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SL Investment

Filed: 12 Nov 21, 4:40pm
______________________________________________________________________________________________________

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________________________________________________________________________________________________
FORM 10-Q


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2021

OR

        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 814-01366

SL Investment Corp.
(Exact name of registrant as specified in its charter)
 Delaware
 85-3472615
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
1585 Broadway10036
New York, NY(Zip Code)
(Address of principal executive offices)

1 (212) 761-4000
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s) Name of each exchange on which registered
NoneNone None

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 ☐

1


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 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 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 November 12, 2021, the Registrant had 14,424,335 shares of common stock, $0.001 par value, outstanding.




SL Investment Corp.
TABLE OF CONTENTS
Part I. Financial Information
Item 1.Consolidated Financial Statements
Item 2.
Item 3.
Item 4.
Part II. Other Information
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.





2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of SL Investment Corp.

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated statements of assets and liabilities of SL Investment Corp. and subsidiary (the "Company") including the consolidated schedule of investments, as of September 30, 2021, and the related consolidated statements of operations and changes in net assets for the three-month and nine-month periods ended September 30, 2021, and the period from August 24, 2020 (inception) through September 30, 2020, and of cash flows for the nine-month period ended September 30, 2021 and the period from August 24, 2020 (inception) through September 30, 2020, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of assets and liabilities of the Company, including the consolidated schedule of investments as of December 31, 2020, and the related consolidated statements of operations, changes in net assets, and cash flows for the period from August 24, 2020 (inception) to December 31, 2020 (not presented herein); and in our report dated March 22, 2021, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statements of assets and liabilities as of December 31, 2020, is fairly stated, in all material respects, in relation to the consolidated statements of assets and liabilities from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/Deloitte & Touche LLP

New York, NY
November 12, 2021
3

SL Investment Corp.
Consolidated Statements of Assets and Liabilities
(In thousands, except share and per share data)

As of
September 30, 2021
As of
December 31, 2020
Assets(unaudited)
Non-controlled/non-affiliated investments, at fair value (amortized cost of $575,466 and $108,117 at September 30, 2021 and December 31, 2020, respectively)$580,059 $108,222 
Cash20,404 25,877 
Deferred financing costs5,166 3,033 
Deferred offering costs62 
Interest receivable from non-controlled/non-affiliated investments3,486 302 
Receivable for investments sold151 11 
Prepaid expenses and other assets10 77 
Total assets$609,280 $137,584 
Liabilities
Debt$325,400 $57,500 
Payable to affiliates (Note 3)1,492 549 
Financing costs payable2,600 1,611 
Dividends payable6,278 83 
Management fee payable137 27 
Interest payable1,354 38 
Accrued expenses and other liabilities945 380 
Total liabilities$338,206 $60,188 
Commitments and Contingencies (Note 7)
Net Assets
Series A Preferred stock, par value $0.001 (1,000,000 shares authorized and 521 and 521 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively)$$
Paid-in capital in excess of par value of Series A Preferred Stock520 520 
Common stock, par value $0.001 per share (100,000,000 shares authorized and 12,781,143 and 3,874,264 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively)13 
Paid-in capital in excess of par value of Common stock264,491 77,000 
Net distributable earnings (losses)6,049 (129)
Total net assets$271,074 $77,396 
Total liabilities and net assets$609,280 $137,584 
Net asset value per common share$21.17 $19.84 


The accompanying notes are an integral part of these consolidated financial statements

4

SL Investment Corp.
Consolidated Statements of Operations (Unaudited)
(In thousands, except share and per share data)

Three
months ended
September 30, 2021
For the period from August 24, 2020 (inception) through September 30, 2020Nine
months ended
September 30, 2021
For the period from August 24, 2020 (inception) through September 30, 2020
Investment income:
From non-controlled/non-affiliated investments:
Interest income$9,065 $— $16,705 $— 
Payment-in-kind interest income67 — 110 — 
Other income506 — 1,510 — 
Total investment income9,638 — 18,325 — 
Expenses:
Interest and other financing expense2,177 — 4,506 — 
Management fees137 — 276 — 
Organization and offering costs20 182 201 182 
Professional fees215 — 619 — 
Directors’ fees52 — 153 — 
Administrative service fees— — — 
General and other expenses132 — 375 — 
Total expenses2,733 182 6,136 182 
Net investment income (loss) before taxes6,905 (182)12,189 (182)
Excise tax expense(1)
— — — 
Net investment income (loss) after taxes6,905 (182)12,189 (182)
Realized and unrealized gains (losses) on investment transactions:
Net realized gain (loss) from non-controlled/non-affiliated investments:52 — 52 — 
Net change in unrealized appreciation (depreciation) from non-controlled/non-affiliated investments:1,135 — 4,488 — 
Net realized and unrealized gains (losses)1,187 — 4,540 — 
Net increase (decrease) in net assets resulting from operations8,092 (182)16,729 (182)
Preferred stock dividend(16)— (47)— 
Net increase (decrease) in net assets resulting from operations attributable to holders of Common stock$8,076 $(182)$16,682 $(182)
Per common share information—basic and diluted
Net investment income (loss) per common share (basic and diluted):$0.69 $(182.00)$1.81 $(182.00)
Earnings per common share (basic and diluted):$0.81 $(182.00)$2.47 $(182.00)
Weighted average common shares outstanding (basic and diluted) (Note 9):9,985,649 1,000 6,743,252 1,000 
Dividend declared per common share$0.49 $— $1.21 $— 
(1) Excise tax expense incurred during the three and nine months ended September 30, 2021 was $0 and $317 (dollar amount in actual), respectively.


The accompanying notes are an integral part of these consolidated financial statements
5

SL Investment Corp.
Consolidated Statements of Changes in Net Assets (Unaudited)
(In thousands, except share data)
Three
months ended
September 30, 2021
For the period from August 24, 2020 (inception) through September 30, 2020Nine
months ended
September 30, 2021
For the period from August 24, 2020 (inception) through September 30, 2020
Increase (decrease) in net assets resulting from operations:
Net investment income (loss)$6,905 $(182)$12,189 $(182)
Net realized gain (loss)52 — 52 — 
Net change in unrealized appreciation (depreciation)1,135 — 4,488 — 
Net increase (decrease) in net assets resulting from operations8,092 (182)16,729 (182)
Capital transactions:
Issuance of common stock95,000 20 187,500 20 
Dividends declared on Preferred stock and Common stock (Note 8)(6,278)— (10,551)— 
Net increase (decrease) in net assets resulting from capital transactions88,722 20 176,949 20 
Total increase (decrease) in net assets96,814 (162)193,678 (162)
Net assets at beginning of period174,260 — 77,396 — 
Net assets at end of period$271,074 $(162)$271,074 $(162)

















The accompanying notes are an integral part of these consolidated financial statements
6

SL Investment Corp.
Consolidated Statement of Cash Flows (Unaudited)
(In thousands, except share and per share data)
For the Nine Months Ended September 30, 2021For the period from August 24, 2020 (inception) through September 30, 2020
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations$16,729 $(182)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net unrealized (appreciation) depreciation on investments(4,488)— 
Net realized (gain) loss on investments(52)— 
Net accretion of discount and amortization of premium(1,311)— 
Payment-in-kind interest capitalized(66)— 
Amortization of deferred financing costs609 — 
Amortization of deferred offering costs59 — 
Purchases of investments and change in payable for investments purchased(496,452)— 
Proceeds from sale of investments and principal repayments and change in receivable for investments sold30,392 — 
Changes in operating assets and liabilities:
(Increase) decrease in interest receivable from non-controlled/non-affiliated investments(3,184)— 
(Increase) decrease in prepaid expenses and other assets67 — 
(Increase) decrease in deferred offering costs— (14)
(Decrease) increase in payable to affiliates943 196 
(Decrease) increase in management fee payable110 — 
(Decrease) increase in interest payable1,316 — 
(Decrease) increase in accrued expenses and other liabilities565 — 
Net cash provided by (used in) operating activities(454,763)— 
Cash flows from financing activities:
Borrowings on debt391,900 — 
Repayments on debt(124,000)— 
Proceeds from issuance of common shares187,500 20 
Deferred financing costs paid(1,753)— 
Dividends paid in cash(4,356)— 
Offering costs paid(1)— 
Net cash provided by (used in) financing activities449,290 20 
Net increase (decrease) in cash(5,473)20 
Cash, beginning of period25,877 — 
Cash, end of period$20,404 $20 
Supplemental information and non-cash financing activities:
Excise tax paid (Note 2)$— $— 
Interest paid during the period$2,061 $— 
Dividends payable$6,278 $— 
Accrued but unpaid deferred financing costs during the period$1,300 $— 

The accompanying notes are an integral part of these consolidated financial statements
7

SL Investment Corp.
Consolidated Schedule of Investments (Unaudited)
September 30, 2021
(In thousands)

Investments-non-controlled/non-affiliated(1)
FootnotesReference Rate and Spread
Interest Rate(2)
Acquisition DateMaturity DatePar Amount/ Shares
Cost(3)
Fair ValuePercentage of Net Assets
First Lien Debt
Aerospace and Defense
Jonathan Acquisition Company(4) (5) (6)L + 5.00%6.00%12/22/202012/22/202612,264$11,991 $12,264 4.52 %
Jonathan Acquisition Company(4) (6) (12)L + 5.00%6.00%12/22/202012/22/2025275234 275 0.10 
PCX Holding Corp.(4) (5) (6)L + 6.25%7.25%04/22/202104/22/20277,9137,838 7,913 2.92 
PCX Holding Corp.(4) (6) (12)L + 6.25%7.25%04/22/202104/22/20273,1733,139 3,173 1.17 
PCX Holding Corp.(4) (6) (12)L + 6.25%7.25%04/22/202104/22/2027(7)— 0.00 
Two Six Labs, LLC(4) (5) (7)L + 5.50%6.25%08/24/202108/20/20274,7564,662 4,662 1.72 
Two Six Labs, LLC(4) (7) (12)L + 5.50%6.25%08/24/202108/20/2027(18)(18)(0.01)
Two Six Labs, LLC(4) (7) (12)L + 5.50%6.25%08/24/202108/20/2027(18)(18)(0.01)
27,821 28,251 10.41 
Auto Components
CC SAG Holdings Corp. (Spectrum Automotive)(4) (5) (7)L + 5.75%6.50%06/29/202106/29/202810,26410,115 10,093 3.72 
CC SAG Holdings Corp. (Spectrum Automotive)(4) (7) (12)L + 5.75%6.50%06/29/202106/29/2028(21)(47)(0.02)
CC SAG Holdings Corp. (Spectrum Automotive)(4) (7) (12)L + 5.75%6.50%06/29/202106/29/2027(5)(6)0.00 
Sonny's Enterprises, Inc.(4) (5) (6)L + 6.75%7.75%12/28/202008/05/20261,8091,777 1,794 0.66 
Sonny's Enterprises, Inc.(4) (6)L + 6.75%7.75%12/28/202008/05/20264,8284,743 4,787 1.77 
16,609 16,621 6.13 
Automobiles
ARI Network Services, Inc.(4) (5) (6)L + 6.50%7.50%06/30/202102/28/20259,0008,831 8,922 3.29 
ARI Network Services, Inc.(4) (5) (6) (12)L + 6.50%7.50%06/30/202102/28/20251,5761,545 1,561 0.58 
ARI Network Services, Inc.(4) (6) (12)L + 6.50%7.50%06/30/202102/28/2025571547 560 0.21 
Summit Buyer, LLC(4) (5) (6)L + 5.25%6.25%09/17/202101/14/20269,6009,409 9,409 3.47 
Summit Buyer, LLC(4) (6) (12)L + 5.25%6.25%06/23/202101/14/20262,8602,701 2,583 0.95 
Summit Buyer, LLC(4) (6) (12)L + 5.25%6.25%06/23/202101/14/2026(19)(21)(0.01)
Turbo Buyer, Inc.(4) (5) (6)L + 5.75%6.75%05/25/202112/02/202514,96314,683 14,707 5.43 
Vehlo Purchaser, LLC(4) (5) (7)L + 5.00%5.75%08/27/202108/27/202711,66711,436 11,436 4.22 
Vehlo Purchaser, LLC(4) (7) (12)L + 5.00%5.75%08/27/202108/27/2027(82)(82)(0.03)
Vehlo Purchaser, LLC(4) (7) (12)L + 5.00%5.75%08/27/202108/27/2027500451 451 0.17 
49,502 49,526 18.28 
Biotechnology
GraphPad Software, LLC(4) (5) (6)L + 5.50%6.50%04/28/202104/27/20275,2375,187 5,237 1.93 
GraphPad Software, LLC(4) (6) (12)L + 6.00%7.00%04/28/202104/27/2027187181 187 0.07 
5,368 5,424 2.00 

8

SL Investment Corp.
Consolidated Schedule of Investments (Unaudited) (continued)
September 30, 2021
(In thousands)

Investments-non-controlled/non-affiliated(1)
FootnotesReference Rate and Spread
Interest Rate(2)
Acquisition DateMaturity DatePar Amount/ Shares
Cost(3)
Fair ValuePercentage of Net Assets
Commercial Services & Supplies
365 Retail Markets, LLC(4) (5) (6)L + 5.25%6.25%08/31/202112/23/20267,481$7,353 $7,352 2.71 %
365 Retail Markets, LLC(4) (5)P + 4.25%7.50%08/31/202112/23/20261918 18 0.01 
365 Retail Markets, LLC(4) (6) (12)L + 5.25%6.25%08/31/202112/23/2026(21)(21)(0.01)
Capstone Acquisition Holdings, Inc.(4) (5) (6)L + 4.75%5.75%11/13/202011/12/20276,9386,881 6,924 2.55 
Capstone Acquisition Holdings, Inc.(4) (6) (12)L + 4.75%5.75%11/13/202011/12/2027(4)(2)0.00 
MHE Intermediate Holdings, LLC(4) (5) (6)L + 5.75%6.75%07/21/202107/21/202712,32112,082 12,082 4.46 
MHE Intermediate Holdings, LLC(4) (6) (12)L + 5.75%6.75%07/21/202107/21/20277963 63 0.02 
MHE Intermediate Holdings, LLC(4) (6) (12)L + 5.75%6.75%07/21/202107/21/2027(21)(21)(0.01)
PDFTron US Acquisition Corp(4) (5) (6) (9)L + 5.50%6.50%07/15/202107/15/202713,20012,979 12,979 4.79 
PDFTron US Acquisition Corp(4) (6) (9) (12)L + 5.50%6.50%07/15/202107/15/20272,6402,588 2,588 0.95 
PDFTron US Acquisition Corp(4) (6) (9) (12)L + 5.50%6.50%07/15/202107/15/2026(63)(63)(0.02)
Sweep Purchaser, LLC(4) (5) (6)L + 5.75%6.75%11/30/202011/30/20262,9382,886 2,938 1.08 
Sweep Purchaser, LLC(4) (6) (12)L + 5.75%6.75%02/12/202111/30/20261,5701,541 1,570 0.58 
Sweep Purchaser, LLC(4) (6) (12)L + 5.75%6.75%11/30/202011/30/20264744 47 0.02 
Sweep Purchaser, LLC(4) (12)P + 4.75%8.00%11/30/202011/30/202610398 103 0.04 
Valcourt Holdings II, LLC(4) (5) (6)L + 5.50%6.50%01/07/202101/07/202712,79812,566 12,798 4.72 
Valcourt Holdings II, LLC(4) (6) (12)L + 5.50%6.50%01/07/202101/07/2027725684 725 0.27 
Vessco Midco Holdings, LLC(4) (5) (6)L + 4.50%5.50%10/30/202011/02/20265,4855,437 5,485 2.02 
Vessco Midco Holdings, LLC(4) (6) (12)L + 4.50%5.50%10/30/202011/02/20262,9512,920 2,951 1.09 
Vessco Midco Holdings, LLC(4) (6) (12)L + 4.50%5.50%10/30/202010/18/2026(8)— 0.00 
VRC Companies, LLC(4) (5) (7)L + 5.50%6.25%06/30/202106/29/202721,19720,890 20,932 7.72 
VRC Companies, LLC(4) (5) (7) (12)L + 5.50%6.25%06/30/202106/29/2027264213 220 0.08 
VRC Companies, LLC(4) (7) (12)L + 5.50%6.25%06/30/202106/29/2027(10)(9)0.00 
89,116 89,659 33.07 
Containers & Packaging
Brook and Whittle Holding Corp.(4) (5) (6)L + 5.75%6.75%10/27/202010/17/20244,2734,222 4,264 1.57 
Brook and Whittle Holding Corp.(4) (5) (6)L + 5.25%6.25%04/16/202110/17/2024326322 326 0.12 
4,544 4,590 1.69 
Diversified Consumer Services
Mammoth Holdings, LLC(4) (5) (6)L + 6.00%7.00%03/23/202110/16/20233,4873,459 3,487 1.29 
Mammoth Holdings, LLC(4) (6) (12)L + 6.00%7.00%03/23/202110/16/20237,2367,105 7,236 2.67 
Mammoth Holdings, LLC(4) (6) (12)L + 6.00%7.00%03/23/202110/16/2023(3)— 0.00 
10,561 10,723 3.96 
Food Products
Teasdale Foods, Inc. (Teasdale Latin Foods)(4) (5) (6)L + 6.25%7.25%12/18/202012/18/20253,7223,657 3,542 1.31 
9

