UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31,September 30, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 814-01351
STEELE CREEK CAPITAL CORPORATION
| Maryland | 85-1327288 | |
(State or other jurisdiction of | (I.R.S. Employer | |
210 S. College Street, Suite 1690, Charlotte, | 28244 | |
| (Address of principal executive offices) | (Zip Code) |
(704) 343-6011
(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 | ||
| None | None | None |
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001 per share
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 Regulation 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, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-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 Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of May 16,November 10, 2022, the registrant had 5,137,1875,577,245 shares of common stock, $0.001 par value per share, outstanding.
STEELE CREEK CAPITAL CORPORATION
TABLE OF CONTENTS
i
Part I. Financial Information
Item 1. Consolidated Financial Statements
Steele Creek Capital Corporation
Consolidated Statements of Assets and Liabilities
(in thousands, except per share data)
| March 31, 2022 | December 31, 2021 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Investments: | ||||||||
| Non-controlled/non-affiliate company investments, at fair value (amortized cost of $129,166 and $106,443, respectively) | $ | 128,455 | $ | 106,997 | ||||
| Cash | 7,515 | 8,449 | ||||||
| Receivable for investments sold | 29,798 | 62,363 | ||||||
| Prepaid expenses and other assets | 982 | 151 | ||||||
| Interest receivable | 336 | 310 | ||||||
| Total assets | $ | 167,086 | $ | 178,270 | ||||
| Liabilities | ||||||||
| Credit facility | 76,000 | 70,380 | ||||||
| Payable for investments purchased | 36,824 | 58,872 | ||||||
| Management fees payable | 220 | 269 | ||||||
| Interest payable | 4 | 11 | ||||||
| Incentive fees payable | - | 309 | ||||||
| Accounts payable and accrued expenses | 386 | 312 | ||||||
| Directors’ fees payable | 17 | 17 | ||||||
| Distributions payable | 800 | 1,107 | ||||||
| Total liabilities | 114,251 | 131,277 | ||||||
| Commitments and contingencies (Note 8) | ||||||||
| Net Assets: | ||||||||
| Common shares, $0.001 par value, 4,964,238 shares authorized, 4,964,238 and 4,311,321 shares issued and outstanding, respectively | $ | 5 | $ | 4 | ||||
| Paid-in-capital in excess of par value | 53,739 | 46,633 | ||||||
| Total distributable earnings | (909 | ) | 356 | |||||
| Total net assets | $ | 52,835 | $ | 46,993 | ||||
| Total liabilities and net assets | $ | 167,086 | $ | 178,270 | ||||
| Net asset value per share | $ | 10.64 | $ | 10.90 | ||||
| September 30, 2022 | December 31, 2021 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Investments: | ||||||||
| Non-controlled/non-affiliate company investments, at fair value (amortized cost of $137,353 and $106,443, respectively) | $ | 127,502 | $ | 106,997 | ||||
| Cash | 14,288 | 8,449 | ||||||
| Receivable for investments sold | 3,075 | 62,363 | ||||||
| Prepaid expenses and other assets | 165 | 151 | ||||||
| Interest receivable | 309 | 310 | ||||||
| Total assets | $ | 145,339 | $ | 178,270 | ||||
| Liabilities | ||||||||
| Credit facility | 84,650 | 70,380 | ||||||
| Payable for investments purchased | 10,080 | 58,872 | ||||||
| Management fees payable | 324 | 269 | ||||||
| Interest payable | 12 | 11 | ||||||
| Incentive fees payable | - | 309 | ||||||
| Accounts payable and accrued expenses | 541 | 312 | ||||||
| Directors’ fees payable | - | 17 | ||||||
| Distributions payable | 772 | 1,107 | ||||||
| Total liabilities | 96,379 | 131,277 | ||||||
| Commitments and contingencies (Note 8) | ||||||||
| Net Assets: | ||||||||
| Common shares, $0.001 par value, 5,492,264 shares authorized, 5,492,264 and 4,311,321 shares issued and outstanding, respectively | $ | 5 | $ | 4 | ||||
| Paid-in-capital in excess of par value | 58,948 | 46,633 | ||||||
| Total distributable (deficit) earnings | (9,993 | ) | 356 | |||||
| Total net assets | $ | 48,960 | $ | 46,993 | ||||
| Total liabilities and net assets | $ | 145,339 | $ | 178,270 | ||||
| Net asset value per share | $ | 8.91 | $ | 10.90 | ||||
The accompanying notes are an integral part of these consolidated financial statements
Steele Creek Capital Corporation
Consolidated Statement of Operations
(unaudited)
(in thousands, except per share data)
| Three months ended March 31, 2022 | Three months ended March 31, 2021 | |||||||
| Investment income: | ||||||||
| Non-controlled/non-affiliate company investments: | ||||||||
| Interest income | $ | 1,471 | $ | 894 | ||||
| Other income | - | 9 | ||||||
| Total investment income | 1,471 | 903 | ||||||
| Expenses: | ||||||||
| Management fees | 431 | 289 | ||||||
| Interest and debt financing expenses | 346 | 238 | ||||||
| Professional fees | 78 | 159 | ||||||
| Incentive fees | (110 | ) | 110 | |||||
| Offering costs - paid by Moelis Asset | - | 60 | ||||||
| Administration expenses | 48 | 38 | ||||||
| Directors’ fees | 20 | 20 | ||||||
| Custody fees | 7 | 7 | ||||||
| Organizational costs | - | 36 | ||||||
| Organizational costs - paid by Moelis Asset | - | 24 | ||||||
| Other general and administrative expenses | 169 | 49 | ||||||
| Total expenses | 989 | 1,030 | ||||||
| Less: management fees waived | (210 | ) | (115 | ) | ||||
| Incentive fee waiver reversal | - | (65 | ) | |||||
| Net expenses | 779 | 850 | ||||||
| Net investment income | 692 | 53 | ||||||
| Realized and unrealized (loss) gain on investments: | ||||||||
| Net realized gain on non-controlled/non-affiliate company investments | 107 | 728 | ||||||
| Net change in unrealized (depreciation) appreciation on non-controlled/non-affiliate company investments | (1,265 | ) | 3 | |||||
| Total net realized and unrealized (loss) gain on investments | (1,158 | ) | 731 | |||||
| Net (decrease) increase in net assets resulting from operations | $ | (466 | ) | $ | 784 | |||
| Per share data: | ||||||||
| Net investment income per share - basic and diluted | $ | 0.14 | $ | 0.02 | ||||
| Net (decrease) increase in net assets resulting from operations per share - basic and diluted | $ | (0.10 | ) | $ | 0.30 | |||
| Weighted average shares outstanding - basic and diluted | 4,802 | 2,652 | ||||||
| Three months ended September 30, 2022 | Nine months ended September 30, 2022 | Three months ended September 30, 2021 | Nine months ended September 30, 2021 | |||||||||||||
| Investment income: | ||||||||||||||||
| Non-controlled/non-affiliate company investments: | ||||||||||||||||
| Interest income | $ | 2,268 | $ | 5,545 | $ | 1,280 | $ | 3,074 | ||||||||
| Other income | - | - | - | 14 | ||||||||||||
| Total investment income | 2,268 | 5,545 | 1,280 | 3,088 | ||||||||||||
| Expenses: | ||||||||||||||||
| Management fees | 385 | 1,231 | 533 | 1,272 | ||||||||||||
| Interest and debt financing expenses | 826 | 1,670 | 339 | 850 | ||||||||||||
| Professional fees | 97 | 254 | 103 | 401 | ||||||||||||
| Incentive fees | - | (110 | ) | 66 | 271 | |||||||||||
| Offering costs - paid by Moelis Asset | - | - | 12 | 111 | ||||||||||||
| Administration expenses | 47 | 150 | 38 | 113 | ||||||||||||
| Directors’ fees | 20 | 60 | 18 | 60 | ||||||||||||
| Custody fees | 14 | 29 | 8 | 23 | ||||||||||||
| Organizational costs | - | - | - | 37 | ||||||||||||
| Organizational costs - paid by Moelis Asset | - | - | - | 24 | ||||||||||||
| Other general and administrative expenses | 203 | 618 | 130 | 184 | ||||||||||||
| Total expenses | 1,592 | 3,902 | 1,247 | 3,346 | ||||||||||||
| Less: management fees waived | (62 | ) | (543 | ) | (259 | ) | (590 | ) | ||||||||
| Incentive fee waiver reversal | - | - | 135 | - | ||||||||||||
| Net expenses | 1,530 | 3,359 | 1,123 | 2,756 | ||||||||||||
| Net investment income | 738 | 2,186 | 157 | 332 | ||||||||||||
| Realized and unrealized (loss) gain on investments: | ||||||||||||||||
| Net realized gain on non-controlled/non-affiliate company investments | 91 | 257 | 562 | 1,887 | ||||||||||||
| Net change in unrealized (depreciation) appreciation on non-controlled/non-affiliate company investments | (1,710 | ) | (10,406 | ) | (121 | ) | (81 | ) | ||||||||
| Total net realized and unrealized (loss) gain on investments | (1,619 | ) | (10,149 | ) | 441 | 1,806 | ||||||||||
| Net (decrease) increase in net assets resulting from operations | $ | (881 | ) | $ | (7,963 | ) | $ | 598 | $ | 2,138 | ||||||
| Per share data: | ||||||||||||||||
| Net investment income per share - basic and diluted | $ | 0.14 | $ | 0.43 | $ | 0.04 | $ | 0.10 | ||||||||
| Net (decrease) increase in net assets resulting from operations per share - basic and diluted | $ | (0.16 | ) | $ | (1.55 | ) | $ | 0.15 | $ | 0.66 | ||||||
| Weighted average shares outstanding - basic and diluted | 5,426 | 5,131 | 3,929 | 3,225 | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
Steele Creek Capital Corporation
Consolidated Statements of Changes in Net Assets
(unaudited)
(in thousands, except per share data)
| Three months ended March 31, 2022 | Three months ended March 31, 2021 | |||||||
| Operations | ||||||||
| Net investment income | $ | 692 | $ | 53 | ||||
| Net realized gain on investments | 107 | 728 | ||||||
| Net change in unrealized (depreciation) appreciation on investments | (1,265 | ) | 3 | |||||
| Net (decrease) increase in net assets resulting from operations | (466 | ) | 784 | |||||
| Distributions to Stockholders | ||||||||
| Distributions of realized income | (800 | ) | (436 | ) | ||||
| Capital Share Transactions | ||||||||
| Issuance of common shares | 7,108 | 800 | ||||||
| Organizational and offering costs | ||||||||
| Contributions for organizational and offering costs | - | 36 | ||||||
| Deferred offering costs | - | 47 | ||||||
| - | 83 | |||||||
| Net Assets | ||||||||
| Net increase in net assets during the period | 5,842 | 1,231 | ||||||
| Net assets at beginning of period | 46,993 | 28,340 | ||||||
| Net assets at end of period | 52,835 | 29,571 | ||||||
| Capital Share Activity | ||||||||
| Issuance of common shares | 653 | 73 | ||||||
| Shares issued and outstanding at beginning of period | 4,311 | 2,633 | ||||||
| Shares issued and outstanding at end of period | 4,964 | 2,706 | ||||||
| Three months ended September 30, 2022 | Nine months ended September 30, 2022 | Three months ended September 30, 2021 | Nine months ended September 30, 2021 | |||||||||||||
| Operations | ||||||||||||||||
| Net investment income | $ | 738 | $ | 2,186 | $ | 157 | $ | 332 | ||||||||
| Net realized gain on investments | 91 | 257 | 562 | 1,887 | ||||||||||||
| Net change in unrealized (depreciation) appreciation on investments | (1,710 | ) | (10,406 | ) | (121 | ) | (81 | ) | ||||||||
| Net (decrease) increase in net assets resulting from operations | (881 | ) | (7,963 | ) | 598 | 2,138 | ||||||||||
| Distributions to Stockholders | ||||||||||||||||
| Distributions of realized income | (772 | ) | (2,386 | ) | (652 | ) | (1,552 | ) | ||||||||
| Capital Share Transactions | ||||||||||||||||
| Issuance of common shares | 2,026 | 12,316 | 2,419 | 15,026 | ||||||||||||
| Organizational and offering costs | ||||||||||||||||
| Contributions for organizational and offering costs | - | - | - | 36 | ||||||||||||
| Deferred offering costs | - | - | 13 | 98 | ||||||||||||
| - | - | 13 | 134 | |||||||||||||
| Net Assets | ||||||||||||||||
| Net (decrease) increase in net assets during the period | 373 | 1,967 | 2,378 | 15,746 | ||||||||||||
| Net assets at beginning of period | 48,587 | 46,993 | 41,708 | 28,340 | ||||||||||||
| Net assets at end of period | 48,960 | 48,960 | 44,086 | 44,086 | ||||||||||||
| Capital Share Activity | ||||||||||||||||
| Issuance of common shares | 217 | 1,181 | 220 | 1,369 | ||||||||||||
| Shares issued and outstanding at beginning of period | 5,275 | 4,311 | 3,782 | 2,633 | ||||||||||||
| Shares issued and outstanding at end of period | 5,492 | 5,492 | 4,002 | 4,002 | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
Steele Creek Capital Corporation
Consolidated Statement of Cash Flows
(unaudited)
(in thousands, except per share data)
| Three months ended March 31, 2022 | Three Months ended March 31, 2021 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (decrease) increase in net assets resulting from operations | $ | (466 | ) | $ | 784 | |||
| Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities | ||||||||
| Purchase of investments | (72,716 | ) | (130,232 | ) | ||||
| Proceeds from sales of investments and paydowns | 50,157 | 127,715 | ||||||
| Payment in-kind interest income | - | (1 | ) | |||||
| Adjustment from Moelis Asset for organizational and offering costs | - | 36 | ||||||
| Amortization of premium/accretion of discount, net | (57 | ) | (46 | ) | ||||
| Net realized (gain) loss on investments | (107 | ) | (728 | ) | ||||
| Net change in unrealized depreciation (appreciation) on investments | 1,265 | (3 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Receivable for investments sold | 32,565 | (28,185 | ) | |||||
| Prepaid expenses and other assets | (831 | ) | 62 | |||||
| Interest receivable | (26 | ) | (64 | ) | ||||
| Payable for investments purchased | (22,048 | ) | 13,116 | |||||
| Management fees payable | (49 | ) | 174 | |||||
| Interest payable | (7 | ) | (36 | ) | ||||
| Inventive fees payable | (309 | ) | 44 | |||||
| Accounts payable and accrued expenses | 74 | (7 | ) | |||||
| Directors' fees payable | - | 20 | ||||||
| Net cash used in operating activities | (12,555 | ) | (17,351 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common shares | 7,108 | 800 | ||||||
| Proceeds from issuance of debt | 5,620 | 17,200 | ||||||
| Payments of offering costs | - | 47 | ||||||
| Stockholder distributions paid | (1,107 | ) | (425 | ) | ||||
| Net cash provided by financing activities | 11,621 | 17,622 | ||||||
| Net decrease in Cash | (934 | ) | 271 | |||||
| Cash, beginning of period | 8,449 | 3,206 | ||||||
| Cash, end of period | $ | 7,515 | $ | 3,477 | ||||
| Supplemental disclosure of Cash Flow Information: | ||||||||
| Operating Activities: | ||||||||
| Interest paid | 353 | 274 | ||||||
| Nine months ended September 30, 2022 | Nine months ended September 30, 2021 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (decrease) increase in net assets resulting from operations | $ | (7,963 | ) | $ | 2,138 | |||
| Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities | ||||||||
| Purchase of investments | (133,566 | ) | (467,840 | ) | ||||
| Proceeds from sales of investments and paydowns | 103,058 | 429,632 | ||||||
| Payment in-kind interest income | - | (6 | ) | |||||
| Adjustment from Moelis Asset for organizational and offering costs | - | 36 | ||||||
| Amortization of premium/accretion of discount, net | (146 | ) | (112 | ) | ||||
| Net realized (gain) on investments | (257 | ) | (1,887 | ) | ||||
| Net change in unrealized depreciation on investments | 10,406 | 81 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Receivable for investments sold | 59,288 | (77,076 | ) | |||||
| Prepaid expenses and other assets | (14 | ) | 60 | |||||
| Interest receivable | 1 | (229 | ) | |||||
| Payable for investments purchased | (48,792 | ) | 61,993 | |||||
| Management fees payable | 55 | 274 | ||||||
| Interest payable | 1 | 76 | ||||||
| Incentive fees payable | (309 | ) | 271 | |||||
| Accounts payable and accrued expenses | 229 | 182 | ||||||
| Directors’ fees payable | (17 | ) | 1 | |||||
| Net cash used in operating activities | (18,026 | ) | (52,406 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common shares | 12,316 | 15,026 | ||||||
| Proceeds from issuance of debt | 14,270 | 39,550 | ||||||
| Payments of offering costs | - | 98 | ||||||
| Stockholder distributions paid | (2,721 | ) | (1,326 | ) | ||||
| Net cash provided by financing activities | 23,865 | 53,348 | ||||||
| Net increase in Cash | 5,839 | 942 | ||||||
| Cash, beginning of period | 8,449 | 3,206 | ||||||
| Cash, end of period | $ | 14,288 | $ | 4,148 | ||||
| Supplemental disclosure of Cash Flow Information: | ||||||||
| Operating Activities: | ||||||||
| Interest paid | $ | 1,669 | $ | 774 | ||||
The accompanying notes are an integral part of these consolidated financial statements
STEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
March 31,September 30, 2022
(unaudited)
(in thousands, except per share data)
| Description (1) (2) | Maturity | Interest Rate (3) | Basis Point Spread Above Index (3) | Interest Rate Floor / Base Rate (3) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (4) | |||||||||||||||||||||
| Non-controlled/Non-Affiliate Investments | |||||||||||||||||||||||||||||
| Term Floating Rate Loans – 243.1% of Shareholder’s Equity (4) | |||||||||||||||||||||||||||||
| Aerospace & Defense | |||||||||||||||||||||||||||||
| Amentum Government Services Holdings LLC | 2/15/2029 | 4.50 | % | S + 4.00% | 0.50 | % | 866 | $ | 862 | $ | 863 | 1.6 | % | ||||||||||||||||
| HDT Holdco, Inc. | 6/30/2027 | 6.50 | % | L + 5.75% | 0.75 | % | 548 | 533 | 533 | 1.0 | % | ||||||||||||||||||
| MAG DS Corp. | 4/1/2027 | 6.50 | % | L + 5.50% | 1.00 | % | 933 | 895 | 849 | 1.6 | % | ||||||||||||||||||
| Peraton Corp. | 2/1/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 972 | 968 | 967 | 1.8 | % | ||||||||||||||||||
| Propulsion (BC) Midco SARL | 2/12/2029 | 4.50 | % | S + 4.00% | 0.50 | % | 1,000 | 995 | 997 | 1.9 | % | ||||||||||||||||||
| Setanta Aircraft Leasing DAC | 11/2/2028 | 3.01 | % | L + 2.00% | 1.01 | % | 1,000 | 998 | 987 | 1.9 | % | ||||||||||||||||||
| Spirit Aerosystems, Inc. (fka Mid-Western Aircraft Systems, Inc and Onex Wind Finance LP.) | 1/15/2025 | 4.25 | % | L + 3.75% | 0.50 | % | 991 | 988 | 992 | 1.9 | % | ||||||||||||||||||
| Vertex Aerospace Services Corp. | 12/6/2028 | 4.75 | % | L + 4.00% | 0.75 | % | 1,000 | 995 | 998 | 1.9 | % | ||||||||||||||||||
| Total Aerospace & Defense | 7,234 | 7,186 | 13.6 | % | |||||||||||||||||||||||||
| Automotive | |||||||||||||||||||||||||||||
| Autokiniton US Holdings, Inc. | 4/6/2028 | 5.00 | % | L + 4.50% | 0.50 | % | 1,495 | 1,487 | 1,477 | 2.8 | % | ||||||||||||||||||
| First Brands Group, LLC | 3/30/2027 | 6.00 | % | L + 5.00% | 1.00 | % | 995 | 995 | 990 | 1.8 | % | ||||||||||||||||||
| Holley Inc. | 11/17/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 855 | 856 | 846 | 1.6 | % | ||||||||||||||||||
| Holley Inc. (6) (7) | 11/17/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 143 | 43 | 41 | 0.1 | % | ||||||||||||||||||
| Total Automotive | 3,381 | 3,354 | 6.3 | % | |||||||||||||||||||||||||
| Banking, Finance, Insurance & Real Estate | |||||||||||||||||||||||||||||
| AssuredPartners, Inc. | 2/12/2027 | 4.00 | % | S + 3.50% | 0.50 | % | 1,000 | 998 | 991 | 1.9 | % | ||||||||||||||||||
| Baldwin Risk Partners, LLC | 10/14/2027 | 4.00 | % | L + 3.50% | 0.50 | % | 1,105 | 1,092 | 1,097 | 2.1 | % | ||||||||||||||||||
| DRW Holdings, LLC | 2/24/2028 | 4.21 | % | L + 3.75% | 0.46 | % | 893 | 889 | 886 | 1.7 | % | ||||||||||||||||||
| FinCo I LLC | 6/27/2025 | 2.96 | % | L + 2.50% | 0.46 | % | 493 | 492 | 489 | 0.9 | % | ||||||||||||||||||
| HIG Finance 2 Limited | 11/12/2027 | 4.00 | % | L + 3.25% | 0.75 | % | 1,485 | 1,485 | 1,471 | 2.8 | % | ||||||||||||||||||
| IMA Financial Group, Inc. | 11/1/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 499 | 493 | 494 | 0.9 | % | ||||||||||||||||||
| Jane Street Group, LLC | 1/26/2028 | 3.21 | % | L + 2.75% | 0.46 | % | 992 | 983 | 981 | 1.9 | % | ||||||||||||||||||
| KREF Holdings X LLC | 9/1/2027 | 4.00 | % | L + 3.50% | 0.50 | % | 499 | 499 | 496 | 0.9 | % | ||||||||||||||||||
| LendingTree, Inc. (6) | 9/15/2028 | 4.75 | % | L + 4.00% | 0.75 | % | 1,500 | (14 | ) | (12 | ) | 0.0 | % | ||||||||||||||||
| Newport Parent, Inc. | 12/10/2027 | 7.50 | % | L + 6.50% | 1.00 | % | 484 | 468 | 480 | 0.9 | % | ||||||||||||||||||
| Paysafe Group Holdings II Limited | 6/24/2028 | 3.25 | % | L + 2.75% | 0.50 | % | 997 | 963 | 956 | 1.8 | % | ||||||||||||||||||
| Resolute Investment Managers, Inc. | 4/30/2024 | 5.25 | % | L + 4.25% | 1.00 | % | 709 | 704 | 705 | 1.3 | % | ||||||||||||||||||
| Russell Investments US Institutional Holdco, Inc. | 5/30/2025 | 4.50 | % | L + 3.50% | 1.00 | % | 1,000 | 992 | 989 | 1.9 | % | ||||||||||||||||||
| Ryan Specialty Group, LLC | 9/1/2027 | 3.75 | % | L + 3.00% | 0.75 | % | 495 | 497 | 492 | 0.9 | % | ||||||||||||||||||
| Total Banking, Finance, Insurance & Real Estate | 10,541 | 10,515 | 19.9 | % | |||||||||||||||||||||||||
| Capital Equipment | |||||||||||||||||||||||||||||
| American Trailer World Corp. | 3/3/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 993 | 983 | 955 | 1.8 | % | ||||||||||||||||||
| DMT Solutions Global Corporation | 7/2/2024 | 8.50 | % | L + 7.50% | 1.00 | % | 717 | 719 | 703 | 1.3 | % | ||||||||||||||||||
| DS Parent, Inc. | 12/10/2028 | 6.50 | % | L + 5.75% | 0.75 | % | 988 | 959 | 963 | 1.8 | % | ||||||||||||||||||
| Energy Acquisition LP | 6/26/2025 | 4.70 | % | L + 4.25% | 0.45 | % | 1,166 | 1,151 | 1,143 | 2.2 | % | ||||||||||||||||||
| Novae LLC | 12/22/2028 | 5.75 | % | S + 5.00% | 0.75 | % | 778 | 770 | 774 | 1.5 | % | ||||||||||||||||||
| Novae LLC (6) | 12/22/2028 | 5.75 | % | S + 5.00% | 0.75 | % | 222 | (2 | ) | (1 | ) | 0.0 | % | ||||||||||||||||
| Total Capital Equipment | 4,580 | 4,537 | 8.6 | % | |||||||||||||||||||||||||
| Chemicals, Plastics, & Rubber | |||||||||||||||||||||||||||||
| Albaugh, LLC | 2/16/2029 | 4.75 | % | S + 3.75% | 1.00 | % | 209 | 207 | 209 | 0.4 | % | ||||||||||||||||||
| Bakelite UK Intermediate Ltd. | 2/2/2029 | 4.50 | % | S + 4.00% | 0.50 | % | 1,000 | 995 | 978 | 1.9 | % | ||||||||||||||||||
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| Non-controlled/Non-Affiliate Investments - 260.4% of Shareholder’s Equity (3) | ||||||||||||||||||||||||||||||
| Investments made in United States Companies | ||||||||||||||||||||||||||||||
| Aerospace & Defense | ||||||||||||||||||||||||||||||
| Amentum Government Services Holdings LLC | First Lien - Term Loan | 2/15/2029 | 7.56 | % | S + 4.00% | 3.56 | % | 864 | 860 | 827 | 1.7 | % | ||||||||||||||||||
| HDT Holdco, Inc. | First Lien - Term Loan | 6/30/2027 | 9.42 | % | L + 5.75% | 3.67 | % | 534 | 520 | 498 | 1.0 | % | ||||||||||||||||||
| MAG DS Corp. | First Lien - Term Loan | 4/1/2027 | 9.17 | % | L + 5.50% | 3.67 | % | 928 | 893 | 854 | 1.7 | % | ||||||||||||||||||
| Peraton Corp. | First Lien - Term Loan | 2/1/2028 | 6.87 | % | L + 3.75% | 3.12 | % | 967 | 963 | 919 | 1.9 | % | ||||||||||||||||||
| Propulsion (BC) Midco SARL | First Lien - Term Loan | 9/14/2029 | 7.18 | % | S + 4.00% | 3.18 | % | 1,000 | 995 | 953 | 1.9 | % | ||||||||||||||||||
| Setanta Aircraft Leasing DAC | First Lien - Term Loan | 11/2/2028 | 5.67 | % | L + 2.00% | 3.67 | % | 1,000 | 998 | 979 | 2.0 | % | ||||||||||||||||||
| Spirit Aerosystems, Inc. (fka Mid-Western Aircraft Systems, Inc and Onex Wind Finance LP.) | First Lien - Term Loan | 1/15/2025 | 6.87 | % | L + 3.75% | 3.12 | % | 986 | 983 | 979 | 2.0 | % | ||||||||||||||||||
| Vertex Aerospace Services Corp. | First Lien - Term Loan | 12/6/2028 | 6.87 | % | L + 3.75% | 3.12 | % | 995 | 991 | 970 | 2.0 | % | ||||||||||||||||||
| Total Aerospace & Defense | 7,203 | 6,979 | 14.2 | % | ||||||||||||||||||||||||||
| Automotive | ||||||||||||||||||||||||||||||
| Autokiniton US Holdings, Inc. | First Lien - Term Loan | 4/6/2028 | 7.18 | % | L + 4.50% | 2.68 | % | 1,484 | 1,476 | 1,371 | 2.8 | % | ||||||||||||||||||
| First Brands Group, LLC | First Lien - Term Loan | 3/30/2027 | 8.37 | % | L + 5.00% | 3.37 | % | 990 | 990 | 955 | 2.0 | % | ||||||||||||||||||
| Holley Inc. | First Lien - Term Loan | 11/17/2028 | 7.42 | % | L + 3.75% | 3.67 | % | 932 | 933 | 854 | 1.7 | % | ||||||||||||||||||
| Total Automotive | 3,399 | 3,180 | 6.5 | % | ||||||||||||||||||||||||||
STEELE
STEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
March 31,September 30, 2022
(unaudited)
(in thousands, except per share data)
| Description (1) (2) | Maturity | Interest Rate (3) | Basis Point Spread Above Index (3) | Interest Rate Floor / Base Rate (3) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (4) | |||||||||||||||||||||
| DCG Acquisition Corp. | 9/30/2026 | 4.96 | % | L + 4.50% | 0.46 | % | 1,237 | 1,240 | 1,220 | 2.3 | % | ||||||||||||||||||
| LSF11 A5 Holdco LLC | 10/15/2028 | 4.00 | % | L + 3.50% | 0.50 | % | 500 | 500 | 494 | 0.9 | % | ||||||||||||||||||
| Sparta U.S. Holdco LLC | 8/2/2028 | 4.25 | % | L + 3.50% | 0.75 | % | 499 | 496 | 494 | 0.9 | % | ||||||||||||||||||
| Total Chemicals, Plastics, & Rubber | 3,438 | 3,395 | 6.4 | % | |||||||||||||||||||||||||
| Construction & Building | |||||||||||||||||||||||||||||
| Janus International Group, LLC | 2/12/2025 | 4.25 | % | L + 3.25% | 1.00 | % | 893 | 895 | 879 | 1.7 | % | ||||||||||||||||||
| Michael Baker International, LLC | 12/1/2028 | 5.75 | % | L + 5.00% | 0.75 | % | 998 | 988 | 990 | 1.9 | % | ||||||||||||||||||
| Smyrna Ready Mix Concrete, LLC | 3/23/2029 | 4.75 | % | S + 4.25% | 0.50 | % | 1,250 | 1,212 | 1,237 | 2.3 | % | ||||||||||||||||||
| Total Construction & Building | 3,095 | 3,106 | 5.9 | % | |||||||||||||||||||||||||
| Consumer Goods: Durable | |||||||||||||||||||||||||||||
| Hunter Douglas Holding B.V. | 2/25/2029 | 4.00 | % | S + 3.50% | 0.50 | % | 1,000 | 995 | 982 | 1.9 | % | ||||||||||||||||||
| LHS Borrower, LLC | 2/16/2029 | 5.25 | % | S + 4.75% | 0.50 | % | 1,000 | 990 | 990 | 1.9 | % | ||||||||||||||||||
| Mannington Mills, Inc. | 8/6/2026 | 4.76 | % | L + 3.75% | 1.01 | % | 435 | 435 | 427 | 0.8 | % | ||||||||||||||||||
| Pelican Products, Inc. | 12/31/2028 | 4.75 | % | L + 4.25% | 0.50 | % | 998 | 994 | 980 | 1.8 | % | ||||||||||||||||||
| Total Consumer Goods: Durable | 3,414 | 3,379 | 6.4 | % | |||||||||||||||||||||||||
| Consumer Goods: Non-Durable | |||||||||||||||||||||||||||||
| Conair Holdings LLC | 5/17/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 746 | 743 | 736 | 1.4 | % | ||||||||||||||||||
| Total Consumer Goods: Non-Durable | 743 | 736 | 1.4 | % | |||||||||||||||||||||||||
| Containers, Packaging & Glass | |||||||||||||||||||||||||||||
| Canister International Group Inc. | 12/21/2026 | 5.21 | % | L + 4.75% | 0.46 | % | 492 | 491 | 491 | 0.9 | % | ||||||||||||||||||
| Clydesdale Acquisition Holdings, Inc. | 4/13/2029 | 4.75 | % | S + 4.25% | 0.50 | % | 1,500 | 1,462 | 1,478 | 2.9 | % | ||||||||||||||||||
| Mar Bidco S.a r.l. (5) | 6/28/2028 | 4.75 | % | L + 4.25% | 0.50 | % | 105 | 105 | 104 | 0.2 | % | ||||||||||||||||||
| Pactiv Evergreen Inc. | 9/22/2028 | 4.00 | % | L + 3.50% | 0.50 | % | 997 | 969 | 975 | 1.8 | % | ||||||||||||||||||
| Plaze, Inc. | 8/3/2026 | 4.50 | % | L + 3.75% | 0.75 | % | 666 | 658 | 644 | 1.2 | % | ||||||||||||||||||
| Sabert Corporation | 12/10/2026 | 5.50 | % | L + 4.50% | 1.00 | % | 1,206 | 1,204 | 1,163 | 2.2 | % | ||||||||||||||||||
| Total Containers, Packaging & Glass | 4,889 | 4,855 | 9.2 | % | |||||||||||||||||||||||||
| Energy: Electricity | |||||||||||||||||||||||||||||
| Astoria Energy LLC | 12/10/2027 | 4.50 | % | L + 3.50% | 1.00 | % | 970 | 966 | 959 | 1.8 | % | ||||||||||||||||||
| Hamilton Projects Acquiror, LLC | 6/17/2027 | 5.50 | % | L + 4.50% | 1.00 | % | 983 | 963 | 967 | 1.8 | % | ||||||||||||||||||
| Total Energy: Electricity | 1,929 | 1,926 | 3.6 | % | |||||||||||||||||||||||||
| Energy: Oil & Gas | |||||||||||||||||||||||||||||
| AL NGPL Holdings, LLC | 4/14/2028 | 4.75 | % | L + 3.75% | 1.00 | % | 717 | 722 | 715 | 1.4 | % | ||||||||||||||||||
| ChampionX Holding Inc. | 6/3/2027 | 6.00 | % | L + 5.00% | 1.00 | % | 913 | 906 | 917 | 1.7 | % | ||||||||||||||||||
| CQP Holdco LP | 6/5/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 1,244 | 1,239 | 1,239 | 2.3 | % | ||||||||||||||||||
| Lucid Energy Group II Borrower, LLC | 11/22/2028 | 5.00 | % | L + 4.25% | 0.75 | % | 1,000 | 991 | 993 | 1.9 | % | ||||||||||||||||||
| Prairie ECI Acquiror LP | 3/11/2026 | 5.21 | % | L + 4.75% | 0.46 | % | 500 | 490 | 490 | 0.9 | % | ||||||||||||||||||
| Total Energy: Oil & Gas | 4,348 | 4,354 | 8.2 | % | |||||||||||||||||||||||||
| Forest Products & Paper | |||||||||||||||||||||||||||||
| Schweitzer-Mauduit International, Inc. | 2/9/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 993 | 984 | 982 | 1.9 | % | ||||||||||||||||||
| Total Forest Products & Paper | 984 | 982 | 1.9 | % | |||||||||||||||||||||||||
| Healthcare & Pharmaceuticals | |||||||||||||||||||||||||||||
| Alvogen Pharma US, Inc. | 12/29/2023 | 6.25 | % | L + 5.25% | 1.00 | % | 963 | 936 | 903 | 1.7 | % | ||||||||||||||||||
| ANI Pharmaceuticals, Inc. | 11/19/2027 | 6.75 | % | L + 6.00% | 0.75 | % | 998 | 985 | 998 | 1.9 | % | ||||||||||||||||||
| ASP Navigate Acquisition Corp. | 10/6/2027 | 5.50 | % | L + 4.50% | 1.00 | % | 995 | 995 | 980 | 1.9 | % | ||||||||||||||||||
| Athletico Management, LLC | 2/15/2029 | 4.75 | % | S + 4.25% | 0.50 | % | 500 | 498 | 498 | 0.9 | % | ||||||||||||||||||
| Aveanna Healthcare LLC | 7/15/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 404 | 402 | 394 | 0.7 | % | ||||||||||||||||||
| Aveanna Healthcare LLC (6) | 7/15/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 94 | - | (2 | ) | 0.0 | % | |||||||||||||||||
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| Banking, Finance, Insurance & Real Estate | ||||||||||||||||||||||||||||||
| AssuredPartners, Inc. | First Lien - Term Loan | 2/12/2027 | 6.53 | % | S + 3.50% | 3.03 | % | 995 | 993 | 944 | 1.9 | % | ||||||||||||||||||
| Asurion, LLC | First Lien - Term Loan | 8/21/2028 | 7.55 | % | S + 4.00% | 3.55 | % | 651 | 644 | 556 | 1.1 | % | ||||||||||||||||||
| Baldwin Risk Partners, LLC | First Lien - Term Loan | 10/14/2027 | 6.26 | % | L + 3.50% | 2.76 | % | 1,099 | 1,088 | 1,053 | 2.2 | % | ||||||||||||||||||
| Blackstone Mortgage Trust, Inc. | First Lien - Term Loan | 4/23/2026 | 6.53 | % | S + 3.50% | 3.03 | % | 851 | 839 | 817 | 1.7 | % | ||||||||||||||||||
| Citadel Securities LP | First Lien - Term Loan | 2/2/2028 | 5.65 | % | L + 2.50% | 3.15 | % | 1,244 | 1,203 | 1,212 | 2.5 | % | ||||||||||||||||||
| Deerfield Dakota Holding, LLC | First Lien - Term Loan | 4/9/2027 | 6.78 | % | S + 3.75% | 3.03 | % | 995 | 990 | 941 | 1.9 | % | ||||||||||||||||||
| DRW Holdings, LLC | First Lien - Term Loan | 2/24/2028 | 6.87 | % | L + 3.75% | 3.12 | % | 893 | 889 | 864 | 1.8 | % | ||||||||||||||||||
| FinCo I LLC | First Lien - Term Loan | 6/27/2025 | 5.62 | % | L + 2.50% | 3.12 | % | 368 | 368 | 366 | 0.7 | % | ||||||||||||||||||
| HIG Finance 2 Limited | First Lien - Term Loan | 11/12/2027 | 6.38 | % | L + 3.25% | 3.13 | % | 1,477 | 1,477 | 1,412 | 2.9 | % | ||||||||||||||||||
| IMA Financial Group, Inc. | First Lien - Term Loan | 11/1/2028 | 6.62 | % | L + 3.50% | 3.12 | % | 496 | 490 | 474 | 1.0 | % | ||||||||||||||||||
| Jane Street Group, LLC | First Lien - Term Loan | 1/26/2028 | 5.87 | % | L + 2.75% | 3.12 | % | 987 | 979 | 948 | 1.9 | % | ||||||||||||||||||
| KREF Holdings X LLC | First Lien - Term Loan | 9/1/2027 | 6.31 | % | L + 3.50% | 2.81 | % | 496 | 496 | 484 | 1.0 | % | ||||||||||||||||||
| LendingTree, Inc. | First Lien - Term Loan | 9/15/2028 | 6.87 | % | L + 3.75% | 3.12 | % | 1,496 | 1,484 | 1,373 | 2.8 | % | ||||||||||||||||||
| Minotaur Acquisition, Inc. | First Lien - Term Loan | 3/27/2026 | 8.13 | % | S + 5.00% | 3.13 | % | 499 | 476 | 475 | 1.0 | % | ||||||||||||||||||
| Newport Parent, Inc. | First Lien - Term Loan | 12/10/2027 | 10.17 | % | L + 6.50% | 3.67 | % | 478 | 463 | 462 | 0.9 | % | ||||||||||||||||||
| Paysafe Group Holdings II Limited | First Lien - Term Loan | 6/28/2028 | 5.87 | % | L + 2.75% | 3.12 | % | 992 | 962 | 871 | 1.8 | % | ||||||||||||||||||
| Resolute Investment Managers, Inc. | First Lien - Term Loan | 4/30/2024 | 7.92 | % | L + 4.25% | 3.67 | % | 703 | 700 | 628 | 1.3 | % | ||||||||||||||||||
| Russell Investments US Institutional Holdco, Inc. | First Lien - Term Loan | 5/30/2025 | 6.62 | % | L + 3.50% | 3.12 | % | 1,583 | 1,567 | 1,469 | 3.0 | % | ||||||||||||||||||
| Ryan Specialty Group, LLC | First Lien - Term Loan | 9/1/2027 | 6.13 | % | L + 3.00% | 3.13 | % | 492 | 494 | 478 | 1.0 | % | ||||||||||||||||||
| Total Banking, Finance, Insurance & Real Estate | 16,602 | 15,827 | 32.4 | % | ||||||||||||||||||||||||||
| Capital Equipment | ||||||||||||||||||||||||||||||
| American Trailer World Corp. | First Lien - Term Loan | 3/3/2028 | 6.88 | % | L + 3.75% | 3.13 | % | 988 | 979 | 902 | 1.8 | % | ||||||||||||||||||
| DMT Solutions Global Corporation | First Lien - Term Loan | 7/2/2024 | 11.07 | % | L + 7.50% | 3.57 | % | 695 | 696 | 667 | 1.4 | % | ||||||||||||||||||
STEELE
STEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
March 31,September 30, 2022
(unaudited)
(in thousands, except per share data)
| Description (1) (2) | Maturity | Interest Rate (3) | Basis Point Spread Above Index (3) | Interest Rate Floor / Base Rate (3) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (4) | |||||||||||||||||||||
| Bayou Intermediate II, LLC | 8/2/2028 | 5.25 | % | L + 4.50% | 0.75 | % | 998 | 993 | 988 | 1.9 | % | ||||||||||||||||||
| Carestream Dental Technology Parent Limited | 9/2/2024 | 5.00 | % | L + 4.50% | 0.50 | % | 998 | 989 | 992 | 1.9 | % | ||||||||||||||||||
| CCRR Parent, Inc. | 3/6/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 990 | 986 | 987 | 1.9 | % | ||||||||||||||||||
| Confluent Health, LLC | 11/30/2028 | 4.50 | % | L + 4.00% | 0.50 | % | 789 | 786 | 782 | 1.5 | % | ||||||||||||||||||
| Confluent Health, LLC (6) (8) | 11/30/2028 | 4.50 | % | L + 4.00% | 0.50 | % | 170 | 11 | 10 | 0.0 | % | ||||||||||||||||||
| FC Compassus, LLC | 12/31/2026 | 5.00 | % | L + 4.25% | 0.75 | % | 1,237 | 1,235 | 1,218 | 2.3 | % | ||||||||||||||||||
| Global Medical Response, Inc. | 9/24/2025 | 5.25 | % | L + 4.25% | 1.00 | % | 494 | 486 | 491 | 0.9 | % | ||||||||||||||||||
| Golden State Buyer, Inc. | 6/21/2026 | 5.50 | % | L + 4.75% | 0.75 | % | 995 | 987 | 981 | 1.9 | % | ||||||||||||||||||
| Help at Home, LLC | 10/29/2027 | 6.00 | % | L + 5.00% | 1.00 | % | 111 | 110 | 110 | 0.2 | % | ||||||||||||||||||
| Help at Home, LLC | 10/29/2027 | 6.00 | % | L + 5.00% | 1.00 | % | 879 | 868 | 870 | 1.6 | % | ||||||||||||||||||
| Onex TSG Intermediate Corp. | 2/26/2028 | 5.50 | % | L + 4.75% | 0.75 | % | 993 | 975 | 987 | 1.9 | % | ||||||||||||||||||
| Owens & Minor, Inc. | 3/23/2029 | 4.25 | % | S + 3.75% | 0.50 | % | 1,500 | 1,478 | 1,498 | 2.8 | % | ||||||||||||||||||
| PDS Holdco Inc. | 8/18/2028 | 5.25 | % | L + 4.50% | 0.75 | % | 1,358 | 1,351 | 1,354 | 2.6 | % | ||||||||||||||||||
| PDS Holdco Inc. (6) (9) | 8/18/2028 | 5.25 | % | L + 4.50% | 0.75 | % | 139 | 79 | 79 | 0.1 | % | ||||||||||||||||||
| Revspring, Inc. (fka Dantom Systems, Inc.) | 10/11/2025 | 5.26 | % | L + 4.25% | 1.01 | % | 514 | 512 | 508 | 1.0 | % | ||||||||||||||||||
| SCP Eye Care Services LLC (6) | 3/16/2028 | 4.50 | % | L + 4.50% | 0.00 | % | 148 | - | (2 | ) | 0.0 | % | |||||||||||||||||
| SCP Eye Care Services LLC | 3/16/2028 | 5.25 | % | L + 4.50% | 0.75 | % | 848 | 844 | 836 | 1.6 | % | ||||||||||||||||||
| TTF Holdings, LLC | 3/31/2028 | 5.00 | % | L + 4.25% | 0.75 | % | 698 | 693 | 696 | 1.3 | % | ||||||||||||||||||
| U.S. Anesthesia Partners, Inc. | 10/2/2028 | 4.75 | % | L + 4.25% | 0.50 | % | 995 | 990 | 990 | 1.9 | % | ||||||||||||||||||
| US Radiology Specialists, Inc. (US Outpatient Imaging Services, Inc.) | 12/15/2027 | 5.75 | % | L + 5.25% | 0.50 | % | 998 | 990 | 996 | 1.9 | % | ||||||||||||||||||
| Zotec Partners, LLC | 2/14/2024 | 4.75 | % | L + 3.75% | 1.00 | % | 495 | 497 | 492 | 0.9 | % | ||||||||||||||||||
| Total Healthcare & Pharmaceuticals | 19,676 | 19,634 | 37.2 | % | |||||||||||||||||||||||||
| High Tech Industries | |||||||||||||||||||||||||||||
| Casa Systems, Inc. | 12/20/2023 | 5.00 | % | L + 4.00% | 1.00 | % | 1,492 | 1,492 | 1,461 | 2.8 | % | ||||||||||||||||||
| CE Intermediate I, LLC | 11/10/2028 | 4.50 | % | L + 4.00% | 0.50 | % | 1,000 | 990 | 990 | 1.9 | % | ||||||||||||||||||
| ConnectWise, LLC | 9/29/2028 | 4.00 | % | L + 3.50% | 0.50 | % | 998 | 993 | 992 | 1.9 | % | ||||||||||||||||||
| Ingram Micro Inc. | 7/2/2028 | 4.00 | % | L + 3.50% | 0.50 | % | 993 | 983 | 986 | 1.9 | % | ||||||||||||||||||
| LogMeIn, Inc. | 8/31/2027 | 5.22 | % | L + 4.75% | 0.47 | % | 988 | 968 | 972 | 1.8 | % | ||||||||||||||||||
| Monotype Imaging Holdings Inc. | 10/9/2026 | 5.75 | % | L + 5.00% | 0.75 | % | 729 | 726 | 729 | 1.4 | % | ||||||||||||||||||
| Quest Software US Holdings Inc. | 2/1/2029 | 4.75 | % | S + 4.25% | 0.50 | % | 1,500 | 1,485 | 1,480 | 2.8 | % | ||||||||||||||||||
| Rocket Software, Inc. | 11/28/2025 | 4.75 | % | L + 4.25% | 0.50 | % | 109 | 107 | 108 | 0.2 | % | ||||||||||||||||||
| Rocket Software, Inc. | 11/28/2025 | 4.75 | % | L + 4.25% | 0.50 | % | 384 | 380 | 379 | 0.7 | % | ||||||||||||||||||
| Seattle SpinCo, Inc. | 2/26/2027 | 4.50 | % | S + 4.00% | 0.50 | % | 1,212 | 1,200 | 1,200 | 2.3 | % | ||||||||||||||||||
| Ultra Clean Holdings, Inc. | 8/27/2025 | 4.21 | % | L + 3.75% | 0.46 | % | 439 | 437 | 439 | 0.8 | % | ||||||||||||||||||
| VeriFone Systems, Inc. | 8/20/2025 | 4.50 | % | L + 4.00% | 0.50 | % | 1,395 | 1,379 | 1,379 | 2.6 | % | ||||||||||||||||||
| Vision Solutions, Inc. (Precisely Software Incorporated) | 4/24/2028 | 4.75 | % | L + 4.00% | 0.75 | % | 994 | 991 | 985 | 1.9 | % | ||||||||||||||||||
| Watlow Electric Manufacturing Company | 3/2/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 347 | 345 | 343 | 0.6 | % | ||||||||||||||||||
| Total High Tech Industries | 12,476 | 12,443 | 23.6 | % | |||||||||||||||||||||||||
| Hotel, Gaming & Leisure | |||||||||||||||||||||||||||||
| Arcis Golf LLC | 11/24/2028 | 4.75 | % | L + 4.25% | 0.50 | % | 998 | 988 | 998 | 1.9 | % | ||||||||||||||||||
| Fertitta Entertainment, LLC | 1/29/2029 | 4.50 | % | S + 4.00% | 0.50 | % | 1,000 | 998 | 996 | 1.9 | % | ||||||||||||||||||
| Herschend Entertainment Company, LLC | 8/28/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 200 | 199 | 200 | 0.4 | % | ||||||||||||||||||
| Sabre GLBL Inc. | 12/17/2027 | 4.00 | % | L + 3.50% | 0.50 | % | 277 | 276 | 274 | 0.5 | % | ||||||||||||||||||
| Sabre GLBL Inc. | 12/17/2027 | 4.00 | % | L + 3.50% | 0.50 | % | 441 | 440 | 437 | 0.8 | % | ||||||||||||||||||
| United AirLines, Inc. | 4/21/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 990 | 986 | 980 | 1.9 | % | ||||||||||||||||||
| Total Hotel, Gaming & Leisure | 3,887 | 3,885 | 7.4 | % | |||||||||||||||||||||||||
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| DS Parent, Inc. | First Lien - Term Loan | 12/10/2028 | 9.92 | % | L + 5.75% | 4.17 | % | 963 | 936 | 926 | 1.9 | % | ||||||||||||||||||
| Energy Acquisition LP | First Lien - Term Loan | 6/26/2025 | 7.37 | % | L + 4.25% | 3.12 | % | 1,162 | 1,149 | 1,084 | 2.2 | % | ||||||||||||||||||
| Novae LLC | First Lien - Term Loan | 12/22/2028 | 7.73 | % | S + 5.00% | 2.73 | % | 1,992 | 1,936 | 1,858 | 3.8 | % | ||||||||||||||||||
| Total Capital Equipment | 5,696 | 5,437 | 11.1 | % | ||||||||||||||||||||||||||
| Chemicals, Plastics, & Rubber | ||||||||||||||||||||||||||||||
| Albaugh, LLC | First Lien - Term Loan | 2/16/2029 | 6.08 | % | S + 3.50% | 2.58 | % | 208 | 206 | 203 | 0.4 | % | ||||||||||||||||||
| Bakelite UK Intermediate Ltd. | First Lien - Term Loan | 5/29/2029 | 7.67 | % | S + 4.00% | 3.67 | % | 998 | 993 | 935 | 1.9 | % | ||||||||||||||||||
| DCG Acquisition Corp. | First Lien - Term Loan | 9/30/2026 | 7.62 | % | L + 4.50% | 3.12 | % | 1,231 | 1,233 | 1,152 | 2.4 | % | ||||||||||||||||||
| Sparta U.S. Holdco LLC | First Lien - Term Loan | 8/2/2028 | 5.80 | % | L + 3.25% | 2.55 | % | 496 | 494 | 473 | 1.0 | % | ||||||||||||||||||
| Total Chemicals, Plastics, & Rubber | 2,926 | 2,763 | 5.7 | % | ||||||||||||||||||||||||||
| Construction & Building | ||||||||||||||||||||||||||||||
| Janus International Group, LLC | First Lien - Term Loan | 2/12/2025 | 6.37 | % | L + 3.25% | 3.12 | % | 888 | 889 | 848 | 1.7 | % | ||||||||||||||||||
| Michael Baker International, LLC | First Lien - Term Loan | 12/1/2028 | 8.12 | % | L + 5.00% | 3.12 | % | 993 | 984 | 970 | 2.0 | % | ||||||||||||||||||
| Smyrna Ready Mix Concrete, LLC | First Lien - Term Loan | 3/23/2029 | 7.38 | % | S + 4.25% | 3.13 | % | 1,247 | 1,211 | 1,194 | 2.4 | % | ||||||||||||||||||
| Total Construction & Building | 3,084 | 3,012 | 6.1 | % | ||||||||||||||||||||||||||
| Consumer Goods: Durable | ||||||||||||||||||||||||||||||
| Hunter Douglas Holding B.V. | First Lien - Term Loan | 2/26/2029 | 6.34 | % | S + 3.50% | 2.84 | % | 998 | 993 | 826 | 1.7 | % | ||||||||||||||||||
| LHS Borrower, LLC | First Lien - Term Loan | 2/16/2029 | 7.88 | % | S + 4.75% | 3.13 | % | 995 | 986 | 813 | 1.6 | % | ||||||||||||||||||
| Mannington Mills, Inc. | First Lien - Term Loan | 8/6/2026 | 7.42 | % | L + 3.75% | 3.67 | % | 432 | 432 | 395 | 0.8 | % | ||||||||||||||||||
| Pelican Products, Inc. | First Lien - Term Loan | 12/29/2028 | 8.42 | % | L + 4.25% | 4.17 | % | 993 | 989 | 916 | 1.9 | % | ||||||||||||||||||
| Total Consumer Goods: Durable | 3,400 | 2,950 | 6.0 | % | ||||||||||||||||||||||||||
STEELE
STEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
March 31,September 30, 2022
(unaudited)
(in thousands, except per share data)
| Description (1) (2) | Maturity | Interest Rate (3) | Basis Point Spread Above Index (3) | Interest Rate Floor / Base Rate (3) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (4) | |||||||||||||||||||||
| Media: Advertising, Printing & Publishing | |||||||||||||||||||||||||||||
| Oceankey (U.S.) II Corp. | 12/15/2028 | 4.00 | % | L + 3.50% | 0.50 | % | 1,000 | 990 | 991 | 1.9 | % | ||||||||||||||||||
| Thryv, Inc. | 3/1/2026 | 9.50 | % | L + 8.50% | 1.00 | % | 1,125 | 1,119 | 1,129 | 2.1 | % | ||||||||||||||||||
| Total Media: Advertising, Printing & Publishing | 2,109 | 2,120 | 4.0 | % | |||||||||||||||||||||||||
| Media: Broadcasting & Subscription | |||||||||||||||||||||||||||||
| LCPR Loan Financing LLC | 10/16/2028 | 4.15 | % | L + 3.75% | 0.40 | % | 500 | 502 | 499 | 0.9 | % | ||||||||||||||||||
| Total Media: Broadcasting & Subscription | 502 | 499 | 0.9 | % | |||||||||||||||||||||||||
| Metals & Mining | |||||||||||||||||||||||||||||
| U.S. Silica Company | 5/1/2025 | 5.00 | % | L + 4.00% | 1.00 | % | 1,243 | 1,217 | 1,225 | 2.3 | % | ||||||||||||||||||
| Total Metals & Mining | 1,217 | 1,225 | 2.3 | % | |||||||||||||||||||||||||
| Retail | |||||||||||||||||||||||||||||
| Apro, LLC | 11/14/2026 | 4.50 | % | L + 3.75% | 0.75 | % | 1,337 | 1,328 | 1,331 | 2.5 | % | ||||||||||||||||||
| EG Group Limited | 3/31/2026 | 4.75 | % | L + 4.25% | 0.50 | % | 993 | 986 | 982 | 1.8 | % | ||||||||||||||||||
| Great Outdoors Group, LLC | 3/6/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 988 | 983 | 985 | 1.9 | % | ||||||||||||||||||
| Rent-A-Center, Inc. | 2/17/2028 | 3.75 | % | L + 3.25% | 0.50 | % | 586 | 586 | 575 | 1.1 | % | ||||||||||||||||||
| Total Retail | 3,883 | 3,873 | 7.3 | % | |||||||||||||||||||||||||
| Services: Business | |||||||||||||||||||||||||||||
| Access CIG, LLC | 2/27/2025 | 4.21 | % | L + 3.75% | 0.46 | % | 362 | 361 | 358 | 0.7 | % | ||||||||||||||||||
| Ahead DB Holdings, LLC | 10/18/2027 | 4.50 | % | L + 3.75% | 0.75 | % | 993 | 993 | 985 | 1.9 | % | ||||||||||||||||||
| Artera Services, LLC | 3/6/2025 | 4.50 | % | L + 3.50% | 1.00 | % | 993 | 986 | 933 | 1.8 | % | ||||||||||||||||||
| Energize Holdco LLC | 12/9/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 877 | 873 | 865 | 1.6 | % | ||||||||||||||||||
| Indy US Bidco, LLC | 3/6/2028 | 3.85 | % | L + 3.75% | 0.10 | % | 495 | 493 | 491 | 0.9 | % | ||||||||||||||||||
| Mermaid Bidco Inc. (Datasite) | 12/22/2027 | 4.25 | % | L + 3.50% | 0.75 | % | 994 | 990 | 984 | 1.9 | % | ||||||||||||||||||
| Misys Limited | 6/13/2024 | 4.50 | % | L + 3.50% | 1.00 | % | 997 | 998 | 986 | 1.9 | % | ||||||||||||||||||
| Phoenix Services International LLC | 3/1/2025 | 4.75 | % | L + 3.75% | 1.00 | % | 1,470 | 1,465 | 1,424 | 2.7 | % | ||||||||||||||||||
| Pitney Bowes Inc. | 3/17/2028 | 4.11 | % | L + 4.00% | 0.11 | % | 990 | 981 | 975 | 1.8 | % | ||||||||||||||||||
| Presidio Holdings Inc. | 1/22/2027 | 3.63 | % | L + 3.50% | 0.13 | % | 1,002 | 1,003 | 997 | 1.9 | % | ||||||||||||||||||
| Sitel Group | 8/27/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 1,493 | 1,486 | 1,483 | 2.8 | % | ||||||||||||||||||
| Skopima Consilio Parent LLC | 5/12/2028 | 4.50 | % | L + 4.00% | 0.50 | % | 995 | 989 | 985 | 1.9 | % | ||||||||||||||||||
| Tempo Acquisition, LLC | 8/31/2028 | 3.50 | % | S + 3.00% | 0.50 | % | 995 | 993 | 990 | 1.9 | % | ||||||||||||||||||
| UST Global Inc | 11/19/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 998 | 993 | 988 | 1.9 | % | ||||||||||||||||||
| Total Services: Business | 13,604 | 13,444 | 25.6 | % | |||||||||||||||||||||||||
| Services: Consumer | |||||||||||||||||||||||||||||
| Cimpress plc | 5/17/2028 | 4.00 | % | L + 3.50% | 0.50 | % | 993 | 984 | 984 | 1.9 | % | ||||||||||||||||||
| WW International, Inc. | 4/13/2028 | 4.00 | % | L + 3.50% | 0.50 | % | 945 | 941 | 866 | 1.6 | % | ||||||||||||||||||
| Total Services: Consumer | 1,925 | 1,850 | 3.5 | % | |||||||||||||||||||||||||
| Telecommunications | |||||||||||||||||||||||||||||
| Avaya Inc. | 12/15/2027 | 4.36 | % | L + 4.25% | 0.11 | % | 850 | 840 | 846 | 1.6 | % | ||||||||||||||||||
| CCI Buyer, Inc. | 12/17/2027 | 4.75 | % | L + 4.00% | 0.75 | % | 990 | 982 | 979 | 1.9 | % | ||||||||||||||||||
| ConvergeOne Holdings, Corp. | 1/4/2026 | 5.10 | % | L + 5.00% | 0.10 | % | 1,485 | 1,462 | 1,426 | 2.7 | % | ||||||||||||||||||
| Digi International Inc. | 12/22/2028 | 5.50 | % | L + 5.00% | 0.50 | % | 825 | 809 | 825 | 1.6 | % | ||||||||||||||||||
| Mavenir Systems, Inc. | 8/18/2028 | 5.25 | % | L + 4.75% | 0.50 | % | 1,500 | 1,486 | 1,495 | 2.8 | % | ||||||||||||||||||
| Plantronics, Inc. | 7/2/2025 | 2.60 | % | L + 2.50% | 0.10 | % | 792 | 783 | 787 | 1.5 | % | ||||||||||||||||||
| Syniverse Holdings, Inc. | 3/9/2023 | 10.00 | % | L + 9.00% | 1.00 | % | 1,250 | 1,252 | 1,191 | 2.3 | % | ||||||||||||||||||
| Syniverse Holdings, Inc. | 3/9/2023 | 6.00 | % | L + 5.00% | 1.00 | % | 1,491 | 1,494 | 1,451 | 2.7 | % | ||||||||||||||||||
| Venga Finance S.a r.l. | 12/3/2028 | 5.50 | % | L + 4.75% | 0.75 | % | 1,000 | 970 | 975 | 1.8 | % | ||||||||||||||||||
| Zacapa S.a r.l. (5) | 3/22/2029 | 4.75 | % | S + 4.25% | 0.50 | % | 1,492 | 1,488 | 1,486 | 2.8 | % | ||||||||||||||||||
| Zayo Group Holdings, Inc. | 3/9/2027 | 3.46 | % | L + 3.00% | 0.46 | % | 1,000 | 996 | 975 | 1.8 | % | ||||||||||||||||||
| Total Telecommunications | 12,562 | 12,436 | 23.5 | % | |||||||||||||||||||||||||
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| Consumer Goods: Non-Durable | ||||||||||||||||||||||||||||||
| Conair Holdings LLC | First Lien - Term Loan | 5/17/2028 | 7.42 | % | L + 3.75% | 3.67 | % | 1,140 | 1,135 | 967 | 2.0 | % | ||||||||||||||||||
| Total Consumer Goods: Non-Durable | 1,135 | 967 | 2.0 | % | ||||||||||||||||||||||||||
| Containers, Packaging & Glass | ||||||||||||||||||||||||||||||
| Canister International Group Inc. | First Lien - Term Loan | 12/21/2026 | 7.87 | % | L + 4.75% | 3.12 | % | 490 | 488 | 483 | 1.0 | % | ||||||||||||||||||
| Clydesdale Acquisition Holdings, Inc. | First Lien - Term Loan | 4/13/2029 | 7.31 | % | S + 4.18% | 3.13 | % | 1,496 | 1,461 | 1,415 | 2.9 | % | ||||||||||||||||||
| Pactiv Evergreen Inc. | First Lien - Term Loan | 9/22/2028 | 6.62 | % | L + 3.50% | 3.12 | % | 992 | 966 | 954 | 1.9 | % | ||||||||||||||||||
| Plaze, Inc. | First Lien - Term Loan | 8/3/2026 | 6.87 | % | L + 3.75% | 3.12 | % | 663 | 655 | 610 | 1.2 | % | ||||||||||||||||||
