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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2019
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 814-01175
BAIN CAPITAL SPECIALTY FINANCE, INC.
(Exact name of registrant as specified in its charter)
|
Delaware
|
|
81-2878769
|
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|
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200 Clarendon Street, 37
th
Floor
|
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02116
|
(617) 516-2000
(Registrant’s telephone number, including area code)
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 x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer o |
|
Accelerated filer o |
|
Non-accelerated filer x |
|
Smaller reporting company o |
|
|
|
Emerging growth company x |
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. x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
|
Common Stock, par value $0.001 per share |
|
BCSF |
|
New York Stock Exchange |
As of May 8, 2019, the registrant had 51,649,812.27 shares of common stock, $0.001 par value, outstanding.
FORWARD-LOOKING STATEMENTS
Statements contained in this Quarterly Report on Form 10-Q (the “Quarterly Report”) (including those relating to current and future market conditions and trends in respect thereof) that are not historical facts are based on current expectations, estimates, projections, opinions and/or beliefs of the Company, BCSF Advisors, LP (the “Advisor”) and/or Bain Capital Credit, LP and its affiliated advisers (collectively, “Bain Capital Credit”). Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. Certain information contained in this Quarterly Report constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “seek,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” “target,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of the Company may differ materially from those reflected or contemplated in such 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 are difficult to predict, that could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation, the risks, uncertainties and other factors we identify in the section entitled Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K (the “Annual Report”) for the fiscal year ended December 31, 2018 and in our filings with the Securities and Exchange Commission (the “SEC”).
Although we believe that the assumptions on which these forward-looking statements are based are reasonable, some of those assumptions may be based on the work of third parties and any of those assumptions could prove to be inaccurate; as a result, the forward-looking statements based on those assumptions also could prove to be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in the section entitled Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. Investors should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report. We do not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which preclude civil liability for certain forward-looking statements, do not apply to the forward-looking statements in this Quarterly Report because we are an investment company.
Item 1. Consolidated Financial Statements
Bain Capital Specialty Finance, Inc.
Consolidated Statements of Assets and Liabilities
|
|
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As of |
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As of |
|
||
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March 31, 2019 |
|
December 31, 2018 |
|
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|
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(Unaudited) |
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||
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Assets |
|
|
|
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Investments at fair value: |
|
|
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|
|
||
|
Non-controlled/non-affiliate investments (amortized cost of $1,481,673,496 and $1,449,749,445, respectively) |
|
$ |
1,469,128,402 |
|
$ |
1,422,837,431 |
|
|
Controlled affiliate investment (amortized cost of $348,095,945 and $296,647,530, respectively) |
|
354,091,548 |
|
298,248,240 |
|
||
|
Non-controlled/affiliate investment (amortized cost of $6,720,000 and $6,720,000, respectively) |
|
6,720,000 |
|
6,720,000 |
|
||
|
Cash and cash equivalents |
|
79,140,512 |
|
14,692,877 |
|
||
|
Foreign cash (cost of $1,657,573 and $588,622, respectively) |
|
1,478,627 |
|
591,113 |
|
||
|
Restricted Cash |
|
14,009,400 |
|
17,986,541 |
|
||
|
Collateral on forward currency exchange contracts |
|
403,790 |
|
3,790 |
|
||
|
Deferred financing costs |
|
3,872,902 |
|
4,017,802 |
|
||
|
Interest receivable on investments |
|
7,973,786 |
|
6,250,621 |
|
||
|
Prepaid insurance |
|
— |
|
1,517 |
|
||
|
Receivable for sales and paydowns of investments |
|
40,235,589 |
|
1,633,739 |
|
||
|
Other assets |
|
3,701,001 |
|
— |
|
||
|
Unrealized appreciation on forward currency exchange contracts |
|
6,038,508 |
|
9,321,758 |
|
||
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Dividend receivable |
|
9,150,109 |
|
8,708,670 |
|
||
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Total Assets |
|
$ |
1,995,944,174 |
|
$ |
1,791,014,099 |
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|
|
|
|
|
|
|
||
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Liabilities |
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|
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|
|
||
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Revolving credit facilities |
|
$ |
551,194,090 |
|
$ |
271,264,902 |
|
|
2018-1 Notes (net of unamortized debt issuance costs of $1,997,725 and $2,040,320, respectively) |
|
363,702,275 |
|
363,659,680 |
|
||
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Offering costs payable |
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1,730,959 |
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1,819,892 |
|
||
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Interest payable |
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5,095,949 |
|
4,835,339 |
|
||
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Payable for investments purchased |
|
24,370,068 |
|
119,165,882 |
|
||
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Base management fee payable |
|
4,500,941 |
|
2,950,412 |
|
||
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Incentive fee payable |
|
2,103,341 |
|
3,300,398 |
|
||
|
Accounts payable and accrued expenses |
|
2,304,869 |
|
1,280,770 |
|
||
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Distributions payable |
|
21,107,677 |
|
21,107,677 |
|
||
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Total Liabilities |
|
976,110,169 |
|
789,384,952 |
|
||
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||
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Commitments and Contingencies (See Note 10) |
|
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||
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Net Assets |
|
|
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||
|
Preferred stock, $0.001 par value per share, 10,000,000,000 shares authorized, none issued and outstanding as of March 31, 2019 and December 31, 2018, respectively |
|
$ |
— |
|
$ |
— |
|
|
Common stock, par value $0.001 per share, 100,000,000,000 and 100,000,000,000 shares authorized, 51,482,137 and 51,482,137 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively |
|
51,482 |
|
51,482 |
|
||
|
Paid in capital in excess of par value |
|
1,034,255,352 |
|
1,034,255,352 |
|
||
|
Total distributable earnings (loss) |
|
(14,472,829 |
) |
(32,677,687 |
) |
||
|
Total Net Assets |
|
1,019,834,005 |
|
1,001,629,147 |
|
||
|
Total Liabilities and Total Net assets |
|
$ |
1,995,944,174 |
|
$ |
1,791,014,099 |
|
|
Net asset value per share |
|
$ |
19.81 |
|
$ |
19.46 |
|
See Notes to Consolidated Financial Statements
Bain Capital Specialty Finance, Inc.
Consolidated Statements of Operations
(Unaudited)
|
|
|
For the Three Months Ended
|
|
For the Three Months Ended
|
|
||
|
|
|
2019 |
|
2018 |
|
||
|
Income |
|
|
|
|
|
||
|
Investment income from non-controlled/non-affiliate investments: |
|
|
|
|
|
||
|
Interest from investments |
|
$ |
30,387,622 |
|
$ |
12,615,297 |
|
|
Dividend income |
|
15,533 |
|
— |
|
||
|
Other income |
|
21,731 |
|
114,004 |
|
||
|
Total investment income from non-controlled/non-affiliate investments |
|
30,424,886 |
|
12,729,301 |
|
||
|
Investment income from controlled affiliate investments: |
|
|
|
|
|
||
|
Interest from investments |
|
107,293 |
|
21,288 |
|
||
|
Dividend income |
|
9,357,644 |
|
4,707,978 |
|
||
|
Total investment income from controlled affiliate investments |
|
9,464,937 |
|
4,729,266 |
|
||
|
Total investment income |
|
39,889,823 |
|
17,458,567 |
|
||
|
|
|
|
|
|
|
||
|
Expenses |
|
|
|
|
|
||
|
Interest and debt financing expenses |
|
$ |
10,545,687 |
|
$ |
4,288,897 |
|
|
Base management fee |
|
6,751,412 |
|
3,247,562 |
|
||
|
Incentive fee |
|
4,085,628 |
|
2,004,548 |
|
||
|
Professional fees |
|
550,432 |
|
523,677 |
|
||
|
Directors fees |
|
105,140 |
|
68,250 |
|
||
|
Other general and administrative expenses |
|
841,177 |
|
174,692 |
|
||
|
Total expenses before fee waivers |
|
22,879,476 |
|
10,307,626 |
|
||
|
Base management fee waiver |
|
(2,250,471 |
) |
(1,623,781 |
) |
||
|
Incentive fee waiver |
|
(1,982,287 |
) |
— |
|
||
|
Total expenses, net of fee waivers |
|
18,646,718 |
|
8,683,845 |
|
||
|
Net investment income before taxes |
|
21,243,105 |
|
8,774,722 |
|
||
|
Excise tax expense |
|
— |
|
309 |
|
||
|
Net investment income after taxes |
|
21,243,105 |
|
8,774,413 |
|
||
|
|
|
|
|
|
|
||
|
Net realized and unrealized gains (losses) |
|
|
|
|
|
||
|
Net realized gain (loss) on non-controlled/non-affiliate investments |
|
(849,933 |
) |
257,702 |
|
||
|
Net realized gain on foreign currency transactions |
|
5,885 |
|
279,145 |
|
||
|
Net realized gain (loss) on forward currency exchange contracts |
|
3,633,076 |
|
(3,317,385 |
) |
||
|
Net change in unrealized depreciation on foreign currency translation |
|
(198,161 |
) |
(17,344 |
) |
||
|
Net change in unrealized appreciation (depreciation) on forward currency exchange contracts |
|
(3,283,250 |
) |
941,491 |
|
||
|
Net change in unrealized appreciation on non-controlled/non-affiliate investments |
|
14,366,920 |
|
2,575,854 |
|
||
|
Net change in unrealized appreciation on controlled affiliate investments |
|
4,394,893 |
|
1,865,229 |
|
||
|
Total net gains |
|
18,069,430 |
|
2,584,692 |
|
||
|
|
|
|
|
|
|
||
|
Net increase in net assets resulting from operations |
|
$ |
39,312,535 |
|
$ |
11,359,105 |
|
|
|
|
|
|
|
|
||
|
Per Common Share Data |
|
|
|
|
|
||
|
Basic and diluted net investment income per common share |
|
$ |
0.41 |
|
$ |
0.30 |
|
|
Basic and diluted increase in net assets resulting from operations per common share |
|
$ |
0.76 |
|
$ |
0.39 |
|
|
Basic and diluted weighted average common shares outstanding |
|
51,482,137 |
|
29,133,586 |
|
||
See Notes to Consolidated Financial Statements
Bain Capital Specialty Finance, Inc.
Consolidated Statements of Changes in Net Assets
(Unaudited)
|
|
|
For the Three Months
|
|
For the Three Months
|
|
||
|
|
|
2019 |
|
2018 |
|
||
|
|
|
|
|
|
|
||
|
Operations: |
|
|
|
|
|
||
|
Net investment income |
|
$ |
21,243,105 |
|
$ |
8,774,413 |
|
|
Net realized gain (loss) |
|
2,789,028 |
|
(2,780,538 |
) |
||
|
Net change in unrealized appreciation |
|
15,280,402 |
|
5,365,230 |
|
||
|
Net increase in net assets resulting from operations |
|
39,312,535 |
|
11,359,105 |
|
||
|
Stockholder distributions: |
|
|
|
|
|
||
|
Distributions from net investment income |
|
(21,107,677 |
) |
(10,609,643 |
) |
||
|
Net decrease in net assets resulting from stockholder distributions |
|
(21,107,677 |
) |
(10,609,643 |
) |
||
|
Capital share transactions: |
|
|
|
|
|
||
|
Issuance of common stock, net |
|
— |
|
125,427,706 |
|
||
|
Reinvestment of stockholder distributions |
|
— |
|
1,329,579 |
|
||
|
Net increase in net assets resulting from capital share transactions |
|
— |
|
126,757,285 |
|
||
|
|
|
|
|
|
|
||
|
Total increase in net assets |
|
18,204,858 |
|
127,506,747 |
|
||
|
Net assets at beginning of period |
|
1,001,629,147 |
|
506,962,828 |
|
||
|
Net assets at end of period |
|
$ |
1,019,834,005 |
|
$ |
634,469,575 |
|
|
|
|
|
|
|
|
||
|
Net asset value per common share |
|
$ |
19.81 |
|
$ |
20.33 |
|
|
Common stock outstanding at end of period |
|
51,482,137 |
|
31,204,831 |
|
||
See Notes to Consolidated Financial Statements
Bain Capital Specialty Finance, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
For the Three Months
|
|
For the Three Months
|
|
||
|
|
|
2019 |
|
2018 |
|
||
|
Cash flows from operating activities |
|
|
|
|
|
||
|
Net increase in net assets resulting from operations |
|
$ |
39,312,535 |
|
$ |
11,359,105 |
|
|
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities: |
|
|
|
|
|
||
|
Purchases of investments |
|
(370,321,836 |
) |
(140,927,335 |
) |
||
|
Proceeds from principal payments and sales of investments |
|
153,616,278 |
|
66,582,086 |
|
||
|
Net realized (gain) loss from investments |
|
849,933 |
|
(257,702 |
) |
||
|
Net realized gain on foreign currency transactions |
|
(5,885 |
) |
(279,145 |
) |
||
|
Net change in unrealized (appreciation) depreciation on forward currency exchange contracts |
|
3,283,250 |
|
(941,491 |
) |
||
|
Net change in unrealized appreciation on investments |
|
(18,761,813 |
) |
(4,441,083 |
) |
||
|
Net change in unrealized depreciation on foreign currency translation |
|
198,161 |
|
17,344 |
|
||
|
Increase in investments due to PIK |
|
(100,779 |
) |
— |
|
||
|
Accretion of discounts and amortization of premiums |
|
(838,687 |
) |
(334,745 |
) |
||
|
Amortization of deferred financing costs and debt issuance costs |
|
311,495 |
|
353,594 |
|
||
|
Changes in operating assets and liabilities: |
|
|
|
|
|
||
|
Collateral on forward currency exchange contracts |
|
(400,000 |
) |
(3,451,767 |
) |
||
|
Interest receivable on investments |
|
(1,723,165 |
) |
(163,472 |
) |
||
|
Prepaid insurance |
|
1,517 |
|
44,625 |
|
||
|
Distribution receivable |
|
— |
|
(1,005,009 |
) |
||
|
Dividend receivable |
|
(441,439 |
) |
(4,639,124 |
) |
||
|
Other assets |
|
(3,701,001 |
) |
— |
|
||
|
Interest payable |
|
260,610 |
|
(154,422 |
) |
||
|
Base management fee payable |
|
1,550,529 |
|
379,748 |
|
||
|
Incentive fee payable |
|
(1,197,057 |
) |
2,004,548 |
|
||
|
Accounts payable and accrued expenses |
|
1,024,099 |
|
(21,065 |
) |
||
|
Excise tax payable |
|
— |
|
(4,882 |
) |
||
|
Net cash used in operating activities |
|
(197,083,255 |
) |
(75,880,192 |
) |
||
|
|
|
|
|
|
|
||
|
Cash flows from financing activities |
|
|
|
|
|
||
|
Borrowings on revolving credit facilities |
|
465,929,188 |
|
59,000,000 |
|
||
|
Repayments of revolving credit facilities |
|
(186,000,000 |
) |
(120,601,250 |
) |
||
|
Payments of financing costs |
|
(124,000 |
) |
— |
|
||
|
Payments of offering costs |
|
(88,933 |
) |
— |
|
||
|
Proceeds from issuance of common stock |
|
— |
|
125,427,706 |
|
||
|
Stockholder distributions paid |
|
(21,107,677 |
) |
(6,412,923 |
) |
||
|
Net cash provided by financing activities |
|
258,608,578 |
|
57,413,533 |
|
||
|
|
|
|
|
|
|
||
|
Net increase (decrease) in cash, foreign cash, restricted cash and cash equivalents |
|
61,525,323 |
|
(18,466,659 |
) |
||
|
Effect of foreign currency exchange rates |
|
(167,315 |
) |
289,401 |
|
||
|
Cash, foreign cash, restricted cash and cash equivalents, beginning of period |
|
33,270,531 |
|
140,918,144 |
|
||
|
Cash, foreign cash, restricted cash and cash equivalents, end of period |
|
$ |
94,628,539 |
|
$ |
122,740,886 |
|
|
|
|
|
|
|
|
||
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
||
|
Cash interest paid during the period |
|
$ |
9,973,582 |
|
$ |
4,089,725 |
|
|
Cash paid for excise taxes during the period |
|
$ |
— |
|
$ |
5,191 |
|
|
Supplemental disclosure of non-cash information: |
|
|
|
|
|
||
|
Reinvestment of stockholder distributions |
|
$ |
— |
|
$ |
1,329,579 |
|
|
|
|
As of March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Cash |
|
$ |
79,140,512 |
|
$ |
120,425,021 |
|
|
Restricted cash |
|
14,009,400 |
|
2,315,865 |
|
||
|
Foreign cash |
|
1,478,627 |
|
— |
|
||
|
Total cash, foreign cash, restricted cash, and cash equivalents shown in the consolidated statements of cash flows |
|
$ |
94,628,539 |
|
$ |
122,740,886 |
|
See Notes to Consolidated Financial Statements
Bain Capital Specialty Finance, Inc.
Consolidated Schedule of Investments
As of March 31, 2019
(unaudited)
|
Portfolio Company (4) |
|
Spread Above Index (1) |
|
Interest Rate |
|
Maturity Date |
|
Principal/
|
|
Amortized Cost |
|
Fair Value |
|
|||
|
Investments and Cash Equivalents 187.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Investments 179.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Non-Controlled/Non-Affiliate Investments 144.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Corporate Fixed Income 2.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Corporate Bond 2.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Beverage, Food & Tobacco 0.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Hearthside Food Solutions, LLC |
|
— |
|
8.50 |
% |
6/1/2026 |
|
$ |
10,000,000 |
|
$ |
9,798,421 |
|
$ |
8,725,000 |
|
|
Total Beverage, Food & Tobacco |
|
|
|
|
|
|
|
|
|
9,798,421 |
|
8,725,000 |
|
|||
|
Consumer Goods: Non-Durable 0.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Kronos Acquisition Holdings Inc. |
|
— |
|
9.00 |
% |
8/15/2023 |
|
$ |
10,000,000 |
|
9,383,119 |
|
8,625,000 |
|
||
|
Total Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
9,383,119 |
|
8,625,000 |
|
|||
|
Utilities: Electric 1.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
CSVC Acquisition Corp |
|
— |
|
7.75 |
% |
6/15/2025 |
|
$ |
13,478,000 |
|
|
12,510,549 |
|
|
10,479,145 |
|
|
Total Utilities: Electric |
|
|
|
|
|
|
|
|
|
12,510,549 |
|
10,479,145 |
|
|||
|
Total Corporate Bond |
|
|
|
|
|
|
|
|
|
$ |
31,692,089 |
|
$ |
27,829,145 |
|
|
|
Total Corporate Fixed Income |
|
|
|
|
|
|
|
|
|
$ |
31,692,089 |
|
$ |
27,829,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Corporate Debt 140.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Delayed Draw Term Loan 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Capital Equipment 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
FFI Holdings I Corp (2) (3) (5) (15) (19) |
|
— |
|
— |
|
1/24/2025 |
|
$ |
— |
|
(16,727 |
) |
(5,915 |
) |
||
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
(16,727 |
) |
(5,915 |
) |
|||
|
Construction & Building 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Chase Industries, Inc. (3) (15) (19) (21) (28) |
|
L+ 4.00% |
|
6.61 |
% |
5/12/2025 |
|
$ |
199,183 |
|
182,648 |
|
189,824 |
|
||
|
Total Construction & Building |
|
|
|
|
|
|
|
|
|
182,648 |
|
189,824 |
|
|||
|
High Tech Industries 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Drilling Info Holdings, Inc (2) (3) (5) (12) (18) (21) |
|
— |
|
— |
|
7/30/2025 |
|
$ |
— |
|
(329 |
) |
(301 |
) |
||
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
(329 |
) |
(301 |
) |
|||
|
Services: Business 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
AMCP Clean Acquisition Company, LLC (3) (12) (18) (19) (21) |
|
L+ 4.25% |
|
6.93 |
% |
6/16/2025 |
|
$ |
1,530,988 |
|
1,524,691 |
|
1,511,402 |
|
||
|
Sovos Compliance, LLC (3) (12) (15) (19) |
|
— |
|
— |
|
8/2/2019 |
|
$ |
— |
|
— |
|
— |
|
||
|
Total Services: Business |
|
|
|
|
|
|
|
|
|
1,524,691 |
|
1,511,402 |
|
|||
|
Telecommunications 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Horizon Telcom, Inc. (2) (3) (5) (12) (15) (19) (21) |
|
— |
|
— |
|
6/15/2023 |
|
$ |
— |
|
(18,327 |
) |
(26,069 |
) |
||
|
Total Telecommunications |
|
|
|
|
|
|
|
|
|
(18,327 |
) |
(26,069 |
) |
|||
|
Total Delayed Draw Term Loan |
|
|
|
|
|
|
|
|
|
$ |
1,671,956 |
|
$ |
1,668,941 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
First Lien Last Out Term Loan 2.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Environmental Industries 1.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Adler & Allan Group Limited (6) (17) (19) (21) (22) |
|
GBP LIBOR+ 8.25% |
|
9.10 |
% |
9/30/2022 |
|
£ |
13,126,156 |
|
16,589,772 |
|
16,938,845 |
|
||
|
Total Environmental Industries |
|
|
|
|
|
|
|
|
|
16,589,772 |
|
16,938,845 |
|
|||
|
Healthcare & Pharmaceuticals 1.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Clinical Innovations, LLC (12) (15) (19) (21) (22) |
|
L+ 5.50% |
|
8.00 |
% |
10/17/2023 |
|
$ |
10,999,896 |
|
10,800,725 |
|
11,109,895 |
|
||
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
10,800,725 |
|
11,109,895 |
|
|||
|
Total First Lien Last Out Term Loan |
|
|
|
|
|
|
|
|
|
$ |
27,390,497 |
|
$ |
28,048,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
First Lien Senior Secured Loan 107.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aerospace & Defense 7.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Forming & Machining Industries Inc. (12) (18) (19) (26) |
|
L+ 4.25% |
|
6.95 |
% |
10/9/2025 |
|
$ |
14,899,926 |
|
14,829,285 |
|
14,378,429 |
|
||
|
Novetta, LLC (12) (15) (21) |
|
L+ 5.00% |
|
7.50 |
% |
10/17/2022 |
|
$ |
6,632,716 |
|
6,529,850 |
|
6,512,498 |
|
|
Salient CRGT, Inc. (12) (15) (19) (26) |
|
L+ 5.75% |
|
8.25 |
% |
2/28/2022 |
|
$ |
12,995,678 |
|
13,051,778 |
|
12,833,232 |
|
|
StandardAero Aviation Holdings, Inc. (12) (15) (21) |
|
L+ 3.75% |
|
6.25 |
% |
7/7/2022 |
|
$ |
19,719,833 |
|
19,814,703 |
|
19,769,232 |
|
|
WCI-HSG Purchaser, Inc. (12) (15) (19) (21) |
|
L+ 4.50% |
|
6.99 |
% |
2/24/2025 |
|
$ |
17,868,359 |
|
17,611,833 |
|
17,600,333 |
|
|
WP CPP Holdings, LLC. (12) (15) (26) |
|
L+ 3.75% |
|
6.51 |
% |
4/30/2025 |
|
$ |
4,703,208 |
|
4,692,553 |
|
4,676,165 |
|
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
76,530,002 |
|
75,769,889 |
|
|
|
Automotive 2.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CST Buyer Company (12) (15) (19) |
|
L+ 5.00% |
|
7.50 |
% |
3/1/2023 |
|
$ |
9,162,113 |
|
9,062,551 |
|
9,162,113 |
|
|
OEConnection LLC (12) (15) (26) |
|
L+ 4.00% |
|
6.50 |
% |
11/22/2024 |
|
$ |
14,148,324 |
|
14,080,567 |
|
14,042,212 |
|
|
Wand Newco 3, Inc. (12) (18) |
|
L+ 3.50% |
|
5.98 |
% |
2/5/2026 |
|
$ |
735,656 |
|
728,304 |
|
737,404 |
|
|
Total Automotive |
|
|
|
|
|
|
|
|
|
23,871,422 |
|
23,941,729 |
|
|
|
Banking 1.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction Network Services, Inc. (12) (15) (21) (26) |
|
L+ 4.00% |
|
6.50 |
% |
8/15/2022 |
|
$ |
18,374,730 |
|
18,156,200 |
|
18,195,577 |
|
|
Total Banking |
|
|
|
|
|
|
|
|
|
18,156,200 |
|
18,195,577 |
|
|
|
Beverage, Food & Tobacco 2.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GOBP Holdings, Inc. (12) (18) (21) (26) |
|
L+ 3.75% |
|
6.35 |
% |
10/22/2025 |
|
$ |
16,590,882 |
|
16,581,628 |
|
16,470,598 |
|
|
NPC International, Inc. (15) (26) |
|
L+ 3.50% |
|
6.05 |
% |
4/19/2024 |
|
$ |
4,987,342 |
|
5,019,077 |
|
4,521,848 |
|
|
Total Beverage, Food & Tobacco |
|
|
|
|
|
|
|
|
|
21,600,705 |
|
20,992,446 |
|
|
|
Capital Equipment 2.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dorner Manufacturing Corp. (12) (15) (19) |
|
L+ 5.75% |
|
8.25 |
% |
3/15/2023 |
|
$ |
7,931,735 |
|
7,828,384 |
|
7,931,735 |
|
|
DXP Enterprises, Inc. (6) (12) (15) |
|
L+ 4.75% |
|
7.25 |
% |
8/29/2023 |
|
$ |
5,164,807 |
|
5,123,478 |
|
5,151,895 |
|
|
FFI Holdings I Corp (12) (15) (19) |
|
L+ 5.75% |
|
8.51 |
% |
1/24/2025 |
|
$ |
5,208,526 |
|
5,146,791 |
|
5,156,441 |
|
|
Wilsonart LLC (15) (26) |
|
L+ 3.25% |
|
5.86 |
% |
12/19/2023 |
|
$ |
9,949,367 |
|
9,938,124 |
|
9,678,894 |
|
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
28,036,777 |
|
27,918,965 |
|
|
|
Chemicals, Plastics & Rubber 2.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASP Chromaflo Intermediate Holdings, Inc. (15) (21) |
|
L+ 3.50% |
|
6.00 |
% |
11/20/2023 |
|
$ |
503,551 |
|
501,851 |
|
500,404 |
|
|
ASP Chromaflo Intermediate Holdings, Inc. (6) (15) (21) |
|
L+ 3.50% |
|
6.00 |
% |
11/20/2023 |
|
$ |
654,777 |
|
652,566 |
|
650,685 |
|
|
Niacet b.v. (6) (15) (19) (21) |
|
EURIBOR+ 4.50% |
|
5.50 |
% |
2/1/2024 |
|
€ |
3,769,837 |
|
4,036,084 |
|
4,218,430 |
|
|
Niacet Corporation (12) (15) (19) |
|
L+ 4.50% |
|
7.00 |
% |
2/1/2024 |
|
$ |
2,168,353 |
|
2,151,398 |
|
2,162,932 |
|
|
Plaskolite, Inc. (15) (26) |
|
L+ 4.25% |
|
6.73 |
% |
12/15/2025 |
|
$ |
12,000,401 |
|
11,766,907 |
|
12,015,401 |
|
|
US Salt, LLC (6) (18) (21) |
|
L+ 4.75% |
|
7.23 |
% |
1/16/2026 |
|
$ |
3,729,604 |
|
3,692,587 |
|
3,729,604 |
|
|
Total Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
22,801,393 |
|
23,277,456 |
|
|
|
Construction & Building 4.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bolt Infrastructure Merger Sub, Inc. (12) (15) |
|
L+ 3.50% |
|
6.00 |
% |
6/21/2024 |
|
$ |
2,663,662 |
|
2,655,830 |
|
2,638,690 |
|
|
Chase Industries, Inc. (12) (15) (19) (21) (27) |
|
L+ 4.00% |
|
6.61 |
% |
5/12/2025 |
|
$ |
11,921,048 |
|
11,868,094 |
|
11,891,245 |
|
|
Crown Subsea (12) (18) (26) |
|
L+ 6.00% |
|
8.49 |
% |
11/3/2025 |
|
$ |
13,232,500 |
|
13,041,177 |
|
13,100,175 |
|
|
Regan Development Holdings Limited (6) (17) (19) |
|
EURIBOR+ 7.00% |
|
7.50 |
% |
4/18/2022 |
|
€ |
2,556,609 |
|
2,785,426 |
|
2,868,004 |
|
|
Regan Development Holdings Limited (6) (17) (19) |
|
EURIBOR+ 7.00% |
|
7.50 |
% |
4/18/2022 |
|
€ |
7,759,873 |
|
8,333,528 |
|
8,705,026 |
|
|
Regan Development Holdings Limited (6) (17) (19) |
|
EURIBOR+ 7.00% |
|
7.50 |
% |
4/18/2022 |
|
€ |
828,924 |
|
941,409 |
|
929,886 |
|
|
Total Construction & Building |
|
|
|
|
|
|
|
|
|
39,625,464 |
|
40,133,026 |
|
|
|
Consumer Goods: Durable 1.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Milani Group LLC (12) (15) (19) (21) |
|
L+ 4.25% |
|
6.74 |
% |
6/6/2024 |
|
$ |
17,273,200 |
|
17,119,701 |
|
17,273,200 |
|
|
Total Consumer Goods: Durable |
|
|
|
|
|
|
|
|
|
17,119,701 |
|
17,273,200 |
|
|
|
Consumer Goods: Non-Durable 10.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FineLine Technologies, Inc. (12) (15) (19) (21) |
|
L+ 4.25% |
|
6.85 |
% |
11/4/2022 |
|
$ |
31,623,451 |
|
31,404,784 |
|
31,465,333 |
|
|
Kronos Acquisition Holdings Inc. (12) (15) (26) |
|
L+ 4.00% |
|
6.50 |
% |
5/15/2023 |
|
$ |
13,181,476 |
|
13,144,549 |
|
12,346,694 |
|
|
Kronos Acquisition Holdings Inc. (18) (19) (21) |
|
L+ 7.00% |
|
9.50 |
% |
5/15/2023 |
|
$ |
2,666,667 |
|
2,617,921 |
|
2,700,000 |
|
|
MND Holdings III Corp (15) (19) (21) (26) |
|
L+ 3.50% |
|
6.10 |
% |
6/19/2024 |
|
$ |
13,731,923 |
|
13,778,746 |
|
13,543,109 |
|
|
RoC Opco LLC (12) (15) (19) (21) |
|
L+ 7.25% |
|
9.90 |
% |
2/25/2025 |
|
$ |
47,793,140 |
|
46,651,384 |
|
46,837,277 |
|
|
Total Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
107,597,384 |
|
106,892,413 |
|
|
|
Containers, Packaging & Glass 2.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mauser Packaging Solutions Holding Company (12) (18) (26) |
|
L+ 3.25% |
|
6.03 |
% |
4/3/2024 |
|
$ |
6,296,385 |
|
6,338,095 |
|
6,158,651 |
|
|
Technimark LLC (12) (18) (19) |
|
L+ 3.75% |
|
6.38 |
% |
8/8/2025 |
|
$ |
2,819,389 |
|
2,816,344 |
|
2,791,196 |
|
|
Terminator Bidco AS (6) (18) (19) (21) |
|
L+ 5.00% |
|
7.63 |
% |
6/20/2022 |
|
$ |
15,100,000 |
|
14,818,649 |
|
15,100,000 |
|
|
Total Containers, Packaging & Glass |
|
|
|
|
|
|
|
|
|
23,973,088 |
|
24,049,847 |
|
|
|
Energy: Electricity 1.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Infinite Electronics International Inc. (12) (18) (19) (21) |
|
L+ 4.00% |
|
6.50 |
% |
7/2/2025 |
|
$ |
19,902,863 |
|
19,888,457 |
|
19,604,320 |
|
|
|
Total Energy: Electricity |
|
|
|
|
|
|
|
|
|
19,888,457 |
|
19,604,320 |
|
||
|
Energy: Oil & Gas 3.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Blackbrush Oil & Gas, L.P. (12) (15) (19) (21) |
|
L+ 8.00% |
|
10.89 |
% |
2/9/2024 |
|
$ |
32,075,000 |
|
31,531,482 |
|
31,192,938 |
|
|
|
Total Energy: Oil & Gas |
|
|
|
|
|
|
|
|
|
31,531,482 |
|
31,192,938 |
|
||
|
FIRE: Finance 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Newport Group Holdings II Inc. (12) (18) |
|
L+ 3.75% |
|
6.36 |
% |
9/12/2025 |
|
$ |
3,632,650 |
|
3,615,064 |
|
3,603,134 |
|
|
|
Total FIRE: Finance |
|
|
|
|
|
|
|
|
|
3,615,064 |
|
3,603,134 |
|
||
|
FIRE: Insurance 1.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Alliant Holdings Intermediate, LLC (18) (21) |
|
L+ 2.75% |
|
5.23 |
% |
5/9/2025 |
|
$ |
3,608,914 |
|
3,604,643 |
|
3,478,668 |
|
|
|
Wink Holdco, Inc. (12) (15) (21) |
|
L+ 3.00% |
|
5.50 |
% |
12/2/2024 |
|
$ |
12,536,055 |
|
12,485,619 |
|
12,175,643 |
|
|
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
16,090,262 |
|
15,654,311 |
|
||
|
FIRE: Real Estate 1.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Spectre (Carrisbrook House) Limited (6) (15) (19) |
|
EURIBOR+ 7.50% |
|
8.50 |
% |
8/9/2021 |
|
€ |
9,300,000.00 |
|
10,732,696 |
|
10,432,740 |
|
|
|
Total FIRE: Real Estate |
|
|
|
|
|
|
|
|
|
10,732,696 |
|
10,432,740 |
|
||
|
Forest Products & Paper 1.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Solenis International LLC (12) (18) (21) (26) |
|
L+ 4.00% |
|
6.63 |
% |
6/26/2025 |
|
$ |
15,314,412 |
|
15,240,654 |
|
15,110,195 |
|
|
|
Total Forest Products & Paper |
|
|
|
|
|
|
|
|
|
15,240,654 |
|
15,110,195 |
|
||
|
Healthcare & Pharmaceuticals 3.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Datix Bidco Limited (6) (19) (21) |
|
BBSW+ 4.50% |
|
6.57 |
% |
4/28/2025 |
|
AUD |
4,211,615 |
|
3,199,293 |
|
2,943,734 |
|
|
|
Medical Depot Holdings, Inc. (12) (15) (19) (21) |
|
L+ 5.50% |
|
8.10 |
% |
1/3/2023 |
|
$ |
16,326,691 |
|
14,798,825 |
|
12,979,720 |
|
|
|
Great Expressions Dental Centers PC (12) (15) (19) |
|
L+ 4.75% |
|
7.63 |
% |
9/28/2023 |
|
$ |
7,961,850 |
|
7,877,358 |
|
7,842,422 |
|
|
|
Island Medical Management Holdings, LLC (15) (19) (21) |
|
L+ 6.50% |
|
9.00 |
% |
9/1/2022 |
|
$ |
9,240,771 |
|
9,139,104 |
|
8,039,470 |
|
|
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
35,014,580 |
|
31,805,346 |
|
||
|
High Tech Industries 16.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
CMI Marketing Inc (12) (15) (19) (21) |
|
L+ 4.75% |
|
7.25 |
% |
5/24/2024 |
|
$ |
15,371,840 |
|
15,237,949 |
|
15,371,840 |
|
|
|
Drilling Info Holdings, Inc (12) (18) (21) |
|
L+ 4.25% |
|
6.75 |
% |
7/30/2025 |
|
$ |
22,707,343 |
|
22,622,998 |
|
22,622,191 |
|
|
|
Elo Touch Solutions, Inc. (18) (21) (26) |
|
L+ 6.50% |
|
9.09 |
% |
12/15/2025 |
|
$ |
18,705,958 |
|
17,799,075 |
|
18,705,958 |
|
|
|
Lighthouse Network, LLC (12) (15) (26) |
|
L+ 4.50% |
|
7.24 |
% |
12/2/2024 |
|
$ |
20,037,653 |
|
19,978,781 |
|
20,004,291 |
|
|
|
MeridianLink, Inc. (15) (26) |
|
L+ 4.00% |
|
6.50 |
% |
5/30/2025 |
|
$ |
1,838,830 |
|
1,815,948 |
|
1,811,247 |
|
|
|
Netsmart Technologies, Inc. (12) (15) (26) |
|
L+ 3.75% |
|
6.25 |
% |
4/19/2023 |
|
$ |
21,567,193 |
|
21,601,682 |
|
21,459,357 |
|
|
|
Park Place Technologies (12) (15) (21) |
|
L+ 4.00% |
|
6.50 |
% |
3/31/2025 |
|
$ |
11,618,900 |
|
11,575,936 |
|
11,565,627 |
|
|
|
Project Alpha Intermediate Holding, Inc. (12) (15) (26) |
|
L+ 3.50% |
|
6.37 |
% |
4/26/2024 |
|
$ |
21,021,259 |
|
20,973,132 |
|
20,548,280 |
|
|
|
VPARK BIDCO AB (6) (16) (19) (21) |
|
CIBOR+ 4.00% |
|
4.75 |
% |
3/10/2025 |
|
DKK |
56,999,385 |
|
9,140,275 |
|
8,565,025 |
|
|
|
VPARK BIDCO AB (6) (16) (19) (21) |
|
NIBOR+ 4.00% |
|
5.24 |
% |