SL Investment Corp
Consolidated Schedule of Investments (Unaudited)(continued)
September 30, 2021
(In thousands)
Investments-non-controlled/non-affiliated(1)
FootnotesReference Rate and Spread
Interest Rate(2)
Acquisition DateMaturity DatePar Amount/ Shares
Cost(3)
Fair ValuePercentage of Net Assets
Health Care Equipment & Supplies
Performance Health Holdings, Inc.(4) (5) (6)L + 6.00%7.00%07/12/202107/12/20274,500$4,413 $4,413 1.63 %
Health Care Providers & Services
Bearcat Buyer, Inc.(4) (5) (6)L + 4.75%5.75%11/18/202007/09/20266,8606,710 6,860 2.53 
Bearcat Buyer, Inc.(4) (6) (12)L + 4.75%5.75%11/18/202007/09/20266,2786,130 6,278 2.32 
DCA Investment Holdings, LLC(4) (5) (7)L + 6.25%7.00%03/12/202103/12/20274,8014,735 4,801 1.77 
DCA Investment Holdings, LLC(4) (7) (12)L + 6.25%7.00%03/12/202103/12/2027232222 232 0.09 
Promptcare Infusion Buyer, Inc.(4) (5) (6)L + 6.00%7.00%09/01/202109/01/20273,9383,860 3,860 1.42 
Promptcare Infusion Buyer, Inc.(4) (6) (12)L + 6.00%7.00%09/01/202109/01/2027(16)(16)(0.01)
Stepping Stones Healthcare Services, LLC(4) (5) (6)L + 6.00%7.00%03/09/202103/09/20276,2996,212 6,299 2.32 
Stepping Stones Healthcare Services, LLC(4) (6) (12)L + 6.00%7.00%03/09/202103/09/2027279267 279 0.10 
Stepping Stones Healthcare Services, LLC(4) (6) (12)L + 6.00%7.00%03/09/202103/09/2026(10)— 0.00 
Suveto Buyer, LLC(4) (7) (12)L + 4.25%5.00%09/09/202109/09/20271,1211,081 1,081 0.40 
Suveto Buyer, LLC(4) (7) (12)L + 4.25%5.00%09/09/202109/09/2027(6)(6)0.00 
29,185 29,668 10.94 
Health Care Technology
Lightspeed Buyer, Inc.(4) (5) (6)L + 5.75%6.75%11/09/202002/03/20264,2774,174 4,192 1.55 
Lightspeed Buyer, Inc.(4) (6) (12)L + 5.75%6.75%11/09/202002/03/20263,1173,021 3,029 1.12 
7,195 7,221 2.67 
Insurance
Galway Borrower, LLC(4) (5) (7)L + 5.25%6.00%09/30/202109/29/202811,48111,251 11,251 4.15 
Galway Borrower, LLC(4) (7) (12)L + 5.25%6.00%09/30/202109/29/2028(26)(26)(0.01)
Galway Borrower, LLC(4) (7) (12)L + 5.25%6.00%09/30/202109/30/2027(18)(18)(0.01)
Higginbotham Insurance Agency, Inc.(4) (5) (7)L + 5.50%6.25%11/25/202011/25/20264,8534,789 4,853 1.79 
Higginbotham Insurance Agency, Inc.(4) (7) (12)L + 5.50%6.25%11/25/202011/25/20261,1171,100 1,117 0.41 
High Street Buyer, Inc.(4) (5) (7)L + 6.00%6.75%04/16/202104/14/20284,3374,254 4,254 1.57 
High Street Buyer, Inc.(4) (7) (12)L + 6.00%6.75%04/16/202104/14/20286,7786,545 6,545 2.41 
High Street Buyer, Inc.(4) (7) (12)L + 6.00%6.75%04/16/202104/16/2027(17)(17)(0.01)
Integrity Marketing Acquisition, LLC(4) (6) (12)L + 5.75%6.75%02/05/202108/27/202524,91124,589 24,589 9.07 
Integrity Marketing Acquisition, LLC(4) (7) (12)L + 5.50%6.25%07/09/202108/27/20251,0811,021 1,021 0.38 
Patriot Growth Insurance Services, LLC(4) (6) (12)L + 5.75%6.75%06/25/202101/02/202511,25010,831 11,250 4.15 
World Insurance Associates, LLC(4) (5) (6)L + 5.75%6.75%12/23/202004/01/202615,11614,745 15,116 5.58 
World Insurance Associates, LLC(4) (5) (6) (12)L + 5.75%6.75%12/23/202004/01/20269,3959,173 9,395 3.47 
World Insurance Associates, LLC(4) (5) (6) (12)L + 5.75%6.75%04/01/202104/01/2026(17)— 0.00 
88,220 89,330 32.95 
10

SL Investment Corp.
Consolidated Schedule of Investments (Unaudited) (continued)
September 30, 2021
(In thousands)

Investments-non-controlled/non-affiliated(1)
FootnotesReference Rate and Spread
Interest Rate(2)
Acquisition DateMaturity DatePar Amount/ Shares
Cost(3)
Fair ValuePercentage of Net Assets
Interactive Media & Services
FMG Suite Holdings, LLC(4) (5) (6)L + 5.50%6.50%04/30/202110/30/202610,125$9,935 $10,113 3.73 %
FMG Suite Holdings, LLC(4) (5) (6) (12)L + 5.50%6.50%04/30/202110/30/2026(42)(3)0.00 
FMG Suite Holdings, LLC(4) (5) (6) (12)L + 5.50%6.50%04/30/202110/30/2026(21)(1)0.00 
MSM Acquisitions, Inc.(4) (5) (6)L + 6.00%7.00%12/09/202012/09/202611,48311,308 11,371 4.19 
MSM Acquisitions, Inc.(4) (6) (12)L + 6.00%7.00%12/09/202012/09/20263,2693,154 3,126 1.15 
MSM Acquisitions, Inc.(4) (12)P + 5.00%8.25%12/09/202012/09/20263310 20 0.01 
Triple Lift, Inc.(4) (5) (7)L + 5.75%6.50%05/06/202105/06/202811,97011,742 11,801 4.35 
Triple Lift, Inc.(4) (7) (12)L + 5.75%6.50%05/06/202105/06/2028(32)(24)(0.01)
36,054 36,403 13.42 
IT Services
Atlas Purchaser, Inc.(5) (7)L + 5.25%6.00%05/03/202105/08/20287,4817,338 7,341 2.71 
Donuts, Inc.(4) (5) (6)L + 6.00%7.00%01/20/202112/29/20266,2036,090 6,203 2.29 
Govbrands Intermediate, Inc.(4) (5) (7)L + 5.50%6.25%08/04/202108/04/202717,25516,833 16,833 6.21 
Govbrands Intermediate, Inc.(4) (7) (12)L + 5.50%6.25%08/04/202108/04/2027(69)(69)(0.03)
Govbrands Intermediate, Inc.(4) (12)P + 4.50%7.75%08/04/202108/04/2027605561 561 0.21 
Thrive Buyer, Inc. (Thrive Networks)(4) (5) (6)L + 6.00%7.00%02/01/202101/22/20277,3367,201 7,336 2.71 
Thrive Buyer, Inc. (Thrive Networks)(4) (6) (12)L + 6.00%7.00%02/01/202101/22/20271,2801,211 1,280 0.47 
Thrive Buyer, Inc. (Thrive Networks)(4) (6) (12)L + 6.00%7.00%02/01/202101/22/2027(8)— 0.00 
Upstack Holdco, Inc.(4) (5) (6)L + 6.00%7.00%08/26/202108/20/20271,5001,459 1,459 0.54 
Upstack Holdco, Inc.(4) (6) (12)L + 6.00%7.00%08/26/202108/20/2027(25)(25)(0.01)
Upstack Holdco, Inc.(4) (6) (12)L + 6.00%7.00%08/26/202108/20/2027(10)(10)0.00 
40,581 40,909 15.10 
Leisure Products
GSM Acquisition Corp. (GSM Outdoors)(4) (5) (6)L + 5.00%6.00%11/16/202011/16/202619,93419,721 19,934 7.35 
GSM Acquisition Corp. (GSM Outdoors)(4) (5) (6) (12)L + 5.00%6.00%11/16/202011/16/20261,7011,681 1,701 0.63 
GSM Acquisition Corp. (GSM Outdoors)(4) (6) (12)L + 5.00%6.00%11/16/202011/16/20261,5611,542 1,561 0.58 
22,944 23,196 8.56 
Multi-Utilities
AWP Group Holdings, Inc.(4) (5) (6)L + 4.50%5.50%12/22/202012/22/202710,83110,681 10,672 3.94 
AWP Group Holdings, Inc.(4) (6) (12)L + 4.50%5.50%12/22/202012/22/20271,5791,545 1,533 0.57 
AWP Group Holdings, Inc.(4) (6) (12)L + 4.50%5.50%12/22/202012/22/2026158141 139 0.05 
AWP Group Holdings, Inc.(4) (12)P + 3.50%6.75%12/22/202012/22/20267971 70 0.03 
Ground Penetrating Radar Systems, LLC(4) (5) (6)L + 4.75%5.75%03/10/202106/26/20263,7683,700 3,768 1.39 
Ground Penetrating Radar Systems, LLC(4) (6) (12)L + 4.75%5.75%03/10/202106/26/2025408396 408 0.15 
16,534 16,590 6.13 
11

SL Investment Corp
Consolidated Schedule of Investments (Unaudited)(continued)
September 30, 2021
(In thousands)
Investments-non-controlled/non-affiliated(1)
FootnotesReference Rate and Spread
Interest Rate(2)
Acquisition DateMaturity DatePar Amount/ Shares
Cost(3)
Fair ValuePercentage of Net Assets
Professional Services
Abacus Data Holdings, Inc. (AbacusNext)(4) (5) (6)L + 6.25%7.25%03/17/202103/10/20278,080$7,911 $8,080 2.98 %
Abacus Data Holdings, Inc. (AbacusNext)(4) (6) (12)L + 6.25%7.25%03/17/202103/10/2027(15)— 0.00 
Abacus Data Holdings, Inc. (AbacusNext)(4) (6) (12)L + 6.25%7.25%03/17/202103/10/20279077 90 0.03 
IQN Holding Corp., dba Beeline(4) (5) (6)L + 5.50%6.50%08/30/202108/20/202419,94919,852 19,852 7.32 
27,825 28,022 10.33 
Real Estate Management & Development
Associations, Inc.(4) (5) (6)L + 4.00%; 2.50% PIK7.50%07/09/202107/02/20276,7506,685 6,685 2.47 
Associations, Inc.(4) (6) (12)L + 4.00%; 2.50% PIK7.50%07/09/202107/02/20271,2991,242 1,242 0.46 
Associations, Inc.(4) (6) (12)L + 4.00%; 2.50% PIK7.50%07/09/202107/02/2027(8)(8)0.00 
Zarya Intermediate, LLC(4) (5) (6)L + 6.50%7.50%07/01/202107/01/202710,50010,297 10,297 3.80 
Zarya Intermediate, LLC(4) (6) (12)L + 6.50%7.50%07/01/202107/01/20278,2508,087 8,087 2.98 
Zarya Intermediate, LLC(4) (6) (12)L + 6.50%7.50%07/01/202107/01/2027(39)(39)(0.01)
26,264 26,264 9.70 
Software
Alert Media, Inc.(4) (5) (6)L + 5.00%6.00%04/12/202104/12/20276,0005,916 5,952 2.20 
Alert Media, Inc.(4) (6) (12)L + 5.00%6.00%04/12/202104/12/2026(10)(6)0.00 
Appfire Technologies, LLC(4) (6) (12)L + 5.50%6.50%07/07/202103/09/2027(28)(28)(0.01)
Cleo Communications Holding, LLC(4) (5) (6)L + 6.75%7.75%06/09/202106/09/202717,09916,935 17,070 6.30 
Cleo Communications Holding, LLC(4) (6) (12)L + 6.75%7.75%06/09/202106/09/2027(51)(9)0.00 
Cordeagle US Finco, Inc.(4) (5) (6) (9)L + 6.75%7.75%07/30/202107/30/20277,8007,648 7,648 2.82 
Cordeagle US Finco, Inc.(4) (6) (9) (12)L + 6.75%7.75%07/30/202107/30/2027(23)(23)(0.01)
GS AcquisitionCo, Inc.(4) (5) (6)L + 5.75%6.75%10/27/202005/25/202610,33110,230 10,280 3.79 
GS AcquisitionCo, Inc.(4) (5) (6) (12)L + 5.75%6.75%10/27/202005/25/20266,0015,916 5,950 2.19 
GS AcquisitionCo, Inc.(4) (6) (12)L + 5.75%6.75%10/27/202005/25/2026(10)(4)0.00 
Gurobi Optimization, LLC(4) (5) (6)L + 5.00%6.00%11/12/202012/19/20234,4204,387 4,420 1.63 
Gurobi Optimization, LLC(4) (6) (12)L + 5.00%6.00%11/12/202012/19/2023(4)— 0.00 
Pound Bidco, Inc.(4) (5) (6) (9)L + 6.50%7.50%01/28/202102/01/20262,1322,094 2,132 0.79 
Pound Bidco, Inc.(4) (5) (6) (9) (12)L + 6.50%7.50%01/28/202102/01/2026(7)— 0.00 
Revalize, Inc.(4) (6) (12)L + 5.25%6.25%07/07/202104/15/2027735703 703 0.26 
Skykick, Inc.(4) (5) (6)L + 7.25%8.25%09/01/202109/01/20272,7002,633 2,633 0.97 
Skykick, Inc.(4) (6) (12)L + 7.25%8.25%09/01/202109/01/2027(14)(14)(0.01)
56,315 56,704 20.92 
Total First Lien Debt$562,708 $567,056 209.19 %
12

SL Investment Corp.
Consolidated Schedule of Investments (Unaudited) (continued)
September 30, 2021
(In thousands)