| Sabert Corporation | First Lien - Term Loan | 12/10/2026 | 7.63 | % | L + 4.50% | 3.13 | % | 1,151 | 1,149 | 1,105 | 2.3 | % | ||||||||||||||||||
| Total Containers, Packaging & Glass | 4,719 | 4,567 | 9.3 | % | ||||||||||||||||||||||||||
| Energy: Electricity | ||||||||||||||||||||||||||||||
| Astoria Energy LLC | First Lien - Term Loan | 12/10/2027 | 6.62 | % | L + 3.50% | 3.12 | % | 961 | 957 | 933 | 1.9 | % | ||||||||||||||||||
| Hamilton Projects Acquiror, LLC | First Lien - Term Loan | 6/17/2027 | 8.17 | % | L + 4.50% | 3.67 | % | 877 | 859 | 864 | 1.8 | % | ||||||||||||||||||
| Total Energy: Electricity | 1,816 | 1,797 | 3.7 | % | ||||||||||||||||||||||||||
| Energy: Oil & Gas | ||||||||||||||||||||||||||||||
| AL NGPL Holdings, LLC | First Lien - Term Loan | 4/14/2028 | 6.10 | % | L + 3.75% | 2.35 | % | 696 | 701 | 686 | 1.4 | % | ||||||||||||||||||
| CQP Holdco LP | First Lien - Term Loan | 6/5/2028 | 7.42 | % | L + 3.75% | 3.67 | % | 1,234 | 1,229 | 1,193 | 2.4 | % | ||||||||||||||||||
| Prairie ECI Acquiror LP | First Lien - Term Loan | 3/11/2026 | 7.87 | % | L + 4.75% | 3.12 | % | 500 | 491 | 469 | 1.0 | % | ||||||||||||||||||
| Total Energy: Oil & Gas | 2,421 | 2,348 | 4.8 | % | ||||||||||||||||||||||||||
| Forest Products & Paper | ||||||||||||||||||||||||||||||
| Schweitzer-Mauduit International, Inc. | First Lien - Term Loan | 4/20/2028 | 6.88 | % | L + 3.75% | 3.13 | % | 988 | 979 | 925 | 1.9 | % | ||||||||||||||||||
| Total Forest Products & Paper | 979 | 925 | 1.9 | % | ||||||||||||||||||||||||||
STEELE
STEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
March 31,September 30, 2022
(unaudited)
(in thousands, except per share data)
| Description (1) (2) | Maturity | Interest Rate (3) | Basis Point Spread Above Index (3) | Interest Rate Floor / Base Rate (3) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (4) | |||||||||||||||||||||
| Transportation: Cargo | |||||||||||||||||||||||||||||
| Carriage Purchaser, Inc. | 9/30/2028 | 5.00 | % | L + 4.25% | 0.75 | % | 995 | 990 | 992 | 1.9 | % | ||||||||||||||||||
| Daseke Companies, Inc. | 3/9/2028 | 4.75 | % | L + 4.00% | 0.75 | % | 990 | 986 | 984 | 1.9 | % | ||||||||||||||||||
| Echo Global Logistics, Inc. | 11/23/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 1,000 | 998 | 990 | 1.9 | % | ||||||||||||||||||
| Kenan Advantage Group, Inc.,The | 9/1/2027 | 8.00 | % | L + 7.25% | 0.75 | % | 1,000 | 982 | 970 | 1.8 | % | ||||||||||||||||||
| Stonepeak Taurus Lower Holdings LLC | 1/28/2030 | 7.50 | % | S + 7.00% | 0.50 | % | 2,000 | 1,971 | 1,970 | 3.7 | % | ||||||||||||||||||
| WWEX UNI TopCo Holdings, LLC | 7/26/2028 | 5.00 | % | L + 4.25% | 0.75 | % | 1,207 | 1,196 | 1,197 | 2.2 | % | ||||||||||||||||||
| Total Transportation: Cargo | 7,123 | 7,103 | 13.4 | % | |||||||||||||||||||||||||
| �� | |||||||||||||||||||||||||||||
| Transportation: Consumer | |||||||||||||||||||||||||||||
| First Student Bidco Inc. | 7/21/2028 | 3.50 | % | L + 3.00% | 0.50 | % | 364 | 363 | 362 | 0.7 | % | ||||||||||||||||||
| First Student Bidco Inc. | 7/21/2028 | 3.50 | % | L + 3.00% | 0.50 | % | 135 | 134 | 134 | 0.2 | % | ||||||||||||||||||
| Safe Fleet Holdings LLC | 2/16/2029 | 4.25 | % | S + 3.75% | 0.50 | % | 643 | 640 | 636 | 1.2 | % | ||||||||||||||||||
| Total Transportation: Consumer | 1,137 | 1,132 | 2.1 | % | |||||||||||||||||||||||||
| Utilities: Electric | |||||||||||||||||||||||||||||
| PG&E Corporation | 6/23/2025 | 3.50 | % | L + 3.00% | 0.50 | % | 491 | 489 | 486 | 0.9 | % | ||||||||||||||||||
| Total Utilities: Electric | 489 | 486 | 0.9 | % | |||||||||||||||||||||||||
| Total Term Floating Rate Loans | 129,166 | 128,455 | 243.1 | % | |||||||||||||||||||||||||
| Total Non-controlled/Non-Affiliate Investments | $ | 129,166 | 128,455 | 243.1 | % | ||||||||||||||||||||||||
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| Healthcare & Pharmaceuticals | ||||||||||||||||||||||||||||||
| Alvogen Pharma US, Inc. | First Lien - Term Loan | 12/31/2023 | 8.95 | % | L + 5.25% | 3.70 | % | 950 | 931 | 833 | 1.7 | % | ||||||||||||||||||
| ANI Pharmaceuticals, Inc. | First Lien - Term Loan | 11/19/2027 | 9.12 | % | L + 6.00% | 3.12 | % | 993 | 981 | 946 | 1.9 | % | ||||||||||||||||||
| ASP Navigate Acquisition Corp. | First Lien - Term Loan | 10/6/2027 | 7.41 | % | L + 4.50% | 2.91 | % | 990 | 990 | 937 | 1.9 | % | ||||||||||||||||||
| Athletico Management, LLC | First Lien - Term Loan | 2/15/2029 | 7.95 | % | S + 4.25% | 3.70 | % | 249 | 242 | 225 | 0.5 | % | ||||||||||||||||||
| Aveanna Healthcare LLC (4) (6) | First Lien - Delayed Draw Loan | 6/30/2028 | 6.80 | % | L + 3.75% | 3.05 | % | 94 | 28 | 10 | 0.0 | % | ||||||||||||||||||
| Aveanna Healthcare LLC | First Lien - Term Loan | 6/30/2028 | 6.80 | % | L + 3.75% | 3.05 | % | 402 | 400 | 325 | 0.7 | % | ||||||||||||||||||
| Bayou Intermediate II, LLC | First Lien - Term Loan | 8/2/2028 | 7.30 | % | L + 4.50% | 2.80 | % | 993 | 988 | 945 | 1.9 | % | ||||||||||||||||||
| Carestream Dental Technology Parent Limited | First Lien - Term Loan | 9/2/2024 | 7.62 | % | L + 4.50% | 3.12 | % | 688 | 683 | 664 | 1.4 | % | ||||||||||||||||||
| CCRR Parent, Inc. | First Lien - Term Loan | 3/6/2028 | 6.87 | % | L + 3.75% | 3.12 | % | 985 | 981 | 952 | 1.9 | % | ||||||||||||||||||
| Confluent Health, LLC (4) (5) | First Lien - Delayed Draw Loan | 11/30/2028 | 7.12 | % | L + 4.00% | 3.12 | % | 170 | 46 | 26 | 0.1 | % | ||||||||||||||||||
| Confluent Health, LLC | First Lien - Term Loan | 11/30/2028 | 7.12 | % | L + 4.00% | 3.12 | % | 785 | 782 | 695 | 1.4 | % | ||||||||||||||||||
| FC Compassus, LLC | First Lien - Term Loan | 12/31/2026 | 7.13 | % | L + 4.25% | 2.88 | % | 1,231 | 1,229 | 1,108 | 2.3 | % | ||||||||||||||||||
| Global Medical Response, Inc. | First Lien - Term Loan | 10/2/2025 | 6.81 | % | L + 4.25% | 2.56 | % | 491 | 485 | 428 | 0.9 | % | ||||||||||||||||||
| Golden State Buyer, Inc. | First Lien - Term Loan | 6/21/2026 | 8.92 | % | L + 4.75% | 4.17 | % | 951 | 944 | 899 | 1.8 | % | ||||||||||||||||||
| Help at Home, LLC | First Lien - Delayed Draw Loan | 10/29/2027 | 8.71 | % | L + 5.00% | 3.71 | % | 111 | 109 | 106 | 0.2 | % | ||||||||||||||||||
| Help at Home, LLC | First Lien - Term Loan | 10/29/2027 | 8.71 | % | L + 5.00% | 3.71 | % | 875 | 864 | 835 | 1.7 | % | ||||||||||||||||||
| Onex TSG Intermediate Corp. | First Lien - Term Loan | 2/28/2028 | 7.87 | % | L + 4.75% | 3.12 | % | 988 | 972 | 876 | 1.8 | % | ||||||||||||||||||
| PDS Holdco Inc. | First Lien - Delayed Draw Loan | 8/18/2028 | 7.28 | % | L + 4.50% | 2.78 | % | 138 | 138 | 125 | 0.2 | % | ||||||||||||||||||
| PDS Holdco Inc. | First Lien - Term Loan | 8/18/2028 | 7.62 | % | L + 4.50% | 3.12 | % | 1,351 | 1,345 | 1,221 | 2.5 | % | ||||||||||||||||||
| Revspring, Inc. (fka Dantom Systems, Inc.) | First Lien - Term Loan | 10/11/2025 | 7.67 | % | L + 4.00% | 3.67 | % | 1,009 | 1,002 | 975 | 2.0 | % | ||||||||||||||||||
| SCP Eye Care Services LLC | First Lien - Delayed Draw Loan | 3/16/2028 | 7.56 | % | L + 4.50% | 3.06 | % | 148 | 148 | 147 | 0.3 | % | ||||||||||||||||||
| SCP Eye Care Services LLC | First Lien - Term Loan | 3/16/2028 | 7.62 | % | L + 4.50% | 3.12 | % | 3,336 | 3,331 | 3,328 | 6.8 | % | ||||||||||||||||||
| TTF Holdings, LLC | First Lien - Term Loan | 3/31/2028 | 7.13 | % | L + 4.00% | 3.13 | % | 635 | 631 | 619 | 1.3 | % | ||||||||||||||||||
| U.S. Anesthesia Partners, Inc. | First Lien - Term Loan | 10/2/2028 | 6.81 | % | L + 4.25% | 2.56 | % | 1,102 | 1,097 | 1,039 | 2.1 | % | ||||||||||||||||||
| US Radiology Specialists, Inc. (US Outpatient Imaging Services, Inc.) | First Lien - Term Loan | 12/15/2027 | 8.92 | % | L + 5.25% | 3.67 | % | 993 | 986 | 878 | 1.8 | % | ||||||||||||||||||
| Zelis Cost Management Buyer, Inc. | First Lien - Term Loan | 9/30/2026 | 6.06 | % | L + 3.50% | 2.56 | % | 421 | 418 | 406 | 0.8 | % | ||||||||||||||||||
| Zotec Partners, LLC | First Lien - Term Loan | 2/14/2024 | 7.43 | % | L + 3.75% | 3.68 | % | 204 | 199 | 196 | 0.4 | % | ||||||||||||||||||
| Total Healthcare & Pharmaceuticals | 20,950 | 19,744 | 40.3 | % | ||||||||||||||||||||||||||
STEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
September 30, 2022
(in thousands, except per share data)
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| High Tech Industries | ||||||||||||||||||||||||||||||
| Boxer Parent Company Inc. | First Lien - Term Loan | 10/2/2025 | 6.87 | % | L + 3.75% | 3.12 | % | 165 | 157 | 157 | 0.3 | % | ||||||||||||||||||
| Casa Systems, Inc. | First Lien - Term Loan | 12/20/2023 | 7.12 | % | L + 4.00% | 3.12 | % | 1,484 | 1,484 | 1,243 | 2.5 | % | ||||||||||||||||||
| CE Intermediate I, LLC | First Lien - Term Loan | 11/10/2028 | 6.91 | % | L + 4.00% | 2.91 | % | 995 | 986 | 930 | 1.9 | % | ||||||||||||||||||
| ConnectWise, LLC | First Lien - Term Loan | 9/29/2028 | 7.17 | % | L + 3.50% | 3.67 | % | 993 | 988 | 931 | 1.9 | % | ||||||||||||||||||
| Ingram Micro Inc. | First Lien - Term Loan | 6/30/2028 | 7.17 | % | L + 3.50% | 3.67 | % | 988 | 979 | 964 | 2.0 | % | ||||||||||||||||||
| LogMeIn, Inc. | First Lien - Term Loan | 8/31/2027 | 7.80 | % | L + 4.75% | 3.05 | % | 983 | 965 | 687 | 1.4 | % | ||||||||||||||||||
| Monotype Imaging Holdings Inc. | First Lien - Term Loan | 10/9/2026 | 8.67 | % | L + 5.00% | 3.67 | % | 725 | 722 | 691 | 1.4 | % | ||||||||||||||||||
| Quest Software US Holdings Inc. | First Lien - Term Loan | 2/1/2029 | 6.98 | % | S + 4.25% | 2.73 | % | 1,500 | 1,486 | 1,118 | 2.3 | % | ||||||||||||||||||
| Rocket Software, Inc. | First Lien - Term Loan | 11/28/2025 | 7.37 | % | L + 4.25% | 3.12 | % | 382 | 379 | 366 | 0.7 | % | ||||||||||||||||||
| Rocket Software, Inc. | First Lien - Term Loan | 11/28/2025 | 7.37 | % | L + 4.25% | 3.12 | % | 108 | 106 | 104 | 0.2 | % | ||||||||||||||||||
| Seattle SpinCo, Inc. | First Lien - Term Loan | 2/26/2027 | 7.15 | % | S + 4.00% | 3.15 | % | 1,206 | 1,195 | 1,185 | 2.4 | % | ||||||||||||||||||
| VeriFone Systems, Inc. | First Lien - Term Loan | 8/20/2025 | 7.00 | % | L + 4.00% | 3.00 | % | 1,388 | 1,374 | 1,251 | 2.6 | % | ||||||||||||||||||
| Vision Solutions, Inc. (Precisely Software Incorporated) | First Lien - Term Loan | 4/24/2028 | 6.78 | % | L + 4.00% | 2.78 | % | 989 | 987 | 870 | 1.8 | % | ||||||||||||||||||
| Watlow Electric Manufacturing Company | First Lien - Term Loan | 3/2/2028 | 6.87 | % | L + 3.75% | 3.12 | % | 345 | 343 | 329 | 0.7 | % | ||||||||||||||||||
| Total High Tech Industries | 12,151 | 10,826 | 22.1 | % | ||||||||||||||||||||||||||
| Hotel, Gaming & Leisure | ||||||||||||||||||||||||||||||
| Arcis Golf LLC | First Lien - Term Loan | 11/24/2028 | 7.37 | % | L + 4.25% | 3.12 | % | 995 | 986 | 970 | 2.0 | % | ||||||||||||||||||
| ClubCorp Holdings, Inc. | First Lien - Term Loan | 9/18/2024 | 6.42 | % | L + 2.75% | 3.67 | % | 499 | 484 | 461 | 0.9 | % | ||||||||||||||||||
| Fertitta Entertainment, LLC | First Lien - Term Loan | 1/29/2029 | 7.03 | % | S + 4.00% | 3.03 | % | 995 | 993 | 926 | 1.9 | % | ||||||||||||||||||
| Herschend Entertainment Company, LLC | First Lien - Term Loan | 8/28/2028 | 6.88 | % | L + 3.75% | 3.13 | % | 199 | 198 | 195 | 0.4 | % | ||||||||||||||||||
| Sabre GLBL Inc. | First Lien - Term Loan | 12/17/2027 | 6.62 | % | L + 3.50% | 3.12 | % | 439 | 438 | 394 | 0.8 | % | ||||||||||||||||||
| Sabre GLBL Inc. | First Lien - Term Loan | 12/17/2027 | 6.62 | % | L + 3.50% | 3.12 | % | 275 | 275 | 247 | 0.5 | % | ||||||||||||||||||
STEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
September 30, 2022
(in thousands, except per share data)
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| Sabre GLBL Inc. | First Lien - Term Loan | 6/30/2028 | 8.13 | % | S + 5.00% | 3.13 | % | 358 | 340 | 332 | 0.7 | % | ||||||||||||||||||
| Scientific Games International, Inc. | First Lien - Term Loan | 4/16/2029 | 5.91 | % | S + 3.00% | 2.91 | % | 998 | 990 | 972 | 2.0 | % | ||||||||||||||||||
| United AirLines, Inc. | First Lien - Term Loan | 4/21/2028 | 6.53 | % | L + 3.75% | 2.78 | % | 985 | 981 | 945 | 1.9 | % | ||||||||||||||||||
| Total Hotel, Gaming & Leisure | 5,685 | 5,442 | 11.1 | % | ||||||||||||||||||||||||||
| Media: Advertising, Printing & Publishing | ||||||||||||||||||||||||||||||
| Oceankey (U.S.) II Corp. | First Lien - Term Loan | 12/15/2028 | 6.62 | % | L + 3.50% | 3.12 | % | 995 | 986 | 935 | 1.9 | % | ||||||||||||||||||
| Thryv, Inc. | First Lien - Term Loan | 3/1/2026 | 11.62 | % | L + 8.50% | 3.12 | % | 1,107 | 1,102 | 1,077 | 2.2 | % | ||||||||||||||||||
| Total Media: Advertising, Printing & Publishing | 2,088 | 2,012 | 4.1 | % | ||||||||||||||||||||||||||
| Media: Broadcasting & Subscription | ||||||||||||||||||||||||||||||
| LCPR Loan Financing LLC | First Lien - Term Loan | 10/16/2028 | 6.57 | % | L + 3.75% | 2.82 | % | 500 | 501 | 486 | 1.0 | % | ||||||||||||||||||
| Sinclair Television Group, Inc. | First Lien - Term Loan | 4/13/2029 | 6.88 | % | S + 3.75% | 3.13 | % | 748 | 727 | 709 | 1.4 | % | ||||||||||||||||||
| Total Media: Broadcasting & Subscription | 1,228 | 1,195 | 2.4 | % | ||||||||||||||||||||||||||
| Retail | ||||||||||||||||||||||||||||||
| Apro, LLC | First Lien - Term Loan | 11/14/2026 | 6.89 | % | L + 3.75% | 3.14 | % | 1,330 | 1,322 | 1,270 | 2.6 | % | ||||||||||||||||||
| EG Group Limited | First Lien - Delayed Draw Loan | 3/31/2026 | 7.92 | % | L + 4.25% | 3.67 | % | 990 | 983 | 927 | 1.9 | % | ||||||||||||||||||
| Great Outdoors Group, LLC | First Lien - Term Loan | 3/6/2028 | 6.87 | % | L + 3.75% | 3.12 | % | 983 | 978 | 911 | 1.9 | % | ||||||||||||||||||
| Rent-A-Center, Inc. | First Lien - Term Loan | 2/17/2028 | 6.06 | % | L + 3.25% | 2.81 | % | 583 | 583 | 533 | 1.1 | % | ||||||||||||||||||
| Total Retail | 3,866 | 3,641 | 7.5 | % | ||||||||||||||||||||||||||
| Services: Business | ||||||||||||||||||||||||||||||
| Access CIG, LLC | First Lien - Term Loan | 2/27/2025 | 6.82 | % | L + 3.75% | 3.07 | % | 1,355 | 1,348 | 1,301 | 2.7 | % | ||||||||||||||||||
STEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
September 30, 2022
(in thousands, except per share data)
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| Ahead DB Holdings, LLC | First Lien - Term Loan | 10/18/2027 | 7.43 | % | L + 3.75% | 3.68 | % | 988 | 988 | 945 | 1.9 | % | ||||||||||||||||||
| Artera Services, LLC | First Lien - Term Loan | 3/6/2025 | 7.17 | % | L + 3.50% | 3.67 | % | 988 | 982 | 809 | 1.6 | % | ||||||||||||||||||
| Congruex Group LLC | First Lien - Term Loan | 5/3/2029 | 8.48 | % | S + 5.75% | 2.73 | % | 998 | 974 | 973 | 2.0 | % | ||||||||||||||||||
| DTI Holdco, Inc. | First Lien - Term Loan | 4/26/2029 | 7.33 | % | S + 4.75% | 2.58 | % | 1,250 | 1,226 | 1,190 | 2.4 | % | ||||||||||||||||||
| Energize Holdco LLC | First Lien - Term Loan | 12/8/2028 | 6.87 | % | L + 3.75% | 3.12 | % | 873 | 869 | 821 | 1.7 | % | ||||||||||||||||||
| Indy US Bidco, LLC | First Lien - Term Loan | 3/6/2028 | 6.87 | % | L + 3.75% | 3.12 | % | 493 | 490 | 444 | 0.9 | % | ||||||||||||||||||
| Mermaid Bidco Inc. (Datasite) | First Lien - Term Loan | 12/22/2027 | 6.30 | % | L + 3.50% | 2.80 | % | 989 | 986 | 927 | 1.9 | % | ||||||||||||||||||
| Misys Limited | First Lien - Term Loan | 6/13/2024 | 6.87 | % | L + 3.50% | 3.37 | % | 992 | 993 | 866 | 1.8 | % | ||||||||||||||||||
| Phoenix Services International LLC | First Lien - Term Loan | 3/1/2025 | 6.67 | % | L + 3.75% | 2.92 | % | 1,466 | 1,462 | 291 | 0.6 | % | ||||||||||||||||||
| Pitney Bowes Inc. | First Lien - Term Loan | 3/17/2028 | 7.12 | % | L + 4.00% | 3.12 | % | 985 | 977 | 891 | 1.8 | % | ||||||||||||||||||
| Presidio Holdings Inc. | First Lien - Term Loan | 1/22/2027 | 6.62 | % | L + 3.50% | 3.12 | % | 997 | 998 | 967 | 2.0 | % | ||||||||||||||||||
| Sitel Group | First Lien - Term Loan | 8/28/2028 | 6.87 | % | L + 3.75% | 3.12 | % | 1,485 | 1,479 | 1,441 | 2.9 | % | ||||||||||||||||||
| Skopima Consilio Parent LLC | First Lien - Term Loan | 5/12/2028 | 7.12 | % | L + 4.00% | 3.12 | % | 990 | 985 | 921 | 1.9 | % | ||||||||||||||||||
| Tempo Acquisition, LLC | First Lien - Term Loan | 8/31/2028 | 6.03 | % | S + 3.00% | 3.03 | % | 990 | 988 | 967 | 2.0 | % | ||||||||||||||||||
| UST Global Inc | First Lien - Term Loan | 11/20/2028 | 6.83 | % | L + 3.75% | 3.08 | % | 993 | 988 | 970 | 2.0 | % | ||||||||||||||||||
| VM Consolidated, Inc. | First Lien - Term Loan | 3/26/2028 | 6.13 | % | L + 3.25% | 2.88 | % | 2 | 2 | 2 | 0.0 | % | ||||||||||||||||||
| Total Services: Business | 16,735 | 14,726 | 30.1 | % | ||||||||||||||||||||||||||
| Services: Consumer | ||||||||||||||||||||||||||||||
| Cimpress plc | First Lien - Term Loan | 5/17/2028 | 6.62 | % | L + 3.50% | 3.12 | % | 988 | 979 | 909 | 1.8 | % | ||||||||||||||||||
| WW International, Inc. | First Lien - Term Loan | 4/13/2028 | 6.62 | % | L + 3.50% | 3.12 | % | 945 | 941 | 669 | 1.4 | % | ||||||||||||||||||
| Total Services: Consumer | 1,920 | 1,578 | 3.2 | % | ||||||||||||||||||||||||||
STEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
September 30, 2022
(in thousands, except per share data)
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| Telecommunications | ||||||||||||||||||||||||||||||
| Avaya Inc. | First Lien - Term Loan | 12/15/2027 | 7.07 | % | L + 4.25% | 2.82 | % | 850 | 840 | 464 | 0.9 | % | ||||||||||||||||||
| CCI Buyer, Inc. | First Lien - Term Loan | 12/17/2027 | 7.55 | % | L + 4.00% | 3.55 | % | 985 | 977 | 931 | 1.9 | % | ||||||||||||||||||
| ConvergeOne Holdings, Corp. | First Lien - Term Loan | 1/4/2026 | 8.12 | % | L + 5.00% | 3.12 | % | 1,477 | 1,457 | 1,063 | 2.2 | % | ||||||||||||||||||
| Digi International Inc. | First Lien - Term Loan | 11/1/2028 | 6.85 | % | L + 5.00% | 1.85 | % | 779 | 766 | 762 | 1.6 | % | ||||||||||||||||||
| Mavenir Systems, Inc. | First Lien - Term Loan | 8/18/2028 | 7.71 | % | L + 4.75% | 2.96 | % | 1,314 | 1,302 | 1,136 | 2.3 | % | ||||||||||||||||||
| Maxar Technologies Inc. | First Lien - Term Loan | 6/14/2029 | 7.38 | % | S + 4.25% | 3.13 | % | 998 | 954 | 940 | 1.9 | % | ||||||||||||||||||
| Patagonia Holdco LLC | First Lien - Term Loan | 8/1/2029 | 8.39 | % | S + 5.75% | 2.64 | % | 500 | 409 | 404 | 0.8 | % | ||||||||||||||||||
| Syniverse Holdings, LLC | First Lien - Term Loan | 5/13/2027 | 10.55 | % | S + 7.00% | 3.55 | % | 1,000 | 962 | 866 | 1.8 | % | ||||||||||||||||||
| Venga Finance S.a r.l. | First Lien - Term Loan | 6/28/2029 | 7.82 | % | L + 4.75% | 3.07 | % | 1,000 | 971 | 928 | 1.9 | % | ||||||||||||||||||
| Zayo Group Holdings, Inc. | First Lien - Term Loan | 3/9/2027 | 6.12 | % | L + 3.00% | 3.12 | % | 1,000 | 996 | 840 | 1.7 | % | ||||||||||||||||||
| Total Telecommunications | 9,634 | 8,334 | 17.0 | % | ||||||||||||||||||||||||||
| Transportation: Cargo | ||||||||||||||||||||||||||||||
| Carriage Purchaser, Inc. | First Lien - Term Loan | 9/30/2028 | 7.37 | % | L + 4.25% | 3.12 | % | 990 | 986 | 921 | 1.9 | % | ||||||||||||||||||
| Daseke Companies, Inc. | First Lien - Term Loan | 3/9/2028 | 7.06 | % | L + 4.00% | 3.06 | % | 985 | 981 | 947 | 1.9 | % | ||||||||||||||||||
| Echo Global Logistics, Inc. | First Lien - Term Loan | 11/24/2028 | 6.62 | % | L + 3.50% | 3.12 | % | 995 | 993 | 938 | 1.9 | % | ||||||||||||||||||
| Kenan Advantage Group, Inc.,The | Second Lien - Term Loan | 9/1/2027 | 10.37 | % | L + 7.25% | 3.12 | % | 1,000 | 983 | 925 | 1.9 | % | ||||||||||||||||||
| Stonepeak Taurus Lower Holdings LLC | Second Lien - Term Loan | 1/28/2030 | 10.65 | % | S + 7.00% | 3.65 | % | 2,000 | 1,972 | 1,870 | 3.8 | % | ||||||||||||||||||
| Total Transportation: Cargo | 5,915 | 5,601 | 11.4 | % | ||||||||||||||||||||||||||
| Transportation: Consumer | ||||||||||||||||||||||||||||||
| Avolon TLB Borrower 1 (US) LLC | First Lien - Term Loan | 12/1/2027 | 5.26 | % | L + 2.25% | 3.01 | % | 614 | 596 | 600 | 1.2 | % | ||||||||||||||||||
| First Student Bidco Inc. | First Lien - Term Loan | 7/21/2028 | 6.64 | % | L + 3.00% | 3.64 | % | 362 | 361 | 336 | 0.7 | % | ||||||||||||||||||
| First Student Bidco Inc. | First Lien - Term Loan | 7/21/2028 | 6.64 | % | L + 3.00% | 3.64 | % | 135 | 134 | 125 | 0.3 | % | ||||||||||||||||||
| Safe Fleet Holdings LLC | First Lien - Term Loan | 2/16/2029 | 6.93 | % | S + 3.75% | 3.18 | % | 640 | 637 | 604 | 1.2 | % | ||||||||||||||||||
| Total Transportation: Consumer | 1,728 | 1,665 | 3.4 | % | ||||||||||||||||||||||||||
STEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
September 30, 2022
(in thousands, except per share data)
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| Utilities: Electric | ||||||||||||||||||||||||||||||
| PG&E Corporation | First Lien - Term Loan | 6/23/2025 | 6.13 | % | L + 3.00% | 3.13 | % | 489 | 487 | 469 | 1.0 | % | ||||||||||||||||||
| Total Utilities: Electric | 487 | 469 | 1.0 | % | ||||||||||||||||||||||||||
| Utilities: Oil & Gas | ||||||||||||||||||||||||||||||
| AL GCX Holdings, LLC | First Lien - Term Loan | 5/17/2029 | 6.07 | % | S + 3.75% | 2.32 | % | 90 | 91 | 89 | 0.2 | % | ||||||||||||||||||
| Total Utilities: Oil & Gas | 91 | 89 | 0.2 | % | ||||||||||||||||||||||||||
| Total Investments made in United States Companies | 135,858 | 126,074 | 257.5 | % | ||||||||||||||||||||||||||
| Investments made in Luxembourg Companies | ||||||||||||||||||||||||||||||
| Containers, Packaging & Glass | ||||||||||||||||||||||||||||||
| Mar Bidco S.a r.l. | First Lien - Term Loan | 6/28/2028 | 7.97 | % | L + 4.30% | 3.67 | % | 14 | 14 | 13 | 0.0 | % | ||||||||||||||||||
| Total Containers, Packaging & Glass | 14 | 13 | 0.0 | % | ||||||||||||||||||||||||||
| Telecommunications | ||||||||||||||||||||||||||||||
| Zacapa S.a r.l. | First Lien - Term Loan | 3/22/2029 | 7.80 | % | S + 4.25% | 3.55 | % | 1,485 | 1,481 | 1,415 | 2.9 | % | ||||||||||||||||||
| Total Telecommunications | 1,481 | 1,415 | 2.9 | % | ||||||||||||||||||||||||||
| Total Investments made in Luxembourg Companies | 1,495 | 1,428 | 2.9 | % | ||||||||||||||||||||||||||
| Total Non-controlled/Non-Affiliate Investments | $ | 137,353 | $ | 127,502 | 260.4 | % | ||||||||||||||||||||||||
| (1) | All investments are non-controlled/non-affiliated investments as defined by the Investment Company Act of 1940 (the “1940 Act”). The provisions of the 1940 Act classify investments based on the level of control that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally presumed to be “non-controlled” when the Company owns 25% or less of the portfolio company’s voting securities and “controlled” when the Company owns more than 25% of the portfolio company’s voting securities. The provisions of the 1940 Act also classify investments further based on the level of ownership that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as “non-affiliated” when the Company owns less than 5% of a portfolio company’s voting securities and “affiliated” when the Company owns 5% or more of a portfolio company’s voting securities. | |
| The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) which reset monthly or quarterly. For each such investment, the Fund has provided the spread over LIBOR and the current contractual interest rate in effect at | ||
| (3) | Percentages are based on net assets of | |
| Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The investment may be subject to an unused/letter of credit facility fee. | ||
| Of the entire $169,752 commitment to Confluent Health, LLC, | ||
| (6) | Of the entire |
The accompanying notes are an integral part of these consolidated financial statements
Steele Creek Capital CorporationSTEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2021
(in thousands, except per share data)
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| Non-controlled/Non-Affiliate Investments - 227.70% of Shareholder’s Equity (3) | ||||||||||||||||||||||||||||||
| Investments made in United States Companies | ||||||||||||||||||||||||||||||
| Aerospace & Defense | ||||||||||||||||||||||||||||||
| Amentum Government Services Holdings LLC | First Lien - Term Loan | 2/1/27 | 5.50 | % | L + 4.75% | 0.75 | % | 993 | $ | 976 | $ | 994 | 2.1 | % | ||||||||||||||||