3/10/2025 |
|
NOK |
74,019,870 |
|
9,177,214 |
|
8,580,323 |
|
|
|
Zywave, Inc. (12) (15) (19) (21) |
|
L+ 5.00% |
|
7.50 |
% |
11/17/2022 |
|
$ |
17,504,729 |
|
17,422,456 |
|
17,504,729 |
|
|
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
167,345,446 |
|
166,738,868 |
|
||
|
Hotel, Gaming & Leisure 3.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Captain D’s LLC (12) (15) (19) (21) |
|
L+ 4.50% |
|
6.99 |
% |
12/15/2023 |
|
$ |
13,138,727 |
|
13,026,488 |
|
12,908,799 |
|
|
|
Quidditch Acquisition, Inc. (12) (15) (19) (21) (26) |
|
L+ 7.00% |
|
9.49 |
% |
3/21/2025 |
|
$ |
19,168,334 |
|
19,154,996 |
|
19,360,017 |
|
|
|
Tacala Investment Corp. (12) (18) (26) |
|
L+ 3.25% |
|
5.75 |
% |
1/31/2025 |
|
$ |
3,495,045 |
|
3,443,487 |
|
3,456,809 |
|
|
|
Total Hotel, Gaming & Leisure |
|
|
|
|
|
|
|
|
|
35,624,971 |
|
35,725,625 |
|
||
|
Media: Advertising, Printing & Publishing 1.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Cambium Learning Group, Inc. (12) (18) (19) (26) |
|
L+ 4.50% |
|
7.00 |
% |
12/18/2025 |
|
$ |
12,294,508 |
|
11,696,837 |
|
12,202,299 |
|
|
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
11,696,837 |
|
12,202,299 |
|
||
|
Media: Broadcasting & Subscription 1.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Micro Holding Corp. (12) (18) (26) |
|
L+ 3.75% |
|
6.24 |
% |
9/13/2024 |
|
$ |
14,729,292 |
|
14,683,488 |
|
14,553,351 |
|
|
|
Total Media: Broadcasting & Subscription |
|
|
|
|
|
|
|
|
|
14,683,488 |
|
14,553,351 |
|
||
|
Media: Diversified & Production 3.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Getty Images, Inc. (18) (21) (26) |
|
L+ 4.50% |
|
7.00 |
% |
2/19/2026 |
|
$ |
22,067,221 |
|
21,861,549 |
|
21,939,673 |
|
|
|
International Entertainment Investments Limited (6) (18) (21) (19) |
|
GBP LIBOR+ 4.75% |
|
5.65 |
% |
5/31/2023 |
|
£ |
8,685,518 |
|
10,624,422 |
|
11,321,573 |
|
|
|
Total Media: Diversified & Production |
|
|
|
|
|
|
|
|
|
32,485,971 |
|
33,261,246 |
|
||
|
Retail 3.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Calceus Acquisition, Inc. (18) (21) |
|
L+ 5.50% |
|
7.99 |
% |
2/12/2025 |
|
$ |
9,169,354 |
|
9,095,558 |
|
9,135,015 |
|
|
|
CVS Holdings I, LP (12) (15) (21) |
|
L+ 2.75% |
|
5.25 |
% |
2/6/2025 |
|
$ |
14,874,812 |
|
14,856,126 |
|
14,409,974 |
|
|
|
Eyemart Express LLC (15) (21) |
|
L+ 3.00% |
|
5.50 |
% |
8/5/2024 |
|
$ |
7,506,781 |
|
7,528,708 |
|
7,445,789 |
|
||
|
Total Retail |
|
|
|
|
|
|
|
|
|
31,480,392 |
|
30,990,778 |
|
|||
|
Services: Business 13.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Advantage Sales & Marketing Inc. (12) (15) (26) |
|
L+ 3.25% |
|
5.75 |
% |
7/23/2021 |
|
$ |
15,702,089 |
|
15,483,104 |
|
13,403,224 |
|
||
|
AMCP Clean Acquisition Company, LLC (12) (18) (19) (21) |
|
L+ 4.25% |
|
6.85 |
% |
6/16/2025 |
|
$ |
16,215,820 |
|
16,170,294 |
|
16,134,741 |
|
||
|
Comet Bidco Limited (6) (18) (21) |
|
GBP LIBOR+ 5.00% |
|
5.73 |
% |
9/30/2024 |
|
£ |
10,260,870 |
|
13,094,692 |
|
12,998,937 |
|
||
|
Lakeland Tours, LLC (12) (15) |
|
L+ 4.00% |
|
6.61 |
% |
12/16/2024 |
|
$ |
2,887,182 |
|
2,878,204 |
|
2,876,355 |
|
||
|
LegalZoom.com, Inc. (18) (21) (26) |
|
L+ 4.50% |
|
6.99 |
% |
11/21/2024 |
|
$ |
15,799,043 |
|
15,698,055 |
|
15,887,913 |
|
||
|
New Insight Holdings, Inc. (12) (15) (26) |
|
L+ 5.50% |
|
8.00 |
% |
12/20/2024 |
|
$ |
20,477,176 |
|
20,002,609 |
|
20,400,387 |
|
||
|
Sovos Compliance, LLC (12) (15) (19) |
|
L+ 6.00% |
|
8.50 |
% |
3/1/2022 |
|
$ |
8,579,030 |
|
8,519,093 |
|
8,493,240 |
|
||
|
Sovos Compliance, LLC (12) (15) (19) |
|
L+ 6.00% |
|
8.50 |
% |
8/2/2019 |
|
$ |
3,947,903 |
|
3,947,903 |
|
3,899,715 |
|
||
|
Valet Waste Holdings, Inc (12) (18) (21) (26) |
|
L+ 4.00% |
|
6.50 |
% |
9/29/2025 |
|
$ |
30,580,255 |
|
30,509,554 |
|
30,484,692 |
|
||
|
XO Management Holding Inc. (18) (19) (26) |
|
L+ 5.75% |
|
8.36 |
% |
12/6/2021 |
|
$ |
12,354,923 |
|
11,549,868 |
|
11,984,276 |
|
||
|
Total Services: Business |
|
|
|
|
|
|
|
|
|
137,853,376 |
|
136,563,480 |
|
|||
|
Services: Consumer 4.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
GI Chill Acquisition LLC (12) (18) (21) (26) |
|
L+ 4.00% |
|
6.60 |
% |
8/6/2025 |
|
$ |
15,370,063 |
|
15,325,606 |
|
15,398,882 |
|
||
|
Trafalgar Bidco Limited (6) (19) (21) |
|
GBP LIBOR+ 5.00% |
|
5.73 |
% |
9/11/2024 |
|
£ |
6,011,060 |
|
7,704,288 |
|
7,639,531 |
|
||
|
Travel Leaders Group, LLC (12) (18) |
|
L+ 4.00% |
|
6.48 |
% |
1/25/2024 |
|
$ |
526,641 |
|
525,454 |
|
528,395 |
|
||
|
Trident LS Merger Sub Corp (12) (18) |
|
L+ 3.00% |
|
5.50 |
% |
5/1/2025 |
|
$ |
4,185,675 |
|
4,181,440 |
|
4,143,818 |
|
||
|
WeddingWire, Inc. (18) (21) (26) |
|
L+ 4.50% |
|
6.99 |
% |
12/19/2025 |
|
$ |
16,177,326 |
|
16,214,865 |
|
16,167,215 |
|
||
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
43,951,653 |
|
43,877,841 |
|
|||
|
Telecommunications 1.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Horizon Telcom, Inc. (12) (15) (19) (21) |
|
L+ 4.50% |
|
6.99 |
% |
6/15/2023 |
|
$ |
13,833,931 |
|
13,688,028 |
|
13,626,422 |
|
||
|
Masergy Holdings, Inc. (15) (26) |
|
L+ 3.25% |
|
5.85 |
% |
12/15/2023 |
|
$ |
684,364 |
|
682,089 |
|
670,677 |
|
||
|
Total Telecommunications |
|
|
|
|
|
|
|
|
|
14,370,117 |
|
14,297,099 |
|
|||
|
Transportation: Cargo 4.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
ENC Holding Corporation (12) (18) (26) |
|
L+ 4.00% |
|
6.60 |
% |
5/30/2025 |
|
$ |
10,345,408 |
|
10,331,665 |
|
10,222,556 |
|
||
|
Grammer Purchaser, Inc. (12) (15) (19) (21) |
|
L+ 4.75% |
|
7.25 |
% |
9/30/2024 |
|
$ |
10,283,318 |
|
10,118,785 |
|
10,129,068 |
|
||
|
PS HoldCo, LLC (12) (15) (26) |
|
L+ 4.75% |
|
7.25 |
% |
3/13/2025 |
|
$ |
23,448,440 |
|
23,438,751 |
|
23,419,129 |
|
||
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
43,889,201 |
|
43,770,753 |
|
|||
|
Wholesale 5.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
PetroChoice Holdings, Inc. (15) (26) |
|
L+ 5.00% |
|
7.74 |
% |
8/19/2022 |
|
$ |
3,619,869 |
|
3,587,386 |
|
3,619,869 |
|
||
|
PT Holdings, LLC (12) (15) (26) |
|
L+ 4.00% |
|
6.50 |
% |
12/9/2024 |
|
$ |
21,616,515 |
|
21,577,120 |
|
21,292,267 |
|
||
|
Specialty Building Products Holdings, LLC (12) (18) (26) |
|
L+ 5.75% |
|
8.25 |
% |
10/1/2025 |
|
$ |
16,944,043 |
|
16,845,998 |
|
16,605,162 |
|
||
|
SRS Distribution Inc. (18) (21) (26) |
|
L+ 3.25% |
|
5.75 |
% |
5/23/2025 |
|
$ |
19,949,875 |
|
19,471,177 |
|
19,093,726 |
|
||
|
Total Wholesale |
|
|
|
|
|
|
|
|
|
61,481,681 |
|
60,611,024 |
|
|||
|
Total First Lien Senior Secured Loan |
|
|
|
|
|
|
|
|
|
$ |
1,106,288,464 |
|
$ |
1,098,439,896 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Revolver 2.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aerospace & Defense 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
API Technologies Corp. (3) (5) (15) (19) |
|
— |
|
— |
|
4/22/2024 |
|
$ |
— |
|
(44,178 |
) |
— |
|
||
|
WCI-HSG Purchaser, Inc. (3) (15) (19) |
|
L+ 4.50% |
|
6.99 |
% |
2/21/2025 |
|
$ |
671,743 |
|
632,317 |
|
631,438 |
|
||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
588,139 |
|
631,438 |
|
|||
|
Automotive 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
CST Buyer Company (3) (5) (15) (19) |
|
— |
|
— |
|
3/1/2023 |
|
$ |
— |
|
(8,794 |
) |
— |
|
||
|
Total Automotive |
|
|
|
|
|
|
|
|
|
(8,794 |
) |
— |
|
|||
|
Capital Equipment 0.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Dorner Manufacturing Corp. (3) (5) (15) (19) |
|
— |
|
— |
|
3/15/2022 |
|
$ |
— |
|
(16,321 |
) |
— |
|
||
|
FFI Holdings I Corp (3) (15) (19) |
|
L+ 5.75% |
|
8.45 |
% |
1/24/2025 |
|
$ |
2,147,827 |
|
2,069,030 |
|
2,093,507 |
|
||
|
Tidel Engineering, L.P. (3) (15) (19) |
|
— |
|
— |
|
3/1/2023 |
|
$ |
— |
|
— |
|
— |
|
||
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
2,052,709 |
|
2,093,507 |
|
|||
|
Chemicals, Plastics & Rubber 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
AP Plastics Group, LLC (3) (15) (19) |
|
— |
|
— |
|
8/2/2021 |
|
$ |
— |
|
— |
|
— |
|
||
|
PRCC Holdings, Inc. (3) (15) (19) |
|
— |
|
— |
|
2/1/2021 |
|
$ |
— |
|
— |
|
— |
|
||
|
Total Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
— |
|
— |
|
|||
|
Construction & Building 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Profile Products LLC (3) (15) (19) |
|
P+ 4.75% |
|
10.25 |
% |
12/20/2024 |
|
$ |
1,469,479 |
|
1,396,298 |
|
1,392,811 |
|
|
Total Construction & Building |
|
|
|
|
|
|
|
|
|
1,396,298 |
|
1,392,811 |
|
|
|
Consumer Goods: Durable 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home Franchise Concepts, Inc. (3) (5) (15) (19) |
|
— |
|
— |
|
7/9/2024 |
|
$ |
— |
|
(15,543 |
) |
— |
|
|
Stanton Carpet Corp. (3) (15) (19) |
|
— |
|
— |
|
11/21/2022 |
|
$ |
— |
|
— |
|
— |
|
|
Total Consumer Goods: Durable |
|
|
|
|
|
|
|
|
|
(15,543 |
) |
— |
|
|
|
Consumer Goods: Non-Durable 0.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FineLine Technologies, Inc. (3) (15) (19) |
|
L+ 4.25% |
|
6.99 |
% |
11/4/2022 |
|
$ |
458,627 |
|
428,044 |
|
445,523 |
|
|
RoC Opco LLC (2) (3) (5) (15) (19) |
|
— |
|
— |
|
2/25/2025 |
|
$ |
— |
|
(201,560 |
) |
(204,828 |
) |
|
Solaray, LLC (3) (15) (19) |
|
L+ 4.50% |
|
7.22 |
% |
9/9/2022 |
|
$ |
8,075,190 |
|
8,017,525 |
|
8,075,190 |
|
|
WU Holdco, Inc. (2) (3) (5) (15) (19) |
|
— |
|
— |
|
3/26/2025 |
|
$ |
— |
|
(63,499 |
) |
(83,392 |
) |
|
Total Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
8,180,510 |
|
8,232,493 |
|
|
|
Energy: Oil & Gas 0.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amspec Services, Inc. (3) (15) (19) |
|
P+ 3.75% |
|
9.25 |
% |
7/2/2024 |
|
$ |
2,189,988 |
|
2,127,630 |
|
2,189,988 |
|
|
Total Energy: Oil & Gas |
|
|
|
|
|
|
|
|
|
2,127,630 |
|
2,189,988 |
|
|
|
FIRE: Insurance 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margaux Acquisition, Inc. (3) (15) (19) |
|
L+ 6.00% |
|
8.50 |
% |
12/19/2024 |
|
$ |
307,766 |
|
252,982 |
|
250,316 |
|
|
Margaux UK Finance Limited (2) (3) (5) (6) (19) |
|
— |
|
— |
|
12/19/2024 |
|
£ |
— |
|
(12,013 |
) |
(13,008 |
) |
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
240,969 |
|
237,308 |
|
|
|
Healthcare & Pharmaceuticals 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clinical Innovations, LLC (3) (15) (19) (22) (23) |
|
L+ 5.50% |
|
8.96 |
% |
10/17/2022 |
|
$ |
317,085 |
|
298,707 |
|
317,085 |
|
|
CPS Group Holdings, Inc. (3) (15) (19) |
|
L+ 5.50% |
|
7.99 |
% |
3/3/2025 |
|
$ |
2,466,720 |
|
2,393,473 |
|
2,417,386 |
|
|
Datix Bidco Limited (2) (3) (5) (6) (18) (19) |
|
— |
|
— |
|
10/28/2024 |
|
£ |
— |
|
(24,159 |
) |
(19,015 |
) |
|
Great Expressions Dental Centers PC (13) (15) (19) |
|
L+ 4.75% |
|
8.80 |
% |
9/28/2022 |
|
$ |
1,167,000 |
|
1,156,730 |
|
1,149,495 |
|
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
3,824,751 |
|
3,864,951 |
|
|
|
High Tech Industries 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Symplr Software, Inc. (3) (18) (19) |
|
L+ 5.50% |
|
8.00 |
% |
11/30/2023 |
|
$ |
248,236 |
|
213,469 |
|
211,001 |
|
|
CMI Marketing Inc (3) (5) (15) (19) |
|
— |
|
— |
|
5/24/2023 |
|
$ |
— |
|
(17,578 |
) |
— |
|
|
Element Buyer, Inc. (3) (5) (15) (19) |
|
— |
|
— |
|
7/19/2024 |
|
$ |
— |
|
(56,443 |
) |
— |
|
|
Zywave, Inc. (3) (15) (19) |
|
L+ 5.00% |
|
7.50 |
% |
11/17/2022 |
|
$ |
767,471 |
|
755,838 |
|
767,471 |
|
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
895,286 |
|
978,472 |
|
|
|
Hotel, Gaming & Leisure 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Captain D’s LLC (3) (15) (19) (24) |
|
L+ 4.50% |
|
8.18 |
% |
12/15/2023 |
|
$ |
775,946 |
|
761,325 |
|
743,356 |
|
|
Total Hotel, Gaming & Leisure |
|
|
|
|
|
|
|
|
|
761,325 |
|
743,356 |
|
|
|
Media: Advertising, Printing & Publishing 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ansira Holdings, Inc. (3) (15) (19) |
|
P+ 4.00% |
|
9.50 |
% |
12/20/2022 |
|
$ |
1,643,372 |
|
1,643,372 |
|
1,643,372 |
|
|
Cruz Bay Publishing (3) (15) (19) |
|
P+ 3.00% |
|
8.50 |
% |
6/6/2019 |
|
$ |
2,266,720 |
|
2,266,720 |
|
2,266,720 |
|
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
3,910,092 |
|
3,910,092 |
|
|
|
Media: Diversified & Production 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficient Collaborative Retail Marketing Company, LLC (3) (15) (19) |
|
— |
|
— |
|
6/15/2022 |
|
$ |
— |
|
— |
|
— |
|
|
Total Media: Diversified & Production |
|
|
|
|
|
|
|
|
|
— |
|
— |
|
|
|
Retail 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batteries Plus Holding Corporation (3) (15) (19) |
|
P+ 5.75% |
|
11.25 |
% |
7/6/2022 |
|
$ |
220,068 |
|
212,505 |
|
212,505 |
|
|
Total Retail |
|
|
|
|
|
|
|
|
|
212,505 |
|
212,505 |
|
|
|
Services: Business 0.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sovos Compliance, LLC (2) (3) (5) (15) (19) |
|
— |
|
— |
|
3/1/2022 |
|
$ |
— |
|
(9,252 |
) |
(14,516 |
) |
|
TEI Holdings Inc. (3) (15) (19) |
|
L+ 6.00% |
|
8.50 |
% |
12/20/2022 |
|
$ |
2,408,390 |
|
2,408,390 |
|
2,397,765 |
|
|
Total Services: Business |
|
|
|
|
|
|
|
|
|
2,399,138 |
|
2,383,249 |
|
|
|
Services: Consumer 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McKissock, LLC (3) (15) (19) |
|
P+ 2.25% |
|
7.75 |
% |
8/5/2021 |
|
$ |
991,690 |
|
991,690 |
|
991,690 |
|
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
991,690 |
|
991,690 |
|
|
|
Telecommunications 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Horizon Telcom, Inc. (2) (3) (15) (19) |
|
— |
|
— |
|
6/15/2023 |
|
$ |
— |
|
— |
|
(17,379 |
) |
|
Total Telecommunications |
|
|
|
|
|
|
|
|
|
— |
|
(17,379 |
) |
|
|
Transportation: Cargo 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grammer Purchaser, Inc. (2) (3) (15) (19) |
|
— |
|
— |
|
9/30/2024 |
|
$ |
— |
|
1,256 |
|
(15,750 |
) |
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
1,256 |
|
(15,750 |
) |
|
|
Transportation: Consumer 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Direct Travel, Inc. (3) (15) (19) |
|
— |
|
— |
|
12/1/2021 |
|
$ |
— |
|
— |
|
— |
|
||
|
Total Transportation: Consumer |
|
|
|
|
|
|
|
|
|
— |
|
— |
|
|||
|
Wholesale 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Abracon Group Holding, LLC. (2) (3) (5) (15) (19) |
|
— |
|
— |
|
7/18/2024 |
|
$ |
— |
|
(37,639 |
) |
(14,167 |
) |
||
|
Aramsco, Inc. (3) (15) (19) |
|
L+ 5.25% |
|
7.75 |
% |
8/28/2024 |
|
$ |
112,893 |
|
65,847 |
|
28,223 |
|
||
|
Total Wholesale |
|
|
|
|
|
|
|
|
|
28,208 |
|
14,056 |
|
|||
|
Total Revolver |
|
|
|
|
|
|
|
|
|
$ |
27,586,169 |
|
$ |
27,842,787 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Second Lien Senior Secured Loan 22.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aerospace & Defense 4.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Forming & Machining Industries Inc. (18) (19) (21) |
|
L+ 8.25% |
|
10.95 |
% |
10/9/2026 |
|
$ |
6,540,000 |
|
6,477,147 |
|
6,311,100 |
|
||
|
Jazz Acquisition, Inc. (15) (21) |
|
L+ 6.75% |
|
9.35 |
% |
6/20/2022 |
|
$ |
15,000,000 |
|
14,432,083 |
|
14,100,000 |
|
||
|
TECT Power Holdings, LLC (15) (19) (21) |
|
L+ 8.50% |
|
11.00 |
% |
12/27/2021 |
|
$ |
14,757,969 |
|
14,556,393 |
|
14,757,969 |
|
||
|
WP CPP Holdings, LLC. (12) (15) (21) (26) |
|
L+ 7.75% |
|
10.51 |
% |
4/30/2026 |
|
$ |
11,723,622 |
|
11,612,738 |
|
11,674,734 |
|
||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
47,078,361 |
|
46,843,803 |
|
|||
|
Automotive 0.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
OEConnection LLC (15) (19) (21) |
|
L+ 8.00% |
|
10.50 |
% |
11/24/2025 |
|
$ |
6,312,688 |
|
6,273,649 |
|
6,265,343 |
|
||
|
Total Automotive |
|
|
|
|
|
|
|
|
|
6,273,649 |
|
6,265,343 |
|
|||
|
Beverage, Food & Tobacco 0.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
NPC International, Inc. (12) (15) (21) |
|
L+ 7.50% |
|
10.13 |
% |
4/18/2025 |
|
$ |
9,158,667 |
|
9,194,780 |
|
7,956,592 |
|
||
|
Total Beverage, Food & Tobacco |
|
|
|
|
|
|
|
|
|
9,194,780 |
|
7,956,592 |
|
|||
|
Capital Equipment 1.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
EXC Holdings III Corp. (12) (15) (21) (26) |
|
L+ 7.50% |
|
10.31 |
% |
12/1/2025 |
|
$ |
8,240,489 |
|
8,254,859 |
|
8,261,090 |
|
||
|
Velvet Acquisition B.V. (6) (18) (19) (21) |
|
EURIBOR+ 8.00% |
|
8.00 |
% |
4/17/2026 |
|
€ |
6,013,072 |
|
7,317,052 |
|
6,745,464 |
|
||
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
15,571,911 |
|
15,006,554 |
|
|||
|
Energy: Electricity 0.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Infinite Electronics International Inc. (18) (19) (21) |
|
L+ 8.00% |
|
10.50 |
% |
7/2/2026 |
|
$ |
2,480,000 |
|
2,430,400 |
|
2,430,400 |
|
||
|
Total Energy: Electricity |
|
|
|
|
|
|
|
|
|
2,430,400 |
|
2,430,400 |
|
|||
|
Forest Products & Paper 1.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Solenis International LLC (18) (21) |
|
L+ 8.50% |
|
11.13 |
% |
6/26/2026 |
|
$ |
10,600,616 |
|
10,288,995 |
|
10,203,093 |
|
||
|
Total Forest Products & Paper |
|
|
|
|
|
|
|
|
|
10,288,995 |
|
10,203,093 |
|
|||
|
FIRE: Insurance 0.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Wink Holdco, Inc. (15) (21) (26) |
|
L+ 6.75% |
|
9.25 |
% |
12/1/2025 |
|
$ |
4,762,543 |
|
4,720,139 |
|
4,667,293 |
|
||
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
4,720,139 |
|
4,667,293 |
|
|||
|
Healthcare & Pharmaceuticals 4.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Concentra Inc. (15) (21) (26) |
|
L+ 6.50% |
|
8.99 |
% |
6/1/2023 |
|
$ |
6,604,805 |
|
6,495,883 |
|
6,635,088 |
|
||
|
Datix Bidco Limited (6) (18) (19) (21) |
|
GBP LIBOR+ 7.75% |
|
8.68 |
% |
4/27/2026 |
|
£ |
12,133,975 |
|
16,286,709 |
|
15,777,095 |
|
||
|
TecoStar Holdings, Inc. (12) (15) (19) (21) |
|
L+ 8.50% |
|
10.99 |
% |
11/1/2024 |
|
$ |
9,471,942 |
|
9,269,406 |
|
9,471,942 |
|
||
|
U.S. Anesthesia Partners, Inc. (12) (15) (19) (21) |
|
L+ 7.25% |
|
9.75 |
% |
6/23/2025 |
|
$ |
16,520,000 |
|
16,321,493 |
|
16,520,000 |
|
||
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
48,373,491 |
|
48,404,125 |
|
|||
|
High Tech Industries 2.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Everest Bidco (6) (15) (19) (21) |
|
GBP LIBOR+ 7.50% |
|
8.50 |
% |
7/3/2026 |
|
£ |
10,216,216 |
|
13,072,796 |
|
12,917,333 |
|
||
|
nThrive, Inc. (15) (19) (21) |
|
L+ 9.75% |
|
12.25 |
% |
4/20/2023 |
|
$ |
8,000,000 |
|
7,986,533 |
|
7,720,000 |
|
||
|
Netsmart Technologies, Inc. (15) (19) (21) |
|
L+ 7.50% |
|
10.00 |
% |
10/19/2023 |
|
$ |
2,749,000 |
|
2,749,000 |
|
2,749,000 |
|
||
|
Park Place Technologies (15) (21) |
|
L+ 8.00% |
|
10.50 |
% |
3/30/2026 |
|
$ |
6,732,980 |
|
6,685,535 |
|
6,640,402 |
|
||
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
30,493,864 |
|
30,026,735 |
|
|||
|
Hotel, Gaming & Leisure 2.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aimbridge Acquisition Co., Inc. (12) (18) (19) |
|
L+ 7.50% |
|
9.99 |
% |
2/1/2027 |
|
$ |
13,067,823 |
|
12,794,868 |
|
12,788,128 |
|
||
|
K-Mac Holdings Corp. (12) (18) |
|
L+ 6.75% |
|
9.24 |
% |
3/16/2026 |
|
$ |
3,200,000 |
|
3,192,726 |
|
3,178,384 |
|
||
|
Tacala Investment Corp. (18) (21) |
|
L+ 7.00% |
|
9.50 |
% |
1/30/2026 |
|
$ |
6,323,404 |
|
6,304,140 |
|
6,312,338 |
|
||
|
Total Hotel, Gaming & Leisure |
|
|
|
|
|
|
|
|
|
22,291,734 |
|
22,278,850 |
|
|||
|
Media: Advertising, Printing & Publishing 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
A-L Parent LLC (12) (15) (21) |
|
L+ 7.25% |
|
9.75 |
% |
12/2/2024 |
|
$ |
4,050,000 |
|
4,017,011 |
|
4,039,875 |
|
||
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
4,017,011 |
|
4,039,875 |
|
|||
|
Retail 1.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
CVS Holdings I, LP (15) (21) (26) |
|
L+ 6.75% |
|
9.25 |
% |
2/6/2026 |
|
$ |
11,606,759 |
|
11,611,176 |
|
11,403,640 |
|
||
|
Total Retail |
|
|
|
|
|
|
|
|
|
11,611,176 |
|
11,403,640 |
|
|||
|
Services: Consumer 1.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Pearl Intermediate Parent LLC (18) (19) (26) |
|
L+ 6.25% |
|
8.74 |
% |
2/13/2026 |
|
$ |
2,570,811 |
|
2,589,107 |
|
2,506,541 |
|
||
|
Trident LS Merger Sub Corp (12) (18) |
|
L+ 7.50% |
|
10.00 |
% |
5/1/2026 |
|
$ |
2,246,470 |
|
2,225,892 |
|
2,235,237 |
|
||
|
WeddingWire, Inc. (18) (21) (26) |
|
L+ 8.25% |
|
10.74 |
% |
12/21/2026 |
|
$ |
6,186,667 |
|
6,131,092 |
|
6,163,467 |
|
||
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
10,946,091 |
|
10,905,245 |
|
|||
|
Telecommunications 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Masergy Holdings, Inc. (15) (26) |
|
L+ 7.50% |
|
10.10 |
% |
12/16/2024 |
|
$ |
857,143 |
|
863,363 |
|
842,143 |
|
||
|
Total Telecommunications |
|
|
|
|
|
|
|
|
|
863,363 |
|
842,143 |
|
|||
|
Transportation: Cargo 0.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Direct ChassisLink, Inc. (18) (19) (26) |
|
L+ 6.00% |
|
8.69 |
% |
6/15/2023 |
|
$ |
2,568,544 |
|
2,558,645 |
|
2,595,834 |
|
||
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
2,558,645 |
|
2,595,834 |
|
|||
|
Transportation: Consumer 0.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Toro Private Holdings III, Ltd (6) (12) (18) (26) |
|
L+ 9.00% |
|
11.58 |
% |
4/2/2027 |
|
$ |
8,998,355 |
|
8,548,437 |
|
8,773,396 |
|
||
|
Total Transportation: Consumer |
|
|
|
|
|
|
|
|
|
8,548,437 |
|
8,773,396 |
|
|||
|
Total Second Lien Senior Secured Loan |
|
|
|
|
|
|
|
|
|
$ |
235,262,047 |
|
$ |
232,642,921 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Subordinated Debt 3.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Healthcare & Pharmaceuticals 2.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Genesis Supply Acquisition Co. (19) |
|
L+ 9.50% |
|
9.50 |
% |
4/23/2021 |
|
$ |
25,000,000 |
|
25,000,000 |
|
25,000,000 |
|
||
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
25,000,000 |
|
25,000,000 |
|
|||
|
Transportation: Cargo 1.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Omni Logistics, LLC (15) (19) |
|
L+ 11.50% |
|
14.00 |
% |
1/19/2024 |
|
$ |
15,000,000 |
|
14,728,124 |
|
14,625,000 |
|
||
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
14,728,124 |
|
14,625,000 |
|
|||
|
Total Subordinated Debt |
|
|
|
|
|
|
|
|
|
$ |
39,728,124 |
|
$ |
39,625,000 |
|
|
|
Total Corporate Debt |
|
|
|
|
|
|
|
|
|
$ |
1,437,927,257 |
|
$ |
1,428,268,285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Equity 1.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Equity Interest 0.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Construction & Building 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
PP Ultimate Holdings B, LLC (14) (19) (25) |
|
— |
|
— |
|
— |
|
1,352 |
|
1,351,900 |
|
1,395,717 |
|
|||
|
Total Construction & Building |
|
|
|
|
|
|
|
|
|
1,351,900 |
|
1,395,717 |
|
|||
|
High Tech Industries 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Impala Private Investments, LLC (14) (19) (25) |
|
— |
|
— |
|
— |
|
1,500,000 |
|
— |
|
163,800 |
|
|||
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
— |
|
163,800 |
|
|||
|
Transportation: Cargo 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Grammer Investment Holdings LLC (14) (19) (25) |
|
— |
|
— |
|
— |
|
600,000 |
|
600,000 |
|
600,000 |
|
|||
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
600,000 |
|
600,000 |
|
|||
|
Wholesale 0.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Abracon Group Holding, LLC. (14) (19) (25) |
|
— |
|
— |
|
— |
|
1,800 |
|
1,800,000 |
|
2,045,700 |
|
|||
|
Armor Group, LP (14) (19) (25) |
|
— |
|
— |
|
— |
|
10,119 |
|
1,011,905 |
|
1,008,662 |
|
|||
|
Total Wholesale |
|
|
|
|
|
|
|
|
|
2,811,905 |
|
3,054,362 |
|
|||
|
Total Equity Interest |
|
|
|
|
|
|
|
|
|
$ |
4,763,805 |
|
$ |
5,213,879 |
|
|
|
Preferred Equity 0.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aerospace & Defense 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
WCI-HSG HOLDCO, LLC (14) (19) (25) |
|
— |
|
— |
|
— |
|
674,533 |
|
674,533 |
|
674,533 |
|
|||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
674,533 |
|
674,533 |
|
|||
|
Capital Equipment 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
FCG Acquisitions, Inc. (14) (19) (25) |
|
— |
|
— |
|
— |
|
4,048 |
|
4,047,600 |
|
4,048,000 |
|
|||
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
4,047,600 |
|
4,048,000 |
|
|||
|
Healthcare & Pharmaceuticals 0.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
CB Titan Holdings, Inc. (14) (19) (25) |
|
— |
|
— |
|
— |
|
1,952,879 |
|
1,952,879 |
|
2,343,455 |
|
|||
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
1,952,879 |
|
2,343,455 |
|
|||
|
Transportation: Cargo 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Grammer Investment Holdings LLC (19) (25) |
|
10% |
PIK |
10.00 |
% |
— |
|
6,153 |
|
615,333 |
|
630,512 |
|
|||
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
615,333 |
|
630,512 |
|
|||
|
Total Preferred Equity |
|
|
|
|
|
|
|
|
|
$ |
7,290,345 |
|
$ |
7,696,500 |
|
|
|
Warrants 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Transportation: Cargo 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Grammer Investment Holdings LLC (14) (19) (25) |
|
— |
|
— |
|
— |
|
121,811 |
|
— |
|
120,593 |
|
|||
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
|
— |
|
|
120,593 |
|
|
|
Total Warrants |
|
|
|
|
|
|
|
|
|
$ |
— |
|
$ |
120,593 |
|
|
|
Total Equity |
|
|
|
|
|
|
|
|
|
$ |
12,054,150 |
|
$ |
13,030,972 |
|
|
|
Total Non-Controlled/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
$ |
1,481,673,496 |
|
$ |
1,469,128,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Non-Controlled/Affiliate Investments 0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Equity 0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Equity Interest 0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Beverage, Food & Tobacco 0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
ADT Pizza, LLC (10) (14) (19) (25) |
|
— |
|
— |
|
— |
|
6,720,000 |
|
6,720,000 |
|
6,720,000 |
|
|||
|
Total Beverage, Food & Tobacco |
|
|
|
|
|
|
|
|
|
6,720,000 |
|
6,720,000 |
|
|||
|
Total Equity Interest |
|
|
|
|
|
|
|
|
|
$ |
6,720,000 |
|
$ |
6,720,000 |
|
|
|
Total Equity |
|
|
|
|
|
|
|
|
|
$ |
6,720,000 |
|
$ |
6,720,000 |
|
|
|
Total Non-Controlled/Affiliate Investments |
|
|
|
|
|
|
|
|
|
$ |
6,720,000 |
|
$ |
6,720,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Controlled Affiliate Investments 34.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Corporate Debt 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
First Lien Senior Secured Loan 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aerospace & Defense 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
BCC Jetstream Holdings Aviation (On II), LLC (10) (11) (19) (20) |
|
|
|
10.00 |
% |
6/2/2022 |
|
$ |
4,144,528 |
|
4,144,528 |
|
4,144,528 |
|
||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
4,144,528 |
|
4,144,528 |
|
|||
|
Total First Lien Senior Secured Loan |
|
|
|
|
|
|
|
|
|
$ |
4,144,528 |
|
$ |
4,144,528 |
|
|
|
Total Corporate Debt |
|
|
|
|
|
|
|
|
|
$ |
4,144,528 |
|
$ |
4,144,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Equity 34.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Equity Interest 1.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aerospace & Defense 1.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
BCC Jetstream Holdings Aviation (On II), LLC (10) (11) (19) (20) (25) |
|
— |
|
— |
|
— |
|
731,387 |
|
731,387 |
|
1,148,781 |
|
|||
|
BCC Jetstream Holdings Aviation (Off I), LLC (6) (10) (11) (19) (20) (25) |
|
— |
|
— |
|
— |
|
11,862,615 |
|
11,862,615 |
|
13,447,514 |
|
|||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
12,594,002 |
|
14,596,295 |
|
|||
|
Total Equity Interest |
|
|
|
|
|
|
|
|
|
$ |
12,594,002 |
|
$ |
14,596,295 |
|
|
|
Investment Vehicle 32.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Antares Bain Capital Complete Financing Solution LLC (6) (10) (11) (19) (25) |
|
— |
|
— |
|
— |
|
331,357,415 |
|
331,357,415 |
|
335,350,725 |
|
|||
|
Total Investment Vehicle |
|
|
|
|
|
|
|
|
|
$ |
331,357,415 |
|
$ |
335,350,725 |
|
|
|
Total Equity |
|
|
|
|
|
|
|
|
|
$ |
343,951,417 |
|
$ |
349,947,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Unfunded Commitment 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aerospace & Defense 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
BCC Jetstream Holdings Aviation (On II), LLC (3) (7) (10) (11) (14) (19) (20) |
|
— |
|
— |
|
6/2/2022 |
|
— |
|
— |
|
— |
|
|||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
— |
|
— |
|
|||
|
Total Unfunded Commitment |
|
|
|
|
|
|
|
|
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Total Controlled Affiliate Investments |
|
|
|
|
|
|
|
|
|
$ |
348,095,945 |
|
$ |
354,091,548 |
|
|
|
Total Investments |
|
|
|
|
|
|
|
|
|
$ |
1,836,489,441 |
|
$ |
1,829,939,950 |
|
|
|
Cash Equivalents 8.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Goldman Sachs Financial Square Government Fund Institutional Share Class |
|
|
|
2.44 |
% |
|
|
72,995,277 |
|
72,995,277 |
|
72,995,277 |
|
||
|
Goldman Sachs US Treasury Liquid Reserves Fund |
|
— |
|
2.40 |
% |
— |
|
10,674,053 |
|
10,674,053 |
|
10,674,053 |
|
||
|
Total Cash Equivalents |
|
|
|
|
|
|
|
|
|
$ |
83,669,330 |
|
$ |
83,669,330 |
|
|
Total Investments and Cash Equivalents |
|
|
|
|
|
|
|
|
|
$ |
1,920,158,771 |
|
$ |
1,913,609,280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Forward Foreign Currency Exchange Contracts
|
Currency Purchased |
|
Currency Sold |
|
Counterparty |
|
Settlement Date |
|
Unrealized Appreciation
|
|
|
|
U.S. DOLLARS 8,720,000 |
|
POUND STERLING 6,400,000 |
|
Bank of New York Mellon |
|
9/21/2020 |
|
$ |
288,722 |
|
|
U.S. DOLLARS 12,176,973 |
|
EURO 10,370,000 |
|
Bank of New York Mellon |
|
1/10/2020 |
|
256,600 |
|
|
|
U.S. DOLLARS 12,042,274 |
|
EURO 10,080,000 |
|
Bank of New York Mellon |
|
6/21/2019 |
|
646,976 |
|
|
|
U.S. DOLLARS 3,169,087 |
|
AUSTRALIAN DOLLARS 4,127,383 |
|
Citibank |
|
4/11/2019 |
|
81,710 |
|
|
|
U.S. DOLLARS 13,192,107 |
|
POUND STERLING 9,260,478 |
|
Citibank |
|
4/11/2019 |
|
698,583 |
|
|
|
U.S. DOLLARS 412,089 |
|
POUND STERLING 310,000 |
|
Citibank |
|
9/21/2020 |
|
449 |
|
|
|
U.S. DOLLARS 3,577,812 |
|
POUND STERLING 2,630,000 |
|
Goldman Sachs |
|
4/11/2019 |
|
236,029 |
|
|
|
U.S. DOLLARS 3,090,562 |
|
AUD 4,130,000 |
|
Goldman Sachs |
|
6/14/2019 |
|
159,163 |
|
|
|
U.S. DOLLARS 8,937,749 |
|
DANISH KRONE 55,570,000 |
|
Goldman Sachs |
|
6/14/2019 |
|
522,043 |
|
|
|
U.S. DOLLARS 11,718,855 |
|
EURO 9,790,000 |
|
Goldman Sachs |
|
6/14/2019 |
|
657,785 |
|
|
|
U.S. DOLLARS 70,817,437 |
|
POUND STERLING 52,910,000 |
|
Goldman Sachs |
|
6/14/2019 |
|
1,760,917 |
|
|
|
U.S. DOLLARS 8,993,793 |
|
NORWEGIAN KRONE 72,170,000 |
|
Goldman Sachs |
|
6/14/2019 |
|
599,866 |
|
|
|
U.S. DOLLARS 8,379,789 |
|
POUND STERLING 6,260,000 |
|
Goldman Sachs |
|
1/10/2020 |
|
129,665 |
|
|
|
|
|
|
|
|
|
|
|
$ |
6,038,508 |
|
(1) The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”), the Euro Interbank Offered Rate (“EURIBOR” or “E”),British Pound Sterling LIBOR Rate (“GBP LIBOR”), the Norwegian Interbank Offered Rate (“NIBOR” or “N”), the Copenhagen Interbank Offered Rate (“CIBOR” or “C”), the Bank Bill Swap Rate (“BBSW”), or the Prime Rate (“Prime” or “P”) and which reset daily, monthly, quarterly or semiannually. Investments or a portion thereof may bear Payment-in-Kind (“PIK”). For each, the Company has provided the PIK or the spread over LIBOR, EURIBOR, GBP LIBOR, NIBOR, CIBOR, BBSW, or Prime and the current weighted average interest rate in effect at March 31, 2019. Certain investments are subject to a LIBOR, EURIBOR, GBP LIBOR, NIBOR, CIBOR, BBSW, or Prime interest rate floor.
