UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM10-Q
(Mark One)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
COMMISSION FILE NUMBER:814-01196
AB Private Credit Investors Corporation
(Exact name of registrant as specified in its charter)
Maryland | 47-5049745 | |
(State of incorporation) | (I.R.S. Employer Identification No.) |
1345 AvenuesAvenue of the Americas
New York, NY 10105
(Address of principal executive offices)
(212)969-1000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
— | — | — |
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.01 per share
(Title of Class)
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 ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of RegulationRegulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | 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 is a shell company (as defined in Rule12b-2 of the Exchange Act). Yes ☐ No ☒
The issuer had 12,498,94619,729,142.943 shares of common stock, $0.01 par value per share, outstanding as of November 14, 2019.June 3, 2020.
AB PRIVATE CREDIT INVESTORS CORPORATION
FORM10-Q FOR THE QUARTER ENDED September 30, 2019March 31, 2020
INDEX | PAGE NO. | |||||
PART I. | FINANCIAL INFORMATION | |||||
Item 1. | Consolidated Financial Statements | 3 | ||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | |||||
Item 4. | Controls and Procedures | |||||
PART II. | OTHER INFORMATION | |||||
Item 1. | Legal Proceedings | |||||
Item 1A. | Risk Factors | |||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||||
Item 3. | Defaults Upon Senior Securities | |||||
Item 4. | Mine Safety Disclosures | |||||
Item 5. | Other Information | |||||
Item 6. | Exhibits | |||||
Item 1. | Financial Statements |
AB Private Credit Investors Corporation
Consolidated Statements of Assets and Liabilities
As of September 30, 2019 (Unaudited) | As of December 31, 2018 | As of March 31, 2020 (Unaudited) | As of December 31, 2019 | |||||||||||||
Assets | Assets |
| Assets |
| ||||||||||||
Investments, at fair value (amortized cost of $299,530,860 and $138,512,243, respectively) | $ | 298,399,417 | $ | 137,803,133 | ||||||||||||
Investments, at fair value (amortized cost of $391,572,934 and $346,873,740, respectively) | $ | 370,688,284 | $ | 345,025,318 | ||||||||||||
Cash and cash equivalents | 38,078,058 | 2,510,208 | 16,251,625 | 14,931,791 | ||||||||||||
Receivable for fund shares | 41,873,602 | 19,909,278 | ||||||||||||||
Interest receivable | 1,978,991 | 808,707 | 1,609,436 | 1,849,816 | ||||||||||||
Receivable for investments sold | 187,501 | — | 74,494 | 286,935 | ||||||||||||
Deferred financing costs | 46,313 | 64,959 | ||||||||||||||
Prepaid expenses | 180,502 | 102,390 | 44,568 | 112,166 | ||||||||||||
Deferred financing costs | 55,200 | 172,580 | ||||||||||||||
Receivable for fund shares sold | — | 12,566,810 | ||||||||||||||
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Total assets | $ | 338,879,669 | $ | 153,963,828 | $ | 430,588,322 | $ | 382,180,263 | ||||||||
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Liabilities | Liabilities |
| Liabilities |
| ||||||||||||
Notes payable (net of unamortized discount and debt issuance costs of $3,195,624 and $0, respectively) | $ | 209,954,376 | $ | — | ||||||||||||
Interest and borrowing expenses payable | 1,291,433 | 247,376 | ||||||||||||||
Management fees payable | 956,799 | 830,130 | ||||||||||||||
Notes payable (net of unamortized discount of $29,882 and $32,835, respectively and debt issuance costs of $2,405,817 and $2,780,532, respectively) | $ | 210,714,301 | $ | 210,336,633 | ||||||||||||
Credit facility payable | 43,000,000 | 19,500,000 | ||||||||||||||
Interest and borrowings expenses payable | 1,765,221 | 3,412,567 | ||||||||||||||
Distribution payable | 767,927 | 403,999 | 1,619,867 | 964,833 | ||||||||||||
Incentive fee payable | 654,162 | 199,862 | 1,331,530 | 1,049,291 | ||||||||||||
Management fees payable | 1,147,126 | 1,053,696 | ||||||||||||||
Professional fees payable | 494,338 | 491,910 | 917,012 | 650,840 | ||||||||||||
Payable to Adviser | 440,560 | 90,446 | 476,585 | 355,255 | ||||||||||||
Administrator and custodian fees payable | 146,101 | 215,678 | 132,404 | 260,061 | ||||||||||||
Accrued expenses and other liabilities | 98,774 | — | ||||||||||||||
Directors’ fees payable | 41,773 | — | 50,000 | — | ||||||||||||
Accrued expenses and other liabilities | 10,747 | — | ||||||||||||||
Miscellaneous payable | 25,295 | 25,295 | ||||||||||||||
Transfer agent fees payable | 8,104 | 10,717 | 20,155 | 9,397 | ||||||||||||
Credit facility payable | — | 88,200,000 | ||||||||||||||
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Total liabilities | $ | 214,766,320 | $ | 90,690,118 | $ | 261,298,270 | $ | 237,617,868 | ||||||||
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Commitments and Contingencies (Note 6) | Commitments and Contingencies (Note 6) |
| Commitments and Contingencies (Note 6) |
| ||||||||||||
Net Assets | Net Assets |
| Net Assets |
| ||||||||||||
Common stock, par value $0.01 per share (200,000,000 shares authorized, 12,498,946 and 6,383,672 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively) | 124,989 | 63,837 | ||||||||||||||
Common stock, par value $0.01 per share (200,000,000 shares authorized, 19,729,143 and 14,627,401 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively) | 197,291 | 146,274 | ||||||||||||||
Paid-in capital in excess of par value | 125,005,710 | 63,838,147 | 189,821,799 | 146,096,298 | ||||||||||||
Distributable earnings (accumulated loss) | (1,017,350 | ) | (628,274 | ) | (20,729,038 | ) | (1,680,177 | ) | ||||||||
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Total net assets | $ | 124,113,349 | $ | 63,273,710 | $ | 169,290,052 | $ | 144,562,395 | ||||||||
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Total liabilities and net assets | $ | 338,879,669 | $ | 153,963,828 | $ | 430,588,322 | $ | 382,180,263 | ||||||||
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Net asset value per share | $ | 9.93 | $ | 9.91 | $ | 8.58 | $ | 9.88 | ||||||||
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See Notes to Unaudited Consolidated Financial Statements
AB Private Credit Investors Corporation
Unaudited Consolidated Statements of Operations
For the three months ended September 30, | For the nine months ended September 30, | For the Three Months Ended March 31, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | |||||||||||||||||||
Investment Income: | Investment Income: |
| Investment Income: |
| ||||||||||||||||||||
Interest income, net of amortization/accretion | $ | 5,718,631 | $ | 1,581,876 | $ | 14,290,652 | $ | 3,189,114 | $ | 7,052,300 | $ | 3,400,195 | ||||||||||||
Payment-in-kind interest | 104,675 | — | 166,946 | — | 206,351 | 28,637 | ||||||||||||||||||
Other fee income | 35,731 | 2,479 | 171,072 | 2,479 | 182,600 | — | ||||||||||||||||||
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Total investment income | 5,859,037 | 1,584,355 | 14,628,670 | 3,191,593 | 7,441,251 | 3,428,832 | ||||||||||||||||||
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Expenses: | Expenses: |
| Expenses: |
| ||||||||||||||||||||
Interest and borrowing expenses | 2,424,364 | 494,991 | 5,844,084 | 927,005 | 2,568,667 | 1,409,152 | ||||||||||||||||||
Management fees | 1,017,059 | 281,892 | 2,477,129 | 560,765 | 1,352,351 | 615,859 | ||||||||||||||||||
Income-based incentive fee | 769,023 | 106,087 | ||||||||||||||||||||||
Professional fees | 379,792 | 379,861 | 1,197,314 | 1,624,403 | 547,269 | 342,361 | ||||||||||||||||||
Collateral management fees | 367,534 | — | 693,343 | — | 459,059 | — | ||||||||||||||||||
Income-based incentive fee | 180,792 | 66,206 | 586,627 | 66,206 | ||||||||||||||||||||
Administration and custodian fees | 113,524 | 39,546 | 259,233 | 155,504 | 91,783 | 65,825 | ||||||||||||||||||
Directors’ fees | 50,000 | 37,500 | ||||||||||||||||||||||
Insurance expenses | 68,338 | 62,383 | 193,013 | 185,116 | 67,596 | 61,027 | ||||||||||||||||||
Directors’ fees | 37,500 | 37,223 | 112,500 | 108,346 | ||||||||||||||||||||
Transfer agent fees | 8,104 | 561 | 19,203 | 561 | 10,758 | 4,662 | ||||||||||||||||||
Offering costs | — | 52,221 | — | 156,089 | ||||||||||||||||||||
Other expenses | 103,084 | 78,595 | 318,440 | 231,873 | 235,122 | 55,914 | ||||||||||||||||||
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Total expenses | 4,700,091 | 1,493,479 | 11,700,886 | 4,015,868 | 6,151,628 | 2,698,387 | ||||||||||||||||||
Waived collateral management fees | (367,534 | ) | — | (693,343 | ) | — | (459,059 | ) | — | |||||||||||||||
Expense reimbursement from Adviser | (31,875 | ) | (462,465 | ) | (447,556 | ) | (2,052,539 | ) | (89,757 | ) | (156,418 | ) | ||||||||||||
Waived management fees | (60,261 | ) | (39,913 | ) | (191,359 | ) | (77,203 | ) | (1,227,046 | ) | (63,171 | ) | ||||||||||||
Waived incentive fees | (56,255 | ) | (32,302 | ) | (132,327 | ) | (32,302 | ) | (486,784 | ) | (76,072 | ) | ||||||||||||
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Net expenses | 4,184,166 | 958,799 | 10,236,301 | 1,853,824 | 3,888,982 | 2,402,726 | ||||||||||||||||||
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Net investment income before taxes | 1,674,871 | 625,556 | 4,392,369 | 1,337,769 | 3,552,269 | 1,026,106 | ||||||||||||||||||
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Excise tax expense | — | — | — | 3 | — | — | ||||||||||||||||||
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Net investment income | 1,674,871 | 625,556 | 4,392,369 | 1,337,766 | 3,552,269 | 1,026,106 | ||||||||||||||||||
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Net realized and change in unrealized gains (losses) on investment transactions: | Net realized and change in unrealized gains (losses) on investment transactions: |
| Net realized and change in unrealized gains (losses) on investment transactions: |
| ||||||||||||||||||||
Net realized gain (loss) from investments | 76,718 | — | 64,058 | — | (13,369 | ) | (1,754 | ) | ||||||||||||||||
Net change in unrealized appreciation (depreciation) from investments | (470,046 | ) | 25,402 | (422,333 | ) | (20,769 | ) | |||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments | (19,036,228 | ) | 358,007 | |||||||||||||||||||||
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Net realized and change in unrealized gains (losses) | (393,328 | ) | 25,402 | (358,275 | ) | (20,769 | ) | |||||||||||||||||
Net realized and change in unrealized gains (losses) on investment transactions | (19,049,597 | ) | 356,253 | |||||||||||||||||||||
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Net increase in net assets resulting from operations | $ | 1,281,543 | $ | 650,958 | $ | 4,034,094 | $ | 1,316,997 | ||||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (15,497,328 | ) | $ | 1,382,359 | |||||||||||||||||||
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Net investment income per share (basic and diluted): | Net investment income per share (basic and diluted): |
| Net investment income per share (basic and diluted): |
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Net investment income per share (basic and diluted): | $ | 0.15 | $ | 0.15 | $ | 0.48 | $ | 0.41 | $ | 0.24 | $ | 0.15 | ||||||||||||
Earnings per share (basic and diluted): | $ | 0.11 | $ | 0.16 | $ | 0.44 | $ | 0.40 | $ | (1.06 | ) | $ | 0.20 | |||||||||||
Weighted average shares outstanding: | 11,226,276 | 4,168,629 | 9,182,983 | 3,258,111 | 14,683,464 | 6,914,873 |
See Notes to Unaudited Consolidated Financial Statements
AB Private Credit Investors Corporation
Unaudited Consolidated Statements of Changes in Net Assets
Common Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||
Shares | Par Amount | Paid in Capital in Excess of Par | Distributable Earnings | Total Net Assets | Shares | Par Amount | Paid in Capital in Excess of Par | Distributable Earnings | Total Net Assets | |||||||||||||||||||||||||||||||
Net assets at June 30, 2019 | 10,620,261 | $ | 106,203 | $ | 106,234,097 | $ | (623,964 | ) | $ | 105,716,336 | ||||||||||||||||||||||||||||||
Net assets at December 31, 2019 | 14,627,401 | $ | 146,274 | $ | 146,096,298 | $ | (1,680,177 | ) | $ | 144,562,395 | ||||||||||||||||||||||||||||||
Increase (decrease) in net assets resulting from operations: | Increase (decrease) in net assets resulting from operations: |
| Increase (decrease) in net assets resulting from operations: |
| ||||||||||||||||||||||||||||||||||||
Net investment income | — | — | — | 1,674,871 | 1,674,871 | — | — | — | 3,552,269 | 3,552,269 | ||||||||||||||||||||||||||||||
Net realized gain (loss) on investments | — | — | — | 76,718 | 76,718 | — | — | — | (13,369 | ) | (13,369 | ) | ||||||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments | — | — | — | (470,046 | ) | (470,046 | ) | — | — | — | (19,036,228 | ) | (19,036,228 | ) | ||||||||||||||||||||||||||
Capital transactions: | Capital transactions: |
| Capital transactions: |
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Issuance of common stock | 1,795,822 | 17,957 | 17,949,853 | — | 17,967,810 | 4,876,625 | 48,766 | 41,796,086 | — | 41,844,852 | ||||||||||||||||||||||||||||||
Issuance of common shares pursuant to distribution reinvestment plan | 91,341 | 913 | 906,089 | — | 907,002 | 225,117 | 2,251 | 1,929,415 | — | 1,931,666 | ||||||||||||||||||||||||||||||
Repurchase of common stock | (8,478 | ) | (84 | ) | (84,329 | ) | — | (84,413 | ) | — | — | — | — | — | ||||||||||||||||||||||||||
Distributions to shareholders | — | — | — | (1,674,929 | ) | (1,674,929 | ) | |||||||||||||||||||||||||||||||||
Distributions to stockholders | — | — | — | (3,551,533 | ) | (3,551,533 | ) | |||||||||||||||||||||||||||||||||
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Total increase (decrease) for the three months ended September 30, 2019 | 1,878,685 | 18,786 | 18,771,613 | (393,386 | ) | 18,397,013 | ||||||||||||||||||||||||||||||||||
Total increase (decrease) for the three months ended March 31, 2020 | 5,101,742 | 51,017 | 43,725,501 | (19,048,861 | ) | 24,727,657 | ||||||||||||||||||||||||||||||||||
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Net assets at September 30, 2019 | 12,498,946 | $ | 124,989 | $ | 125,005,710 | $ | (1,017,350 | ) | $ | 124,113,349 | ||||||||||||||||||||||||||||||
Net assets at March 31, 2020 | 19,729,143 | $ | 197,291 | $ | 189,821,799 | $ | (20,729,038 | ) | $ | 169,290,052 | ||||||||||||||||||||||||||||||
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Distributions declared per share | — | $ | — | $ | — | $ | 0.13 | $ | 0.13 | — | $ | — | $ | — | $ | 0.24 | $ | 0.24 | ||||||||||||||||||||||
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Net assets at December 31, 2018 | 6,383,672 | $ | 63,837 | $ | 63,838,147 | $ | (628,274 | ) | $ | 63,273,710 | ||||||||||||||||||||||||||||||
Increase (decrease) in net assets resulting from operations: |
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Net investment income | — | — | — | 4,392,369 | 4,392,369 | |||||||||||||||||||||||||||||||||||
Net realized gain (loss) on investments | — | — | — | 64,058 | 64,058 | |||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments | — | — | — | (422,333 | ) | (422,333 | ) | |||||||||||||||||||||||||||||||||
Capital transactions: |
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Issuance of common stock | 5,896,977 | 58,969 | 58,997,766 | — | 59,056,735 | |||||||||||||||||||||||||||||||||||
Issuance of common shares pursuant to distribution reinvestment plan | 241,635 | 2,416 | 2,401,687 | — | 2,404,103 | |||||||||||||||||||||||||||||||||||
Repurchase of common stock | (23,338 | ) | (233 | ) | (231,890 | ) | — | (232,123 | ) | |||||||||||||||||||||||||||||||
Distributions to shareholders | — | — | — | (4,423,170 | ) | (4,423,170 | ) | |||||||||||||||||||||||||||||||||
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Total increase (decrease) for the nine months ended September 30, 2019 | 6,115,274 | 61,152 | 61,167,563 | (389,076 | ) | 60,839,639 | ||||||||||||||||||||||||||||||||||
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Net assets at September 30, 2019 | 12,498,946 | $ | 124,989 | $ | 125,005,710 | $ | (1,017,350 | ) | $ | 124,113,349 | ||||||||||||||||||||||||||||||
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Distributions declared per share | — | $ | — | $ | — | $ | 0.44 | $ | 0.44 | |||||||||||||||||||||||||||||||
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See Notes to Unaudited Consolidated Financial Statements
AB Private Credit Investors Corporation
Unaudited Consolidated Statements of Changes in Net Assets
Common Stock | ||||||||||||||||||||
Shares | Par Amount | Paid in Capital in Excess of Par | Distributable Earnings | Total Net Assets | ||||||||||||||||
Net assets at December 31, 2018 | 6,383,672 | $ | 63,837 | $ | 63,838,147 | $ | (628,274 | ) | $ | 63,273,710 | ||||||||||
Increase (decrease) in net assets resulting from operations: |
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Net investment income | — | — | — | 1,026,106 | 1,026,106 | |||||||||||||||
Net realized gain (loss) on investments | — | — | — | (1,754 | ) | (1,754 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) on investments | — | — | — | 358,007 | 358,007 | |||||||||||||||
Capital transactions: |
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Issuance of common stock | 2,317,068 | 23,171 | 23,102,137 | — | 23,125,308 | |||||||||||||||
Issuance of common shares pursuant to distribution reinvestment plan | 58,319 | 583 | 580,714 | — | 581,297 | |||||||||||||||
Repurchase of common stock | (7,331 | ) | (74 | ) | (72,594 | ) | — | (72,668 | ) | |||||||||||
Distributions to stockholders | — | — | — | (1,057,242 | ) | (1,057,242 | ) | |||||||||||||
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Total increase (decrease) for the three months ended March 31, 2019 | 2,368,056 | 23,680 | 23,610,257 | 325,117 | 23,959,054 | |||||||||||||||
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Net assets at March 31, 2019 | 8,751,728 | $ | 87,517 | $ | 87,448,404 | $ | (303,157 | ) | $ | 87,232,764 | ||||||||||
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Distributions declared per share | — | $ | — | $ | — | $ | 0.15 | $ | 0.15 | |||||||||||
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Common Stock | ||||||||||||||||||||
Shares | Par Amount | Paid in Capital in Excess of Par | Distributable Earnings | Total Net Assets | ||||||||||||||||
Net assets at June 30, 2018 | 3,458,778 | $ | 34,588 | $ | 34,634,602 | $ | (37,865 | ) | $ | 34,631,325 | ||||||||||
Increase (decrease) in net assets resulting from operations: |
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Net investment income | — | — | — | 625,556 | 625,556 | |||||||||||||||
Net realized gain (loss) on investments | — | — | — | — | — | |||||||||||||||
Net change in unrealized appreciation (depreciation) on investments | — | — | — | 25,402 | 25,402 | |||||||||||||||
Capital transactions: |
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Issuance of common stock | 1,577,979 | 15,780 | 15,897,011 | — | 15,912,791 | |||||||||||||||
Issuance of common shares pursuant to distribution reinvestment plan | 34,652 | 346 | 347,562 | — | 347,908 | |||||||||||||||
Distributions to shareholders | — | — | — | (625,565 | ) | (625,565 | ) | |||||||||||||
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Total increase (decrease) for the three months ended September 30, 2018 | 1,612,631 | 16,126 | 16,244,573 | 25,393 | 16,286,092 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net assets at September 30, 2018 | 5,071,409 | $ | 50,714 | $ | 50,879,175 | $ | (12,472 | ) | $ | 50,917,417 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Distributions declared per share | — | $ | — | $ | — | $ | 0.12 | $ | 0.12 | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net assets at December 31, 2017 | 2,417,371 | $ | 24,174 | $ | 24,152,786 | $ | 55,423 | $ | 24,232,383 | |||||||||||
Increase (decrease) in net assets resulting from operations: |
| |||||||||||||||||||
Net investment income | — | — | — | 1,337,766 | 1,337,766 | |||||||||||||||
Net realized gain (loss) on investments | — | — | — | — | — | |||||||||||||||
Net change in unrealized appreciation (depreciation) on investments | — | — | — | (20,769 | ) | (20,769 | ) | |||||||||||||
Capital transactions: |
| |||||||||||||||||||
Issuance of common stock | 2,576,996 | 25,770 | 25,954,821 | — | 25,980,591 | |||||||||||||||
Issuance of common shares pursuant to distribution reinvestment plan | 77,042 | 770 | 771,568 | — | 772,338 | |||||||||||||||
Distributions to shareholders | — | — | — | (1,384,892 | ) | (1,384,892 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total increase (decrease) for the nine months ended September 30, 2018 | 2,654,038 | 26,540 | 26,726,389 | (67,895 | ) | 26,685,034 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net assets at September 30, 2018 | 5,071,409 | $ | 50,714 | $ | 50,879,175 | $ | (12,472 | ) | $ | 50,917,417 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Distributions declared per share | — | $ | — | $ | — | $ | 0.37 | $ | 0.37 | |||||||||||
|
|
|
|
|
|
|
|
|
|
See Notes to Unaudited Consolidated Financial Statements
AB Private Credit Investors Corporation
Unaudited Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2019 | Nine Months Ended September 30, 2018 | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | |||||||||||||
Cash flows from operating activities | Cash flows from operating activities |
| Cash flows from operating activities |
| ||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 4,034,094 | $ | 1,316,997 | $ | (15,497,328 | ) | $ | 1,382,359 | |||||||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used for) operating activities: | Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used for) operating activities: |
| Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used for) operating activities: |
| ||||||||||||
Purchases of investments | (191,726,921 | ) | (67,235,166 | ) | (57,511,820 | ) | (60,724,441 | ) | ||||||||
Payment-in-kind investments | (166,946 | ) | — | (206,351 | ) | (28,637 | ) | |||||||||
Proceeds from sales of investments and principal repayments | 31,722,080 | 5,780,804 | 13,458,168 | 2,479,560 | ||||||||||||
Net realized (gain) loss on investments | (64,058 | ) | — | 13,369 | 1,754 | |||||||||||
Net change in unrealized (appreciation) depreciation on investments | 422,333 | 20,769 | 19,036,228 | (358,007 | ) | |||||||||||
Amortization of premium and accretion of discount, net | (782,772 | ) | (122,140 | ) | ||||||||||||
Amortization of premium and (accretion) of discount, net | (452,560 | ) | (124,006 | ) | ||||||||||||
Amortization of debt issuance and deferred financing costs | 640,997 | 288,965 | 396,314 | 142,897 | ||||||||||||
Amortization of deferred offering costs | — | 156,089 | ||||||||||||||
Increase (decrease) in operating assets and liabilities: | Increase (decrease) in operating assets and liabilities: |
| Increase (decrease) in operating assets and liabilities: |
| ||||||||||||
(Increase) decrease in receivable for investments sold | (187,501 | ) | (5,633 | ) | 212,441 | (66,507 | ) | |||||||||
(Increase) decrease in interest receivable | (1,170,284 | ) | (387,074 | ) | 240,380 | (352,249 | ) | |||||||||
(Increase) decrease in receivable from Adviser | — | (626,976 | ) | |||||||||||||
(Increase) decrease in prepaid expenses | (78,112 | ) | (62,384 | ) | 67,598 | 61,027 | ||||||||||
Increase (decrease) in investments purchased payable | — | 136,194 | ||||||||||||||
Increase (decrease) in management fees payable | 126,669 | 483,562 | 93,430 | 552,688 | ||||||||||||
Increase (decrease) in payable to Adviser | 350,114 | — | 121,330 | (87,581 | ) | |||||||||||
Increase (decrease) in administrator and custodian fees payable | (69,577 | ) | 155,504 | (127,657 | ) | (69,439 | ) | |||||||||
Increase (decrease) in professional fees payable | 2,428 | 788,635 | 266,172 | 134,064 | ||||||||||||
Increase (decrease) in excise tax payable | — | (2,336 | ) | |||||||||||||
Increase (decrease) in incentive fees payable | 454,300 | 33,904 | 282,239 | 30,015 | ||||||||||||
Increase (decrease) in directors’ fees payable | 41,773 | (187 | ) | 50,000 | 34,500 | |||||||||||
Increase (decrease) in transfer agent fees payable | (2,613 | ) | 6,855 | 10,758 | 4,663 | |||||||||||
Increase (decrease) in interest and borrowing expenses payable | 1,044,057 | 62,392 | ||||||||||||||
Increase (decrease) in accrued organization and offering costs | — | (90,308 | ) | |||||||||||||
Increase (decrease) in interest and borrowings expenses payable | (1,647,346 | ) | 702,105 | |||||||||||||
Increase (decrease) in accrued expenses and other liabilities | 10,747 | 92,110 | 98,774 | 10,710 | ||||||||||||
|
|
|
| |||||||||||||
Net cash provided by (used for) operating activities | (155,399,192 | ) | (59,345,618 | ) | (41,095,861 | ) | (56,138,331 | ) | ||||||||
|
|
|
| |||||||||||||
Cash flows from financing activities | Cash flows from financing activities |
| ||||||||||||||
Issuance of common stock | 71,623,545 | 32,437,843 | 19,880,528 | 20,266,912 | ||||||||||||
Repurchase of common stock | (232,123 | ) | — | — | (72,668 | ) | ||||||||||
Distributions paid | (1,655,139 | ) | (334,897 | ) | (964,833 | ) | (403,998 | ) | ||||||||
Financing costs paid | (3,686,406 | ) | (180,492 | ) | — | (899,946 | ) | |||||||||
Borrowings on notes | 213,117,165 | — | ||||||||||||||
Borrowings on credit facility | 214,750,000 | 77,750,000 | 56,000,000 | 144,000,000 | ||||||||||||
Repayments of credit facility | (302,950,000 | ) | (65,000,000 | ) | (32,500,000 | ) | (90,200,000 | ) | ||||||||
|
|
|
| |||||||||||||
Net cash provided by (used for) financing activities | 190,967,042 | 44,672,454 | 42,415,695 | 72,690,300 | ||||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in cash | 35,567,850 | (14,673,164 | ) | 1,319,834 | 16,551,969 | |||||||||||
Cash and cash equivalents, beginning of period | 2,510,208 | 17,139,858 | 14,931,791 | 2,510,208 | ||||||||||||
|
|
|
| |||||||||||||
Cash and cash equivalents, end of period | $ | 38,078,058 | $ | 2,466,694 | $ | 16,251,625 | $ | 19,062,177 | ||||||||
|
|
|
| |||||||||||||
Supplemental andnon-cash financing activities | Supplemental andnon-cash financing activities |
| Supplemental andnon-cash financing activities |
| ||||||||||||
Cash paid during the period for interest | $ | 3,986,622 | $ | 531,923 | $ | 3,787,866 | $ | 528,010 | ||||||||
Issuance of common shares pursuant to distribution reinvestment plan | $ | 2,404,103 | $ | 772,338 | $ | 1,931,666 | $ | 581,297 | ||||||||
Excise taxes paid | $ | — | $ | 2,339 |
See Notes to Unaudited Consolidated Financial Statements
AB Private Credit Investors Corporation
Consolidated Schedule of Investments as of September 30, 2019March 31, 2020
(Unaudited)
Portfolio Company | Industry | Facility Type | Interest | Maturity | Funded Par Amount | Cost | Fair Value | |||||||||||||
Investments at Fair Value - 240.42% + * # ^ | ||||||||||||||||||||
U.S. Corporate Debt - 235.48% |
| |||||||||||||||||||
1st Lien/Senior Secured Debt - 229.34% |
| |||||||||||||||||||
BEP Borrower Holdco, | Business Services | Term Loan A | 7.05% (L + 5.00%; 1.00% Floor) | 06/12/2024 | $ | 3,435,477 | $ | 3,386,457 | $ | 3,383,945 | ||||||||||
BEP Borrower Holdco, | Business Services | Revolver | 7.05% (L + 5.00%; 1.00% Floor) | 06/12/2024 | — | (6,058 | ) | (6,442 | ) | |||||||||||
BEP Borrower Holdco, | Business Services | Delayed Draw Term Loan B | 7.05% (L + 5.00%; 1.00% Floor) | 06/12/2024 | — | (24,228 | ) | (25,766 | ) | |||||||||||
BEP Borrower Holdco, | Business Services | Delayed Draw Term Loan A | 7.05% (L + 5.00%; 1.00% Floor) | 06/12/2024 | — | (12,114 | ) | (12,883 | ) | |||||||||||
Edgewood Partners Holdings | Business Services | Term Loan | 6.29% (L + 4.25%; 1.00% Floor) | 09/06/2024 | 3,122,652 | 3,094,448 | 3,091,425 | |||||||||||||
Edgewood Partners Holdings | Business Services | Delayed Draw Term Loan | 6.29% (L + 4.25%; 1.00% Floor) | 09/06/2024 | 235,723 | 220,678 | 218,781 | |||||||||||||
IFS Acquisition, LLC(1) (4) | Business Services | Term Loan | 6.55% (L + 4.50%; 1.00% Floor) | 11/21/2023 | 6,254,241 | 6,170,690 | 6,254,241 | |||||||||||||
IFS Acquisition, LLC(2) (4) | Business Services | Revolver | 8.50% (P + 3.50%; 1.00% Floor) | 11/21/2023 | 99,551 | 92,229 | 99,551 | |||||||||||||
IFS Acquisition, LLC(1) (4) | Business Services | Delayed Draw Term Loan | 6.53% (L + 4.50%; 1.00% Floor) | 11/21/2023 | 1,598,847 | 1,575,339 | 1,598,847 | |||||||||||||
Metametrics, Inc.(1) | Business Services | Term Loan | 8.13% (L + 6.00%; 1.00% Floor) | 09/10/2025 | 5,904,056 | 5,786,808 | 5,785,975 | |||||||||||||
Metametrics, Inc.(2) (3) | Business Services | Revolver | 8.13% (L + 6.00%; 1.00% Floor) | 09/10/2025 | — | (12,902 | ) | (13,024 | ) | |||||||||||
Nuvei Technologies | Business Services | Initial U.S. Term Loan Commitment | 7.06% (L + 5.00%; 1.00% Floor) | 09/29/2025 | 310,334 | 300,079 | 305,679 | |||||||||||||
Nuvei Technologies | Business Services | Initial Canadian Term Loan Commitment | 7.06% (L + 5.00%; 1.00% Floor) | 09/29/2025 | 1,836,987 | 1,828,144 | 1,809,432 | |||||||||||||
Quirch Foods Holdings, | Business Services | Term Loan B | 8.05% (L + 6.00%) | 12/19/2025 | 2,122,895 | 2,103,117 | 2,101,666 | |||||||||||||
Single Digits, Inc.(1) | Business Services | Term Loan | 8.11% (L + 6.00%; 1.00% Floor) | 12/21/2023 | 3,304,212 | 3,273,874 | 3,271,169 | |||||||||||||
Single Digits, Inc.(2) (3) | Business Services | Revolver | 8.11% (L + 6.00%; 1.00% Floor) | 12/21/2023 | — | (3,523 | ) | (4,162 | ) | |||||||||||
Single Digits, Inc.(2) (3) | Business Services | Delayed Draw Term Loan | 8.11% (L + 6.00%; 1.00% Floor) | 12/21/2023 | — | (9,269 | ) | (10,404 | ) | |||||||||||
Smile Brands, Inc.(2) | Business Services | Revolver | 8.50% (P + 3.50%) | 10/12/2023 | 38,221 | 36,138 | 35,673 | |||||||||||||
Smile Brands, Inc.(1) | Business Services | Term Loan | 6.70% (L + 4.50%) | 10/12/2024 | 1,643,828 | 1,629,920 | 1,627,390 | |||||||||||||
Smile Brands, Inc.(2) | Business Services | Delayed Draw Term Loan | 6.70% (L + 4.50%) | 10/12/2024 | 301,879 | 296,548 | 295,523 | |||||||||||||
GPS Hospitality Holding | ConsumerNon-Cyclical | Term Loan B | 6.35% (L + 4.25%) | 12/08/2025 | 2,435,452 | 2,402,456 | 2,398,920 | |||||||||||||
Blink Holdings, Inc.(1) | ConsumerNon-Cyclical | Term Loan | 6.79% (L + 4.75%; 1.00% Floor) | 11/08/2024 | 1,664,454 | 1,647,809 | 1,647,809 | |||||||||||||
Blink Holdings, Inc.(2) | ConsumerNon-Cyclical | Delayed Draw Term Loan | 6.79% (L + 4.75%; 1.00% Floor) | 11/08/2024 | 642,012 | 630,109 | 630,109 | |||||||||||||
Captain D’s, Inc.(1) | ConsumerNon-Cyclical | Term Loan | 6.54% (L + 4.50%; 1.00% Floor) | 12/15/2023 | 2,008,379 | 1,993,377 | 1,988,295 | |||||||||||||
Captain D’s, Inc.(2) (6) | ConsumerNon-Cyclical | Revolver | 6.54% (L + 4.50%; 1.00% Floor) | 12/15/2023 | 108,579 | 107,118 | 106,629 | |||||||||||||
Lucky Bucks, LLC(1) | ConsumerNon-Cyclical | Term Loan | 9.62% (L + 7.00%; 1.00% Floor) | 04/10/2023 | 991,381 | 977,040 | 974,032 | |||||||||||||
Lucky Bucks, LLC(1) (2) (7) | Consumer Non-Cyclical | Delayed Draw Term Loan | 9.52% (L + 7.00%; 1.00% Floor) | 04/10/2023 | 1,013,315 | 997,713 | 993,925 | |||||||||||||
PF Growth Partners, | ConsumerNon-Cyclical | Term Loan | 7.04% (L + 5.00%) | 07/11/2025 | 2,037,317 | 2,017,439 | 2,016,944 | |||||||||||||
PF Growth Partners, | ConsumerNon-Cyclical | Delayed Draw Term Loan | 9.00% (P + 4.00%) | 07/11/2025 | 24,029 | 20,517 | 20,424 | |||||||||||||
Tropical Smoothie Cafe, | ConsumerNon-Cyclical | Term Loan | 7.54% (L + 5.50%; 1.00% Floor) | 09/24/2023 | 1,346,714 | 1,335,656 | 1,346,714 | |||||||||||||
Tropical Smoothie Cafe, | ConsumerNon-Cyclical | Revolver | 7.54% (L + 5.50%; 1.00% Floor) | 09/24/2023 | 38,574 | 37,458 | 38,574 | |||||||||||||
5 Bars, LLC | Digital Infrastructure & Services | Term Loan | 8.56% (L + 6.50%; 1.00% Floor) | 09/27/2024 | 4,742,121 | 4,670,990 | 4,670,990 | |||||||||||||
5 Bars, LLC(2) (3) | Digital Infrastructure & Services | Revolver | 8.56% (L + 6.50%; 1.00% Floor) | 09/27/2024 | — | (9,679 | ) | (9,700 | ) | |||||||||||
5 Bars, LLC(2) (3) | Digital Infrastructure & Services | Delayed Draw Term Loan | 8.56% (L + 6.50%; 1.00% Floor) | 09/27/2024 | — | (51,640 | ) | (51,733 | ) | |||||||||||
D1 Holdings LLC | Digital Infrastructure & Services | Note | 7.00% | 06/26/2020 | 31,682 | 31,682 | 31,682 | |||||||||||||
Fuze, Inc.(1) | Digital Infrastructure & Services | Term Loan | 8.34% (L + 6.25%; 1.00% Floor) | 09/20/2024 | 11,015,029 | 10,960,123 | 10,959,956 | |||||||||||||
Fuze, Inc.(2) (3) | Digital Infrastructure & Services | Revolver | 8.34% (L + 6.25%; 1.00% Floor) | 09/20/2024 | — | (6,441 | ) | (6,480 | ) | |||||||||||
Fuze, Inc.(2) (3) | Digital Infrastructure & Services | Delayed Draw Term Loan | 8.34% (L + 6.25%; 1.00% Floor) | 09/20/2024 | — | (12,895 | ) | (12,959 | ) | |||||||||||
InSite Wireless Group, | Digital Infrastructure & Services | Term Loan | 6.61% (L + 4.57%; 0.50% Floor) | 03/15/2023 | 6,285,306 | 6,135,697 | 6,119,356 | |||||||||||||
InSite Wireless Group, | Digital Infrastructure & Services | Revolver | 6.62% (L + 4.57%; 0.50% Floor) | 03/15/2023 | 78,892 | 76,842 | 76,427 | |||||||||||||
Maintech, Incorporated(3) | Digital Infrastructure & Services | Term Loan | (L + 7.00%; 1.00% Floor) | 12/28/2022 | — | (1,376 | ) | — | ||||||||||||
AEG Holding Company, | Education | Term Loan | 8.05% (L + 6.00%; 1.00% Floor) | 11/20/2023 | 6,121,828 | 6,033,717 | 5,999,391 | |||||||||||||
AEG Holding Company, | Education | Term Loan | 8.04% (L + 6.00%; 1.00% Floor) | 11/20/2023 | 1,880,970 | 1,845,118 | 1,843,350 | |||||||||||||
AEG Holding Company, | Education | Revolver | 8.03% (L + 6.00%; 1.00% Floor) | 11/20/2023 | 614,275 | 596,663 | 591,938 | |||||||||||||
AEG Holding Company, Inc.(1) | Education | Delayed Draw Term Loan | 8.04% (L + 6.00%; 1.00% Floor) | 11/20/2023 | 1,080,920 | 1,065,969 | 1,059,302 |
Portfolio Company | Industry | Facility Type | Interest | Maturity | Funded Par Amount | Cost | Fair Value | |||||||||||||
Investments at Fair Value—218.97% + * # ^ | ||||||||||||||||||||
U.S. Corporate Debt—213.17% |
| |||||||||||||||||||
1st Lien/Senior Secured Debt—208.82% |
| |||||||||||||||||||
Amercareroyal, LLC(1) | Business Services | Term Loan | 6.81% (L + 5.00%; 1.00% Floor) | 11/25/2025 | $ | 4,682,293 | $ | 4,637,733 | $ | 4,495,001 | ||||||||||
BEP Borrower Holdco, | Business Services | Term Loan A | 5.24% (L + 4.25%; 1.00% Floor) | 06/12/2024 | 3,435,477 | 3,391,099 | 3,126,284 | |||||||||||||
BEP Borrower Holdco, | Business Services | Revolver | 5.24% (L + 4.25%; 1.00% Floor) | 06/12/2024 | — | (5,436 | ) | (38,649 | ) | |||||||||||
BEP Borrower Holdco, | Business Services | Delayed Draw Term Loan B | 5.24% (L + 4.25%; 1.00% Floor) | 06/12/2024 | — | (21,683 | ) | (219,012 | ) | |||||||||||
BEP Borrower Holdco, | Business Services | Delayed Draw Term Loan A | 5.24% (L + 4.25%; 1.00% Floor) | 06/12/2024 | — | (10,842 | ) | (109,506 | ) | |||||||||||
Edgewood Partners Holdings LLC(1) | Business Services | Term Loan | 5.25% (L + 4.25%; 1.00% Floor) | 09/06/2024 | 5,608,636 | 5,560,183 | 5,356,248 | |||||||||||||
Metametrics, Inc.(1) | Business Services | Term Loan | 7.20% (L + 5.75%; 1.00% Floor) | 09/10/2025 | 5,889,296 | 5,780,306 | 5,594,831 | |||||||||||||
Metametrics, Inc.(2) | Business Services | Revolver | 7.20% (L + 5.75%; 1.00% Floor) | 09/10/2025 | 434,122 | 422,287 | 401,563 | |||||||||||||
Quirch Foods Holdings, | Business Services | Term Loan B | 6.93% (L + 6.00%) | 12/19/2025 | 2,112,200 | 2,093,820 | 2,027,712 | |||||||||||||
Single Digits, Inc.(1) | Business Services | Term Loan | 7.46% (L + 6.00%; 1.00% Floor) | 12/21/2023 | 3,287,566 | 3,260,548 | 3,024,560 | |||||||||||||
Single Digits, Inc.(2) (3) | Business Services | Revolver | 7.46% (L + 6.00%; 1.00% Floor) | 12/21/2023 | — | (3,110 | ) | (33,292 | ) | |||||||||||
Single Digits, Inc.(2) (3) | Business Services | Delayed Draw Term Loan | 7.46% (L + 6.00%; 1.00% Floor) | 12/21/2023 | — | (7,777 | ) | (83,230 | ) | |||||||||||
Smile Brands, Inc.(1) | Business Services | Term Loan | 6.28% (L + 4.50%) | 10/12/2024 | 1,635,547 | 1,622,871 | 1,545,592 | |||||||||||||
Smile Brands, Inc.(2) | Business Services | Revolver | 6.75% (P + 3.50%) | 10/12/2023 | 225,363 | 223,546 | 211,349 | |||||||||||||
Smile Brands, Inc.(2) | Business Services | Delayed Draw Term Loan | 6.28% (L + 4.50%) | 10/12/2024 | 482,126 | 477,274 | 447,247 | |||||||||||||
Blink Holdings, Inc.(1) | ConsumerNon-Cyclical | Term Loan | 6.64% (L + 5.50%; 1.00% Floor) | 11/08/2024 | 1,656,068 | 1,640,917 | 1,548,424 | |||||||||||||
Blink Holdings, Inc.(2) | ConsumerNon-Cyclical | Delayed Draw Term Loan | 6.77% (L + 5.50%; 1.00% Floor) | 11/08/2024 | 824,456 | 810,306 | 730,439 | |||||||||||||
Blink Holdings, Inc.(1) | ConsumerNon-Cyclical | Delayed Draw Term Loan | 6.57% (L + 5.50%; 1.00% Floor) | 11/08/2024 | 1,184,620 | 1,173,757 | 1,107,619 | |||||||||||||
Captain D’s, Inc.(1) | ConsumerNon-Cyclical | Term Loan | 5.50% (L + 4.50%; 1.00% Floor) | 12/15/2023 | 2,015,002 | 2,001,600 | 1,793,352 | |||||||||||||
Captain D’s, Inc.(2) | ConsumerNon-Cyclical | Revolver | 6.75% (P + 3.50%; 1.00% Floor) | 12/15/2023 | 145,851 | 144,552 | 124,278 | |||||||||||||
GPS Hospitality Holding Company LLC(1) | Consumer Non-Cyclical | Term Loan B | 5.70% (L + 4.25%) | 12/08/2025 | 2,423,183 | 2,392,545 | 2,120,285 | |||||||||||||
PF Growth Partners, LLC(1) | ConsumerNon-Cyclical | Term Loan | 6.45% (L + 5.00%) | 07/11/2025 | 2,027,105 | 2,008,798 | 1,824,394 | |||||||||||||
PF Growth Partners, LLC(2) | ConsumerNon-Cyclical | Delayed Draw Term Loan | 6.12% (L + 5.00%) | 07/11/2025 | 120,143 | 116,938 | 84,100 | |||||||||||||
Tropical Smoothie Cafe, LLC(1) | ConsumerNon-Cyclical | Term Loan | 6.50% (L + 5.50%; 1.00% Floor) | 09/24/2023 | 1,336,588 | 1,326,849 | 1,303,173 | |||||||||||||
Tropical Smoothie Cafe, LLC | ConsumerNon-Cyclical | Revolver | 6.50% (L + 5.50%; 1.00% Floor) | 09/24/2023 | 135,009 | 134,028 | 131,634 | |||||||||||||
Tropical Smoothie Cafe, LLC(1) (2) | ConsumerNon-Cyclical | Delayed Draw Term Loan | 6.50% (L + 5.50%; 1.00% Floor) | 09/24/2023 | 7,698,435 | 7,626,577 | 7,505,464 | |||||||||||||
5 Bars, LLC(1) | Digital Infrastructure & Services | Term Loan | 7.50% (L + 6.50%; 1.00% Floor) | 09/27/2024 | 4,742,121 | 4,677,270 | 4,623,568 | |||||||||||||
5 Bars, LLC(2) (3) | Digital Infrastructure & Services | Revolver | 7.50% (L + 6.50%; 1.00% Floor) | 09/27/2024 | — | (8,720 | ) | (16,166 | ) | |||||||||||
5 Bars, LLC(2) (3) | Digital Infrastructure & Services | Delayed Draw Term Loan | 7.50% (L + 6.50%; 1.00% Floor) | 09/27/2024 | — | (46,509 | ) | (86,220 | ) | |||||||||||
Ahead Data Blue, LLC(1) | Digital Infrastructure & Services | Term Loan | 6.20% (L + 4.75%; 1.00% Floor) | 11/08/2024 | 5,419,884 | 5,318,877 | 5,203,088 | |||||||||||||
Ahead Data Blue, LLC(2) | Digital Infrastructure & Services | Revolver | 7.00% (P + 3.75%; 1.00% Floor) | 11/08/2024 | 443,657 | 425,932 | 405,207 |
Portfolio Company Facility Type Interest BCP Raptor II, LLC(1) (8) Brazos Delaware II, LLC(1) (8) Nine Point Energy, LLC(1) Nine Point Energy, LLC(2) Nine Point Energy, LLC(2) American Physician Partners, LLC(1) American Physician Partners, LLC(2) American Physician Partners, LLC(1) (2) (3) Analogic Corporation(1) Analogic Corporation(2) (3) CutisPharma Inc.(1) CutisPharma, Inc.(2) (3) CutisPharma, Inc.(2) (3) Delaware Valley Management Holdings, Inc.(1) Delaware Valley Management Holdings, Inc.(2) (3) Delaware Valley Management Holdings, Inc.(2) (3) Ethos Veterinary Health GHA Buyer, Inc.(1) GHA Buyer, Inc.(2) (3) GHA Buyer, Inc.(2) (3) INH Buyer, Inc.(1) INH Buyer, Inc.(2) (3) Pace Health Companies, LLC(1) Pace Health Companies, Pinnacle Dermatology Management, LLC(1) Pinnacle Dermatology Management, LLC(2) (3) Pinnacle Dermatology Management, LLC(1) (2) (3) Platinum Dermatology Partners, LLC(1) Platinum Dermatology Partners, LLC(1) Platinum Dermatology Partners, LLC(9) Platinum Dermatology Partners, LLC(1) (10) RCP Encore Acquisition, Inc.(1) The Center for Orthopedic and Research Excellence, Inc.(1) The Center for Orthopedic and Research Excellence, Inc.(2) The Center for Orthopedic and Research Excellence, Theranest, LLC(1) Theranest, LLC(2) (3) Theranest, LLC(1) (2) (3) RxBenefits, Inc.(1) RxBenefits, Inc.(2) (3) AMI US Holdings, Inc.(1) AMI US Holdings, Inc.(2) Avetta, LLC(1) Avetta, LLC(2) (3) Avetta, LLC(1) Avetta, LLC(2) (3) Broadway Technology, LLC(1) Broadway Technology, Businesssolver.com, Inc.(1) Businesssolver.com, Inc.(2) Businesssolver.com, Inc.(2) Degreed, Inc.(1) Industry Maturity Funded