| HDT Holdco, Inc. | First Lien - Term Loan | 6/30/27 | 6.50 | % | L + 5.75% | 0.75 | % | 975 | 947 | 966 | 2.1 | % | ||||||||||||||||||
| MAG DS Corp. | First Lien - Term Loan | 4/1/27 | 6.50 | % | L + 5.50% | 1.00 | % | 953 | 913 | 877 | 1.9 | % | ||||||||||||||||||
| Peraton Corp. | First Lien - Term Loan | 2/1/28 | 4.50 | % | L + 3.75% | 0.75 | % | 993 | 988 | 995 | 2.1 | % | ||||||||||||||||||
| Setanta Aircraft Leasing DAC | First Lien - Term Loan | 11/2/28 | 2.14 | % | L + 2.00% | 0.14 | % | 1,000 | 998 | 1,001 | 2.1 | % | ||||||||||||||||||
| Spirit Aerosystems, Inc. (fka Mid-Western Aircraft Systems, Inc and Onex Wind Finance LP.) | First Lien - Term Loan | 1/15/25 | 4.25 | % | L + 3.75% | 0.50 | % | 994 | 991 | 996 | 2.1 | % | ||||||||||||||||||
| Vertex Aerospace Services Corp. | First Lien - Term Loan | 12/6/28 | 4.75 | % | L + 4.00% | 0.75 | % | 1,000 | 995 | 1,000 | 2.1 | % | ||||||||||||||||||
| Total Aerospace & Defense | 6,808 | 6,829 | 14.5 | % | ||||||||||||||||||||||||||
| Automotive | ||||||||||||||||||||||||||||||
| Autokiniton US Holdings, Inc. | First Lien - Term Loan | 4/6/28 | 5.00 | % | L + 4.50% | 0.50 | % | 995 | 993 | 998 | 2.1 | % | ||||||||||||||||||
| First Brands Group, LLC | First Lien - Term Loan | 3/30/27 | 6.00 | % | L + 5.00% | 1.00 | % | 997 | 997 | 1,004 | 2.2 | % | ||||||||||||||||||
| Total Automotive | 1,990 | 2,002 | 4.3 | % | ||||||||||||||||||||||||||
| Banking, Finance, Insurance & Real Estate | ||||||||||||||||||||||||||||||
| Baldwin Risk Partners, LLC | First Lien - Term Loan | 10/14/27 | 4.00 | % | L + 3.50% | 0.50 | % | 1,108 | 1,094 | 1,103 | 2.4 | % | ||||||||||||||||||
| DRW Holdings, LLC | First Lien - Term Loan | 2/24/28 | 3.85 | % | L + 3.75% | 0.10 | % | 902 | 898 | 900 | 1.9 | % | ||||||||||||||||||
| FinCo I LLC | First Lien - Term Loan | 6/27/25 | 2.60 | % | L + 2.50% | 0.10 | % | 494 | 493 | 493 | 1.0 | % | ||||||||||||||||||
| HIG Finance 2 Limited | First Lien - Term Loan | 11/12/27 | 4.00 | % | L + 3.25% | 0.75 | % | 1,489 | 1,489 | 1,484 | 3.2 | % | ||||||||||||||||||
| Jane Street Group, LLC | First Lien - Term Loan | 1/26/28 | 2.85 | % | L + 2.75% | 0.10 | % | 995 | 986 | 989 | 2.1 | % | ||||||||||||||||||
| KREF Holdings X LLC | First Lien - Term Loan | 9/1/27 | 3.69 | % | L + 3.50% | 0.19 | % | 500 | 500 | 501 | 1.1 | % | ||||||||||||||||||
| LendingTree, Inc. | First Lien - Term Loan | 8/24/28 | 4.15 | % | L + 4.00% | 0.15 | % | 1,500 | $ | (14 | ) | 1 | 0.0 | % | ||||||||||||||||
| Description (1) (2) | Maturity | Interest Rate (3) | Basis Point Spread Above Index (3) | Interest Rate Floor / Base Rate (3) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (4) | ||||||||||||||||||||
| Non-controlled/Non-Affiliate Investments | ||||||||||||||||||||||||||||
| Term Floating Rate Loans – 227.7% of Net Assets (4) | ||||||||||||||||||||||||||||
| Aerospace & Defense | ||||||||||||||||||||||||||||
| Amentum Government Services Holdings LLC | 2/1/2027 | 5.50 | % | L + 4.75% | 0.75 | % | 993 | $ | 976 | $ | 994 | 2.1 | % | |||||||||||||||
| HDT Holdco, Inc. | 6/30/2027 | 6.50 | % | L + 5.75% | 0.75 | % | 975 | 947 | 966 | 2.1 | % | |||||||||||||||||
| MAG DS Corp. | 4/1/2027 | 6.50 | % | L + 5.50% | 1.00 | % | 953 | 913 | 877 | 1.9 | % | |||||||||||||||||
| Peraton Corp. | 2/1/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 993 | 988 | 995 | 2.1 | % | |||||||||||||||||
| Setanta Aircraft Leasing DAC | 11/2/2028 | 2.14 | % | L + 2.00% | 0.14 | % | 1,000 | 998 | 1,001 | 2.1 | % | |||||||||||||||||
| Spirit Aerosystems, Inc. (fka Mid-Western Aircraft Systems, Inc and Onex Wind Finance LP.) | 1/15/2025 | 4.25 | % | L + 3.75% | 0.50 | % | 994 | 991 | 996 | 2.1 | % | |||||||||||||||||
| Vertex Aerospace Services Corp. | 12/6/2028 | 4.75 | % | L + 4.00% | 0.75 | % | 1,000 | 995 | 1,000 | 2.1 | % | |||||||||||||||||
| Total Aerospace & Defense | 6,808 | 6,829 | 14.5 | % | ||||||||||||||||||||||||
| Automotive | ||||||||||||||||||||||||||||
| Autokiniton US Holdings, Inc. | 4/6/2028 | 5.00 | % | L + 4.50% | 0.50 | % | 995 | 993 | 998 | 2.1 | % | |||||||||||||||||
| First Brands Group, LLC | 3/30/2027 | 6.00 | % | L + 5.00% | 1.00 | % | 997 | 997 | 1,004 | 2.2 | % | |||||||||||||||||
| Total Automotive | 1,990 | 2,002 | 4.3 | % | ||||||||||||||||||||||||
| Banking, Finance, Insurance & Real Estate | ||||||||||||||||||||||||||||
| Baldwin Risk Partners, LLC | 10/14/2027 | 4.00 | % | L + 3.50% | 0.50 | % | 1,108 | 1,094 | 1,103 | 2.4 | % | |||||||||||||||||
| DRW Holdings, LLC | 2/24/2028 | 3.85 | % | L + 3.75% | 0.10 | % | 902 | 898 | 900 | 1.9 | % | |||||||||||||||||
| FinCo I LLC | 6/27/2025 | 2.60 | % | L + 2.50% | 0.10 | % | 494 | 493 | 493 | 1.0 | % | |||||||||||||||||
| HIG Finance 2 Limited | 11/12/2027 | 4.00 | % | L + 3.25% | 0.75 | % | 1,489 | 1,489 | 1,484 | 3.2 | % | |||||||||||||||||
| Jane Street Group, LLC | 1/26/2028 | 2.85 | % | L + 2.75% | 0.10 | % | 995 | 986 | 989 | 2.1 | % | |||||||||||||||||
| KREF Holdings X LLC | 9/1/2027 | 3.69 | % | L + 3.50% | 0.19 | % | 500 | 500 | 501 | 1.1 | % | |||||||||||||||||
| LendingTree, Inc.(7) | 8/24/2028 | 4.15 | % | L + 4.00% | 0.15 | % | 1,500 | (14 | ) | 1 | 0.0 | % | ||||||||||||||||
| Newport Parent, Inc. | 12/10/2027 | 7.50 | % | L + 6.50% | 1.00 | % | 488 | 470 | 490 | 1.0 | % | |||||||||||||||||
| Resolute Investment Managers, Inc. | 4/30/2024 | 5.25 | % | L + 4.25% | 1.00 | % | 711 | 706 | 713 | 1.5 | % | |||||||||||||||||
| Russell Investments US Institutional Holdco, Inc. | 5/30/2025 | 4.50 | % | L + 3.50% | 1.00 | % | 1,000 | 991 | 1,001 | 2.1 | % | |||||||||||||||||
| Ryan Specialty Group, LLC | 9/1/2027 | 3.75 | % | L + 3.00% | 0.75 | % | 496 | 498 | 497 | 1.1 | % | |||||||||||||||||
| Total Banking, Finance, Insurance & Real Estate | 8,111 | 8,172 | 17.4 | % | ||||||||||||||||||||||||
| Capital Equipment | ||||||||||||||||||||||||||||
| American Trailer World Corp. | 3/3/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 995 | 996 | 993 | 2.1 | % | |||||||||||||||||
| DMT Solutions Global Corporation | 7/2/2024 | 8.50 | % | L + 7.50% | 1.00 | % | 728 | 730 | 713 | 1.5 | % | |||||||||||||||||
| DS Parent, Inc. | 12/10/2028 | 6.50 | % | L + 5.75% | 0.75 | % | 2,000 | 1,940 | 1,955 | 4.2 | % | |||||||||||||||||
| Energy Acquisition LP | 6/26/2025 | 4.35 | % | L + 4.25% | 0.10 | % | 1,169 | 1,153 | 1,162 | 2.5 | % | |||||||||||||||||
| Total Capital Equipment | 4,819 | 4,823 | 10.3 | % | ||||||||||||||||||||||||
Steele Creek Capital CorporationSTEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2021
(in thousands, except per share data)
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| Newport Parent, Inc. | First Lien - Term Loan | 12/10/27 | 7.50 | % | L + 6.50% | 1.00 | % | 488 | 470 | 490 | 1.0 | % | ||||||||||||||||||
| Resolute Investment Managers, Inc. | First Lien - Term Loan | 4/30/24 | 5.25 | % | L + 4.25% | 1.00 | % | 711 | 706 | 713 | 1.5 | % | ||||||||||||||||||
| Russell Investments US Institutional Holdco, Inc. | First Lien - Term Loan | 5/30/25 | 4.50 | % | L + 3.50% | 1.00 | % | 1,000 | 991 | 1,001 | 2.1 | % | ||||||||||||||||||
| Ryan Specialty Group, LLC | First Lien - Term Loan | 9/1/27 | 3.75 | % | L + 3.00% | 0.75 | % | 496 | 498 | 497 | 1.1 | % | ||||||||||||||||||
| Total Banking, Finance, Insurance & Real Estate | 8,111 | 8,172 | 17.4 | % | ||||||||||||||||||||||||||
| Capital Equipment | ||||||||||||||||||||||||||||||
| American Trailer World Corp. | First Lien - Term Loan | 3/3/28 | 4.50 | % | L + 3.75% | 0.75 | % | 995 | 996 | 993 | 2.1 | % | ||||||||||||||||||
| DMT Solutions Global Corporation | First Lien - Term Loan | 7/2/24 | 8.50 | % | L + 7.50% | 1.00 | % | 728 | 730 | 713 | 1.5 | % | ||||||||||||||||||
| DS Parent, Inc. | First Lien - Term Loan | 12/10/28 | 6.50 | % | L + 5.75% | 0.75 | % | 2,000 | 1,940 | 1,955 | 4.2 | % | ||||||||||||||||||
| Energy Acquisition LP | First Lien - Term Loan | 6/26/25 | 4.35 | % | L + 4.25% | 0.10 | % | 1,169 | 1,153 | 1,162 | 2.5 | % | ||||||||||||||||||
| Total Capital Equipment | 4,819 | 4,823 | 10.3 | % | ||||||||||||||||||||||||||
| Chemicals, Plastics, & Rubber | ||||||||||||||||||||||||||||||
| DCG Acquisition Corp. | First Lien - Term Loan | 9/30/26 | 4.60 | % | L + 4.50% | 0.10 | % | 241 | 241 | 241 | 0.4 | % | ||||||||||||||||||
| LSF11 A5 Holdco LLC | First Lien - Term Loan | 10/15/28 | 4.25 | % | L + 3.75% | 0.50 | % | 500 | 500 | 500 | 1.1 | % | ||||||||||||||||||
| Sparta U.S. Holdco LLC | First Lien - Term Loan | 4/28/28 | 4.25 | % | L + 3.50% | 0.75 | % | 500 | 498 | 501 | 1.1 | % | ||||||||||||||||||
| Total Chemicals, Plastics, & Rubber | 1,239 | 1,242 | 2.6 | % | ||||||||||||||||||||||||||
| Construction & Building | ||||||||||||||||||||||||||||||
| Janus International Group, LLC | First Lien - Term Loan | 2/12/25 | 4.25 | % | L + 3.25% | 1.00 | % | 895 | 897 | 895 | 2.0 | % | ||||||||||||||||||
| Michael Baker International, LLC | First Lien - Term Loan | 12/1/28 | 5.75 | % | L + 5.00% | 0.75 | % | 1,000 | 990 | 1,010 | 2.1 | % | ||||||||||||||||||
| Total Construction & Building | 1,887 | 1,905 | 4.1 | % | ||||||||||||||||||||||||||
| Description (1) (2) | Maturity | Interest Rate (3) | Basis Point Spread Above Index (3) | Interest Rate Floor / Base Rate (3) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (4) | |||||||||||||||||||||
| Chemicals, Plastics, & Rubber | |||||||||||||||||||||||||||||
| DCG Acquisition Corp. | 9/30/2026 | 4.60 | % | L + 4.50% | 0.10 | % | 241 | $ | 241 | $ | 241 | 0.4 | % | ||||||||||||||||
| LSF11 A5 Holdco LLC | 10/15/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 500 | 500 | 500 | 1.1 | % | ||||||||||||||||||
| Sparta U.S. Holdco LLC | 4/28/2028 | 4.25 | % | L + 3.50% | 0.75 | % | 500 | 498 | 501 | 1.1 | % | ||||||||||||||||||
| Total Chemicals, Plastics, & Rubber | 1,239 | 1,242 | 2.6 | % | |||||||||||||||||||||||||
| Construction & Building | |||||||||||||||||||||||||||||
| Janus International Group, LLC | 2/12/2025 | 4.25 | % | L + 3.25% | 1.00 | % | 895 | 897 | 895 | 2.0 | % | ||||||||||||||||||
| Michael Baker International, LLC | 12/1/2028 | 5.75 | % | L + 5.00% | 0.75 | % | 1,000 | 990 | 1,010 | 2.1 | % | ||||||||||||||||||
| Total Construction & Building | 1,887 | 1,905 | 4.1 | % | |||||||||||||||||||||||||
| Consumer Goods: Durable | |||||||||||||||||||||||||||||
| Mannington Mills, Inc. | 8/6/2026 | 3.97 | % | L + 3.75% | 0.22 | % | 436 | 436 | 436 | 0.9 | % | ||||||||||||||||||
| Pelican Products, Inc. | 12/29/2028 | 4.75 | % | L + 4.25% | 0.50 | % | 1,000 | 996 | 997 | 2.1 | % | ||||||||||||||||||
| Total Consumer Goods: Durable | 1,432 | 1,433 | 3.0 | % | |||||||||||||||||||||||||
| Consumer Goods: Non-Durable | |||||||||||||||||||||||||||||
| Conair Holdings LLC | 5/17/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 748 | 745 | 749 | 1.6 | % | ||||||||||||||||||
| Total Consumer Goods: Non-Durable | 745 | 749 | 1.6 | % | |||||||||||||||||||||||||
| Containers, Packaging & Glass | |||||||||||||||||||||||||||||
| Canister International Group Inc. | 12/21/2026 | 4.85 | % | L + 4.75% | 0.10 | % | 494 | 492 | 496 | 1.1 | % | ||||||||||||||||||
| Mar Bidco S.a r.l. (5) | 6/28/2028 | 4.75 | % | L + 4.25% | 0.50 | % | 106 | 105 | 106 | 0.2 | % | ||||||||||||||||||
| Plaze, Inc. | 8/3/2026 | 4.50 | % | L + 3.75% | 0.75 | % | 668 | 659 | 663 | 1.4 | % | ||||||||||||||||||
| Sabert Corporation | 11/26/2026 | 5.50 | % | L + 4.50% | 1.00 | % | 706 | 702 | 707 | 1.5 | % | ||||||||||||||||||
| Total Containers, Packaging & Glass | 1,958 | 1,972 | 4.2 | % | |||||||||||||||||||||||||
| Energy: Electricity | |||||||||||||||||||||||||||||
| Astoria Energy LLC | 12/10/2027 | 4.50 | % | L + 3.50% | 1.00 | % | 983 | 979 | 982 | 2.1 | % | ||||||||||||||||||
| Hamilton Projects Acquiror, LLC | 6/17/2027 | 5.50 | % | L + 4.50% | 1.00 | % | 985 | 965 | 986 | 2.1 | % | ||||||||||||||||||
| Total Energy: Electricity | 1,944 | 1,968 | 4.2 | % | |||||||||||||||||||||||||
| Energy: Oil & Gas | |||||||||||||||||||||||||||||
| AL NGPL Holdings, LLC | 4/14/2028 | 4.75 | % | L + 3.75% | 1.00 | % | 748 | 753 | 754 | 1.6 | % | ||||||||||||||||||
| ChampionX Holding Inc. | 6/3/2027 | 6.00 | % | L + 5.00% | 1.00 | % | 925 | 918 | 938 | 2.0 | % | ||||||||||||||||||
| CQP Holdco LP | 6/5/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 1,244 | 1,238 | 1,243 | 2.6 | % | ||||||||||||||||||
| Lucid Energy Group II Borrower, LLC | 11/22/2028 | 5.00 | % | L + 4.25% | 0.75 | % | 1,000 | 990 | 990 | 2.2 | % | ||||||||||||||||||
| Navitas Midstream Midland Basin, LLC | 12/13/2024 | 4.75 | % | L + 4.00% | 0.75 | % | 755 | 753 | 755 | 1.6 | % | ||||||||||||||||||
| Prairie ECI Acquiror LP | 3/11/2026 | 4.85 | % | L + 4.75% | 0.10 | % | 500 | 490 | 485 | 1.0 | % | ||||||||||||||||||
| Total Energy: Oil & Gas | 5,142 | 5,165 | 11.0 | % | |||||||||||||||||||||||||
| Forest Products & Paper | |||||||||||||||||||||||||||||
| Schweitzer-Mauduit International, Inc. | 2/9/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 995 | 986 | 994 | 2.1 | % | ||||||||||||||||||
| Total Forest Products & Paper | 986 | 994 | 2.1 | % | |||||||||||||||||||||||||
| Healthcare & Pharmaceuticals | |||||||||||||||||||||||||||||
| Alvogen Pharma US, Inc. | 12/29/2023 | 6.25 | % | L + 5.25% | 1.00 | % | 975 | 944 | 935 | 2.0 | % | ||||||||||||||||||
| ANI Pharmaceuticals, Inc. | 5/24/2027 | 6.75 | % | L + 6.00% | 0.75 | % | 1,000 | 987 | 1,005 | 2.1 | % | ||||||||||||||||||
| ASP Navigate Acquisition Corp. | 10/6/2027 | 5.50 | % | L + 4.50% | 1.00 | % | 997 | 997 | 1,002 | 2.1 | % | ||||||||||||||||||
| Aveanna Healthcare LLC | 6/30/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 405 | 403 | 403 | 0.9 | % | ||||||||||||||||||
| Aveanna Healthcare LLC (7) | 6/30/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 94 | - | - | 0.0 | % | ||||||||||||||||||
| Bayou Intermediate II, LLC | 5/15/2028 | 5.25 | % | L + 4.50% | 0.75 | % | 1,000 | 995 | 1,005 | 2.1 | % | ||||||||||||||||||
| Carestream Dental Technology Parent Limited | 9/2/2024 | 5.00 | % | L + 4.50% | 0.50 | % | 1,000 | 990 | 1,000 | 2.1 | % | ||||||||||||||||||
Steele Creek Capital CorporationSTEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2021
(in thousands, except per share data)
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| Consumer Goods: Durable | ||||||||||||||||||||||||||||||
| Mannington Mills, Inc. | First Lien - Term Loan | 8/6/26 | 3.97 | % | L + 3.75% | 0.22 | % | 436 | 436 | 436 | 0.9 | % | ||||||||||||||||||
| Pelican Products, Inc. | First Lien - Term Loan | 12/29/28 | 4.75 | % | L + 4.25% | 0.50 | % | 1,000 | 996 | 997 | 2.1 | % | ||||||||||||||||||
| Total Consumer Goods: Durable | 1,432 | 1,433 | 3.0 | % | ||||||||||||||||||||||||||
| Consumer Goods: Non-Durable | ||||||||||||||||||||||||||||||
| Conair Holdings LLC | First Lien - Term Loan | 5/17/28 | 4.25 | % | L + 3.75% | 0.50 | % | 748 | 745 | 749 | 1.6 | % | ||||||||||||||||||
| Total Consumer Goods: Non-Durable | 745 | 749 | 1.6 | % | ||||||||||||||||||||||||||
| Containers, Packaging & Glass | ||||||||||||||||||||||||||||||
| Canister International Group Inc. | First Lien - Term Loan | 12/21/26 | 4.85 | % | L + 4.75% | 0.10 | % | 494 | 492 | 496 | 1.1 | % | ||||||||||||||||||
| Plaze, Inc. | First Lien - Term Loan | 8/3/26 | 4.50 | % | L + 3.75% | 0.75 | % | 668 | 659 | 663 | 1.4 | % | ||||||||||||||||||
| Sabert Corporation | First Lien - Term Loan | 11/26/26 | 5.50 | % | L + 4.50% | 1.00 | % | 706 | 702 | 707 | 1.5 | % | ||||||||||||||||||
| Total Containers, Packaging & Glass | 1,853 | 1,866 | 4.0 | % | ||||||||||||||||||||||||||
| Energy: Electricity | ||||||||||||||||||||||||||||||
| Astoria Energy LLC | First Lien - Term Loan | 12/10/27 | 4.50 | % | L + 3.50% | 1.00 | % | 983 | 979 | 982 | 2.1 | % | ||||||||||||||||||
| Hamilton Projects Acquiror, LLC | First Lien - Term Loan | 6/17/27 | 5.50 | % | L + 4.50% | 1.00 | % | 985 | 965 | 986 | 2.1 | % | ||||||||||||||||||
| Total Energy: Electricity | 1,944 | 1,968 | 4.2 | % | ||||||||||||||||||||||||||
| Energy: Oil & Gas | ||||||||||||||||||||||||||||||
| AL NGPL Holdings, LLC | First Lien - Term Loan | 4/14/28 | 4.75 | % | L + 3.75% | 1.00 | % | 748 | 753 | 754 | 1.6 | % | ||||||||||||||||||
| ChampionX Holding Inc. | First Lien - Term Loan | 6/3/27 | 6.00 | % | L + 5.00% | 1.00 | % | 925 | 918 | 938 | 2.0 | % | ||||||||||||||||||
| CQP Holdco LP | First Lien - Term Loan | 6/5/28 | 4.25 | % | L + 3.75% | 0.50 | % | 1,244 | 1,238 | 1,243 | 2.6 | % | ||||||||||||||||||
| Lucid Energy Group II Borrower, LLC | First Lien - Term Loan | 11/22/28 | 5.00 | % | L + 4.25% | 0.75 | % | 1,000 | 990 | 990 | 2.2 | % | ||||||||||||||||||
| Navitas Midstream Midland Basin, LLC | First Lien - Term Loan | 12/13/24 | 4.75 | % | L + 4.00% | 0.75 | % | 755 | 753 | 755 | 1.6 | % | ||||||||||||||||||
| Prairie ECI Acquiror LP | First Lien - Term Loan | 3/11/26 | 4.85 | % | L + 4.75% | 0.10 | % | 500 | 490 | 485 | 1.0 | % | ||||||||||||||||||
| Total Energy: Oil & Gas | 5,142 | 5,165 | 11.0 | % | ||||||||||||||||||||||||||
| Description (1) (2) | Maturity | Interest Rate (3) | Basis Point Spread Above Index (3) | Interest Rate Floor / Base Rate (3) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (4) | |||||||||||||||||||||
| CCRR Parent, Inc. | 3/6/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 992 | $ | 988 | $ | 993 | 2.1 | % | ||||||||||||||||
| Confluent Health, LLC | 11/30/2028 | 4.10 | % | L + 4.00% | 0.10 | % | 789 | 785 | 790 | 1.7 | % | ||||||||||||||||||
| Confluent Health, LLC (7) | 11/30/2028 | 4.10 | % | L + 4.00% | 0.10 | % | 170 | - | - | 0.0 | % | ||||||||||||||||||
| FC Compassus, LLC | 12/31/2026 | 5.00 | % | L + 4.25% | 0.75 | % | 990 | 988 | 991 | 2.1 | % | ||||||||||||||||||
| Global Medical Response, Inc. | 9/24/2025 | 5.25 | % | L + 4.25% | 1.00 | % | 495 | 487 | 494 | 1.1 | % | ||||||||||||||||||
| Golden State Buyer, Inc. | 6/22/2026 | 5.50 | % | L + 4.75% | 0.75 | % | 995 | 987 | 992 | 2.1 | % | ||||||||||||||||||
| Help at Home, LLC | 10/22/2027 | 6.00 | % | L + 5.00% | 1.00 | % | 112 | 110 | 112 | 0.2 | % | ||||||||||||||||||
| Help at Home, LLC | 10/20/2027 | 6.00 | % | L + 5.00% | 1.00 | % | 881 | 870 | 882 | 1.9 | % | ||||||||||||||||||
| Onex TSG Intermediate Corp. | 2/28/2028 | 5.50 | % | L + 4.75% | 0.75 | % | 995 | 977 | 996 | 2.1 | % | ||||||||||||||||||
| PDS Holdco Inc. | 8/18/2028 | 5.25 | % | L + 4.50% | 0.75 | % | 1,361 | 1,354 | 1,363 | 3.0 | % | ||||||||||||||||||
| PDS Holdco Inc. (6) | 8/18/2028 | 5.25 | % | L + 4.50% | 0.75 | % | 139 | 58 | 59 | 0.1 | % | ||||||||||||||||||
| Revspring, Inc. (fka Dantom Systems, Inc.) | 10/3/2025 | 4.47 | % | L + 4.25% | 0.22 | % | 515 | 513 | 517 | 1.1 | % | ||||||||||||||||||
| SCP Eye Care Services LLC | 3/16/2028 | 5.25 | % | L + 4.50% | 0.75 | % | 848 | 846 | 851 | 1.8 | % | ||||||||||||||||||
| SCP Eye Care Services LLC (7) | 3/16/2028 | 4.65 | % | L + 4.50% | 0.15 | % | 148 | - | - | 0.0 | % | ||||||||||||||||||
| TTF Holdings, LLC | 3/31/2028 | 5.00 | % | L + 4.25% | 0.75 | % | 699 | 695 | 701 | 1.5 | % | ||||||||||||||||||
| U.S. Anesthesia Partners, Inc. | 10/2/2028 | 4.75 | % | L + 4.25% | 0.50 | % | 998 | 993 | 996 | 2.1 | % | ||||||||||||||||||
| US Radiology Specialists, Inc. (US Outpatient Imaging Services, Inc.) | 12/15/2027 | 5.75 | % | L + 5.25% | 0.50 | % | 1,000 | 993 | 1,001 | 2.1 | % | ||||||||||||||||||
| Zotec Partners, LLC | 2/14/2024 | 4.75 | % | L + 3.75% | 1.00 | % | 496 | 498 | 496 | 1.1 | % | ||||||||||||||||||
| Total Healthcare & Pharmaceuticals | 17,458 | 17,584 | 37.4 | % | |||||||||||||||||||||||||
| High Tech Industries | |||||||||||||||||||||||||||||
| Casa Systems, Inc. | 12/20/2023 | 5.00 | % | L + 4.00% | 1.00 | % | 1,496 | 1,496 | 1,465 | 3.1 | % | ||||||||||||||||||
| CE Intermediate I, LLC | 11/10/2028 | 4.50 | % | L + 4.00% | 0.50 | % | 1,000 | 990 | 994 | 2.1 | % | ||||||||||||||||||
| ConnectWise, LLC | 9/29/2028 | 4.00 | % | L + 3.50% | 0.50 | % | 1,000 | 995 | 999 | 2.1 | % | ||||||||||||||||||
| Ingram Micro Inc. | 6/30/2028 | 4.00 | % | L + 3.50% | 0.50 | % | 995 | 985 | 997 | 2.1 | % | ||||||||||||||||||
| LogMeIn, Inc. | 8/31/2027 | 4.86 | % | L + 4.75% | 0.11 | % | 990 | 970 | 986 | 2.1 | % | ||||||||||||||||||
| Monotype Imaging Holdings Inc. | 10/9/2026 | 5.75 | % | L + 5.00% | 0.75 | % | 998 | 993 | 1,000 | 2.1 | % | ||||||||||||||||||
| Quest Software US Holdings Inc. | 5/18/2026 | 8.38 | % | L + 8.25% | 0.13 | % | 610 | 611 | 611 | 1.3 | % | ||||||||||||||||||
| Rocket Software, Inc. | 11/28/2025 | 4.75 | % | L + 4.25% | 0.50 | % | 109 | 107 | 109 | 0.3 | % | ||||||||||||||||||
| Rocket Software, Inc. | 11/28/2025 | 4.35 | % | L + 4.25% | 0.10 | % | 385 | 381 | 383 | 0.8 | % | ||||||||||||||||||
| Ultra Clean Holdings, Inc. | 8/27/2025 | 3.85 | % | L + 3.75% | 0.10 | % | 442 | 440 | 443 | 1.0 | % | ||||||||||||||||||
| VeriFone Systems, Inc. | 8/20/2025 | 4.18 | % | L + 4.00% | 0.18 | % | 1,487 | 1,469 | 1,464 | 3.1 | % | ||||||||||||||||||
| Vision Solutions, Inc. (Precisely Software Incorporated) | 4/24/2028 | 4.75 | % | L + 4.00% | 0.75 | % | 1,496 | 1,489 | 1,496 | 3.2 | % | ||||||||||||||||||
| Watlow Electric Manufacturing Company | 3/2/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 347 | 346 | 347 | 0.7 | % | ||||||||||||||||||
| Total High Tech Industries | 11,272 | 11,294 | 24.0 | % | |||||||||||||||||||||||||
| Hotel, Gaming & Leisure | |||||||||||||||||||||||||||||
| Arcis Golf LLC | 11/20/2028 | 4.75 | % | L + 4.25% | 0.50 | % | 1,000 | 990 | 1,005 | 2.2 | % | ||||||||||||||||||
| Herschend Entertainment Company, LLC | 8/28/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 201 | 199 | 201 | 0.4 | % | ||||||||||||||||||
| Sabre GLBL Inc. | 12/17/2027 | 4.00 | % | L + 3.50% | 0.50 | % | 277 | 277 | 274 | 0.6 | % | ||||||||||||||||||
| Sabre GLBL Inc. | 12/17/2027 | 4.00 | % | L + 3.50% | 0.50 | % | 442 | 441 | 437 | 0.9 | % | ||||||||||||||||||
| United AirLines, Inc. | 4/21/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 993 | 988 | 998 | 2.1 | % | ||||||||||||||||||
| Total Hotel, Gaming & Leisure | 2,895 | 2,915 | 6.2 | % | |||||||||||||||||||||||||
| Media: Advertising, Printing & Publishing | |||||||||||||||||||||||||||||
| Oceankey (U.S.) II Corp. | 12/15/2028 | 4.00 | % | L + 3.50% | 0.50 | % | 1,000 | 990 | 998 | 2.1 | % | ||||||||||||||||||
| Thryv, Inc. | 3/2/2026 | 9.50 | % | L + 8.50% | 1.00 | % | 387 | 377 | 394 | 0.9 | % | ||||||||||||||||||
| Total Media: Advertising, Printing & Publishing | 1,367 | 1,392 | 3.0 | % | |||||||||||||||||||||||||
| Media: Broadcasting & Subscription | |||||||||||||||||||||||||||||
| LCPR Loan Financing LLC | 10/16/2028 | 3.86 | % | L + 3.75% | 0.09 | % | 500 | 502 | 503 | 1.1 | % | ||||||||||||||||||
| Total Media: Broadcasting & Subscription | 502 | 503 | 1.1 | % | |||||||||||||||||||||||||
Steele Creek Capital CorporationSTEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2021
(in thousands, except per share data)
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets 3) | |||||||||||||||||||||
| Forest Products & Paper | ||||||||||||||||||||||||||||||
| Schweitzer-Mauduit International, Inc. | First Lien - Term Loan | 2/9/28 | 4.50 | % | L + 3.75% | 0.75 | % | 995 | 986 | 994 | 2.1 | % | ||||||||||||||||||
| Total Forest Products & Paper | 986 | 994 | 2.1 | % | ||||||||||||||||||||||||||
| Healthcare & Pharmaceuticals | ||||||||||||||||||||||||||||||
| Alvogen Pharma US, Inc. | First Lien - Term Loan | 12/29/23 | 6.25 | % | L + 5.25% | 1.00 | % | 975 | 944 | 935 | 2.0 | % | ||||||||||||||||||
| ANI Pharmaceuticals, Inc. | First Lien - Term Loan | 5/24/27 | 6.75 | % | L + 6.00% | 0.75 | % | 1,000 | 987 | 1,005 | 2.1 | % | ||||||||||||||||||
| ASP Navigate Acquisition Corp. | First Lien - Term Loan | 10/6/27 | 5.50 | % | L + 4.50% | 1.00 | % | 997 | 997 | 1,002 | 2.1 | % | ||||||||||||||||||