Investments-non-controlled/non-affiliated(1)
FootnotesReference Rate and Spread
Interest Rate(2)
Acquisition DateMaturity DatePar Amount/ Shares
Cost(3)
Fair ValuePercentage of Net Assets
Second Lien Debt
Electronic Equipment, Instruments & Components
1A Smart Start, LLC(4) (5) (6)L + 8.50%9.50%06/02/202106/02/20283,750$3,696 $3,750 1.38 %
Infinite Bidco, LLC(4) (5) (8)L + 7.00%7.50%02/24/202103/02/20293,0002,988 3,000 1.11 
Infinite Bidco, LLC(4) (8) (12)L + 7.00%7.50%03/18/202103/02/2029(3)— 0.00 
6,681 6,750 2.49 
Industrial Conglomerates
Aptean, Inc.(4) (5) (7)L + 7.00%7.75%04/22/202104/23/20271,0501,050 1,050 0.39 
IT Services
Idera, Inc.(4) (5) (7)L + 6.75%7.50%02/04/202103/02/2029530526 530 0.20 
Red Dawn SEI Buyer, Inc.(4) (5) (6)L + 8.50%9.50%01/27/202111/20/20261,000977 1,000 0.37 
1,503 1,530 0.56 
Software
Flexera Software, LLC(4) (5) (6)L + 7.00%8.00%03/03/202103/03/20291,5001,471 1,500 0.55 
Total Second Lien Debt$10,705 $10,830 3.99 %
Other Securities
Unsecured Debt
Familia Intermediate Holdings I Corp. (Teasdale Latin Foods)(4) (10)16.25% PIK12/18/202006/18/2026576$568 $492 0.18 %
Total Unsecured Debt568 492 0.18 
Preferred Equity
Skykick, Inc.(4) (11)08/31/202123,665225 225 0.08 
Total Preferred Equity225 225 0.08 
Common Equity
Abacus Data Holdings, Inc. (AbacusNext)(4) (11)03/09/20215,196520 485 0.18 
CSC Thrive Holdings, LP (Thrive Networks)(4) (11)03/01/202150,000125 179 0.07 
GSM Equity Investors, LP (GSM Outdoors)(4) (11)11/16/202050050 150 0.06 
PCX Holding Corp.(4) (11)04/22/20211,154115 115 0.04 
Shelby Co-invest, LP (Spectrum Automotive)(4) (11)06/29/20211,500150 150 0.06 
SSG Holdco, LLC (Stepping Stones Healthcare Services, LLC)(4) (11)03/09/20212,017300 377 0.14 
Total Common Equity1,260 1,456 0.55 
Total Other Securities$2,053 $2,173 0.81 %
Total Portfolio Investments$575,466 $580,059 $213.99 %
13

SL Investment Corp
Consolidated Schedule of Investments (Unaudited)(continued)
September 30, 2021
(In thousands)
(1)Unless otherwise indicated, issuers of debt and equity investments held by the SL Investment Corp. (the “Company”) are denominated in dollars. For the purpose of this Consolidated Schedule of Investments, the term “Company” shall include the Company and its consolidated subsidiary. All debt investments are income producing unless otherwise indicated. All equity investments are non-income producing unless otherwise noted. Certain portfolio company investments are subject to contractual restrictions on sales. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of such portfolio company’s outstanding voting securities and/or held the power to exercise control over the management or policies of such portfolio company. As of September 30, 2021, the Company does not “control” any of these portfolio companies. Under the 1940 Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of such portfolio company’s outstanding voting securities. As of September 30, 2021, the Company is not an “affiliated person” of any of its portfolio companies.
(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either the London Interbank Offered Rate (“LIBOR” or “L”) or an alternate base rate (commonly based on the Federal Funds Rate (“F”) or the U.S. Prime Rate (“P”)), which generally resets periodically. For each loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of September 30, 2021. For investments with multiple reference rates or alternate base rates, the interest rate shown is the weighted average interest rate in effect at September 30, 2021. As of September 30, 2021, the reference rates for the Company’s variable rate loans were the 1-month L at 0.08%, the 3-month L at 0.13%, the 6-month L at 0.16% and the P at 3.25%.
(3)The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.
(4)These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by or under the direction of the Company’s board of directors (the “Board”) (see Note 2 and Note 5), pursuant to the Company’s valuation policy.
(5)Assets or a portion thereof are pledged as collateral for the JPM Funding Facility (as defined in Note 6). See Note 6 “Debt”.
(6)The interest rate floor on these investments as of September 30, 2021 was 1.00%.
(7)The interest rate floor on these investments as of September 30, 2021 was 0.75%.
(8)The interest rate floor on these investments as of September 30, 2021 was 0.50%.
(9)The investment is not a qualifying asset under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of September 30, 2021, non-qualifying assets represented 4.1% of total assets as calculated in accordance with regulatory requirements.
(10)Represents a senior unsecured note, which is subordinated to senior secured term loans of the portfolio company.
(11)Securities exempt from registration under the Securities Act of 1933, as amended, and may be deemed to be “restricted securities”. As of September 30, 2021, the aggregate fair value of these securities is $1,681 or 0.6% of the Company’s net assets. The initial acquisition dates have been included for such securities.
(12)Position or a portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may earn unused commitment fees. Negative cost and fair value, if any, results from unamortized fees, which are capitalized to the cost of the investment. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company’s unfunded commitments as of September 30, 2021:

Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
First Lien Debt
365 Retail Markets, LLC0.50%Revolver12/23/2026$1,200 $(21)
Abacus Data Holdings, Inc. (AbacusNext)1.00%Delayed Draw Term Loan09/10/20221,500 — 
Abacus Data Holdings, Inc. (AbacusNext)0.50%Revolver03/10/2027510 — 
Alert Media, Inc.0.50%Revolver04/12/2026750 (6)
Appfire Technologies, LLC0.50%Delayed Draw Term Loan01/07/20237,800 (28)
ARI Network Services, Inc.1.00%Delayed Draw Term Loan12/30/202182 (1)
ARI Network Services, Inc.0.50%Revolver02/28/2025727 (6)
Associations, Inc.2.50%Delayed Draw Term Loan01/09/2024789 (8)
Associations, Inc.1.00%Delayed Draw Term Loan01/09/20243,865 (38)
Associations, Inc.0.50%Revolver07/02/2027797 (8)
AWP Group Holdings, Inc.1.00%Delayed Draw Term Loan12/22/20221,579 (23)
AWP Group Holdings, Inc.0.50%Revolver12/22/20261,658 (24)
Bearcat Buyer, Inc.1.00%Delayed Draw Term Loan11/23/2022513 — 
Capstone Acquisition Holdings, Inc.1.00%Delayed Draw Term Loan05/12/20221,013 (2)
CC SAG Holdings Corp. (Spectrum Automotive)1.00%Delayed Draw Term Loan06/29/20232,832 (48)
14

SL Investment Corp.
Consolidated Schedule of Investments (Unaudited) (continued)
September 30, 2021
(In thousands)

Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
CC SAG Holdings Corp. (Spectrum Automotive)0.50%Revolver06/29/2027$378 $(6)
CLEO Communications Holding, LLC0.50%Revolver06/09/20275,358 (9)
Cordeagle US Finco, Inc.0.50%Revolver07/30/20271,200 (23)
DCA Investment Holdings, LLC1.00%Delayed Draw Term Loan03/12/2022955 — 
FMG Suite Holdings, LLC0.50%Delayed Draw Term Loan10/30/20222,250 (3)
FMG Suite Holdings, LLC0.50%Revolver10/30/20261,125 (1)
Galway Borrower, LLC0.00%Delayed Draw Term Loan09/30/20232,639 (26)
Galway Borrower, LLC0.50%Revolver09/30/2027880 (18)
Govbrands Intermediate Inc1.00%Delayed Draw Term Loan08/04/20225,676 (69)
Govbrands Intermediate Inc0.50%Revolver08/04/20271,211 (29)
GraphPad Software, LLC0.50%Revolver04/27/2027562 — 
Ground Penetrating Radar Systems, LLC0.50%Revolver06/26/2025295 — 
GS AcquisitionCo, Inc.0.50%Delayed Draw Term Loan04/01/20224,350 (21)
GS AcquisitionCo, Inc.0.50%Revolver05/25/2026907 (4)
GSM Acquisition Corp. (GSM Outdoors)0.50%Revolver11/16/202673 — 
Gurobi Optimization, LLC0.50%Revolver12/19/2023536 — 
Higginbotham Insurance Agency, Inc.1.00%Delayed Draw Term Loan11/25/2022253 — 
High Street Buyer, Inc.1.00%Delayed Draw Term Loan10/16/202110,606 (114)
High Street Buyer, Inc.0.50%Revolver04/16/2027915 (17)
Integrity Marketing Acquisition, LLC1.00%Delayed Draw Term Loan07/09/20236,416 (51)
Jonathan Acquisition Company0.50%Revolver12/22/20251,648 — 
Lightspeed Buyer, Inc.1.00%Delayed Draw Term Loan05/09/20221,350 (27)
Mammoth Holdings, LLC0.50%Delayed Draw Term Loan09/12/2022371 — 
Mammoth Holdings, LLC0.50%Delayed Draw Term Loan12/15/20227,965 — 
Mammoth Holdings, LLC0.50%Revolver10/16/2023408 — 
MHE Intermediate Holdings, LLC1.00%Delayed Draw Term Loan07/21/20231,528 (15)
MHE Intermediate Holdings, LLC0.50%Revolver07/21/20271,071 (21)
MSM Acquisitions, Inc.1.00%Delayed Draw Term Loan01/30/202311,364 (111)
MSM Acquisitions, Inc.0.50%Revolver12/09/20261,283 (12)
Patriot Growth Insurance Services, LLC0.75%Delayed Draw Term Loan01/07/20231,250 — 
Patriot Growth Insurance Services, LLC0.75%Delayed Draw Term Loan06/25/202317,500 — 
PCX Holding Corp.1.00%Delayed Draw Term Loan04/22/2023793 — 
PCX Holding Corp.0.50%Revolver04/22/2027793 — 
PDFTron US Acquisition Corp1.00%Delayed Draw Term Loan01/15/20231,560 (19)
PDFTron US Acquisition Corp0.50%Revolver07/15/20263,300 (63)
Pound Bidco, Inc.0.50%Revolver02/01/2026388 — 
Promptcare Infusion Buyer, Inc.1.00%Delayed Draw Term Loan09/01/20231,667 (16)
15

SL Investment Corp
Consolidated Schedule of Investments (Unaudited)(continued)
September 30, 2021
(In thousands)
Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
Revalize, Inc.0.50%Delayed Draw Term Loan01/07/2023$7,515 $(30)
Skykick, Inc.1.00%Delayed Draw Term Loan03/01/20231,125 (14)
Stepping Stones Healthcare Services, LLC1.00%Delayed Draw Term Loan03/09/2023604 — 
Stepping Stones Healthcare Services, LLC0.50%Revolver03/09/2026736 — 
Summit Buyer, LLC1.00%Delayed Draw Term Loan06/23/202311,102 (220)
Summit Buyer, LLC0.50%Revolver01/14/20261,037 (21)
Suveto Buyer, LLC1.00%Delayed Draw Term Loan09/09/20235,824 (34)
Suveto Buyer, LLC0.50%Revolver09/09/2027555 (6)
Sweep Purchaser, LLC1.00%Delayed Draw Term Loan02/12/2023111 — 
Sweep Purchaser, LLC0.50%Revolver11/30/2026319 — 
Thrive Buyer, Inc. (Thrive Networks)1.00%Delayed Draw Term Loan06/30/20232,395 — 
Thrive Buyer, Inc. (Thrive Networks)0.50%Revolver01/22/2027444 — 
Triple Lift, Inc.0.50%Revolver05/06/20281,714 (24)
Two Six Labs, LLC0.50%Delayed Draw Term Loan08/24/20231,829 (18)
Two Six Labs, LLC0.50%Revolver08/20/2027915 (18)
Upstack Holdco, Inc.1.00%Delayed Draw Term Loan08/26/20231,875 (25)
Upstack Holdco, Inc.0.50%Revolver08/20/2027375 (10)
Valcourt Holdings II, LLC1.00%Delayed Draw Term Loan01/07/20231,578 — 
Vehlo Purchaser, LLC1.00%Delayed Draw Term Loan08/27/20238,333 (82)
Vehlo Purchaser, LLC0.50%Revolver08/27/20272,000 (39)
Vessco Midco Holdings, LLC1.00%Delayed Draw Term Loan11/02/2022617 — 
Vessco Midco Holdings, LLC0.50%Revolver10/18/2026895 — 
VRC Companies, LLC0.75%Delayed Draw Term Loan06/29/20233,278 (41)
VRC Companies, LLC0.50%Revolver06/29/2027708 (9)
World Insurance Associates, LLC1.00%Delayed Draw Term Loan10/01/20222,406 — 
World Insurance Associates, LLC0.50%Revolver04/01/2026970 — 
Zarya Intermediate, LLC0.50%Revolver07/01/20272,000 (39)
Total First Lien Debt Unfunded Commitments$187,699 $(1,518)
Second Lien Debt
Infinite Bidco, LLC1.00%Delayed Draw Term Loan03/18/2022$1,500 $— 
Total Second Lien Debt Unfunded Commitments$1,500 $— 
Total Unfunded Commitments$189,199 $(1,518)
16

SL Investment Corp.
Consolidated Schedule of Investments
December 31, 2020
(In thousands)
Investments-non-controlled/non-affiliated(1)
FootnotesReference Rate and Spread
Interest Rate(2)
Acquisition DateMaturity DatePar Amount/ Shares
Cost(3)
Fair ValuePercentage of Net Assets
First Lien Debt
Aerospace and Defense
Jonathan Acquisition Company(4) (5)L + 5.00%6.00%12/22/202012/22/202612,357$12,049 $12,049 15.57 %
Jonathan Acquisition Company(4) (5) (9)L + 5.00%6.00%12/22/202012/22/2025(48)(48)(0.06)
12,001 12,001 15.51 
Auto Components
Sonny's Enterprises, Inc.(4) (5) (6)L + 7.00%8.00%12/28/202008/05/20261,8231,787 1,787 2.31 
Sonny's Enterprises, Inc.(4) (5) (9)L + 7.00%8.00%12/28/202008/05/2026(89)(89)(0.11)
1,698 1,698 2.19 
Commercial Services & Supplies
Capstone Acquisition Holdings, Inc.(5) (6)L + 4.75%5.75%11/13/202011/12/20275,6535,598 5,691 7.35 
Capstone Acquisition Holdings, Inc.(5) (9)L + 4.75%5.75%11/13/202011/12/2027(5)0.01 
Sweep Purchaser LLC(4) (5) (6)L + 5.75%6.75%11/30/202011/30/20262,9532,895 2,895 3.74 
Sweep Purchaser LLC(4) (5) (9)L + 5.75%6.75%11/30/202011/30/2026(9)(9)(0.01)
Sweep Purchaser LLC(4) (5) (9)L + 5.75%6.75%11/30/202011/30/2026(9)(9)(0.01)
Vessco Midco Holdings LLC(4) (5) (6)L + 4.50%5.50%10/30/202011/02/20265,5265,472 5,472 7.07 
Vessco Midco Holdings LLC(4) (5) (9)L + 4.50%5.50%10/30/202011/02/2026268233 233 0.30 
Vessco Midco Holdings LLC(4) (5) (9)L + 4.50%5.50%10/30/202010/18/2026(9)(9)(0.01)
14,166 14,271 18.44 
Containers & Packaging
Brook and Whittle Holding Corp.(4) (5) (6)L + 6.00%7.00%10/27/202010/17/20244,3054,243 4,243 5.48 
Food Products
Teasdale Foods, Inc. (Teasdale Latin Foods)(4) (5)L + 6.25%7.25%12/18/202012/18/20253,7503,675 3,675 4.75 
Health Care Providers & Services
Bearcat Buyer, Inc.(4) (5) (6)L + 4.75%5.75%11/18/202007/09/20266,9126,741 6,741 8.71 
Bearcat Buyer, Inc.(4) (5) (9)L + 4.75%5.75%11/18/202007/09/20261,4251,256 1,256 1.62 
7,997 7,997 10.33 
Health Care Technology
Lightspeed Buyer, Inc.(4) (5) (6)L + 5.50%6.50%11/09/202002/03/20263,1253,033 3,033 3.92 
Lightspeed Buyer, Inc.(4) (5) (9)L + 5.50%6.50%11/09/202002/03/2026(61)(61)(0.08)
2,972 2,972 3.84 
Insurance
Higginbotham Insurance Agency, Inc.(4) (6) (7)L + 5.75%6.50%11/25/202011/25/20264,8774,805 4,805 6.21 
Higginbotham Insurance Agency, Inc.(4) (7) (9)L + 5.75%6.50%11/25/202011/25/2026(10)(10)(0.01)
Propel Insurance Agency LLC(4) (5) (6)L + 5.00%6.00%12/09/202006/01/20246,1426,082 6,082 7.86 
Propel Insurance Agency LLC(4) (5) (9)L + 5.00%6.00%12/09/202006/01/2024(6)(6)(0.01)
17