Par Amount Cost Fair
Value Energy Term Loan 6.79% (L + 4.75%) 11/03/2025 $ 5,726,562 $ 5,732,541 $ 5,130,026 Energy Term Loan B 6.05% (L + 4.00%) 05/21/2025 4,055,427 3,959,783 3,736,062 Energy Term Loan 7.54% (L + 5.50%; 1.00% Floor) 06/07/2024 4,921,875 4,827,497 4,823,438 Energy Revolver 7.55% (L + 5.50%; 1.00% Floor) 06/07/2024 153,125 146,907 146,563 Energy Delayed Draw Term Loan 7.54% (L + 5.50%; 1.00% Floor) 06/07/2024 437,500 404,031 402,500 Healthcare & HCIT Term Loan A 8.60% (L + 6.50%; 1.00% Floor) 12/21/2021 5,639,988 5,537,329 5,555,388 Healthcare & HCIT Revolver 8.60% (L + 6.50%; 1.00% Floor) 12/21/2021 177,601 172,750 170,941 Healthcare & HCIT Delayed Draw Term Loan 8.60% (L + 6.50%; 1.00% Floor) 12/21/2021 1,002,296 992,233 986,329 Healthcare & HCIT Term Loan 8.04% (L + 6.00%; 1.00% Floor) 06/24/2024 2,982,913 2,933,965 2,923,255 Healthcare & HCIT Revolver 8.04% (L + 6.00%; 1.00% Floor) 06/22/2023 28,696 24,153 22,956 Healthcare & HCIT Term Loan 7.79% (L + 5.75%; 1.00% Floor) 03/21/2023 7,292,268 7,175,226 7,164,653 Healthcare & HCIT Revolver 7.79% (L + 5.75%; 1.00% Floor) 03/21/2023 — (7,646 ) (8,452 ) Healthcare & HCIT Delayed Draw Term Loan 7.79% (L + 5.75%; 1.00% Floor) 03/21/2023 — (30,582 ) (33,806 ) Healthcare & HCIT Term Loan 7.81% (L + 5.75%; 1.00% Floor) 03/21/2024 4,425,237 4,344,333 4,336,732 Healthcare & HCIT Revolver 7.81% (L + 5.75%; 1.00% Floor) 03/21/2024 — (9,449 ) (10,538 ) Healthcare & HCIT Delayed Draw Term Loan 7.81% (L + 5.75%; 1.00% Floor) 03/21/2024 — (59,767 ) (105,376 )
LLC(1) (2) (3) Healthcare & HCIT Term Loan 7.04% (L + 5.00%) 05/15/2026 3,388,686 3,347,657 3,346,409 Healthcare & HCIT Term Loan 7.54% (L + 5.50%; 1.00% Floor) 10/23/2023 2,003,194 1,969,673 1,963,130 Healthcare & HCIT Revolver 7.54% (L + 5.50%; 1.00% Floor) 10/23/2023 — (3,300 ) (4,050 ) Healthcare & HCIT Delayed Draw Term Loan 7.54% (L + 5.50%; 1.00% Floor) 10/23/2023 — (2,933 ) (13,500 ) Healthcare & HCIT Term Loan 8.76% (L + 6.50%; 1.00% Floor) 01/31/2025 8,643,359 8,522,975 8,513,709 Healthcare & HCIT Revolver 8.76% (L + 6.50%; 1.00% Floor) 01/31/2024 — (2,746 ) (3,088 ) Healthcare & HCIT Term Loan 6.77% (L + 4.50%; 1.00% Floor) 08/02/2024 5,426,804 5,372,976 5,372,536
LLC(2) (3) Healthcare & HCIT Revolver 6.77% (L + 4.50%; 1.00% Floor) 08/02/2024 — (6,099 ) (6,167 ) Healthcare & HCIT Term Loan 6.36% (L + 4.25%; 1.00% Floor) 05/18/2023 1,850,273 1,822,773 1,813,268 Healthcare & HCIT Revolver 6.36% (L + 4.25%; 1.00% Floor) 05/18/2023 — (6,844 ) (9,369 ) Healthcare & HCIT Delayed Draw Term Loan 6.36% (L + 4.25%; 1.00% Floor) 05/18/2023 4,473,445 4,405,541 4,379,760 Healthcare & HCIT Term Loan 8.59% (L + 6.25%; 1.00% Floor) 01/03/2023 3,152,594 3,101,335 3,089,542 Healthcare & HCIT Specified Delayed Draw Term Loan Commitment 10.25% (P + 5.25%; 1.00% Floor) 01/03/2023 1,964,451 1,937,952 1,925,162 Healthcare & HCIT Revolver 10.25% (P + 5.25%; 1.00% Floor) 01/03/2023 498,592 492,048 488,620 Healthcare & HCIT General Delayed Draw Term Loan Commitment 8.36% (L + 6.25%; 1.00% Floor) 01/03/2023 1,425,972 1,398,906 1,397,452 Healthcare & HCIT Term Loan 7.16% (L + 4.75%; 1.00% Floor) 06/09/2025 3,984,727 3,946,536 3,944,880 Healthcare & HCIT Term Loan 7.56% (L + 5.50%; 1.00% Floor) 08/15/2025 5,006,357 4,920,074 4,918,746 Healthcare & HCIT Revolver 7.56% (L + 5.50%; 1.00% Floor) 08/15/2025 103,580 91,701 91,496
Inc.(2) (3) Healthcare & HCIT Delayed Draw Term Loan 7.56% (L + 5.50%; 1.00% Floor) 08/15/2025 — (14,790 ) (15,105 ) Healthcare & HCIT Term Loan 7.26% (L + 5.00%; 1.00% Floor) 07/24/2023 3,000,000 2,952,789 2,940,000 Healthcare & HCIT Revolver 7.26% (L + 5.00%; 1.00% Floor) 07/24/2023 — (6,565 ) (8,571 ) Healthcare & HCIT Delayed Draw Term Loan 7.26% (L + 5.00%; 1.00% Floor) 07/24/2023 1,062,214 1,019,183 1,017,214 Pharmaceutical Term Loan A 7.70% (L + 5.50%; 1.00% Floor) 03/28/2025 5,792,538 5,792,538 5,734,613 Pharmaceutical Revolver 7.70% (L + 5.50%; 1.00% Floor) 03/29/2024 — — (5,757 ) Software & Services Term Loan 7.60% (L + 5.50%; 1.00% Floor) 04/01/2025 8,277,402 8,069,042 8,111,854 Software & Services Revolver 7.55% (L + 5.50%; 1.00% Floor) 04/01/2024 612,979 593,232 591,087 Software & Services Term Loan 7.55% (L + 5.50%; 1.00% Floor) 04/10/2024 3,295,461 3,246,375 3,229,552 Software & Services Revolver 7.55% (L + 5.50%; 1.00% Floor) 04/10/2024 — (7,016 ) (9,888 ) Software & Services Incremental Term Loan B 7.55% (L + 5.50%; 1.00% Floor) 04/10/2024 4,337,713 4,256,111 4,250,959 Software & Services Delayed Draw Term Loan 7.55% (L + 5.50%; 1.00% Floor) 04/10/2024 — (11,754 ) (12,360 ) Software & Services Term Loan 7.07% (L + 4.75%; 1.00% Floor) 04/01/2024 4,455,799 4,371,515 4,366,683
LLC(2) (3) Software & Services Revolver 7.07% (L + 4.75%; 1.00% Floor) 04/01/2024 — (6,925 ) (7,677 ) Software & Services Term Loan 9.66% (L + 7.50%; 1.00% Floor) 05/15/2023 2,588,235 2,549,068 2,588,235 Software & Services Revolver 9.55% (L + 7.50%; 1.00% Floor) 05/15/2023 $ 71,176 $ 66,490 $ 71,176 Software & Services Delayed Draw Term Loan 9.66% (L + 7.50%; 1.00% Floor) 05/15/2023 278,235 273,302 278,235 Software & Services Term Loan 8.40% (L + 6.35%; 1.00% Floor) 05/31/2024 2,228,335 2,206,931 2,206,051
Portfolio Company Facility Type Interest Degreed, Inc.(2) (3) Degreed, Inc.(2) (3) Drilling Info Holdings, E2open LLC(1) E2open LLC(2) (3) Engage2Excel, Inc.(1) Engage2Excel, Inc.(1) Engage2Excel, Inc.(2) Engage2Excel, Inc.(2) (3) EnterpriseDB Corporation(1) EnterpriseDB Exterro, Inc.(1) Exterro, Inc.(2) (3) Exterro, Inc.(1) Finalsite Holdings, Inc.(1) Finalsite Holdings, Inc.(2) (3) Genesis Acquisition Co.(1) Genesis Acquisition Co.(2) (3) Genesis Acquisition Co.(2) (3) GS AcquisitionCo, Inc.(1) GS AcquisitionCo, Inc.(2) GS AcquisitionCo, Inc.(2) Ministry Brands, LLC(1) Ministry Brands, Rhode Holdings, Inc.(1) Rhode Holdings, Inc.(2) (3) Rhode Holdings, Inc.(2) (3) Selligent, Inc. Selligent, Inc.(2) (3) Sirsi Corporation(1) Sirsi Corporation(2) Sugarcrm Inc.(1) Sugarcrm, Inc.(2) Summit Infrastructure Group, Inc.(1) Summit Infrastructure Group, Inc.(2) (3) Summit Infrastructure Group, Inc.(2) (3) Swiftpage, Inc. Swiftpage, Inc. Swiftpage, Inc.(2) (3) Symplr Software, Inc.(1) (11) Symplr Software, Inc.(2) (11) TRGRP, Inc.(1) TRGRP, Inc.(2) (3) TRGRP, Inc.(1) Velocity Purchaser Corporation(1) Velocity Purchaser Corporation(1) Velocity Purchaser Corporation(2) (3) Watermark Insights, LLC(1) Watermark Insights, LLC(1) Purchasing Power, LLC(1) Dillon Logistics, Inc.(1) Dillon Logistics, Inc.(1) Dillon Logistics, Inc.(2) (12) OSG Bulk Ships, Inc.(1) Total 1st Lien/Senior Secured Debt See Notes to Unaudited Consolidated Financial Statements Industry Maturity Funded
Par Amount Cost Fair Value Software & Services Revolver 8.40% (L + 6.35%; 1.00% Floor) 05/31/2024 — (3,947 ) (4,178 ) Software & Services Delayed Draw Term Loan 8.40% (L + 6.35%; 1.00% Floor) 05/31/2024 — (13,810 ) (14,623 )
Inc.(1) (8) Software & Services Term Loan 6.29% (L + 4.25%) 07/30/2025 3,403,830 3,390,454 3,386,810 Software & Services Term Loan 7.87% (L + 5.75%; 1.00% Floor) 11/26/2024 4,957,292 4,891,445 4,907,719 Software & Services Revolver 7.87% (L + 5.75%; 1.00% Floor) 11/26/2024 — (4,024 ) (3,114 ) Software & Services Term Loan 8.71% (L + 6.50%; 1.00% Floor) 03/07/2023 2,977,748 2,932,154 2,918,193 Software & Services Term Loan 9.12% (L + 6.50%; 1.00% Floor) 03/07/2023 1,033,074 1,014,326 1,012,412 Software & Services Revolver 10.50% (P + 5.50%; 1.00% Floor) 03/07/2023 188,452 182,166 180,914 Software & Services Delayed Draw Term Loan 10.50% (P + 5.50%; 1.00% Floor) 03/07/2023 — (5,911 ) (6,645 ) Software & Services Term Loan 7.33% (L + 4.50%; 0.75% PIK; 1.00% Floor) 06/21/2024 7,814,444 7,664,598 7,658,156
Corporation(2) (3) Software & Services Revolver 7.33% (L + 4.50%; 0.75% PIK; 1.00% Floor) 06/21/2024 — (13,167 ) (13,928 ) Software & Services Term Loan 7.64% (L + 5.50%; 1.00% Floor) 05/31/2024 6,067,644 5,950,715 5,946,291 Software & Services Revolver 7.64% (L + 5.50%; 1.00% Floor) 05/31/2024 — (4,429 ) (6,600 ) Software & Services Initial Term Loan 7.64% (L + 5.50%; 1.00% Floor) 05/31/2024 2,932,875 2,888,709 2,874,218 Software & Services Term Loan 7.76% (L + 5.50%; 1.00% Floor) 09/25/2024 3,341,470 3,291,234 3,291,348 Software & Services Revolver 7.76% (L + 5.50%; 1.00% Floor) 09/25/2024 — (3,695 ) (3,797 ) Software & Services Term Loan 6.10% (L + 4.00%) 07/31/2024 1,366,142 1,343,481 1,338,819 Software & Services Revolver 6.11% (L + 4.00%) 07/31/2024 70,840 67,564 66,792 Software & Services Delayed Draw Term Loan 6.10% (L + 4.00%) 07/31/2024 — (2,954 ) (3,644 ) Software & Services Term Loan 7.80% (L + 5.75%; 1.00% Floor) 05/24/2024 2,723,599 2,690,436 2,689,554 Software & Services Second Supplemental Delayed Draw Term Loan 7.80% (L + 5.75%; 1.00% Floor) 05/24/2024 205,536 191,314 190,877 Software & Services Revolver 7.80% (L + 5.75%; 1.00% Floor) 05/24/2024 60,452 56,786 56,674 Software & Services Term Loan 6.04% (L + 4.00%; 1.00% Floor) 12/02/2022 3,152,486 3,141,507 3,136,724
LLC(1) (2) (3) Software & Services Delayed Draw Term Loan 6.04% (L + 4.00%; 1.00% Floor) 12/02/2022 659,271 654,399 652,314 Software & Services Term Loan 8.72% (L + 5.50%; 1.00% PIK; 1.00% Floor) 05/02/2025 4,465,729 4,425,389 4,376,414 Software & Services Revolver 8.60% (L + 6.50%; 1.00% Floor) 05/02/2025 107,425 103,918 99,906 Software & Services Delayed Draw Term Loan 8.69% (L + 5.50%; 1.00% PIK; 1.00% Floor) 05/02/2025 69,827 64,209 63,758 Software & Services Term Loan 7.61% (L + 5.50%; 1.00% Floor) 11/05/2024 1,911,885 1,887,450 1,883,207 Software & Services Revolver 7.61% (L + 5.50%; 1.00% Floor) 11/03/2023 — (2,474 ) (3,010 ) Software & Services Term Loan 6.78% (L + 4.75%; 1.00% Floor) 03/15/2024 9,022,523 8,895,481 8,887,185 Software & Services Revolver 6.79% (L + 4.75%; 1.00% Floor) 03/15/2024 221,496 214,116 213,190 Software & Services Term Loan 8.79% (L + 6.75%; 1.00% Floor) 07/31/2024 3,235,401 3,187,753 3,203,047 Software & Services Revolver 9.39% (L + 6.75%; 1.00% Floor) 07/31/2024 186,146 181,754 183,044 Software & Services Term Loan 7.03% (L + 5.00%; 1.00% Floor) 03/15/2024 7,035,977 6,904,702 6,895,257 Software & Services Revolver 7.03% (L + 5.00%; 1.00% Floor) 03/15/2024 — (10,057 ) (11,257 ) Software & Services Delayed Draw Term Loan 7.03% (L + 5.00%; 1.00% Floor) 03/15/2024 — (20,114 ) (22,515 ) Software & Services Term Loan A 7.04% (L + 5.00%; 1.00% Floor) 06/13/2023 230,377 226,202 225,769 Software & Services Term Loan 7.06% (L + 5.00%; 1.00% Floor) 06/13/2023 2,503,126 2,465,201 2,453,063 Software & Services Revolver 7.06% (L + 5.00%; 1.00% Floor) 06/13/2023 — (3,354 ) (4,507 ) Software & Services Term Loan 8.10% (L + 6.00%) 11/28/2025 5,771,447 5,691,726 5,684,875 Software & Services Revolver 8.10% (L + 6.00%) 11/30/2023 240,978 237,274 236,531 Software & Services Term Loan 9.04% (L + 4.50%; 2.50% PIK; 1.00% Floor) 11/01/2023 4,775,514 4,693,346 4,680,004 Software & Services Revolver 9.04% (L + 4.50%; 2.50% PIK; 1.00% Floor) 11/01/2023 — (5,468 ) (6,666 ) Software & Services Incremental Term Loan 9.04% (L + 4.50%; 2.50% PIK; 1.00% Floor) 11/01/2023 1,067,144 1,046,692 1,045,801 Software & Services Term Loan 8.05% (L + 6.00%; 1.00% Floor) 12/01/2022 2,815,750 2,780,052 2,815,750 Software & Services Term Loan 8.06% (L + 6.00%; 1.00% Floor) 12/01/2022 700,038 688,838 700,038 Software & Services Revolver 8.06% (L + 6.00%; 1.00% Floor) 12/01/2022 — (2,655 ) — Software & Services Term Loan 6.81% (L + 4.75%; 1.00% Floor) 06/07/2024 2,619,336 2,598,216 2,593,143 Software & Services Delayed Draw Term Loan 6.81% (L + 4.75%; 1.00% Floor) 06/07/2024 328,708 326,821 325,421 Specialty Finance Term Loan 9.35% (L + 7.25%; 1.00% Floor) 02/06/2024 $ 2,929,842 $ 2,881,943 $ 2,878,570 Transport &
Logistics Term Loan B 10.34% (L + 3.00%; 5.00% PIK; 1.00% Floor) 12/11/2023 1,158,111 1,138,307 1,088,624 Transport &
Logistics Term Loan A 10.34% (L + 3.00%; 5.00% PIK; 1.00% Floor) 12/11/2023 2,625,051 2,580,041 2,467,548 Transport &
Logistics Revolver 9.18% (L + 7.00%; 1.00% Floor) 12/11/2023 380,081 372,642 355,683 Transport &
Logistics Term Loan 7.10% (L + 5.00%) 12/21/2023 6,143,151 6,076,620 6,066,361 285,952,814 284,641,539
Portfolio Company Facility Type Interest 2nd Lien/Junior Secured Debt- 6.14% Brave Parent Holdings, Inc.(1) Conterra Ultra Broadband Holdings, Inc.(1) Total 2nd Lien/Junior Secured Debt Total U.S. Corporate Debt U.S. Preferred Stock- 3.60% Datarobot, Inc.(13) Degreed, Inc.(13) Heap(13) Protoscale Rubrik(13) Punchh(13) Symplr Software Intermediate Holdings, Workfront, Inc.(13) Total U.S. Preferred Stock U.S. Common Stock- 1.34% SSC TS Investments, LLC(13) (14) NC Holdings, LLC(13) (15) Leeds FEG Investors, LLC(13) INH Group Holdings(13) Aggregator, LLC(13) Total U.S. Common Stock TOTAL INVESTMENTS - 240.42%(16) Cash Equivalents- 0.01% U.S. Investment Companies- 0.01% Fidelity Government Portfolio I(17) Total U.S. Investment Companies Total Cash Equivalents LIABILITIES IN EXCESS OF OTHER ASSETS - (140.43%) NET ASSETS—100.00% Portfolio Company Interest D1 Holdings LLC EvolveIP, LLC(1) EvolveIP, LLC(2) EvolveIP, LLC(2) (3) Fuze, Inc.(1) Fuze, Inc.(2) (3) Fuze, Inc.(2) InSite Wireless Group, InSite Wireless Group, LLC Star2star Communications, LLC(1) Star2star Communications, LLC(2) (3) Star2star Communications, LLC(2) (3) AEG Holding Company, Inc.(1) AEG Holding Company, Inc.(1) AEG Holding Company, Inc. AEG Holding Company, Inc.(1) Accelerate Resources Operating, LLC Accelerate Resources Operating, LLC(2) (3) Accelerate Resources Operating, LLC(2) (3) BCP Raptor II, LLC(1) Brazos Delaware II, LLC(1) Nine Point Energy, LLC(1) Nine Point Energy, LLC(1) Nine Point Energy, LLC(1) (2) Higginbotham Insurance Agency, Inc. American Physician Partners, LLC American Physician Partners, LLC(1) American Physician Partners, LLC(2) American Physician Partners, LLC(1) Analogic Corporation(1) Analogic Corporation(2) BK Medical Holding Company, Inc. BK Medical Holding Company, Inc.(2) (3) CutisPharma, Inc.(1) CutisPharma, Inc.(2) (3) Industry Maturity Funded
Par Amount Cost Fair Value Energy Term Loan 9.76% (L + 7.50%) 04/17/2026 1,230,107 1,203,534 1,180,902 Software & Services Term Loan 10.11% (L + 8.00%; 1.00% Floor) 04/30/2027 6,537,710 6,442,487 6,439,645 7,646,021 7,620,547 293,598,835 292,262,086 Software & Services 38,190 $ 289,278 $ 289,278 Software & Services 43,819 278,541 278,540 Software & Services 189,617 696,351 696,351 Software & Services 25,397 598,212 598,201 Software & Services 24,262 275,337 275,337
Inc.(13) Software & Services 1,196 1,160,531 1,332,182 Software & Services 104,058 999,997 999,997 4,298,247 4,469,886 Business Services 62,734 $ 62,734 $ 170,010 Digital Infrastructure & Services 313,087 347,370 347,370 Education 320 321,309 359,147 Healthcare & HCIT 484,552 484,552 373,105 Software & Services 417,813 417,813 417,813 1,633,778 1,667,445 $ 299,530,860 $ 298,399,417 Money Market Portfolio 1.86% (18) 11,329 $ 11,329 $ 11,329 11,329 11,329 11,329 11,329 $ (174,297,397 ) $ 124,113,349 Industry Facility Type Maturity Funded
Par Amount Cost Fair
Value Digital Infrastructure
& Services Note 7.00% 06/26/2020 32,804 32,804 — Digital
Infrastructure &
Services Term Loan A 6.75% (L + 5.75%; 1.00% Floor) 06/07/2023 6,617,196 6,526,536 6,418,680 Digital Infrastructure
& Services Revolver 6.75% (L + 5.75%; 1.00% Floor) 06/07/2023 113,374 105,695 96,368 Digital Infrastructure
& Services Delayed Draw Term Loan 6.75% (L + 5.75%; 1.00% Floor) 06/07/2023 — (10,246 ) (22,675 ) Digital Infrastructure
& Services Term Loan 7.25% (L + 6.25%; 1.00% Floor) 09/20/2024 11,015,029 10,965,679 10,857,514 Digital Infrastructure
& Services Revolver 7.25% (L+ 6.25%; 1.00% Floor) 09/20/2024 — (5,798 ) (18,531 ) Digital Infrastructure
& Services Delayed Draw Term Loan 7.79% (L + 6.25%; 1.00% Floor) 09/20/2024 777,531 194,636 766,905
LLC(1) (2) Digital Infrastructure
& Services Term Loan 5.38% (L + 4.61%; 0.50% Floor) 03/15/2023 10,210,781 10,087,339 10,048,118 Digital Infrastructure
& Services Revolver 5.38% (L + 4.61%; 0.50% Floor) 03/15/2023 460,172 455,435 454,419 Digital Infrastructure
& Services Term Loan 6.50% (L + 5.50%; 1.00% Floor) 03/13/2025 5,444,894 5,336,539 5,335,996 Digital Infrastructure
& Services Revolver 6.50% (L + 5.50%; 1.00% Floor) 03/13/2025 — (19,025 ) (19,217 ) Digital Infrastructure
& Services Delayed Draw Term Loan 6.50% (L + 5.50%; 1.00% Floor) 03/13/2025 $ — $ (12,683 ) $ (12,812 ) Education Term Loan 7.08% (L + 6.00%; 1.00% Floor) 11/20/2023 6,090,673 6,011,995 5,816,593 Education Term Loan 7.00% (L + 6.00%; 1.00% Floor) 11/20/2023 1,871,541 1,839,991 1,787,322 Education Revolver 7.00% (L + 6.00%; 1.00% Floor) 11/20/2023 1,116,864 1,101,185 1,066,606 Education Delayed Draw Term Loan 7.00% (L + 6.00%; 1.00% Floor) 11/20/2023 1,075,502 1,062,110 1,027,104 Energy Term Loan 7.00% (L + 6.00%; 1.00% Floor) 02/24/2026 4,977,171 4,879,252 4,355,025 Energy Revolver 7.00% (L + 6.00%; 1.00% Floor) 02/24/2026 — (8,160 ) (51,846 ) Energy Delayed Draw Term Loan 7.00% (L + 6.00%; 1.00% Floor) 02/24/2026 — (57,119 ) (362,919 ) Energy Term Loan 5.74% (L + 4.75%) 11/03/2025 5,697,857 5,696,961 4,301,882 Energy Term Loan B 4.92% (L + 4.00%) 05/21/2025 4,034,893 3,943,343 2,824,425 Energy Term Loan 6.50% (L + 5.50%; 1.00% Floor) 06/07/2024 4,921,875 4,836,347 4,085,156 Energy Revolver 6.50% (L + 5.50%; 1.00% Floor) 06/07/2024 328,125 322,517 272,344 Energy Delayed Draw Term Loan 6.50% (L + 5.50%; 1.00% Floor) 06/07/2024 437,500 407,847 336,875 Financial Services Incremental Term Loan 5.25% (L + 4.25%, 1.00% Floor) 12/19/2024 3,404,667 3,371,933 3,276,992 Healthcare & HCIT Term Loan C 7.95% (L + 6.50%; 1.00% Floor) 12/21/2021 1,189,788 1,180,137 1,142,197 Healthcare & HCIT Term Loan A 7.95% (L + 6.50%; 1.00% Floor) 12/21/2021 5,498,506 5,447,151 5,278,566 Healthcare & HCIT Revolver 7.95% (L + 6.50%; 1.00% Floor) 12/21/2021 346,322 342,460 328,562 Healthcare & HCIT Delayed Draw Term Loan 7.95% (L + 6.50%; 1.00% Floor) 12/21/2021 1,037,754 1,028,688 996,243 Healthcare & HCIT Term Loan 6.25% (L + 5.25%; 1.00% Floor) 06/24/2024 2,133,542 2,103,630 2,026,865 Healthcare & HCIT Revolver 6.25% (L + 5.25%; 1.00% Floor) 06/22/2023 18,333 15,710 7,639 Healthcare & HCIT Term Loan A 6.25% (L + 5.25%; 1.00% Floor) 06/22/2024 3,002,838 2,974,096 2,882,724 Healthcare & HCIT Revolver 6.25% (L + 5.25%; 1.00% Floor) 06/22/2023 — (3,038 ) (12,869 ) Healthcare & HCIT Term Loan 6.84% (L + 5.25%; 1.00% Floor) 03/21/2023 7,292,268 7,190,658 7,073,500 Healthcare & HCIT Revolver 6.84% (L + 5.25%; 1.00% Floor) 03/21/2023 — (6,553 ) (14,488 )
See Notes to Unaudited Consolidated Financial Statements
Portfolio Company Interest CutisPharma, Inc.(2) (3) Delaware Valley Management Holdings, Inc. Delaware Valley Management Holdings, Inc. Delaware Valley Management Holdings, Inc.(2) (3) Ethos Veterinary Health LLC(1) Ethos Veterinary Health LLC(1) (2) GHA Buyer, Inc.(1) GHA Buyer, Inc.(1) GHA Buyer, Inc.(2) (3) GHA Buyer, Inc.(2) (3) GHA Buyer, Inc.(2) (3) INH Buyer, Inc.(1) INH Buyer, Inc.(2) OMH-HealthEdge Holdings, OMH-HealthEdge Holdings, Pace Health Companies, LLC(1) Pace Health Companies, LLC(2) Pinnacle Dermatology Management, LLC(1) Pinnacle Dermatology Management, LLC Pinnacle Dermatology Management, LLC(2) (3) Pinnacle Treatment Centers, Inc. Pinnacle Treatment Centers, Inc.(4) Pinnacle Treatment Centers, Platinum Dermatology Partners, LLC Platinum Dermatology Partners, LLC Platinum Dermatology Partners, LLC(5) Platinum Dermatology Partners, LLC(6) RCP Encore Acquisition, Inc.(1) The Center for Orthopedic and Research Excellence, Inc.(1) The Center for Orthopedic and Research Excellence, Inc. The Center for Orthopedic and Research Excellence, Inc.(2) (3) Industry Facility Type Maturity Funded
Par Amount Cost Fair
Value Healthcare & HCIT Delayed Draw Term Loan 6.84% (L + 5.25%; 1.00% Floor) 03/21/2023 — (6,553 ) (14,488 ) Healthcare & HCIT Term Loan 6.75% (L + 5.75%; 1.00% Floor) 03/21/2024 4,299,211 4,228,711 3,288,896 Healthcare & HCIT Revolver 6.75% (L + 5.75%; 1.00% Floor) 03/21/2024 526,880 518,399 403,063 Healthcare & HCIT Delayed Draw Term Loan 6.75% (L + 5.75%; 1.00% Floor) 03/21/2024 — (65,360 ) (1,238,167 ) Healthcare & HCIT Term Loan 5.99% (L + 5.00%) 05/15/2026 2,309,120 2,288,131 2,124,391 Healthcare & HCIT Delayed Draw Term Loan 5.99% (L + 5.00%) 05/15/2026 1,067,934 1,049,318 915,372 Healthcare & HCIT Term Loan 6.95% (L + 5.50%; 1.00% Floor) 10/23/2023 1,993,069 1,963,370 1,893,415 Healthcare & HCIT Term Loan 6.95% (L + 5.50%; 1.00% Floor) 10/23/2023 569,488 558,578 541,014 Healthcare & HCIT Revolver 6.95% (L + 5.50%; 1.00% Floor) 10/23/2023 — (2,899 ) (10,126 ) Healthcare & HCIT Delayed Draw Term Loan 6.95% (L + 5.50%; 1.00% Floor) 10/23/2023 — (4,844 ) (27,002 ) Healthcare & HCIT Delayed Draw Term Loan 6.95% (L + 5.50%; 1.00% Floor) 10/23/2023 — (5,426 ) (22,837 ) Healthcare & HCIT Term Loan 10.28% (L + 6.50%; 2.00% PIK, 1.00% Floor) 01/31/2025 8,636,935 8,526,212 7,859,611 Healthcare & HCIT Revolver 7.50% (L + 6.50%; 1.00% Floor) 01/31/2024 109,791 107,391 91,264
LLC(1) Healthcare & HCIT Term Loan 6.50% (L + 5.50%; 1.00% Floor) 10/24/2025 3,765,523 3,685,802 3,614,902
LLC(2) (3) Healthcare & HCIT Revolver 6.50% (L + 5.50%; 1.00% Floor) 10/24/2024 — (9,438 ) (18,349 ) Healthcare & HCIT Term Loan 5.95% (L + 4.50%; 1.00% Floor) 08/02/2024 5,399,670 5,351,008 5,075,690 Healthcare & HCIT Revolver 5.50% (L + 4.50%; 1.00% Floor) 08/02/2024 533,430 527,951 496,429 Healthcare & HCIT Term Loan 5.32% (L + 4.25%; 1.00% Floor) 05/18/2023 6,314,350 6,210,668 5,809,202 Healthcare & HCIT Revolver 5.37% (L + 4.25%; 1.00% Floor) 05/18/2023 322,749 318,676 296,929 Healthcare & HCIT Delayed Draw Term Loan 5.37% (L + 4.25%; 1.00% Floor) 05/18/2023 — (53,858 ) (263,091 ) Healthcare & HCIT Term Loan 8.03% (L + 6.25%; 1.00% Floor) 12/31/2022 4,247,838 4,208,129 4,162,881 Healthcare & HCIT Revolver 8.25% (P + 5.00%; 1.00% Floor) 12/31/2022 292,954 290,136 287,095
Inc.(2) (3) Healthcare & HCIT Delayed Draw Term Loan 8.25% (P + 5.00%; 1.00% Floor) 12/31/2022 — (4,107 ) (10,253 ) Healthcare & HCIT Term Loan 8.10% (L + 4.00%; 2.25% PIK, 1.00% Floor) 01/03/2023 $ 3,147,110 $ 3,110,731 $ 2,407,539 Healthcare & HCIT Specified Delayed Draw
Term Loan 8.50% (P + 3.00%; 2.25% PIK, 1.00% Floor) 01/03/2023 1,970,427 1,947,512 1,507,376 Healthcare & HCIT Revolver 8.50% (P + 3.00%; 2.25% PIK, 1.00% Floor) 01/03/2023 500,683 494,966 383,023 Healthcare & HCIT General Delayed Draw
Term Loan 8.20% (L + 4.00%; 2.25% PIK, 1.00% Floor) 01/03/2023 1,430,469 1,414,213 1,094,309 Healthcare & HCIT Term Loan 6.20% (L + 4.75%; 1.00% Floor) 06/09/2025 3,964,703 3,929,569 3,746,645 Healthcare & HCIT Term Loan 6.25% (L + 5.25%; 1.00% Floor) 08/15/2025 4,981,325 4,901,591 4,794,525 Healthcare & HCIT Revolver 6.33% (L + 5.25%; 1.00% Floor) 08/15/2025 690,532 679,592 664,637 Healthcare & HCIT Delayed Draw Term Loan 6.33% (L + 5.25%; 1.00% Floor) 08/15/2025 — (13,572 ) (49,632 )
See Notes to Unaudited Consolidated Financial Statements
Portfolio Company Interest Theranest, LLC(1) Theranest, LLC Theranest, LLC(1) (2) ZBS Alliance Animal Health, ZBS Alliance Animal Health, LLC ZBS Alliance Animal Health, RxBenefits, Inc.(1) RxBenefits, Inc.(2) AMI US Holdings, Inc.(1) AMI US Holdings, Inc.(2) Avetta, LLC(1) Avetta, LLC(2) (3) Avetta, LLC(1) Avetta, LLC(2) (3) Businesssolver.com, Inc. Businesssolver.com, Inc.(1) Businesssolver.com, Inc.(2) (3) Businesssolver.com, Inc.(1) Degreed, Inc.(1) Degreed, Inc. Degreed, Inc. Dispatch Track, LLC(1) Dispatch Track, LLC(2) Drilling Info Holdings, Inc.(1) E2open LLC(1) E2open LLC(2) Engage2Excel, Inc.(1) Engage2Excel, Inc.(1) Engage2Excel, Inc.(1) (2) (7) Engage2Excel, Inc.(2) (3) EnterpriseDB Corporation(1) EnterpriseDB Corporation(2) (3) Exterro, Inc.(1) Exterro, Inc. Exterro, Inc.(1) Finalsite Holdings, Inc.(1) Finalsite Holdings, Inc.(2) (3) Genesis Acquisition Co.(1) Genesis Acquisition Co. Genesis Acquisition Co.(2) (3) GS AcquisitionCo, Inc.(1) GS AcquisitionCo, Inc.(2) GS AcquisitionCo, Inc.(2) Kaseya Inc.(1) (8) Kaseya Inc.(2) (8) Industry Facility Type Maturity Funded
Par Amount Cost Fair
Value Healthcare & HCIT Term Loan 6.81% (L + 5.00%; 1.00% Floor) 07/24/2023 2,992,500 2,950,912 2,902,725 Healthcare & HCIT Revolver 7.25% (P + 4.00%; 1.00% Floor) 07/24/2023 428,571 422,853 415,714 Healthcare & HCIT Delayed Draw Term Loan 6.81% (L + 5.00%; 1.00% Floor) 07/24/2023 1,613,143 1,579,374 1,536,943
LLC(1) Healthcare & HCIT Term Loan 5.75% (L + 4.75%; 1.00% Floor) 11/08/2025 2,714,557 2,663,290 2,592,402 Healthcare & HCIT Revolver 5.75% (L + 4.75%; 1.00% Floor) 11/08/2025 680,340 667,523 649,725
LLC(1) (2) Healthcare & HCIT Delayed Draw Term Loan 5.75% (L + 4.75%; 1.00% Floor) 11/08/2025 2,095,447 2,010,619 1,891,345 Pharmaceutical Term Loan A 6.58% (L + 5.00%; 1.00% Floor) 03/28/2025 5,763,430 5,763,430 5,475,259 Pharmaceutical Revolver 6.00% (L + 5.00%; 1.00% Floor) 03/29/2024 469,151 464,531 440,363 Software & Services Term Loan 6.34% (L + 5.25%; 1.00% Floor) 04/01/2025 8,235,807 8,093,648 7,947,554 Software & Services Revolver 6.39% (L + 5.25%; 1.00% Floor) 04/01/2024 1,007,037 989,120 968,725 Software & Services Term Loan 6.82% (L + 5.75%; 1.00% Floor) 04/10/2024 3,278,775 3,202,758 3,164,018 Software & Services Revolver 6.82% (L + 5.75%; 1.00% Floor) 04/10/2024 — (6,687 ) (17,304 ) Software & Services Incremental Term Loan B 6.82% (L + 5.75%; 1.00% Floor) 04/10/2024 4,315,915 4,242,622 4,164,858 Software & Services Delayed Draw Term Loan 6.82% (L + 5.75%; 1.00% Floor) 04/10/2024 — (10,480 ) — Software & Services Term Loan 8.81% (L + 7.50%; 1.00% Floor) 05/15/2023 1,390,037 1,362,730 1,337,911 Software & Services Term Loan 9.19% (L + 7.50%; 1.00% Floor) 05/15/2023 2,588,235 2,553,710 2,491,176 Software & Services Revolver 9.19% (L + 7.50%; 1.00% Floor) 05/15/2023 — (4,117 ) (12,132 ) Software & Services Delayed Draw Term Loan 9.19% (L + 7.50%; 1.00% Floor) 05/15/2023 388,235 385,254 373,676 Software & Services Term Loan 7.35% (L + 6.35%; 1.00% Floor) 05/31/2024 2,228,335 2,208,906 2,189,784 Software & Services Revolver 7.35% (L + 6.35%; 1.00% Floor) 05/31/2024 417,813 414,320 410,585 Software & Services Delayed Draw Term Loan 7.35% (L + 6.35%; 1.00% Floor) 05/31/2024 2,924,689 2,853,263 2,874,092 Software & Services Term Loan 6.41% (L + 4.50%; 1.00% Floor) 12/17/2024 6,038,593 5,953,108 5,736,663 Software & Services Revolver 6.41% (L + 4.50%; 1.00% Floor) 12/17/2024 132,849 128,575 117,753 Software & Services Term Loan 5.24% (L + 4.25%) 07/30/2025 3,386,643 3,374,308 3,149,578 Software & Services Term Loan 7.36% (L + 5.75%; 1.00% Floor) 11/26/2024 4,932,505 4,872,158 4,611,892 Software & Services Revolver 6.95% (L + 5.75%; 1.00% Floor) 11/26/2024 155,682 152,044 135,444 Software & Services Term Loan 8.42% (L + 6.50%; 1.00% Floor) 03/07/2023 1,027,882 1,011,702 914,815 Software & Services Term Loan 8.40% (L + 6.50%; 1.00% Floor) 03/07/2023 2,962,633 2,923,106 2,636,743 Software & Services Revolver 7.71% (L + 6.50%; 1.00% Floor) 03/07/2023 257,552 253,005 216,092 Software & Services Delayed Draw Term Loan 8.75% (P + 5.50%; 1.00% Floor) 03/07/2023 — (5,056 ) (66,449 ) Software & Services Term Loan 6.50% (L + 4.50%; 0.75% PIK; 1.00% Floor) 06/21/2024 7,844,102 7,708,704 7,706,831 Software & Services Revolver 6.50% (L + 4.50%; 0.75% PIK; 1.00% Floor) 06/21/2024 — (11,797 ) (12,186 ) Software & Services Term Loan 6.76% (L + 5.50%; 1.00% Floor) 05/31/2024 5,809,123 5,703,908 5,780,077 Software & Services Revolver 7.75% (P + 4.50%; 1.00% Floor) 05/31/2024 330,000 325,357 328,350 Software & Services Initial Term Loan 6.76% (L + 5.50%; 1.00% Floor) 05/31/2024 2,793,450 2,755,165 2,779,483 Software & Services Term Loan 7.28% (L + 5.50%; 1.00% Floor) 09/25/2024 3,324,594 3,278,954 3,224,856 Software & Services Revolver 7.75% (P + 4.50%; 1.00% Floor) 09/25/2024 — (3,327 ) (7,594 ) Software & Services Term Loan 5.20% (L + 3.75%) 07/31/2024 1,359,260 1,338,765 1,247,121 Software & Services Revolver 4.73% (L + 3.75%) 07/31/2024 202,400 199,435 185,702 Software & Services Delayed Draw Term Loan 4.74% (L + 3.75%) 07/31/2024 — (2,656 ) (26,424 ) Software & Services Term Loan 6.83% (L + 5.75%; 1.00% Floor) 05/24/2024 3,553,584 3,513,527 3,429,208 Software & Services Second Supplemental
Delayed Draw Term Loan 6.83% (L + 5.75%; 1.00% Floor) 05/24/2024 1,149,970 1,135,849 1,081,288 Software & Services Revolver 6.83% (L + 5.75%; 1.00% Floor) 05/24/2024 218,809 214,527 205,407 Software & Services Term Loan 8.09% (L + 4.00%; 3.00% PIK; 1.00% Floor) 05/02/2025 4,844,900 4,800,677 4,687,441 Software & Services Revolver 7.50% (L + 6.50%; 1.00% Floor) 05/02/2025 372,230 369,014 360,011
See Notes to Unaudited Consolidated Financial Statements
Portfolio Company Interest Kaseya Inc.(2) (8) Kaseya Inc.(2) (3) (8) Ministry Brands, LLC(1) Ministry Brands, LLC(1) Real Capital Analytics, Inc.(1) Real Capital Analytics, Inc.(2) Real Capital Analytics, Inc.(1) Selligent, Inc.(15) Selligent, Inc.(2) (3) (15) Sirsi Corporation(1) Sirsi Smartlinx Solutions, LLC(1) Smartlinx Solutions, Sugarcrm, Inc.(1) Sugarcrm, Inc. Summit Infrastructure Group, Inc.(1) Summit Infrastructure Group, Inc.(2) (3) Summit Infrastructure Group, Inc.(2) (3) Swiftpage, Inc. Swiftpage, Inc. Swiftpage, Inc. Symplr Software, Inc.(1) Symplr Software, Inc. Telesoft Holdings, LLC Telesoft Holdings, LLC(2) TRGRP, Inc.(1) TRGRP, Inc. TRGRP, Inc.(1) Velocity Purchaser Corporation(1) Velocity Purchaser Corporation(1) Velocity Purchaser Corporation Watermark Insights, LLC(1) Watermark Insights, LLC(1) Purchasing Power, LLC(1) Dillon Logistics, Inc. Dillon Logistics, Inc. Dillon Logistics, Inc.(2) (10) OSG Bulk Ships, Inc.(1) Total U.S. 1st Lien/Senior Secured Debt 2nd Lien/Junior Secured Debt—4.35% Brave Parent Holdings, Inc.(1) Industry Facility Type Maturity Funded
Par Amount Cost Fair
Value Software & Services Delayed Draw Term Loan 8.09% (L + 4.00%; 3.00% PIK; 1.00% Floor) 05/02/2025 $ 70,128 $ 64,905 $ 57,337 Software & Services Delayed Draw Term Loan 8.09% (L + 4.00%; 3.00% PIK; 1.00% Floor) 05/02/2025 — (2,286 ) (5,939 ) Software & Services Term Loan 5.62% (L + 4.00%; 1.00% Floor) 12/02/2022 3,136,744 3,127,383 3,058,325 Software & Services Delayed Draw Term Loan 5.62% (L + 4.00%; 1.00% Floor) 12/02/2022 655,979 654,010 639,579 Software & Services Term Loan 6.91% (L + 5.00%, 1.00% Floor) 10/02/2024 4,863,178 4,840,938 4,765,915 Software & Services Revolver 6.32% (L + 5.00%, 1.00% Floor) 10/02/2024 555,792 552,635 541,897 Software & Services First Supplemental Term
Loan
6.91% (L + 5.00%, 1.00% Floor) 10/02/2024 3,019,297 3,005,101 2,958,911 Software & Services Term Loan 6.96% (L + 5.50%; 1.00% Floor) 11/05/2024 1,902,253 1,879,343 1,845,186 Software & Services Revolver 6.96% (L + 5.50%; 1.00% Floor) 11/03/2023 — (2,174 ) (6,020 ) Software & Services Term Loan 5.75% (L + 4.75%; 1.00% Floor) 03/15/2024 8,908,313 8,796,304 8,551,981
Corporation(2) (9) Software & Services Revolver 5.75% (L + 4.75%; 1.00% Floor) 03/15/2024 110,748 104,042 88,599 Software & Services Term Loan 7.00% (L + 6.00%; 1.00% Floor) 03/04/2026 5,779,256 5,664,318 5,620,327
LLC(2) (3) Software & Services Revolver 7.00% (L + 6.00%; 1.00% Floor) 03/04/2026 — (5,131 ) (14,286 ) Software & Services Term Loan 7.50% (L + 6.50%; 1.00% Floor) 07/31/2024 3,600,024 3,550,598 3,573,024 Software & Services Revolver 7.50% (L + 6.50%; 1.00% Floor) 07/31/2024 310,244 306,236 307,917 Software & Services Term Loan 5.20% (L + 4.00%; 1.00% Floor) 03/15/2024 7,003,611 6,886,326 7,003,611 Software & Services Revolver 5.20% (L + 4.00%; 1.00% Floor) 03/15/2024 — (8,963 ) — Software & Services Delayed Draw Term Loan 5.20% (L + 4.00%; 1.00% Floor) 03/15/2024 — (17,902 ) — Software & Services Term Loan A 6.13% (L + 5.00%; 1.00% Floor) 06/13/2023 229,216 225,645 221,194 Software & Services Term Loan 6.00% (L + 5.00%; 1.00% Floor) 06/13/2023 2,490,452 2,456,950 2,403,286 Software & Services Revolver 7.25% (P + 4.00%; 1.00% Floor) 06/13/2023 225,317 222,411 217,430 Software & Services Term Loan 6.57% (L + 5.50%) 11/28/2025 5,742,372 5,668,272 5,397,829 Software & Services Revolver 6.60% (L + 5.50%) 11/30/2023 296,459 293,141 278,672 Software & Services Term Loan 7.45% (L + 6.00%, 1.00% Floor) 12/16/2025 5,968,665 5,839,738 5,700,075 Software & Services Revolver 7.00% (L + 6.00%, 1.00% Floor) 12/16/2025 397,911 385,112 371,052 Software & Services Term Loan 8.00% (L + 4.50%; 2.50% PIK; 1.00% Floor) 11/01/2023 4,836,525 4,763,567 4,691,430 Software & Services Revolver 8.00% (L + 4.50%; 2.50% PIK; 1.00% Floor) 11/01/2023 333,333 328,524 323,333 Software & Services Incremental Term Loan 8.00% (L + 4.50%; 2.50% PIK; 1.00% Floor) 11/01/2023 1,080,778 1,062,852 1,048,354 Software & Services Term Loan 7.08% (L + 6.00%; 1.00% Floor) 12/01/2022 2,815,750 2,784,493 2,815,750 Software & Services Term Loan 7.00% (L + 6.00%; 1.00% Floor) 12/01/2022 700,038 690,443 700,038 Software & Services Revolver 7.00% (L + 6.00%; 1.00% Floor) 12/01/2022 193,237 191,131 193,237 Software & Services Term Loan 6.50% (L + 5.50%; 1.00% Floor) 06/07/2024 2,606,074 2,586,998 2,449,709 Software & Services Delayed Draw Term Loan 6.50% (L + 5.50%; 1.00% Floor) 06/07/2024 327,047 325,325 307,425 Specialty Finance Term Loan 8.25% (L + 7.25%; 1.00% Floor) 02/06/2024 2,816,062 2,775,000 2,661,178 Transport &
Logistics Term Loan B 9.81% (L + 1.00%; 7.50% PIK, 1.00% Floor) 12/11/2023 1,195,878 1,178,279 717,527 Transport &
Logistics Term Loan A 9.81% (L + 1.00%; 7.50% PIK, 1.00% Floor) 12/11/2023 2,710,658 2,670,661 1,626,395 Transport &
Logistics Revolver 8.71% (L + 7.00%; 1.00% Floor) 12/11/2023 365,443 360,675 202,789 Transport &
Logistics Term Loan 5.98% (L + 5.00%) 12/21/2023 5,891,434 5,834,456 5,685,233 373,483,172 353,520,684 Energy Term Loan 9.28% (L + 7.50%) 04/17/2026 1,230,107 1,205,643 1,088,644
See Notes to Unaudited Consolidated Financial Statements
Portfolio Company Interest Conterra Ultra Broadband Holdings, Inc.(1) Total 2nd Lien/Junior Secured Debt Total U.S. Corporate Debt Canadian Corporate Debt- 1.63% 1st Lien/Senior Secured Debt- 1.63% JHMCRN Holdings, Inc.(1)(15) Nuvei Technologies Corp.(1)(15) Total Canadian 1st Lien/Senior Secured Debt Total Canadian Corporate Debt U.S. Preferred Stock- 3.21% Concerto, LLC(11) (12) Health Platforms Group, Inc.(12) Datarobot, Inc.(12) Degreed, Inc.(12) Heap(12) Netskope, Inc.(12) Phenom People, Inc.(12) Protoscale Rubrik(12) Punchh(12) Symplr Software Intermediate Holdings, Inc.(12) Workfront, Inc.(12) Total U.S. Preferred Stock U.S. Common Stock- 0.81% NC Holdings, LLC(12) (13) Leeds FEG Investors, LLC(12) INH Group Holdings(12) Aggregator, LLC(12) Total U.S. Common Stock U.S. Warrants- 0.15% Fuze, Inc., Warrants expire 09/20/2029(12) Degreed, Inc., Warrants expire 05/31/2026(12) Total U.S. Warrants TOTAL INVESTMENTS - 218.97%(14) LIABILITIES IN EXCESS OF OTHER ASSETS —(118.97%) NET ASSETS — 100.00% Industry Facility Type Maturity Funded
Par Amount Cost Fair
Value Software &
Services Term Loan 9.00% (L + 8.00%; 1.00% Floor) 04/30/2027 6,537,710 6,447,439 6,276,202 7,653,082 7,364,846 381,136,254 360,885,530 Business Services Term Loan 6.81% (L + 5.00%; 1.00% Floor) 11/25/2025 846,198 838,144 812,350 Business Services Term Loan 6.00% (L + 5.00%; 1.00% Floor) 09/29/2025 2,015,143 2,010,808 1,939,575 2,848,952 2,751,925 2,848,952 2,751,925 Healthcare & HCIT 65,614 $ 349,977 $ 349,977 Healthcare & HCIT 16,502 90,761 90,761 Software & Services 38,190 289,278 289,278 Software & Services 43,819 278,541 377,720 Software & Services 189,617 696,351 696,349 Software & Services 36,144 302,536 302,536 Software & Services 35,055 220,610 220,612 Software & Services 25,397 598,212 598,201 Software & Services 24,262 275,337 275,337 Software & Services 1,196 1,160,532 1,230,642 Software & Services 104,058 999,997 999,997 5,262,132 5,431,410 Digital Infrastructure & Services 396,513 439,931 294,754 Education 320 321,309 331,162 Healthcare & HCIT 484,552 484,552 290,731 Software & Services 417,813 417,813 452,909 1,663,605 1,369,556 Digital Infrastructure & Services 196,328 615,168 190,438 Software & Services 26,294 46,823 59,425 661,991 249,863 $ 391,572,934 $ 370,688,284 $ (201,398,232 ) $ 169,290,052
+ | As of |
* | Unless otherwise indicated, all securities are valued using significant unobservable inputs, which are categorized as Level 3 assets under the definition of |
# | Percentages are based on net assets. |
^ | Generally, the interest rate on floating interest rate investments is at benchmark rate plus spread. The borrower has an option to choose the benchmark rate, such as the London Interbank Offered Rate (“LIBOR”) or the U.S. Prime rate. The spread may change based on the type of rate used. The terms in the |
(1) | Position, or a portion thereof, has been segregated to collateralize ABPCI Direct Lending Fund CLO VI Ltd. |
See Notes to Unaudited Consolidated Financial Statements
(2) | Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The unfunded loan commitment may be subject to a commitment termination date, that may expire prior to the maturity date stated. See Note 6 “Commitments and |
(3) | The negative cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value is the result of the capitalized discount on the loan. |
(4) |
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$ |
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$124,648 of the funded par amount accrues interest at |
$ |
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$ |
(8) | Rhode Holdings, Inc. has been renamed to Kaseya Inc. in 2020. |
(9) | $55,374 of the funded par amount accrues interest at 7.00% (P + 3.75%). |
(10) | $62,056 of the funded par amount accrues interest at 9.25% (P + 6.00%). |
Concerto, LLC is held through ABPCIC Concerto Holdings LLC. |
(12) | Non-income producing investment. |
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NC Holdings LLC is held through ABPCIC NC Holdings LLC. |
Aggregate gross unrealized appreciation for federal income tax purposes is |
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L | - | LIBOR | ||
P | - | Prime | ||
PIK | - | Payment-In-Kind |
See Notes to Unaudited Consolidated Financial Statements
AB Private Credit Investors Corporation
Consolidated Schedule of Investments as of December 31, 20182019
Portfolio Company | Industry | Facility Type | Interest | Maturity | Funded Par Amount | Cost | Fair Value | |||||||||||||||
Investments at Fair Value—217.79% + * # ^ | ||||||||||||||||||||||
U.S. Corporate Debt—215.36% | ||||||||||||||||||||||
1st Lien/Senior Secured Debt—213.46% | ||||||||||||||||||||||
Pivotal Payments Direct Corp. | Business Services | Initial Canadian Term Loan Commitment | 9.00% (P + 3.50%; 1.00% Floor) | 09/28/2025 | $ | 1,004,630 | $ | 994,863 | $ | 994,584 | ||||||||||||
Pivotal Payments, Inc. | Business Services | Initial U.S. Term Loan Commitment | 9.00% (P + 3.50%; 1.00% Floor) | 09/28/2025 | 672,556 | 666,017 | 665,830 | |||||||||||||||
Pivotal Payments, Inc.(1) | Business Services | Delayed Draw Term Loan | 7.01% (L + 4.50%; 1.00% Floor) | 09/28/2025 | 302,582 | 297,860 | 297,725 | |||||||||||||||
Single Digits, Inc. | Business Services | Term Loan | 8.79% (L + 6.00%; 1.00% Floor) | 12/21/2023 | 3,329,180 | 3,295,889 | 3,295,889 | |||||||||||||||
Single Digits, Inc.(1) (2) | Business Services | Revolver | 8.79% (L + 6.00%; 1.00% Floor) | 12/21/2023 | — | (4,161 | ) | (4,161 | ) | |||||||||||||
Single Digits, Inc.(1) (2) | Business Services | Delayed Draw Term Loan | 8.79% (L + 6.00%; 1.00% Floor) | 12/21/2023 | — | (10,404 | ) | (10,404 | ) | |||||||||||||
Smile Brands, Inc. | Business Services | Term Loan | 7.13% (L + 4.50%) | 10/12/2024 | 1,656,250 | 1,640,203 | 1,639,688 | |||||||||||||||
Smile Brands, Inc.(1) | Business Services | Revolver | 9.00% (P + 3.50%) | 10/12/2023 | 42,468 | 40,015 | 39,920 | |||||||||||||||
Smile Brands, Inc.(1) | Business Services | Delayed Draw Term Loan | 7.13% (L + 4.50%) | 10/12/2024 | 159,680 | 153,543 | 153,309 | |||||||||||||||
Trade Supplies Acquisition, LLC | Business Services | Term Loan | 7.01% (L + 4.50%; 1.00% Floor) | 11/21/2023 | 6,301,503 | 6,208,200 | 6,206,980 | |||||||||||||||
Trade Supplies Acquisition, LLC(1) | Business Services | Revolver | 9.00% (P + 3.50%; 1.00% Floor) | 11/21/2023 | 119,748 | 111,113 | 110,914 | |||||||||||||||