| Aveanna Healthcare LLC | First Lien - Term Loan | 6/30/28 | 4.25 | % | L + 3.75% | 0.50 | % | 405 | 403 | 403 | 0.9 | % | ||||||||||||||||||
| Aveanna Healthcare LLC (5) | First Lien - Delayed Draw Loan | 6/30/28 | 4.25 | % | L + 3.75% | 0.50 | % | 94 | - | - | 0.0 | % | ||||||||||||||||||
| Bayou Intermediate II, LLC | First Lien - Term Loan | 5/15/28 | 5.25 | % | L + 4.50% | 0.75 | % | 1,000 | 995 | 1,005 | 2.1 | % | ||||||||||||||||||
| Carestream Dental Technology Parent Limited | First Lien - Term Loan | 9/2/24 | 5.00 | % | L + 4.50% | 0.50 | % | 1,000 | 990 | 1,000 | 2.1 | % | ||||||||||||||||||
| CCRR Parent, Inc. | First Lien - Term Loan | 3/6/28 | 4.50 | % | L + 3.75% | 0.75 | % | 992 | 988 | 993 | 2.1 | % | ||||||||||||||||||
| Confluent Health, LLC | First Lien - Term Loan | 11/30/28 | 4.10 | % | L + 4.00% | 0.10 | % | 789 | 785 | 790 | 1.7 | % | ||||||||||||||||||
| Confluent Health, LLC (5) | First Lien - Delayed Draw Loan | 11/30/28 | 4.10 | % | L + 4.00% | 0.10 | % | 170 | - | - | 0.0 | % | ||||||||||||||||||
| FC Compassus, LLC | First Lien - Term Loan | 12/31/26 | 5.00 | % | L + 4.25% | 0.75 | % | 990 | 988 | 991 | 2.1 | % | ||||||||||||||||||
| Global Medical Response, Inc. | First Lien - Term Loan | 9/24/25 | 5.25 | % | L + 4.25% | 1.00 | % | 495 | 487 | 494 | 1.1 | % | ||||||||||||||||||
| Golden State Buyer, Inc. | First Lien - Term Loan | 6/22/26 | 5.50 | % | L + 4.75% | 0.75 | % | 995 | 987 | 992 | 2.1 | % | ||||||||||||||||||
| Help at Home, LLC | First Lien - Delayed Draw Loan | 10/22/27 | 6.00 | % | L + 5.00% | 1.00 | % | 112 | 110 | 112 | 0.2 | % | ||||||||||||||||||
| Help at Home, LLC | First Lien - Term Loan | 10/20/27 | 6.00 | % | L + 5.00% | 1.00 | % | 881 | 870 | 882 | 1.9 | % | ||||||||||||||||||
| Onex TSG Intermediate Corp. | First Lien - Term Loan | 2/28/28 | 5.50 | % | L + 4.75% | 0.75 | % | 995 | 977 | 996 | 2.1 | % | ||||||||||||||||||
| PDS Holdco Inc. | First Lien - Term Loan | 8/18/28 | 5.25 | % | L + 4.50% | 0.75 | % | 1,361 | 1,354 | 1,363 | 3.0 | % | ||||||||||||||||||
| PDS Holdco Inc. (4) | First Lien - Delayed Draw Loan | 8/18/28 | 5.25 | % | L + 4.50% | 0.75 | % | 139 | 58 | 59 | 0.1 | % | ||||||||||||||||||
| Revspring, Inc. (fka Dantom Systems, Inc.) | First Lien - Term Loan | 10/3/25 | 4.47 | % | L + 4.25% | 0.22 | % | 515 | 513 | 517 | 1.1 | % | ||||||||||||||||||
| SCP Eye Care Services LLC | First Lien - Term Loan | 3/16/28 | 5.25 | % | L + 4.50% | 0.75 | % | 848 | 846 | 851 | 1.8 | % | ||||||||||||||||||
| SCP Eye Care Services LLC (5) | First Lien - Delayed Draw Loan | 3/16/28 | 4.65 | % | L + 4.50% | 0.15 | % | 148 | - | - | 0.0 | % | ||||||||||||||||||
| TTF Holdings, LLC | First Lien - Term Loan | 3/31/28 | 5.00 | % | L + 4.25% | 0.75 | % | 699 | 695 | 701 | 1.5 | % | ||||||||||||||||||
| U.S. Anesthesia Partners, Inc. | First Lien - Term Loan | 10/2/28 | 4.75 | % | L + 4.25% | 0.50 | % | 998 | 993 | 996 | 2.1 | % | ||||||||||||||||||
| US Radiology Specialists, Inc. (US Outpatient Imaging Services, Inc.) | First Lien - Term Loan | 12/15/27 | 5.75 | % | L + 5.25% | 0.50 | % | 1,000 | 993 | 1,001 | 2.1 | % | ||||||||||||||||||
| Zotec Partners, LLC | First Lien - Term Loan | 2/14/24 | 4.75 | % | L + 3.75% | 1.00 | % | 496 | 498 | 496 | 1.1 | % | ||||||||||||||||||
| Total Healthcare & Pharmaceuticals | 17,458 | 17,584 | 37.4 | % | ||||||||||||||||||||||||||
| Description (1) (2) | Maturity | Interest Rate (3) | Basis Point Spread Above Index (3) | Interest Rate Floor / Base Rate (3) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (4) | |||||||||||||||||||||
| Metals & Mining | |||||||||||||||||||||||||||||
| U.S. Silica Company | 5/1/2025 | 5.00 | % | L + 4.00% | 1.00 | % | 496 | $ 477 | $ 486 | 1.0 | % | ||||||||||||||||||
| Total Metals & Mining | 477 | 486 | 1.0 | % | |||||||||||||||||||||||||
| Retail | |||||||||||||||||||||||||||||
| Apro, LLC | 11/14/2026 | 4.50 | % | L + 3.75% | 0.75 | % | 1,340 | 1,331 | 1,342 | 2.9 | % | ||||||||||||||||||
| EG Group Limited | 3/31/2026 | 4.75 | % | L + 4.25% | 0.50 | % | 995 | 987 | 1,003 | 2.1 | % | ||||||||||||||||||
| Great Outdoors Group, LLC | 3/6/2028 | 4.50 | % | L + 3.75% | 0.75 | % | 990 | 985 | 992 | 2.1 | % | ||||||||||||||||||
| Rent-A-Center, Inc. | 2/17/2028 | 3.75 | % | L + 3.25% | 0.50 | % | 587 | 587 | 587 | 1.3 | % | ||||||||||||||||||
| Total Retail | 3,890 | 3,924 | 8.4 | % | |||||||||||||||||||||||||
| Services: Business | |||||||||||||||||||||||||||||
| Access CIG, LLC | 2/27/2025 | 3.84 | % | L + 3.75% | 0.09 | % | 363 | 362 | 362 | 0.8 | % | ||||||||||||||||||
| Ahead DB Holdings, LLC | 10/18/2027 | 4.50 | % | L + 3.75% | 0.75 | % | 995 | 995 | 998 | 2.1 | % | ||||||||||||||||||
| Artera Services, LLC | 3/6/2025 | 4.50 | % | L + 3.50% | 1.00 | % | 995 | 988 | 966 | 2.1 | % | ||||||||||||||||||
| Energize Holdco LLC | 12/8/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 877 | 873 | 874 | 1.9 | % | ||||||||||||||||||
| Indy US Bidco, LLC | 3/6/2028 | 3.85 | % | L + 3.75% | 0.10 | % | 496 | 494 | 496 | 1.1 | % | ||||||||||||||||||
| Mermaid Bidco Inc. (Datasite) | 12/22/2027 | 4.50 | % | L + 3.75% | 0.75 | % | 996 | 993 | 1,000 | 2.1 | % | ||||||||||||||||||
| Phoenix Services International LLC | 3/3/2025 | 4.75 | % | L + 3.75% | 1.00 | % | 992 | 989 | 987 | 2.1 | % | ||||||||||||||||||
| Pitney Bowes Inc. | 3/17/2028 | 4.11 | % | L + 4.00% | 0.11 | % | 993 | 983 | 994 | 2.1 | % | ||||||||||||||||||
| Presidio Holdings Inc. | 1/22/2027 | 3.63 | % | L + 3.50% | 0.13 | % | 1,005 | 1,006 | 1,006 | 2.1 | % | ||||||||||||||||||
| Sitel Group | 8/28/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 1,496 | 1,489 | 1,498 | 3.2 | % | ||||||||||||||||||
| Skopima Consilio Parent LLC | 5/12/2028 | 4.50 | % | L + 4.00% | 0.50 | % | 997 | 991 | 993 | 2.1 | % | ||||||||||||||||||
| Tempo Acquisition, LLC | 8/31/2028 | 3.50 | % | L + 3.00% | 0.50 | % | 998 | 995 | 1,002 | 2.1 | % | ||||||||||||||||||
| UST Global Inc | 11/20/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 1,000 | 995 | 1,000 | 2.1 | % | ||||||||||||||||||
| Total Services: Business | 12,153 | 12,176 | 25.9 | % | |||||||||||||||||||||||||
| Services: Consumer | |||||||||||||||||||||||||||||
| Cimpress plc | 5/17/2028 | 4.00 | % | L + 3.50% | 0.50 | % | 995 | 986 | 996 | 2.1 | % | ||||||||||||||||||
| WW International, Inc. | 4/13/2028 | 4.00 | % | L + 3.50% | 0.50 | % | 945 | 941 | 937 | 2.0 | % | ||||||||||||||||||
| Total Services: Consumer | 1,927 | 1,933 | 4.1 | % | |||||||||||||||||||||||||
| Telecommunications | |||||||||||||||||||||||||||||
| Avaya Inc. | 12/15/2027 | 4.36 | % | L + 4.25% | 0.11 | % | 850 | 839 | 854 | 1.8 | % | ||||||||||||||||||
| CCI Buyer, Inc. | 12/17/2027 | 4.50 | % | L + 3.75% | 0.75 | % | 992 | 984 | 995 | 2.1 | % | ||||||||||||||||||
| ConvergeOne Holdings, Corp. | 1/4/2026 | 5.10 | % | L + 5.00% | 0.10 | % | 1,489 | 1,464 | 1,461 | 3.1 | % | ||||||||||||||||||
| Digi International Inc. | 12/22/2028 | 5.50 | % | L + 5.00% | 0.50 | % | 857 | 840 | 851 | 1.8 | % | ||||||||||||||||||
| Mavenir Systems, Inc. | 8/18/2028 | 5.25 | % | L + 4.75% | 0.50 | % | 1,500 | 1,485 | 1,502 | 3.2 | % | ||||||||||||||||||
| Plantronics, Inc. | 7/2/2025 | 2.60 | % | L + 2.50% | 0.10 | % | 1,000 | 988 | 981 | 2.1 | % | ||||||||||||||||||
| Syniverse Holdings, Inc. | 3/9/2023 | 10.00 | % | L + 9.00% | 1.00 | % | 1,250 | 1,252 | 1,243 | 2.7 | % | ||||||||||||||||||
| Syniverse Holdings, Inc. | 3/9/2023 | 6.00 | % | L + 5.00% | 1.00 | % | 495 | 489 | 493 | 1.0 | % | ||||||||||||||||||
| Venga Finance S.a r.l. | 12/4/2028 | 5.50 | % | L + 4.75% | 0.75 | % | 1,000 | 970 | 983 | 2.1 | % | ||||||||||||||||||
| Zacapa S.A R.L. (5) | 7/2/2025 | 4.72 | % | L + 4.50% | 0.22 | % | 992 | 990 | 995 | 2.1 | % | ||||||||||||||||||
| Zayo Group Holdings, Inc. | 3/9/2027 | 3.10 | % | L + 3.00% | 0.10 | % | 1,000 | 995 | 988 | 2.1 | % | ||||||||||||||||||
| Total Telecommunications | 11,296 | 11,346 | 24.1 | % | |||||||||||||||||||||||||
| Transportation: Cargo | |||||||||||||||||||||||||||||
| Carriage Purchaser, Inc. | 10/31/2028 | 5.00 | % | L + 4.25% | 0.75 | % | 997 | 993 | 999 | 2.1 | % | ||||||||||||||||||
| Daseke Companies, Inc. | 3/9/2028 | 4.75 | % | L + 4.00% | 0.75 | % | 992 | 988 | 994 | 2.1 | % | ||||||||||||||||||
| Echo Global Logistics, Inc. | 11/23/2028 | 4.25 | % | L + 3.75% | 0.50 | % | 1,000 | 998 | 998 | 2.1 | % | ||||||||||||||||||
| Kenan Advantage Group, Inc. | 9/1/2027 | 8.00 | % | L + 7.25% | 0.75 | % | 1,000 | 981 | 999 | 2.1 | % | ||||||||||||||||||
| WWEX UNI TopCo Holdings, LLC | 7/26/2028 | 5.00 | % | L + 4.25% | 0.75 | % | 1,210 | 1,198 | 1,214 | 2.7 | % | ||||||||||||||||||
| Total Transportation: Cargo | 5,158 | 5,204 | 11.1 | % | |||||||||||||||||||||||||
| Transportation: Consumer | |||||||||||||||||||||||||||||
| First Student Bidco Inc. | 7/21/2028 | 3.50 | % | L + 3.00% | 0.50 | % | 365 | 363 | 364 | 0.8 | % | ||||||||||||||||||
| First Student Bidco Inc. | 7/21/2028 | 3.50 | % | L + 3.00% | 0.50 | % | 135 | 134 | 134 | 0.3 | % | ||||||||||||||||||
| Total Transportation: Consumer | 497 | 498 | 1.1 | % | |||||||||||||||||||||||||
STEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2021
(in thousands, except per share data)
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| High Tech Industries | ||||||||||||||||||||||||||||||
| Casa Systems, Inc. | First Lien - Term Loan | 12/20/23 | 5.00 | % | L + 4.00% | 1.00 | % | 1,496 | 1,496 | 1,465 | 3.1 | % | ||||||||||||||||||
| CE Intermediate I, LLC | First Lien - Term Loan | 11/10/28 | 4.50 | % | L + 4.00% | 0.50 | % | 1,000 | 990 | 994 | 2.1 | % | ||||||||||||||||||
| ConnectWise, LLC | First Lien - Term Loan | 9/29/28 | 4.00 | % | L + 3.50% | 0.50 | % | 1,000 | 995 | 999 | 2.1 | % | ||||||||||||||||||
| Ingram Micro Inc. | First Lien - Term Loan | 6/30/28 | 4.00 | % | L + 3.50% | 0.50 | % | 995 | 985 | 997 | 2.1 | % | ||||||||||||||||||
| LogMeIn, Inc. | First Lien - Term Loan | 8/31/27 | 4.86 | % | L + 4.75% | 0.11 | % | 990 | 970 | 986 | 2.1 | % | ||||||||||||||||||
| Monotype Imaging Holdings Inc. | First Lien - Term Loan | 10/9/26 | 5.75 | % | L + 5.00% | 0.75 | % | 998 | 993 | 1,000 | 2.1 | % | ||||||||||||||||||
| Quest Software US Holdings Inc. | Second Lien - Term Loan | 5/18/26 | 8.38 | % | L + 8.25% | 0.13 | % | 610 | 611 | 611 | 1.3 | % | ||||||||||||||||||
| Rocket Software, Inc. | First Lien - Term Loan | 11/28/25 | 4.75 | % | L + 4.25% | 0.50 | % | 109 | 107 | 109 | 0.3 | % | ||||||||||||||||||
| Rocket Software, Inc. | First Lien - Term Loan | 11/28/25 | 4.35 | % | L + 4.25% | 0.10 | % | 385 | 381 | 383 | 0.8 | % | ||||||||||||||||||
| Ultra Clean Holdings, Inc. | First Lien - Term Loan | 8/27/25 | 3.85 | % | L + 3.75% | 0.10 | % | 442 | 440 | 443 | 1.0 | % | ||||||||||||||||||
| VeriFone Systems, Inc. | First Lien - Term Loan | 8/20/25 | 4.18 | % | L + 4.00% | 0.18 | % | 1,487 | 1,469 | 1,464 | 3.1 | % | ||||||||||||||||||
| Vision Solutions, Inc. (Precisely Software Incorporated) | First Lien - Term Loan | 4/24/28 | 4.75 | % | L + 4.00% | 0.75 | % | 1,496 | 1,489 | 1,496 | 3.2 | % | ||||||||||||||||||
| Watlow Electric Manufacturing Company | First Lien - Term Loan | 3/2/28 | 4.25 | % | L + 3.75% | 0.50 | % | 347 | 346 | 347 | 0.7 | % | ||||||||||||||||||
| Total High Tech Industries | 11,272 | 11,294 | 24.0 | % | ||||||||||||||||||||||||||
| Hotel, Gaming & Leisure | ||||||||||||||||||||||||||||||
| Arcis Golf LLC | First Lien - Term Loan | 11/20/28 | 4.75 | % | L + 4.25% | 0.50 | % | 1,000 | 990 | 1,005 | 2.2 | % | ||||||||||||||||||
| Herschend Entertainment Company, LLC | First Lien - Term Loan | 8/28/28 | 4.25 | % | L + 3.75% | 0.50 | % | 201 | 199 | 201 | 0.4 | % | ||||||||||||||||||
| Sabre GLBL Inc. | First Lien - Term Loan | 12/17/27 | 4.00 | % | L + 3.50% | 0.50 | % | 277 | 277 | 274 | 0.6 | % | ||||||||||||||||||
| Sabre GLBL Inc. | First Lien - Term Loan | 12/17/27 | 4.00 | % | L + 3.50% | 0.50 | % | 442 | 441 | 437 | 0.9 | % | ||||||||||||||||||
| United AirLines, Inc. | First Lien - Term Loan | 4/21/28 | 4.50 | % | L + 3.75% | 0.75 | % | 993 | 988 | 998 | 2.1 | % | ||||||||||||||||||
| Total Hotel, Gaming & Leisure | 2,895 | 2,915 | 6.2 | % | ||||||||||||||||||||||||||
| Media: Advertising, Printing & Publishing | ||||||||||||||||||||||||||||||
| Oceankey (U.S.) II Corp. | First Lien - Term Loan | 12/15/28 | 4.00 | % | L + 3.50% | 0.50 | % | 1,000 | 990 | 998 | 2.1 | % | ||||||||||||||||||
| Thryv, Inc. | First Lien - Term Loan | 3/2/26 | 9.50 | % | L + 8.50% | 1.00 | % | 387 | 377 | 394 | 0.9 | % | ||||||||||||||||||
| Total Media: Advertising, Printing & Publishing | 1,367 | 1,392 | 3.0 | % | ||||||||||||||||||||||||||
| Media: Broadcasting & Subscription | ||||||||||||||||||||||||||||||
| LCPR Loan Financing LLC | First Lien - Term Loan | 10/16/28 | 3.86 | % | L + 3.75% | 0.11 | % | 500 | 502 | 503 | 1.1 | % | ||||||||||||||||||
| Total Media: Broadcasting & Subscription | 502 | 503 | 1.1 | % | ||||||||||||||||||||||||||
| Description (1) (2) | Maturity | Interest Rate (3) | Basis Point Spread Above Index (3) | Interest Rate Floor / Base Rate (3) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (4) | |||||||||||||||||||||
| Utilities: Electric | |||||||||||||||||||||||||||||
| PG&E Corporation | 6/23/2025 | 3.50 | % | L + 3.00% | 0.50 | % | 493 | 490 | 488 | 1.0 | % | ||||||||||||||||||
| Total Utilities: Electric | 490 | 488 | 1.0 | % | |||||||||||||||||||||||||
| Total Term Floating Rate Loans | 106,443 | 106,997 | 227.7 | % | |||||||||||||||||||||||||
| Total Non-controlled/Non-Affiliate Investments | $ | 106,443 | $ | 106,997 | 227.7 | % | |||||||||||||||||||||||
STEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2021
(in thousands, except per share data)
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets (3) | |||||||||||||||||||||
| Metals & Mining | ||||||||||||||||||||||||||||||
| U.S. Silica Company | First Lien - Term Loan | 5/1/25 | 5.00 | % | L + 4.00% | 1.00 | % | 496 | 477 | 486 | 1.0 | % | ||||||||||||||||||
| Total Metals & Mining | �� | 477 | 486 | 1.0 | % | |||||||||||||||||||||||||
| Retail | ||||||||||||||||||||||||||||||
| Apro, LLC | First Lien - Term Loan | 11/14/26 | 4.50 | % | L + 3.75% | 0.75 | % | 1,340 | 1,331 | 1,342 | 2.9 | % | ||||||||||||||||||
| EG Group Limited | First Lien - Delayed Draw Loan | 3/31/26 | 4.75 | % | L + 4.25% | 0.50 | % | 995 | 987 | 1,003 | 2.1 | % | ||||||||||||||||||
| Great Outdoors Group, LLC | First Lien - Term Loan | 3/6/28 | 4.50 | % | L + 3.75% | 0.75 | % | 990 | 985 | 992 | 2.1 | % | ||||||||||||||||||
| Rent-A-Center, Inc. | First Lien - Term Loan | 2/17/28 | 3.75 | % | L + 3.25% | 0.50 | % | 587 | 587 | 587 | 1.3 | % | ||||||||||||||||||
| Total Retail | 3,890 | 3,924 | 8.4 | % | ||||||||||||||||||||||||||
| Services: Business | ||||||||||||||||||||||||||||||
| Access CIG, LLC | First Lien - Term Loan | 2/27/25 | 3.84 | % | L + 3.75% | 0.09 | % | 363 | 362 | 362 | 0.8 | % | ||||||||||||||||||
| Ahead DB Holdings, LLC | First Lien - Term Loan | 10/18/27 | 4.50 | % | L + 3.75% | 0.75 | % | 995 | 995 | 998 | 2.1 | % | ||||||||||||||||||
| Artera Services, LLC | First Lien - Term Loan | 3/6/25 | 4.50 | % | L + 3.50% | 1.00 | % | 995 | 988 | 966 | 2.1 | % | ||||||||||||||||||
| Energize Holdco LLC | First Lien - Term Loan | 12/8/28 | 4.25 | % | L + 3.75% | 0.50 | % | 877 | 873 | 874 | 1.9 | % | ||||||||||||||||||
| Indy US Bidco, LLC | First Lien - Term Loan | 3/6/28 | 3.85 | % | L + 3.75% | 0.10 | % | 496 | 494 | 496 | 1.1 | % | ||||||||||||||||||
| Mermaid Bidco Inc. (Datasite) | First Lien - Term Loan | 12/22/27 | 4.50 | % | L + 3.75% | 0.75 | % | 996 | 993 | 1,000 | 2.1 | % | ||||||||||||||||||
| Phoenix Services International LLC | First Lien - Term Loan | 3/3/25 | 4.75 | % | L + 3.75% | 1.00 | % | 992 | 989 | 987 | 2.1 | % | ||||||||||||||||||
| Pitney Bowes Inc. | First Lien - Term Loan | 3/17/28 | 4.11 | % | L + 4.00% | 0.11 | % | 993 | 983 | 994 | 2.1 | % | ||||||||||||||||||
| Presidio Holdings Inc. | First Lien - Term Loan | 1/22/27 | 3.63 | % | L + 3.50% | 0.13 | % | 1,005 | 1,006 | 1,006 | 2.1 | % | ||||||||||||||||||
| Sitel Group | First Lien - Term Loan | 8/28/28 | 4.25 | % | L + 3.75% | 0.50 | % | 1,496 | 1,489 | 1,498 | 3.2 | % | ||||||||||||||||||
| Skopima Consilio Parent LLC | First Lien - Term Loan | 5/12/28 | 4.50 | % | L + 4.00% | 0.50 | % | 997 | 991 | 993 | 2.1 | % | ||||||||||||||||||
| Tempo Acquisition, LLC | First Lien - Term Loan | 8/31/28 | 3.50 | % | L + 3.00% | 0.50 | % | 998 | 995 | 1,002 | 2.1 | % | ||||||||||||||||||
| UST Global Inc | First Lien - Term Loan | 11/20/28 | 4.25 | % | L + 3.75% | 0.50 | % | 1,000 | 995 | 1,000 | 2.1 | % | ||||||||||||||||||
| Total Services: Business | 12,153 | 12,176 | 25.9 | % | ||||||||||||||||||||||||||
| Services: Consumer | ||||||||||||||||||||||||||||||
| Cimpress plc | First Lien - Term Loan | 5/17/28 | 4.00 | % | L + 3.50% | 0.50 | % | 995 | 986 | 996 | 2.1 | % | ||||||||||||||||||
| WW International, Inc. | First Lien - Term Loan | 4/13/28 | 4.00 | % | L + 3.50% | 0.50 | % | 945 | 941 | 937 | 2.0 | % | ||||||||||||||||||
| Total Services: Consumer | 1,927 | 1,933 | 4.1 | % | ||||||||||||||||||||||||||
| Telecommunications | ||||||||||||||||||||||||||||||
| Avaya Inc. | First Lien - Term Loan | 12/15/27 | 4.36 | % | L + 4.25% | 0.11 | % | 850 | 839 | 854 | 1.8 | % | ||||||||||||||||||
| CCI Buyer, Inc. | First Lien - Term Loan | 12/17/27 | 4.50 | % | L + 3.75% | 0.75 | % | 992 | 984 | 995 | 2.1 | % | ||||||||||||||||||
| ConvergeOne Holdings, Corp. | First Lien - Term Loan | 1/4/26 | 5.10 | % | L + 5.00% | 0.10 | % | 1,489 | 1,464 | 1,461 | 3.1 | % | ||||||||||||||||||
| Digi International Inc. | First Lien - Term Loan | 12/22/28 | 5.50 | % | L + 5.00% | 0.50 | % | 857 | 840 | 851 | 1.8 | % | ||||||||||||||||||
| Mavenir Systems, Inc. | First Lien - Term Loan | 8/18/28 | 5.25 | % | L + 4.75% | 0.50 | % | 1,500 | 1,485 | 1,502 | 3.2 | % | ||||||||||||||||||
| Plantronics, Inc. | First Lien - Term Loan | 7/2/25 | 2.60 | % | L + 2.50% | 0.10 | % | 1,000 | 988 | 981 | 2.1 | % | ||||||||||||||||||
| Syniverse Holdings, Inc. | Second Lien - Term Loan | 3/9/23 | 10.00 | % | L + 9.00% | 1.00 | % | 1,250 | 1,252 | 1,243 | 2.7 | % | ||||||||||||||||||
| Syniverse Holdings, Inc. | First Lien - Term Loan | 3/9/23 | 6.00 | % | L + 5.00% | 1.00 | % | 495 | 489 | 493 | 1.0 | % | ||||||||||||||||||
| Venga Finance S.a r.l. | First Lien - Term Loan | 12/4/28 | 5.50 | % | L + 4.75% | 0.75 | % | 1,000 | 970 | 983 | 2.1 | % | ||||||||||||||||||
| Zayo Group Holdings, Inc. | First Lien - Term Loan | 3/9/27 | 3.10 | % | L + 3.00% | 0.10 | % | 1,000 | 995 | 988 | 2.1 | % | ||||||||||||||||||
| Total Telecommunications | 10,306 | 10,351 | 22.0 | % | ||||||||||||||||||||||||||
STEELE CREEK CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2021
(in thousands, except per share data)
| Description (1) | Investment Type | Maturity | Interest Rate (2) | Basis Point Spread Above Index (2) | Interest Rate Floor / Base Rate (2) | Par Amount | Amortized Cost | Fair Value | % of Net Assets(3) | |||||||||||||||||||||
| Transportation: Cargo | ||||||||||||||||||||||||||||||
| Carriage Purchaser, Inc. | First Lien - Term Loan | 10/31/28 | 5.00 | % | L + 4.25% | 0.75 | % | 997 | 993 | 999 | 2.1 | % | ||||||||||||||||||
| Daseke Companies, Inc. | First Lien - Term Loan | 3/9/28 | 4.75 | % | L + 4.00% | 0.75 | % | 992 | 988 | 994 | 2.1 | % | ||||||||||||||||||
| Echo Global Logistics, Inc. | First Lien - Term Loan | 11/23/28 | 4.25 | % | L + 3.75% | 0.50 | % | 1,000 | 998 | 998 | 2.1 | % | ||||||||||||||||||
| Kenan Advantage Group, Inc.,The | Second Lien - Term Loan | 9/1/27 | 8.00 | % | L + 7.25% | 0.75 | % | 1,000 | 981 | 999 | 2.1 | % | ||||||||||||||||||
| WWEX UNI TopCo Holdings, LLC | First Lien - Term Loan | 7/26/28 | 5.00 | % | L + 4.25% | 0.75 | % | 1,210 | 1,198 | 1,214 | 2.7 | % | ||||||||||||||||||
| Total Transportation: Cargo | 5,158 | 5,204 | 11.1 | % | ||||||||||||||||||||||||||
| Transportation: Consumer | ||||||||||||||||||||||||||||||
| First Student Bidco Inc. | First Lien - Term Loan | 7/21/28 | 3.50 | % | L + 3.00% | 0.50 | % | 365 | 363 | 364 | 0.8 | % | ||||||||||||||||||
| First Student Bidco Inc. | First Lien - Term Loan | 7/21/28 | 3.50 | % | L + 3.00% | 0.50 | % | 135 | 134 | 134 | 0.3 | % | ||||||||||||||||||
| Total Transportation: Consumer | 497 | 498 | 1.1 | % | ||||||||||||||||||||||||||
| Utilities: Electric | ||||||||||||||||||||||||||||||
| PG&E Corporation | First Lien - Term Loan | 6/23/25 | 3.50 | % | L + 3.00% | 0.50 | % | 493 | 490 | 488 | 1.0 | % | ||||||||||||||||||
| Total Utilities: Electric | 490 | 488 | 1.0 | % | ||||||||||||||||||||||||||
| Total Investments made in United States Companies | 105,348 | 105,896 | 225.4 | % | ||||||||||||||||||||||||||
| Investments made in Luxembourg Companies | ||||||||||||||||||||||||||||||
| Containers, Packaging & Glass | ||||||||||||||||||||||||||||||
| Mar Bidco S.a r.l. | First Lien - Term Loan | 6/28/28 | 4.75 | % | L + 4.25% | 0.50 | % | 106 | 105 | 106 | 0.2 | % | ||||||||||||||||||
| Total Containers, Packaging & Glass | 105 | 106 | 0.2 | % | ||||||||||||||||||||||||||
| Telecommunications | ||||||||||||||||||||||||||||||
| Zacapa S.A R.L. | First Lien - Term Loan | 7/2/25 | 4.72 | % | L + 4.50% | 0.22 | % | 992 | 990 | 995 | 2.1 | % | ||||||||||||||||||
| Total Telecommunications | 990 | 995 | 2.1 | % | ||||||||||||||||||||||||||
| Total Investments made in Luxembourg Companies | 1,095 | 1,101 | 2.3 | % | ||||||||||||||||||||||||||
| Total Non-controlled/Non-Affiliate Investments | $ | 106,443 | $ | 106,997 | 227.7 | % | ||||||||||||||||||||||||
| (1) | All investments are non-controlled/non-affiliated investments as defined by the Investment Company Act of 1940 (the “1940 Act”). The provisions of the 1940 Act classify investments based on the level of control that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally presumed to be “non-controlled” when the Company owns 25% or less of the portfolio company’s voting securities and “controlled” when the Company owns more than 25% of the portfolio company’s voting securities. The provisions of the 1940 Act also classify investments further based on the level of ownership that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as “non-affiliated” when the Company owns less than 5% of a portfolio company’s voting securities and “affiliated” when the Company owns 5% or more of a portfolio company’s voting securities. |
| (2) |
| The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) which reset monthly or quarterly. For each such investment, the Fund has provided the spread over LIBOR and the current contractual interest rate in effect at December 31, 2021. As of December 31, 2021, rates for 1M L, 2M L, 3M L and 6M L are 0.10%, 0.15%, 0.21%, and 0.34% respectively. |
| Percentages are based on net assets of $46,993 as of December 31, 2021. |
| Of the entire $138,889 commitment to PDS Holdco Inc., $80,556 was unfunded as of December 31, 2021. |
| Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The investment may be subject to an unused/letter of credit facility fee. |
The accompanying notes are an integral part of these consolidated financial statements
Steele Creek Capital Corporation
Notes to the Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
1. ORGANIZATION
Steele Creek Capital Corporation (which is referred to as the “Company”, “we”, “us” and “our”) was originally organized as MSC Capital LLC as a Delaware limited liability company on June 3, 2020. The Company commenced operations as MSC Capital LLC on July 1, 2020. On October 7, 2020, MSC Capital LLC converted to a Maryland corporation. We are a closed-end externally managed, non-diversified management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). The Company will electhas elected for federal income tax purposes to be treated as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”).