(2) The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par.
(3) Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The investment may be subject to an unused/letter of credit facility fee.
(4) Percentages are based on the Company’s net assets of $1,019,834,005 as of March 31, 2019.
(5) The negative amortized cost is the result of the capitalized
discount being greater than the principal amount outstanding on the loan.
(6) The investment is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940. 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 March 31, 2019, non-qualifying assets totaled 25.8% of the Company’s total assets.
(7) The assets to be issued will be determined at the time the funds are called.
(8) Unrealized appreciation/(depreciation) on forward currency exchange contracts.
(9) The principal amount (par amount) for all debt securities is denominated in U.S. dollars, unless otherwise noted. £ represents Pound Sterling, € represents Euro, NOK represents Norwegian krone, AUD represents Australian and DKK represents Kroner.
(10) As defined in the 1940 Act, the Company is deemed to be an “Affiliated Investment” of the Company as the Company owns 5% or more of the portfolio company’s securities.
(11) As defined in the 1940 Act, the Company is deemed to “Control” this portfolio company as the Company either owns more than 25% of the portfolio company’s outstanding voting
securities or has the power to exercise control over management or policies of such portfolio company.
(12) Assets or a portion thereof are pledged as collateral for the 2018-1 Issuer. See Note 6 “Borrowings”.
(13) $903,591 of the total par amount for this security is at P+ 3.75%.
(14) Non-Income Producing.
(15) Loan includes interest rate floor of 1.00%.
(16) Loan includes interest rate floor of 0.75%.
(17) Loan includes interest rate floor of 0.50%.
(18) Loan includes interest rate floor of 0.00%.
(19) Security valued using unobservable inputs (Level 3).
(20) The Company holds non-controlling, affiliate interest in an aircraft-owning special purpose vehicle through this investment.
(21) Assets or a portion thereof are pledged as collateral for the BCSF Revolving Credit Facility. See Note 6 “Borrowings”.
(22) The Company generally earns a higher interest rate on the “last out” tranche of debt, to the extent the debt has been allocated to “first out” and “last out” tranches, whereby the “first out” tranche will have priority as to the “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder.
(23) $153,563 of the total par amount for this security is at P+ 4.50%.
(24) $459,360 of the total par amount for this security is at P+ 3.50%.
(25) Security exempt from registration under the Securities Act of 1933 (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of March 31, 2019, the aggregate fair value of these securities is $369,697,992 or 36.3% of the Company’s net assets. The acquisition dates of the restricted securities are as follows:
|
Investment |
|
Acquisition Date |
|
|
BCC Jetstream Holdings Aviation (On II), LLC - Equity Interest |
|
6/1/2017 |
|
|
BCC Jetstream Holdings Aviation (Off I), LLC - Equity Interest |
|
6/1/2017 |
|
|
Antares Bain Capital Complete Financing Solution LLC - Investment Vehicle |
|
11/29/2017 |
|
|
CB Titan Holdings, Inc. - Preferred Equity |
|
11/14/2017 |
|
|
Impala Private Investments, LLC - Equity Interest |
|
11/10/2017 |
|
|
Abracon Group Holding, LLC. - Equity Interest |
|
7/18/2018 |
|
|
Armor Group, LP - Equity Interest |
|
8/28/2018 |
|
|
Grammer Investment Holdings LLC - Equity Interest |
|
10/1/2018 |
|
|
Grammer Investment Holdings LLC - Equity Interest |
|
10/1/2018 |
|
|
Grammer Investment Holdings LLC - Preferred Equity |
|
10/1/2018 |
|
|
ADT Pizza, LLC - Equity Interest |
|
10/29/2018 |
|
|
PP Ultimate Holdings B, LLC - Equity Interest |
|
12/20/2018 |
|
|
FCG Acquisitions, Inc. - Preferred equity |
|
1/24/2019 |
|
|
WCI-HSG HOLDCO, LLC - Preferred equity |
|
2/22/2019 |
|
(26) Assets or a portion thereof are pledged as collateral for the Citibank Revolving Credit Agreement. See Note 6 “Borrowings”.
(27) $29,952 of the total par amount for this security is at P+ 3.00%.
(28) $499 of the total par amount for this security is at P+ 3.00%.
See Notes to Consolidated Financial Statements
Bain Capital Specialty Finance, Inc.
Consolidated Schedule of Investments
As of December 31, 2018
|
Portfolio Company (4) |
|
Spread Above
|
|
Interest
|
|
Maturity
|
|
Principal/
|
|
Amortized Cost |
|
Fair Value |
|
|||
|
Investments and Cash Equivalents 172.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Investments 172.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Non-Controlled/Non-Affiliate Investments 142.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Corporate Fixed Income 3.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Corporate Bond 3.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Beverage, Food & Tobacco 0.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Hearthside Food Solutions, LLC |
|
— |
|
8.50 |
% |
6/1/2026 |
|
$ |
10,000,000 |
|
$ |
9,793,446 |
|
$ |
8,000,000 |
|
|
Total Beverage, Food & Tobacco |
|
|
|
|
|
|
|
|
|
9,793,446 |
|
8,000,000 |
|
|||
|
Consumer Goods: Non-Durable 0.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Kronos Acquisition Holdings Inc. |
|
— |
|
9.00 |
% |
8/15/2023 |
|
$ |
10,000,000 |
|
9,356,074 |
|
7,700,000 |
|
||
|
Total Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
9,356,074 |
|
7,700,000 |
|
|||
|
Containers, Packaging & Glass 0.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
BWAY Holding Company |
|
— |
|
7.25 |
% |
4/15/2025 |
|
$ |
10,000,000 |
|
9,755,474 |
|
9,012,500 |
|
||
|
Total Containers, Packaging & Glass |
|
|
|
|
|
|
|
|
|
9,755,474 |
|
9,012,500 |
|
|||
|
Utilities: Electric 1.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
CSVC Acquisition Corp |
|
— |
|
7.75 |
% |
6/15/2025 |
|
$ |
13,478,000 |
|
|
12,483,046 |
|
|
10,310,670 |
|
|
Total Utilities: Electric |
|
|
|
|
|
|
|
|
|
12,483,046 |
|
10,310,670 |
|
|||
|
Total Corporate Bond |
|
|
|
|
|
|
|
|
|
$ |
41,388,040 |
|
$ |
35,023,170 |
|
|
|
Total Corporate Fixed Income |
|
|
|
|
|
|
|
|
|
$ |
41,388,040 |
|
$ |
35,023,170 |
|
|
|
Corporate Debt 137.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Delayed Draw Term Loan 0.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Construction & Building 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Chase Industries, Inc. (3) (15) (21) |
|
L+ 4.00% |
|
6.82 |
% |
5/12/2025 |
|
$ |
199,183 |
|
181,857 |
|
169,235 |
|
||
|
Total Construction & Building |
|
|
|
|
|
|
|
|
|
181,857 |
|
169,235 |
|
|||
|
High Tech Industries 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Drilling Info Holdings, Inc. (2) (3) (5) (12) (18) (21) |
|
— |
|
— |
|
7/30/2025 |
|
$ |
— |
|
(7,201 |
) |
(13,302 |
) |
||
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
(7,201 |
) |
(13,302 |
) |
|||
|
Services: Business 0.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
AMCP Clean Acquisition Company, LLC (3) (12) (18) (21) |
|
L+ 4.25% |
|
6.93 |
% |
6/16/2025 |
|
$ |
1,489,192 |
|
1,482,756 |
|
1,432,122 |
|
||
|
Sovos Compliance, LLC (3) (15) (19) |
|
L+ 6.00% |
|
8.52 |
% |
3/1/2022 |
|
$ |
3,957,823 |
|
3,957,823 |
|
3,909,535 |
|
||
|
Total Services: Business |
|
|
|
|
|
|
|
|
|
5,440,579 |
|
5,341,657 |
|
|||
|
Telecommunications 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Horizon Telcom, Inc. (2) (3) (5) (12) (15) (19) (21) |
|
— |
|
— |
|
6/15/2023 |
|
$ |
— |
|
(19,383 |
) |
(26,069 |
) |
||
|
Total Telecommunications |
|
|
|
|
|
|
|
|
|
(19,383 |
) |
(26,069 |
) |
|||
|
Transportation: Cargo 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
ENC Holding Corporation (2) (3) (5) (18) |
|
— |
|
— |
|
5/30/2025 |
|
$ |
— |
|
(831 |
) |
(8,931 |
) |
||
|
Transportation: Cargo |
|
— |
|
— |
|
— |
|
— |
|
(831 |
) |
(8,931 |
) |
|||
|
Total Delayed Draw Term Loan |
|
|
|
|
|
|
|
|
|
$ |
5,595,021 |
|
$ |
5,462,590 |
|
|
|
First Lien Last Out Term Loan 2.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Environmental Industries 1.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Adler & Allan Group Limited (6) (17) (19) (21) (22) |
|
GBP LIBOR+ 8.25% (2% PIK) |
|
9.14 |
% |
9/30/2022 |
|
£ |
13,061,742 |
|
16,488,981 |
|
16,482,011 |
|
||
|
Total Environmental Industries |
|
|
|
|
|
|
|
|
|
16,488,981 |
|
16,482,011 |
|
|||
|
Healthcare & Pharmaceuticals 1.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Clinical Innovations, LLC (12) (15) (19) (21) (22) |
|
L+ 5.50% |
|
8.02 |
% |
10/17/2023 |
|
$ |
11,027,744 |
|
10,817,411 |
|
10,972,605 |
|
||
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
10,817,411 |
|
10,972,605 |
|
|||
|
Total First Lien Last Out Term Loan |
|
|
|
|
|
|
|
|
|
$ |
27,306,392 |
|
$ |
27,454,616 |
|
|
|
First Lien Senior Secured Loan 103.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aerospace & Defense 5.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Forming & Machining Industries Inc. (12) (18) (21) |
|
L+ 4.25% |
|
6.85 |
% |
10/9/2025 |
|
$ |
14,937,269 |
|
14,863,280 |
|
14,713,210 |
|
||
|
Novetta, LLC (12) (15) |
|
L+ 5.00% |
|
7.53 |
% |
10/17/2022 |
|
$ |
3,814,708 |
|
3,750,386 |
|
3,738,414 |
|
||
|
Salient CRGT, Inc. (12) (15) (19) (21) |
|
L+ 5.75% |
|
8.27 |
% |
2/28/2022 |
|
$ |
13,086,496 |
|
13,155,083 |
|
12,890,199 |
|
||
|
StandardAero Aviation Holdings, Inc. (12) (15) (21) |
|
L+ 3.75% |
|
6.27 |
% |
7/7/2022 |
|
$ |
19,770,921 |
|
19,869,616 |
|
19,583,097 |
|
||
|
WP CPP Holdings, LLC. (12) (15) (21) |
|
L+ 3.75% |
|
6.28 |
% |
4/30/2025 |
|
$ |
4,715,025 |
|
4,704,012 |
|
4,561,787 |
|
||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
56,342,377 |
|
55,486,707 |
|
|||
|
Automotive 2.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
CST Buyer Company (12) (15) (19) |
|
L+ 5.00% |
|
7.52 |
% |
3/1/2023 |
|
$ |
9,309,556 |
|
9,208,345 |
|
9,309,556 |
|
||
|
OEConnection LLC (12) (15) (21) |
|
L+ 4.00% |
|
6.53 |
% |
11/22/2024 |
|
$ |
14,078,908 |
|
14,009,520 |
|
13,762,133 |
|
|
|
Total Automotive |
|
|
|
|
|
|
|
|
|
23,217,865 |
|
23,071,689 |
|
||
|
Banking 1.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Transaction Network Services, Inc. (15) (21) |
|
L+ 4.00% |
|
6.71 |
% |
8/14/2022 |
|
$ |
13,393,649 |
|
13,259,712 |
|
13,234,599 |
|
|
|
Total Banking |
|
|
|
|
|
|
|
|
|
13,259,712 |
|
13,234,599 |
|
||
|
Beverage, Food & Tobacco 2.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
GOBP Holdings, Inc. (12) (18) (21) |
|
L+ 3.75% |
|
6.55 |
% |
10/22/2025 |
|
$ |
16,632,463 |
|
16,621,045 |
|
16,216,651 |
|
|
|
NPC International, Inc. (15) (21) |
|
L+ 3.50% |
|
6.02 |
% |
4/19/2024 |
|
$ |
4,987,342 |
|
5,020,452 |
|
4,675,633 |
|
|
|
Total Beverage, Food & Tobacco |
|
|
|
|
|
|
|
|
|
21,641,497 |
|
20,892,284 |
|
||
|
Capital Equipment 2.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Dorner Manufacturing Corp. (12) (15) (19) |
|
L+ 5.75% |
|
8.55 |
% |
3/15/2023 |
|
$ |
7,985,580 |
|
7,878,378 |
|
7,985,580 |
|
|
|
DXP Enterprises, Inc. (6) (12) (15) |
|
L+ 4.75% |
|
7.27 |
% |
8/29/2023 |
|
$ |
5,177,916 |
|
5,133,782 |
|
5,158,499 |
|
|
|
Wilsonart LLC (12) (15) (21) |
|
L+ 3.25% |
|
6.06 |
% |
12/19/2023 |
|
$ |
15,393,418 |
|
15,438,069 |
|
14,777,681 |
|
|
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
28,450,229 |
|
27,921,760 |
|
||
|
Chemicals, Plastics & Rubber 1.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
ASP Chromaflo Intermediate Holdings, Inc. (15) (21) |
|
L+ 3.50% |
|
6.02 |
% |
11/20/2023 |
|
$ |
504,839 |
|
503,053 |
|
493,480 |
|
|
|
ASP Chromaflo Intermediate Holdings, Inc. (6) (15) (21) |
|
L+ 3.50% |
|
6.02 |
% |
11/20/2023 |
|
$ |
656,452 |
|
654,129 |
|
641,681 |
|
|
|
Niacet b.v. (6) (15) (19) (21) |
|
EURIBOR+ 4.50% |
|
5.50 |
% |
2/1/2024 |
|
€ |
3,777,239 |
|
4,044,191 |
|
4,304,065 |
|
|
|
Niacet Corporation (12) (15) (19) |
|
L+ 4.50% |
|
7.02 |
% |
2/1/2024 |
|
$ |
2,172,611 |
|
2,155,584 |
|
2,161,748 |
|
|
|
Plaskolite, Inc. (15) (19) (21) |
|
L+ 4.25% |
|
6.69 |
% |
12/15/2025 |
|
$ |
12,030,477 |
|
11,789,867 |
|
11,910,172 |
|
|
|
Total Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
19,146,824 |
|
19,511,146 |
|
||
|
Construction & Building 4.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Bolt Infrastructure Merger Sub, Inc. (12) (15) |
|
L+ 3.50% |
|
6.02 |
% |
6/21/2024 |
|
$ |
2,670,423 |
|
2,661,781 |
|
2,617,014 |
|
|
|
Chase Industries, Inc. (12) (15) (21) |
|
L+ 4.00% |
|
6.61 |
% |
5/11/2025 |
|
$ |
11,921,048 |
|
11,862,535 |
|
11,825,679 |
|
|
|
Crown Subsea (12) (18) (21) |
|
L+ 6.00% |
|
8.35 |
% |
11/2/2025 |
|
$ |
13,400,000 |
|
13,201,050 |
|
12,931,000 |
|
|
|
Regan Development Holdings Limited (6) (17) (19) |
|
EURIBOR+ 7.00% |
|
7.50 |
% |
4/18/2022 |
|
€ |
2,556,609 |
|
2,785,426 |
|
2,927,829 |
|
|
|
Regan Development Holdings Limited (6) (17) (19) |
|
EURIBOR+ 7.00% |
|
7.50 |
% |
4/18/2022 |
|
€ |
7,759,873 |
|
8,329,888 |
|
8,886,607 |
|
|
|
Regan Development Holdings Limited (6) (17) (19) |
|
EURIBOR+ 7.00% |
|
7.50 |
% |
4/18/2022 |
|
€ |
828,924 |
|
941,409 |
|
949,283 |
|
|
|
Total Construction & Building |
|
|
|
|
|
|
|
|
|
39,782,089 |
|
40,137,412 |
|
||
|
Consumer Goods: Durable 1.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
New Milani Group LLC (12) (15) (19) (21) |
|
L+ 4.25% |
|
6.77 |
% |
6/6/2024 |
|
$ |
17,273,200 |
|
17,113,611 |
|
17,273,200 |
|
|
|
Total Consumer Goods: Durable |
|
|
|
|
|
|
|
|
|
17,113,611 |
|
17,273,200 |
|
||
|
Consumer Goods: Non-Durable 5.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
FineLine Technologies, Inc. (12) (15) (19) (21) |
|
L+ 4.25% |
|
7.06 |
% |
11/2/2022 |
|
$ |
31,703,107 |
|
31,465,508 |
|
31,544,591 |
|
|
|
Kronos Acquisition Holdings Inc. (12) (15) (21) |
|
L+ 4.00% |
|
6.52 |
% |
5/15/2023 |
|
$ |
13,181,476 |
|
13,142,079 |
|
12,522,403 |
|
|
|
MND Holdings III Corp (15) (19) (21) |
|
L+ 3.50% |
|
6.30 |
% |
6/19/2024 |
|
$ |
13,766,864 |
|
13,815,431 |
|
13,560,361 |
|
|
|
Total Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
58,423,018 |
|
57,627,355 |
|
||
|
Containers, Packaging & Glass 3.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
BWAY Holding Company (12) (18) (21) |
|
L+ 3.25% |
|
5.66 |
% |
4/3/2024 |
|
$ |
12,812,406 |
|
12,836,361 |
|
12,099,716 |
|
|
|
Technimark LLC (12) (18) |
|
L+ 3.75% |
|
6.27 |
% |
8/8/2025 |
|
$ |
2,826,456 |
|
2,823,098 |
|
2,784,059 |
|
|
|
Terminator Bidco AS (6) (18) (19) (21) |
|
L+ 5.00% |
|
7.80 |
% |
5/22/2022 |
|
$ |
15,100,000 |
|
14,798,247 |
|
14,798,000 |
|
|
|
Total Containers, Packaging & Glass |
|
|
|
|
|
|
|
|
|
30,457,706 |
|
29,681,775 |
|
||
|
Energy: Electricity 2.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Infinite Electronics International Inc. (12) (18) (19) (21) |
|
L+ 4.00% |
|
6.52 |
% |
7/2/2025 |
|
$ |
19,952,996 |
|
19,938,102 |
|
19,853,231 |
|
|
|
Total Energy: Electricity |
|
|
|
|
|
|
|
|
|
19,938,102 |
|
19,853,231 |
|
||
|
Energy: Oil & Gas 3.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Blackbrush Oil & Gas, L.P. (12) (15) (21) |
|
L+ 8.00% |
|
10.89 |
% |
2/9/2024 |
|
$ |
31,200,000 |
|
30,674,839 |
|
30,264,000 |
|
|
|
Total Energy: Oil & Gas |
|
|
|
|
|
|
|
|
|
30,674,839 |
|
30,264,000 |
|
||
|
FIRE: Finance 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Badger Merger Sub, Inc. (12) (18) |
|
L+ 3.75% |
|
6.54 |
% |
9/12/2025 |
|
$ |
3,641,777 |
|
3,623,568 |
|
3,559,837 |
|
|
|
Total FIRE: Finance |
|
|
|
|
|
|
|
|
|
3,623,568 |
|
3,559,837 |
|
||
|
FIRE: Insurance 2.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Alliant Holdings Intermediate, LLC (12) (18) (21) |
|
L+ 2.75% |
|
5.21 |
% |
5/9/2025 |
|
$ |
16,598,005 |
|
16,650,414 |
|
15,734,908 |
|
|
|
Wink Holdco, Inc. (12) (15) (21) |
|
L+ 3.00% |
|
5.52 |
% |
12/2/2024 |
|
$ |
12,567,792 |
|
12,514,187 |
|
11,939,402 |
|
|
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
29,164,601 |
|
27,674,310 |
|
||
|
FIRE: Real Estate 1.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Spectre (Carrisbrook House) Limited (6) (15) (19) |
|
EURIBOR+ 7.50% |
|
8.50 |
% |
8/9/2021 |
|
€ |
9,300,000 |
|
10,713,530 |
|
10,650,360 |
|
|
|
Total FIRE: Real Estate |
|
|
|
|
|
|
|
|
|
10,713,530 |
|
10,650,360 |
|
||
|
Forest Products & Paper 0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Solenis International LLC (12) (18) (21) |
|
L+ 4.00% |
|
6.80 |
% |
6/26/2025 |
|
$ |
7,334,513 |
|
7,279,504 |
|
7,082,389 |
|
|
|
Total Forest Products & Paper |
|
|
|
|
|
|
|
|
|
7,279,504 |
|
7,082,389 |
|
||
|
Healthcare & Pharmaceuticals 3.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Datix Bidco Limited (6) (19) (21) |
|
BBSW+ 4.50% |
|
6.57 |
% |
4/28/2025 |
|
AUD |
4,211,615 |
|
3,197,488 |
|
2,921,747 |
|
|
|
Drive DeVilbiss (12) (15) (21) |
|
L+ 5.50% |
|
8.30 |
% |
1/3/2023 |
|
$ |
8,528,844 |
|
7,867,168 |
|
7,398,772 |
|
|
|
Great Expressions Dental Centers PC (12) (15) (19) |
|
L+ 4.75% |
|
7.63 |
% |
9/28/2023 |
|
$ |
7,982,265 |
|
7,893,662 |
|
7,862,531 |
|
|
|
Island Medical Management Holdings, LLC (15) (19) (21) |
|
L+ 6.50% |
|
9.02 |
% |
9/1/2022 |
|
$ |
9,267,544 |
|
9,157,984 |
|
8,618,816 |
|
|
|
U.S. Anesthesia Partners, Inc. (12) (15) (21) |
|
L+ 3.00% |
|
5.52 |
% |
6/24/2024 |
|
$ |
4,641,369 |
|
4,572,533 |
|
4,458,035 |
|
|
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
32,688,835 |
|
31,259,901 |
|
||
|
High Tech Industries 17.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
CMI Marketing Inc. (12) (15) (19) (21) |
|
L+ 4.75% |
|
7.27 |
% |
5/24/2024 |
|
$ |
15,410,560 |
|
15,271,043 |
|
15,410,560 |
|
|
|
Drilling Info Holdings, Inc. (12) (18) (21) |
|
L+ 4.25% |
|
6.77 |
% |
7/30/2025 |
|
$ |
20,178,083 |
|
20,094,063 |
|
20,102,415 |
|
|
|
Elo Touch Solutions, Inc. (18) (21) |
|
L+ 6.50% |
|
9.28 |
% |
12/7/2025 |
|
$ |
18,942,743 |
|
17,995,606 |
|
18,256,069 |
|
|
|
Lighthouse Network, LLC (12) (15) (19) (21) |
|
L+ 4.50% |
|
7.03 |
% |
12/2/2024 |
|
$ |
16,088,382 |
|
16,023,630 |
|
16,007,940 |
|
|
|
Netsmart Technologies, Inc. (12) (15) (21) |
|
L+ 3.75% |
|
6.27 |
% |
4/19/2023 |
|
$ |
21,622,636 |
|
21,657,213 |
|
21,352,353 |
|
|
|
Park Place Technologies (12) (15) (21) |
|
L+ 4.00% |
|
6.52 |
% |
3/31/2025 |
|
$ |
10,324,227 |
|
10,293,367 |
|
10,117,743 |
|
|
|
Qlik Technologies (12) (15) (21) |
|
L+ 3.50% |
|
5.94 |
% |
4/26/2024 |
|
$ |
22,724,748 |
|
22,666,315 |
|
22,014,599 |
|
|
|
SolarWinds Holdings, Inc. (18) (21) |
|
L+ 2.75% |
|
5.27 |
% |
2/5/2024 |
|
$ |
14,763,095 |
|
14,844,760 |
|
14,227,933 |
|
|
|
VPARK BIDCO AB (6) (16) (19) (21) |
|
CIBOR+ 5.00% |
|
5.75 |
% |
3/8/2025 |
|
DKK |
56,999,385 |
|
9,134,484 |
|
8,742,907 |
|
|
|
VPARK BIDCO AB (6) (16) (19) (21) |
|
NIBOR+ 5.00% |
|
6.28 |
% |
3/8/2025 |
|
NOK |
74,019,870 |
|
9,174,183 |
|
8,557,804 |
|
|
|
Zywave, Inc. (12) (15) (19) (21) |
|
L+ 5.00% |
|
7.52 |
% |
11/17/2022 |
|
$ |
17,549,498 |
|
17,457,898 |
|
17,549,498 |
|
|
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
174,612,562 |
|
172,339,821 |
|
||
|
Hotel, Gaming & Leisure 6.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Aimbridge Hospitality LP (15) (19) (21) |
|
L+ 5.00% |
|
7.52 |
% |
6/22/2022 |
|
$ |
25,584,242 |
|
25,250,600 |
|
25,584,242 |
|
|
|
Aimbridge Hospitality LP (12) (15) (19) (21) |
|
L+ 5.00% |
|
7.52 |
% |
6/22/2022 |
|
$ |
4,264,055 |
|
4,206,019 |
|
4,264,055 |
|
|
|
Captain D’s LLC (12) (15) (19) (21) |
|
L+ 4.50% |
|
7.30 |
% |
12/15/2023 |
|
$ |
13,388,719 |
|
13,269,421 |
|
13,154,417 |
|
|
|
Quidditch Acquisition, Inc. (12) (15) (19) (21) |
|
L+ 7.00% |
|
9.47 |
% |
3/21/2025 |
|
$ |
15,903,406 |
|
15,859,074 |
|
15,823,889 |
|
|
|
Tacala Investment Corp. (12) (18) (21) |
|
L+ 3.25% |
|
5.77 |
% |
1/31/2025 |
|
$ |
3,503,871 |
|
3,450,624 |
|
3,383,425 |
|
|
|
Total Hotel, Gaming & Leisure |
|
|
|
|
|
|
|
|
|
62,035,738 |
|
62,210,028 |
|
||
|
Media: Advertising, Printing & Publishing 1.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Cambium Learning Group, Inc. (12) (18) (21) |
|
L+ 4.50% |
|
7.02 |
% |
12/18/2025 |
|
$ |
12,325,321 |
|
11,709,055 |
|
11,770,682 |
|
|
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
11,709,055 |
|
11,770,682 |
|
||
|
Media: Broadcasting & Subscription 2.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Micro Holding Corp. (12) (18) (21) |
|
L+ 3.75% |
|
6.25 |
% |
9/13/2024 |
|
$ |
21,931,455 |
|
21,868,277 |
|
20,944,540 |
|
|
|
Total Media: Broadcasting & Subscription |
|
|
|
|
|
|
|
|
|
21,868,277 |
|
20,944,540 |
|
||
|
Media: Diversified & Production 3.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Getty Images, Inc. (21) (26) |
|
L+ 3.50% |
|
6.02 |
% |
10/18/2019 |
|
$ |
19,946,950 |
|
19,743,947 |
|
19,419,772 |
|
|
|
International Entertainment Investments Limited (6) (18) (19) (21) |
|
GBP LIBOR+ 4.75% |
|
5.65 |
% |
5/31/2023 |
|
£ |
8,685,518 |
|
10,619,969 |
|
11,070,561 |
|
|
|
Total Media: Diversified & Production |
|
|
|
|
|
|
|
|
|
30,363,916 |
|
30,490,333 |
|
||
|
Retail 2.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
CH Hold Corp. (12) (15) |
|
L+ 3.00% |
|
5.52 |
% |
2/1/2024 |
|
$ |
1,498,382 |
|
1,496,191 |
|
1,485,271 |
|
|
|
CVS Holdings I, LP (12) (15) (21) |
|
L+ 2.75% |
|
5.28 |
% |
2/6/2025 |
|
$ |
14,912,375 |
|
14,892,976 |
|
14,166,756 |
|
|
|
Eyemart Express LLC (12) (15) (21) |
|
L+ 3.00% |
|
5.46 |
% |
8/5/2024 |
|
$ |
11,505,683 |
|
11,544,208 |
|
11,189,277 |
|
|
|
Total Retail |
|
|
|
|
|
|
|
|
|
27,933,375 |
|
26,841,304 |
|
||
|
Services: Business 12.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Advantage Sales & Marketing Inc. (12) (15) (21) |
|
L+ 3.25% |
|
5.77 |
% |
7/23/2021 |
|
$ |
15,743,193 |
|
15,500,361 |
|
13,972,084 |
|
|
|
AMCP Clean Acquisition Company, LLC (12) (18) (21) |
|
L+ 4.25% |
|
7.05 |
% |
6/16/2025 |
|
$ |
15,773,321 |
|
15,724,960 |
|
15,536,721 |
|
|
|
Comet Bidco Limited (6) (18) (21) |
|
GBP LIBOR+ 5.25% |
|
5.98 |
% |
9/30/2024 |
|
£ |
10,260,870 |
|
13,080,675 |
|
12,718,845 |
|
|
|
Lakeland Tours, LLC (12) (15) |
|
L+ 4.00% |
|
6.79 |
% |
12/16/2024 |
|
$ |
2,887,182 |
|
2,878,034 |
|
2,820,416 |
|
|
|
LegalZoom.com, Inc. (18) (19) (21) |
|
L+ 4.50% |
|
7.00 |
% |
11/21/2024 |
|
$ |
15,838,640 |
|
15,735,468 |
|
15,601,060 |
|
|
|
New Insight Holdings, Inc. (12) (15) (21) |
|
L+ 5.50% |
|
8.02 |
% |
12/20/2024 |
|
$ |
20,529,017 |
|
20,041,341 |
|
20,349,388 |
|
|
|
Sovos Compliance, LLC (12) (15) (19) |
|
L+ 6.00% |
|
8.52 |
% |
3/1/2022 |
|
$ |
8,600,804 |
|
8,540,782 |
|
8,514,796 |
|
|
|
Valet Waste Holdings, Inc. (12) (18) (21) |
|
L+ 4.00% |
|
6.52 |
% |
9/29/2025 |
|
$ |
28,761,340 |
|
28,686,319 |
|
28,401,823 |
|
|
|
XO Management Holding Inc. (18) (19) (21) |
|
L+ 5.75% |
|
8.49 |
% |
12/4/2021 |
|
$ |
12,354,923 |
|
11,490,079 |
|
11,490,079 |
|
|
|
Total Services: Business |
|
|
|
|
|
|
|
|
|
131,678,019 |
|
129,405,212 |
|
||
|
Services: Consumer 2.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
GI Chill Acquisition LLC (12) (18) (19) (21) |
|
L+ 4.00% |
|
6.80 |
% |
8/6/2025 |
|
$ |
11,463,557 |
|
11,441,001 |
|
11,463,557 |
|
|
|
Travel Leaders Group, LLC (12) (18) |
|
L+ 4.00% |
|
6.46 |
% |
1/25/2024 |
|
$ |
527,968 |
|
526,724 |
|
524,008 |
|
|
|
Trident LS Merger Sub Corp (12) (18) |
|
L+ 3.00% |
|
5.52 |
% |
5/1/2025 |
|
$ |
4,185,675 |
|
4,177,322 |
|
4,101,962 |
|
|
|
WeddingWire, Inc. (18) (21) |
|
L+ 4.50% |
|
7.29 |
% |
12/19/2025 |
|
$ |
13,217,871 |
|
13,250,531 |
|
13,019,602 |
|
|
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
29,395,578 |
|
29,109,129 |
|
||
|
Telecommunications 1.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Horizon Telcom, Inc. (12) (15) (19) (21) |
|
L+ 4.50% |
|
6.85 |
% |
6/15/2023 |
|
$ |
13,868,690 |
|
13,711,631 |
|
13,660,659 |
|
|
|
Masergy Holdings, Inc. (15) (21) |
|
L+ 3.25% |
|
6.05 |
% |
12/15/2023 |
|
$ |
686,114 |
|
683,713 |
|
663,816 |
|
|
|
Total Telecommunications |
|
|
|
|
|
|
|
|
|
14,395,344 |
|
14,324,475 |
|
||
|
Transportation: Cargo 4.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
ENC Holding Corporation (12) (18) (27) |
|
L+ 4.00% |
|
6.80 |
% |
5/30/2025 |
|
$ |
9,774,591 |
|
9,760,848 |
|
9,627,972 |
|
|
|
Grammer Purchaser, Inc. (12) (15) (19) (21) |
|
L+ 4.75% |
|
7.27 |
% |
9/30/2024 |
|
$ |
10,500,000 |
|
10,332,000 |
|
10,342,500 |
|
|
|
PS HoldCo, LLC (12) (15) (21) |
|
L+ 4.75% |
|
7.28 |
% |
3/13/2025 |
|
$ |
21,458,545 |
|
21,457,647 |
|
20,922,082 |
|
|
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
41,550,495 |
|
40,892,554 |
|
||
|
Wholesale 6.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
PetroChoice Holdings, Inc. (15) (19) (21) |
|
L+ 5.00% |
|
7.53 |
% |
8/22/2022 |
|
$ |
3,638,290 |
|