SL Investment Corp.
Consolidated Schedule of Investments (Continued)
December 31, 2020
(In thousands)
Investments-non-controlled/non-affiliated(1)
FootnotesReference Rate and Spread
Interest Rate(2)
Acquisition DateMaturity DatePar Amount/ Shares
Cost(3)
Fair ValuePercentage of Net Assets
World Insurance Associates LLC(4) (5) (6)L + 5.50%6.50%12/23/202004/01/202611,912$11,556 $11,556 14.93 %
World Insurance Associates LLC(4) (5) (9)L + 5.50%6.50%12/23/202004/01/2026(46)(46)(0.06)
22,381 22,381 28.92 
Interactive Media & Services
MSM Acquisitions, Inc.(4) (5) (6)L + 6.00%7.00%12/09/202012/09/20267,8957,738 7,738 10.00 
MSM Acquisitions, Inc.(4) (5) (9)L + 6.00%7.00%12/09/202012/09/2026(16)(16)(0.02)
MSM Acquisitions, Inc.(4) (5) (9)L + 6.00%7.00%12/09/202012/09/2026(26)(26)(0.03)
7,696 7,696 9.94 
Leisure Products
GSM Acquisition Corp. (GSM Outdoors)(4) (5) (6)L + 5.00%6.00%11/16/202011/16/20267,5957,483 7,483 9.67 
GSM Acquisition Corp. (GSM Outdoors)(4) (5) (9)L + 5.00%6.00%11/16/202011/16/2026534516 516 0.67 
GSM Acquisition Corp. (GSM Outdoors)(4) (5) (9)L + 5.00%6.00%11/16/202011/16/2026(17)(17)(0.02)
7,982 7,982 10.31 
Multi-Utilities
AWP Group Holdings, Inc.(4) (5)L + 4.75%5.75%12/22/202012/22/20278,5268,399 8,399 10.85 
AWP Group Holdings, Inc.(4) (5) (9)L + 4.75%5.75%12/22/202012/22/2027(12)(12)(0.02)
AWP Group Holdings, Inc.(4) (5) (9)L + 4.75%5.75%12/22/202012/22/2026(28)(28)(0.04)
8,359 8,359 10.80 
Software
GS AcquisitionCo, Inc.(4) (5) (6)L + 5.75%6.75%10/27/202005/24/20247,8917,775 7,775 10.05 
GS AcquisitionCo, Inc.(4) (5) (9)L + 5.75%6.75%12/11/202005/24/20242,2832,221 2,221 2.87 
GS AcquisitionCo, Inc.(4) (5) (9)L + 5.75%6.75%12/11/202005/24/2024(7)(7)(0.01)
Gurobi Optimization LLC(4) (5) (6)L + 5.25%6.25%11/12/202012/19/20234,4534,410 4,410 5.70 
Gurobi Optimization LLC(4) (5) (9)L + 5.25%6.25%11/12/202012/19/2023(5)(5)(0.01)
14,394 14,394 18.60 
Total First Lien Debt$107,564 $107,669 139.11 %
Other Securities
Unsecured Debt
Food Products
Familia Intermediate Holdings I Corp. (Teasdale Latin Foods)(4) (8)N/A16.25% PIK12/18/202006/18/2026503$503 $503 0.65 %
Total Unsecured Debt503 503 0.65 
Common Equity
GSM Equity Investors, LP (GSM Outdoors)(4)50050 50 0.06 
Total Common Equity50 50 0.06 
Total Other Securities$553 $553 0.71%
Total Portfolio Investments$108,117 $108,222 139.83 %
18

SL Investment Corp.
Consolidated Schedule of Investments (Continued)
December 31, 2020
(In thousands)
(1)Unless otherwise indicated, issuers of debt and equity investments held by the Company are denominated in dollars. For the purpose of this Consolidated Schedule of Investments, the term “Company” shall include the Company and its consolidated subsidiary. All debt investments are income producing unless otherwise indicated. All equity investments are non-income producing unless otherwise noted. Certain portfolio company investments are subject to contractual restrictions on sales. Under the 1940 Act, the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of such portfolio company's outstanding voting securities and/or held the power to exercise control over the management or policies of such portfolio company. As of December 31, 2020, the Company does not “control” any of these portfolio companies. Under the 1940 Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of such portfolio company’s outstanding voting securities. As of December 31, 2020, the Company is not an “affiliated person” of any of its portfolio companies.
(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate (“F”) or the U.S. Prime Rate (“P”)), which generally resets periodically. For each loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2020. As of December 31, 2020, the reference rates for the Company's variable rate loans were the 1-month L at 0.14%, the 3-month L at 0.24% and the 6-month L at 0.26%.
(3)The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.
(4)These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by or under the direction of the Board (see Note 2 and Note 5), pursuant to the Company’s valuation policy.
(5)The interest rate floor of these investments as of December 31, 2020 was 1%.
(6)Assets or a portion thereof are pledged as collateral for the JPM Funding Facility (as defined in Note 6). See Note 6 “Debt”.
(7)The interest rate floor on these investments as of December 31, 2020 was 0.75%.
(8)Represents a senior unsecured note, which is subordinated to senior secured term loans of the portfolio company.
(9)Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may earn unused commitment fees. Negative cost and fair value, if any, results from unamortized fees, which are capitalized to the cost of the investment. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company’s unfunded commitments as of December 31, 2020:
19

SL Investment Corp.
Consolidated Schedule of Investments (Continued)
December 31, 2020
(In thousands)
Investments-non-controlled/non-affiliatedUnused Fee RateCommitment TypeCommitment Expiration DateUnfunded CommitmentFair Value
First Lien Debt
AWP Group Holdings, Inc.1.00%Delayed Draw Term Loan12/22/2022$1,579 $(12)
AWP Group Holdings, Inc.0.50%Revolver12/22/20261,895 (28)
Bearcat Buyer, Inc.1.00%Delayed Draw Term Loan11/18/20225,413 (133)
Capstone Acquisition Holdings, Inc.1.00%Delayed Draw Term Loan11/13/20221,013 
GS AcquisitionCo, Inc.0.50%Delayed Draw Term Loan10/27/20213,744 (36)
GS AcquisitionCo, Inc.0.50%Revolver05/24/2024457 (7)
GSM Acquisition Corp.1.00%Delayed Draw Term Loan11/16/2022732 (11)
GSM Acquisition Corp.0.50%Revolver11/16/20261,139 (17)
Gurobi Optimization LLC0.50%Revolver12/19/2023536 (5)
Higginbotham Insurance Agency, Inc.1.00%Delayed Draw Term Loan11/25/20221,373 (10)
Jonathan Acquisition Company0.50%Revolver12/22/20251,922 (48)
Lightspeed Buyer, Inc.1.00%Delayed Draw Term Loan05/09/20223,125 (61)
MSM Acquisitions, Inc.0.00%Delayed Draw Term Loan06/09/20223,289 (16)
MSM Acquisitions, Inc.0.00%Revolver12/09/20261,316 (26)
Propel Insurance Agency LLC1.00%Delayed Draw Term Loan12/09/20221,291 (6)
Sonny's Enterprises, Inc.1.00%Delayed Draw Term Loan12/28/20214,427 (88)
Sweep Purchaser LLC0.00%Delayed Draw Term Loan11/30/2022938 (9)
Sweep Purchaser LLC0.50%Revolver11/30/2026469 (9)
Vessco Midco Holdings LLC1.00%Delayed Draw Term Loan10/30/20223,311 (32)
Vessco Midco Holdings LLC0.50%Revolver10/18/2026895 (9)
World Insurance Associates LLC0.50%Delayed Draw Term Loan06/23/20223,088 (46)
Total First Lien Debt Unfunded Commitments41,952 (602)
Total Unfunded Commitments$41,952 $(602)
20

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)


(1)Organization

SL Investment Corp. (together with its consolidated subsidiary, the “Company”) is a Delaware corporation formed on August 24, 2020 and structured as an externally managed specialty finance company that is focused on lending to middle-market companies. The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940 Act, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, the Company has elected to be treated, and intends to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

On September 24, 2020, the Company filed an amended and restated certificate of incorporation (the “Amended and Restated Certificate of Incorporation”) in the State of Delaware to, among other things, authorize additional shares of its common stock, par value $0.001 per share (the “Common Stock”), and to authorize shares of preferred stock having a par value of $0.001 per share (the “Series A Preferred Stock”) such that the Company has authorized stock consisting of 100,000,000 shares of Common Stock and 1,000,000 shares of Series A Preferred Stock.

On September 24, 2020, the then sole stockholder approved the application of the reduced asset coverage requirements in Section 61(a)(2) of the 1940 Act to the Company, effective as of September 25, 2020. As a result of the stockholder approval, effective September 25, 2020, the asset coverage ratio decreased to 150% from 200%, so long as the Company meets certain disclosure requirements under the 1940 Act.

The Company commenced investment operations in October 2020. The Company’s investment objective is to achieve attractive risk-adjusted returns via current income and, to a lesser extent, capital appreciation by investing primarily in directly originated senior secured term loans issued by U.S. middle-market companies backed by financial sponsors.

On October 19, 2020, the Company sold 521 shares of its Series A Preferred Stock for $1,000 per share to a select group of individual investors who are “accredited investors” within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

On February 1, 2021, the Company filed its Second Amended and Restated Certificate of Incorporation, which amended and restated the Amended and Restated Certificate of Incorporation to clarify that the Company may be subject to provisions of the Employee Retirement Income Security Act of 1971, as amended (“ERISA”), during all periods when its assets are treated as “plan assets” for purposes of ERISA.

The Company is conducting private offerings (the “Private Offerings”) of shares of Common Stock to investors in reliance on exemptions from the registration requirements of the Securities Act. At the closing of any Private Offering, each investor makes a capital commitment (a “Capital Commitment”) to purchase shares of Common Stock pursuant to a subscription agreement entered into with the Company (each, a “Subscription Agreement”). Investors are required to fund drawdowns to purchase shares of Common Stock up to the amount of their respective Capital Commitments each time the Company delivers a notice to the investors.

SLIC Financing SPV LLC (“SLIC SPV”) is a wholly owned subsidiary of the Company that was formed as a Delaware limited liability company on November 4, 2020. SLIC SPV expects to hold investments in first and second lien senior secured loans. SLIC SPV is consolidated in these consolidated financial statements commencing from the date of its formation.
(2)Summary of Significant Accounting Policies
Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). As an investment company, the Company applies the accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies (“ASC
21

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)
946”) issued by the Financial Accounting Standards Board (“FASB”). The carrying value for all assets and liabilities approximates their fair value.

The interim consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X. Accordingly, certain disclosures accompanying the annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted.  In the opinion of management, all adjustments, consisting solely of normal recurring accruals considered necessary for the fair presentation of financial statements for the interim period presented, have been included. The current period’s results of operations will not necessarily be indicative of results that the Company may ultimately achieve for the year ending December 31, 2021. All intercompany balances and transactions have been eliminated.
Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Such amounts could differ from those estimates and such differences could be material. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. Assumptions and estimates regarding the valuation of investments involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements.

Consolidation

As provided under ASC 946, the Company will not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the results of the Company’s wholly-owned subsidiary.

As of September 30, 2021, the Company’s consolidated subsidiary was SLIC SPV.

Cash

Cash is carried at cost, which approximates fair value. The Company deposits its cash with multiple financial institutions and, at times, may exceed the Federal Deposit Insurance Corporation insured limit.
Investments

Investment transactions are recorded on the trade date. Receivables/payables from investments sold/purchased on the Consolidated Statements of Assets and Liabilities consist of amounts receivable to or payable by the Company for transactions that have not settled at the reporting date. The net change in unrealized gains or losses on the Consolidated Statements of Operations primarily reflects the change in investment values, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period. See Note 5 for further information about fair value measurements.
Revenue Recognition

Interest Income

Interest income is recorded on an accrual basis and includes the accretion of discounts and amortizations of premiums.  Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method.  The amortized cost of debt investments represents the original cost, including loan origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion

22

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)
of discounts and amortization of premiums, if any.  Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income in the current period.

PIK Income

The Company has loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. Such income is included in interest income on the Consolidated Statements of Operations. If at any point the Company believes PIK is not expected to be realized, the investment generating PIK will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest is generally reversed through interest income. To maintain the Company’s status as a RIC, this non-cash source of income must be paid out to stockholders in the form of dividends, even though the Company has not yet collected cash.

Dividend income

Dividend income on common equity investments is recorded on the record date for private portfolio companies and on the ex-dividend date for publicly traded portfolio companies. Dividend income are presented net of withholding tax, if any.

Other Income

    The Company may receive various fees in the ordinary course of business such as structuring, consent, waiver, amendment and syndication fees as well as fees for managerial assistance rendered by the Company to the portfolio companies.  Such fees are recognized in income when earned or when the services are rendered and there is no uncertainty or contingency related to the amount to be received.  

Non-Accrual Income

Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full.  Accrued interest is generally reversed when a loan is placed on non-accrual status. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status.  Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in management’s judgment, are likely to remain current. Management may determine to not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.

Realized Gains/Losses

Realized gains or losses are measured by the difference between the net proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries.

Organization and Offering Costs

Costs associated with the organization of the Company are expensed as incurred, subject to the limitations discussed below. These costs consist primarily of legal fees and other costs of organizing the Company. Costs associated with the offering of Common Stock and Series A Preferred Stock are capitalized as “deferred offering costs” on the Consolidated Statements of Assets and Liabilities and amortized over a twelve-month period from the initial capital call and Series A Preferred Stock issuance date, respectively, subject to the limitation described in Note 3 below. These costs consist primarily of legal fees and other costs incurred in connection with the Company’s continuous Private Offerings of its Common Stock and issuance of its Series A Preferred Stock.

23

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)
Expenses

The Company is responsible for investment expenses, legal expenses, auditing fees and other expenses related to the Company’s operations. Such fees and expenses, including expenses incurred by MS Capital Partners Adviser Inc., the Company’s investment adviser (the “Investment Adviser”), on behalf of the Company, are reimbursed by the Company.

The Company pays the Investment Adviser a base management fee under the Restated Advisory Agreement as described in Note 3 below. The fee is recorded on the Consolidated Statements of Operations.
Deferred Financing Costs

Deferred financing costs represent upfront fees, legal and other direct incremental costs incurred in connection with the Company’s borrowings. These costs are deferred and will be amortized over the life of the related borrowings using the straight-line method. Deferred financing costs related to revolving credit facilities are presented separately as an asset on the Company’s Consolidated Statements of Assets and Liabilities.
Income Taxes

The Company has elected to be treated as a RIC under Subchapter M of the Code. So long as the Company maintains its status as a RIC, it generally will not pay corporate U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends.

In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.

The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (the “ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.

In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. The Company intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more likely than not” to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income tax expense. SLIC SPV is a disregarded entity for tax purposes and is consolidated with the tax return of the Company.

For the three and nine months ended September 30, 2021, the Company incurred $0 and $317 (dollar amount in actual), respectively, of U.S. federal excise tax.