In September 2020, we formed a wholly-owned special purpose financing vehicle, Steele Creek Funding I, LLC (“Funding I”), a Delaware limited liability company.
Steele Creek Investment Management LLC (the “Investment Advisor” or “Administrator”) is our investment adviser and an affiliate of Moelis Asset Management LP (“Moelis Asset”). We entered into an Investment Advisory Agreement with the Investment Advisor who, subject to the supervision of our board of directors (the “Board”), manages the day-to-day operations and provides investment advisory services to the Company. The Company has no paid employees and the Investment Advisor has entered into an agreement (the “Custody Agreement”) to delegate certain administrative and custody functions to US Bank (the “Custodian”).
The Company is a financial services company that primarily invests in syndicated corporate bank loans, bonds, other debt securities, and structured products. The investment objective is to generate high current income by investing primarily in fixed income instruments, including broadly syndicated bank loans, structured products, mezzanine financings and senior secured bonds.
The term “shares” herein refers to membership interest in the Company prior to conversion.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its consolidated subsidiaries. The Company is an investment company following accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services-Investment Companies. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the results of operations and financial condition as of and for the periods presented. All significant intercompany balances and transactions have been eliminated. Financial statements are prepared in accordance with GAAP for financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X. In the opinion of management, all adjustments, consisting solely of normal recurring accruals considered necessary for the fair presentation of financial statements for the period presented, have been included. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”).
Use of Estimates - The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Investment Advisor to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from such estimates included in the consolidated financial statements.
Securities Transactions - Securities transactions are recorded on the trade date. The trade date for loans purchased in the “primary market” and for loans and other investments purchased in the “secondary market” is the date on which the transaction is entered. Cost is determined based on consideration given, adjusted for amortization of original issuance discounts (“OID”), market discounts and premiums.
Investment Income - For debt investments, we record interest income on the accrual basis to the extent that such amounts are expected to be collected. Where applicable, OID and purchased discounts and premiums are accreted into interest income using the effective interest method. Loan origination fees are deferred and accreted into interest income using the effective interest method. We record prepayment premiums on loans and other investments as interest income when such amounts are received. We stop accruing interest on investments when it is determined that interest is no longer collectible. For the three and nine months ended March 31,September 30, 2022, andthere was one loan on non-accrual status. For the three and nine months ended March 31,September 30, 2021, there were no loans in non-accrual status.
Expenses - Expenses include management fees, incentive fees, administrator fees, custody fees, legal fees, audit and tax service expenses, third-party valuation fees and other general and administrative expenses. Expenses are recognized on an accrual basis.
Organizational and offering costs - Organizational costs include costs relating to the formation and incorporation of the business and are expensed as incurred. Offering costs include legal fees and other costs pertaining to the registration statement and the private placement memorandum. Offering costs are deferred and amortized over a period of twelve months.
Realized Gain or Loss and Unrealized Gain or Loss - Realized gain or loss from an investment is recorded at the time of disposition and calculated using the weighted average cost method. Unrealized gain or loss reflects the changes in fair value of investments as determined in compliance with the Investment Advisor’s valuation policy.
Cash - The Company maintains its cash in a bank account, which, at times, may exceed federally insured limits. As of March 31,September 30, 2022, and December 31, 2021, our cash balance exceeded federally insured limits. The Investment Advisor continuously monitors the performance of the bank where the account is held in order to manage any risk associated with such account.
Earnings per share - The Company calculates earnings per share by dividing the net increase in net assets resulting from operations by the weighted average shares for the period.
Paid-in-capital in Excess of Par Value - The Company records the proceeds from the sale of its shares on a net basis to capital stock and paid-in capital in excess of par value, excluding all offering costs.
Fair Value of Financial Instruments - Assets and liabilities which qualify as financial instruments under relevant authoritative guidance are carried at fair value or contractual amounts approximating fair value.
Investment Classification - As required by the 1940 Act, investments are classified by level of control. “Control Investments” are defined as investments in portfolio companies that we are deemed to control, as defined in the 1940 Act. “Affiliate Investments” are investments in those companies that are affiliated companies, as defined in the 1940 Act, other than Control Investments. “Non-Control/Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments. Generally, under the 1940 Act, we are deemed to control a company in which we have invested if we own more than 25% of the voting securities of such company. We are deemed to be an affiliate of a company if we own 5% or more of the voting securities of such company. As of March 31,September 30, 2022 and December 31, 2021, all of our investments were Non-Control/Non-Affiliate investments.
Valuation of Investments - We value our investments in accordance with the 1940 Act and ASC Topic 820 – Fair Value Measurement and Disclosures, (“ASC Topic 820”) as determined in good faith by our Board based on the input of our Investment Advisor, the respective independent valuation firms, and the Audit Committee. ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Investments are reflected on the Consolidated Statement of Assets and Liabilities at fair value, with changes in unrealized gains and losses resulting from changes in fair value reflected in the accompanying Consolidated Statement of Operations as “net change in unrealized appreciation on non-controlled/non-affiliate company investments.” Fair value is the amount 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 (i.e., the exit price). Publicly-traded investments in active markets are reported at the market closing price. Investment transactions are recorded on a trade date basis (for publicly-traded investments and securities traded through dealer markets) or upon closing of the transaction (for private investments). The cost of an investment includes all costs incurred by the Company as part of the purchase of such investment. The difference between the initially recognized cost and the subsequent fair value measurement of an investment is reflected as “net change in unrealized appreciation on non-controlled/non-affiliate company investments” in the Consolidated Statement of Operations.
We value our investments in accordance with the Investment Advisor��sAdvisor’s valuation policy. Valuations are prepared by the Investment Advisor and approved by the valuation committee on a monthly basis.CFO of the Company for each accounting close.
Transfers of investments between different levels of the fair value hierarchy are recorded at the end of the period. For the three and nine months ended March 31,September 30, 2022 and March 31,September 30, 2021 there were no transfers between levels.
Income Taxes - For the three and nine months ended March 31,September 30, 2022 and March 31,September 30, 2021, we have complied with the requirements of Subchapter M of the Code and expect to be treated as a RIC for federal income tax purposes. In this regard, we account for income taxes using the asset and liability method prescribed by ASC Topic 740 – Income Taxes (“ASC Topic 740”). Under this method, income taxes are provided for amounts currently payable and for amounts deferred as tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. Based upon our qualification and election to be treated as a RIC for federal income tax purposes, we typically do not incur any material federal income taxes. However, we may choose to retain a portion of our calendar year income, which may result in the imposition of an excise tax.
We recognize the effect of a tax position in our Consolidated Financial Statements in accordance with ASC Topic 740 when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by the applicable tax authority. Tax positions not considered to satisfy the “more-likely-than-not” threshold would be recorded as a tax expense or benefit. Penalties or interest, if applicable, that may be assessed relating to income taxes would be classified as other operating expenses in the financial statements. There were no tax accruals relating to uncertain tax positions and no amounts accrued for any related interest or penalties with respect to the period presented herein. The Company’s determinations regarding ASC Topic 740 may be subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going analysis of tax laws, regulations and interpretations thereof. Although the Company files both federal and state income tax returns, the Company’s major tax jurisdiction is federal.
Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and net realized gains recognized for financial reporting purposes. Differences between tax regulations and GAAP may be permanent or temporary. Permanent differences are reclassified among capital accounts in the Consolidated Financial Statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.
The 2021 and 2020 tax years for the Company are not yet closed and remain subject to examination by U.S. Federal, state and local tax authorities.
Recent Accounting Pronouncements
The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on its consolidated financial statements.
In August 2020, the FASB issued ASU No. 2020-06, “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,” which simplifies the accounting for convertible instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, after adoption, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 and can be adopted on either a fully retrospective or modified retrospective basis. The application of this guidance will not have a material impact on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, “Reference“Reference Rate Reform (Topic 848),” which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04ASU2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of the adoption of ASU 2020-04 and 2021-01 on its consolidated financial statements.
In March 2022, the FASB issued ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326)”, which is intended to address issues identified during the post-implementation review of ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The amendment, among other things, eliminates the accounting guidance for troubled debt restructurings by creditors in Subtopic 310-40, “Receivables -Troubled Debt Restructurings by Creditors”, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The new guidance is effective for interim and annual periods beginning after December 15, 2022. The Company is currently evaluating the impact of the adoption of ASU 2022-02 on its consolidated financial statements.
3. AGREEMENTS AND RELATED PARTY TRANSACTIONS
Investment Advisory Agreement
Pursuant to the investment advisory agreement between the Company and the Investment Advisor (the “Investment Advisory Agreement”), we have agreed to pay a fee for investment advisory and management services consisting of two components, a base management fee and an incentive fee. The cost of both the base management fee and the incentive fee will ultimately be borne by our stockholders.
Our Investment Advisor has agreed to maintain a targeted annual distribution payment on shares of common stock outstanding on the relevant payment dates of 6.0% based on our net asset valuation per share and has agreed to waive all or a portion of the base management and income incentive fee, (quarterly) and the capital incentive fee (annually) where net investment income plus net realized capital gains is not sufficient to maintain the targeted annual distribution payment. The Advisor’s fees will be calculated in accordance with the Investment Advisory Agreement once the annual distribution payment has been earned with realized income.
On August 15, 2022 the Board approved the renewal of the Investment Advisory Agreement which automatically renews for successive one-year periods each September 17th; provided that such continuance is specifically approved at least annually by the vote of the Board or by the vote of a majority of the outstanding voting securities of the Company and the vote of a majority of the Independent Directors, in accordance with the requirements of the 1940 Act.
Base Management Fee
The base management fee is calculated at a maximum annual rate of 1.0% of the average of the weighted average (based on the number of shares outstanding each day in the quarter) of our gross assets (including uninvested cash and cash equivalents) at the end of each of the two most recently completed calendar quarters. For each the quarter, the base management fee is calculated based on the average of our gross assets as of such quarter-end. The base management fee for any partial quarter is pro-rated based on the number of days actually elapsed in that quarter relative to the total number of days in such quarter.
Gross and net management fees for the three and nine months ended March 31,September 30, 2022 were $431$385 thousand and $221$1,231 thousand, respectfully. Gross and netrespectively. Net management fees for the three and nine months ended March 31, 2021September 30, 2022 were $289$323 thousand and $174$688 thousand, respectfully.respectively. The CompanyInvestment Advisor elected to waive a portion of the management fee and charged management fees on investments rather than gross assets.
Gross management fees for the three and nine months ended September 30, 2021 were $533 thousand and $1,272 thousand, respectively. Net management fees for the three and nine months ended September 30, 2021 were $274 thousand and $682 thousand, respectively. The Investment Advisor elected to waive a portion of the management fee and charged management fees on investments rather than gross assets.
Incentive Fee
The Incentive Fee will consist of an income-based component and a capital gains component.
The portion of the incentive fee based on income is determined and paid quarterly in arrears commencing with the first calendar quarter following the Company’s election to be regulated as a BDC, and equals 15% of the pre-incentive fee net investment income in excess of a 1.5% quarterly (or 6% annually) “hurdle rate.” There are no catch-up provisions applicable to income-based incentive fees under the Investment Advisory Agreement.
Pre-incentive fee net investment income 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 Company receives from portfolio companies) that the Company accrues, minus the Company’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 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 also includes, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero coupon securities), accrued income that the Company has not yet received in cash. The Investment Advisor is not under any obligation to reimburse the Company for any part of the income-based incentive fees it received that was based on accrued interest that the Company never actually received. Because of the structure of the incentive fee, it is possible that we may pay an incentive fee in a quarter where we incur a loss. For example, if we receive pre-incentive fee net investment income in excess of the Hurdle rate for a quarter, we will pay the applicable incentive fee even if we have incurred a loss in that quarter due to realized and unrealized capital losses.
The portion of the incentive fee based on capital-gains is payable at the end of each calendar year in arrears, equals 15% of cumulative realized capital gains from the date of the Company’s election to be regulated as a BDC to the end of each calendar year, less cumulative net realized capital losses and unrealized capital depreciation. We will accrue, but will not pay, a capital gains incentive fee with respect to unrealized appreciation. Also, it should be noted that while we accrue the capital incentive fee quarterly, the expense will fluctuate with the Company’s overall investment results and the expense will be finalized at year end.
In determining the capital gains incentive fee payable to the Investment Advisor, we calculate the cumulative aggregate realized capital gains and cumulative aggregate realized capital losses since our inception, and the aggregate unrealized capital depreciation as of the date of the calculation, as applicable, with respect to each of the investments in our portfolio. For this purpose, cumulative aggregate realized capital gains, if any, equals the sum of the differences between the net sales price of each investment, when sold, and the original cost of such investment since our inception. Cumulative aggregate realized capital losses equals the sum of the amounts by which the net sales price of each investment, when sold, is less than the original cost of such investment since our inception. Aggregate unrealized capital depreciation equals the sum of the difference, if negative, between the valuation of each investment as of the applicable calculation date and the original cost of such investment. At the end of the applicable year, the amount of capital gains that serves as the basis for our calculation of the capital gains incentive fee equals the cumulative aggregate realized capital gains less cumulative aggregate realized capital losses, less aggregate unrealized capital depreciation, with respect to our portfolio of investments.
For the three and nine months ended March 31,September 30, 2022, the Company returnedInvestment Advisor did not charge an incentive fee. For the nine months ended September 30, 2022, the Investment Advisor reversed $110 thousand of accrued incentive fees. This reversal was necessary due to the Company’s performance in 2022.
Gross capital incentive fees for the first quarter of 2022. Forthree and nine months ended September 30, 2021 were $201 thousand and $271 thousand, respectively. The fee for the three months ended March 31,September 30, 2021 consists of $66 thousand earned in the Companycurrent period and $135 thousand of fees originally waived a portionin the first six months of the year. The Company’s performance through September 30, 2021 produced returns that are sufficient for the Investment Advisor to charge a full capital incentive fee to payfor the 6% priority dividend. Gross capital incentive fees were $110 thousand and after the waiver the net capital incentive fee was $45 thousand.nine months ended September 30, 2021.
Fee Waivers
On February 18, 2021, the Company and the Investment Advisor executed a Waiver Letter (the “Waiver”), whereby the Investment Advisor agrees to waive all or such portion of the Base Management Fee, the Income Incentive Fee and the Capital Incentive Fee (collectively the “Fees”) that they would otherwise be entitled to receive under the Investment Advisory Agreement, dated as of September 16, 2020 (the ‘Agreement”) for any quarter prior to a Liquidity Event to the extent required in order for the Company to earn a quarterly net investment income plus net realized capital gains to maintain an annual distribution payment of shares of common stock outstanding of 6.0%. The Company’s performance will impact the amount and timing of the fee waivers.
For the three and nine months ended March 31,September 30, 2022 and March 31,September 30, 2021, the Board agreed upon a fee waiver to reduce the basis for the quarterly management fee from gross assets to investments. For the three and nine months ended March 31,September 30, 2022 the Investment Advisor waived $62 thousand and $286 thousand, respectively. For the three and nine months ended March 31,September 30, 2021 the CompanyInvestment Advisor waived $135$259 thousand and $115$590 thousand, respectfully.respectively. This fee waiver will be re-evaluated annually.
Additionally, the Company’s performance for the threenine months ended March 31,September 30, 2022 did not produce realized income sufficient to charge a full management fee. Therefore, the CompanyInvestment Advisor waived an additional $75$257 thousand of management fees for the threenine months ended March 31, 2022. The Company waived $65 thousand of incentive fees forSeptember 30, 2022, respectively. For the three and nine months ended March 31, 2021.September 30, 2021, the Company’s performance produced realized income sufficient to charge a full management fee.
Administration Agreement
The Administration Agreement provides that the Administrator will furnish us with office facilities and equipment and will provide us with clerical, bookkeeping, recordkeeping and other administrative services at such facilities. Under the Administration Agreement, the Administrator will perform, or oversee the performance of, our required administrative services, which will include being responsible for the financial and other records that we are required to maintain and preparing reports to our stockholders and reports and other materials filed with the SEC. In addition, the Administrator will assist us in determining and publishing our net asset value, oversee the preparation and filing of our tax returns and the printing and dissemination of reports and other materials to our stockholders, and generally oversee the payment of our expenses and the performance of administrative and professional services rendered to us by others. Under the Administration Agreement, the Administrator will also provide managerial assistance on our behalf to those portfolio companies that have accepted our offer to provide such assistance.
Under the Administration Agreement, we will reimburse the Administrator based upon our allocable portion (subject to the review and approval of our Board) of the Administrator’s overhead (including rent) in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing compliance functions and our allocable portion of the cost of our Chief Financial Officer and Chief Compliance Officer, and any of their respective staff who provide services to us, operations staff who provide services to us, and internal audit staff, if any, to the extent internal audit performs a role in our Sarbanes-Oxley internal control assessment. In addition, if requested to provide significant managerial assistance to our portfolio companies, the Administrator will be paid an additional amount based on the services provided, which shall not exceed the amount we receive from such portfolio companies for providing this assistance. The Administration Agreement will have an initial term of two years and thereafter may be renewed annually with the approval of our Board. The Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other party. To the extent that the Administrator outsources any of its functions, we will pay the fees associated with such functions on a direct basis without any incremental profit to the Administrator.
On August 15, 2022 the Board approved the renewal of the Administration Agreement which automatically renews for successive one-year periods each September 17th; provided that such continuance is specifically approved at least annually by the vote of the Board or by the vote of a majority of the outstanding voting securities of the Company and the vote of a majority of the members of the Company’s Board who are not parties to this Agreement or “interested persons” (as such term defined in Section 2(a)(19) of the Investment Company Act) of any such party, in accordance with the Investment Company Act.
Related Party Transactions
As of March 31,September 30, 2022, affiliates owned approximately 48%43% of the Company representing approximately $25,291$21,182 thousand of the Company’s net assets. As of December 31, 2021, affiliates owned approximately 55% of the Company representing approximately $25,901 thousand of the Company’s net assets.
For the three and nine months ended March 31,September 30, 2022, Moelis Asset, parent of the Investment Advisor did not make a contribution to the Company. For the three months ended March 31,September 30, 2021, Moelis Asset, parent of the Investment Advisor did not make a contribution to the Company. For the nine months ended September 30, 2021, Moelis Asset contributed approximately $36 thousand to pay organizational and offering costs incurred by the Company related to the formation of the entity. Moelis Asset has incurred these expenses and they will not be charged back to the Company.
Separate from the contributions made above, the Company may, from time to time, purchase investments from, or sell investments to affiliates of our Investment Advisor at fair value on the trade date. For the three and nine months ended March 31,September 30, 2022 and March 31,September 30, 2021 there were no purchases of investments from or sales of investments to affiliates of our Investment Advisor.
Prior to the MSC Capital LLC’s conversion to a corporation and election to be treated as a BDC, it did not pay the Investment Advisor for the services it provided to MSC Capital LLC. Similarly, the affiliated directors and officers of the Company did not receive compensation from the Company. Upon conversion, the Company began accruing directors’ compensation for the three independent directors in accordance with the governing documents. For the three and nine months ended March 31,September 30, 2022, and March 31, 2021, the Company incurred $20 thousand and $20$60 thousand in directors’ fees expense, respectively. For the three and nine months ended September 30, 2021, the Company incurred $18 thousand and $60 thousand in directors’ fees expense, respectively. On August 13, 2021, the Board agreed to make investments rather than gross assets the basis for their fee to be more in line with the waivers implemented for management fees.
The Company carries employment practices liability, directors and officers and errors and omission insurance. For the best interests of the Company, these policies are joint liability policies with Moelis Asset and its affiliates.
4. INVESTMENTS
Fair Value Measurements
We value our investments on a monthly basisfor each accounting close at fair value in accordance with the 1940 Act and ASC Topic 820, which defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Due to the uncertainty inherent in the valuation process, estimates of fair value may differ significantly from the values that would have been used had a ready market for our investments existed, and the differences could be material. Additionally, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on the investments to be different than the valuations currently assigned.
Investments for which observable market prices in active markets do not exist are reported at fair value, as determined by the Investment Advisor using the best information available. The amount determined to be fair value may incorporate the Investment Advisor’s own assumptions (including assumptions that the Investment Advisor believes market participants would use in valuing the investment, and assumptions relating to appropriate risk adjustments for non-performance and lack of marketability).
The fair values assigned to our investments are based upon available information and do not necessarily represent amounts which might ultimately be realized. Due to the absence of readily determinable fair values and the inherent uncertainty of valuations, the estimated fair values may differ significantly from values that would have been used had a ready market for the securities existed, and the differences could be material.
The guidance establishes a framework for measuring fair value, and requires enhanced disclosures about fair value measurements. The fair value hierarchy prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment, the characteristics specific to the investment, and the state of the marketplace (including the existence and transparency of transactions between market participants). Investments with readily-available actively quoted prices or for which fair value can be measured from actively-quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following categories (from highest to lowest) based on inputs:
Level 1 – Quoted prices (unadjusted) are available in active markets for identical investments that the Company has the ability to access as of the reporting date. The type of investments which would generally be included in Level 1 include listed equity securities and listed derivatives. The Company, to the extent that it holds such investments, does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. This may include valuations based on executed trades, broker quotations that constitute an executable price, and alternative pricing sources supported by observable inputs which, in each case, are either directly or indirectly observable for the asset in connection with market data at the measurement date.
Level 3 – Pricing inputs are unobservable for the investments and include situations where there is little, if any, market activity for the investments. The inputs into the determination of fair value require significant judgment or estimation by the Investment Advisor. In certain cases, investments classified within Level 3 may include securities for which we have obtained indicative quotes from broker-dealers that do not necessarily represent prices the broker may be willing to trade on.
The valuation techniques used maximize the use of observable inputs and minimize the use of unobservable inputs. Our loans are predominately valued based on evaluated prices from a nationally recognized independent pricing service or from third-party brokers who make markets in such debt investments. When possible, we make inquiries of third-party pricing sources to understand their use of significant inputs and assumptions. We review the third-party fair value estimates and perform procedures to validate their reasonableness, including an analysis of the range and dispersion of third-party estimates, frequency of pricing updates, comparison of recent trade activity for similar securities, and review for consistency with market conditions observed as of the measurement date.
There may be instances when independent or third-party pricing sources are not available, or cases where we believe that the third-party pricing sources do not provide sufficient evidence to support a market participant’s view of the fair value of the debt investment being valued. These instances may result from an investment in a less liquid loan such as a middle market loan, a mezzanine loan or unitranche loan, or a loan to a company that has become financially distressed. In these instances, we may estimate the fair value based on a combination of a market yield valuation methodology and evaluated pricing discussed above, or solely based on a market yield valuation methodology. Under the market yield valuation methodology, we estimate the fair value based on a discounted cash flow technique. For these loans, the unobservable inputs used in the market yield valuation methodology to measure fair value reflect management’s best estimate of assumptions that would be used by market participants when pricing the investment in a hypothetical transaction, including estimated remaining life, current market yield and interest rate spreads of similar loans and securities as of the measurement date. We will estimate the remaining life based on market data for the average life of similar loans. However, if we have information that the loan is expected to be repaid in the near term, we would use an estimated remaining life based on the expected repayment date. The average life to be used to estimate the fair value of our loans may be shorter than the legal maturity of the loans since many loans are prepaid prior to the maturity date. The interest rate spreads used to estimate the fair value of our loans is based on current interest rate spreads of similar loans. If there is a significant deterioration of the credit quality of a loan, we may consider other factors that a hypothetical market participant would use to estimate fair value, including the proceeds that would be received in a liquidation analysis.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of observable input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgement, and considers factors specific to the investment.
The following fair value hierarchy table sets forth our investments by level as of March 31,September 30, 2022:
| September 30, 2022 | ||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||
| Term Loans | $ | 127,502 | $ | - | $ | 127,502 | $ | - | ||||||||
| Total Investments | $ | 127,502 | $ | - | $ | 127,502 | $ | - | ||||||||
| March 31, 2022 | ||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||
| Term Loans | $ | 128,455 | $ | - | $ | 128,455 | $ | - | ||||||||
| Total Investments | $ | 128,455 | $ | - | $ | 128,455 | $ | - | ||||||||
The following fair value hierarchy table sets forth our investments by level as of December 31, 2021:
| December 31, 2021 | ||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||
| Term Loans | $ | 106,997 | $ | - | $ | 106,997 | $ | - | ||||||||
| Total Investments | $ | 106,997 | $ | - | $ | 106,997 | $ | - | ||||||||
5. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share:share for the three and nine months ended September 30, 2022:
| For the three months ended March 31, 2022 | For the three months ended March 31, 2021 | |||||||
| Numerator - net earnings | $ | (466 | ) | $ | 784 | |||
| Denominator - weighted average shares | 4,802 | 2,652 | ||||||
| Net earnings per share | $ | (0.10 | ) | $ | 0.30 | |||
| For the three months ended September 30, 2022 | For the nine months ended September 30, 2022 | |||||||
| Numerator - net (loss) earnings | $ | (881 | ) | $ | (7,963 | ) | ||
| Denominator - weighted average shares | 5,426 | 5,131 | ||||||
| Net (loss) earnings per share | $ | (0.16 | ) | $ | (1.55 | ) | ||
The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2021:
| For the three months ended September 30, 2021 | For the nine months ended September 30, 2021 | |||||||
| Numerator – net (loss) earnings | $ | 598 | $ | 2,138 | ||||
| Denominator - weighted average shares | 3,929 | 3,225 | ||||||
| Net (loss) earnings per share | $ | 0.15 | $ | 0.66 | ||||
6. NET ASSETS
The Company has been actively fundraising since its inception. The table below summarizes the capital the Company has raised and the shares issued to investors during the threenine months ended March 31,September 30, 2022.
| Date Closed | Capital Raised (in thousands) | Shares Issued | ||||||
| Balance at December 31, 2021 | $ | 45,555 | 4,311,321 | |||||
| January 7, 2022 | 4,395 | 401,369 | ||||||
| January 21, 2022 | 675 | 61,059 | ||||||
| February 4, 2022 | 725 | 65,809 | ||||||
| February 18, 2022 | 100 | 9,299 | ||||||
| March 4, 2022 | 374 | 34,875 | ||||||
| March 18, 2022 | 839 | 80,506 | ||||||
| Balance at March 31, 2022 | $ | 52,663 | 4,964,238 | |||||
| April 1, 2022 | 769 | 72,225 | ||||||
| April 18, 2022 | 347 | 32,246 | ||||||
| May 6, 2022 | 724 | 68,479 | ||||||
| May 20, 2022 | 861 | 87,990 | ||||||
| June 3, 2022 | 234 | 23,769 | ||||||
| June 17, 2022 | 247 | 25,801 | ||||||
| Balance at June 30, 2022 | $ | 55,845 | 5,274,748 | |||||
| July 1, 2022 | 563 | 61,107 | ||||||
| July 15, 2022 | 672 | 73,722 | ||||||
| August 5, 2022 | 54 | 5,651 | ||||||
| August 19, 2022 | 347 | 36,028 | ||||||
| September 2, 2022 | 30 | 3,137 | ||||||
| September 16, 2022 | 360 | 37,871 | ||||||
| Balance at September 30, 2022 | $ | 57,871 | 5,492,264 | |||||
| Date Closed | Capital Raised (in thousands) | Shares Issued | ||||||
| Balance at December 31, 2021 | $ | 45,555 | 4,311,321 | |||||
| January 7, 2022 | 4,395 | 401,369 | ||||||
| January 21, 2022 | 675 | 61,059 | ||||||
| February 4, 2022 | 725 | 65,809 | ||||||
| February 18, 2022 | 100 | 9,299 | ||||||
| March 4, 2022 | 374 | 34,875 | ||||||
| March 18, 2022 | 839 | 80,506 | ||||||
| Balance at March 31, 2022 | $ | 52,663 | 4,964,238 | |||||
The table below summarizes the capital the Company has raised and the shares issued to investors during the threenine months ended March 31,September 30, 2021.
| Date Closed | Capital Raised (in thousands) | Shares Issued | ||||||
| Balance at December 31, 2020 | $ | 27,108 | 2,633,228 | |||||
| March 4, 2021 | 600 | 54,898 | ||||||
| March 19, 2021 | 200 | 18,268 | ||||||
| Balance at March 31, 2021 | 27,908 | 2,706,394 | ||||||
| Date Closed | Capital Raised (in thousands) | Shares Issued | ||||||
| Balance at December 31, 2020 | $ | 27,108 | 2,633,228 | |||||
| March 4, 2021 | 600 | 54,898 | ||||||
| March 19, 2021 | 200 | 18,268 | ||||||
| Balance at March 31, 2021 | 27,908 | 2,706,394 | ||||||
| April 5, 2021 | 525 | 48,062 | ||||||
| April 16, 2021 | 500 | 45,400 | ||||||
| June 4, 2021 | 10,699 | 974,744 | ||||||
| June 18, 2021 | 84 | 7,616 | ||||||
| Balance at June 30, 2021 | 39,716 | 3,782,216 | ||||||
| July 1, 2021 | 365 | 33,155 | ||||||
| July 16, 2021 | 649 | 58,735 | ||||||
| August 6, 2021 | 730 | 66,097 | ||||||
| August 19, 2021 | 500 | 45,818 | ||||||
| September 3, 2021 | 124 | 11,263 | ||||||
| September 17, 2021 | 50 | 4,547 | ||||||
| Balance at September 30, 2021 | $ | 42,134 | 4,001,831 | |||||
During the three and nine months ended March 31,September 30, 2022, the Company issued 652,917217,516 shares and 1,180,943 shares with an aggregate value of $7,108 thousand.$2,026 thousand and $12,316 thousand, respectively. During the three and nine months ended March 31,September 30, 2021, the Company issued 73,166219,615 shares and 1,368,603 shares, with an aggregate value of $800 thousand.$2,418 thousand and $15,026 thousand, respectively.
As of March 31,September 30, 2022, and December 31, 2021 the Company had 4,964,2385,492,264 and 4,311,321 shares of common stock, $0.001 par value per share, outstanding, respectively.
7. CREDIT FACILITY
On October 13, 2020, Funding I entered into a two-year secured revolving Credit Agreement with BNP Paribas (“BNP”) as lender and administrative agent (the “BNP Credit Facility”) providing a maximum of $45,000 thousand (“Maximum Facility Amount”) to Funding I. During the Credit Facility’s revolving period (earlier of the termination by the borrower or twelve month anniversary of the closing date), it bears interest at London Interbank Offered Rate, or LIBOR, plus 175 basis points. The Company created a wholly owned subsidiary, Funding I, which it will use to hold the Company’s investments, and a first priority continuing security interest in, to and under each investment, all underlying investments and underlying assets has been granted to BNP to be used as collateral for the BNP Credit Facility. The Company began transferring investments into Steele Creek Funding I, LLC in October 2020.
Funding I is required to pay an administrative agent fee equal to $25 thousand per annum and a structuring fee equal to 0.25% of the Maximum Facility Amount paid on the twelve-month anniversary of the closing date. Additionally, an unused fee is payable quarterly in arrears in an amount equal to 0.70% on the actual daily unused amount greater than 20% of the Maximum Facility Amount under the BNP Credit Facility from April 13, 2021 to the end of the revolving period.
