act. Non-qualifying assets represent 25.7% of total investments at fair value as of December 31, 2021. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. If at any time qualifying assets do not represent at least 70% of the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a).
(4)As defined in the 1940 Act, the Company is deemed to be an “affiliated person” of the portfolio company as the Company owns between 5% or more, up to 25% (inclusive), of the portfolio company's voting securities (“non-controlled affiliate”). Transactions related to investments in non-controlled "Affiliate Investments" for the year ended December 31, 2021 were as follows:
December 31, 2020
Value		Gross Additions
(b)		Gross Reductions (c) Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss)December 31, 2021 Value Amount of Interest or Dividends Credited to Income(d)
Portfolio CompanyType of Investment(a)
Advantage Insurance, Inc.(e)
Preferred Stock (587,001 shares)$5,946,641 $— $(5,870,010)$(76,631)$— $— $71,500 
5,946,641 — (5,870,010)(76,631)— — 71,500 
Eclipse Business Capital, LLC (e)
Second Lien Senior Secured Term Loan (7.5% Cash)— 4,502,420 — — 235,810 4,738,230 169,899 
Revolver (LIBOR + 7.25%)— 1,690,997 — — 127,185 1,818,182 52,983 
LLC units (89,447,396 units)— 89,849,519 — — 2,817,984 92,667,503 3,581,825 
— 96,042,936 — — 3,180,979 99,223,915 3,804,707 
Jocassee Partners LLC9.1% Member Interest22,623,820 10,000,000 — — 4,977,670 37,601,490 — 
22,623,820 10,000,000 — — 4,977,670 37,601,490 — 
JSC Tekers Holdings(e)
Preferred Stock (9,159,085 shares)4,753,000 — (4)— 1,444,041 6,197,037 — 
Common Stock (3,201 shares)— — — — — — — 
4,753,000 — (4)— 1,444,041 6,197,037 — 
Security Holdings B.V(e)
Bridge Loan (5.0% PIK 5/31/2021)5,187,508 263,697 — — — 5,451,205 276,345 
Senior Subordinated Loan (3.1% PIK)8,746,454 778,163 — — — 9,524,617 285,318 
Senior Unsecured Term Loan (9.0% PIK)— 8,831,162 (1,168,250)(24,300)(332,105)7,306,507 819,588 
Common Equity Interest21,329,370 — — — 3,495,705 24,825,075 — 
35,263,332 9,873,022 (1,168,250)(24,300)3,163,600 47,107,404 1,381,251 
Thompson Rivers LLC15.90% Member Interest10,011,840 69,414,271 — — 5,012,145 84,438,256 4,776,145 
10,011,840 69,414,271 — — 5,012,145 84,438,256 4,776,145 
Waccamaw River LLC20% Member Interest— 13,762,417 (68,188)— (193,543)13,500,686 280,000 
— 13,762,417 (68,188)— (193,543)13,500,686 280,000 
Total Affiliate Investments$78,598,633 $199,092,646 $(7,106,452)$(100,931)$17,584,892 $288,068,788 $10,313,603 
(a)     Eclipse Business Capital, LLC, Thompson Rivers LLC and Waccamaw River LLC equity investments are income producing. All other equity and any equity-linked investments are non-income producing.
(b)     Gross additions include increases in the cost basis of investments resulting from new investments and follow-on investments.
(c)    Gross reductions include decreases in the total cost basis of investments resulting from principal repayments or sales.
F-25


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2021
(d) Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Affiliate category.
(e) The fair value of the investment was determined using significant unobservable inputs.
(5)    As defined in the 1940 Act, the Company is deemed to be both an “affiliated person” and “control” the portfolio company because it owns more than 25% of the portfolio company’s outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company (including through a management agreement). Transactions as of and during the year ended December 31, 2021 in which the portfolio company is deemed to be a "Control Investment" of the Company were as follows:
December 31, 2020
Value		Gross Additions
(b)		Gross Reductions (c) Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss)
December 31, 2021
Value
 Amount of Interest or Dividends Credited to Income(d)
Portfolio CompanyType of Investment(a)
MVC Automotive Group GmbH(e)
Common Equity Interest$9,582,368 $— $— $— $(1,882,934)$7,699,434 $— 
Bridge Loan (6.0% Cash 12/31/2021)7,149,166 — — — — 7,149,166 434,908 
16,731,534 — — — (1,882,934)14,848,600 434,908 
MVC Private Equity Fund LPLimited Partnership Interest8,899,284 — — — (1,522,896)7,376,388 — 
General Partnership Interest224,978 — — (37,465)187,513 642,609 
9,124,262 — — — (1,560,361)7,563,901 642,609 
Waccamaw River LLC50% Member Interest— 4,500,000 (4,474,229)— (25,771)— — 
Total Control Investments$25,855,796 $4,500,000 $(4,474,229)$— $(3,469,066)$22,412,501 $1,077,517 
(a)     Equity and equity-linked investments are non-income producing, unless otherwise noted.
(b) Gross additions include increases in the cost basis of investments resulting from new investments and follow-on investments.
(c)     Gross reductions include decreases in the total cost basis of investments resulting from principal repayments or sales.
(d)    Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Control category.
(e) The fair value of the investment was determined using significant unobservable inputs.
(6)Some or all of the investment is or will be encumbered as security for the Company's $875.0 million senior secured credit facility with ING Capital LLC initially entered into in February 2019 (as amended, restated and otherwise modified from time to time, the "February 2019 Credit Facility").
(7)The fair value of the investment was determined using significant unobservable inputs.
(8)Debt investment includes interest rate floor feature.
(9)The interest rate on these loans is subject to 1 Month LIBOR, which as of December 31, 2021 was 0.10125%.
(10)The interest rate on these loans is subject to 3 Month LIBOR, which as of December 31, 2021 was 0.20913%.
(11)The interest rate on these loans is subject to 6 Month LIBOR, which as of December 31, 2021 was 0.33875%.
(12)The interest rate on these loans is subject to 3 Month GBP LIBOR, which as of December 31, 2021 was 0.26225%.
(13)The interest rate on these loans is subject to 6 Month GBP LIBOR, which as of December 31, 2021 was 0.47363%.
(14)The interest rate on these loans is subject to 3 Month EURIBOR, which as of December 31, 2021 was -0.57200%.
(15)The interest rate on these loans is subject to 6 Month EURIBOR, which as of December 31, 2021 was -0.54600%.
(16)The interest rate on these loans is subject to 3 Month SONIA, which as of December 31, 2021 was 0.33830%.
(17)The interest rate on these loans is subject to 6 Month SONIA, which as of December 31, 2021 was 0.49870%.
(18)The interest rate on these loans is subject to 3 Month STIBOR, which as of December 31, 2021 was -0.00050%.
(19)The interest rate on these loans is subject to 1 Month BBSY, which as of December 31, 2021 was 0.01500%.
(20)The interest rate on these loans is subject to 3 Month BBSY, which as of December 31, 2021 was 0.06770%.
(21)The interest rate on these loans is subject to 3 Month CDOR, which as of December 31, 2021 was 0.51750%.
(22)The interest rate on these loans is subject to 3 Month SOFR, which as of December 31, 2021 was 0.09125%.
(23)The interest rate on these loans is subject to 6 Month SOFR, which as of December 31, 2021 was 0.19947%.
(24)Non-accrual investment.
(25)Investment was purchased as part of the MVC Acquisition and is part of the Reference Portfolio for purposes of the MVC Credit Support Agreement.
(26)In 2017, MVC received $5.7 million of 9.5% second lien callable notes due in 2025, in lieu of an escrow to satisfy any indemnification claims associated with MVC’s sale of its equity investment in U.S. Gas & Electric ("U.S. Gas"). Effective January 1, 2018, the cost basis of the U.S. Gas second lien loan was decreased by approximately $3.0 million due to a working capital adjustment. This loan is still subject to indemnification adjustments.

See accompanying notes.
F-26


Barings BDC, Inc.
Consolidated Schedule of Investments
December 31, 2020

Portfolio Company(6)
Industry
Type of Investment(1) (2) (6)
Principal
Amount		CostFair
Value
Non–Control / Non–Affiliate Investments:
1WorldSync, Inc. (4.0%)*(7) (9) (12)
IT Consulting & Other ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 07/19, Due 07/25)$29,000,000 $28,490,102 $28,420,000 
29,000,000 28,490,102 28,420,000 
Accelerate Learning, Inc.
(1.0%)*(7) (9) (12)
Education ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/18, Due 12/24)7,567,965 7,461,410 7,258,435 
7,567,965 7,461,410 7,258,435 
Accurus Aerospace Corporation (2.9%)*(7) (9) (12)
Aerospace & DefenseFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 10/18, Due 10/24)24,500,000 24,251,575 20,506,500 
24,500,000 24,251,575 20,506,500 
ADE Holding (d/b/a AD Education) (0.8%)*(3) (7) (9) (19)
Education ServicesFirst Lien Senior Secured Term Loan (EURIBOR + 5.0%, 5.0% Cash, Acquired 01/20, Due 01/27)5,459,746 4,977,557 5,459,746 
5,459,746 4,977,557 5,459,746 
AEP Holdings, Inc. (1.8%)*(7) (9)
Wholesale
First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 6.8% Cash, Acquired 11/20, Due 11/25) (18)
4,362,794 4,143,810 4,275,538 
First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/20, Due 11/25) (12)
8,902,516 8,727,725 8,724,466 
13,265,310 12,871,535 13,000,004 
Aftermath Bidco Corporation (1.3%)* (7) (9) (12)
Professional ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 04/19, Due 04/25)9,425,284 9,265,301 9,335,155 
9,425,284 9,265,301 9,335,155 
Ahead DB Borrower, LLC. (0.3%)*(7) (9) (12)
Technology DistributorsSecond Lien Senior Secured Term Loan (LIBOR + 8.5%, 9.5% Cash, Acquired 10/20, Due 10/28)2,139,295 2,076,161 2,075,117 
2,139,295 2,076,161 2,075,117 
Air Canada 2020-2 Class B Pass Through Trust (1.1%)*AirlinesStructured Secured Note - Class B (9.0% Cash, Acquired 09/20, Due 10/25)7,500,000 7,500,000 8,077,169 
7,500,000 7,500,000 8,077,169 
American Dental Partners, Inc. (1.3%)*(7) (9) (12)
Health Care ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 11/18, Due 03/23)9,800,000 9,786,672 9,396,240 
9,800,000 9,786,672 9,396,240 
American Scaffold, Inc. (1.3%)*(7) (9) (12)
Aerospace & DefenseFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 09/19, Due 09/25)9,686,750 9,509,443 9,686,750 
9,686,750 9,509,443 9,686,750 
Anagram Holdings, LLC
(2.2%)*(3)
Chemicals, Plastics, & RubberFirst Lien Senior Secured Note (10.0% Cash, 5.0% PIK, Acquired 08/20, Due 08/25)13,673,780 12,565,289 15,588,108 
13,673,780 12,565,289 15,588,108 
Anchorage Capital CLO Ltd: Series 2013-1A (0.3%)*(3) (9) (12)
Structured FinanceStructured Secured Note - Class DR (LIBOR + 6.8%, 7.0% Cash, Acquired 03/20, Due 10/30)2,000,000 1,743,066 2,000,156 
2,000,000 1,743,066 2,000,156 
Anju Software, Inc. (1.9%)*(7) (12)
Application SoftwareFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 6.4% Cash, Acquired 02/19, Due 02/25)13,701,182 13,442,543 13,385,963 
13,701,182 13,442,543 13,385,963 
Apex Bidco Limited (0.3%)*(3) (7)
Business Equipment & Services
First Lien Senior Secured Term Loan (GBP LIBOR + 6.50%, 7.0% Cash, Acquired 01/20, Due 01/27) (9) (15)
1,992,033 1,851,359 1,950,974 
Subordinated Senior Unsecured Term Loan (8.0% PIK, Acquired 01/20, Due 07/27)258,955 241,837 253,618 
2,250,988 2,093,196 2,204,592 
AQA Acquisition Holding, Inc. (f/k/a SmartBear) (0.7%)*(7) (9) (12)
High Tech IndustriesSecond Lien Senior Secured Term Loan (LIBOR + 8.0%, 9.0% Cash, Acquired 10/18, Due 05/24)4,959,088 4,877,581 4,959,088 
4,959,088 4,877,581 4,959,088 
Arch Global Precision LLC (2.3%)*(7) (12)
Industrial MachineryFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.0% Cash, Acquired 04/19, Due 04/26)16,649,218 16,496,045 16,557,510 
16,649,218 16,496,045 16,557,510 
F-27


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2020
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2016

Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
Non–Control / Non–Affiliate Investments:      
ACA Holdings LLC (0%)* Security Company Preferred Units (2,000,000 units)   $2,000,000
 $1,242,000
      2,000,000
 1,242,000
           
Access Medical Acquisition, Inc. (3%)* Operator of Primary Care Clinics Subordinated Notes (10% Cash, 2% PIK, Due 01/22) $13,819,514
 13,593,292
 13,593,292
  Class A Units (1,500,000 units)   901,026
 3,618,000
    13,819,514
 14,494,318
 17,211,292
           
Aden & Anais Holdings, Inc. (0%)* Baby Products Common Stock (20,000 shares)   2,000,000
 2,000,000
      2,000,000
 2,000,000
           
Agilex Flavors & Fragrances, Inc. (2%)* Custom Fragrance Producer Subordinated Note (12% Cash, Due 11/21) 13,168,124
 13,048,983
 13,048,983
Common Units (1,250 units)   1,250,000
 2,227,000
   13,168,124
 14,298,983
 15,275,983
           
AGM Automotive, LLC (1%)* Auto Industry Interior Components Supplier Units (1,500,000 units)   630,134
 4,266,000
     630,134
 4,266,000
           
Avkem International, LLC (1%)* Flux and Foundry Manufacturer and Supplier Subordinated Note (10% Cash, 4% PIK, Due 12/17) 4,112,935
 4,075,177
 4,075,177
    4,112,935
 4,075,177
 4,075,177
           
AVL Holdings, Inc. (0%)* Manufacturer and Distributor for Independent Artists and Authors Common Stock (138 shares)   1,300,000
 1,767,000
      1,300,000
 1,767,000
           
Baker Hill Acquisition, LLC (2%)* Loan Origination Software Solutions Provider 
Subordinated Notes (LIBOR + 11.0%, 12% Cash, Due 03/21)(8)
 13,500,000
 13,334,260
 12,320,000
  Limited Partnership Interest   1,498,500
 721,000
    13,500,000
 14,832,760
 13,041,000
           
Cafe Enterprises, Inc. (2%)* Restaurant Subordinated Note (7% Cash, 7% PIK, Due 09/19) 13,882,800
 13,743,461
 10,331,000
  Series C Preferred Stock (10,000 shares)   1,000,000
 —
    13,882,800
 14,743,461
 10,331,000
           
Capital Contractors, Inc. (0%)* Janitorial and Facilities Maintenance Services Subordinated Notes (5% Cash, Due 06/20) 9,843,542
 9,711,658
 —
Series A Redeemable Preferred Stock (200 shares)   2,000,000
 —
Common Stock Warrants (20 shares)   492,000
 —
  9,843,542
 12,203,658
 —
           
Captek Softgel International, Inc.
(3%)*
 Nutraceutical Manufacturer Subordinated Note (10% Cash, 2.5% PIK, Due 06/21) 15,407,336
 15,150,497
 15,150,497
Common Stock (15,000 shares)   1,500,000
 1,500,000
   15,407,336
 16,650,497
 16,650,497
           
Carolina Beverage Group, LLC (0%)* Beverage Manufacturing
and Packaging		 Class B Units (11,974 units)   119,735
 264,000
     119,735
 264,000
           
Centerfield Media Holding Company (4%)* Digital Marketing Subordinated Note (10% Cash, 3.5% PIK, Due 03/21) 18,857,978
 18,567,590
 19,235,000
  Common Shares (1,000 shares)   1,000,000
 2,220,000
    18,857,978
 19,567,590
 21,455,000
           
Community Intervention Services, Inc. (2%)* Provider of Behavioral Health Services 
Subordinated Note (7% Cash, 6% PIK, Due 01/21) (5)
 18,736,265
 17,717,756
 14,134,000
    18,736,265
 17,717,756
 14,134,000
           
Comverge, Inc. (3%)* Provider of Intelligent Energy Management Solutions Senior Note (12% Cash, Due 05/18) 15,505,583
 15,406,749
 15,406,749
Preferred Stock (703 shares)   554,458
 835,000
Common Stock (1,000,000 shares)   100,000
 353,000
   15,505,583
 16,061,207
 16,594,749
           
CPower Ultimate HoldCo, LLC (0%)* Demand Response Business Units (345,542 units)   345,542
 345,542
      345,542
 345,542
           

Portfolio Company(6)
Industry
Type of Investment(1) (2) (6)
Principal
Amount		CostFair
Value
Archimede (0.4%)*(3) (7) (9) (17)
Consumer ServicesFirst Lien Senior Secured Term Loan (EURIBOR + 6.0%, 6.0% Cash, Acquired 10/20, Due 10/27)$2,677,354 $2,510,391 $2,610,420 
2,677,354 2,510,391 2,610,420 
Argus Bidco Limited (0.8%)*(3) (7) (9) (15)
High Tech IndustriesFirst Lien Senior Secured Term Loan (GBP LIBOR + 5.5%, 5.8% Cash, Acquired 12/20, Due 12/27)5,715,005 5,383,300 5,543,555 
5,715,005 5,383,300 5,543,555 
Armstrong Transport Group (Pele Buyer, LLC ) (1.0%)*(7) (9) (12)
Air Freight & LogisticsFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 06/19, Due 06/24)5,354,941 5,277,976 5,302,778 
First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 07/20, Due 06/24)2,000,318 1,964,493 2,000,318 
7,355,259 7,242,469 7,303,096 
Ascensus Specialties, LLC
(1.0%)*(7) (9) (10)
Specialty ChemicalsFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.9% Cash, Acquired 09/19, Due 09/26)7,019,401 6,959,939 6,978,909 
7,019,401 6,959,939 6,978,909 
ASPEQ Heating Group LLC (1.2%)* (7) (9) (12)
Building Products, Air & HeatingFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 11/19, Due 11/25)8,945,499 8,833,249 8,862,629 
8,945,499 8,833,249 8,862,629 
Auxi International (0.2%)*(3) (7) (9) (19)
Commercial FinanceFirst Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 12/19, Due 12/26)1,712,970 1,514,901 1,682,438 
1,712,970 1,514,901 1,682,438 
AVSC Holding Corp.
(1.4%)*(9) (12)
AdvertisingFirst Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, 0.25% PIK, Acquired 08/18, Due 03/25)4,904,496 4,313,104 4,165,780 
First Lien Senior Secured Term Loan (LIBOR + 4.50%, 5.5% Cash, 1.0% PIK, Acquired 08/18, Due 03/25)748,116 682,722 665,823 
First Lien Senior Secured Term Loan (5.0% Cash, 10.0% PIK, Acquired 11/20, Due 10/26)4,951,086 4,816,560 5,668,994 
10,603,698 9,812,386 10,500,597 
Bass Pro Group, LLC (0.3%)*(9) (12)
General Merchandise StoresFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 5.8% Cash, Acquired 03/20, Due 09/24)1,979,540 1,793,950 1,983,083 
1,979,540 1,793,950 1,983,083 
BDP International, Inc. (f/k/a BDP Buyer, LLC) (4.8%)*(7) (9) (12)
Air Freight & LogisticsFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 12/18, Due 12/24)34,937,500 34,387,459 34,238,750 
34,937,500 34,387,459 34,238,750 
Beacon Pointe Advisors, LLC (0.1%)*(7) (9) (12)
Asset Manager & Custody BankFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 03/20, Due 03/26)631,591 611,703 631,591 
631,591 611,703 631,591 
Benify (Bennevis AB)
(0.2%)*(3) (7) (9) (20)
High Tech IndustriesFirst Lien Senior Secured Term Loan (STIBOR + 5.25%, 5.3% Cash, Acquired 07/19, Due 07/26)1,588,980 1,366,586 1,576,555 
1,588,980 1,366,586 1,576,555 
Black Diamond Equipment Rentals LLC (1.2%)*(7) (23)
Equipment RentalSecond Lien Loan (12.5% Cash, Acquired 12/20, Due 06/22)7,500,000 7,500,000 7,500,000 
Warrant (1.0 unit, Acquired 12/20)847,000 847,000 
7,500,000 8,347,000 8,347,000 
British Airways 2020-1 Class B Pass Through Trust (0.2%)*AirlinesStructured Secured Note - Class B (8.4% Cash, Acquired 11/20, Due 11/28)1,500,000 1,500,000 1,661,827 
1,500,000 1,500,000 1,661,827 
British Engineering Services Holdco Limited (1.1%)*(3) (7) (9) (15)
Commercial Services & SuppliesFirst Lien Senior Secured Term Loan (GBP LIBOR + 5.25%, 5.5% Cash, Acquired 12/20, Due 12/27)8,667,451 7,989,566 8,191,066 
8,667,451 7,989,566 8,191,066 
Brown Machine Group Holdings, LLC (0.7%)*(7) (9) (12)
Industrial EquipmentFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/18, Due 10/24)5,286,022 5,241,933 5,286,022 
5,286,022 5,241,933 5,286,022 
Cadent, LLC (f/k/a Cross MediaWorks) (1.0%)*(7) (9) (12)
Media & EntertainmentFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 09/18, Due 09/23)7,532,846 7,490,785 7,361,851 
7,532,846 7,490,785 7,361,851 
F-28


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2020
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments — (Continued)
December 31, 2016
Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
CWS Holding Company, LLC (0%)* Manufacturer of Custom Windows and Sliding Doors Class A Units (1,500,000 units)   $1,500,000
 $2,076,000
     1,500,000
 2,076,000
           
Data Source Holdings, LLC (0%)* Print Supply Chain Management Services Common Units (47,503 units)   1,000,000
 940,000
     1,000,000
 940,000
           
Del Real, LLC (2%)* Hispanic Refrigerated Foods Company Subordinated Note (11% Cash, Due 04/23) $14,000,000
 13,727,515
 13,727,515
  Class A Units (3,000,000 units)   3,000,000
 3,000,000
    14,000,000
 16,727,515
 16,727,515
           
DialogDirect, Inc. (2%)* Business Process Outsourcing Provider Subordinated Notes (12% Cash, 1.5% PIK, Due 04/20) 16,126,541
 16,020,226
 11,994,000
   16,126,541
 16,020,226
 11,994,000
           
Dimora Brands, Inc. (2%)* Hardware Designer and Distributor 
Subordinated Note (LIBOR + 10.0%, 11% Cash, Due 10/23)(8)
 12,500,000
 12,267,514
 12,267,514
    12,500,000
 12,267,514
 12,267,514
           
DLC Acquisition, LLC (6%)* Staffing Firm 
Senior Notes (LIBOR + 8.0%, 10% Cash, Due 12/20)(8)
 21,312,500
 21,047,577
 21,047,577
 Senior Note (10% Cash, 2% PIK, Due 12/20) 16,929,763
 16,735,793
 16,735,793
   38,242,263
 37,783,370
 37,783,370
           
Dyno Acquiror, Inc. (1%)* Sewing Products and Seasonal Decorative Products Supplier Subordinated Note (12% Cash, 2% PIK, Due 11/19) 7,531,330
 7,474,744
 7,474,744
 Series A Units (600,000 units)   600,000
 739,000
   7,531,330
 8,074,744
 8,213,744
           
Eckler's Holdings, Inc. (1%)* Restoration Parts and Accessories for Classic Cars and Trucks Subordinated Note (11% Cash, 4.5% PIK, Due 07/18) 9,941,563
 9,882,596
 8,396,000
 Common Stock (18,029 shares)   183,562
 —
 Series A Preferred Stock (1,596 shares)   1,596,126
 —
 Series B Preferred Stock (185 shares)   185,127
 —
   9,941,563
 11,847,411
 8,396,000
           
Fresh-G Restaurant Holding, LLC (0%)* Restaurant Class A Units (5,000 units)   500,000
 —
      500,000
 —
           
Flowchem Holdings LLC (0%)* Services to Crude Oil Pipeline Operators Common Units (1,000,000 units)   782,356
 2,552,000
     782,356
 2,552,000
           
Fridababy Holdings, LLC (4%)* Baby Products 
Senior Notes (LIBOR + 9.0%, 10% Cash, Due 10/21)(8)
 23,000,000
 22,558,007
 22,558,007
  Class B Units (4,500 units)   273,401
 273,401
    23,000,000
 22,831,408
 22,831,408
           
FrontStream Holdings, LLC (2%)* Payment and Donation Management Product Service Provider Subordinated Note (12.5% Cash, Due 12/20) 13,375,000
 13,254,632
 12,643,000
  Series C-2 Preferred Shares (500 shares)   500,000
 435,000
    13,375,000
 13,754,632
 13,078,000
           
Frontstreet Facility Solutions, Inc. (1%)* Retail, Restaurant and Commercial Facilities Maintenance Subordinated Note (11% Cash, 2% PIK, Due 07/18) 8,462,629
 8,418,332
 6,771,000
  Series A Convertible Preferred Stock (2,500 shares)   250,000
 —
  Series B Convertible Preferred Stock (5,556 shares)   500,000
 —
    8,462,629
 9,168,332
 6,771,000
           
Frozen Specialties, Inc. (2%)* Frozen Foods Manufacturer Subordinated Note (10% Cash, 4% PIK, Due 12/17) 13,675,353
 13,675,353
 13,675,353
  13,675,353
 13,675,353
 13,675,353
           
GST AutoLeather, Inc. (4%)* Supplier of Automotive Interior Leather Subordinated Note (11% Cash, 2% PIK, Due 01/21) 23,131,473
 22,812,032
 22,812,032
    23,131,473
 22,812,032
 22,812,032
           
Halo Branded Solutions, Inc. (2%)* Supply Chain Services Subordinated Notes (11% Cash, 1% PIK, Due 10/22) 10,410,398
 10,190,992
 10,190,992
  Class A1 Units (2,600 units)   2,600,000
 3,308,000
    10,410,398
 12,790,992
 13,498,992
           
HKW Capital Partners IV, L.P.
(0%)*(4)
 Multi-Sector Holdings 0.6% Limited Partnership Interest   835,283
 1,231,000
      835,283
 1,231,000
           
           

Portfolio Company(6)
Industry
Type of Investment(1) (2) (6)
Principal
Amount		CostFair
Value
Carlson Travel, Inc (1.0%)*Business Travel ManagementFirst Lien Senior Secured Note (6.8% Cash, Acquired 09/20, Due 12/25)$3,000,000 $2,362,500 $2,471,250 
Super Senior Senior Secured Term Loan (10.5% Cash, Acquired 12/20, Due 3/25)4,239,000 4,149,608 4,376,768 
Common Stock (1,962 units, Acquired 11/20)(7)
88,290 68,670 
7,239,000 6,600,398 6,916,688 
Carlyle Aviation Partners Ltd. (0.2%)*Structured FinanceStructured Secured Note, Series 2019-2 - Class A (3.4% Cash, Acquired 3/20, Due 11/39)912,844 826,343 863,003 
Structured Secured Note, Series 2018-2 - Class A (4.5% Cash, Acquired 3/20, Due 11/38)432,194 391,920 408,302 
1,345,038 1,218,263 1,271,305 
Centralis Finco S.a.r.l. (0.1%)*(3) (7) (9) (18)
Diversified Financial ServicesFirst Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 05/20, Due 05/27)867,913 732,995 867,913 
867,913 732,995 867,913 
Cineworld Group PLC
(1.1%)*(3) (9) (13)
Leisure ProductsFirst Lien Senior Secured Term Loan (LIBOR + 2.50%, 2.8% Cash, Acquired 04/20, Due 02/25)9,070,729 5,915,501 6,121,290 
Super Senior Secured Term Loan (7.0% Cash, 8.3% PIK, Acquired 11/20, Due 05/24)1,618,242 1,446,976 1,920,318 
Warrants (553,375 units, Acquired 12/20)101,602 166,416 
10,688,971 7,464,079 8,208,024 
Classic Collision (Summit Buyer, LLC) (1.6%)*(7) (9) (12)
Auto Collision Repair CentersFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 01/20, Due 01/26)12,006,341 11,774,075 11,820,664 
12,006,341 11,774,075 11,820,664 
CM Acquisitions Holdings Inc. (3.4%)*(7) (9) (13)
Internet & Direct MarketingFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 05/19, Due 05/25)24,655,278 24,287,477 24,196,657 
24,655,278 24,287,477 24,196,657 
CMT Opco Holding, LLC (Concept Machine) (0.6%)*(7) (9) (12)
DistributorsFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 01/20, Due 01/25)4,425,935 4,351,646 4,097,088 
LLC Units (8,309 units, Acquired 01/20)332,904 230,492 
4,425,935 4,684,550 4,327,580 
Command Alkon (Project Potter Buyer, LLC) (3.0%)*(7) (9) (10)
SoftwareFirst Lien Senior Secured Term Loan (LIBOR + 8.25%, 9.3% Cash, Acquired 04/20, Due 04/27)22,166,804 21,527,201 21,501,800 
Class A Units (90.384 units, Acquired 04/20)90,384 93,510 
Class B Units (33,324.69 units, Acquired 04/20)— 8,165 
22,166,804 21,617,585 21,603,475 
Confie Seguros Holding II Co. (0.3%)*(9) (12)
Insurance Brokerage ServicesSecond Lien Senior Secured Term Loan (LIBOR + 8.5%, 8.7% Cash, Acquired 10/19, Due 11/25)2,500,000 2,370,563 2,233,600 
2,500,000 2,370,563 2,233,600 
Contabo Finco S.À R.L (0.2%)*(3) (7) (9) (18)
Internet Software & ServicesFirst Lien Senior Secured Term Loan (EURIBOR + 4.75%, 4.8% Cash, Acquired 10/19, Due 10/26)1,483,377 1,310,386 1,454,918 
1,483,377 1,310,386 1,454,918 
CSL DualCom (0.5%)*(3) (7) (9) (15)
Tele-communicationsFirst Lien Senior Secured Term Loan (GBP LIBOR + 5.5%, 5.6% Cash, Acquired 09/20, Due 09/27)3,776,936 3,339,563 3,646,170 
3,776,936 3,339,563 3,646,170 
Custom Alloy Corporation (4.8%)*(7) (23)
Manufacturer of Pipe Fittings & ForgingsSecond Lien Loan (15.0% PIK, Acquired 12/20, Due 04/22)39,391,300 31,434,257 31,434,257 
Revolver (15.0% PIK, Acquired 12/20, Due 04/21)3,745,808 3,228,308 3,228,308 
43,137,108 34,662,565 34,662,565 
Dart Buyer, Inc. (1.7%)*(3) (7) (9) (12)
Aerospace & DefenseFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 04/19, Due 04/25)12,310,907 12,092,929 12,188,061 
12,310,907 12,092,929 12,188,061 
Diamond Sports Group, LLC (0.1%)*(9) (10)
BroadcastingFirst Lien Senior Secured Term Loan (LIBOR + 3.25%, 3.4% Cash, Acquired 03/20, Due 08/26)989,975 790,536 872,208 
989,975 790,536 872,208 
F-29


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2020
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments — (Continued)
December 31, 2016
Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
           
HTC Borrower, LLC (4%)* Hunting and Outdoor Products Subordinated Notes (10% Cash, 3% PIK, Due 09/20) $26,131,706
 $25,854,767
 $25,854,767
    26,131,706
 25,854,767
 25,854,767
           
ICP Industrial, Inc. (4%)* Coatings Formulator and Manufacturer 
Second Lien Term Note (LIBOR + 8.5%, 9.5% Cash, Due 04/22)(8)
 7,500,000
 7,435,556
 7,435,556
  Subordinated Notes (10% Cash, 1% PIK, Due 10/22) 8,088,123
 7,946,278
 7,946,278
  Subordinated Notes (14% PIK, Due 10/22) 5,743,159
 5,688,352
 5,688,352
  Class A Units (1,289 units)   1,751,483
 1,929,000
    21,331,282
 22,821,669
 22,999,186
           
Inland Pipe Rehabilitation Holding Company LLC (0%)* Cleaning and Repair Services Membership Interest Purchase Warrant (3%)   853,500
 1,527,000
    853,500
 1,527,000
           
IPS Structural Adhesives Holdings, Inc. (2%)* Specialty Adhesives and Plumbing Products Manufacturer 
Second Lien Term Note (LIBOR + 9.5%, 10.5% Cash, Due 12/24)(8)
 15,000,000
 14,700,000
 14,700,000
    15,000,000
 14,700,000
 14,700,000
           
KidKraft, Inc. (4%)* Children's Toy Manufacturer and Distributor Second Lien Term Note (11% Cash, 1% PIK, Due 03/22) 27,668,623
 27,135,218
 27,135,218
    27,668,623
 27,135,218
 27,135,218
           
K-Square Restaurant Partners, LP (1%)* Restaurant Class A Units of Limited Partnership (2,000 units)   638,260
 3,830,000
      638,260
 3,830,000
           
Lakeview Health Holdings, Inc. (3%)* Substance Abuse Treatment Service Provider 
Senior Note (LIBOR + 6.75%, 7.8% Cash, Due 12/21)(8)
 18,612,633
 18,412,633
 18,412,633
  Common Stock (2,000 shares)   2,000,000
 2,000,000
    18,612,633
 20,412,633
 20,412,633
           
Media Storm, LLC (1%)* Marketing Services Subordinated Note (10% Cash, Due 08/19) 6,545,455
 6,533,934
 5,055,000
Membership Units (1,216,204 units)   1,176,957
 260,000
  6,545,455
 7,710,891
 5,315,000
           
MIC Holding LLC (2%)* Firearm Accessories Manufacturer and Distributor Preferred Units (1,470 units)   1,470,000
 3,012,000
  Common Units (30,000 units)   30,000
 8,837,000
      1,500,000
 11,849,000
           
Micross Solutions LLC (4%)* Provider of Semiconductor Products and Services Subordinated Note (12% Cash, 3% PIK, Due 06/18) 24,435,074
 24,342,230
 24,342,230
Class A-2 Common Units (1,979,524 units)   2,019,693
 1,875,000
  24,435,074
 26,361,923
 26,217,230
           
Motor Vehicle Software Corporation (3%)* Provider of EVR Services Subordinated Note (10% Cash, 0.5% PIK, Due 03/21) 20,245,100
 19,917,945
 19,917,945
  Class A Units (1,000,000 units)   1,076,210
 1,372,000
    20,245,100
 20,994,155
 21,289,945
           
Nautic Partners VII, LP (0%)*(4)
 Multi-Sector Holdings 0.4% Limited Partnership Interest   1,093,312
 1,520,000
      1,093,312
 1,520,000
           
Nomacorc, LLC (3%)* Synthetic Wine Cork Producer Subordinated Note (10% Cash, 2.3% PIK, Due 07/21) 20,875,890
 20,572,926
 16,597,000
  Limited Partnership Interest   2,150,637
 —
    20,875,890
 22,723,563
 16,597,000
           
Orchid Underwriters Agency, LLC (4%)* Insurance Underwriter Term B Note (10% Cash, Due 11/19) 21,409,670
 21,125,036
 21,125,036
Class A Preferred Units (15,000 units)   1,500,000
 1,972,000
Class A Common Units (15,000 units)   —
 1,624,000
  21,409,670
 22,625,036
 24,721,036
           
PowerDirect Marketing, LLC (0%)* Marketing Services 
Senior Note (13% Cash, 2% PIK, Due 06/17)(6)
 8,573,531
 5,077,482
 850,000
Common Unit Purchase Warrants   590,200
 —
  8,573,531
 5,667,682
 850,000
           
ProAmpac PG Borrower LLC (2%)* Manufacturer of Flexible Packaging Products 
Second Lien Term Note (LIBOR + 8.5%, 9.5% Cash, Due 11/24)(8)
 15,000,000
 14,775,000
 14,775,000
    15,000,000
 14,775,000
 14,775,000
           
           

Portfolio Company(6)
Industry
Type of Investment(1) (2) (6)
Principal
Amount		CostFair
Value
Discovery Education, Inc. (3.7%)*(7) (9) (10)
PublishingFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 10/20, Due 10/26)$27,000,000 $26,538,991 $26,527,500 
27,000,000 26,538,991 26,527,500 
Distinct Holdings, Inc. (1.0%)*(7) (9) (10)
Systems SoftwareFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 04/19, Due 12/23)7,516,792 7,453,665 7,475,638 
7,516,792 7,453,665 7,475,638 
DreamStart Bidco SAS (d/b/a SmartTrade) (0.3%)*(3) (7) (9) (19)
Diversified Financial ServicesFirst Lien Senior Secured Term Loan (EURIBOR + 4.5%, 4.5% Cash, 1.8% PIK, Acquired 03/20, Due 03/27)2,232,173 1,939,189 2,176,655 
2,232,173 1,939,189 2,176,655 
Dukane IAS, LLC (0.6%)*(7) (23)
Welding Equipment ManufacturerSecond Lien Note (10.5% Cash, 2.5% PIK, Acquired 12/20, Due 12/24)4,604,374 4,604,374 4,604,374 
4,604,374 4,604,374 4,604,374 
Envision Healthcare Corp.
(0.4%)*(9) (10)
Health Care ServicesFirst Lien Senior Secured Term Loan (LIBOR + 3.75%, 3.9% Cash, Acquired 03/20, Due 10/25)3,156,772 2,259,339 2,623,688 
3,156,772 2,259,339 2,623,688 
Exeter Property Group, LLC (2.6%)*(7) (9) (10)
Real EstateFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.7% Cash, Acquired 02/19, Due 08/24)19,363,647 19,100,177 18,976,374 
19,363,647 19,100,177 18,976,374 
F24 (Stairway BidCo Gmbh) (0.3%)*(3) (7) (9) (18)
Software ServicesFirst Lien Senior Secured Term Loan (EURIBOR + 6.5%, 6.5% Cash, Acquired 08/20, Due 08/27)1,855,625 1,734,062 1,805,715 
1,855,625 1,734,062 1,805,715 
FitzMark Buyer, LLC (0.5%)*(7) (9) (10)
Cargo & TransportationFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/20, Due 12/26)3,529,412 3,429,854 3,429,412 
3,529,412 3,429,854 3,429,412 
Foundation Risk Partners, Corp.
(1.4%)*(7) (9) (12)
Financial ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 09/20, Due 11/23)8,789,777 8,575,855 8,576,718 
Second Lien Senior Secured Term Loan (LIBOR + 8.50%, 9.5% Cash, Acquired 09/20, Due 11/24)1,722,222 1,588,593 1,602,355 
10,511,999 10,164,448 10,179,073 
GoldenTree Loan Opportunities IX, Limited: Series 2014-9A (0.2%)*(3) (9) (12)
Structured FinanceStructured Secured Note - Class DR2 (LIBOR + 3.0%, 3.2% Cash, Acquired 03/20, Due 10/29)1,250,000 916,935 1,231,963 
1,250,000 916,935 1,231,963 
GTM Intermediate Holdings, Inc. (0.9%)*(7) (23)
Medical Equipment ManufacturerSecond Lien Loan (11.0% Cash, 1.0% PIK, Acquired 12/20, Due 11/24)5,115,750 5,064,593 5,064,593 
Common Stock (2 shares, Acquired 12/20)1,078,778 1,078,778 
5,115,750 6,143,371 6,143,371 
Gulf Finance, LLC (0.1%)*(9) (10)
Oil & Gas Exploration & ProductionFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/18, Due 08/23)1,048,305 944,246 788,105 
1,048,305 944,246 788,105 
Hawaiian Airlines 2020-1 Class B Pass Through Certificates (1.1%)*AirlinesStructured Secured Note - Class B (11.3% Cash, Acquired 08/20, Due 09/25)7,500,000 7,500,000 7,738,286 
7,500,000 7,500,000 7,738,286 
Heartland, LLC (1.2%)*(7) (9) (12)
Commercial Services & SuppliesFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 08/19, Due 08/25)8,831,018 8,667,194 8,582,892 
8,831,018 8,667,194 8,582,892 
Heilbron (f/k/a Sucsez (Bolt Bidco B.V.)) (1.6%)*(3) (7) (9)
Insurance
First Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 09/19, Due 09/26)(19)
10,413,655 9,216,174 10,266,128 
First Lien Senior Secured Term Loan (EURIBOR + 6.25%, 6.3% Cash, Acquired 07/20, Due 09/26) (18)
1,092,757 820,169 1,092,757 
11,506,412 10,036,343 11,358,885 
Highbridge Loan Management Ltd: Series 2014A-19 (0.1%)*(3) (9) (12)
Structured FinanceStructured Secured Note - Class E (LIBOR + 6.75%, 7.0% Cash, Acquired 03/20, Due 07/30)1,000,000 833,749 978,180 
1,000,000 833,749 978,180 
F-30


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2020
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments — (Continued)
December 31, 2016
Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
RockYou, Inc. (0%)* Mobile Game Advertising Network Common Stock (67,585 shares)   $111,000
 $111,000
      111,000
 111,000
           