24

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)
New Accounting Standards

In March 2020, the FASB issued Accounting Standards Update 2020-04 (“ASU 2020-04”) “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This accounting update provides optional accounting relief to entities with contracts, hedge accounting relationships or other transactions that reference the London Interbank Offered Rate (“LIBOR”) or other interest rate benchmarks for which the referenced rate is expected to be discontinued or replaced. This optional relief generally allows for contract modifications solely related to the replacement of the reference rate to be accounted for as a continuation of the existing contract instead of as an extinguishment of the contract, and would therefore not trigger certain accounting impacts that would otherwise be required. The optional relief can be applied beginning January 1, 2020 and ending December 31, 2022. We plan to apply the accounting relief as relevant contract relationship modifications are made during the course of the reference rate reform transition period.
(3)Related Party Transactions
Investment Advisory Agreement

On February 1, 2021, the Company entered into an amended and restated investment advisory agreement (the “Restated Advisory Agreement”) with the Investment Adviser, which amended and restated the Company’s initial investment advisory agreement (the “Investment Advisory Agreement”) to clarify that the Company may be subject to provisions of ERISA, during all periods when the Company’s assets are treated as “plan assets” for purposes of ERISA. No material terms changed in the Restated Advisory Agreement as compared to the Investment Advisory Agreement entered into on September 24, 2020, including the Base Management Fee (as defined below).

The Company pays the Investment Adviser a fee for its services under the Restated Advisory Agreement (the “Base Management Fee”). The cost of the Base Management Fee will ultimately be borne by holders of the Common Stock. As a part of the Restated Advisory Agreement, the Company agreed to reimburse the Investment Adviser for certain expenses it incurs on the Company's behalf.

Base Management Fee

The Base Management Fee is calculated at an annual rate of 0.25% of the Company’s average Capital Under Management, at the end of the then-current quarter and the prior calendar quarter (and, in the case of the Company's first quarter, Capital Under Management as of such quarter-end). “Capital Under Management” means cumulative capital called, less cumulative distributions categorized as returned capital. Capital Under Management does not include capital acquired through the use of leverage. The Investment Adviser does not receive any fees on unused capital commitments.

For the three and nine months ended September 30, 2021, $137 and $276, respectively, of Base Management Fee was accrued to the Investment Adviser. For the period from August 24, 2020 (inception) through September 30, 2020, the Company did not incur any Base Management Fee.

As of September 30, 2021 and December 31, 2020, $137 and $27, respectively, were payable to the Investment Adviser relating to Base Management Fees.

Administration Agreement

MS Private Credit Administrative Services LLC (the “Administrator”), is the administrator of the Company pursuant to an administration agreement entered into by the Company and the Administrator on September 24, 2020 (the “Administration Agreement”).

On February 1, 2021, the Company entered into an amended and restated administration agreement (the “Restated Administration Agreement”) with the Administrator which amended and restated the Administration Agreement to clarify that the Company may be subject to provisions of ERISA during all periods when its assets are treated as “plan assets” for purposes of ERISA
25

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)
and to make certain conforming changes in connection with such revisions. No material terms changed in the Restated Administration Agreement as compared to the Administration Agreement.

Pursuant to the Restated Administration Agreement, the Administrator provides services and receives reimbursements from the Company equal to an amount that reimburses the Administrator for certain expenses and the Company’s allocable portion of certain expenses incurred by the Administrator in performing its obligations under the Administration Agreement. Reimbursements under the Administration Agreement are made quarterly in arrears.

For the three and nine months ended September 30, 2021, the Company incurred $0 and $6, respectively, in expenses under the Administration Agreement, which were recorded in administrative service expenses on the Company’s Consolidated Statements of Operations. For the period from August 24, 2020 (inception) through September 30, 2020, the Company did not incur any expenses under the Administration Agreement.

Amounts unpaid and included in payable to affiliates on the Consolidated Statements of Assets and Liabilities as of September 30, 2021 and December 31, 2020 were $24 and $18, respectively.

Expense Support and Waiver Agreement

On February 1, 2021, the Company entered into an expense support and waiver agreement (the “Expense Support and Waiver Agreement”) with the Investment Adviser. Under the terms of the Expense Support and Waiver Agreement, the Investment Adviser agreed to waive any reimbursement by the Company of offering and organizational expenses to be incurred by the Investment Adviser on behalf of the Company in excess of $1,000 or 0.10% of the aggregate Capital Commitments of the Company, whichever is greater. If actual organization and offering costs incurred exceed the greater of $1,000 or 0.10% of the Company’s total Capital Commitments, the Investment Adviser or its affiliate will bear the excess costs. The Company shall reimburse the Investment Adviser for payments of any excess costs borne by the Investment Adviser on the Company’s behalf within three years of October 9, 2020.

For the three and nine months ended September 30, 2021, the Company incurred $20 and $201, respectively, towards organization cost and amortization of offering cost. These costs did not exceed the Investment Adviser reimbursement threshold, and as a result, no excess organization and offering costs were waived. For the period from August 24, 2020 (inception) through September 30, 2020, the Company incurred $182 towards organization cost.

Adviser Investment

On September 10, 2020, the Investment Adviser purchased all 1,000 of the Company’s then issued and outstanding shares of Common Stock at a price per share of $20.00 for an aggregate purchase price of $20 (the “Seed Capital”).

(4)Investments

The composition of the Company’s investment portfolio at cost and fair value were as follows:
September 30, 2021December 31, 2020
CostFair Value% of Total Investments at Fair ValueCostFair Value% of Total Investments at Fair Value
First Lien Debt$562,708 $567,056 97.7 %$107,564 $107,669 99.5 %
Second Lien Debt10,705 10,830 1.9 — — — 
Other Securities2,053 2,173 0.4 553 553 0.5 
Total$575,466 $580,059 100.0 %$108,117 $108,222 100.0 %


26

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)
The industry composition of investments at fair value were as follows:
 September 30, 2021December 31, 2020
Aerospace and Defense4.9 %11.1 %
Auto Components2.9 1.6 
Automobiles8.5 — 
Biotechnology0.9 — 
Commercial Services & Supplies15.5 13.2 
Containers & Packaging0.8 3.9 
Diversified Consumer Services1.8 — 
Electronic Equipment, Instruments & Components1.2 — 
Food Products0.7 3.9 
Health Care Equipment & Supplies0.8 — 
Health Care Providers & Services5.2 7.4 
Health Care Technology1.2 2.7 
Industrial Conglomerates0.2 — 
Insurance15.4 20.7 
Interactive Media & Services6.3 7.1 
IT Services7.3 — 
Leisure Products4.0 7.4 
Multi-Utilities2.9 7.7 
Professional Services4.9 — 
Real Estate Management & Development4.5 — 
Software10.1 13.3 
Total100.0 %100.0 %

The geographic composition of investments at cost and fair value were as follows:
 September 30, 2021December 31, 2020
CostFair Value% of Total
Investments at
Fair Value
CostFair Value% of Total
Investments at
Fair Value
Canada$15,504 $15,504 2.7 %$— $— — %
United States559,962 564,555 97.3 108,117 108,222 100.0 
Total$575,466 $580,059 100.0 %$108,117 $108,222 100.0 %

(5)Fair Value Measurements

The Company conducts the valuation of assets at all times consistent with U.S. GAAP and the 1940 Act. The Company’s board of directors (the “Board”), with the assistance of the Audit Committee of the Board (the “Audit Committee”), determines the fair value of the assets for assets with a daily public market, and for assets with no readily available public market, on at least a quarterly basis, in accordance with FASB ASC 820, Fair Value Measurements (“ASC 820”). Valuation procedures are set forth in more detail below.

ASC 820 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Fair value is a market-based measurement, not an entity-specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other
27

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)
assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same—to estimate the price when an orderly transaction to sell the asset or transfer the liability would take place between market participants at the measurement date under current market conditions (that is, an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).

ASC 820 establishes a hierarchical disclosure framework which ranks the observability of inputs used in measuring financial instruments at fair value. The observability of inputs is impacted by a number of factors, including the type of financial instruments and their specific characteristics. Financial instruments with readily available quoted prices, or for which fair value can be measured from quoted prices in active markets, generally will have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.

The three-level hierarchy for fair value measurements is defined as follows:

Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical financial instruments as of the measurement date. The types of financial instruments in this category include unrestricted securities, including equities and derivatives, listed in active markets. We do not adjust the quoted price for these instruments, even in situations where we hold a large position and a sale could reasonably impact the quoted price.

Level 2—inputs to the valuation methodology are quoted prices in markets that are not active or for which all significant inputs are either directly or indirectly observable as of the measurement date. The types of financial instruments in this category include less liquid and restricted securities listed in active markets, securities traded in markets that are not active, and certain over-the-counter derivatives where the fair value is based on observable inputs.

Level 3—inputs to the valuation methodology are unobservable and significant to the overall fair value measurement, and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation. The types of financial instruments in this category include investments in privately held entities, non-investment grade residual interests in securitizations and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

Pursuant to the framework set forth above, the Company values securities traded in active markets on the measurement date by multiplying the exchange closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of the investments from pricing services, brokers or dealers’ quotes, or counterparty marks in order to value liquid assets that are not traded in active markets. Pricing services aggregate, evaluate and report pricing from a variety of sources including observed trades of identical or similar securities, broker or dealer quotes, model-based valuations and internal fundamental analysis and research. When doing so, the Company determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. If determined adequate, the Company uses the quote obtained.

Securities that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or the Board, does not represent fair value, each is valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment but include comparable public market valuations, comparable precedent transaction valuations and discounted cash flow analyses. Non-controlled debt investments are generally fair valued using discounted cash flow technique. Expected cash flows are projected based on contractual terms and discounted back to the measurement date based on a discount rate. Discount rate is determined based upon an assessment of current and expected yields for similar investments and risk profiles. Non-controlled equity investments are generally fair valued using a market approach and/or an income approach. The market approach typically utilizes market value multiples of comparable publicly traded companies. The income approach typically utilizes a

28

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)
discounted cash flow analysis of the portfolio company. The Board undertakes a multi-step valuation process each quarter, as described below:

(1)each portfolio company or investment is initially valued by using a standardized template designed to approximate fair market value based on observable market inputs and updated credit statistics and unobservable inputs;

(2)preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of the Investment Adviser’s senior management;

(3)the Board engages one independent third-party valuation firm to provide positive assurance on a portion of the Company’s illiquid investments each quarter (such that each illiquid investment will be reviewed by an independent valuation firm at least once on a rolling twelve month basis) including review of management’s preliminary valuation and conclusion of fair value;

(4)the Audit Committee reviews the assessments of the Investment Adviser and the independent third-party valuation firm and provide the Board with recommendations with respect to the fair value of each investment in the Company’s portfolio; and

(5)    the Board discusses the valuation recommendations of the Audit Committee and determine the fair value of each investment in the Company’s portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.

The fair value is generally determined based on the assessment of the following factors, as relevant:
•     the nature and realizable value of any collateral;
•     call features, put features and other relevant terms of debt;
•     the portfolio company’s leverage and ability to make payments;
•     the portfolio company’s public or “private letter” credit ratings;
•     the portfolio company’s actual and expected earnings and discounted cash flow;
•     prevailing interest rates for like securities and expected volatility in future interest rates;
•     the markets in which the issuer does business and recent economic and/or market events; and
•     comparisons to publicly traded securities.

Investment performance data utilized will be the most recently available as of the measurement date which in many cases may reflect up to a one quarter lag in information.

The Board is ultimately responsible for the determination, in good faith, of the fair value of the Company’s portfolio investments.

During the three and nine months ended September 30, 2021, there were $0 and $5,698 of portfolio investments transferred into Level 3 from Level 2 at fair value, respectively, as of the beginning of the period in which the reclassification occurred, primarily due to decreased price transparency.

The following table presents the fair value hierarchy of the investments:
September 30, 2021
Level 1Level 2Level 3Total
First Lien Debt$— $7,341 $559,715 $567,056 
Second Lien Debt— — 10,830 10,830 
Other Securities— — 2,173 2,173 
Total$— $7,341 $572,718 $580,059 
29

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)

December 31, 2020
Level 1Level 2Level 3Total
First Lien Debt$— $5,698 $101,971 $107,669 
Other Securities  553 553 
Total$— $5,698 $102,524 $108,222 

The following table presents changes in the fair value of the investments for which Level 3 inputs were used to determine the fair value for the three months ended September 30, 2021:
First Lien DebtSecond Lien DebtOther SecuritiesTotal Investments
Fair value, June 30, 2021$359,225 $10,774 $1,857 $371,856 
Purchases of investments217,020 — 295 217,315 
Proceeds from principal repayments and sales of investments(18,351)— — (18,351)
Accretion of discount/amortization of premium691 — 695 
Payment-in-kind— — 23 23 
Net change in unrealized appreciation (depreciation)1,078 52 (2)1,128 
Net realized gain (loss)52 — — 52 
Transfers into/out of Level 3— — — — 
Fair value, September 30, 2021$559,715 $10,830 $2,173 $572,718 
Net change in unrealized appreciation (depreciation) from investments still held as of September 30, 2021$1,245 $52 $(2)$1,295 

The following table presents changes in the fair value of the investments for which Level 3 inputs were used to determine the fair value for the nine months ended September 30, 2021:


30

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)
First Lien DebtSecond Lien DebtOther SecuritiesTotal Investments
Fair value, December 31, 2020$101,971 $— $553 $102,524 
Purchases of investments476,970 10,698 1,435 489,103 
Proceeds from principal repayments and sales of investments(30,513)— — (30,513)
Accretion of discount/amortization of premium1,297 — 1,304 
Payment-in-kind— — 66 66 
Net change in unrealized appreciation (depreciation)4,240 125 119 4,484 
Net realized gain (loss)52 — — 52 
Transfers into/out of Level 35,698 — — 5,698 
Fair value, September 30, 2021$559,715 $10,830 $2,173 $572,718 
Net change in unrealized appreciation (depreciation) from investments still held as of September 30, 2021$4,240 $125 $119 $4,484 

The Company did not hold any investments during the period from August 24, 2020 (inception) through September 30, 2020.

The following table presents quantitative information about the significant unobservable inputs of the Company’s Level 3 financial instruments. The table is not intended to be all-inclusive but instead captures the significant unobservable inputs relevant to the Company’s determination of fair value.
September 30, 2021
Range
Fair
Value
Valuation TechniqueUnobservable
Input
LowHighWeighted
Average
Investments in first lien debt$559,715 Yield AnalysisDiscount Rate5.24 %9.60 %7.20 %
Investments in second lien debt10,830 Yield AnalysisDiscount Rate7.07 %10.18 %8.46 %
Investments in other securities:
  Unsecured debt492 Yield AnalysisDiscount Rate21.53 %21.53 %21.53 %
Market ApproachEBITDA Multiple9.00x9.00x9.00x
  Preferred equity225 Market ApproachRevenue Multiple11.80x11.80x11.80x
  Common equity1,456 Market ApproachEBITDA Multiple8.10x16.90x14.91x
Total investments in other securities$2,173 
Total investments$572,718 

December 31, 2020
Range
Fair
Value
Valuation TechniqueUnobservable
Input
LowHighWeighted
Average
Investments in first lien debt$101,971 Yield AnalysisDiscount Rate5.91 %8.86 %6.98 %
Investments in other securities553 Market ApproachEBITDA Multiple10.00x10.01x10.00x
Total investments$102,524 
31

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)

The significant unobservable input used in yield analysis is discount rate based on comparable market yields. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement. The significant unobservable input used in the market approach is the comparable company multiple. The multiple is used to estimate the enterprise value of the underlying investment. An increase/decrease in the multiple would result in an increase/decrease, respectively, in the fair value.