On April 29, 2021, Funding I executed an amendment to the BNP Credit Facility. The amendment solidified the LIBOR transition to Secured Overnight Financing Rate (“SOFR”) for the planned discontinuation of LIBOR. The amendment also increased the Individual Lender Maximum Facility Amount from $45,000 thousand to $80,000 thousand.
On October 28, 2021, the Company executed an additional amendment to the Credit Agreement. Material amendments included the revolving period being extended 36 months, from 12 months to 48 months and the interest rate being reduced from LIBOR plus 175 basis points to LIBOR plus 140 basis points. The advance rate was increased from 67.5% to 70% and expanded to include a triple C bucket with a 60% advance rate. The structuring fee was increased from 0.25% of the Maximum Facility Amount to 0.50% of the Maximum Facility Amount and will be paid in three equal installments (December 2021, December 2022, and December 2023). Updates were made to allow for more flexibility to move capital out of the facility subject to certain covenants. Except as described above, all other terms and provisions of the Agreement remain in full force and effect.
On March 22, 2022, the Company amended the Credit Agreement between Steele Creek Capital Funding I, LLC, BNP Paribas, and the Company as dated October 13, 2020 and as previously amended (the “Agreement”). Material amendments to the Agreement include the interest rate being converted from LIBOR plus 140 basis points to SOFR plus 140 basis points plus 15 basis points. In addition, the Individual Lender Maximum Facility Amount increased from $80,000 thousand to $95,000 thousand and the language and requirements related to the Agreed Upon Procedures provided by independent accountants were amended to be more appropriate for the underlying collateral.
On August 23, 2022, the Company amended the Credit Agreement between Steele Creek Capital Funding I, LLC, BNP Paribas, and the Company as dated October 13, 2020 and as previously amended (the “Agreement”). This amendment contained certain conforming changes that are not material.
As of March 31,September 30, 2022 and December 31, 2021, there was $76,000$84,650 thousand and $70,380 thousand outstanding, respectively, and $19,000$10,350 thousand and $9,620 thousand available, respectively, to be drawn under the BNP Credit Facility. As of March 31,September 30, 2022 and December 31, 2021, the BNP Credit Facility had a fair value of $76,000$84,650 thousand and $70,380 thousand, respectively and a weighted average interest rate of 1.64%3.60% and 1.84%, respectively. The fair value of the BNP Credit Facility is determined in accordance with ASC 820, which definesapproximates fair value in terms ofbecause the price that would be paidinterest rates adjust to transfer a liability in an orderly transaction betweenthe market participants at the measurement date under current market conditions and is measured with Level 2 inputs.interest rates (Level 3 input). As of March 31,September 30, 2022 and December 31, 2021, Funding I was in compliance with all covenants of the BNP Credit Facility.
For the three and nine months ended March 31,September 30, 2022, we incurred interest expense of $346 thousand.$826 thousand and $1,670 thousand, respectively. The average debt outstanding for the three and nine months ended March 31,September 30, 2022 was $76,270 thousand. $85,870 thousand and $81,643 thousand, respectively.
For the three and nine months ended September 30, 2021, we incurred interest expense of $339 thousand and $850 thousand, respectively. The average debt outstanding for the three and nine months ended September 30, 2021 was $57,420 thousand and $47,764 thousand, respectively.
8. COMMITMENTS AND CONTINGENCIES
Commitments to extend credit include loan proceeds we are obligated to advance, such as delayed draws. Commitments generally have fixed expiration dates or other termination clauses. Unrealized gains or losses associated with unfunded commitments are recorded in the consolidated financial statements and reflected as an adjustment to the fair value of the related security in the Consolidated Schedule of Investments. The par amount of the unfunded commitments is not recognized by the Company until the commitment becomes funded. As of March 31,September 30, 2022 and December 31, 2021, the Company had unfunded commitments of $2,283$190 thousand and $2,051 thousand, respectively.
In the ordinary course of business, we may be a party to certain legal proceedings, including actions brought against us and others with respect to investment transactions. The outcomes of any such legal proceedings are uncertain and, as a result of these proceedings, the values of the investments to which they relate could decrease. We were not subject to any litigation against us as of March 31,September 30, 2022. The debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and neither the Members nor any other person or entity shall be obligated personally for any such debt, obligation or liability of the Company.
9. FINANCIAL HIGHLIGHTS
The following financial highlights are calculated for the shareholders as a whole.
| Three months ended March 31, 2022 | Three months ended March 31, 2021 | |||||||
| Per share data: | ||||||||
| Net asset value at beginning of period | $ | 10.90 | $ | 10.76 | ||||
| Net investment income (1) | 0.14 | 0.02 | ||||||
| Net realized gain (1) | 0.02 | 0.28 | ||||||
| Net change in unrealized (depreciation) appreciation (1) | (0.26 | ) | 0.00 | |||||
| Net (decrease) increase in net assets resulting from operations (1) | (0.10 | ) | 0.30 | |||||
| Stockholder distributions from income (2) | (0.17 | ) | (0.16 | ) | ||||
| Issuance of common shares | - | 0.01 | ||||||
| Other (3) | 0.01 | 0.02 | ||||||
| Net asset value at end of period | $ | 10.64 | $ | 10.93 | ||||
| Net assets at end of period | $ | 52,835 | $ | 29,571 | ||||
| Shares outstanding at end of period | 4,964,238 | 2,706,393 | ||||||
| Total return (2) | (0.88 | )% | 3.06 | % | ||||
| Ratio/Supplemental data: | ||||||||
| Ratio of net expenses excluding waivers and reversals to average net assets (4) | 8.71 | % | 12.00 | % | ||||
| Ratio of net expenses including waivers and reversals to average net assets (4) | 8.29 | % | 11.37 | % | ||||
| Ratio of net investment income to average net assets (4) | 3.67 | % | 1.27 | % | ||||
| Portfolio turnover (5) | 42.6 | % | 183.87 | % | ||||
| Nine months ended September 30, 2022 | Nine months ended September 30, 2021 | |||||||
| Per share data: | ||||||||
| Net asset value at beginning of period | $ | 10.90 | $ | 10.76 | ||||
| Net investment income (1) | 0.43 | 0.10 | ||||||
| Net realized gain (1) | 0.05 | 0.58 | ||||||
| Net change in unrealized (depreciation) appreciation (1) | (2.03 | ) | (0.02 | ) | ||||
| Net (decrease) increase in net assets resulting from operations (1) | (1.55 | ) | 0.66 | |||||
| Stockholder distributions from income (2) | (0.47 | ) | (0.50 | ) | ||||
| Other (3) | 0.03 | 0.10 | ||||||
| Net asset value at end of period | $ | 8.91 | $ | 11.02 | ||||
| Net assets at end of period | $ | 48,960 | $ | 44,086 | ||||
| Shares outstanding at end of period | 5,492,264 | 4,001,831 | ||||||
| Total return (2) | (14.46 | )% | 7.18 | % | ||||
| Ratio/Supplemental data: | ||||||||
| Ratio of net expenses excluding waivers and reversals to average net assets (4) | 10.65 | % | 11.98 | % | ||||
| Ratio of net expenses including waivers and reversals to average net assets (4) | 9.55 | % | 10.33 | % | ||||
| Ratio of net investment income to average net assets (4) | 5.47 | % | 1.16 | % | ||||
| Portfolio turnover (5) | 83.4 | % | 480.3 | % | ||||
| (1) | The per share data was derived by using the weighted average shares outstanding during the period. |
| (2) | Total return is calculated as the change in net asset value (“NAV”) per share during the period, plus distributions per share, if any, divided by the beginning NAV per share. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at the quarter end NAV per share preceding the distribution. Return calculations are not annualized. |
| (3) | Includes the impact of different amounts used in calculating per share data as a result of calculating certain per share data based on weighted average shares outstanding during the period and certain per share data based on shares outstanding as of a period end or transaction date. |
| (4) | Ratios are annualized. |
| (5) | Portfolio turnover rate is calculated using the lesser of year-to-date sales or year-to-date purchases over the average of the invested assets at fair value for the periods reported. Ratio is not annualized. |
10. SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date of issuance of these financial statements and has determined that there are no subsequent events outside the ordinary scope of business that require adjustment to, or disclosure in, the financial statements other than those disclosed below.
On April 1,October 7, 2022, the Company issued and sold 72,22527,315 shares of its common stock to certain investors for an aggregate offering price of $769$247 thousand. The sale of its common stock was made pursuant to subscription agreements between the Company and the investors, and the issuance of the common stock was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D thereunder.
On October 21, 2022, the Company issued and sold 2,622 shares of its common stock to certain investors for an aggregate offering price of $24 thousand. The sale of its common stock was made pursuant to subscription agreements between the Company and the investors, and the issuance of the common stock was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D thereunder.
On April 18,November 4, 2022, the Company issued and sold 32,24555,044 shares of its common stock to certain investors for an aggregate offering price of $347$500 thousand. Of the 55,044 shares issued and sold, 27,522 shares with an aggregate offering price of $250 thousand were issued and sold to an existing related party. The sale of its common stock was made pursuant to subscription agreements between the Company and the investors, and the issuance of the common stock was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D thereunder.
On May 6, 2022, the Company issued and sold 68,479 shares of its common stock to certain investors for an aggregate offering price of $724 thousand. The sale of its common stock was made pursuant to subscription agreements between the Company and the investors, and the issuance of the common stock was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D thereunder.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q. Except as otherwise specified, references to “we,” “us,” “our,” or the “Company” refer to MSC Capital LLC prior to the Conversion (as defined herein), and Steele Creek Capital Corporation on and after the Conversion.
Forward-Looking Statements
Some of the statements in this report constitute forward-looking statements that involve substantial known and unknown risks, uncertainties and other factors. Undue reliance should not be placed on such statements. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our company, our current and prospective portfolio investments, our industry, our beliefs and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. Our actual results could differ materially and these statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including:
| ● | uncertainties associated with the coronavirus (“COVID-19”) pandemic, including the negative effect that the COVID-19 pandemic is having and is expected to have on the credit markets and the negative effect that the COVID-19 pandemic could have on our business; |
| ● | our future operating results; |
| ● | our business prospects and the prospects of our portfolio companies; |
| ● | the impact of investments that we expect to make; |
| ● | changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets; |
| ● | the ability of the Steele Creek Investment Management LLC (the “Investment Advisor”) to locate suitable investments for us and to monitor and administer our investments; |
| ● | the ability of the Investment Advisor and its affiliates to attract and retain highly talented professionals; |
| ● | risk associated with possible disruptions in our operations or the economy generally; |
| ● | the timing of cash flows, if any, from the operations of the companies in which we invest; |
| ● | the adequacy of our cash resources and working capital; |
| ● | the ability of the companies in which we invest to achieve their objectives; |
| ● | the dependence of our future success on the general economy and its effect on the industries in which we invest; |
| ● | our ability to maintain our qualification as a BDC and as a RIC under the Code; |
| ● | the use of borrowed money to finance a portion of our investments; |
| ● | the adequacy, availability and pricing of our financing sources and working capital; |
| ● | actual or potential conflicts of interest with the Investment Advisor and its affiliates; |
| ● | our contractual arrangements and relationships with third parties; |
| ● | our expected financings and investments; |
| ● | the economic downturn, interest rate volatility, loss of key personnel, and the illiquid nature of our investments; and |
| ● | the risks, uncertainties and other factors we identify under “Item 1A. Risk Factors” and elsewhere in this quarterly report on Form 10-Q. |
We have based the forward-looking statements included in this report on information available to us on the date of this report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we may file with the U.S. Securities and Exchange Commission (“SEC”) in the future, including any annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of the assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In particular, statements herein about the effects of the COVID-19 pandemic on our business, results, financial position, and liquidity may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently estimated. In addition, new risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. 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 us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in the section entitled “Item 1A. Risk Factors” and elsewhere in this report. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this report. Moreover, we assume no duty and do not undertake to update the forward-looking statements.
Overview
We are a financial services company that primarily invests in syndicated corporate bank loans, bonds, other debt securities, and structured products. We are an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a BDC and intends to electhas elected to be treated for U.S. federal income tax purposes, and to qualify annually thereafter, as a RIC under the Code. We were formed on June 3, 2020 as a Delaware limited liability company under the name MSC Capital LLC. MSC Capital LLC was formed by Steele Creek Investment Management LLC, Moelis Asset and two affiliates. On October 7, 2020, MSC Capital LLC converted to a Maryland corporation (the “Conversion”), named Steele Creek Capital Corporation. On September 3, 2020, we formed a wholly-owned consolidated special purpose financing vehicle, Steele Creek Capital Funding I, LLC, a Delaware limited liability company.
Our investment objective is to generate high current income by investing primarily in fixed income instruments, including broadly syndicated bank loans, structured products, mezzanine financings and senior secured bonds. We provide moderate liquidity to our shareholders by offering a quarterly share repurchase program. As of March 31,September 30, 2022, no shares have been tendered through the share repurchase program. Broadly syndicated loans are generally more liquid than directly originated investments and may provide more attractive financing terms than less liquid assets. Mezzanine financings are generally unrated or below investment grade rated investments that have greater credit and liquidity risk than more highly rated debt obligations. Moreover, mezzanine financings are generally unsecured and subordinate to other obligations of the obligor and are subject to many of the same risks as those associated with high-yield debt securities.
27
Revenues
We generate revenue primarily in the form of interest and fee income on debt investments we hold and capital gains, if any, on investments. We generally expect our debt investments to bear interest at a floating rate usually determined on the basis of a benchmark such as LIBOR or SOFR. Interest on debt securities is generally payable monthly, quarterly or semi-annually. In some instances, we expect to receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we may receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments is expected to fluctuate significantly from period to period. Our portfolio activity is also expected to reflect the proceeds of sales of securities. We may also generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees.
Expenses
Our primary operating expenses include the payment of fees to our Investment Advisor under the Investment Advisory Agreement, our allocable portion of overhead and rental expenses under the Administration Agreement and other operating costs described below. We bear all other out-of-pocket costs and expenses of our operations and transactions, including:
| ● | our initial organization costs incurred prior to the commencement of our operations; |
| ● | operating costs incurred prior to the commencement of our operations; |
| ● | the cost of calculating our net asset value, including the cost of any third-party valuation services; |
| ● | the cost of effecting sales and repurchases of shares of our common stock and other securities, including in connection with the Private Offering; |
| ● | distribution and shareholder servicing fees payable to our dealer manager and financial intermediaries; |
| ● | fees payable to third parties relating to making investments, including our Investment Advisor’s or its affiliates’ travel expenses, research costs and out-of-pocket fees and expenses associated with performing due diligence and reviews of prospective investments; |
| ● | interest expense and other costs associated with our indebtedness; |
| ● | transfer agent and custodial fees; |
| ● | out-of-pocket fees and expenses associated with marketing efforts; |
| ● | federal and state registration fees and any stock exchange listing fees; |
| ● | U.S. federal, state and local taxes; |
| ● | Independent Directors’ fees and expenses; |
| ● | brokerage commissions and markups; |
| ● | fidelity bond, directors’ and officers’ liability insurance and other insurance premiums; |
| ● | direct costs, such as printing, mailing, long distance telephone and staff; |
| ● | fees and expenses associated with independent audits and outside legal costs; |
| ● | costs associated with our reporting and compliance obligations under the 1940 Act and other applicable U.S. federal and state securities laws; and |
| ● | other expenses incurred by the Administrator or us in connection with administering our business, including payments under the Administration Agreement that will be based upon our allocable portion (subject to the review and approval of our Board) of overhead, including rental expenses |
From time to time, the Administrator or its affiliates may pay third-party providers of goods or services. We will reimburse the Administrator or such affiliates thereof for any such amounts paid on our behalf under the Administration Agreement. All of the foregoing expenses will ultimately be borne by our stockholders.
Our Investment Advisor is authorized to determine the broker to be used for each portfolio transaction. In selecting brokers to execute transactions, the Investment Advisor need not solicit competitive bids and does not have an obligation to seek the lowest available commission cost. In selecting brokers, the Investment Advisor may or may not negotiate “execution only” commission rates and thus we may be deemed to be paying for other services provided by the broker that are included in the commission rate. In negotiating commission rates, the Investment Advisor will take into account the financial stability and reputation of the broker and the brokerage, research and other services provided to us, the Investment Advisor and other customers of the Investment Advisor and its affiliates by such broker, even though we may not, in any particular instance, be the direct or indirect beneficiaries of the research or other services provided and the management fee payable to the Investment Advisor is not reduced because it receives such services. In addition, the Investment Advisor may direct commissions to certain brokers that on the foregoing basis may furnish other services to us, the Investment Advisor and other customers of the Investment Advisor and its affiliates, such as telephone lines, news and quotation equipment, electronic office equipment, account record keeping and clerical services, trading software, financial publications and economic consulting services. As a result of the brokerage practices described above, the levels of commission paid, and prices paid or received by us in portfolio transactions may be less favorable than in portfolio transactions effected on a best price and execution basis.
Compensation Paid to the Dealer Manager and Participating Financial Intermediaries
The Company has engaged S2K Financial LLC as dealer manager to assist with the placement of the Company’s shares (“Dealer Manager”). Investors will pay a maximum upfront sales load of up to 5.5% of the Company’s net asset value per share for combined upfront selling commissions and dealer manager fees. Investors will pay a maximum upfront selling commission of 3.0% and a maximum dealer manager fee of 2.5%. The purchase price paid by an investor will be the Company’s net asset value per share plus all upfront selling commissions and dealer manager fees. All or a portion of selling commissions and dealer manager fees may be reduced or eliminated in connection with certain categories of sales such as, without limitation, sales through investment advisers or sales to our affiliates.
The Company will pay to the Dealer Manager a shareholder servicing fee (“Shareholder Servicing Fee”) at a maximum annual rate equal to 0.0% of the Company’s net assets up to $28.2 million and of 1.0% of the Company’s net assets over $28.2 million. The Shareholder Servicing Fee will be payable on a monthly basis. With respect to each share sold, the Shareholder Servicing Fee will be paid until the third anniversary of the applicable month of purchase. All or a portion of which may be reallowed by the Dealer Manager to participating Financial Intermediaries. The purpose of the Shareholder Servicing Fee is to reimburse our Dealer Manager for costs incurred by selected Financial Intermediaries and investment representatives for providing ongoing shareholder services. The Shareholder Servicing Fee is paid pursuant to a Servicing Plan adopted by the Board, including a majority of the Independent Directors and who have no direct or indirect financial interest in the operation of the Servicing Plan or in any agreements entered into in connection therewith. The Servicing Plan will remain in effect for so long as such continuance is reapproved annually by the Board.
The Investment Advisor or its affiliates, in Investment Advisor’s discretion and from their own resources, will pay additional compensation to our Dealer Manager in connection with the sale and servicing of shares (“Additional Compensation”). In return for the Additional Compensation, the Company may receive certain marketing advantages. Our Dealer Manager may reallow all or a portion of the Additional Compensation to participating Financial Intermediaries. The Additional Compensation will not be paid by our shareholders.
Current Market Conditions
The warVolatility in Ukraine spurred volatility that reverberated across all risk assets including bank loans during the loan market continued into the third quarter. Loan new issuance slowedGains made in the first half of the quarter were reversed at the end of August and declined further into September following the invasion while demandelevated inflation report, increased credit concerns, and ongoing supply chain challenges. Downgrades by the rating agencies outpaced upgrades by a measure of 2:1 and default forecasts were raised for 2023, with Fitch indicating a range of 2%-3%. New loan issuance was also impacted as CLO creation felldown over 60% from the second quarter and retail fund inflows reversed. Net retail fund inflows were robust forover 80% from the quarter againstprior year. Despite the rising rate backdrop, with $15.5 billion of net inflows. Theaverage bid price on the Credit Suisse Leveraged Loan Index returned -0.10% forfalling to 91.60 at the end of the quarter withversus 91.96 the average bid price down 101 basis pointsprior quarter, the overall return was up 1.19% due to 97.38 and defaults were in line with Q4 2021 at 0.6% for the last twelve months according to Fitch.
COVID-19 Developments
The rapid, worldwide spread of a novel strain of coronavirus (“COVID-19”)higher interest income that has continued global economic disruption and uncertainty. The impact of the COVID-19 outbreak has affected the global economy, the economies of individual countries, and the financial performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways. The COVID-19 pandemic and its effects may last for an extended period of time, and in either case could result in significant market volatility, exchange trading suspensions and closures, declines in global financial markets, higher default rates, and a substantial economic downturn or recession. The foregoing could disrupt the operations of the Company and its service providers, adversely affect the value and liquidity of the Company’s investments, and negatively impact the Company’s performance and your investment in the Company. benefited from rising LIBOR.
Portfolio and Investment Activity
As of March 31,September 30, 2022, our portfolio had a fair market value of approximately $128,455$127,502 thousand,, a cost basis of approximately $129,166$137,353 thousand and was comprised of leveraged loans and equity securities, measured at fair value. Our loan portfolio consisted of 151158 investments in 25 industries.industries and in 2 domiciled countries. The following table depicts a summary of the portfolio as of March 31,September 30, 2022 (in thousands):
| Investments | ||||
| Cost | $ | 129,166 | ||
| Cumulative Net Unrealized Depreciation | (711 | ) | ||
| Fair Value | $ | 128,455 | ||
| Yield at Cost | 4.96 | % | ||
| Investments | ||||
| Cost | $ | 137,353 | ||
| Cumulative Net Unrealized Depreciation | (9,851 | ) | ||
| Fair Value | $ | 127,502 | ||
| Yield at Cost | 7.42 | % | ||
As of December 31, 2021, our portfolio had a fair market value of approximately $106,997 thousand, a cost basis of approximately $106,443 thousand and was comprised of leveraged loans, measured at fair value. Our loan portfolio consisted of 130 investments in 25 industries.industries and in 2 domiciled countries. The following table depicts a summary of the portfolio as of December 31, 2021 (in thousands):
| Investments | ||||
| Cost | $ | 106,443 | ||
| Cumulative Net Unrealized Appreciation | 554 | |||
| Fair Value | $ | 106,997 | ||
| Yield at Cost | 4.90 | % | ||
| Investments | ||||
| Cost | $ | 106,443 | ||
| Cumulative Net Unrealized Appreciation | 554 | |||
| Fair Value | $ | 106,997 | ||
| Yield at Cost | 4.90 | % | ||
As of March 31,September 30, 2022, 100.0%100% of the term loan investments in the portfolio bore interest at floating rates, with 84.9%76.4% of our loan portfolio (at fair value) and 84.9%76.4% of our loan portfolio (at cost) having an interest rate floor above 0.0%. The composition of our floating rate loan portfolio byRecent interest rate floorincrease announced in the United States have driven the LIBOR and SOFR base rates above the floors in effect as of March 31, 2022, was as follows (in thousands): quarter end. Base rates on 100% of the portfolio exceed the stated floors.
| March 31, 2022 | ||||||||||||||||||
| Interest Rate Floor | Fair Value | % of Floating Rate Portfolio | Cost | % of Floating Rate Portfolio | ||||||||||||||
| 0.00 | % | $ | 19,419 | 15.12 | % | $ | 19,548 | 15.13 | % | |||||||||
| 0.50 | % | 50,523 | 39.33 | % | 50,632 | 39.20 | % | |||||||||||
| 0.75 | % | 34,342 | 26.73 | % | 34,435 | 26.66 | % | |||||||||||
| 1.00 | % | 24,171 | 18.82 | % | 24,551 | 19.01 | % | |||||||||||
| $ | 128,455 | 100.00 | % | $ | 129,166 | 100.00 | % | |||||||||||
As of December 31, 2021, 100.0% of the investments in the portfolio bore interest at floating rates, with 80.8% of our loan portfolio (at fair value) and 80.8% of our loan portfolio (at cost) having an interest rate floor above 0.0%. The composition of our floating rate loan portfolio by interest rate floor as of December 31, 2021 was as follows (in thousands):
| December 31, 2021 | |||||||||||||||||
| Interest Rate Floor | Fair Value | % of Floating Rate Portfolio | Cost | % of Floating Rate Portfolio | |||||||||||||
| 0.00 | % | $ | 20,539 | 19.20 | % | $ | 20,465 | 19.23 | % | ||||||||
| 0.50 | % | 29,680 | 27.74 | % | 29,515 | 27.73 | % | ||||||||||
| 0.75 | % | 36,763 | 34.35 | % | 36,468 | 34.26 | % | ||||||||||
| 1.00 | % | 20,015 | 18.71 | % | 19,995 | 18.78 | % | ||||||||||
| $ | 106,997 | 100.00 | % | $ | 106,443 | 100.00 | % | ||||||||||
| December 31, 2021 | ||||||||||||||||
| Interest Rate Floor | Fair Value | % of Floating Rate Portfolio | Cost | % of Floating Rate Portfolio | ||||||||||||
| 0.00% | $ | 20,539 | 19.20 | % | $ | 20,465 | 19.23 | % | ||||||||
| 0.50% | 29,680 | 27.74 | % | 29,515 | 27.73 | % | ||||||||||
| 0.75% | 36,763 | 34.35 | % | 36,468 | 34.26 | % | ||||||||||
| 1.00% | 20,015 | 18.71 | % | 19,995 | 18.78 | % | ||||||||||
| $ | 106,997 | 100.00 | % | $ | 106,443 | 100.00 | % | |||||||||
The portfolio is actively managed, with a turnover ratio of 42.6%83.4% for the threenine months ended March 31,September 30, 2022, our loan portfolio rotation was reflective of the active management style, which seeks to optimize the portfolio based on current market conditions by rotating into positions that have better relative values. We do not expect to maintain thisOur level of turnover ratio as this level is inflated due to the ramping of the portfolio and fundraising. However, thisThis high level does provide an indication of the liquidity in our portfolio and the leverage loan market. The annualized average yield for the three months ended March 31,as of September 30, 2022 on the investment was 4.99%8.0%. The following tables depict the portfolio activity (in thousands):
| Three months ended September 30, 2022 | Nine months ended September 30, 2022 | |||||||
| Fair Value, Beginning | $ | 131,581 | $ | 106,997 | ||||
| Purchases | 13,693 | 133,566 | ||||||
| Sales and Repayments | (16,196 | ) | (103,058 | ) | ||||
| Non-cash income accrual | 43 | 146 | ||||||
| Net realized gains | 91 | 257 | ||||||
| Net unrealized (depreciation) appreciation | (1,710 | ) | (10,406 | ) | ||||
| Fair Value, Ending | $ | 127,502 | $ | 127,502 | ||||
| Three months ended September 30, 2021 | Nine months ended September 30, 2021 | |||||||
| Fair Value, Beginning | $ | 110,970 | $ | 67,811 | ||||
| Purchases | 155,537 | 467,840 | ||||||
| Sales and Repayments | (159,041 | ) | (429,632 | ) | ||||
| Payment in-kind interest income | 2 | 6 | ||||||
| Non-cash income accrual | 34 | 112 | ||||||
| Net realized gains | 562 | 1,887 | ||||||
| Net unrealized (depreciation) appreciation | (121 | ) | (81 | ) | ||||
| Fair Value, Ending | $ | 107,943 | $ | 107,943 | ||||
| Three months ended March 31, 2022 | Three months ended March 31, 2021 | |||||||
| Fair Value, Beginning | $ | 106,997 | $ | 67,811 | ||||
| Purchases | 72,716 | 130,232 | ||||||
| Sales and Repayments | (50,157 | ) | (127,715 | ) | ||||
| Payment in-kind interest income | - | 1 | ||||||
| Non-cash income accrual | 57 | 46 | ||||||
| Net realized gains | 107 | 728 | ||||||
| Net unrealized (depreciation) appreciation | (1,265 | ) | 3 | |||||
| Fair Value, Ending | $ | 128,455 | $ | 71,106 | ||||
| Three months ended March 31, 2022 | Three months ended March 31, 2021 | |||||||
| Investments, Beginning | 130 | 84 | ||||||
| Purchases (new) | 45 | 94 | ||||||
| Complete exit | (24 | ) | (89 | ) | ||||
| Investments, Ending | 151 | 89 | ||||||
| Three months ended September 30, 2022 | Nine months ended September 30, 2022 | |||||||
| Investments, Beginning | 160 | 130 | ||||||
| Purchases (new) | 12 | 92 | ||||||
| Complete exit | (14 | ) | (64 | ) | ||||
| Investments, Ending | 158 | 158 | ||||||
| Three months ended September 30, 2021 | Nine months ended September 30, 2021 | |||||||
| Investments, Beginning | 137 | 84 | ||||||
| Purchases (new) | 113 | 340 | ||||||
| Complete exit | (119 | ) | (293 | ) | ||||
| Investments, Ending | 131 | 131 | ||||||
The portfolio was diversified across both issuers and industries with the average investment exposure in our loan portfolio of $851$807 thousand at fair value, or 0.7%0.6% of the total portfolio, as of the threenine months ended March 31,September 30, 2022. The following table shows the loan portfolio composition by industry grouping at fair value as a percentage of total loans as of March 31,September 30, 2022:
| Industry | As of September 30, 2022 | |||
| Healthcare & Pharmaceuticals | % | |||
| Banking, Finance, Insurance & Real Estate | % | |||
| Services: Business | 11.5 | % | ||
| High Tech Industries | 8.5 | % | ||
| Telecommunications | 7.6 | % | ||
| Aerospace & Defense | % | |||
| Transportation: Cargo | % | |||
| Hotel, Gaming & Leisure | 4.3 | % | ||
| Capital Equipment | 4.2 | % | ||
| Containers, Packaging & Glass | % | |||
| % | ||||
| Automotive | 2.5 | % | ||
| Construction & Building | 2.4 | % | ||
| Consumer goods: Durable | 2.3 | % | ||
| Chemicals, Plastics, & Rubber | 2.2 | % | ||
| Energy: Oil & Gas | % | |||
| Media: Advertising, Printing & Publishing | 1.6 | % | ||
| Energy: Electricity | % | |||
| % | ||||
| % | ||||
| 0.9 | % | |||
| Consumer goods: Non-durable | 0.8 | % | ||
| Forest Products & Paper | % | |||
| % | ||||
| % | ||||
| % | ||||
The portfolio was diversified across both issuers and industries with the average investment exposure in our loan portfolio of $823 thousand at fair value, or 0.8% of the total portfolio, as of December 31, 2021. The following table shows the loan portfolio composition by industry grouping at fair value as a percentage of total loans as of December 31, 2021:
| Industry | As of December 31, 2021 | |||
| Healthcare & Pharmaceuticals | 16.4 | % | ||
| Services: Business | 11.4 | % | ||
| Telecommunications | 10.6 | % | ||
| High Tech Industries | 10.6 | % | ||
| Banking, Finance, Insurance & Real Estate | 7.6 | % | ||
| Aerospace & Defense | 6.4 | % | ||
| Transportation: Cargo | 4.9 | % | ||
| Energy: Oil & Gas | 4.8 | % | ||
| Capital Equipment | 4.4 | % | ||
| Retail | 3.7 | % | ||
| Hotel, Gaming & Leisure | 2.7 | % | ||
| Automotive | 1.9 | % | ||
| Containers, Packaging & Glass | 1.8 | % | ||
| Energy: Electricity | 1.8 | % | ||
| Services: Consumer | 1.8 | % | ||
| Construction & Building | 1.8 | % | ||
| Consumer goods: Durable | 1.3 | % | ||
| Media: Advertising, Printing & Publishing | 1.3 | % | ||
| Chemicals, Plastics, & Rubber | 1.2 | % | ||
| Forest Products & Paper | 0.9 | % | ||
| Consumer goods: Non-durable | 0.7 | % | ||
| Media: Broadcasting & Subscription | 0.5 | % | ||
| Transportation: Consumer | 0.5 | % | ||
| Utilities: Electric | 0.5 | % | ||
| Metals & Mining | 0.5 | % | ||
| 100.0 | % | |||
Results of Operations
Operating results were as follows (in thousands):
| Three months ended September 30, 2022 | Nine months ended September 30, 2022 | |||||||
| Investment income: | ||||||||
| Interest income | $ | 2,268 | $ | 5,545 | ||||
| Total investment income | 2,268 | 5,545 | ||||||
| Expenses: | ||||||||
| Management fees | 385 | 1,231 | ||||||
| Interest and debt financing expenses | 826 | 1,670 | ||||||
| Professional fees | 97 | 254 | ||||||
| Incentive fees | - | (110 | ) | |||||
| Administration expenses | 47 | 150 | ||||||
| Directors’ fees | 20 | 60 | ||||||
| Custody fees | 14 | 29 | ||||||
| Other general and administrative expenses | 203 | 618 | ||||||
| Total expenses | 1,592 | 3,902 | ||||||
| Less: management fees waived | (62 | ) | (543 | ) | ||||
| Net expenses | 1,530 | 3,359 | ||||||
| Net investment income | 738 | 2,186 | ||||||
| Net realized gain on investments | 91 | 257 | ||||||
| Net unrealized (depreciation) appreciation on investments | (1,710 | ) | (10,406 | ) | ||||
| Net realized and unrealized (loss) gain on investments | (1,619 | ) | (10,149 | ) | ||||
| Net (decrease) increase in net assets | $ | (881 | ) | $ | (7,963 | ) | ||
| Three months ended September 30, 2021 | Nine months ended September 30, 2021 | |||||||
| Investment income: | ||||||||
| Interest income | $ | 1,280 | $ | 3,074 | ||||
| Other income | - | 14 | ||||||
| Total investment income | 1,280 | 3,088 | ||||||
| Expenses: | ||||||||
| Management fees | 533 | 1,272 | ||||||
| Interest and debt financing expenses | 339 | 850 | ||||||
| Professional fees | 103 | 401 | ||||||
| Incentive fees | 66 | 271 | ||||||
| Offering costs – paid by Moelis Asset | 12 | 111 | ||||||
| Administration expenses | 38 | 113 | ||||||
| Organization costs | - | 37 | ||||||
| Organizational costs – paid by Moelis Asset | - | 24 | ||||||
| Directors’ fees | 18 | 60 | ||||||
| Custody fees | 8 | 23 | ||||||
| Other general and administrative expenses | 130 | 184 | ||||||
| Total expenses | 1,247 | 3,346 | ||||||
| Less: management fees waived | (259 | ) | (590 | ) | ||||
| Incentive fee waiver reversal | 135 | - | ||||||
| Net expenses | 1,123 | 2,756 | ||||||
| Net investment income | 157 | 332 | ||||||
| Net realized gain on investments | 562 | 1,887 | ||||||
| Net unrealized (depreciation) appreciation on investments | (121 | ) | (81 | ) | ||||
| Net realized and unrealized (loss) gain on investments | 441 | 1,806 | ||||||
| Net (decrease) increase in net assets | $ | 598 | $ | 2,138 | ||||
| For the Three months ended March 31, 2022 | For the Three months ended March 31, 2021 | |||||||
| Investment income: | ||||||||
| Interest income | $ | 1,471 | $ | 894 | ||||
| Other income | - | 9 | ||||||
| Total investment income | 1,471 | 903 | ||||||
| Expenses: | ||||||||
| Management fees | 431 | 289 | ||||||
| Interest and debt financing expenses | 346 | 238 | ||||||
| Professional fees | 78 | 159 | ||||||
| Incentive fees | (110 | ) | 110 | |||||
| Offering costs – paid by Moelis Asset | - | 60 | ||||||
| Administration expenses | 48 | 38 | ||||||
| Organization costs | - | 36 | ||||||
| Organizational costs – paid by Moelis Asset | - | 24 | ||||||
| Directors’ fees | 20 | 20 | ||||||
| Custody fees | 7 | 7 | ||||||
| Other general and administrative expenses | 169 | 49 | ||||||
| Total expenses | 989 | 1,030 | ||||||
| Less: management fees waived | (210 | ) | (115 | ) | ||||
| Less: incentive fee waived | - | (65 | ) | |||||
| Net expenses | 779 | 850 | ||||||
| Net investment income | 692 | 53 | ||||||
| Net realized gain on investments | 107 | 728 | ||||||
| Net unrealized (depreciation) appreciation on investments | (1,265 | ) | 3 | |||||
| Net realized and unrealized (loss) gain on investments | (1,158 | ) | 731 | |||||
| Net (decrease) increase in net assets | $ | (466 | ) | $ | 784 | |||
Investment Income
Investment income is recorded on the accrual basis to the extent that such amounts are expected to be collected. Where applicable, OID and purchased discounts and premiums are accreted into interest income using the effective interest method. Loan origination fees are deferred and accreted into interest income using the effective interest method. We record prepayment premiums on loans and other investments as interest income when such amounts are received. Investment income for the three and nine months ended March 31,September 30, 2022 and March 31, 2021 was approximately $1,471$2,268 thousand and $903$5,545 thousand, respectively. Investment income for the three and nine months ended September 30, 2021 are approximately $1,280 thousand and $3,088 thousand, respectively.