InSite Wireless Group, LLC(1) | Communications & IT Infrastructure | Term Loan | 8.03% (L + 5.61%; 0.50% Floor) | 03/15/2023 | 2,238,572 | 2,206,783 | 2,185,319 | |||||||||||||||
InSite Wireless Group, LLC(1) (2) | Communications & IT Infrastructure | Revolver | 8.03% (L + 5.61%; 0.50% Floor) | 03/15/2023 | — | (2,490 | ) | (2,958 | ) | |||||||||||||
Maintech, Incorporated(3) | Communications & IT Infrastructure | Term Loan | 9.80% (L + 7.00%; 1.00% Floor) | 12/28/2022 | 2,887,500 | 2,845,887 | 2,844,187 | |||||||||||||||
Maintech, Incorporated (1) (3) (4) | Communications & IT Infrastructure | Revolver | 11.50% (P + 6.00%; 1.00% Floor) | 12/28/2022 | 214,500 | 211,071 | 210,375 | |||||||||||||||
Captain D’s, Inc. | ConsumerNon-Cyclical | Term Loan | 7.30% (L + 4.50%; 1.00% Floor) | 12/15/2023 | 2,057,194 | 2,039,173 | 2,036,622 | |||||||||||||||
Captain D’s, Inc.(1) (5) | ConsumerNon-Cyclical | Revolver | 9.00% (P + 3.50%; 1.00% Floor) | 12/15/2023 | 82,573 | 80,898 | 80,622 | |||||||||||||||
GPS Hospitality Holding Company LLC | ConsumerNon-Cyclical | Term Loan B | 6.99% (L + 4.25%) | 12/06/2025 | 2,453,856 | 2,417,343 | 2,417,048 | |||||||||||||||
Lucky Bucks, LLC | ConsumerNon-Cyclical | Term Loan | 9.78% (L + 7.00%; 1.00% Floor) | 04/09/2023 | 1,078,856 | 1,060,428 | 1,059,976 | |||||||||||||||
Lucky Bucks, LLC(1) | ConsumerNon-Cyclical | Delayed Draw Term Loan | 9.86% (L + 7.00%; 1.00% Floor) | 04/09/2023 | 551,452 | 532,621 | 532,061 | |||||||||||||||
Tropical Smoothie Café, LLC | ConsumerNon-Cyclical | Term Loan | 8.00% (L + 5.50%; 1.00% Floor) | 09/24/2023 | 1,350,089 | 1,337,204 | 1,336,588 | |||||||||||||||
Tropical Smoothie Café, LLC(1) | Consumer Non-Cyclical | Revolver | 8.00% (L + 5.50%; 1.00% Floor) | 09/24/2023 | 38,574 | 37,285 | 37,224 | |||||||||||||||
AEG Holding Company, Inc. | Education | Term Loan | 8.53% (L + 6.00%; 1.00% Floor) | 11/20/2023 | 6,168,559 | 6,064,136 | 6,045,188 | |||||||||||||||
AEG Holding Company, Inc.(1) | Education | Revolver | 8.52% (L + 6.00%; 1.00% Floor) | 11/20/2023 | 595,996 | 582,236 | 579,742 | |||||||||||||||
AEG Holding Company, Inc.(1) (2) | Education | Delayed Draw Term Loan | 8.53% (L + 6.00%; 1.00% Floor) | 11/20/2023 | — | (17,771 | ) | (21,673 | ) | |||||||||||||
BCP Raptor II, LLC(6) | Energy | Term Loan | 7.37% (L + 4.75%) | 11/03/2025 | 5,740,914 | 5,712,752 | 5,303,169 | |||||||||||||||
Brazos Delaware II, LLC(6) | Energy | Term Loan B | 6.50% (L + 4.00%) | 05/21/2025 | 4,086,228 | 3,957,985 | 3,738,898 | |||||||||||||||
American Physician Partners LLC | Healthcare & HCIT | Term Loan A | 9.30% (L + 6.25%; 1.00% Floor) | 12/21/2021 | 3,113,453 | 3,068,540 | 3,066,751 | |||||||||||||||
American Physician Partners | Healthcare & HCIT | Revolver | 9.29% (L + 6.25%; 1.00% Floor) | 12/21/2021 | 241,459 | 232,964 | 232,626 | |||||||||||||||
American Physician Partners | Healthcare & HCIT | Delayed Draw Term Loan | 9.30% (L + 6.25%; 1.00% Floor) | 12/21/2021 | 446,243 | 393,462 | 391,355 | |||||||||||||||
Analogic Corporation | Healthcare & HCIT | Term Loan | 8.52% (L + 6.00%; 1.00% Floor) | 06/22/2024 | 3,005,511 | 2,949,568 | 2,945,401 | |||||||||||||||
Analogic Corporation(1) (2) | Healthcare & HCIT | Revolver | 8.52% (L + 6.00%; 1.00% Floor) | 06/22/2023 | — | (5,246 | ) | (5,739 | ) | |||||||||||||
GHA Buyer, Inc. | Healthcare & HCIT | Term Loan | 8.02% (L + 5.50%; 1.00% Floor) | 10/22/2023 | 2,025,133 | 1,985,938 | 1,984,631 | |||||||||||||||
GHA Buyer, Inc.(1) (2) | Healthcare & HCIT | Revolver | 8.02% (L + 5.50%; 1.00% Floor) | 10/22/2023 | — | (3,895 | ) | (4,050 | ) | |||||||||||||
GHA Buyer, Inc.(1) (2) | Healthcare & HCIT | Delayed Draw Term Loan | 8.02% (L + 5.50%; 1.00% Floor) | 10/22/2023 | — | (5,966 | ) | (13,501 | ) | |||||||||||||
Pinnacle Dermatology Management, LLC | Healthcare & HCIT | Term Loan | 6.77% (L + 4.25%; 1.00% Floor) | 05/18/2023 | 1,864,326 | 1,831,047 | 1,827,039 |
Portfolio Company | Industry | Facility Type | Interest | Maturity | Funded Par Amount | Cost | Fair Value | |||||||||||||||
Investments at Fair Value—238.67% + * # ^ | ||||||||||||||||||||||
U.S. Corporate Debt—231.87% | ||||||||||||||||||||||
1st Lien/Senior Secured Debt—226.60% | ||||||||||||||||||||||
Amercareroyal, LLC(1) | Business Services | Term Loan | 6.80% (L + 5.00%; 1.00% Floor) | 11/25/2025 | $ | 4,682,293 | $ | 4,636,124 | $ | 4,635,470 | ||||||||||||
BEP Borrower Holdco, | Business Services | Term Loan A | 6.80% (L + 5.00%; 1.00% Floor) | 06/12/2024 | 3,435,477 | 3,388,842 | 3,383,945 | |||||||||||||||
BEP Borrower Holdco, | Business Services | Revolver | 6.80% (L + 5.00%; 1.00% Floor) | 06/12/2024 | — | (5,753 | ) | (6,442 | ) | |||||||||||||
BEP Borrower Holdco, | Business Services | Delayed Draw Term Loan B | 6.80% (L + 5.00%; 1.00% Floor) | 06/12/2024 | — | (22,949 | ) | (25,766 | ) | |||||||||||||
BEP Borrower Holdco, | Business Services | Delayed Draw Term Loan A | 6.80% (L + 5.00%; 1.00% Floor) | 06/12/2024 | — | (11,474 | ) | (12,883 | ) | |||||||||||||
Edgewood Partners Holdings LLC(1) | Business Services | Term Loan | 6.05% (L + 4.25%; 1.00% Floor) | 09/06/2024 | 5,622,980 | 5,572,024 | 5,568,438 | |||||||||||||||
Metametrics, Inc.(1) | Business Services | Term Loan | 7.89% (L + 6.00%; 1.00% Floor) | 09/10/2025 | 5,904,056 | 5,790,820 | 5,785,975 | |||||||||||||||
Metametrics, Inc.(2)(3) | Business Services | Revolver | 7.89% (L + 6.00%; 1.00% Floor) | 09/10/2025 | — | (12,365 | ) | (13,024 | ) | |||||||||||||
Quirch Foods Holdings, | Business Services | Term Loan B | 7.93% (L + 6.00%) | 12/19/2025 | 2,117,548 | 2,098,488 | 2,096,372 | |||||||||||||||
Single Digits, Inc.(1) | Business Services | Term Loan | 7.95% (L + 6.00%; 1.00% Floor) | 12/21/2023 | 3,295,889 | 3,267,258 | 3,262,930 | |||||||||||||||
Single Digits, Inc.(2)(3) | Business Services | Revolver | 7.95% (L + 6.00%; 1.00% Floor) | 12/21/2023 | — | (3,315 | ) | (4,161 | ) | |||||||||||||
Single Digits, Inc.(2)(3) | Business Services | Delayed Draw Term Loan | 7.95% (L + 6.00%; 1.00% Floor) | 12/21/2023 | — | (8,290 | ) | (10,404 | ) | |||||||||||||
Smile Brands, Inc.(1) | Business Services | Term Loan | 6.70% (L + 4.50%) | 10/12/2024 | 1,639,688 | 1,626,385 | 1,639,688 | |||||||||||||||
Smile Brands, Inc.(2) | Business Services | Revolver | 8.25% (P + 3.50%) | 10/12/2023 | 33,974 | 32,034 | 33,974 | |||||||||||||||
Smile Brands, Inc.(2) | Business Services | Delayed Draw Term Loan | 6.70% (L + 4.50%) | 10/12/2024 | 301,121 | 296,019 | 301,121 | |||||||||||||||
GPS Hospitality Holding Company LLC(1) | Consumer Non-Cyclical | Term Loan B | 6.19% (L + 4.25%) | 12/08/2025 | 2,429,318 | 2,397,496 | 2,392,878 | |||||||||||||||
Blink Holdings, Inc.(1) | ConsumerNon-Cyclical | Term Loan | 6.49% (L + 4.75%; 1.00% Floor) | 11/08/2024 | 1,660,261 | 1,644,369 | 1,643,658 | |||||||||||||||
Blink Holdings, Inc.(1)(2) | ConsumerNon-Cyclical | Delayed Draw Term Loan | 6.49% (L + 4.75%; 1.00% Floor) | 11/08/2024 | 1,068,410 | 1,057,010 | 1,056,534 | |||||||||||||||
Captain D’s, Inc.(1) | ConsumerNon-Cyclical | Term Loan | 6.44% (L + 4.50%; 1.00% Floor) | 12/15/2023 | 2,003,178 | 1,988,982 | 1,983,146 | |||||||||||||||
Captain D’s, Inc.(2)(5) | ConsumerNon-Cyclical | Revolver | 8.25% (P + 3.50%, 1.00% Floor) | 12/15/2023 | 134,587 | 133,209 | 132,636 | |||||||||||||||
Lucky Bucks, LLC(1) | ConsumerNon-Cyclical | Term Loan | 8.93% (L + 7.00%; 1.00% Floor) | 04/10/2023 | 962,223 | 949,192 | 945,384 | |||||||||||||||
Lucky Bucks, LLC(1)(2)(6) | ConsumerNon-Cyclical | Delayed Draw Term Loan | 8.91% (L + 7.00%; 1.00% Floor) | 04/10/2023 | 1,043,095 | 1,028,456 | 1,023,705 | |||||||||||||||
PF Growth Partners, LLC(1) | ConsumerNon-Cyclical | Term Loan | 6.80% (L + 5.00%) | 07/11/2025 | 2,032,211 | 2,013,134 | 2,011,889 | |||||||||||||||
PF Growth Partners, LLC(2) | ConsumerNon-Cyclical | Delayed Draw Term Loan | 6.74% (L + 5.00%) | 07/11/2025 | 60,071 | 56,721 | 56,467 | |||||||||||||||
Tropical Smoothie Cafe, LLC(1) | ConsumerNon-Cyclical | Term Loan | 7.30% (L + 5.50%; 1.00% Floor) | 09/24/2023 | 1,343,338 | 1,332,936 | 1,343,338 | |||||||||||||||
Tropical Smoothie Cafe, LLC(2) | ConsumerNon-Cyclical | Revolver | 7.30% (L + 5.50%; 1.00% Floor) | 09/24/2023 | 38,574 | 37,526 | 38,574 | |||||||||||||||
Tropical Smoothie Cafe, LLC(2)(3) | ConsumerNon-Cyclical | Delayed Draw Term Loan | 7.30% (L + 5.50%; 1.00% Floor) | 09/24/2023 | — | (65,980 | ) | — | ||||||||||||||
Ahead Data Blue, LLC(1) | Digital Infrastructure & Services | Term Loan | 6.49% (L + 4.75%; 1.00% Floor) | 11/08/2024 | 5,447,119 | 5,340,940 | 5,338,177 | |||||||||||||||
Ahead Data Blue, LLC(2)(3) | Digital Infrastructure & Services | Revolver | 6.49% (L + 4.75%; 1.00% Floor) | 11/08/2024 | — | (18,666 | ) | (19,225 | ) |
Portfolio Company Facility Type Interest Pinnacle Dermatology Management, LLC(1) (2) Pinnacle Dermatology Management, LLC(1) Platinum Dermatology Partners, LLC Platinum Dermatology Partners, LLC(1) (2) Platinum Dermatology Partners, LLC Platinum Dermatology Partners, LLC(1) Qualifacts Corporation Qualifacts Corporation(1) (2) Theranest, LLC Theranest, LLC(1) (2) Theranest, LLC(1) Avetta, LLC Avetta, LLC(1) (2) Avetta, LLC(1) (2) Businesssolver.com, Inc. Businesssolver.com, Inc.(1) Businesssolver.com, Inc.(1) Caliper Software, Inc. Caliper Software, Inc.(1) Drilling Info Holdings, Inc.(6) Drilling Info Holdings, Inc. (1) (2) (6) Delayed Draw Term Loan E2open LLC E2open LLC(1) (2) E2open LLC(1) Delayed Draw Term Loan Engage2Excel, Inc. Engage2Excel, Inc.(1) Exterro, Inc. Initial Term Loan Exterro, Inc.(1) (2) Finalsite Holdings, Inc. Finalsite Holdings, Inc.(1) (2) Genesis Acquisition Co. Genesis Acquisition Co.(1) (2) Genesis Acquisition Co.(1) (2) Ministry Brands, LLC 1st Lien Term Loan Ministry Brands, LLC(1) Perforce Intermediate Holdings, LLC Perforce Intermediate Holdings, LLC(1) (2) Industry Maturity Funded
Par Amount Cost Fair Value Healthcare & HCIT Revolver 6.77% (L + 4.25%; 1.00% Floor) 05/18/2023 — (8,226 ) (9,368 ) Healthcare & HCIT Delayed Draw Term Loan 6.77% (L + 4.25%; 1.00% Floor) 05/18/2023 2,763,699 2,681,310 2,670,014 Healthcare & HCIT Term Loan 9.05% (L + 6.25%; 1.00% Floor) 01/03/2023 3,169,048 3,108,282 3,105,667 Healthcare & HCIT Revolver 9.05% (L + 6.25%; 1.00% Floor) 01/03/2023 — (8,024 ) (9,972 ) Healthcare & HCIT Specified Delayed Draw Term Loan Commitment 9.11% (L + 6.25%; 1.00% Floor) 01/03/2023 1,979,408 1,946,432 1,939,820 Healthcare & HCIT General Delayed Draw Term Loan Commitment 9.13% (L + 6.25%; 1.00% Floor) 01/03/2023 1,425,972 1,392,746 1,386,084 Healthcare & HCIT Term Loan 9.78% (L + 7.00%; 1.00% Floor) 12/12/2022 2,820,000 2,773,525 2,805,900 Healthcare & HCIT Revolver 9.78% (L + 7.00%; 1.00% Floor) 12/12/2022 — (4,756 ) (1,500 ) Healthcare & HCIT Term Loan 7.76% (L + 5.00%; 1.00% Floor) 07/23/2023 3,000,000 2,944,416 2,940,000 Healthcare & HCIT Revolver 7.76% (L + 5.00%; 1.00% Floor) 07/23/2023 $ — $ (7,832 ) $ (8,571 ) Healthcare & HCIT Delayed Draw Term Loan 7.79% (L + 5.00%; 1.00% Floor) 07/23/2023 214,286 173,176 169,286 Software & Services Term Loan 7.76% (L + 5.25%; 1.00% Floor) 04/10/2024 3,320,490 3,260,667 3,287,285 Software & Services Revolver 7.76% (L + 5.25%; 1.00% Floor) 04/10/2024 — (8,475 ) (4,944 ) Software & Services Delayed Draw Term Loan 7.76% (L + 5.25%; 1.00% Floor) 04/10/2024 — (13,634 ) (12,360 ) Software & Services Term Loan 10.12% (L + 7.50%; 1.00% Floor) 05/15/2023 2,588,235 2,541,806 2,536,471 Software & Services Revolver 12.00% (P + 6.50%; 1.00% Floor) 05/15/2023 129,412 123,756 122,941 Software & Services Delayed Draw Term Loan 10.12% (L + 7.50%; 1.00% Floor) 05/15/2023 97,059 93,663 89,294 Software & Services Term Loan 8.02% (L + 5.50%) 11/30/2025 3,891,026 3,832,660 3,832,660 Software & Services Revolver 8.02% (L + 5.50%) 11/30/2023 14,823 10,376 10,376 Software & Services Term Loan 6.77% (L + 4.25%) 07/30/2025 3,059,098 3,044,509 3,039,979 Software & Services 6.77% (L + 4.25%) 07/30/2025 — (1,103 ) (1,461 ) Software & Services Term Loan 7.68% (L + 5.00%; 1.00% Floor) 11/26/2024 4,150,293 4,088,890 4,088,039 Software & Services Revolver 7.68% (L + 5.00%; 1.00% Floor) 11/26/2024 — (4,595 ) (4,670 ) Software & Services 7.68% (L + 5.00%; 1.00% Floor) 11/26/2024 93,382 86,567 80,931 Software & Services Term Loan 9.36% (L + 6.50%; 1.00% Floor) 03/07/2023 3,000,421 2,945,737 2,940,413 Software & Services Revolver 9.36% (L + 6.50%; 1.00% Floor) 03/07/2023 106,790 99,884 99,252 Software & Services 8.24% (L + 5.50%; 1.00% Floor) 05/31/2024 2,955,150 2,903,587 2,896,047 Software & Services Revolver 8.24% (L + 5.50%; 1.00% Floor) 05/31/2024 — (5,651 ) (6,600 ) Software & Services Term Loan 8.03% (L + 5.50%; 1.00% Floor) 09/25/2024 3,366,784 3,309,983 3,307,865 Software & Services Revolver 8.03% (L + 5.50%; 1.00% Floor) 09/25/2024 — (4,234 ) (4,430 ) Software & Services Term Loan 6.52% (L + 4.00%; 1.00% Floor) 07/31/2024 1,376,466 1,350,527 1,348,936 Software & Services Revolver 6.52% (L + 4.00%; 1.00% Floor) 07/31/2024 — (3,772 ) (4,048 ) Software & Services Delayed Draw Term Loan 6.52% (L + 4.00%; 1.00% Floor) 07/31/2024 — (3,399 ) (3,645 ) Software & Services 6.52% (L + 4.00%; 1.00% Floor) 12/02/2022 3,176,249 3,162,463 3,160,367 Software & Services Delayed Draw Term Loan 6.52% (L + 4.00%; 1.00% Floor) 12/02/2022 448,683 442,681 441,704 Software & Services Term Loan 6.77% (L + 4.25%; 1.00% Floor) 12/27/2024 3,835,253 3,758,340 3,796,900 Software & Services Revolver 6.77% (L + 4.25%; 1.00% Floor) 12/28/2022 — (10,987 ) (5,915 )
Portfolio Company Facility Type Interest Selligent, Inc. Selligent, Inc.(1) (2) Sugarcrm, Inc. Sugarcrm, Inc.(1) Swiftpage, Inc. Swiftpage, Inc. Swiftpage, Inc.(1) (2) TRGRP Acquisition Corp. TRGRP Acquisition Corp.(1) (2) Velocity Purchaser Corporation Velocity Purchaser Corporation Velocity Purchaser Corporation(1) (2) Veriforce Holdings, LLC Veriforce Holdings, LLC(1) (2) Watermark Insights, LLC Watermark Insights, LLC Delayed Draw Term Loan Dillon Logistics, Inc. Logistics Dillon Logistics, Inc. Logistics Dillon Logistics, Inc. Logistics Dillon Logistics, Inc.(1) Logistics OSG Bulk Ships, Inc. Logistics Total 1st Lien/Senior Secured Debt 2nd Lien/Junior Secured Debt —1.90% Brave Parent Holdings, Inc. Total 2nd Lien/Junior Secured Debt Total U.S. Corporate Debt Portfolio Company Industry Coupon U.S. Preferred Stock—1.83% Symplr Software Intermediate Holdings, Inc.(7) Total U.S. Preferred Stock U.S. Common Stock—0.60% SSC TS Investments, LLC(7) (8) Leeds FEG Investors, LLC(7) Total U.S. Common Stock TOTAL INVESTMENTS—217.79%(9) LIABILITIES IN EXCESS OF OTHER ASSETS—(117.79%) NET ASSETS—100.00% See Notes to Unaudited Consolidated Financial Statements Industry Maturity Funded
Par Amount Cost Fair Value Software & Services Term Loan 8.09% (L + 5.50%; 1.00% Floor) 11/05/2024 1,926,332 1,898,180 1,897,437 Software & Services Revolver 8.09% (L + 5.50%; 1.00% Floor) 11/03/2023 — (2,917 ) (3,010 ) Software & Services Term Loan 9.27% (L + 6.75%; 1.00% Floor) 07/31/2024 3,235,401 3,181,827 3,178,782 Software & Services Revolver 9.43% (L + 6.75%; 1.00% Floor) 07/31/2024 77,561 72,502 72,132 Software & Services Term Loan 8.01% (L + 5.50%; 1.00% Floor) 06/13/2023 2,522,137 2,476,347 2,471,694 Software & Services Term Loan A 8.01% (L + 5.50%; 1.00% Floor) 06/13/2023 232,118 227,512 227,475 Software & Services Revolver 8.01% (L + 5.50%; 1.00% Floor) 06/13/2023 — (4,019 ) (4,506 ) Software & Services Term Loan 9.80% (L + 4.50%; 2.50% PIK; 1.00% Floor) 11/01/2023 4,686,111 4,595,436 4,592,389 Software & Services Revolver 9.80% (L + 4.50%; 2.50% PIK; 1.00% Floor) 11/01/2023 — (6,447 ) (6,667 ) Software & Services Term Loan 8.53% (L + 6.00%; 1.00% Floor) 12/01/2022 2,931,594 2,883,855 2,872,962 Software & Services Term Loan 8.52% (L + 6.00%; 1.00% Floor) 12/01/2022 728,749 714,791 714,174 Software & Services Revolver 8.53% (L + 6.00%; 1.00% Floor) 12/01/2022 — (3,174 ) (3,865 ) Software & Services Term Loan 9.14% (L + 6.50%; 1.00% Floor) 07/13/2023 3,082,612 3,032,743 3,028,666 Software & Services Revolver 9.14% (L + 6.50%; 1.00% Floor) 07/13/2023 — (4,556 ) (4,929 ) Software & Services Term Loan 7.26% (L + 4.75%; 1.00% Floor) 06/07/2024 2,639,230 2,614,903 2,612,837 Software & Services 7.26% (L + 4.75%; 1.00% Floor) 06/07/2024 331,198 328,821 327,886 Transport & Term Loan A 9.80% (L + 7.00%; 1.00% Floor) 12/11/2023 2,592,288 2,540,918 2,540,442 Transport & Term Loan B �� 9.80% (L + 7.00%; 1.00% Floor) 12/11/2023 1,270,729 1,245,548 1,245,315 Transport & Term Loan C 9.80% (L + 7.00%; 1.00% Floor) 12/31/2020 304,975 299,032 298,876 Transport & Revolver 9.65% (L + 7.00%; 1.00% Floor) 12/11/2023 333,571 325,211 325,133 Transport & Term Loan 7.78% (L + 5.00%) 12/21/2023 6,544,642 6,463,245 6,462,835 135,776,144 135,061,980 Energy Term Loan 10.02% (L + 7.50%) 04/17/2026 1,230,107 1,201,433 1,200,773 1,201,433 1,200,773 136,977,577 136,262,753 Shares Cost Fair Value Software & Services $ 1,196 $ 1,160,531 $ 1,160,531 1,160,531 1,160,531 Business Services 62,734 $ 62,735 $ 62,735 Education 311 $ 311,400 $ 317,114 374,135 379,849 $ 138,512,243 $ 137,803,133 $ (74,529,423 ) $ 63,273,710
Portfolio Company Facility Type Interest EvolveIP, LLC(1) EvolveIP, LLC(2)(3) EvolveIP, LLC(2)(3) 5 Bars, LLC 5 Bars, LLC(2)(3) 5 Bars, LLC(2)(3) D1 Holdings LLC Fuze, Inc.(1) Fuze, Inc.(2) Fuze, Inc.(2)(3) InSite Wireless Group, LLC(1)(2) InSite Wireless Group, LLC AEG Holding Company, Inc.(1) AEG Holding Company, Inc.(1) AEG Holding Company, Inc.(2) AEG Holding Company, Inc.(1) BCP Raptor II, LLC(1)(7) Brazos Delaware II, LLC(1)(7) Nine Point Energy, LLC(1) Nine Point Energy, LLC(1)(2)(3) Nine Point Energy, LLC(1)(2) Higginbotham Insurance Agency, Inc. Higginbotham Insurance Agency, Inc.(2) OMH-HealthEdge Holdings, OMH-HealthEdge Holdings, ZBS Alliance Animal Health, ZBS Alliance Animal Health, ZBS Alliance Animal Health, American Physician Partners, LLC Industry Maturity Funded
Par Amount Cost Fair Value Digital
Infrastructure &
Services Term Loan A 7.55% (L + 5.75%; 1.00% Floor) 06/07/2023 6,633,822 6,536,708 6,534,315 Digital Infrastructure &
Services Revolver 7.55% (L + 5.75%; 1.00% Floor) 06/07/2023 — (8,269 ) (8,503 ) Digital
Infrastructure &
Services Delayed Draw Term Loan 7.55% (L + 5.75%; 1.00% Floor) 06/07/2023 — (11,028 ) (11,337 ) Digital
Infrastructure &
Services Term Loan 8.30% (L + 6.50%; 1.00% Floor) 09/27/2024 4,742,121 4,674,290 4,670,990 Digital
Infrastructure &
Services Revolver 8.30% (L + 6.50%; 1.00% Floor) 09/27/2024 — (9,197 ) (9,700 ) Digital
Infrastructure &
Services Delayed Draw Term Loan 8.30% (L + 6.50%; 1.00% Floor) 09/27/2024 — (49,051 ) (51,732 ) Digital
Infrastructure &
Services Note 7.00% 06/26/2020 32,241 32,241 32,241 Digital
Infrastructure &
Services Term Loan 8.34% (L + 6.25%; 1.00% Floor) 09/20/2024 11,015,029 10,961,643 10,513,845 Digital
Infrastructure &
Services Revolver 10.00% (P + 5.25%; 1.00% Floor) 09/20/2024 907,120 901,003 848,157 Digital
Infrastructure &
Services Delayed Draw Term Loan 8.34% (L + 6.25%; 1.00% Floor) 09/20/2024 — (586,835 ) (117,926 ) Digital
Infrastructure &
Services Term Loan 6.28% (L + 4.52%; 0.50% Floor) 03/15/2023 6,833,574 6,700,275 6,670,911 Digital
Infrastructure &
Services Revolver 6.32% (L + 4.52%; 0.50% Floor) 03/15/2023 460,172 455,073 454,419 Education Term Loan 7.74% (L + 6.00%; 1.00% Floor) 11/20/2023 1,876,255 1,842,769 1,838,730 Education Term Loan 7.80% (L + 6.00%; 1.00% Floor) 11/20/2023 $ 6,106,250 $ 6,022,723 $ 5,984,125 Education Revolver 7.72% (L + 6.00%; 1.00% Floor) 11/20/2023 558,432 541,763 536,095 Education Delayed Draw Term Loan 7.74% (L + 6.00%; 1.00% Floor) 11/20/2023 1,078,211 1,063,994 1,056,647 Energy Term Loan 6.55% (L + 4.75%) 11/03/2025 5,712,209 5,711,278 5,255,233 Energy Term Loan B 5.79% (L + 4.00%) 05/21/2025 4,045,160 3,949,599 3,441,743 Energy Term Loan 7.24% (L + 5.50%; 1.00% Floor) 06/07/2024 4,921,875 4,832,047 4,823,438 Energy Revolver 7.21% (L + 5.50%; 1.00% Floor) 06/07/2024 — (5,998 ) (6,562 ) Energy Delayed Draw Term Loan 7.24% (L + 5.50%; 1.00% Floor) 06/07/2024 437,500 406,186 402,500 Financial Services Incremental Term Loan 6.05% (L + 4.25%, 1.00% Floor) 12/19/2024 1,047,616 1,037,219 1,037,140 Financial Services Delayed Draw Term Loan 6.05% (L + 4.25%, 1.00% Floor) 12/19/2024 — — —
LLC(1) Healthcare & HCIT Term Loan 7.30% (L + 5.50%; 1.00% Floor) 10/24/2025 3,774,984 3,692,206 3,690,047
LLC(2)(3) Healthcare & HCIT Revolver 7.30% (L + 5.50%; 1.00% Floor) 10/24/2024 — (9,940 ) (10,321 )
LLC(1) Healthcare & HCIT Term Loan 5.97% (L + 4.25%; 1.00% Floor) 11/08/2025 2,721,360 2,668,061 2,666,933
LLC(2) Healthcare & HCIT Revolver 6.04% (L + 4.25%; 1.00% Floor) 11/08/2025 498,916 485,603 485,309
LLC(2)(3) Healthcare & HCIT Delayed Draw Term Loan 5.97% (L + 4.25%; 1.00% Floor) 11/08/2025 — (88,520 ) (90,712 ) Healthcare & HCIT Term Loan C 8.44% (L + 6.50%; 1.00% Floor) 12/21/2021 1,203,704 1,192,634 1,191,667
See Notes to Unaudited Consolidated Financial Statements
Portfolio Company Facility Type Interest American Physician Partners, LLC(1) American Physician Partners, LLC(2) American Physician Partners, LLC(1) Analogic Corporation(1) Analogic Corporation(2) CutisPharma, Inc.(1) CutisPharma, Inc.(2)(3) CutisPharma, Inc.(2)(3) Delaware Valley Management Holdings, Inc.(1) Delaware Valley Management Holdings, Inc.(2) Delaware Valley Management Holdings, Inc.(2)(3) Ethos Veterinary Health LLC(1) (2) GHA Buyer, Inc.(1) GHA Buyer, Inc.(1) GHA Buyer, Inc.(2)(3) GHA Buyer, Inc.(2)(3) GHA Buyer, Inc.(2)(3) INH Buyer, Inc.(1) INH Buyer, Inc.(2)(3) Pace Health Companies, LLC(1) Pace Health Companies, LLC(2)(3) Pinnacle Dermatology Management, Pinnacle Dermatology Management, Pinnacle Dermatology Management, Platinum Dermatology Partners, LLC Platinum Dermatology Partners, LLC(1) Platinum Dermatology Partners, LLC(8) Platinum Dermatology Partners, LLC(1)(9) RCP Encore Acquisition, Inc.(1) The Center for Orthopedic and Research Excellence, Inc.(1) The Center for Orthopedic and Research Excellence, Inc.(2) Industry Maturity Funded
Par Amount Cost Fair Value Healthcare &
HCIT Term Loan A 8.44% (L + 6.50%; 1.00% Floor) 12/21/2021 5,562,816 5,503,929 5,507,188 Healthcare &
HCIT Revolver 8.44% (L + 6.50%; 1.00% Floor) 12/21/2021 177,601 173,200 173,161 Healthcare &
HCIT Delayed Draw Term Loan 8.44% (L + 6.50%; 1.00% Floor) 12/21/2021 1,049,891 1,039,517 1,039,392 Healthcare &
HCIT Term Loan 7.80% (L + 6.00%; 1.00% Floor) 06/24/2024 2,937,163 2,891,148 2,893,987 Healthcare &
HCIT Revolver 7.80% (L + 6.00%; 1.00% Floor) 06/22/2023 28,696 24,667 24,678 Healthcare &
HCIT Term Loan 7.79% (L + 5.75%; 1.00% Floor) 03/21/2023 7,292,268 7,183,139 7,164,653 Healthcare &
HCIT Revolver 7.79% (L + 5.75%; 1.00% Floor) 03/21/2023 — (7,096 ) (8,451 ) Healthcare &
HCIT Delayed Draw Term Loan 7.79% (L + 5.75%; 1.00% Floor) 03/21/2023 — (7,096 ) (8,451 ) Healthcare &
HCIT Term Loan 7.55% (L + 5.75%; 1.00% Floor) 03/21/2024 4,414,146 4,337,516 4,325,863 Healthcare &
HCIT Revolver 7.50% (L + 5.75%; 1.00% Floor) 03/21/2024 368,816 359,862 358,278 Healthcare &
HCIT Delayed Draw Term Loan 7.55% (L + 5.75%; 1.00% Floor) 03/21/2024 — (69,365 ) (105,376 ) Healthcare &
HCIT Term Loan 6.80% (L + 5.00%) 05/15/2026 3,382,870 3,343,496 3,340,651 Healthcare &
HCIT Term Loan 7.22% (L + 5.50%; 1.00% Floor) 10/23/2023 570,916 559,588 559,497 Healthcare &
HCIT Term Loan 7.30% (L + 5.50%; 1.00% Floor) 10/23/2023 1,998,132 1,966,554 1,958,169 Healthcare &
HCIT Revolver 7.30% (L + 5.50%; 1.00% Floor) 10/23/2023 — (3,098 ) (4,050 ) Healthcare &
HCIT Delayed Draw Term Loan 7.22% (L + 5.50%; 1.00% Floor) 10/23/2023 — (5,656 ) (5,709 ) Healthcare &
HCIT Delayed Draw Term Loan 7.30% (L + 5.50%; 1.00% Floor) 10/23/2023 — (5,175 ) (6,750 ) Healthcare &
HCIT Term Loan 10.43% (L + 6.50%; 2.00% PIK, 1.00% Floor) 01/31/2025 8,643,765 8,528,135 8,514,109 Healthcare &
HCIT Revolver 10.43% (L + 6.50%; 2.00% PIK, 1.00% Floor) 01/31/2024 — (2,542 ) (3,088 ) Healthcare &
HCIT Term Loan 6.44% (L + 4.50%; 1.00% Floor) 08/02/2024 5,413,237 5,362,021 5,359,104 Healthcare &
HCIT Revolver 6.44% (L + 4.50%; 1.00% Floor) 08/02/2024 — (5,789 ) (6,167 )
LLC(1) Healthcare &
HCIT Term Loan 6.05% (L + 4.25%; 1.00% Floor) 05/18/2023 6,319,034 6,207,891 6,192,653
LLC(2)(3) Healthcare &
HCIT Revolver 6.11% (L + 4.25%; 1.00% Floor) 05/18/2023 — (6,377 ) (9,368 )
LLC(2) Healthcare &
HCIT Delayed Draw Term Loan 6.11% (L + 4.25%; 1.00% Floor) 05/18/2023 1,499,395 1,455,846 1,436,536 Healthcare &
HCIT Term Loan 8.24% (L + 6.25%; 1.00% Floor) 01/03/2023 3,147,110 3,107,800 2,911,076 Healthcare &
HCIT Specified Delayed Draw Term Loan Commitment 10.00% (P + 5.25%; 1.00% Floor) 01/03/2023 1,959,465 1,934,744 1,812,505 Healthcare &
HCIT Revolver 10.00% (P + 5.25%; 1.00% Floor) 01/03/2023 498,592 492,422 461,197 Healthcare &
HCIT General Delayed Draw Term Loan Commitment 8.20% (L + 6.25%; 1.00% Floor) 01/03/2023 1,422,407 1,404,839 1,315,726 Healthcare &
HCIT Term Loan 6.46% (L + 4.75%; 1.00% Floor) 06/09/2025 3,974,715 3,938,087 3,934,968 Healthcare &
HCIT Term Loan 7.31% (L + 5.25%; 1.00% Floor) 08/15/2025 $ 4,993,841 $ 4,910,901 $ 4,906,449 Healthcare &
HCIT Revolver 7.31% (L + 5.25%; 1.00% Floor) 08/15/2025 34,527 23,105 22,442
See Notes to Unaudited Consolidated Financial Statements
Portfolio Company Facility Type Interest The Center for Orthopedic and Research Excellence, Inc.(2)(3) Theranest, LLC(1) Theranest, LLC(2)(3) Theranest, LLC(1)(2) RxBenefits, Inc.(1) RxBenefits, Inc.(2)(3) Dispatch Track, LLC(1) Dispatch Track, LLC(2) Real Capital Analytics, Inc.(1) Real Capital Analytics, Inc.(2) Real Capital Analytics, Inc. Telesoft Holdings, LLC Telesoft Holdings, LLC(2)(3) AMI US Holdings, Inc.(1) AMI US Holdings, Inc.(2) Avetta, LLC(1) Avetta, LLC(2)(3) Avetta, LLC(1) Avetta, LLC(2)(3) Broadway Technology, LLC(1) Broadway Technology, LLC(2)(3) Businesssolver.com, Inc.(1) Businesssolver.com, Inc.(2)(10) Businesssolver.com, Inc.(1) Degreed, Inc.(1) Degreed, Inc.(2)(3) Degreed, Inc.(2) Drilling Info Holdings, Inc.(1)(7) E2open LLC(1) E2open LLC(2)(3) Engage2Excel, Inc.(1) Engage2Excel, Inc.(1) Engage2Excel, Inc.(1)(2)(11) Industry Maturity Funded
Par Amount Cost Fair Value Healthcare &
HCIT Delayed Draw Term Loan 7.31% (L + 5.25%; 1.00% Floor) 08/15/2025 — (14,181 ) (15,105 ) Healthcare &
HCIT Term Loan 6.93% (L + 5.00%; 1.00% Floor) 07/24/2023 3,000,000 2,955,526 2,940,000 Healthcare &
HCIT Revolver 6.93% (L + 5.00%; 1.00% Floor) 07/24/2023 — (6,143 ) (8,571 ) Healthcare &
HCIT Delayed Draw Term Loan 6.93% (L + 5.00%; 1.00% Floor) 07/24/2023 1,613,143 1,577,054 1,568,143 Pharmaceutical Term Loan A 7.17% (L + 5.25%; 1.00% Floor) 03/28/2025 5,777,984 5,777,984 5,720,204 Pharmaceutical Revolver 7.17% (L + 5.25%; 1.00% Floor) 03/29/2024 — (4,900 ) (5,758 ) Software &
Services Term Loan 6.41% (L + 4.50%; 1.00% Floor) 12/17/2024 6,038,593 5,948,735 5,948,014 Software &
Services Revolver 6.41% (L + 4.50%; 1.00% Floor) 12/17/2024 132,849 128,320 128,320 Software &
Services Term Loan 7.09% (L + 5.00%, 1.00% Floor) 10/02/2024 4,863,178 4,839,901 4,838,862 Software &
Services Revolver 6.90% (L + 5.00%, 1.00% Floor) 10/02/2024 555,792 552,482 552,318 Software &
Services First Supplemental Term Loan 6.71% (L + 5.00%, 1.00% Floor) 10/02/2024 3,019,297 3,004,200 3,004,200 Software &
Services Term Loan 7.69% (L + 5.75%, 1.00% Floor) 12/16/2025 5,968,665 5,834,630 5,834,370 Software &
Services Revolver 7.69% (L + 5.75%, 1.00% Floor) 12/16/2025 — (13,366 ) (13,430 ) Software &
Services Term Loan 7.19% (L + 5.50%; 1.00% Floor) 04/01/2025 8,256,605 8,108,278 8,091,473 Software &
Services Revolver 7.30% (L + 5.50%; 1.00% Floor) 04/01/2024 481,626 462,683 459,734 Software &
Services Term Loan 7.55% (L + 5.75%; 1.00% Floor) 04/10/2024 3,287,118 3,206,937 3,221,375 Software &
Services Revolver 7.55% (L + 5.75%; 1.00% Floor) 04/10/2024 — (7,093 ) (9,888 ) Software &
Services Incremental Term Loan B 7.55% (L + 5.75%; 1.00% Floor) 04/10/2024 4,326,814 4,249,497 4,240,278 Software &
Services Delayed Draw Term Loan 7.55% (L + 5.75%; 1.00% Floor) 04/10/2024 — (11,111 ) (12,360 ) Software &
Services Term Loan 6.85% (L + 4.75%; 1.00% Floor) 04/01/2024 4,444,603 4,365,514 4,355,711 Software &
Services Revolver 6.85% (L + 4.75%; 1.00% Floor) 04/01/2024 — (6,544 ) (7,677 ) Software &
Services Term Loan 9.41% (L + 7.50%; 1.00% Floor) 05/15/2023 2,588,235 2,551,360 2,588,235 Software &
Services Revolver 9.30% (L + 7.50%; 1.00% Floor) 05/15/2023 129,412 124,990 129,412 Software &
Services Delayed Draw Term Loan 9.41% (L + 7.50%; 1.00% Floor) 05/15/2023 388,235 385,043 388,235 Software &
Services Term Loan 8.15% (L + 6.35%; 1.00% Floor) 05/31/2024 2,228,335 2,207,938 2,189,784 Software &
Services Revolver 8.15% (L + 6.35%; 1.00% Floor) 05/31/2024 — (3,698 ) (7,228 ) Software &
Services Delayed Draw Term Loan 8.06% (L + 6.35%; 1.00% Floor) 05/31/2024 1,114,167 1,068,684 1,085,798 Software &
Services Term Loan 6.05% (L + 4.25%) 07/30/2025 3,395,236 3,382,377 3,395,236 Software &
Services Term Loan 7.66% (L + 5.75%; 1.00% Floor) 11/26/2024 4,944,898 4,881,721 4,895,449 Software &
Services Revolver 7.66% (L + 5.75%; 1.00% Floor) 11/26/2024 — (3,830 ) (3,114 ) Software &
Services Term Loan 8.42% (L + 6.50%; 1.00% Floor) 03/07/2023 1,030,478 1,013,050 1,009,868 Software &
Services Term Loan 8.71% (L + 6.50%; 1.00% Floor) 03/07/2023 2,970,191 2,927,623 2,910,787 Software &
Services Revolver 10.25% (P + 5.50%; 1.00% Floor) 03/07/2023 251,270 246,280 243,732
See Notes to Unaudited Consolidated Financial Statements
Portfolio Company Facility Type Interest Engage2Excel, Inc.(2)(3) EnterpriseDB Corporation(1) EnterpriseDB Corporation(2)(3) Exterro, Inc.(1) Exterro, Inc.(2)(3) Exterro, Inc.(1) Finalsite Holdings, Inc.(1) Finalsite Holdings, Inc.(2)(3) Genesis Acquisition Co.(1) Genesis Acquisition Co.(2) Genesis Acquisition Co.(2)(3) GS AcquisitionCo, Inc.(1) GS AcquisitionCo, Inc.(2) GS AcquisitionCo, Inc.(2) Ministry Brands, LLC(1) Ministry Brands, LLC(1) Rhode Holdings, Inc.(1) Rhode Holdings, Inc.(2) Rhode Holdings, Inc.(2) Selligent, Inc.(19) Selligent, Inc.(2)(3)(19) Sirsi Corporation(1) Sirsi Corporation(2)(12) Sugarcrm, Inc.(1) Sugarcrm, Inc.(2)(3) Summit Infrastructure Group, Inc.(1) Summit Infrastructure Group, Inc.(2)(3) Summit Infrastructure Group, Inc.(2)(3) Industry Maturity Funded
Par Amount Cost Fair Value Software &
Services Delayed Draw Term Loan 10.25% (P + 5.50%; 1.00% Floor) 03/07/2023 — (5,481 ) (6,645 ) Software &
Services Term Loan 7.33% (L + 4.50%; 0.75% PIK; 1.00% Floor) 06/21/2024 7,829,259 7,687,008 7,711,820 Software &
Services Revolver 7.33% (L + 4.50%; 0.75% PIK; 1.00% Floor) 06/21/2024 — (12,478 ) (10,445 ) Software &
Services Term Loan 7.41% (L + 5.50%; 1.00% Floor) 05/31/2024 5,945,987 5,834,920 5,916,257 Software &
Services Revolver 7.41% (L + 5.50%; 1.00% Floor) 05/31/2024 — (4,915 ) (1,650 ) Software &
Services Initial Term Loan 7.41% (L + 5.50%; 1.00% Floor) 05/31/2024 2,866,875 2,825,603 2,852,541 Software &
Services Term Loan 6.93% (L + 5.00%; 1.00% Floor) 09/25/2024 3,333,032 3,285,122 3,283,036 Software &
Services Revolver 6.93% (L + 5.00%; 1.00% Floor) 09/25/2024 — (3,509 ) (3,797 ) Software &
Services Term Loan 5.69% (L + 3.75%) 07/31/2024 1,362,701 1,341,127 1,335,447 Software &
Services Revolver 5.69% (L + 3.75%) 07/31/2024 70,840 67,715 66,792 Software &
Services Delayed Draw Term Loan 5.69% (L + 3.75%) 07/31/2024 — (2,804 ) (3,645 ) Software &
Services Term Loan 7.55% (L + 5.75%; 1.00% Floor) 05/24/2024 2,716,747 2,685,271 2,682,788 Software &
Services Second Supplemental Delayed Draw Term Loan 7.55% (L + 5.75%; 1.00% Floor) 05/24/2024 205,022 191,520 190,366 Software &
Services Revolver 7.55% (L + 5.75%; 1.00% Floor) 05/24/2024 193,445 189,956 189,667 Software &
Services Term Loan 5.85% (L + 4.00%; 1.00% Floor) 12/02/2022 3,144,605 3,134,417 3,128,882 Software &
Services Delayed Draw Term Loan 5.85% (L + 4.00%; 1.00% Floor) 12/02/2022 657,623 655,480 654,335 Software &
Services Term Loan 8.72% (L + 5.50%; 1.00% PIK; 1.00% Floor) 05/02/2025 4,477,141 4,437,548 4,387,598 Software &
Services Revolver 8.30% (L + 6.50%; 1.00% Floor) 05/02/2025 214,851 211,489 207,332 Software &
Services Delayed Draw Term Loan 8.69% (L + 5.50%; 1.00% PIK; 1.00% Floor) 05/02/2025 69,949 64,481 63,878 Software &
Services Term Loan 7.45% (L + 5.50%; 1.00% Floor) 11/05/2024 1,907,069 1,883,067 1,878,463 Software &
Services Revolver 7.45% (L + 5.50%; 1.00% Floor) 11/03/2023 — (2,323 ) (3,010 ) Software &
Services Term Loan 6.49% (L + 4.75%; 1.00% Floor) 03/15/2024 8,965,418 8,846,501 8,830,937 Software &
Services Revolver 8.50% (P + 3.75%; 1.00% Floor) 03/15/2024 $ 221,497 $ 214,397 $ 213,190 Software &
Services Term Loan 8.30% (L + 6.50%; 1.00% Floor) 07/31/2024 3,600,024 3,548,249 3,600,024 Software &
Services Revolver 8.54% (L + 6.50%; 1.00% Floor) 07/31/2024 — (4,235 ) — Software &
Services Term Loan 5.75% (L + 4.00%; 1.00% Floor) 03/15/2024 7,019,794 6,895,695 6,879,398 Software &
Services Revolver 5.75% (L + 4.00%; 1.00% Floor) 03/15/2024 — (9,518 ) (11,258 ) Software &
Services Delayed Draw Term Loan 5.75% (L + 4.00%; 1.00% Floor) 03/15/2024 — (19,006 ) (22,515 )
See Notes to Unaudited Consolidated Financial Statements
Portfolio Company Facility Type Interest Swiftpage, Inc. Swiftpage, Inc. Swiftpage, Inc.(2)(3) Symplr Software, Inc.(1)(13) Symplr Software, Inc.(2)(13) TRGRP, Inc.(1) TRGRP, Inc.(2)(3) TRGRP, Inc.(1) Velocity Purchaser Corporation(1) Velocity Purchaser Corporation(1) Velocity Purchaser Corporation(2)(3) Watermark Insights, LLC(1) Watermark Insights, LLC(1) Purchasing Power, LLC(1) Dillon Logistics, Inc.(1) Dillon Logistics, Inc.(1) Dillon Logistics, Inc.(2)(14) OSG Bulk Ships, Inc.(1) Total 1st Lien/Senior Secured Debt 2nd Lien/Junior Secured Debt—5.27% Brave Parent Holdings, Inc.(1) Conterra Ultra Broadband Holdings, Inc.(1) Total 2nd Lien/Junior Secured Debt Total U.S. Corporate Debt Canadian Corporate Debt—1.95% 1st Lien/Senior Secured Debt—1.95% JHMCRN Holdings, Inc.(1)(19) Nuvei Technologies Corp.(1)(4)(19) Total 1st Lien/Senior Secured Debt Total Canadian Corporate Debt Portfolio Company Industry U.S. Preferred Stock—3.36% Concerto, LLC(15)(16) Datarobot, Inc.(16) Degreed, Inc.(16) Heap(16) Protoscale Rubrik(16) Punchh(16) Symplr Software Intermediate Holdings, Inc.(16) Workfront, Inc.(16) Total U.S. Preferred Stock Industry Maturity Funded
Par Amount Cost Fair Value Software &
Services Term Loan A 7.24% (L + 5.50%; 1.00% Floor) 06/13/2023 $ 229,796 $ 225,972 $ 225,200 Software &
Services Term Loan 7.30% (L + 5.50%; 1.00% Floor) 06/13/2023 2,496,789 2,460,901 2,446,853 Software &
Services Revolver 7.30% (L + 5.50%; 1.00% Floor) 06/13/2023 — (3,128 ) (4,506 ) Software &
Services Term Loan 7.94% (L + 6.00%) 11/28/2025 5,756,909 5,680,081 5,670,556 Software &
Services Revolver 7.94% (L + 6.00%) 11/30/2023 268,631 265,115 264,184 Software &
Services Term Loan 8.80% (L + 4.50%; 2.50% PIK; 1.00% Floor) 11/01/2023 4,806,090 4,728,641 4,709,968 Software &
Services Revolver 8.80% (L + 4.50%; 2.50% PIK; 1.00% Floor) 11/01/2023 — (5,139 ) (6,667 ) Software &
Services Incremental Term Loan 8.80% (L + 4.50%; 2.50% PIK; 1.00% Floor) 11/01/2023 1,073,976 1,054,948 1,052,497 Software &
Services Term Loan 7.80% (L + 6.00%; 1.00% Floor) 12/01/2022 2,815,750 2,781,894 2,815,750 Software &
Services Term Loan 7.79% (L + 6.00%; 1.00% Floor) 12/01/2022 700,038 689,647 700,038 Software &
Services Revolver 7.80% (L + 6.00%; 1.00% Floor) 12/01/2022 — (2,300 ) — Software &
Services Term Loan 7.29% (L + 5.50%; 1.00% Floor) 06/07/2024 2,612,705 2,592,613 2,586,578 Software &
Services Delayed Draw Term Loan 7.29% (L + 5.50%; 1.00% Floor) 06/07/2024 327,878 326,063 324,599 Specialty Finance Term Loan 8.96% (L + 7.25%; 1.00% Floor) 02/06/2024 2,854,850 2,810,973 2,804,891 Transport &
Logistics Term Loan B 10.48% (L + 3.00%; 5.00% PIK; 1.00% Floor) 12/11/2023 1,172,909 1,154,246 1,089,984 Transport &
Logistics Term Loan A 10.48% (L + 3.00%; 5.00% PIK; 1.00% Floor) 12/11/2023 2,658,594 2,616,179 2,470,631 Transport &
Logistics Revolver 8.90% (L + 7.00%; 1.00% Floor) 12/11/2023 365,443 360,395 336,694 Transport &
Logistics Term Loan 6.69% (L + 5.00%) 12/21/2023 6,017,292 5,955,690 5,942,076 329,471,892 327,560,477 Energy Term Loan 9.43% (L + 7.50%) 04/17/2026 1,230,107 1,204,314 1,180,902 Software &
Services Term Loan 9.70% (L + 8.00%; 1.00% Floor) 04/30/2027 6,537,710 6,445,244 6,439,645 7,649,558 7,620,547 337,121,450 335,181,024 Business Services Term Loan 6.80% (L + 5.00%; 1.00% Floor) 11/25/2025 846,198 837,854 837,736 Business Services Term Loan 6.80% (L + 5.00%; 1.00% Floor) 09/29/2025 2,015,143 2,010,646 1,994,992 2,848,500 2,832,728 2,848,500 2,832,728 Shares Cost Fair Value Healthcare & HCIT 65,614 $ 349,977 $ 349,977 Software & Services 38,190 289,278 289,278 Software & Services 43,819 278,541 278,540 Software & Services 189,617 696,351 696,351 Software & Services 25,397 598,212 598,201 Software & Services 24,262 275,337 275,337 Software & Services 1,196 1,160,531 1,374,165 Software & Services 104,058 999,998 999,998 4,648,225 4,861,847
See Notes to Unaudited Consolidated Financial Statements
Portfolio Company Industry U.S. Common Stock—1.05% NC Holdings, LLC(16)(17) Leeds FEG Investors, LLC(16) INH Group Holdings(16) Aggregator, LLC(16) Total U.S. Common Stock U.S. Warrants—0.44% Degreed, Inc., Warrants expire 05/31/2026(16) Fuze, Inc., Warrants expire 09/20/2029(16) Total U.S. Warrants TOTAL INVESTMENTS—238.67%(18) LIABILITIES IN EXCESS OF OTHER ASSETS —(138.67%) NET ASSETS—100.00% Shares Cost Fair Value Digital Infrastructure & Services 360,996 400,525 400,525 Education 320 321,309 359,147 Healthcare & HCIT 484,552 484,552 290,731 Software & Services 417,813 417,813 467,950 1,624,199 1,518,353 Software & Services 17,749 27,511 27,511 Digital Infrastructure & Services 184,665 $ 603,855 $ 603,855 631,366 631,366 $ 346,873,740 $ 345,025,318 $ (200,462,923 ) $ 144,562,395
+ | As of December 31, |
* | Unless otherwise indicated, all securities are valued using significant unobservable inputs, which are categorized as Level 3 assets under the definition of |
# | Percentages are based on net assets. |
^ | Generally, the interest rate on floating interest rate investments is at benchmark rate plus spread. The borrower has an option to choose the benchmark rate, such as the London Interbank Offered Rate (“LIBOR”) or the U.S. Prime |
based on the type of rate used. The terms in the |
(1) | Position, or a portion thereof, has been segregated to collateralize ABPCI Direct Lending Fund CLO VI Ltd. |
(2) | Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The unfunded loan commitment may be subject to a commitment termination date, that may expire prior to the maturity date stated. See Note 6 “Commitments and |
The negative cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value is the result of the capitalized discount on the loan. |
|
$ |
$ |
Categorized as Level 2 assets under the definition of ASC 820 fair value hierarchy. |
$124,648 of the funded par amount accrues interest at 8.24% (L + 6.25%). |
(9) | $293,434 of the funded par amount accrues interest at 10.00% (P + 5.25%). |
(10) | $45,294 of the funded par amount accrues interest at 11.25% (P + 6.50%). |
(11) | $78,522 of the funded par amount accrues interest at 8.49% (L + 6.50%). |
(12) | $110,748 of the funded par amount accrues interest at 6.54% (L + 4.75%). |
(13) | Caliper Software, Inc. has been renamed to Symplr Software, Inc. in 2019. |
(14) | $62,056 of the funded par amount accrues interest at 10.75% (P + 6.00%). |
(15) | Concerto, LLC is held through ABPCIC Concerto Holdings LLC. |
(16) | Non-income producing |
|
Aggregate gross unrealized appreciation for federal income tax purposes is |
(19) | Positions considerednon-qualifying assets therefore excluded from the qualifying assets calculation as noted in footnote + above. |
L | - | LIBOR | ||
P | - | Prime | ||
PIK | - | Payment-In-Kind |
See Notes to Unaudited Consolidated Financial Statements
AB Private Credit Investors Corporation
Notes to Unaudited Consolidated Financial Statements (Unaudited)
September 30, 2019March 31, 2020
1. Organization
AB Private Credit Investors Corporation (the “Fund,” “we,” “our,” and “us”), an externally managed,non-diversified,closed-end, management investment company that elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), was incorporated under the laws of the state of Maryland on February 6, 2015. The Fund was formed to invest in primary-issue middle-market credit opportunities that are directly sourced and privately negotiated. AB Private Credit Investors LLC serves as the Fund’s external investment adviser (the “Adviser”).