Financial instruments disclosed but not carried at fair value

The carrying value and fair value of the Company’s secured borrowings disclosed but not carried at fair value were as follows:
September 30, 2021December 31, 2020
Carrying ValueFair ValueCarrying ValueFair Value
JPM Funding Facility$325,400 $325,400 $57,500 $57,500 
Total$325,400 $325,400 $57,500 $57,500 

The above fair value measurements were based on significant unobservable inputs and thus represent Level 3 measurements as defined under ASC 820.

The carrying amounts of the Company’s assets and liabilities, other than investments at fair value and the JPM Funding Facility (as defined below), approximate fair value. These financial instruments are categorized as Level 3 within the hierarchy as of both September 30, 2021 and December 31, 2020.

(6)Debt

JPM Funding Facility

On June 3, 2021, SLIC SPV entered into an Amended and Restated Loan and Security Agreement, which was subsequently amended on August 18, 2021, by and among SLIC SPV, as the borrower, the Company, as the parent and as the servicer, SL Investment Feeder Fund L.P. and SL Investment Feeder Fund GP Ltd., as pledgors, U.S. Bank National Association, as collateral agent, collateral administrator and securities intermediary, and JP Morgan Chase Bank, NA (“JPM”), as the administrative agent and arranger, the lenders party thereto, and the issuing banks party thereto (as amended, the "JPM Funding Facility). Pursuant to the JPM Funding Facility, JPM has agreed to extend credit to SLIC SPV in an aggregate principal amount, as of September 30, 2021, of up to $500.0 million at any one time outstanding, subject to the satisfaction of various conditions, including availability under the borrowing base, which is based on a combination of unfunded capital commitments and loan collateral. In addition, the JPM Funding Facility provides for an ability to increase the maximum capacity, at the option of existing and new lenders, from $500.0 million to $950.0 million, subject to lender consent and the other conditions set forth therein.

The JPM Funding Facility is a revolving funding facility with a reinvestment period ending December 3, 2023 (or earlier upon the occurrence of certain events as specified therein) and a final maturity date of December 3, 2025. Subject to certain conditions, the reinvestment period and final maturity are both subject to a one-year extension. Advances under the JPM Funding Facility are available in U.S. dollars and other permitted currencies. The interest charged on the JPM Funding Facility is based on LIBOR (Dollar), SONIA, EURIBOR or CDOR, as applicable (or, if LIBOR (Dollar) is not available, a benchmark replacement or a “base rate” (which is the greater of a prime rate and the federal funds rate plus 0.50%), as applicable), plus a margin of 2.225% prior to the transition date, and 2.375% subsequent to the transition date, as set forth in the JPM Funding Facility.

As of September 30, 2021 and December 31, 2020, the Company was in compliance with all covenants and other requirements of the JPM Funding Facility, as well as the leverage restrictions contained in the 1940 Act. The summary information of

32

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)
the JPM Funding Facility for the three and nine months ended September 30, 2021 was as follows:
Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
Borrowing interest expense$1,754 $3,377 
Facility unused commitment fees159 520 
Amortization of financing costs264 609 
Total$2,177 $4,506 
Weighted average interest rate (excluding unused fees and financing costs)2.33 %2.47 %
Weighted average outstanding balance$294,873 $180,196 

During the three months ended September 30, 2021, the Company borrowed $210,500 and repaid $92,000 under the JPM Funding Facility. During the nine months ended September 30, 2021, the Company borrowed $391,900 and repaid $124,000 under the JPM Funding Facility. For the period from August 24, 2020 (inception) through September 30, 2020, the Company did not have any borrowings outstanding.

The Company’s outstanding debt obligations were as follows:

September 30, 2021
Aggregate Principal CommittedOutstanding PrincipalUnused Portion
Amount Available(1)
JPM Funding Facility$500,000 $325,400 $174,600 $72,605 
Total$500,000 $325,400 $174,600 $72,605 

December 31, 2020
Aggregate Principal CommittedOutstanding PrincipalUnused Portion
Amount Available(1)
JPM Funding Facility$250,000 $57,500 $192,500 $131,698 
Total$250,000 $57,500 $192,500 $131,698 

(1) The amount available reflects any limitations related to such credit facility’s borrowing base.

(7)Commitments and Contingencies

In the normal course of business, the Company may enter into contracts that provide a variety of general indemnifications. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. Currently, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications.

As of September 30, 2021 and December 31, 2020, the Company had $189,199 and $41,952 of unfunded commitments to fund delayed draw and revolving senior secured loans, respectively.

A summary of the Company’s contractual payment obligations under the JPM Funding Facility as of September 30, 2021 was as follows:
33

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)
Payments Due by Period
TotalLess
than
1 year
1-3 years3-5
years
After 5
years
JPM Funding Facility$325,400 $— $— $325,400 $— 
Total Contractual Obligations$325,400 $— $— $325,400 $— 

As of September 30, 2021 and December 31, 2020, the Company had $652,320 and $502,320, respectively, in total Capital Commitments from holders of the Common Stock, of which $387,800 and $425,300, respectively, were unfunded.
(8)Net Assets

The Company has the authority to issue 100,000,000 shares of common stock at $0.001 par value per share and 1,000,000 shares of Series A Preferred Stock at $0.001 par value per share.

The following table shows the components of distributable earnings as shown on the Consolidated Statements of Assets and Liabilities:
As of
September 30, 2021
As of
December 31, 2020
Net distributable earnings (accumulated losses), beginning of period$(129)$— 
Net investment income (loss)12,189 (154)
Net realized gain (loss)52 — 
Net unrealized appreciation (depreciation)4,488 105 
Dividends declared(10,551)(96)
Tax reclassifications to equity of holders of Common Stock— 16 
Net distributable earnings (accumulated losses), end of period$6,049 $(129)

As of September 30, 2021, the Company received aggregate Capital Commitments of $652,320, including $20 Seed Capital from the Investment Adviser.

The following table summarizes the total shares issued and proceeds received from the Company’s capital drawdowns delivered pursuant to the Subscription Agreements for the nine months ended September 30, 2021 (dollar amounts in millions):

Common Share Issuance DateCommon Shares IssuedAmount
March 12, 20211,113,310$22.50 
May 07, 20211,679,46335.00 
June 28, 20211,679,46335.00 
August 06, 20211,647,83435.00 
September 10, 20212,786,80960.00 
Total8,906,879$187.50 

During the period from August 24, 2020 (inception) through September 30, 2020, the Company received $20 Seed Capital from the Investment Advisor and issued 1,000 Common Shares.

The following table summarizes the Company’s dividends declared and payable for the nine months ended September 30, 2021 (dollar amounts in thousands) to the holders of Common Stock:


34

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)
Date DeclaredRecord DatePayment DatePer Share AmountTotal Amount
March 09, 2021March 09, 2021April 15, 2021$0.20 $775 
June 23, 2021June 23, 2021July 19, 20210.52 3,467 
September 23, 2021September 23, 2021October 22, 20210.49 6,262 
Total Distributions$1.21 $10,504 
During the nine months ended September 30, 2021, we accrued $47.0 of dividend to holders of the Series A Preferred Stock, of which $15.6 was unpaid and included in dividends payable on the Consolidated Statements of Assets and Liabilities. For the period from August 24, 2020 (inception) through September 30, 2020, no shares of Series A Preferred Stock were outstanding and no dividends were accrued.

(9)Earnings Per Share

    The following table sets forth the computation of basic and diluted earnings per common share:
For the three months ended September 30, 2021For the period from August 24, 2020 (inception) through September 30, 2020For the nine months ended September 30, 2021For the period from August 24, 2020 (inception) through September 30, 2020
Numerator for basic and diluted earnings per common share - net increase/(decrease) in net assets resulting from operations$8,076 $(182)$16,682 $(182)
Denominator for basic and diluted earnings per common share - weighted average shares outstanding9,985,649 1,000 6,743,252 1,000 
Basic and diluted earnings per common share$0.81 $(182.00)$2.47 $(182.00)



















35

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)





(10) Financial Highlights

The following are the financial highlights for the nine months ended September 30, 2021 (dollar amounts in thousands, except per common share data):
For the nine months ended September 30, 2021
Per Common Share Data:(1)
Net asset value, beginning of period$19.84 
Net investment income (loss)1.81 
Net unrealized and realized gain (loss)(2)
0.69 
Net increase (decrease) in net assets resulting from operations2.50 
Dividends declared(1.21)
Issuance of common stock0.04 
Total increase (decrease) in net assets1.33 
Net asset value, end of period$21.17 
Shares outstanding, end of period12,781,143 
Total return based on net asset value(3)
6.70 %
Ratio/Supplemental Data (all amounts in thousands except ratios and shares):
Net assets attributable to the holders of Common Stock, end of period$270,553 
Weighted average common shares outstanding6,743,252 
Ratio of total expenses to average net assets(4)
5.48 %
Ratio of net investment income to average net assets(4)
11.02 %
Total capital commitments, end of period$652,320 
Ratios of total contributed capital to total committed capital, end of period40.55 %
Asset coverage ratio183.01 %
Portfolio turnover rate9.85 %

The Company commenced investing operations in October 2020; therefore, financial highlights for the period from August 24, 2020 (inception) through September 30, 2020 are not meaningful.

(1)The per share data was derived by using the weighted average shares outstanding during the period.
(2)For the nine months ended September 30, 2021, the amount shown does not correspond with the aggregate amount for the period as it includes the effect of the timing of capital transactions.
(3)Total return (not annualized) is calculated as the change in net asset value per common share plus dividends declared during the period, divided by the beginning net asset value per common share. Excluding the effects of the higher offering price of subscriptions, total return (not annualized) would have been 6.50%.
(4)Ratios are calculated using the average net assets of the Company attributable to the holders of Common Stock. Amounts are annualized except for organization and offering costs.






36

SL Investment Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2021
(In thousands, except shares and per share data)
(11)Subsequent Events

Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed below.
On October 7, 2021, the Company delivered a capital drawdown notice to its stockholders relating to the sale of approximately 1,643,192 shares of Common Stock for an aggregate offering price of approximately $35.0 million. The sale closed on October 15, 2021.
On November 5, 2021, the Company delivered a capital drawdown notice to its stockholders for an aggregate offering price of approximately $75.0 million. The sale of Common Stock closed on November 12, 2021.
37


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(dollar amounts in thousands, except per share amounts, unless otherwise indicated)

In this Quarterly Report on Form 10-Q, or this “Report”, except where context suggests otherwise, the terms
“Company,” “we,” “our” or “us” refers to SL Investment Corp. and its consolidated subsidiary. This Report contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, 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. 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:

our future operating results;
our business prospects and the prospects of our portfolio companies;
risk associated with possible disruptions in our operations or the economy generally, including disruptions from the impact of the current Coronavirus (also referred to as “COVID-19” or “Coronavirus”) pandemic;
general economic, political and industry trends and other external factors, including uncertainty surrounding the financial and political stability of the United States, the United Kingdom, the European Union and China;
our contractual arrangements and relationships with third parties;
actual and potential conflicts of interest with MS Capital Partners Adviser Inc., our investment adviser, or the Investment Adviser, and its affiliates;
the dependence of our future success on the general economy and its effect on the industries in which we invest;
the ability of our portfolio companies to achieve their objectives, including as a result of the Coronavirus pandemic;
the use of borrowed money to finance a portion of our investments;
the adequacy of our financing sources and working capital;
the timing of cash flows, if any, from the operations of our portfolio companies;
the ability of our Investment Adviser to locate suitable investments for us and to monitor and administer our investments;
the ability of our Investment Adviser and its affiliates to attract and retain highly talented professionals;
our ability to qualify and maintain our qualification as a business development company, or a BDC, and as a regulated investment company, or a RIC, under the Internal Revenue Code of 1986, as amended, or the Code;
the effect of changes in tax laws and regulations and interpretations thereof; and
the risks, uncertainties and other factors we identify under “Item 1A. Risk Factors” and elsewhere in this Report.

The information contained in this section should be read in conjunction with “Item 1. Consolidated Financial Statements.” 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 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.   This discussion contains forward-looking statements, which relate to future events or our future performance or financial condition and involves numerous risks and uncertainties, including, but not limited to, those set forth in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020, or the Form 10-K, and Part II, Item 1A of 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. You are advised to consult any additional disclosures that we make directly to you or through reports that we have filed or in the future file with the Securities and Exchange Commission, or the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.


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You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act.



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OVERVIEW
We are an externally managed specialty finance company formed on August 24, 2020 focused on lending to middle-market companies. We have elected to be regulated as a BDC under the Investment Company Act of 1940, or the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated, and intend to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code.
Our investment objective is to achieve attractive risk-adjusted returns via current income and, to a lesser extent, capital appreciation by investing primarily in directly originated senior secured term loans issued by U.S. middle-market companies backed by financial sponsors. For the purposes of this Report, “middle-market companies” refers to companies that, in general, generate annual earnings before interest, taxes, depreciation, and amortization (“EBITDA”) in the range of approximately $15 million to $100 million, which we believe is a useful proxy for cash flow. We intend to achieve our investment objective by investing primarily in directly originated senior secured term loans including first lien senior secured term loans and second lien senior secured term loans, higher-yielding assets such as mezzanine debt, unsecured debt, equity investments and other opportunistic asset purchases. Under normal market circumstances, we expect that investments other than first lien senior secured term loan would not exceed 10% of our gross assets at the time of acquisition of any such investments. Typical middle-market senior loans may be issued by middle-market companies in the context of leveraged buyouts (“LBOs”), acquisitions, debt refinancings, recapitalizations, and other similar transactions. We expect to generate revenues primarily in the form of interest income from investments we hold. In addition, we expect to generate income from distributions on any direct equity investments, capital gains on the sale of loans and debt and equity securities, and various other loan origination and other fees, including commitment, origination, amendment, syndication, structuring or due diligence fees, fees for providing managerial assistance and consulting fees.
On September 18, 2020, the SEC granted our Investment Adviser exemptive relief (the “Order”) that allows us to enter into certain negotiated co-investment transactions alongside certain Affiliated Investment Accounts (as defined in the Order), which are managed by our Investment Adviser or its affiliates, in a manner consistent with our investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with certain conditions specified in the Order. Pursuant to the Order, we are permitted to co-invest with our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our eligible directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies.
Coronavirus Developments
The effect on the U.S. and global economy of the ongoing Coronavirus pandemic, uncertainty relating to more contagious strains of the Coronavirus that have emerged in the United States and globally, the efficiency and success of the global vaccine rollout, the length of economic recovery, and policies of the new U.S. presidential administration have created stress on the market and could affect our portfolio companies. In addition, government spending and disruptions in supply chains in the United States and elsewhere in response to the Coronavirus pandemic and otherwise, in conjunction with other factors, including those described above, have led and could continue to lead to inflationary economic environments that could affect our portfolio companies, our financial condition and our results of operations. Despite these factors, we believe we are very well positioned to manage the current environment. Our portfolio was constructed entirely “post-COVID-19” market dislocation and we believe we still have sufficient available capital to be prudently invested in the current credit environment. We intend to continue to deploy capital in a measured pace as we find what we believe are compelling investment opportunities, while seeking to avoid investing in cyclical industries and industries directly impacted by the effects of the Coronavirus pandemic.
We cannot predict the full impact of the Coronavirus pandemic, especially in light of the uncertainty surrounding more contagious strains of the virus that have emerged in the United States and globally and the potential impact on the vaccine rollout. While the U.S. Food and Drug Administration has approved certain vaccines, including for emergency use, we cannot be certain if and when the United States and countries worldwide will achieve “herd immunity”. Any delay in the dissemination of the vaccines and any unwillingness amongst the population to get vaccinated could result in further social distancing measures and/or localized outbreaks, which may impede the global economic recovery. As such, the extent to which Coronavirus and/or other health pandemics may negatively affect our and our portfolio companies’ operating results and financial condition, or the duration of any potential business or supply-chain disruption for us, our Investment Adviser and/or our portfolio companies, is uncertain. Depending on the
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duration and extent of the disruption to the operations of our portfolio companies, certain portfolio companies may experience financial distress and possibly default on their financial obligations to us and their other capital providers. These developments would likely result in a decrease in the value of our investment in any such portfolio company.
We will continue to monitor the evolving situation relating to the Coronavirus pandemic and guidance from U.S. and international authorities, including federal, state and local public health authorities and may take additional actions based on such pronouncements. In these circumstances, there may be developments outside our control requiring us to adjust our plan of operation. As such, given the dynamic nature of this situation, we cannot reasonably estimate the impacts of Coronavirus on our financial condition, results of operations or cash flows in the future.
Investment Strategy

Our primary investment strategy is to make privately negotiated senior secured credit investments in U.S. middle-market companies that have leading market positions, enjoy high barriers to entry, such as high startup costs or other obstacles that prevent new competitors from easily entering the portfolio company’s industry or area of business, generate strong and stable free cash flow and are led by a proven management team with strong financial sponsor backing. Our investment approach is focused on long-term credit performance, risk mitigation and preservation of capital. Our Investment Adviser employs a highly rigorous, fundamentals-driven and disciplined investment process developed and refined by the investment professionals of the private credit platform of Morgan Stanley Investment Management, which is Morgan Stanley’s investment management unit and represents one of Morgan Stanley’s three business segments. Our Investment Adviser is an indirect wholly owned subsidiary of Morgan Stanley. The experienced investment professionals of our Investment Adviser work on a particular transaction from origination to close and continue to monitor each investment throughout its life cycle.