Rotolo Consultants, Inc. (1%)* Landscape Services Subordinated Note (11% Cash, 3% PIK, Due 08/21) $6,904,210
 6,792,686
 6,792,686
  Series A Preferred Units (39 units)   3,654,253
 1,671,000
    6,904,210
 10,446,939
 8,463,686
           
SCA Pharmaceuticals, LLC (0%)* Provider of Pharmaceutical Products 
Subordinated Note (LIBOR + 9.0%, 10% Cash, Due 12/20)(8)
 3,000,000
 2,700,000
 2,700,000
    3,000,000
 2,700,000
 2,700,000
           
SCUF Gaming, Inc. (4%)* Gaming Controller Manufacturer 
Senior Notes (LIBOR + 8.5%, 9.5% Cash, Due 12/21)(8)
 25,008,000
 24,507,840
 24,507,840
  Common Stock (27,112 shares)   742,000
 742,000
    25,008,000
 25,249,840
 25,249,840
           
Smile Brands, Inc. (4%)* Dental Service Organization Subordinated Notes (10% Cash, 2% PIK, Due 02/23) 22,341,283
 21,910,129
 21,910,129
  Class A Units (3,000 units)   3,000,000
 3,000,000
    22,341,283
 24,910,129
 24,910,129
           
SPC Partners V, LP (0%)*(4)
 Multi-Sector Holdings 0.7% Limited Partnership Interest   1,922,865
 2,019,000
      1,922,865
 2,019,000
           
Specialized Desanders, Inc. (2%)*(4)
 Sand and Particulate Removal Equipment Provider for Oil and Gas Companies Subordinated Note (12% Cash, 2% PIK, Due 03/20) 16,110,042
 15,966,524
 12,524,143
Class C Partnership Units (2,000,000 units)   1,937,421
 2,813,000
   16,110,042
 17,903,945
 15,337,143
           
Tate's Bake Shop (2%)* Producer of Baked Goods Subordinated Note (10% Cash, 3% PIK, Due 02/20) 10,737,451
 10,606,430
 10,606,430
  Limited Partnership Interest   925,000
 1,310,000
    10,737,451
 11,531,430
 11,916,430
           
TCFI Merlin LLC (2%)* Specialty Staffing Service Provider Senior Notes (10% Cash, 1% PIK, Due 09/19) 13,396,027
 13,212,935
 13,212,935
  Limited Partnership Units (500,500 units)   500,000
 578,000
    13,396,027
 13,712,935
 13,790,935
           
The Cook & Boardman Group, LLC (3%)* Distributor of Doors and Related Products Subordinated Note (10% Cash, 2.5% PIK, Due 03/20) 14,840,320
 14,656,890
 14,656,890
  Class A Units (1,400,000 units)   1,400,000
 2,663,000
    14,840,320
 16,056,890
 17,319,890
           
Trademark Global LLC (3%)* Supplier to Mass Market Internet Retail Subordinated Note (10% Cash, 1.3% PIK, Due 04/23) 14,800,000
 14,584,165
 14,584,165
  Class A Units (1,500,000 units)   1,500,000
 1,500,000
  Class B Units (1,500,000 units)   —
 —
    14,800,000
 16,084,165
 16,084,165
           
Travelpro Products, Inc. ("Travelpro") and TP - Holiday Group Limited ("TP") (3%)* Luggage and Travel Bag Supplier Second Lien Term Note - Travelpro (11% Cash, 2% PIK, Due 11/22) 10,126,055
 9,919,675
 9,919,675
  
Second Lien Term Note - TP (11% Cash, 2% PIK, Due 11/22)(4)
 8,970,540
 8,784,798
 8,562,599
  Common Units - Travelpro (2,000,000 units)   2,000,000
 2,077,000
    19,096,595
 20,704,473
 20,559,274
           
United Biologics, LLC (2%)* Allergy Immunotherapy Senior Note (12% Cash, 2% PIK, Due 04/18) 12,758,807
 12,686,184
 12,686,184
 Class A-1 Common Units (18,818 units)   137,324
 137,000
 Class A Common Units (177,935 units)   1,999,989
 1,767,000
 Class A-2 Common Kicker Units (444,003 units)   —
 —
 Class A-1 Common Kicker Units (14,114 units)   —
 —
 Class A, Class A-1, Class A-1 Kicker & Class B Unit Purchase Warrants   838,117
 361,000
    12,758,807
 15,661,614
 14,951,184
           
Vantage Mobility International, LLC (5%)* Wheelchair Accessible Vehicle Manufacturer 
Subordinated Notes (10.2% Cash, Due 09/21)(8)
 29,350,000
 28,785,893
 28,785,893
  Class A Units (1,750,000 units)   1,750,000
 1,750,000
    29,350,000
 30,535,893
 30,535,893
           

Portfolio Company(6)
Industry
Type of Investment(1) (2) (6)
Principal
Amount		CostFair
Value
Highpoint Global LLC (0.7%)*(7) (23)
Government ServicesSecond Lien Note (12.0% Cash, 2.0% PIK, Acquired 12/20, Due 09/22)$5,307,799 $5,286,568 $5,286,568 
5,307,799 5,286,568 5,286,568 
Holley Performance Products (Holley Purchaser, Inc.) (2.4%)*(7) (9) (12)
Automotive Parts & EquipmentFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 5.2% Cash, Acquired 10/18, Due 10/25)16,936,387 16,754,221 16,936,387 
16,936,387 16,754,221 16,936,387 
HTI Technology & Industries (1.70%)* (7) (23)
Electronic Component ManufacturingSecond Lien Note (12.0% Cash, 4.8% PIK, Acquired 12/20, Due 09/24)12,619,964 12,115,165 12,115,165 
12,619,964 12,115,165 12,115,165 
HW Holdco, LLC (Hanley Wood LLC) (1.0%)*(7) (9) (12)
AdvertisingFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 12/18, Due 12/24)7,527,218 7,396,115 7,527,218 
7,527,218 7,396,115 7,527,218 
Hyperion Materials & Technologies, Inc. (1.9%)*(7) (9) (12)
Industrial MachineryFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 08/19, Due 08/26)13,855,795 13,643,767 13,700,560 
13,855,795 13,643,767 13,700,560 
IGL Holdings III Corp. (1.9%)*(7) (9) (12)
Commercial PrintingFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/20, Due 11/26)14,025,147 13,635,887 13,626,360 
14,025,147 13,635,887 13,626,360 
IM Analytics Holding, LLC (d/b/a NVT) (1.0%)*(7) (9) (12)
Electronic Instruments & ComponentsFirst Lien Senior Secured Term Loan (LIBOR + 7.0%, 8.0% Cash, Acquired 11/19, Due 11/23)8,209,191 8,147,872 6,982,738 
Warrant (68,950 units, Acquired 11/19)— — 
8,209,191 8,147,872 6,982,738 
INOS 19-090 GmbH (1.7%)*(3) (7) (9) (18)
Aerospace & DefenseFirst Lien Senior Secured Term Loan (EURIBOR + 6.1%, 6.1% Cash, Acquired 12/20, Due 10/27)12,275,911 11,888,699 11,934,913 
12,275,911 11,888,699 11,934,913 
Institutional Shareholder Services, Inc. (0.7%)*(7) (9) (12)
Diversified Support ServicesSecond Lien Senior Secured Term Loan (LIBOR + 8.5%, 8.7% Cash, Acquired 03/19, Due 03/27)4,951,685 4,830,132 4,951,685 
4,951,685 4,830,132 4,951,685 
International Precision Components (1.0%)*(7) (23)
Plastic Injection MoldingSecond Lien Loan (12.0% Cash, 2.0% PIK, Acquired 12/20, Due 10/24)7,000,000 6,895,000 6,895,000 
7,000,000 6,895,000 6,895,000 
ISS#2, LLC (d/b/a Industrial Services Solutions) (0.9%)*(7) (9) (12)
Commercial Services & SuppliesFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 02/20, Due 02/26)6,819,551 6,700,432 6,300,583 
6,819,551 6,700,432 6,300,583 
Jade Bidco Limited (Jane's)
(1.7%)*(3) (7) (9)
Aerospace & Defense
First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.8% Cash, 2.0% PIK, Acquired 11/19, Due 12/26)(13)
10,538,414 10,291,098 10,353,797 
First Lien Senior Secured Term Loan (EURIBOR + 4.5%, 4.5% Cash, 2.0% PIK, Acquired 11/19, Due 12/26)(19)
2,057,007 1,813,166 2,020,971 
12,595,421 12,104,264 12,374,768 
Jedson Engineering, Inc. (0.4%)*(7) (8) (23)
Engineering & Construction ManagementFirst Lien Loan (12.0% Cash, 3.0% PIK, Acquired 12/20, Due 06/22)9,560,423 3,000,000 3,000,000 
9,560,423 3,000,000 3,000,000 
JetBlue 2019-1 Class B Pass Through Trust (0.7%)*AirlinesStructured Secured Note - Class B (8.0% Cash, Acquired 08/20, Due 11/27)4,721,693 4,721,693 5,048,044 
4,721,693 4,721,693 5,048,044 
Kano Laboratories LLC (1.4%)*(7) (9) (12)
Chemicals, Plastics & RubberFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 11/20, Due 09/26)9,873,095 9,589,856 9,584,754 
Partnership Equity (227.2 units, Acquired 11/20)227,198 227,200 
9,873,095 9,817,054 9,811,954 
Kenan Advantage Group Inc. (0.6%)* (9) (10)
TruckingFirst Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.0% Cash, Acquired 08/18, Due 07/22)4,265,453 4,263,951 4,217,125 
4,265,453 4,263,951 4,217,125 
F-31


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2020
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments — (Continued)
December 31, 2016
Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
Water Pik, Inc. (5%)* Oral Health and Shower Head Supplier 
Second Lien Term Loan (LIBOR + 8.75%, 9.8% Cash, Due 01/21)(8)
 $31,150,970
 $30,769,847
 $30,769,847
    31,150,970
 30,769,847
 30,769,847
           
Wheel Pros Holdings, Inc. (3%)* Wheel/Rim and Performance Tire Distributor 
Subordinated Note (LIBOR + 7.0%, 11% Cash, Due 06/20)(8)
 13,822,500
 13,605,040
 13,605,040
  Class A Units (2,000 units)   1,954,144
 1,954,000
    13,822,500
 15,559,184
 15,559,040
           
Women's Marketing, Inc. (2%)* Full-Service Media Organization 
Subordinated Note (11% Cash, 1.5% PIK, Due 06/21)(6)
 16,868,045
 16,141,439
 11,093,000
  Class A Common Units (16,300 units)   1,630,000
 —
    16,868,045
 17,771,439
 11,093,000
           
WSO Holdings, LP (1%)* Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer Common Points (3,000 points)   3,000,000
 3,576,000
     3,000,000
 3,576,000
       
YummyEarth Inc. (3%)* Organic Candy Manufacturer 
Senior Notes (LIBOR + 8.5%, 9.5% Cash, Due 08/20)(8)
 22,000,000
 21,565,471
 19,564,000
  Limited Partnership Interest   3,496,500
 —
    22,000,000
 25,061,971
 19,564,000
       
Subtotal Non–Control / Non–Affiliate Investments 825,243,841
 888,974,154
 857,604,639
           
Affiliate Investments:          
All Metals Holding, LLC (1%)* Steel Processor and Distributor Subordinated Note (12% Cash, 1% PIK, Due 12/21) 6,433,333
 6,249,220
 6,249,220
  Units (318,977 units)   793,331
 754,000
    6,433,333
 7,042,551
 7,003,220
           
CIS Secure Computing Inc. (2%)* Secure Communications and Computing Solutions Provider Subordinated Note (12% Cash, 3% PIK, Due 03/18) 11,670,708
 11,670,708
 11,670,708
Common Stock (84 shares)   502,320
 2,155,000
  11,670,708
 12,173,028
 13,825,708
           
Consolidated Lumber Company LLC (1%)* Lumber Yard Operator Subordinated Note (10% Cash, 2% PIK, Due 09/20) 4,193,848
 4,121,389
 4,278,000
  Class A Units (15,000 units)   1,500,000
 2,481,000
    4,193,848
 5,621,389
 6,759,000
           
DPII Holdings, LLC (0%)* Satellite Communication Business 
Tranche I & II Subordinated Notes (12% Cash, 4% PIK, Due 01/18)(6)
 3,744,709
 3,227,001
 2,356,001
  
Tranche III Subordinated Note (19% PIK, Due 01/18)(6)
 2,408,752
 2,148,462
 —
  Class A Membership Interest (17,308 units)   1,107,692
 —
    6,153,461
 6,483,155
 2,356,001
           
FCL Holding SPV, LLC (0%)* Commercial Printing Services Class A Interest (24,873 units)   292,000
 645,000
  Class B Interest (48,427 units)   —
 101,000
  Class C Interest (3,746 units)   —
 —
      292,000
 746,000
           
Frank Entertainment Group, LLC
(3%)*
 Movie Theatre and Family Entertainment Operator 
Senior Note (LIBOR + 7%, 10% Cash, 5.8% PIK, Due 06/18)(8)
 9,997,644
 9,940,684
 9,940,684
  Class A Redeemable Preferred Units (10.5% Cash) (196,718 units)   3,934,666
 4,566,904
  Class B Redeemable Preferred Units (18,667 units)   433,334
 1,660,810
  Class C Redeemable Preferred Units (25,846 units)   600,000
 600,000
  Class A Common Units (43,077 units)   1,000,000
 —
  Class A Common Warrants   632,000
 —
    9,997,644
 16,540,684
 16,768,398
           
MS Bakery Holdings, Inc. (1%)* Baked Goods Provider Preferred Units (233 units)   211,867
 397,000
 Common B Units (3,000 units)   23,140
 2,110,000
 Common A Units (1,652 units)   14,993
 1,162,000
      250,000
 3,669,000
           
           
           

Portfolio Company(6)
Industry
Type of Investment(1) (2) (6)
Principal
Amount		CostFair
Value
Kene Acquisition, Inc. (En Engineering) (1.0%)*(7) (9) (12)
Oil & Gas Equipment & ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 08/19, Due 08/26)$7,298,712 $7,173,784 $7,202,679 
7,298,712 7,173,784 7,202,679 
Kona Buyer, LLC (4.8%)*(7) (9) (12)
High Tech IndustriesFirst Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 12/20, Due 12/27)35,000,000 34,132,135 34,125,000 
35,000,000 34,132,135 34,125,000 
LAC Intermediate, LLC (f/k/a Lighthouse Autism Center) (1.3%)*(7) (9) (12)
Healthcare & PharmaceuticalsFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 10/18, Due 10/24)9,218,032 9,083,136 8,987,581 
Class A LLC Units (154,320 units, Acquired 10/18)154,320 184,312 
9,218,032 9,237,456 9,171,893 
Learfield Communications, LLC (1.0%)*Broadcasting
First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, Acquired 08/20, Due 12/23)(9)(10)
136,803 96,446 123,073 
First Lien Senior Secured Term Loan (LIBOR + 3.00%, 3.2% Cash, 10.0% PIK, Acquired 08/20, Due 12/23)(12)
7,181,368 7,117,163 7,133,468 
7,318,171 7,213,609 7,256,541 
Legal Solutions Holdings (1.3%)*(7) (23)
Business ServicesSenior Subordinated Loan (6.0% Cash, 10.0% PIK, Acquired 12/20, Due 03/22)10,398,126 9,597,471 9,597,471 
10,398,126 9,597,471 9,597,471 
MB2 Dental Solutions, LLC (1.0%)*(7) (9) (12)
Health Care ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.5%, 6.7% Cash, Acquired 09/19, Due 09/23)7,443,622 7,381,819 7,443,622 
7,443,622 7,381,819 7,443,622 
Media Recovery, Inc. (SpotSee) (1.3%)*(7) (9) (12)
Containers, Packaging & GlassFirst Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 11/19, Due 11/25)9,179,626 8,873,020 9,018,983 
9,179,626 8,873,020 9,018,983 
Modern Star Holdings Bidco Pty Limited. (1.4%)*(3) (7) (9) (22)
Non-durable Consumer GoodsFirst Lien Senior Secured Term Loan (BBSY + 6.25%, 6.8% Cash, Acquired 12/20, Due 12/26)10,482,797 9,973,821 10,101,881 
10,482,797 9,973,821 10,101,881 
MSG National Properties (0.3%)*(3) (7) (9) (12)
Hotel, Gaming, & LeisureFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.0% Cash, Acquired 11/20, Due 11/25)2,461,759 2,389,417 2,474,068 
2,461,759 2,389,417 2,474,068 
Murphy Midco Limited (1.3%)*(3) (7) (9) (16)
Media, Diversified & ProductionFirst Lien Senior Secured Term Loan (GBP LIBOR + 5.50%, 5.5% Cash, Acquired 11/20, Due 11/27)9,904,416 9,228,222 9,508,239 
9,904,416 9,228,222 9,508,239 
Music Reports, Inc. (0.8%)*(7) (9) (10)
Media & EntertainmentFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 08/20, Due 08/26)5,592,972 5,459,912 5,469,461 
5,592,972 5,459,912 5,469,461 
Neuberger Berman CLO Ltd: Series 2020-36A (0.3%)*(3) (9) (12)
Structured FinanceStructured Secured Note - Class E (LIBOR + 7.81%, 8.0% Cash, Acquired 03/20, Due 04/33)2,500,000 2,476,562 2,501,790 
2,500,000 2,476,562 2,501,790 
NGS US Finco, LLC (f/k/a Dresser Natural Gas Solutions) (1.6%)*(7) (9) (10)
Energy Equipment & ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 10/18, Due 10/25)11,855,804 11,813,315 11,645,956 
11,855,804 11,813,315 11,645,956 
Omni Intermediate Holdings, LLC (1.4%)*(7) (9) (10)
TransportationFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/20, Due 12/26)10,000,000 9,700,263 9,700,000 
10,000,000 9,700,263 9,700,000 
Options Technology Ltd.
(1.3%)*(3) (7) (9) (12)
Computer ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 12/19, Due 12/25)9,796,552 9,583,342 9,633,049 
9,796,552 9,583,342 9,633,049 
Pacific Health Supplies Bidco Pty Limited (2.5%)*(3) (7) (9) (21)
Healthcare & PharmaceuticalsFirst Lien Senior Secured Term Loan (BBSY + 6.0%, 6.5% Cash, Acquired 12/20, Due 12/25)18,489,367 17,237,355 17,919,335 
18,489,367 17,237,355 17,919,335 
Pare SAS (SAS Maurice MARLE) (0.7%)*(3) (7) (9) (19)
Health Care EquipmentFirst Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, 1.5% PIK, Acquired 12/19, Due 12/26)4,817,430 4,305,403 4,683,024 
4,817,430 4,305,403 4,683,024 
F-32


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2020
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments — (Continued)
December 31, 2016
Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
NB Products, Inc. (8%)* Distributor of Work Apparel and Accessories Subordinated Note (12% Cash, 2% PIK, Due 02/20) $23,105,315
 $22,751,190
 $22,751,190
 Jr. Subordinated Note (10% PIK, Due 02/20) 4,705,830
 4,595,921
 4,595,921
 Jr. Subordinated Bridge Note (20% PIK, Due 05/21) 2,002,586
 1,972,727
 1,972,727
 Series A Redeemable Senior Preferred Stock (7,839 shares)   7,621,648
 9,412,000
 Common Stock (1,668,691 shares)   333,738
 9,779,000
   29,813,731
 37,275,224
 48,510,838
           
PCX Aerostructures, LLC (4%)* Aerospace Component Manufacturer Subordinated Note (10.5% Cash, Due 10/19) 29,647,359
 29,148,152
 21,960,000
 Series A Preferred Stock (6,066 shares)   6,065,621
 —
Series B Preferred Stock (411 shares)   410,514
 —
Class A Common Stock (121,922 shares)   30,480
 —
   29,647,359
 35,654,767
 21,960,000
           
Team Waste, LLC (1%)* Environmental and Facilities Services Preferred Units (455,000 units)   9,100,000
 9,100,000
       9,100,000
 9,100,000
           
Technology Crops, LLC (2%)* Supply Chain Management Services Subordinated Notes (12% Cash, 5% PIK, Due 09/17) 11,837,622
 11,837,622
 11,837,622
Common Units (50 units)   500,000
 —
   11,837,622
 12,337,622
 11,837,622
           
TGaS Advisors, LLC (2%)* Advisory Solutions to Pharmaceutical Companies Senior Note (10% Cash, 1% PIK, Due 11/19) 9,674,276
 9,521,986
 9,521,986
 Preferred Units (1,685,357 units)   1,556,069
 1,270,000
   9,674,276
 11,078,055
 10,791,986
           
Tulcan Fund IV, L.P. (0%)* Custom Forging and Fastener Supplies Common Units (1,000,000 units)   1,000,000
 —
      1,000,000
 —
           
United Retirement Plan Consultants, Inc. (0%)* Retirement Plan Administrator Series A Preferred Shares (9,400 shares)   205,748
 257,000
  Common Shares (100,000 shares)   1,000,000
 301,000
      1,205,748
 558,000
           
Waste Recyclers Holdings, LLC (0%)* Environmental and Facilities Services Class A Preferred Units (280 units)   2,251,100
 —
Class B Preferred Units (11,484,867 units)   3,304,218
 817,000
Common Unit Purchase Warrant (1,170,083 units)   748,900
 —
Common Units (153,219 units)   180,783
 —
     6,485,001
 817,000
           
Wythe Will Tzetzo, LLC (1%)* Confectionery Goods Distributor Series A Preferred Units (99,829 units)   —
 6,808,000
      —
 6,808,000
           
Subtotal Affiliate Investments   119,421,982
 162,539,224
 161,510,773
           
Control Investments:          
CRS Reprocessing, LLC (1%)* Fluid
Reprocessing
Services		 
Senior Notes (LIBOR + 3.5%, 4.3% Cash, Due 06/17)(8)
 2,942,769
 2,942,769
 2,942,769
 Split Collateral Term Loans (8% Cash, Due 06/17) 11,192,464
 11,192,464
 6,182,000
Series F Preferred Units (705,321 units)   9,134,807
 —
 Common Units (15,174 units)   —
 —
   14,135,233
 23,270,040
 9,124,769
           
DCWV Acquisition Corporation
(0%)*
 Arts & Crafts and Home Decor Products Designer and Supplier 
Senior Subordinated Note (15% PIK, Due 12/19)(6)
 291,875
 250,000
 250,000
  
Subordinated Note (12% Cash, 3% PIK, Due 12/19)(6)
 8,090,699
 6,178,633
 1,389,000
 
Jr. Subordinated Note (15% PIK, Due 12/19)(6)
 2,440,829
 2,000,000
 —
 Series A Preferred Equity (1,200 shares)   1,200,000
 —
 100% Common Shares   —
 —
   10,823,403
 9,628,633
 1,639,000
           

Portfolio Company(6)
Industry
Type of Investment(1) (2) (6)
Principal
Amount		CostFair
Value
Patriot New Midco 1 Limited (Forensic Risk Alliance) (1.2%)*(3) (7) (9)
Diversified Financial Services
First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 02/20, Due 02/27)(12)
$4,489,471 $4,372,581 $4,388,907 
First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 02/20, Due 02/27) (18)
4,126,940 3,579,755 4,034,496 
8,616,411 7,952,336 8,423,403 
PerTronix, LLC (1.1%)*(7) (9) (13)
AutomotiveFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/20, Due 10/26)8,308,515 8,186,879 8,183,887 
8,308,515 8,186,879 8,183,887 
Playtika Holding Corp. (0.5%)*(9) (12)
Leisure, Amusement & EntertainmentFirst Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 03/20, Due 12/24)3,800,000 3,536,230 3,818,582 
3,800,000 3,536,230 3,818,582 
Premier Technical Services Group (Project Graphite) (0.4%)*(3) (7) (9) (15)
Construction & EngineeringFirst Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 7.3% Cash, Acquired 08/19, Due 06/26)3,108,900 2,681,906 3,039,998 
3,108,900 2,681,906 3,039,998 
Premium Franchise Brands, LLC (3.4%)*(7) (9) (12)
Research & Consulting ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/20, Due 12/26)25,000,000 24,501,666 24,500,000 
25,000,000 24,501,666 24,500,000 
Process Equipment, Inc. (ProcessBarron) (0.8%)*(7) (9) (12)
Industrial Air & Material Handling EquipmentFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 03/19, Due 03/25)6,173,594 6,090,812 5,612,414 
6,173,594 6,090,812 5,612,414 
Professional Datasolutions, Inc. (PDI) (2.3%)*(7) (9) (12)
Application SoftwareFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 03/19, Due 10/24)16,924,678 16,905,254 16,628,496 
16,924,678 16,905,254 16,628,496 
PSC UK Pty Ltd. (0.4%)*(3) (7) (9) (15)
Insurance ServicesFirst Lien Senior Secured Term Loan (GBP LIBOR + 6.0%, 6.5% Cash, Acquired 11/19, Due 10/24)2,684,817 2,439,292 2,614,299 
2,684,817 2,439,292 2,614,299 
Questel Unite (3.1%)*(3) (7) (9) (18)
Business Services
First Lien Senior Secured Term Loan (EURIBOR + 6.25%, 7.3% Cash, Acquired 12/20, Due 12/27)
22,451,369 21,728,443 21,905,058 
22,451,369 21,728,443 21,905,058 
Radwell International, LLC (1.9%)*(7) (9) (12)
WholesaleFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/20, Due 12/26)14,264,053 13,916,962 13,914,053 
14,264,053 13,916,962 13,914,053 
Recovery Point Systems, Inc.
(1.6%)*(7) (9) (10)
TechnologyFirst Lien Senior Secured Term Loan (LIBOR + 6.5%, 7.5% Cash, Acquired 03/20, Due 07/26)11,795,776 11,572,084 11,766,287 
11,795,776 11,572,084 11,766,287 
REP SEKO MERGER SUB LLC
(1.2%)* (7) (9) (10)
Air Freight & LogisticsFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/20, Due 12/26)8,545,455 8,290,487 8,345,456 
8,545,455 8,290,487 8,345,456 
RPX Corporation (2.4%)*(7) (9) (12)
Research & Consulting ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 10/20, Due 10/25)17,500,000 17,110,715 17,106,250 
17,500,000 17,110,715 17,106,250 
RR Ltd: Series 2019-6A
(0.3%)*(3) (12)
Structured FinanceStructured Secured Note - Class D (LIBOR + 6.75%, 7.0% Cash, Acquired 03/20, Due 04/30)2,000,000 1,661,539 2,000,124 
2,000,000 1,661,539 2,000,124 
Ruffalo Noel Levitz, LLC
(1.3%)*(7) (9) (12)
Media ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 01/19, Due 05/22)9,616,736 9,552,719 9,567,718 
9,616,736 9,552,719 9,567,718 
Safety Products Holdings, LLC (2.5%)* (9) (12)
Non-durable Consumer Goods
First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 12/20, Due 12/26)(7)
18,108,567 17,559,056 17,555,609 
Common Stock (424.1 units, Acquired 12/20)424,088 424,090 
18,108,567 17,983,144 17,979,699 
Scaled Agile, Inc. (0.7%)*(7) (9) (10)
Research & Consulting ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 06/19, Due 06/24)4,845,720 4,807,839 4,797,263 
4,845,720 4,807,839 4,797,263 
F-33


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2020
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments — (Continued)
December 31, 2016
Portfolio Company Industry 
Type of Investment(1)(2)(7)
 
Principal
Amount
 Cost 
Fair
Value(3)
Gerli & Company (0%)* Specialty Woven Fabrics Manufacturer 
Subordinated Note (13% Cash, Due 01/17)(6)
 $648,527
 $375,000
 $—
Subordinated Note (8.5% Cash, Due 01/17)(6)
 4,900,843
 3,000,000
 —
Class A Preferred Shares (1,211 shares)   855,000
 —
Class C Preferred Shares (744 shares)   —
 —
Class E Preferred Shares (400 shares)   161,440
 —
Common Stock (300 shares)   100,000
 —
   5,549,370
 4,491,440
 —
         
SRC Worldwide, Inc. (1%)* Specialty Chemical Manufacturer Common Stock (5,000 shares)   8,028,000
 8,028,000
      8,028,000
 8,028,000
           
           
Subtotal Control Investments   30,508,006
 45,418,113
 18,791,769
         
Total Investments, December 31, 2016 (170%)*   $975,173,829
 $1,096,931,491
 $1,037,907,181
Portfolio Company(6)
Industry
Type of Investment(1) (2) (6)
Principal
Amount		CostFair
Value
Serta Simmons Bedding LLC
(1.5%)*(9) (10)
Home FurnishingsSuper Priority First Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23)$7,424,499 $7,234,063 $7,498,744 
Super Priority Second Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23)3,643,817 3,379,870 3,272,913 
11,068,316 10,613,933 10,771,657 
SISU ACQUISITIONCO., INC. (2.2%)*(7) (9) (12)
Aerospace & DefenseFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 12/20, Due 12/26)16,132,835 15,811,282 15,810,178 
16,132,835 15,811,282 15,810,178 
SMA Holdings, Inc. (1.0%)*(7) (23)
ConsultingFirst Lien Loan (11.0% Cash, Acquired 12/20, Due 06/24)7,000,000 6,720,000 6,720,000 
Warrants (2.0 units, Acquired 12/20)286,781 286,781 
7,000,000 7,006,781 7,006,781 
Smile Brands Group Inc.
(2.1%)*(7) (9) (12)
Health Care ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.17%, 5.4% Cash, Acquired 10/18, Due 10/24)5,880,607 5,842,184 5,824,154 
First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/20, Due 10/24)9,310,993 9,030,258 9,024,500 
15,191,600 14,872,442 14,848,654 
SN BUYER, LLC (4.8%)*(7) (9) (12)
Health Care ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/20, Due 11/26)35,000,000 34,304,393 34,300,000 
35,000,000 34,304,393 34,300,000 
Springbrook Software (SBRK Intermediate, Inc.) (1.3%)*(7) (9) (12)
Enterprise Software & ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/19, Due 12/26)9,349,719 9,152,983 9,201,599 
9,349,719 9,152,983 9,201,599 
SSCP Pegasus Midco Limited (2.3%)*(3) (7) (9) (16)
Healthcare & PharmaceuticalsFirst Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 6.8% Cash, Acquired 12/20, Due 11/27)17,664,989 16,498,614 16,733,353 
17,664,989 16,498,614 16,733,353 
Syniverse Holdings, Inc. (2.2%)*(9) (12)
Technology DistributorsFirst Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 08/18, Due 03/23)17,480,454 16,048,735 15,749,365 
17,480,454 16,048,735 15,749,365 
Team Health Holdings, Inc. (0.8%)*(9) (10)
Health Care ServicesFirst Lien Senior Secured Term Loan (LIBOR + 2.75%, 3.8% Cash, Acquired 09/18, Due 02/24)6,822,785 6,659,174 6,058,906 
6,822,785 6,659,174 6,058,906 
The Hilb Group, LLC
(2.1%)*(7) (9)
Insurance Brokerage
First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/19, Due 12/26)(11)
11,667,719 11,413,365 11,541,707 
First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 12/19, Due 12/26)(12)
3,602,001 3,374,934 3,373,303 
15,269,720 14,788,299 14,915,010 
Total Safety U.S. Inc. (0.9%)* (12)
Diversified Support ServicesFirst Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 11/19, Due 08/25)6,857,482 6,611,003 6,576,325 
6,857,482 6,611,003 6,576,325 
Transit Technologies LLC
(0.7%)*(7) (9) (12)
SoftwareFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.0% Cash, Acquired 02/20, Due 02/25)6,035,305 5,859,123 5,221,746 
6,035,305 5,859,123 5,221,746 
Transportation Insight, LLC (3.3%)*(7) (9) (12)
Air Freight & LogisticsFirst Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.6% Cash, Acquired 08/18, Due 12/24)24,506,875 24,346,335 23,899,105 
24,506,875 24,346,335 23,899,105 
Truck-Lite Co., LLC (3.0%)*(7) (9) (12)
Automotive Parts & EquipmentFirst Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/19, Due 12/26)22,352,885 21,960,470 21,791,827 
22,352,885 21,960,470 21,791,827 
Trystar, LLC (2.5%)*(7) (9) (12)
Power Distribution SolutionsFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 09/18, Due 09/23)17,596,398 17,384,658 17,288,461 
Class A LLC Units (384.5 units, Acquired 09/18)395,995 339,474 
17,596,398 17,780,653 17,627,935 
F-34


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2020
Portfolio Company(6)
Industry
Type of Investment(1) (2) (6)
Principal
Amount		CostFair
Value
Tuf-Tug, Inc. (0.1%)*(7) (23)
Safety Equipment ManufacturerCommon Stock (24.6 shares, Acquired 12/20)$385,047 $385,047 
385,047 385,047 
Turf Products, LLC (1.2%)*(7) (23)
Landscaping & Irrigation Equipment DistributorSenior Subordinated Debt (10.0% Cash, Acquired 12/20, Due 10/23)$8,697,056 8,383,962 8,383,962 
8,697,056 8,383,962 8,383,962 
U.S. Gas & Electric, Inc. (0.2%)*(7) (23)
Energy ServicesSecond Lien Loan (9.5% Cash, Acquired 12/20, Due 07/25)2,285,250 1,785,250 1,785,250 
Second Lien Loan (9.5% Cash, Acquired 12/20, Due 07/25)(24)
2,485,469 — — 
4,770,719 1,785,250 1,785,250 
U.S. Silica Company (0.2%)*(3) (9) (10)
Metal & Glass ContainersFirst Lien Senior Secured Term Loan (LIBOR + 4.0%, 5.0% Cash, Acquired 08/18, Due 05/25)1,487,525 1,490,312 1,299,724 
1,487,525 1,490,312 1,299,724 
UKFast Leaders Limited (3.3%)*(3) (7) (9) (14)
TechnologyFirst Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 6.8% Cash, Acquired 09/20, Due 9/27)24,226,278 22,140,865 23,625,466 
24,226,278 22,140,865 23,625,466 
USF Holdings LLC (U.S. Farathane, LLC) (0.4%)*(9) (12)
Auto Parts & EquipmentFirst Lien Senior Secured Term Loan (LIBOR + 3.5%, 4.5% Cash, Acquired 08/18, Due 12/21)3,088,580 3,092,541 2,849,214 
3,088,580 3,092,541 2,849,214 
USLS Acquisition, Inc. (f/k/a US Legal Support, Inc.) (2.1%)*(7) (9) (12)
Legal ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/18, Due 11/24)16,388,428 16,165,710 15,226,488 
16,388,428 16,165,710 15,226,488 
Utac Ceram (0.2%)*(3) (7) (9) (18)
Business ServicesFirst Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 09/20, Due 09/27)1,713,064 1,524,242 1,651,143 
1,713,064 1,524,242 1,651,143 
Validity, Inc. (0.6%)*(7) (9) (10)
IT Consulting & Other ServicesFirst Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.9% Cash, Acquired 07/19, Due 05/25)5,025,862 4,896,882 4,586,098 
5,025,862 4,896,882 4,586,098 
W2O Holdings, Inc. (0.0%)* (7) (9)
Healthcare TechnologyUndrawn Delayed Draw Term Loan (LIBOR + 5.0%, 5.0% Cash, Acquired 10/20, Due 06/25)— (115,981)(104,214)
— (115,981)(104,214)
Winebow Group, LLC, (The) (2.1%)*(9) (10)
Consumer GoodsFirst Lien Senior Secured Term Loan (LIBOR + 3.75%, 4.8% Cash, Acquired 11/19, Due 07/21)10,599,445 10,113,510 9,690,543 
Second Lien Senior Secured Term Loan (LIBOR + 7.5%, 8.5% Cash, Acquired 10/19, Due 01/22)
7,141,980 4,813,864 5,713,584 
17,741,425 14,927,374 15,404,127 
World 50, Inc. (1.7%)*(7) (9) (10)
Professional ServicesFirst Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 01/20, Due 01/26)3,313,191 3,218,141 3,313,191 
First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 09/20, Due 01/26)9,100,607 8,905,025 8,940,436 
12,413,798 12,123,166 12,253,627 
Subtotal Non–Control / Non–Affiliate Investments (184.7%)1,378,776,392 1,318,614,617 1,325,783,281 
Affiliate Investments:(4)
Advantage Insurance, Inc. (0.8%)*(7) (23)
Banking, Finance, Insurance, & Real EstatePreferred Stock (587,001 shares, Acquired 12/20)5,946,641 5,946,641 
5,946,641 5,946,641 
Jocassee Partners LLC (3.2%)*(3)
Investment Funds & Vehicles9.1% Member Interest, Acquired 06/1920,158,270 22,623,820 
20,158,270 22,623,820 
JSC Tekers Holdings (0.7%)*(3) (7) (23)
Real Estate ManagementPreferred Stock (9,159,085 shares, Acquired 12/20)4,753,000 4,753,000 
Common Stock (3,201 shares, Acquired 12/20)— — 
4,753,000 4,753,000 
F-35


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2020
Portfolio Company(6)
Industry
Type of Investment(1) (2) (6)
Principal
Amount		CostFair
Value
Security Holdings B.V. (4.9%)*(3) (7) (23)
Electrical EngineeringBridge Loan (5.0% PIK, Acquired 12/20, Due 05/22)$5,187,506 $5,187,508 $5,187,508 
Senior Subordinated Loan (3.1% PIK, Acquired 12/20, Due 05/22)8,746,454 8,746,454 8,746,454 
Common Stock (1,099.5 shares, Acquired 12/20)21,264,000 21,329,370 
13,933,960 35,197,962 35,263,332 
Thompson Rivers LLC (1.4%)*(3)
Investment Funds & Vehicles10% Member Interest, Acquired 06/2010,000,000 10,011,840 
10,000,000 10,011,840 
Subtotal Affiliate Investments (11.0%)13,933,960 76,055,873 78,598,633 
Control Investments:(5)
MVC Automotive Group Gmbh (2.3%)*(3) (7) (23)
Other Diversified Financial ServicesBridge Loan (6.0% Cash, Acquired 12/20, Due 12/21)7,149,166 7,149,166 7,149,166 
Common Equity Interest (18,000 shares, Acquired 12/20)9,553,000 9,582,368 
7,149,166 16,702,166 16,731,534 
MVC Private Equity Fund LP (1.3%)*(3) (23)
Investment Funds & VehiclesGeneral Partnership Interest224,978 224,978 
Limited Partnership Interest8,899,284 8,899,284 
9,124,262 9,124,262 
Subtotal Control Investments (3.6%)7,149,166 25,826,428 25,855,796 
Short-Term Investments:
BlackRock, Inc. (4.2%)*Money Market FundBlackRock Liquidity Temporary Fund (0.08% yield)30,000,000 30,000,000 
30,000,000 30,000,000 
JPMorgan Chase & Co. (5.0%)*Money Market FundJPMorgan Prime Money Market Fund (0.09% yield)35,558,227 35,558,227 
35,558,227 35,558,227 
Subtotal Short-Term Investments (9.1%)65,558,227 65,558,227 
Total Investments, December 31, 2020 (208.4%)*$1,399,859,518 $1,486,055,145 $1,495,795,937 
F-36


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2020
Derivative Instruments
Credit Support Agreement(a)(b)(d)
DescriptionCounter PartySettlement Date(c)Notional AmountValueUnrealized Appreciation (Depreciation)
Credit Support AgreementBarings LLC01/01/31$23,000,000 $13,600,000 $— 
Total Credit Support Agreement, December 31, 2020$— 
(a) The MVC Credit Support Agreement covers all of the investments acquired by the Company from MVC Capital, Inc. ("MVC") in connection with the MVC Acquisition (as defined in “Note 10 – MVC Capital, Inc. Acquisition”) and any investments received by the Company in connection with the restructuring, amendment, extension or other modification (including the issuance of new securities) of any of the investments acquired by the Company from MVC in connection with the MVC Acquisition (collectively, the “Reference Portfolio”). Each investment that is included in the Reference Portfolio is denoted in the above Schedule of Investments with footnote (23).
(b)      The Company and Barings LLC entered into a Credit Support Agreement pursuant to which Barings LLC agreed to provide credit support to the Company in the amount of up to $23.0 million.
(c) Settlement Date means the earlier of (1) January 1, 2031 and (2) the date on which the entire Reference Portfolio has been realized or written off.
(d) See “Note 2 – Agreements and Related Party Transactions” for additional information regarding the MVC Credit Support Agreement.
Foreign Currency Forward Contracts:
DescriptionNotional Amount to be PurchasedNotional Amount to be SoldSettlement DateUnrealized Appreciation (Depreciation)
Foreign currency forward contract (AUD)$8,471,304A$11,378,67001/05/21$(309,049)
Foreign currency forward contract (AUD)A$11,378,670$8,610,50401/05/21169,849 
Foreign currency forward contract (AUD)$148,019A$193,88204/06/21(1,698)
Foreign currency forward contract (EUR)$13,472,749€11,406,60401/05/21(483,801)
Foreign currency forward contract (EUR)€11,406,604$13,518,02301/05/21438,526 
Foreign currency forward contract (EUR)$561,754€456,60404/06/211,944 
Foreign currency forward contract (GBP)$13,554,607£10,215,29901/05/21(409,190)
Foreign currency forward contract (GBP)£10,215,299$13,717,67801/05/21246,118 
Foreign currency forward contract (GBP)$13,109,849£9,672,75804/06/21(119,769)
Foreign currency forward contract (SEK)$141,6031,259,406kr01/05/21(11,748)
Foreign currency forward contract (SEK)1,259,406kr$152,39601/05/21955 
Foreign currency forward contract (SEK)$164,3251,356,628kr04/06/21(1,028)
Total Foreign Currency Forward Contracts, December 31, 2020$(478,891)

*    Fair value as a percentpercentage of net assetsassets.
(1)All debt investments are income producing, unless otherwise noted. Equity and any equity-linked investments are non-income producing, unless otherwise noted. The Company's Board of Directors (the "Board") determined in good faith that all investments were valued at fair value in accordance with the Company's valuation policies and procedures and the Investment Company Act of 1940, as amended, (the "1940 Act") based on, among other things, the input of the Company's external investment adviser, Barings LLC ("Barings"), the Company’s Audit Committee and independent valuation firms that have been engaged to assist in the valuation of the Company's middle-market investments. In addition, all debt investments are variable rate investments unless otherwise noted. Index-based floating interest rates are generally subject to a contractual minimum interest rate. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference to LIBOR, EURIBOR, GBP LIBOR, BBSY, STIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically reset semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan.
(2)All of the Company’s portfolio company investments (including joint venture and short-term investments), which as of December 31, 2020 represented 208.4% of the Company’s net assets, are subject to legal restrictions on sales. The acquisition date represents the date of the Company's initial investment in the relevant portfolio company.
(3)Investment is not a qualifying investment as defined under Section 55(a) of the 1940 Act. Non-qualifying assets represent 23.4% of total investments at fair value as of December 31, 2020. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. If at any time qualifying assets do not represent at least 70% of the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a).