Prior to 2017, there were no significant operations other than the sale and issuance of 100 shares of common stock, par value $0.01, on June 27, 2016, at an aggregate purchase price of $1,000 ($10.00 per share) to the Adviser. The sale of common shares was approved by the unanimous consent of the Fund’s Board of Directors (the “Board”). In addition, prior to commencing operations in 2017, on May 26, 2017, the Fund issued and sold an additional 2,400 shares of common stock, par value $0.01 at an aggregate purchase price of $24,000 ($10.00 per share) to the Adviser. That sale was also approved by the unanimous consent of the Fund’s Board.
The Fund is conducting private offerings (each a “Private Offering”) of its common stock to investors in reliance on an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). At the closing of any Private Offering, each investor will make a capital commitment (a “Capital Commitment”) to purchase shares of the Fund’s common stock pursuant to a subscription agreement entered into with the Fund. Investors will be required to fund drawdowns to purchase shares of the Fund’s common stock up to the amount of their respective Capital Commitment on anas-needed basis each time the Fund delivers a capital draw-down notice to its investors.
On September 29, 2017, the Fund completed the initial closing (“Initial Closing”) of its Private Offering after entering into subscription agreements (collectively, the “Subscription Agreements”) with several investors, providing for the private placement of the Fund’s common shares. At September 30, 2019,March 31, 2020, the Fund had total Capital Commitments of $359,356,251,$418,448,516, of which 66%56% is unfunded. Capital Commitments may be drawn down by the Fund on a pro rata basis, as needed (includingfollow-on investments), for paying the Fund’s expenses, including fees under the Advisory Agreement, and/or maintaining a reserve account for the payment of future expenses or liabilities.
There were no operating activities from February 6, 2015 to November 15, 2017. As described above, the Fund completed its Initial Closing on September 29, 2017, and commenced operations on November 15, 2017. The Fund’s fiscal year ends on December 31.
On October 31, 2018, the Adviser established ABPCIC SSC TS Holdings LLC (“ABPCIC SSC TS”), through which the Fund made an investment. ABPCIC SSC TS is 100% owned by the Fund and is consolidated in the Fund’s consolidated financial statements commencing from the date of its formation. On December 19, 2018, the Adviser established ABPCIC Funding I LLC (“ABPCIC Funding”), a Delaware limited liability company. ABPCIC Funding is 100% owned by the Fund and is consolidated in the Fund’s consolidated financial statements commencing from the date of its formation.
On June 14, 2019, the Adviser established ABPCI Direct Lending Fund CLO VI Ltd (“CLO VI”), an exempted company incorporated with limited liability under the laws of the Cayman Islands. CLO VI is 100% owned by the Fund and is consolidated in the Fund’s consolidated financial statements.
On August 9, 2019, ABPCIC Funding and CLO VI entered into a merger agreement, pursuant to which ABPCIC Funding has agreed to merge with and into CLO VI, with CLO VI as the surviving entity. CLO VI is 100% owned byissued Class B, Class C and Subordinated Notes to the Fund and is consolidated inthrough AB PCI Direct Lending Fund CLO VI Depositor LLC, a wholly-owned subsidiary of the Fund’s consolidated financial statements.Fund established on August 9, 2019.
On September 25, 2019, the AdviserFund established ABPCIC NC Holdings LLC (“ABPCIC NC”), and together with ABPCIC SSC TS, the “Blockers”) through which the Fund made an investment. ABPCIC NC is 100% owned by the Fund and is consolidated in the Fund’s consolidated financial statements commencing from the date of its formation.
On December 17, 2019, the Fund established ABPCIC Concerto Holdings LLC (“ABPCIC Concerto”), through which the Fund made an investment. ABPCIC Concerto is 100% owned by the Fund and is consolidated in the Fund’s consolidated financial statements commencing from the date of its formation.
On February 7, 2020, the Fund and an affiliate of Abbott Capital Management, LLC (“Abbott”) became members of, ABPCIC Equity Holdings, LLC, a Delaware limited liability company and a special purpose vehicle designed to invest in private equity investments sourced by Abbott. The Fund owns 100% of the Class L Units and 93% of the Class A Units of ABPCIC Equity Holdings, LLC, which had not commenced operations as of March 31, 2020.
2. Significant Accounting Policies
The Fund is an investment company under accounting principles generally accepted in the United States of America (“GAAP”) and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946,Financial Services – Investment Companies.The Fund
has prepared the consolidated financial statements and related financial information pursuant to the requirements for reporting on Form10-Q and Articles 6 and 10 of RegulationS-X. Accordingly, we have not included in this quarterly report all of the information and notes required by GAAP for annual financial statements. In the opinion of management, the unaudited financial information for the interim period presented in this report reflects all normal and recurring adjustments necessary for a fair statement of financial position and results from operations. Operating results for interim periods are not necessarily indicative of operating results for an entire year.
The functional currency of the Fund is U.S. dollars and these consolidated financial statements have been prepared in that currency.
The consolidated financial statements include the accounts of the Fund and its wholly-owned Blockers and CLO VI.subsidiaries. All intercompany balances and transactions have been eliminated.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current presentation, with no significant effect on our financial condition, results of operations or cash flows.
The following is a summary of significant accounting policies followed by the Fund.
Cash and Cash Equivalents
Cash consists of demand deposits and money market portfolios.accounts. Cash is carried at cost, which approximates fair value. The Fund maintains deposits of its cash with financial institutions, and, at times, cash held in bank accounts may exceed the Federal Deposit Insurance Corporation insured limit. The Fund considers all highly liquid investments, with original maturities of less than ninety days, as cash equivalents.
Revenue Recognition
Investment transactions are recorded on a trade-date basis. Interest income is recognized on an accrual basis. Interest income on debt instruments is accrued and recognized for those issuers who are currently paying in full or expected to pay in full. For those issuers who are in default or expected to default, interest is not accrued and is only recognized when received. Generally, when interest and/or principal payments on a loan become past due, or if the Fund otherwise does not expect the borrower to be able to service its debt and other obligations, the Fund will place the loan onnon-accrual status and will 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 restructuring such that the interest income is deemed to be collectible. The Fund generally restoresnon-accrual loans to accrual status when past due principal and interest is paid and, in the management’s judgment, is likely to remain current. Interest income and expense include discounts accreted and premiums amortized on certain debt instruments as determined in good faith by the Adviser and calculated using the effective interest method. Loan origination fees, original issue discounts and market discounts or premiums are capitalized as part of the underlying cost of the investments and accreted or amortized over the life of the investment as interest income.
Realized gains and losses on investment transactions are determined on the specific identification method.
Certain investments in debt securities may contain a contractualpayment-in-kind (“PIK”) interest provision. The PIK provisions generally feature the obligation, or the option, at each interest payment date of making interest payments in (i) cash, (ii) additional debt or (iii) a combination of cash and additional debt. PIK interest, computed at the contractual rate specified in the investment’s credit agreement, is accrued as interest income and recorded as interest receivable up to the interest payment date. On the interest payment date, the accrued interest receivable attributable to PIK is added to the principal balance of the investment. When additional debt is received on the interest payment date, it typically has the same terms, including maturity dates and interest rates, as the original loan. PIK interest generally becomes due on the investment’s maturity date or call date.
The Fund may earn various fees during the life of the loans. Such fees include, but are not limited to, syndication, commitment, administration, prepayment and amendment fees, some of which are paid to the Fund on an ongoing basis. These fees and any other income are recognized as earned.
Credit Facility Related Costs, Expenses and Deferred Financing Costs
The Revolving Credit Facility (as defined below)in Note 4) is recorded at carrying value, which approximates fair value. Interest expense and unused commitment fees on the Revolving Credit Facility are recorded on an accrual basis. Unused commitment fees are included in interest and borrowing expenses in the consolidated statements of operations. Deferred financing costs include capitalized expenses related to the closing of the Revolving Credit Facility. Amortization of deferred financing costs is computed on the straight-line basis over the contractual term. The amortization of such costs is included in interest and borrowing expenses in the consolidated statements of operations, with any unamortized amounts included in deferred financing costs on the consolidated statements of assets and liabilities.
Notes Payable Related Costs, Expenses and Unamortized Debt Issuance Costs
The Notes (as defined below)in Note 4) are recorded at carrying value. Interest expense on notes payable is recorded on an accrual basis. Debt issuance costs relating to notes payable are amortized on a straight-line basis over the contractual term and included in interest and borrowing expenses in the consolidated statements of operations. The unamortized debt issuance costs are included as a direct reduction of the carrying value of the notes payable (i.e. a contra liability).
Upon early termination or partial principal pay down of the Notes, the unamortized costs related to the Notes are accelerated into interest and borrowing expenses on the Fund’s consolidated statements of operations.
Income Taxes
ASC 740, “Accounting for Uncertainty in Income Taxes” (“ASC 740”) provides guidance on the accounting for and disclosure of uncertainty in tax position.positions. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are“more-likely-than-not” of being sustained by the applicable tax authority. Tax positions deemed to meet themore-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Based on its analysis of its tax position for all open tax years (the current and prior year)two years), the Fund has concluded that it does not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740. Such open tax years remain subject to examination and adjustment by tax authorities.
The Fund has elected to be treated and intends to continue to be treated for federal income tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). So long as the Fund is able to maintain its status as a RIC, it intends not to be subject to U.S. federal income tax on the portion of its taxable income and gains distributed to stockholders, if any. To qualify for RIC tax treatment, the Fund is required to distribute at least 90% of its investment company taxable income annually, meet diversification and income requirements quarterly, meet gross income requirements annually and file Form1120-RIC, as provided by the Code. In order for the Fund not to be subject to U.S. federal excise taxes, it must distribute annually an amount at least equal to the sum of (i) 98% of its net ordinary income (taking into account certain deferrals and elections) for the calendar year, (ii) 98.2% of its capital gains in excess of capital losses for theone-year period ending
on October 31 of the calendar year and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years that were not distributed during such years. The Fund, at its discretion, may carry forward taxable income in excess of calendar year dividends and pay a 4% nondeductible U.S. federal excise tax on this income. The Fund will accrue excise tax on estimated undistributed taxable income as required. For the three and nine months ended September 30,March 31, 2020 and 2019, the Fund accrued excise taxes of $0 and $0, respectively. For the three and nine months ended September 30, 2018, the Fund accrued excise taxes of $0 and $3, respectively. As of September 30, 2019,March 31, 2020, and December 31, 2018,2019, $0 and $0, respectively, of accrued excise taxes remained payable.
The Fund may be subject to taxes imposed by countries in which the Fund invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued and applied to net investment income, net realized gains and net unrealized gain (loss) as such income and/or gains are earned.
The Fund remains subject to examination by U.S. federal and state jurisdictions, as well as international jurisdictions, and upon completion of these examinations (if undertaken by the taxing jurisdiction) tax adjustments may be necessary and retroactive to all open tax years.
Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities, if any, at the date of the consolidated financial statements, and the reported amounts of revenues and expenses recorded during the reporting period. Actual results could differ from those estimates and such differences could be material.
Distributions
Distributions from net investment income and net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with GAAP. The Fund may pay distributions in excess of its taxable net investment income. This excess would be atax-free return of capital in the period and reduce the stockholder’s tax basis in its shares. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent they are charged or credited topaid-in capital in excess of par, accumulated undistributed net investment income or accumulated net realized gain (loss), as appropriate, in the period that the differences arise. Temporary and permanent differences are primarily attributable to differences in the tax treatment of certain loans and the tax characterization of income andnon-deductible expenses. These differences are generally determined in conjunction with the preparation of the Fund’s annual RIC tax return. Distributions to common stockholders are recorded on theex-dividend date. The amount to be paid out as a distribution is determined by the Board each quarter and is generally based upon the earnings estimated by the Adviser. The Fund may pay distributions to its stockholders in a year in excess of its net ordinary income and capital gains for that year and, accordingly, a portion of such distributions may constitute a return of capital for U.S. federal income tax purposes. The Fund intends to timely distribute to its stockholders substantially all of its annual taxable income for each year, except that the Fund may retain certain net capital gains for reinvestment and, depending upon the level of the Fund’s taxable income earned in a year, the Fund may choose to carry forward taxable income for distribution in the following year and pay any applicable U.S. federal excise tax. The specific tax characteristics of the Fund’s distributions will be reported to stockholders after the end of the calendar year. All distributions will be subject to available funds, and no assurance can be given that the Fund will be able to declare such distributions in future periods.
The Fund has adopted a dividend reinvestment plan that provides for stockholders to receive dividends or other distributions declared by the Board in cash unless a stockholder elects to “opt in” to the dividend reinvestment plan. As a result, if the Board declares a cash distribution, then the stockholders who have “opted in” to the dividend reinvestment plan will have their cash distributions automatically reinvested in additional shares of common stock, rather than receiving the cash distribution.
Recent Accounting Pronouncements
As of and for the three and nine months ended September 30, 2019, there are no recent accounting pronouncements that affect the Fund.
3. Related Party Transactions
Advisory Agreement
On July 5, 2017,November 13, 2019, the Board approvedFund entered into the investmentAmended and Restated Advisory Agreement (the “Amended and Restated Advisory Agreement”), replacing the advisory agreement the Fund entered into with the Adviser on July 27, 2017 (the “Advisory
Agreement”), pursuant to which the Fund will pay the Adviser, quarterly in arrears, a base management fee calculated at an annual rate of 1.50%. The base management fee is calculated based on a percentage of the average outstanding assets of the Fund (which equals the gross value of equity and debt instruments, including investments made utilizing leverage), excluding cash and cash equivalents, during such fiscal quarter. The average outstanding assets will beis calculated by taking the average of the amount of assets of the Fund at the beginning and end of each month that occurs during the calculation period. The base management fee will beis calculated and paid quarterly in arrears but will be accrued monthly by the Fund over the fiscal quarter for which such base management fee is paid. The base management fee for any partial month or quarter will beis appropriately prorated. For the three and nine months ended September 30,March 31, 2020, the Fund incurred a management fee of $1,352,351, of which $1,227,046 was voluntarily waived by the Adviser. For the three months ended March 31, 2019, the Fund incurred a management fee of $1,017,059 and $2,477,129, respectively,$615,859, of which $60,261 and $191,359, respectively, were voluntarily waived by the Adviser. For the three and nine months ended September 30, 2018, the Fund incurred a management fee of $281,892 and $560,765, respectively, of which $39,913 and $77,203, respectively, were$63,171 was voluntarily waived by the Adviser. As of September 30, 2019March 31, 2020, and December 31, 2018, $956,7992019, $1,147,126 and $830,130,$1,053,696, respectively, of accrued management fee remained payable.
The Fund will also pay the Adviser an incentive fee that provides the Adviser with a share of the income that the Adviser generates for the Fund. The incentive fee will consist of an income-based incentive fee component and a capital-gains component, which are largely independent of each other, with the result that one component may be payable even if the other is not.
Income-Based Incentive Fee: The income-based incentive fee is calculated and payable quarterly in arrears based on the Fund’s net investment income prior to any deductions with respect to such income-based incentive fees and capital gains incentive fees(“Pre-incentive Fee Net Investment Income” or “PIFNII”) for the quarter, as further described below.Pre-incentive Fee Net Investment
Income PIFNII means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial and consulting fees or other fees the Fund receives from portfolio companies) that the Fund accrues during the fiscal quarter, minus the Fund’s operating expenses for the quarter (including the base management fee, expenses payable under the administration agreement (the “Administration Agreement”) we have entered into with State Street Bank and Trust (the “Administrator”), and any interest expense and dividends paid on any issued and outstanding indebtedness or preferred stock, respectively, but excluding, for avoidance of doubt, the income-based incentive fee accrued under GAAP).Pre-incentive Fee Net Investment Income PIFNII also includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with pay in kindpay-in-kind interest andzero-coupon securities), accrued income that the Fund has not yet received in cash. The Adviser is not under any obligation to reimburse the Fund for any part of the income-based incentive fees it received that was based on accrued interest that the Fund never actually received.
Pre-incentive Fee Net Investment IncomePIFNII does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Because of the structure of the income-based incentive fee, it is possible that the Fund may accrue such income-based incentive fee in a quarter where the Fund incurs a net loss. For example, if the Fund receivesPre-incentive Fee Net Investment Income PIFNII in excess of a hurdle rate (as defined below) for a quarter, the Fund will accrue the applicable income-based incentive fee even if the Fund has incurred a realized and/or unrealized capital loss in that quarter. However, cash payment of the income-based incentive fee may be deferred in this situation, subject to the restrictions detailed at the end of this section.
Pre-incentive Fee Net Investment Income,PIFNII, expressed as a rate of return on the average value of the Fund’s net assets (defined as total assets, less indebtedness and before taking into account any incentive fees payable during the period) atas of the endfirst day of each month during the course of the immediately preceding fiscalcalendar quarter, will be compared to various “hurdle rates,” with the income-based incentive fee rate of return increasing at each hurdle rate.
Description of Quarterly Incentive Fee Calculations
We payThe Fund pays the Adviser an income-based incentive fee with respect toPre-incentive Fee Net Investment Income PIFNII in each calendar quarter as follows:
No income-based incentive fee in any calendar quarter in whichPre-incentive Fee Net Investment Income PIFNII does not exceed 1.5% per quarter (6% per annum), the “6% Hurdle Rate”;
100% ofPre-incentive Fee Net Investment Income PIFNII with respect to that portion of suchPre-incentive Fee Net Investment Income, PIFNII, if any, that exceeds the 6% Hurdle Rate but is less than 1.67% in any calendar quarter (the “6%Catch-up Cap”), approximately 6.67% per annum. This portion ofPre-incentive Fee Net Investment Income PIFNII (which exceeds the 6% Hurdle Rate but is less than the 6%Catch-up Cap) is referred to as the “6%Catch-up.” The 6%Catch-up is meant to provide the Adviser with 10.0% of thePre-incentive Fee Net Investment Income PIFNII as if hurdle rate did not apply if this net investment income exceeded 1.67% but was less than 1.94% in any calendar quarter; and
10.0% of the amount ofPre-incentive Fee Net Investment Income, PIFNII, if any, that exceeds the 6%Catch-up Cap, but is less than 1.94% (the “7% Hurdle Rate”), approximately 7.78% per annum. The 7% Hurdle Rate is meant to limit the Adviser to 10% of thePre-incentive Fee Net Investment Income PIFNII until the amount ofPre-incentive Fee Net Investment Income PIFNII exceeds 1.94%, approximately 7.78% per annum; and
100% ofPre-incentive Fee Net Investment Income PIFNII with respect to that portion of suchPre-incentive Fee Net Investment Income, PIFNII, if any, that exceeds the 7% Hurdle Rate but is less than 2.06% in any calendar quarter (the “7%Catch-up Cap”), approximately 8.24% per annum. This portion ofPre-incentive Fee Net Investment Income PIFNII (which exceeds the 7% Hurdle Rate but is less than the 7%Catch-up Cap) is referred to as the “7%Catch-up.” The 7%Catch-up is meant to provide the Adviser with 15.0% of thePre-incentive Fee Net Investment Income PIFNII as if a hurdle rate did not apply if this net investment income exceeded 2.06% but was less than 2.35% in any calendar quarter; and
15.0% of the amount ofPre-incentive Fee Net Investment Income, PIFNII, if any, that exceeds the 7%Catch-up Cap, but is less than 2.35% (the “8% Hurdle Rate”, approximately 9.41% per annum). The 8% Hurdle Rate is meant to limit the Adviser to 15% of thePre-incentive Fee Net Investment Income PIFNII until the amount ofPre-incentive Fee Net Investment Income PIFNII exceeds 2.06%2.35%, approximately 9.41% per annum; and
100% ofPre-incentive Fee Net Investment Income PIFNII with respect to that portion of suchPre-incentive Fee Net Investment Income, PIFNII, if any, that exceeds the 8% Hurdle Rate but is less than 2.50% in any calendar quarter (the “8%Catch-up Cap”), approximately 10% per annum. This portion ofPre-incentive Fee Net Investment Income (which PIFNII(which exceeds the 8% Hurdle Rate but is less than the 8%Catch-up cap) is referred to as the “8%Catch-up”. The 8%Catch-up is meant to provide the Adviser with 20.0% of thePre-incentive Fee Net Investment Income PIFNII as if a hurdle rate did not apply if this net investment income exceeded 2.50% in any calendar quarter; and
20.0% of the amount ofPre-incentive Fee Net Investment Income, PIFNII, if any, that exceeds 2.50% in any calendar quarter.
For the three and nine months ended September 30, 2019,March 31, 2020, the Fund incurred income-based incentive fees of $180,792 and $586,627, respectively,$769,023, of which $56,255 and $132,327, respectively,$486,784, was voluntarily waived by the Adviser. For the three and nine months ended September 30, 2018,March 31, 2019, the Fund incurred income-based incentive fees of $66,206 and $66,206, respectively,$106,087, of which $32,302 and $32,302, respectively,$76,072, was voluntarily waived by the Adviser. As of September 30, 2019March 31, 2020 and December 31, 2018, $654,1622019, $1,331,530, and $199,862, respectively, of accrued income-based incentive fees$1,049,291 remained payable.
Capital Gains Incentive Fee: The capital gains incentive fee is determined and payable at the end of each fiscal year as 20% of aggregate cumulative realized capital gains from the date of the Fund’s election to be regulated as a BDC through the end of that year, computed net of all aggregate cumulative realized capital losses and aggregate cumulative unrealized depreciation through the end of such year, less the aggregate amount of any previously paid capital gain incentive fees. For the foregoing purpose, “aggregate cumulative realized capital gains” will not include any unrealized appreciation. For accounting purposes only, we are required under GAAP to accrue a hypothetical capital gains incentive fee based upon net realized gains and unrealized depreciation for that calendar year (in accordance with the terms of the Amended and Restated Advisory Agreement), plus unrealized appreciation on investments held at the end of the period. The accrual of this hypothetical capital gains incentive fee assumes all unrealized capital gain and loss is realized in order to reflect a hypothetical capital gains incentive fee that would be payable to the Adviser at each measurement date. The capital gains incentive fee is not subject to any minimum return to stockholders. If such amount is negative, then no capital gains incentive fee will be payable for such year. Additionally, if the Amended and Restated Advisory 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 the capital gains incentive fee.
Since inception, no capital gains incentive fees have been incurred or are payable as of September 30, 2019March 31, 2020 and December 31, 2018,2019, and for the three and nine months ended September 30, 2019March 31, 2020 and September 30, 2018.March 31, 2019.
The amount of capital gains incentive fee expense related to a hypothetical liquidation of the portfolio (and assuming no other changes in realized or unrealized gains and losses) would only become payable to the Adviser in the event of a complete liquidation of the Fund’s portfolio as of period end and the termination of the Amended and Restated Advisory Agreement on such date. Also, it should be noted that the capital gains incentive fee expense fluctuates with the Fund’s overall investment results.
The Fund will defer cash payment of any income-based incentive fee and/or any capital gains incentive fee otherwise earned by the Adviser if during the most recent four full fiscal quarter periods ending on or prior to the date such payment is to be made, the sum of (a) thePre-incentive Fee Net Investment Income, PIFNII, and (b) the realized capital gain / loss and (c) unrealized capital appreciation/ depreciation expressed as a rate of return on the value of our net assets, is less than 6.0%. Any such deferred fees are carried over for payment in subsequent calculation periods to the extent such payment is payable under the Amended and Restated Advisory Agreement.
Administration Agreement and Expense Reimbursement Agreement
We have entered into the Administration Agreement with the Administrator and a separate expense reimbursement agreement with the Adviser (the “Expense Reimbursement Agreement”) under which any allocable portion of the cost of our Chief Compliance Officer and Chief Financial Officer and their respective staffs will be reimbursed by the Fund. Under the Administration Agreement, the Administrator will be responsible for providing us with clerical, bookkeeping, recordkeeping and other administrative services. We will reimburse the Adviser an amount equal to our allocable portion (subject to the review of our Board) of its overhead resulting from its obligations under the Expense Reimbursement Agreement, including the allocable portion of the cost of our Chief Compliance Officer and Chief Financial Officer and their respective staffs.
Expense Support and Conditional Reimbursement Agreement
On September 29, 2017, the Fund and the Adviser entered into an agreement (the “Expense Support and Conditional Reimbursement Agreement”) to limit certain of the Fund’s Operating Expenses, as defined in the Expense Support and Conditional Reimbursement Agreement,below, to no more than 1.5% of the Fund’s average quarterly gross assets. To achieve this percentage limitation,
the Adviser has agreed to reimburse the Fund for certain Operating Expenses on a quarterly basis (any such payment by the Adviser, an “Expense Payment”) and the Fund has agreed to later repay such amounts (any such payment by the Fund, a “Reimbursement Payment”), pursuant to the terms of the Expense Support and Conditional Reimbursement Agreement. The actual percentage of Operating Expenses paid by the Fund in any quarter after deducting any Expense Payment, as a percentage of the Fund’s average quarterly gross assets, is referred to as the “Percentage Limit.”
Any Expense Payment by the Adviser pursuant to the Expense Support and Conditional Reimbursement Agreement will be subject to repayment by the Fund on a quarterly basis within the three years following the fiscal quarter of the Fund in which the Operating Expenses were paid or absorbed, if the total Operating Expenses for the current quarter, including Reimbursement Payments, expressed as a percentage of the Fund’s average gross assets during such quarter is less than the then-current Percentage Limit, if any, and the Percentage Limit that was in effect at the time when the Adviser reimbursed the Operating Expenses that are the subject of the repayment, subject to certain provisions of the Expense Support and Conditional Reimbursement Agreement, as described below. For purposes of the Expense Support and Conditional Reimbursement Agreement, “Operating Expenses” means the Fund’s Total Operating Expenses (as defined below), excluding base management fees, incentive fees, distribution and shareholderstockholder servicing fees, financing fees and costs, interest expense, brokerage commissions and extraordinary expenses and “Total Operating Expenses” means all of the Fund’s operating costs and expenses incurred, as determined in accordance with generally accepted accounting principles for investment companies.
However, no Reimbursement Payment for any quarter will be made if: (1) the Effective Rate of Distributions Per Share (as defined below) declared by the Fund at the time of such Reimbursement Payment is less than or equal to the Effective Rate of Distributions Per Share at the time the Expense Payment was made to which such Reimbursement Payment relates, or (2) the Fund’s Operating Expense Ratio at the time of such Reimbursement Payment is greater than or equal to the Operating Expense Ratio (as defined below) at the time the Expense Payment was made to which such Reimbursement Payment relates. For purposes of the Expense Support and Conditional Reimbursement Agreement, “Effective Rate of Distributions Per Share” means the annualized rate (based on a365- day year) of regular cash distributions per share exclusive of returns of capital, distribution rate reductions due to distribution and shareholderstockholder fees, and declared special dividends or special distributions, if any. The “Operating Expense Ratio” is calculated by dividing Operating Expenses in any quarter by the Fund’s average net assets in such quarter.
The specific amount of expenses paid by the Adviser, if any, will be determined at the end of each quarter. The Fund or the Adviser may terminate the Expense Support and Conditional Reimbursement Agreement at any time, with or without notice. The Expense Support and Conditional Reimbursement Agreement will automatically terminate in the event of (a) the termination of the Amended and Restated Advisory Agreement, or (b) the Board of the Fund makesmaking a determination to dissolve or liquidate the Fund. Upon termination of the Expense Support and Conditional Reimbursement Agreement, the Fund will be required to fund any Expense Payments, subject to the aforementioned requirements per the Expense Support and Conditional Reimbursement Agreement, that have not been reimbursed by the Fund to the Adviser.
As of September 30, 2019,March 31, 2020, the amount of Expense Payments provided by the Adviser since inception is $4,784,382. Management believes that Reimbursement Payments by the Fund to the Adviser were not probable under the terms of the Expense Support Agreement as of September 30, 2019, and therefore have not been accrued.$4,874,139. The following table reflects the Expense Payments that may be subject to reimbursement pursuant to the Expense Agreement:
For the Quarters Ended | Amount of Expense Support | Effective Rate of Distribution per Share (1) | Reimbursement Eligibility Expiration | Percentage Limit (2) | Amount of Expense Support | Amount of Reimbursement Payment | Amount of Unreimbursed Expense Support | Effective Rate of Distribution per Share(1) | Reimbursement Eligibility Expiration | Percentage Limit (2) | ||||||||||||||||||||||||||
September 30, 2017 | $ | 1,002,147 | n/a | September 30, 2020 | 1.5 | % | $ | 1,002,147 | $ | 107,841 | $ | 894,306 | n/a | September 30, 2020 | 1.5 | % | ||||||||||||||||||||
December 31, 2017 | 1,027,398 | n/a | December 31, 2020 | 1.5 | % | 1,027,398 | — | 1,027,398 | n/a | December 31, 2020 | 1.5 | % | ||||||||||||||||||||||||
March 31, 2018 | 503,592 | n/a | March 31, 2021 | 1.5 | % | 503,592 | — | 503,592 | n/a | March 31, 2021 | 1.5 | % | ||||||||||||||||||||||||
June 30, 2018 | 1,086,482 | 4.787% | June 30, 2021 | 1.0 | % | 1,086,482 | — | 1,086,482 | 4.787 | % | June 30, 2021 | 1.0 | % | |||||||||||||||||||||||
September 30, 2018 | 462,465 | 4.715% | September 30, 2021 | 1.0 | % | 462,465 | — | 462,465 | 4.715 | % | September 30, 2021 | 1.0 | % | |||||||||||||||||||||||
December 31, 2018 | 254,742 | 6.762% | December 31, 2021 | 1.0 | % | 254,742 | — | 254,742 | 6.762 | % | December 31, 2021 | 1.0 | % | |||||||||||||||||||||||
March 31, 2019 | 156,418 | 5.599% | March 31, 2022 | 1.0 | % | 156,418 | — | 156,418 | 5.599 | % | March 31, 2022 | 1.0 | % | |||||||||||||||||||||||
June 30, 2019 | 259,263 | 6.057% | June 30, 2022 | 1.0 | % | 259,263 | — | 259,263 | 6.057 | % | June 30, 2022 | 1.0 | % | |||||||||||||||||||||||
September 30, 2019 | 31,875 | 5.154% | September 30, 2022 | 1.0 | % | 31,875 | — | 31,875 | 5.154 | % | September 30, 2022 | 1.0 | % | |||||||||||||||||||||||
December 31, 2019 | — | — | — | 6.423 | % | December 31, 2022 | 1.0 | % | ||||||||||||||||||||||||||||
March 31, 2020 | 89,757 | — | 89,757 | 10.17 | % | March 31, 2023 | 1.0 | % | ||||||||||||||||||||||||||||
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Total | $ | 4,784,382 | $ | 4,874,139 | $ | 107,841 | $ | 4,766,298 | ||||||||||||||||||||||||||||
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(1) | The effective rate of distribution per share is expressed as a percentage equal to the projected annualized distribution amount as of the end of the applicable period (which is calculated by annualizing the regular quarterly cash distributions per share as of such date without compounding), divided by the Fund’s gross offering price per share as of such date. |
(2) | Represents the actual percentage of Operating Expenses paid by the Fund in any quarter after deducting any Expense Payment, as a percentage of the Fund’s average quarterly gross assets. |
Transfer Agency Agreement
On September 26, 2017, the Fund and AllianceBernstein Investor Services, Inc. (“ABIS”), an affiliate of the Fund, entered into an agreement pursuant to which ABIS will provide transfer agent services to the Fund. The Fund bears the expenses related to the agreement with ABIS.
For the three and nine months ended September 30,March 31, 2020 and 2019, the Fund accrued $8,104$10,758 and $19,203 in transfer agent fees, respectively. For the three and nine months ended September 30, 2018, the Fund accrued $561 and $561$4,662 in transfer agent fees, respectively. As of September 30, 2019March 31, 2020 and December 31, 2018, $8,1042019, $20,155 and $10,717,$9,397, respectively, of accrued transfer agent fees remained payable.
4. Borrowings
Credit FacilityFacilities
On November 15, 2017, the Fund entered into a credit agreement (the “Credit Agreement”) to establish a revolving credit facility (the “Revolving Credit Facility”) with HSBC Bank USA, National Association (“HSBC”) as administrative agent (the “Administrative Agent”). The initial maximum commitment amount (the “Maximum Commitment”) under the Revolving Credit Facility was $30 million and may be increased in a minimum amount of $10 million and in $5 million increments thereof with the consent of HSBC or reduced upon request of the Fund. As of September 30,January 31, 2019, the Fund has adjustedincreased the Maximum Commitment to $50 million. So long as no request for borrowing is outstanding, the Fund may terminate the Commitmentslenders’ commitments (“Commitments”) or reduce the Maximum Commitments by giving prior irrevocable written notice to the administrative agent.Administrative Agent. Any reduction of the Maximum Commitments shall be in an amount equal to $10 million or multiples thereof; and in no event, shall a reduction by the Fund reduce the Commitments to $35 million or less (in each case, except for a termination of all the Commitments). Proceeds under the Credit Agreement may be used for any purpose permitted under our organizational documents, including general corporate purposes such as the making of investments. The Credit Agreement contains certain customary covenants and events of default, with customary cure and notice provisions. As of September 30, 2019,March 31, 2020, the Fund is in compliance with these covenants. The Fund’s obligations under the Credit Agreement are secured by the Capital Commitments and capital contributions to the Fund.
Borrowings under the Credit Agreement bear interest, at the Fund’s election at the time of drawdown, at a rate per annum equal to (i) with respect to LIBOR Rate Loans, Adjusted LIBOR (as defined in the Credit Agreement) for the applicable Interest Period;Period (as defined in the Credit Agreement); and (ii) with respect to Reference Rate Loans (as defined in the Credit Agreement), the greatest of: (i)(x) the rate of interest per annum publicly announced from time to time by HSBC as its prime rate, (ii)(y) the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, plus two hundred basis points (2.00%), provided that if such rate is not so published for any day that is a Business Day (as defined in the credit agreement)Credit Agreement), the average of the quotation for such day on such transactions received by the administrative agent (as defined in the credit agreement),Administrative Agent, from three (3) Federal funds brokers of recognized standing selected by the administrative agentAdministrative Agent and, upon request of Borrowers (as defined in the Credit Agreement), with notice of such quotations to the Borrowers and (iii)(z) except during any period of time during which LIBOR isunavailable, one-month Adjusted LIBOR plus twoone hundred ninety basis points (2.00%(1.90%). The Fund will also pay an unused commitment fee of 35 basis points (0.35%) on any unused commitments.
The Revolving Credit Facility wasis scheduled to mature on November 13, 2019,11, 2020, subject to the Fund’s option to extend the maturity date for up to one additional term not longer than 364 days, subject to the following conditions: (i) each of the Lenders (as defined in the Credit Agreement) and the administrative agentAdministrative Agent consents to the extension in their sole discretion; (ii) the Fund has paid an extension fee to the administrative agentAdministrative Agent for the benefit of the extending Lenders consenting to such extension in an amount agreed to by the administrative agentAdministrative Agent and the Borrowers at the time of the extension and as set forth in the applicable extension request; (iii) no potential default or event of default has occurred and is continuing on the date on which notice is given in accordance with the following clause (iv) or on November 13, 2019;11, 2020; and (v) the Fund has delivered an extension request to the administrative agentAdministrative Agent not more than one hundred twenty (120) days or less than forty-five (45) days prior to November 13, 2019.11, 2020.
On January 30, 2019, ABPCIC Funding entered into a Credit Agreement (the “Barclays Credit Facility”) with Barclays Bank PLC, New York Branch (“Barclays”) as facility agent (in such capacity, the “Facility Agent”) and U.S. Bank National Association (“U.S. Bank”) as collateral agent (in such capacity, the “Collateral Agent”), collateral administrator (in such capacity, the “Collateral Administrator”) and custodian (in such capacity, the “Custodian”). The Barclays Credit Facility was in effect during the quarter, but terminated on August 9, 2019.
All of the collateral pledged to lenders by ABPCIC Funding under the Barclays Credit Facility was held in the custody of the Custodian under an account control agreement by and among ABPCIC Funding, the Collateral Agent and the Custodian. The Collateral Administrator maintained and performed certain collateral administration services with respect to the collateral pursuant to a collateral administration agreement among ABPCIC Funding, the Adviser and the Collateral Administrator. Borrowings under the Barclays Credit Facility were secured by all of the assets held by ABPCIC Funding. Pursuant to a collateral management agreement (the “Collateral Management Agreement”) by and between ABPCIC Funding and the Adviser as collateral manager, the Adviser performed certain duties with respect to the purchase and management of the assets securing the Barclays Credit Facility. The Adviser elected to waive any fees that would otherwise be payable under the Barclays Credit Facility and the Collateral Management Agreement. ABPCIC Funding was responsible for reimbursing the expenses incurred by the Adviser in the performance of its obligations under the Collateral Management Agreement other than any ordinary overhead expenses, which were not required to be reimbursed. For the three and nine months ended September 30, 2019, the Fund incurred a collateral management fee of $100,949 and $426,758, respectively, which was voluntarily waived by the Adviser.
The Barclays Credit Facility provided for borrowings in an aggregate amount up to $150 million. Borrowings under the Barclays Credit Facility bore interest paid on an annual adjusted LIBOR for the relevant interest period, plus an applicable spread of 2.25%. ABPCIC Funding would also pay an unused commitment fee of .50% and the commitment would have expired on July 30, 2020. Interest and fees were paid quarterly in arrears. Any amounts borrowed under the Barclays Credit Facility would have matured, and all accrued and unpaid interest thereunder would have been due and payable, on the earlier of (i) January 20, 2029, (ii) the date on which ABPCIC Funding issues collateralized loan obligation securities in a transaction for which the sole arranger is Barclays (or an affiliate thereof) or (iii) upon certain other events which result in accelerated maturity under the credit facility. Borrowing under the Barclays Credit Facility was subject to certain restrictions contained in the 1940 Act. The Barclays Credit Facility matured and was paid down during the periodin 2019 in connection with the issuance of the Notes (as defined below). For a discussion of the CLO Transaction see ““SeeNotes to Unaudited Consolidated Financial Statements – Note 4. Collateralized Loan Obligations.”
The Fund’s outstanding borrowings through the Revolving Credit Facility as of September 30, 2019March 31, 2020 were as follows:
Aggregate Borrowing Amount Committed | Outstanding Borrowing | Amount Available | Carrying Value | Aggregate Borrowing Amount Committed | Outstanding Borrowing | Amount Available | Carrying Value | |||||||||||||||||||||||||
HSBC | $ | 50,000,000 | $ | — | $ | 50,000,000 | $ | — | $ | 50,000,000 | $ | 43,000,000 | $ | 7,000,000 | $ | 43,000,000 | ||||||||||||||||
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Total | $ | 50,000,000 | $ | — | $ | 50,000,000 | $ | — | $ | 50,000,000 | $ | 43,000,000 | $ | 7,000,000 | $ | 43,000,000 | ||||||||||||||||
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The Fund’s outstanding borrowings through the Revolving Credit Facility as of December 31, 20182019 were as follows:
Aggregate Borrowing Amount Committed | Outstanding Borrowing | Amount Available | Carrying Value | Aggregate Borrowing Amount Committed | Outstanding Borrowing | Amount Available | Carrying Value | |||||||||||||||||||||||||
HSBC | $ | 125,000,000 | $ | 88,200,000 | $ | 36,800,000 | $ | 88,200,000 | $ | 50,000,000 | $ | 19,500,000 | $ | 30,500,000 | $ | 19,500,000 | ||||||||||||||||
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Total | $ | 125,000,000 | $ | 88,200,000 | $ | 36,800,000 | $ | 88,200,000 | $ | 50,000,000 | $ | 19,500,000 | $ | 30,500,000 | $ | 19,500,000 | ||||||||||||||||
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As of September 30, 2019March 31, 2020 and December 31, 2018,2019, deferred financing costs were $55,200$46,313 and $172,580,$64,959, respectively, which remain to be amortized, and are reflected on the consolidated statements of assets and liabilities.
Collateralized Loan Obligations
On August 9, 2019, CLO VI (the “Issuer”) and ABPCI Direct Lending Fund CLO VI LLC, a limited liability company organized under the laws of the State of Delaware (the“Co-Issuer,” and together with the Issuer, the“Co-Issuers”), each a newly formed special purpose vehicle, completed a $300,500,000 term debt securitization (the “CLO Transaction”). The stated reinvestment date is August 9, 2022.
The CLO Transaction was executed through a private placement and the notes offered (the “Notes”) that remain outstanding as of September 30,March 31, 2020 and December 31, 2019 arewere as follows:
March 31, 2020 | March 31, 2020 |
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Principal Amount | Interest Rate | Carrying Value(1) | Principal Amount | Interest Rate | Carrying Value(1) | |||||||||||||||||||
Class A-1 Senior Secured Floating Rate Note(“Class A-1”) | $ | 178,200,000 | 3M L + 1.73 | % | $ | 175,528,458 | $ | 178,200,000 | L + 1.73 | % | $ | 176,185,732 | ||||||||||||
Class A-2A Senior Secured Floating Rate Note(“Class A-2A”) | $ | 25,000,000 | L + 2.45 | % | $ | 24,625,153 | $ | 25,000,000 | L + 2.45 | % | $ | 24,717,415 | ||||||||||||
Class A-2B Senior Secured Fixed Rate Note(“Class A-2B”) | $ | 9,950,000 | 4.23 | % | $ | 9,800,765 | $ | 9,950,000 | 4.23 | % | $ | 9,811,154 | ||||||||||||
Class B Secured Deferrable Floating Rate Note (“Class B”) | $ | 16,400,000 | L + 3.40 | % | $ | — | * | $ | 16,400,000 | L + 3.40 | % | $ | — | * | ||||||||||
Class C Secured Deferrable Floating Rate Note (“Class C”) | $ | 17,350,000 | L + 4.40 | % | $ | — | * | $ | 17,350,000 | L + 4.40 | % | $ | — | * | ||||||||||
Subordinated Notes | $ | 53,600,000 | N/A | $ | — | * | $ | 53,600,000 | N/A | $ | — | * |
* | Class B, Class C and Subordinated Notes |
(1) | Carrying value is net of unamortized discount and debt issuance costs. Unamortized discount and debt issuance costs associated with the Notes totaled |
December 31, 2019 | ||||||||||||
Principal Amount | Interest Rate | Carrying Value(1) | ||||||||||
Class A-1 Senior Secured Floating Rate Note(“Class A-1”) | $ | 178,200,000 | L + 1.73 | % | $ | 175,875,031 | ||||||
Class A-2A Senior Secured Floating Rate Note(“Class A-2A”) | $ | 25,000,000 | L + 2.45 | % | $ | 24,673,826 | ||||||
Class A-2B Senior Secured Fixed Rate Note(“Class A-2B”) | $ | 9,950,000 | 4.23 | % | $ | 9,787,776 | ||||||
Class B Secured Deferrable Floating Rate Note (“Class B”) | $ | 16,400,000 | L + 3.40 | % | $ | — | * | |||||
Class C Secured Deferrable Floating Rate Note (“Class C”) | $ | 17,350,000 | L + 4.40 | % | $ | — | * | |||||
Subordinated Notes | $ | 53,600,000 | N/A | $ | — | * |
* | Class B, Class C and Subordinated Notes have been eliminated in consolidation. |
(1) | Carrying value is net of unamortized discount and debt issuance costs. Unamortized discount and debt issuance costs associated with the Notes totaled $32,835 and $2,780,532, respectively, as of December 31, 2019 and are reflected on the consolidated statements of assets and liabilities. |
The Notes are scheduled to mature on August 9, 2030.
The CLO VI indenture provides that the holders of the CLO VIClass A-1,Class A-2A,Class A-2B, Class B and Class C Notes are to receive quarterly interest payments, in arrears, on the 20th day in January, April, July and October of each year, commencing in August 2019.
The Notes are the secured obligations of theCo-Issuers, and the indenture governing the Notes includes customary covenants and events of default. The Notes have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state securities or “blue sky” laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from registration.
The Adviser serves as collateral manager to the Issuer pursuant to a collateral management agreement between the Adviser and the Issuer (the “CLO Collateral Management Agreement”). For so long as the Adviser serves as collateral manager to the Issuer, the Adviser will elect to irrevocably waive any base management fee or subordinated interest to which it may be entitled under the CLO Collateral Management Agreement. For the three and nine monthsthree-month period ended September 30, 2019,March 31, 2020, the Fund incurred a collateral management fee of $266,585 and $266,585, respectively,$459,059, which was voluntarily waived by the Adviser.
As of September 30, 2019March 31, 2020 and December 31, 2018,2019 outstanding borrowings under the Revolving Credit Facility and Notes were $209,954,376$253,714,301 and $88,200,000,$229,836,633, respectively.
For the three and nine months ended September 30,March 31, 2020, and March 31, 2019, and September 30, 2018, the components of interest and other debt expenses related to the borrowings were as follows:
For the three months ended September 30, | For the nine months ended September 30, | For the three months ended March 31, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | |||||||||||||||||||
Interest and borrowing expenses | $ | 2,072,853 | $ | 340,405 | $ | 5,024,175 | $ | 585,832 | $ | 2,144,095 | $ | 1,187,000 | ||||||||||||
Commitment fees | 45,986 | 18,217 | 178,912 | 52,208 | 28,258 | 79,255 | ||||||||||||||||||
Amortization of debt issuance and deferred financing costs | 305,525 | 136,369 | 640,997 | 288,965 | 396,314 | 142,897 | ||||||||||||||||||
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Total | $ | 2,424,364 | $ | 494,991 | $ | 5,844,084 | $ | 927,005 | $ | 2,568,667 | $ | 1,409,152 | ||||||||||||
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Weighted average interest rate | 4.32 | % | 4.17 | % | 4.64 | % | 4.09 | % | 3.73 | % | 4.87 | % | ||||||||||||
Average outstanding balance | $ | 190,161,957 | $ | 32,350,000 | $ | 144,708,242 | $ | 19,157,509 | $ | 231,210,440 | $ | 98,848,889 |
(1) | Calculated as the amount of the stated interest expense and fees divided by average borrowings during the period. |
LIBOR Risk—The Fund may invest in certain debt securities, derivatives or other financial instruments that utilize the London Interbank Offered Rate, or “LIBOR,” as a “benchmark” or “reference rate” for various interest rate calculations. In July 2017, the head of the United Kingdom Financial Conduct Authority, which regulates LIBOR, announced the intentionthat it intends to phase out the use of LIBOR by the end of 2021. BecauseIt is unclear if at that time LIBOR will cease to exist or if new methods of calculating LIBOR will be established such that it continues to exist after 2021. In addition, in April 2018, the statements madeFederal Reserve System, in conjunction with the Alternative Reference Rates Committee, announced the replacement of LIBOR with a new index, calculated by short-term repurchase agreements collateralized by U.S. Treasury securities, called the head ofSecured Overnight Financing Rate, or the United Kingdom Financial Conduct Authority are recent in nature, there“SOFR.” At this time, it is no definitive information regardingnot possible to predict whether SOFR will attain market traction as a LIBOR replacement. Additionally, the future of LIBOR at this time is uncertain. Potential changes, or uncertainty related to such potential changes, may adversely affect the market for LIBOR-based securities, including our portfolio of any particular replacement index rate. As such,LIBOR-indexed, floating-rate debt securities, or the cost of our borrowings. In addition, 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 for LIBOR-based securities, including the value of the LIBOR-indexed, floating-rate debt securities in our portfolio, or the cost of our borrowings. Additionally, if LIBOR ceases to exist, we may need to renegotiate our credit arrangements extending beyond 2021 with our portfolio companies that utilize LIBOR as a factor in determining the interest rate and certain of our existing credit facilities to replace LIBOR with the new standard that is established. The potential effect of any such eventthephase-out or replacement of LIBOR on our cost of capital and net investment income cannot yet be determined.
5. Fair Value Measurement
In accordance with ASC 820, fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a framework for measuring fair value and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability as of the reporting date.
Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation.
The three-tier hierarchy of inputs is summarized below:
Level 1 – Quoted prices in active markets for identical investments.
Level 2 – Other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3 – Significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments at the reporting date).
The level in the fair value hierarchy within which the fair value measurement is categorized in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. If a fair value measurement uses price data vendors or observable market price quotations, that measurement is a Level 2 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.
The determination of what constitutes “observable” requires significant judgment by the Fund. The Fund considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.
Valuation of Investments
Investments are valued at fair value as determined in good faith by our Board, based on input of management, the audit committee and independent valuation firms that have been engaged to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter.
The fair values of loan investments based upon pricepricing data vendors or observable market price quotations are generally categorized as Level 2; however, those priced using models with significant unobservable inputs are categorized as Level 3.
In determining the fair value of the Fund’s Level 3 debt and equity positions, the Adviser uses the following factors where relevant: loan to value (“LTV”) based on an enterprise value determined using the original purchase price, public equity comparable, recent M&A transaction, and a discounted cash flow (“DCF”) analysis, and yields from comparable loans, comparable high yield bonds, high yield indexes and loan indexes (“comparable yields”).
Due to the inherent uncertainty of valuations, however, estimated fair values may differ from the values that would have been used had a readily available market for the securities existed and the differences could be material.