We seek to invest primarily in companies backed by leading private equity sponsors with strong track records. We believe lending to sponsor-backed companies (versus non-sponsor-backed companies) has many distinct potential advantages including:

Strong, predictable deal flow given significant private equity committed capital;
Well-capitalized borrowers, including access to additional capital from sponsors, if needed;
Access to detailed financial, operational, industry data, and third-party legal and accounting due diligence reports conducted by the sponsor as part of their due diligence;
Proper oversight and governance provided by a board of directors, coupled with industry and/or operating expertise;
Natural alignment of interests between lender and sponsor given focus on exit strategy; and
Supplemental diligence beyond the credit analysis of the borrower, given the ability to analyze track records of each private equity firm.

We intend to create and maintain a well-diversified, defensive portfolio of investments focusing on generally avoiding issuer or industry concentration in order to mitigate risk and achieve our investment objective. We intend to primarily focus on U.S. middle-market companies. However, to the extent that we invest in foreign companies, we intend to do so in accordance with the limitations under the 1940 Act and only in jurisdictions with established legal frameworks and a history of respecting creditor rights, including the United Kingdom and countries that are members of the European Union, as well as Canada, Australia and Japan. Our investment strategy is predicated on seeking to lend to companies in non-cyclical industry sectors (typically avoiding sectors such as retail, restaurants, energy, alcohol, tobacco, pork manufacturing, gaming and gambling, and pornography) with proven management teams.

KEY COMPONENTS OF OUR RESULTS OF OPERATIONS
Investments
Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt available to middle-market companies, the general economic environment and the competitive environment for the type of investments we make.
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Revenue
We expect to generate revenue primarily in the form of interest income on debt investments we hold. In addition, we expect to generate income from dividends on direct equity investments, capital gains on the sales of loans and debt and equity securities and various loan origination and other fees. Our debt investments generally have a stated term of five to eight years and generally bear interest at a floating rate usually determined on the basis of a benchmark such as the London Inter-bank Offered Rate, or LIBOR. Interest on these debt investments is generally paid quarterly. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. We may also generate revenue in the form of commitment, origination, amendment, structuring, syndication or due diligence fees, fees for providing managerial assistance and consulting fees.
Expenses
Our primary operating expenses include the payment of: (i) a base management fee to our Investment Adviser pursuant to the investment advisory agreement between us and our Investment Adviser, as amended and restated on February 1, 2021, or the Restated Advisory Agreement; (ii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under the administration agreement between us and MS Private Credit Administrative Services LLC, our Administrator, as amended and restated as of February 1, 2021, or the “Restated Administration Agreement”; and (iii) other operating expenses as detailed below:
initial organization costs and offering costs incurred prior to the filing of our election to be regulated as a BDC (subject to an expense support and waiver agreement entered into with the Investment Adviser, or the Expense Support and Waiver Agreement);
costs associated with our initial private offering;
costs of any other offerings of our common stock, par value $0.001 per share, or the Common Stock, our preferred stock, par value $0.001 per share, or the Series A Preferred Stock, and other securities, if any;
calculating individual asset values and our net asset value (including the cost and expenses of any third-party valuation services);
out of pocket expenses, including travel expenses, incurred by the Investment Adviser, or members of its investment team or payable to third parties, performing due diligence on prospective portfolio companies and monitoring actual portfolio companies and, if necessary, enforcing our rights;
base management fees under the Restated Advisory Agreement;
certain costs and expenses relating to distributions paid by us;
administration fees payable under the Restated Administration Agreement and any sub-administration agreements, including related expenses;
debt service and other costs of borrowings, senior securities or other financing arrangements;
the allocated costs incurred by the Investment Adviser in providing managerial assistance to those portfolio companies that request it;
amounts payable to third parties relating to, or associated with, making or holding investments;
the costs associated with subscriptions to data service, research-related subscriptions and expenses and quotation equipment and services used in making or holding investments;
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transfer agent and custodial fees;
costs of hedging;
commissions and other compensation payable to brokers or dealers;
any fees payable to rating agencies;
federal and state registration fees;
U.S. federal, state and local taxes, including any excise taxes;
independent director fees and expenses;
costs of preparing financial statements and maintaining books and records, costs of preparing tax returns, costs of Sarbanes-Oxley Act compliance and attestation and costs of filing reports or other documents with the SEC (or other regulatory bodies), and other reporting and compliance costs, including registration fees, and the compensation of professionals responsible for the preparation or review of the foregoing;
the costs of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholders’ meetings, and costs and expenses of preparation for the foregoing and related matters;
the costs of specialty and custom software for monitoring risk, compliance and overall investments;
any fidelity bond required by applicable law;
any necessary insurance premiums;
indemnification payments;
any extraordinary expenses (such as litigation or indemnification payments or amounts payable pursuant to any agreement to provide indemnification entered into by us), provided that we will not bear such expenses to the extent, but only to the extent, that the relevant conduct is not indemnifiable under applicable law, including, if applicable, the Employee Retirement Income Security Act of 1971, as amended);
direct fees and expenses associated with independent audits, agency, consulting and legal costs;
cost of winding up; and
all other expenses incurred by either the Administrator or us in connection with administering our business.
We will reimburse the Administrator or its affiliates for amounts paid or costs borne that properly constitute Company expenses as set forth in the Restated Administration Agreement or otherwise. We expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.
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PORTFOLIO AND INVESTMENT ACTIVITY
As of September 30, 2021, we had investments in 64 portfolio companies across 21 industries. Based on fair value as of September 30, 2021, 99.9% of our debt portfolio was invested in debt bearing a floating interest rate. Approximately 99.9% of our debt investments at fair value had a LIBOR floor. The weighted average LIBOR floor across our debt investments was approximately 0.94% as of September 30, 2021. These floors allow us to potentially mitigate (to a degree) the impact of spread widening on the valuation of our investments. As of September 30, 2021, our weighted average total yield on debt securities at amortized cost was 7.1%. Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of September 30, 2021.

As of December 31, 2020, we had investments in 17 portfolio companies across 12 industries. Based on fair value as of December 31, 2020, 99.5% of our debt portfolio was invested in senior secured first lien debt bearing a floating interest rate and all of which are subject to a LIBOR floor. The weighted average LIBOR floor across our floating-rate portfolio was approximately 1.0% as of December 31, 2020. As of December 31, 2020, our weighted average total yield on debt securities at amortized cost was 6.9%. Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2020.    
Our investment activity is presented below (information presented herein is at amortized cost unless otherwise indicated, dollar amounts in thousands):
As of and for the Three Months ended September 30, 2021
New Investments Committed/Purchased
Gross Principal Balance(1)
$271,700 
Less: Syndications— 
Net New Investments Committed/Purchased271,700 
Investments, at Cost
Investments, beginning of period375,748 
New investments purchased217,315 
Net accretion of discount on investments700 
Payment-in-kind23 
Net realized gain (loss) on investments52 
Investments sold or repaid(18,372)
Investments, end of period$575,466 
Amount of investments funded, at principal
First lien debt investments$221,203 
Other securities(2)
295 
Total$221,498 
Amount of investments sold/fully repaid, at principal
First lien debt investments8,116 
Total$8,116 
Weighted average yield on debt and income producing investments, at cost(3)
7.1 %
Weighted average yield on debt and income producing investments, at fair value(3)
7.1 %
Number of portfolio companies64 
Percentage of debt investments bearing a floating rate, at fair value99.9 %
Percentage of debt investments bearing a fixed rate, at fair value0.1 %

The Company commenced investing operations in October 2020; therefore, no investment activities were reported for the period from August 24, 2020 (inception) through September 30, 2020.

(1)Includes new investment commitments, excluding sale/repayments and including unfunded investment commitments.
(2)Includes dollar amount of equity investments funded.
(3)Computed as (a) the annual stated spread, plus applicable Prime/LIBOR or Floor, as applicable, plus the annual accretion of discounts, as applicable, on accruing debt securities, divided by (b) total debt investments (at fair value or cost, as applicable) included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented herein. 
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As part of the monitoring process, our Investment Adviser has developed risk policies pursuant to which it regularly assesses the risk profile of each of our debt investments. Our Investment Adviser has developed a classification system to group investments into four categories. The investments are evaluated regularly and assigned a category based on certain credit metrics. Our Investment Adviser’s ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments. Please see below for a description of the four categories of the Investment Adviser’s Internal Risk Rating system:

Category 1 — In the opinion of our Investment Adviser, investments in Category 1 involve the least amount of risk relative to our initial cost basis at the time of origination or acquisition. Category 1 investments performance is above our initial underwriting expectations and the business trends and risk factors are generally favorable, which may include the performance of the portfolio company, or the likelihood of a potential exit.

Category 2 — In the opinion of our Investment Adviser, investments in Category 2 involve a level of risk relative to our initial cost basis at the time of origination or acquisition. Category 2 investments are generally performing in line with our initial underwriting expectations and risk factors to ultimately recoup the cost of our principal investment are neutral to favorable. All new originated or acquired investments are initially included in Category 2.

Category 3 — In the opinion of our Investment Adviser, investments in Category 3 indicate that the risk to our ability to recoup the initial cost basis at the time of origination or acquisition has increased materially since the origination or acquisition of the investment, such as declining financial performance and non-compliance with debt covenants; however, principal and interest payments are not more than 120 days past due.

Category 4 — In the opinion of our Investment Adviser, investments in Category 4 involve a borrower performing substantially below expectations and indicate that the loan's risk has increased substantially since origination or acquisition. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. For Category 4 investments, it is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis at the time of origination or acquisition upon exit.
The distribution of our portfolio on the Investment Adviser’s Internal Risk Rating System as of September 30, 2021 and December 31, 2020 was as follows (dollar amounts in thousands):

September 30, 2021
Fair Value% of PortfolioNumber of Portfolio Companies
Risk rating 1$— — %— 
Risk rating 2580,059 100 64 
Risk rating 3— — — 
Risk rating 4— — — 
$580,059 100 %64 
December 31, 2020
Fair Value% of PortfolioNumber of Portfolio Companies
Risk rating 1$— — %— 
Risk rating 2108,222 100 17 
Risk rating 3— — — 
Risk rating 4— — — 
$108,222 100 %17 
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CONSOLIDATED RESULTS OF OPERATIONS
We were formed on August 24, 2020 and commenced our investment operations in October 2020. The following table represents our operating results (dollar amounts in thousands):
For the Three Months Ended September 30, 2021For the period from August 24, 2020 (inception) through September 30, 2020For the Nine Months Ended September 30, 2021For the period from August 24, 2020 (inception) through September 30, 2020
Total investment income$9,638 $— $18,325 $— 
Less: Net expenses2,733 182 6,136 182 
Net investment income6,905 (182)12,189 (182)
Excise tax expense(1)
— — — — 
Net change in unrealized appreciation (depreciation)1,135 — 4,488 — 
Net realized gain (loss)52 — 52 — 
Net increase (decrease) in net assets resulting from operations$8,092 $(182)$16,729 $(182)
(1) Excise tax expense incurred was $0 and $317 (dollar amount in actual), respectively, during the three and nine months ended September 30, 2021. The Company did not incur any excise tax for the period from August 24, 2020 (inception) through September 30, 2020.
Investment Income

Investment income was as follows (dollar amounts in thousands):
    

For the Three Months Ended September 30, 2021For the period from August 24, 2020 (inception) through September 30, 2020For the Nine Months Ended September 30, 2021For the period from August 24, 2020 (inception) through September 30, 2020
Investment income:
Interest income$9,065 $— $16,705 $— 
       Payment-in-kind interest income67 — 110 — 
       Other income506 — 1,510 — 
Total investment income$9,638 $— $18,325 $— 

For the three and nine months ended September 30, 2021, total investment income was driven by our deployment of capital and invested balance of investments. All senior secured debt investments were income-producing as of September 30, 2021.  

We received payment-in-kind, or PIK, interest income of $67 and $110 for the three and nine months ended September 30, 2021, respectively. The increase was driven by new investments made during the periods earning PIK interest income.

Interest income on our first and second lien debt investments is generally dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of September 30, 2021, and for the period then ended, all of our first and second lien debt investments were performing and current on their interest payments.

We earned $506 and $1,510 of other income from investments for the three and nine months ended September 30, 2021, respectively. Other income was primarily comprised of syndication fees earned.

We did not earn any investment income for the period from August 24, 2020 (inception) through September 30, 2020.
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Expenses
Expenses were as follows (dollar amounts in thousands):
For the Three Months Ended September 30, 2021For the period from August 24, 2020 (inception) through September 30, 2020For the Nine Months Ended September 30, 2021For the period from August 24, 2020 (inception) through September 30, 2020
Expenses:
Interest and other financing expenses$2,177 $— $4,506 $— 
Management fees137 — 276 — 
Organization and offering costs20 182 201 182 
Professional fees215 — 619 — 
Directors’ fees52 — 153 — 
Administrative service fees— — — 
General and other expenses132 — 375 — 
Net expenses$2,733 $182 $6,136 $182 
Excise tax expense(1)
— — — — 
(1) Excise tax expense incurred during the three and nine months ended September 30, 2021 was $0 and $317 (dollar amount in actual), respectively. The Company did not incur any excise tax for the period from August 24, 2020 (inception) through September 30, 2020.
Interest expense for the three months ended September 30, 2021 was mainly driven by approximately $294,873 of average borrowings (at an average effective interest rate of 2.33%) under our JPM Funding Facility (as defined in Note 6 of our accompanying unaudited consolidated financial statements) related to borrowings for investments and expenses.
Interest expense for the nine months ended September 30, 2021 was mainly driven by approximately $180,196 of average borrowings (at an average effective interest rate of 2.47%) under our JPM Funding Facility related to borrowings for investments and expenses.
Professional fees include legal, audit, tax, valuation, and other professional fees incurred related to the management of the Company. Administrative service fees represent fees paid to the Administrator for our allocable portion of certain expenses incurred by our Administrator in performing its administrative obligations under the Restated Administration Agreement between us and our Administrator. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs. Organization costs and offering costs include expenses incurred in our initial formation and our offering of Common Stock and Series A Preferred Stock.
For the three and nine months ended September 30, 2021, the Company incurred $20 and $201 towards organization cost and amortization of offering cost, respectively. These costs did not exceed the Investment Adviser reimbursement threshold, and as a result, no excess organization and offering costs were waived. For the period from August 24, 2020 (inception) through September 30, 2020, the Company incurred $182 towards organization cost. See “Item 1. Consolidated Financial Statements—Notes to Consolidated Financial Statements—Note 3. Related Party Transactions.”
Income Taxes, Including Excise Taxes
We have elected to be treated as a RIC under Subchapter M of the Code, and we intend to operate in a manner so as to continue to qualify for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, we must, among other things, distribute to our stockholders in each taxable year generally at least 90% of the sum of our investment company taxable income, as defined by the Code (without regard to the deduction for dividends paid), and net tax-exempt income for that taxable year. To maintain our tax treatment as a RIC, we, among other things, intend to make the requisite distributions to our stockholders, which generally relieve us from corporate-level U.S. federal income taxes. For the three and nine months ended September 30, 2021, we incurred $0 and $317 of U.S. federal excise tax (dollar amount in actual), respectively. For the period from August 24, 2020 (inception) through September 30, 2020, we did not incur any excise tax.
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Net Realized Gain (Loss) and Unrealized Gain (Loss) on Investments
For the Three Months Ended September 30, 2021For the period from August 24, 2020 (inception) through September 30, 2020For the Nine Months Ended September 30, 2021For the period from August 24, 2020 (inception) through September 30, 2020
Realized and unrealized gains (losses) on investment transactions:
Net realized gain (loss):
Non-controlled/non-affiliated investments$52 $— $52 $— 
Net change in unrealized appreciation (depreciation):
Non-controlled/non-affiliated investments1,135 — 4,488 — 
Net realized and unrealized gains (losses)$1,187 $— $4,540 $— 
 

During the three and nine months ended September 30, 2021, the net change in unrealized appreciation of $1.1 million and $4.5 million of investments were primarily driven by the increase of valuations of our debt investments as a result of the tightening credit spread environment and strong portfolio company performance.