(1)All debt investments are income producing, unless otherwise noted. Equity and equity-linked investments are non-income producing, unless otherwise noted. The fair values of all investments were determined using significant unobservable inputs.
(2)Disclosures of interest rates on notes include cash interest rates and payment-in-kind (“PIK”) interest rates.
(3)All investments are restricted as to resale and were valued at fair value as determined in good faith by the Board of Directors.
(4)Investment is not a qualifying investment as defined under Section 55(a) of the Investment Company Act of 1940, as amended. Non-qualifying assets represent 2.5% of total investments at fair value as of December 31, 2016. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. If at any time qualifying assets do not represent at least 70% of the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a).
(5)PIK non-accrual investment
(6)Non-accrual investment
(7)All of the Company's investments, unless otherwise noted, are encumbered either as security for the Company's senior secured credit facility or in support of the SBA-guaranteed debentures issued by Triangle Mezzanine Fund LLLP and Triangle Mezzanine Fund II LP.
(8)Index-based floating interest rate is subject to contractual minimum interest rate. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference to either LIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan.








F-37


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2020

(4)As defined in the 1940 Act, the Company is deemed to be an “affiliated person” of the portfolio company as the Company owns between 5% or more, up to 25%(inclusive), of the portfolio company's voting securities (“non-controlled affiliate”). Transactions related to investments in non-controlled "Affiliate Investments" for the year ended December 31, 2020 were as follows:
 Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(b)December 31, 2019
Value		Gross Additions
(c)		Gross Reductions (d)December 31, 2020
Value
Portfolio CompanyType of Investment(a)
Advantage Insurance, Inc.(e)
Preferred Stock (587,001 shares)$— $— $— $— $5,946,641 $— $5,946,641 
— — — — 5,946,641 — 5,946,641 
Jocassee Partners LLC9.1% Member Interest— 2,394,007 — 10,229,813 12,394,007 — 22,623,820 
— 2,394,007 — 10,229,813 12,394,007 — 22,623,820 
JSC Tekers Holdings(e)
Common Stock (3,201 shares)— — — — — — — 
Preferred Stock (9,159,085 shares)— — — — 4,753,000 — 4,753,000 
— — — — 4,753,000 — 4,753,000 
Security Holdings B.V(e)
Bridge Loan (5.0% PIK)— — — — 5,187,508 — 5,187,508 
Senior Subordinated Loan (3.1% PIK)— — — — 8,746,454 — 8,746,454 
Common Stock (1,099.5 shares)— 65,370 — — 21,329,370 — 21,329,370 
— 65,370 — — 35,263,332 — 35,263,332 
Thompson Rivers LLC10% Member Interest— 11,840 — — 10,011,840 — 10,011,840 
— 11,840 — — 10,011,840 — 10,011,840 
Total Affiliate Investments$— $2,471,217 $— $10,229,813 $68,368,820 $— $78,598,633 

(a)     Equity and equity-linked investments are non-income producing, unless otherwise noted.
(b) Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Affiliate category.
(c)     Gross additions include increases in the cost basis of investments resulting from new investments and follow-on investments. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation.
(d)    Gross reductions include decreases in the total cost basis of investments resulting from principal repayments or sales. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation.
(e) The fair value of the investment was determined using significant unobservable inputs.
(5)    As defined in the 1940 Act, the Company is deemed to be both an “affiliated person” and “control” the portfolio company because it owns more than 25% of the portfolio company’s outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company (including through a management agreement). Transactions as of and during the year ended December 31, 2020 in which the portfolio company is deemed to be a "Control Investment" of the Company are as follows:










F-38


Barings BDC, Inc.
Consolidated Schedule of Investments — (Continued)
December 31, 2020
 Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(b)December 31, 2019
Value		Gross Additions
(c)		Gross Reductions (d)December 31, 2020
Value
Portfolio CompanyType of Investment(a)
MVC Automotive Group GmbH(e)
Common Equity Interest (18,000 shares)$— $29,368 $— $— $9,582,368 $— $9,582,368 
Bridge Loan (6.0% PIK)— — 9,532 — 7,149,166 — 7,149,166 
— 29,368 9,532 — 16,731,534 — 16,731,534 
MVC Private Equity Fund LP(e)
Limited Partnership Interest— — — — 8,899,284 — 8,899,284 
General Partnership Interest— — 5,292 — 224,978 — 224,978 
— — 5,292 — 9,124,262 — 9,124,262 
Total Control Investments$— $29,368 $14,824 $— $25,855,796 $— $25,855,796 
(a)     Equity and equity-linked investments are non-income producing, unless otherwise noted.
(b) Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Control category.
(c)     Gross additions include increases in the cost basis of investments resulting from new investments and follow-on investments. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation.
(d)    Gross reductions include decreases in the total cost basis of investments resulting from principal repayments or sales. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation.
(e) The fair value of the investment was determined using significant unobservable inputs.
(6)Some or all of the investment is or will be encumbered as security for the Company's $800.0 million senior secured credit facility with ING Capital LLC initially entered into in February 2019 (as amended, restated and otherwise modified from time to time, the "February 2019 Credit Facility").
(7)The fair value of the investment was determined using significant unobservable inputs.
(8)Non-accrual investment.
(9)Debt investment includes interest rate floor feature.
(10)The interest rate on these loans is subject to 1 Month LIBOR, which as of December 31, 2020 was 0.14388%.
(11)The interest rate on these loans is subject to 2 Month LIBOR, which as of December 31, 2020 was 0.19038%.
(12)The interest rate on these loans is subject to 3 Month LIBOR, which as of December 31, 2020 was 0.23838%.
(13)The interest rate on these loans is subject to 6 Month LIBOR, which as of December 31, 2020 was 0.25763%.
(14)The interest rate on these loans is subject to 2 month GBP LIBOR, which as of December 31, 2020 was 0.06088%.
(15)The interest rate on these loans is subject to 3 Month GBP LIBOR, which as of December 31, 2020 was 0.02550%.
(16)The interest rate on these loans is subject to 6 Month GBP LIBOR, which as of December 31, 2020 was 0.02988%.
(17)The interest rate on these loans is subject to 1 Month EURIBOR, which as of December 31, 2020 was -0.55400%.
(18)The interest rate on these loans is subject to 3 Month EURIBOR, which as of December 31, 2020 was -0.54500%.
(19)The interest rate on these loans is subject to 6 Month EURIBOR, which as of December 31, 2020 was -0.526%.
(20)The interest rate on these loans is subject to 3 Month STIBOR, which as of December 31, 2020 was -0.08500%.
(21)The interest rate on these loans is subject to 1 Month BBSY, which as of December 31, 2020 was 0.01000%.
(22)The interest rate on these loans is subject to 3 Month BBSY, which as of December 31, 2020 was 0.01000%.
(23)Investment was purchased as part of the MVC Acquisition and is part of the Reference Portfolio for purposes of the MVC Credit Support Agreement.
(24)In 2017, MVC Capital, Inc. received $5.7 million of 9.5% second lien callable notes due in 2025, in lieu of an escrow to satisfy any indemnification claims associated with MVC Capital, Inc's sale of its equity investment in U.S. Gas & Electric. Effective January 1, 2018, the cost basis of the U.S. Gas second lien loan was decreased by approximately $3.0 million due to a working capital adjustment. This loan is still subject to indemnification adjustments.


See accompanying notes.

F-39

Triangle Capital Corporation



Barings BDC, Inc.
Notes to Consolidated Financial Statements


1. Organization, Business, Basis of Presentation and Summary of Significant Accounting Policies
Organization and Business
Triangle Capital Corporation was incorporated on October 10, 2006 for the purposes of acquiring 100% of the equity interest in Triangle Mezzanine Fund LLLP (“Triangle SBIC”Barings BDC, Inc. (the "Company") and its general partner, Triangle Mezzanine LLC, raising capital in an initial public offering, which was completed in February 2007 (the “IPO”)wholly-owned subsidiaries are specialty finance companies. The Company currently operates as a closed-end, non-diversified investment company and thereafter operatinghas elected to be treated as an internally managed Business Development Company (“BDC”a business development company ("BDC") under the Investment Company Act of 1940, as amended (the “1940 Act”"1940 Act"). The Company has elected for federal income tax purposes to be treated as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended (the "Code").
The Asset Sale and Externalization Transactions
On April 3, 2018, the Company entered into an asset purchase agreement (the "Asset Purchase Agreement") with BSP Asset Acquisition I, LLC (the "Asset Buyer"), an affiliate of Benefit Street Partners L.L.C., pursuant to which the Company agreed to sell its December 15, 2009,31, 2017 investment portfolio to the Asset Buyer for gross proceeds of $981.2 million in cash, subject to certain adjustments to take into account portfolio activity and other matters occurring since December 31, 2017 (such transaction referred to herein as the "Asset Sale Transaction").
Also on April 3, 2018, the Company entered into a stock purchase and transaction agreement (the "Externalization Agreement") with Barings LLC ("Barings" or the "Adviser"), through which Barings agreed to become the investment adviser to the Company in exchange for (1) a payment by Barings of $85.0 million directly to the Company’s stockholders, (2) an investment by Barings of $100.0 million in newly issued shares of the Company's common stock at net asset value and (3) a commitment from Barings to purchase up to $50.0 million of shares of the Company's common stock in the open market at prices up to and including the Company's then-current net asset value per share for a two-year period, after which Barings agreed to use any remaining funds from the $50.0 million to purchase additional newly issued shares of the Company's common stock at the greater of the Company's then-current net asset value per share and market price (collectively, the "Externalization Transaction"). The Asset Sale Transaction and the Externalization Transaction are collectively referred to as the "Transactions." The Transactions were approved by the Company's stockholders at the Company's July 24, 2018 special meeting of stockholders.
The Company's former wholly-owned subsidiaries, Triangle Mezzanine Fund LLLP (“Triangle SBIC”), Triangle Mezzanine Fund II LP (“Triangle SBIC II”) was organized as a limited partnership under the laws of the State of Delaware. On March, 26, 2012,and Triangle Mezzanine Fund III LP (“Triangle SBIC III”) was organized as awere specialty finance limited partnership underpartnerships that were formed to make investments primarily in lower middle-market companies located throughout the lawsUnited States. Each of the State of Delaware. Unless otherwise noted, the terms “its” or “the Company” refer to Triangle SBIC prior to the IPO and to Triangle Capital Corporation and its subsidiaries, including Triangle SBIC, Triangle SBIC II and Triangle SBIC III after the IPO.
Triangle SBIC, Triangle SBIC II and Triangle SBIC III are specialty finance limited partnerships formed to make investments primarily in lower middle market companies located throughout the United States. On September 11, 2003, Triangle SBIC was licensedheld licenses to operate as a Small Business Investment CompanyCompanies (“SBIC”SBICs”) under the authority of the United States Small Business Administration (“SBA”). On May 26, 2010,In connection with the closing of the Asset Sale Transaction, the Company repaid all of its outstanding SBA-guaranteed debentures and surrendered the SBIC licenses held by Triangle SBIC, Triangle SBIC II, obtained its license to operate as an SBIC and on January 6, 2017, Triangle SBIC III obtainedIII. The Company recognized a loss on extinguishment of debt of $3.5 million related to the repayment of its license to operate as an SBIC. As SBICs,outstanding SBA-guaranteed debentures. Triangle SBIC, Triangle SBIC II, and Triangle SBIC III are subject to a variety of regulations concerning, among other things,were dissolved during the size and natureyear ended December 31, 2019.
The Externalization Transaction closed on August 2, 2018 (the "Externalization Closing"). Effective as of the companiesExternalization Closing, the Company changed its name from Triangle Capital Corporation to Barings BDC, Inc. and on August 3, 2018 began trading on the New York Stock Exchange ("NYSE") under the symbol "BBDC."
In connection with the Externalization Closing, the following events occurred:
•On August 2, 2018, the Company entered into an investment advisory agreement (the "Original Advisory Agreement") and an administration agreement (the "Administration Agreement") with the Adviser pursuant to which the Adviser serves as the Company’s investment adviser and administrator and manages its investment portfolio which initially consisted primarily of the cash proceeds received in connection with the Asset Sale Transaction.
•On August 2, 2018, the Company issued 8,529,917 shares of the Company's common stock to the Adviser at a price of $11.723443 per share, or an aggregate of $100.0 million in cash, in a private transaction
F-40


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act") and/or Rule 506 of Regulation D thereunder (the "Stock Issuance").
•On August 2, 2018, the Company entered into a registration rights agreement with the Adviser with respect to the shares of the Company's common stock acquired in the Stock Issuance.
•On August 7, 2018, the Company launched a $50.0 million issuer tender offer (the "Tender Offer"). Pursuant to the Tender Offer, on September 11, 2018, the Company purchased 4,901,961 shares of the Company's common stock at a purchase price of $10.20 per share, for an aggregate cost of approximately $50.0 million, excluding fees and expenses relating to the Tender Offer. The shares of common stock purchased in the Tender Offer represented approximately 8.7% of the Company’s issued and outstanding shares as of September 6, 2018.
•On September 24, 2018, the Adviser entered into a Rule 10b5-1 Purchase Plan, (the "10b5-1 Plan"), that qualified for the safe harbors provided by Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Pursuant to the 10b5-1 Plan, an independent broker made purchases of shares of the Company's common stock on the open market on behalf of the Adviser in accordance with purchase guidelines specified in the 10b5-1 Plan. The 10b5-1 Plan was established in accordance with the Adviser's obligation under the Externalization Agreement to enter into a trading plan pursuant to which they may investthe Adviser committed to purchase $50.0 million in value of shares in open market transactions through an independent broker. The maximum aggregate purchase price of all shares purchased under the 10b5-1 Plan was $50.0 million. On February 11, 2019, the Adviser fulfilled its obligations under the 10b5-1 Plan to purchase an aggregate amount of $50.0 million in shares of the Company's common stock and the structure10b5-1 Plan terminated in accordance with its terms. Upon completion of those investments.the 10b5-1 Plan, the Adviser had purchased 5,084,302 shares of the Company's common stock pursuant to the 10b5-1 Plan and as of December 31, 2021, owned a total of 13,639,681 shares of our common stock, or 20.9% of the total shares outstanding.
Organization
The Company currently operates asis a closed–end, non–diversified investment company and has electedMaryland corporation incorporated on October 10, 2006. Prior to be treated as a BDC under the 1940 Act. TheExternalization Transaction, the Company iswas internally managed by its executive officers under the supervision of its Board of Directors (the "Board"). Thethe Board. During this period, the Company doesdid not pay management or advisory fees, but instead incursincurred the operating costs associated with employing executive management and investment and portfolio management professionals. On August 2, 2018, the Company entered into the Original Advisory Agreement and became an externally-managed BDC managed by the Adviser. An externally-managed BDC generally does not have any employees, and its investment and management functions are provided by an outside investment adviser and administrator under an investment advisory agreement and administration agreement. Instead of the Company directly compensating employees, the Company pays the Adviser for investment and management services pursuant to the terms of the Amended and Restated Advisory Agreement (as defined in “Note 2 - Agreements and Related Party Transactions”) (and, prior to January 1, 2021, under the terms of the Original Advisory Agreement) and the Administration Agreement. See “Note 2 - Agreements and Related Party Transactions” for additional information regarding the Company’s investment advisory agreement and administration agreement.
Basis of Presentation
The financial statements of the Company include the accounts of Triangle Capital CorporationBarings BDC, Inc. and its wholly-owned subsidiaries, including Triangle SBIC, Triangle SBIC II and Triangle SBIC III.subsidiaries. The effects of all intercompany transactions between Triangle Capital Corporationthe Company and its wholly-owned subsidiaries have been eliminated in consolidation. Under theThe Company is an investment company rules and, regulations pursuant to Article 6 of Regulation S-Xtherefore, applies the specialized accounting and Financial Accounting Standards Board ("FASB")reporting guidance in Accounting Standards Codification ("ASC"(“ASC”) Topic 946, Financial Services -– Investment Companies,Companies. ASC Topic 946 states that consolidation by the Company of an investee that is precluded from consolidating portfolio company investments, including those in which it has a controlling interest, unless the portfolionot an investment company is another investment company. An exception to this general principle occurs ifnot appropriate, except when the Company holds a controlling interest in an operating company that provides all or substantially all of its services directly to the Company or to its portfolio companies. None of the portfolio investments made by the Company qualify for this exception. Therefore, the Company's investment portfolio is carried on the Consolidated Balance Sheets at fair value, as discussed below under
F-41


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
Significant Accounting Policies - Valuation of Investments, with any adjustments to fair value recognized as “Net unrealized appreciation (depreciation)” on the Consolidated Statements of Operations.
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All financial data and information included in these financial statements have been presented on the basis described above. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.
Recently Issued Accounting Standards
In March 2020, the FASB issued Accounting Standards Update, 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of adopting ASU 2020-04 on its consolidated financial statements.
Share Repurchase Plan
On February 25, 2019, the Company adopted a share repurchase plan, pursuant to Board approval, for the purpose of repurchasing shares of the Company's common stock in the open market during the 2019 fiscal year (the "2019 Share Repurchase Plan"). The Board authorized the Company to repurchase in 2019 up to a maximum of 5.0% of the amount of shares outstanding under the following targets:
•a maximum of 2.5% of the amount of shares of the Company's common stock outstanding if shares traded below NAV per share but in excess of 90% of NAV per share; and
•a maximum of 5.0% of the amount of shares of the Company's common stock outstanding if shares traded below 90% of NAV per share.
The 2019 Share Repurchase Plan was executed in accordance with applicable rules under the Exchange Act including Rules 10b5-1 and 10b-18 thereunder, as well as certain price, market volume and timing constraints specified in the 2019 Share Repurchase Plan. The 2019 Share Repurchase Plan was designed to allow the Company to repurchase its shares both during its open window periods and at times when it otherwise might be prevented from doing so under applicable insider trading laws or because of self-imposed trading blackout periods. A broker selected by the Company was delegated the authority to repurchase shares on the Company's behalf in the open market, pursuant to, and under the terms and limitations of, the 2019 Share Repurchase Plan. During the year ended December 31, 2019, the Company repurchased a total of 2,333,261 shares of its common stock in the open market under the 2019 Share Repurchase Plan at an average price of $10.01 per share, including broker commissions.
On February 27, 2020, the Board approved an open-market share repurchase program for the 2020 fiscal year (the “2020 Share Repurchase Program”). Under the 2020 Share Repurchase Program, the Company was authorized during fiscal year 2020 to repurchase up to a maximum of 5.0% of the amount of shares outstanding as of February 27, 2020 if shares traded below NAV per share, subject to liquidity and regulatory constraints.
Purchases under the 2020 Share Repurchase Program were made in open-market transactions and included transactions being executed by a broker selected by the Company that had been delegated the authority to repurchase shares on the Company's behalf in the open market in accordance with applicable rules under the Exchange Act, including Rules 10b5-1 and 10b-18 thereunder, and pursuant to, and under the terms and limitations of, the 2020 Share Repurchase Program. During the year ended December 31, 2020, the Company repurchased a total of 989,050 shares of its common stock in the open market under the 2020 Share Repurchase Program at an average price of $7.21 per share, including broker commissions.
F-42




Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

Recently Issued Accounting Standards
In May 2014,connection with the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification ("ASC") Topic 606) ("ASU 2014-09"). ASU 2014-09 supersedes the revenue recognition requirements under ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the ASC. The core principlecompletion of the guidance is that an entity should recognize revenueCompany’s acquisition of MVC Capital, Inc. (“MVC”), a Delaware corporation, on December 23, 2020 (the “MVC Acquisition”), the Company committed to depict the transfermake open-market purchases of promised goods or services to customersshares of its common stock in an aggregate amount that reflectsof up to $15.0 million at then-current market prices at any time shares trade below 90% of the consideration to which an entity expects to be entitled in exchange for those goods or services. The new guidance will significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. Additionally, the guidance requires improved disclosures asCompany’s then most recently disclosed NAV per share. Any repurchases pursuant to the nature, amount, timingauthorized program will occur during the 12-month period commencing upon the filing of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2021, which occurred on May 6, 2021, and uncertainty of revenue that is recognized. The new guidance will be effective for the annual reporting period beginning after December 15, 2017, including interim periods within that reporting period. The Company completed its initial assessment in evaluating the potential impact on its consolidated financial statements and based on its initial assessment, determined that its financial contracts are excluded from the scope of ASU 2014-09. As a result of the scope exception for financial contracts, the Company's management has determined that there will be no material changes to the recognition timing and classification of revenues and expenses; additionally, the Company's management does not expect the adoption of ASU 2014-09 to have a significant impact on its consolidated financial statement disclosures upon adoption.
Reclassifications
Certain reclassifications have been made in accordance with applicable legal, contractual and regulatory requirements. During the financial highlights for the yearsyear ended December 31, 2014 and December 31, 2013 in order to conform to current presentation. The2021, the Company had historically presenteddid not repurchase any shares under the ratio of total expenses to average net assets exclusive of loss on extinguishment of debt. Beginning in 2015, this ratio is presented including loss on extinguishment of debt.authorized program.
Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Valuation of Investments
The Company has a valuation policy, as well as established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring (at least quarterly) basis in accordance with the 1940 Act and FASB ASC Topic 820, Fair Value Measurements and Disclosures (“("ASC Topic 820”820"). The Company's current valuation policy and processes were established by management of the Company with the assistance of certain third-party advisorsAdviser and were approved by the Board.
Under ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For the Company’s portfolio securities, fair value is generally the amount that the Company might reasonably expect to receive upon the current sale of the security. The fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. If no market for the security exists or if the Company does not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market.
Under ASC Topic 820, there are three levels of valuation inputs, as follows:
Level 1 Inputs – include quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs – include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 Inputs – include inputs that are unobservable and significant to the fair value measurement.
The Company’s investment portfolio is primarily comprised of debt and equity instruments of privately held companies for which quoted prices or other inputs falling within the categories of Level 1 and Level 2 are generally not available. Therefore, the Company determines the fair value of its investments in good faith primarily using Level 3 inputs. In certain cases, quoted prices or other observable inputs may exist, and if so, the Company assesses




Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

the appropriateness of the use of these third-party quotes in determining fair value based on (i) its understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer and (ii) the depth and consistency of broker quotes and the correlation of changes in broker quotes with the underlying performance of the portfolio company.
Under ASC Topic 820, aA financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized as Level 3 investments within the tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).
The Company’s investment portfolio includes certain debt and equity instruments of privately held companies for which quoted prices or other observable inputs falling within the categories of Level 1 and Level 2 are generally not available. In such cases, the Company determines the fair value of its investments in good faith primarily using Level 3 inputs. In certain cases, quoted prices or other observable inputs exist, and if so, the Company assesses the appropriateness of the use of these third-party quotes in determining fair value based on (i) its understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer and (ii) the depth and consistency of broker quotes and the correlation of changes in broker quotes with the underlying performance of the portfolio company.
F-43


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of the Company’s Level 3 investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.
Investment Valuation Process
The Company’s valuation process is led by the Company’s executive officers. The Company’s valuation process begins withAdviser has established a quarterly review of each investment in the Company’s investment portfolio by the Company’s executive officers and investment committee. Valuations of each portfolio security are then prepared by the Company’s investment professionals, who have direct responsibility for the origination, management and monitoring of each investment. Under the Company’s valuation policy, each investment valuationpricing committee that is, subject to (i) a review by the lead investment officeroversight of the Board, responsible for the portfolio company investmentapproval, implementation and (ii) a peer review by a second investment officer or executive officeroversight of the processes and methodologies that relate to the pricing and valuation of assets held by the Company. Generally, any investment that is valued below cost is subjectedThe Adviser uses independent third-party providers to review by one ofprice the Company’s executive officers. Afterportfolio, but in the peer review is complete,event an acceptable price cannot be obtained from an approved external source, the Company engages two independent valuation firms, including Duff & Phelps, LLC (collectively, the “Valuation Firms”), to provide third-party reviews of certain investments, as described further below. Finally, the Board has the responsibility for reviewing and approving, in good faith, the fair value of the Company’s investmentsAdviser will utilize alternative methods in accordance with internal pricing procedures established by the 1940 Act.Adviser's pricing committee.
At least annually, the Adviser conducts reviews of the primary pricing vendors to validate that the inputs used in the vendors’ pricing process are deemed to be market observable. While the Adviser is not provided access to proprietary models of the vendors, the reviews have included on-site walkthroughs of the pricing process, methodologies and control procedures for each asset class and level for which prices are provided. The review also includes an examination of the underlying inputs and assumptions for a sample of individual securities across asset classes, credit rating levels and various durations, a process the Adviser continues to perform annually. In addition, the pricing vendors have an established challenge process in place for all security valuations, which facilitates identification and resolution of prices that fall outside expected ranges. The Adviser believes that the prices received from the pricing vendors are representative of prices that would be received to sell the assets at the measurement date (i.e. exit prices).
The Company's money market fund investments are generally valued using Level 1 inputs and its equity investments listed on an exchange or on the NASDAQ National Market System are valued using Level 1 inputs, using the last quoted sale price of that day. The Company’s syndicated senior secured loans and structured products are generally valued using Level 2 inputs, which are generally valued at the bid quotation obtained from dealers in loans by an independent pricing service. The Company's middle-market, private debt and equity investments are generally valued using Level 3 inputs.
Independent Valuation Firms
For the year ended December 31, 2019, the Company engaged an independent valuation firm to provide third-party valuation consulting services toat the Companyend of each fiscal quarter which consistconsisted of certain limited procedures that the Company identified and requested the Valuation Firmsvaluation firm to perform (hereinafter referred to as the “Procedures”"Procedures"). The Procedures aregenerally consisted of a review of the quarterly fair values of the Company's middle-market investments, and were generally performed with respect to each portfolio companyinvestment every quarter beginning in the quarter after the investment was made.
Beginning with the first quarter of 2020, the Company revised its valuation process to require that the Procedures generally be performed with respect to each middle-market investment at least once in every calendar year and for new portfolio companies,investments, at least once in the twelve-month period subsequent to the initial investment. In addition, the Procedures arewere generally performed with respect to a portfolio company whenan investment where there has beenwas a significant change in the fair value or performance of the investment.
Beginning with the fourth quarter of 2020, the fair value of loans and equity investments that are not syndicated or for which market quotations are not readily available, including middle-market loans, are generally submitted to independent providers to perform an independent valuation on those loans and equity investments as of the end of each quarter. Such loans and equity investments are initially held at cost, as that is a reasonable approximation of fair value on the acquisition date, and monitored for material changes that could affect the valuation (for example, changes in interest rates or the credit quality of the borrower). At the quarter end following the initial acquisition, such loans and equity investments are generally sent to a valuation provider which will determine the fair value of each investment. The independent valuation providers apply various methods (synthetic
F-44


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
rating analysis, discounting cash flows, and re-underwriting analysis) to establish the rate of return a market participant would require (the “discount rate”) as of the valuation date, given market conditions, prevailing lending standards and the perceived credit quality of the issuer. Future expected cash flows for each investment are discounted back to present value using these discount rates in the discounted cash flow analysis. A range of values will be provided by the valuation provider and Barings will determine the point within that range that it will use in making valuation recommendations to the Board, and will report to the Board on its rationale for each such determination. Barings uses its internal valuation model as a comparison point to validate the price range provided by the valuation provider and, where applicable, in determining the point within that range that it will use in making valuation recommendations to the Board. If Barings’ pricing committee disagrees with the price range provided, it may make a fair value recommendation to the Board that is outside of the range provided by the independent valuation provider, and will notify the Board of any such override and the reasons therefore. In certain instances, the Companywe may determine that it is not cost-effective, and as a result is not in the Company’s stockholders’stockholders' best interest,interests, to request the Valuation Firmsan independent valuation firm to perform the Proceduresan independent valuation on one or more portfolio companies.certain investments. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio. Pursuant to these procedures, the Board determines in good faith whether our investments were valued at fair value in accordance with our valuation policies and procedures and the 1940 Act based on, among other things, the input of Barings, our Audit Committee and the independent valuation firm.
Valuation Techniques
The Company's valuation techniques are based upon both observable and unobservable pricing inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. An independent pricing service provider is the preferred source of pricing a loan, however, to the extent the independent pricing service provider price is unavailable or not relevant and reliable, the Company will utilize alternative approaches such as broker quotes or manual prices. The Company attempts to maximize the use of observable inputs and minimize the use of unobservable inputs. The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security.
Valuation of Investments in Jocassee, Thompson Rivers, Waccamaw River and MVC Private Equity Fund LP
As Jocassee, Thompson Rivers, Waccamaw River and MVC Private Equity Fund LP are investment companies with no readily determinable fair values, the Company estimates the fair value of the Company’s investments in these entities using net asset value of each company and the Company’s ownership percentage as a practical expedient. The net asset value is determined in accordance with the specialized accounting guidance for investment companies.
F-45




Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

Level 3 Unobservable Inputs
The total numberfollowing tables summarize the significant unobservable inputs the Company used in the valuation of investmentsits Level 3 debt and the percentageequity securities as of the investment portfolioDecember 31, 2021 and 2020. The weighted average range of unobservable inputs is based on which the Procedures were performed are summarized below by period:
For the quarter ended: 
Total
companies
 
Percent of total
investments at
fair value(1)
March 31, 2015 16 28%
June 30, 2015 15 26%
September 30, 2015 22 34%
December 31, 2015 17 28%
March 31, 2016 18 27%
June 30, 2016 19 30%
September 30, 2016 19 33%
December 31, 2016 20 33%
March 31, 2017 18 30%
June 30, 2017 20 29%
September 30, 2017 22 25%
December 31, 2017 21 35%
(1)Exclusive of the fair value of new investments made during the quarter.
Upon completion of the Procedures, the Valuation Firms concluded that, with respect to each investment reviewed by each Valuation Firm, the fair value of thoseinvestments.
December 31, 2021:Fair ValueValuation
Model		Level 3
Input		Range of
Inputs		Weighted
Average		Impact to Valuation from an Increase in Input
Senior debt and 1st lien notes(1)
$717,374,281 Yield AnalysisMarket Yield5.2% – 33.5%7.7%Decrease
416,010,236 Recent TransactionTransaction Price96.5% – 99.0%97.7%Increase
Subordinated debt and 2nd lien notes(2)
107,345,323 Yield AnalysisMarket Yield5.3% – 19.0%11.5%Decrease
64,895,063 Market ApproachAdjusted EBITDA Multiple0.6x – 9.0x5.67xIncrease
40,353,543 Recent TransactionTransaction Price97.0% – 100.0%98.0%Increase
Equity shares(3)
137,393,404 Market ApproachAdjusted EBITDA Multiple5.5x – 54.0x13.1xIncrease
6,197,037 
Expected Transaction(4)
Transaction Price$6,197,037$6,197,037Increase
4,545,542 Recent TransactionTransaction Price$1.0 – $1,000$140.03Increase
Equity warrants863,949 Market ApproachAdjusted EBITDA Multiple5.0x-6.0x6.0xIncrease
(1)Excludes investments subjected to the Procedures appeared reasonable. The Board is ultimately responsible for determining thewith an aggregate fair value of the Company’s investments in good faith.
Investment Valuation Inputs
Under ASC Topic 820, fair value is the price that would be receivedamounting to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For the Company’s portfolio securities, fair value is generally the amount that the Company might reasonably expect to receive upon the current sale of the security. Under ASC Topic 820, the fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. Under ASC Topic 820, if no market for the security exists or if the Company does not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market. The securities in$3,938,412, which the Company investsvalued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are generally only purchased and sold in merger and acquisition transactions, innot readily available.
(2)Excludes investments with an aggregate fair value amounting to $17,974,944, which case the entire portfolio company is sold to a third-party purchaser. As a result, unless the Company has the abilityvalued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.
(3)Excludes investments with an aggregate fair value amounting to control such a transaction, the assumed principal market for the Company’s securities is a hypothetical secondary market. The Level 3 inputs to the Company’s valuation process reflect the Company’s best estimate of the assumptions that would be used by market participants in pricing the investment in a transaction in a hypothetical secondary market.
Enterprise Value Waterfall Approach
In valuing equity securities (including warrants),$3,145,740, which the Company estimates fair valuevalued using an “Enterprise Value Waterfall” valuation model. The Company estimates the enterprise value of a portfolio companyunadjusted prices from independent pricing services and then allocates the enterprise value to the portfolio company’s securities in order of their relative liquidation preference. In addition, the model assumes that any outstanding debt or other securities thatindependent indicative broker quotes where pricing inputs are senior to the Company’s equity securities are requirednot readily available.
(4)Estimated proceeds expected to be repaid at par. Additionally, the Company estimates the fair valuereceived under legally binding asset purchase agreement for sale of a limited number of its debt securities using the Enterprise Value Waterfall approach in cases where the Company does not expect to receive full repayment.real estate held by portfolio company.
F-46




Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

December 31, 2020:Fair ValueValuation
Model		Level 3
Input		Range of
Inputs		Weighted
Average		Impact to Valuation from an Increase in Input
Senior debt and 1st lien notes(1)
$650,550,710 Yield AnalysisMarket Yield4.7% – 16.2%7.4%Decrease
3,000,000 Liquidation AnalysisAdjusted EBITDA Multiple0.05x – 0.15x0.10xIncrease
399,692,333 Recent TransactionTransaction Price96.0% – 100.0%97.8%Increase
Subordinated debt and 2nd lien notes(2)
109,851,771 Yield AnalysisMarket Yield6.0% – 26.0%16.7%Decrease
13,933,960 Market ApproachAdjusted EBITDA Multiple5.0x – 6.0x5.50xIncrease
4,959,088 Recent TransactionTransaction Price100%100%Increase
Equity shares(3)
39,178,157 Market ApproachAdjusted EBITDA Multiple0.8x – 11.8x4.80xIncrease
4,752,997 Real Estate - Cost ApproachReplacement Cost (CZK/m2)1,237 to 1,8921,892Increase
Real Estate - Cost ApproachDepreciation Factor0.50 to 1.000.81Increase
Real Estate - Income ApproachMarket Rent
CZK/Year		CZK5,011,718 to CZK8,700,000CZK5,011,718Increase
Real Estate - Income ApproachCap Rate6.0% to 7.0%6.5%Decrease
Real Estate - Income ApproachAdj. Factor for
Development Zone		n/a1.15Increase
227,200 Recent TransactionTransaction Price$1,000$1,000Increase
Equity warrants1,133,781 Market ApproachAdjusted EBITDA Multiple4.8x-9.0x6.0xIncrease
To estimate(1)Excludes investments with an aggregate fair value amounting to $2,474,068, which the enterpriseCompany valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.
(2)Excludes investments with an aggregate fair value amounting to $2,075,117, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.
(3)Excludes investments with an aggregate fair value amounting to $68,670, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.
Unsettled Purchases and Sales of Investments
Investment transactions are recorded based on the trade date of the portfolio company,transaction. As a result, unsettled purchases and sales are recorded as payables and receivables from unsettled transactions, respectively. While purchases and sales of the Company's syndicated senior secured loans generally settle on a T+7 basis, the settlement period will sometimes extend past the scheduled settlement. In such cases, the Company primarily uses a valuation model based on a transaction multiple, which generally is the original transaction multiple,contractually owed and measures of the portfolio company’s financial performance. In addition, the Company considers other factors, including but not limited to (i) offers from third-parties to purchase the portfolio company, (ii) the implied value of recent investments in the equity securities of the portfolio company, (iii) publicly available information regarding recent sales of private companies in comparable transactions and (iv) when the Company believes there are comparable companies that are publicly traded, the Company performs a review of these publicly traded companies and the market multiple of their equity securities. For certain non-performing assets, the Company may utilize the liquidation or collateral value of the portfolio company's assets in its estimation of enterprise value.
The significant Level 3 inputs to the Enterprise Value Waterfall model are (i) an appropriate transaction multiple and (ii) a measure of the portfolio company’s financial performance, which generally is either earnings beforerecognizes interest taxes, depreciation and amortization, as adjusted ("Adjusted EBITDA"), or revenues. Such inputs can be based on historical operating results, projections of future operating results, or a combination thereof. The operating results of a portfolio company may be unaudited, projected or pro forma financial information and may require adjustments for certain non-recurring items. In determining the operating results input, the Company utilizes the most recent portfolio company financial statements and forecasts available as of the valuation date. The Company also consults with the portfolio company’s senior management to obtain updates on the portfolio company’s performance, including information such as industry trends, new product development, loss of customers and other operational issues.
Fair value measurements using the Enterprise Value Waterfall model can be sensitive to changes in one or more of the inputs. Assuming all other inputs to the Enterprise Value Waterfall model remain constant, any increase (decrease) in either the transaction multiple, Adjusted EBITDA or revenues for a particular equity security would result in a higher (lower) fair value for that security.
Income Approach
In valuing debt securities, the Company utilizes an “Income Approach” model that considers factors including, but not limited to, (i) the stated yield on the debt security, (ii) the portfolio company’s current Adjusted EBITDA as compared to the portfolio company’s historical or projected Adjusted EBITDA as of the date the investment was made and the portfolio company’s anticipated Adjusted EBITDA for the next twelve months of operations, (iii) the portfolio company’s current Leverage Ratio (defined as the portfolio company’s total indebtedness divided by Adjusted EBITDA) as compared to its Leverage Ratio as of the date the investment was made, (iv) publicly available information regarding current pricing and credit metrics for similar proposed and executed investment transactions of private companies and (v) when the Company believes a relevant comparison exists, current pricing and credit metrics for similar proposed and executed investment transactions of publicly traded debt. In addition, the Company uses a risk rating system to estimate the probability of default on the debt securities and the probability of loss if there is a default. This risk rating system covers both qualitative and quantitative aspects of the business and the securities held.
The Company considers the factors above, particularly any significant changes in the portfolio company’s results of operations and leverage, and develops an expectation of the yield that a hypothetical market participant would require when purchasing the debt investment ("the Required Rate of Return"). The Required Rate of Return, along with the Leverage Ratio and Adjusted EBITDA, are the significant Level 3 inputs to the Income Approach model. For investments where the Leverage Ratio and Adjusted EBITDA have not fluctuated significantly from the date the investment was made or have not fluctuated significantly from the Company’s expectations as of the date the investment was made, and where there have been no significant fluctuations in the market pricing for such investments, the Company may conclude that the Required Rate of Return isincome equal to the stated rateapplicable margin ("spread") beginning on the investmentT+7 date. Such income is accrued as interest receivable and therefore, the debt security is appropriately priced. In instances where the Company determines that the Required Ratecollected upon settlement of Return is different from the stated rate on the investment the Company discounts thetransaction.
F-47




Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

contractual cash flows on the debt instrument using the Required Rate of Return in order to estimate the fair value of the debt security.
Fair value measurements using the Income Approach model can be sensitive to changes in one or more of the inputs. Assuming all other inputs to the Income Approach model remain constant, any increase (decrease) in the Required Rate of Return or Leverage Ratio inputs for a particular debt security would result in a lower (higher) fair value for that security. Assuming all other inputs to the Income Approach model remain constant, any increase (decrease) in the Adjusted EBITDA input for a particular debt security would result in a higher (lower) fair value for that security.
The fair value of the Company’s royalty rights are calculated based on specific provisions contained in the pertinent operating or royalty agreements. The determination of the fair value of such royalty rights is not a significant component of the Company’s valuation process.
The ranges and weighted average values of the significant Level 3 inputs used in the valuation of the Company’s significant debt and equity securities at December 31, 2017 and 2016 are summarized as follows:
December 31, 2017:
Fair Value(1)
 
Valuation
Model
 
Level 3
Input
 
Range of
Inputs
 
Weighted
Average
Subordinated debt and 2nd lien notes$570,133,358
 
Income
Approach
 Required Rate of Return 8.9% – 15.1% 11.7%
    Leverage Ratio 0.0x – 7.1x 4.6x
    Adjusted EBITDA $1.0 million – $1.0 billion $44.1 million
Subordinated debt and 2nd lien notes12,981,000
 
Enterprise
Value Waterfall
Approach
 Adjusted EBITDA Multiple 5.5x – 7.6x 6.6x
    Adjusted EBITDA $1.7 million – $6.6 million $4.3 million
    Revenue Multiple 0.8x – 0.8x 0.8x
    Revenues $76.6 million – $76.6 million $76.6 million
Senior debt and 1st lien notes249,780,755
 
Income
Approach
 Required Rate of Return 6.8% – 25.0% 10.8%
    Leverage Ratio 0.6x – 8.5x 4.4x
    Adjusted EBITDA $2.9 million – $142.4 million $16.2 million
Equity shares and warrants163,666,691
 
Enterprise
Value Waterfall
Approach
 Adjusted EBITDA Multiple 3.3x – 14.9x 7.8x
    Adjusted EBITDA $1.0 million –   $60.0 million $15.6 million
     Revenue Multiple 0.8x – 3.0x 1.3x
     Revenues $17.0 million – 76.6 million $53.7 million
(1)
One subordinated debt investment with a fair value of $6,434,000, one senior debt investment with a fair value of $13,022,542 and one equity security with a fair value of $266,000 were repaid or redeemed subsequent to the end of the reporting period and were valued at their transaction price.




Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

December 31, 2016:
Fair Value(1)
 Valuation
Model		 Level 3
Input		 Range of
Inputs		 Weighted
Average
Subordinated debt and 2nd lien notes$646,856,367
 Income
Approach		 Required Rate of Return 9.5% – 35.0% 13.8%
   Leverage Ratio 0.1x – 9.5x 4.8x
   Adjusted EBITDA $2.6 million – $169.8 million $27.9 million
Subordinated debt and 2nd lien notes19,790,000
 Enterprise
Value Waterfall
Approach		 Adjusted EBITDA Multiple 5.0x – 6.7x 5.8x
   Adjusted EBITDA $0.6 million – $4.9 million $2.1 million
     Revenue Multiple 0.8x – 0.8x 0.8x
     Revenues $98.0 million – $98.0 million $98.0 million
Senior debt and 1st lien notes190,793,157
 Income Approach Required Rate of Return 4.3% – 20.0% 11.0%
   Leverage Ratio 0.0x – 8.3x 3.2x

  Adjusted EBITDA $4.0 million – $14.1 million $9.3 million
Equity shares and warrants152,435,657
 Enterprise
Value Waterfall
Approach		 Adjusted EBITDA Multiple 3.3x – 14.9x 7.4x
   Adjusted EBITDA ($1.4 million) –   $82.1 million $15.0 million

  Revenue Multiple 0.8x – 4.0x 1.4x
   Revenues $19.0 million – $98.0 million $61.7 million
(1)
Certain subordinated debt investments with a total fair value of $23,513,000 and certain equity securities with a total fair value of $3,669,000 were repaid or redeemed subsequent to the end of the reporting period and were valued at their transaction price. One senior debt investment with a total fair value of $850,000 is expected to be repaid subsequent to the end of the reporting period and was valued at its expected settlement value.
Warrants
When originating a debt security, the Company will sometimes receive warrants or other equity-related securities from the borrower. The Company determines the cost basis of the warrants or other equity-related securities received based upon their respective fair values on the date of receipt in proportion to the total fair value of the debt and warrants or other equity-related securities received. Any resulting difference between the face amount of the debt and its recorded fair value resulting from the assignment of value to the warrant or other equity instruments is treated as original issue discount and accreted into interest income over the life of the loan.
Realized Gain or Loss and Unrealized Appreciation or Depreciation of Portfolio Investments
Realized gains or losses are recorded upon the sale or liquidation of investments and are calculated as the difference between the net proceeds from the sale or liquidation, if any, and the cost basis of the investment using the specific identification method. Unrealized appreciation or depreciation reflects the difference between the fair value of the investments and the cost basis of the investments.
Investment Classification
In accordance with the provisions of the 1940 Act, the Company classifies investments by level of control. As defined in the 1940 Act, “Control Investments”"Control Investments" are investments in those companies that the Company is deemed to “Control.” “Affiliate Investments”"Control." "Affiliate Investments" are investments in those companies that are “Affiliated Companies”"Affiliated Persons" of the




Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

Company, as defined in the 1940 Act, other than Control Investments. “Non-Control/"Non-Control / Non-Affiliate Investments”Investments" are those that are neither Control Investments nor Affiliate Investments. Generally, under the 1940 Act, the Company is deemed to control a company in which it has invested if the Company owns more than 25.0% of the voting securities of such company, has greater than 50.0% representation on its board (i.e., securities with the right to elect directors) and/or has the power to exercise control over the management or policies of such portfolio company. The Company is deemed to be an affiliate of a companyGenerally, under the 1940 Act, “Affiliate Investments” that are not otherwise “Control Investments” are defined as investments in which the Company has invested if it owns at least 5.0% but no more than, up to 25.0% (inclusive), of the voting securities and does not have the power to exercise control over the management or policies of such portfolio company.
Cash and Cash EquivalentsShort-Term Investments
The Company considers all highly liquidShort-term investments with an original maturity of three months or less at the date of purchase to be cash equivalents.represent investments in money market funds.
Deferred Financing Fees
Costs incurred to issue long-term debt are capitalized and are amortized over the term of the debt agreements using the effective interest method.
Depreciation
Furniture, fixtures and equipment are depreciated on a straight-line basis over an estimated useful life of five years. Software and computer equipment are depreciated on a straight-line basis over an estimated useful life of three years.
Investment Income
Interest income, adjusted forincluding amortization of premium and accretion of original issue discount, is recorded on the accrual basis to the extent that such amounts are expected to be collected. Generally, when interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Company writes off any previously accrued and uncollected interest when it is determined that interest is no longer considered collectible. As of December 31, 2021, the Company had two investments that were on non-accrual. As of December 31, 2020, the Company had one investment that was on non-accrual. Dividend income is recorded on the ex-dividend date. The Company had dividend income of approximately $2.3 million during the year ended December 31, 2016, consisting of dividend income of approximately $3.6 million and a negative true-up adjustment of $1.3 million related to a portfolio company distribution that was received in 2015. In 2015, the Company received information that indicated that the tax character of the distribution was 100% dividend income, but received updated information in 2016 indicating that only 14% of the distribution was dividend income and the remainder was a return of capital, which necessitated the adjustment.
Payment-in-Kind Interest
The Company currently holds, and expects to hold in the future, some loans in its portfolio that contain a payment-in-kind (“PIK”("PIK") interest provisions. The PIK interest, computed at the contractual rate specified in each loan agreement, is periodically added to the principal balance of the loan, rather than being paid to the Company in cash, and is recorded as interest income. Thus, the actual collection of PIK interest may be deferred until the time of debt principal repayment.
PIK interest, which is a non-cash source of income at the time of recognition, is included in the Company'sCompany’s taxable income and therefore affects the amount the Company is required to distribute to its stockholders to maintain its tax treatment as a regulated investment company ("RIC")RIC for federal income tax purposes, even though the Company has not yet collected the cash. Generally, when current cash interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other




Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

obligations, the Company will place the loan on non-accrual status and will generally cease recognizing PIK interest income on that loan for financial
F-48


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Company writes off any accrued and uncollected PIK interest when it is determined that the PIK interest is no longer collectible.
Fee Income
Origination, facility, commitment, consent and other advance fees received in connection with loan agreements ("Loan Origination Fees") are recorded as deferred income and recognized as investment income over the term of the loan. Upon prepayment of a loan, any unamortized Loan Origination Fees are recorded as investment income. In the general course of its business, the Company receives certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and loan waiver and amendment fees, and are recorded as investment income when earned.
Fee income for the years ended December 31, 2017, 20162021, 2020 and 20152019 was as follows:
Years Ended December 31Year Ended December 31
2017 2016 2015202120202019
Recurring Fee Income:     Recurring Fee Income:
Amortization of loan origination fees$2,445,485
 $2,161,711
 $2,061,004
Amortization of loan origination fees$4,620,259 $2,179,859 $914,197 
Management, valuation and other fees940,361
 1,024,213
 895,677
Management, valuation and other fees2,185,600 867,465 275,510 
Total Recurring Fee Income3,385,846
 3,185,924
 2,956,681
Total Recurring Fee Income6,805,859 3,047,324 1,189,707 
Non-Recurring Fee Income:     Non-Recurring Fee Income:
Prepayment fees2,688,814
 1,903,251
 4,344,705
Prepayment fees474,499 84,151 59,617 
Acceleration of unamortized loan origination fees4,202,078
 2,406,688
 4,104,485
Acceleration of unamortized loan origination fees4,823,674 536,906 694,971 
Advisory and structuring fees230,000
 200,000
 578,162
Loan amendment fees132,278
 277,396
 469,357
Other fees9,000
 412,606
 391,538
Advisory, loan amendment and other feesAdvisory, loan amendment and other fees916,212 412,255 172,525 
Total Non-Recurring Fee Income7,262,170
 5,199,941
 9,888,247
Total Non-Recurring Fee Income6,214,385 1,033,312 927,113 
Total Fee Income$10,648,016
 $8,385,865
 $12,844,928
Total Fee Income$13,020,244 $4,080,636 $2,116,820 
Compensation Expenses
Compensation expenses generally include salaries, discretionary compensation, equity-based compensation and benefits.
General and Administrative Expenses
General and administrative expenses include administrative costs, facilities costs, insurance, legal and accounting expenses, expenses reimbursable to the Adviser under the terms of the Administration Agreement and other costs related to operating as a publicly-traded company.
Income Taxes
The Company elected for federal income tax purposes to be treated as a RIC under the Internal Revenue Code of 1986, as amended (the “Code”) commencing with its taxable year ended December 31, 2007. In order to maintain its tax treatment as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute (actually or constructively) and certain built-in gains.




Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

The Company has certain wholly-owned taxable subsidiaries (the “Taxable Subsidiaries”), each of which holds one or more of its portfolio investments that are listed on the Consolidated Schedule of Investments. The Taxable Subsidiaries are consolidated for financial reporting purposes, such that the Company’s consolidated financial statements reflect the Company’s investments in the portfolio companies owned by the Taxable Subsidiaries. The purpose of the Taxable Subsidiaries is to permit the Company to hold certain portfolio companies that are organized as limited liability companies (“LLCs”) (or other forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of the RIC’s gross income for income tax purposes must consist of qualifying investment income. Absent the Taxable Subsidiaries, a proportionate amount of any gross income of an LLC (or other pass-through entity) portfolio investment would flow through directly to the RIC. To the extent that such income did not consist of qualifying investment income, it could jeopardize the Company’s ability to qualify as a RIC and therefore cause the Company to incur significant amounts of federal income taxes. When LLCs (or other pass-through entities) are owned by the Taxable Subsidiaries, their income is taxed to the Taxable Subsidiaries and does not flow through to the RIC, thereby helping the Company preserve its RIC tax treatment and resultant tax advantages. The Taxable Subsidiaries are not consolidated for income tax purposes and may generate income tax expense as a result of their ownership of the portfolio companies. This income tax expense is reflected in the Company’s Consolidated Statements of Operations.
Segments
The Company lends to and invests in customers in various industries. The Company separately evaluates the performance of each of its lending and investment relationships. However, because each of these loan and investment relationships has similar business and economic characteristics, they have been aggregated into a single lending and investment segment. All applicable segment disclosures are included in or can be derived from the Company’s financial statements.
Concentration of Credit Risk
The Company’s investments are generally in lower middle market companies in a variety of industries. As of both December 31, 20172021 and 2016,2020, there were no individual investments representing greater than 10% of the fair value of the Company’s portfolio. As of December 31, 20172021 and December 31, 2016,2020, the Company’s largest single portfolio company investment, excluding short-term investments, represented approximately 5.6%5.5% and 4.7%2.5%, respectively, of the fair value of the Company’s portfolio.portfolio, exclusive of short-term investments. Income, consisting of interest, dividends, fees, other investment income and realization of gains or losses, on equity interests, can fluctuate
F-49


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
dramatically upon repayment of an investment or sale of an equity interest and in any given year can be highly concentrated among several portfolio companies.
The Company’s investments carry a number of risks including, but not limited to: (i) investing in lower middle market companies which have limited operating historiesCompany places its cash with financial institutions and, financial resources, (ii) investing in senior subordinated debt which ranks equal to or lower than debt held by other investors and (iii) holding investments that are not publicly traded and are subject to legal and other restrictions on resale and other risks common to investing in below investment grade debt and equity instruments.at times, cash may exceed insured limits under applicable law.
As of December 31, 2017, $823.9 million2021, all of the Company's assets were or will be pledged as collateral for the Company's third amended and restated senior secured credit facility (the “Credit Facility”) and $399.2 million were subject to superior claim over the Company's stockholders by the SBA. If the Company defaults on its obligations under theFebruary 2019 Credit Facility or its SBA-guaranteed debentures, the lenders and/or the SBA may have the right to foreclose upon and sell, or otherwise transfer, the collateral subject to their security interests or their superior claims.
Public Offerings of Common Stock and Debt Securities
In February 2015, the Company issued $86.3 million of unsecured notes due 2022 (the "March 2022 Notes"). The March 2022 Notes mature on March 15, 2022 and may be redeemed in whole or in part at any time or from time to time at the Company's option on or after March 15, 2018. The March 2022 Notes bear interest at a rate of 6.375% per year payable quarterly on March 15, June 15, September 15 and December 15 of each year, beginning March 15,




Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

2015. The net proceeds to the Company from the sale of the March 2022 Notes, after underwriting discounts and offering expenses, were approximately $83.4 million.
On July 26, 2016, the Company filed a prospectus supplement pursuant to which 6,250,000 shares of common stock were offered for sale at a price to the public of $19.90 per share. In addition, the underwriters involved were granted an overallotment option to purchase an additional 937,500 shares of our common stock at the same public offering price. Pursuant to this offering, 6,742,362 shares (including 492,362 shares of the overallotment option shares) were sold and delivered resulting in net proceeds to the Company, after underwriting discounts and offering expenses, of approximately $129.1 million.
On February 28, 2017, the Company filed a prospectus supplement pursuant to which 7,000,000 shares of common stock were offered for sale at a price to the public of $19.50 per share. Pursuant to this offering, 7,000,000 shares were sold and delivered resulting in net proceeds to the Company, after underwriting discounts and offering expenses, of approximately $132.0 million.Facility.
Investments Denominated in Foreign Currency
As of both December 31, 2017 and 2016,2021 the Company held investmentsone investment that was denominated in two portfolio companiesCanadian dollars, one investment that was denominated in Danish kroner, five investments that were denominated in Canadian dollars.Australian dollars, one investment that was denominated in Swedish kronas, 36 investments that were denominated in Euros and 18 investments that were denominated in British pounds sterling. As of December 31, 2020, the Company held two investments that were denominated in Australian dollars, one investment that was denominated in Swedish kronas, 17 investments that were denominated in Euros and 11 investments that were denominated in British pounds sterling.
At each balance sheet date, portfolio company investments denominated in foreign currencies are translated into United States dollars using the spot exchange rate on the last business day of the period. Purchases and sales of foreign portfolio company investments, and any income from such investments, are translated into United States dollars using the rates of exchange prevailing on the respective dates of such transactions.
Although the fair values of foreign portfolio company investments and the fluctuation in such fair values are translated into United States dollars using the applicable foreign exchange rates described above, the Company does not isolateseparately report that portion of the change in fair values resulting from foreign currency exchange rates fluctuations from the change in fair values of the underlying investment. All fluctuations in fair value are included in net unrealized appreciation (depreciation) of investments in the Company's Consolidated Statements of Operations.
In addition, during the years ended December 31, 2021 and 2020, the Company entered into forward currency contracts primarily to help mitigate the impact that an adverse change in foreign exchange rates would have on net interest income from the Company's investments and related borrowings denominated in foreign currencies. Net unrealized appreciation or depreciation on foreign currency contracts are included in "Net unrealized appreciation (depreciation) - foreign currency transactions" and net realized gains or losses on forward currency contracts are included in "Net realized gains (losses) - foreign currency transactions" in the Consolidated Statements of Operations.
Investments denominated in foreign currencies and foreign currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the United StatesU.S. Dollar.
Dividends and Distributions
Dividends and distributions to common stockholders are approved by the Board and the dividenddividends payable isare recorded on the ex-dividend date.
The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of dividends on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, when the Company declares a dividend, stockholders who have not opted out of the DRIP will have their dividends automatically reinvested in shares of the Company’s common stock, rather than receiving cash dividends.    
F-50




Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

The table below summarizes the Company’s dividends and distributions in the three years ended December 31, 2017:2021: 
Declared Record Payable 
Per  Share
Amount
 
Amount
Paid in
Cash
 Amount Settled via Newly Issued Shares Total
February 25, 2015  March 11, 2015  March 25, 2015 $0.54
 $17,163,000
 $760,000
 $17,923,000
February 25, 2015  March 11, 2015 March 25, 2015 0.05
 1,589,000
 70,000
 1,659,000
May 27, 2015  June 10, 2015  June 24, 2015 0.54
 17,156,000
 792,000
 17,948,000
May 27, 2015 June 10, 2015 June 24, 2015 0.05
 1,588,000
 73,000
 1,661,000
August 26, 2015  September 9, 2015  September 23, 2015 0.54
 17,067,000
 898,000
 17,965,000
August 26, 2015  September 9, 2015  September 23, 2015 0.05
 1,580,000
 83,000
 1,663,000
November 25, 2015  December 9, 2015  December 23, 2015 0.54
 17,033,000
 961,000
 17,994,000
November 25, 2015  December 9, 2015  December 23, 2015 0.05
 1,577,000
 89,000
 1,666,000
Total 2015 dividends and distributions $2.36
 $74,753,000
 $3,726,000
 $78,479,000
February 24, 2016 March 9, 2016 March 23, 2016 $0.54
 $17,264,000
 $844,000
 $18,108,000
May 4, 2016 June 8, 2016 June 22, 2016 0.45
 14,369,000
 746,000
 15,115,000
August 24, 2016 September 7, 2016 September 21, 2016 0.45
 17,430,000
 736,000
 18,166,000
November 23, 2016 December 7, 2016 December 21, 2016 0.45
 17,413,000
 750,000
 18,163,000
Total 2016 dividends and distributions $1.89
 $66,476,000
 $3,076,000
 $69,552,000
February 22, 2017 March 8, 2017 March 22, 2017 $0.45
 $20,688,000
 $750,000
 $21,438,000
May 3, 2017 June 7, 2017 June 21, 2017 0.45
 20,575,000
 888,000
 21,463,000
August 2, 2017 September 6, 2017 September 20, 2017 0.45
 21,484,000
 —
 21,484,000
November 1, 2017 December 6, 2017 December 20, 2017 0.30
 14,322,000
 —
 14,322,000
Total 2017 dividends and distributions $1.65
 $77,069,000
 $1,638,000
 $78,707,000
DeclaredRecordPayablePer  Share
Amount		Amount
Paid in
Cash		Amount Settled via Newly Issued SharesTotal
February 27, 2019March 13, 2019March 20, 2019$0.12 $6,107,000 $— $6,107,000 
May 9, 2019June 12, 2019June 19, 20190.13 6,541,000 — 6,541,000 
July 26, 2019September 11, 2019September 18, 20190.14 6,935,000 — 6,935,000 
October 29, 2019December 11, 2019December 18, 20190.15 7,345,000 — 7,345,000 
Total 2019 dividends and distributions$0.54 $26,928,000 $— $26,928,000 
February 27, 2020March 11, 2020March 18, 2020$0.16 $7,824,000 $— $7,824,000 
April 30, 2020June 10, 2020June 17, 20200.16 7,674,000 — 7,674,000 
August 5, 2020September 9, 2020September 16, 20200.16 7,674,000 — 7,674,000 
November 9, 2020November 25, 2020December 2, 20200.17 8,153,000 — 8,153,000 
Total 2020 dividends and distributions$0.65 $31,325,000 $— $31,325,000 
February 7, 2021March 10, 2021March 17, 2021$0.19 $12,410,056 $— $12,410,056 
May 6, 2021June 9, 2021June 16, 20210.20 13,063,217 — 13,063,217 
August 5, 2021September 8, 2021September 15, 20210.21 13,716,378 — 13,716,378 
November 9, 2021November 24, 2021December 1, 20210.22 14,369,539 — 14,369,539 
Total 2021 dividends and distributions$0.82 $53,559,190 $— $53,559,190 
Per Share Amounts
Per share amounts included in the Consolidated Statements of Operations are computed by dividing net investment income and net increase in net assets resulting from operations by the weighted average number of shares of common stock outstanding for the period. As the Company has no common stock equivalents outstanding, diluted per share amounts are the same as basic per share amounts. Net asset value per share is computed by dividing total net assets by the number of common shares outstanding as of the end of the period.
2. Agreements and Related Party Transactions
On August 2, 2018, the Company entered into the Original Advisory Agreement and the Administration Agreement with the Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended. In connection with the MVC Acquisition (as defined in “Note 10 – MVC Capital, Inc. Acquisition”), on December 23, 2020, the Company entered into an amended and restated investment advisory agreement (the “Amended and Restated Advisory Agreement”) with the Adviser, following approval of the Amended and Restated Advisory Agreement by the Company’s stockholders at its December 23, 2020 special meeting of stockholders. The terms of the Amended and Restated Advisory Agreement became effective on January 1, 2021.
The Amended and Restated Advisory Agreement amended the Original Advisory Agreement to, among other things, (i) reduce the annual base management fee payable to the Adviser from 1.375% to 1.250% of the Company’s gross assets, (ii) reset the commencement date for the rolling 12-quarter “look-back” provision used to calculate the income incentive fee and incentive fee cap to January 1, 2021 from January 1, 2020 and (iii) describe the fact that the Company may enter into guarantees, sureties and other credit support arrangements with respect to one or more of its investments, including the impact of these arrangements on the income incentive fee cap.
Investment Advisory Agreement
Pursuant to the Amended and Restated Advisory Agreement, the Adviser manages the Company's day-to-day operations and provides the Company with investment advisory services. Among other things, the Adviser (i) determines the composition of the portfolio of the Company, the nature and timing of the changes therein and the manner of implementing such changes; (ii) identifies, evaluates and negotiates the structure of the investments made by the Company; (iii) executes, closes, services and monitors the investments that the Company makes;
F-51




Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

(iv) determines the securities and other assets that the Company will purchase, retain or sell; (v) performs due diligence on prospective portfolio companies and (vi) provides the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably require for the investment of its funds.
2.The Amended and Restated Advisory Agreement provides that, absent fraud, willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, the Adviser, and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser (collectively, the "IA Indemnified Parties"), are entitled to indemnification from the Company for any damages, liabilities, costs, demands, charges, claims and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by the IA Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising out of any actions or omissions or otherwise based upon the performance of any of the Adviser’s duties or obligations under the Amended and Restated Advisory Agreement or otherwise as an investment adviser of the Company. The Adviser’s services under the Amended and Restated Advisory Agreement are not exclusive, and the Adviser is generally free to furnish similar services to other entities so long as its performance under the Amended and Restated Advisory Agreement is not adversely affected.
The Adviser has entered into a personnel-sharing arrangement with its affiliate, Baring International Investment Limited ("BIIL"). BIIL is a wholly-owned subsidiary of Baring Asset Management Limited, which in turn is an indirect, wholly-owned subsidiary of the Adviser. Pursuant to this arrangement, certain employees of BIIL may serve as "associated persons" of the Adviser and, in this capacity, subject to the oversight and supervision of the Adviser, may provide research and related services, and discretionary investment management and trading services (including acting as portfolio managers) to the Company on behalf of the Adviser. This arrangement is based on no-action letters of the staff of the Securities and Exchange Commission (the "SEC") that permit SEC-registered investment advisers to rely on and use the resources of advisory affiliates or "participating affiliates," subject to the supervision of that SEC-registered investment adviser. BIIL is a "participating affiliate" of the Adviser, and the BIIL employees are "associated persons" of the Adviser.
Under the Amended and Restated Advisory Agreement, the Company pays the Adviser (i) a base management fee (the "Base Management Fee") and (ii) an incentive fee (the "Incentive Fee") as compensation for the investment advisory and management services it provides the Company thereunder.
Pre-January 1, 2021 Base Management Fee
For the period from January 1, 2020 through December 31, 2020, the Base Management Fee was calculated based on the Company's gross assets, including the MVC Credit Support Agreement, assets purchased with borrowed funds or other forms of leverage and excluding cash and cash equivalents, at an annual rate of 1.375%. The annual rate of the Base Management Fee was 1.125% for the period commencing on January 1, 2019 through December 31, 2019.
The Base Management Fee was payable quarterly in arrears on a calendar quarter basis. The Base Management Fee was calculated based on the average value of the Company’s gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters prior to the quarter for which such fees are being calculated. Base Management Fees for any partial month or quarter were appropriately pro-rated.
Post-December 31, 2020 Base Management Fee
Beginning January 1, 2021, the Base Management Fee is calculated based on the Company’s gross assets, including the MVC Credit Support Agreement, assets purchased with borrowed funds or other forms of leverage and excluding cash and cash equivalents, at an annual rate of 1.25%. The Base Management Fee is payable quarterly in arrears on a calendar quarter basis. The Base Management Fee will be calculated based on the average value of the Company’s gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters prior to the quarter for which such fees are being calculated. Base Management Fees for any partial month or quarter will be appropriately pro-rated.
F-52


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
For the year ended December 31, 2021, the Base Management Fee determined in accordance with the terms of the Amended and Restated Advisory Agreement was approximately $19.5 million. For the years ended December 31, 2020 and December 31, 2019, the Base Management Fee determined in accordance with the terms of the Original Advisory Agreement was approximately $14.3 million and $12.1 million, respectively. As of December 31, 2021, the Base Management Fee of $5.4 million for the three months ended December 31, 2021 was unpaid and included in “Base management fees payable” in the accompanying Consolidated Balance Sheets. As of December 31, 2020, the Base Management Fee of $3.4 million for the three months ended December 31, 2020 was unpaid and included in “Base management fees payable” in the accompanying Consolidated Balance Sheets.
Pre-January 1, 2021 Incentive Fee
For the period from August 2, 2018 through December 31, 2020, under the Original Advisory Agreement, the Incentive Fee was comprised of two parts: (1) a portion based on the Company’s pre-incentive fee net investment income (the "Pre-2021 Income-Based Fee") and (2) a portion based on the net capital gains received on the Company’s portfolio of securities on a cumulative basis for each calendar year, net of all realized capital losses and all unrealized capital depreciation for that same calendar year (the "Pre-2021 Capital Gains Fee").
The Pre-2021 Income-Based Fee was calculated as follows:
(i)For each quarter from and after August 2, 2018 through December 31, 2019 (the "Pre-2020 Period"), the Pre-2021 Income-Based Fee was calculated and payable quarterly in arrears based on the Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter for which such fees were being calculated. In respect of the Pre-2020 Period, "Pre-Incentive Fee Net Investment Income" meant interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial assistance and consulting fees or other fees that the Company receives from portfolio companies) accrued during the relevant calendar quarter, minus the Company’s operating expenses for such quarter (including the Base Management Fee, expenses payable under the Administration Agreement, any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee Net Investment Income included, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income not yet received in cash. Pre-Incentive Fee Net Investment Income did not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
(ii)For each quarter beginning on and after January 1, 2020 (the "Post-2019 Period"), the Pre-2021 Income-Based Fee was calculated and payable quarterly in arrears based on the Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter and the eleven preceding calendar quarters (or such fewer number of preceding calendar quarters counting each calendar quarter beginning on or after January 1, 2020) (each such period referred to as the "Pre-2021 Trailing Twelve Quarters") for which such fees were being calculated and was payable promptly following the filing of the Company’s financial statements for such quarter. In respect of the Post-2019 Period, "Pre-Incentive Fee Net Investment Income" meant interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial assistance and consulting fees or other fees that the Company receives from portfolio companies) accrued during the relevant Pre-2021 Trailing Twelve Quarters, minus the Company’s operating expenses for such Pre-2021 Trailing Twelve Quarters (including the Base Management Fee, expenses payable under the Administration Agreement, any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee) divided by the number of quarters that comprise the relevant Pre-2021 Trailing Twelve Quarters. Pre-Incentive Fee Net Investment Income included, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income not yet received in cash. Pre-Incentive Fee Net Investment Income did not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
(iii)Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets (defined as total assets less senior securities constituting indebtedness and preferred stock) at the
F-53


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
end of the calendar quarter for which such fees were being calculated, was compared to a "hurdle rate", expressed as a rate of return on the value of the Company’s net assets at the end of the most recently completed calendar quarter, of 2% per quarter (8% annualized). The Company paid the Adviser the Pre-2021 Income-Based Fee with respect to the Company’s Pre-Incentive Fee Net Investment Income in each calendar quarter as follows:
(1)(a) With respect to the Pre-2020 Period, no Pre-2021 Income-Based Fee for any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) did not exceed the hurdle rate;
(b) With respect to the Post-2019 Period, no Pre-2021 Income-Based Fee for any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) did not exceed the hurdle rate;
(2)(a) With respect to the Pre-2020 Period, 100% of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) for any calendar quarter with respect to that portion of the Pre-Incentive Fee Net Investment Income for such quarter, if any, that exceeded the hurdle rate but was less than 2.5% (10% annualized) (the "Pre-2020 Catch-Up Amount"). The Pre-2020 Catch-Up Amount was intended to provide the Adviser with an incentive fee of 20% on all of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) when the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) reached 2% per quarter (8% annualized);
(b) With respect to the Post-2019 Period, 100% of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) with respect to that portion of the Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above), if any, that exceeded the hurdle rate but was less than 2.5% (10% annualized) (the "Post-2019 Catch-Up Amount"). The Post-2019 Catch-Up Amount was intended to provide the Adviser with an incentive fee of 20% on all of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) when the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) reached 2% per quarter (8% annualized);
(3)(a) With respect to the Pre-2020 Period, 20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) for any calendar quarter with respect to that portion of the Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) for such quarter, if any, that exceeded the Pre-2020 Catch-Up Amount; and
(b) With respect to the Post-2019 Period, 20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) for any calendar quarter with respect to that portion of the Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above), if any, that exceeded the Post-2019 Catch-Up Amount.
However, with respect to the Post-2019 Period, the Pre-2021 Income-Based Fee paid to the Adviser would in no event be in excess of the Pre-2021 Incentive Fee Cap. With respect to the Post-2019 Period, the "Pre-2021 Incentive Fee Cap" for any quarter was an amount equal to (a) 20% of the Cumulative Net Return (as defined below) during the relevant Pre-2021 Trailing Twelve Quarters minus (b) the aggregate Pre-2021 Income-Based Fee that was paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Pre-2021 Trailing Twelve Quarters.
Cumulative Net Return meant (x) the aggregate net investment income in respect of the relevant Pre-2021 Trailing Twelve Quarters minus (y) any Net Capital Loss (as defined below), if any, in respect of the relevant Pre-2021 Trailing Twelve Quarters. If, in any quarter, the Pre-2021 Incentive Fee Cap was zero or a negative value, the Company paid no Pre-2021 Income-Based Fee to the Adviser for such quarter. If, in any quarter, the Pre-2021 Incentive Fee Cap for such quarter was a positive value but was less than the Pre-2021 Income-Based Fee that was payable to the Adviser for such quarter (before giving effect to the Pre-2021 Incentive Fee Cap) calculated as described above, the Company paid a Pre-2021 Income-Based Fee to the Adviser equal to the Pre-2021 Incentive
F-54


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
Fee Cap for such quarter. If, in any quarter, the Pre-2021 Incentive Fee Cap for such quarter was equal to or greater than the Pre-2021 Income-Based Fee that was payable to the Adviser for such quarter (before giving effect to the Pre-2021 Incentive Fee Cap) calculated as described above, the Company paid an Pre-2021 Income-Based Fee to the Adviser equal to the Pre-2021 Income-Based Fee calculated as described above for such quarter without regard to the Pre-2021 Incentive Fee Cap.
Net Capital Loss in respect of a particular period meant the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in such period and (ii) aggregate capital gains, whether realized or unrealized, in such period.
The Pre-2021 Capital Gains Fee was determined and payable in arrears as of the end of each calendar year, commencing with the calendar year ended on December 31, 2018, and was calculated at the end of each applicable year by subtracting (1) the sum of the Company’s cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (2) the Company’s cumulative aggregate realized capital gains, in each case calculated from August 2, 2018. If such amount was positive at the end of such year, then the Pre-2021 Capital Gains Fee payable for such year was equal to 20% of such amount, less the cumulative aggregate amount of Pre-2021 Capital Gains Fees paid in all prior years. If such amount was negative, then there was no Pre-2021 Capital Gains Fee payable for such year.
Post-December 31, 2020 Incentive Fee
Beginning January 1, 2021, the Incentive Fee continues to consist of two components that are independent of each other, with the result that one component may be payable even if the other is not. Under the Amended and Restated Advisory Agreement, a portion of the Incentive Fee is based on the Company's income (the “ Income-Based Fee”) and a portion is based on the Company's capital gains (the “Capital Gains Fee”), each as described below:
(i) The Income-Based Fee will be determined and paid quarterly in arrears based on the amount by which (x) the aggregate “Pre-Incentive Fee Net Investment Income” (as defined below) in respect of the current calendar quarter and the eleven preceding calendar quarters beginning with the calendar quarter that commences on or after January 1, 2021, as the case may be (or the appropriate portion thereof in the case of any of the Company's first eleven calendar quarters that commences on or after January 1, 2021) (in either case, the “Trailing Twelve Quarters”) exceeds (y) the Hurdle Amount (as defined below) in respect of the Trailing Twelve Quarters. The Hurdle Amount will be determined on a quarterly basis, and will be calculated by multiplying 2.0% (8% annualized) by the aggregate of the Company's net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. For this purpose, under the Amended and Restated Advisory Agreement, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including, without limitation, any accrued income that we have not yet received in cash and any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies) accrued during the calendar quarter, minus the Company's operating expenses accrued during the calendar quarter (including, without limitation, the Base Management Fee, administration expenses and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the Income-Based Fee and the Capital Gains Fee). For the avoidance of doubt, Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation:
The calculation of the Income-Based Fee for each quarter is as follows:
(A) No Income-Based Fee will be payable to the Adviser in any calendar quarter in which the Company's aggregate Pre-Incentive Fee Net Investment Income for the Trailing Twelve Quarters does not exceed the Hurdle Amount;
(B) 100% of the Company's aggregate Pre-Incentive Fee Net Investment Income for the Trailing Twelve Quarters, if any, that exceeds the Hurdle Amount but is less than or equal to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.5% (10% annualized) by the
F-55


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
Company's net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 20% on all of the Company's Pre-Incentive Fee Net Investment Income when the Company's Pre-Incentive Fee Net Investment Income reaches the Catch-Up Amount for the Trailing Twelve Quarters; and
(C) For any quarter in which the Company's aggregate Pre-Incentive Fee Net Investment Income for the Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income-Based Fee shall equal 20% of the amount of the Company's Pre-Incentive Fee Net Investment Income for such Trailing Twelve Quarters, as the Hurdle Amount and Catch-Up Amount will have been achieved.
Subject to the Incentive Fee Cap described below, the amount of the Income-Based Fee that will be paid to the Adviser for a particular quarter will equal the excess of the aggregate Income-Based Fee so calculated less the aggregate Income-Based Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
(ii) The Income-Based Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is an amount equal to (a) 20% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less (b) the aggregate Income-Based Fee that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, we will pay no Income-Based Fee to the Adviser in that quarter. If, in any quarter, the Incentive Fee Cap is a positive value but is less than the Income-Based Fee calculated in accordance with paragraph (i) above, we will pay the Adviser the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap is equal to or greater than the Income-Based Fee calculated in accordance with paragraph (i) above, we will pay the Adviser the Income-Based Fee for such quarter.
“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses on the Company's assets, whether realized or unrealized, in such period and (ii) aggregate capital gains or other gains on the Company's assets (including, for the avoidance of doubt, the value ascribed to any credit support arrangement in the Company's financial statements even if such value is not categorized as a gain therein), whether realized or unrealized, in such period.
(iii) The second part of the Incentive Fee (the “Capital Gains Fee”) will be determined and payable in arrears as of the end of each calendar year (or upon termination of the Amended and Restated Advisory Agreement), commencing with the calendar year ended on December 31, 2018, and is calculated at the end of each applicable year by subtracting (1) the sum of the Company's cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (2) the Company's cumulative aggregate realized capital gains, in each case calculated from August 2, 2018. If such amount is positive at the end of such year, then the Capital Gains Fee payable for such year is equal to 20% of such amount, less the cumulative aggregate amount of Capital Gains Fees paid in all prior years commencing with the calendar year ended on December 31, 2018. If such amount is negative, then there is no Capital Gains Fee payable for such year. If this Agreement is terminated as of a date that is not a calendar year end, the termination date will be treated as though it were a calendar year end for purposes of calculating and paying a Capital Gains Fee.
Under the Amended and Restated Advisory Agreement, the "cumulative aggregate realized capital gains" are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in the Company's portfolio when sold and (b) the accreted or amortized cost basis of such investment.
F-56


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
The cumulative aggregate realized capital losses are calculated as the sum of the differences, if negative, between (a) the net sales price of each investment in the Company's portfolio when sold and (b) the accreted or amortized cost basis of such investment.
The aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company's portfolio as of the applicable Capital Gains Fee calculation date and (b) the accreted or amortized cost basis of such investment.
Under the Amended and Restated Advisory Agreement, the “accreted or amortized cost basis of an investment” shall mean the accreted or amortized cost basis of such investment as reflected in the Company’s financial statements.
For the year ended December 31, 2021, the Income-Based Fee determined in accordance with the terms of the Amended and Restated Advisory Agreement was $14.7 million. As of December 31, 2021, the Income-Based Fee of $4.1 million for the three months ended December 31, 2021 was unpaid and included in “Incentive management fees payable” in the accompanying Consolidated Balance Sheet. The Company did not pay any Pre-2021 Income-Based Fee for the years ended December 31, 2020 and 2019.
The Company did not incur any capital gains fees for the years ended December 31, 2021, 2020 and 2019.
Payment of Company Expenses
Under the Amended and Restated Advisory Agreement, all investment professionals of the Adviser and its staff, when and to the extent engaged in providing services required to be provided by the Adviser under the Amended and Restated Advisory Agreement, and the compensation and routine overhead expenses of such personnel allocable to such services, are provided and paid for by the Adviser and not by the Company, except that all costs and expenses relating to the Company's operations and transactions, including, without limitation, those items listed in the Amended and Restated Advisory Agreement, will be borne by the Company.
Administration Agreement
Under the terms of the Administration Agreement, the Adviser performs (or oversees, or arranges for, the performance of) the administrative services necessary for the operation of the Company, including, but not limited to, office facilities, equipment, clerical, bookkeeping and record-keeping services at such office facilities and such other services as the Adviser, subject to review by the Board, from time to time, determines to be necessary or useful to perform its obligations under the Administration Agreement. The Adviser also, on behalf of the Company and subject to oversight by the Board, arranges for the services of, and oversees, custodians, depositories, transfer agents, dividend disbursing agents, other stockholder servicing agents, accountants, attorneys, valuation experts, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable.
The Company will reimburse Barings for the costs and expenses incurred by it in performing its obligations and providing personnel and facilities under the Administration Agreement in an amount to be negotiated and mutually agreed to by the Company and Barings quarterly in arrears. In no event will the agreed-upon quarterly expense amount exceed the amount of expenses that would otherwise be reimbursable by the Company under the Administration Agreement for the applicable quarterly period, and Barings will not be entitled to the recoupment of any amounts in excess of the agreed-upon quarterly expense amount. The costs and expenses incurred by the Adviser on behalf of the Company under the Administration Agreement include, but are not limited to:
•the allocable portion of the Adviser’s rent for the Company’s Chief Financial Officer and the Chief Compliance Officer and their respective staffs, which is based upon the allocable portion of the usage thereof by such personnel in connection with their performance of administrative services under the Administration Agreement;
•the allocable portion of the salaries, bonuses, benefits and expenses of the Company’s Chief Financial Officer and Chief Compliance Officer and their respective staffs, which is based upon the
F-57