The following table summarizes the valuation of the Fund’s investments as of September 30, 2019:March 31, 2020:
Assets* | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
1st Lien/Senior Secured Debt | $ | — | $ | 12,252,898 | $ | 272,388,641 | $ | 284,641,539 | $ | — | $ | — | $ | 356,272,609 | $ | 356,272,609 | ||||||||||||||||
2nd Lien/Junior Secured Debt | — | — | 7,620,547 | 7,620,547 | — | — | 7,364,846 | 7,364,846 | ||||||||||||||||||||||||
Preferred Stock | — | — | 4,469,886 | 4,469,886 | ||||||||||||||||||||||||||||
Common Stock | — | — | 1,667,445 | 1,667,445 | ||||||||||||||||||||||||||||
Investment Companies | 11,329 | — | — | 11,329 | ||||||||||||||||||||||||||||
U.S. Preferred Stock | — | — | 5,431,410 | 5,431,410 | ||||||||||||||||||||||||||||
U.S. Common Stock | — | — | 1,369,556 | 1,369,556 | ||||||||||||||||||||||||||||
U.S Warrants | — | — | 249,863 | 249,863 | ||||||||||||||||||||||||||||
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Total assets | $ | 11,329 | $ | 12,252,898 | $ | 286,146,519 | $ | 298,410,746 | $ | — | $ | — | $ | 370,688,284 | $ | 370,688,284 | ||||||||||||||||
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* | See consolidated schedule of investments for industry classifications. |
The following table summarizes the valuation of the Fund’s investments as of December 31, 2018:2019:
Assets* | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
1st Lien/Senior Secured Debt | $ | — | $ | 12,080,585 | $ | 122,981,395 | $ | 135,061,980 | $ | — | $ | 12,092,212 | $ | 318,300,993 | $ | 330,393,205 | ||||||||||||||||
2nd Lien/Junior Secured Debt | — | — | 1,200,773 | 1,200,773 | — | — | 7,620,547 | 7,620,547 | ||||||||||||||||||||||||
Preferred Stock | — | — | 1,160,531 | 1,160,531 | ||||||||||||||||||||||||||||
Common Stock | — | — | 379,849 | 379,849 | ||||||||||||||||||||||||||||
U.S. Preferred Stock | — | — | 4,861,847 | 4,861,847 | ||||||||||||||||||||||||||||
U.S. Common Stock | — | — | 1,518,353 | 1,518,353 | ||||||||||||||||||||||||||||
U.S. Warrants | — | — | 631,366 | 631,366 | ||||||||||||||||||||||||||||
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Total assets | $ | — | $ | 12,080,585 | $ | 125,722,548 | $ | 137,803,133 | $ | — | $ | 12,092,212 | $ | 332,933,106 | $ | 345,025,318 | ||||||||||||||||
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* | See consolidated schedule of investments for industry classifications. |
The following is a reconciliation of Level 3 assets for the ninethree months ended September 30, 2019:March 31, 2020:
1st Lien/Senior Secured Debt | 2nd Lien/Junior Secured Debt | Common Stock | Preferred Stock | Total | 1st Lien/Senior Secured Debt | 2nd Lien/ Junior Secured Debt | U.S. Common Stock | U.S. Preferred Stock | U.S. Warrants | Total | ||||||||||||||||||||||||||||||||||
Balance as of January 1, 2019 | $ | 122,981,395 | $ | 1,200,773 | $ | 379,849 | $ | 1,160,531 | $ | 125,722,548 | ||||||||||||||||||||||||||||||||||
Balance as of January 1, 2020 | $ | 318,300,993 | $ | 7,620,547 | $ | 1,518,353 | $ | 4,861,847 | $ | 631,366 | $ | 332,933,106 | ||||||||||||||||||||||||||||||||
Purchases (including PIK) | 180,686,950 | 6,439,645 | 1,259,643 | 3,137,716 | 191,523,954 | 57,034,233 | — | 39,406 | 613,907 | 30,625 | 57,718,171 | |||||||||||||||||||||||||||||||||
Sales and principal payments | (31,599,236 | ) | — | — | — | (31,599,236 | ) | (13,458,168 | ) | — | — | — | — | (13,458,168 | ) | |||||||||||||||||||||||||||||
Realized Gain (Loss) | 65,081 | — | — | — | 65,081 | (13,369 | ) | — | — | — | — | (13,369 | ) | |||||||||||||||||||||||||||||||
Net Amortization of Premium/Discount | 655,240 | 4,943 | — | — | 660,183 | 449,036 | 3,524 | — | — | — | 452,560 | |||||||||||||||||||||||||||||||||
Transfers In | — | — | — | — | — | 12,092,212 | — | — | — | — | 12,092,212 | |||||||||||||||||||||||||||||||||
Transfers Out | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) | (400,789 | ) | (24,814 | ) | 27,953 | 171,639 | (226,011 | ) | (18,132,328 | ) | (259,225 | ) | (188,203 | ) | (44,344 | ) | (412,128 | ) | (19,036,228 | ) | ||||||||||||||||||||||||
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Balance as of September 30, 2019 | $ | 272,388,641 | $ | 7,620,547 | $ | 1,667,445 | $ | 4,469,886 | $ | 286,146,519 | ||||||||||||||||||||||||||||||||||
Balance as of March 31, 2020 | $ | 356,272,609 | $ | 7,364,846 | $ | 1,369,556 | $ | 5,431,410 | $ | 249,863 | $ | 370,688,284 | ||||||||||||||||||||||||||||||||
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Change in Unrealized Appreciation (Depreciation) for Investments Still Held | $ | (335,674 | ) | $ | (24,815 | ) | $ | 27,953 | $ | 171,639 | $ | (160,897 | ) | $ | (18,388,026 | ) | $ | (259,225 | ) | $ | (188,203 | ) | $ | (44,344 | ) | $ | (412,128 | ) | $ | (19,291,926 | ) |
For the ninethree months ended September 30, 2019,March 31, 2020, there were transfers of $12,092,212 from Level 2 to Level 3 fair value measurements for the Fund due to no visual trades and lack of liquidity. There were no transfers to or from Level 3.
The following is a reconciliation of Level 3 assets for the year ended December 31, 2018:2019:
1st Lien/Senior Secured Debt | 2nd Lien/Junior Secured Debt | Common Stock | Preferred Stock | Total | 1st Lien/Senior Secured Debt | 2nd Lien/ Junior Secured Debt | U.S. Common Stock | U.S. Preferred Stock | U.S. Warrants | Total | ||||||||||||||||||||||||||||||||||
Balance as of January 1, 2018 | $ | 23,561,630 | $ | — | $ | 311,400 | $ | — | $ | 23,873,030 | ||||||||||||||||||||||||||||||||||
Balance as of January 1, 2019 | $ | 122,981,395 | $ | 1,200,773 | $ | 379,849 | $ | 1,160,531 | $ | — | $ | 125,722,548 | ||||||||||||||||||||||||||||||||
Purchases (including PIK) | 115,019,854 | 1,200,773 | 62,735 | 1,160,531 | 117,443,893 | 238,113,812 | 6,439,645 | 1,312,798 | 3,487,694 | 631,366 | 249,985,315 | |||||||||||||||||||||||||||||||||
Sales and principal payments | (15,791,044 | ) | — | — | — | (15,791,044 | ) | (43,180,812 | ) | — | (183,182 | ) | — | — | (43,363,994 | ) | ||||||||||||||||||||||||||||
Realized Gain (Loss) | 8,664 | — | — | — | 8,664 | (37,702 | ) | — | 120,448 | — | — | 82,746 | ||||||||||||||||||||||||||||||||
Net Amortization of Premium/Discount | 258,651 | 660 | — | — | 259,311 | 1,319,839 | 8,480 | — | — | — | 1,328,319 | |||||||||||||||||||||||||||||||||
Transfers In | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Transfers Out | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) | (76,360 | ) | (660 | ) | 5,714 | — | (71,306 | ) | (895,539 | ) | (28,351 | ) | (111,560 | ) | 213,622 | — | (821,828 | ) | ||||||||||||||||||||||||||
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Balance as of December 31, 2018 | $ | 122,981,395 | $ | 1,200,773 | $ | 379,849 | $ | 1,160,531 | $ | 125,722,548 | ||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | $ | 318,300,993 | $ | 7,620,547 | $ | 1,518,353 | $ | 4,861,847 | $ | 631,366 | $ | 332,933,106 | ||||||||||||||||||||||||||||||||
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Change in Unrealized Appreciation (Depreciation) for Investments Still Held | $ | (77,132 | ) | $ | (660 | ) | $ | 5,714 | $ | — | $ | (72,078 | ) | $ | (830,746 | ) | $ | (28,351 | ) | $ | (111,560 | ) | $ | 213,622 | $ | — | $ | (757,035 | ) |
For the year ended December 31, 2018,2019, there were no transfers to or from Level 3.
The following tables present the ranges of significant unobservable inputs used to value the Fund’s Level 3 investments as of September 30, 2019March 31, 2020 and December 31, 2018,2019, respectively. These ranges represent the significant unobservable inputs that were used in the valuation of each type of investment. These inputs are not representative of the inputs that could have been used in the valuation of any one investment. Accordingly, the ranges of inputs presented below do not represent uncertainty in, or possible ranges of, fair value measurements of the Fund’s Level 3 investments.
Valuation Techniques Unobservable Input Range Assets: 1st Lien/Senior Secured Debt 2nd Lien/Junior Secured Debt Common Stock Preferred Stock Total Assets Fair Value
as of
30-Sep-19
(Weighted
Average) (1) Impact to
Valuation from
an Increase in
Input $ 174,350,874 Market Yield Analysis Market Yield 6.3% - 11.5% (8.3%) Decrease 98,037,767 Recent Purchase Purchase Price N/A N/A 1,180,902 Market Yield Analysis Market Yield 11.20% Decrease 6,439,645 Recent Purchase Purchase Price N/A N/A 1,320,075 Market Approach EBITDA Multiple 11.0x - 17.0x (13.3x) Increase 347,370 Recent Purchase Purchase Price N/A N/A 1,332,182 Market Approach EBITDA Multiple 13.6x Increase 1,598,198 Market Approach Revenue Multiple 5.0x - 10.5x (7.1x) Increase 1,539,506 Recent Purchase Purchase Price N/A N/A $ 286,146,519
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Fair Value as of December 31. 2018 | Valuation Techniques | Unobservable Input | Range | Impact to Valuation from an Increase in Input | Fair Value as of March 31, 2020 | Valuation | Unobservable Input | Range (Weighted Average)(1) | Impact to Valuation from an Increase in Input | |||||||||||||||||
Assets: | ||||||||||||||||||||||||||
1st Lien/Senior Secured Debt | $ | 59,170,282 | Market Yield Analysis | Market Yield | 6.0% - 15.5% (9.2%) | Decrease | $ | 348,421,931 | Market Yield Analysis | Market Yield | 5.0%-18.1% (8.5%) | Decrease | ||||||||||||||
63,811,113 | Recent Purchase | Purchase Price | N/A | N/A | ||||||||||||||||||||||
2,546,711 | Liquidation Value | Recovery Rate | 85% | Increase | ||||||||||||||||||||||
5,303,967 | Recent Purchase | Purchase Price | N/A | N/A | ||||||||||||||||||||||
2nd Lien/Junior Secured Debt | 1,200,773 | Recent Purchase | Purchase Price | N/A | N/A | 7,364,846 | Market Yield Analysis | Market Yield | 10.6%-13.1% (11.0%) | Decrease | ||||||||||||||||
Common Stock | 317,114 | Market Approach | EBITDA Multiple | 12.5x | Increase | |||||||||||||||||||||
62,735 | Recent Purchase | Purchase Price | N/A | N/A | ||||||||||||||||||||||
Preferred Stock | 1,160,531 | Recent Purchase | Purchase Price | N/A | N/A | |||||||||||||||||||||
U.S. Common Stock | 621,893 | Market Approach | EBITDA Multiple | 11.5x-15.7x (13.5x) | Increase | |||||||||||||||||||||
452,909 | Market Approach | Recurring Revenue Multiple | 4.5x | Increase | ||||||||||||||||||||||
294,754 | Market Approach | Network Cashflow Multiple | 29.6x | Increase | ||||||||||||||||||||||
U.S. Preferred Stock | 1,230,642 | Market Approach | EBITDA Multiple | 13.6x | Increase | |||||||||||||||||||||
3,236,882 | Market Approach | Revenue Multiple | 5.0x-13.4x (9.2x) | Increase | ||||||||||||||||||||||
963,886 | Recent Purchase | Purchase Price | N/A | N/A | ||||||||||||||||||||||
U.S. Warrants | 249,863 | Market Approach | Revenue Multiple | 9.0x-13.3x (10.0x) | Increase | |||||||||||||||||||||
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Total Assets | $ | 125,722,548 | $ | 370,688,284 |
(1) | Weighted averages are calculated based on fair value of investments. |
Valuation Unobservable Input Range (Weighted Average)(1) Impact to Valuation from an Increase in Input Assets: 1st Lien/Senior Secured Debt 2nd Lien/Junior Secured Debt U.S. Common Stock Market Approach U.S. Preferred Stock U.S. Warrants Market Approach Revenue Multiple Total Assets Fair Value
as of
December 31,
2019
Techniques $ 233,166,392 Market Yield Analysis Market Yield 6.3%-11.7% (8.2%) Decrease 85,134,601 Recent Purchase Purchase Price N/A N/A 7,620,547 Market Yield Analysis Market Yield 10.5%-11.0% (10.6%) Decrease 1,117,827 EBITDA Multiple 5.0x-16.0x (10.3x) Increase 400,526 Recent Purchase Purchase Price N/A N/A 1,374,166 Market Approach EBITDA Multiple 13.6x Increase 2,573,089 Market Approach Revenue Multiple 5.0x-12.7x (9.0x) Increase 914,592 Recent Purchase Purchase Price N/A N/A 27,511 12.3x Increase 603,855 Recent Purchase Purchase Price N/A N/A $ 332,933,106
(1) | Weighted averages are calculated based on fair value of investments. |
Financial Instruments Disclosed, But Not Carried, At Fair Value
The following table presents the carrying value and fair value of the Fund’s financial liabilities disclosed, but not carried, at fair value as of September 30, 2019March 31, 2020 and the level of each financial liability within the fair value hierarchy.
Carrying | Fair | Carrying | Fair | |||||||||||||||||||||||||||||||||||||
($ in millions) | Value (1) | Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||||
Value (1) | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||||||
Class A-1 Senior Secured Notes | $ | 175,528,458 | $ | 178,200,00 | $ | — | $ | — | $ | 178,200,000 | $ | 176,185,732 | $ | 168,371,201 | $ | — | $ | — | $ | 168,371,201 | ||||||||||||||||||||
Class A-2A Senior Secured Notes | 24,625,153 | 25,000,000 | — | — | 25,000,000 | 24,717,415 | 22,404,575 | — | — | 22,404,575 | ||||||||||||||||||||||||||||||
Class A-2B Senior Secured Notes | 9,800,765 | 9,950,000 | — | — | 9,950,000 | 9,811,154 | 9,452,679 | — | — | 9,452,679 | ||||||||||||||||||||||||||||||
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Total | $ | 209,954,376 | $ | 213,150,000 | $ | — | $ | — | $ | 213,150,000 | $ | 210,714,301 | $ | 200,228,455 | $ | — | $ | — | $ | 200,228,455 | ||||||||||||||||||||
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(1) | Carrying value is net of unamortized discount and debt issuance costs. Unamortized discount and debt issuance costs associated with the Notes totaled |
The following table presents the carrying value and fair value of the Fund’s financial liabilities disclosed, but not carried, at fair value as of December 31, 2019 and the level of each financial liability within the fair value hierarchy.
Carrying | Fair | |||||||||||||||||||
Value (1) | Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Class A-1 Senior Secured Notes | $ | 175,875,031 | $ | 178,195,723 | $ | — | $ | — | $ | 178,195,723 | ||||||||||
Class A-2A Senior Secured Notes | 24,673,826 | 24,889,050 | — | — | 24,889,050 | |||||||||||||||
Class A-2B Senior Secured Notes | 9,787,776 | 9,916,279 | — | — | 9,916,279 | |||||||||||||||
|
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Total | $ | 210,336,633 | $ | 213,001,052 | $ | — | $ | — | $ | 213,001,052 |
(1) | Carrying value is net of unamortized discount and debt issuance costs. Unamortized discount and debt issuance costs associated with the Notes totaled $32,835 and $2,780,532 as of December 31, 2019 and are reflected on the consolidated statements of assets and liabilities. |
|
6. Commitments & Contingencies
Commitments
The Fund may enter into commitments to fund investments. As of September 30, 2019,March 31, 2020, the Fund believed that it had adequate financial resources to satisfy its unfunded commitments. The amounts associated with unfunded commitments to provide funds to portfolio companies are not recorded in the Fund’s consolidated statements of assets and liabilities. Since these commitments and the associated amounts may expire without being drawn upon, the total commitment amount does not necessarily represent a future cash requirement. The Fund had the following unfunded commitments by investment types as of September 30, 2019:March 31, 2020:
Investment Type | Facility Type | Commitment Expiration Date (1) | Unfunded Commitment (2) | Fair Value (3) | Facility Type | Commitment Expiration Date (1) | Unfunded Commitment (2) | Fair Value (3) | ||||||||||||||||||||
1st Lien/Senior Secured Debt | ||||||||||||||||||||||||||||
5 Bars, LLC | Delayed Draw Term Loan | 9/27/2024 | $ | 3,448,816 | $ | (51,733 | ) | Delayed Draw Term Loan | 9/27/2024 | $ | 3,448,816 | $ | (86,220 | ) | ||||||||||||||
5 Bars, LLC | Revolver | 9/27/2024 | $ | 646,653 | $ | (9,700 | ) | Revolver | 9/27/2024 | $ | 646,653 | $ | (16,166 | ) | ||||||||||||||
AEG Holding Company, Inc. | Revolver | 11/20/2023 | $ | 502,589 | $ | (10,052 | ) | |||||||||||||||||||||
Accelerate Resources Operating, LLC | Delayed Draw Term Loan | 8/24/2021 | $ | 2,903,350 | $ | (362,919 | ) | |||||||||||||||||||||
Accelerate Resources Operating, LLC | Revolver | 2/24/2026 | $ | 414,764 | $ | (51,846 | ) | |||||||||||||||||||||
Ahead Data Blue, LLC | Revolver | 11/8/2024 | $ | 517,600 | $ | (20,704 | ) | |||||||||||||||||||||
American Physician Partners, LLC | Delayed Draw Term Loan | 1/29/2020 | $ | 62,160 | $ | (932 | ) | Revolver | 12/21/2021 | $ | 97,681 | $ | (3,907 | ) | ||||||||||||||
American Physician Partners, LLC | Revolver | 12/21/2021 | $ | 266,402 | $ | (3,996 | ) | |||||||||||||||||||||
AMI US Holdings Inc. | Revolver | 4/1/2024 | $ | 481,626 | $ | (9,633 | ) | |||||||||||||||||||||
AMI US Holdings, Inc. | Revolver | 4/1/2024 | $ | 87,568 | $ | (3,065 | ) | |||||||||||||||||||||
Analogic Corporation | Revolver | 6/22/2023 | $ | 258,261 | $ | (5,165 | ) | Revolver | 6/22/2023 | $ | 195,556 | $ | (9,778 | ) | ||||||||||||||
Avetta, LLC | Delayed Draw Term Loan | 4/11/2020 | $ | 1,235,991 | $ | (12,360 | ) | Delayed Draw Term Loan | 4/11/2020 | $ | 1,235,991 | $ | — | |||||||||||||||
Avetta, LLC | Revolver | 4/10/2024 | $ | 494,396 | $ | (9,888 | ) | Revolver | 4/10/2024 | $ | 494,396 | $ | (17,304 | ) | ||||||||||||||
BEP Borrower Holdco, LLC | Delayed Draw Term Loan A | 6/12/2021 | $ | 1,288,304 | $ | (12,883 | ) | Delayed Draw Term Loan A | 6/12/2021 | $ | 1,288,304 | $ | (109,506 | ) | ||||||||||||||
BEP Borrower Holdco, LLC | Delayed Draw Term Loan B | 6/30/2020 | $ | 2,576,608 | $ | (25,766 | ) | Delayed Draw Term Loan B | 6/30/2020 | $ | 2,576,608 | $ | (219,012 | ) | ||||||||||||||
BEP Borrower Holdco, LLC | Revolver | 6/12/2024 | $ | 429,435 | $ | (6,442 | ) | Revolver | 6/12/2024 | $ | 429,435 | $ | (38,649 | ) | ||||||||||||||
BK Medical Holding Company, Inc. | Revolver | 6/22/2023 | $ | 321,733 | $ | (12,869 | ) | |||||||||||||||||||||
Blink Holdings, Inc. | Delayed Draw Term Loan | 11/8/2020 | $ | 548,269 | $ | (5,483 | ) | Delayed Draw Term Loan | 9/10/2021 | $ | 621,958 | $ | (40,427 | ) | ||||||||||||||
Broadway Technology, LLC | Revolver | 4/1/2024 | $ | 383,845 | $ | (7,677 | ) | |||||||||||||||||||||
Businesssolver.com, Inc. | Delayed Draw Term Loan | 5/15/2020 | $ | 110,000 | $ | — | ||||||||||||||||||||||
Businesssolver.com, Inc. | Revolver | 5/15/2023 | $ | 252,353 | $ | — | Revolver | 5/15/2023 | $ | 323,529 | $ | (12,132 | ) | |||||||||||||||
Captain D’s, Inc. | Revolver | 12/15/2023 | $ | 86,474 | $ | (865 | ) | Revolver | 12/15/2023 | $ | 50,267 | $ | (5,529 | ) | ||||||||||||||
CutisPharma Inc. | Delayed Draw Term Loan | 5/17/2021 | $ | 1,931,727 | $ | (33,806 | ) | |||||||||||||||||||||
CutisPharma Inc. | Revolver | 3/21/2023 | $ | 482,932 | $ | (8,452 | ) | |||||||||||||||||||||
Degreed, Inc. | Delayed Draw Term Loan | 5/31/2021 | $ | 2,924,689 | $ | (14,623 | ) | |||||||||||||||||||||
Degreed, Inc. | Revolver | 5/31/2024 | $ | 417,813 | $ | (4,178 | ) | |||||||||||||||||||||
CutisPharma, Inc. | Revolver | 3/21/2023 | $ | 482,931 | $ | (14,488 | ) | |||||||||||||||||||||
CutisPharma, Inc. | Delayed Draw Term Loan | 5/17/2021 | $ | 482,931 | $ | (14,488 | ) | |||||||||||||||||||||
Delaware Valley Management Holdings, Inc. | Delayed Draw Term Loan | 3/21/2021 | $ | 5,268,797 | $ | (105,376 | ) | Delayed Draw Term Loan | 3/21/2021 | $ | 5,268,797 | $ | (1,238,167 | ) | ||||||||||||||
Delaware Valley Management Holdings, Inc. | Revolver | 3/21/2024 | $ | 526,880 | $ | (10,538 | ) | |||||||||||||||||||||
Dillon Logistics, Inc. | Revolver | 12/11/2023 | $ | 41,191 | $ | (16,476 | ) | |||||||||||||||||||||
Dispatch Track, LLC | Revolver | 12/17/2024 | $ | 169,081 | $ | (8,454 | ) | |||||||||||||||||||||
E2open LLC | Revolver | 11/26/2024 | $ | 155,682 | $ | (10,119 | ) | |||||||||||||||||||||
Engage2Excel, Inc. | Delayed Draw Term Loan | 10/25/2020 | $ | 664,490 | $ | (66,449 | ) | |||||||||||||||||||||
Engage2Excel, Inc. | Revolver | 3/7/2023 | $ | 119,353 | $ | (13,129 | ) | |||||||||||||||||||||
EnterpriseDB Corporation | Revolver | 6/21/2024 | $ | 696,355 | $ | (12,186 | ) | |||||||||||||||||||||
Ethos Veterinary Health LLC | Delayed Draw Term Loan | 5/17/2021 | $ | 839,091 | $ | (67,127 | ) | |||||||||||||||||||||
EvolveIP, LLC | Delayed Draw Term Loan | 11/26/2021 | $ | 755,824 | $ | (22,675 | ) | |||||||||||||||||||||
EvolveIP, LLC | Revolver | 6/7/2023 | $ | 453,495 | $ | (13,605 | ) | |||||||||||||||||||||
Finalsite Holdings, Inc. | Revolver | 9/25/2024 | $ | 253,142 | $ | (7,594 | ) | |||||||||||||||||||||
Fuze, Inc. | Delayed Draw Term Loan | 9/20/2021 | $ | 1,814,240 | $ | (7,438 | ) | |||||||||||||||||||||
Fuze, Inc. | Revolver | 9/20/2024 | $ | 1,295,886 | $ | (18,531 | ) | |||||||||||||||||||||
Genesis Acquisition Co. | Delayed Draw Term Loan | 7/31/2020 | $ | 364,466 | $ | (26,424 | ) |
Dillon Logistics, Inc. | Revolver | 12/11/2023 | $ | 26,552 | $ | (1,593 | ) | |||||||||||||||||||||
E2open LLC | Revolver | 11/26/2024 | $ | 311,365 | $ | (3,114 | ) | |||||||||||||||||||||
Edgewood Partners Holdings LLC | Delayed Draw Term Loan | 12/31/2019 | $ | 1,458,540 | $ | (14,585 | ) | |||||||||||||||||||||
Engage2Excel, Inc | Delayed Draw Term Loan | 10/25/2020 | $ | 664,490 | $ | (6,645 | ) | |||||||||||||||||||||
Engage2Excel, Inc | Revolver | 3/7/2023 | $ | 188,453 | $ | (3,769 | ) | |||||||||||||||||||||
EnterpriseDB Corporation | Revolver | 6/21/2024 | $ | 696,355 | $ | (13,928 | ) | |||||||||||||||||||||
Ethos Veterinary Health LLC | Term Loan | 5/17/2021 | $ | 839,091 | $ | (8,391 | ) | |||||||||||||||||||||
Exterro, Inc. | Revolver | 5/31/2024 | $ | 330,000 | $ | (6,600 | ) | |||||||||||||||||||||
Finalsite Holdings, Inc. | Revolver | 9/25/2024 | $ | 253,142 | $ | (3,797 | ) | |||||||||||||||||||||
Fuze, Inc. | Delayed Draw Term Loan | 9/20/2021 | $ | 2,591,772 | $ | (12,959 | ) | |||||||||||||||||||||
Fuze, Inc. | Revolver | 9/20/2024 | $ | 1,295,886 | $ | (6,480 | ) | |||||||||||||||||||||
Genesis Acquisition Co. | Delayed Draw Term Loan | 7/31/2020 | $ | 364,466 | $ | (3,644 | ) | |||||||||||||||||||||
Genesis Acquisition Co. | Revolver | 7/31/2024 | $ | 131,560 | $ | (2,631 | ) | |||||||||||||||||||||
Investment Type | Facility Type | Commitment Expiration Date (1) | Unfunded Commitment (2) | Fair Value (3) | ||||||||||||||||||||||||
GHA Buyer, Inc. | Delayed Draw Term Loan | 12/31/2020 | $ | 570,916 | $ | (22,837 | ) | |||||||||||||||||||||
GHA Buyer, Inc. | Delayed Draw Term Loan | 6/20/2020 | $ | 675,044 | $ | (13,500 | ) | Delayed Draw Term Loan | 12/31/2020 | $ | 675,044 | $ | (27,002 | ) | ||||||||||||||
GHA Buyer, Inc. | Revolver | 10/22/2023 | $ | 202,513 | $ | (4,050 | ) | Revolver | 10/23/2023 | $ | 202,513 | $ | (10,126 | ) | ||||||||||||||
GS AcquisitionCo, Inc. | Revolver | 5/24/2024 | $ | 241,806 | $ | (3,023 | ) | Revolver | 5/24/2024 | $ | 164,107 | $ | (5,744 | ) | ||||||||||||||
GS AcquisitionCo, Inc. | Second Supplemental Delayed Draw Term Loan | 8/2/2021 | $ | 1,934,450 | $ | (13,251 | ) | Second Supplemental Delayed Draw Term Loan | 8/2/2021 | $ | 988,988 | $ | (31,757 | ) | ||||||||||||||
IFS Acquisition, LLC | Revolver | 11/21/2023 | $ | 489,374 | $ | — | ||||||||||||||||||||||
INH Buyer, Inc. | Revolver | 1/31/2024 | $ | 205,858 | $ | (3,088 | ) | Revolver | 1/31/2024 | $ | 96,067 | $ | (8,646 | ) | ||||||||||||||
InSite Wireless Group, LLC | Revolver | 3/15/2023 | $ | 118,339 | $ | (1,479 | ) | Term Loan | 8/1/2022 | $ | 2,802,260 | $ | (35,028 | ) | ||||||||||||||
InSite Wireless Group, LLC | Term Loan | 8/1/2022 | $ | 6,990,675 | $ | (87,383 | ) | |||||||||||||||||||||
Lucky Bucks, LLC | Delayed Draw Term Loan | 4/9/2020 | $ | 94,699 | $ | (1,657 | ) | |||||||||||||||||||||
Kaseya Inc. | Delayed Draw Term Loan | 5/3/2021 | $ | 467,302 | $ | (11,122 | ) | |||||||||||||||||||||
Kaseya Inc. | Delayed Draw Term Loan | 3/4/2022 | $ | 237,545 | $ | (5,939 | ) | |||||||||||||||||||||
Kaseya Inc. | Revolver | 5/2/2025 | $ | 3,760 | $ | (122 | ) | |||||||||||||||||||||
Metametrics, Inc. | Revolver | 9/10/2025 | $ | 651,183 | $ | (13,024 | ) | Revolver | 9/10/2025 | $ | 217,061 | $ | (10,853 | ) | ||||||||||||||
Ministry Brands, LLC | Delayed Draw Term Loan | 12/2/2022 | $ | 732,132 | $ | (3,661 | ) | |||||||||||||||||||||
Nine Point Energy, LLC | Delayed Draw Term Loan | 6/7/2021 | $ | 1,312,500 | $ | (26,250 | ) | Delayed Draw Term Loan | 6/7/2021 | $ | 1,312,500 | $ | (75,469 | ) | ||||||||||||||
Nine Point Energy, LLC | Revolver | 6/7/2024 | $ | 175,000 | $ | (3,500 | ) | |||||||||||||||||||||
OMH-HealthEdge Holdings, LLC | Revolver | 10/24/2024 | $ | 458,720 | $ | (18,349 | ) | |||||||||||||||||||||
Pace Health Companies, LLC | Revolver | 8/2/2024 | $ | 616,682 | $ | (6,167 | ) | Revolver | 8/2/2024 | $ | 83,252 | $ | (4,995 | ) | ||||||||||||||
PF Growth Partners, LLC | Delayed Draw Term Loan | 7/11/2021 | $ | 336,399 | $ | (3,364 | ) | Delayed Draw Term Loan | 7/11/2021 | $ | 240,285 | $ | (24,029 | ) | ||||||||||||||
Pinnacle Dermatology Management, LLC | Delayed Draw Term Loan | 5/18/2020 | $ | 210,791 | $ | (4,216 | ) | Delayed Draw Term Loan | 5/18/2020 | $ | 3,288,636 | $ | (263,091 | ) | ||||||||||||||
Pinnacle Dermatology Management, LLC | Revolver | 5/18/2023 | $ | 468,424 | $ | (9,369 | ) | |||||||||||||||||||||
Rhode Holdings Inc. | Delayed Draw Term Loan | 5/3/2021 | $ | 467,302 | $ | (5,281 | ) | |||||||||||||||||||||
Rhode Holdings Inc. | Revolver | 5/2/2025 | $ | 268,565 | $ | (5,371 | ) | |||||||||||||||||||||
Pinnacle Treatment Centers, Inc. | Delayed Draw Term Loan | 1/17/2022 | $ | 585,909 | $ | (10,253 | ) | |||||||||||||||||||||
Real Capital Analytics, Inc. | Revolver | 10/2/2024 | $ | 138,948 | $ | (2,779 | ) | |||||||||||||||||||||
RxBenefits, Inc. | Revolver | 3/29/2024 | $ | 575,767 | $ | (5,757 | ) | Revolver | 3/29/2024 | $ | 106,616 | $ | (5,331 | ) | ||||||||||||||
Selligent, Inc. | Revolver | 11/3/2023 | $ | 200,660 | $ | (3,010 | ) | Revolver | 11/3/2023 | $ | 200,660 | $ | (6,020 | ) | ||||||||||||||
Single Digits, Inc | Delayed Draw Term Loan | 12/21/2020 | $ | 1,040,369 | $ | (10,404 | ) | |||||||||||||||||||||
Single Digits, Inc | Revolver | 12/21/2023 | $ | 416,148 | $ | (4,162 | ) | |||||||||||||||||||||
Single Digits, Inc. | Delayed Draw Term Loan | 12/21/2020 | $ | 1,040,369 | $ | (83,230 | ) | |||||||||||||||||||||
Single Digits, Inc. | Revolver | 12/21/2023 | $ | 416,147 | $ | (33,292 | ) | |||||||||||||||||||||
Sirsi Corporation | Revolver | 3/15/2024 | $ | 332,245 | $ | (4,984 | ) | Revolver | 3/15/2024 | $ | 442,993 | $ | (17,720 | ) | ||||||||||||||
Smartlinx Solutions, LLC | Revolver | 3/4/2026 | $ | 519,484 | $ | (14,286 | ) | |||||||||||||||||||||
Smile Brands, Inc. | Delayed Draw Term Loan | 10/12/2020 | $ | 333,798 | $ | (3,338 | ) | Delayed Draw Term Loan | 10/12/2020 | $ | 152,035 | $ | (8,362 | ) | ||||||||||||||
Smile Brands, Inc. | Revolver | 10/12/2023 | $ | 216,587 | $ | (2,166 | ) | Revolver | 10/12/2023 | $ | 29,445 | $ | (1,619 | ) | ||||||||||||||
Sugarcrm Inc. | Revolver | 7/31/2024 | $ | 124,098 | $ | (1,241 | ) | |||||||||||||||||||||
Star2star Communications, LLC | Delayed Draw Term Loan | 3/11/2022 | $ | 640,576 | $ | (12,812 | ) | |||||||||||||||||||||
Star2star Communications, LLC | Revolver | 3/13/2025 | $ | 960,864 | $ | (19,217 | ) | |||||||||||||||||||||
Summit Infrastructure Group, Inc. | Delayed Draw Term Loan | 3/15/2021 | $ | 1,125,756 | $ | (22,515 | ) | Delayed Draw Term Loan | 3/15/2021 | $ | 1,125,756 | $ | — | |||||||||||||||
Summit Infrastructure Group, Inc. | Revolver | 3/15/2024 | $ | 562,878 | $ | (11,257 | ) | Revolver | 3/15/2024 | $ | 562,878 | $ | — | |||||||||||||||
Swiftpage, Inc. | Revolver | 6/13/2023 | $ | 225,317 | $ | (4,507 | ) | |||||||||||||||||||||
Symplr Software, Inc. | Revolver | 11/30/2023 | $ | 55,481 | $ | (832 | ) | |||||||||||||||||||||
The Center for Orthopedic and Research Excellence, Inc. | Delayed Draw Term Loan | 8/15/2021 | $ | 1,726,330 | $ | (15,105 | ) | |||||||||||||||||||||
Telesoft Holdings, LLC | Revolver | 12/16/2025 | $ | 198,955 | $ | (8,953 | ) | |||||||||||||||||||||
The Center for Orthopedic and Research Excellence, Inc. | Revolver | 8/15/2025 | $ | 586,952 | $ | (10,272 | ) | Delayed Draw Term Loan | 8/15/2021 | $ | 1,726,330 | $ | (49,632 | ) | ||||||||||||||
Theranest, LLC | Delayed Draw Term Loan | 7/23/2020 | $ | 1,937,786 | $ | (29,067 | ) | Delayed Draw Term Loan | 7/23/2020 | $ | 1,386,857 | $ | (35,226 | ) | ||||||||||||||
Theranest, LLC | Revolver | 7/24/2023 | $ | 428,571 | $ | (8,571 | ) | |||||||||||||||||||||
TRGRP, Inc. | Revolver | 11/1/2023 | $ | 333,333 | $ | (6,666 | ) | |||||||||||||||||||||
Tropical Smoothie Cafe, LLC | Revolver | 9/24/2023 | $ | 96,435 | $ | — | Delayed Draw Term Loan | 6/18/2021 | $ | 20,418 | $ | (510 | ) | |||||||||||||||
Velocity Purchaser Corporation | Revolver | 12/1/2022 | $ | 193,237 | $ | — | ||||||||||||||||||||||
ZBS Alliance Animal Health, LLC | Delayed Draw Term Loan | 11/8/2025 | $ | 2,440,153 | $ | (109,806 | ) | |||||||||||||||||||||
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Total 1st Lien/Senior Secured Debt | $ | 60,480,176 | $ | (789,172 | ) | $ | 54,015,513 | $ | (3,541,540 | ) | ||||||||||||||||||
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|
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| |||||||||||||||||||||||||
Total | $ | 60,480,176 | $ | (789,172 | ) | $ | 54,015,513 | $ | (3,541,540 | ) | ||||||||||||||||||
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The Fund had the following unfunded commitments by investment types as of December 31, 2018:2019:
Investment Type Facility Type 1st Lien/Senior Secured Debt 5 Bars, LLC 5 Bars, LLC AEG Holding Company, Inc. Ahead Data Blue, LLC American Physician Partners, LLC AMI US Holdings, Inc. Analogic Corporation Avetta, LLC Avetta, LLC BEP Borrower Holdco, LLC BEP Borrower Holdco, LLC BEP Borrower Holdco, LLC Blink Holdings, Inc. Broadway Technology, LLC Businesssolver.com, Inc. Captain D’s, Inc. CutisPharma, Inc. CutisPharma, Inc. Degreed, Inc. Degreed, Inc. Delaware Valley Management Holdings, Inc. Delaware Valley Management Holdings, Inc. Dillon Logistics, Inc. Dispatch Track, LLC E2open LLC Engage2Excel, Inc. Engage2Excel, Inc. EnterpriseDB Corporation Ethos Veterinary Health LLC EvolveIP, LLC EvolveIP, LLC Exterro, Inc. Finalsite Holdings, Inc. Fuze, Inc. Fuze, Inc. Genesis Acquisition Co. Genesis Acquisition Co. GHA Buyer, Inc. GHA Buyer, Inc. GHA Buyer, Inc. GS AcquisitionCo, Inc. GS AcquisitionCo, Inc. Higginbotham Insurance Agency, Inc. INH Buyer, Inc. InSite Wireless Group, LLC Lucky Bucks, LLC Metametrics, Inc. Nine Point Energy, LLC Nine Point Energy, LLC Commitment
Expiration Date (1) Unfunded
Commitment (2) Fair
Value (3) Delayed Draw Term Loan 9/27/2024 $ 3,448,816 $ (51,732 ) Revolver 9/27/2024 $ 646,653 $ (9,700 ) Revolver 11/20/2023 $ 558,432 $ (11,168 ) Revolver 11/8/2024 $ 961,256 $ (19,225 ) Revolver 12/21/2021 $ 266,402 $ (2,664 ) Revolver 4/1/2024 $ 612,979 $ (12,260 ) Revolver 6/22/2023 $ 258,261 $ (3,616 ) Delayed Draw Term Loan 4/11/2020 $ 1,235,991 $ (12,360 ) Revolver 4/10/2024 $ 494,396 $ (9,888 ) Delayed Draw Term Loan A 6/12/2021 $ 1,288,304 $ (12,883 ) Delayed Draw Term Loan B 6/30/2020 $ 2,576,608 $ (25,766 ) Revolver 6/12/2024 $ 429,435 $ (6,442 ) Delayed Draw Term Loan 11/8/2020 $ 119,189 $ (1,192 ) Revolver 4/1/2024 $ 383,845 $ (7,677 ) Revolver 5/15/2023 $ 194,118 $ — Revolver 12/15/2023 $ 60,466 $ (604 ) Revolver 3/21/2023 $ 482,932 $ (8,451 ) Delayed Draw Term Loan 5/17/2021 $ 482,932 $ (8,451 ) Delayed Draw Term Loan 5/31/2021 $ 1,810,522 $ (17,562 ) Revolver 5/31/2024 $ 417,813 $ (7,228 ) Delayed Draw Term Loan 3/21/2021 $ 5,268,797 $ (105,376 ) Revolver 3/21/2024 $ 158,064 $ (3,161 ) Revolver 12/11/2023 $ 41,191 $ (2,912 ) Revolver 12/17/2024 $ 169,081 $ (2,537 ) Revolver 11/26/2024 $ 311,365 $ (3,114 ) Delayed Draw Term Loan 10/25/2020 $ 664,490 $ (6,645 ) Revolver 3/7/2023 $ 125,635 $ (2,513 ) Revolver 6/21/2024 $ 696,355 $ (10,445 ) Term Loan 5/17/2021 $ 839,091 $ (8,391 ) Delayed Draw Term Loan 11/26/2021 $ 755,824 $ (11,337 ) Revolver 6/7/2023 $ 566,868 $ (8,503 ) Revolver 5/31/2024 $ 330,000 $ (1,650 ) Revolver 9/25/2024 $ 253,142 $ (3,797 ) Delayed Draw Term Loan 9/20/2021 $ 2,591,772 $ (117,926 ) Revolver 9/20/2024 $ 388,766 $ (17,689 ) Delayed Draw Term Loan 7/31/2020 $ 364,466 $ (3,645 ) Revolver 7/31/2024 $ 131,560 $ (2,631 ) Delayed Draw Term Loan 12/31/2020 $ 570,916 $ (5,709 ) Delayed Draw Term Loan 12/31/2020 $ 675,044 $ (6,750 ) Revolver 10/23/2023 $ 202,513 $ (4,050 ) Revolver 5/24/2024 $ 108,813 $ (1,360 ) Second Supplemental Delayed Draw Term Loan 8/2/2021 $ 1,934,450 $ (13,251 ) Delayed Draw Term Loan 3/11/2020 $ 2,365,584 $ — Revolver 1/31/2024 $ 205,858 $ (3,088 ) Term Loan 8/1/2022 $ 6,179,466 $ (77,243 ) Delayed Draw Term Loan 4/9/2020 $ 64,919 $ (1,136 ) Revolver 9/10/2025 $ 651,183 $ (13,024 ) Revolver 6/7/2024 $ 328,125 $ (6,562 ) Delayed Draw Term Loan 6/7/2021 $ 1,312,500 $ (26,250 )
Investment Type | Facility Type | Commitment Expiration Date (1) | Unfunded Commitment (2) | Fair Value (3) | ||||||||||
1st Lien/Senior Secured Debt | ||||||||||||||
AEG Holding Company, Inc. | Delayed Draw Term Loan | 11/20/2019 | $ | 1,083,629 | $ | (21,673 | ) | |||||||
AEG Holding Company, Inc. | Revolver | 11/20/2023 | $ | 216,726 | $ | (4,335 | ) | |||||||
American Physician Partners LLC | Delayed Draw Term Loan | 01/29/2020 | $ | 3,212,948 | $ | (48,194 | ) | |||||||
American Physician Partners LLC | Revolver | 12/21/2021 | $ | 347,466 | $ | (5,212 | ) | |||||||
Analogic Corporation | Revolver | 06/22/2023 | $ | 286,957 | $ | (5,739 | ) | |||||||
Avetta, LLC | Delayed Draw Term Loan | 04/11/2020 | $ | 1,235,991 | $ | (12,360 | ) | |||||||
Avetta, LLC | Revolver | 04/10/2024 | $ | 494,396 | $ | (4,944 | ) | |||||||
Businesssolver.com, Inc. | Delayed Draw Term Loan | 05/15/2020 | $ | 291,176 | $ | (5,824 | ) | |||||||
Businesssolver.com, Inc. | Revolver | 05/15/2023 | $ | 194,118 | $ | (3,882 | ) | |||||||
Caliper Software, Inc. | Revolver | 11/30/2023 | $ | 281,636 | $ | (4,225 | ) | |||||||
Captain D’s, Inc. | Revolver | 12/15/2023 | $ | 112,481 | $ | (1,125 | ) | |||||||
Dillon Logistics, Inc. | Revolver | 12/11/2023 | $ | 225,550 | $ | (3,404 | ) | |||||||
Drilling Info Holdings, Inc. | Delayed Draw Term Loan | 07/30/2020 | $ | 233,718 | $ | (1,461 | ) | |||||||
E2open LLC | Delayed Draw Term Loan | 05/26/2020 | $ | 736,677 | $ | (11,050 | ) | |||||||
E2open LLC | Revolver | 11/26/2024 | $ | 311,365 | $ | (4,670 | ) | |||||||
Engage2Excel, Inc. | Revolver | 03/07/2023 | $ | 270,115 | $ | (5,402 | ) | |||||||
Exterro, Inc. | Revolver | 05/31/2024 | $ | 330,000 | $ | (6,600 | ) | |||||||
Finalsite Holdings, Inc. | Revolver | 09/25/2024 | $ | 253,142 | $ | (4,430 | ) | |||||||
Genesis Acquisition Co. | Delayed Draw Term Loan | 07/31/2020 | $ | 364,466 | $ | (3,645 | ) | |||||||
Genesis Acquisition Co. | Revolver | 07/31/2024 | $ | 202,400 | $ | (4,048 | ) | |||||||
GHA Buyer, Inc. | Delayed Draw Term Loan | 06/20/2020 | $ | 675,044 | $ | (13,501 | ) | |||||||
GHA Buyer, Inc. | Revolver | 10/22/2023 | $ | 202,513 | $ | (4,050 | ) | |||||||
InSite Wireless Group, LLC | Revolver | 03/15/2023 | $ | 197,231 | $ | (2,958 | ) | |||||||
InSite Wireless Group, LLC | Term Loan | 03/15/2021 | $ | 1,311,586 | $ | (19,674 | ) | |||||||
Lucky Bucks, LLC | Delayed Draw Term Loan | 04/09/2020 | $ | 556,562 | $ | (9,740 | ) | |||||||
Maintech, Incorporated | Revolver | 12/28/2022 | $ | 60,500 | $ | (908 | ) | |||||||
Ministry Brands, LLC | Delayed Draw Term Loan | 12/02/2022 | $ | 947,111 | $ | (4,736 | ) | |||||||
Perforce Intermediate Holdings, LLC | Revolver | 12/28/2022 | $ | 591,549 | $ | (5,915 | ) | |||||||
Pinnacle Dermatology Management, LLC | Delayed Draw Term Loan | 05/18/2020 | $ | 1,920,536 | $ | (38,411 | ) | |||||||
Pinnacle Dermatology Management, LLC | Revolver | 05/18/2023 | $ | 468,424 | $ | (9,368 | ) | |||||||
Pivotal Payments, Inc. | Delayed Draw Term Loan | 03/28/2020 | $ | 183,152 | $ | (1,832 | ) | |||||||
Platinum Dermatology Partners, LLC | General Delayed Draw Term Loan Commitment | 07/03/2019 | $ | 568,394 | $ | (11,368 | ) | |||||||
Platinum Dermatology Partners, LLC | Revolver | 01/03/2023 | $ | 498,592 | $ | (9,972 | ) | |||||||
Qualifacts Corporation | Revolver | 12/12/2022 | $ | 300,000 | $ | (1,500 | ) | |||||||
Selligent, Inc. | Revolver | 11/03/2023 | $ | 200,660 | $ | (3,010 | ) | |||||||
Single Digits, Inc. | Delayed Draw Term Loan | 12/21/2020 | $ | 1,040,369 | $ | (10,404 | ) | |||||||
Single Digits, Inc. | Revolver | 12/21/2023 | $ | 416,148 | $ | (4,161 | ) | |||||||
Smile Brands, Inc. | Delayed Draw Term Loan | 10/12/2020 | $ | 477,340 | $ | (4,773 | ) | |||||||
Smile Brands, Inc. | Revolver | 10/12/2023 | $ | 212,340 | $ | (2,123 | ) | |||||||
Sugarcrm, Inc. | Revolver | 07/31/2024 | $ | 232,683 | $ | (4,072 | ) | |||||||
Swiftpage, Inc. | Revolver | 06/13/2023 | $ | 225,317 | $ | (4,506 | ) | |||||||
Theranest, LLC | Delayed Draw Term Loan | 07/23/2020 | $ | 2,785,713 | $ | (41,786 | ) | |||||||
Theranest, LLC | Revolver | 07/24/2023 | $ | 428,571 | $ | (8,571 | ) | |||||||
Trade Supplies Acquisition, LLC | Revolver | 11/21/2023 | $ | 469,177 | $ | (7,038 | ) | |||||||
TRGRP Acquisition Corp. | Revolver | 11/01/2023 | $ | 333,333 | $ | (6,667 | ) | |||||||
Tropical Smoothie Café, LLC | Revolver | 09/24/2023 | $ | 96,435 | $ | (964 | ) | |||||||
Velocity Purchaser Corporation | Revolver | 12/01/2022 | $ | 193,237 | $ | (3,865 | ) | |||||||
Veriforce Holdings, LLC | Revolver | 07/13/2023 | $ | 281,646 | $ | (4,929 | ) | |||||||
|
|
|
| |||||||||||
Total 1st Lien/Senior Secured Debt | $ | 26,559,120 | $ | (403,025 | ) | |||||||||
|
|
|
| |||||||||||
Total | $ | 26,559,120 | $ | (403,025 | ) | |||||||||
|
|
|
|
Investment Type Facility Type OMH-HealthEdge Holdings, LLC Pace Health Companies, LLC PF Growth Partners, LLC Pinnacle Dermatology Management, LLC Pinnacle Dermatology Management, LLC Real Capital Analytics, Inc. Rhode Holdings, Inc. Rhode Holdings, Inc. RxBenefits, Inc. Selligent, Inc. Single Digits, Inc. Single Digits, Inc. Sirsi Corporation Smile Brands, Inc. Smile Brands, Inc. Sugarcrm, Inc. Summit Infrastructure Group, Inc. Summit Infrastructure Group, Inc. Swiftpage, Inc. Symplr Software, Inc. Telesoft Holdings, LLC The Center for Orthopedic and Research Excellence, Inc. The Center for Orthopedic and Research Excellence, Inc. Theranest, LLC Theranest, LLC TRGRP, Inc. Tropical Smoothie Cafe, LLC Tropical Smoothie Cafe, LLC Velocity Purchaser Corporation ZBS Alliance Animal Health, LLC ZBS Alliance Animal Health, LLC Total 1st Lien/Senior Secured Debt Total Commitment
Expiration Date (1) Unfunded
Commitment (2) Fair
Value (3) Revolver 10/24/2024 $ 458,721 $ (10,321 ) Revolver 8/2/2024 $ 616,682 $ (6,167 ) Delayed Draw Term Loan 7/11/2021 $ 300,356 $ (3,003 ) Delayed Draw Term Loan 5/18/2020 $ 1,643,567 $ (32,871 ) Revolver 5/18/2023 $ 468,424 $ (9,368 ) Revolver 10/2/2024 $ 138,948 $ (695 ) Delayed Draw Term Loan 5/3/2021 $ 467,302 $ (5,280 ) Revolver 5/2/2025 $ 161,139 $ (3,223 ) Revolver 3/29/2024 $ 575,767 $ (5,758 ) Revolver 11/3/2023 $ 200,660 $ (3,010 ) Delayed Draw Term Loan 12/21/2020 $ 1,040,369 $ (10,404 ) Revolver 12/21/2023 $ 416,148 $ (4,161 ) Revolver 3/15/2024 $ 332,245 $ (4,984 ) Delayed Draw Term Loan 10/12/2020 $ 333,798 $ — Revolver 10/12/2023 $ 220,833 $ — Revolver 7/31/2024 $ 310,244 $ — Delayed Draw Term Loan 3/15/2021 $ 1,125,756 $ (22,515 ) Revolver 3/15/2024 $ 562,878 $ (11,258 ) Revolver 6/13/2023 $ 225,317 $ (4,506 ) Revolver 11/30/2023 $ 27,828 $ (417 ) Revolver 12/16/2025 $ 596,865 $ (13,430 ) Delayed Draw Term Loan 8/15/2021 $ 1,726,330 $ (15,105 ) Revolver 8/15/2025 $ 656,005 $ (11,480 ) Delayed Draw Term Loan 7/23/2020 $ 1,386,857 $ (20,803 ) Revolver 7/24/2023 $ 428,571 $ (8,571 ) Revolver 11/1/2023 $ 333,333 $ (6,667 ) Revolver 9/24/2023 $ 96,435 $ — Delayed Draw Term Loan 6/18/2021 $ 6,659,893 $ — Revolver 12/1/2022 $ 193,237 $ — Delayed Draw Term Loan 11/8/2025 $ 4,535,600 $ (90,712 ) Revolver 11/8/2025 $ 181,424 $ (3,628 ) $ 71,406,720 $ (1,007,901 ) $ 71,406,720 $ (1,007,901 )
(1) | Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity. |
(2) | Net of capitalized fees, expenses and original issue discount (“OID”). |
(3) | A negative fair value was reflected as investments, at fair value in the consolidated statements of assets and liabilities. The negative fair value is the result of the capitalized discount on the loan. |
Contingencies
In the normal course of business, the Fund enters into contracts that provide a variety of general indemnifications. Any exposure to the Fund under these arrangements could involve future claims that may be made against the Fund. Currently, no such claims exist or are expected to arise and, accordingly, the Fund has not accrued any liability in connection with such indemnifications.