For the three and nine months ended September 30, 2021, the net realized gain of $52 and $52 were driven by sale of investments to third parties.

The Company commenced investing operations in October 2020 and did not hold any investments during the period from August 24, 2020 (inception) through September 30, 2020.
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FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
We generate cash from the net proceeds of offerings of our Common Stock, net borrowings from our credit facility, and through cash flows from operations, including investment sales and repayments as well as income earned on investments and cash equivalents. As of September 30, 2021, we had one revolving credit facility outstanding, as described in “Debt” below. We may also from time to time enter into new credit facilities, increase the size of existing credit facilities or issue debt securities. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.
As of September 30, 2021, we had approximately $20.4 million of cash, which taken together with our approximately $174.6 million of availability under the JPM Funding Facility (subject to borrowing base availability), and our approximately $387.8 million of uncalled capital commitments to purchase shares of Common Stock, or Capital Commitments, we expect to be sufficient for our investing activities and to conduct our operations in the near term.
Equity
As of September 30, 2021, we had received aggregate Capital Commitments of approximately $652.3 million.
During the nine months ended September 30, 2021, we issued five capital calls to the holders of our Common Stock. As a result, the total shares issued and proceeds received related to the capital drawdown delivered pursuant to the Subscription Agreements were as follows (dollar amounts in millions):
Common Share Issuance DateCommon Shares IssuedAmount
March 12, 20211,113,310$22.50 
May 07, 20211,679,46335.00 
June 28, 20211,679,46335.00 
August 06, 20211,647,83435.00 
September 10, 20212,786,80960.00 
Total8,906,879$187.50 
During the period from August 24, 2020 (inception) through September 30, 2020, we received $20 Seed Capital from the Investment Advisor and issued 1,000 Common Shares.
Distributions
The following table summarizes our distributions declared and payable for the nine months ended September 30, 2021 to holders of our Common Stock (dollar amounts in thousands):
Date DeclaredRecord DatePayment DatePer Share Amount
Dividend Yield(1)
Total Amount
March 09, 2021March 09, 2021April 15, 2021$0.20 6.2 %$775 
June 23, 2021June 23, 2021July 19, 20210.52 11.2 3,467 
September 23, 2021September 23, 2021October 22, 20210.49 12.0 %6,262 
Total Distributions$1.21 $10,504 
(1) Annualized dividend yield is calculated by dividing the declared dividend by the weighted average of the net asset value attributable to the holders of Common Stock at the beginning of the quarter and the capital called during the quarter and annualizing over four quarterly periods.
During the nine months ended September 30, 2021, we accrued $47.0 of dividend to holders of the Series A Preferred Stock, of which $15.6 was unpaid and included in dividends payable on the Consolidated Statements of Assets and Liabilities.

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For the period from August 24, 2020 (inception) through September 30, 2020, we did not accrue any dividends to the holders of Common Stock. For the period from August 24, 2020 (inception) though September 30, 2020, no shares of Series A Preferred Stock were outstanding, and no dividends were accrued.
Debt
Our outstanding debt obligations were as follows (dollar amounts in thousands):
September 30, 2021
Aggregate Principal CommittedOutstanding PrincipalUnused Portion
Amount Available(1)
JPM Funding Facility$500,000 $325,400 $174,600 $72,605 
Total$500,000 $325,400 $174,600 $72,605 
December 31, 2020
Aggregate Principal CommittedOutstanding PrincipalUnused Portion
Amount Available(1)
JPM Funding Facility$250,000 $57,500 $192,500 $131,698 
Total$250,000 $57,500 $192,500 $131,698 
(1) The amount available reflects any limitations related to such credit facility’s borrowing base.
JPM Funding Facility
On June 3, 2021, SLIC SPV entered into an Amended and Restated Loan and Security Agreement, which was subsequently amended on August 18, 2021, by and among SLIC SPV, as the borrower, the Company, as the parent and as the servicer, SL Investment Feeder Fund L.P. and SL Investment Feeder Fund GP Ltd., as pledgors, U.S. Bank National Association, as collateral agent, collateral administrator and securities intermediary, and JP Morgan Chase Bank, NA (“JPM”), as the administrative agent and arranger, the lenders party thereto, and the issuing banks party thereto (as amended, the “JPM Funding Facility”). Pursuant to the JPM Funding Facility, JPM has agreed to extend credit to SLIC SPV in an aggregate principal amount, as of September 30, 2021, of up to $500.0 million at any one time outstanding, subject to the satisfaction of various conditions, including availability under the borrowing base, which is based on a combination of unfunded capital commitments and loan collateral. In addition, the JPM Funding Facility provides for an ability to increase the maximum capacity, at the option of existing and new lenders, from $500.0 million to $950.0 million, subject to lender consent and the other conditions set forth therein.

The JPM Funding Facility is a revolving funding facility with a reinvestment period ending December 3, 2023 (or earlier upon the occurrence of certain events as specified therein) and a final maturity date of December 3, 2025. Subject to certain conditions, the reinvestment period and final maturity are both subject to a one-year extension. Advances under the JPM Funding Facility are available in U.S. dollars and other permitted currencies. The interest charged on the JPM Funding Facility is based on LIBOR (Dollar), SONIA, EURIBOR or CDOR, as applicable (or, if LIBOR (Dollar) is not available, a benchmark replacement or a “base rate” (which is the greater of a prime rate and the federal funds rate plus 0.50%), as applicable), plus a margin of 2.225% prior to the transition date, and 2.375% subsequent to the transition date, as set forth in the JPM Funding Facility.
During the three and nine months ended September 30, 2021, we borrowed $210.5 million and $391.9 million, respectively, and repaid $92.0 million and $124.0 million, respectively, under the JPM Funding Facility. During the year ended December 31, 2020, we borrowed $57.5 million under the JPM Funding Facility. As of September 30, 2021 and December 31, 2020, we had $325.4 million and $57.5 million outstanding under the JPM Funding Facility, respectively. As of September 30, 2021 and December 31, 2020, we had $174.6 million and $192.5 million, respectively, of available capacity under the JPM Funding Facility (subject to borrowing base availability). During the period from August 24, 2020 (inception) through September 30, 2020, the Company did not have any borrowings outstanding.
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As of September 30, 2021, we were in compliance with all covenants and other requirements of the JPM Funding Facility, as well as the leverage restrictions contained in the 1940 Act.
OFF BALANCE SHEET ARRANGEMENTS
In the ordinary course of our business, we enter into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in our financial statements as of September 30, 2021 in Part I, Item 1 of this Report for any such exposure.
We have in the past and may in the future become obligated to fund commitments such as revolving credit facilities, bridge financing commitments, or delayed draw commitments.
As of September 30, 2021, we had delayed draw and revolving senior secured loans with an aggregate of $189.2 million of unfunded commitments.
As of December 31, 2020, we had delayed draw and revolving senior secured loans with an aggregate of $42.0 million of unfunded commitments.
Other Commitments and Contingencies
From time to time, we may become a party to certain legal proceedings incidental to the normal course of our business. As of September 30, 2021, management is not aware of any material pending or threatened litigation relating to us.
CONTRACTUAL OBLIGATIONS
A summary of our contractual payment obligations under our JPM Funding Facility as of September 30, 2021 was as follows (dollar amounts in thousands):
Payments Due by Period
TotalLess
than
1 year
1-3 years3-5
years
After 5
years
JPM Funding Facility$325,400 $— $— $325,400 $— 
Total Contractual Obligations$325,400 $— $— $325,400 $— 

RECENT DEVELOPMENTS
During the period from October 1, 2021 through November 12, 2021, the Company has closed or the Investment Adviser’s Investment Committee has committed/approved approximately $303.6 million of new/add-on investments. This includes transactions for which a formal mandate, letter of intent or a signed commitment have been issued, and therefore the Company believes are likely to close. Of these new commitments, approximately 99.4% were first lien senior secured loans, 0.3% were second lien senior secured loans and 0.3% were equity investments. 100% of the senior secured loans were floating rate loans. We remain highly focused on conducting extensive due diligence and leveraging the Morgan Stanley platform. We continue to seek to invest in companies that are led by strong management teams, generate substantial free cash flow, have leading market positions, benefit from sustainable business models, and are well positioned to perform well despite the impact of the Coronavirus pandemic. We believe the current market environment offers opportunities to seek compelling risk adjusted returns. Our investment pace will depend on several factors including the market environment, deal flow, and the continued impact of the Coronavirus pandemic.
On October 7, 2021, the Company delivered a capital drawdown notice to its stockholders relating to the sale of approximately 1,643,192 shares of Common Stock for an aggregate offering price of approximately $35.0 million. The sale closed on October 15, 2021.
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On November 5, 2021, the Company delivered a capital drawdown notice to its stockholders for an aggregate offering price of approximately $75.0 million. The sale of Common Stock closed on November 12, 2021.

CRITICAL ACCOUNTING POLICIES
The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those relating to the valuation of our investment portfolio, should be read in connection with our financial statements in Part I, Item 1 of this Report, “Risk Factors” in Part II, Item 1A of this Report, and “Risk Factors” in Part I, Item 1A of our Form 10-K.
RELATED PARTY TRANSACTIONS
We have entered into a number of business relationships with affiliated or related parties, including the following:
the Restated Advisory Agreement;
the Restated Administration Agreement; and
Expense Support and Waiver Agreement.

See “Item 1. Consolidated Financial Statements—Notes to Consolidated Financial Statements—Note 3. Related Party Transactions.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including valuation risk, market risk and interest rate risk.

Valuation Risk

We have invested, and plan to continue to invest, primarily in illiquid debt and equity securities of portfolio companies. During periods of market dislocation, we will seek to invest prudently in the secondary loan market to provide our investors better risk adjusted returns while adhering to our core investment tenants. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Coronavirus Developments.” Most of our investments will not have a readily available market price. To ensure accurate valuation, our investments are valued at fair value in good faith by the board of directors, or the Board, based on, among other things, the input of the Investment Adviser, our Audit Committee and independent third-party valuation firm engaged at the direction of the Board, and in accordance with our valuation policy. There is no single standard for determining fair value. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each investment while employing a consistently applied valuation process for the investments we hold. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material.

Market Risk

The market value of a security may move up or down, sometimes rapidly and unpredictably. These fluctuations may cause a security to be worth less than the price originally paid for it, or less than it was worth at an earlier time. Market risk may affect a single issuer, industry, sector of the economy or the market as a whole. Global economies and financial markets are increasingly interconnected, which increases the probabilities that conditions in one country or region might adversely impact issuers in a different country or region. Conditions affecting the general economy, including political, social, or economic instability at the local, regional, or global level may also affect the market value of a security. Health crises, such as pandemic and epidemic diseases, as well as other incidents that interrupt the expected course of events, such as natural disasters, war or civil disturbance, acts of terrorism, power outages and other unforeseeable and external events, and the public response to or fear of such diseases or events, have and may in the future have an adverse effect on our investments and net asset value and can lead to increased market volatility. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Coronavirus Developments.”

Interest Rate Risk
We are subject to financial market risks, most significantly 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, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.
In addition, the Coronavirus pandemic has resulted in a decrease in LIBOR and a general reduction of certain interest rates by the U.S. Federal Reserve and other central banks. A continued decline in interest rates, including LIBOR, could result in a reduction of our gross investment income. In addition, our net investment income could also decline if such decreases in LIBOR are not offset by, among other things, a corresponding increase in the spread over LIBOR in our portfolio investments, a decrease in our operating expenses, or a decrease in the interest rates of our liabilities that are tied to LIBOR. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Coronavirus Developments.”
As of September 30, 2021, 99.9% of our debt investments were at floating rates. Based on our Consolidated Statement of Assets and Liabilities as of September 30, 2021, the following table shows the annualized impact on net income of hypothetical base rate changes in interest rates (considering interest rate floors and ceilings for floating rate debt instruments assuming no changes in our investments and borrowing structure as of September 30, 2021) (dollar amounts in thousands):

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  Interest Interest Net
Basis Point Change - Interest RatesIncomeExpenseIncome
Up 300 basis points$12,730 $(9,762)$2,968
Up 200 basis points$6,882 $(6,508)$374
Up 100 basis points$1,034 $(3,254)$(2,220)
Down 100 basis points$— $423 $423
Down 200 basis points$— $423 $423
Down 300 basis points$— $423 $423

We may hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts or our credit facilities subject to the requirements of the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates or higher exchange rates with respect to our portfolio of investments with fixed interest rates or investments denominated in foreign currencies. During the periods covered by this Report, we did not engage in interest rate hedging activities.


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Item 4: Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures
In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Report and determined that our disclosure controls and procedures are effective as of the end of the period covered by this Report.
(b) Changes in Internal Controls Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II - Other Information

Item 1: Legal Proceedings.

    Each of us, the Investment Adviser and the Administrator may become party to certain lawsuits in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. Each of us, the Investment Adviser and the Administrator is not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against any of us, the Investment Adviser or the Administrator.

Item 1A: Risk Factors.

In addition to the other information set forth in this Report, you should carefully consider the risk factors previously disclosed under Item 1A of the Form 10-K, which could materially affect our business, financial condition and/or operating results. The risks disclosed in the Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition and/or operating results.

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Item 2: Unregistered Sales of Equity Securities and Use of Proceeds.

Sales of Unregistered Securities
Refer to “Item 1. Financial Statements—Notes to Consolidated Financial Statements—Note 8. Net Assets” in this Report and our Current Report on Form 8-K filed on September 15, 2021 for an issuance of our Common Stock during the quarter ended September 30, 2021. Such issuance was part of our Private Offering pursuant to Section 4(a)(2) of the Securities Act and Regulation D thereunder.
Issuer Purchases of Equity Securities
None.

Item 3: Defaults Upon Senior Securities.

None.

Item 4: Mine Safety Disclosures.

Not applicable

Item 5: Other Information.

None.



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Item 6: Exhibits.


_________________
* Filed herewith




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SIGNATURES

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.

SL Investment Corp.
Dated: November 12, 2021By/s/ Jeffrey S. Levin
Jeffrey S. Levin
President and Chief Executive Officer
(Principal Executive Officer)
Dated: November 12, 2021By/s/ Venugopal Rathi
Venugopal Rathi
Chief Financial Officer
(Principal Financial Officer)


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