3,603,010 |
|
3,601,907 |
|
|
|
PT Holdings, LLC (12) (15) (21) |
|
L+ 4.00% |
|
6.80 |
% |
12/9/2024 |
|
$ |
21,671,240 |
|
21,630,543 |
|
21,183,638 |
|
|
|
Specialty Building Products Holdings, LLC (12) (18) (19) (21) |
|
L+ 5.75% |
|
8.27 |
% |
10/1/2025 |
|
$ |
16,944,043 |
|
16,841,132 |
|
16,435,721 |
|
|
|
SRS Distribution Inc. (18) (21) |
|
L+ 3.25% |
|
5.77 |
% |
5/23/2025 |
|
$ |
20,000,000 |
|
19,505,319 |
|
18,725,000 |
|
||
|
Total Wholesale |
|
|
|
|
|
|
|
|
|
61,580,004 |
|
59,946,266 |
|
|||
|
Total First Lien Senior Secured Loan |
|
|
|
|
|
|
|
|
|
$ |
1,049,040,270 |
|
$ |
1,033,456,299 |
|
|
|
Revolver 1.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aerospace & Defense 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
API Technologies Corp. (2) (3) (5) (15) (19) |
|
— |
|
— |
|
4/22/2024 |
|
$ |
— |
|
(46,293 |
) |
(10,458 |
) |
||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
(46,293 |
) |
(10,458 |
) |
|||
|
Automotive 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
CST Buyer Company (3) (5) (15) (19) |
|
— |
|
— |
|
3/1/2023 |
|
$ |
— |
|
(9,348 |
) |
— |
|
||
|
Total Automotive |
|
|
|
|
|
|
|
|
|
(9,348 |
) |
— |
|
|||
|
Capital Equipment 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Dorner Manufacturing Corp. (3) (15) (19) |
|
P+ 4.75% |
|
10.00 |
% |
3/15/2022 |
|
$ |
54,944 |
|
37,262 |
|
54,944 |
|
||
|
Tidel Engineering, L.P. (3) (15) (19) |
|
— |
|
— |
|
3/1/2023 |
|
$ |
— |
|
— |
|
— |
|
||
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
37,262 |
|
54,944 |
|
|||
|
Chemicals, Plastics & Rubber 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
AP Plastics Group, LLC (3) (15) (19) |
|
— |
|
— |
|
8/1/2021 |
|
$ |
— |
|
— |
|
— |
|
||
|
PRCC Holdings, Inc. (3) (15) (19) |
|
— |
|
— |
|
2/1/2021 |
|
$ |
— |
|
— |
|
— |
|
||
|
Total Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
— |
|
— |
|
|||
|
Construction & Building 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Profile Products LLC (2) (3) (5) (15) (19) |
|
— |
|
— |
|
12/20/2024 |
|
$ |
— |
|
(76,251 |
) |
(76,668 |
) |
||
|
Total Construction & Building |
|
|
|
|
|
|
|
|
|
(76,251 |
) |
(76,668 |
) |
|||
|
Consumer Goods: Durable 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Home Franchise Concepts, Inc. (2) (3) (5) (15) (19) |
|
— |
|
— |
|
7/9/2024 |
|
$ |
— |
|
(16,299 |
) |
(25,298 |
) |
||
|
Stanton Carpet Corp. (3) (15) (19) |
|
— |
|
— |
|
11/21/2022 |
|
$ |
— |
|
— |
|
— |
|
||
|
Total Consumer Goods: Durable |
|
|
|
|
|
|
|
|
|
(16,299 |
) |
(25,298 |
) |
|||
|
Consumer Goods: Non-Durable 0.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
FineLine Technologies, Inc. (3) (15) (19) |
|
L+ 4.25% |
|
6.79 |
% |
11/2/2021 |
|
$ |
458,627 |
|
425,135 |
|
445,523 |
|
||
|
Solaray, LLC (3) (15) (19) (23) |
|
L+ 4.50% |
|
7.69 |
% |
9/9/2022 |
|
$ |
5,666,800 |
|
5,605,006 |
|
5,666,800 |
|
||
|
Total Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
6,030,141 |
|
6,112,323 |
|
|||
|
Energy: Oil & Gas 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Amspec Services, Inc. (3) (15) (19) |
|
P+ 3.75% |
|
9.25 |
% |
7/2/2024 |
|
$ |
931,498 |
|
865,976 |
|
931,498 |
|
||
|
Total Energy: Oil & Gas |
|
|
|
|
|
|
|
|
|
865,976 |
|
931,498 |
|
|||
|
FIRE: Insurance 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Margaux Acquisition, Inc. (3) (15) (19) |
|
P+ 5.00% |
|
10.50 |
% |
12/19/2024 |
|
$ |
615,532 |
|
558,428 |
|
558,082 |
|
||
|
Margaux UK Finance Limited (2) (3) (5) (6) (19) |
|
— |
|
— |
|
12/19/2024 |
|
£ |
— |
|
(12,551 |
) |
(12,719 |
) |
||
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
545,877 |
|
545,363 |
|
|||
|
Healthcare & Pharmaceuticals 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Clinical Innovations, LLC (3) (15) (19) (22) |
|
L+ 5.50% |
|
7.93 |
% |
10/17/2022 |
|
$ |
38,391 |
|
18,735 |
|
32,632 |
|
||
|
Datix Bidco Limited (2) (3) (5) (6) (18) (19) |
|
— |
|
— |
|
10/28/2024 |
|
£ |
— |
|
(25,173 |
) |
(18,593 |
) |
||
|
Great Expressions Dental Centers PC (3) (13) (15) (19) |
|
L+ 4.75% |
|
8.70 |
% |
9/28/2022 |
|
$ |
953,606 |
|
942,612 |
|
936,101 |
|
||
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
936,174 |
|
950,140 |
|
|||
|
High Tech Industries 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Caliper Software, Inc. (3) (18) (19) |
|
L+ 5.50% |
|
8.04 |
% |
11/30/2023 |
|
$ |
124,118 |
|
87,515 |
|
86,883 |
|
||
|
CMI Marketing Inc. (3) (5) (15) (19) |
|
— |
|
— |
|
5/24/2023 |
|
$ |
— |
|
(18,608 |
) |
— |
|
||
|
Element Buyer, Inc. (2) (3) (5) (15) (19) |
|
— |
|
— |
|
7/19/2024 |
|
$ |
— |
|
(59,017 |
) |
(31,876 |
) |
||
|
Zywave, Inc. (3) (15) (19) |
|
L+ 5.00% |
|
7.52 |
% |
11/17/2022 |
|
$ |
767,471 |
|
755,048 |
|
767,471 |
|
||
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
764,938 |
|
822,478 |
|
|||
|
Hotel, Gaming & Leisure 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aimbridge Hospitality LP (3) (5) (15) (19) |
|
— |
|
— |
|
6/22/2022 |
|
$ |
— |
|
(14,830 |
) |
— |
|
||
|
Captain D’s LLC (3) (15) (19) (24) |
|
L+ 4.50% |
|
8.15 |
% |
12/15/2023 |
|
$ |
788,361 |
|
772,975 |
|
755,771 |
|
||
|
Total Hotel, Gaming & Leisure |
|
|
|
|
|
|
|
|
|
758,145 |
|
755,771 |
|
|||
|
Media: Advertising, Printing & Publishing 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Ansira Holdings, Inc. (3) (15) (19) |
|
P+ 4.00% |
|
9.50 |
% |
12/20/2022 |
|
$ |
1,643,372 |
|
1,643,372 |
|
1,643,372 |
|
||
|
Cruz Bay Publishing (3) (15) (19) |
|
P+ 3.00% |
|
8.50 |
% |
6/6/2019 |
|
$ |
2,266,720 |
|
2,266,720 |
|
2,266,720 |
|
||
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
3,910,092 |
|
3,910,092 |
|
|||
|
Media: Diversified & Production 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Efficient Collaborative Retail Marketing Company, LLC (3) (15) (19) |
|
— |
|
— |
|
6/15/2022 |
|
$ |
— |
|
— |
|
— |
|
||
|
Total Media: Diversified & Production |
|
|
|
|
|
|
|
|
|
— |
|
— |
|
|||
|
Retail 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Batteries Plus Holding Corporation (3) (15) (19) |
|
— |
|
— |
|
7/6/2022 |
|
$ |
— |
|
— |
|
— |
|
||
|
Total Retail |
|
|
|
|
|
|
|
|
|
— |
|
— |
|
|||
|
Services: Business 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Sovos Compliance, LLC (2) (3) (5) (15) (19) |
|
— |
|
— |
|
3/1/2022 |
|
$ |
— |
|
(10,034 |
) |
(14,516 |
) |
||
|
TEI Holdings Inc. (3) (15) (19) |
|
P+ 5.00% |
|
10.50 |
% |
12/20/2022 |
|
$ |
708,350 |
|
708,350 |
|
665,849 |
|
||
|
Total Services: Business |
|
|
|
|
|
|
|
|
|
698,316 |
|
651,333 |
|
|||
|
Services: Consumer 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
McKissock, LLC (3) (15) (19) |
|
P+ 2.25% |
|
7.68 |
% |
8/5/2021 |
|
$ |
991,690 |
|
991,690 |
|
991,690 |
|
||
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
991,690 |
|
991,690 |
|
|||
|
Telecommunications 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Horizon Telcom, Inc. (2) (3) (15) (19) |
|
— |
|
— |
|
6/15/2023 |
|
$ |
— |
|
— |
|
(17,379 |
) |
||
|
Total Telecommunications |
|
|
|
|
|
|
|
|
|
— |
|
(17,379 |
) |
|||
|
Transportation: Cargo 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Grammer Purchaser, Inc. (3) (15) (18) (19) |
|
L+ 4.75% |
|
7.27 |
% |
9/30/2024 |
|
$ |
105,000 |
|
105,629 |
|
89,250 |
|
||
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
105,629 |
|
89,250 |
|
|||
|
Transportation: Consumer 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Direct Travel, Inc. (3) (15) (19) |
|
— |
|
— |
|
12/1/2021 |
|
$ |
— |
|
— |
|
— |
|
||
|
Total Transportation: Consumer |
|
|
|
|
|
|
|
|
|
— |
|
— |
|
|||
|
Wholesale 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Abracon Group Holding, LLC. (2) (3) (5) (15) (19) |
|
— |
|
— |
|
7/18/2024 |
|
$ |
— |
|
(39,405 |
) |
(28,334 |
) |
||
|
Aramsco, Inc. (3) (15) (19) |
|
L+ 5.25% |
|
7.77 |
% |
8/28/2024 |
|
$ |
225,787 |
|
177,175 |
|
132,650 |
|
||
|
Total Wholesale |
|
|
|
|
|
|
|
|
|
137,770 |
|
104,316 |
|
|||
|
Total Revolver |
|
|
|
|
|
|
|
|
|
$ |
15,633,819 |
|
$ |
15,789,395 |
|
|
|
Second Lien Senior Secured Loan 25.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aerospace & Defense 4.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Forming & Machining Industries Inc. (18) (19) (21) |
|
L+ 8.25% |
|
10.85 |
% |
10/9/2026 |
|
$ |
6,540,000 |
|
6,474,987 |
|
6,474,600 |
|
||
|
Jazz Acquisition, Inc. (15) (21) |
|
L+ 6.75% |
|
9.55 |
% |
6/20/2022 |
|
$ |
15,000,000 |
|
14,395,871 |
|
14,136,375 |
|
||
|
TECT Power Holdings, LLC (15) (19) (21) |
|
L+ 8.50% |
|
11.02 |
% |
12/27/2021 |
|
$ |
14,757,969 |
|
14,537,795 |
|
14,905,549 |
|
||
|
WP CPP Holdings, LLC. (12) (15) (21) |
|
L+ 7.75% |
|
10.28 |
% |
4/30/2026 |
|
$ |
11,723,622 |
|
11,608,238 |
|
11,533,113 |
|
||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
47,016,891 |
|
47,049,637 |
|
|||
|
Automotive 0.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
OEConnection LLC (15) (19) (21) |
|
L+ 8.00% |
|
10.53 |
% |
11/24/2025 |
|
$ |
6,312,688 |
|
6,273,929 |
|
6,265,343 |
|
||
|
Total Automotive |
|
|
|
|
|
|
|
|
|
6,273,929 |
|
6,265,343 |
|
|||
|
Capital Equipment 1.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
EXC Holdings III Corp. (12) (15) (21) |
|
L+ 7.50% |
|
9.85 |
% |
12/1/2025 |
|
$ |
8,240,489 |
|
8,254,043 |
|
7,869,667 |
|
||
|
Velvet Acquisition B.V. (6) (18) (19) (21) |
|
EURIBOR+ 8.00% |
|
8.00 |
% |
4/17/2026 |
|
€ |
6,013,072 |
|
7,312,569 |
|
6,949,523 |
|
||
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
15,566,612 |
|
14,819,190 |
|
|||
|
Energy: Electricity 0.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Infinite Electronics International Inc. (18) (19) (21) |
|
L+ 8.00% |
|
10.52 |
% |
7/2/2026 |
|
$ |
2,480,000 |
|
2,430,400 |
|
2,430,400 |
|
||
|
Total Energy: Electricity |
|
|
|
|
|
|
|
|
|
2,430,400 |
|
2,430,400 |
|
|||
|
Forest Products & Paper 1.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Solenis International LLC (18) (21) |
|
L+ 8.50% |
|
11.21 |
% |
6/26/2026 |
|
$ |
15,600,616 |
|
15,235,022 |
|
14,820,585 |
|
||
|
Total Forest Products & Paper |
|
|
|
|
|
|
|
|
|
15,235,022 |
|
14,820,585 |
|
|||
|
FIRE: Insurance 1.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Wink Holdco, Inc. (15) (21) |
|
L+ 6.75% |
|
9.28 |
% |
12/1/2025 |
|
$ |
13,637,543 |
|
13,577,886 |
|
12,887,479 |
|
||
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
13,577,886 |
|
12,887,479 |
|
|||
|
Healthcare & Pharmaceuticals 5.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Concentra Inc. (12) (15) (21) |
|
L+ 6.50% |
|
8.88 |
% |
6/1/2023 |
|
$ |
14,104,833 |
|
13,861,386 |
|
14,051,940 |
|
||
|
Datix Bidco Limited (6) (18) (19) (21) |
|
GBP LIBOR+ 7.75% |
|
8.68 |
% |
4/27/2026 |
|
£ |
12,133,975 |
|
16,272,151 |
|
15,311,305 |
|
||
|
TecoStar Holdings, Inc. (12) (15) (19) (21) |
|
L+ 8.50% |
|
10.89 |
% |
11/1/2024 |
|
$ |
9,471,942 |
|
9,262,563 |
|
9,471,942 |
|
||
|
U.S. Anesthesia Partners, Inc. (12) (15) (19) (21) |
|
L+ 7.25% |
|
9.77 |
% |
6/23/2025 |
|
$ |
16,520,000 |
|
16,312,901 |
|
16,520,000 |
|
||
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
55,709,001 |
|
55,355,187 |
|
|||
|
High Tech Industries 3.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Everest Bidco (6) (15) (19) (21) |
|
GBP LIBOR+ 7.50% |
|
8.50 |
% |
7/3/2026 |
|
£ |
10,216,216 |
|
13,059,928 |
|
12,630,942 |
|
||
|
nThrive, Inc. (15) (19) (21) |
|
L+ 9.75% |
|
12.27 |
% |
4/20/2023 |
|
$ |
8,000,000 |
|
7,982,464 |
|
7,760,000 |
|
||
|
Netsmart Technologies, Inc. (15) (19) (21) |
|
L+ 7.50% |
|
10.03 |
% |
10/19/2023 |
|
$ |
2,749,000 |
|
2,749,000 |
|
2,735,255 |
|
||
|
Park Place Technologies (15) (21) |
|
L+ 8.00% |
|
10.52 |
% |
3/30/2026 |
|
$ |
6,732,980 |
|
6,683,929 |
|
6,598,321 |
|
||
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
30,475,321 |
|
29,724,518 |
|
|||
|
Hotel, Gaming & Leisure 1.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
K-Mac Holdings Corp. (12) (18) |
|
L+ 6.75% |
|
9.25 |
% |
3/16/2026 |
|
$ |
3,200,000 |
|
3,192,581 |
|
3,024,000 |
|
||
|
NPC International, Inc. (12) (15) (21) |
|
L+ 7.50% |
|
10.02 |
% |
4/18/2025 |
|
$ |
9,158,667 |
|
9,193,992 |
|
8,654,940 |
|
||
|
Tacala Investment Corp. (18) (21) |
|
L+ 7.00% |
|
9.52 |
% |
1/30/2026 |
|
$ |
6,323,404 |
|
6,305,874 |
|
6,038,851 |
|
||
|
Total Hotel, Gaming & Leisure |
|
|
|
|
|
|
|
|
|
18,692,447 |
|
17,717,791 |
|
|||
|
Media: Advertising, Printing & Publishing 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Learfield Communications LLC (12) (15) (19) (21) |
|
L+ 7.25% |
|
9.78 |
% |
12/2/2024 |
|
$ |
4,050,000 |
|
4,016,231 |
|
4,050,000 |
|
||
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
4,016,231 |
|
4,050,000 |
|
|||
|
Retail 1.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
CH Hold Corp. (12) (15) |
|
L+ 7.25% |
|
9.77 |
% |
2/3/2025 |
|
$ |
1,215,470 |
|
1,210,942 |
|
1,209,392 |
|
||
|
CVS Holdings I, LP (15) (19) (21) |
|
L+ 6.75% |
|
9.28 |
% |
2/6/2026 |
|
$ |
14,109,824 |
|
14,119,690 |
|
13,333,784 |
|
||
|
Total Retail |
|
|
|
|
|
|
|
|
|
15,330,632 |
|
14,543,176 |
|
|||
|
Services: Consumer 1.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Pearl Intermediate Parent LLC (18) (21) |
|
L+ 6.25% |
|
8.75 |
% |
2/13/2026 |
|
$ |
2,570,811 |
|
2,589,592 |
|
2,544,332 |
|
||
|
Trident LS Merger Sub Corp (12) (18) |
|
L+ 7.50% |
|
10.02 |
% |
5/1/2026 |
|
$ |
2,246,470 |
|
2,225,404 |
|
2,221,197 |
|
||
|
WeddingWire, Inc. (18) (21) |
|
L+ 8.25% |
|
11.04 |
% |
12/21/2026 |
|
$ |
6,186,667 |
|
6,124,800 |
|
6,155,733 |
|
||
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
10,939,796 |
|
10,921,262 |
|
|||
|
Telecommunications 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Masergy Holdings, Inc. (15) |
|
L+ 7.50% |
|
10.31 |
% |
12/16/2024 |
|
$ |
857,143 |
|
863,323 |
|
840,000 |
|
||
|
Total Telecommunications |
|
|
|
|
|
|
|
|
|
863,323 |
|
840,000 |
|
|||
|
Transportation: Cargo 2.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Direct ChassisLink, Inc. (12) (18) (19) (21) |
|
L+ 6.00% |
|
8.53 |
% |
6/15/2023 |
|
$ |
27,685,436 |
|
27,630,868 |
|
26,716,446 |
|
||
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
27,630,868 |
|
26,716,446 |
|
|||
|
Total Second Lien Senior Secured Loan |
|
|
|
|
|
|
|
|
|
$ |
263,758,359 |
|
$ |
258,141,014 |
|
|
|
Subordinated Debt 4.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Healthcare & Pharmaceuticals 2.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Genesis Supply Acquisition Co. (19) |
|
— |
|
9.50 |
% |
4/23/2021 |
|
$ |
25,000,000 |
|
25,000,000 |
|
25,000,000 |
|
||
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
25,000,000 |
|
25,000,000 |
|
|||
|
Transportation: Cargo 1.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Omni Logistics, LLC (15) (19) (21) |
|
L+ 11.50% |
|
14.02 |
% |
1/19/2024 |
|
$ |
15,000,000 |
|
14,710,860 |
|
14,625,000 |
|
||
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
14,710,860 |
|
14,625,000 |
|
|||
|
Total Subordinated Debt |
|
|
|
|
|
|
|
|
|
$ |
39,710,860 |
|
$ |
39,625,000 |
|
|
|
Total Corporate Debt |
|
|
|
|
|
|
|
|
|
$ |
1,401,044,721 |
|
$ |
1,379,928,914 |
|
|
|
Equity 0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Series A Preferred Units 0.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Healthcare & Pharmaceuticals 0.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
CB Titan Holdings, Inc. (14) (19) (25) |
|
— |
|
— |
|
— |
|
1,952,879 |
|
1,952,879 |
|
2,206,753 |
|
|||
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
1,952,879 |
|
2,206,753 |
|
|||
|
Total Series A Preferred Units |
|
|
|
|
|
|
|
|
|
1,952,879 |
|
2,206,753 |
|
|||
|
Equity Interest 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Construction & Building 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
PP Ultimate Holdings B, LLC (14) (19) (25) |
|
— |
|
— |
|
— |
|
1,352 |
|
1,351,900 |
|
1,352,000 |
|
|||
|
Total Construction & Building |
|
|
|
|
|
|
|
|
|
1,351,900 |
|
1,352,000 |
|
|||
|
High Tech Industries 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Impala Private Investments, LLC (14) (19) (25) |
|
— |
|
— |
|
— |
|
1,500,000 |
|
— |
|
126,232 |
|
|||
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
— |
|
126,232 |
|
|||
|
Transportation: Cargo 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Grammer Investment Holdings LLC (14) (19) (25) |
|
— |
|
— |
|
— |
|
600,000 |
|
600,000 |
|
600,000 |
|
|||
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
600,000 |
|
600,000 |
|
|||
|
Wholesale 0.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Abracon Group Holding, LLC. (14) (19) (25) |
|
— |
|
— |
|
— |
|
1,800 |
|
1,800,000 |
|
1,991,700 |
|
|||
|
Armor Group, LP (14) (19) (25) |
|
— |
|
— |
|
— |
|
10,119 |
|
1,011,905 |
|
1,008,662 |
|
|||
|
Total Wholesale |
|
|
|
|
|
|
|
|
|
2,811,905 |
|
3,000,362 |
|
|||
|
Total Equity Interest |
|
|
|
|
|
|
|
|
|
$ |
4,763,805 |
|
$ |
5,078,594 |
|
|
|
Preferred Equity 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Transportation: Cargo 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Grammer Investment Holdings LLC (14) (19) (25) |
|
10% PIK |
|
10.00 |
% |
— |
|
6,000 |
|
600,000 |
|
600,000 |
|
|||
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
600,000 |
|
600,000 |
|
|||
|
Total Preferred Equity |
|
|
|
|
|
|
|
|
|
$ |
600,000 |
|
$ |
600,000 |
|
|
|
Warrants 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Transportation: Cargo 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Grammer Investment Holdings LLC (14) (19) (25) |
|
— |
|
— |
|
— |
|
121,811 |
|
— |
|
— |
|
|||
|
Total Transportation: Cargo |
|
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
|
Total Warrants |
|
|
|
|
|
|
|
|
|
$ |
— |
|
$ |
— |
|
|
|
Total Equity |
|
|
|
|
|
|
|
|
|
$ |
7,316,684 |
|
$ |
7,885,347 |
|
|
|
Total Non-Controlled/Non-Affiliate Investments |
|
|
|
|
|
|
|
|
|
$ |
1,449,749,445 |
|
$ |
1,422,837,431 |
|
|
|
Non-Controlled/Affiliate Investments 0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Equity 0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Equity Interest 0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Beverage, Food & Tobacco 0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
ADT Pizza, LLC (10) (14) (19) (25) |
|
— |
|
— |
|
— |
|
6,720,000 |
|
6,720,000 |
|
6,720,000 |
|
|||
|
Total Beverage, Food & Tobacco |
|
|
|
|
|
|
|
|
|
6,720,000 |
|
6,720,000 |
|
|||
|
Total Equity Interest |
|
|
|
|
|
|
|
|
|
$ |
6,720,000 |
|
$ |
6,720,000 |
|
|
|
Total Equity |
|
|
|
|
|
|
|
|
|
$ |
6,720,000 |
|
$ |
6,720,000 |
|
|
|
Total Non-Controlled/Affiliate Investments |
|
|
|
|
|
|
|
|
|
$ |
6,720,000 |
|
$ |
6,720,000 |
|
|
|
Controlled Affiliate Investments 29.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Corporate Debt 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
First Lien Senior Secured Loan 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aerospace & Defense 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
BCC Jetstream Holdings Aviation (On II), LLC (10) (11) (19) (20) |
|
— |
|
10.00 |
% |
6/2/2022 |
|
$ |
4,162,757 |
|
4,162,757 |
|
4,162,757 |
|
||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
4,162,757 |
|
4,162,757 |
|
|||
|
Total First Lien Senior Secured Loan |
|
|
|
|
|
|
|
|
|
$ |
4,162,757 |
|
$ |
4,162,757 |
|
|
|
Total Corporate Debt |
|
|
|
|
|
|
|
|
|
$ |
4,162,757 |
|
$ |
4,162,757 |
|
|
|
Equity 29.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Equity Interest 1.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Aerospace & Defense 1.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
BCC Jetstream Holdings Aviation (On II), LLC (10) (11) (19) (20) (25) |
|
— |
|
— |
|
— |
|
731,387 |
|
731,387 |
|
1,243,216 |
|
||
|
BCC Jetstream Holdings Aviation (Off I), LLC (6) (10) (11) (19) (20) (25) |
|
— |
|
— |
|
— |
|
11,862,614 |
|
11,862,614 |
|
13,479,475 |
|
||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
12,594,001 |
|
14,722,691 |
|
||
|
Total Equity Interest |
|
|
|
|
|
|
|
|
|
$ |
12,594,001 |
|
$ |
14,722,691 |
|
|
Investment Vehicles 27.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Antares Bain Capital Complete Financing Solution LLC (6) (10) (11) (19) (25) |
|
— |
|
— |
|
— |
|
279,890,772 |
|
279,890,772 |
|
279,362,792 |
|
||
|
Total Investment Vehicles |
|
|
|
|
|
|
|
|
|
$ |
279,890,772 |
|
$ |
279,362,792 |
|
|
Total Equity |
|
|
|
|
|
|
|
|
|
$ |
292,484,773 |
|
$ |
294,085,483 |
|
|
Unfunded Commitment 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Aerospace & Defense 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
BCC Jetstream Holdings Aviation (On II), LLC (7) (10) (11) (14) (19) (20) |
|
— |
|
— |
|
6/2/2022 |
|
— |
|
— |
|
— |
|
||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
— |
|
— |
|
||
|
Total Unfunded Commitment |
|
|
|
|
|
|
|
|
|
$ |
— |
|
$ |
— |
|
|
Total Controlled Affiliate Investments |
|
|
|
|
|
|
|
|
|
$ |
296,647,530 |
|
$ |
298,248,240 |
|
|
Total Investments |
|
|
|
|
|
|
|
|
|
$ |
1,753,116,975 |
|
$ |
1,727,805,671 |
|
|
Cash Equivalents 0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Goldman Sachs Financial Square Government Fund Institutional Share Class |
|
— |
|
2.52 |
% |
— |
|
876,881 |
|
876,881 |
|
876,881 |
|
||
|
Total Cash Equivalents |
|
|
|
|
|
|
|
|
|
$ |
876,881 |
|
$ |
876,881 |
|
|
Total Investments and Cash Equivalents |
|
|
|
|
|
|
|
|
|
$ |
1,753,993,856 |
|
$ |
1,728,682,552 |
|
|
Forward Foreign Currency Exchange Contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Currency Purchased |
|
Currency Sold |
|
Counterparty |
|
Settlement
|
|
Unrealized
|
|
|
|
U.S. DOLLARS 8,720,000 |
|
POUND STERLING 6,400,000 |
|
Bank of New York Mellon |
|
9/21/2020 |
|
$ |
355,091 |
|
|
U.S. DOLLARS 27,913,899 |
|
EURO 22,117,810 |
|
Bank of New York Mellon |
|
1/18/2019 |
|
2,184,652 |
|
|
|
U.S. DOLLARS 11,541,188 |
|
POUND STERLING 8,262,000 |
|
Bank of New York Mellon |
|
1/18/2019 |
|
445,074 |
|
|
|
U.S. DOLLARS 12,042,274 |
|
EURO 10,080,000 |
|
Bank of New York Mellon |
|
6/21/2019 |
|
344,462 |
|
|
|
U.S. DOLLARS 10,064,978 |
|
DANISH KRONE 59,805,094 |
|
Citibank |
|
1/18/2019 |
|
567,944 |
|
|
|
U.S. DOLLARS 9,957,148 |
|
NORWEGIAN KRONE 77,560,211 |
|
Citibank |
|
1/18/2019 |
|
334,485 |
|
|
|
U.S. DOLLARS 3,169,087 |
|
AUSTRALIAN DOLLARS 4,127,383 |
|
Citibank |
|
4/11/2019 |
|
81,710 |
|
|
|
U.S. DOLLARS 13,192,107 |
|
POUND STERLING 9,260,478 |
|
Citibank |
|
4/11/2019 |
|
698,583 |
|
|
|
U.S. DOLLARS 412,089 |
|
POUND STERLING 310,000 |
|
Citibank |
|
9/21/2020 |
|
(6,913 |
) |
|
|
U.S. DOLLARS 3,577,812 |
|
POUND STERLING 2,630,000 |
|
Goldman Sachs |
|
4/11/2019 |
|
213,533 |
|
|
|
U.S. DOLLARS 3,090,562 |
|
AUD 4,130,000 |
|
Goldman Sachs |
|
6/14/2019 |
|
176,427 |
|
|
|
U.S. DOLLARS 8,937,749 |
|
DANISH KRONE 55,570,000 |
|
Goldman Sachs |
|
6/14/2019 |
|
291,425 |
|
|
|
U.S. DOLLARS 11,718,855 |
|
EURO 9,790,000 |
|
Goldman Sachs |
|
6/14/2019 |
|
364,746 |
|
|
|
U.S. DOLLARS 60,093,636 |
|
POUND STERLING 44,750,000 |
|
Goldman Sachs |
|
6/14/2019 |
|
2,679,311 |
|
|
|
U.S. DOLLARS 8,993,793 |
|
NORWEGIAN KRONE 72,170,000 |
|
Goldman Sachs |
|
6/14/2019 |
|
591,228 |
|
|
|
|
|
|
|
|
|
|
|
$ |
9,321,758 |
|
(1) The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”), the Euro Interbank Offered Rate (“EURIBOR” or “E”),British Pound Sterling LIBOR Rate (“GBP LIBOR”), the Norwegian Interbank Offered Rate (“NIBOR” or “N”), the Copenhagen Interbank Offered Rate (“CIBOR” or “C”), the Bank Bill Swap Rate (“BBSW”), or the Prime Rate (“Prime” or “P”) and which reset daily, monthly, quarterly or semiannually. Investments or a portion thereof may bear Payment-in-Kind (“PIK”). For each, the Company has provided the PIK or the spread over LIBOR, EURIBOR, GBP LIBOR, NIBOR, CIBOR, BBSW, or Prime and the current weighted average interest rate in effect at December 31, 2018. Certain investments are subject to a LIBOR, EURIBOR, GBP LIBOR, NIBOR, CIBOR, BBSW, or Prime interest rate floor.
(2) The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par.
(3) Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The investment may be subject to an unused/letter of credit facility fee.
(4) Percentages are based on the Company’s net assets of $1,001,629,147 as of December 31, 2018.
(5) The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(6) The investment is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940. 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 December 31, 2018, non-qualifying assets totaled 24.4% of the Company’s total assets.
(7) The assets to be issued will be determined at the time the funds are called.
(8) Unrealized appreciation/(depreciation) on forward currency exchange contracts.