Total Expenses
Total expenses for the three and nine months ended March 31,September 30, 2022 and March 31, 2021 of approximately $989$1,592 thousand and $1,030$3,902 thousand, respectively, include management, incentive, audit and tax preparation fees, organizational costs, offering costs, interest and debt financing costs, directors’ fees, administration expenses and other general and administrative expenses. Total expenses for the three and nine months ended September 30, 2021 were approximately $1,247 thousand and $3,346 thousand, respectively. Expenses are recognized on an accrual basis. Moelis Asset, parent of the Investment Advisor paid no organizational and offering costs incurred by the Company related to the formation of the entity for the three and nine months ended March 31,September 30, 2022. For the three and nine months ended March 31,September 30, 2021 Moelis Asset paid approximately $36$12 thousand and $135 thousand of organizational and offering costs incurred by the Company related to the formation of the entity, respectively, Moelis Asset will incur these expenses and they will not be charged back to the Company.
For the three and nine months ended March 31,September 30, 2022, the Investment Advisor waived $210$62 thousand and $543 thousand of management fees. The actions taken by Moelis Asset and the Investment Advisor effectively reduced total expenses incurred by the Company for the three and nine months ended March 31,September 30, 2022 of approximately $989$1,592 thousand to approximately $779 thousand.$1,530 thousand and approximately $3,902 thousand to approximately $3,359 thousand, respectively.
For the three and nine months ended March 31,September 20, 2021, the Investment Advisor waived $115$259 thousand and $590 thousand of management fees, and $65 thousand of incentive fees.respectively. The actions taken by Moelis Asset and the Investment Advisor effectively reduced total expenses incurred by the Company for the three and nine months ended March 31,September 30, 2021 of approximately $1,030$1,247 thousand to approximately $850 thousand.$988 thousand and $3,346 thousand to $2,756 thousand, respectively.
Net Realized Gain on Investments
Sales and repayments of investments during the three and nine months ended March 31,September 30, 2022 totaled approximately $50,157$16,196 thousand and $103,058 thousand, respectively, resulting in net realized gains of approximately $91 thousand and $257 thousand, respectively.
Sales and repayments of investments during the three and nine months ended September 30, 2021 totaled approximately $159,041 thousand and $429,632 thousand resulting in net realized gains of approximately $107 thousand. Sales$562 thousand and repayments of investments during the three months ended March 31, 2021 totaled approximately $127,715$1,887 thousand, resulting in net realized gains of approximately $728 thousand.respectively.
Net Unrealized Appreciation or Depreciation on Investments
Unrealized depreciation during the three and nine months ended March 31,September 30, 2022 totaled approximately $1,265$1,710 thousand and the unrealized appreciation during the three months ended March 31, 2021, totaled approximately $3$10,406 thousand, respectively, reflects the changes in fair value of investments as determined in compliance with the Investment Advisor’s valuation policy. The unrealized depreciation during the three and nine months ended September 30, 2021 that totaled approximately $121 thousand and $81 thousand, respectively, reflects the changes in fair value of investments as determined in compliance with the Investment Advisor’s valuation policy.
35
Taxes
We elected to be treated, and intend to qualify annually to maintain our election to be treated, as a RIC under Subchapter M of the Code. To maintain our RIC tax election, we must, among other requirements, meet certain annual source-of-income and quarterly asset diversification requirements. We also must annually distribute dividends for U.S. federal income tax purposes to our stockholders out of the assets legally available for distribution of an amount generally at least equal to 90% of the sum of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, or investment company taxable income, determined without regard to any deduction for dividends paid.
Although not required for us to maintain our RIC tax status, in order to avoid the imposition of a 4% nondeductible federal excise tax imposed on RICs, we must distribute dividends for U.S. federal income tax purposes to our stockholders in respect of each calendar year of an amount at least equal to the Excise tax Avoidance Requirement.
Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and net realized gain recognized for financial reporting purposes. Differences between tax regulations and GAAP may be permanent or temporary. Permanent differences are reclassified among capital accounts in the Consolidated Financial Statements to reflect their appropriate tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.
We have formed and expect to continue to form certain taxable subsidiaries, including the Taxable Subsidiary, which are taxed as corporations. These taxable subsidiaries allow us to hold equity securities of certain portfolio companies treated as pass-through entities for U.S. federal income tax purposes while facilitating our ability to qualify as a RIC under the Code.
Financial Condition, Liquidity and Capital Resources
We generate cash primarily from the net proceeds of any offering of shares of our common stock and from cash flows from interest and fees earned from our investments and principal repayments and proceeds from sales of our investments. We may also fund a portion of our investments through borrowings from banks and issuances of senior securities, including before we have fully invested the proceeds of the Private Offering. Our primary use of cash is investments in portfolio companies, payments of our expenses and payment of cash distributions to our stockholders.
Capital Contributions
For the three and nine months ended March 31,September 30, 2022, the Company issued and sold 652,917217,516 shares and 1,180,943 shares of Common Stock with a par value of $0.001 per share for an aggregate offering price of $7,108 thousand.$2,026 thousand and $12,316 thousand, respectively. For the three and nine months ended March 31,September 30, 2021, the Company issued and sold 73,165219,615 shares and 1,368,603 shares of Common Stock with a par value of $0.001 per share for an aggregate offering price of $800 thousand.$2,418 thousand and $15,026 thousand, respectively. The sale of its common stock was made pursuant to subscription agreements between the Company and the investors, and the issuance of the common stock was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D thereunder.
Our shares of common stock constitute illiquid investments for which there is not, and will likely not be, a secondary market at any time prior to a public offering and listing of our shares on a national securities exchange. There can be no guarantee that we will conduct a public offering and list our shares on a national securities exchange. Investment in the Company is suitable only for sophisticated investors and requires the financial ability and willingness to acceptbe exposed to higher liquidity risk than would be the high riskscase were the securities publicly listed and lack of liquidity inherent in an investment in the Company.actively traded.
We provide moderate liquidity to our shareholders by offering a quarterly share repurchase program. As of March 31,September 30, 2022, no shares have been tendered through the share repurchase program.
As of March 31,November 10, 2022, the Company issued 4,964,2385,577,245 shares of Common Stock.
Borrowings
October 13, 2020, we entered into a two-year secured revolving Credit Agreement (the “Credit Agreement”) with BNP Paribas (“BNP”) as lender and administrative agent (the “BNP Credit Facility”) providing a maximum of $45.0 million (“Maximum Facility Amount”) to Steele Creek Capital Funding I, LLC (“Funding I”). The Company created a wholly owned subsidiary, Funding I, which it will use to hold the Company’s investments, and a first priority continuing security interest in, to and under each investment, all underlying investments and underlying assets has been granted to BNP to be used as collateral for the BNP Credit Facility. During the BNP Credit Facility’s revolving period, it bears interest at LIBOR plus 175 basis points. We believe that our capital resources will provide us with the flexibility to take advantage of market opportunities when they arise. For the three and nine months ended March 31,September 30, 2022, and March 31, 2021, we had an average of $76,270$85,870 thousand and $36,200$81,643 thousand outstanding under the BNP Credit Facility, respectively. For the three and nine months ended September 30, 2021, we had an average of $57,420 thousand and 47,764 thousand outstanding under the BNP Credit Facility.
Funding I is required to pay an administrative agent fee equal to $25 thousand per annum and a structuring fee equal to 0.25% of the Maximum Facility Amount paid on the twelve month anniversary of the closing date. Additionally, an unused fee is payable quarterly in arrears in an amount equal to 0.70% on the actual daily unused amount greater than 20% of the Maximum Facility Amount under the BNP Credit Facility from April 13, 2021 to the end of the revolving period.
On April 29, 2021, Funding I executed an amendment to the BNP Credit Facility. The amendment solidified the LIBOR transition to Secured Overnight Financing Rate (“SOFR”) for the planned discontinuation of LIBOR. The amendment also increased the Individual Lender Maximum Facility Amount from $45,000 thousand to $80,000 thousand.
On October 28, 2021, the Company executed an additional amendment to the Credit Agreement. Material amendments included at this time include the revolving period being extended 36 months, from 12 months to 48 months and the interest rate being reduced from LIBOR plus 175 basis points to LIBOR plus 140 basis points. The advance rate was increased from 67.5% to 70% and expanded to include a triple C bucket with a 60% advance rate. The structuring fee was increased from 0.25% of the Maximum Facility Amount to 0.50% of the Maximum Facility Amount and will be paid in three equal installments (December 2021, December 2022, and December 2023). Updates were made to allow for more flexibility to move capital out of the facility subject to certain covenants. Except as described above, all other terms and provisions of the Agreement remain in full force and effect.
On March 22, 2022, the Company amended the Credit Agreement between Steele Creek Capital Funding I, LLC, BNP Paribas, and the Company as dated October 13, 2020 and as previously amended (the “Agreement”). Material amendments to the Agreement include the interest rate being converted from LIBOR plus 140 basis points to SOFR plus 140 basis points plus 15 basis points. In addition, the Individual Lender Maximum Facility Amount increased from $80,000 thousand to $95,000 thousand and the language and requirements related to the Agreed Upon Procedures provided by independent accountants were amended to be more appropriate for the underlying collateral.
On August 23, 2022, the Company amended the Credit Agreement between Steele Creek Capital Funding I, LLC, BNP Paribas, and the Company as dated October 13, 2020 and as previously amended (the “Agreement”). This amendment contained certain conforming changes that are not material.
Distribution Policy
To the extent that we have income available, we intend to distribute quarterly dividends to our stockholders. Our quarterly dividends, if any, will be determined by our Board. Any dividends to our stockholders will be declared out of assets legally available for distribution.
We intend for the Company to elect to be treated, and intend to qualify annually thereafter, as a RIC under the Code. To obtain and maintain RIC tax treatment, among other things, we must distribute dividends to our stockholders in respect of each taxable year of an amount at least equal to 90% of the sum of our net ordinary income and net short-term capital gains in excess of our net long-term capital losses (“investment company taxable income”), determined without regard to any deduction for dividends paid. In order to avoid certain excise taxes imposed on RICs, we currently intend to distribute dividends to our stockholders in respect of each calendar year of an amount at least equal to the sum of: (1) 98% of our net ordinary income (taking into account certain deferrals and elections) for such calendar year; (2) 98.2% of our capital gains in excess of capital losses (“capital gain net income”), adjusted for certain ordinary losses, generally for the one-year period ending on October 31 of such calendar year; and (3) any net ordinary income and capital gain net income for preceding years that were not distributed during such years and on which we previously paid no U.S. federal income tax.
We currently intend to distribute net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, we may decide in the future to retain such capital gains for investment, incur a corporate-level tax on such capital gains, and elect to treat such capital gains as deemed distributions to you. If this happens, you will be treated for U.S. federal income tax purposes as if you had received an actual distribution of the capital gains that we retain and reinvested the net after tax proceeds in us. In this situation, you would be eligible to claim a tax credit equal to your allocable share of the tax we paid on the capital gains deemed distributed to you. We cannot assure you that we will achieve results that will permit us to pay any cash distributions, and if we issue senior securities, we will be prohibited from making distributions if doing so would cause us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if such distributions are limited by the terms of any of our borrowings.
Asset Coverage
In accordance with the 1940 Act, the Company 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 Company 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 October 5, 2020, the Board and the Members of MSC Capital LLC voted to approve the adoption of the reduced asset coverage ratio.
As of March 31,September 30, 2022 and December 31, 2021, the Company had total senior securities of $76,000$84,650 thousand and $74,380$70,380 thousand, respectively, consisting of borrowings under the Credit Facility, and had asset coverage ratios of 169.5%157.8% and 166.8%, respectively. For a discussion of certain risks associated with the reduction of the required minimum asset coverage ratio applicable to the Company, see “Risk Factors — Risks Related to Our Business and Structure — The SBCAA allows us to incur additional leverage, which may increase the risk of investing with us.”
Critical Accounting Policies
Valuation Procedures
Under procedures established by our Board and in accordance with the 1940 Act, we value investments for which market quotations are readily available at such market quotations. Assets listed on an exchange will be valued at their last sales prices as reported to the consolidated quotation service at 4:00 P.M. eastern time on the date of determination. If no such sales of such securities occurred, such securities will be valued at the mean between the last available bid and ask prices as reported by an independent, third party pricing service on the date of determination. Debt and equity securities that are not publicly traded or whose market prices are not readily available will be valued at fair value, subject at all times to the oversight and approval of our Board. Such determination of fair values may involve subjective judgments and estimates, although we will also engage independent valuation providers to review the valuation of each portfolio investment that constitutes a material portion of our portfolio and that does not have a readily available market quotation at least once annually. With respect to unquoted securities, our Investment Advisor, together with our independent valuation advisors, and subject at all times to the oversight and approval of our Board, will value each investment considering, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies that are public and other factors. We intend to retain one or more independent providers of financial advisory services to assist the Investment Advisor and the Board by performing certain limited third-party valuation services. We may appoint additional or different third-party valuation firms in the future.
When an external event such as a purchase transaction, public offering or subsequent equity sale occurs with respect to a fair-valued portfolio company or comparable company, our Board will use the pricing indicated by the external event to corroborate and/or assist us in our valuation. Because we expect that there will not be a readily available market for many of the investments in our portfolio, we expect to value many of our portfolio investments at fair value as determined in good faith by our 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 our investments may differ significantly from the values that would have been used had readily available market quotations existed for such investments, and the differences could be material.
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820 – Fair Value Measurements and Disclosures (“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 of information used in the valuation. In accordance with ASC Topic 820, these inputs are summarized in the three levels listed below.
Level 1 – Valuations are based on quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.
Level 2 – Valuations are based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly and model-based valuation techniques for which all significant inputs are observable.
Level 3 – Valuations are based on inputs that are unobservable and significant to the overall fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models incorporating significant unobservable inputs, such as discounted cash flow models and other similar valuations techniques. The valuation of Level 3 assets and liabilities generally requires significant management judgment due to the inability to observe inputs to valuation.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of observable input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and it considers factors specific to the investment.
��
With respect to investments for which market quotations are not readily available, our Investmentthe Advisor, as designee of the Board, Company’s Board will undertake a multi-step valuation process each quarter, as described below:
| ● |
| The |
| ● | Preliminary valuation conclusions are then |
| ● | At least once annually, the valuation for each portfolio investment |
| ● |
Investment Transactions, Realized/Unrealized Gains or Losses, and Income Recognition
Investment transactions are recorded on a trade date basis (for publicly-traded investments and securities traded through dealer markets) or upon closing of the transaction (for private investments). The cost of an investment includes all costs incurred by the Company as part of the purchase of such investment. The difference between the initially recognized cost and the subsequent fair value measurement of an investment is reflected as “net change in unrealized appreciation on non-controlled/non-affiliate company investments” on the Consolidated Statements of Operations.
Realized gain or loss from an investment is recorded at the time of disposition and calculated using the weighted average cost method. Unrealized gain or loss reflects the changes in fair value of investments as determined in compliance with the Investment Advisor’s valuation policy.
Interest income, adjusted for amortization of market premium and accretion of market discount, is recorded on an accrual basis to the extent that we expect 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
The base management fee and the income-based incentive fees are expensed each quarter and payable in arrears. Additionally, we accrue a capital gains-based incentive fee quarterly that is paid annually in arrears. The accrual for the capital incentive fee includes the recognition of 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 Company’s portfolio as of period end and the termination of the Advisory Agreement on such date. Also, it should be noted that while we accrue the capital incentive fee quarterly, the expense will fluctuate with the Company’s overall investment results and the expense will be finalized at year end.
Expenses
For the three and nine months ended March 31,September 30, 2022, and March 31, 2021, the Company incurred expenses of approximately $989$1,592 thousand and $1,030$3,902 thousand, respectively, primarily related to management fees, incentive fees, interest and debt financing expenses, organization expenses, professional fees, directors’ fees, offering costs and administration and custodian fees. For the three and nine months ended September 30, 2021, the Company incurred expenses of approximately $1,247 thousand and $3,346 thousand, respectively.
Federal Income Taxes
We have 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 intend to distribute sufficient dividends to maintain our RIC status each year and we do not anticipate paying any material federal income taxes in the future.
Investment Income
For debt investments, we record interest income on the accrual basis to the extent that such amounts are expected to be collected. OID and purchased discounts and premiums are accreted/amortized into interest income using the effective interest method, where applicable. Loan origination fees are deferred and accreted into interest income using the effective interest method. We record prepayment premiums on loans and other investments as interest income when such amounts are received. We stop accruing interest on investments when it is determined that interest is no longer collectible. As of March 31,September 30, 2022 and March 31,we had one loan on non-accrual status. As of September 30, 2021, we had no loans on non-accrual status.
Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation
We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.
Realized gains and losses from securities transactions and unrealized appreciation and depreciation of securities are determined using the identified cost basis method for financial reporting.
Contractual Obligations
Commitments to extend credit include loan proceeds we are obligated to advance, such as delayed draws. Commitments generally have fixed expiration dates or other termination clauses. The par amount of the unfunded commitments is not recognized by the Company until the commitment becomes funded. As of March 31,September 30, 2022 and December 31, 2021 the Company had unfunded commitments of $2,283$190 thousand and $2,051 thousand, respectively.
Off-Balance Sheet Arrangements
Other than contractual commitments and other legal contingencies incurred in the normal course of our business, we do not expect to have any off-balance sheet financings or liabilities. These instruments include commitments to extend credit and fund equity capital and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. As of MarchSeptember 30, 2022 and December 31, 2022,2021, we had a total of $2,283$190 thousand and $2,051 thousand, respectfully in outstanding commitments comprised of investments with commitments to fund revolving loans that had not been fully drawn or term loans with additional commitments not yet funded. As of December 31, 2021, we had a total of $2,051 thousand in outstanding commitments comprised of investments with commitments to fund revolving loans that had not been fully drawn or term loans with additional commitments not yet funded.
Related Party Transactions
As of March 31,September 30, 2022, affiliates owned approximately 48%43% of the Company representing approximately $25,291$21,182 thousand of the Company’s net assets. As of December 31, 2021, affiliates owned approximately 55% of the Company representing approximately $25,901 thousand of the Company’s net assets.
For the three and nine months ended September 30, 2022 and the three months ended March 31, 2022,September 30, 2021, Moelis Asset, parent of the Investment Advisor did not make a contribution to the Company. For the threenine months ended March 31,September 30, 2021, Moelis Asset, parent of the Investment Advisor contributed approximately $36 thousand to pay organizational and offering costs incurred by the Company related to the formation of the entity. Moelis Asset has incurred these expenses and they will not be charged back to the Company.
Separate from the contributions made above, the Company may, from time to time, purchase investments from, or sell investments to affiliates of our Investment Advisor at fair value on the trade date. For the three and nine months ended March 31,September 30, 2022 and March 31,September 30, 2021, there were no purchases of investments from or sales of investments to affiliates of our Investment Advisor.
For the three and nine months ended March 31,September 30, 2022, and March 31, 2021, the Company incurred $20 thousand and $20$60 thousand in directors’ fees expense, respectively. For the three and nine months ended September 30, 2021, the Company incurred $18 thousand and $60 thousand in directors’ fees expense, respectively. On August 13, 2021, the Board agreed to make investments rather than gross assets the basis for their fee to be more inlinein line with the waivers implemented for management fees.
The Company carries employment practices liability, directors and officers and errors and omission insurance. For the best interests of the Company, these policies are joint liability policies with Moelis Asset and its affiliates.
Organizational and Offering Expenses
For the three and nine months ended March 31,September 30, 2022 the Company did not incur organizational or offering expenses. For the three and nine months ended March 31,September 30, 2021, the Company incurred $120$12 thousand and $172 thousand of organizational and offering costs.costs, respectively. Organizational costs are expensed as incurred and offering cost are amortized over a 12 month period. For the three and nine months ended March 31,September 30, 2022 Moelis Asset, parent of the Investment Advisor, did not pay any organizational and offering costs incurred by the Company. For the three and nine months ended March 31,September 30, 2021 Moelis Asset paid approximately $36$12 thousand and $135 thousand of organizational and offering costs incurred by the Company related to the formation of the entity.entity, respectively. Moelis Asset incurred these expenses and they will not be charged back to the Company.
Investment Advisory Agreement
We have entered into the Investment Advisory Agreement with the Investment Advisor, an affiliate of Moelis Asset, which was approved by our Board and our sole stockholder for aan initial two-year term, under which the Investment Advisor, subject to the overall supervision of our Board manages the day-to-day operations of and provides investment advisory services to us. Subsequent to that two-year term, the Board will approve the Investment Advisory Agreement of Investment Advisor for renewal annually.
On August 15, 2022 the Board approved the renewal of the Investment Advisory Agreement which automatically renews for successive one-year periods each September 17th; provided that such continuance is specifically approved at least annually by the vote of the Board or by the vote of a majority of the outstanding voting securities of the Company and the vote of a majority of the Independent Directors, in accordance with the requirements of the 1940 Act.
The base management fee is calculated at a maximum annual rate of 1.0% of the average of the weighted average (based on the number of shares outstanding each day in the quarter) of our gross assets (including uninvested cash and cash equivalents) at the end of each of the two most recently completed calendar quarters. Net management fees for the three and nine months ended March 31,September 30, 2022 were $221 thousand.$323 thousand and $688 thousand, respectively. The Company elected to waive a portion of the management fee and charged management fees on investments rather than gross assets. The Investment Advisor has agreed to a 6.0% priority dividend to shareholders before receiving a fee for the services it provides to the Company.
Administration Agreement
We have entered into the Administration Agreement with the Administrator, pursuant toan affiliate of Moelis Asset, which was approved by our Board and our sole stockholder for an initial two-year term, under which the Administrator, subject to the overall supervision of our Board manages the day-to-day operations of, and provides us with office space, office services and equipment and other administrative services.administration services to us. Subsequent to that two-year term, the Board will approve the Administration Agreement of Administrator for renewal annually.
On August 15, 2022 the Board approved the renewal of the Administration Agreement which automatically renews for successive one-year periods each September 17th; provided that such continuance is specifically approved at least annually by the vote of the Board or by the vote of a majority of the outstanding voting securities of the Company and the vote of a majority of the members of the Company’s Board who are not parties to this Agreement or “interested persons” (as such term defined in Section 2(a)(19) of the Investment Company Act) of any such party, in accordance with the Investment Company Act.
Recent Developments
Management has evaluated subsequent events through the date of issuance of these financial statements and has determined that there are no subsequent events outside the ordinary scope of business that require adjustment to, or disclosure in, the financial statements other than those disclosed below.
On April 1,October 7, 2022, the Company issued and sold 72,22527,315 shares of its common stock to certain investors for an aggregate offering price of $769$247 thousand. The sale of its common stock was made pursuant to subscription agreements between the Company and the investors, and the issuance of the common stock was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D thereunder.
On April 18,October 21, 2022, the Company issued and sold 32,2452,622 shares of its common stock to certain investors for an aggregate offering price of $347$24 thousand. The sale of its common stock was made pursuant to subscription agreements between the Company and the investors, and the issuance of the common stock was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D thereunder.
On May 6,November 4, 2022, the Company issued and sold 68,47955,044 shares of its common stock to certain investors for an aggregate offering price of $724$500 thousand. Of the 55,044 shares issued and sold, 27,522 shares with an aggregate offering price of $250 thousand were issued and sold to an existing related party. The sale of its common stock was made pursuant to subscription agreements between the Company and the investors, and the issuance of the common stock was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D thereunder.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are subject to financial market risks, including changes in interest rates. Interest rate sensitivity refers to the change in our earnings that may result from changes in the level of interest rates. Because we expect to fund a portion of our investments with borrowings, our net investment income is expected to be affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.
As of March 31,September 30, 2022, 100% of our loan portfolio bore interest at floating rates with 84.9 %76.4% (at fair value) having an interest rate floor between 0.50% and 1.00%. The floating rate loans are usually based on a LIBOR (or an alternative risk-free floating interest rate index) rate and typically have durations ranging from one to six months, after which they reset to current market interest rates. Floating rate investments subject to a floor generally reset to the current market index after one to nine months if the index exceeds the floor. For positions with an interest rate floor, we do not benefit from increases in interest rates until such rates exceed the floor and thereafter benefit from market rates above any such floor. Recent interest rate increases announced in the United States have driven the LIBOR and SOFR rates above the floors in effect as of quarter end. Base rates on 100% of the portfolio exceeds the stated floors.
Assuming that the consolidated statement of assets and liabilities as of the three months ended March 31,September 30, 2022 was to remain constant and that we took no actions to alter our existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates:
| As of September 30, 2022 | ||||||||||||
| Basis Point Changes | Interest Income | Interest Expense | Net Income | |||||||||
| Up 300 basis points | $ | 4,167 | $ | (2,576 | ) | $ | 1,591 | |||||
| Up 200 basis points | 2,778 | (1,717 | ) | 1,061 | ||||||||
| Up 100 basis points | 1,389 | (859 | ) | 530 | ||||||||
| Down 100 basis points | (1,389 | ) | 859 | (530 | ) | |||||||
| Down 200 basis points | (2,760 | ) | 1,717 | (1,043 | ) | |||||||
| Down 300 basis points | (3,580 | ) | 2,576 | (1,004 | ) | |||||||
| For the three months ended March 31, 2022 | ||||||||||||
| Basis Point Changes | Interest Income | Interest Expense | Net Income | |||||||||
| Up 300 basis points | $ | 3,791 | $ | (2,396 | ) | $ | 1,395 | |||||
| Up 200 basis points | 2,486 | (1,598 | ) | 888 | ||||||||
| Up 100 basis points | 1,180 | (799 | ) | 381 | ||||||||
Due to the current LIBOR and SOFR rates used by our investments and the majority of our investments having interest rate floors, a decline in interest rates would not have a material impact in our consolidated financial statements.
Although management believes that this measure is indicative of our sensitivity to interest rates, it does not reflect any potential impact to the fair value of our investments as a result of changes to interest rates, nor does it adjust for potential changes in the credit market, credit quality, size and composition of the assets in our consolidated statement of assets and liabilities and other business developments that could affect the net increase/(decrease) in net assets resulting from operations or net investment income. Accordingly, no assurances can be given that actual results would not differ materially from those shown above.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of March 31,September 30, 2022, we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.
Changes in Internal Control over Financial Reporting
There have been no changes in our “internal control over financial reporting” (as defined in Rule 13a 15(f) of the Exchange Act) that occurred during our quarter ended March 31,September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under loans to or other contracts with our portfolio companies.
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 our Annual Report on Form 10-K for the fiscal year ended December 31, 20202021 (the “Annual Report on Form 10-K”), which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties that are not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. Other than the risk factors below, during the threenine months ended September 30, 2021,2022, there have been no material changes from the risk factors set forth in our Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Default Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
None.
Item 6. Exhibits, Financial Statement Schedules
Exhibit Index
| * | 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.
| Steele Creek Capital Corporation | ||
| Date: | /s/ Glenn Duffy | |
| Name: | Glenn Duffy | |
| Title: | Chief Executive Officer, Chief Investment Officer, and President (Principal Executive Officer) | |
| Date: | /s/ Douglas Applegate Jr. | |
| Name: | Douglas Applegate Jr. | |
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) | |
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