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
allocable portion of the time spent by such personnel in connection with performing administrative services for the Company under the Administration Agreement;
•the actual cost of goods and services used for the Company and obtained by the Adviser from entities not affiliated with the Company, which is reasonably allocated to the Company on the basis of assets, revenues, time records or other methods conforming with generally accepted accounting principles;
•all fees, costs and expenses associated with the engagement of a sub-administrator, if any; and
•costs associated with (a) the monitoring and preparation of regulatory reporting, including registration statements and amendments thereto, prospectus supplements, and tax reporting, (b) the coordination and oversight of service provider activities and the direct cost of such contractual matters related thereto and (c) the preparation of all financial statements and the coordination and oversight of audits, regulatory inquiries, certifications and sub-certifications.
For the years ended December 31, 2021 and 2020, the Company incurred and was invoiced by the Adviser for expenses of approximately $2.5 million and $1.6 million, respectively, under the terms of the Administration Agreement. For the year ended December 31, 2019, the Company incurred and was invoiced by the Adviser for expenses of approximately $2.3 million. As of December 31, 2021, the administrative expenses of $0.8 million incurred for the three months ended December 31, 2021 were unpaid and included in "Administrative fees payable" in the accompanying Consolidated Balance Sheets. As of December 31, 2020, the administrative expenses of $0.7 million incurred for the three months ended December 31, 2020 were unpaid and included in "Administrative fees payable" in the accompanying Consolidated Balance Sheets.
MVC Credit Support Agreement
In connection with the MVC Acquisition, on December 23, 2020, promptly following the closing of the MVC Merger (as defined in “Note 10 – MVC Capital, Inc. Acquisition”), the Company entered into a Credit Support Agreement (the “MVC Credit Support Agreement”) with the Adviser, pursuant to which the Adviser has agreed to provide credit support to the Company in the amount of up to $23.0 million relating to the net cumulative realized and unrealized losses on the acquired MVC investment portfolio over a 10-year period. A summary of the material terms of the MVC Credit Support Agreement are as follows:
•The MVC Credit Support Agreement covers all of the investments in the Reference Portfolio.
•The Adviser has an obligation to provide credit support to the Company in an amount equal to the excess of (1) the aggregate realized and unrealized losses on the Reference Portfolio over (2) the aggregate realized and unrealized gains on the Reference Portfolio, in each case from the date of the closing of the MVC Merger through the Designated Settlement Date (up to a $23.0 million cap) (such amount, the “Covered Losses”). For purposes of the MVC Credit Support Agreement, “Designated Settlement Date” means the earlier of (1) January 1, 2031 and (2) the date on which the entire Reference Portfolio has been realized or written off. No credit support is required to be made by the Adviser to the Company under the MVC Credit Support Agreement if the aggregate realized and unrealized gains on the Reference Portfolio exceed realized and unrealized losses of the Reference Portfolio on the Designated Settlement Date.
•The Adviser will settle any credit support obligation under the MVC Credit Support Agreement as follows. If the Covered Losses are greater than $0.00, then, in satisfaction of the Adviser’s obligation set forth in the MVC Credit Support Agreement, the Adviser will irrevocably waive during the Waiver Period (as defined below) (1) the incentive fees payable under the Amended and Restated Advisory Agreement (including any incentive fee calculated on an annual basis during the Waiver Period), and (2) in the event that Covered Losses exceed such incentive fee, the base management fees payable under the Amended and Restated Advisory Agreement. The “Waiver Period” means the four quarterly measurement periods immediately following the quarter in which the Designated Settlement Date occurs. If the Covered Losses exceed the aggregate amount of incentive fees and base management fees waived by the Adviser during the Waiver Period, then, on the date on which the last incentive fee or base management fee payment would otherwise be due during the Waiver Period, the Adviser shall make a cash payment to the Company equal to the
F-58


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
positive difference between the Covered Losses and the aggregate amount of incentive fees and base management fees previously waived by the Adviser during the Waiver Period.
•The MVC Credit Support Agreement and the rights of the Company thereunder shall automatically terminate if the Adviser (or an affiliate of the Adviser) ceases to serve as the investment adviser to the Company or any successor thereto, other than as a result of the voluntary termination by the Adviser of its investment advisory agreement with the Company. In the event of such a voluntary termination by the Adviser of the then-current investment advisory agreement with the Company, the Adviser will remain obligated to provide the credit support contemplated by the MVC Credit Support Agreement. In the event of a non-voluntary termination of the advisory agreement or its expiration (due to non-renewal by the Board), the Adviser will have no obligations under the MVC Credit Support Agreement.
The MVC Credit Support Agreement is intended to give stockholders of the combined company downside protection from net cumulative realized and unrealized losses on the acquired MVC portfolio and insulate the combined company’s stockholders from potential value volatility and losses in MVC’s portfolio following the closing of the MVC Merger. There is no fee or other payment by the Company to the Adviser or any of its affiliates in connection with the MVC Credit Support Agreement. Any cash payment from the Adviser to the Company under the MVC Credit Support Agreement will be excluded from the combined company’s incentive fee calculations under the Amended and Restated Advisory Agreement.
When the Company and the Adviser entered into the MVC Credit Support Agreement, it was accounted for as a deemed contribution from the Adviser and was included in "Additional paid-in capital" in the accompanying Consolidated Balance Sheets. In addition, the MVC Credit Support Agreement is accounted for as a derivative in accordance with ASC 815, Derivatives and Hedging, and is included in "Credit support agreement" in the accompanying Consolidated Balance Sheets.
3. Investments
Portfolio Composition
The Company invests predominately in senior secured private debt investments in well-established middle-market businesses that operate across a wide range of industries, as well as syndicated senior secured loans, structured product investments, bonds and other fixed income securities. Structured product investments include collateralized loan obligations and asset-backed securities. The Adviser's existing SEC co-investment exemptive relief under the 1940 Act permits the Company and the Adviser's affiliated private funds and SEC-registered funds to co-invest in loans originated by the Adviser, which allows the Adviser to efficiently implement its senior secured private debt investment strategy for the Company.
F-59


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
The cost basis of the Company's debt investments includes any unamortized purchased premium or discount, unamortized loan origination fees and PIK interest, if any. Summaries of the composition of the Company’s investment portfolio at cost and fair value, and as a percentage of total investments and net assets, are shown in the following tables: 
CostPercent of
Total
Portfolio		Fair ValuePercent of
Total
Portfolio		Percent of
Total
Net Assets
 Cost 
Percentage of
Total
Portfolio
 Fair Value 
Percentage of
Total
Portfolio
December 31, 2017:        
December 31, 2021:December 31, 2021:
Senior debt and 1st lien notes
Senior debt and 1st lien notes
$1,217,899,217 68 %$1,221,597,953 68 %165 %
Subordinated debt and 2nd lien notes
 $710,543,854
 63% $589,548,358
 58%
Subordinated debt and 2nd lien notes
253,550,848 14 240,036,808 13 32 
Senior debt and 1st lien notes
 275,088,787
 25
 262,803,297
 26
Structured productsStructured products37,054,829 2 40,270,659 2 6 
Equity shares 134,301,587
 12
 162,543,691
 16
Equity shares145,790,765 8 154,476,657 9 21 
Equity warrants 1,691,617
 —
 1,389,000
 —
Equity warrants1,111,602 — 1,107,543 — — 
Investments in joint ventures / PE fundInvestments in joint ventures / PE fund132,416,803 8 143,104,332 8 19 
 $1,121,625,845
 100% $1,016,284,346
 100%
December 31, 2016:        
$1,787,824,064 100 %$1,800,593,952 100 %243 %
December 31, 2020:December 31, 2020:
Senior debt and 1st lien notes
Senior debt and 1st lien notes
$1,167,436,742 79 %$1,171,250,512 79 %163 %
Subordinated debt and 2nd lien notes
 $753,635,857
 69% $690,159,367
 67%
Subordinated debt and 2nd lien notes
137,776,808 9 138,767,120 9 19 
Senior debt and 1st lien notes
 198,616,110
 18
 191,643,157
 18
Structured productsStructured products30,071,808 2 32,508,845 2 5 
Equity shares 140,524,807
 13
 154,216,657
 15
Equity shares44,693,645 3 44,651,114 3 6 
Equity warrants 4,154,717
 —
 1,888,000
 —
Equity warrants1,235,383 — 1,300,197 — — 
Investment in joint ventureInvestment in joint venture39,282,532 3 41,759,922 3 6 
Short-term investmentsShort-term investments65,558,227 4 65,558,227 4 9 
 $1,096,931,491
 100% $1,037,907,181
 100%$1,486,055,145 100 %$1,495,795,937 100 %208 %
During the year ended December 31, 2017,2021, the Company made twenty-nine112 new investments including recapitalizations oftotaling $1,069.4 million, made investments in existing portfolio companies totaling approximately $408.9$234.0 million, made a new joint venture equity investment totaling $13.7 million, made an additional debt investments in eighteen existing portfolio companies of approximately $70.4 million and additionaljoint venture equity investments in eleven existing portfolio companies totaling approximately $4.4 million. $79.4 million and made an $89.8 million equity co-investment alongside certain affiliates in a portfolio company focused on directly originated, senior-secured asset-based loans to middle-market companies.
During the year ended December 31, 2016,2020, the Company made sixteen76 new investments including recapitalizationstotaling $743.2 million, purchased $185.0 million of investments as part of the MVC Acquisition, made investments in existing portfolio companies totaling approximately $274.1$114.6 million, additional debt investments in eleven existing portfolio companies of approximately $37.8made a new joint venture equity investment totaling $10.0 million and made an additional investment in one existing joint venture equity investments in ten existing portfolio companiescompany totaling approximately $7.5$10.0 million.
During the year ended December 31, 2015,2019, the Company made twenty-three43 new investments including recapitalizations oftotaling $425.9 million, investments in existing portfolio companies totaling approximately $361.2 million, additional debt investments in ten existing portfolio companies of approximately $84.2$14.0 million and additionalmade one new joint venture equity investments in eleven existing portfolio companiesinvestment totaling approximately $8.6$10.2 million.
F-60




Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
Industry Composition
The industry composition of investments at fair value at December 31, 2021 and December 31, 2020, excluding short-term investments, was as follows:
December 31, 2021Percent of PortfolioDecember 31, 2020Percent of Portfolio
Aerospace and Defense$91,128,494 5.1 %$82,501,170 5.8 %
Automotive55,875,164 3.1 61,581,980 4.3 
Banking, Finance, Insurance and Real Estate208,397,175 11.6 99,099,552 6.9 
Beverage, Food and Tobacco38,984,756 2.2 15,404,126 1.1 
Capital Equipment42,916,165 2.4 30,899,579 2.2 
Chemicals, Plastics, and Rubber32,234,304 1.8 32,378,972 2.3 
Construction and Building62,083,040 3.4 59,861,616 4.2 
Consumer goods: Durable47,315,953 2.6 38,165,784 2.7 
Consumer goods: Non-durable28,305,788 1.6 28,081,580 2.0 
Containers, Packaging and Glass10,218,137 0.6 9,018,983 0.6 
Energy: Electricity12,190,087 0.7 17,627,935 1.2 
Energy: Oil and Gas5,774,031 0.3 788,105 0.1 
Environmental Industries8,080,699 0.4 — — 
Healthcare and Pharmaceuticals134,285,598 7.5 142,708,050 10.0 
High Tech Industries139,590,064 7.7 152,413,985 10.6 
Hotel, Gaming and Leisure27,552,728 1.5 10,682,093 0.7 
Investment Funds and Vehicles143,104,333 7.9 41,759,922 2.9 
Media: Advertising, Printing and Publishing46,414,314 2.6 54,123,033 3.8 
Media: Broadcasting and Subscription7,440,621 0.4 6,464,741 0.4 
Media: Diversified and Production52,886,896 2.9 48,200,216 3.4 
Metals and Mining10,684,298 0.6 17,857,236 1.2 
Retail— — 1,983,083 0.1 
Services: Business342,757,761 19.0 209,974,914 14.7 
Services: Consumer65,801,151 3.7 54,450,324 3.8 
Structured Products24,661,909 1.4 32,508,845 2.3 
Telecommunications45,181,572 2.5 43,021,001 3.0 
Transportation: Cargo86,964,435 4.8 91,132,943 6.4 
Transportation: Consumer12,231,077 0.7 — — 
Utilities: Electric12,856,773 0.7 8,987,929 0.6 
Utilities: Oil and Gas4,676,629 0.3 11,645,956 0.8 
Wholesale— — 26,914,057 1.9 
Total$1,800,593,952 100.0 %$1,430,237,710 100.0 %
F-61


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
The following table presents the Company’s investment portfolio at fair value as of December 31, 20172021 and 2016,2020, categorized by the ASC Topic 820 valuation hierarchy, as previously described:
Fair Value at December 31, 2021
Level 1Level 2Level 3Total
Senior debt and 1st lien notes
$— $84,275,024 $1,137,322,929 $1,221,597,953 
Subordinated debt and 2nd lien notes
— 9,467,935 230,568,873 240,036,808 
Structured products— 40,270,659 — 40,270,659 
Equity shares111,357 3,083,577 151,281,723 154,476,657 
Equity warrants— 243,594 863,949 1,107,543 
Short-term investments— — — — 
Investments subject to leveling$111,357 $137,340,789 $1,520,037,474 $1,657,489,620 
Investments in joint ventures / PE fund(1)143,104,332 
$1,800,593,952 
 Fair Value at December 31, 2020
 Level 1Level 2Level 3Total
Senior debt and 1st lien notes
$— $115,533,401 $1,055,717,111 $1,171,250,512 
Subordinated debt and 2nd lien notes
— 7,947,184 130,819,936 138,767,120 
Structured products— 32,508,845 — 32,508,845 
Equity shares— 424,090 44,227,024 44,651,114 
Equity warrants— 166,416 1,133,781 1,300,197 
Short-term investments65,558,227 — — 65,558,227 
Investments subject to leveling$65,558,227 $156,579,936 $1,231,897,852 $1,454,036,015 
Investments in joint ventures / PE fund(1)41,759,922 
$1,495,795,937 
(1)The Company's investments in Jocassee, Thompson Rivers, Waccamaw River and the MVC Private Equity Fund LP are measured at fair value using net asset value and have not been categorized in the fair value hierarchy. The fair value amount presented in this table is intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheets.
F-62


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
 Fair Value at December 31, 2017
 Level 1 Level 2 Level 3 Total
Subordinated debt and 2nd lien notes
$—
 $—
 $589,548,358
 $589,548,358
Senior debt and 1st lien notes
—
 —
 262,803,297
 262,803,297
Equity shares—
 —
 162,543,691
 162,543,691
Equity warrants—
 —
 1,389,000
 1,389,000
 $—
 $—
 $1,016,284,346
 $1,016,284,346
        
 Fair Value at December 31, 2016
 Level 1 Level 2 Level 3 Total
Subordinated debt and 2nd lien notes
$—
 $—
 $690,159,367
 $690,159,367
Senior debt and 1st lien notes
—
 —
 191,643,157
 191,643,157
Equity shares—
 —
 154,216,657
 154,216,657
Equity warrants—
 —
 1,888,000
 1,888,000
 $—
 $—
 $1,037,907,181
 $1,037,907,181
The following tables reconcile the beginning and ending balances of the Company’s investment portfolio measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 20172021 and 2020:
Year Ended December 31, 2021:
Senior Debt
and 1st Lien
Notes
Subordinated Debt and 2nd Lien Notes
Equity
Shares		Equity WarrantsTotal
Fair value, beginning of period$1,055,717,111 $130,819,936 $44,227,024 $1,133,781 $1,231,897,852 
New investments1,096,052,639 151,300,891 103,526,450 163,000.00 1,351,042,980 
Transfers into (out of) Level 3, net(2,629,679)2,233,600 3,223,510.00 — 2,827,431 
Proceeds from sales of investments(736,674,890)(13,683,500)(7,964,049)(450,000)(758,772,439)
Loan origination fees received(26,844,600)(3,659,741)— — (30,504,341)
Principal repayments received(255,215,358)(32,131,013)— — (287,346,371)
Payment-in-kind interest865,462 8,503,991 — — 9,369,453 
Accretion of loan premium/discount15,607 222,447 — — 238,054 
Accretion of deferred loan origination revenue8,584,545 602,604 — — 9,187,149 
Realized gain (loss)(575,227)(36,487)949,693 163,219 501,198 
Unrealized appreciation (depreciation)(1,972,681)(13,603,855)7,319,095 (146,051)(8,403,492)
Fair value, end of period$1,137,322,929 $230,568,873 $151,281,723 $863,949 $1,520,037,474 
Year Ended December 31, 2020:
Senior Debt
and 1st Lien
Notes
Subordinated Debt and 2nd Lien Notes
Equity
Shares		Equity WarrantsTotal
Fair value, beginning of period$555,500,307 $12,011,965 $760,716 $— $568,272,988 
New investments735,177,116 4,027,048 862,277 — 740,066,441 
Investments acquired in MVC merger9,720,000 122,082,933 42,980,466 1,133,781 175,917,180 
Transfers into (out of) Level 3, net19,074,284 (2,677,220)— — 16,397,064 
Proceeds from sales of investments(209,685,651)(444,978)(78,992)— (210,209,621)
Loan origination fees received(17,726,770)(19,808)— — (17,746,578)
Principal repayments received(37,416,476)(5,104,857)— — (42,521,333)
Payment-in-kind interest249,907 41,753 — — 291,660 
Accretion of loan premium/discount17,936 1,045 — — 18,981 
Accretion of deferred loan origination revenue2,631,269 44,571 — — 2,675,840 
Realized gain (loss)1,544,794 (35,357)(10,019)— 1,499,418 
Unrealized appreciation (depreciation)(3,369,605)892,841 (287,424)— (2,764,188)
Fair value, end of period$1,055,717,111 $130,819,936 $44,227,024 $1,133,781 $1,231,897,852 
2016:
Year Ended
December 31, 2017:
Subordinated
Debt and 2nd
Lien Notes
 
Senior Debt
and 1st Lien
Notes
 
Equity
Shares
 
Equity
Warrants
 Total
Fair value, beginning of period$690,159,367
 $191,643,157
 $154,216,657
 $1,888,000
 $1,037,907,181
New investments262,333,868
 205,493,670
 15,915,860
 —
 483,743,398
Investment reclass33,614,656
 (42,014,656) 8,400,000
 —
 —
Proceeds from sales of investments—
 —
 (29,065,946) (550,863) (29,616,809)
Loan origination fees received(4,355,181) (2,938,834) —
 —
 (7,294,015)
Principal repayments received(302,112,732) (71,949,131) —
 —
 (374,061,863)
PIK interest earned9,916,389
 1,001,142
 —
 —
 10,917,531
PIK interest payments received(12,431,539) (507,979) —
 —
 (12,939,518)
Accretion of loan discounts419,114
 57,778
 —
 —
 476,892
Accretion of deferred loan origination revenue4,846,747
 1,490,694
 —
 —
 6,337,441
Realized loss(35,323,325) (14,160,007) (1,473,134) (1,912,237) (52,868,703)
Unrealized appreciation (depreciation)(57,519,006) (5,312,537) 14,550,254
 1,964,100
 (46,317,189)
Fair value, end of period$589,548,358
 $262,803,297
 $162,543,691
 $1,389,000
 $1,016,284,346









Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

Year Ended
December 31, 2016:
Subordinated
Debt and 2nd
Lien Notes
 
Senior Debt
and 1st Lien
Notes
 
Equity
Shares
 
Equity
Warrants
 Total
Fair value, beginning of period$699,125,083
 $132,929,264
 $141,555,369
 $3,667,000
 $977,276,716
New investments220,825,664
 71,620,633
 26,370,669
 650,000
 319,466,966
Investment reclass4,020,247
 (4,020,247) —
 —
 —
Proceeds from sales of investments—
 —
 (28,340,004) (5,742,355) (34,082,359)
Loan origination fees received(4,613,831) (1,200,160) —
 —
 (5,813,991)
Principal repayments received(194,883,407) (7,727,099) —
 —
 (202,610,506)
PIK interest earned13,784,921
 1,449,498
 —
 —
 15,234,419
PIK interest payments received(9,326,564) (236,150) —
 —
 (9,562,714)
Accretion of loan discounts193,801
 203,303
 —
 —
 397,104
Accretion of deferred loan origination revenue4,012,181
 556,218
 —
 —
 4,568,399
Realized gain (loss)(14,752,679) (1,560,322) 15,029,594
 3,268,455
 1,985,048
Unrealized appreciation (depreciation)(28,226,049) (371,781) (398,971) 44,900
 (28,951,901)
Fair value, end of period$690,159,367
 $191,643,157
 $154,216,657
 $1,888,000
 $1,037,907,181
All realized and unrealized gains and losses and unrealized appreciation and depreciation are included in earnings (changes in net assets) and are reported on separate line items within the Company’s Consolidated Statements of Operations.
F-63


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
Pre-tax net unrealized depreciation on Level 3 investments of $93.0$3.8 million during the year ended December 31, 2017 were2021 was related to portfolio company investments that were still held by the Company as of December 31, 2017.2021. Pre-tax net unrealized depreciation on Level 3 investments of $31.0$4.9 million during the year ended December 31, 2016 were2020 was related to portfolio company investments that were still held by the Company as of December 31, 2016.2020.
The Company’s primary investment objective is to generate current income and capital appreciation by investing directly in privately-held lower middle market companies to help these companies fund acquisitions, growth or refinancing. DuringExclusive of short-term investments, during the year ended December 31, 2017,2021, the Company made investments of approximately $471.1$1,410.5 million in portfolio companies to which it was not previously contractually committed to provide the financial support.such financing. During the year ended December 31, 2017,2021, the Company made investments of $12.7$70.0 million in companies to which it was previously committed to provide the financial support. Duringsuch financing.
Exclusive of short-term investments, during the year ended December 31, 2016,2020, the Company made investments of approximately $310.2$1,030.5 million in portfolio companies (including $185.0 million from the MVC Acquisition), to which it was not previously contractually committed to provide the financial support.such financing. During the year ended December 31, 2016,2020, the Company made investments of $9.2$32.4 million in companies to which it was previously committed to provide such financing.
Jocassee Partners LLC
On May 8, 2019, the financial support.Company entered into an agreement with South Carolina Retirement Systems Group Trust ("SCRS") to create and co-manage Jocassee Partners LLC ("Jocassee"), a joint venture, which invests in a highly diversified asset mix including senior secured, middle-market, private debt investments, syndicated senior secured loans and structured product investments. The detailsCompany and SCRS committed to initially provide $50.0 million and $500.0 million, respectively, of equity capital to Jocassee. Equity contributions will be called from each member on a pro-rata basis, based on their equity commitments.
The total value of Jocassee’s investment portfolio was $1,258.2 million as of December 31, 2021, as compared to $869.6 million as of December 31, 2020. As of December 31, 2021, Jocassee’s investments had an aggregate cost of $1,242.2 million, as compared to $839.5 million as of December 31, 2020. As of December 31, 2021 and December 31, 2020, the Jocassee investment portfolio consisted of the Company’s investments have been disclosed on the Consolidated Schedule of Investments.following investments:
CostPercentage of
Total
Portfolio		Fair ValuePercentage of
Total
Portfolio
December 31, 2021:
Senior debt and 1st lien notes
$1,084,501,574 87 %$1,085,171,923 86 %
Subordinated debt and 2nd lien notes23,607,437 2 %24,010,554 2 %
Structured products4,568,790 — %5,409,080 1 %
Equity shares5,447,983 1 %3,887,352 — %
Equity warrants31,451 — %75,406 — %
Investment in joint ventures111,489,807 9 %127,092,288 10 %
Short-term investments12,571,932 1 %12,571,932 1 %
$1,242,218,974 100 %$1,258,218,535 100 %
December 31, 2020:
Senior debt and 1st lien notes
$686,341,760 81 %$714,747,405 82 %
Subordinated debt and 2nd lien notes10,079,164 1 10,170,127 1 
Structured products22,981,004 3 25,626,147 3 
Equity shares6,964,845 1 5,829,554 1 
Equity warrants31,451 — 51,515 — 
Investment in joint ventures90,000,000 11 90,106,560 10 
Short-term investments23,093,064 3 23,093,055 3 
$839,491,288 100 %$869,624,363 100 %
F-64






Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

3. ScheduleAs of Investments inDecember 31, 2021 and Advances to AffiliatesDecember 31, 2020, the weighted average yield on the principal amount of Jocassee’s outstanding debt investments was approximately 5.3% and 4.4%, respectively. The weighted average yield on the principal amount of all of Jocassee’s outstanding investments (including equity and equity-linked investments and short-term investments) was approximately 4.8% and 3.8% as of December 31, 2021 and December 31, 2020, respectively.
The following schedules present information aboutindustry composition of Jocassee’s investments in and advances to affiliates for the year endedat fair value at December 31, 20172021 and year ended December 31, 2016:2020, excluding short-term investments, was as follows:
December 31, 2021December 31, 2020
Aerospace and Defense$71,856,682 5.8 %$21,044,217 2.5 %
Automotive18,625,991 1.5 15,520,985 1.8 
Banking, Finance, Insurance and Real Estate109,961,068 8.8 80,759,836 9.6 
Beverage, Food and Tobacco30,351,648 2.5 24,931,070 2.9 
Capital Equipment17,006,354 1.4 19,953,788 2.4 
Chemicals, Plastics, and Rubber24,665,132 2.0 26,419,508 3.1 
Construction and Building14,505,666 1.2 14,979,023 1.8 
Consumer goods: Durable10,293,735 0.8 14,256,411 1.7 
Consumer goods: Non-durable23,886,104 1.9 4,749,797 0.6 
Containers, Packaging and Glass25,276,979 2.0 16,742,506 2.0 
Energy: Electricity10,570,961 0.8 5,897,687 0.7 
Energy: Oil and Gas5,091,154 0.4 4,602,739 0.5 
Environmental Industries7,562,679 0.6 2,697,765 0.3 
Forest Products & Paper474,674 — — — 
Healthcare and Pharmaceuticals128,494,962 10.3 84,624,495 10.0 
High Tech Industries171,959,733 13.8 75,759,051 8.9 
Hotel, Gaming and Leisure35,382,908 2.8 49,013,967 5.8 
Investment Funds and Vehicles127,092,288 10.2 90,106,560 10.6 
Media: Advertising, Printing and Publishing18,422,570 1.5 9,761,091 1.2 
Media: Broadcasting and Subscription37,839,637 3.0 40,885,203 4.8 
Media: Diversified and Production21,059,457 1.7 12,950,796 1.5 
Metals and Mining5,791,736 0.5 1,645,763 0.2 
Retail14,420,299 1.2 15,962,027 1.9 
Services: Business151,722,574 12.2 87,474,340 10.3 
Services: Consumer55,156,390 4.4 40,177,219 4.7 
Structured Product5,409,080 0.4 17,515,085 2.1 
Telecommunications36,036,221 2.9 48,768,364 5.8 
Transportation: Cargo49,102,935 3.9 4,927,508 0.6 
Transportation: Consumer6,546,191 0.5 7,730,907 0.9 
Utilities: Electric3,265,429 0.3 5,720,376 0.7 
Utilities: Oil and Gas6,870,267 0.6 — — 
Wholesale945,099 0.1 953,224 0.1 
Total$1,245,646,603 100.0 %$846,531,308 100.0 %
F-65
Year Ended December 31, 2017: Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(2)
December 31, 2016
Value
Gross Additions
(3)
Gross Reductions (4)
December 31, 2017
Value
Portfolio CompanyType of Investment(1)
Control Investments:        
CRS Reprocessing, LLCDebtor in Possession Loan (8% PIK)$(2,634,714)$—
$—
$—
$4,000,000
$4,000,000
$—
Senior Notes (LIBOR + 3.5%)(6)
(1,938,339)—
79,534
2,942,769
—
2,942,769
—
Split Collateral Term Loans (8% Cash)(11,554,845)5,010,464
513,963
6,182,000
11,360,464
17,542,464
—
Subordinated Note (5% Cash)(82,335)—
—
—
125,000
125,000
—
Series F Preferred Units (705,321 units)(9,134,807)9,134,807
—
—
—
—
—
Common Units (15,174 units)—
—
—
—
—
 —
 (25,345,040)14,145,271
593,497
9,124,769
15,485,464
24,610,233
—
         
CRS-SPV, Inc.Common Stock (1,100 shares)—
1,855,000
—
—
20,283,000
—
20,283,000
 —
1,855,000
—
—
20,283,000
—
20,283,000
         
DCWV Acquisition CorporationSenior Subordinated Note (15% PIK)(250,000)—
—
250,000
—
250,000
—
Subordinated Note (12% Cash, 3% PIK)(4,396,350)4,789,633
—
1,389,000
4,789,633
6,178,633
—
Jr. Subordinated Note (15% PIK)(2,000,000)2,000,000
—
—
2,000,000
2,000,000
—
Series A Preferred Equity (1,200 shares)(1,200,000)1,200,000
—
—
1,200,000
1,200,000
—
100% Common Shares—
—
—
—
—
—
—
 (7,846,350)7,989,633
—
1,639,000
7,989,633
9,628,633
—
         
DialogDirect, Inc.Subordinated Note (8% PIK)(7,523,038)6,640,226
—
—
20,020,227
20,020,227
—
Class A Common Units (1,176,500 units)—
—
—
—
—
—
—
 (7,523,038)6,640,226
—
—
20,020,227
20,020,227
—
         





Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

The geographic composition of Jocassee’s investments at fair value at December 31, 2021 and December 31, 2020, excluding short-term investments, was as follows:
December 31, 2021December 31, 2020
Australia$16,509,299 1.3 %$— — %
Austria1,115,024 0.1 1,181,240 0.1 
Belgium14,813,432 1.2 3,940,942 0.5 
Canada8,506,813 0.7 5,691,085 0.7 
Denmark6,959,844 0.6 4,839,238 0.6 
Finland47,992,207 3.9 2,328,122 0.3 
France3,391,221 0.3 77,599,427 9.1 
Germany6,356,605 0.5 41,184,179 4.9 
Hong Kong2,272,125 0.2 — — 
Ireland123,816,362 9.9 2,440,052 0.3 
Italy113,895,808 9.1 607,762 0.1 
Luxembourg4,766,248 0.4 2,512,059 0.3 
Netherlands3,743,457 0.3 26,905,224 3.2 
Panama— — 965,149 0.1 
Spain1,224,851 0.1 11,163,151 1.3 
Sweden32,149,538 2.6 13,169,200 1.6 
Switzerland965,247 0.1 13,208,446 1.6 
United Kingdom5,305,027 0.4 76,748,680 9.0 
USA851,863,495 68.4 562,047,352 66.3 
Total$1,245,646,603 100.0 %$846,531,308 100.0 %
Jocassee’s subscription facility with Bank of America N.A., which is non-recourse to the Company, had approximately $176.3 million and $204.9 million outstanding as of December 31, 2021 and December 31, 2020, respectively. Jocassee’s credit facility with Citibank, N.A., which is non-recourse to the Company, had approximately $342.8 million and $113.1 million outstanding as of December 31, 2021 and December 31, 2020, respectively. Jocassee’s term debt securitization, which is non-recourse to the Company, had approximately $323.1 million and $302.3 million outstanding as of December 31, 2021 and December 31, 2020, respectively.
The Company may sell portions of its investments via assignment to Jocassee. Since inception, as of December 31, 2021, and December 31, 2020, the Company had sold $698.5 million and $162.2 million, respectively, of its investments to Jocassee. For both the years ended December 31, 2021 and December 31, 2020, the Company realized a loss on the sales of its investments to Jocassee of $1.4 million. As of December 31, 2021 and December 31, 2020, the Company had $216.9 million and $44.2 million, respectively, in unsettled receivables due from Jocassee that were included in "Receivable from unsettled transactions" in the accompanying Consolidated Balance Sheets. The sale of the investments met the criteria set forth in ASC 860, Transfers and Servicing for treatment as a sale and satisfies the following conditions:
•Assigned investments have been isolated from the Company, and put presumptively beyond the reach of the Company and its creditors, even in bankruptcy or other receivership;
•each participant has the right to pledge or exchange the assigned investments it received, and no condition both constrains the participant from taking advantage of its right to pledge or exchange and provides more than a trivial benefit to the Company; and
•the Company, its consolidated affiliates or its agents do not maintain effective control over the assigned investments through either: (i) an agreement that entitles and/or obligates the Company to
F-66
Year Ended December 31, 2017: Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(2)
December 31, 2016
Value
Gross Additions
(3)
Gross Reductions (4)
December 31, 2017
Value
Portfolio CompanyType of Investment(1)
Frank Entertainment Group, LLC(7)
Senior Note (6% Cash)(5)
$—
$(3,127,606)$—
$—
$9,808,054
$3,267,054
$6,541,000
Second Lien Term Note (2.5% Cash)(5)
—
(2,705,479)—
—
2,715,723
2,715,723
—
Redeemable Preferred Units (2,800,000 units)—
(1,074,000)—
—
1,074,000
1,074,000
—
Redeemable Class B Preferred Units (2,800,000 units)—
—
—
—
—
—
—
Class A Common Units (606,552 units)—
—
—
—
—
—
—
 —
(6,907,085)—
—
13,597,777
7,056,777
6,541,000
         
FrontStream Holdings, LLCSubordinate Note (LIBOR + 6%, 7.3% Cash)—
348,542
—
—
7,663,542
249,542
7,414,000
Common Stock (1,000 shares)—
—
—
—
—
—
—
 —
348,542
—
—
7,663,542
249,542
7,414,000
         
Frontstreet Facility Solutions, Inc.Subordinated Note (13% Cash)—
(1,014,755)569,586
—
4,764,755
1,014,755
3,750,000
Series A Convertible Preferred Stock (60,000 shares)—
(575)—
—
575
575
—
Series B Convertible Preferred Stock (20,000 shares)—
(144)—
—
144
144
—
Common Stock (27,890 shares)—
(279)—
—
279
279
—
 —
(1,015,753)569,586
—
4,765,753
1,015,753
3,750,000
         
Gerli & CompanySubordinated Note (13% Cash)(375,000)375,000
—
—
375,000
375,000
—
Subordinated Note (8.5% Cash)(3,000,000)3,000,000
—
—
3,000,000
3,000,000
—
Class A Preferred Shares (1,211 shares)(855,000)855,000
—
—
855,000
855,000
—
Class C Preferred Shares (744 shares)—
—
—
—
—
—
—
Class E Preferred Shares (400 shares)(161,440)161,440
—
—
161,440
161,440
—
Common Stock (300 shares)(100,000)100,000
—
—
100,000
100,000
—
 (4,491,440)4,491,440
—
—
4,491,440
4,491,440
—
         
SRC Worldwide, Inc.Common Stock (5,000 shares)—
—
400,000
8,028,000
—
8,028,000
—
 —
—
400,000
8,028,000
—
8,028,000
—
         
Total Control Investments(45,205,868)27,547,274
1,563,083
18,791,769
94,296,836
75,100,605
37,988,000
         
         





Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

repurchase or redeem the assets before maturity, or (ii) the ability to unilaterally cause the holder to return specific assets, other than through a cleanup call.
The Company has determined that Jocassee is an investment company under ASC, Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Jocassee as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control Jocassee due to the allocation of voting rights among Jocassee members.
As of December 31, 2021 and December 31, 2020, Jocassee had the following contributed capital and unfunded commitments from its members:
As of December 31, 2021As of December 31, 2020
Total contributed capital by Barings BDC, Inc.$30,000,000 $20,000,000 
Total contributed capital by all members$330,000,000 $220,000,000 
Total unfunded commitments by Barings BDC, Inc.$20,000,000 $30,000,000 
Total unfunded commitments by all members$220,000,000 $330,000,000 
Thompson Rivers LLC
On April 28, 2020, Thompson Rivers LLC (“Thompson Rivers”) was formed as a Delaware limited liability company. On May 13, 2020, the Company entered into a limited liability company agreement governing Thompson Rivers. Under Thompson Rivers’ current operating agreement, as amended to date, the Company has a capital commitment of $75.0 million of equity capital to Thompson Rivers, all of which has been funded as of December 31, 2021. As of December 31, 2021, aggregate commitments to Thompson Rivers by the Company and the other members under the current operating agreement total $450.0 million, all of which has been funded.
For the year ended December 31, 2021, Thompson Rivers declared $37.5 million in dividends, of which $4.8 million was recognized as dividend income in the Company’s Consolidated Statement of Operations.
As of December 31, 2021, Thompson Rivers had $3.1 billion in Ginnie Mae early buyout loans and $220.6 million in cash. As of December 31, 2020, Thompson Rivers had $715.2 million in Ginnie Mae early buyout loans. As of December 31, 2021, Thompson Rivers had 15,617 outstanding loans with an average unpaid balance of $0.2 million and weighted average coupon of 4.01%. As of December 31, 2020, Thompson Rivers had 3,023 outstanding loans with an average unpaid balance of $0.2 million and weighted average coupon of 4.65%.
F-67
Year Ended December 31, 2017: Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(2)
December 31, 2016
Value
Gross Additions
(3)
Gross Reductions (4)
December 31, 2017
Value
Portfolio CompanyType of Investment(1)
Affiliate Investments:        
All Metals Holding, LLCSubordinated Note (12% Cash, 1% PIK)$—
$155,098
$878,223
$6,249,220
$249,113
$64,333
$6,434,000
Units (318,977 units)—
(488,000)—
754,000
—
488,000
266,000
 —
(332,902)878,223
7,003,220
249,113
552,333
6,700,000
         
CIS Secure Computing Inc.Subordinated Note (12% Cash, 3% PIK)—
—
1,154,260
11,670,708
207,319
11,878,027
—
Common Stock (84 shares)1,679,180
(1,652,680)—
2,155,000
1,679,181
3,834,181
—
 1,679,180
(1,652,680)1,154,260
13,825,708
1,886,500
15,712,208
—
         
Consolidated Lumber Holdings, LLCSubordinated Note (10% Cash, 2% PIK)—
(156,611)194,082
4,278,000
78,750
4,356,750
—
Class A Units (15,000 units)—
2,019,000
274,167
2,481,000
2,019,000
—
4,500,000
 —
1,862,389
468,249
6,759,000
2,097,750
4,356,750
4,500,000
         
DPII Holdings, LLCTranche III Subordinated Note (19% PIK)(2,269,044)871,000
—
2,356,001
871,000
3,227,001
—
Tranche I & II Subordinated Notes (12% Cash, 4% PIK)(462)2,148,462
—
—
2,148,462
2,148,462
—
Class A Membership Interest (17,308 units)(1,107,692)1,107,692
—
—
1,107,692
1,107,692
—
 (3,377,198)4,127,154
—
2,356,001
4,127,154
6,483,155
—
         
FCL Holding SPV, LLCClass A Interest (24,873 units)—
(75,000)45,452
645,000
—
75,000
570,000
Class B Interest (48,427 units)—
(101,000)—
101,000
—
101,000
—
Class B Interest (3,746 units)—
 —
—
—
—
—
 —
(176,000)45,452
746,000
—
176,000
570,000
         
         





Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

As of December 31, 2021 and December 31, 2020, the Thompson Rivers investment portfolio consisted of the following investments:
CostPercentage of
Total
Portfolio		Fair ValuePercentage of
Total
Portfolio
December 31, 2021:
Federal Housing Administration (“FHA”) loans$2,799,868,603 93 %$2,839,495,339 93 %
Veterans Affairs (“VA”) loans224,659,875 7 %223,540,415 7 %
$3,024,528,478 100 %$3,063,035,754 100 %
December 31, 2020:
Federal Housing Administration (“FHA”) loans$712,854,085 100 %$712,854,085 100 %
$712,854,085 100 %$712,854,085 100 %
Thompson Rivers’ repurchase agreement with JPMorgan Chase Bank, which is non-recourse to the Company, had approximately $694.8 million and $670.1 million outstanding as of December 31, 2021 and December 31, 2020, respectively. Thompson Rivers’ repurchase agreement with Bank of America N.A., which is non-recourse to the Company, had approximately $1,245.2 million outstanding as of December 31, 2021. Thompson Rivers’ repurchase agreement with Barclays Bank, which is non-recourse to the Company, had approximately $933.1 million outstanding as of December 31, 2021.
The Company has determined that Thompson Rivers is an investment company under ASC, Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Thompson Rivers as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control Thompson Rivers due to the allocation of voting rights among Thompson Rivers members.
As of December 31, 2021 and December 31, 2020, Thompson Rivers had the following contributed capital and unfunded commitments from its members:
As of December 31, 2021As of December 31, 2020
Total contributed capital by Barings BDC, Inc.$79,414,272 (1)$10,000,000 
Total contributed capital by all members$482,120,173 (2)$100,000,000 (3)
Total unfunded commitments by Barings BDC, Inc.$— $— 
Total unfunded commitments by all members$— $— 
(1)Includes $4.4 million of dividend re-investments.
(2)Includes dividend re-investments of $32.1 million and $162.3 million of total contributed capital by related parties.
(3)Includes $90.0 million of total contributed capital by related parties.
F-68
Year Ended December 31, 2017: Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(2)
December 31, 2016
Value
Gross Additions
(3)
Gross Reductions (4)
December 31, 2017
Value
Portfolio CompanyType of Investment(1)
Frank Entertainment Group, LLC(7)
Senior Note (LIBOR + 7%, 10% Cash, 5.8% PIK)(6)
$—
$(1,077,888)$823,087
$9,940,684
$351,600
$10,292,284
$—
Second Lien Term Note (10% Cash)—
(174,000)15,000
—
1,200,000
1,200,000
—
Class A Redeemable Preferred Units (10.5% Cash) (196,718 units)—
(3,492,904)—
4,566,904
—
4,566,904
—
Class B Redeemable Preferred Units (18,667 units)—
(1,660,810)—
1,660,810
—
1,660,810
—
Class C Redeemable Preferred Units (25,846 units)—
(600,000)—
600,000
—
600,000
—
Class A Common Units (43,077 units)—
—
—
—
—
—
—
Class A Common Warrants—
—
—
—
—
—
—
 —
(7,005,602)838,087
16,768,398
1,551,600
18,319,998
—
         