(9) The principal amount (par amount) for all debt securities is denominated in U.S. dollars, unless otherwise noted. £ represents Pound Sterling, € represents Euro, NOK represents Norwegian krone, AUD represents Australian and DKK represents Kroner.
(10) As defined in the 1940 Act, the Company is deemed to be an “Affiliated Investment” of the Company as the Company owns five percent or more of the portfolio company’s securities.
(11) As defined in the 1940 Act, the Company is deemed to “Control” this portfolio company as the Company either owns more than 25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company.
(12) Assets or a portion thereof are pledged as collateral for the 2018-1 Issuer. See Note 6 “Borrowings”.
(13) $690,197 of the total par amount for this security is at P+ 3.75%.
(14) Non-Income Producing.
(15) Loan includes interest rate floor of 1.00%.
(16) Loan includes interest rate floor of 0.75%.
(17) Loan includes interest rate floor of 0.50%.
(18) Loan includes interest rate floor of 0.00%.
(19) Security valued using unobservable inputs (Level 3).
(20) The Company holds non-controlling, affiliate interest in an aircraft-owning special purpose vehicle through this investment.
(21) Assets or a portion thereof are pledged as collateral for the BCSF Revolving Credit Facility. See Note 6 “Borrowings”.
(22) The Company generally earns a higher interest rate on the “last out” tranche of debt, to the extent the debt has been allocated to “first out” and “last out” tranches, whereby the “first out” tranche will have priority as to the “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder.
(23) $2,266,720 of the total par amount for this security is at P+ 3.50%.
(24) $471,776 of the total par amount for this security is at P+ 3.50%.
(25) Security exempt from registration under the Securities Act of 1933 (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of December 31, 2018, the aggregate fair value of these securities is $308,690,830 or 30.8% of the Company’s net assets. The acquisition dates of the restricted securities are as follows:
|
Investment |
|
Acquisition Date |
|
|
BCC Jetstream Holdings Aviation (On II), LLC - Equity Interest |
|
6/1/2017 |
|
|
BCC Jetstream Holdings Aviation (Off I), LLC - Equity Interest |
|
6/1/2017 |
|
|
Antares Bain Capital Complete Financing Solution LLC - Investment Vehicle |
|
11/29/2017 |
|
|
CB Titan Holdings, Inc. - Equity Interest |
|
11/14/2017 |
|
|
Impala Private Investments, LLC - Equity Interest |
|
11/10/2017 |
|
|
Abracon Group Holding, LLC. - Equity Interest |
|
7/18/2018 |
|
|
Armor Group, LP-Equity Interest |
|
8/28/2018 |
|
|
Grammer Investment Holdings LLC - Warrant |
|
10/1/2018 |
|
|
Grammer Investment Holdings LLC - Equity Interest |
|
10/1/2018 |
|
|
Grammer Investment Holdings LLC - Preferred Equity |
|
10/1/2018 |
|
|
ADT Pizza, LLC - Equity Interest |
|
10/29/2018 |
|
|
PP Ultimate Holdings B, LLC - Equity Interest |
|
12/20/2018 |
|
|
|
|
|
|
(26) Loan includes interest rate floor of 1.25%.
See Notes to Consolidated Financial Statements.
BAIN CAPITAL SPECIALTY FINANCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1. Organization
Bain Capital Specialty Finance, Inc. (the “Company”) was formed on October 5, 2015 and commenced investment operations on October 13, 2016. The Company has elected to be treated and is regulated as a business development company (a “BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for tax purposes the Company has elected to be treated, and intends to operate in a manner so as to continuously qualify, as a regulated investment company (a “RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), commencing concurrently with its election to be treated as a BDC. The Company is externally managed by BCSF Advisors, LP (the “Advisor” or “BCSF Advisors”), our investment adviser that is registered with the Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Advisor also provides the administrative services necessary for the Company to operate (in such capacity, the “Administrator” or “BCSF Advisors”).
On November 19, 2018, the Company closed its initial public offering (the “IPO”), which was a Qualified IPO, issuing 7,500,000 shares of its common stock at a public offering price of $20.25 per share. Shares of common stock of the Company began trading on the New York Stock Exchange under the symbol “BCSF” on November 15, 2018.
The Company’s primary focus is capitalizing on opportunities within its Advisor’s Senior Direct Lending Strategy, which seeks to provide risk-adjusted returns and current income to its stockholders by investing primarily in middle-market companies with between $10.0 million and $150.0 million in EBITDA. The Company focuses on senior investments with a first or second lien on collateral and strong structures and documentation intended to protect the lender. The Company generally seeks to retain voting control in respect of the loans or particular classes of securities in which the Company invests through maintaining affirmative voting positions or negotiating consent rights that allow the Company to retain a blocking position. The Company may also invest in mezzanine debt and other junior securities and in secondary purchases of assets or portfolios, as described below. Investments are likely to include, among other things, (i) senior first lien, stretch senior, senior second lien, unitranche, (ii) mezzanine debt and other junior investments and (iii) secondary purchases of assets or portfolios that primarily consist of middle-market corporate debt. The Company may also invest, from time to time, in equity securities, distressed debt, debtor-in-possession loans, structured products, structurally subordinate loans, investments with deferred interest features, zero-coupon securities and defaulted securities.
Our operations comprise only a single reportable segment.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The Company’s consolidated financial statements and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. These consolidated financial statements reflect adjustments that in the opinion of the Company are necessary for the fair statement of the financial position and results of operations for the periods presented herein and are not necessarily indicative of the full fiscal year. The Company has determined it meets the definition of an investment company and follows the accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 — Financial Services — Investment Companies . The functional currency of the Company is U.S. dollars and these consolidated financial statements have been prepared in that currency.
The information included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018.
Basis of Consolidation
The Company will generally consolidate any wholly, or substantially, owned subsidiary when the design and purpose of the subsidiary is to act as an extension of the Company’s investment operations and to facilitate the execution of the Company’s investment strategy. Accordingly, the Company consolidated the results of its subsidiaries BCSF I, LLC, BCSF II-C, LLC and BCC Middle Market CLO 2018-1, LLC in its consolidated financial statements. All intercompany transactions and balances have been eliminated in consolidation. Since the Company is an investment company, portfolio investments held by the Company are not consolidated into the consolidated financial statements. The portfolio investments held by the Company (including its investments held by consolidated
subsidiaries) are included on the consolidated statements of assets and liabilities as investments at fair value. The Company does not consolidate its interest in Antares Bain Capital Complete Financing Solution LLC (together with ABC Complete Financing Solution LLC, “ABCS”). See further description of the Company’s investment in ABCS in Note 3.
Use of Estimates
The preparation of the consolidated financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates and such differences could be material.
Valuation of Portfolio Investments
Investments for which market quotations are readily available are typically valued at such market quotations. Market quotations are obtained from an independent pricing service, where available. If a price cannot be obtained from an independent pricing service or if the independent pricing service is not deemed to be current with the market, certain investments held by the Company will be valued on the basis of prices provided by principal market makers. Generally investments marked in this manner will be marked at the mean of the bid and ask of the independent broker quotes obtained. To validate market quotations, the Company utilizes a number of factors to determine if the quotations are representative of fair value, including the source and number of quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value, subject at all times to the oversight and approval of the Board of Directors of the Company (the “Board”), based on, among other things, the input of the Advisor, the Company’s audit committee of the Board (the “Audit Committee) and one or more independent third party valuation firms engaged by the Board.
With respect to unquoted securities, the Company will value each investment considering, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies that are public and other factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Company will use the pricing indicated by the external event to corroborate and/or assist us in our valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.
With respect to investments for which market quotations are not readily available, the Advisor will undertake a multi-step valuation process, which includes among other things, the below:
· The Company’s quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of the Advisor responsible for the portfolio investment or by an independent valuation firm;
· Preliminary valuation conclusions are then documented and discussed with the Company’s senior management and the Advisor. Agreed upon valuation recommendations are presented to the Audit Committee;
· The Audit Committee of the Board reviews the valuations presented and recommends values for each of the investments to the Board; and
· The Board will discuss valuations and determine the fair value of each investment in good faith based upon, among other things, the input of the Advisor, independent valuation firms, where applicable, and the Audit Committee.
In following this approach, the types of factors that are taken into account in the fair value pricing of investments include, as relevant, but are not limited to: comparison to publicly traded securities, including factors such as yield, maturity and measures of credit quality; the enterprise value of a portfolio company; the nature and realizable value of any collateral; the portfolio company’s ability to make payments and its earnings and discounted cash flows; and the markets in which the portfolio company does business. In cases where an independent valuation firm provides fair valuations for investments, the independent valuation firm provides a fair valuation report, a description of the methodology used to determine the fair value and their analysis and calculations to support their conclusion. The Company determines the fair value of its investment in ABCS giving consideration to the assets and liabilities of ABCS, at fair value, including consideration of any necessary adjustments. The Company currently conducts this valuation process on a quarterly basis.
The Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value in accordance with US GAAP and required disclosures of fair value measurements. The fair value of a financial instrument is the amount that would be received in an orderly transaction between market participants at the measurement date. The Company
determines the fair value of investments consistent with its valuation policy. The Company discloses the fair value of its investments in a hierarchy which prioritizes and ranks the level of market observability used in the determination of fair value. In accordance with ASC 820, these levels are summarized below:
· Level 1 — Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date.
· Level 2 — Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
· Level 3 — Valuations based on inputs that are unobservable and significant to the fair value measurement.
A financial instrument’s level within the hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuations of Level 2 investments are generally based on quotations received from pricing services, dealers or brokers. Consideration is given to the source and nature of the quotations and the relationship of recent market activity to the quotations provided.
Transfers between levels, if any, are recognized at the beginning of the reporting period in which the transfers occur. The Company evaluates the source of inputs used in the determination of fair value, including any markets in which the investments, or similar investments, are trading. When the fair value of an investment is determined using inputs from a pricing service (or principal market makers), the Company considers various criteria in determining whether the investment should be classified as a Level 2 or Level 3 investment. Criteria considered includes the pricing methodologies of the pricing services (or principal market makers) to determine if the inputs to the valuation are observable or unobservable, as well as the number of prices obtained and an assessment of the quality of the prices obtained. The level of an investment within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment.
The value assigned to these investments is based upon available information and may fluctuate from period to period. In addition, it does not necessarily represent the amount that might ultimately be realized upon sale. Due to inherent uncertainty of valuation, the estimated fair value of investments may differ from the value that would have been used had a ready market for the security existed, and the difference could be material.
Securities Transactions, Revenue Recognition and Expenses
The Company records its investment transactions on a trade date basis. The Company measures realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specified identification method. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium to par value on investments acquired are accreted and amortized, respectively, into interest income over the life of the respective investment using the effective interest method. Loan origination fees, original issue discount and market discount or premium are capitalized and amortized against or accreted into interest income using the effective interest method or straight-line method, as applicable. For the Company’s investments in revolving bank loans, the cost basis of the investment purchased is adjusted for the cash received for the discount on the total balance committed. The fair value is also adjusted for price appreciation or depreciation on the unfunded portion. As a result, the purchase of commitments not completely funded may result in a negative value until it is offset by the future amounts called and funded. Upon prepayment of a loan or debt security, any prepayment premium, unamortized upfront loan origination fees and unamortized discount are recorded as interest income.
Dividend income on preferred equity investments is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. 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. Distributions received from a limited liability company or limited partnership investment are evaluated to determine if the distribution should be recorded as dividend income or a return of capital.
Certain investments may have contractual payment-in-kind (“PIK”) interest or dividends. PIK represents accrued interest or accumulated dividends that are added to the loan principal of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity or upon being called by the issuer. PIK is recorded as interest or dividend income, as applicable. 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. Accrued PIK interest or dividends are generally reversed through interest or dividend income, respectively, when an investment is placed on non-accrual status.
Certain structuring fees and amendment fees are recorded as other income when earned. Administrative agent fees received by the Company are recorded as other income when the services are rendered.
Expenses are recorded on an accrual basis.
Non-Accrual Loans
Loans or debt securities are placed on non-accrual status when there is reasonable doubt that principal or interest will be collected. Accrued interest generally is reversed when a loan or debt security is placed on non-accrual status. Interest payments received on non-accrual loans or debt securities may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans and debt securities are restored to accrual status when past due principal and interest are paid and, in management’s judgment, principal and interest payments are likely to remain current. The Company may make exceptions to this treatment if a loan has sufficient collateral value and is in the process of collection. As of March 31, 2019 and December 31, 2018, no securities had been placed on non-accrual status.
Distributions
Distributions to common stockholders are recorded on the record date. The amount to be distributed, if any, is determined by the Board each quarter, and is generally based upon the earnings estimated by the Advisor. Distributions from net investment income and net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with US GAAP. The Company may pay distributions to its stockholders in a year in excess of its investment company taxable income and net capital gain for that year and, accordingly, a portion of such distributions may constitute a return of capital for U.S. federal income tax purposes. This excess generally would be a tax-free return of capital in the period and generally would reduce the stockholder’s tax basis in its shares. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent; they are charged or credited to paid-in capital in excess of par, accumulated undistributed net investment income or accumulated net realized gain (loss), as appropriate, in the period that the differences arise. Temporary and permanent differences are primarily attributable to differences in the tax treatment of certain loans and the tax characterization of income and non-deductible expenses.
The Company intends to timely distribute to its stockholders substantially all of its annual taxable income for each year, except that the Company may retain certain net capital gains for reinvestment and, depending upon the level of the Company’s taxable income earned in a year, the Company may choose to carry forward taxable income for distribution in the following year and incur applicable U.S. federal excise tax. The specific tax characteristics of the Company’s distributions will be reported to stockholders after the end of the calendar year. All distributions will be subject to available funds, and no assurance can be given that the Company will be able to declare such distributions in future periods.
The Company distributes net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, the Company may decide in the future to retain such capital gains for investment, incur a corporate-level tax on such capital gains, and elect to treat such capital gains as deemed distributions to stockholders.
Dividend Reinvestment Plan
The Company has adopted a dividend reinvestment plan that provides for the reinvestment of cash dividends and distributions. Prior to the IPO, stockholders who “opt in” to the Company’s dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash dividends and distributions.
Subsequent to the IPO, stockholders who do not “opt out” of the Company’s dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash dividends and distributions.
Organizational and Offering Costs
Organizational costs consist of primarily legal, incorporation and accounting fees incurred in connection with the organization of the Company. Organizational costs are expensed as incurred and are shown in the Company’s consolidated statements of operations.
Offering costs consist primarily of fees and expenses incurred in connection with the offering of shares, legal, printing and other costs associated with the preparation and filing of applicable registration statements. To the extent such expenses relate to equity offerings, these expenses are charged as a reduction of paid-in-capital upon each such offering.
Cash, Restricted Cash, and Cash Equivalents
Cash and cash equivalents consist of deposits held at custodian banks, and highly liquid investments, such as money market funds, with original maturities of three months or less. Cash and cash equivalents are carried at cost or amortized cost, which approximates fair value. The Company may deposit its cash and cash equivalents in financial institutions and, at certain times, such balances may exceed the Federal Deposit Insurance Corporation insurance limits. Cash equivalents are presented separately on the consolidated schedules of investments. Restricted cash is collected and held by the trustee who has been appointed as custodian of the assets securing certain of the Company’s financing transactions.
Foreign Currency Translation
The accounting records of the Company are maintained in U.S. dollars. The fair values of foreign securities, foreign cash and other assets and liabilities denominated in foreign currency are translated to U.S. dollars based on the current exchange rates at the end of each business day. Income and expenses denominated in foreign currencies are translated at current exchange rates when accrued or incurred. Unrealized gains and losses on foreign currency holdings and non-investment assets and liabilities attributable to the changes in foreign currency exchange rates are included in the net change in unrealized appreciation (depreciation) on foreign currency translation on the consolidated statements of operations. Net realized gains and losses on foreign currency holdings and non-investment assets and liabilities attributable to changes in foreign currency exchange rates are included in net realized gain (loss) on foreign currency transactions on the consolidated statements of operations. The portion of both realized and unrealized gains and losses on investments that result from changes in foreign currency exchange rates is not separately disclosed, but is included in net realized gain (loss) on investments and net change in unrealized appreciation (depreciation) on investments, respectively, on the consolidated statements of operations.
Forward Currency Exchange Contracts
The Company may enter into forward currency exchange contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations in the value of foreign currencies. A forward currency exchange contract is an agreement between two parties to buy and sell a currency at a set price on a future date. The Company does not utilize hedge accounting and as such the Company recognizes the value of its derivatives at fair value on the consolidated statements of assets and liabilities with changes in the net unrealized appreciation (depreciation) on forward currency exchange contracts recorded on the consolidated statements of operations. Forward currency exchange contracts are valued using the prevailing forward currency exchange rate of the underlying currencies. Unrealized appreciation (depreciation) on forward currency exchange contracts are recorded on the consolidated statements of assets and liabilities by counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable. Cash collateral maintained in accounts held by counterparties is included in collateral on forward currency exchange contracts on the consolidated statements of assets and liabilities. Notional amounts and the gross fair value of forward currency exchange contracts assets and liabilities are presented separately on the consolidated schedules of investments.
Changes in net unrealized appreciation (depreciation) are recorded on the consolidated statements of operations in net change in unrealized appreciation (depreciation) on forward currency exchange contracts. Net realized gains and losses are recorded on the consolidated statements of operations in net realized gain (loss) on forward currency exchange contracts. Realized gains and losses on forward currency exchange contracts are determined using the difference between the fair market value of the forward currency exchange contract at the time it was opened and the fair market value at the time it was closed or covered. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms.
Deferred Financing Costs and Debt Issuance Costs
The Company records costs related to issuance of revolving debt obligations as deferred financing costs. These costs are deferred and amortized using the straight-line method over the stated maturity life of the obligation. The Company records costs related to the issuance of term debt obligations as debt issuance costs. These costs are deferred and amortized using the effective interest method. These costs are presented as a reduction to the outstanding principal amount of the term debt obligations on the consolidated statements of assets and liabilities.
Income Taxes
The Company has elected to be treated for U.S. federal income tax purposes as a RIC under the Code. So long as the Company maintains its status as a RIC, it will generally not be subject to corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually as dividends to its stockholders. As a result, any tax liability related to income earned
and distributed by the Company represents obligations of the Company’s stockholders and will not be reflected in the consolidated financial statements of the Company.
The Company intends to comply with the applicable provisions of the Code pertaining to RICs and to make distributions of taxable income sufficient to relieve it from substantially all federal income taxes. Accordingly, no provision for income taxes is required in the consolidated financial statements. For income tax purposes, distributions made to stockholders are reported as ordinary income, capital gains, non-taxable return of capital, or a combination thereof. The tax character of distributions paid to stockholders through March 31, 2019 may include return of capital, however, the exact amount cannot be determined at this point. The final determination of the tax character of distributions will not be made until we file our tax return for the tax year ending December 31, 2019. The character of income and gains that we will distribute is determined in accordance with income tax regulations that may differ from GAAP. BCSF I, LLC, BCSF II-C, LLC and BCC Middle Market CLO 2018-1, LLC are disregarded entities for tax purposes and are consolidated with the tax return of the Company.
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. Tax positions not deemed to meet the “more-likely-than-not” threshold are reversed and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes, if any, are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. Management has analyzed the Company’s tax positions, and has concluded that no liability for unrecognized tax benefits related to uncertain tax positions on returns to be filed by the Company for all open tax years should be recorded. The Company identifies its major tax jurisdiction as the United States, and the Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months. As of March 31, 2019, the tax years that remain subject to examination is from the inception on October 5, 2015 forward.
Recent Accounting Pronouncements
In March 2017, the FASB issued ASU 2017-08, “ Receivables — Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities .” ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium by requiring the premium to be amortized to the earliest call date. This new guidance is effective for fiscal years beginning after December 15, 2018, as well as for interim periods within those fiscal years. Early adoption is permitted. The Company adopted these changes and there is no material impact on its consolidated financial statements and disclosures.
In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. ” ASU 2018-13 is part of the disclosure framework project and eliminates certain disclosure requirements for fair value measurements, requires entities to disclose new information, and modifies existing disclosure requirements. The new guidance is effective for fiscal years and interim periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact this change will have on its consolidated financial statements and disclosures.
Note 3. Investments
The following table shows the composition of the investment portfolio, at amortized cost and fair value as of March 31, 2019 (with corresponding percentage of total portfolio investments):
|
|
|
As of March 31, 2019 |
|
||||||||
|
|
|
Amortized Cost |
|
Percentage of
|
|
Fair Value |
|
Percentage of
|
|
||
|
First Lien Senior Secured Loans |
|
$ |
1,139,392,410 |
|
62.0 |
% |
$ |
1,131,779,067 |
|
61.9 |
% |
|
First Lien Last Out Loans |
|
27,689,204 |
|
1.5 |
|
28,365,825 |
|
1.6 |
|
||
|
Second Lien Senior Secured Loans |
|
235,262,047 |
|
12.8 |
|
232,642,921 |
|
12.7 |
|
||
|
Subordinated Debt |
|
39,728,124 |
|
2.2 |
|
39,625,000 |
|
2.2 |
|
||
|
Corporate Bonds |
|
31,692,089 |
|
1.7 |
|
27,829,145 |
|
1.5 |
|
||
|
Investment Vehicles (1) |
|
331,357,415 |
|
18.1 |
|
335,350,725 |
|
18.3 |
|
||
|
Equity Interests |
|
24,077,807 |
|
1.3 |
|
26,530,174 |
|
1.4 |
|
||
|
Preferred Equity |
|
7,290,345 |
|
0.4 |
|
7,696,500 |
|
0.4 |
|
||
|
Warrants |
|
— |
|
0.0 |
|
120,593 |
|
0.0 |
|
||
|
Total |
|
$ |
1,836,489,441 |
|
100.0 |
% |
$ |
1,829,939,950 |
|
100.0 |
% |
(1) Represents equity investment in ABCS.
The following table shows the composition of the investment portfolio, at amortized cost and fair value as of December 31, 2018 (with corresponding percentage of total portfolio investments):
|
|
|
As of December 31, 2018 |
|
||||||||
|
|
|
Amortized Cost |
|
Percentage of
|
|
Fair Value |
|
Percentage of
|
|
||
|
First Lien Senior Secured Loans |
|
$ |
1,074,413,132 |
|
61.3 |
% |
$ |
1,058,838,409 |
|
61.3 |
% |
|
First Lien Last Out Loans |
|
27,325,127 |
|
1.5 |
|
27,487,248 |
|
1.6 |
|
||
|
Second Lien Senior Secured Loans |
|
263,758,359 |
|
15.0 |
|
258,141,014 |
|
14.9 |
|
||
|
Subordinated Debt |
|
39,710,860 |
|
2.3 |
|
39,625,000 |
|
2.3 |
|
||
|
Corporate Bonds |
|
41,388,040 |
|
2.4 |
|
35,023,170 |
|
2.0 |
|
||
|
Investment Vehicles (1) |
|
279,890,772 |
|
16.0 |
|
279,362,792 |
|
16.2 |
|
||
|
Equity Interests |
|
24,077,806 |
|
1.4 |
|
26,521,285 |
|
1.5 |
|
||
|
Preferred Equity |
|
2,552,879 |
|
0.1 |
|
2,806,753 |
|
0.2 |
|
||
|
Warrants |
|
— |
|
0.0 |
|
— |
|
0.0 |
|
||
|
Total |
|
$ |
1,753,116,975 |
|
100.0 |
% |
$ |
1,727,805,671 |
|
100.0 |
% |
(1) Represents equity investment in ABCS.
The following table shows the composition of the investment portfolio by geographic region, at amortized cost and fair value as of March 31, 2019 (with corresponding percentage of total portfolio investments):
|
|
|
As of March 31, 2019 |
|
||||||||
|
|
|
Amortized Cost |
|
Percentage of
|
|
Fair Value |
|
Percentage of
|
|
||
|
United States (1) |
|
$ |
1,680,122,871 |
|
91.5 |
% |
$ |
1,674,516,631 |
|
91.5 |
% |
|
United Kingdom |
|
67,463,004 |
|
3.7 |
|
67,587,692 |
|
3.7 |
|
||
|
Ireland |
|
22,793,059 |
|
1.2 |
|
22,935,656 |
|
1.3 |
|
||
|
Sweden |
|
18,317,489 |
|
1.0 |
|
17,145,348 |
|
0.9 |
|
||
|
Norway |
|
14,818,649 |
|
0.8 |
|
15,100,000 |
|
0.8 |
|
||
|
France |
|
13,072,796 |
|
0.7 |
|
12,917,333 |
|
0.7 |
|
||
|
Netherlands |
|
11,353,136 |
|
0.6 |
|
10,963,894 |
|
0.6 |
|
||
|
Luxembourg |
|
8,548,437 |
|
0.5 |
|
8,773,396 |
|
0.5 |
|
||
|
Total |
|
$ |
1,836,489,441 |
|
100.0 |
% |
$ |
1,829,939,950 |
|
100.0 |
% |
(1) Includes equity investment in ABCS.
The following table shows the composition of the investment portfolio by geographic region, at amortized cost and fair value as of December 31, 2018 (with corresponding percentage of total portfolio investments):
|
|
|
As of December 31, 2018 |
|
||||||||
|
|
|
Amortized Cost |
|
Percentage of
|
|
Fair Value |
|
Percentage of
|
|
||
|
United States (1) |
|
$ |
1,613,201,580 |
|
92.0 |
% |
$ |
1,589,935,194 |
|
92.0 |
% |
|
United Kingdom |
|
59,621,540 |
|
3.4 |
|
58,473,157 |
|
3.4 |
|
||
|
Ireland |
|
22,770,253 |
|
1.3 |
|
23,414,079 |
|
1.4 |
|
||
|
Sweden |
|
18,308,667 |
|
1.0 |
|
17,300,711 |
|
1.0 |
|
||
|
Norway |
|
14,798,247 |
|
0.9 |
|
14,798,000 |
|
0.9 |
|
||
|
France |
|
13,059,928 |
|
0.7 |
|
12,630,942 |
|
0.7 |
|
||
|
Netherlands |
|
11,356,760 |
|
0.7 |
|
11,253,588 |
|
0.6 |
|
||
|
Total |
|
$ |
1,753,116,975 |
|
100.0 |
% |
$ |
1,727,805,671 |
|
100.0 |
% |
(1) Includes equity investment in ABCS.
The following table shows the composition of the investment portfolio by industry, at amortized cost and fair value as of March 31, 2019 (with corresponding percentage of total portfolio investments):
|
|
|
As of March 31, 2019 |
|
||||||||
|
|
|
Amortized Cost |
|
Percentage of
|
|
Fair Value |
|
Percentage of
|
|
||
|
Investment Vehicles (1) |
|
$ |
331,357,415 |
|
18.1 |
% |
$ |
335,350,725 |
|
18.3 |
% |
|
High Tech Industries |
|
198,734,267 |
|
10.8 |
|
197,907,574 |
|
10.8 |
|
||
|
Aerospace & Defense |
|
141,609,565 |
|
7.7 |
|
142,660,486 |
|
7.8 |
|
||
|
Services: Business |
|
141,777,205 |
|
7.7 |
|
140,458,131 |
|
7.7 |
|
||
|
Consumer Goods: Non-Durable |
|
125,161,013 |
|
6.8 |
|
123,749,906 |
|
6.8 |
|
||
|
Healthcare & Pharmaceuticals |
|
124,966,426 |
|
6.8 |
|
122,527,772 |
|
6.7 |
|
||
|
Wholesale |
|
64,321,794 |
|
3.5 |
|
63,679,442 |
|
3.5 |
|
||
|
Transportation: Cargo |
|
62,392,559 |
|
3.4 |
|
62,326,942 |
|
3.4 |
|
||
|
Hotel, Gaming & Leisure |
|
58,678,030 |
|
3.2 |
|
58,747,831 |
|
3.2 |
|
||
|
Services: Consumer |
|
55,889,434 |
|
3.0 |
|
55,774,776 |
|
3.0 |
|
||
|
Capital Equipment |
|
49,692,270 |
|
2.7 |
|
49,061,111 |
|
2.7 |
|
||
|
Beverage, Food & Tobacco |
|
47,313,906 |
|
2.6 |
|
44,394,038 |
|
2.4 |
|
||
|
Construction & Building |
|
42,556,310 |
|
2.3 |
|
43,111,378 |
|
2.4 |
|
||
|
Retail |
|
43,304,073 |
|
2.4 |
|
42,606,923 |
|
2.3 |
|
||
|
Energy: Oil & Gas |
|
33,659,112 |
|
1.8 |
|
33,382,926 |
|
1.8 |
|
||
|
Media: Diversified & Production |
|
32,485,971 |
|
1.8 |
|
33,261,246 |
|
1.8 |
|
||
|
Automotive |
|
30,136,277 |
|
1.6 |
|
30,207,072 |
|
1.7 |
|
||
|
Forest Products & Paper |
|
25,529,649 |
|
1.4 |
|
25,313,288 |
|
1.4 |
|
||
|
Containers, Packaging & Glass |
|
23,973,088 |
|
1.3 |
|
24,049,847 |
|
1.3 |
|
||
|
Chemicals, Plastics & Rubber |
|
22,801,393 |
|
1.2 |
|
23,277,456 |
|
1.3 |
|
||
|
Energy: Electricity |
|
22,318,857 |
|
1.2 |
|
22,034,720 |
|
1.2 |
|
||
|
FIRE: Insurance (2) |
|
21,051,370 |
|
1.2 |
|
20,558,912 |
|
1.1 |
|
||
|
Media: Advertising, Printing & Publishing |
|
19,623,940 |
|
1.1 |
|
20,152,266 |
|
1.1 |
|
||
|
Banking |
|
18,156,200 |
|
1.0 |
|
18,195,577 |
|
1.0 |
|
||
|
Consumer Goods: Durable |
|
17,104,158 |
|
0.9 |
|
17,273,200 |
|
0.9 |
|
||
|
Environmental Industries |
|
16,589,772 |
|
0.9 |
|
16,938,845 |
|
0.9 |
|
||
|
Telecommunications |
|
15,215,153 |
|
0.8 |
|
15,095,794 |
|
0.8 |
|
||
|
Media: Broadcasting & Subscription |
|
14,683,488 |
|
0.8 |
|
14,553,351 |
|
0.8 |
|
||
|
Utilities: Electric |
|
12,510,549 |
|
0.7 |
|
10,479,145 |
|
0.6 |
|
||
|
FIRE: Real Estate (2) |
|
10,732,696 |
|
0.6 |
|
10,432,740 |
|
0.6 |
|
||
|
Transportation: Consumer |
|
8,548,437 |
|
0.5 |
|
8,773,396 |
|
0.5 |
|
||
|
FIRE: Finance (2) |
|
3,615,064 |
|
0.2 |
|
3,603,134 |
|
0.2 |
|
||
|
Total |
|
$ |
1,836,489,441 |
|
100.0 |
% |
$ |
1,829,939,950 |
|
100.0 |
% |
(1) Represents equity investment in ABCS.
(2) Finance, Insurance, and Real Estate (“FIRE”).
The following table shows the composition of the investment portfolio by industry, at amortized cost and fair value as of December 31, 2018 (with corresponding percentage of total portfolio investments):
|
|
|
As of December 31, 2018 |
|
||||||||
|
|
|
Amortized Cost |
|
Percentage of
|
|
Fair Value |
|
Percentage of
|
|
||
|
Investment Vehicles (1) |
|
$ |
279,890,772 |
|
16.0 |
% |
$ |
279,362,792 |
|
16.2 |
% |
|
High Tech Industries |
|
205,845,620 |
|
11.7 |
|
202,999,747 |
|
11.7 |
|
||
|
Services: Business |
|
137,816,914 |
|
7.9 |
|
135,398,202 |
|
7.8 |
|
||
|
Healthcare & Pharmaceuticals |
|
127,104,300 |
|
7.3 |
|
125,744,586 |
|
7.3 |
|
||
|
Aerospace & Defense |
|
120,069,733 |
|
6.8 |
|
121,411,334 |
|
7.0 |
|
||
|
Transportation: Cargo |
|
85,197,021 |
|
4.9 |
|
83,514,319 |
|
4.8 |
|
||
|
Hotel, Gaming & Leisure |
|
81,486,330 |
|
4.6 |
|
80,683,590 |
|
4.7 |
|
||
|
Consumer Goods: Non-Durable |
|
73,809,233 |
|
4.2 |
|
71,439,678 |
|
4.1 |
|
||
|
Wholesale |
|
64,529,679 |
|
3.7 |
|
63,050,944 |
|
3.6 |
|
||
|
Capital Equipment |
|
44,054,103 |
|
2.5 |
|
42,795,894 |
|
2.5 |
|
||
|
Construction & Building |
|
41,239,595 |
|
2.4 |
|
41,581,979 |
|
2.4 |
|
||
|
Retail |
|
43,264,007 |
|
2.5 |
|
41,384,480 |
|
2.4 |
|
||
|
FIRE: Insurance (2) |
|
43,288,364 |
|
2.5 |
|
41,107,152 |
|
2.4 |
|
||
|
Service: Consumer |
|
41,327,064 |
|
2.4 |
|
41,022,081 |
|
2.4 |
|
||
|
Containers, Packaging & Glass |
|
40,213,180 |
|
2.3 |
|
38,694,275 |
|
2.2 |
|
||
|
Beverage, Food & Tobacco |
|
38,154,943 |
|
2.2 |
|
35,612,284 |
|
2.1 |
|
||
|
Energy: Oil & Gas |
|
31,540,815 |
|
1.8 |
|
31,195,498 |
|
1.8 |
|
||
|
Media: Diversified & Production |
|
30,363,916 |
|
1.7 |
|
30,490,333 |
|
1.8 |
|
||
|
Automotive |
|
29,482,446 |
|
1.7 |
|
29,337,032 |
|
1.7 |
|
||
|
Energy: Electricity |
|
22,368,502 |
|
1.3 |
|
22,283,631 |
|
1.3 |
|
||
|
Forest Products & Paper |
|
22,514,526 |
|
1.3 |
|
21,902,974 |
|
1.3 |
|
||
|
Media: Broadcasting & Subscription |
|
21,868,277 |
|
1.2 |
|
20,944,540 |
|
1.2 |
|
||
|
Media: Advertising, Printing & Publishing |
|
19,635,378 |
|
1.1 |
|
19,730,774 |
|
1.1 |
|
||
|
Chemicals, Plastics & Rubber |
|
19,146,824 |
|
1.1 |
|
19,511,146 |
|
1.1 |
|
||
|
Consumer Goods: Durable |
|
17,097,312 |
|
0.9 |
|
17,247,902 |
|
1.0 |
|
||
|
Environmental Industries |
|
16,488,981 |
|
0.9 |
|
16,482,011 |
|
1.0 |
|
||
|
Telecommunications |
|
15,239,284 |
|
0.9 |
|
15,121,027 |
|
0.9 |
|
||
|
Banking |
|
13,259,712 |
|
0.7 |
|
13,234,599 |
|
0.8 |
|
||
|
FIRE: Real Estate (2) |
|
10,713,530 |
|
0.6 |
|
10,650,360 |
|
0.6 |
|
||
|
Utilities: Electric |
|
12,483,046 |
|
0.7 |
|
10,310,670 |
|
0.6 |
|
||
|
FIRE: Finance (2) |
|
3,623,568 |
|
0.2 |
|
3,559,837 |
|
0.2 |
|
||
|
Total |
|
$ |
1,753,116,975 |
|
100.0 |
% |
$ |
1,727,805,671 |
|
100.0 |
% |
(1) Represents equity investment in ABCS.
(2) Finance, Insurance, and Real Estate (“FIRE”).