7. Net Assets
Equity Issuance
In connection with its formation, the Fund has the authority to issue 200,000,000 shares of the Fund’s common stock, par value $0.01 per share.
On September 29, 2017, the Fund completed its Initial Closing after entering into Subscription Agreements with several investors, including the Adviser, providing for the private placement of the Fund’s common shares. Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase the Fund’s common shares up to the amount of their respective Capital Commitments on anas-needed basis upon the issuance of a capital draw-down notice. At September 30,March 31, 2020 the Fund had total Capital Commitments of $418,448,516, of which 56% is unfunded. At December 31, 2019, the Fund had total Capital Commitments of $359,356,251, of which 66% is unfunded.$397,620,551. The minimum Capital Commitment of an investor is $50,000. The Adviser, however, may waive the minimum Capital Commitment at its discretion.
Capital Commitments may be drawn down by the Fund on a pro rata basis, as needed (including forfollow-on investments), for paying the Fund’s expenses, including fees under the Amended and Restated Advisory Agreement, and/or maintaining a reserve account for the payment of future expenses or liabilities.
The following table summarizestables summarize the total shares issued and amount received related to capital drawdowns delivered pursuant to the Subscription Agreements during the ninethree months ended September 30, 2019March 31, 2020 and September 30, 2018:2019:
For the nine months ended September 30, 2019 | For the nine months ended September 30, 2018 | For the three months ended March 31, 2020 | For the three months ended March 31, 2019 | |||||||||||||||||||||||||||||
Quarter Ended | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
March 31 | 2,317,068 | $ | 23,125,308 | 599,421 | $ | 6,066,799 | 4,876,625 | $41,844,852 | 2,317,068 | $ | 23,125,308 | |||||||||||||||||||||
June 30 | 1,784,087 | $ | 17,963,617 | 399,596 | $ | 4,001,001 | ||||||||||||||||||||||||||
September 30 | 1,795,822 | $ | 17,967,810 | 1,577,979 | $ | 15,912,791 | ||||||||||||||||||||||||||
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| |||||||||||||||||||||||||
Total capital drawdowns | 5,896,977 | $ | 59,056,735 | 2,576,996 | $ | 25,980,591 | 4,876,625 | $ | 41,844,852 | 2,317,068 | $ | 23,125,308 | ||||||||||||||||||||
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Distributions
The following tables reflect the distributions declared on shares of the Fund’s common stock during the ninethree months ended September 30, 2019March 31, 2020 and September 30, 2018:March 31, 2019:
Date Declared | Record Date | Payment Date | Amount Per Share | Dollar Amount | ||||
3/27/2019 | 3/27/2019 | 4/25/2019 | $0.15 | $1,057,242 | ||||
6/28/2019 | 6/28/2019 | 7/19/2019 | $0.16 | $1,690,999 | ||||
9/25/2019 | 9/26/2019 | 10/30/2019 | $0.13 | $1,674,929 | ||||
| ||||||||
$4,423,170 | ||||||||
|
Date Declared | Record Date | Payment Date | Amount Per Share | Dollar Amount | ||||
3/27/2020 | 3/27/2020 | 4/29/2020 | $0.24 | $3,551,533 | ||||
| ||||||||
$3,551,533 | ||||||||
|
Date Declared | Record Date | Payment Date | Amount Per Share | Dollar Amount | ||||
3/27/2019 | 3/27/2019 | 4/25/2019 | $0.15 | $1,057,242 | ||||
| ||||||||
$1,057,242 | ||||||||
|
Date Declared Record Date Payment Date Amount Per Share Dollar Amount 6/28/2018 9/27/2018 6/28/2018 6/29/2018 $0.25 $759,327 9/27/2018 9/28/2018 $0.12 $625,565 $1,384,892
Distribution Reinvestment Plan
On September 26, 2017, the Fund adopted a dividend reinvestment plan, which was amended and restated on August 6, 2018 (the “DRIP”). Pursuant to the DRIP (both before and after it was amended), stockholders receive dividends or other distributions in cash unless a stockholder elects to reinvest his or her dividends and other distributions. As a result of adopting the DRIP, if the Board authorizes, and the Fund declares, a cash dividend or distribution, stockholders who have opted into the DRIP will have their cash dividends or distributions automatically reinvested in additional shares of common stock, rather than receiving cash.
The following tables summarize shares distributed pursuant to the DRIP during the ninethree months ended September 30,March 31, 2020 and March 31, 2019 and September 30, 2018 to stockholders who opted into the DRIP:
Date Declared | Record Date | Reinvestment Date | Shares | Dollar Amount | ||||
3/27/2019 | 3/27/2019 | 3/29/2019 | 58,319 | $ 581,297 | ||||
6/28/2019 | 6/28/2019 | 6/28/2019 | 91,975 | $ 915,804 | ||||
9/25/2019 | 9/26/2019 | 9/30/2019 | 91,341 | $ 907,002 | ||||
|
| |||||||
241,635 | $2,404,103 | |||||||
|
|
Date Declared | Record Date | Reinvestment Date | Shares | Dollar Amount | ||||
3/27/2020 | 3/27/2020 | 3/31/2020 | 225,117 | $1,931,666 | ||||
| ||||||||
$1,931,666 | ||||||||
|
Date Declared | Record Date | Reinvestment Date | Shares | Dollar Amount | ||||
6/28/2018 | 6/28/2018 | 6/29/2018 | 42,390 | $424,430 | ||||
9/27/2018 | 9/27/2018 | 9/28/2018 | 34,652 | $347,908 | ||||
| ||||||||
77,042 | $772,338 | |||||||
|
Date Declared | Record Date | Reinvestment Date | Shares | Dollar Amount | ||||
3/27/2019 | 3/27/2019 | 3/29/2019 | 58,319 | $581,297 | ||||
| ||||||||
$581,297 | ||||||||
|
Share Repurchase Plan
On March 23, 2018, the Small Business Credit Availability Act (the “SBCAA”) was signed into law. The SBCAA, among other things, modifies the applicable provisions of the 1940 Act to reduce the required asset coverage ratio applicable to BDCs from 200% to 150% subject to certain approval, time and disclosure requirements (including either stockholder approval or approval of a majority of the directors who are not interested persons of the BDC and who have no financial interest in the proposal). On September 26, 2018, the Fund’s stockholders approved the reduction of the asset coverage ratio applicable to the Fund from 200% to 150%. Pursuant to the SBCAA, on November 27, 2018, the Fund extended to its stockholders as of such date the opportunity to sell the shares held by that stockholder as of such date, with 25% of those shares to be repurchased in each of the four calendar quarters following the calendar quarter in which the approval was obtained. The first tender offer period began on November 27, 2018 and expired on December 27, 2018. The second tender offer period began on February 22, 2019 and expired on
There were no shares repurchased during the three months ended March 26, 2019. The third tender offer period began on May 17, 2019 and expired on June 25, 2019. The fourth tender offer period began on August 16, 2019 and expired on September 25, 2019.31, 2020.
The following table summarizes shares repurchased during the ninethree months ended September 30,March 31, 2019:
Payment Date | Shares | Dollar Amount | ||
3/28/2019 | 7,331 | $72,668 | ||
6/28/2019 | 7,529 | $75,042 | ||
9/25/2019 | 8,478 | $84,413 | ||
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| |||
23,338 | $232,123 | |||
|
|
Tender Period | Payment Date | Shares | Dollar Amount | Average Price Paid Per | ||||
2/22/2019-3/26/2019 | 3/28/2019 | 7,331 | $72,668 | $9.91 | ||||
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| ||||||
7,331 | $72,668 | $9.91 |
There were no shares repurchased during the nine months ended September 30, 2018.
(1) | Per share price disclosed in this column is the actual price at which each share was repurchased. |
8. Earnings Per Share
The following information sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2019March 31, 2020 and September 30, 2018:March 31, 2019:
For the three months ended September 30, | For the nine months ended September 30, | For the three months ended March 31, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | |||||||||||||||||||
Net increase (decrease) in net assets from operations | $ | 1,281,543 | $ | 650,958 | $ | 4,034,094 | $ | 1,316,997 | $ | (15,497,328 | ) | $ | 1,382,359 | |||||||||||
Weighted average common shares outstanding | 11,226,276 | 4,168,629 | 9,182,983 | 3,258,111 | 14,683,464 | 6,914,873 | ||||||||||||||||||
Earnings per common share-basic and diluted | $ | 0.11 | $ | 0.16 | $ | 0.44 | $ | 0.40 | $ | (1.06 | ) | $ | 0.20 |
9. Financial Highlights
Below is the schedule of financial highlights of the Fund for the ninethree months ended September 30, 2019March 31, 2020 and September 30, 2018:March 31, 2019:
For the nine months ended September 30, 2019 | For the nine months ended September 30, 2018 | For the three months ended March 31, 2020 | For the three months ended March 31, 2019 | |||||||||||||
Per Share Data:(1) | Per Share Data:(1) |
| Per Share Data:(1) |
| ||||||||||||
Net asset value, beginning of period | $ | 9.91 | $ | 10.02 | $ | 9.88 | $ | 9.91 | ||||||||
Net investment income (loss) | 0.48 | 0.41 | 0.24 | 0.15 | ||||||||||||
Net realized and unrealized gains (losses) on investments | (0.02 | ) | (0.02 | ) | (1.30 | ) | 0.06 | |||||||||
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| |||||||||||||
Net increase (decrease) in net assets resulting from operations | 0.46 | 0.39 | (1.06 | ) | 0.21 | |||||||||||
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| |||||||||||||
Distributions to shareholders(2) | (0.44 | ) | (0.37 | ) | ||||||||||||
Distributions to stockholders(2) | (0.24 | ) | (0.15 | ) | ||||||||||||
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| |||||||||||||
Net asset value, end of period | $ | 9.93 | $ | 10.04 | $ | 8.58 | $ | 9.97 | ||||||||
Shares outstanding, end of period | 12,498,946 | 5,071,409 | 19,729,143 | 8,751,728 | ||||||||||||
Total return at net asset value before incentive | 5.08 | % | 3.97 | % | (10.53 | )% | 2.09 | % | ||||||||
Total return at net asset value after incentive | 4.65 | % | 3.91 | % | (10.72 | )% | 2.05 | % | ||||||||
Ratio/Supplemental Data: | Ratio/Supplemental Data: |
| Ratio/Supplemental Data: |
| ||||||||||||
Net assets, end of period | $ | 124,113,349 | $ | 50,917,417 | $ | 169,290,052 | $ | 87,232,764 | ||||||||
Ratio of total expenses to weighted average net | 15.68 | % | 13.73 | % | 13.08 | % | 12.57 | % | ||||||||
Ratio of net expenses to weighted average net | 13.78 | % | 6.34 | % | 8.32 | % | 11.71 | % | ||||||||
Ratio of net investment income (loss) before waivers to weighted average net assets(5) | 4.76 | % | (1.29 | )% | 5.99 | % | 5.91 | % | ||||||||
Ratio of net investment income (loss) after waivers to weighted average net assets(5)(6) | 6.66 | % | 6.10 | % | 10.75 | % | 6.77 | % | ||||||||
Ratio of interest and credit facility expenses to weighted average net assets(5) | 8.17 | % | 3.61 | % | 6.58 | % | 7.59 | % | ||||||||
Ratio of incentive fees to weighted average net assets | 0.61 | % | 0.19 | % | 0.49 | % | 0.14 | % | ||||||||
Portfolio turnover rate(4) | 14.47 | % | 11.55 | % | 3.75 | % | 1.51 | % | ||||||||
Asset coverage ratio | 159 | % | 240 | % | 167 | % | 161 | % |
(1) | The per share data was derived by using the weighted average shares outstanding during the applicable period. |
(2) | The per share data for distributions is the actual amount of distributions paid or payable per share of common stock outstanding during the entire period. |
(3) | Total return based on NAV is calculated as the change in NAV per share during the respective periods, assuming dividends and distributions, if any, are reinvested in accordance with the Fund’s dividend reinvestment plan. |
(4) | Not annualized. |
(5) | Annualized, except for professional fees, directors’ fees, and incentive |
(6) | For the |
(7) | Ratio of incentive fees to weighted average net assets calculated before the voluntary waiver of incentive fees by the Adviser. |
(8) | Asset coverage ratio is equal to (i) the sum of (A) net assets at end of period and (B) debt outstanding at end of period, divided by (ii) total debt outstanding at the end of the period. |
10. Subsequent Events
Subsequent events after the consolidated statements of assets and liabilities date have been evaluated through the date the financial statements were issued. The Fund has concluded that there isare no impactevents requiring adjustment or disclosure in the financial statements.
Effective November 13, 2019, the Fund has exercised its option to extend the maturity date of the Revolving Credit Facility to November 11, 2020.
On November 13, 2019, the Fund entered into the Amended and Restated Advisory Agreement with the Adviser, replacing the Advisory Agreement (which was terminated concurrently with the effectiveness of the Amended and Restated Advisory Agreement). The Amended and Restated Advisory Agreement is identical in all material respects to the Advisory Agreement, except that (i) it reflects new effective and termination dates and (ii) the income-based incentive fee has been revised to calculate Pre-incentive Fee Net Investment Income, which is expressed as a rate of return on the value of the Fund’s net assets, using the Fund’s average monthly net assets as of the first day of each month in the calendar quarter, rather than using the Fund’s net assets at the end of the immediately preceding fiscal quarter.
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Forward-Looking Statements
This Quarterly Report on Form10-Q (this “Quarterly Report”) contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, ourthe Fund, its current and prospective portfolio investments, ourits industry, ourits beliefs and opinions, and ourits assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond ourthe Fund’s control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:
an economic downturn could impair ourthe Fund’s portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of ourthe Fund’s investments in such portfolio companies;
such an economic downturn could disproportionately impact the companies that we intendthe Fund intends to target for investment, potentially causing usthe Fund to experience a decrease in investment opportunities and diminished demand for capital from these companies;
pandemics or other serious public health events, such as the recent global outbreak of a novel strain of the coronavirus, commonly known as “COVID-19”;
a contraction of available credit and/or an inability to access the equity markets could impair ourthe Fund’s lending and investment activities;
interest rate volatility could adversely affect ourthe Fund’s results, particularly if we electthe Fund elects to use leverage as part of ourits investment strategy;
ourthe Fund’s future operating results;
ourthe Fund’s business prospects and the prospects of ourthe Fund’s portfolio companies;
ourthe Fund’s contractual arrangements and relationships with third parties;
the ability of ourthe Fund’s portfolio companies to achieve their objectives;
competition with other entities and ourthe Fund’s affiliates for investment opportunities;
the speculative and illiquid nature of ourthe Fund’s investments;
the use of borrowed money to finance a portion of ourthe Fund’s investments;
the adequacy of ourthe Fund’s financing sources and working capital;
the loss of key personnel;
the timing of cash flows, if any, from the operations of ourthe Fund’s portfolio companies;
the ability of the Adviser to locate suitable investments for usthe Fund and to monitor and administer ourthe Fund’s investments;
the ability of the Adviser to attract and retain highly talented professionals;
ourthe Fund’s ability to qualify and maintain ourits qualification as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and as a business development company (“BDC”);
the effect of legal, tax and regulatory changes, including the Small Business Credit Availability Act (the “SBCAA”);changes; and
the other risks, uncertainties and other factors we identifythe Fund identifies under “Risk Factors” of ourits Annual Report on Form10-K for the fiscal year ended December 31, 2018 and our Quarterly Reports onForm 10-Q for2019.
Although the quarters ended March 31, 2019 and June��30, 2019.
Although we believeFund believes that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by usthe Fund that ourthe Fund’s plans and objectives will be achieved. These risks and uncertainties include those described or identified in the section entitled “Item 1A. Risk Factors” of Annual Report on Form10-K for the fiscal year ended December 31, 2018, our Quarterly Reports onForm 10-Q for the quarters ended March 31, 2019 and June 30, 2019 and elsewhere in this report. These forward-looking statements apply only as of the date of this report. Moreover, we assumethe Fund assumes no duty and dodoes not undertake to update the forward-looking statements. The forward-looking statements and projections contained in this AnnualQuarterly Report are excluded from the safe harbor protection provided by Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) because we arethe Fund is an investment company.
The following analysis of ourthe Fund’s financial condition and results of operations should be read in conjunction with ourthe Fund’s financial statements and the related notes thereto contained elsewhere in this Quarterly Report.
Overview
We wereThe Fund was formed on February 6, 2015 as a corporation under the laws of the State of Maryland. We areThe Fund is structured as an externally managed,non-diversified,closed-end management investment company. We wereThe Fund was formed to invest primarily in primary-issue middle-market credit opportunities that are directly sourced and privately negotiated. WeThe Fund commenced investment operations on November 15, 2017 (“Commencement”). We areThe Fund is advised by AB Private Credit Investors LLC (the “Adviser”), which is registered with the Securities and Exchange Commission (“SEC”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Adviser is responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring investments and monitoring ourthe Fund’s portfolio on an ongoing basis. State Street Bank and Trust Company (the “Administrator”) provides the administrative services necessary for the Fund to operate.
On October 6, 2016, we filed with the SEC an electionThe Fund has elected to be treated as a BDC under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, theThe Fund has also elected to be treated and intends to qualify annually as a RIC under Subchapter M of the Code for U.S. federal income tax purposes. To the extent that we have net taxable income prior to our qualification as a RIC, we will be subject to U.S. federal income tax on such income. As a BDC and a RIC, respectively, we arethe Fund is and will be required to comply with various regulatory requirements, such as the requirement to invest at least 70% of ourits assets in “qualifying assets,” source of income limitations, asset diversification requirements, and the requirement to distribute annually at least 90% of ourits taxable income and tax exempt interest.
We areThe Fund is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). WeThe Fund will remain an emerging growth company for up to five years following ourits initial public offering, if any, although if the market value of ourits common stock that is held bynon-affiliates exceeds $700 million as of any June 30 before that time, wethe Fund would cease to be an emerging growth company as of the following December 31. For so long as we remainthe Fund remains an emerging growth company under the JOBS Act, weit will be subject to reduced public company reporting requirements.
Effects ofCOVID-19 on the Fund’s Results of Operations
The rapid spread ofCOVID-19, a novel strain of coronavirus causing respiratory illness(“COVID-19”) has resulted in temporary closures of many corporate offices, retail stores, and manufacturing facilities and factories around the world, which could materially disrupt the demand for the Fund’s portfolio companies’ products and services. On March 11, 2020, the World Health Organization declaredCOVID-19 a global pandemic and recommended containment and mitigation measures worldwide. TheCOVID-19 pandemic has had a significant impact on the U.S. economy and supply chains worldwide have been interrupted, slowed or rendered inoperable, with an increasing number of individuals becoming ill, subject to quarantine, or otherwise unable to work and/or travel due to health reasons or governmental restrictions. Governmental mandates to control an outbreak may require forced shutdown of the Fund’s portfolio companies’ facilities for extended or indefinite periods. The extent of the impact of theCOVID-19 outbreak on the financial performance of the Fund’s current and future investments will depend on future developments, including the duration and spread of the virus, related advisories and restrictions, and the health of the financial markets and economy as a result ofCOVID-19, all of which are highly uncertain and cannot be predicted. Adverse impacts on the Fund’s investments may have a material adverse impact on the Fund’s future net investment income, the fair value of the Fund’s portfolio investments, the Fund’s financial condition and results of operations and the financial condition of the Fund’s portfolio companies.
The Fund has had a reduction in its net asset value as of March 31, 2020, as compared to its net asset value as of December 31, 2019, which is primarily the result of the impact of theCOVID-19 pandemic. The decrease in net asset value as of March 31, 2020, primarily resulted from an increase in the aggregate unrealized depreciation of the Fund’s investment portfolio due to decreases in fair value of investments attributable to theCOVID-19 pandemic. As of March 31, 2020, the Fund is in compliance with its asset coverage requirements under the 1940 Act. In addition, the Fund is not in default of any of the covenants under the Revolving Credit Facility as of March 31, 2020. However, any continued increase in unrealized depreciation of the Fund’s investment portfolio or further significant reductions in the Fund’s net asset value as a result of the effects of theCOVID-19 pandemic or otherwise, increase the risk of breaching the relevant covenants and requirements.
The Fund will continue to monitor the rapidly evolving situation surrounding theCOVID-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. The majority of the Fund’s exposure is within sectors that the Fund expects to be relatively insulated from the impact ofCOVID-19 and related social distancing measures, such as software and technology enabled services, pharmaceutical and healthcare information technology, digital infrastructure and services, and other mission critical business services. The Fund has no direct investments in commercial aviation companies, and the Fund believes that it has limited exposure to sectors currently experiencing challenges, such as gym franchises (comprising approximately 1.4% of the Fund’s portfolio as of March 31, 2020), energy (comprising approximately 5.6% of the Fund’s portfolio as of March 31, 2020) and quick service restaurants (comprising approximately 3.1% of the Fund’s portfolio as of March 31, 2020). In sectors where the Fund believes that it has modest exposure, such as health care services/practice management (comprising approximately 20.5% of the Fund’s portfolio as of March 31, 2020), the Fund is closely monitoring these companies. In these circumstances, there may be developments outside the Fund’s control requiring it to adjust its plan of operation. As such, given the dynamic nature of this situation, the Fund cannot reasonably estimate the impact ofCOVID-19 on its financial condition, results of operations or cash flows in the future.
The Private Offering
We enterThe Fund enters into separate subscription agreements with investors providing for the private placement of ourits common stock (the “Shares”) in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act,” and such offering, the “Private Offering”). Each investor makes a capital commitment (a “Capital Commitment”) to purchase Shares pursuant to a subscription agreement. Investors are required to make capital contributions to purchase Shares each time we deliverthe Fund delivers a capital call notice, which is issued based on ourthe Fund’s anticipated investment activities and capital needs, delivered at least 10 business days prior to the required funding date, provided that investors may fund such requirements sooner than the deadline as agreed between the Fund and the investor. Generally, purchases of ourthe Fund’s Shares are made pro rata in accordance with each investor’s Capital Commitment, in an amount not to exceed each investor’s remaining capital commitment (“Remaining Commitment”), at aper-Share price equal to the net asset value per share of ourthe Fund’s common stock subject to any adjustments. Pursuant to the Private Offering, the Fund’s initial closing occurred on September 29, 2017.
WeThe Fund may accept additional Capital Commitments quarterly (“Subsequent Closings”) from new investors as well as existing investors that wish to increase their commitment and shareholding in the Fund. These Subsequent Closings are expected to occur on a calendar-quarter end based on investor interest as well as the state of the market and ourthe Fund’s capacity to invest the additional capital in a reasonable period. Each Capital Commitment is for the life of the Fund or for a shorter period based on the investor’s liquidation election, subject to the Fund’s receipt of exemptive relief that would permit stockholders to liquidate their investments pursuant to transactions that are currently prohibited by the 1940 Act and would require an SEC order in order to be established.
Revenues
OurThe Fund’s investment objective is to generate current income and prioritize capital preservation through a portfolio that primarily invests in directly-sourced, privately-negotiated, secured, middle market loans. We intendThe Fund intends to primarily invest in middle market businesses based in the United States. We expectThe Fund expects that the primary use of proceeds by the companies in which we investthe Fund invests will be for leveraged buyouts, recapitalizations, mergers and acquisitions and growth capital.
We
The Fund will seek to build the Fund’sits portfolio in a defensive manner that minimizes cyclical and correlated risks across individual names and sector verticals by targeting companies with strong underlying business models and durable intrinsic value.
WeThe Fund will primarily hold secured loans, which encompass traditional first lien, unitranche and second lien loans, but may also invest in mezzanine, structured preferred stock andnon-control equityco-investment opportunities. WeThe Fund will seek to deliver attractive risk adjusted returns with lower volatility and low correlation relative to the public credit markets. The Adviser believes ourthe Fund’s flexibility to invest across the capital structure and liquidity spectrum will allow usthe Fund to optimize investor risk-adjusted returns.
Expenses
Under the Amended and Restated Advisory Agreement, ourthe Fund’s primary operating expenses will include the payment of fees to the Adviser, ourthe Fund’s allocable portion of overhead expenses under the Expense Reimbursement Agreement and other operating costs described below. We bearThe Fund bears all otherout-of-pocket costs and expenses of ourthe Fund’s operations and transactions, including those relating to:
reasonable and documented organization and offering expenses to the extent reimbursement of such expenses is included in any future agreement with the Adviser;
calculating ourthe Fund’s net asset value (including the cost and expenses of any independent valuation firm);
fees and expenses payable to third parties, including agents, consultants or other advisers, in connection with monitoring financial (including advising with respect to ourthe Fund’s financing strategy) and legal affairs for usthe Fund and in providing administrative services, monitoring ourthe Fund’s investments and performing due diligence on ourthe Fund’s prospective portfolio companies or otherwise relating to, or associated with, evaluating and making investments;
interest payable on debt, if any, incurred to finance ourthe Fund’s investments;
sales and purchases of ourthe Fund’s common stock and other securities;
base management fees and incentive fees payable to the Adviser;
transfer agent and custodial fees;
federal and state registration fees;
all costs of registration and listing ourthe Fund’s securities on any securities exchange;
U.S. federal, state and local taxes;
independent directors’ fees and expenses;
costs of preparing and filing reports or other documents required by the SEC, the Financial Industry Regulatory Authority or other regulators;
costs of any reports, proxy statements or other notices to stockholders, including printing costs;
ourthe Fund’s allocable portion of any fidelity bond, directors’ and officers’ errors and omissions liability insurance, and any other insurance premiums;
direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs; and
all other expenses incurred by us,the Fund, the Administrator or the Adviser in connection with administering ourthe Fund’s business, including payments under the Administration Agreement and payments under the Expense Reimbursement Agreement based on ourthe Fund’s allocable portion of the Adviser’s overhead in performing its obligations under the Expense Reimbursement Agreement, including the allocable portion of the cost of ourthe Fund’s Chief Compliance Officer and Chief Financial Officer and their respective staffs.
Portfolio and Investment Activity
During the three months ended September 30, 2019, weMarch 31, 2020, the Fund invested $43,773,769$26,047,107 in 1012 portfolio companies, $7,722,734$31,464,713 was drawn down against the revolvers and delayed draw term loans, and wethe Fund had $11,984,003$12,615,490 in aggregate amount of principal repayments, which includes $1,995,849$3,988,364 in revolver and delayed draw term loan paydowns, and $5,323$842,678 in sales, resulting in net investments of $39,507,177$44,053,652 for the period.
During the three months ended September 30, 2018, weMarch 31, 2019, the Fund invested $23,840,581$57,136,514 in 911 portfolio companies, $1,383,962 was drawn down against the revolvers, and we had $907,626 in aggregate amount of principal repayments, which includes $563,856 in revolver paydowns, and $0 in sales, resulting in net investments of $24,316,917 for the period.
During the nine months ended September 30, 2019, we invested $174,165,536 in 35 portfolio companies, $17,561,385$3,587,927 was drawn down against the revolvers and delayed draw term loans, and wethe Fund had $24,086,016$2,348,789 in aggregate amount of principal repayments, which includes $6,444,889$1,876,665 in revolver and delayed draw term loan paydowns, and $7,636,064$130,771 in sales, resulting in net investments of $160,004,841 for the period.
During the nine months ended September 30, 2018, we invested $59,776,931 in 21 portfolio companies, $7,458,235 was drawn down against the revolvers, and we had $1,847,318 in aggregate amount of principal repayments, which includes $1,290,748 in revolver paydowns, and $3,933,486 in sales, resulting in net investments of $61,454,362$58,244,881 for the period.
The following table shows the composition of the investment portfolio and associated yield data as of September 30, 2019:March 31, 2020:
As of September 30, 2019 | As of March 31, 2020 | |||||||||||||||||||||||||||||||||||||||
Cost | Percentage of Total Portfolio | Fair Value | Percentage of Total Portfolio | Weighted Average Yield(1) | Cost | Percentage of Total Portfolio | Fair Value | Percentage of Total Portfolio | Weighted Average Yield(1) | |||||||||||||||||||||||||||||||
First Lien Senior Secured Debt | $ | 285,952,814 | 95.47 | % | $ | 284,641,539 | 95.39 | % | 8.56 | % | $ | 376,332,124 | 96.11 | % | $ | 356,272,609 | 96.11 | % | 9.63 | % | ||||||||||||||||||||
Second Lien Junior Secured Debt | 7,646,021 | 2.55 | 7,620,547 | 2.55 | 10.89 | $ | 7,653,082 | 1.96 | % | $ | 7,364,846 | 1.99 | % | 11.42 | % | |||||||||||||||||||||||||
Preferred Stock | 4,298,247 | 1.43 | 4,469,886 | 1.50 | — | $ | 5,262,132 | 1.34 | % | $ | 5,431,410 | 1.46 | % | 0 | % | |||||||||||||||||||||||||
Common Stock | 1,633,778 | 0.55 | 1,667,445 | 0.56 | — | $ | 1,663,605 | 0.42 | % | $ | 1,369,556 | 0.37 | % | 0 | % | |||||||||||||||||||||||||
Investment Company | 11,329 | 0 | 11,329 | 0 | — | |||||||||||||||||||||||||||||||||||
Warrants | $ | 661,991 | 0.17 | % | $ | 249,863 | 0.07 | % | 0 | % | ||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||
Total | $ | 299,542,189 | 100 | % | $ | 298,410,746 | 100 | % | $ | 391,572,934 | 100 | % | $ | 370,688,284 | 100 | % | ||||||||||||||||||||||||
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(1) | Based upon the par value of |
The following table shows the composition of the investment portfolio and associated yield data as of December 31, 2018:2019:
As of December 31, 2018 | As of December 31, 2019 | |||||||||||||||||||||||||||||||||||||||
Cost | Percentage of Total Portfolio | Fair Value | Percentage of Total Portfolio | Weighted Average Yield(1) | Amortized Cost | Percentage of Total Portfolio | Fair Value | Percentage of Total Portfolio | Weighted Average Yield(1) | |||||||||||||||||||||||||||||||
First Lien Senior Secured Debt | $ | 135,776,144 | 98.02 | % | $ | 135,061,980 | 98.01 | % | 9.34 | % | $ | 332,320,392 | 95.80 | % | $ | 330,393,205 | 95.76 | % | 8.31 | % | ||||||||||||||||||||
Second Lien Junior Secured Debt | 1,201,433 | 0.87 | 1,200,773 | 0.87 | 10.91 | $ | 7,649,558 | 2.21 | % | $ | 7,620,547 | 2.21 | % | 10.49 | % | |||||||||||||||||||||||||
Preferred Stock | 1,160,531 | 0.84 | 1,160,531 | 0.84 | — | $ | 4,648,225 | 1.34 | % | $ | 4,861,847 | 1.41 | % | 0 | % | |||||||||||||||||||||||||
Common Stock | 374,135 | 0.27 | 379,849 | 0.28 | — | $ | 1,624,199 | 0.47 | % | $ | 1,518,353 | 0.44 | % | 0 | % | |||||||||||||||||||||||||
Warrants | $ | 631,366 | 0.18 | % | $ | 631,366 | 0.18 | % | 0 | % | ||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||
Total | $ | 138,512,243 | 100 | % | $ | 137,803,133 | 100 | % | $ | 346,873,740 | 100 | % | $ | 345,025,318 | 100 | % | ||||||||||||||||||||||||
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(1) | Based upon the par value of |
The following table presents certain selected financial information regarding ourthe Fund’s investment portfolio:
As of September 30, 2019 | As of December 31, 2018 | As of March 31, 2020 | As of December 31, 2019 | |||||||||||||
Number of portfolio companies | 80 | 44 | 90 | 85 | ||||||||||||
Percentage of debt bearing a floating rate(1) | 100 | % | 100 | % | ||||||||||||
Percentage of debt bearing a fixed rate(1) | — | % | — | % | ||||||||||||
Percentage of debt bearing a floating rate(1) | 99.9 | % | 99.99 | % | ||||||||||||
Percentage of debt bearing a fixed rate(1) | 0.01 | % | 0.01 | % |
(1) | Measured on a fair value basis, and excludes equity securities. |
The following table shows the amortized cost and fair value of ourthe Fund’s performing andnon-accrual debt investments as of September 30, 2019:March 31, 2020:
As of September 30, 2019 | As of March 31, 2020 | |||||||||||||||||||||||||||||||
Amortized Cost | Percentage at Amortized Cost | Fair Value | Percentage at Fair Value | Amortized Cost | Percentage at Amortized Cost | Fair Value | Percentage at Fair Value | |||||||||||||||||||||||||
Performing | $ | 293,598,835 | 100 | % | $ | 292,262,086 | 100 | % | $ | 383,985,206 | 100 | % | $ | 363,637,455 | 100 | % | ||||||||||||||||
Non-accrual | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
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Total | $ | 293,598,835 | 100 | % | $ | 292,262,086 | 100 | % | $ | 383,985,206 | 100 | % | $ | 363,637,455 | 100 | % | ||||||||||||||||
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The following table shows the amortized cost and fair value of ourthe Fund’s performing andnon-accrual debt investments as of December 31, 2018:2019:
As of December 31, 2018 | As of December 31, 2019 | |||||||||||||||||||||||||||||||
Amortized Cost | Percentage at Amortized Cost | Fair Value | Percentage at Fair Value | Amortized Cost | Percentage at Amortized Cost | Fair Value | Percentage at Fair Value | |||||||||||||||||||||||||
Performing | $ | 136,977,577 | 100 | % | $ | 136,262,753 | 100 | % | $ | 339,969,950 | 100 | % | $ | 338,013,752 | 100 | % | ||||||||||||||||
Non-accrual | — | — | — | — | 0 | — | 0 | — | ||||||||||||||||||||||||
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Total | $ | 136,977,577 | 100 | % | $ | 136,262,753 | 100 | % | $ | 339,969,950 | 100 | % | $ | 338,013,752 | 100 | % | ||||||||||||||||
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Generally, when interest and/or principal payments on a loan become past due, or if the Fund otherwise does not expect the borrower to be able to service its debt and other obligations, the Fund will place the loan onnon-accrual status and will 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 restructuring such that the interest income is deemed to be collectible. The Fund generally restoresnon-accrual loans to accrual status when past due principal and interest is paid and, in the management’s judgment, is likely to remain current. As of September 30, 2019March 31, 2020 and as of December 31, 2018,2019, the Fund had no investments that were onnon-accrual status.
The following table shows the amortized cost and fair value of the investment portfolio and cash and cash equivalents as of September 30, 2019:March 31, 2020:
As of September 30, 2019 | As of March 31, 2020 | |||||||||||||||||||||||||||||||
Amortized Cost | Percentage of Total | Fair Value | Percentage of Total | Amortized Cost | Percentage of Total Portfolio | Fair Value | Percentage of Total Portfolio | |||||||||||||||||||||||||
First Lien Senior Secured Debt | $ | 285,952,814 | 84.71 | % | $ | 284,641,539 | 84.59 | % | $ | 376,332,124 | 92.28 | % | $ | 356,272,609 | 92.08 | % | ||||||||||||||||
Second Lien Junior Secured Debt | 7,646,021 | 2.26 | 7,620,547 | 2.26 | 7,653,082 | 1.88 | 7,364,846 | 1.90 | ||||||||||||||||||||||||
Preferred Stock | 4,298,247 | 1.27 | 4,469,886 | 1.33 | 5,262,132 | 1.29 | 5,431,410 | 1.40 | ||||||||||||||||||||||||
Common Stock | 1,633,778 | 0.48 | 1,667,445 | 0.50 | 1,663,605 | 0.41 | 1,369,556 | 0.35 | ||||||||||||||||||||||||
Warrants | 661,991 | 0.16 | 249,863 | 0.07 | ||||||||||||||||||||||||||||
Cash and cash equivalents | 38,078,058 | 11.28 | 38,078,058 | 11.32 | 16,251,625 | 3.98 | 16,251,625 | 4.20 | ||||||||||||||||||||||||
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Total | $ | 337,608,918 | 100 | % | $ | 336,477,475 | 100 | % | $ | 407,824,559 | 100.00 | % | $ | 386,939,909 | 100.00 | % | ||||||||||||||||
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The following table shows the amortized cost and fair value of the investment portfolio and cash and cash equivalents as of December 31, 2018:2019:
As of December 31, 2018 | ||||||||||||||||
Amortized Cost | Percentage of Total | Fair Value | Percentage of Total | |||||||||||||
First Lien Senior Secured Debt | $ | 135,776,144 | 96.2 | % | $ | 135,061,980 | 96.2 | % | ||||||||
Second Lien Junior Secured Debt | 1,201,433 | 0.9 | 1,200,773 | 0.9 | ||||||||||||
Preferred Stock | 1,160,531 | 0.8 | 1,160,531 | 0.8 | ||||||||||||
Common Stock | 374,135 | 0.3 | 379,849 | 0.3 | ||||||||||||
Cash | 2,510,208 | 1.8 | 2,510,208 | 1.8 | ||||||||||||
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Total | $ | 141,022,451 | 100 | % | $ | 140,313,341 | 100 | % | ||||||||
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First Lien Senior Secured Debt Second Lien Junior Secured Debt Preferred Stock Common Stock Warrants Cash and cash equivalents Total As of December 31, 2019 Amortized Cost Percentage of
Total
Portfolio Fair Value Percentage of
Total
Portfolio $ 332,320,392 91.85 % $ 330,393,205 91.79 % $ 7,649,558 2.11 % $ 7,620,547 2.11 % $ 4,648,225 1.28 % $ 4,861,847 1.35 % $ 1,624,199 0.45 % $ 1,518,353 0.42 % $ 631,366 0.17 % $ 631,366 0.18 % $ 14,931,791 4.14 % $ 14,931,791 4.15 % $ 361,805,531 100 % $ 359,957,109 100 %
The following table shows the composition of the investment portfolio by industry, at amortized cost and fair value as of September 30, 2019March 31, 2020 (with corresponding percentage of total portfolio investments):
As of September 30, 2019 | As of March 31, 2020 | |||||||||||||||||||||||||||||||
Amortized Cost | Percentage of Total Portfolio | Fair Value | Percentage of Total Portfolio | Amortized Cost | Percentage of Total Portfolio | Fair Value | Percentage of Total Portfolio | |||||||||||||||||||||||||
Business Services | $ | 29,789,109 | 9.94 | % | $ | 29,976,626 | 10.05 | % | $ | 30,269,771 | 7.73 | % | $ | 28,498,623 | 7.69 | % | ||||||||||||||||
ConsumerNon-Cyclical | 12,166,692 | 4.06 | 12,162,375 | 4.08 | $ | 19,376,867 | 4.95 | % | $ | 18,273,162 | 4.93 | % | ||||||||||||||||||||
Digital Infrastructure & Services | 22,140,673 | 7.39 | 22,124,909 | 7.41 | $ | 45,078,860 | 11.51 | % | $ | 44,519,434 | 12.01 | % | ||||||||||||||||||||
Education | 9,862,776 | 3.29 | 9,853,128 | 3.30 | $ | 10,336,590 | 2.64 | % | $ | 10,028,786 | 2.71 | % | ||||||||||||||||||||
Energy | 16,274,293 | 5.43 | 15,419,491 | 5.17 | $ | 21,226,631 | 5.42 | % | $ | 16,849,586 | 4.55 | % | ||||||||||||||||||||
Financial Services | $ | 3,371,933 | 0.86 | % | $ | 3,276,992 | 0.88 | % | ||||||||||||||||||||||||
Healthcare & HCIT | 66,815,939 | 22.33 | 66,517,261 | 22.30 | $ | 87,637,397 | 22.38 | % | $ | 80,233,526 | 21.64 | % | ||||||||||||||||||||
Pharmaceutical | 5,792,538 | 1.93 | 5,728,856 | 1.92 | $ | 6,227,961 | 1.59 | % | $ | 5,915,622 | 1.60 | % | ||||||||||||||||||||
Software & Services | 123,639,287 | 41.28 | 123,759,985 | 41.47 | $ | 155,227,853 | 39.64 | % | $ | 152,199,431 | 41.05 | % | ||||||||||||||||||||
Specialty Finance | 2,881,943 | 0.96 | 2,878,570 | 0.96 | $ | 2,775,000 | 0.71 | % | $ | 2,661,178 | 0.72 | % | ||||||||||||||||||||
Transport & Logistics | 10,167,610 | 3.39 | 9,978,216 | 3.34 | $ | 10,044,071 | 2.57 | % | $ | 8,231,944 | 2.22 | % | ||||||||||||||||||||
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$ | 299,530,860 | 100 | % | $ | 298,399,417 | 100 | % | $ | 391,572,934 | 100 | % | $ | 370,688,284 | 100 | % | |||||||||||||||||
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The following table shows the composition of the investment portfolio by industry, at amortized cost and fair value as of December 31, 20182019 (with corresponding percentage of total portfolio investments):
As of December 31, 2018 | As of December 31, 2019 | |||||||||||||||||||||||||||||||
Amortized Cost | Percentage of Total Portfolio | Fair Value | Percentage of Total Portfolio | Amortized Cost | Percentage of Total Portfolio | Fair Value | Percentage of Total Portfolio | |||||||||||||||||||||||||
Business Services | $ | 13,455,873 | 9.72 | % | $ | 13,453,009 | 9.77 | % | $ | 29,492,348 | 8.50 | % | $ | 29,467,961 | 8.54 | % | ||||||||||||||||
Communications & IT Infrastructure | 5,261,251 | 3.80 | 5,236,923 | 3.80 | ||||||||||||||||||||||||||||
ConsumerNon-Cyclical | 7,504,952 | 5.42 | 7,500,141 | 5.44 | $ | 12,573,051 | 3.63 | % | $ | 12,628,209 | 3.66 | % | ||||||||||||||||||||
Digital Infrastructure & Services | $ | 35,923,507 | 10.36 | % | $ | 35,849,013 | 10.39 | % | ||||||||||||||||||||||||
Education | 6,940,001 | 5.01 | 6,920,371 | 5.02 | $ | 9,792,558 | 2.82 | % | $ | 9,774,744 | 2.83 | % | ||||||||||||||||||||
Energy | 10,872,170 | 7.85 | 10,242,840 | 7.43 | $ | 16,097,426 | 4.64 | % | $ | 15,097,254 | 4.38 | % | ||||||||||||||||||||
Financial Services | $ | 1,037,219 | 0.30 | % | $ | 1,037,140 | 0.30 | % | ||||||||||||||||||||||||
Healthcare & HCIT | 25,437,461 | 18.36 | 25,411,873 | 18.44 | $ | 77,923,042 | 22.46 | % | $ | 77,112,970 | 22.35 | % | ||||||||||||||||||||
Software & Services | 58,166,581 | 41.99 | 58,165,375 | 42.21 | ||||||||||||||||||||||||||||
Transport & Logistics | 10,873,954 | 7.85 | 10,872,601 | 7.89 | ||||||||||||||||||||||||||||
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$ | 138,512,243 | 100 | % | $ | 137,803,133 | 100 | % | |||||||||||||||||||||||||
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Pharmaceutical | $ | 5,773,084 | 1.66 | % | $ | 5,714,446 | 1.66 | % |
Software & Services Specialty Finance Transport & Logistics As of December 31, 2019 Amortized Cost Percentage of
Total Portfolio Fair Value Percentage of
Total Portfolio $ 145,364,022 41.91 % $ 145,699,305 42.23 % $ 2,810,973 0.81 % $ 2,804,891 0.81 % $ 10,086,510 2.91 % $ 9,839,385 2.85 % $ 346,873,740 100 % $ 345,025,318 100 %
The Adviser monitors ourthe Fund’s portfolio companies on an ongoing basis. It monitors the financial trends of each portfolio company to determine if they are meeting their respective business plans and to assess the appropriate course of action for each company. The Adviser has several methods of evaluating and monitoring the performance and fair value of ourthe Fund’s investments, which may include the following:
assessment of success in adhering to the portfolio company’s business plan and compliance with covenants;
periodic or regular contact with portfolio company management and, if appropriate, the financial or strategic sponsor to discuss financial position, requirements and accomplishments;
comparisons to ourthe Fund’s other portfolio companies in the industry, if any;
attendance at and participation in board meetings or presentations by portfolio companies; and
review of monthly and quarterly consolidated financial statements and financial projections of portfolio companies.
Results of Operations
OperatingThe following is a summary of the Fund’s operating results for the three monthsquarters ended September 30, 2019March 31, 2020 and 2018, were as follows:2019:
For the Three Months Ended September 30, 2019 | For the Three Months Ended September 30, 2018 | |||||||
Total investment income | $ | 5,859,037 | $ | 1,584,355 | ||||
Total expenses | 4,700,091 | 1,493,479 | ||||||
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| |||||
Waived collateral management fees | (367,534 | ) | — | |||||
Expense reimbursement from Adviser | (31,875 | ) | (462,465 | ) | ||||
Waived management fees | (60,261 | ) | (39,913 | ) | ||||
Waived incentive fees | (56,255 | ) | (32,302 | ) | ||||
Net investment income | 1,674,871 | 625,556 | ||||||
Net realized and change in unrealized gains (losses) | (393,328 | ) | 25,402 | |||||
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Net increase in net assets resulting from operations | $ | 1,281,543 | $ | 650,958 | ||||
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Operating results for the nine months ended September 30, 2019 and 2018, were as follows:
For the Nine Months Ended September 30, 2019 | For the Nine Months Ended September 30, 2018 | |||||||
Total investment income | $ | 14,628,670 | $ | 3,191,593 | ||||
Total expenses | 11,700,886 | 4,015,868 | ||||||
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|
| |||||
Waived collateral management fees | (693,343 | ) | — | |||||
Expense reimbursement from Adviser | (447,556 | ) | (2,052,539 | ) | ||||
Waived management fees | (191,359 | ) | (77,203 | ) | ||||
Waived incentive fees | (132,327 | ) | (32,302 | ) | ||||
Excise tax expense | — | 3 | ||||||
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| |||||
Net investment income | 4,392,369 | 1,337,766 | ||||||
Net realized and change in unrealized gains (losses) | (358,275 | ) | (20,769 | ) | ||||
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Net increase in net assets resulting from operations | $ | 4,034,094 | $ | 1,316,997 | ||||
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For the Three Months Ended March 31, 2020 | For the Three Months Ended March 31, 2019 | |||||||
Total investment income | $ | 7,441,251 | $ | 3,428,832 | ||||
Total expenses | 6,151,628 | 2,698,387 | ||||||
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Expense Reimbursement from Adviser | (89,757 | ) | (156,418 | ) | ||||
Waived Collateral Management Fees | (459,059 | ) | — | |||||
Waived Management Fees | (1,227,046 | ) | (63,171 | ) | ||||
Waived Incentive Fees | (486,784 | ) | (76,072 | ) | ||||
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| |||||
Net investment income | 3,552,269 | 1,026,106 | ||||||
Net realized and change in unrealized depreciation on investments | (19,049,597 | ) | 356,253 | |||||
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Net increase (decrease) in net assets resulting from operations | $ | (15,497,328 | ) | $ | 1,382,359 | |||
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Investment Income
During the three months ended September 30,March 31, 2020, the Fund’s investment income was comprised of $7,052,300 of interest income, which includes $452,560 from the net amortization of premium and accretion of discounts, $206,351 ofpayment-in-kind interest and $182,600 of other fee income.
During the three months ended March 31, 2019, the Fund’s investment income was comprised of $5,718,631$3,400,195 of interest income, which includes $297,702$124,006 from the net amortization of premium and accretion of discounts, $104,675$28,637 ofpayment-in-kind interest and other fee income of $35,731.
During the three months ended September 30, 2018, the Fund’s investment income was comprised of $1,581,876 of interest income, which includes $60,967 from the accretion of discounts and other fee income of $2,479.
During the nine months ended September 30, 2019, the Fund’s investment income was comprised of $14,290,652 of interest income, which includes $782,772 from net amortization of premium and accretion of discounts, $166,946 ofpayment-in-kind interest and other fee income of $171,072.interest.
During the nine months ended September 30, 2018, the Fund’s investment income was comprised of $3,189,114 of interest income, which includes $122,140 from the accretion of discounts and other fee income of $2,479.
Operating Expenses
The compositionfollowing is a summary of ourthe Fund’s operating expenses for the three monthsquarters ended September 30, 2019March 31, 2020 and 2018 was as follows:2019:
For the Three Months Ended | For the Three Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2019 | 2018 | For the Three Months Ended March 31, 2020 | For the Three Months Ended March 31, 2019 | |||||||||||||
Interest and borrowing expenses | $ | 2,424,364 | $ | 494,991 | $ | 2,568,667 | $ | 1,409,152 | ||||||||
Management fees | 1,017,059 | 281,892 | 1,352,351 | 615,859 | ||||||||||||
Professional fees | 379,792 | 379,861 | 547,269 | 342,361 | ||||||||||||
Collateral management fees | 367,534 | — | 459,059 | 0 | ||||||||||||
Income-based incentive fee | 180,792 | 66,206 | 769,023 | 106,087 | ||||||||||||
Administration and custodian fees | 113,524 | 39,546 | 91,783 | 65,825 | ||||||||||||
Insurance expenses | 68,338 | 62,383 | 67,596 | 61,027 | ||||||||||||
Directors’ fees | 37,500 | 37,223 | 50,000 | 37,500 | ||||||||||||
Transfer agent fees | 8,104 | 561 | 10,758 | 4,662 | ||||||||||||
Offering costs | — | 52,221 | ||||||||||||||
Other expenses | 103,084 | 78,595 | 235,122 | 55,914 | ||||||||||||
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|
| |||||||||||||
Total expenses | 4,700,091 | 1,493,479 | 6,151,628 | 2,698,387 | ||||||||||||
Expense reimbursement from Adviser | (89,757 | ) | (156,418 | ) | ||||||||||||
Waived collateral management fees | (367,534 | ) | — | (459,059 | ) | 0 | ||||||||||
Expense reimbursement from Adviser | (31,875 | ) | (462,465 | ) | ||||||||||||
Waived management fees | (60,261 | ) | (39,913 | ) | (1,227,046 | ) | (63,171 | ) | ||||||||
Waived incentive fees | (56,255 | ) | (32,302 | ) | (486,784 | ) | (76,072 | ) | ||||||||
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Net expenses | $ | 4,184,166 | $ | 958,799 | $ | 3,888,982 | $ | 2,402,726 | ||||||||
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The composition of our operating expenses for the nine months ended September 30, 2019 and 2018 was as follows:
For the Nine Months Ended | For the Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2019 | 2018 | |||||||
Interest and borrowing expenses | $ | 5,844,084 | $ | 927,005 | ||||
Management fees | 2,477,129 | 560,765 | ||||||
Professional fees | 1,197,314 | 1,624,403 | ||||||
Income-based incentive fee | 586,627 | 66,206 | ||||||
Collateral management fees | 693,343 | — | ||||||
Administration and custodian fees | 259,233 | 155,504 | ||||||
Insurance expenses | 193,013 | 185,116 | ||||||
Directors’ fees | 112,500 | 108,346 | ||||||
Transfer agent fees | 19,203 | 561 | ||||||
Offering costs | — | 156,089 | ||||||
Other expenses | 318,440 | 231,873 | ||||||
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|
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| |||||
Total expenses | 11,700,886 | 4,015,868 | ||||||
Expense reimbursement from Adviser | (447,556 | ) | (2,052,539 | ) | ||||
Waived collateral management fees | (693,343 | ) | — | |||||
Waived management fees | (191,359 | ) | (77,203 | ) | ||||
Waived incentive fees | (132,327 | ) | (32,302 | ) | ||||
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| |||||
Net expenses | $ | 10,236,301 | $ | 1,853,824 |
Interest and borrowing expensesBorrowing Expenses
Interest and borrowing expenses includes interest, amortization of debt issuance and deferred financing costs, upfront commitment fees and unused fees on the unused portion of the HSBCRevolving Credit Facility and the Barclays Credit Facility (each defined herein, and together, the “Credit Facilities”), and the Notes issued in the CLO transaction.Transaction. The Fund first drew on the HSBCRevolving Credit Facility on November 15, 2017. The Fund first drewAs of March 31, 2020, there was an outstanding balance of $43,000,000 on the Barclays Credit Facility on January 30, 2019. As of September 30, 2019, there was no outstanding balance on the HSBCRevolving Credit Facility. As of December 31, 2018,2019, the HSBCRevolving Credit Facility had an outstanding balance of $88,200,000.$19,500,000. On August 9, 2019, ABPCIC Funding issued collateralized loan obligation securities (“CLOs”), and terminated the Barclays Credit Facility. The outstanding amount on the Notes is $209,954,376$210,714,301, net of unamortized discount and debt issuance costs as of September 30, 2019. March 31, 2020. As of December 31, 2019, the amount outstanding on the Notes was $210,336,633, net of unamortized discount and debt issuance costs.