Mac Land Holdings, Inc.Common Stock (139 shares)—
(369,000)—
—
369,000
369,000
—
 —
(369,000)—
—
369,000
369,000
—
         
MS Bakery Holdings, Inc.Preferred Units (233 units)185,133
(185,133)—
397,000
185,133
582,133
—
Common B Units (3,000 units)2,087,323
(2,086,860)—
2,110,000
2,087,323
4,197,323
—
Common A Units (1,652 units)1,147,007
(1,147,007)—
1,162,000
1,147,007
2,309,007
—
 3,419,463
(3,419,000)—
3,669,000
3,419,463
7,088,463
—
         
Native Maine Operations, Inc.
Senior Notes (LIBOR + 9%)(6)
—
—
1,338,898
—
18,000,000
18,000,000
—
Preferred Units (20,000 units)—
—
—
—
2,000,000
2,000,000
—
 —
—
1,338,898
—
20,000,000
20,000,000
—
         
NB Products, Inc.Subordinated Note (12% Cash, 2% PIK)—
—
3,540,905
22,751,190
556,895
—
23,308,085
Jr. Subordinated Note (10% PIK)—
—
503,674
4,595,921
518,671
—
5,114,592
Jr. Subordinated Bridge Note (20% PIK)—
—
439,568
1,972,727
439,568
—
2,412,295
Series A Redeemable Senior Preferred Stock (7,839 shares)—
978,000
—
9,412,000
978,000
—
10,390,000
Common Stock (1,668,691 shares)—
6,265,000
—
9,779,000
6,265,000
—
16,044,000
 —
7,243,000
4,484,147
48,510,838
8,758,134
—
57,268,972
         





Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

Waccamaw River LLC
On January 4, 2021, Waccamaw River LLC (“Waccamaw River”) was formed as a Delaware limited liability company. On February 8, 2021, the Company entered into a limited liability company agreement governing Waccamaw River. Under Waccamaw River’s current operating agreement, as amended to date, the Company has a capital commitment of $25.0 million of equity capital to Waccamaw River, of which approximately $19.0 million (including approximately $5.3 million of recallable return of capital) has been funded as of December 31, 2021. As of December 31, 2021, aggregate commitments to Waccamaw River by the Company and the other members under the current operating agreement total $125.0 million, of which $82.6 million (including $14.0 million of recallable return of capital) has been funded.
For the year ended December 31, 2021, Waccamaw River declared $1.4 million in dividends, of which $0.3 million was recognized as dividend income in the Company’s Consolidated Statement of Operations. As of December 31, 2021, Waccamaw River had $60.8 million in unsecured consumer loans and $4.9 million in cash. As of December 31, 2021, Waccamaw River had 5,500 outstanding loans with an average loan size of $11,280, remaining average life to maturity of 46.5 months and weighted average interest rate of 10.9%.
The Company has determined that Waccamaw River is an investment company under ASC, Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Waccamaw River as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control Waccamaw River due to the allocation of voting rights among Waccamaw River members.
As of December 31, 2021, Waccamaw River had the following contributed capital and unfunded commitments from its members:
As of December 31, 2021
Total contributed capital by Barings BDC, Inc.$19,000,000 
Total contributed capital by all members$82,620,000 (1)
Total return of capital (recallable) by Barings BDC, Inc.$(5,280,000)
Total return of capital (recallable) by all members$(14,020,000)(2)
Total unfunded commitments by Barings BDC, Inc.$11,280,000 
Total unfunded commitments by all members$56,400,000 (3)
(1)Includes $48.2 million of total contributed capital by related parties.
(2)Includes ($7.0) million of total return of capital (recallable) by related parties.
(3)Includes $33.8 million of unfunded commitments by related parties.
F-69
Year Ended December 31, 2017: Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(2)
December 31, 2016
Value
Gross Additions
(3)
Gross Reductions (4)
December 31, 2017
Value
Portfolio CompanyType of Investment(1)
Passport Food Group, LLC
Senior Notes (LIBOR + 9.0%, 10.3% Cash)(6)
$—
$(2,976,160)$1,621,494
$—
$19,648,160
$2,976,160
$16,672,000
Common Stock (20,000 shares)—
(1,643,000)—
—
2,000,000
1,643,000
357,000
 —
(4,619,160)1,621,494
—
21,648,160
4,619,160
17,029,000
         
PCX Aerostructures, LLC
Subordinated Note (10.5% Cash)(8)
—
(1,481,848)3,354,176
21,960,000
2,095,848
1,481,848
22,574,000
Subordinated Note (6% PIK)(8)
—
(211,286)—
—
759,286
211,286
548,000
Series A Preferred Stock (6,066 shares)—
—
—
—
—
—
—
Series B Preferred Stock (411 shares)—
—
—
—
—
—
—
Class A Common Stock (121,922 shares)—
—
—
—
—
—
—
 —
(1,693,134)3,354,176
21,960,000
2,855,134
1,693,134
23,122,000
         
Team Waste, LLCSubordinated Note (10% Cash, 2% PIK)—
—
171,863
—
4,930,962
—
4,930,962
Preferred Units (500,000 units)—
—
9,000
9,100,000
900,000
—
10,000,000
 —
—
180,863
9,100,000
5,830,962
—
14,930,962
         
Technology Crops, LLCSubordinated Notes (12% Cash)—
(3,677,102)1,930,662
11,837,622
456,480
3,677,102
8,617,000
Common Units (50 units)—
—
—
—
—
—
—
 —
(3,677,102)1,930,662
11,837,622
456,480
3,677,102
8,617,000
         
TGaS Advisors, LLCSenior Note (10% Cash, 1% PIK)—
—
1,143,884
9,521,986
158,001
248,972
9,431,015
Preferred Units (1,685,357 units)—
254,000
—
1,270,000
254,000
—
1,524,000
 —
254,000
1,143,884
10,791,986
412,001
248,972
10,955,015
         
Tulcan Fund IV, L.P.Common Units (1,000,000 units)—
—
—
—
—
—
—
 —
—
—
—
—
—
—
         
United Retirement Plan Consultants, Inc.Series A Preferred Shares (9,400 shares)—
45,000
—
257,000
45,000
—
302,000
Common Shares (100,000 shares)—
118,000
—
301,000
118,000
—
419,000
 —
163,000
—
558,000
163,000
—
721,000
         





Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

Eclipse Business Capital Holdings LLC
Year Ended December 31, 2017: Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(2)
December 31, 2016
Value
Gross Additions
(3)
Gross Reductions (4)
December 31, 2017
Value
Portfolio CompanyType of Investment(1)
Waste Recyclers Holdings, LLCClass A Preferred Units (280 units)$(2,251,100)$2,251,100
$—
$—
$2,251,100
$2,251,100
$—
Class B Preferred Units (11,484,867 units)(2,935,218)2,487,218
—
817,000
2,487,218
3,304,218
—
Common Unit Purchase Warrant (1,170,083 units)(748,900)748,900
—
—
748,900
748,900
—
Common Units (153,219 units)(180,783)180,783
—
—
180,783
180,783
—
 (6,116,001)5,668,001
—
817,000
5,668,001
6,485,001
—
         
Wythe Will Tzetzo, LLCSeries A Preferred Units (99,829 units)—
(4,120,000)—
6,808,000
—
4,120,000
2,688,000
 —
(4,120,000)—
6,808,000
—
4,120,000
2,688,000
         
Investments not held at the end of the period 414,889
—
—
—
414,889
414,889
—
Deferred taxes —
390,990
—
—
—
—
—
         
Total Affiliate Investments$(3,979,667)$(7,356,046)$17,438,395
$161,510,773
$79,907,341
$94,316,165
$147,101,949
On July 8, 2021, the Company made an equity investment in Eclipse Business Capital Holdings LLC (“Eclipse”) of $89.8 million, a second lien senior secured loan of $4.5 million and unfunded revolver of $13.6 million, alongside other related party affiliates. As of December 31, 2021, $1.8 million of the revolver was funded. Eclipse conducts its business through Eclipse Business Capital LLC. Eclipse is one of the country’s leading independent asset-based lending (“ABL”) platforms that provides financing to middle-market borrowers in the U.S. and Canada. Eclipse provides revolving lines of credit and term loans ranging in size from $10 – $125 million that are secured by collateral such as accounts receivable, inventory, equipment, or real estate. Eclipse lends to both privately-owned and publicly-traded companies across a range of industries, including manufacturing, retail, automotive, oil & gas, services, distribution, and consumer products. The addition of Eclipse to the portfolio allows the Company to participate in an asset class and commercial finance operations that offer differentiated income returns as compared to directly originated loans. Eclipse is led by a seasoned team of ABL experts.

(1)All debt investments are income producing, unless otherwise noted. Equity and equity-linked investments are non-income producing, unless otherwise noted. The fair values of all investments were determined using significant unobservable inputs.
(2)Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in Control or Affiliate categories, respectively. Amounts include accrued PIK interest if the description of the security includes disclosure of a PIK interest rate.
(3)Gross additions include increase in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation.
(4)Gross reductions include decreases in the total cost basis of investments resulting from principal or PIK repayments or sales. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation.
(5)Non-accrual investment
(6)Index-based floating interest rate is subject to contractual minimum interest rate. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference to either LIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan.
(7)During the year ended December 31, 2017, as a result of a balance sheet restructuring, Frank Entertainment Group, LLC moved from an affiliate investment to a control investment.
(8)Effective February 9, 2018, the Company's debt investments in PCX Aerostructures, LLC were amended to provide for cash interest at all-in rate of 6% per annum.

The Company has determined that Eclipse is not an investment company under ASC, Topic 946, Financial Services - Investment Companies. Under ASC 810-10-15-12(d), an investment company generally does not consolidate an investee that is not an investment company. Thus, the Company is not required to consolidate Eclipse. Instead the Company accounts for its investment in Eclipse in accordance with ASC 946-320, presented as a single investment measured at fair value.






Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

Year Ended December 31, 2016: Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(2)
December 31, 2015
Value
Gross Additions
(3)
Gross Reductions(4)
December 31, 2016
Value
Portfolio CompanyType of Investment(1)
Control Investments:        
CRS Reprocessing, LLC
Senior Notes (LIBOR + 3.5%, 4.3% Cash)(6)
$—
$—
$120,067
$2,942,769
$—
$—
$2,942,769
Split Collateral Term Loans (8% Cash)—
(5,010,464)897,649
6,192,464
5,000,000
5,010,464
6,182,000
Series F Preferred Units (705,321 units)—
(5,221,000)—
5,221,000
—
5,221,000
—
Common Units (15,174 units)—
—
333
—
—
 —
 —
(10,231,464)1,018,049
14,356,233
5,000,000
10,231,464
9,124,769
         
DCWV Acquisition Corporation
Senior Subordinated Note (15% PIK)(5)
—
—
—
250,000
—
—
250,000
Subordinated Note (12% Cash, 3% PIK)(5)
—
(1,728,000)—
3,117,000
—
1,728,000
1,389,000
Jr. Subordinated Note (15% PIK)(5)
—
—
—
—
—
—
—
Series A Preferred Equity (1,200 shares)—
—
—
—
—
—
—
100% Common Shares—
—
—
—
—
—
—
 —
(1,728,000)—
3,367,000
—
1,728,000
1,639,000
         
Gerli & Company
Subordinated Note (13% Cash)(5)
—
(375,000)—
375,000
—
375,000
—
Subordinated Note (8.5% Cash)(5)
—
(437,000)—
437,000
—
437,000
—
Class A Preferred Shares (1,211 shares)—
—
—
—
—
—
—
Class C Preferred Shares (744 shares)—
—
—
—
—
—
—
Class E Preferred Shares (400 shares)—
—
—
—
—
—
—
Common Stock (300 shares)—
—
—
—
—
—
—
 —
(812,000)—
812,000
—
812,000
—
         
SRC Worldwide, Inc.Common Stock (5,000 shares)—
1,307,000
700,000
6,921,000
1,307,000
200,000
8,028,000
 —
1,307,000
700,000
6,921,000
1,307,000
200,000
8,028,000
         
Total Control Investments—
(11,464,464)1,718,049
25,456,233
6,307,000
12,971,464
18,791,769
         
Affiliate Investments:        
All Aboard America! Holdings Inc.Subordinated Note (12% Cash, 3% PIK)—
—
2,440,362
14,953,191
577,433
15,530,624
—
Membership Units in LLC3,118,958
(2,723,218)—
5,024,000
3,118,958
8,142,958
—
 3,118,958
(2,723,218)2,440,362
19,977,191
3,696,391
23,673,582
—
         




Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

Year Ended December 31, 2016: Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(2)
December 31, 2015
Value
Gross Additions
(3)
Gross Reductions(4)
December 31, 2016
Value
Portfolio CompanyType of Investment(1)
All Metals Holding, LLCSubordinated Note (12% Cash, 1% PIK)$—
$—
$—
$—
$6,249,220
$—
$6,249,220
Units (318,977 units)—
(55,331)—
—
809,331
55,331
754,000
 —
(55,331)—
—
7,058,551
55,331
7,003,220
         
American De-Rosa Lamparts, LLC and Hallmark Lighting, LLCSubordinated Note (12% Cash, 3% PIK)—
—
663,502
7,186,235
227,130
7,413,365
—
Membership Units (8,364 units)3,555,652
(3,251,347)102,800
3,872,000
3,555,652
7,427,652
—
 3,555,652
(3,251,347)766,302
11,058,235
3,782,782
14,841,017
—
         
CIS Secure Computing Inc.Subordinated Note (12% Cash, 3% PIK)—
—
1,757,750
11,323,440
347,268
—
11,670,708
Common Stock (84 shares)—
1,956,000
—
199,000
1,956,000
—
2,155,000
 —
1,956,000
1,757,750
11,522,440
2,303,268
—
13,825,708
         
Consolidated Lumber Company LLCSubordinated Note (10% Cash, 2% PIK)—
156,611
1,480,383
14,332,445
564,627
10,619,072
4,278,000
Class A Units (15,000 units)—
981,000
451,128
1,500,000
981,000
—
2,481,000
 —
1,137,611
1,931,511
15,832,445
1,545,627
10,619,072
6,759,000
         
DPII Holdings, LLC
Tranche I & II Subordinated Notes (12% Cash, 4% PIK)(5)
—
(871,000)115,147
3,558,804
5,708
1,208,511
2,356,001
Tranche III Subordinated Note (19% PIK)(5)
—
(2,148,462)—
—
2,148,462
2,148,462
—
Class A Membership Interest (17,308 units)—
(795,000)—
795,000
—
795,000
—
 —
(3,814,462)115,147
4,353,804
2,154,170
4,151,973
2,356,001
         
FCL Holding SPV, LLCClass A Interest (24,873 units)—
195,000
—
—
645,000
—
645,000
Class B Interest (48,427 units)—
101,000
—
—
101,000
—
101,000
Class B Interest (3,746 units)—
—
—
—
—
—
—
 —
296,000
—
—
746,000
—
746,000
         
Frank Entertainment Group, LLC
Senior Note (LIBOR + 7%, 10% Cash, 5.8% PIK)(6)
—
—
1,599,606
9,592,545
605,281
257,142
9,940,684
Class A Redeemable Preferred Units (10.5% Cash) (196,718 units)—
—
324,995
4,566,904
—
—
4,566,904
Class B Redeemable Preferred Units (18,667 units)—
—
—
1,660,810
—
—
1,660,810
Class C Redeemable Preferred Units (25,846 units)—
—
—
600,000
—
—
600,000
Class A Common Units (43,077 units)—
—
—
—
—
—
—
Class A Common Warrants—
—
—
—
—
—
—
 —
—
1,924,601
16,420,259
605,281
257,142
16,768,398
         




Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

Year Ended December 31, 2016: Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(2)
December 31, 2015
Value
Gross Additions
(3)
Gross Reductions(4)
December 31, 2016
Value
Portfolio CompanyType of Investment(1)
GenPref LLC 7.0% LLC Interest$30,823
$6,762
$—
$16,400
$37,585
$53,985
$—
 30,823
6,762
—
16,400
37,585
53,985
—
         
MS Bakery Holdings, Inc.Preferred Units (233 units)—
30,000
—
367,000
30,000
—
397,000
Common B Units (3,000 units)—
303,000
—
1,807,000
303,000
—
2,110,000
Common A Units (1,652 units)—
167,000
—
995,000
167,000
—
1,162,000
 —
500,000
—
3,169,000
500,000
—
3,669,000
         
NB Products, Inc.Subordinated Note (12% Cash, 2% PIK)—
—
3,368,353
20,327,140
2,424,050
—
22,751,190
Jr. Subordinated Note (10% PIK)—
—
462,929
4,126,030
469,891
—
4,595,921
Jr. Subordinated Bridge Note (20% PIK)—
—
244,654
—
1,972,727
—
1,972,727
Series A Redeemable Senior Preferred Stock (7,839 shares)—
887,000
—
8,525,000
887,000
—
9,412,000
Common Stock (1,668,691 shares)—
5,782,000
—
3,997,000
5,782,000
—
9,779,000
 —
6,669,000
4,075,936
36,975,170
11,535,668
—
48,510,838
         
PCX Aerostructures, LLCSubordinated Note (10.5% Cash)—
(6,001,060)3,339,521
18,612,000
9,409,060
6,061,060
21,960,000
Series A Preferred Stock (6,066 shares)—
(1,912,668)—
1,191,000
721,668
1,912,668
—
Series B Preferred Stock (411 shares)—
(410,514)—
—
410,514
410,514
—
Class A Common Stock (121,922 shares)—
(3,626)—
—
3,626
3,626
—
 —
(8,327,868)3,339,521
19,803,000
10,544,868
8,387,868
21,960,000
         
Team Waste, LLCPreferred Units (455,000 units)—
—
36,000
5,500,000
3,600,000
—
9,100,000
 —
—
36,000
5,500,000
3,600,000
—
9,100,000
         
Technology Crops, LLCSubordinated Notes (12% Cash, 5% PIK)—
—
1,944,252
11,252,123
585,499
—
11,837,622
Common Units (50 units)—
(400,000)—
400,000
—
400,000
—
 —
(400,000)1,944,252
11,652,123
585,499
400,000
11,837,622
         
TGaS Advisors, LLCSenior Note (10% Cash, 1% PIK)—
—
1,180,938
9,633,898
177,061
288,973
9,521,986
Preferred Units (1,685,357 units)—
(27,712)33,000
1,427,000
—
157,000
1,270,000
 —
(27,712)1,213,938
11,060,898
177,061
445,973
10,791,986
         
Tulcan Fund IV, L.P.Common Units (1,000,000 units)—
(416,000)—
416,000
—
416,000
—
 —
(416,000)—
416,000
—
416,000
—
         




Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

Year Ended December 31, 2016: Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) Amount of Interest or Dividends Credited to Income(2)
December 31, 2015
Value
Gross Additions
(3)
Gross Reductions(4)
December 31, 2016
Value
Portfolio CompanyType of Investment(1)
UCS Super HoldCo LLCMembership Units (1,000 units)$(2,000,000)$2,000,000
$—
$—
$2,000,000
$2,000,000
$—
Participation Interest(626,437)700,000
—
300,000
700,000
1,000,000
—
 (2,626,437)2,700,000
—
300,000
2,700,000
3,000,000
—
         
United Retirement Plan Consultants, Inc.Series A Preferred Shares (9,400 shares)—
505,252
—
446,000
265,000
454,000
257,000
Common Shares (100,000 shares)—
(599,000)—
—
611,000
310,000
301,000
 —
(93,748)—
446,000
876,000
764,000
558,000
         
Waste Recyclers Holdings, LLCClass A Preferred Units (280 units)—
—
—
—
—
—
—
Class B Preferred Units (11,484,867 units)—
74,000
—
743,000
74,000
—
817,000
Common Unit Purchase Warrant (1,170,083 units)—
—
—
—
—
—
—
Common Units (153,219 units)—
—
—
—
—
—
—
 —
74,000
—
743,000
74,000
—
817,000
         
Wythe Will Tzetzo, LLCSeries A Preferred Units (99,829 units)—
(1,528,000)195,997
8,336,000
—
1,528,000
6,808,000
 —
(1,528,000)195,997
8,336,000
—
1,528,000
6,808,000
         
Investments not held at the end of the period 319,802
—
—
—
319,802
319,802
—
Deferred taxes —
1,825,301
—
—
—
—
—
         
Total Affiliate Investments$4,398,798
$(5,473,012)$19,741,317
$177,581,965
$52,842,553
$68,913,745
$161,510,773

(1)All debt investments are income producing, unless otherwise noted. Equity and equity-linked investments are non-income producing, unless otherwise noted. The fair values of all investments were determined using significant unobservable inputs.
(2)Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in Control or Affiliate categories, respectively. Amounts include accrued PIK interest if the description of the security includes disclosure of a PIK interest rate.
(3)Gross additions include increase in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation.
(4)Gross reductions include decreases in the total cost basis of investments resulting from principal or PIK repayments or sales. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation.
(5)Non-accrual investment
(6)Index-based floating interest rate is subject to contractual minimum interest rate. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference to either LIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan.





Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

4. Borrowings
The Company had the following borrowings outstanding as of December 31, 20172021 and 2016:2020: 
Issuance DateMaturity DateInterest Rate as of December 31, 2021December 31,
2021		December 31,
2020
Credit Facilities:
February 21, 2019February 21, 20242.100%$655,189,256 $719,660,707 
Total Credit Facilities$655,189,256 $719,660,707 
Notes:
September 24, 2020 - August 2025 NotesAugust 4, 20254.660%$25,000,000 $25,000,000 
September 29, 2020 - August 2025 NotesAugust 4, 20254.660%25,000,000 25,000,000 
November 5, 2020 - Series B NotesNovember 4, 20254.250%62,500,000 62,500,000 
November 5, 2020 - Series C NotesNovember 4, 20274.750%112,500,000 112,500,000 
February 25, 2021 Series D NotesFebruary 26, 20263.410%80,000,000 — 
February 25, 2021 Series E NotesFebruary 26, 20284.060%70,000,000 — 
November 23, 2021 - November 2026 NotesNovember 23, 20263.300%350,000,000 — 
Less: Deferred financing fees(7,443,704)(664,334)
Total Notes$717,556,296 $224,335,666 
August 2018 Credit Facility
On July 3, 2018, the Company formed Barings BDC Senior Funding I, LLC, an indirectly wholly-owned Delaware limited liability company (“BSF”), the primary purpose of which was to function as the Company's special purpose, bankruptcy-remote, financing subsidiary. On August 3, 2018, BSF entered into the August 2018 Credit Facility (as subsequently amended in December 2018 and in February 2020) with Bank of America, N.A., as administrative agent and Class A-1 Lender, Société Générale, as Class A Lender, and Bank of America Merrill Lynch, as sole lead arranger and sole book manager. BSF and the administrative agent also entered into a security agreement dated as of August 3, 2018 (the "Security Agreement") pursuant to which BSF’s obligations under the
F-70


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
Issuance/Pooling Date Maturity Date Interest Rate as of December 31, 2017 
December 31,
2017
 December 31,
2016
SBA-Guaranteed Debentures:        
March 25, 2009 March 1, 2019 5.337% $22,000,000
 $22,000,000
March 24, 2010 March 1, 2020 4.825% 6,800,000
 6,800,000
September 22, 2010 September 1, 2020 3.687% 32,590,000
 32,590,000
March 29, 2011 March 1, 2021 4.474% 75,400,000
 75,400,000
September 21, 2011 September 1, 2021 3.392% 19,100,000
 19,100,000
March 27, 2013 March 1, 2023 3.155% 30,000,000
 30,000,000
September 24, 2014 September 1, 2024 3.790% 31,310,000
 31,310,000
September 21, 2016 September 1, 2026 2.723% 32,800,000
 32,800,000
Less: Deferred financing fees     (3,678,875) (4,610,034)
Total SBA-Guaranteed Debentures     $246,321,125
 $245,389,966
Credit Facility:        
May 1, 2017 April 30, 2022 4.124% $156,070,484
 $127,011,475
Total Credit Facility     $156,070,484
 $127,011,475
Notes:        
October 19, 2012 December 15, 2022 6.375% 80,500,000
 80,500,000
February 6, 2015 March 15, 2022 6.375% 86,250,000
 86,250,000
Less: Deferred financing fees     (3,341,699) (3,994,619)
Total Notes     $163,408,301
 $162,755,381
August 2018 Credit Facility were secured by a first-priority security interest in substantially all of the assets of BSF, including its portfolio of investments (the "Pledged Property"). In connection with the first-priority security interest established under the Security Agreement, all of the Pledged Property was held in the custody of State Street Bank and Trust Company, as collateral administrator.
SBA-Guaranteed Debentures
Under the Small Business Investment Act of 1958, as amended, and current SBA policy applicable to SBICs,The August 2018 Credit Facility initially provided for borrowings in an SBIC (or group of SBICs under common control) can have outstanding at any time, SBA-guaranteed debenturesaggregate amount up to two times (and in certain cases, with SBA approval,$750.0 million, including up to three times)$250.0 million borrowed under the amount ofClass A Loan Commitments and up to $500.0 million borrowed under the Class A-1 Loan Commitments. Effective February 28, 2019, the Company reduced its regulatory capital. As of December 31, 2017,Class A Loan Commitments to $100.0 million, which reduced total commitments under the maximum statutory limit onAugust 2018 Credit Facility to $600.0 million. Effective May 9, 2019, the dollar amount of outstanding SBA-guaranteed debentures that can be issued by a single SBIC wasCompany further reduced its Class A Loan Commitments under the August 2018 Credit Facility from $100.0 million to zero and reduced its Class A-1 Loan Commitments under the August 2018 Credit Facility from $500.0 million to $300.0 million, which collectively reduced total commitments under the August 2018 Credit Facility to $300.0 million. Effective June 18, 2019, the Company further reduced its Class A-1 Loan Commitments, and therefore total commitments, under the August 2018 Credit Facility from $300.0 million to $250.0 million. Effective August 14, 2019, the Company further reduced its Class A-1 Loan Commitments, and therefore total commitments, under the August 2018 Credit Facility from $250.0 million to $177.0 million. Effective October 29, 2019, the Company further reduced its Class A-1 Loan Commitments, and therefore total commitments, under the August 2018 Credit Facility from $177.0 million to $150.0 million. Effective January 21, 2020, the Company further reduced its Class A-1 Loan Commitments, and therefore total commitments, under the August 2018 Credit Facility from $150.0 million and by a group of SBICs under common control was $350.0to $80.0 million. As of December 31, 2017, Triangle SBIC had issued the maximum $150.0 million of SBA-guaranteed debentures and Triangle SBIC II had issued the maximum $100.0 million of SBA-guaranteed debentures, leaving borrowing capacity of a maximum of $100.0 million of SBA-guaranteed debentures for Triangle SBIC III. Interest payments on SBA-guaranteed debentures are payable semi-annually and there are no principal payments required on these debentures prior to maturity, nor do the debentures carry any prepayment penalties. The weighted average interest rate for all SBA-guaranteed debentures as of both December 31, 2017 and 2016 was 3.90%. As of both December 31, 2017 and 2016, all SBA-guaranteed debentures were pooled.
In addition to a one-time 1.0% fee on the total commitment from the SBA,Effective April 23, 2020, the Company also pays a one-time 2.425% fee onfurther reduced its Class A-1 Loan Commitments, and therefore total commitments, under the amountAugust 2018 Credit Facility from $80.0 million to $30.0 million. Finally, effective June 26, 2020, the Company further reduced its Class A-1 Loan Commitments, and therefore total commitments, under the August 2018 Credit Facility from $30.0 million to zero. In connection with these reductions, the pro rata portion of each SBA-guaranteed debenture issued. These fees are capitalized as deferred financing costs and are amortized over the term of the debt agreements using the effective interest method. Upon prepayment of an SBA-guaranteed debenture, any unamortized deferred financing costs related to the SBA-guaranteed debenture areAugust 2018 Credit Facility was written off and recognized as a loss on extinguishment of debt in the Company's Consolidated Statements of Operations.

On February 21, 2020, the Company extended the maturity date of the August 2018 Credit Facility from August 3, 2020 to August 3, 2021. On June 30, 2020, following the repayment of all borrowings, interest, and fees payable thereunder and at the election of the Company, the August 2018 Credit Facility was terminated, including all commitments and obligations of Bank of America, N.A. to lend or make advances to BSF. In addition, the Security Agreement was terminated and all security interests in the assets of BSF in favor of the lenders were terminated. As a result of these terminations, all obligations of BSF under the August 2018 Credit Facility and Security Agreement were fully discharged.

All borrowings under the August 2018 Credit Facility bore interest, subject to BSF’s election, on a per annum basis equal to (i) the applicable base rate plus the applicable spread or (ii) the applicable LIBOR rate plus the applicable spread. The applicable base rate was equal to the greater of (i) the federal funds rate plus 0.5%, (ii) the prime rate or (iii) one-month LIBOR plus 1.0%. The applicable LIBOR rate depended on the term of the borrowing under the August 2018 Credit Facility, which could be either one month or three months, and could not be less than zero. BSF was required to pay commitment fees on the unused portion of the August 2018 Credit Facility. BSF could prepay any borrowing at any time without premium or penalty, except that BSF could have been liable for certain funding breakage fees if prepayments occurred prior to expiration of the relevant interest period. BSF could also permanently reduce all or a portion of the commitment amount under the August 2018 Credit Facility without penalty.

Borrowings under the August 2018 Credit Facility were subject to compliance with a borrowing base, pursuant to which the amount of funds advanced by the lenders to BSF would vary depending upon the types of assets in BSF’s portfolio. Assets were required to meet certain criteria to be included in the borrowing base, and the borrowing base was subject to certain portfolio restrictions including investment size, sector concentrations, investment type and credit ratings.

Borrowings of BSF were considered borrowings by the Company for purposes of complying with the asset coverage requirements under the 1940 Act applicable to business development companies. The obligations of BSF under the August 2018 Credit Facility were non-recourse to the Company.
Triangle Capital CorporationThe August 2018 Credit Facility was terminated at the Company’s election on June 30, 2020.
F-71


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

The fair values of the SBA-guaranteed debentures are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. As of December 31, 2017 and December 31, 2016, the carrying amounts of SBA-guaranteed debentures were approximately $246.3 million and $245.4 million, respectively. As of December 31, 2017 and December 31, 2016, the fair values of the SBA-guaranteed debentures were approximately $262.2 million and $264.9 million, respectively. As of December 31, 2017, the Company was in compliance with SBA regulatory requirements.
February 2019 Credit Facility
In May 2015,On February 21, 2019, the Company entered into the February 2019 Credit Facility which was(as subsequently amended in May 2017.December 2019) with ING Capital LLC ("ING"), as administrative agent, and the lenders party thereto. The amendment, among other things, increasedinitial commitments from $300.0 million to $435.0 million and extendedunder the maturity by two years. The revolving period of theFebruary 2019 Credit Facility ends April 30,total $800.0 million. Effective on November 4, 2021, followed by a one-year amortization period with a final maturity date of April 30, 2022. Thethe Company has the ability to borrow in both United States dollars as well as foreign currenciesincreased aggregate commitments under the Credit Facility. TheFebruary 2019 Credit Facility which is structured to operate like a revolving credit facility, is secured primarily by$875.0 million from $800.0 million pursuant to the Company's assets, excludingaccordion feature under the assets of the Company’s wholly-owned SBIC subsidiaries. TheFebruary 2019 Credit Facility, has an accordion feature thatwhich allows for an increase in the total borrowing size upcommitments to $550.0 million,an aggregate of $1.2 billion subject to certain conditions and the satisfaction of specified financial covenants. Using this accordion feature, in July 2017, theThe Company increased its commitmentscan borrow foreign currencies directly under the February 2019 Credit Facility. The February 2019 Credit Facility, from $435.0 million to $465.0 million,which is structured as a revolving credit facility, is secured primarily by a material portion of the Company's assets and guaranteed by certain subsidiaries of the Company. Following the termination on June 30, 2020 of Barings BDC Senior Funding I, LLC’s (“BSF”) credit facility entered into in September 2017,August 2018 with Bank of America, N.A. (the “August 2018 Credit Facility”), BSF became a subsidiary guarantor and its assets secure the Company again increased its commitments underFebruary 2019 Credit Facility. The revolving period of the February 2019 Credit Facility from $465.0 million to $480.0 million.ends on February 21, 2023, followed by a one-year repayment period with a final maturity date of February 21, 2024.
Borrowings under the February 2019 Credit Facility bear interest, subject to the Company's election, on a per annum basis equal to (i) the applicable base rate plus 1.75%1.00% (or 1.50%1.25% if the Company receivesno longer maintains an investment grade credit rating), (ii) the applicable LIBOR rate plus 2.75%2.00% (or 2.50%2.25% if the Company receivesno longer maintains an investment grade credit rating), (iii) for borrowings denominated in certain foreign currencies other than Australian dollars, the applicable currency rate for the foreign currency as defined in the credit agreement plus 2.00% (or 2.25% if the Company no longer maintains an investment grade credit rating) or (iii)(iv) for borrowings denominated in CanadianAustralian dollars, the applicable Canadian Dealer OfferedAustralian dollars Screen Rate, plus 2.75%2.20% (or 2.50%2.45% if the Company receivesno longer maintains an investment grade credit rating). The applicable base rate is equal to the greatergreatest of (i) the prime rate, (ii) the federal funds rate plus 0.5% or, (iii) the Overnight Bank Funding Rate plus 0.5%, (iv) the adjusted one-month LIBORthree-month applicable currency rate plus 2.0%1.0% and (v) 1.0%. The applicable LIBOR rate dependsand currency rates depend on the currency and term of the draw under the February 2019 Credit Facility. TheFacility, and cannot be less than zero.
In addition, the Company pays a commitment fee of 1.00%(i) 0.5% per annum on undrawn amounts if the usedunused portion of the February 2019 Credit Facility is lessgreater than or equal to 25.0%two-thirds of total commitments or (ii) 0.375% per annum on undrawn amounts if the usedunused portion of the February 2019 Credit Facility is greaterequal to or less than 25.0%two-thirds of total commitments. These commitment fees are included in interest and otherIn connection with entering into the February 2019 Credit Facility, the Company incurred financing fees onof approximately $6.4 million, which will be amortized over the Company's Consolidated Statements of Operations. Borrowings under the Credit Facility are limited to a borrowing base, which includes certain cash and a portion of eligible debt investments.
As of December 31, 2017, the Company had United States dollar borrowings of $139.3 million outstanding under the Credit Facility with an interest rate of 4.12% and non-United States dollar borrowings denominated in Canadian dollars of $21.0 million ($16.8 million in United States dollars) outstanding under the Credit Facility with a weighted average interest rate of 4.16%. The borrowings denominated in Canadian dollars are translated into United States dollars based on the spot rate at each balance sheet date. The impact resulting from changes in foreign exchange rates on the Credit Facility borrowings is included in unrealized appreciation (depreciation) on foreign currency borrowings in the Company's Consolidated Statements of Operations. The borrowings denominated in Canadian dollars may be positively or negatively affected by movements in the rate of exchange between the United States dollar and the Canadian dollar. This movement is beyond the controlremaining life of the Company and cannot be predicted. As of December 31, 2016, the Company had United States dollar borrowings of $105.7 million outstanding under theFebruary 2019 Credit Facility with an interest rate of 3.37% and non-United States dollar borrowings denominated in Canadian dollars of $28.6 million ($21.3 million United States dollars) outstanding under the Credit Facility with an interest rate of 3.64%.Facility.
The fair value of the borrowings outstanding under the Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. As of December 31, 2017 and December 31, 2016, the fair values of the borrowings outstanding under the Credit Facility were $156.1 million and $127.0 million, respectively.




Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

TheFebruary 2019 Credit Facility contains certain affirmative and negative covenants, including but not limited to (i) maintaining a minimum interest coverage ratio,stockholders' equity, (ii) maintaining a minimum consolidated tangibleobligors' net worth, (iii) maintaining a minimum asset coverage ratio, (iv) meeting a minimum liquidity test and (iv)(v) maintaining the Company's status as a RICregulated investment company and as a BDC.business development company. The February 2019 Credit Facility also contains customary events of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to other indebtedness, bankruptcy, change of control, and material adverse effect. The February 2019 Credit Facility also permits Branch Banking and Trust Company, the administrative agent to select an independent third-party valuation firm to determine valuations of certain portfolio investments for purposes of borrowing base provisions. In connection with the February 2019 Credit Facility, the Company also entered into new collateral documents. As of December 31, 2017 and 2016,2021, the Company was in compliance with all covenants ofunder the February 2019 Credit Facility.
Notes
In March 2012,As of December 31, 2021, the Company had U.S. dollar borrowings of $377.0 million outstanding under the February 2019 Credit Facility with an interest rate of 2.125% (one month LIBOR of 0.125%), borrowings denominated in Swedish kronas of 12.8kr million ($1.4 million U.S. dollars) with an interest rate of 2.000% (one month STIBOR of 0.000%), borrowings denominated in British pounds sterling of £68.3 million ($92.5 million U.S. dollars) with an average interest rate of 2.125% (one month GBP LIBOR of 0.125%), borrowings denominated in Australian dollars of A$36.6 million ($26.6 million U.S. dollars) with an interest rate of 2.250% (one month AUD Screen Rate of 0.250%) and borrowings denominated in Euros of €138.6 million ($157.6 million U.S. dollars) with
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Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
an interest rate of 2.00% (one month EURIBOR of 0.000%). The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the February 2019 Credit Facility borrowings is included in "Net unrealized appreciation (depreciation) - foreign currency transactions" in the Company's Consolidated Statements of Operations.
As of December 31, 2020, the Company had U.S. dollar borrowings of $472.0 million outstanding under the February 2019 Credit Facility with a weighted average interest rate of 2.188% (weighted average one month LIBOR of 0.188%), borrowings denominated in Swedish kronas of 12.8kr million ($1.6 million U.S. dollars) with an interest rate of 2.000% (one month STIBOR of 0.000%), borrowings denominated in British pounds sterling of £69.3 million ($94.8 million U.S. dollars) with a weighted average interest rate of 2.063% (weighted average one month GBP LIBOR of 0.063%), borrowings denominated in Australian dollars of A$36.6 million ($28.2 million U.S. dollars) with a weighted average interest rate of 2.250% (weighted average one month AUD Screen Rate of 0.050%) and borrowings denominated in Euros of €100.6 million ($123.1 million U.S. dollars) with a weighted average interest rate of 2.00% (weighted average one month EURIBOR of 0.000%). The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the February 2019 Credit Facility borrowings is included in "Net unrealized appreciation (depreciation) - foreign currency transactions" in the Company's Consolidated Statements of Operations.
As of December 31, 2021 and 2020, the total fair value of the borrowings outstanding under the February 2019 Credit Facility was $655.2 million and $719.7 million, respectively. The fair values of the borrowings outstanding under the February 2019 Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.
Debt Securitization
On May 9, 2019, the Company completed a $449.3 million term debt securitization (the "Debt Securitization"). Term debt securitizations are also known as collateralized loan obligations and are a form of secured financing incurred by the Company, which is consolidated by the Company for financial reporting purposes and subject to its overall asset coverage requirement. The notes offered in the Debt Securitization (collectively, the “2019 Notes”) were issued $69.0by Barings BDC Static CLO Ltd. 2019-I (“BBDC Static CLO Ltd.”) and Barings BDC Static CLO 2019-I, LLC, wholly-owned and consolidated subsidiaries of the Company (collectively, the “Issuers”), and were secured by a diversified portfolio of senior secured loans and participation interests therein. The Debt Securitization was executed through a private placement of approximately $296.8 million of unsecured notes dueAAA(sf) Class A-1 Senior Secured Floating Rate 2019 Notes (the “2019“Class A-1 2019 Notes”)., which bore interest at the three-month LIBOR plus 1.02%; $51.5 million of AA(sf) Class A-2 Senior Secured Floating Rate 2019 Notes (the “Class A-2 2019 Notes”), which bore interest at the three-month LIBOR plus 1.65%; and $101.0 million of Subordinated 2019 Notes which did not bear interest and were not rated. The Company retained all of the Subordinated 2019 Notes issued in the Debt Securitization in exchange for the Company’s sale and contribution to BBDC Static CLO Ltd. of the initial closing date portfolio, which included senior secured loans and participation interests therein distributed to the Company by BSF. The 2019 Notes were scheduled to mature on April 15, 2027; however, the 2019 Notes could be redeemed by the Issuers, at the direction of the Company as holder of the Subordinated 2019 Notes, on any business day after May 9, 2020. In connection with the sale and contribution, the Company made customary representations, warranties and covenants to the Issuers.
The Class A-1 2019 Notes and Class A-2 2019 Notes were the secured obligations of the Issuers, the Subordinated 2019 Notes were the unsecured obligations of BBDC Static CLO Ltd., and the indenture governing the 2019 Notes included customary covenants and events of default. The 2019 Notes were not registered under the Securities Act or any state securities or “blue sky” laws and could not be offered or sold in the United States absent registration with the SEC or an applicable exemption from registration.
The Company served as collateral manager to BBDC Static CLO Ltd. under a collateral management agreement and agreed to irrevocably waive all collateral management fees payable pursuant to the collateral management agreement.
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Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
The Class A-1 2019 Notes and the Class A-2 2019 Notes issued in connection with the Debt Securitization had floating rate interest provisions based on the three-month LIBOR that reset quarterly, except that LIBOR for the first interest accrual period was calculated by reference to an interpolation between the rate for deposits with a term equal to the next shorter period of time for which rates were available and the rate appearing for deposits with a term equal to the next longer period of time for which rates were available.
During the year ended December 31, 2019, $30.0 million of the Class A-1 2019 Notes were repaid. During the year ended December 31, 2020, the remaining 2019 Notes were repaid in full, with the final repayment on June 22, 2015 for a total redemption priceOctober 15, 2020. In connection with these repayments, the pro rata portion of $69.0 million, which resulted inthe unamortized deferred financing costs related to the 2019 Notes was written off and recognized as a loss on the extinguishment of debt in the Company's Consolidated Statements of $1.4 million. Prior to the redemption, the 2019Operations.
August 2025 Notes bore interest at a rate of 7.00% per year payable quarterly on March 15, June 15, September 15 and December 15 of each year, beginning June 15, 2012.
In October 2012,On August 3, 2020, the Company issued $70.0entered into a Note Purchase Agreement (the "August 2020 NPA") with Massachusetts Mutual Life Insurance Company governing the issuance of (1) $50.0 million in aggregate principal amount of Series A senior unsecured notes due 2022August 2025 (the "December 2022"Series A Notes due 2025") with a fixed interest rate of 4.66% per year, and (2) up to $50.0 million in aggregate principal amount of additional senior unsecured notes due August 2025 with a fixed interest rate per year to be determined (the "Additional Notes" and, collectively with the Series A Notes due 2025, the "August 2025 Notes"), and in November 2012, issued $10.5each case, to qualified institutional investors in a private placement. An aggregate principal amount of $25.0 million of the December 2022Series A Notes pursuantdue 2025 was issued on September 24, 2020 and an aggregate principal amount of $25.0 million of the Series A Notes due 2025 was issued on September 29, 2020, both of which will mature on August 4, 2025 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with their terms. Interest on the August 2025 Notes is due semiannually in March and September, beginning in March 2021. In addition, the Company is obligated to offer to repay the August 2025 Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the exerciseterms of an over-allotment option. The December 2022the August 2020 NPA, the Company may redeem the August 2025 Notes mature on December 15, 2022, and may be redeemed in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if redeemed on or before November 3, 2024, a make-whole premium. The August 2025 Notes are guaranteed by certain of the Company's option. subsidiaries, and are the Company's general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.
On November 4, 2020, the Company amended the August 2020 NPA to reduce the aggregate principal amount of unissued Additional Notes from $50.0 million to $25.0 million.
The December 2022August 2020 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments, minimum shareholders’ equity, maximum net debt to equity ratio and minimum asset coverage ratio. The August 2020 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the August 2025 Notes bear interest at a rate of 6.375% per year payable quarterly on March 15, June 15, September 15the time outstanding may declare all August 2025 Notes then outstanding to be immediately due and December 15 of each year, beginning December 15, 2012.payable. As of December 31, 20172021, the Company was in compliance with all covenants under the August 2020 NPA.
The August 2025 Notes were offered in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The August 2025 Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.
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Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
As of both December 31, 2016,2021 and 2020, the carrying amountsfair value of the December 2022outstanding August 2025 Notes were $79.0 million and $78.7 million, respectively. As of December 31, 2017 and December 31, 2016, thewas $52.2 million. The fair valuesvalue determination of the December 2022August 2025 Notes were $80.9 millionwas based on a market yield approach and $81.9 million, respectively.current interest rates, which are Level 3 inputs to the market yield model.
In February 2015,November Notes
On November 4, 2020, the Company issued $86.3entered into a Note Purchase Agreement (the “November 2020 NPA”) governing the issuance of (1) $62.5 million in aggregate principal amount of Series B senior unsecured notes due 2022November 2025 (the "March 2022 Notes"“Series B Notes”). with a fixed interest rate of 4.25% per year and (2) $112.5 million in aggregate principal amount of Series C senior unsecured notes due November 2027 (the “Series C Notes” and, collectively with the Series B Notes, the “November Notes”) with a fixed interest rate of 4.75% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable November Notes do not satisfy certain investment grade conditions and/or (y) 1.50% per year, to the extent the ratio of the Company’s secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The March 2022November Notes were delivered and paid for on November 5, 2020. The Series B Notes will mature on March 15, 2022November 4, 2025, and the Series C Notes will mature on November 4, 2027 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with their terms. Interest on the November Notes is due semiannually in May and November, beginning in May 2021. In addition, the Company is obligated to offer to repay the November Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the November 2020 NPA, the Company may be redeemedredeem the Series B Notes and the Series C Notes in whole or in part at any time or from time to time at the Company'sCompany’s option at par plus accrued interest to the prepayment date and, if redeemed on or after March 15, 2018.before May 4, 2025, with respect to the Series B Notes, or on or before May 4, 2027, with respect to the Series C Notes, a make-whole premium. The March 2022November Notes are guaranteed by certain of the Company’s subsidiaries, and are the Company's general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.
The November 2020 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments, minimum shareholders’ equity, maximum net debt to equity ratio and minimum asset coverage ratio. The November 2020 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the November Notes at the time outstanding may declare all November Notes then outstanding to be immediately due and payable. As of December 31, 2021, the Company was in compliance with all covenants under the November 2020 NPA.
The November Notes were offered in reliance on Section 4(a)(2) of the Securities Act. The November Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.
As of both December 31, 2021 and 2020, the fair value of the outstanding Series B Notes and the Series C Notes was $64.1 million and $115.3 million, respectively. The fair value determinations of the Series B Notes and Series C Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.
February Notes
On February 25, 2021, the Company entered into a Note Purchase Agreement (the “February 2021 NPA”) governing the issuance of (1) $80.0 million in aggregate principal amount of Series D senior unsecured notes due February 26, 2026 (the “Series D Notes”) with a fixed interest rate of 3.41% per year and (2) $70.0 million in
F-75


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
aggregate principal amount of Series E senior unsecured notes due February 26, 2028 (the “Series E Notes” and, collectively with the Series D Notes, the “February Notes”) with a fixed interest rate of 4.06% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable February Notes do not satisfy certain investment grade rating conditions and/or (y) 1.50% per year, to the extent the ratio of the Company’s secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The February Notes were delivered and paid for on February 26, 2021.
The Series D Notes will mature on February 26, 2026, and the Series E Notes will mature on February 26, 2028 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with the terms of the February 2021 NPA. Interest on the February Notes is due semiannually in February and August of each year, beginning in August 2021. In addition, the Company is obligated to offer to repay the February Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the February 2021 NPA, the Company may redeem the Series D Notes and the Series E Notes in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if redeemed on or before August 26, 2025, with respect to the Series D Notes, or on or before August 26, 2027, with respect to the Series E Notes, a make-whole premium. The February Notes are guaranteed by certain of the Company’s subsidiaries, and are the Company's general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.
The February 2021 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement , including, without limitation, information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, and certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments. In addition, the February 2021 NPA contains the following financial covenants: (a) maintaining a minimum obligors’ net worth, measured as of each fiscal quarter end; (b) not permitting the Company’s asset coverage ratio, as of the date of the incurrence of any debt for borrowed money or the making of any cash dividend to shareholders, to be less than the statutory minimum then applicable to the Company under the 1940 Act; and (c) not permitting the Company’s net debt to equity ratio to exceed 2.0x, measured as of each fiscal quarter end.
The February 2021 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness or that of the Company’s subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of certain events of default, the holders of at least 66-2/3% in principal amount of the February Notes at the time outstanding may declare all February Notes then outstanding to be immediately due and payable. As of December 31, 2021, the Company was in compliance with all covenants under the February 2021 NPA.
The February Notes were offered in reliance on Section 4(a)(2) of the Securities Act. The February Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.
As of December 31, 2021, the fair value of the outstanding Series D Notes and the Series E Notes was $79.2 million and $68.7 million, respectively. The fair value determinations of the Series D Notes and Series E Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.
November 2026 Notes
On November 23, 2021, the Company and U.S. Bank National Association (the “Trustee”) entered into an Indenture (the “Base Indenture”) and a Supplemental Indenture (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). The First Supplemental Indenture relates to the Company’s issuance of $350.0 million aggregate principal amount of its 3.300% notes due 2026 (the “November 2026 Notes”).

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Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
The November 2026 Notes will mature on November 23, 2026 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Indenture. The November 2026 Notes bear interest at a rate of 6.375%3.300% per year payable quarterlysemi-annually on March 15, June 15, September 15May 23 and December 15November 23 of each year, beginning March 15, 2015.commencing on May 23, 2022. The net proceedsNovember 2026 Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the November 2026 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, from the salerank effectively junior to any of the March 2022 Notes, after underwriting discounts and offering expenses, were approximately $83.4 million. As of December 31, 2017 and December 31, 2016,Company’s secured indebtedness (including unsecured indebtedness that the carrying amountsCompany later secures) to the extent of the March 2022 Notes were $84.4 million and $84.1 million, respectively. As of December 31, 2017 and December 31, 2016, the fair valuesvalue of the March 2022 Notes were $86.9 millionassets securing such indebtedness, and $87.7 million, respectively. The fair values ofrank structurally junior to all existing and future indebtedness (including trade payables) incurred by the December 2022 Notes and the March 2022 Notes are based on the closing prices of each respective security on the New York Stock Exchange, which are Level 1 inputs under ASC 820.Company’s subsidiaries, financing vehicles or similar facilities.
The indenture and related supplements thereto relating to the December 2022 Notes and the March 2022 Notes containIndenture contains certain covenants, including but not limited to (i) a requirement thatcovenants requiring the Company to comply with the asset coverage requirementrequirements of Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the 1940 Act, whether or any successor provisions, after giving effectnot it is subject to any exemptive relief granted to the Company by the Securitiesthose requirements, and Exchange Commission (the "SEC"), (ii) a requirement that the Company will not declare any cash dividend, or declare any other cash distribution, upon a class of its capital stock, or purchase any such capital stock, unless, in every such case, at the time of the declaration of any such dividend or distribution, or at the time of any such purchase, the Company has an asset coverage (as defined in the 1940 Act) of at least 200% after deducting the amount of such dividend, distribution or purchase price, as the case may be, giving effect to any exemptive relief granted to the Company by the SEC and (iii) a requirement to provide financial information to the holders of the notesNovember 2026 Notes and the trustee under the indentureTrustee if the Company shouldis no longer be subject to the reporting requirements under the Securities Exchange ActAct. These covenants are subject to important limitations and exceptions that are described in the Indenture.
In addition, on the occurrence of 1934,a “change of control repurchase event,” as amended. defined in the Indenture, the Company will generally be required to make an offer to purchase the outstanding November 2026 Notes at a price equal to 100% of the principal amount of such November 2026 Notes plus accrued and unpaid interest to the repurchase date.
As of December 31, 2017 and 2016,2021, the Company was in compliance with all covenantsfair value of the December 2022outstanding November 2026 Notes was $346.8 million. The fair value determinations of the November 2026 Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the March 2022 Notes.

market yield model.



Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

5. Income Taxes
The Company has elected for federal income tax purposes to be treated, and intends to qualify annually, as a RIC under the Code and intends to make the required distributions to its stockholders as specified therein. In order to maintain its tax treatment as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay taxes only on the portion of its taxable income and gains it does not distribute (actually or constructively) and certain built-in gains. The Company has historically met its minimum distribution requirements for 2017, 2016 and 2015 and continually monitors its distribution requirements with the goal of ensuring compliance with the Code.
The minimum distribution requirements applicable to RICs requireDepending on the Company to distribute to its stockholders at least 90%level of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, and net capital gains, if any, or taxable income, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax yearundistributed taxable income and pay a 4% nondeductible U.S. federal excise tax on such excess.certain undistributed income unless the Company distributes, in a timely manner, an amount at least equal to the sum of (i) 98% of net ordinary income for each calendar year, (ii) 98.2% of the amount by which capital gains exceed capital losses (adjusted for certain ordinary losses) for the one-year period ending October 31 in that calendar year and (iii) certain undistributed amounts from previous years on which the Company paid no U.S. federal income tax. Any such carryover ICTIof taxable income must be distributed before the end of that next tax year through a dividend declared prior to filing of the final tax return related to the year which generated such ICTI.taxable income not to be subject to U.S. federal income tax. For the years ended December 31, 2021 and 2020, we recorded a net expense of $7,495 and $0.1 million,respectively, for U.S. federal excise tax.
ICTITaxable income generally differs from increase in net investment income for financial reporting purposesassets resulting from operations due to temporary and permanent differences in the recognition of income and expenses. The Company may be required to recognize ICTI in certain circumstances in which it does not receive cash. For example, if the Company holds debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments issued with warrants), the Company must include in ICTI each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by the Company in the same taxable year. The Company may also have to include in ICTI other amounts that it has not yet received in cash, such as (i) PIK interest incomeexpenses, and (ii) interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. Because any original issue discount or other amounts accrued will be included in the Company’s ICTI for the year of accrual, the Company may be required to make a distribution to its stockholders in order to satisfy the minimum distribution requirements, even though the Company will not have received and may not ever receive any corresponding cash amount. ICTI also excludes net unrealized appreciationgains or depreciation,losses, as investmentunrealized gains or losses are generally not included in taxable income until they are realized.
Permanent The Company makes certain adjustments to the classification of net assets as a result of permanent book-to-tax differences, between ICTI and net investment income for financial reporting purposes are reclassified among capital accountswhich include differences in the consolidated financial statementsbook and tax basis of certain assets and liabilities, and nondeductible federal taxes or losses among other items. To the extent these differences are permanent, they are charged or credited to reflect their tax character. Differencesadditional paid in classification may also result from the treatment of short-term gainscapital, or total distributable earnings (loss), as ordinary income for tax purposes. appropriate.
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Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
During the years ended December 31, 2017, 20162021, 2020 and 2015,2019, the Company reclassified for book purposes amounts arising from permanent book/tax differences primarily related to differences in the tax basis and book basis of investments sold, merger adjustments and non-deductible excise taxes paid during the year as follows:
  December 31,
  2017 2016 2015
Additional paid in capital $(689,101) $(484,037) $(1,039,969)
Investment income in excess of distributions $9,761,203
 $867,350
 $3,585,623
Accumulated realized gains on investments $(9,072,102) $(383,313) $(2,545,654)
 December 31,
 202120202019
Additional paid-in capital$1,628,875 $3,878,798 $(7,773,706)
Total distributable earnings (loss)$(1,628,875)$(3,878,798)$7,773,706 
Tax positions taken or expected to be taken in the course of preparing the Company's tax returns are evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than not threshold would be recorded as a tax benefit or expense in the current year. Management has analyzed the Company's tax positions taken, or to be taken, on federal income tax returns for all open tax years (fiscal years 2014-2017)2018-2020), and has concluded that the provision for uncertain tax positions in the Company's financial statements is necessary.appropriate.
For income tax purposes, distributions paid to stockholders are reported as ordinary income, long-term capital gains, return of capital or a combination thereof. The tax character of distributions paid for the years ended December 31, 2021, 2020 and 2019 was as follows:
Year Ended December 31,
202120202019
Ordinary income$51,910,038 $31,325,222 $26,927,706 
Tax return of capital1,649,152 — — 
Distributions on a tax basis$53,559,190 $31,325,222 $26,927,706 
At December 31, 2021, 2020 and 2019, the components of distributable earnings on a tax basis detailed below differ from the amounts reflected in the Company’s Consolidated Balance Sheets by temporary and other book/tax differences, primarily relating to accruals of defaulted debt investment interest and the tax treatment of certain partnership investments, as follows:
 December 31,
 202120202019
Undistributed net investment income$— $1,712,779 $2,537,913 
Accumulated capital losses(304,240,560)(312,322,988)(267,368,444)
Other permanent differences relating to the Company's formation1,975,543 1,975,543 1,975,543 
Other temporary differences67,837 (4)(4)
Unrealized depreciation16,375,859 (1,333,169)(20,085,620)
Components of distributable earnings at year end$(285,821,321)$(309,967,839)$(282,940,612)
Tax information for the fiscal year ended December 31, 2021 is estimated and is not considered final until the Company files its tax return.
Under current law, the Company may carry forward net capital losses indefinitely to use to offset capital gains realized in future years. As of December 31, 2021, the Company estimates that it will have a capital loss carryforward of approximately $304.2 million ($5.7 million of short-term capital losses and $298.5 million of long-term capital losses), none of which will expire. Because of the loss limitation rules of the Code, some of the tax basis losses may be limited in their use. The unused balance will be carried forward and utilized as gains are realized, subject to such limitations. As of December 31, 2020, the Company estimates that it will have a capital loss carryforward of approximately $312.3 million ($6.4 million of short-term capital losses and $305.9 million of long-term capital losses), none of which will expire. In addition, MVC had a capital loss carryforward of $3.8 million as of the merger date.
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Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

For federal income tax purposes, the cost of investments owned as of December 31, 2021 and December 31, 2020 was approximately $1,792.1 million and $1,486.0 million, respectively. As of December 31, 2021, net unrealized depreciation on the Company's investments (tax basis) was approximately $16.4 million, consisting of gross unrealized appreciation, where the fair value of the Company's investments exceeds their tax cost, of approximately $45.6 million and gross unrealized depreciation, where the tax cost of the Company's investments exceeds their fair value, of approximately $29.2 million. As of December 31, 2020, net unrealized depreciation on the Company's investments (tax basis) was approximately $1.3 million, consisting of gross unrealized appreciation, where the fair value of the Company's investments exceeds their tax cost, of approximately $23.4 million and gross unrealized depreciation, where the tax cost of the Company's investments exceeds their fair value, of approximately $24.7 million.
In addition, the Company has certain wholly-owned taxable subsidiaries (the “Taxable Subsidiaries”), each of which holds one or more of itshold certain portfolio investments that are listed on the Consolidated Schedules of Investments. The Taxable Subsidiaries are consolidated for financial reporting purposes, such that the Company’s consolidated financial statements reflect the Company’s investments in the portfolio companies owned by the Taxable Subsidiaries. The purpose of the Taxable Subsidiaries is to permit the Company to hold certain portfolio companies that are organized as limited liability companies (“LLCs”)LLCs (or other forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of the RIC’s gross revenue for income tax purposes must consist of qualifying investment income. Absent the Taxable Subsidiaries, a proportionate amount of any gross income of an LLC (or other pass-through entity) portfolio investment would flow through directly to the RIC. To the extent that such income did not consist of qualifying investment income, it could jeopardize the Company’s ability to qualify as a RIC and therefore cause the Company to incur significant amounts of federal income taxes. When LLCs (or other pass-through entities) are owned by the Taxable Subsidiaries, their income is taxed to the Taxable Subsidiaries and does not flow through to the RIC, thereby helping the Company preserve its RIC statustax treatment and resultant tax advantages. The Taxable Subsidiaries are not consolidated for income tax purposes and may generate income tax expense as a result of their ownership of the portfolio companies. This income tax expense or benefit, if any, is reflected in the Company’s Consolidated Statements of Operations. Additionally, any unrealized appreciation related to portfolio investments held by the Taxable Subsidiaries (net of unrealized depreciation related to portfolio investments held by the Taxable Subsidiaries) is reflected net of applicable federal and state income taxes, if any, in the Company's Consolidated Statements of Operations, with the related deferred tax assets or liabilities, presentedif any, included in "Accounts payable and accrued liabilities" in the Company's Consolidated Balance Sheets.
InAs of December 2017, the United States enacted tax reform legislation through the bill commonly known as the Tax Cuts and Jobs Act (the "Tax Act"), which significantly changed the existing U.S. tax laws, including a reduction in the corporate tax rate from 35% to 21%, a move from a worldwide tax system to a territorial system, as well as other changes. The Taxable Subsidiaries' provisional tax is based on the new lower blended federal and state corporate tax rate of 26%.  This estimate incorporates assumptions made based on the Company's current interpretation of the Tax Act and may change, possibly materially, as31, 2021, the Company completes the analysishad a deferred tax asset of $8.3 million pertaining to operating losses, related to its investments and receives additional clarification and implementation guidance. In addition, changes in interpretations, assumptions, and guidance regarding the newa deferred tax legislation, as well as the potential for technical correctionsasset of $0.3 million pertaining to the Tax Act, could have a material impacttax basis differences related to the Company’s effectivecertain partnership interests. A valuation allowance is provided against deferred tax rate in future periods. Finally, given the significant complexity of the Tax Act, current guidance from the U.S. Treasury about implementing the Tax Act and any related guidance from the SEC or the FASB may change, which may require us to refine the Company's estimates in the future.assets when it is more likely than not
For income tax purposes, distributions paid to stockholders are reported as ordinary income, long-term capital gains, return of capital or a combination thereof. The tax character of distributions paid for the years ended December 31, 2017, 2016 and 2015 was as follows:
  Year Ended December 31,
  2017 2016 2015
Ordinary income $77,484,420
 $68,239,124
 $68,413,242
Distributions of long-term capital gains —
 —
 8,242,911
Distributions on a tax basis $77,484,420
 $68,239,124
 $76,656,153

Under Section 852(b)(3)(C) of the Code, the Company hereby designates the above distributions of long-term capital gains as capital gain dividends for the fiscal year ended December 31, 2015. The Company did not designate long-term capital gains for the fiscal years ended December 31, 2016 or 2017.
The Company may retainthat some portion or all of its realized net long-term capital gains in excessthe deferred tax asset will not be realized. Given the losses generated by the entity, the deferred tax assets have been offset by a valuation allowance of realized net short-term capital losses and may designate the retained net capital gain as a “deemed distribution.” In that case, among other consequences,$8.6 million. As of December 31, 2020, the Company will payhad a deferred tax onasset of $8.6 million pertaining to operating losses, related to its investments. Given the retained amount, each U.S. stockholder will be required to include his, her or its sharelosses generated by the entity, the deferred tax asset has been offset by a valuation allowance of the deemed distribution in income as if it had been actually distributed to the$8.6 million.

F-79



Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

6. Derivative Instruments
MVC Credit Support Agreement
U.S. stockholder,In connection with the MVC Acquisition, on December 23, 2020, promptly following the closing of the MVC Merger, the Company and the U.S. stockholder will be entitledAdviser entered into the MVC Credit Support Agreement, pursuant to claimwhich the Adviser has agreed to provide credit support to the Company in the amount of up to $23.0 million relating to the net cumulative realized and unrealized losses on the acquired MVC investment portfolio over a 10-year period. See “Note 2 - Agreements and Related Party Transactions” for additional information regarding the MVC Credit Support Agreement. Net unrealized appreciation or depreciation on the MVC Credit Support Agreement is included in "Net unrealized appreciation (depreciation) - credit equal to his, her or its allocable sharesupport agreement" in the accompanying Consolidated Statements of Operations.
The following tables present the fair value and aggregate unrealized depreciation of the tax paid thereon by us. For the years ended MVC Credit Support Agreement as of December 31, 2017, 20162021 and 2015 the Company did not elect to designate retained net capital gains as deemed distributions.2020:
At December 31, 2017, 2016 and 2015, the components of distributable earnings on a tax basis detailed below differ from the amounts reflected in the Company’s Consolidated Balance Sheets by temporary and other book/tax differences, primarily relating to depreciation expense, stock-based compensation, accruals of defaulted debt investment interest and the tax treatment of certain partnership investments, as follows:
  December 31,
  2017 2016 2015
Undistributed net investment income 18,384,766
 $13,510,440
 $19,826,302
Accumulated capital gains (losses) (87,489,121) (37,164,237) (30,555,004)
Other permanent differences relating to the Company's formation 1,975,543
 1,975,543
 1,975,543
Other temporary differences (7,410,910) (4,816,603) (3,695,494)
Unrealized appreciation (depreciation) (107,847,526) (49,224,340) (28,459,406)
Components of distributable earnings at year end $(182,387,248) $(75,719,197) $(40,908,059)
As of December 31, 2021:
Description
Counter PartySettlement DateNotional AmountValueUnrealized Appreciation (Depreciation)
MVC Credit Support AgreementBarings LLC01/01/31$23,000,000 $15,400,000 $1,800,000 
Total MVC Credit Support Agreement$1,800,000 
Under current law, the Company may carry forward net capital losses indefinitely to use to offset capital gains realized in future years. Capital losses realized under current law will carry forward retaining their classification as long-term or short-term losses. 
As of December 31, 2020:
Description
Counter PartySettlement DateNotional AmountValueUnrealized Appreciation (Depreciation)
MVC Credit Support AgreementBarings LLC01/01/31$23,000,000 $13,600,000 $— 
Total MVC Credit Support Agreement$— 
As of December 31, 2017, the Company had $87.5 million of long-term capital losses which will not expire.
For federal income tax purposes, the cost of investments owned at December 31, 20172021 and 2016 was approximately $1,123.7 million and $1,102.3 million, respectively. As of December 31, 2017, net unrealized depreciation on the Company's investments was approximately $107.8 million, consisting of gross unrealized appreciation, where2020, the fair value of the Company's investments exceeds their tax cost, of approximately $89.2MVC Credit Support Agreement was $15.4 million and gross unrealized depreciation, where$13.6 million, respectively, and is included in "Credit support agreement" in the tax costaccompanying Consolidated Balance Sheets. The fair value of the MVC Credit Support Agreement was determined based on an income approach, with the primary inputs being the enterprise value, the continuously annual risk-free interest rate, a measure of expected asset volatility, and the expected time until an exit event for each portfolio company in the Referenced Portfolio, which are all Level 3 inputs.
Foreign Currency Forward Contracts
The Company enters into forward currency contracts from time to time to primarily help mitigate the impact that an adverse change in foreign exchange rates would have on net interest income from the Company's investments exceeds their fair value, of approximately $197.0 million.
6. Equity-Based and Other Compensation Plans
In February 2017, both the compensation committee of the Boardrelated borrowings denominated in foreign currencies. Net unrealized appreciation or depreciation on foreign currency contracts are included in "Net unrealized appreciation (depreciation) - foreign currency transactions" and the Board adopted the Triangle Capital Corporation Omnibus Incentive Plan (the "Omnibus Plan"), andnet realized gains or losses on forward currency contracts are included in May 2017, the Company’s stockholders approved the Omnibus Plan at the Company’s 2017 Annual Meeting of Stockholders. Prior to the approval of the Omnibus Plan, the Company compensated its professionals through two separate plans: the Amended and Restated 2007 Equity Incentive Plan (the "Equity Incentive Plan"), which provided for grants of restricted stock and options to employees, officers and directors, and the 2012 Executive Cash Incentive Plan (the "Cash Incentive Plan"), which provided for the payment of cash bonuses to employees and officers. The Omnibus Plan was created primarily for the purpose of combining the Equity Incentive Plan and the Cash Incentive Plan in order to reduce the administrative burden of monitoring the terms and conditions of two separate plans. The terms of the Equity Incentive Plan and the Cash Incentive Plan, as combined and reflected"Net realized gains (losses) - foreign currency transactions" in the Omnibus Plan,Consolidated Statements of Operations. Forward currency contracts are substantially similar to the respective terms of each standalone plan.
The Omnibus Plan provides for grants of restricted stock, incentive stock options, non-statutory stock options and cash-based and/or stock-based performance awards, collectively, “Awards,” to the Company’s existing and future employees. Equity-based awards granted under the Omnibus Plan to independent directors generally will vest over a one-year period and equity-based awards granted under the Omnibus Plan to executive officers and employees generally will vest ratably over a four-year period. In addition, the Omnibus Plan increased the maximum number of shares of the Company’s common stock with respect to which Awards may be granted under the Omnibusconsidered undesignated derivative instruments.
F-80




Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

The following tables present the Company's foreign currency forward contracts as of December 31, 2021 and 2020:
Plan to 4,000,000 shares of the Company’s common stock from 2,400,000 shares of the Company’s common stock that were approved under the Equity Incentive Plan. The Omnibus Plan expires May 3, 2027.
As of December 31, 2021:
Description
Notional Amount to be PurchasedNotional Amount to be SoldMaturity DateGross Amount of Recognized Assets (Liabilities)Balance Sheet Location of Net Amounts
Foreign currency forward contract (AUD)A$31,601,341$22,849,50301/06/22$126,319 Prepaid expenses and other assets
Foreign currency forward contract (AUD)A$2,098,659$1,507,74201/06/2218,092 Prepaid expenses and other assets
Foreign currency forward contract (AUD)$20,727,370A$28,700,00001/06/22(139,026)Derivative liability
Foreign currency forward contract (AUD)$3,579,961A$5,000,00004/08/22(55,300)Derivative liability
Foreign currency forward contract (AUD)$18,247,151A$25,385,69704/08/22(214,805)Derivative liability
Foreign currency forward contract (CAD)C$3,229,673$2,527,52701/06/2229,309 Prepaid expenses and other assets
Foreign currency forward contract (CAD)C$3,000,000$2,425,20901/06/22(50,198)Derivative liability
Foreign currency forward contract (CAD)$4,881,155C$6,229,67301/06/22(50,693)Derivative liability
Foreign currency forward contract (CAD)$2,506,088C$3,203,16104/08/22(28,983)Derivative liability
Foreign currency forward contract (DKK)2,142,838kr.$326,30901/06/221,343 Prepaid expenses and other assets
Foreign currency forward contract (DKK)$335,1072,142,838kr.01/06/227,455 Prepaid expenses and other assets
Foreign currency forward contract (DKK)$322,7262,115,990kr.04/08/22(1,490)Derivative liability
Foreign currency forward contract (EUR)€52,582,593$59,524,35801/06/22274,882 Prepaid expenses and other assets
Foreign currency forward contract (EUR)€5,019,529$5,701,273.904/08/2218,430 Prepaid expenses and other assets
Foreign currency forward contract (EUR)$24,721,638€21,500,00001/06/22270,891 Prepaid expenses and other assets
Foreign currency forward contract (EUR)$14,562,667€12,900,00001/06/22(107,781)Derivative liability
Foreign currency forward contract (EUR)$20,655,383€18,182,59301/06/22(22,663)Derivative liability
Foreign currency forward contract (EUR)$60,413,175€53,264,85704/08/22(281,606)Derivative liability
Foreign currency forward contract (EUR)$1,129,597€1,000,00004/08/22(9,893)Derivative liability
Foreign currency forward contract (EUR)$8,513,639€7,500,00004/08/22(32,537)Derivative liability
Foreign currency forward contract (GBP)£9,900,000$13,219,51901/06/22189,513 Prepaid expenses and other assets
Foreign currency forward contract (GBP)$13,348,815£9,900,00001/06/22(60,217)Derivative liability
Foreign currency forward contract (GBP)$6,121,622£4,598,70704/08/22(104,366)Derivative liability
Foreign currency forward contract (SEK)1,791,942kr$198,15401/07/22(230)Derivative liability
Foreign currency forward contract (SEK)$203,8531,791,942kr01/07/225,928 Prepaid expenses and other assets
Foreign currency forward contract (SEK)$207,4831,874,724kr04/08/22244 Prepaid expenses and other assets
Total$(217,382)
As of December 31, 2020:
Description
Notional Amount to be PurchasedNotional Amount to be SoldMaturity DateGross Amount of Recognized Assets (Liabilities)Balance Sheet Location of Net Amounts
Foreign currency forward contract (AUD)$8,471,304A$11,378,67001/05/21$(309,049)Derivative liability
Foreign currency forward contract (AUD)A$11,378,670$8,610,50401/05/21169,849 Prepaid expenses and other assets
Foreign currency forward contract (AUD)$148,019A$193,88204/06/21(1,698)Derivative liability
Foreign currency forward contract (EUR)$13,472,749€11,406,60401/05/21(483,801)Derivative liability
Foreign currency forward contract (EUR)€11,406,604$13,518,02301/05/21438,526 Prepaid expenses and other assets
Foreign currency forward contract (EUR)$561,754€456,60404/06/211,944 Derivative liability
Foreign currency forward contract (GBP)$13,554,607£10,215,29901/05/21(409,190)Derivative liability
Foreign currency forward contract (GBP)£10,215,299$13,717,67801/05/21246,118 Prepaid expenses and other assets
Foreign currency forward contract (GBP)$13,109,849£9,672,75804/06/21(119,769)Derivative liability
Foreign currency forward contract (SEK)$141,6031,259,406kr01/05/21(11,748)Derivative liability
Foreign currency forward contract (SEK)1,259,406kr$152,39601/05/21955 Prepaid expenses and other assets
Foreign currency forward contract (SEK)$164,3251,356,628kr04/06/21(1,028)Derivative liability
Total$(478,891)
F-81
The Company accounts for its equity-based compensation using the fair value method, as prescribed by ASC Topic 718, Stock Compensation. Accordingly, for restricted stock awards, the Company measures the grant date fair value based upon the market price of the Company’s common stock on the date of the grant and amortizes this fair value to compensation expense ratably over the requisite service period or vesting term.
The following table presents information with respect to equity-based compensation for the years ended December 31, 2017, 2016 and 2015:
  Year Ended December 31,
  2017 2016 2015
  
Number
of Shares
 
Weighted Average
Grant Date Fair
Value per Share
 
Number
of Shares
 
Weighted Average
Grant Date Fair
Value per Share
 
Number
of Shares
 
Weighted Average
Grant Date Fair
Value per Share
Unvested shares, beginning of period 631,622
 $21.23
 778,116
 $24.10
 662,965
 $25.87
Shares granted during the period 360,470
 $19.22
 364,605
 $17.56
 360,840
 $21.82
Shares vested during the period (243,418) $22.69
 (511,099) $22.98
 (245,689) $24.31
Unvested shares, end of period 748,674
 $19.79
 631,622
 $21.23
 778,116
 $24.10
In the year ended December 31, 2017, the Company recognized equity-based compensation expense of approximately $6.0 million. In the year ended December 31, 2016, the Company recognized equity-based compensation expense of approximately $10.3 million, $2.7 million of which related to the accelerated vesting of outstanding shares of restricted stock of the Company's former Chief Executive Officer, Garland S. Tucker, III, who retired from his officer positions in February 2016, and $1.4 million related to the accelerated vesting of outstanding shares of restricted stock of Brent P.W. Burgess, the Company's former Chief Investment Officer, who resigned from his position in October 2016. In the year ended December 31, 2015, the Company recognized equity-based compensation expense of approximately $7.0 million.
As of December 31, 2017, there was approximately $9.6 million of total unrecognized compensation cost, related to the Company’s non-vested restricted shares. This cost is expected to be recognized over a weighted average period of approximately 1.7 years. 
The Board has adopted a nonqualified deferred compensation plan covering the Company’s executive officers and key employees. Any compensation deferred, and the Company’s contributions, will earn a return based on the returns on certain investments designated by the Compensation Committee of the Board. Participants are 100% vested in amounts deferred under the deferred compensation plan and the earnings thereon. Contributions to the plan and earnings thereon generally vest ratably over a four-year period.
The Company maintains a 401(k) plan in which all full-time employees who are at least 21 years of age are eligible to participate and receive employer contributions. Eligible employees may contribute a portion of their compensation on a pretax basis into the 401(k) plan up to the maximum amount allowed under the Code, and direct the investment of their contributions.




Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

As of December 31, 2021 and 2020, the total fair value of the Company's foreign currency forward contracts was $(0.2) million and $(0.5) million, respectively. The fair values of the Company's foreign currency forward contracts are based on unadjusted prices from independent pricing services and independent indicative broker quotes, which are Level 2 inputs.
7. Transactions with Controlled Companies
In December 2017,During the Company contributed its equity investment in SRC Worldwide, Inc. ("SRC"), a 100%-owned portfolio company, to CRS-SPV, Inc. ("CRS-SPV"), a 100%-owned portfolio company. In connection with this contribution, SRC became a wholly-owned subsidiary of CRS-SPV, and the Company's investment in SRC is consolidated with CRS-SPV in the Consolidated Schedule of Investments as of December 31, 2017.
During each of the yearsyear ended December 31, 2017, 20162021 and 2015,2020, the Company received management and other fees from SRC totaling $0.4 million.the MVC PE Fund of $0.6 million and $5,292, respectively. These fees were recognized as fee income in the Company's Consolidated Statements of Operations. In addition, during the years ended December 31, 2017 and 2016, the Company recognized dividend and interest income from control investments as disclosed in Note 3 - Schedule of Investments in and Advances to Affiliates.




Triangle Capital Corporation
Notes to Consolidated Financial Statements — (Continued)

8. Commitments and Contingencies
In the normal course of business, the Company is party to financial instruments with off-balance sheet risk, consisting primarily of unused commitments to extend financing to the Company’s portfolio companies. Since commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. As of December 31, 2021 and 2020, the Company believed that it had adequate financial resources to satisfy its unfunded commitments. The balances of unused commitments to extend financing as of December 31, 20172021 and 20162020 were as follows:
Portfolio CompanyInvestment TypeDecember 31, 2021December 31, 2020
Acclime Holdings HK Limited(1)Delayed Draw Term Loan$1,178,571 $— 
Acclime Holdings HK Limited(1)Delayed Draw Term Loan110,119 — 
ADE Holding(1)(3)Committed Capex Line— 91,814 
Air Comm Corporation, LLC(1)Delayed Draw Term Loan10,801 — 
Air Comm Corporation, LLC(1)Delayed Draw Term Loan1,448,107 — 
Amtech Software(1)(2)Delayed Draw Term Loan2,727,273 — 
Amtech Software(1)(2)Revolver681,818 — 
AnalytiChem Holding GmbH(1)(2)(3)Delayed Draw Term Loan6,207,333 — 
Anju Software, Inc.(1)Delayed Draw Term Loan— 1,981,371 
Aquavista Watersides 2 LTD(1)(4)Bridge Revolver503,472 — 
Aquavista Watersides 2 LTD(1)(4)Acquisition Facility3,146,698 — 
Arch Global Precision, LLC(1)Delayed Draw Term Loan— 4,193,475 
Astra Bidco Limited(1)(2)(4)Delayed Draw Term Loan2,571,405 — 
Avance Clinical Bidco Pty Ltd(1)(5)Delayed Draw Term Loan3,497,352 — 
Azalea Buyer, Inc.(1)(2)Delayed Draw Term Loan961,538 — 
Azalea Buyer, Inc.(1)(2)Revolver480,769 — 
Bariacum S.A(1)(3)Acquisition Facility2,160,679 — 
Beacon Pointe Advisors, LLC(1)Delayed Draw Term Loan— 363,636 
Beyond Risk Management, Inc.(1)(2)Delayed Draw Term Loan2,573,333 — 
BigHand UK Bidco Limited(1)(2)(4)Acquisition Facility378,348 — 
Bounteous, Inc.(1)Delayed Draw Term Loan2,840,367 — 
Brightpay Limited(1)(2)(3)Delayed Draw Term Loan431,799 — 
Brightpay Limited(1)(2)(3)Delayed Draw Term Loan143,933 — 
BrightSign LLC(1)Revolver1,328,991 — 
British Engineering Services Holdco Limited(1)(4)Acquisition Facility— 7,006,008 
British Engineering Services Holdco Limited(1)(4)Bridge Revolver612,525 618,177 
CAi Software, LLC(1)(2)Revolver942,986 — 
Canadian Orthodontic Partners Corp.(1)(2)(6)Acquisition Facility166,685 — 
F-82
Portfolio CompanyInvestment TypeDecember 31, 2017 December 31, 2016
DPII Holdings, LLCGuaranty$—
 $576,925
Deva Holdings, Inc.Revolver2,500,000
 —
DLC Acquisition, LLCRevolver1,800,000
 3,000,000
Frank Entertainment Group, LLC(1)Delayed Draw Senior130,212
 —
Frank Entertainment Group, LLC(1)Delayed Draw Second Lien303,827
 —
Halo Branded Solutions, Inc.Delayed Draw Term Loan—
 3,250,000
HKW Capital Partners IV, L.P.Private Equity214,823
 530,032
ICP Industries Inc.Delayed Draw Term Loan5,000,000
 —
Lakeview Health Acquisition Company(1)Revolver1,387,367
 1,387,367
Micross Solutions, LLCDelayed Draw Term Loan3,000,000
 —
Nautic Partners VII, LPPrivate Equity509,080
 642,172
Nomacorc, LLC(1)Equity Investment838,813
 849,362
Orchid Underwriters Agency, LLCDelayed Draw Term Loan649,143
 8,400,000
Orchid Underwriters Agency, LLCRevolver—
 5,000,000
SCA Pharmaceuticals, LLCDelayed Draw Term Loan—
 12,000,000
Schweiger Dermatology Group, LLCDelayed Draw Term Loan4,500,000
 —
SCUF Gaming, Inc.Revolver2,000,000
 3,500,000
Smile Brands, Inc.Equity Investment1,000,000
 1,000,000
Smile Brands, Inc.Delayed Draw Term Loan18,826,531
 18,826,531
SPC Partners V, LPPrivate Equity185,297
 522,881
SPC Partners VI, LPPrivate Equity2,792,172
 3,000,000
Tate's Bake ShopRevolver550,000
 —
Team Waste, LLCEquity Investment—
 900,000
TGaS Advisors, LLCRevolver2,000,000
 2,000,000
YummyEarth Inc.Delayed Draw Term Loan—
 1,500,000
Total Unused Commitments $48,187,265
 $66,885,270
(1)Represents a commitment to extend financing to a portfolio company where one or more of the Company's current investments in the portfolio company are carried at less than cost as of December 31, 2017. The Company's estimate of the fair value of the current investments in this portfolio company includes an analysis of the value of any unfunded commitments.




Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
Portfolio CompanyInvestment TypeDecember 31, 2021December 31, 2020
Centralis Finco S.a.r.l.(1)(3)Acquisition Facility$460,949 $495,950 
Ceres Pharma NV(1)(3)Delayed Draw Term Loan2,148,974 — 
Classic Collision (Summit Buyer, LLC)(1)Delayed Draw Term Loan392,619 1,672,446 
CM Acquisitions Holdings Inc.(1)Delayed Draw Term Loan— 1,551,602 
Coastal Marina Holdings, LLC(1)PIK Tranche B Term Loan1,311,220 — 
Coastal Marina Holdings, LLC(1)Tranche A Term Loan3,575,892 — 
Command Alkon (Project Potter Buyer, LLC)(1)Delayed Draw Term Loan6,018,078 — 
Contabo Finco S.À R.L(1)(3)Delayed Draw Term Loan— 228,211 
Coyo Uprising GmbH(1)(3)Delayed Draw Term Loan893,523 — 
Crash Champions, LLC(1)(2)Delayed Draw Term Loan5,420,303 — 
CSL Dualcom(1)(4)Acquisition Term Loan997,972 1,007,182 
Dart Buyer, Inc.(1)(2)Delayed Draw Term Loan2,430,569 2,430,569 
DecksDirect, LLC(1)(2)Revolver218,182 — 
DreamStart Bidco SAS(1)(3)Acquisition Facility616,916 995,640 
Dune Group(1)(3)Delayed Draw Term Loan664,587 — 
Dwyer Instruments, Inc.(1)Delayed Draw Term Loan691,712 — 
Eclipse Business Capital, LLC(1)Revolver11,818,182 — 
EMI Porta Holdco LLC(1)(2)Delayed Draw Term Loan12,457,627 — 
EMI Porta Holdco LLC(1)(2)Revolver2,966,102 — 
EPS NASS Parent, Inc.(1)Delayed Draw Term Loan583,051 — 
eShipping, LLC(1)(2)Delayed Draw Term Loan2,548,131 — 
eShipping, LLC(1)(2)Revolver1,231,597 — 
F24 (Stairway BidCo GmbH)(1)(2)(3)Delayed Draw Term Loan405,130 323,840 
FitzMark Buyer, Inc.(1)(2)Delayed Draw Term Loan— 1,470,588 
Foundation Risk Partners, Corp.(1)Delayed Draw Term Loan— 4,984,771 
Fineline Technologies, Inc.(1)Delayed Draw Term Loan180,000 — 
FragilePak LLC(1)Delayed Draw Term Loan2,354,167 — 
Heartland, LLC(1)(2)Delayed Draw Term Loan— 5,347,666 
Heartland Veterinary Partners, LLC(1)(2)Delayed Draw Term Loan657,143 — 
Heavy Construction Systems Specialists, LLC(1)Revolver2,631,772 — 
Heilbron (f/k/a Sucsez (Bolt Bidco B.V.))(1)(2)(3)Accordion Facility— 10,225,081 
HW Holdco, LLC (Hanley Wood LLC)(1)(2)Delayed Draw Term Loan1,563,022 — 
IGL Holdings III Corp.(1)Delayed Draw Term Loan1,217,221 5,914,219 
Innovad Group II BV(1)(2)(3)Delayed Draw Term Loan1,824,551 — 
INOS 19-090 GmbH(1)(2)(3)Acquisition Facility2,535,457 2,727,980 
Jocassee Partners LLCJoint Venture20,000,000 30,000,000 
ITI Intermodal, Inc.(1)(2)Delayed Draw Term Loan103,058 — 
ITI Intermodal, Inc.(1)(2)Revolver124,006 — 
Jaguar Merger Sub Inc.(1)(2)Delayed Draw Term Loan1,960,784 — 
Jaguar Merger Sub Inc.(1)(2)Revolver490,196 — 
Kano Laboratories LLC(1)(2)Delayed Draw Term Loan153,064 — 
Kano Laboratories LLC(1)(2)Delayed Draw Term Loan4,543,950 4,543,950 
Kene Acquisition, Inc.(1)(2)Delayed Draw Term Loan— 322,928 
LAF International(1)(2)(3)Acquisition Facility341,160 — 
F-83


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
Portfolio CompanyInvestment TypeDecember 31, 2021December 31, 2020
Lambir Bidco Limited(1)(3)Bridge Revolver$940,651 $— 
Lambir Bidco Limited(1)(3)Delayed Draw Term Loan1,881,303 — 
LivTech Purchaser, Inc.(1)Delayed Draw Term Loan81,977 — 
Marmoutier Holding B.V.(1)(3)Delayed Draw Term Loan405,082 — 
Marmoutier Holding B.V.(1)(3)Revolver162,033 — 
MC Group Ventures Corporation(1)Delayed Draw Term Loan817,250 — 
Modern Star Holdings Bidco Pty Limited(1)(5)Capex Term Loan1,038,302 2,315,967 
Murphy Midco Limited(1)(4)Delayed Draw Term Loan2,617,027 3,301,472 
Narda Acquisitionco., Inc.(1)(2)Revolver1,310,680 — 
Navia Benefit Solutions, Inc.(1)Delayed Draw Term Loan1,260,800 — 
Nexus Underwriting Management Limited(1)(4)Revolver103,483 — 
Nexus Underwriting Management Limited(1)(4)Acquisition Facility540,919 — 
OA Buyer, Inc.(1)(2)Revolver1,331,244 — 
OG III B.V.(1)(2)(3)Acquisition CapEx Facility686,294 — 
Omni Intermediate Holdings, LLC(1)Delayed Draw Term Loan816,892 — 
Omni Intermediate Holdings, LLC(1)Delayed Draw Term Loan4,356,757 — 
Options Technology Ltd.(1)(2)Delayed Draw Term Loan— 2,604,080 
OSP Hamilton Purchaser, LLC(1)(2)Revolver186,567 — 
Pacific Health Supplies Bidco Pty Limited(1)(2)(5)CapEx Term Loan1,282,566 1,535,025 
PDQ.Com Corporation(1)(2)Delayed Draw Term Loan289,389 — 
PDQ.Com Corporation(1)(2)Delayed Draw Term Loan10,947,692 — 
Polara Enterprises, L.L.C.(1)(2)Revolver545,234 — 
Policy Services Company, LLC(1)(2)Delayed Draw Term Loan6,944,079 — 
Premier Technical Services Group(1)(4)Acquisition Facility— 1,197,505 
Premium Invest(1)(2)(3)Acquisition Facility1,933,240 — 
Protego Bidco B.V.(1)(2)(3)Delayed Draw Term Loan844,265 — 
PSC UK Pty Ltd.(1)(4)GBP Acquisition Facility— 535,157 
QPE7 SPV1 BidCo Pty Ltd(1)(5)Acquisition Term Loan373,449 — 
Questel Unite(1)(3)Cap Acquisition Facility— 10,300,913 
Radwell International, LLC(1)Delayed Draw Term Loan— 3,235,947 
Rep Seko Merger Sub LLC(1)Delayed Draw Term Loan1,454,545 1,454,546 
Reward Gateway (UK) Ltd(1)(2)(4)Acquisition Facility1,061,336 — 
Riedel Beheer B.V.(1)(3)Revolver229,711 — 
Riedel Beheer B.V.(1)(3)Delayed Draw Term Loan153,141 — 
Safety Products Holdings, LLC(1)Delayed Draw Term Loan— 6,467,345 
Scaled Agile, Inc.(1)(2)Delayed Draw Term Loan416,188 — 
Scaled Agile, Inc.(1)(2)Revolver335,821 — 
Security Holdings B.V.(1)(3)Delayed Draw Term Loan2,274,399 — 
Security Holdings B.V.(1)(3)Revolver1,137,200 — 
Smartling, Inc.(1)(2)Delayed Draw Term Loan2,352,941 — 
Smartling, Inc.(1)(2)Revolver1,176,471 — 
Smile Brands Group, Inc.(1)(2)Delayed Draw Term Loan654,691 2,148,691 
Springbrook Software (SBRK Intermediate, Inc.)(1)Delayed Draw Term Loan2,372,538 3,489,026 
SSCP Pegasus Midco Limited(1)(4)Delayed Draw Term Loan5,251,478 13,389,546 
F-84


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
Portfolio CompanyInvestment TypeDecember 31, 2021December 31, 2020
Superjet Buyer, LLC(1)Revolver$1,825,293 $— 
Syntax Systems Ltd(1)(2)Revolver568,965 — 
Syntax Systems Ltd(1)(2)Delayed Draw Term Loan1,933,077 — 
Techone B.V.(1)(3)Delayed Draw Term Loan1,620,901 — 
Techone B.V.(1)(3)Revolver432,240 — 
Tencarva Machinery Company, LLC(1)(2)Delayed Draw Term Loan885,903 — 
Tencarva Machinery Company, LLC(1)(2)Revolver1,128,585 — 
The Caprock Group, Inc. (aka TA/TCG Holdings, LLC)(1)(2)Delayed Draw Term Loan2,811,186 — 
The Caprock Group, Inc. (aka TA/TCG Holdings, LLC)(1)(2)Revolver826,620 — 
The Hilb Group, LLC(1)(2)Delayed Draw Term Loan2,773,208 5,545,939 
Transit Technologies LLC(1)(2)Delayed Draw Term Loan1,857,017 6,035,305 
Truck-Lite Co., LLC(1)(2)Delayed Draw Term Loan4,539,745 — 
Turbo Buyer, Inc.(1)(2)Delayed Draw Term Loan2,070,000 — 
USLS Acquisition, Inc.(1)Delayed Draw Term Loan— 450,466 
Utac Ceram(1)(2)(3)Delayed Draw Term Loan— 743,327 
Waccamaw River(2)Joint Venture11,280,000 — 
W2O Holdings, Inc.(1)Delayed Draw Term Loan3,831,517 
Woodland Foods, Inc.(1)(2)Revolver2,069,868 5,989,298 
Total unused commitments to extend financing$234,657,529 $159,236,659 
(1)The Company’s headquartersCompany's estimate of the fair value of the current investments in these portfolio companies includes an analysis of the fair value of any unfunded commitments.
(2)Represents a commitment to extend financing to a portfolio company where one or more of the Company's current investments in the portfolio company are carried at less than cost.
(3)Actual commitment amount is leased under an agreement that expiresdenominated in Euros. Commitment was translated into U.S. dollars based on May 31, 2019. Rent expense for the years ended spot rate at the relevant balance sheet date.
(4)Actual commitment amount is denominated in British pounds sterling.Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.
(5)Actual commitment amount is denominated in Australian dollars. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.
(6)Actual commitment amount is denominated in Canadian dollars. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.
In the normal course of business, the Company guarantees certain obligations in connection with its portfolio companies (in particular, certain controlled portfolio companies). Under these guarantee arrangements, payments may be required to be made to third parties if such guarantees are called upon or if the portfolio companies were to default on their related obligations, as applicable. As of December 31, 2017, 20162021 and 2015 was approximately $426,000, $417,0002020, we had guaranteed €9.9 million ($11.3 million U.S. dollars and $407,000, respectively,$12.1 million U.S. dollars, respectively) relating to credit facilities among Erste Bank and MVC Automotive Group Gmbh ("MVC Auto"). The Company would be required to make payments to Erste Bank if MVC Auto were to default on their related payment obligations. None of the rent commitmentscredit facility guarantees are recorded as a liability on the Company's Consolidated Balance Sheets, as such the credit facility liabilities are considered in the valuation of the investments in MVC Auto. The guarantees denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date.
In addition, as of December 31, 20172020, we agreed to cash collateralize a $3.5 million letter of credit for Security Holdings B.V. The $3.5 million cash collateralization is reflected as "Restricted cash" on the accompanying Consolidated Balance Sheets as of December 31, 2020. The letter of credit expired on April 30, 2021, and as of December 31, 2021, none of the Company’s cash was restricted.
F-85


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
Neither the Company, the Adviser, nor the Company’s subsidiaries are as follows:
Year ending December 31,Rent Commitment
2018435,571
2019187,637
Total$623,208
  
currently subject to any material pending legal proceedings, other than ordinary routine litigation incidental to their respective businesses. The Company, and certain current and former executive officers have been named as defendants in two putative securities class action lawsuits each filed in the United States District Court for the Southern District of New York (and then transferred to the United States District Court for the Eastern District of North Carolina) on behalf of all persons who purchased or otherwise acquired our common stock between May 7, 2014 and November 1, 2017. The first lawsuit was filed on November 21, 2017, and is currently captioned Elias Dagher, et al., v. Triangle Capital Corporation, et al., Case No. 5:18-cv-00015-FL (the “Dagher Action”). The second lawsuit was filed on November 28, 2017, and is currently captioned Gary W. Holden, et al., v. Triangle Capital Corporation, et al., Case No. 5:18-cv-00010-FL (the “Holden Action”).
The complaints in the Dagher ActionAdviser, and the Holden Action allege certain violationsCompany’s subsidiaries may from time to time, however, be involved in litigation arising out of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions regarding the Company’s business, operations and prospects between May 7, 2014 and November 1, 2017. The plaintiffs seek compensatory damages and attorneys’ fees and costs, among other relief, but did not specify the amount of damages being sought.
On January 22, 2018, five applications for appointment as lead plaintiff and motions to consolidate the Dagher Action and the Holden Action were filed. The applications for appointment as lead plaintiff and motions to consolidate are currently pending before the Court.
In addition, the Company is party to certain lawsuits in the normal course of business.business or otherwise, including in connection with strategic transactions. Furthermore, third parties may try to seek to impose liability on the Company in connection with the activities of its portfolio companies.
While the outcome of any opencurrent legal proceedings including those described above, cannot at this time be predicted with certainty, the Company does not expect that any reasonably possible losses arising from thesecurrent matters will materially affect its financial condition or results of operations. Furthermore,operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on the Company’s financial condition or results of operations in management's opinion,any future reporting period.
COVID-19 Developments
During the year ended December 31, 2021, the Coronavirus and the COVID-19 pandemic continued to have a significant impact on the U.S and global economies. To the extent the Company's portfolio companies are adversely impacted by the effects of the COVID-19 pandemic, it is not possible to estimatemay have a rangematerial adverse impact on the Company's future net investment income, the fair value of reasonably possible losses with respect to litigation contingencies.its portfolio investments, its financial condition and the results of operations and financial condition of the Company's portfolio companies.


F-86



Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

9. Financial Highlights
9. Summarized Financial Information
 Year Ended December 31,
 20212020201920182017
Per share data:
Net asset value at beginning of period$10.99 $11.66 $10.98 $13.43 $15.13 
Net investment income(1)0.90 0.64 0.61 — 1.55 
Net realized loss on investments / foreign currency(1)(0.05)(0.79)(0.08)(3.17)(1.11)
Net unrealized appreciation (depreciation) on investments / foreign currency(1)0.34 0.38 0.64 1.08 (1.04)
Total increase (decrease) from investment operations(1)1.19 0.23 1.17 (2.09)(0.60)
Dividends paid to stockholders from net investment income(0.79)(0.65)(0.54)(0.41)(1.65)
Tax return of capital to stockholders(0.03)— — (0.02)— 
Total dividends and distributions paid(0.82)(0.65)(0.54)(0.43)(1.65)
Common stock offerings— (0.63)— — 0.61 
Deemed contribution - CSA— 0.28 — — — 
Deemed contribution - Barings LLC— 0.07 — — — 
Purchase of shares in tender offer— — — 0.13 — 
Purchases of shares in share repurchase plan— 0.05 0.07 — — 
Stock-based compensation(1)— — — 0.17 (0.01)
Shares issued pursuant to Dividend Reinvestment Plan— — — — 0.01 
Loss on extinguishment of debt(1)— (0.06)(0.01)(0.21)— 
Benefit from (provision for) taxes(1)— — (0.01)0.02 (0.02)
Other— 0.04 — (0.04)(0.04)
Net asset value at end of period$11.36 $10.99 $11.66 $10.98 $13.43 
Market value at end of period(2)$11.02 $9.20 $10.28 $9.01 $9.49 
Shares outstanding at end of period65,316,085 65,316,085 48,950,803 51,284,064 47,740,832 
Net assets at end of period$741,930,763 $717,804,524 $570,874,709 $562,967,287 $641,275,374 
Average net assets$739,250,121 $517,740,268 $579,198,975 $628,154,942 $667,188,287 
Ratio of total expenses, prior to waiver of base management fee, including loss on extinguishment of debt and benefit from (provision for) taxes, to average net assets (3)10.33 %8.33 %7.90 %14.54 %7.74 %
Ratio of total expenses, net of base management fee waived, including loss on extinguishment of debt and benefit from (provision for) taxes, to average net assets(3)10.33 %8.33 %7.90 %14.31 %7.74 %
Ratio of net investment income to average net assets7.98 %5.99 %5.27 %(0.01)%10.83 %
Portfolio turnover ratio(4)68.63 %67.80 %113.99 %228.49 %37.02 %
Total return(5)29.34 %(2.17)%20.27 %18.18 %(42.15)%
(1)Weighted average per share data—basic and diluted; per share data was derived by using the weighted average shares outstanding during the applicable period.
(2)Represents the closing price of Unconsolidated Subsidiaries

The Company holds a control interest, as defined by the 1940 Act, in CRS-SPV, Inc. ("CRS"), a majority-owned portfolio company that is considered a significant subsidiary under the guidance in Regulation S-X, but is not consolidated in the Company’s consolidated financial statements. Below is summarized financial informationcommon stock on the last day of the period.
(3)Does not include expenses of underlying investment companies, including joint ventures and short-term investments.
(4)Portfolio turnover ratio as of December 31, 20172021 and 2016 and for2020 excludes the three years ended December 31, 2017 (dollars in thousands):
 As of December 31,  
 2017 2016  
Current assets$6,296
 $5,127
  
Noncurrent assets$16,162
 $14,712
  
Total assets$22,458
 $19,839
  
Current liabilities$1,843
 $46,723
  
Total liabilities$3,901
 $48,103
  
      
 Years Ended December 31,
 2017 2016 2015
Revenues$9,344
 $13,851
 $14,998
Cost of revenues$5,992
 $12,976
 $15,217
Gross profit (loss)$3,352
 $875
 $(219)
Net loss$(8,640) $(12,845) $(11,658)

The Company also holds a control interest, as defined by the 1940 Act, in Frank Entertainment Group, LLC ("Frank") and determined that Frank is a significant subsidiary under the guidance in Regulation S-X, but is not consolidated in the Company's consolidated financial statements. Below is summarized financial informationimpact of short-term investments. Portfolio turnover ratio as of December 31, 20172020 excludes the impact of the MVC Acquisition.
(5)Total return is based on purchase of stock at the current market price on the first day and 2016a sale at the current market price on the last day of each period reported on the table and forassumes reinvestment of dividends at prices obtained by the three years ended December 31, 2017 (dollars in thousands):Company's dividend reinvestment plan during the period.
F-87
 As of December 31,  
 2017 2016  
Current assets$8,570
 $8,379
  
Noncurrent assets$29,505
 $33,956
  
Total assets$38,075
 $42,335
  
Current liabilities$13,700
 $16,175
  
Total liabilities$54,151
 $49,039
  
      
 Years Ended December 31,
 2017 2016 2015
Revenues$56,196
 $66,208
 $63,078
Cost of revenues$21,082
 $24,944
 $23,719
Gross profit$35,114
 $41,264
 $39,359
Pretax loss$(11,372) $(9,452) $(6,479)






Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)

10. MVC Capital, Inc. Acquisition
10. Financial HighlightsOn December 23, 2020, the Company completed its acquisition of MVC pursuant to the terms and conditions of that certain Agreement and Plan of Merger (the “MVC Merger Agreement”), dated as of August 10, 2020, with MVC, Mustang Acquisition Sub, Inc., a Delaware corporation and our wholly owned subsidiary (“Acquisition Sub”), and Barings. To effect the acquisition, Acquisition Sub merged with and into MVC, with MVC surviving the merger as our wholly owned subsidiary (the “First MVC Merger”). Immediately thereafter, MVC merged with and into the Company, with the Company as the surviving company (the “Second MVC Merger” and, together with the First MVC Merger, the “MVC Merger”). The Merger has been treated as a “reorganization” within the meaning of Section 368(a)(1)(A) of the Code.
Pursuant to the MVC Merger Agreement, MVC stockholders received the right to the following merger consideration in exchange for each share of MVC common stock issued and outstanding immediately prior to the effective time of the First MVC Merger (other than shares of MVC common stock issued and outstanding immediately prior to the effective time of the First MVC Merger that were held by a subsidiary of MVC or held, directly or indirectly, by the Company or the Acquisition Sub), in accordance with the MVC Merger Agreement: (i) an amount in cash from Barings, without interest, equal to $0.39492, and (ii) 0.9790836 shares of the Company’s common stock, which ratio gave effect to the Euro-dollar exchange rate adjustment mechanism in the MVC Merger Agreement, plus cash in lieu of fractional shares. The Company issued approximately 17,354,332 shares of its common stock to MVC’s then-existing stockholders in connection with the MVC Merger, thereby resulting in the Company’s then-existing stockholders owning approximately 73.4% of the combined company and MVC's then-existing stockholders owning approximately 26.6% of the combined company.
In connection with the closing of the MVC Merger on December 23, 2020, the Board affirmed the Company’s commitment to open-market purchases of shares of its common stock in an aggregate amount of up to $15.0 million at then-current market prices at any time shares trade below 90% of the Company’s then most recently disclosed net asset value per share. Any repurchases pursuant to the authorized program will occur during the 12-month period that commenced upon the filing of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2021, which occurred on May 6, 2021, and will be made in accordance with applicable legal, regulatory and contractual requirements, including covenants under the February 2019 Credit Facility. During the year ended December 31, 2021, the Company did not repurchase any shares under the authorized program.
In connection with the MVC Acquisition, on December 23, 2020, following the closing of the MVC Merger, the Company entered into the Amended and Restated Advisory Agreement with Barings, effective January 1, 2021. Promptly following the closing of the MVC Merger, the Company also entered into the MVC Credit Support Agreement with Barings. See “Note 2 - Agreements and Related Party Transactions” for more information regarding the Amended and Restated Advisory Agreement and the MVC Credit Support Agreement.
In connection with the closing of the MVC Merger, MVC notified U.S. Bank National Association ("U.S. Bank"), the trustee for MVC Capital's 6.25% Senior Notes due 2022 (the "MVC Notes"), of the election to redeem the remaining $95.0 million in aggregate principal amount of the MVC Notes outstanding at a price equal to 100% of the principal amount of the MVC Notes, plus accrued and unpaid interest on the Notes to, but excluding, the date of redemption, and the Company caused the discharge of the MVC Notes by entering into a Satisfaction and Discharge of Indenture, dated December 23, 2020, with respect to the indenture governing the MVC Notes. The trustee provided notice of such redemption to the holders of the MVC Notes in accordance with the terms of the indenture governing the MVC Notes. The redemption was completed on January 22, 2021 and was funded with trust funds deposited with U.S. Bank in trust for such purpose.
The MVC Acquisition was accounted for in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations-Related Issues. Under asset acquisition accounting, acquiring assets in groups not only requires ascertaining the cost of the asset (or net assets), but also allocating that cost to the individual assets (or individual assets and liabilities) that make up the group. Per ASC 805-50-30-1, the acquired assets (as a group) are recognized based on their cost to the acquiring entity, which generally includes transaction costs of the asset acquisition, and no gain or loss is recognized unless the fair value of noncash assets given as consideration differs from the assets carrying amounts on the acquiring entity’s records. ASC 805-50-30-2 goes on to say asset acquisitions in which the consideration given is cash are measured by the amount of cash paid.
F-88
  Year Ended December 31,
  2017 2016 2015 2014 2013
Per share data:          
Net asset value at beginning of period $15.13
 $15.23
 $16.11
 $16.10
 $15.30
Net investment income(1) 1.55
 1.62
 2.16
 2.08
 2.23
Net realized gain (loss) on investments(1) (1.11) 0.05
 (0.83) 0.46
 0.67
Net unrealized appreciation (depreciation) on investments / foreign currency(1) (1.04) (0.72) 0.17
 (1.48) 0.08
Total increase (decrease) from investment operations(1) (0.60) 0.95
 1.50
 1.06
 2.98
Dividends paid to stockholders from net investment income (1.65) (1.89) (2.11) (1.88) (2.14)
Dividends paid to stockholders from realized gains —
 —
 (0.25) (0.68) (0.02)
Total dividends paid (1.65) (1.89) (2.36) (2.56) (2.16)
Common stock offerings 0.61
 0.72
 —
 1.49
 —
Stock-based compensation(1) (0.01) 0.09
 0.01
 —
 (0.03)
Shares issued pursuant to Dividend Reinvestment Plan 0.01
 0.04
 0.03
 0.04
 0.04
Loss on extinguishment of debt(1) —
 —
 (0.04) —
 (0.01)
Provision for taxes(1) (0.02) (0.01) (0.01) (0.10) (0.02)
Other(2) (0.04) —
 (0.01) 0.08
 —
Net asset value at end of period $13.43
 $15.13
 $15.23
 $16.11
 $16.10
Market value at end of period(3) $9.49
 $18.34
 $19.11
 $20.29
 $27.65
Shares outstanding at end of period 47,740,832
 40,401,292
 33,375,126
 32,950,288
 27,697,483
Net assets at end of period $641,275,374
 $611,156,258
 $508,367,755
 $530,826,629
 $445,792,130
Average net assets $667,188,287
 $556,549,060
 $524,579,829
 $482,679,489
 $434,926,009
Ratio of total operating expenses, including loss on extinguishment of debt and provision for taxes, to average net assets 7.74 % 9.93% 9.81% 9.45 % 9.30%
Ratio of net investment income to average net assets 10.83 % 10.58% 13.65% 12.85 % 14.15%
Portfolio turnover ratio 37.02 % 24.61% 37.62% 29.21 % 25.96%
Total return(4) (42.15)% 5.86% 5.82% (17.36)% 16.95%
Supplemental Data:          
Efficiency ratio(5) 17.48 % 24.70% 18.88% 20.40 % 19.07%
(1)Weighted average basic per share data.
(2)Represents the impact of the different share amounts used in calculating per share data as a result of calculating certain per share data based upon the weighted average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date.
(3)Represents the closing price of the Company’s common stock on the last day of the period.
(4)Total return is based on purchase of stock at the current market price on the first day and a sale at the current market price on the last day of each period reported on the table and assumes reinvestment of dividends at prices obtained by the Company's dividend reinvestment plan during the period. Total return is not annualized.
(5)Efficiency ratio equals the sum of (i) compensation and related expenses and (ii) general and administrative expenses divided by total investment income.





Triangle Capital CorporationBarings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
However, if the consideration given is not in the form of cash (that is, in the form of noncash assets, liabilities incurred, or equity interests issued), measurement is based on the cost to the acquiring entity or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measured.
The fair value of the merger consideration paid by the Company was allocated to the assets acquired and liabilities assumed based on their relative fair values as of the date of acquisition and did not give rise to goodwill. Since the fair value of the net assets acquired exceeded the fair value of the merger consideration paid by the Company, the Company recognized a deemed contribution from the Adviser.
The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed as a result of the MVC Acquisition:
Common stock issued by the Company$160,354,027 
Cash consideration paid by the Company(1)7,633,267 
Deemed contribution from Barings LLC(2)3,254,849 
Total purchase price$171,242,143 
Assets acquired:
Investments(3)$185,041,442 
Cash71,267,327 
Other assets(4)10,961,944 
Total assets acquired$267,270,713 
Liabilities assumed(5)(96,028,570)
Net assets acquired$171,242,143 
(1)During the year ended December 31, 2020, the Company incurred $7.6 million in professional fees and other costs related to the MVC Acquisition. For the year ended December 31, 2020, these costs included $2.5 million one-time investment banking fees.
(2)Non-cash operating activity included in "Acquisition of MVC Capital, net of cash acquired" on the Company's Consolidated Statements of Cash Flows
(3)Investments acquired were recorded at fair value, which is also the Company's initial cost basis
(4)Other assets acquired in the MVC Acquisition consisted of the following:
Interest receivable$9,530,086 
Fees receivable927,889 
Escrow receivable500,000 
Other assets3,969 
Total$10,961,944 
(5)Liabilities assumed in the MVC Acquisition consisted of the following:
Notes payable(a)$93,815,587 
Accrued interest payable1,138,023 
Other liabilities1,074,960 
Total$96,028,570 
(a) On December 23, 2020, MVC and the Company deposited with the trustee for the MVC Notes funds from cash on hand sufficient to satisfy all obligations remaining to the redemption date for the MVC Notes under the indenture, and the trustee for the MVC Notes entered into a Satisfaction and Discharge of Indenture with the Company with respect to the indenture governing the MVC Notes. The redemption was completed on January 22, 2021 with such trust funds.
F-89


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
11. Sierra Acquisition
On September 21, 2021, the Company entered into an Agreement and Plan of Merger (the “Sierra Merger Agreement”) by and among the Company, Mercury Acquisition Sub, Inc., a Maryland corporation and a direct wholly owned subsidiary of the Company (“Sierra Acquisition Sub”), Sierra Income Corporation, a Maryland corporation (“Sierra”), and Barings. The Sierra Merger Agreement provides that, on the terms and subject to the conditions set forth in the Sierra Merger Agreement, Sierra Acquisition Sub will merge with and into Sierra, with Sierra continuing as the surviving company and as a wholly owned subsidiary of the Company (the “First Sierra Merger”) and, immediately thereafter, Sierra will merge with and into the Company, with the Company continuing as the surviving company (the “Second Sierra Merger” and, together with the First Sierra Merger, the “Sierra Merger”). The Board and the board of directors of Sierra, including all of the respective independent directors, have approved the Sierra Merger Agreement and the transactions contemplated therein. The parties to the Sierra Merger Agreement intend the Sierra Merger to be treated as a “reorganization” within the meaning of Section 368(a) of the Code.
In the First Sierra Merger, each share of Sierra common stock issued and outstanding immediately prior to the effective time of the First Sierra Merger (excluding any shares cancelled pursuant to the Sierra Merger Agreement) will be converted into the right to receive (i) $0.9783641 per share in cash, without interest, from Barings (such amount of cash, the “Sierra Cash Consideration”) and (ii) 0.44973 of a validly issued, fully paid and non-assessable share of the Company’s common stock (the “Sierra Share Consideration” and, together with the Sierra Cash Consideration, the “Sierra Merger Consideration”).
The Sierra Merger Agreement contains representations, warranties and covenants, including, among others, covenants relating to the operation of each of the Company’s and Sierra’s businesses during the period prior to the closing of the Sierra Merger. The Company and Sierra have agreed to convene and hold stockholder meetings for the purpose of obtaining the approvals required of the Company’s and Sierra’s stockholders, respectively, and the Board and the board of directors of Sierra have agreed to recommend that their respective stockholders approve the applicable proposals (as described below).
The Sierra Merger Agreement provides that Sierra shall not, and shall cause its subsidiaries and instruct its representatives not to, directly or indirectly, solicit proposals relating to alternative transactions, or, subject to certain exceptions, initiate or participate in discussions or negotiations regarding, or provide information with respect to, any proposal for an alternative transaction. However, the Sierra board of directors may, subject to certain conditions, change its recommendation to the Sierra stockholders or, on payment of a termination fee of $11.0 million to the Company and the reimbursement of up to $2.0 million in expenses incurred by the Company and Barings, terminate the Sierra Merger Agreement and enter into an Alternative Acquisition Agreement (as defined in the Sierra Merger Agreement) for a Superior Proposal (as defined in the Sierra Merger Agreement) if it determines in good faith, after consultation with its outside legal counsel, that failure to do so would be inconsistent with the directors’ duties under applicable law.
Consummation of the First Sierra Merger, which is currently anticipated to occur during the first quarter of fiscal year 2022, is subject to certain customary closing conditions, including (1) approval of the First Sierra Merger by the holders of at least a majority of the outstanding shares of Sierra common stock entitled to vote thereon, (2) approval of the issuance of the Company’s common stock to be issued in the First Sierra Merger by a majority of the votes cast by the Company stockholders on the matter at the Company stockholders meeting, (3) approval of the issuance of the Company’s common stock in connection with the First Sierra Merger at a price below the then-current net asset value per share of the Company common stock, if applicable, by the vote specified in Section 63(2)(A) of the 1940 Act, (4) the absence of certain legal impediments to the consummation of the Sierra Merger, (5) effectiveness of the registration statement for the Company common stock to be issued as consideration in the First Sierra Merger, (6) approval for listing on the NYSE of the Company common stock to be issued as consideration in the First Sierra Merger, (7) subject to certain materiality standards, the accuracy of the representations and warranties and compliance with the covenants of each party to the Sierra Merger Agreement, and (8) required regulatory approvals (including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or early termination thereof).
F-90


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
Barings, as party to the Sierra Merger Agreement, agreed to vote all shares of the Company common stock over which it has voting power (other than in its fiduciary capacity) in favor of the proposals to be submitted by the Company to its stockholders for approval relating to the Sierra Merger.
In addition, the Company and Sierra will take steps necessary to provide for the repayment at closing of Sierra’s existing loan agreement. The Sierra Merger Agreement also contains certain termination rights in favor of the Company and Sierra, including if the First Sierra Merger is not completed on or before March 31, 2022 or if the requisite approvals of the Company stockholders or Sierra stockholders are not obtained.
Further, the Company will enter into an amendment and restatement of the Amended and Restated Advisory Agreement, effective as of the closing of the Sierra Merger, to raise the annualized hurdle rate thereunder from 8.0% to 8.25%. Following the closing of the Sierra Merger, the Company will also enter into a credit support agreement with Barings, for the benefit of the combined company, to protect against net cumulative unrealized and realized losses of up to $100.0 million on the acquired Sierra investment portfolio over the next ten years.
The Company is expected to account for the Sierra Merger as an asset acquisition in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations-Related Issues. Under asset acquisition accounting, acquiring assets in groups not only requires ascertaining the cost of the asset (or net assets), but also allocating that cost to the individual assets (or individual assets and liabilities) that make up the group. Per ASC 805-50-30-1, the acquired assets (as a group) are recognized based on their cost to the acquiring entity, which generally includes transaction costs of the asset acquisition, and no gain or loss is recognized unless the fair value of noncash assets given as consideration differs from the assets carrying amounts on the acquiring entity’s records. ASC 805-50-30-2 goes on to say asset acquisitions in which the consideration given is cash are measured by the amount of cash paid. However, if the consideration given is not in the form of cash (that is, in the form of noncash assets, liabilities incurred, or equity interests issued), measurement is based on the cost to the acquiring entity or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measured.
If the fair value of the net assets to be acquired exceeds the fair value of the Sierra Merger Consideration to be paid by the Company, then the Company would recognize a deemed contribution from Barings in an amount up to approximately $100.0 million. If the fair value of net assets to be acquired exceeds the fair value of the Sierra Merger Consideration to be paid by the Company and by Barings, then the Company would also recognize a purchase accounting gain. Alternatively, if the fair value of the net assets to be acquired is less than the fair value of the portion of the Sierra Merger Consideration to be paid by the Company, then the Company would recognize a purchase accounting loss. The Company expects any potential gain or loss would be classified as unrealized on the statement of operations until the underlying assets are sold.
The cost of the group of assets acquired in an asset acquisition is allocated to the individual assets acquired or liabilities assumed based on their relative fair values of net identifiable assets acquired other than “non-qualifying” assets (for example cash) and does not give rise to goodwill. The final allocation of the purchase price will be determined after the Sierra Merger is completed and after completion of a final analysis to determine the estimated relative fair values of the acquired assets and liabilities.
F-91


Barings BDC, Inc.
Notes to Consolidated Financial Statements — (Continued)
12. Selected Quarterly Financial Data (Unaudited)
The following tables set forth certain quarterly financial information for each of the eight quarters in the two years ended December 31, 2017.2021. Results for any quarter are not necessarily indicative of results for the full year or for any future quarter. 
 Quarter Ended
 March 31,
2021		June 30,
2021		September 30,
2021		December 31,
2021
Total investment income$30,593,231 $33,153,488 $34,983,825 $36,604,830 
Net investment income14,374,134 14,557,658 14,857,019 15,171,528 
Net increase in net assets resulting from operations22,488,279 29,308,031 14,410,382 11,478,737 
Net investment income per share$0.22 $0.22 $0.23 $0.23 
 Quarter Ended
 March 31,
2020		June 30,
2020		September 30,
2020		December 31,
2020
Total investment income$18,679,598 $16,139,764 $16,329,142 $19,882,564 
Net investment income7,294,069 6,529,129 7,952,605 9,212,001 
Net increase (decrease) in net assets resulting from operations(112,521,747)54,748,708 43,177,627 22,772,205 
Net investment income per share$0.15 $0.14 $0.17 $0.19 
  Quarter Ended
  March 31,
2017		 June 30,
2017		 September 30,
2017		 December 31,
2017
Total investment income $30,190,770
 $31,213,767
 $29,888,058
 $31,712,037
Net investment income 17,819,433
 19,350,962
 17,150,917
 17,916,505
Net increase (decrease) in net assets resulting from operations 7,193,240
 (2,027,746) (57,496,676) 23,680,721
Net investment income per share $0.42
 $0.41
 $0.36
 $0.38
  Quarter Ended
  March 31,
2016		 June 30,
2016		 September 30,
2016		 December 31,
2016
Total investment income $26,655,870
 $28,421,860
 $27,412,457
 $31,189,370
Net investment income 9,598,083
 16,338,913
 15,831,157
 17,108,720
Net increase in net assets resulting from operations 12,427,258
 6,686,827
 7,879,673
 7,262,674
Net investment income per share $0.29
 $0.49
 $0.42
 $0.42
12.13. Subsequent Events
Subsequent to December 31, 2021, the Company made approximately $126.3 million of new commitments, of which $104.8 million closed and funded. The $104.8 million of investments consists of $75.8 million of first lien senior secured debt investments and $28.9 million of equity and joint venture investments. The weighted average yield of the debt investments was 6.3%. In addition, the Company funded $7.9 million of previously committed revolvers and delayed draw term loans.
On February 2018,1, 2022, the Board granted 409,000 restricted sharesdeclared a quarterly distribution of the Company’s common stock$0.23 per share payable on February 23, 2022 to certain employees. These restricted shares had a total grant date fair valueholders of approximately $4.4 million, which will be expensed on a straight-line basis over a four-year vesting period.record as of February 16, 2022.





EXHIBIT INDEX
F-92
NumberExhibit
10.23†
Form of Indemnification Agreement.*
10.24†
Form of Amendment to Executive Retention Agreement.*
10.25†
Triangle Capital Corporation Amended and Restated Change in Control Retention Policy.*
11
Statement re computation of per share earnings (Included in the consolidated financial statements filed with this report).*
21.1
List of Subsidiaries.*
23.1
Consent of Ernst & Young LLP.*
31.1
Chief Executive Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2
Chief Financial Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1
Chief Executive Officer Certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2
Chief Financial Officer Certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
†Management contract or compensatory plan or arrangement.
*Filed herewith.
**Furnished herewith.