Antares Bain Capital Complete Financing Solution
The Company has entered into a limited liability company agreement with Antares Midco Inc. (“Antares”) to invest in ABC Complete Financing Solution LLC, which makes investments through its subsidiary, Antares Bain Capital Complete Financing Solution LLC (together with ABC Complete Financing Solution LLC, “ABCS”). ABCS, an unconsolidated Delaware limited liability company, was formed on September 27, 2017 and commenced operations on November 29, 2017. ABCS’ principal purpose is to make investments, primarily in senior secured unitranche loans. The Company records its investment in ABCS at fair value. Distributions of income received from ABCS, if any, are recorded as dividend income from controlled investments in the consolidated statements of operations. Distributions received from ABCS in excess of income earned at ABCS, if any, are recorded as a return of capital and reduce the amortized cost of controlled affiliate investments.
The Company and Antares, as members of ABCS, have agreed to contribute capital up to (subject to the terms of their agreement) $950.0 million in aggregate to purchase equity interests in ABCS, with the Company and Antares contributing up to $425.0 million and $525.0 million, respectively. Funding of such commitments generally requires the consent of both Antares Credit Opportunities Manager LLC and the Advisor on behalf of Antares and the Company, respectively. ABCS is capitalized with capital contributions from its members on a pro-rata basis based on their maximum capital contributions as transactions are funded after they have been approved.
Investment decisions of ABCS require the consent of both the Advisor and Antares Credit Opportunities Manager LLC, as representatives of the Company and Antares, respectively. Each of the Advisor and Antares source investments for ABCS.
As of March 31, 2019, ABCS had the following maximum capital contributions, contributions and unfunded capital contributions from its members.
|
|
|
As of March 31, 2019 |
|
|||||||
|
|
|
Maximum Capital
|
|
Contributed
|
|
Unfunded Capital
|
|
|||
|
Bain Capital Specialty Finance, Inc. |
|
$ |
425,000,000 |
|
$ |
332,667,673 |
|
$ |
92,332,327 |
|
|
Antares Midco Inc. |
|
525,000,000 |
|
410,936,125 |
|
114,063,875 |
|
|||
|
Total Investments |
|
$ |
950,000,000 |
|
$ |
743,603,798 |
|
$ |
206,396,202 |
|
As of December 31, 2018, ABCS had the following maximum capital contributions, contributions and unfunded capital contributions from its members.
|
|
|
As of December 31, 2018 |
|
|||||||
|
|
|
Maximum Capital
|
|
Contributed
|
|
Unfunded Capital
|
|
|||
|
Bain Capital Specialty Finance, Inc. |
|
$ |
425,000,000 |
|
$ |
281,201,031 |
|
$ |
143,798,969 |
|
|
Antares Midco Inc. |
|
525,000,000 |
|
347,360,091 |
|
177,639,909 |
|
|||
|
Total Investments |
|
$ |
950,000,000 |
|
$ |
628,561,122 |
|
$ |
321,438,878 |
|
ABCS entered into a senior credit facility with JP Morgan on November 29, 2017 (the “ABCS Facility”). The ABCS Facility allows ABCS to borrow up to $1.5 billion subject to leverage and borrowing base restrictions. The maturity date of the ABCS Facility is November 29, 2022. As of March 31, 2019 and December 31, 2018, the ABCS Facility had $1,243.4 million and $1,031.2 million of outstanding debt under the credit facility, respectively. As of March 31, 2019 and December 31, 2018, the effective rate on the ABCS Facility was 5.51% and 5.13% per annum, respectively.
As of March 31, 2019 and December 31, 2018, ABCS held total investments with a fair value of $1,982.7 million and $1,632.5 million, respectively. As of March 31, 2019 and December 31, 2018, ABCS’s portfolio was comprised of senior secured unitranche loans of 25 and 22 different borrowers, respectively. As of March 31, 2019 and December 31, 2018, there were no loans on non-accrual status. The portfolio companies in ABCS are in industries similar to those in which the Company may invest directly. Below is a summary of ABCS’s portfolio, followed by a portfolio listing as of March 31, 2019 and December 31, 2018:
|
|
|
As of |
|
||||
|
|
|
March 31, 2019 |
|
December 31, 2018 |
|
||
|
Total first lien senior secured loans (1) |
|
$ |
1,993,297,899 |
|
$ |
1,648,306,973 |
|
|
Weighted average yield on first lien unitranche loans (2) |
|
8.4 |
% |
8.5 |
% |
||
|
Largest loan to a single borrower (1) |
|
$ |
126,163,507 |
|
$ |
122,910,538 |
|
|
Total of five largest loans to borrowers (1) |
|
$ |
599,160,108 |
|
$ |
566,072,685 |
|
|
Number of borrowers in the ABCS |
|
25 |
|
22 |
|
||
|
Commitments to fund delayed draw loans (3) |
|
$ |
74,748,969 |
|
$ |
57,622,635 |
|
(1) At principal amount.
(2) Based on par amount.
(3) As discussed above, these commitments have been approved by ABCS.
Below is certain summarized financial information for ABCS as of March 31, 2019 and December 31, 2018 and for the three months ended March 31, 2019 and 2018:
Selected Balance Sheet Information
|
|
|
As of |
|
||||
|
|
|
March 31, 2019 |
|
December 31, 2018 |
|
||
|
Loans, net of allowance of $21,277,037 and $17,616,259, respectively (1) |
|
$ |
1,953,503,699 |
|
$ |
1,616,794,497 |
|
|
Cash, restricted cash and other assets |
|
44,478,060 |
|
52,240,642 |
|
||
|
Total assets |
|
$ |
1,997,981,759 |
|
$ |
1,669,035,139 |
|
|
Debt (2) |
|
$ |
1,240,077,930 |
|
$ |
1,027,614,661 |
|
|
Other liabilities |
|
35,099,874 |
|
30,762,175 |
|
||
|
Total liabilities |
|
$ |
1,275,177,804 |
|
$ |
1,058,376,836 |
|
|
Members’ equity |
|
722,803,955 |
|
610,658,303 |
|
||
|
Total liabilities and members’ equity |
|
$ |
1,997,981,759 |
|
$ |
1,669,035,139 |
|
(1) ABCS is not considered an investment company and does not follow the accounting and reporting guidelines in ASC 946. ABCS applies an allowance for loan loss methodology prescribed by FASB ASC 310, Receivables , and FASB ASC 450 Contingencies . The allowance for loan loss as of March 31, 2019 is a general allowance, there was no specific allowance for loan losses during the period. The Company estimates a fair value for each loan in the ABCS portfolio, which is presented in the Antares Bain Capital Complete Financing Solution schedule of investments below, which is an input to the Company’s valuation of ABCS as a whole.
(2) Net of $3.3 million and $3.6 million deferred financing costs for the ABCS Facility, as of March 31, 2019 and December 31, 2018, respectively.
Selected Statement of Operations Information
|
|
|
For the Three Months Ended |
|
||||
|
|
|
March 31, 2019 |
|
March 31, 2018 |
|
||
|
Interest Income |
|
$ |
38,911,534 |
|
$ |
19,918,482 |
|
|
Fee income |
|
187,768 |
|
79,886 |
|
||
|
Total revenues |
|
39,099,302 |
|
19,998,368 |
|
||
|
Credit facility expenses (1) |
|
16,259,569 |
|
8,907,531 |
|
||
|
Other fees and expenses |
|
5,066,256 |
|
1,348,003 |
|
||
|
Total expenses |
|
21,325,825 |
|
10,255,534 |
|
||
|
Net investment income |
|
17,773,477 |
|
9,742,834 |
|
||
|
Net increase in members’ capital from operations |
|
$ |
17,773,477 |
|
$ |
9,742,834 |
|
(1) As of March 31, 2019 and December 31, 2018, the ABCS Facility had $1,243.4 million and $1,031.2 million of outstanding debt, respectively.
Loan Origination and Structuring Fees
ABCS is obligated to pay sourcing fees to the applicable member affiliate that sources the deal. For the three months ended March 31, 2019 and 2018, the Company did not earn any sourcing fees.
Antares Bain Capital Complete Financing Solution
As of March 31, 2019
|
Portfolio Company |
|
Spread Above Index
|
|
Interest Rate |
|
Maturity Date |
|
Principal/
|
|
Carrying Value |
|
Fair Value (2) |
|
|
|
Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delayed Draw Term Loan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFI Holdings I Corp (3) |
|
— |
|
— |
|
1/24/2025 |
|
$ |
— |
|
— |
|
(129,174 |
) |
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
— |
|
(129,174 |
) |
|
|
Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRCC Holdings, Inc. (10) |
|
L+ 6.50% |
|
9.01 |
% |
2/1/2021 |
|
$ |
11,878,108 |
|
11,878,108 |
|
11,878,108 |
|
|
Total Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
11,878,108 |
|
11,878,108 |
|
|
|
Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Solaray, LLC (8) |
|
L+ 5.75% |
|
8.08 |
% |
9/9/2023 |
|
$ |
29,933,358 |
|
28,700,780 |
|
29,933,357 |
|
|
WU Holdco, Inc. (3) |
|
— |
|
— |
|
3/26/2026 |
|
$ |
— |
|
— |
|
(133,145 |
) |
|
Total Consumer goods: non-durable |
|
|
|
|
|
|
|
|
|
28,700,780 |
|
29,800,212 |
|
|
|
FIRE: Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margaux Acquisition Inc. |
|
L+ 6.00% |
|
8.50 |
% |
12/19/2024 |
|
$ |
4,909,991 |
|
3,127,510 |
|
4,492,642 |
|
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
3,127,510 |
|
4,492,642 |
|
|
|
High Tech Industries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Element Buyer, Inc. |
|
L+ 5.25% |
|
7.75 |
% |
7/18/2025 |
|
$ |
7,600,080 |
|
7,600,080 |
|
7,853,416 |
|
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
7,600,080 |
|
7,853,416 |
|
|
|
Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ansira Holdings, Inc. |
|
L+ 5.75% |
|
8.25 |
% |
12/20/2022 |
|
$ |
2,475,264 |
|
2,475,264 |
|
2,450,283 |
|
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
2,475,264 |
|
2,450,283 |
|
|
|
Services: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McKissock, LLC |
|
L+ 5.75% |
|
8.25 |
% |
8/5/2021 |
|
$ |
2,598,485 |
|
2,598,485 |
|
2,598,485 |
|
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
2,598,485 |
|
2,598,485 |
|
|
|
Transportation: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Travel, Inc. |
|
L+ 6.50% |
|
8.88 |
% |
12/1/2021 |
|
$ |
1,890,742 |
|
1,890,742 |
|
1,890,742 |
|
|
Total Transportation: Consumer |
|
|
|
|
|
|
|
|
|
1,890,742 |
|
1,890,742 |
|
|
|
Total Delayed Draw Term Loan |
|
|
|
|
|
|
|
|
|
58,270,969 |
|
60,834,714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First lien senior secured loan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace & Defense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
API Technologies Corp. |
|
L+ 5.75% |
|
8.25 |
% |
4/22/2024 |
|
$ |
115,055,468 |
|
113,844,289 |
|
115,630,745 |
|
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
113,844,289 |
|
115,630,745 |
|
|
|
Capital Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFI Holdings I Corp |
|
L+ 5.75% |
|
8.51 |
% |
1/24/2025 |
|
$ |
113,750,618 |
|
111,904,731 |
|
112,613,110 |
|
|
Tidel Engineering, L.P. |
|
L+ 6.25% |
|
8.85 |
% |
3/1/2024 |
|
$ |
85,616,623 |
|
85,591,598 |
|
85,616,623 |
|
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
197,496,329 |
|
198,229,733 |
|
|
|
Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AP Plastics Group, LLC |
|
L+ 5.25% |
|
7.74 |
% |
8/1/2022 |
|
$ |
48,397,584 |
|
48,351,415 |
|
47,550,626 |
|
|
PRCC Holdings, Inc. (9) |
|
L+ 6.50% |
|
9.01 |
% |
2/1/2021 |
|
$ |
73,813,402 |
|
73,813,402 |
|
73,813,402 |
|
|
Total Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
122,164,817 |
|
121,364,028 |
|
|
|
Construction & Building |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profile Products LLC |
|
L+ 5.75% |
|
8.38 |
% |
12/20/2024 |
|
$ |
78,832,202 |
|
77,663,894 |
|
77,255,558 |
|
|
Total Construction & Building |
|
|
|
|
|
|
|
|
|
77,663,894 |
|
77,255,558 |
|
|
|
Consumer Goods: Durable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home Franchise Concepts, Inc. |
|
L+ 5.00% |
|
7.49 |
% |
7/9/2024 |
|
$ |
84,924,108 |
|
84,464,670 |
|
84,924,108 |
|
|
Stanton Carpet Corp. (7) |
|
L+ 5.50% |
|
8.06 |
% |
11/21/2022 |
|
$ |
57,748,494 |
|
57,701,945 |
|
57,748,494 |
|
|
Total Consumer goods: durable |
|
|
|
|
|
|
|
|
|
142,166,615 |
|
142,672,602 |
|
|
|
Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Solaray, LLC |
|
L+ 5.75% |
|
8.38 |
% |
9/11/2023 |
|
$ |
96,230,150 |
|
96,230,149 |
|
96,230,150 |
|
||
|
WU Holdco, Inc. |
|
L+ 5.50% |
|
8.11 |
% |
3/26/2026 |
|
$ |
89,423,290 |
|
87,909,571 |
|
87,532,626 |
|
||
|
Total Consumer goods: non-durable |
|
|
|
|
|
|
|
|
|
184,139,720 |
|
183,762,776 |
|
|||
|
Energy: Oil & Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Amspec Services, Inc. |
|
L+ 5.75% |
|
8.35 |
% |
7/2/2024 |
|
$ |
89,799,695 |
|
88,809,318 |
|
88,809,318 |
|
||
|
Total Energy: Oil & Gas |
|
|
|
|
|
|
|
|
|
88,809,318 |
|
88,809,318 |
|
|||
|
FIRE: Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Margaux Acquisition Inc. |
|
L+ 6.00% |
|
8.48 |
% |
12/19/2024 |
|
$ |
65,124,823 |
|
65,124,823 |
|
63,822,327 |
|
||
|
Margaux UK Finance Limited |
|
GBP LIBOR+ 6.00% |
|
7.00 |
% |
12/19/2024 |
|
£ |
17,355,633 |
|
22,616,125 |
|
22,160,401 |
|
||
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
87,740,948 |
|
85,982,728 |
|
|||
|
Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
CPS Group Holdings, Inc. |
|
L+ 5.50% |
|
7.99 |
% |
3/3/2025 |
|
$ |
125,591,322 |
|
123,734,095 |
|
124,335,409 |
|
||
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
123,734,095 |
|
124,335,409 |
|
|||
|
High Tech Industries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Symplr Software, Inc. |
|
L+ 5.50% |
|
8.00 |
% |
11/28/2025 |
|
$ |
68,011,212 |
|
67,363,573 |
|
66,991,044 |
|
||
|
Element Buyer, Inc. |
|
L+ 5.25% |
|
7.75 |
% |
7/18/2025 |
|
$ |
85,073,395 |
|
83,584,805 |
|
85,924,129 |
|
||
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
150,948,378 |
|
152,915,173 |
|
|||
|
Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Ansira Holdings, Inc. |
|
L+ 5.75% |
|
8.25 |
% |
12/20/2022 |
|
$ |
80,807,041 |
|
80,672,838 |
|
80,605,023 |
|
||
|
Cruz Bay Publishing, Inc. (5) |
|
L+ 5.75% |
|
8.52 |
% |
6/6/2019 |
|
$ |
11,259,640 |
|
11,259,640 |
|
11,259,640 |
|
||
|
Cruz Bay Publishing, Inc. (6) |
|
L+ 6.75% |
|
9.38 |
% |
6/6/2019 |
|
$ |
3,760,115 |
|
3,760,115 |
|
3,760,115 |
|
||
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
95,692,593 |
|
95,624,778 |
|
|||
|
Media: Diversified & Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Efficient Collaborative Retail Marketing Company, LLC |
|
L+ 6.75% |
|
9.35 |
% |
6/15/2022 |
|
$ |
22,569,647 |
|
22,569,647 |
|
22,738,920 |
|
||
|
Efficient Collaborative Retail Marketing Company, LLC |
|
L+ 6.75% |
|
9.35 |
% |
6/15/2022 |
|
$ |
33,741,229 |
|
33,208,745 |
|
33,994,288 |
|
||
|
Total Media: Diversified & Production |
|
|
|
|
|
|
|
|
|
55,778,392 |
|
56,733,208 |
|
|||
|
Retail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Batteries Plus Holding Corporation |
|
L+ 6.75% |
|
9.25 |
% |
7/6/2022 |
|
$ |
67,808,467 |
|
67,808,467 |
|
67,808,467 |
|
||
|
Total Retail |
|
|
|
|
|
|
|
|
|
67,808,467 |
|
67,808,467 |
|
|||
|
Services: Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
TEI Holdings Inc. |
|
L+ 6.00% |
|
8.80 |
% |
12/20/2023 |
|
$ |
118,589,052 |
|
117,768,575 |
|
118,292,579 |
|
||
|
Total Services: Business |
|
|
|
|
|
|
|
|
|
117,768,575 |
|
118,292,579 |
|
|||
|
Services: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
McKissock, LLC |
|
L+ 5.75% |
|
8.25 |
% |
8/5/2021 |
|
$ |
8,050,994 |
|
8,050,994 |
|
8,050,994 |
|
||
|
McKissock, LLC |
|
L+ 5.75% |
|
8.25 |
% |
8/5/2021 |
|
$ |
42,038,104 |
|
41,640,076 |
|
42,353,390 |
|
||
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
49,691,070 |
|
50,404,384 |
|
|||
|
Transportation: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Direct Travel, Inc. |
|
L+ 6.50% |
|
9.11 |
% |
12/1/2021 |
|
$ |
111,870,016 |
|
111,534,998 |
|
111,870,017 |
|
||
|
Total Transportation: Consumer |
|
|
|
|
|
|
|
|
|
111,534,998 |
|
111,870,017 |
|
|||
|
Wholesale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Abracon Group Holding, LLC. (4) |
|
L+ 5.75% |
|
8.36 |
% |
7/18/2024 |
|
$ |
81,292,356 |
|
80,215,937 |
|
80,885,894 |
|
||
|
Aramsco, Inc. |
|
L+ 5.25% |
|
7.75 |
% |
8/28/2024 |
|
$ |
50,216,699 |
|
49,311,331 |
|
49,311,331 |
|
||
|
Total Wholesale |
|
|
|
|
|
|
|
|
|
129,527,268 |
|
130,197,225 |
|
|||
|
Total First Lien Senior Secured |
|
|
|
|
|
|
|
|
|
1,916,509,766 |
|
1,921,888,728 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Total Corporate Debt |
|
|
|
|
|
|
|
|
|
$ |
1,974,780,735 |
|
$ |
1,982,723,442 |
|
|
|
Total Investments |
|
|
|
|
|
|
|
|
|
$ |
1,974,780,735 |
|
$ |
1,982,723,442 |
|
|
(1) The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”) which reset daily, monthly, quarterly or semiannually. For each, the Company has provided the spread over LIBOR and the current weighted average interest rate in effect at March 31, 2019. Certain investments are subject to a LIBOR interest rate floor.
(2) Fair Value determined by the Advisor.
(3) The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par.
(4) $204,252 of the total par amount for this security is at P + 4.75%.
(5) $158,063 of the total par amount for this security is at P + 4.75%.
(6) $52,785 of the total par amount for this security is at P + 5.75%.
(7) $1,770,487 of the total par amount for this security is at P + 4.50%.
(8) $38,975 of the total par amount for this security is at P + 4.75%.
(9) $393,462 of the total par amount for this security is at P + 5.50%.
(10) $62,615 of the total par amount for this security is at P + 5.50%.
Antares Bain Capital Complete Financing Solution
Schedule of Investments
|
Portfolio Company |
|
Spread Above
|
|
Interest
|
|
Maturity Date |
|
Principal/
|
|
Carrying Value |
|
Fair Value (2) |
|
|||
|
Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Corporate Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Delayed Draw Term Loan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
PRCC Holdings, Inc. |
|
L+ 6.50% |
|
9.02 |
% |
2/1/2021 |
|
$ |
11,878,108 |
|
$ |
11,878,108 |
|
$ |
11,878,108 |
|
|
Total Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
11,878,108 |
|
11,878,108 |
|
|||
|
Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Solaray, LLC |
|
L+ 5.75% |
|
8.49 |
% |
9/9/2023 |
|
$ |
26,680,389 |
|
26,387,900 |
|
26,546,987 |
|
||
|
Solaray, LLC (3) |
|
— |
|
— |
|
9/9/2023 |
|
$ |
— |
|
— |
|
(33,132 |
) |
||
|
Total Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
26,387,900 |
|
26,513,855 |
|
|||
|
FIRE: Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Margaux Acquisition Inc. (3) |
|
— |
|
— |
|
12/19/2024 |
|
$ |
— |
|
— |
|
(417,349 |
) |
||
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
— |
|
(417,349 |
) |
|||
|
High Tech Industries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Element Buyer, Inc. (3) |
|
— |
|
— |
|
7/19/2025 |
|
$ |
— |
|
— |
|
(133,001 |
) |
||
|
Element Buyer, Inc. |
|
L+ 5.25% |
|
7.76 |
% |
7/19/2025 |
|
$ |
7,600,080 |
|
7,473,201 |
|
7,543,079 |
|
||
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
7,473,201 |
|
7,410,078 |
|
|||
|
Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Ansira Holdings, Inc. |
|
L+ 5.75% |
|
8.27 |
% |
12/20/2022 |
|
$ |
2,478,122 |
|
2,471,720 |
|
2,459,537 |
|
||
|
Ansira Holdings, Inc. (3) |
|
— |
|
— |
|
12/20/2022 |
|
$ |
— |
|
— |
|
(56,379 |
) |
||
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
2,471,720 |
|
2,403,158 |
|
|||
|
Services: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
McKissock, LLC |
|
L+ 5.75% |
|
8.55 |
% |
8/5/2021 |
|
$ |
2,605,055 |
|
2,583,309 |
|
2,605,055 |
|
||
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
2,583,309 |
|
2,605,055 |
|
|||
|
Transportation: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Direct Travel, Inc. |
|
L+ 6.50% |
|
9.12 |
% |
12/1/2021 |
|
$ |
1,672,019 |
|
1,669,299 |
|
1,672,019 |
|
||
|
Direct Travel, Inc. |
|
— |
|
— |
|
12/1/2021 |
|
$ |
— |
|
— |
|
— |
|
||
|
Total Transportation: Consumer |
|
|
|
|
|
|
|
|
|
1,669,299 |
|
1,672,019 |
|
|||
|
Total Delayed Draw Term Loan |
|
|
|
|
|
|
|
|
|
$ |
52,463,537 |
|
$ |
52,064,924 |
|
|
|
First lien senior secured loan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aerospace & Defense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
API Technologies Corp. |
|
L+ 5.75% |
|
8.27 |
% |
4/20/2024 |
|
$ |
117,860,616 |
|
116,559,417 |
|
117,565,964 |
|
||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
116,559,417 |
|
117,565,964 |
|
|||
|
Capital Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Tidel Engineering, L.P. |
|
L+ 6.25% |
|
9.05 |
% |
3/1/2024 |
|
$ |
86,441,743 |
|
86,415,211 |
|
86,441,743 |
|
||
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
86,415,211 |
|
86,441,743 |
|
|||
|
Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
AP Plastics Group, LLC |
|
L+ 5.25% |
|
7.60 |
% |
8/1/2022 |
|
$ |
48,397,584 |
|
48,348,003 |
|
47,913,608 |
|
||
|
PRCC Holdings, Inc. |
|
L+ 6.50% |
|
9.02 |
% |
2/1/2021 |
|
$ |
73,813,402 |
|
73,813,402 |
|
73,813,402 |
|
||
|
Total Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
122,161,405 |
|
121,727,010 |
|
|||
|
Construction & Building |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Profile Products LLC |
|
L+ 5.75% |
|
8.54 |
% |
12/20/2024 |
|
$ |
78,832,202 |
|
77,613,584 |
|
77,255,558 |
|
||
|
Total Construction & Building |
|
|
|
|
|
|
|
|
|
77,613,584 |
|
77,255,558 |
|
|||
|
Consumer Goods: Durable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Home Franchise Concepts, Inc. |
|
L+ 5.00% |
|
7.43 |
% |
7/9/2024 |
|
$ |
69,090,608 |
|
68,773,182 |
|
68,399,702 |
|
||
|
Stanton Carpet Corp. (7) |
|
L+ 5.50% |
|
8.04 |
% |
11/21/2022 |
|
$ |
60,231,137 |
|
60,179,302 |
|
59,628,826 |
|
||
|
Total Consumer Goods: Durable |
|
|
|
|
|
|
|
|
|
128,952,484 |
|
128,028,528 |
|
|||
|
Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Solaray, LLC |
|
L+ 5.75% |
|
8.49 |
% |
9/9/2023 |
|
$ |
96,230,150 |
|
95,175,207 |
|
95,748,999 |
|
||
|
Total Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
95,175,207 |
|
95,748,999 |
|
|||
|
Energy: Oil & Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Amspec Services, Inc. |
|
L+ 5.75% |
|
8.55 |
% |
7/2/2024 |
|
$ |
90,025,323 |
|
88,985,892 |
|
86,874,436 |
|
||
|
Total Energy: Oil & Gas |
|
|
|
|
|
|
|
|
|
88,985,892 |
|
86,874,436 |
|
|||
|
FIRE: Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Margaux Acquisition Inc. |
|
L+ 6.00% |
|
8.80 |
% |
12/19/2024 |
|
$ |
65,124,823 |
|
63,765,565 |
|
63,822,327 |
|
||
|
Margaux UK Finance Limited |
|
GBP LIBOR+ 6.00% |
|
7.00 |
% |
12/19/2024 |
|
£ |
17,355,633 |
|
21,651,078 |
|
21,665,453 |
|
||
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
85,416,643 |
|
85,487,780 |
|
|||
|
High Tech Industries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Caliper Software, Inc. |
|
L+ 5.50% |
|
8.02 |
% |
11/28/2025 |
|
$ |
68,181,667 |
|
67,508,387 |
|
67,158,942 |
|
||
|
Element Buyer, Inc. |
|
L+ 5.25% |
|
7.78 |
% |
7/19/2025 |
|
$ |
85,287,148 |
|
83,863,326 |
|
84,647,494 |
|
||
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
151,371,713 |
|
151,806,436 |
|
|||
|
Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Ansira Holdings, Inc. |
|
L+ 5.75% |
|
8.27 |
% |
12/20/2022 |
|
$ |
81,011,099 |
|
80,874,067 |
|
80,403,516 |
|
||
|
Cruz Bay Publishing, Inc. (5) |
|
L+ 5.75% |
|
8.30 |
% |
6/6/2019 |
|
$ |
11,417,703 |
|
11,417,703 |
|
11,417,703 |
|
||
|
Cruz Bay Publishing, Inc. (6) |
|
L+ 6.75% |
|
9.57 |
% |
6/6/2019 |
|
$ |
3,812,900 |
|
3,812,900 |
|
3,812,900 |
|
||
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
96,104,670 |
|
95,634,119 |
|
|||
|
Media: Diversified & Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Efficient Collaborative Retail Marketing Company, LLC |
|
L+ 6.75% |
|
9.55 |
% |
6/15/2022 |
|
$ |
22,799,950 |
|
22,721,506 |
|
22,571,950 |
|
||
|
Efficient Collaborative Retail Marketing Company, LLC |
|
L+ 6.75% |
|
9.56 |
% |
6/15/2022 |
|
$ |
33,741,229 |
|
33,241,212 |
|
33,403,817 |
|
||
|
Total Media: Diversified & Production |
|
|
|
|
|
|
|
|
|
55,962,718 |
|
55,975,767 |
|
|||
|
Retail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Batteries Plus Holding Corporation |
|
L+ 6.75% |
|
9.27 |
% |
7/6/2022 |
|
$ |
68,156,203 |
|
68,156,203 |
|
68,156,203 |
|
||
|
Total Retail |
|
|
|
|
|
|
|
|
|
68,156,203 |
|
68,156,203 |
|
|||
|
Services: Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
TEI Holdings Inc. |
|
L+ 6.00% |
|
8.80 |
% |
12/20/2023 |
|
$ |
118,589,052 |
|
117,725,743 |
|
117,403,161 |
|
||
|
Total Services: Business |
|
|
|
|
|
|
|
|
|
117,725,743 |
|
117,403,161 |
|
|||
|
Services: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
McKissock, LLC |
|
L+ 5.75% |
|
8.55 |
% |
8/5/2021 |
|
$ |
8,071,352 |
|
8,003,974 |
|
8,071,352 |
|
||
|
McKissock, LLC |
|
L+ 5.75% |
|
8.55 |
% |
8/5/2021 |
|
$ |
42,144,017 |
|
41,792,208 |
|
42,460,097 |
|
||
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
49,796,182 |
|
50,531,449 |
|
|||
|
Transportation: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Direct Travel, Inc. |
|
L+ 6.50% |
|
9.30 |
% |
12/1/2021 |
|
$ |
112,153,232 |
|
111,788,965 |
|
112,153,232 |
|
||
|
Total Transportation: Consumer |
|
|
|
|
|
|
|
|
|
111,788,965 |
|
112,153,232 |
|
|||
|
Wholesale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Abracon Group Holding, LLC. (4) |
|
L+ 5.75% |
|
8.56 |
% |
7/18/2024 |
|
$ |
81,496,608 |
|
80,367,292 |
|
80,681,642 |
|
||
|
Aramsco, Inc. |
|
L+ 5.25% |
|
7.77 |
% |
8/28/2024 |
|
$ |
50,342,871 |
|
49,393,889 |
|
48,958,442 |
|
||
|
Total Wholesale |
|
|
|
|
|
|
|
|
|
129,761,181 |
|
129,640,084 |
|
|||
|
Total First Lien Senior Secured |
|
|
|
|
|
|
|
|
|
$ |
1,581,947,218 |
|
$ |
1,580,430,469 |
|
|
|
Total Corporate Debt |
|
|
|
|
|
|
|
|
|
$ |
1,634,410,755 |
|
$ |
1,632,495,393 |
|
|
|
Total Investments |
|
|
|
|
|
|
|
|
|
$ |
1,634,410,755 |
|
$ |
1,632,495,393 |
|
|
(1) The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”) which reset daily, monthly, quarterly or semiannually. For each, the Company has provided the spread over LIBOR and the current weighted average interest rate in effect at December 31, 2018. Certain investments are subject to a LIBOR interest rate floor.
(2) Fair Value determined by the Advisor.
(3) The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par.
(4) $204,252 of the total par amount for this security is at P + 4.75%.
(5) $158,063 of the total par amount for this security is at P + 4.75%.
(6) $52,785 of the total par amount for this security is at P + 5.75%.
(7) $391,241 of the total par amount for this security is at P + 4.50%.
Note 4. Fair Value Measurements
Fair Value Disclosures
The following table presents fair value measurements of investments by major class, cash equivalents and derivatives as of March 31, 2019, according to the fair value hierarchy:
|
|
|
Fair Value Measurements |
|
||||||||||
|
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
||||
|
Investments: |
|
|
|
|
|
|
|
|
|
||||
|
First Lien Senior Secured Loans |
|
$ |
— |
|
$ |
600,134,732 |
|
$ |
531,644,335 |
|
$ |
1,131,779,067 |
|
|
First Lien Last Out Loans |
|
— |
|
— |
|
28,365,825 |
|
28,365,825 |
|
||||
|
Second Lien Senior Secured Loans |
|
— |
|
113,086,772 |
|
119,556,149 |
|
232,642,921 |
|
||||
|
Subordinated Debt |
|
— |
|
— |
|
39,625,000 |
|
39,625,000 |
|
||||
|
Corporate Bonds |
|
— |
|
27,829,145 |
|
— |
|
27,829,145 |
|
||||
|
Investment Vehicles (1) |
|
— |
|
— |
|
335,350,725 |
|
335,350,725 |
|
||||
|
Equity Interest |
|
— |
|
— |
|
26,530,174 |
|
26,530,174 |
|
||||
|
Preferred Equity |
|
— |
|
— |
|
7,696,500 |
|
7,696,500 |
|
||||
|
Warrants |
|
— |
|
— |
|
120,593 |
|
120,593 |
|
||||
|
Total Investments |
|
$ |
— |
|
$ |
741,050,649 |
|
$ |
1,088,889,301 |
|
$ |
1,829,939,950 |
|
|
Cash equivalents |
|
$ |
83,669,330 |
|
$ |
— |
|
$ |
— |
|
$ |
83,669,330 |
|
|
Forward currency exchange contracts (liability) |
|
$ |
— |
|
$ |
6,038,508 |
|
$ |
— |
|
$ |
6,038,508 |
|
(1) Represents equity investment in ABCS.
The following table presents fair value measurements of investments by major class, cash equivalents and derivatives as of December 31, 2018, according to the fair value hierarchy:
|
|
|
Fair Value Measurements |
|
||||||||||
|
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
||||
|
Investments: |
|
|
|
|
|
|
|
|
|
||||
|
First Lien Senior Secured Loans |
|
$ |
— |
|
$ |
619,351,395 |
|
$ |
439,487,014 |
|
$ |
1,058,838,409 |
|
|
First Lien Last Out Loans |
|
— |
|
— |
|
27,487,248 |
|
27,487,248 |
|
||||
|
Second Lien Senior Secured Loans |
|
— |
|
112,585,925 |
|
145,555,089 |
|
258,141,014 |
|
||||
|
Subordinated Debt |
|
— |
|
— |
|
39,625,000 |
|
39,625,000 |
|
||||
|
Corporate Bonds |
|
— |
|
35,023,170 |
|
— |
|
35,023,170 |
|
||||
|
Investment Vehicles (1) |
|
— |
|
— |
|
279,362,792 |
|
279,362,792 |
|
||||
|
Equity Interest |
|
— |
|
— |
|
26,521,285 |
|
26,521,285 |
|
||||
|
Preferred Equity |
|
— |
|
— |
|
2,806,753 |
|
2,806,753 |
|
||||
|
Warrants |
|
— |
|
— |
|
— |
|
— |
|
||||
|
Total Investments |
|
$ |
— |
|
$ |
766,960,490 |
|
$ |
960,845,181 |
|
$ |
1,727,805,671 |
|
|
Cash equivalents |
|
$ |
876,881 |
|
$ |
— |
|
$ |
— |
|
$ |
876,881 |
|
|
Forward currency exchange contracts (liability) |
|
$ |
— |
|
$ |
9,321,758 |
|
$ |
— |
|
$ |
9,321,758 |
|
(1) Represents equity investment in ABCS.
The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended March 31, 2019:
|
|
|
First Lien
|
|
First Lien
|
|
Second Lien
|
|
Subordinated
|
|
Investment
|
|
Equity
|
|
Preferred
|
|
Warrants |
|
Total
|
|
|||||||||
|
Balance as of January 1, 2019 |
|
$ |
439,487,014 |
|
$ |
27,487,248 |
|
$ |
145,555,089 |
|
$ |
39,625,000 |
|
$ |
279,362,792 |
|
$ |
26,521,285 |
|
$ |
2,806,753 |
|
$ |
— |
|
$ |
960,845,181 |
|
|
Purchases of investments and other adjustments to cost |
|
112,742,903 |
|
307,126 |
|
20,095,881 |
|
— |
|
51,466,642 |
|
— |
|
4,722,133 |
|
|
|
189,334,685 |
|
|||||||||
|
Paid-in-kind interest |
|
— |
|
85,446 |
|
— |
|
— |
|
— |
|
— |
|
15,333 |
|
— |
|
100,779 |
|
|||||||||
|
Net accretion of discounts (amortization of premiums) |
|
370,793 |
|
27,278 |
|
86,586 |
|
17,264 |
|
— |
|
— |
|
— |
|
— |
|
501,921 |
|
|||||||||
|
Proceeds from principal repayments and sales of investments |
|
(63,507,282 |
) |
(55,773 |
) |
(32,658,614 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(96,221,669 |
) |
|||||||||
|
Net change in unrealized appreciation (depreciation) on investments |
|
(473,974 |
) |
514,500 |
|
1,046,462 |
|
(17,264 |
) |
4,521,291 |
|
8,889 |
|
152,281 |
|
120,593 |
|
5,872,778 |
|
|||||||||
|
Net realized gains (losses) on investments |
|
(137,118 |
) |
— |
|
270,197 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
133,079 |
|
|||||||||
|
Transfers out of Level 3 |
|
(71,418,450 |
) |
— |
|
(17,383,784 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(88,802,234 |
) |
|||||||||
|
Transfers to Level 3 |
|
114,580,449 |
|
— |
|
2,544,332 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
117,124,781 |
|
|||||||||
|
Balance as of March 31, 2019 |
|
$ |
531,644,335 |
|
$ |
28,365,825 |
|
$ |
119,556,149 |
|
$ |
39,625,000 |
|
$ |
335,350,725 |
|
$ |
26,530,174 |
|
$ |
7,696,500 |
|
$ |
120,593 |
|
$ |
1,088,889,301 |
|
|
Change in unrealized appreciation (depreciation) attributable to investments still held at March 31, 2019 |
|
$ |
(839,473 |
) |
$ |
514,500 |
|
$ |
1,046,462 |
|
$ |
(17,264 |
) |
$ |
4,521,291 |
|
$ |
8,889 |
|
$ |
152,281 |
|
$ |
120,593 |
|
$ |
5,507,279 |
|
(1) Represents equity investment in ABCS.