Interest and borrowing expenses for the three months ended September 30, 2019March 31, 2020, were $2,568,667, and 2018, were $2,424,364 and $494,991, respectively. Interest and borrowing expenses for the ninethree months ended September 30,March 31, 2019, and 2018, were $5,844,084 and $927,005, respectively.$1,409,152. The weighted average interest rate (excluding deferred upfront financing costs and unused fees) on ourthe Fund’s debt outstanding was 4.64%3.73% and 4.09% for the period ending September 30,4.87% as of March 31, 2020 and March 31, 2019, and September 30, 2018, respectively.
Management Fee
The gross management fee expenses for the three months ended September 30,March 31, 2020 and March 31, 2019 were $1,352,351 and 2018 were $1,017,059 and $281,892$615,859, respectively. The increase in the management fee for the three months ended September 30, 2019March 31, 2020 was a result of the increase in average gross assets during thisthe period, which are the basis used to calculate management fees. The management fee expenses forFor the ninethree months ended September 30,March 31, 2020 and March 31, 2019, the Adviser waived management fees of $1,227,046 and 2018 were $2,477,129 and $560,765$63,171, respectively. The increase in
Fund Expenses
For the management fee for the ninethree months ended September 30, 2019March 31, 2020, the Fund incurred $6,151,628 of expenses in relation to professional fees, directors’ fees, collateral management fees, management fees, incentive fees, insurance expenses, interest and borrowing expenses, transfer agent fees, other fees, and administration and custodian fees, of which $89,757 was also a resultreimbursed by the Adviser and its affiliates on behalf of the increaseFund, and $1,227,046 of management fees, $486,784 of incentive fees and $459,059 of collateral management fees were waived by the Adviser.
For the three months ended March 31, 2019, the Fund incurred $2,698,387 of expenses in average gross assets during this period,relation to professional fees, directors’ fees, management fees, incentive fees, insurance expenses, interest and borrowing expenses, transfer agent fees, other fees, and administration and custodian fees, of which are$156,418 was reimbursed by the basis used to calculateAdviser and its affiliates on behalf of the Fund, and $63,171 of management fees.fees and $76,072 of incentive fees were waived by the Adviser.
Net Realized Gain (Loss) on Investments
During the three months ended September 30, 2019, weMarch 31, 2020, the Fund had principal repayments of $11,984,003,$12,615,490, which includes $1,995,849included $3,988,364 of revolver and delayed draw term loan paydowns, and $5,323$842,678 in sales, resulting in $76,718$13,369 of net realized gain. loss.
During the ninethree months ended September 30,March 31, 2019, wethe Fund had principal repayments of $24,086,016,$2,348,789, which includes $6,444,889included $1,876,665 of revolver and delayed draw term loan paydowns, and $7,636,064$130,771 in sales, resulting in $64,058$1,754 of net realized gain.
During the three months ended September 30, 2018, we had principal repayments of $907,626, which includes $563,856 of revolver paydowns, and $0 in sales, resulting in $0 of net realized gain/loss. During the nine months ended September 30, 2018, we had principal repayments of $1,847,318, which includes $1,290,748 of revolver paydowns, and $3,933,486 in sales, resulting in $0 of net realized gain/loss.
Net Change in Unrealized Appreciation (Depreciation) on Investments
During the three months ended September 30, 2019, weMarch 31, 2020, the Fund had $470,046$19,036,228 in net change in unrealized depreciation on $299,530,860$391,572,934 of investments in 8090 portfolio companies. The increase in net unrealized depreciation for the three months ended March 31, 2020 was primarily due to the negative economic impact and the increased uncertainty caused byCOVID-19.
During the three months ended September 30, 2018, weMarch 31, 2019, the Fund had $25,402$358,007 in net change in unrealized appreciation on $85,453,778$196,908,013 of investments in 27 portfolio companies.
During the nine months ended September 30, 2019, we had $422,333 in net change in unrealized depreciation on $299,530,860 of investments in 80 portfolio companies.
During the nine months ended September 30, 2018, we had $20,769 in net change in unrealized depreciation on $85,453,778 of investments in 2755 portfolio companies.
Net Increase (Decrease) in Net Assets Resulting from Operations
For the three months ended September 30,March 31, 2020 and March 31, 2019, and 2018, the net decrease and increase in net assets resulting from operations was $1,281,543$(15,497,328) and $650,958,$1,382,359, respectively. Based on the weighted average shares of common stock outstanding for the three months ended September 30,March 31, 2020 and March 31, 2019, and 2018, ourthe Fund’s per share net decrease and increase in net assets resulting from operations was $0.11$(1.06) and $0.16, respectively.
For the nine months ended September 30, 2019 and 2018, the net increase in net assets resulting from operations was $4,034,094 and $1,316,997, respectively. Based on the weighted average shares of common stock outstanding for the nine months ended September 30, 2019 and 2018, our per share net increase in net assets resulting from operations was $0.44 and $0.40,$0.21, respectively.
Cash Flows
For the ninethree months ended September 30, 2019,March 31, 2020, cash increased by $35,567,850.$1,319,834. During the same period, wethe Fund used $155,399,192$41,095,861 in operating activities, primarily as a result of purchases of investments. During the ninethree months ended September 30, 2019, weMarch 31, 2020, the Fund generated $190,967,042$42,415,695 from financing activities, primarily from issuance of common stock, repurchase of common stock, distributions paid, financing costs paid and net borrowings and repayments on the HSBCRevolving Credit Facility and Barclays Credit Facility and CLO Notes.Facility.
For the ninethree months ended September 30, 2018,March 31, 2019, cash decreasedincreased by $14,673,164.$16,551,969. During the same period, wethe Fund used $59,345,618$56,138,331 in operating activities, primarily as a result of purchases of investments. During the ninethree months ended September 30, 2018, weMarch 31, 2019, the Fund generated $44,672,454$72,690,300 from financing activities, primarily from issuance of common stock, and net borrowings and repayments on the HSBCRevolving Credit Facility.
Hedging
The Fund may enter into currency hedging contracts, interest rate hedging agreements such as futures, options, swaps and forward contracts, and credit hedging contracts, such as credit default swaps. However, no assurance can be given that such hedging transactions will be entered into or, if they are, that they will be effective. For the ninethree months ended September 30,March 31, 2020 and March 31, 2019, the Fund did not enter into any hedging contracts.
Financial Condition, Liquidity and Capital Resources
At September 30, 2019,March 31, 2020, and December 31, 2018, we2019, the Fund had $38,078,058$16,251,625 and $2,510,208$14,931,791 in cash and cash equivalents, on hand, respectively. We expectThe Fund expects to generate cash primarily from (i) the net proceeds of the Private Offering, (ii) cash flows from ourthe Fund’s operations, (iii) any financing arrangements now existing or that wethe Fund may enter into in the future and (iv) any future offerings of ourthe Fund’s equity or debt securities. WeThe Fund may fund a portion of ourits investments through borrowings from banks, or other large global institutions such as insurance companies, and issuances of senior securities.
OurThe Fund’s primary use of funds from a credit facility will be investments in portfolio companies, cash distributions to holders of ourits common stock and the payment of operating expenses.
In the future, wethe Fund may also securitize or finance a portion of ourthe Fund’s investments with a special purpose vehicle. If we undertakethe Fund undertakes a securitization transaction, wethe Fund will consolidate ourits allocable portion of the debt of any securitization subsidiary on ourits financial statements, and include such debt in ourits calculation of the asset coverage test, if and to the extent required pursuant to the guidance of the staff of the SEC.
Cash and cash equivalents as of the ninethree months ended September 30, 2019,March 31, 2020, taken together with ourthe Fund’s uncalled Capital Commitments of $237,562,848$234,905,730 and $50,000,000$7,000,000 undrawn amount on ourthe Fund’s Revolving Credit Facilities,Facility, is expected to be sufficient for ourthe Fund’s investing activities and to conduct ourthe Fund’s operations for at least the next twelve months. As of March 31, 2020, the Fund had $16,251,625 in the near term.cash and cash equivalents. During the ninethree months ended September 30, 2019, weMarch 31, 2020, the Fund used $155,399,192$41,095,861 for operating activities. This “Financial Condition, Liquidity and Capital Resources” section should be read in conjunction with “Effects ofCOVID-19 on the Fund’s Results of Operations” above.
Equity Activity
We haveThe Fund has the authority to issue 200,000,000 shares of common stock at a $0.01 per share par value.
We haveThe Fund has entered into Subscription Agreements with investors providing for the private placement of ourthe Fund’s common shares. Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase the Fund’s common shares up to the amount of their respective Capital Commitments on anas-needed basis upon the issuance of a capital draw down notice. As of September 30, 2019, weMarch 31, 2020, the Fund received capital commitmentsCapital Commitments of $359,356,251.$418,448,516. Inception to September 30, 2019, weMarch 31, 2020, the Fund received capital contributions to the Fund of $121,793,403. Proceeds from the issuance of shares in respect of draw down notices described below were used for investing activities and for other general corporate purposes.$183,542,786.
For the three months ended September 30, 2019,March 31, 2020, the Fund received no capital commitments,total Capital Commitments of $20,827,965, had $907,002$1,931,666 of dividend reinvestments and issued 91,341225,117 shares to investors that opted into the Fund’s dividend reinvestment plan, $84,413 was withdrawn from the Fund as part of thequarter-end SBCAA share repurchase program, issued capital drawdown notices to its investors for an aggregate amount of $17,967,810$41,844,852 and issued 1,795,8224,876,625 shares to investors in respect of such capital drawdowns. For the three months ended September 30, 2018,March 31, 2019, the Fund received additional capital commitments of $40,975,677,$51,768,231, had $347,908$581,297 of dividend reinvestments and issued 34,65258,319 shares to investors that opted into the Fund’s dividend reinvestment plan, $0 was withdrawn from the Fund as part of thequarter-end SBCAA share repurchase program (which commenced in November 2018) and issued capital drawdown notices to its investors for an aggregate amount of $15,912,791$23,125,308 and issued 1,577,979 shares to investors in respect of such capital drawdowns.
For the nine months ended September 30, 2019, the Fund received capital commitments of $51,852,141 (however, a capital commitment of $4,000,000, originally committed during the quarter ended March 31, 2019, was subsequently reduced by $1,000,000 before any capital was called), had $2,404,103 of dividend reinvestments, issued 241,635 shares to investors that opted into the Fund’s dividend reinvestment plan, $232,123 was withdrawn from the Fund as part of thequarter-end SBCAA share repurchase program, issued capital drawdown notices to its investors for an aggregate amount of $59,056,735 and issued 5,896,977 shares to investors in respect of such capital drawdowns. For the nine months ended September 30, 2018, the Fund received capital commitments of $131,960,240 (however, two capital commitments of $95,000 and $150,000, originally committed during the year ended December 31, 2017, and quarter ended June 30, 2018, respectively, were subsequently cancelled before any capital was called), had $772,338 of dividend reinvestments, issued 77,042 shares to investors that opted into the Fund’s dividend reinvestment plan, $0 was withdrawn from the Fund as part of thequarter-end SBCAA share repurchase program (which commenced in November 2018) and issued capital drawdown notices to its investors for an aggregate amount of $25,980,591 and issued 2,576,9962,317,068 shares to investors in respect of such capital drawdowns.
Distributions
Distributions to stockholders are recorded on the record date. To the extent that we havethe Fund has income available, we intendthe Fund intends to distribute quarterly distributions to ourits stockholders. OurThe Fund’s quarterly distributions, if any, will be determined by the Board. Any distributions to ourthe Fund’s stockholders will be declared out of assets legally available for distribution.
The following table summarizes distributions declared during the ninethree months ended September 30, 2019:March 31, 2020:
Date Declared | Record Date | Payment Date | Amount Per Share | Total Distributions | ||||||||||||
March 27, 2019 | March 27, 2019 | April 25, 2019 | $ | 0.15 | $ | 1,057,242 | ||||||||||
June 28, 2019 | June 28, 2019 | July 19, 2019 | $ | 0.16 | $ | 1,690,999 | ||||||||||
September 25, 2019 | September 26, 2019 | October 30, 2019 | $ | 0.13 | $ | 1,674,929 | ||||||||||
|
|
|
| |||||||||||||
Total distributions declared | $ | 0.44 | $ | 4,423,170 | ||||||||||||
|
|
|
|
Date Declared | Record Date | Payment Date | Amount Per Share | Total Distributions | ||||||||||||
March 27, 2020 | March 27, 2020 | April 29, 2020 | $ | 0.24 | $ | 3,551,533 | ||||||||||
|
|
|
| |||||||||||||
Total distributions declared | $ | 0.24 | $ | 3,551,533 | ||||||||||||
|
|
|
|
The following table summarizes distributions declared during the ninethree months ended September 30, 2018:March 31, 2019:
Date Declared | Record Date | Payment Date | Amount Per Share | Total Distributions | Record Date | Payment Date | Amount Per Share | Total Distributions | ||||||||||||||||||||||||
June 28, 2018 | June 28, 2018 | June 29, 2018 | $ | 0.25 | $ | 759,327 | ||||||||||||||||||||||||||
September 27, 2018 | September 27, 2018 | September 28, 2018 | $ | 0.12 | $ | 625,565 | ||||||||||||||||||||||||||
March 27, 2019 | March 27, 2019 | April 25, 2019 | $ | 0.15 | $ | 1,057,242 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||
Total distributions declared | $ | 0.37 | $ | 1,384,892 | $ | 0.15 | $ | 1,057,242 | ||||||||||||||||||||||||
|
|
|
|
The federal income tax characterization of distributions declared and paid for the fiscal year will be determined at fiscalyear-end based upon ourthe Fund’s investment company taxable income for the full fiscal year and distributions paid during the full year. For the ninethree months ended September 30, 2019,March 31, 2020, the Fund estimates that the aggregate $4,423,170 distributed $3,551,533 to stockholders, of which $3,551,533 was attributable to ordinary income. The character of distributions for federal income tax purposes are determined in accordance with income tax regulations which may differ from GAAP. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is only ordinary income or gains.
To the extent the Fund’s taxable earnings fall below the total amount of its distributions paid for that fiscal year, a portion of those distributions may be deemed a return of capital to the Fund’s stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to stockholders may be the original capital invested by the stockholder rather than the Fund’s income or gains.
Share Repurchase Plan
OnFor the three months ended March 23, 2018, the SBCAA was signed into law. The SBCAA, among other things, modifies the applicable provisions of the 1940 Act to reduce the required asset coverage ratio applicable to BDCs from 200% to 150% subject to certain approval, time and disclosure requirements (including either stockholder approval or approval of a majority of the directors who are not interested persons of the BDC and who have no financial interest in the proposal). On September 26, 2018, the Fund’s stockholders approved the reduction of the asset coverage ratio applicable to31, 2019, the Fund distributed $1,057,242 to stockholders, of which $1,057,242 was attributable to ordinary income and $0 was attributable to long-term capital gains. The character of distributions for federal income tax purposes are determined in accordance with income tax regulations which may differ from 200% to 150%. Pursuant toGAAP. Stockholders should not assume that the SBCAA, on November 27, 2018, the Fund extended to its stockholders assource of such date the opportunity to sell the shares held by that stockholder as of such date, with 25% of those shares to be repurchased in each of the four calendar quarters following the calendar quarter in which the approval wasany distribution is only ordinary income or gains.
obtained. The first tender offer period began on November 27, 2018 and expired on December 27, 2018. The second tender offer period began on February 22, 2019 and expired on March 26, 2019. The third tender offer period began on May 17, 2019 and expired on June 25, 2019. The fourth tender offer period began on August 16, 2019 and expired on September 25, 2019.
The following table summarizes shares repurchased during the nine months ended September 30, 2019:
Payment Date | Shares | Dollar Amount | ||
3/28/2019 | 7,331 | $72,668 | ||
6/28/2019 | 7,529 | $75,042 | ||
9/25/2019 | 8,478 | $84,413 | ||
Total shares repurchased | 23,338 | $232,123 | ||
|
|
There were no shares repurchased during the nine months ended September 30, 2018.
Contractual Obligations
We haveThe Fund has entered into certain contracts under which we haveit has future commitments. Payments under the Amended and Restated Advisory Agreement with the Adviser consist of (i) a base management fee equal to a percentage of the average outstanding assets of the Fund (which equals the gross value of equity and debt instruments, including investments made utilizing leverage), excluding cash and cash equivalents, during such fiscal quarter and (ii) an incentive fee based on ourthe Fund’s performance. The cost of both the base management fee and the incentive fee will ultimately be borne by ourthe Fund’s stockholders. Under the Administration Agreement, wethe Fund will reimburse the Adviser an amount equal to ourthe Fund’s allocable portion (subject to the review of ourthe Fund’s Board) of its overhead resulting from its obligations under the Expense Reimbursement Agreement. Stockholder approval is not required to amend the Administration Agreement or Expense Reimbursement Agreement. Any new investment advisory agreement would be subject to approval by ourthe Fund’s stockholders.
The following table shows ourthe Fund’s contractual obligations as of September 30,March 31, 2020:
Payments Due by Period | ||||||||||||||||||||
Total | Less Than 1 Year | 1 – 3 Years | 3 – 5 Years | More Than 5 Years | ||||||||||||||||
Revolving Credit Facility | $ | 43,000,000 | $ | 43,000,000 | $ | — | $ | — | $ | — | ||||||||||
Class A-1 Senior Secured Floating Rate Note | $ | 178,200,000 | $ | — | $ | — | $ | — | $ | 178,200,000 | ||||||||||
Class A-2A Senior Secured Floating Rate Note | $ | 25,000,000 | $ | — | $ | — | $ | — | $ | 25,000,000 | ||||||||||
Class A-2B Senior Secured Floating Rate Note | $ | 9,950,000 | $ | — | $ | — | $ | — | $ | 9,950,000 |
The following table shows the Fund’s contractual obligations as of December 31, 2019:
Payments Due by Period (Millions) | Payments Due by Period | |||||||||||||||||||||||||||||||||||||||
Total | Less Than 1 Year | 1 – 3 Years | 3 – 5 Years | More Than 5 Years | Total | Less Than 1 Year | 1 –3 Years | 3 – 5 Years | More Than 5 Years | |||||||||||||||||||||||||||||||
HSBC Credit Facility | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 19,500,000 | $ | 19,500,000 | $ | — | $ | — | $ | — | ||||||||||||||||||||
Class A-1 Senior Secured Floating Rate Note | $ | — | $ | — | $ | — | $ | — | $ | 178.2 | $ | 178,200,000 | $ | — | $ | — | $ | — | $ | 178,200,000 | ||||||||||||||||||||
Class A-2A Senior Secured Floating Rate Note | $ | — | $ | — | $ | — | $ | — | $ | 25.0 | $ | 25,000,000 | $ | — | $ | — | $ | — | $ | 25,000,000 | ||||||||||||||||||||
Class A-2B Senior Secured Floating Rate Note | $ | — | $ | — | $ | — | $ | — | $ | 9.95 | $ | 9,950,000 | $ | — | $ | — | $ | — | $ | 9,950,000 |
See“Notes to Unaudited Consolidated Financial Statements – Note 4. Borrowings,” for a discussion of the terms of the Revolving Credit FacilitiesFacility and CLO Notes.
Off-Balance Sheet Arrangements
As of September 30, 2019March 31, 2020 and December 31, 2018,2019, the Fund had unfunded Capital Commitments related to Subscription Agreements of $237,562,848$234,905,730 and $245,767,442,$255,922,617, respectively.
WeThe Fund may become a party to financial instruments withoff-balance sheet risk in the normal course of ourthe Fund’s business to fund investments and to meet the financial needs of ourthe Fund’s portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the consolidated statements of assets and liabilities.
As of September 30, 2019 ourMarch 31, 2020, the Fund’soff-balance sheet arrangements consisted of the following:
Investment Type | Facility Type | Commitment Expiration Date (1) | Unfunded Commitment (2) | Fair Value (3) | ||||||||||
1st Lien/Senior Secured Debt | ||||||||||||||
5 Bars, LLC | Delayed Draw Term Loan | 9/27/2024 | $ | 3,448,816 | $ | (51,733 | ) | |||||||
5 Bars, LLC | Revolver | 9/27/2024 | $ | 646,653 | $ | (9,700 | ) | |||||||
AEG Holding Company, Inc. | Revolver | 11/20/2023 | $ | 502,589 | $ | (10,052 | ) | |||||||
American Physician Partners, LLC | Delayed Draw Term Loan | 1/29/2020 | $ | 62,160 | $ | (932 | ) | |||||||
American Physician Partners, LLC | Revolver | 12/21/2021 | $ | 266,402 | $ | (3,996 | ) | |||||||
AMI US Holdings Inc. | Revolver | 4/1/2024 | $ | 481,626 | $ | (9,633 | ) | |||||||
Analogic Corporation | Revolver | 6/22/2023 | $ | 258,261 | $ | (5,165 | ) | |||||||
Avetta, LLC | Delayed Draw Term Loan | 4/11/2020 | $ | 1,235,991 | $ | (12,360 | ) | |||||||
Avetta, LLC | Revolver | 4/10/2024 | $ | 494,396 | $ | (9,888 | ) | |||||||
BEP Borrower Holdco, LLC | Delayed Draw Term Loan A | 6/12/2021 | $ | 1,288,304 | $ | (12,883 | ) | |||||||
BEP Borrower Holdco, LLC | Delayed Draw Term Loan B | 6/30/2020 | $ | 2,576,608 | $ | (25,766 | ) | |||||||
BEP Borrower Holdco, LLC | Revolver | 6/12/2024 | $ | 429,435 | $ | (6,442 | ) | |||||||
Blink Holdings, Inc. | Delayed Draw Term Loan | 11/8/2020 | $ | 548,269 | $ | (5,483 | ) | |||||||
Broadway Technology, LLC | Revolver | 4/1/2024 | $ | 383,845 | $ | (7,677 | ) | |||||||
Businesssolver.com, Inc. | Delayed Draw Term Loan | 5/15/2020 | $ | 110,000 | $ | — | ||||||||
Businesssolver.com, Inc. | Revolver | 5/15/2023 | $ | 252,353 | $ | — | ||||||||
Captain D’s, Inc. | Revolver | 12/15/2023 | $ | 86,474 | $ | (865 | ) | |||||||
CutisPharma Inc. | Delayed Draw Term Loan | 5/17/2021 | $ | 1,931,727 | $ | (33,806 | ) | |||||||
CutisPharma Inc. | Revolver | 3/21/2023 | $ | 482,932 | $ | (8,452 | ) | |||||||
Degreed, Inc. | Delayed Draw Term Loan | 5/31/2021 | $ | 2,924,689 | $ | (14,623 | ) | |||||||
Degreed, Inc. | Revolver | 5/31/2024 | $ | 417,813 | $ | (4,178 | ) | |||||||
Delaware Valley Management Holdings, Inc. | Delayed Draw Term Loan | 3/21/2021 | $ | 5,268,797 | $ | (105,376 | ) | |||||||
Delaware Valley Management Holdings, Inc. | Revolver | 3/21/2024 | $ | 526,880 | $ | (10,538 | ) | |||||||
Dillon Logistics, Inc. | Revolver | 12/11/2023 | $ | 26,552 | $ | (1,593 | ) | |||||||
E2open LLC | Revolver | 11/26/2024 | $ | 311,365 | $ | (3,114 | ) | |||||||
Edgewood Partners Holdings LLC | Delayed Draw Term Loan | 12/31/2019 | $ | 1,458,540 | $ | (14,585 | ) | |||||||
Engage2Excel, Inc | Delayed Draw Term Loan | 10/25/2020 | $ | 664,490 | $ | (6,645 | ) | |||||||
Engage2Excel, Inc | Revolver | 3/7/2023 | $ | 188,453 | $ | (3,769 | ) | |||||||
EnterpriseDB Corporation | Revolver | 6/21/2024 | $ | 696,355 | $ | (13,928 | ) | |||||||
Ethos Veterinary Health LLC | Term Loan | 5/17/2021 | $ | 839,091 | $ | (8,391 | ) | |||||||
Exterro, Inc. | Revolver | 5/31/2024 | $ | 330,000 | $ | (6,600 | ) | |||||||
Finalsite Holdings, Inc. | Revolver | 9/25/2024 | $ | 253,142 | $ | (3,797 | ) | |||||||
Fuze, Inc. | Delayed Draw Term Loan | 9/20/2021 | $ | 2,591,772 | $ | (12,959 | ) | |||||||
Fuze, Inc. | Revolver | 9/20/2024 | $ | 1,295,886 | $ | (6,480 | ) | |||||||
Genesis Acquisition Co. | Delayed Draw Term Loan | 7/31/2020 | $ | 364,466 | $ | (3,644 | ) | |||||||
Genesis Acquisition Co. | Revolver | 7/31/2024 | $ | 131,560 | $ | (2,631 | ) | |||||||
GHA Buyer, Inc. | Delayed Draw Term Loan | 6/20/2020 | $ | 675,044 | $ | (13,500 | ) | |||||||
GHA Buyer, Inc. | Revolver | 10/22/2023 | $ | 202,513 | $ | (4,050 | ) | |||||||
GS AcquisitionCo, Inc. | Revolver | 5/24/2024 | $ | 241,806 | $ | (3,023 | ) | |||||||
GS AcquisitionCo, Inc. | Second Supplemental Delayed Draw Term Loan | 8/2/2021 | $ | 1,934,450 | $ | (13,251 | ) | |||||||
IFS Acquisition, LLC | Revolver | 11/21/2023 | $ | 489,374 | $ | — | ||||||||
INH Buyer, Inc. | Revolver | 1/31/2024 | $ | 205,858 | $ | (3,088 | ) | |||||||
InSite Wireless Group, LLC | Revolver | 3/15/2023 | $ | 118,339 | $ | (1,479 | ) |
Investment Type | Facility Type | Commitment Expiration Date (1) | Unfunded Commitment (2) | Fair Value(3) | ||||||||||
1st Lien/Senior Secured Debt | ||||||||||||||
5 Bars, LLC | Delayed Draw Term Loan | 9/27/2024 | $ | 3,448,816 | $ | (86,220 | ) | |||||||
5 Bars, LLC | Revolver | 9/27/2024 | $ | 646,653 | $ | (16,166 | ) | |||||||
Accelerate Resources Operating, LLC | Delayed Draw Term Loan | 8/24/2021 | $ | 2,903,350 | $ | (362,919 | ) | |||||||
Accelerate Resources Operating, LLC | Revolver | 2/24/2026 | $ | 414,764 | $ | (51,846 | ) | |||||||
Ahead Data Blue, LLC | Revolver | 11/8/2024 | $ | 517,600 | $ | (20,704 | ) | |||||||
American Physician Partners, LLC | Revolver | 12/21/2021 | $ | 97,681 | $ | (3,907 | ) | |||||||
AMI US Holdings, Inc. | Revolver | 4/1/2024 | $ | 87,568 | $ | (3,065 | ) | |||||||
Analogic Corporation | Revolver | 6/22/2023 | $ | 195,556 | $ | (9,778 | ) | |||||||
Avetta, LLC | Delayed Draw Term Loan | 4/11/2020 | $ | 1,235,991 | $ | — | ||||||||
Avetta, LLC | Revolver | 4/10/2024 | $ | 494,396 | $ | (17,304 | ) | |||||||
BEP Borrower Holdco, LLC | Delayed Draw Term Loan A | 6/12/2021 | $ | 1,288,304 | $ | (109,506 | ) | |||||||
BEP Borrower Holdco, LLC | Delayed Draw Term Loan B | 6/30/2020 | $ | 2,576,608 | $ | (219,012 | ) | |||||||
BEP Borrower Holdco, LLC | Revolver | 6/12/2024 | $ | 429,435 | $ | (38,649 | ) | |||||||
BK Medical Holding Company, Inc. | Revolver | 6/22/2023 | $ | 321,733 | $ | (12,869 | ) | |||||||
Blink Holdings, Inc. | Delayed Draw Term Loan | 9/10/2021 | $ | 621,958 | $ | (40,427 | ) | |||||||
Businesssolver.com, Inc. | Revolver | 5/15/2023 | $ | 323,529 | $ | (12,132 | ) | |||||||
Captain D’s, Inc. | Revolver | 12/15/2023 | $ | 50,267 | $ | (5,529 | ) | |||||||
CutisPharma, Inc. | Revolver | 3/21/2023 | $ | 482,931 | $ | (14,488 | ) | |||||||
CutisPharma, Inc. | Delayed Draw Term Loan | 5/17/2021 | $ | 482,931 | $ | (14,488 | ) | |||||||
Delaware Valley Management Holdings, Inc. | Delayed Draw Term Loan | 3/21/2021 | $ | 5,268,797 | $ | (1,238,167 | ) | |||||||
Dillon Logistics, Inc. | Revolver | 12/11/2023 | $ | 41,191 | $ | (16,476 | ) | |||||||
Dispatch Track, LLC | Revolver | 12/17/2024 | $ | 169,081 | $ | (8,454 | ) |
Investment Type | Facility Type | Commitment Expiration Date (1) | Unfunded Commitment (2) | Fair Value(3) | ||||||||||||||||||||||||
E2open LLC | Revolver | 11/26/2024 | $ | 155,682 | $ | (10,119 | ) | |||||||||||||||||||||
Engage2Excel, Inc. | Delayed Draw Term Loan | 10/25/2020 | $ | 664,490 | $ | (66,449 | ) | |||||||||||||||||||||
Engage2Excel, Inc. | Revolver | 3/7/2023 | $ | 119,353 | $ | (13,129 | ) | |||||||||||||||||||||
EnterpriseDB Corporation | Revolver | 6/21/2024 | $ | 696,355 | $ | (12,186 | ) | |||||||||||||||||||||
Ethos Veterinary Health LLC | Delayed Draw Term Loan | 5/17/2021 | $ | 839,091 | $ | (67,127 | ) | |||||||||||||||||||||
EvolveIP, LLC | Delayed Draw Term Loan | 11/26/2021 | $ | 755,824 | $ | (22,675 | ) | |||||||||||||||||||||
EvolveIP, LLC | Revolver | 6/7/2023 | $ | 453,495 | $ | (13,605 | ) | |||||||||||||||||||||
Finalsite Holdings, Inc. | Revolver | 9/25/2024 | $ | 253,142 | $ | (7,594 | ) | |||||||||||||||||||||
Fuze, Inc. | Delayed Draw Term Loan | 9/20/2021 | $ | 1,814,240 | $ | (7,438 | ) | |||||||||||||||||||||
Fuze, Inc. | Revolver | 9/20/2024 | $ | 1,295,886 | $ | (18,531 | ) | |||||||||||||||||||||
Genesis Acquisition Co. | Delayed Draw Term Loan | 7/31/2020 | $ | 364,466 | $ | (26,424 | ) | |||||||||||||||||||||
GHA Buyer, Inc. | Delayed Draw Term Loan | 12/31/2020 | $ | 570,916 | $ | (22,837 | ) | |||||||||||||||||||||
GHA Buyer, Inc. | Delayed Draw Term Loan | 12/31/2020 | $ | 675,044 | $ | (27,002 | ) | |||||||||||||||||||||
GHA Buyer, Inc. | Revolver | 10/23/2023 | $ | 202,513 | $ | (10,126 | ) | |||||||||||||||||||||
GS AcquisitionCo, Inc. | Revolver | 5/24/2024 | $ | 164,107 | $ | (5,744 | ) | |||||||||||||||||||||
GS AcquisitionCo, Inc. | Second Supplemental Delayed Draw Term Loan | 8/2/2021 | $ | 988,988 | $ | (31,757 | ) | |||||||||||||||||||||
INH Buyer, Inc. | Revolver | 1/31/2024 | $ | 96,067 | $ | (8,646 | ) | |||||||||||||||||||||
InSite Wireless Group, LLC | Term Loan | 8/1/2022 | $ | 6,990,675 | $ | (87,383 | ) | Term Loan | 8/1/2022 | $ | 2,802,260 | $ | (35,028 | ) | ||||||||||||||
Lucky Bucks, LLC | Delayed Draw Term Loan | 4/9/2020 | $ | 94,699 | $ | (1,657 | ) | |||||||||||||||||||||
Kaseya Inc. | Delayed Draw Term Loan | 5/3/2021 | $ | 467,302 | $ | (11,122 | ) | |||||||||||||||||||||
Kaseya Inc. | Delayed Draw Term Loan | 3/4/2022 | $ | 237,545 | $ | (5,939 | ) | |||||||||||||||||||||
Kaseya Inc. | Revolver | 5/2/2025 | $ | 3,760 | $ | (122 | ) | |||||||||||||||||||||
Metametrics, Inc. | Revolver | 9/10/2025 | $ | 651,183 | $ | (13,024 | ) | Revolver | 9/10/2025 | $ | 217,061 | $ | (10,853 | ) | ||||||||||||||
Ministry Brands, LLC | Delayed Draw Term Loan | 12/2/2022 | $ | 732,132 | $ | (3,661 | ) | |||||||||||||||||||||
Nine Point Energy, LLC | Delayed Draw Term Loan | 6/7/2021 | $ | 1,312,500 | $ | (26,250 | ) | Delayed Draw Term Loan | 6/7/2021 | $ | 1,312,500 | $ | (75,469 | ) | ||||||||||||||
Nine Point Energy, LLC | Revolver | 6/7/2024 | $ | 175,000 | $ | (3,500 | ) | |||||||||||||||||||||
OMH-HealthEdge Holdings, LLC | Revolver | 10/24/2024 | $ | 458,720 | $ | (18,349 | ) | |||||||||||||||||||||
Pace Health Companies, LLC | Revolver | 8/2/2024 | $ | 616,682 | $ | (6,167 | ) | Revolver | 8/2/2024 | $ | 83,252 | $ | (4,995 | ) | ||||||||||||||
PF Growth Partners, LLC | Delayed Draw Term Loan | 7/11/2021 | $ | 336,399 | $ | (3,364 | ) | Delayed Draw Term Loan | 7/11/2021 | $ | 240,285 | $ | (24,029 | ) | ||||||||||||||
Pinnacle Dermatology Management, LLC | Delayed Draw Term Loan | 5/18/2020 | $ | 210,791 | $ | (4,216 | ) | Delayed Draw Term Loan | 5/18/2020 | $ | 3,288,636 | $ | (263,091 | ) | ||||||||||||||
Pinnacle Dermatology Management, LLC | Revolver | 5/18/2023 | $ | 468,424 | $ | (9,369 | ) | |||||||||||||||||||||
Rhode Holdings Inc. | Delayed Draw Term Loan | 5/3/2021 | $ | 467,302 | $ | (5,281 | ) | |||||||||||||||||||||
Rhode Holdings Inc. | Revolver | 5/2/2025 | $ | 268,565 | $ | (5,371 | ) | |||||||||||||||||||||
Pinnacle Treatment Centers, Inc. | Delayed Draw Term Loan | 1/17/2022 | $ | 585,909 | $ | (10,253 | ) | |||||||||||||||||||||
Real Capital Analytics, Inc. | Revolver | 10/2/2024 | $ | 138,948 | $ | (2,779 | ) | |||||||||||||||||||||
RxBenefits, Inc. | Revolver | 3/29/2024 | $ | 575,767 | $ | (5,757 | ) | Revolver | 3/29/2024 | $ | 106,616 | $ | (5,331 | ) | ||||||||||||||
Selligent, Inc. | Revolver | 11/3/2023 | $ | 200,660 | $ | (3,010 | ) | Revolver | 11/3/2023 | $ | 200,660 | $ | (6,020 | ) | ||||||||||||||
Single Digits, Inc | Delayed Draw Term Loan | 12/21/2020 | $ | 1,040,369 | $ | (10,404 | ) | |||||||||||||||||||||
Single Digits, Inc | Revolver | 12/21/2023 | $ | 416,148 | $ | (4,162 | ) | |||||||||||||||||||||
Single Digits, Inc. | Delayed Draw Term Loan | 12/21/2020 | $ | 1,040,369 | $ | (83,230 | ) | |||||||||||||||||||||
Single Digits, Inc. | Revolver | 12/21/2023 | $ | 416,147 | $ | (33,292 | ) | |||||||||||||||||||||
Sirsi Corporation | Revolver | 3/15/2024 | $ | 332,245 | $ | (4,984 | ) | Revolver | 3/15/2024 | $ | 442,993 | $ | (17,720 | ) | ||||||||||||||
Smartlinx Solutions, LLC | Revolver | 3/4/2026 | $ | 519,484 | $ | (14,286 | ) | |||||||||||||||||||||
Smile Brands, Inc. | Delayed Draw Term Loan | 10/12/2020 | $ | 333,798 | $ | (3,338 | ) | Delayed Draw Term Loan | 10/12/2020 | $ | 152,035 | $ | (8,362 | ) | ||||||||||||||
Smile Brands, Inc. | Revolver | 10/12/2023 | $ | 216,587 | $ | (2,166 | ) | Revolver | 10/12/2023 | $ | 29,445 | $ | (1,619 | ) | ||||||||||||||
Sugarcrm Inc. | Revolver | 7/31/2024 | $ | 124,098 | $ | (1,241 | ) | |||||||||||||||||||||
Star2star Communications, LLC | Delayed Draw Term Loan | 3/11/2025 | $ | 640,576 | $ | (12,812 | ) | |||||||||||||||||||||
Star2star Communications, LLC | Revolver | 3/13/2025 | $ | 960,864 | $ | (19,217 | ) | |||||||||||||||||||||
Summit Infrastructure Group, Inc. | Delayed Draw Term Loan | 3/15/2021 | $ | 1,125,756 | $ | (22,515 | ) | Delayed Draw Term Loan | 3/15/2021 | $ | 1,125,756 | $ | — | |||||||||||||||
Summit Infrastructure Group, Inc. | Revolver | 3/15/2024 | $ | 562,878 | $ | (11,257 | ) | Revolver | 3/15/2024 | $ | 562,878 | $ | — | |||||||||||||||
Swiftpage, Inc. | Revolver | 6/13/2023 | $ | 225,317 | $ | (4,507 | ) | |||||||||||||||||||||
Symplr Software, Inc. | Revolver | 11/30/2023 | $ | 55,481 | $ | (832 | ) | |||||||||||||||||||||
The Center for Orthopedic and Research Excellence, Inc. | Delayed Draw Term Loan | 8/15/2021 | $ | 1,726,330 | $ | (15,105 | ) | |||||||||||||||||||||
Telesoft Holdings, LLC | Revolver | 12/16/2025 | $ | 198,955 | $ | (8,953 | ) | |||||||||||||||||||||
The Center for Orthopedic and Research Excellence, Inc. | Revolver | 8/15/2025 | $ | 586,952 | $ | (10,272 | ) | Delayed Draw Term Loan | 8/15/2021 | $ | 1,726,330 | $ | (49,632 | ) | ||||||||||||||
Theranest, LLC | Delayed Draw Term Loan | 7/23/2020 | $ | 1,937,786 | $ | (29,067 | ) | Delayed Draw Term Loan | 7/23/2020 | $ | 1,386,857 | $ | (35,226 | ) | ||||||||||||||
Theranest, LLC | Revolver | 7/24/2023 | $ | 428,571 | $ | (8,571 | ) | |||||||||||||||||||||
TRGRP, Inc. | Revolver | 11/1/2023 | $ | 333,333 | $ | (6,666 | ) | |||||||||||||||||||||
Tropical Smoothie Cafe, LLC | Revolver | 9/24/2023 | $ | 96,435 | $ | — | Delayed Draw Term Loan | 6/18/2021 | $ | 20,418 | $ | (510 | ) | |||||||||||||||
Velocity Purchaser Corporation | Revolver | 12/1/2022 | $ | 193,237 | $ | — | ||||||||||||||||||||||
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ZBS Alliance Animal Health, LLC | Delayed Draw Term Loan | 11/8/2025 | $ | 2,440,153 | $ | (109,806 | ) | |||||||||||||||||||||
Total 1st Lien/Senior Secured Debt | $ | 60,480,176 | $ | (789,172 | ) | $ | 54,015,513 | $ | (3,541,540 | ) | ||||||||||||||||||
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Total | $ | 60,480,176 | $ | (789,172 | ) | $ | 54,015,513 | $ | (3,541,540 | ) | ||||||||||||||||||
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As of December 31, 2018, our2019, the Fund’soff-balance sheet arrangements consisted of the following:
Investment Type | Facility Type | Commitment Expiration Date (1) | Unfunded Commitment (2) | Fair Value (3) | ||||||||||
1st Lien/Senior Secured Debt | ||||||||||||||
AEG Holding Company, Inc. | Delayed Draw Term Loan | 11/20/2019 | $ | 1,083,629 | $ | (21,673 | ) | |||||||
AEG Holding Company, Inc. | Revolver | 11/20/2023 | $ | 216,726 | $ | (4,335 | ) | |||||||
American Physician Partners LLC | Delayed Draw Term Loan | 01/29/2020 | $ | 3,212,948 | $ | (48,194 | ) | |||||||
American Physician Partners LLC | Revolver | 12/21/2021 | $ | 347,466 | $ | (5,212 | ) | |||||||
Analogic Corporation | Revolver | 06/22/2023 | $ | 286,957 | $ | (5,739 | ) | |||||||
Avetta, LLC | Delayed Draw Term Loan | 04/11/2020 | $ | 1,235,991 | $ | (12,360 | ) | |||||||
Avetta, LLC | Revolver | 04/10/2024 | $ | 494,396 | $ | (4,944 | ) | |||||||
Businesssolver.com, Inc. | Delayed Draw Term Loan | 05/15/2020 | $ | 291,176 | $ | (5,824 | ) | |||||||
Businesssolver.com, Inc. | Revolver | 05/15/2023 | $ | 194,118 | $ | (3,882 | ) | |||||||
Caliper Software, Inc. | Revolver | 11/30/2023 | $ | 281,636 | $ | (4,225 | ) | |||||||
Captain D’s, Inc. | Revolver | 12/15/2023 | $ | 112,481 | $ | (1,125 | ) | |||||||
Dillon Logistics, Inc. | Revolver | 12/11/2023 | $ | 225,550 | $ | (3,404 | ) | |||||||
Drilling Info Holdings, Inc. | Delayed Draw Term Loan | 07/30/2020 | $ | 233,718 | $ | (1,461 | ) | |||||||
E2open LLC | Delayed Draw Term Loan | 05/26/2020 | $ | 736,677 | $ | (11,050 | ) | |||||||
E2open LLC | Revolver | 11/26/2024 | $ | 311,365 | $ | (4,670 | ) | |||||||
Engage2Excel, Inc. | Revolver | 03/07/2023 | $ | 270,115 | $ | (5,402 | ) | |||||||
Exterro, Inc. | Revolver | 05/31/2024 | $ | 330,000 | $ | (6,600 | ) | |||||||
Finalsite Holdings, Inc. | Revolver | 09/25/2024 | $ | 253,142 | $ | (4,430 | ) | |||||||
Genesis Acquisition Co. | Delayed Draw Term Loan | 07/31/2020 | $ | 364,466 | $ | (3,645 | ) | |||||||
Genesis Acquisition Co. | Revolver | 07/31/2024 | $ | 202,400 | $ | (4,048 | ) | |||||||
GHA Buyer, Inc. | Delayed Draw Term Loan | 06/20/2020 | $ | 675,044 | $ | (13,501 | ) | |||||||
GHA Buyer, Inc. | Revolver | 10/22/2023 | $ | 202,513 | $ | (4,050 | ) | |||||||
InSite Wireless Group, LLC | Revolver | 03/15/2023 | $ | 197,231 | $ | (2,958 | ) | |||||||
InSite Wireless Group, LLC | Term Loan | 03/15/2021 | $ | 1,311,586 | $ | (19,674 | ) | |||||||
Lucky Bucks, LLC | Delayed Draw Term Loan | 04/09/2020 | $ | 556,562 | $ | (9,740 | ) | |||||||
Maintech, Incorporated | Revolver | 12/28/2022 | $ | 60,500 | $ | (908 | ) | |||||||
Ministry Brands, LLC | Delayed Draw Term Loan | 12/02/2022 | $ | 947,111 | $ | (4,736 | ) | |||||||
Perforce Intermediate Holdings, LLC | Revolver | 12/28/2022 | $ | 591,549 | $ | (5,915 | ) | |||||||
Pinnacle Dermatology Management, LLC | Delayed Draw Term Loan | 05/18/2020 | $ | 1,920,536 | $ | (38,411 | ) | |||||||
Pinnacle Dermatology Management, LLC | Revolver | 05/18/2023 | $ | 468,424 | $ | (9,368 | ) | |||||||
Pivotal Payments, Inc. | Delayed Draw Term Loan | 03/28/2020 | $ | 183,152 | $ | (1,832 | ) | |||||||
Platinum Dermatology Partners, LLC | General Delayed Draw Term Loan Commitment | 07/03/2019 | $ | 568,394 | $ | (11,368 | ) | |||||||
Platinum Dermatology Partners, LLC | Revolver | 01/03/2023 | $ | 498,592 | $ | (9,972 | ) | |||||||
Qualifacts Corporation | Revolver | 12/12/2022 | $ | 300,000 | $ | (1,500 | ) | |||||||
Selligent, Inc. | Revolver | 11/03/2023 | $ | 200,660 | $ | (3,010 | ) | |||||||
Single Digits, Inc. | Delayed Draw Term Loan | 12/21/2020 | $ | 1,040,369 | $ | (10,404 | ) | |||||||
Single Digits, Inc. | Revolver | 12/21/2023 | $ | 416,148 | $ | (4,161 | ) | |||||||
Smile Brands, Inc. | Delayed Draw Term Loan | 10/12/2020 | $ | 477,340 | $ | (4,773 | ) | |||||||
Smile Brands, Inc. | Revolver | 10/12/2023 | $ | 212,340 | $ | (2,123 | ) | |||||||
Sugarcrm, Inc. | Revolver | 07/31/2024 | $ | 232,683 | $ | (4,072 | ) | |||||||
Swiftpage, Inc. | Revolver | 06/13/2023 | $ | 225,317 | $ | (4,506 | ) | |||||||
Theranest, LLC | Delayed Draw Term Loan | 07/23/2020 | $ | 2,785,713 | $ | (41,786 | ) | |||||||
Theranest, LLC | Revolver | 07/24/2023 | $ | 428,571 | $ | (8,571 | ) | |||||||
Trade Supplies Acquisition, LLC | Revolver | 11/21/2023 | $ | 469,177 | $ | (7,038 | ) | |||||||
TRGRP Acquisition Corp. | Revolver | 11/01/2023 | $ | 333,333 | $ | (6,667 | ) | |||||||
Tropical Smoothie Café, LLC | Revolver | 09/24/2023 | $ | 96,435 | $ | (964 | ) | |||||||
Velocity Purchaser Corporation | Revolver | 12/01/2022 | $ | 193,237 | $ | (3,865 | ) | |||||||
Veriforce Holdings, LLC | Revolver | 07/13/2023 | $ | 281,646 | $ | (4,929 | ) | |||||||
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Total 1st Lien/Senior Secured Debt | $ | 26,559,120 | $ | (403,025 | ) | |||||||||
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Total | $ | 26,559,120 | $ | (403,025 | ) | |||||||||
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Investment Type | Facility Type | Commitment Expiration Date(1) | Unfunded Commitment(2) | Fair Value(3) | ||||||||||
1st Lien/Senior Secured Debt | ||||||||||||||
5 Bars, LLC | Delayed Draw Term Loan | 9/27/2024 | $ | 3,448,816 | $ | (51,732 | ) | |||||||
5 Bars, LLC | Revolver | 9/27/2024 | $ | 646,653 | $ | (9,700 | ) | |||||||
AEG Holding Company, Inc. | Revolver | 11/20/2023 | $ | 558,432 | $ | (11,168 | ) | |||||||
Ahead Data Blue, LLC | Revolver | 11/8/2024 | $ | 961,256 | $ | (19,225 | ) | |||||||
American Physician Partners, LLC | Revolver | 12/21/2021 | $ | 266,402 | $ | (2,664 | ) | |||||||
AMI US Holdings, Inc. | Revolver | 4/1/2024 | $ | 612,979 | $ | (12,260 | ) | |||||||
Analogic Corporation | Revolver | 6/22/2023 | $ | 258,261 | $ | (3,616 | ) | |||||||
Avetta, LLC | Delayed Draw Term Loan | 4/11/2020 | $ | 1,235,991 | $ | (12,360 | ) | |||||||
Avetta, LLC | Revolver | 4/10/2024 | $ | 494,396 | $ | (9,888 | ) | |||||||
BEP Borrower Holdco, LLC | Delayed Draw Term Loan A | 6/12/2021 | $ | 1,288,304 | $ | (12,883 | ) | |||||||
BEP Borrower Holdco, LLC | Delayed Draw Term Loan B | 6/30/2020 | $ | 2,576,608 | $ | (25,766 | ) | |||||||
BEP Borrower Holdco, LLC | Revolver | 6/12/2024 | $ | 429,435 | $ | (6,442 | ) | |||||||
Blink Holdings, Inc. | Delayed Draw Term Loan | 11/8/2020 | $ | 119,189 | $ | (1,192 | ) | |||||||
Broadway Technology, LLC | Revolver | 4/1/2024 | $ | 383,845 | $ | (7,677 | ) | |||||||
Businesssolver.com, Inc. | Revolver | 5/15/2023 | $ | 194,118 | $ | — | ||||||||
Captain D’s, Inc. | Revolver | 12/15/2023 | $ | 60,466 | $ | (604 | ) | |||||||
CutisPharma, Inc. | Revolver | 3/21/2023 | $ | 482,932 | $ | (8,451 | ) | |||||||
CutisPharma, Inc. | Delayed Draw Term Loan | 5/17/2021 | $ | 482,932 | $ | (8,451 | ) | |||||||
Degreed, Inc. | Delayed Draw Term Loan | 5/31/2021 | $ | 1,810,522 | $ | (17,562 | ) | |||||||
Degreed, Inc. | Revolver | 5/31/2024 | $ | 417,813 | $ | (7,228 | ) | |||||||
Delaware Valley Management Holdings, Inc. | Delayed Draw Term Loan | 3/21/2021 | $ | 5,268,797 | $ | (105,376 | ) | |||||||
Delaware Valley Management Holdings, Inc. | Revolver | 3/21/2024 | $ | 158,064 | $ | (3,161 | ) | |||||||
Dillon Logistics, Inc. | Revolver | 12/11/2023 | $ | 41,191 | $ | (2,912 | ) | |||||||
Dispatch Track, LLC | Revolver | 12/17/2024 | $ | 169,081 | $ | (2,537 | ) | |||||||
E2open LLC | Revolver | 11/26/2024 | $ | 311,365 | $ | (3,114 | ) | |||||||
Engage2Excel, Inc. | Delayed Draw Term Loan | 10/25/2020 | $ | 664,490 | $ | (6,645 | ) | |||||||
Engage2Excel, Inc. | Revolver | 3/7/2023 | $ | 125,635 | $ | (2,513 | ) | |||||||
EnterpriseDB Corporation | Revolver | 6/21/2024 | $ | 696,355 | $ | (10,445 | ) | |||||||
Ethos Veterinary Health LLC | Term Loan | 5/17/2021 | $ | 839,091 | $ | (8,391 | ) | |||||||
EvolveIP, LLC | Delayed Draw Term Loan | 11/26/2021 | $ | 755,824 | $ | (11,337 | ) | |||||||
EvolveIP, LLC | Revolver | 6/7/2023 | $ | 566,868 | $ | (8,503 | ) | |||||||
Exterro, Inc. | Revolver | 5/31/2024 | $ | 330,000 | $ | (1,650 | ) | |||||||
Finalsite Holdings, Inc. | Revolver | 9/25/2024 | $ | 253,142 | $ | (3,797 | ) | |||||||
Fuze, Inc. | Delayed Draw Term Loan | 9/20/2021 | $ | 2,591,772 | $ | (117,926 | ) | |||||||
Fuze, Inc. | Revolver | 9/20/2024 | $ | 388,766 | $ | (17,689 | ) | |||||||
Genesis Acquisition Co. | Delayed Draw Term Loan | 7/31/2020 | $ | 364,466 | $ | (3,645 | ) | |||||||
Genesis Acquisition Co. | Revolver | 7/31/2024 | $ | 131,560 | $ | (2,631 | ) | |||||||
GHA Buyer, Inc. | Delayed Draw Term Loan | 12/31/2020 | $ | 570,916 | $ | (5,709 | ) | |||||||
GHA Buyer, Inc. | Delayed Draw Term Loan | 12/31/2020 | $ | 675,044 | $ | (6,750 | ) |
Investment Type Facility Type GHA Buyer, Inc. GS AcquisitionCo, Inc. GS AcquisitionCo, Inc. Higginbotham Insurance Agency, Inc. INH Buyer, Inc. InSite Wireless Group, LLC Lucky Bucks, LLC Metametrics, Inc. Nine Point Energy, LLC Nine Point Energy, LLC OMH-HealthEdge Holdings, LLC Pace Health Companies, LLC PF Growth Partners, LLC Pinnacle Dermatology Management, LLC Pinnacle Dermatology Management, LLC Real Capital Analytics, Inc. Rhode Holdings, Inc. Rhode Holdings, Inc. RxBenefits, Inc. Selligent, Inc. Single Digits, Inc. Single Digits, Inc. Sirsi Corporation Smile Brands, Inc. Smile Brands, Inc. Sugarcrm, Inc. Summit Infrastructure Group, Inc. Summit Infrastructure Group, Inc. Swiftpage, Inc. Symplr Software, Inc. Telesoft Holdings, LLC The Center for Orthopedic and Research Excellence, Inc. The Center for Orthopedic and Research Excellence, Inc. Theranest, LLC Theranest, LLC TRGRP, Inc. Tropical Smoothie Cafe, LLC Tropical Smoothie Cafe, LLC Velocity Purchaser Corporation ZBS Alliance Animal Health, LLC ZBS Alliance Animal Health, LLC Total 1st Lien/Senior Secured Debt Total Commitment
Expiration Date(1) Unfunded
Commitment(2) Fair
Value(3) Revolver 10/23/2023 $ 202,513 $ (4,050 ) Revolver 5/24/2024 $ 108,813 $ (1,360 ) Second Supplemental
Delayed Draw Term Loan 8/2/2021 $ 1,934,450 $ (13,251 ) Delayed Draw Term Loan 3/11/2020 $ 2,365,584 $ — Revolver 1/31/2024 $ 205,858 $ (3,088 ) Term Loan 8/1/2022 $ 6,179,466 $ (77,243 ) Delayed Draw Term Loan 4/9/2020 $ 64,919 $ (1,136 ) Revolver 9/10/2025 $ 651,183 $ (13,024 ) Revolver 6/7/2024 $ 328,125 $ (6,562 ) Delayed Draw Term Loan 6/7/2021 $ 1,312,500 $ (26,250 ) Revolver 10/24/2024 $ 458,721 $ (10,321 ) Revolver 8/2/2024 $ 616,682 $ (6,167 ) Delayed Draw Term Loan 7/11/2021 $ 300,356 $ (3,003 ) Delayed Draw Term Loan 5/18/2020 $ 1,643,567 $ (32,871 ) Revolver 5/18/2023 $ 468,424 $ (9,368 ) Revolver 10/2/2024 $ 138,948 $ (695 ) Delayed Draw Term Loan 5/3/2021 $ 467,302 $ (5,280 ) Revolver 5/2/2025 $ 161,139 $ (3,223 ) Revolver 3/29/2024 $ 575,767 $ (5,758 ) Revolver 11/3/2023 $ 200,660 $ (3,010 ) Delayed Draw Term Loan 12/21/2020 $ 1,040,369 $ (10,404 ) Revolver 12/21/2023 $ 416,148 $ (4,161 ) Revolver 3/15/2024 $ 332,245 $ (4,984 ) Delayed Draw Term Loan 10/12/2020 $ 333,798 $ — Revolver 10/12/2023 $ 220,833 $ — Revolver 7/31/2024 �� $ 310,244 $ — Delayed Draw Term Loan 3/15/2021 $ 1,125,756 $ (22,515 ) Revolver 3/15/2024 $ 562,878 $ (11,258 ) Revolver 6/13/2023 $ 225,317 $ (4,506 ) Revolver 11/30/2023 $ 27,828 $ (417 ) Revolver 12/16/2025 $ 596,865 $ (13,430 ) Delayed Draw Term Loan 8/15/2021 $ 1,726,330 $ (15,105 ) Revolver 8/15/2025 $ 656,005 $ (11,480 ) Delayed Draw Term Loan 7/23/2020 $ 1,386,857 $ (20,803 ) Revolver 7/24/2023 $ 428,571 $ (8,571 ) Revolver 11/1/2023 $ 333,333 $ (6,667 ) Revolver 9/24/2023 $ 96,435 $ — Delayed Draw Term Loan 6/18/2021 $ 6,659,893 $ — Revolver 12/1/2022 $ 193,237 $ — Delayed Draw Term Loan 11/8/2025 $ 4,535,600 $ (90,712 ) Revolver 11/8/2025 $ 181,424 $ (3,628 ) $ 71,406,720 $ (1,007,901 ) $ 71,406,720 $ (1,007,901 )
(1) | Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity. |
(2) | Net of capitalized fees, expenses and original issue discount (“OID”). |
(3) | A negative fair value was reflected as investments, at fair value in the consolidated statements of assets and liabilities. The negative fair value is the result of the capitalized discount on the loan. |
Co-investment Exemptive Order
On August 6, 2018, the SEC granted usthe Fund relief sought in a new exemptive application that expands theco-investment exemptive relief previously granted to usthe Fund in October 2016 to allow usthe Fund toco-invest in portfolio companies with Affiliated Funds in a manner consistent with ourits investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with the Order. Pursuant to the Order, we arethe Fund is permitted toco-invest with Affiliated Funds, which the new exemptive relief defines to include affiliated managed accounts, if, among other things, a “required majority” (as defined in Section 57(o) of the 1940 Act) of ourthe Fund’s independent directors make certain conclusions in connection with aco-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to usthe Fund and ourthe Fund’s stockholders and do not involve overreaching in respect of usthe Fund or ourthe Fund’s stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of ourthe Fund’s stockholders and is consistent with ourthe Fund’s investment objective and strategies. We intendThe Fund intends toco-invest with Affiliated Funds, subject to the conditions included in the Order.