Transfers between levels, if any, are recognized at the beginning of the quarter in which transfers occur. For the three months ended March 31, 2019, transfers from Level 2 to Level 3 were primarily due to decreased price transparency. For the three months ended March 31, 2019, transfers from Level 3 to Level 2 were primarily due to increased price transparency.
The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended March 31, 2018:
|
|
|
First Lien
|
|
First Lien
|
|
Second Lien
|
|
Investment
|
|
Equity
|
|
Preferred
|
|
Total
|
|
|||||||
|
Balance as of January 1, 2018 |
|
$ |
215,339,087 |
|
$ |
30,515,994 |
|
$ |
84,722,132 |
|
$ |
178,409,807 |
|
$ |
9,763,092 |
|
$ |
1,963,490 |
|
$ |
520,713,602 |
|
|
Purchases of investments and other adjustments to cost |
|
102,664,923 |
|
— |
|
20,618,726 |
|
2,993,256 |
|
— |
|
— |
|
126,276,905 |
|
|||||||
|
Net accretion of discounts (amortization of premiums) |
|
135,971 |
|
11,826 |
|
61,933 |
|
— |
|
— |
|
— |
|
209,730 |
|
|||||||
|
Proceeds from principal repayments and sales of investments |
|
(37,696,682 |
) |
(25,355 |
) |
(1,337,905 |
) |
(1,005,009 |
) |
— |
|
— |
|
(40,064,951 |
) |
|||||||
|
Net change in unrealized appreciation on investments |
|
1,367,669 |
|
276,446 |
|
426,620 |
|
1,865,227 |
|
2 |
|
109,302 |
|
4,045,266 |
|
|||||||
|
Net realized gains on investments |
|
1,573 |
|
— |
|
18,493 |
|
— |
|
— |
|
— |
|
20,066 |
|
|||||||
|
Transfers out of Level 3 |
|
(5,282,654 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(5,282,654 |
) |
|||||||
|
Transfers to Level 3 |
|
8,165,560 |
|
— |
|
1,242,818 |
|
— |
|
— |
|
— |
|
9,408,378 |
|
|||||||
|
Balance as of March 31, 2018 |
|
$ |
284,695,447 |
|
$ |
30,778,911 |
|
$ |
105,752,817 |
|
$ |
182,263,281 |
|
$ |
9,763,094 |
|
$ |
2,072,792 |
|
$ |
615,326,342 |
|
|
Change in unrealized appreciation attributable to investments still held at March 31, 2018 |
|
$ |
1,666,700 |
|
$ |
276,446 |
|
$ |
426,620 |
|
$ |
1,865,227 |
|
$ |
2 |
|
$ |
109,302 |
|
$ |
4,344,297 |
|
(1) Represents equity investment in ABCS.
Transfers between levels, if any, are recognized at the beginning of the quarter in which transfers occur. For the three months ended March 31, 2018, transfers from Level 2 to Level 3 were primarily due to decreased price transparency. For the three months ended March 31, 2018, the transfer from Level 3 to Level 2 was primarily due to increased price transparency.
Significant Unobservable Inputs
ASC 820 requires disclosure of quantitative information about the significant unobservable inputs used in the valuation of assets and liabilities classified as Level 3 within the fair value hierarchy. Disclosure of this information is not required in circumstances where a valuation (unadjusted) is obtained from a third-party pricing service and the information regarding the unobservable inputs is not reasonably available to the Company and as such, the disclosures provided below exclude those investments valued in that manner.
|
|
|
As of March 31, 2019 |
|
|||||||
|
|
|
Fair Value
|
|
Valuation
|
|
Significant
|
|
Range of Significant
|
|
|
|
First Lien Senior Secured Loans |
|
$ |
15,166,960 |
|
Collateral analysis |
|
Recovery Rate |
|
100% |
|
|
First Lien Senior Secured Loans |
|
4,144,528 |
|
Comparable company multiple |
|
Book value multiple |
|
1.0x-1.0x (1.0x) |
|
|
|
First Lien Senior Secured Loans |
|
223,858,657 |
|
Discounted cash flows |
|
Comparative yields |
|
4.6%-9.3% (7.5%) |
|
|
|
First Lien Senior Secured Loans |
|
8,039,470 |
|
Comparable company multiple |
|
EBITDA Multiple |
|
5.6x-5.6x (5.6x) |
|
|
|
First Lien Last Out |
|
28,048,740 |
|
Discounted cash flows |
|
Comparative yields |
|
7.7%-14.0% (11.5%) |
|
|
|
Second Lien Senior Secured Loans |
|
86,340,203 |
|
Discounted cash flows |
|
Comparative yields |
|
6.1%-14.5% (10.3%) |
|
|
|
Subordinated Debt |
|
39,625,000 |
|
Discounted cash flows |
|
Comparative yields |
|
10.0%-15.8% (12.1%) |
|
|
|
Equity Interest |
|
14,596,295 |
|
Comparable company multiple |
|
Book value multiple |
|
1.0x-1.0x (1.0x) |
|
|
|
Equity Interest |
|
11,770,079 |
|
Comparable company multiple |
|
EBITDA Multiple |
|
7.0x-13.8x (9.3x) |
|
|
|
Preferred Equity |
|
2,973,967 |
|
Comparable company multiple |
|
EBITDA Multiple |
|
7.5x-10.5x (9.9x) |
|
|
|
Warrants |
|
120,593 |
|
Comparable company multiple |
|
EBITDA Multiple |
|
7.5x-7.5x (7.5x) |
|
|
|
Investment Vehicles (3) |
|
335,350,725 |
|
Other |
|
N/A |
|
N/A |
|
|
|
Total investments |
|
$ |
770,035,217 |
|
|
|
|
|
|
|
(1) Included within the Level 3 assets of $1,088,889,301 is an amount of $318,854,084 for which the Advisor did not develop the unobservable inputs for the determination of fair value (examples include single source quotation and prior or pending transactions).
(2) Weighted average is calculated by weighing the significant unobservable input by the relative fair value of each investment in the category.
(3) Represents equity investment in ABCS. The Company determines the fair value of its investment in ABCS giving consideration to the assets and liabilities of ABCS, at fair value, including consideration of any necessary adjustments. The fair value of the loans held by ABCS have been determined based upon recent transactions or the use of discounted cash flows, with comparative yields ranging from 6.8% to 9.7% and a weighted average of 8.4%. The carrying value of the ABCS Facility approximates fair value.
The Company used the income approach and market approach to determine the fair value of certain Level 3 assets as of March 31, 2019. The significant unobservable input used in the income approach is the comparative yield. The comparative yield is used to discount the estimated future cash flows expected to be received from the underlying investment. An increase/decrease in the comparative yield would result in a decrease/increase, respectively, in the fair value. 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.
The valuation techniques and significant unobservable inputs used in Level 3 fair value measurements of assets as of December 31, 2018 were as follows:
|
|
|
As of December 31, 2018 |
|
|||||||
|
|
|
Fair Value
|
|
Valuation
|
|
Significant
|
|
Range of Significant
|
|
|
|
First Lien Senior Secured Loans |
|
$ |
248,966,920 |
|
Discounted Cash Flows |
|
Comparative Yields |
|
5.4%-12.8% (8.1%) |
|
|
First Lien Senior Secured Loans |
|
4,162,757 |
|
Comparable Company Multiple |
|
Book Value Multiple |
|
1x-1x (1x) |
|
|
|
First Lien Senior Secured Loans |
|
11,500,080 |
|
Collateral Analysis |
|
Recovery Rate |
|
100% |
|
|
|
First Lien Last Out Loans |
|
27,454,616 |
|
Discounted Cash Flows |
|
Comparative Yields |
|
8.6%-14.5% (12.1%) |
|
|
|
Second Lien Senior Secured Loans |
|
85,979,661 |
|
Discounted Cash Flows |
|
Comparative Yields |
|
6.6%-14.5% (10.6%) |
|
|
|
Subordinated Debt |
|
39,625,000 |
|
Discounted Cash Flows |
|
Comparative Yields |
|
10.0%-16.2% (12.3%) |
|
|
|
Investment Vehicles (3) |
|
279,362,792 |
|
Other |
|
— |
|
— |
|
|
|
Equity Interest |
|
3,000,362 |
|
Comparable Company Multiple |
|
EBITDA Multiple |
|
13.3x-13.5x (13.4x) |
|
|
|
Equity Interest |
|
14,722,691 |
|
Comparable Company Multiple |
|
Book Value Multiple |
|
1x-1x (1x) |
|
|
|
Preferred Equity |
|
2,206,753 |
|
Comparable Company Multiple |
|
EBITDA Multiple |
|
10.5x-10.5x (10.5x) |
|
|
|
Total investments |
|
$ |
716,981,632 |
|
|
|
|
|
|
|
(1) Included within the Level 3 assets of $960,845,181 is an amount of $243,863,549 for which the Advisor did not develop the unobservable inputs for the determination of fair value (examples include single source quotation and prior or pending transactions).
(2) Weighted average is calculated by weighing the significant unobservable input by the relative fair value of each investment in the category.
(3) Represents equity investment in ABCS. The Company determines the fair value of its investment in ABCS giving consideration to the assets and liabilities of ABCS, at fair value, including consideration of any necessary adjustments. The fair value of the loans held by ABCS have been determined based upon recent transactions or the use of discounted cash flows, with comparative yields ranging from 7.7% to 10.9% and a weighted average of 8.9%. The carrying value of the ABCS Facility approximates fair value.
The Company used the income approach and market approach to determine the fair value of certain Level 3 assets as of December 31, 2018. The significant unobservable input used in the income approach is the comparative yield. The comparative yield is used to discount the estimated future cash flows expected to be received from the underlying investment. An increase/decrease in the comparative yield would result in a decrease/increase, respectively, in the fair value. 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.
The fair value of the BCSF Revolving Credit Facility (as defined in Note 6), which is categorized as Level 3 within the fair value hierarchy as of March 31, 2019 and December 31, 2018, approximates the carrying value of such facility. The fair values of the 2018-1 Notes (as defined in Note 6), which are categorized as Level 3 within the fair value hierarchy as of March 31, 2019, approximate the carrying value of such facilities. The fair value of the Citibank Revolving Credit Facility (as defined in Note 6), which is categorized as Level 3 within the fair value hierarchy as of March 31, 2019, approximates the carrying value of such facility.
Note 5. Related Party Transactions
Investment Advisory Agreement
The Company has entered into the first amended and restated investment advisory agreement as of November 14, 2018 (the “Investment Advisory Agreement”) with the Advisor, pursuant to which the Advisor manages the Company’s investment program and related activities. On November 28, 2018, the Board, including a majority of the Independent Directors, approved a second amended and restated advisory agreement (the “Amended Advisory Agreement”) between the Company and BCSF Advisors, LP (“the Advisor”). On February 1, 2019, Shareholders approved the Amended Advisory Agreement which replaced the existing Investment Advisory Agreement.
Base Management Fee
The Company pays the Advisor a base management fee (the “Base Management Fee”), accrued and payable quarterly in arrears. The Base Management Fee is calculated at an annual rate of 1.50% (0.375% per quarter) of the average value of the Company’s gross assets (excluding cash and cash equivalents, but including assets purchased with borrowed amounts) at the end of each of the two most recently completed calendar quarters (and, in the case of our first quarter, our gross assets as of such quarter-end). Such amount shall be appropriately adjusted (based on the actual number of days elapsed relative to the total number of days in such calendar quarter) for any share issuance or repurchases by the Company during a calendar quarter. The Base Management Fee for any partial quarter will be appropriately prorated. Effective February 1, 2019, the base management fee has been revised to a tiered management fee structure so that the base management fee of 1.5% (0.375% per quarter) of the average value of the Company’s gross assets (excluding cash and cash equivalents, but including assets purchased with borrowed amounts) will continue to apply to assets held at an asset coverage ratio down to 200%, but a lower base management fee of 1.0% (0.25% per quarter) of the average value of the Company’s gross assets (excluding cash and cash equivalents, but including assets purchased with borrowed amounts) will apply to any amount of assets attributable to leverage decreasing the Company’s asset coverage ratio below 200%.
The Advisor, however, contractually waived its right to receive the Base Management Fee in excess of 0.75% of the aggregate gross assets excluding cash (including capital drawn to pay the Company’s expenses) during any period prior to the IPO. Additionally, for the period from the date of the IPO through December 31, 2018, the Advisor voluntarily waived its right to receive the Base Management Fee in excess of 0.75%. The Advisor was not permitted to recoup any waived amounts. In certain previous filings, management fees were presented on a net basis.
For the three months ended March 31, 2019 and 2018 Management fees were $6.8 million and $3.2 million, respectively. For the three months ended March 31, 2019, $0.0 million was contractually waived and $2.3 million was voluntarily waived. For the three months ended March 31, 2018, $1.6 million was contractually waived and $0.0 million was voluntarily waived.
As of March 31, 2019 and December 31, 2018, management fees payable were $4.5 million and $3.0 million, respectively.
Incentive Fee
For the periods ended March 31, 2019 and 2018, the incentive fee consists of two parts that are determined independently of each other such that one component may be payable even if the other is not.
The first part, the Incentive Fee based on income (the “Income Fee”), is calculated and payable quarterly in arrears as detailed below.
The second part, the capital gains incentive fee, is determined and payable in arrears as detailed below.
Incentive Fee on Pre-Incentive Fee Net Investment Income
Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the quarter (including the Base Management Fee, any expenses payable under the Administration Agreement, and any interest expense and dividends paid on any outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature such as market discount, original issue discount (“OID”), debt instruments with PIK interest, preferred stock with PIK dividends and zero-coupon securities, accrued income that the Company has not yet received in cash.
Pre-incentive fee net investment income does not include any realized or unrealized capital gains or losses or unrealized capital appreciation or depreciation. Because of the structure of the incentive fee, it is possible that the Company may pay an incentive fee in a quarter where the Company incurs a loss. For example, if the Company receives pre-incentive fee net investment income in excess of the Hurdle rate for a quarter, the Company will pay the applicable incentive fee even if the Company has incurred a loss in that quarter due to realized and unrealized capital losses.
Prior to the calendar quarter that commences on January 1, 2019 the incentive on income was calculated as follows:
(i) 15.0% of the pre-incentive fee net investment income for the current quarter prior to the IPO; or
(ii) 17.5% of the pre-incentive fee net income for the current quarter after the IPO;: and
(i) 15.0% of all remaining pre-incentive fee net investment income above the “catch-up” prior to the IPO, or
(ii) 17.5% of all remaining pre-incentive fee net investment income above the “catch-up” after the IPO.
Beginning with the calendar quarter that commences on January 1, 2019, the incentive fee based on income is calculated and payable quarterly in arrears based on the aggregate pre-incentive fee net investment income in respect of the current calendar quarter and the eleven preceding calendar quarters beginning with the calendar quarter that commences on or after January 1, 2019 (or the appropriate portion thereof in the case of any of the Company’s first eleven calendar quarters that commence on or after January 1, 2019) (in either case, the “Trailing Twelve Quarters”). This calculation is referred to as the “Three-Year Lookback.”
With respect to any calendar quarter that commences on or after January 1, 2019, pre-incentive fee net investment income in respect of the relevant Trailing Twelve Quarters is compared to a “Hurdle Amount” equal to the product of (i) the hurdle rate of 1.5% per quarter (6% annualized) and (ii) the sum of our net assets (defined as total assets less indebtedness and before taking into account any incentive fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to our NAV at the beginning of each applicable calendar quarter for our subscriptions (which shall include all issuances by us of shares of our Common Stock, including issuances pursuant to the Company’s dividend reinvestment plan) and distributions during the applicable calendar quarter.
Commencing on January 1, 2019, the quarterly incentive fee based on income is calculated, subject to the Incentive Fee Cap (as defined below), based on the amount by which (A) aggregate pre-incentive fee net investment income in respect of the relevant Trailing Twelve Quarters exceeds (B) the Hurdle Amount for such Trailing Twelve Quarters. The amount of the excess of (A) over (B) described in this paragraph for such Trailing Twelve Quarters is referred to as the “Excess Income Amount.” The incentive fee based on income that is paid to the Advisor in respect of a particular calendar quarter will equal the Excess Income Amount less the aggregate incentive fees based on income that were paid to the Advisor in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
The incentive fee based on income for each calendar quarter is determined as follows:
(i) No incentive fee based on income is payable to the Advisor for any calendar quarter for which there is no Excess Income Amount;
(ii) 100% of the aggregate pre-incentive fee net investment income in respect of the Trailing Twelve Quarters with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the Hurdle Amount, but is less than or equal to an amount, which we refer to as the “Catch-up Amount,” determined as the sum of 1.8182% multiplied by our NAV at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters; and
(iii) 17.5% of the aggregate pre-incentive fee net investment income in respect of the Trailing Twelve Quarters that exceeds the Catch-up Amount.
Incentive Fee Cap
With respect to any calendar quarter that commences on or after January 1, 2019, the incentive fee based on income is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 17.5% of the Cumulative Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate incentive fees based on income that were paid to the Advisor in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.
“Cumulative Net Return” during the relevant Trailing Twelve Quarters means (x) the pre-incentive fee net investment income in respect of the relevant Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the relevant Trailing Twelve Quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, we will pay no incentive fee based on income to the Advisor in respect of that quarter. If, in any quarter, the Incentive Fee Cap for such quarter is a positive value but is less than the incentive fee based on income that is payable to the Advisor for such quarter calculated as described above, we will pay an incentive fee based on income to the Advisor equal to the Incentive Fee Cap in respect of such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is equal to or greater than the incentive fee based on income that is payable to the Advisor for such quarter calculated as described above, we will pay an incentive fee based on income to the Advisor equal to the incentive fee calculated as described above for such quarter without regard to the Incentive Fee Cap.
“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.
For the three months ended March 31, 2019 and 2018, the Company incurred $4.1 million and $1.6 million, respectively, of income incentive fees (before waivers), which are included in incentive fees on the consolidated statements of operations. The Advisor has voluntarily waived $2.0 million and $0.0 million, respectively, of the income incentive fees earned by the Advisor during the three months ended March 31, 2019 and 2018. Such income incentive fee waiver is irrevocable and such waived income incentive fees will not be subject to recoupment in future periods. This income incentive fee waiver does not impact any income incentive fees earned by the Advisor in future periods.
As a result of the income incentive fee waivers, the Company incurred $2.1 million of income incentive fees (after waivers) for the three months ended March 31, 2019. As a result of the income incentive fee waivers, the Company incurred $1.6 million of income incentive fees (after waivers) for the three months ended March 31, 2018, respectively.
As of March 31, 2019 and December 31, 2018, there was $2.1 million and $3.3 million, respectively, related to the income incentive fee accrued in incentive fee payable on the consolidated statements of assets and liabilities.
On October 11, 2018, the Board approved, subject to completion of the IPO, the Investment Advisory Agreement. Beginning with the calendar quarter that commenced January 1, 2019, this Investment Advisory Agreement incorporates (i) a three-year lookback provision and (ii) a cap on quarterly income incentive fee payments based on net realized or unrealized capital loss, if any, during the applicable three-year lookback period. The Amended Advisory Agreement approved by Stockholders on February 1, 2019 contains the same provisions.
Annual Incentive Fee Based on Capital Gains
The second part of the incentive fee is a capital gains incentive fee that will be determined and payable in arrears in cash as of the end of each fiscal year (or upon termination of the Amended Advisory Agreement, as of the termination date), and equals (i) 15% of our realized capital gains as of the end of the fiscal year prior to the IPO, and (ii) 17.5% of our realized capital gains as of the end of the fiscal year after the IPO. In determining the capital gains incentive fee payable to the Advisor, the Company calculates the cumulative
aggregate realized capital gains and cumulative aggregate realized capital losses since our inception, and the aggregate unrealized capital depreciation as of the date of the calculation, as applicable, with respect to each of the investments in our portfolio. For this purpose, cumulative aggregate realized capital gains, if any, equals the sum of the differences between the net sales price of each investment, when sold, and the cost of such investment. Cumulative aggregate realized capital losses equals the sum of the amounts by which the net sales price of each investment, when sold, is less than the cost of such investment. Aggregate unrealized capital depreciation equals the sum of the difference, if negative, between the valuation of each investment as of the applicable calculation date and the cost of such investment. At the end of the applicable year, the amount of capital gains that serves as the basis for our calculation of the capital gains incentive fee equals the cumulative aggregate realized capital gains less cumulative aggregate realized capital losses, less aggregate unrealized capital depreciation, with respect to our portfolio of investments. If this number is positive at the end of such year, then the capital gains incentive fee for such year will equal 15% before the IPO or 17.5% after the IPO, as applicable, of such amount, less the aggregate amount of any capital gains incentive fees paid in respect of our portfolio in all prior years.
Because the IPO occurred on a date other than the first day of a fiscal year, a capital gains incentive fee shall be calculated as of the day before the IPO, with such capital gains incentive fee paid to the Advisor following the end of the fiscal year in which the IPO occurred. For the avoidance of doubt, such capital gains incentive fee shall be equal to 15% of the Company’s realized capital gains on a cumulative basis from inception through the day before the IPO, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gains incentive fees. Following the IPO, solely for the purposes of calculating the capital gains incentive fee, the Company will be deemed to have previously paid capital gains incentive fees prior to the IPO equal to the product obtained by multiplying (a) the actual aggregate amount of previously paid capital gains incentive fees for all periods prior to the IPO by (b) the percentage obtained by dividing (x) 17.5% by (y) 15%. In the event that the Investment Advisory Agreement shall terminate as of a date that is not a fiscal year end, the termination date shall be treated as though it were a fiscal year end for purposes of calculating and paying a capital gains incentive fee.
There was no capital gains incentive fee payable to the Advisor under the Amended Advisory Agreement as of March 31, 2019 and December 31, 2018.
US GAAP requires that the incentive fee accrual consider the cumulative aggregate unrealized capital appreciation of investments or other financial instruments in the calculation, as an incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Amended Advisory Agreement (“GAAP Incentive Fee”). There can be no assurance that such unrealized appreciation will be realized in the future. Accordingly, such fee, as calculated and accrued, would not necessarily be payable under the Amended Advisory Agreement, and may never be paid based upon the computation of incentive fees in subsequent period.
For the three months ended March 31, 2019 and 2018, the Company incurred $0.0 million and $0.4 million of incentive fees related to the GAAP Incentive Fee, respectively, which is included in incentive fees on the consolidated statements of operations. As of March 31, 2019 and December 31, 2018, there was $0.0 million and $0.0 million related to the GAAP Incentive Fee accrued in incentive fee payable on the consolidated statements of assets and liabilities.
Administration Agreement
The Company has entered into an administration agreement (the “Administration Agreement”) with the Advisor (in such capacity, the “Administrator”), pursuant to which the Administrator will provide the administrative services necessary for us to operate, and the Company will utilize the Administrator’s office facilities, equipment and recordkeeping services. Pursuant to the Administration Agreement, the Administrator has agreed to oversee our public reporting requirements and tax reporting and monitor our expenses and the performance of professional services rendered to us by others. The Administrator has also hired a sub-administrator to assist in the provision of administrative services. The Company will reimburse the Administrator for its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including certain compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and any of their respective staff who provide services to us, operations staff who provide services to us, and internal audit staff, if any, to the extent internal audit performs a role in our Sarbanes-Oxley internal control assessment. Our allocable portion of overhead will be determined by the Administrator, which expects to use various methodologies such as allocation based on the percentage of time certain individuals devote, on an estimated basis, to the business and affairs of the Company, and will be subject to oversight by the Board. The Company incurred expenses related to the Administrator of $0.1 million and $0.0 million for the three months ended March 31, 2019 and 2018, respectively, which is included in other general and administrative expenses on the consolidated statements of operations. The sub-administrator is paid its compensation for performing its sub-administrative services under the sub-administration agreement. The Company incurred expenses related to the sub-administrator of $0.2 million and $0.2 million for the three months ended March 31, 2019 and 2018, respectively, which is included in other general and administrative expenses on the consolidated statements of operations. The Administrator will not seek reimbursement in the event that any such reimbursements would cause any distributions to our stockholders to constitute a return of capital. In addition, the Administrator is permitted to delegate its duties under the Administration
Agreement to affiliates or third parties and the Company will reimburse the expenses of these parties incurred and paid by the Advisor on our behalf.
Resource Sharing Agreement
The Company’s investment activities are managed by the Advisor, an investment adviser that is registered with the SEC under the Advisers Act. The Advisor is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring our investments and monitoring our investments and portfolio companies on an ongoing basis.
The Advisor has entered into a Resource Sharing Agreement (the “Resource Sharing Agreement”) with Bain Capital Credit, LP (“Bain Capital Credit”), pursuant to which Bain Capital Credit provides the Advisor with experienced investment professionals (including the members of the Advisor’s Credit Committee) and access to the resources of Bain Capital Credit so as to enable the Advisor to fulfill its obligations under the Amended Advisory Agreement. Through the Resource Sharing Agreement, the Advisor intends to capitalize on the significant deal origination, credit underwriting, due diligence, investment structuring, execution, portfolio management and monitoring experience of Bain Capital Credit’s investment professionals. There can be no assurance that Bain Capital Credit will perform its obligations under the Resource Sharing Agreement. The Resource Sharing Agreement may be terminated by either party on 60 days’ notice, which if terminated may have a material adverse consequence on the Company’s operations.
Co-investments
We will invest alongside our affiliates, subject to compliance with applicable regulations and our allocation procedures. Certain types of negotiated co-investments will be made only in accordance with the terms of the exemptive order we received from the SEC initially on August 23, 2016, as amended on March 23, 2018 (the “Order”). Under the terms of the Order, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors must be able to reach certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction are reasonable and fair to us and our stockholders and do not involve overreaching of our or its 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 Board’s approved criteria. In certain situations where co-investment with one or more funds managed by the Advisor or its affiliates is not covered by the Order, the personnel of the Advisor or its affiliates will need to decide which funds will proceed with the investment. Such personnel will make these determinations based on policies and procedures, which are designed to reasonably ensure that investment opportunities are allocated fairly and equitably among affiliated funds over time and in a manner that is consistent with applicable laws, rules and regulations.
Related Party Commitments
Prior to the IPO, the Advisor made commitments of $10.8 million to the Company as of December 31, 2018, of which $7.8 million had been called by the Company as of December 31, 2018. As of March 31, 2019 and December 31, 2018, the Advisor held 389,531.37 and 389,476.18 shares of the Company’s common stock, respectively. An affiliate of the Advisor is the investment manager to certain pooled investment vehicles which are investors in the Company. Collectively, these investors had made commitments to the Company of $555.3 million as of December 31, 2018 of which $388.7 million had been called by the Company as of December 31, 2018. These investors held 19,318,870.62 and 19,306,284.66 shares of the Company at March 31, 2019 and December 31, 2018, respectively.
All outstanding commitments were cancelled due the completion of the IPO on November 15, 2018.
Controlled Affiliate Investments
Transactions during the three months ended March 31, 2019 in which the issuer was either an Affiliated Person or an Affiliated Person that the Company is deemed to Control are as follows:
|
Portfolio Company |
|
Principal/
|
|
Fair Value
|
|
Gross
|
|
Gross
|
|
Change in
|
|
Realized
|
|
Fair Value
|
|
Dividend
|
|
Other
|
|
|||||||||
|
Non-Controlled/affiliate investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
ADT Pizza, LLC, Equity Interest (1) |
|
$ |
6,720,000 |
|
$ |
6,720,000 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
6,720,000 |
|
$ |
— |
|
$ |
— |
|
|
Total Non-Controlled/affiliate investment |
|
$ |
6,720,000 |
|
$ |
6,720,000 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
6,720,000 |
|
$ |
— |
|
$ |
— |
|
|
Controlled affiliate investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Antares Bain Capital Complete Financing Solution LLC, Investment Vehicle |
|
$ |
331,357,415 |
|
$ |
279,362,792 |
|
$ |
51,466,644 |
|
$ |
— |
|
$ |
4,521,289 |
|
$ |
— |
|
$ |
335,350,725 |
|
$ |
9,011,763 |
|
$ |
— |
|
|
BCC Jetstream Holdings Aviation (On II), LLC, Unfunded Commitment (1) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|||||||||
|
BCC Jetstream Holdings Aviation (On II), LLC, Equity Interest |
|
731,387 |
|
1,243,216 |
|
— |
|
— |
|
(94,435 |
) |
— |
|
1,148,781 |
|
31,282 |
|
— |
|
|||||||||
|
BCC Jetstream Holdings Aviation (On II), LLC, First Lien Senior Secured Loan |
|
4,144,528 |
|
4,162,757 |
|
— |
|
(18,229 |
) |
— |
|
— |
|
4,144,528 |
|
107,293 |
|
— |
|
|||||||||
|
BCC Jetstream Holdings Aviation (Off I), LLC, Equity Interest |
|
11,862,615 |
|
13,479,475 |
|
— |
|
— |
|
(31,961 |
) |
— |
|
13,447,514 |
|
314,599 |
|
— |
|
|||||||||
|
Total Controlled affiliate investment |
|
$ |
348,095,945 |
|
$ |
298,248,240 |
|
$ |
51,466,644 |
|
$ |
(18,229 |
) |
$ |
4,394,893 |
|
$ |
— |
|
$ |
354,091,548 |
|
$ |
9,464,937 |
|
$ |
— |
|
|
Total |
|
$ |
354,815,945 |
|
$ |
304,968,240 |
|
$ |
51,466,644 |
|
$ |
(18,229 |
) |
$ |
4,394,893 |
|
$ |
— |
|
$ |
360,811,548 |
|
$ |
9,464,937 |
|
$ |
— |
|
(1) Non-income producing.
Transactions during the year ended December 31, 2018 in which the issuer was either an Affiliated Person or an Affiliated Person a portfolio company that the Company is deemed to Control are as follows:
|
Portfolio Company |
|
Principal/
|
|
Fair Value
|
|
Gross
|
|
Gross
|
|
Change in
|
|
Realized
|
|
Fair Value
|
|
Dividend
|
|
Other
|
|
|||||||||
|
Non-Controlled/affiliate investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
ADT Pizza, LLC, Equity Interest (1) |
|
$ |
6,720,000 |
|
$ |
— |
|
$ |
6,720,000 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
6,720,000 |
|
$ |
— |
|
$ |
— |
|
|
Total Non-Controlled/affiliate investment |
|
$ |
6,720,000 |
|
$ |
— |
|
$ |
6,720,000 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
6,720,000 |
|
$ |
— |
|
$ |
— |
|
|
Controlled affiliate investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Antares Bain Capital Complete Financing Solution LLC, Investment Vehicle |
|
$ |
279,890,772 |
|
$ |
178,409,807 |
|
$ |
103,148,743 |
|
$ |
(1,310,259 |
) |
$ |
(885,499 |
) |
$ |
— |
|
$ |
279,362,792 |
|
$ |
24,491,466 |
|
$ |
— |
|
|
BCC Jetstream Holdings Aviation (On II), LLC, Unfunded Commitment (1) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|||||||||
|
BCC Jetstream Holdings Aviation (On II), LLC, Equity Interest |
|
731,387 |
|
424,261 |
|
407,173 |
|
— |
|
411,782 |
|
— |
|
1,243,216 |
|
30,083 |
|
13 |
|
|||||||||
|
BCC Jetstream Holdings Aviation (On II), LLC, First Lien Senior Secured Loan |
|
4,162,757 |
|
1,837,216 |
|
2,325,541 |
|
— |
|
— |
|
— |
|
4,162,757 |
|
312,132 |
|
— |
|
|||||||||
|
BCC Jetstream Holdings Aviation (Off I), LLC, Equity Interest |
|
11,862,614 |
|
7,838,831 |
|
4,459,109 |
|
— |
|
1,181,535 |
|
— |
|
13,479,475 |
|
865,914 |
|
16 |
|
|||||||||
|
Total Controlled affiliate investment |
|
$ |
296,647,530 |
|
$ |
188,510,115 |
|
$ |
110,340,566 |
|
$ |
(1,310,259 |
) |
$ |
707,818 |
|
$ |
— |
|
$ |
298,248,240 |
|
$ |
25,699,595 |
|
$ |
29 |
|
|
Total |
|
$ |
303,367,530 |
|
$ |
188,510,115 |
|
$ |
117,060,566 |
|
$ |
(1,310,259 |
) |
$ |
707,818 |
|
$ |
— |
|
$ |
304,968,240 |
|
$ |
25,699,595 |
|
$ |
29 |
|
(1) Non-income producing.
Note 6. Borrowings
In accordance with applicable SEC staff guidance and interpretations, as a BDC, with certain exceptions, effective February 2, 2019, the Company is permitted to borrow amounts such that its asset coverage ratio is at least 150% after such borrowing (if certain requirements are met), rather than 200%, as previously required. As of March 31, 2019 and December 31, 2018, the Company’s asset coverage ratio based on aggregated borrowings outstanding was 211% and 257%, respectively.
The Company’s outstanding borrowings as of March 31, 2019 and December 31, 2018 were as follows:
|
|
|
As of March 31, 2019 |
|
As of December 31, 2018 |
|
||||||||||||||
|
|
|
Total Aggregate
|
|
Principal
|
|
Carrying
|
|
Total Aggregate
|
|
Principal
|
|
Carrying
|
|
||||||
|
BCSF Revolving Credit Facility |
|
$ |
500,000,000 |
|
$ |
358,264,902 |
|
$ |
358,264,902 |
|
$ |
500,000,000 |
|
$ |
271,264,902 |
|
$ |
271,264,902 |
|
|
2018-1 Notes |
|
365,700,000 |
|
365,700,000 |
|
363,702,275 |
|
365,700,000 |
|
365,700,000 |
|
363,659,680 |
|
||||||
|
Citibank Revolving Credit Facility |
|
350,000,000 |
|
192,929,188 |
|
192,929,188 |
|
— |
|
— |
|
— |
|
||||||
|
Total Debt |
|
$ |
1,215,700,000 |
|
$ |
916,894,090 |
|
$ |
914,896,365 |
|
$ |
865,700,000 |
|
$ |
636,964,902 |
|
$ |
634,924,582 |
|
(1) Carrying value represents aggregate principal amount outstanding less unamortized debt issuance costs.
The combined weighted average interest rate (excluding deferred upfront financing costs and unused fees) of the aggregate borrowings outstanding for the three months ended March 31, 2019 and year ended December 31, 2018 were 4.86% and 4.31%, respectively.