Credit FacilitiesFacility
HSBCRevolving Credit Facility Agreement
On November 15, 2017, the Fund entered into a credit agreement (the “HSBCthe Credit Agreement”)Agreement to establish a revolving credit facility (the “HSBCthe Revolving Credit Facility”)Facility with HSBC Bank USA, National Association (“HSBC”) as administrative agent (the “Administrative Agent”)Administrative Agent and any other lender that becomes a party to the HSBCRevolving Credit Facility in accordance with the terms of the HSBCRevolving Credit Facility, as lenders.
The initial maximum principal amount (the “Maximum Commitment”)Maximum Commitment of the HSBCRevolving Credit Facility wasis $30 million. The Maximum Commitment amount may be increased upon request of the Fund to an amount agreed upon by the Fund and the Administrative Agent. Such increase may be done in one or more requested increases, each in a minimum amount of $10 million and in $5 million increments thereof, or such lesser amount to be determined by the Administrative Agent, subject to certain terms and conditions. As ofOn January 31, 2019, the Fund setincreased the Maximum Commitment asto $50 million. So long as no request for borrowing is outstanding, the Fund may terminate the Lenders’ commitments (the “Commitments”)Commitments or reduce the Maximum Commitments by giving prior irrevocable written notice to the Administrative Agent. Any reduction of the Maximum Commitments shall be in an amount equal to $10 million or multiples thereof; and in no event shall a reduction by the Fund reduce the Commitments to $35 million or less (in each case, except for a termination of all the Commitments). Proceeds under the HSBCRevolving Credit Facility may be used for any purpose permitted under ourthe Fund’s organizational documents, including general corporate purposes such as the making of investments.
Borrowings under the HSBCRevolving Credit Facility bear interest, at the Fund’s election at the time of drawdown, at a rate per annum equal to (i) with respect to LIBOR Rate Loans, Adjusted LIBOR (as defined in the HSBC Credit Agreement) for the applicable Interest Period; and (ii) with respect to Reference Rate Loans, (as defined in the HSBC Credit Agreement), the greatest of: (i)(x) the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate, (ii)(y) the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, plus two hundred basis points (2.00%), provided that if such rate is not so published for any day that is a Business Day, the average of the quotation for such day on such transactions received by the Administrative Agent from three (3) Federal funds brokers of recognized standing selected by the Administrative Agent and, upon request of Borrowers, with notice of such quotations to the Borrowers and (iii)(z) except during any period of time during which LIBOR isunavailable, one-month Adjusted LIBOR plus twoone hundred ninety basis points (2.00%(1.90%). The Fund will also pay an unused commitment fee of 35 basis points (0.35%) on any unused commitments.
The HSBCRevolving Credit Facility wasis scheduled to mature on November 13, 2019,11, 2020, subject to the Fund’s option to extend the maturity date for up to one additional term not longer than 364 days, subject to the following conditions: (i) each of the Lenders and the Administrative Agent consents to the extension in their sole discretion; (ii) the Fund has paid an extension fee to the Administrative Agent for the benefit of the extending Lenders consenting to such extension in an amount agreed to by the Administrative Agent and the Borrowers at the time of the extension and as set forth in the applicable extension request; (iii) no potential default or event of default has occurred and is continuing on the date on which notice is given in accordance with the following clause (iv) or on November 13, 2019;11, 2020; and (iv)(v) the Fund has delivered an extension request to the Administrative Agent not more than one hundred twenty (120) days or less than forty-five (45) days prior to November 13, 2019.11, 2020.
Subject to certain terms and conditions, the HSBCRevolving Credit Facility is secured by a first priority, exclusive, perfected security interest and lien in and on all of the Fund’s right, title and interest, in, to and under, whether now existing or hereafter acquired or arising and wherever located (a) all of the Fund’s rights, titles, interests and privileges in and to the Capital Commitments, and the Capital Contributions made by its Investors, and all other rights, titles, interests, powers and privileges related to, appurtenant to or arising out of the Capital Commitments; (b) all of the Fund’s rights, titles, interests, remedies, and privileges under the Constituent Documents (i) to issue and enforce Capital Calls and Pendingpending Capital Calls, (ii) to receive and enforce Capital Contributions and (iii) relating to Capital Calls, Pendingpending Capital Calls, Capital Commitments or Capital Contributions; (c) all proceeds of any and all of the foregoing.
The HSBCRevolving Credit Facility contains customary covenants and events of default (with customary cure and notice provisions).
As of September 30, 2019, there was noMarch 31, 2020, the Fund had $43,000,000 outstanding balance on the HSBCRevolving Credit Facility and we werethe Fund in compliance with the terms of the HSBCRevolving Credit Facility. As of December 31, 2018, we2019, the Fund had $88,200,000$19,500,000 outstanding on the HSBCRevolving Credit Facility and we werethe Fund was in compliance with the terms of the HSBCRevolving Credit Facility. We intendThe Fund intends to continue to utilize the HSBCRevolving Credit Facility on a revolving basis to fund investments and for other general corporate purposes.
For the three months ended September 30,March 31, 2020 and 2019, and 2018, the components of interest expense related to the HSBCRevolving Credit Facility were as follows:
For the Three Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Borrowing interest expense | $ | 44,955 | $ | 340,405 | ||||
Commitment fees | 40,945 | 18,217 | ||||||
Amortization of deferred financing costs | 43,878 | 136,369 | ||||||
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Total interest and borrowing expenses | $ | 129,778 | $ | 494,991 | ||||
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For the nine months ended September 30, 2019 and 2018, the components of interest expense related to the HSBC Credit Facility were as follows:
For the Nine Months Ended September 30, | For the Three Months Ended March 31, | |||||||||||||||
2019 | 2018 | 2020 | 2019 | |||||||||||||
Borrowing interest expense | $ | 410,787 | $ | 585,832 | $ | 145,023 | $ | 303,967 | ||||||||
Commitment fees | 122,574 | 52,208 | $ | 28,258 | $ | 42,041 | ||||||||||
Amortization of deferred financing costs | 147,432 | 288,965 | ||||||||||||||
Amortization of financing costs | $ | 18,646 | $ | 36,593 | ||||||||||||
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Total interest and borrowing expenses | $ | 680,793 | $ | 927,005 | ||||||||||||
Total interest and debt financing expenses | $ | 191,927 | $ | 382,601 | ||||||||||||
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Barclays Credit Facility Agreement
On December 19, 2018, the Fund formed AB PCICABPCIC Funding, I LLC, an indirectly wholly-owned Delaware limited liability company, (“ABPCIC Funding”), the primary purpose of which iswas to function as the Fund’s special purpose, bankruptcy remote, financing subsidiary in connection with a credit agreement (the “Barclaysthe Barclays Credit Agreement,” together with all ancillary documents thereto, the “Barclays Credit Facility”) with Barclays Bank PLC, New York Branch (“Barclays”) as facility agent (in such capacity, the “Facility Agent”) and U.S. Bank National Association (“U.S. Bank”) as collateral agent (in such capacity, the “Collateral Agent”), collateral administrator (in such capacity, the “Collateral Administrator”) and custodian (in such capacity, the “Custodian”) providing for borrowings in an aggregate amount up to $150,000,000 collateralized with certain assets sold to ABPCIC Funding by the Fund
(the (the “Collateral”). The Fund has beenwas appointed as the Designated Manager of ABPCIC Funding and as such hashad full and exclusive control of ABPCIC Funding’s business and makes all decisions affecting its affairs (except with respect to certain material actions). On January 30, 2019, ABPCIC Funding entered into the Barclays Credit Agreement. Concurrently with the closing of the Barclays Credit Agreement, the Fund contributed and/or sold certain assets to ABPCIC Funding pursuant to a transfer agreement (the “Transfer Agreement”), by and between the Fund as seller and ABPCIC Funding as buyer. The Fund expectsexpected to continue to contribute and/or sell assets to ABPCIC Funding pursuant to the Transfer Agreement in the future.
All of the collateral pledged to lenders by ABPCIC Funding under the Barclays Credit Facility was held in the custody of the Custodian under an account control agreement by and among ABPCIC Funding, the Collateral Agent and the Custodian. The Collateral Administrator maintained and performed certain collateral administration services with respect to the collateral pursuant to a collateral administration agreement among ABPCIC Funding, the Adviser and the Collateral Administrator. Borrowings under the Barclays Credit Facility were secured by all of the assets held by ABPCIC Funding. Pursuant to a collateral management agreement (the “Collateral Management Agreement”) by and between ABPCIC Funding and the Adviser as collateral manager, the Adviser performed certain duties with respect to the purchase and management of the assets securing the Barclays Credit Facility. The Adviser elected to waive any fees that would otherwise be payable under the Barclays Credit Facility and the Collateral Management Agreement. ABPCIC Funding was responsible for reimbursing the expenses incurred by the Adviser in the performance of its obligations under the Collateral Management Agreement other than any ordinary overhead expenses, which were not required to be reimbursed. For the three and nine months ended September 30,March 31, 2020 and March 31, 2019, the Fund incurred ano collateral management fee of $100,949 and $426,758, respectively, which was voluntarily waived by the Adviser.fees.
The Barclays Credit Facility provided for borrowings in an aggregate amount up to $150 million. Borrowings under the Barclays Credit Facility bore interest paid on an annual adjusted LIBOR for the relevant interest period, plus an applicable spread of 2.25%. ABPCIC Funding would also pay an unused commitment fee of .50% and the commitment would have expired on July 30, 2020. Interest and fees were paid quarterly in arrears. Any amounts borrowed under the Barclays Credit Facility would have matured, and all accrued and unpaid interest thereunder would have been due and payable, on the earlier of (i) January 20, 2029, (ii) the date on which ABPCIC Funding issues collateralized loan obligation securities in a transaction for which the sole arranger is Barclays (or an affiliate thereof) or (iii) upon certain other events which result in accelerated maturity under the credit facility. Borrowing under the Barclays Credit Facility was subject to certain restrictions contained in the 1940 Act. On August 9, 2019, ABPCIC Funding issued collateralized loan obligation securities, and terminated the Barclays Credit Facility. For a discussion of the CLO Transaction see“Notes to Unaudited Consolidated Financial Statements –— Note 4. Collateralized Loan Obligations.”
For the three months ended September 30,March 31, 2020 and March 31, 2019, and 2018, the components of interest expense related to the Barclays Credit Facility were as follows:
For the Three Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Borrowing interest expense | $ | 751,048 | $ | — | ||||
Commitment fees | 5,041 | — | ||||||
Amortization of deferred financing costs | 123,547 | — | ||||||
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Total interest and borrowing expenses | $ | 879,636 | $ | — | ||||
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For the nine months ended September 30, 2019 and 2018, the components of interest expense related to the Barclays Credit Facility were as follows:
For the Nine Months Ended September 30, | For the three Months Ended March 31 | |||||||||||||||
2019 | 2018 | 2020 | 2019 | |||||||||||||
Borrowing interest expense | $ | 3,336,538 | $ | — | ||||||||||||
Interest and borrowing expenses | $ | — | $ | 883,033 | ||||||||||||
Commitment fees | 56,338 | — | — | 37,214 | ||||||||||||
Amortization of deferred financing costs | 355,465 | — | — | 106,304 | ||||||||||||
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Total interest and borrowing expenses | $ | 3,748,341 | $ | — | $ | — | $ | 1,026,551 | ||||||||
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Borrowings of ABPCIC Funding arewere considered borrowings by the Fund for purposes of complying with the asset coverage requirements under the 1940 Act applicable to business development companies. The obligations of ABPCIC Funding under the Barclays Credit Facility werenon-recourse to the Fund. The Barclays Credit Facility was in effect during 2019, but terminated on August 9, 2019.
Debt Securitization
On August 9, 2019, ABPCI Direct Lending Fund CLO VI Ltd (the “Issuer”) and ABPCI Direct Lending Fund CLO VI LLC (the“Co-Issuer,” and together with the Issuer and the“Co-Issuers”),Co-Issuer, each a newly formed special purpose vehicle, completed a $300,500,000 term debt securitization (the “CLO Transaction”).the CLO Transaction. The notesNotes offered by theCo-Issuers in the CLO Transaction (the “Notes”) are secured by a diversified portfolio of theCo-Issuers consisting primarily of middle market loans and participation interests in middle market loans and may also include some broadly syndicated loans. The CLO Transaction was executed through a private placement of: (i) $178,200,000 ofClass A-1 Senior Secured Floating Rate Notes, which bear interest at three-months LIBOR plus 1.73%per annum;annum; (ii) $25,000,000 ofClass A-2A Senior Secured Floating Rate Notes, which bear interest at LIBOR plus 2.45%per annum;annum; (iii) $9,950,000 ofClass A-2B Senior Secured Fixed Rate Notes, which bear interest at 4.23%per annum;
annum; (iv) $16,400,000 of Class B Secured Deferrable Floating Rate Notes, which bear interest at LIBOR plus 3.40%per annum;annum; and (v) $17,350,000 of Class C Secured Deferrable Floating Rate Notes, which bear interest at LIBOR plus 4.40%per annum.annum. The Notes are scheduled to mature on August 9, 2030.
In a series of contemporaneous transactions on the closing date of the CLO Transaction, (i) the Issuer, together with the issuance of certain of the Notes (including $16,400,000 of Class B Notes, $17,350,000 of Class C Notes and $53,600,000 of subordinated notes (the “Subordinated Notes”) to ABPCI Direct Lending Fund CLO VI Depositor LLC (the “Depositor”), a newly-formed wholly-owned subsidiary of the Fund, purchased the initial collateral obligations (which will settle pursuant to the Closing Merger, as such term is defined below) pursuant to a loan sale and contribution agreement dated as of August 9, 2019 (the “Loan Sale Agreement”), among the Fund, as seller, the Depositor, as intermediate seller, and the Issuer, as buyer, as amended or otherwise modified from time to time, (ii) the Issuer repaid all of the outstanding obligations owed to the lenders and agents of the Barclays Credit Facility, (iii) the Issuer made a cash distribution of approximately $8,400,000 to the Fund (in its capacity as sole member of ABPCIC Funding), (iv) the Fund caused ABPCIC Funding to merge into the Issuer with the Issuer being the entity surviving such merger (such merger transaction, the “Closing Merger”) and (v) the Issuer made any other payments due in connection with the repayment of the Barclays Credit Facility and the Closing Merger and paid any other fees and expenses expected to be paid as of such date. Any realized and unrealized gains and losses of ABPCIC Funding during the term of the Barclays Credit Facility are for the Issuer’s account (except to the extent previously distributed to the Fund). Under the terms of the Closing Merger, the rights and property of ABPCIC Funding (including the collateral obligations and eligible investments (if any) acquired by ABPCIC Funding and not distributed or sold as described above) immediately vested in the Issuer. In addition, the Issuer became liable for and subject, in the same manner as ABPCIC Funding, to all funding obligations on any revolving collateral obligations and delayed drawdown collateral obligations and all other liabilities and obligations related to the collateral obligations previously owned by ABPCIC Funding. Following the closing of the CLO Transaction, the Depositor is the 100% owner of the Subordinated Notes.
The Notes are the secured obligations of theCo-Issuers, and the indenture governing the Notes includes customary covenants and events of default. The Notes have not been, and will not be, registered under the Securities Act, of 1933, as amended, or any state securities or “blue sky” laws and may not be offered or sold in the United States absent registration with the Securities and Exchange CommissionSEC or an applicable exemption from registration.
The Adviser serves as collateral manager to the Issuer pursuant to a collateral management agreement between the Adviser and the Issuer (the “CollateralCollateral Management Agreement”).Agreement. For so long as the Adviser serves as collateral manager to the Issuer, the Adviser will elect to irrevocably waive any base management fee or subordinated interest to which it may be entitled under the Collateral Management Agreement. For the three and nine monthsperiod ended September 30, 2019,March 31, 2020, the Fund incurred a collateral management fee of $266,585 and $266,585, respectively,$459,059, which was voluntarily waived by the Adviser.
The interest rate and outstanding borrowings under the Notes as of September 30,March 31, 2020 were as follows:
Notes | Principal Amount | Interest rate at March 31, 2020 | Carrying Value | Fair Value | ||||||||||||
Class A-1 | $ | 178,200,000 | L+1.73% | $ | 176,185,732 | 168,371,201 | ||||||||||
Class A-2A | 25,000,000 | L+2.45% | 24,717,415 | 22,404,575 | ||||||||||||
Class A-2B | 9,950,000 | 4.23% | 9,811,154 | 9,452,679 | ||||||||||||
Class B | 16,400,000 | L+3.40% | 0 | 0 | * | |||||||||||
Class C | 17,350,000 | L+4.40% | 0 | 0 | * | |||||||||||
Subordinated Notes | 53,600,000 | N/A | 0 | 0 | * | |||||||||||
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Total | $ | 300,500,000 | $ | 210,714,301 | $ | 200,228,455 | ||||||||||
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* | Class B, Class C and Subordinated Notes have been eliminated in consolidation. |
The interest rate and outstanding borrowings under the Notes as of December 31, 2019 were as follows:
Notes | Principal Amount | Interest rate at September 30, 2019 | Outstanding Borrowings | Fair Value | Principal Amount | Interest rate at December 31, 2019 | Carrying Value | Fair Value | ||||||||||||||||||||||
Class A-1 | $ | 178,200,000 | L+1.73% | $ | 178,200,000 | $178,200,000 | $ | 178,200,000 | L+1.73% | $ | 175,875,031 | 178,195,723 | ||||||||||||||||||
Class A-2A | 25,000,000 | L+2.45% | 25,000,000 | 25,000,000 | 25,000,000 | L+2.45% | 24,673,826 | 24,889,050 | ||||||||||||||||||||||
Class A-2B | 9,950,000 | 4.23% | 9,950,000 | 9,950,000 | 9,950,000 | 4.23% | 9,787,776 | 9,916,279 | ||||||||||||||||||||||
Class B | 16,400,000 | L+3.40% | 0 | 0 | 16,400,000 | L+3.40% | 0 | 0 | * | |||||||||||||||||||||
Class C | 17,350,000 | L+4.40% | 0 | 0 | 17,350,000 | L+4.40% | 0 | 0 | * | |||||||||||||||||||||
Subordinated Notes | 53,600,000 | N/A | 0 | 0 | 53,600,000 | N/A | 0 | 0 | * | |||||||||||||||||||||
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Total | $ | 300,500,000 | $ | 213,150,000 | $213,150,000 | $ | 300,500,000 | $ | 210,336,633 | $ | 213,001,052 | |||||||||||||||||||
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* | Class B, Class C and Subordinated Notes have been eliminated in consolidation. |
For the three and nine months ended September 30, 2019,March 31, 2020, the components of interest expense related to the Notes were as follows:
For the Three and Nine Months Ended September 30, 2019 | ||||
Borrowing interest expense | $ | 1,276,850 | ||
Commitment fees | — | |||
Amortization of debt issuance costs | 138,100 | |||
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Total interest expenses | $ | 1,414,950 | ||
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Interest and borrowing expenses Amortization of debt issuance costs Total interest and borrowing expenses For the three Months Ended
March 31 2020 2019 $ 1,999,072 $ — 377,668 — $ 2,376,740 $ —
Asset Coverage
In accordance with the 1940 Act, the Fund has historically only been allowed to borrow amounts such that its “asset coverage,” as defined in the 1940 Act, is at least 200% after such borrowing, permitting the Fund to borrow up to one dollar for investment purposes for every one dollar of investor equity. “Asset coverage” generally refers to a company’s total assets, less all liabilities and indebtedness not represented by “senior securities,” as defined in the 1940 Act, divided by total senior securities representing indebtedness and, if applicable, preferred stock. “Senior securities” for this purpose includes borrowings from banks or other lenders, debt securities and preferred stock.
On March 23, 2018, the SBCAA was signed into law. The SBCAA, among other things, modifies the applicable provisions of the 1940 Act to reduce the required asset coverage ratio applicable to BDCs from 200% to 150% subject to certain approval, time and disclosure requirements (including either stockholder approval or approval of a majority of the directors who are not interested persons of the BDC and who have no financial interest in the proposal). On July 5, 2018, the Board voted to approve the adoption of the reduced asset coverage ratio and separately recommended that Investors approve the reduced asset coverage requirements at the 2018 annual meeting of stockholders. On September 26, 2018, at the Fund’s 2018 annual meeting of stockholders, the Fund’s stockholders approved the reduction of the required minimum asset coverage ratio applicable to the Fund from 200% to 150%, which took effect on September 27, 2018. This reduction in the required minimum asset coverage ratio increases the amount of debt that the Fund is permitted to incur, permitting the Fund to borrow up to two dollars for investment purposes for every one dollar of investor equity.
As of September 30, 2019,March 31, 2020, and December 31, 2018,2019, the Fund had total senior securities of $209,954,376$253,714,301 and $88,200,000,$229,836,633, respectively, consisting of borrowings under the Revolving Credit Facility and the Notes, and had asset coverage ratios of 159%167% and 172%163%, respectively.
Critical Accounting Policies
Valuation of InvestmentsInvestment
We measureThe Fund measures the value of ourits investments at fair value accordance with Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosure, or “ASC Topic 820,” issued by the Financial Accounting Standards Board, or “FASB.” Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The audit committee of ourthe Fund’s Board (the “Audit Committee”) is also responsible for assisting ourthe Fund’s Board in valuing investments that are not publicly traded or for which current market values are not readily available. Investments for which market quotations are readily available are valued using market quotations, which are generally obtained from independent pricing services, broker-dealers or market makers. With respect to portfolio investments for which market quotations are not readily available, ourthe Fund’s Board, with the assistance of the Adviser and its senior investment team and independent valuation firms, is responsible for determining in good faith the fair value in accordance with the valuation policy approved by ourthe Fund’s Board. If more than one valuation method is used to measure fair value, the results are evaluated and weighted, as appropriate, considering the reasonableness of the range indicated by those results. We considerThe Fund considers a range of fair values based upon the valuation techniques utilized and selectselects the value within that range that was most representative of fair value based on current market conditions as well as other factors the Adviser’s senior investment team considers relevant. Due to the unprecedented conditions surroundingCOVID-19 spreading throughout the United States and the significant disruptions to the economy that have resulted from such spread during the three months ended March 31, 2020, the Fund undertook supplemental reviews of the fair value of its portfolio with the assistance of a third-party independent valuation firm.
ASC Topic 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. ASC Topic 820 also provides guidance regarding a fair value hierarchy, which prioritizes information used to measure fair value and the effect of fair value measurements on earnings and provides for enhanced disclosures determined by the level within the hierarchy of information used in the valuation. In accordance with ASC Topic 820, these inputs are summarized in the three levels listed below:
Level 1 – Quoted prices in active markets for identical investments.
Level 2 – Other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3 – Significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments at the reporting date).
The level in the fair value hierarchy within which the fair value measurement is categorized in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require
significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. If a fair value measurement uses price data vendors or observable market price quotations, that measurement is a Level 2 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.
The determination of what constitutes “observable” requires significant judgment by the Fund. The Fund considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.
Because of the inherent uncertainty of valuation for all fair value investments and interests, the Board’s determination of fair value may differ from the values that would have been used had a ready market existed, or that could have been (or will be) realized in an actual sale, and such differences could be material.
The value of any investment on any valuation date is intended to represent the fair value of such investment on such date based upon the amount at which the investment could be exchanged between willing parties, other than in a forced liquidation sale, and reflects the Board’s determination of fair value using the methodology described herein. Any valuation of an investment may not reflect the actual amount received by the Fund upon the liquidation of such investment.
OurThe Fund’s investments will be primarily loans made to middle-market companies. These investments are mostly considered Level 3 assets under ASC Topic 820 because there is not usually a known or accessible market or market indices for these types of debt instruments and, thus, the Adviser’s senior investment team must estimate the fair value of these investment securities based on models utilizing unobservable inputs.
Investment Transactions, Realized/Unrealized Gains or Losses, and Income Recognition
Investment transactions are recorded on a trade-date basis. We measureThe Fund measures realized gains or losses from the repayment or sale of investments using the identified cost method. The amortized cost basis of investments represents the original cost adjusted for the accretion/amortization of discounts and premiums and upfront loan origination fees. We reportThe Fund reports changes in fair value of investments that are measured at fair value as a component of net change in unrealized appreciation (depreciation) on investments in the consolidated statement of operations.
Interest income, adjusted for amortization of market premium and accretion of market discount, is recorded on an accrual basis to the extent that we expectthe Fund expects to collect such amounts. Interest income on debt instruments is accrued and recognized for those issuers who are currently paying in full or expected to pay in full. For those issuers who are in default or expected to default, interest is not accrued and is only recognized when received. Interest income and expense include discounts accreted and premiums amortized on certain debt instruments as determined in good faith by the Adviser and calculated using the effective interest method. Loan origination fees, original issue discounts and market discounts or premiums are capitalized as part of the underlying cost of the investments and accreted or amortized over the life of the investment as interest income.
Management and Incentive Fees
WeThe Fund will accrue for the base management fee and incentive fee. The accrual for the incentive fee includes the recognition of the incentive fee on unrealized capital gains, even though such incentive fee is neither earned nor payable to the Adviser until the gains are both realized and in excess of unrealized depreciation on investments. The amount of capital gains incentive fee expense related to the hypothetical liquidation of the portfolio (and assuming no other changes in realized or unrealized gains and losses) would only become payable to the Adviser in the event of a complete liquidation of the Fund’s portfolio as of period end and the termination of the Amended and Restated Advisory Agreement on such date. Also, it should be noted that the capital gains incentive fee expense fluctuates with the Fund’s overall investment results.
Federal Income Taxes
We haveThe Fund has elected to be treated, and to qualify annually, as a RIC under Subchapter M of the Code. Generally, a RIC is not subject to federal income taxes on distributed income and gains if it distributes at least 90% of its net ordinary income and net short-term capital gains in excess of its net long-term capital losses, if any, to its stockholders. We intendThe Fund intends to distribute sufficient dividends to maintain ourits RIC status each year and we dothe Fund does not anticipate paying any material federal income taxes in the future.
Item 3. | Quantitative and Qualitative Disclosures |
We areThe Fund is subject to financial market risks, including changes in interest rates. To the extent that we borrowthe Fund borrows money to make investments, ourthe Fund’s net investment income is dependent upon the difference between the rate at which we borrowthe Fund borrows funds and the rate at which we investthe Fund invests these funds. In periods of rising interest rates, ourthe Fund’s cost of funds would increase, which may reduce ourthe Fund’s net investment income. Because we expectthe Fund expects that most of ourits investments will bear interest at floating rates, we anticipatethe Fund anticipates that an increase in interest rates would have a corresponding increase in ourthe Fund’s interest income that would likely offset any increase in ourthe Fund’s cost of funds and, thus, net investment income would not be reduced. However, there can be no assurance that a significant change in market interest rates will not have an adverse effect on ourthe Fund’s net investment income. In addition, U.S. and global capital markets and credit markets have experienced a higher level of stress due to the globalCOVID-19 pandemic, which has resulted in an increase in the level of volatility across such markets and a general decline in the value of the securities held by the Fund.
WeThe Fund will generally invest in illiquid loans and securities including debt and equity securities of middle-market companies. Because we expectthe Fund expects that there will not be a readily available market for many of the investments in ourthe Fund’s portfolio, we expectthe Fund expects to value many of ourits portfolio investments at fair value as determined in good faith by the Board using a documented valuation policy and a consistently applied valuation process. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of ourthe Fund’s investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.
In connection with theCOVID-19 pandemic, the U.S. Federal Reserve and other central banks have reduced certain interest rates and LIBOR has decreased. A prolonged reduction in interest rates will reduce the Fund’s gross investment income and could result in a decrease in the Fund’s net investment income if such decreases in LIBOR are not offset by a corresponding increase in the spread over LIBOR that the Fund earns on any portfolio investments, a decrease in the Fund’s operating expenses, including with respect to the Fund’s income incentive fee, or a decrease in the interest rate of the Fund’s floating interest rate liabilities tied to LIBOR.
Assuming that the consolidated statement of assets and liabilities as of September 30, 2019,March 31, 2020, were to remain constant and that wethe Fund took no actions to alter ourits existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates.
Change in Interest Rates | Increase (Decrease) in Interest Income | Increase (Decrease) in Interest Expense | Net Increase (Decrease) in Net Investment Income | Increase (Decrease) in Interest Income | Increase (Decrease) in Interest Expense | Net Increase (Decrease) in Net Investment Income | ||||||||||||||||||
Down 25 basis points | $ | (746,009 | ) | $ | (508,000 | ) | $ | (238,009 | ) | $ | (1,064,012 | ) | $ | (615,500 | ) | $ | (448,512 | ) | ||||||
Up 100 basis points | 2,984,038 | 2,032,000 | 952,038 | 4,256,049 | 2,462,000 | 1,794,049 | ||||||||||||||||||
Up 200 basis points | 5,868,076 | 4,064,000 | 1,804,076 | 8,512,098 | 4,924,000 | 3,588,098 | ||||||||||||||||||
Up 300 basis points | 8,952,113 | 6,096,000 | 2,856,113 | 12,768,147 | 7,386,000 | 5,382,147 |
In addition, although we dothe Fund does not currently intend to make investments that are denominated in a foreign currency, to the extent we do, weit does, the Fund will be subject to risks associated with changes in currency exchange rates. These risks include the possibility of significant fluctuations in the foreign currency markets, the imposition or modification of foreign exchange controls and potential illiquidity in the secondary market. These risks will vary depending upon the currency or currencies involved.
WeThe Fund may hedge against interest rate and currency exchange rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. While hedging activities may insulate usthe Fund against adverse changes in interest rates, they may also limit ourthe Fund’s ability to participate in benefits of lower interest rates with respect to ourthe Fund’s portfolio of investments with fixed interest rates.
Item 4. | Controls and Procedures |
As of the end of the period covered by this report, wethe Fund carried out an evaluation, under the supervision and with the participation of ourthe Fund’s management, including our Presidentthe Fund’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of ourthe Fund’s disclosure controls and procedures (as defined in Rule13a-1513a-15(e) and15d-15(e) under the Exchange Act). Based on that evaluation, ourthe Fund’s President and Chief Financial Officer have concluded that ourthe Fund’s current disclosure controls and procedures are effective in timely alerting them to material information relating to usthe Fund that is required to be disclosed by usthe Fund in the reports we fileit files or submitsubmits under the Exchange Act.
There have been no changes in ourthe Fund’s internal control over financial reporting that occurred during ourthe Fund’s most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, ourthe Fund’s internal control over financial reporting.
Item 1. | Legal Proceedings |
We areThe Fund is not currently subject to any material legal proceedings, nor, to ourthe Fund’s knowledge, is any material legal proceeding threatened against us.the Fund. From time to time, wethe Fund may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of ourthe Fund’s rights under contracts with ourits portfolio companies. OurThe Fund’s business is also subject to extensive regulation, which may result in regulatory proceedings against us.the Fund. While the outcome of these legal proceedings cannot be predicted with certainty, we dothe Fund does not expect that these proceedings will have a material effect upon ourits financial condition or results of operations.
Item 1A. | Risk Factors |
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in ourthe Fund’s Annual Report onForm 10-K for the fiscal year ended December 31, 2018,2019, which could materially affect ourthe Fund’s business, financial condition and/or operating results. The risks described in ourthe Fund’s Annual Report onForm 10-K are not the only risks we face.the Fund faces. Additional risks and uncertainties are not currently known to usthe Fund or that wethe Fund currently deemdeems to be immaterial also may materially adversely affect ourthe Fund’s business, financial condition and/or operating results. As of September 30, 2019,During the three months ended March 31, 2020, there have been no material changes from the risk factors set forth in ourthe Fund’s Annual Report onForm 10-K for the year ended December 31, 2018,2019 except for the following.
The Small Business Credit Availability Act allows usthe Fund to incur additional leverage, which may increase the risk of investing with us.the Fund.
On March 23, 2018, the SBCAA was signed into law. The SBCAA, among other things, modifies the applicable provisions of the 1940 Act to reduce the required asset coverage ratio applicable to BDCs from 200% to 150% subject to certain approval, time and disclosure requirements (including either stockholder approval or approval of a majority of the directors who are not interested persons of the BDC and who have no financial interest in the proposal). On July 5, 2018, the Board voted to approve the adoption of the reduced asset coverage ratio and separately recommended that Investors approve the reduced asset coverage requirements at the 2018 annual meeting of stockholders. On September 26, 2018, the Fund’s stockholders voted to approve the adoption of the reduced asset coverage ratio, effective September 27, 2018.
Increased leverage could increase the risks associated with investing in the Fund. For example, if the value of the Fund’s assets decreases, although the asset base and expected revenues would be larger because increased leverage would permit the Fund to acquire additional assets, leverage will cause the Fund’s net asset value to decline more sharply than it otherwise would have without leverage or with lower leverage. Similarly, any decrease in the Fund’s revenue would cause its net income to decline more sharply, on a relative basis, than it would have if the Fund had not borrowed or had borrowed less (although, as noted above, the Fund’s asset base and expected revenues would likely be larger). However, since the Fund already uses leverage in optimizing its investment portfolio, there are no material new risks associated with increased leverage other than the amount of the leverage.
If the Fund’s asset coverage ratio falls below the required limit, the Fund will not be able to incur additional debt until it is able to comply with the asset coverage ratio. This could have a material adverse effect on the Fund’s operations, and the Fund may not be able to make distributions to stockholders. The actual amount of leverage that the Fund employs will depend on the Board’s and the Adviser’s assessment of market and other factors at the time of any proposed borrowing. The Fund currently anticipates being able to obtain sufficient credit on acceptable terms, although the Fund can make no assurance that this will be the case or that it will remain such in the future.
The following table illustrates the effect of leverage on returns from an investment in the shares of common stock assuming that we employthe Fund employs leverage such that ourthe Fund’s asset coverage equals (1) ourthe Fund’s actual asset coverage as of September 30, 2019March 31, 2020 and (2) 150%, each at various annual returns, net of expenses and as of September 30, 2019.March 31, 2020.
The calculations in the tables below are hypothetical, and are provided for illustrative purposes only. Actual returns may be higher or lower than those appearing below.
Assumed Return on Our Portfolio (net of expenses) | (10.00 | )% | (5.00 | )% | 0.00 | % | 5.00 | % | 10.00 | % | ||||||||||
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Corresponding net return to holders of common stock assuming actual asset coverage as of September 30, 2019(1) | (18.5 | )% | (4.8 | )% | 8.9 | % | 22.5 | % | 36.2 | % | ||||||||||
Corresponding net return to holders of common stock assuming 150% asset coverage(2) | (19.8 | )% | (4.8 | )% | 10.2 | % | 25.2 | % | 40.2 | % | ||||||||||
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Assumed Return on the Fund’s Portfolio (net of expenses) | (10.00 | )% | (5.00 | )% | 0.00 | % | 5.00 | % | 10.00 | % | ||||||||||
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Corresponding net return to holders of common stock assuming actual asset coverage as of March 31, 2020(1) | (18.6 | )% | (5.9 | )% | 6.8 | % | 19.5 | % | 32.2 | % | ||||||||||
Corresponding net return to holders of common stock assuming 150% asset coverage(2) | (21.2 | )% | (6.2 | )% | 8.8 | % | 23.8 | % | 38.8 | % | ||||||||||
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(1) | Assumes |
(2) | Assumes |
Uncertainty relating toEconomic recessions or downturns could impair the LIBOR calculation process may adversely affectFund’s portfolio companies and harm the value of our portfolioFund’s operating results.
Certain of the LIBOR-indexed, floating-rate debt securities in ourFund’s portfolio companies may be susceptible to economic downturns or recessions and may be unable to repay the cost of our borrowings.
On July 27, 2017,Fund’s loans during these periods. Therefore, during these periods the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is unclear if at that time whether or not LIBOR will cease to exist or if new methods of calculating LIBOR will be established such that it continues to exist after 2021. In addition, in April 2018, the Federal Reserve System, in conjunction with the Alternative Reference Rates Committee, announced the replacement of LIBOR with a new index, calculated by short-term repurchase agreements collateralized by U.S. Treasury securities, called the Secured Overnight Financing Rate, or the “SOFR.” At this time, it is not possible to predict whether SOFR will attain market traction as a LIBOR replacement. Additionally, the future of LIBOR at this time is uncertain. Potential changes, or uncertainty related to such potential changes,Fund’s non-performing assets may adversely affect the market for LIBOR-based securities, including our portfolio of LIBOR-indexed, floating-rate debt securities, or the cost of our borrowings. In addition, 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 for LIBOR-based securities, includingand the value of the LIBOR-indexed,Fund’s portfolio may decrease if the Fund is required to write down the values of its investments. Adverse economic conditions also may decrease the value of collateral securing some of the Fund’s loans and the value of the Fund’s equity investments.
The Fund principally invests in floating-rate debt securitiesassets and incurs indebtedness on a floating-rate basis as well, and intends to incur indebtedness, when possible, on the same floating base rate applicable to the assets in our portfolio, orwhich it invests, which is currently LIBOR. Regulators in the U.K. have set a 2021 deadline for a transition away from LIBOR. The discontinuation of LIBOR creates uncertainty around the indebtedness the Fund will incur on a floating-rate basis in the future. Because the base rate of the Fund’s assets and indebtedness are expected to be same and will therefore fluctuate on largely the same basis, the increased cost of our borrowings. Additionally,the Fund’s indebtedness (resulting from rising interest rates in the event of a recession or downturn) would be expected to be accompanied by increased revenues resulting from the same rising interest rates on the Fund’s floating rate assets. Nonetheless, economic slowdowns or recessions could lead to financial losses in the Fund’s portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase the Fund’s funding costs, limit the Fund’s access to the capital markets or result in a decision by lenders not to extend credit to the Fund. Furthermore, while most of the Fund’s investments are not publicly traded, applicable accounting standards require the Fund to assume as part of its valuation process that the Fund’s investments are sold in a principal market to market participants (even if LIBOR ceasesthe Fund plans on holding an investment through its maturity) and impairments of the market values or fair market values of the Fund’s investments, even if unrealized, must be reflected in the Fund’s financial statements for the applicable period, which could result in significant reductions to exist, wethe Fund’s net asset value for the period. These events could prevent the Fund from increasing investments and harm the Fund’s operating results.
The recent global outbreak ofCOVID-19 has disrupted economic markets and the prolonged economic impact is uncertain. Some economists and major investment banks have expressed concern that the continued spread ofCOVID-19 globally could lead to a world-wide economic downturn. Many manufacturers of goods in China and other countries in Asia have seen a downturn in production due to the suspension of business and temporary closure of factories in an attempt to curb the spread of the illness. As the impact ofCOVID-19 spreads to other parts of the world, similar impacts may needoccur with respect to renegotiateaffected countries. Similarly, between 2008 and 2009, instability in the global capital markets resulted in disruptions in liquidity in the debt capital markets, significant write-offs in the financial services sector, there-pricing of credit risk in the broadly syndicated credit market and the failure of major domestic and international financial institutions. In particular, the financial services sector was negatively impacted by significant write-offs as the value of the assets held by financial firms declined, impairing their capital positions and abilities to lend and invest. While market conditions have largely recovered from the events of 2008 and 2009, there have been continuing periods of volatility. There can be no assurance that market conditions will not worsen in the future.
A portfolio company’s failure to satisfy financial or operating covenants imposed by the Fund or other lenders could lead to defaults and, potentially, acceleration of the time when the loans are due and foreclosure on its assets representing collateral for its obligations, which could trigger cross defaults under other agreements extending beyond 2021and jeopardize the Fund’s portfolio company’s ability to meet its obligations under the debt investments that the Fund holds and the value of any equity securities the Fund owns. The Fund may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with oura defaulting portfolio company. Any extension or restructuring of the Fund’s loans could adversely affect the Fund’s cash flow. In addition, if one of the Fund’s portfolio companies were to go bankrupt, even though the Fund may have structured its interest as senior debt, depending on the facts and circumstances, including the extent to which the Fund actually provided managerial assistance to that utilize LIBOR asportfolio company, a factor in determiningbankruptcy courtmight re-characterize the interest rate Fund’s debt holding and certain of our existing credit facilities to replace LIBOR with the new standard that is established. The potential effectsubordinate all or a portion of thephase-out or replacement of LIBOR on our cost Fund’s claim to those other creditors.
The Fund is currently operating in a period of capital markets disruption and neteconomic uncertainty.
The U.S. capital markets have experienced extreme volatility and disruption following the global outbreak ofCOVID-19 that began in December 2019. Some economists and major investment income cannot yetbanks have expressed concern that the continued spread of the virus globally could lead to a world-wide economic downturn. Disruptions in the capital markets have increased the spread between the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of the capital markets. These and future market disruptions and/or illiquidity would be determined.expected to have an adverse effect on the Fund’s business, financial condition, results of operations and cash flows. Unfavorable economic conditions also would be expected to increase the Fund’s funding costs, limit the Fund’s access to the capital markets or result in a decision by lenders not to extend credit to the Fund. These events have limited and could continue to limit the Fund’s investment originations, limit the Fund’s ability to grow and have a material negative impact on the Fund’s operating results and the fair values of the Fund’s debt and equity investments.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Except as previously reported by the Fund on its current reports on Form8-K, wethe Fund did not sell any securities during the period covered by this Quarterly Report that were not registered under the Securities Act.
Item 3. | Defaults Upon Senior Securities |
None.
Item 4. | Mine Safety Disclosure |
Not applicable.
Item 5. | Other Information |
(a) On November 13, 2019, followingDue to the saleoutbreak of, and local, state and federal government responses to, theCOVID-19 pandemic, the Fund availed itself of an extension to file the Quarterly Report, originally due on May 15, 2020 by AXA S.A.filing a Current Report on Form8-K on May 8, 2020. In taking such action, the Fund relied on the order issued by the SEC on March 25, 2020 (which extended and superseded a prior order issued on March 4, 2020), pursuant to Section 36 of the Exchange Act (ReleaseNo. 34-88465) (the “COVID-19 Filing Extension Order”), regarding exemptions granted to certain public companies. The COVID-19 Filing Extension Order allows a registrant up to an additional 45 days after the original due date of certain reports required to be filed with the SEC if a registrant’s ability to file such report timely is affected due toCOVID-19.
Due to the unprecedented conditions surroundingCOVID-19 spreading throughout the United States and the significant disruptions to the economy that have resulted from such spread, the Fund undertook additional review of the fair value of its minority stake of AXA Equitable Holdings, Inc., an indirect holderportfolio with the assistance of a majority ofthird-party independent valuation firm. Given the membership interests in AllianceBernstein L.P., the direct parent of Alliance Capital Management LLC, the direct parent of the Adviser, via an initial public offering and listing of AXA Equitable’s shares of common stock on the New York Stock Exchange, the Fund entered into a new investment advisory agreement (the “Amended and Restated Advisory Agreement”) with the Adviser, replacing the Advisory Agreement (which was terminated concurrently with the effectiveness of the Amended and Restated Advisory Agreement).
The Amended and Restated Advisory Agreement is identical in all material respects to the Advisory Agreement, except that (i) it reflects new effective and termination dates and (ii) the income-based incentive fee has been revised tocalculate Pre-incentive Fee Net Investment Income, which is expressed as a rate of return on the valuetime taken for this additional review of the Fund’s net assets, usingportfolio investments, the Fund’s average monthly net assets aspreparation of the first dayQuarterly Report was disrupted. As such, the Fund relied on the COVID-19 Filing Extension Order and made use of each month inthe45-day grace period provided by the calendar quarter, rather than usingCOVID-19 Filing Extension Order to delay the Fund’s net assets at the endfiling of the immediately preceding fiscal quarter.
The Amended and Restated Advisory Agreement will remain in effect initially for two years, and thereafter will continue automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the affirmative vote of a majority of the Board, or by the affirmative vote of a majority of the outstanding voting securities of the Fund, and (ii) the affirmative vote of a majority of the Fund’s directors who are not “interested persons,” as defined in the 1940 Act (the “Independent Directors”). The Amended and Restated Advisory Agreement may be terminated at any time, without the payment of any penalty, upon not more than 60 days’ written notice by: (i) the affirmative vote of a majority of the outstanding voting securities of the Fund, (ii) the affirmative vote of a majority of the Board, including a majority of the Independent Directors, or (iii) the Adviser. The Amended and Restated Advisory Agreement will automatically terminate in the event of its “assignment” (as such term is defined for purposes of Section 15(a)(4) of the 1940 Act).
The Amended and Restated Advisory Agreement was approved by the Board (including all of the Independent Directors) on March 28, 2019, and by the Fund’s stockholders at a meeting held on September 26, 2019.
The description of the Advisory Agreement contained in this Part II, Item 5 does not purport to be complete and is qualified in its entirety by reference to the Advisory Agreement, attached to this Quarterly Report on Form10-Q as Exhibit 10.1.Report.
Item 6. | Exhibits |
The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC:
* | Filed herewith |
Pursuant to the requirements of 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.
AB PRIVATE CREDIT INVESTORS CORPORATION | ||||||
Date: | By: | /s/ J. Brent Humphries | ||||
J. Brent Humphries | ||||||
President and Chief Executive Officer | ||||||
(Principal Executive Officer) | ||||||
Date: | By: | /s/ Wesley Raper | ||||
Wesley Raper | ||||||
Chief Financial Officer and Treasurer | ||||||
(Principal Financial and Accounting Officer) |