The following table shows the contractual maturities of our debt obligations as of March 31, 2019:
|
|
|
Payments Due by Period |
|
|||||||||||||
|
|
|
Total |
|
Less than
|
|
1 — 3 years |
|
3 — 5 years |
|
More than
|
|
|||||
|
BCSF Revolving Credit Facility |
|
$ |
358,264,902 |
|
$ |
— |
|
$ |
— |
|
$ |
358,264,902 |
|
$ |
— |
|
|
2018-1 Notes |
|
365,700,000 |
|
— |
|
— |
|
— |
|
365,700,000 |
|
|||||
|
Citibank Revolving Credit Facility |
|
192,929,188 |
|
— |
|
192,929,188 |
|
— |
|
— |
|
|||||
|
Total Debt Obligations |
|
$ |
916,894,090 |
|
$ |
— |
|
$ |
192,929,188 |
|
$ |
358,264,902 |
|
$ |
365,700,000 |
|
SMBC Revolving Credit Agreement
On December 22, 2016, we entered into the revolving credit agreement (the “SMBC Revolving Credit Agreement”). The maximum commitment amount under the SMBC Revolving Credit Facility was $150.0 million, and may be increased up to $350.0 million (“Maximum Commitment”) with the consent of SMBC or reduced upon our request. Effective July 31, 2018, we reduced the commitment amount under the SMBC Revolving Credit Facility to $85.0 million. Proceeds under the SMBC Revolving Credit Facility may be used for any purpose permitted under our organizational documents, including general corporate purposes such as the making of investments. The SMBC Revolving Credit Agreement contains certain covenants, including maintaining an asset coverage ratio of total assets to total borrowings of at least 200%.
Borrowings under the SMBC Revolving Credit Facility bear interest at the London Interbank Offered Rate (“LIBOR”) plus a margin. The SMBC Revolving Credit Facility was accruing interest expense at a rate of LIBOR plus 1.40%. We pay an unused commitment fee of: (a) where the Maximum Commitment which is unused on such date is greater than fifty (50) percent of the Maximum Commitment, a rate of 20 basis points (0.20%) per annum; or (b) where the Maximum Commitment which is unused on such date is less than or equal to fifty (50) percent of the Maximum Commitment, a rate of 15 basis points (0.15%) per annum. Interest is payable in arrears either on a one month, two month, three month or six month LIBOR period. Any amounts borrowed under the SMBC Revolving Credit Facility, and all accrued and unpaid interest, will be due and payable, on the earliest of: (a) December 22, 2019; (b) the date upon which SMBC declares the obligations, or the obligations become, due and payable after the occurrence of an event of default under the SMBC Revolving Credit Facility; (c) the date upon which we terminate the commitments under the SMBC Revolving Credit Facility; and (d) 45 days prior to the earlier of (1) the date upon which the commitment period under the subscription agreements terminates and (2) the date upon which the ability to make capital calls and receive capital contributions otherwise terminates.
On November 21, 2018, the SMBC Revolving Credit Facility was terminated. The proceeds from the initial public offering on November 15, 2018, were used to repay the total outstanding debt.
For the three months ended March 31, 2019 and 2018, the components of interest expense related to the Revolving Credit Facility were as follows:
|
|
|
For the Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Borrowing interest expense |
|
$ |
— |
|
$ |
1,056,935 |
|
|
Unused facility fee |
|
— |
|
3,533 |
|
||
|
Amortization of deferred financing costs and upfront commitment fees |
|
— |
|
90,228 |
|
||
|
Total interest and debt financing expenses |
|
$ |
— |
|
$ |
1,150,696 |
|
BCSF Revolving Credit Facility
On October 4, 2017, we entered into the revolving credit agreement (the “BCSF Revolving Credit Facility”) with us, as equity holder, BCSF I, LLC, a Delaware limited liability company and a wholly owned and consolidated subsidiary of the Company, as borrower, and Goldman Sachs Bank USA, as sole lead arranger (“Goldman Sachs”). The BCSF Revolving Credit Facility was subsequently amended on May 15, 2018 to reflect certain clarifications regarding margin requirements and hedging currencies. The maximum commitment amount under the BCSF Revolving Credit Facility is $500.0 million, and may be increased up to $750.0 million. Proceeds of the loans under the BCSF Revolving Credit Facility may be used to acquire certain qualifying loans and such other uses as permitted under the BCSF Revolving Credit Facility. The BCSF Revolving Credit Facility includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature. As of March 31, 2019 and December 31, 2018, we were in compliance with these covenants.
Assets that are pledged as collateral for the BCSF Revolving Credit Facility are not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company’s obligations under the BCSF Revolving Credit Facility.
Borrowings under the BCSF Revolving Credit Facility bear interest at LIBOR plus a margin. As of March 31, 2019 and December 31, 2018, the BCSF Revolving Credit Facility was accruing interest expense at a rate of LIBOR plus 2.50%. We pay an unused commitment fee of 30 basis points (0.30%) per annum. Interest is payable quarterly in arrears. Any amounts borrowed under the BCSF Revolving Credit Facility, and all accrued and unpaid interest, will be due and payable, on the earliest of: (a) October 5, 2022 and (b) the date upon which all loans shall become due and payable in full, whether by acceleration or otherwise.
As of March 31, 2019 and December 31, 2018 there were $358.3 million and $271.3 million borrowings under the BCSF Revolving Credit Facility, respectively and we were in compliance with the terms of the BCSF Revolving Credit Facility.
For the three months ended March 31, 2019 and 2018, the components of interest expense related to the BCSF Revolving Credit Facility were as follows:
|
|
|
For the Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Borrowing interest expense |
|
$ |
4,988,189 |
|
$ |
2,696,109 |
|
|
Unused facility fee |
|
87,276 |
|
178,725 |
|
||
|
Amortization of deferred financing costs and upfront commitment fees |
|
263,367 |
|
263,367 |
|
||
|
Total interest and debt financing expenses |
|
$ |
5,338,832 |
|
$ |
3,138,201 |
|
2018-1 Notes
On September 28, 2018 (the “2018-1 Closing Date”), the Company, through BCC Middle Market CLO 2018-1 LLC (the “2018-1 Issuer”), a Delaware limited liability company and a wholly owned and consolidated subsidiary of the Company, completed its $451.2 million term debt securitization (the “CLO Transaction”). The notes issued in connection with the CLO Transaction (the “2018-1 Notes”) are secured by a diversified portfolio of the Issuer consisting primarily of middle market loans and participation interests in middle market loans, the majority of which are senior secured loans (the “2018-1 Portfolio”). At the 2018-1 Closing Date, the 2018-1 Portfolio was comprised of assets transferred from the Company and its consolidated subsidiaries. All transfers were eliminated in consolidation and there were no realized gains or losses recognized in the CLO Transaction.
The CLO Transaction was executed through a private placement of the following 2018-1 Notes:
|
2018-1 Notes |
|
Principal Amount |
|
Spread above Index |
|
Interest rate at
|
|
|
|
Class A-1 A |
|
$ |
205,900,000 |
|
1.55% + 3 Month LIBOR |
|
4.31 |
% |
|
Class A-1 B |
|
45,000,000 |
|
1.50% + 3 Month LIBOR (first 24 months) |
|
4.26 |
% |
|
|
|
|
|
|
1.80% + 3 Month LIBOR (thereafter) |
|
|
|
|
|
Class A-2 |
|
55,100,000 |
|
2.15% + 3 Month LIBOR |
|
4.91 |
% |
|
|
Class B |
|
29,300,000 |
|
3.00% + 3 Month LIBOR |
|
5.76 |
% |
|
|
Class C |
|
30,400,000 |
|
4.00% + 3 Month LIBOR |
|
6.76 |
% |
|
|
Total 2018-1 Notes |
|
365,700,000 |
|
|
|
|
|
|
|
Membership Interests |
|
85,450,000 |
|
Non-interest bearing |
|
Not applicable |
||
|
Total |
|
$ |
451,150,000 |
|
|
|
|
|
The Class A-1 A, A-1 B, A-2, B and C 2018-1 Notes were issued at par and are scheduled to mature on October 20, 2030. The Company received 100% of the membership interests (the “Membership Interests”) in the 2018-1 Issuer in exchange for its sale to the 2018-1 Issuer of the initial closing date loan portfolio. The Membership Interests do not bear interest.
The Class A-1 A, A-1 B, A-2, B and C 2018-1 Notes are included in the consolidated financial statements of the Company. The Membership Interests are eliminated in consolidation.
The Company serves as portfolio manager of the 2018-1 Issuer pursuant to a portfolio management agreement between the Company and the 2018-1 Issuer. For so long as the Company serves as portfolio manager, the Company will not charge any management fee or subordinated interest to which it may be entitled.
During the reinvestment period (four years from the closing date of the CLO Transaction), pursuant to the indenture governing the 2018-1 Notes, all principal collections received on the underlying collateral may be used by the 2018-1 Issuer to purchase new collateral under the direction of the Company in its capacity as portfolio manager of the 2018-1 Issuer and in accordance with the 2018-1 Issuer’s investment strategy and the terms of the indenture.
The Company has agreed to hold on an ongoing basis the Membership Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate amount of all obligations issued by the 2018-1 Issuer for so long as the 2018-1 Notes remain outstanding.
The 2018-1 Issuer pays ongoing administrative expenses to the trustee, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2018-1 Issuer.
As of March 31, 2019, there were 75 first lien and second lien senior secured loans with a total fair value of approximately $431.5 million and cash of $14.0 million securing the 2018-1 Notes. Assets that are pledged as collateral for the 2018-1 Notes are not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company’s obligations under the indenture governing the 2018-1 Notes. As of December 31, 2018, there were 75 first lien and second lien senior secured loans with a total fair value of approximately $437.2 million and cash of $18.0 million securing the 2018-1 Notes. Such assets are included in the Company’s consolidated financial statements. The creditors of the 2018-1 Issuer have received security interests in such assets and such assets are not intended to be available to the creditors of the Company (or an affiliate of the Company). The 2018-1 Portfolio must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture governing the 2018-1 Notes. As of March 31, 2019 and December 31, 2018, the Company was in compliance with its covenants related to the 2018-1 Notes.
Costs of $2.1 million were incurred in connection with debt securitization of the 2018-1 Notes by the 2018-1 Issuer which have been recorded as debt issuance costs and presented as a reduction to the outstanding principal amount of the 2018-1 Notes on the consolidated statements of assets and liabilities and are being amortized over the life of the 2018-1 Issuer using the effective interest method. The balance of the unamortized deferred financing costs related to the 2018-1 Issuer was $2.0 million and $2.0 million as of March 31, 2019 and December 31, 2018, respectively.
For the three months ended March 31, 2019 and 2018, the components of interest expense related to the 2018-1 Issuer were as follows:
|
|
|
For the Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Borrowing interest expense |
|
$ |
4,238,121 |
|
$ |
— |
|
|
Amortization of deferred financing costs and upfront commitment fees |
|
42,595 |
|
— |
|
||
|
Total interest and debt financing expenses |
|
$ |
4,280,716 |
|
$ |
— |
|
Citibank Revolving Credit Facility
On February 19, 2019, the Company entered into a credit and security agreement (the “Credit Agreement” or the “Citibank Revolving Credit Facility”) with the Company as equity holder and servicer, BCSF II-C, LLC as Borrower, Citibank, N.A., as Administrative Agent, and Wells Fargo Bank, National Association as Collateral Administrator, Collateral Agent and Custodian. The Credit Agreement is effective as of February 19, 2019.
The facility amount under the Credit Agreement is $350,000,000. Proceeds of the loans under the Credit Agreement may be used to acquire certain qualifying loans and such other uses as permitted under the Credit Agreement. The period from the closing date until February 19, 2020 is referred to as the reinvestment period and during such reinvestment period, the Borrower may request drawdowns under the Credit Agreement. The final maturity date is the earliest of: (a) the business day designated by the Borrower as the final maturity date upon not less than three business days’ prior written notice to the Administrative Agent, the Collateral Agent, the Lenders, the Custodian and the Collateral Administrator, (b) February 19, 2022 and (c) the date on which the Administrative Agent provides notice of the declaration of the final maturity date after the occurrence of an event of default. The Credit Agreement includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature. As of March 31, 2019, we were in compliance with these covenants.
Assets that are pledged as collateral for the Citibank Revolving Credit Facility are not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company’s obligations under the Citibank Revolving Credit Facility.
Borrowings under the Citibank Revolving Credit Facility bear interest at the London Interbank Offered Rate (“LIBOR”) plus a margin. During the period prior to the last day of the reinvestment period, borrowings under the Credit Agreement will bear interest at a rate equal to the three-month LIBOR plus 1.60%. Commencing on the last day of the reinvestment period, the interest rate on borrowings under the Credit Agreement will reset to three month LIBOR plus 2.60% for the remaining term of the Credit Agreement. We pay an unused commitment fee based on a corresponding utilization rate; (i) 0 basis points (0.00%) per annum when greater than or equal to 85.0% utilization, (ii) 25 basis points (0.25%) per annum when greater than or equal to 75.0% but less than 85.0% utilization, (iii) 50 basis points (0.50%) per annum when greater than or equal to 50.0% but less than 75.0% utilization, (iv) 75 basis points (0.75%) per annum when greater than or equal to 25.0% but less than 50% utilization, or (v) 100 basis points (1.00%) per annum when less than 25.0% utilization.
As of March 31, 2019, there were $192.9 million borrowings under the Citibank Revolving Credit Facility.
For the three months ended March 31, 2019 and 2018, the components of interest expense related to the Citibank Revolving Credit Facility were as follows:
|
|
|
For the Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Borrowing interest expense |
|
$ |
906,191 |
|
$ |
— |
|
|
Unused facility fee |
|
14,415 |
|
— |
|
||
|
Amortization of deferred financing costs and upfront commitment fees |
|
5,533 |
|
— |
|
||
|
Total interest and debt financing expenses |
|
$ |
926,139 |
|
$ |
— |
|
Note 7. Derivatives
The Company is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by the Company may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency.
The Company may enter into forward currency exchange contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations in the value of foreign currencies, as described in Note 2. The fair value of derivative contracts open as of March 31, 2019 and December 31, 2018 is included on the consolidated schedule of investments by contract. The Company posted collateral of $0.4 million and $0.0 million with the counterparties on foreign currency exchange contracts at March 31, 2019 and December 31, 2018, respectively. Collateral amounts posted are included in collateral on forward currency exchange contracts on the consolidated statements of assets and liabilities.
For the three months ended March 31, 2019, the Company’s average U.S. dollar notional exposure to forward currency exchange contracts was $128.0 million. For the three months ended March 31, 2018, the Company’s average U.S. dollar notional exposure to forward currency exchange contracts was $82.6 million.
By using derivative instruments, the Company is exposed to the counterparty’s credit risk—the risk that derivative counterparties may not perform in accordance with the contractual provisions offset by the value of any collateral received. The Company’s exposure to credit risk associated with counterparty non-performance is limited to collateral posted and the unrealized gains inherent in such transactions that are recognized in the consolidated statements of assets and liabilities. The Company minimizes
counterparty credit risk through credit monitoring procedures, executing master netting arrangements and managing margin and collateral requirements, as appropriate.
The Company presents forward currency exchange contracts on a net basis by counterparty on the consolidated statements of assets and liabilities. The Company has elected not to offset assets and liabilities in the consolidated statements of assets and liabilities that may be received or paid as part of collateral arrangements, even when an enforceable master netting arrangement or other arrangement is in place that provides the Company, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.
The following table presents both gross and net information about derivative instruments eligible for offset in the consolidated statements of assets and liabilities as of March 31, 2019.
|
Counterparty |
|
Account in the
|
|
Gross amount of
|
|
Gross amount of
|
|
Net amount of assets or
|
|
Cash Collateral
|
|
Net
|
|
|||||
|
Bank of New York |
|
Unrealized appreciation on forward currency contracts |
|
$ |
1,192,298 |
|
$ |
— |
|
$ |
1,192,298 |
|
$ |
— |
|
$ |
1,192,298 |
|
|
Citibank |
|
Unrealized appreciation on forward currency contracts |
|
$ |
780,742 |
|
$ |
— |
|
$ |
780,742 |
|
$ |
— |
|
$ |
780,742 |
|
|
Goldman Sachs |
|
Unrealized appreciation on forward currency contracts |
|
$ |
4,065,468 |
|
$ |
— |
|
$ |
4,065,468 |
|
$ |
— |
|
$ |
4,065,468 |
|
(1) Amount excludes excess cash collateral paid.
(2) Net amount represents the net amount due (to) from counterparty in the event of default based on the contractual set-off rights under the agreement. Net amount excludes any over-collateralized amounts.
The following table presents both gross and net information about derivative instruments eligible for offset in the consolidated statements of assets and liabilities as of December 31, 2018.
|
Counterparty |
|
Account in the
|
|
Gross amount of
|
|
Gross amount of
|
|
Net amount of assets or
|
|
Cash Collateral
|
|
Net
|
|
|||||
|
Bank of New York |
|
Unrealized appreciation on forward currency contracts |
|
$ |
3,329,279 |
|
$ |
— |
|
$ |
3,329,279 |
|
$ |
— |
|
$ |
3,329,279 |
|
|
Citibank |
|
Unrealized appreciation on forward currency contracts |
|
$ |
1,675,809 |
|
$ |
— |
|
$ |
1,675,809 |
|
$ |
— |
|
$ |
1,675,809 |
|
|
Goldman Sachs |
|
Unrealized appreciation on forward currency contracts |
|
$ |
4,316,670 |
|
$ |
— |
|
$ |
4,316,670 |
|
$ |
— |
|
$ |
4,316,670 |
|
(1) Amount excludes excess cash collateral paid.
(2) Net amount represents the net amount due (to) from counterparty in the event of default based on the contractual set-off rights under the agreement. Net amount excludes any over-collateralized amounts.
The effect of transactions in derivative instruments to the consolidated statements of operations during the three months ended March 31, 2019 and 2018 was as follows:
|
|
|
For the Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Net realized gain (loss) on forward currency exchange contracts |
|
$ |
3,633,076 |
|
$ |
(3,317,385 |
) |
|
Net change in unrealized appreciation (depreciation) on forward currency exchange contracts |
|
(3,283,250 |
) |
941,491 |
|
||
|
Total net realized and unrealized gains (losses) on forward currency exchange contracts |
|
$ |
349,826 |
|
$ |
(2,375,894 |
) |
Included in total net gains (losses) on the consolidated statements of operations is net gains (losses) of $0.5 million and $2.6 million related to realized and unrealized gains and losses on investments, foreign currency holdings and non-investment assets and liabilities attributable to the changes in foreign currency exchange rates for the three months ended March 31, 2019 and 2018, respectively. Including the total net realized and unrealized gains (losses) on forward currency exchange contracts of $0.3 million and ($2.4) million, respectively, included in the above table. The net impact of foreign currency on total net gains (losses) on the consolidated statements of operations is $0.8 million and $0.2 million for the three months ended March 31, 2019 and 2018, respectively.
Note 8. Distributions
The Company’s distributions are recorded on the record date. The following table summarizes distributions declared during the three months ended March 31, 2019:
|
Date Declared |
|
Record Date |
|
Payment Date |
|
Amount
|
|
Total
|
|
||
|
February 21, 2019 |
|
March 29, 2019 |
|
April 12, 2019 |
|
$ |
0.41 |
|
$ |
21,107,677 |
|
|
Total distributions declared |
|
|
|
|
|
$ |
0.41 |
|
$ |
21,107,677 |
|
The distributions declared during the three months ended March 31, 2019 were derived from investment company taxable income and net capital gain, if any.
The Company’s distributions are recorded on the record date. The following table summarizes distributions declared during the three months ended March 31, 2018:
|
Date Declared |
|
Record Date |
|
Payment Date |
|
Amount
|
|
Total
|
|
||
|
March 28, 2018 |
|
March 28, 2018 |
|
May 17, 2018 |
|
$ |
0.34 |
|
$ |
10,609,643 |
|
|
Total distributions declared |
|
|
|
|
|
$ |
0.34 |
|
$ |
10,609,643 |
|
The distributions declared during the three months ended March 31, 2018 were derived from investment company taxable income and net capital gain, if any.
The federal income tax characterization of distributions declared and paid for the fiscal year will be determined at fiscal year-end based upon our investment company taxable income for the full fiscal year and distributions paid during the full year.
Note 9. Common Stock/Capital
The Company has authorized 100,000,000,000 shares of its common stock with a par value of $0.001 per share. The Company has authorized 10,000,000,000 shares of its preferred stock with a par value of $0.001 per share. Shares of preferred stock have not been issued.
Prior to the IPO, the Company had issued 43,982,137.46 shares in the private placement of the Company’s common shares (the “Private Offering”). Each investor had entered into a separate subscription agreement relating to the Company’s common stock (the “Subscription Agreements”). Each investor had made a capital commitment to purchase shares of the Company’s common stock pursuant to the Subscription Agreements. Investors were required to make capital contributions to purchase shares of the Company’s common stock each time the Company delivered a drawdown notice, which were delivered at least 10 business days prior to the required funding date in an aggregate amount not to exceed their respective capital commitments. The number of shares to be issued to a stockholder was determined by dividing the total dollar amount of the contribution by a stockholder by the net asset value per share of the common stock as of the last day of the Company’s fiscal quarter or such other date and price per share as determined by the Board in accordance with the requirements of the 1940 Act. As of December 31, 2018, aggregate commitments relating to the Private Offering were $1.3 billion. All outstanding commitments related to these Subscription Agreements were cancelled due to the completion of the IPO on November 15, 2018. As of March 31, 2019 and December 31, 2018, BCSF Advisors, LP contributed in aggregate $7.8 million to the Company and received 389,531.37 shares of the Company and contributed $7.8 million to the Company and received 389,476.18
shares of the Company, respectively. At March 31, 2019 and December 31, 2018, BCSF Advisors, LP owned 0.76% and 0.76%, respectively, of the outstanding common stock of the Company.
On November 19, 2018, the Company closed its initial public offering (the “IPO”) issuing 7,500,000 shares of its common stock at a public offering price of $20.25 per share. Shares of common stock of the Company began trading on the New York Stock Exchange under the symbol “BCSF” on November 15, 2018. The offering generated proceeds, before expenses, of $147.3 million. All outstanding commitments were cancelled due the completion of the initial public offering.
The following table summarizes the total shares issued and amount received related to capital drawdowns delivered pursuant to the Subscription Agreements and shares issued pursuant to the dividend reinvestment plan during the three months ended March 31, 2019 and 2018:
|
|
|
For the Three Months Ended March 31, |
|
||||||||
|
|
|
2019 |
|
2018 |
|
||||||
|
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
||
|
Total capital drawdowns |
|
— |
|
$ |
— |
|
6,163,522.52 |
|
$ |
125,427,706 |
|
|
Issuance of common stock, net |
|
— |
|
— |
|
— |
|
— |
|
||
|
Dividend reinvestment |
|
— |
|
— |
|
65,496.52 |
|
1,329,579 |
|
||
|
Total capital drawdowns and dividend reinvestment |
|
— |
|
$ |
— |
|
6,229,019.04 |
|
$ |
126,757,285 |
|
BCSF Investments, LLC and certain individuals, including Michael A. Ewald, our Chief Executive Officer and a Managing Director of Bain Capital Credit, Jonathan S. Lavine, Co-Managing Partner of Bain Capital and Founder and Chief Investment Officer of Bain Capital Credit, John Connaughton, Co-Managing Partner of Bain Capital, LP, Jeffrey B. Hawkins, Chairman of our Board of Directors and a Managing Director of Bain Capital Credit, and Michael J. Boyle, our Vice President and Treasurer and a Managing Director of Bain Capital Credit, adopted the 10b5-1 Plan in accordance with Rules 10b5-1 and 10b-18 under the Exchange Act, under which such parties will buy up to $20 million in the aggregate of our common stock in the open market during the period beginning after four full calendar weeks after the closing of the IPO and ending on the earlier of the date on which the capital committed to the 10b5-1 has been exhausted or one year after the closing of the IPO. For the three months ended March 31, 2019, 827,933 shares were purchased at a weighted average price of $18.78, inclusive of commissions, for a total cost of $15.6 million. As of February 21, 2019, zero dollars remain under the 10b5-1 Plan and no further purchases are intended under the 10b5-1 Plan.
Note 10. Commitments and Contingencies
Commitments
The Company’s investment portfolio may contain debt investments that are in the form of lines of credit and unfunded delayed draw commitments, which require the Company to provide funding when requested by portfolio companies in accordance with the terms of the underlying loan agreements.
As of March 31, 2019, the Company had $122.5 million of unfunded commitments under loan and financing agreements as follows:
|
|
|
Expiration Date (1) |
|
Unfunded Commitments (2) (3) |
|
|
|
First Lien Senior Secured Loans |
|
|
|
|
|
|
|
Abracon Group Holding, LLC. — Revolver |
|
7/18/2024 |
|
$ |
2,833,400 |
|
|
AMCP Clean Acquisition Company, LLC — Delayed Draw Term Loan |
|
6/16/2025 |
|
2,386,381 |
|
|
|
Amspec Services, Inc. — Revolver |
|
7/2/2024 |
|
3,476,812 |
|
|
|
Ansira Holdings, Inc. — Revolver |
|
12/20/2022 |
|
5,440,128 |
|
|
|
AP Plastics Group, LLC — Revolver |
|
8/2/2021 |
|
8,500,200 |
|
|
|
API Technologies Corp. — Revolver |
|
4/22/2024 |
|
4,183,169 |
|
|
|
Aramsco, Inc. — Revolver |
|
8/28/2024 |
|
3,273,905 |
|
|
|
Batteries Plus Holding Corporation — Revolver |
|
7/6/2022 |
|
4,037,595 |
|
|
|
Captain D’s LLC — Revolver |
|
12/15/2023 |
|
1,086,324 |
|
|
|
Chase Industries, Inc. — Delayed Draw Term Loan |
|
5/12/2025 |
|
3,544,365 |
|
|
|
Clinical Innovations, LLC — Revolver |
|
10/17/2022 |
|
834,640 |
|
|
|
CMI Marketing Inc. — Revolver |
|
5/24/2023 |
|
2,112,000 |
|
|
|
CPS Group Holdings, Inc. — Revolver |
|
3/3/2025 |
|
2,466,720 |
|
|
|
Cruz Bay Publishing, Inc. — Revolver |
|
6/6/2019 |
|
566,680 |
|
|
|
CST Buyer Company — Revolver |
|
3/1/2023 |
|
897,478 |
|
|
|
Datix Bidco Limited — Revolver |
|
10/28/2024 |
|
1,267,612 |
|
|
|
Direct Travel, Inc. — Revolver |
|
12/1/2021 |
|
4,250,100 |
|
|
|
Dorner Manufacturing Corp — Revolver |
|
3/15/2022 |
|
1,098,883 |
|
|
|
Drilling Info Holdings, Inc. — Delayed Draw Term Loan |
|
7/30/2025 |
|
80,166 |
|
|
|
Efficient Collaborative Retail Marketing Company, LLC — Revolver |
|
6/15/2022 |
|
3,541,750 |
|
|
|
Element Buyer, Inc. — Revolver |
|
7/19/2024 |
|
4,250,100 |
|
|
|
FFI Holdings I Corp — Delayed Draw Term Loan |
|
1/24/2025 |
|
591,474 |
|
|
|
FFI Holdings I Corp — Revolver |
|
1/24/2025 |
|
3,284,173 |
|
|
|
Fineline Technologies, Inc. — Revolver |
|
11/4/2022 |
|
2,162,097 |
|
|
|
Grammer Purchaser, Inc. — Revolver |
|
9/30/2024 |
|
1,050,000 |
|
|
|
Home Franchise Concepts, Inc. — Revolver |
|
7/9/2024 |
|
2,529,821 |
|
|
|
Horizon Telcom, Inc. — Delayed Draw Term Loan |
|
6/15/2023 |
|
1,737,931 |
|
|
|
Horizon Telcom, Inc. — Revolver |
|
6/15/2023 |
|
1,158,621 |
|
|
|
Margaux Acquisition Inc. — Revolver |
|
12/19/2024 |
|
2,564,716 |
|
|
|
Margaux UK Finance Limited — Revolver |
|
12/19/2024 |
|
650,350 |
|
|
|
McKissock, LLC — Revolver |
|
8/5/2021 |
|
1,841,710 |
|
|
|
PRCC Holdings, Inc. — Revolver |
|
2/1/2021 |
|
3,541,750 |
|
|
|
Profile Products LLC — Revolver |
|
12/20/2024 |
|
2,363,945 |
|
|
|
RoC Opco LLC — Revolver |
|
2/25/2025 |
|
10,241,400 |
|
|
|
Solaray, LLC — Revolver |
|
9/9/2022 |
|
4,675,110 |
|
|
|
Sovos Compliance, LLC — Revolver |
|
3/1/2022 |
|
1,451,615 |
|
|
|
Sovos Compliance, LLC — Delayed Draw Term Loan |
|
8/2/2019 |
|
870,968 |
|
|
|
Stanton Carpet Corp. — Revolver |
|
11/21/2022 |
|
4,250,100 |
|
|
|
Symplr Software, Inc. — Revolver |
|
11/30/2023 |
|
2,234,123 |
|
|
|
TEI Holdings Inc. — Revolver |
|
12/20/2022 |
|
1,841,710 |
|
|
|
Tidel Engineering, L.P. — Revolver |
|
3/1/2023 |
|
4,250,100 |
|
|
|
WCI-HSG Purchaser, Inc. — Revolver |
|
2/21/2025 |
|
2,015,228 |
|
|
|
WU Holdco, Inc. — Revolver |
|
3/26/2025 |
|
3,944,222 |
|
|
|
Zywave, Inc. — Revolver |
|
11/17/2022 |
|
511,647 |
|
|
|
Total First Lien Senior Secured Loans |
|
|
|
$ |
119,891,219 |
|
|
Other Unfunded Commitments |
|
|
|
|
|
|
|
BCC Jetstream Holdings Aviation (On II), LLC |
|
|
|
2,561,470 |
|
|
|
Total Other Unfunded Commitments |
|
|
|
$ |
2,561,470 |
|
|
Total |
|
|
|
$ |
122,452,689 |
|
(1) Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.
(2) Unfunded commitments denominated in currencies other than U.S. dollars have been converted to U.S. dollars using the applicable foreign currency exchange rate as of March 31, 2019.
(3) Unfunded commitments represent unfunded commitments to fund investments, excluding our investment in ABCS as of March 31, 2019.
As of December 31, 2018, the Company had $110.2 million of unfunded commitments under loan and financing agreements as follows:
|
|
|
Expiration Date (1) |
|
Unfunded Commitments (2) (3) |
|
|
|
First Lien Senior Secured Loans |
|
|
|
|
|
|
|
Abracon Group Holding, LLC — Revolver |
|
7/18/2024 |
|
$ |
2,833,400 |
|
|
Aimbridge Hospitality LP — Revolver |
|
6/22/2022 |
|
1,176,500 |
|
|
|
AMCP Clean Acquisition Company, LLC — Delayed Draw Term Loan |
|
6/16/2025 |
|
2,315,428 |
|
|
|
Amspec Services, Inc. — Revolver |
|
7/2/2024 |
|
4,735,302 |
|
|
|
Ansira Holdings, Inc. — Revolver |
|
12/20/2022 |
|
5,440,128 |
|
|
|
AP Plastics Group, LLC— Revolver |
|
8/1/2021 |
|
8,500,200 |
|
|
|
API Technologies Corp. — Revolver |
|
4/22/2024 |
|
4,183,169 |
|
|
|
Aramsco, Inc. — Revolver |
|
8/28/2024 |
|
3,161,012 |
|
|
|
Batteries Plus Holding Corporation — Revolver |
|
7/6/2022 |
|
4,250,100 |
|
|
|
Caliper Corporation — Revolver |
|
11/30/2023 |
|
2,358,241 |
|
|
|
Captain D’s LLC — Revolver |
|
12/15/2023 |
|
1,073,909 |
|
|
|
Chase Industries, Inc. — Delayed Draw Term Loan |
|
5/12/2025 |
|
3,544,365 |
|
|
|
Clinical Innovations, LLC — Revolver |
|
10/17/2022 |
|
1,113,333 |
|
|
|
CMI Marketing Inc. — Revolver |
|
5/24/2023 |
|
2,112,000 |
|
|
|
Cruz Bay Publishing, Inc. — Revolver |
|
6/6/2019 |
|
566,680 |
|
|
|
CST Buyer Company — Revolver |
|
3/1/2023 |
|
897,478 |
|
|
|
Datix Bidco Limited — Revolver |
|
10/28/2024 |
|
1,239,500 |
|
|
|
Direct Travel, Inc. — Revolver |
|
12/1/2021 |
|
4,250,100 |
|
|
|
Dorner Manufacturing Corp. — Revolver |
|
3/15/2022 |
|
1,043,939 |
|
|
|
Drilling Info Holdings, Inc. — Delayed Draw Term Loan |
|
7/30/2025 |
|
1,662,801 |
|
|
|
Efficient Collaborative Retail Marketing Company, LLC — Revolver |
|
6/15/2022 |
|
3,541,750 |
|
|
|
Element Buyer, Inc. — Revolver |
|
7/19/2024 |
|
4,250,100 |
|
|
|
ENC Holding Corporation — Delayed Draw Term Loan |
|
5/30/2025 |
|
595,376 |
|
|
|
FineLine Technologies, Inc. — Revolver |
|
11/2/2021 |
|
2,162,097 |
|
|
|
Grammer Purchaser, Inc. — Revolver |
|
9/30/2024 |
|
945,000 |
|
|
|
Great Expressions Dental Centers PC — Revolver |
|
9/28/2022 |
|
213,394 |
|
|
|
Home Franchise Concepts, Inc. — Revolver |
|
7/9/2024 |
|
2,529,821 |
|
|
|
Horizon Telcom, Inc. — Delayed Draw Term Loan |
|
6/15/2023 |
|
1,737,931 |
|
|
|
Horizon Telcom, Inc. — Revolver |
|
6/15/2023 |
|
1,158,621 |
|
|
|
Margaux UK Finance — Revolver |
|
12/19/2024 |
|
635,927 |
|
|
|
Margaux Acquisition Inc.— Revolver |
|
12/19/2024 |
|
2,256,950 |
|
|
|
McKissock, LLC — Revolver |
|
8/5/2021 |
|
1,841,710 |
|
|
|
PRCC Holdings, Inc. — Revolver |
|
2/1/2021 |
|
3,541,750 |
|
|
|
Profile Products LLC — Revolver |
|
12/20/2024 |
|
3,833,424 |
|
|
|
Solaray, LLC — Revolver |
|
9/9/2022 |
|
7,083,500 |
|
|
|
Sovos Compliance, LLC — Delayed Draw Term Loan |
|
3/1/2022 |
|
870,968 |
|
|
|
Sovos Compliance, LLC — Revolver |
|
3/1/2022 |
|
1,451,615 |
|
|
|
Stanton Carpet Corp. — Revolver |
|
11/21/2022 |
|
4,250,100 |
|
|
|
TEI Holdings Inc. — Revolver |
|
12/20/2022 |
|
3,541,750 |
|
|
|
Tidel Engineering, L.P. — Revolver |
|
3/1/2023 |
|
4,250,100 |
|
|
|
Zywave, Inc. — Revolver |
|
11/17/2022 |
|
511,647 |
|
|
|
Total First Lien Senior Secured Loans |
|
|
|
$ |
107,661,116 |
|
|
Other Unfunded Commitments |
|
|
|
|
|
|
|
BCC Jetstream Holdings Aviation (On II), LLC |
|
|
|
2,561,470 |
|
|
|
Total Other Unfunded Commitments |
|
|
|
$ |
2,561,470 |
|
|
Total |
|
|
|
$ |
110,222,586 |
|
(1) Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.
(2) Unfunded commitments denominated in currencies other than U.S. dollars have been converted to U.S. dollars using the applicable foreign currency exchange rate as of December 31, 2018.
(3) Unfunded commitments represent unfunded commitments to fund investments, excluding our investment in ABCS as of December 31, 2018.
Contingencies
In the normal course of business, the Company may enter into certain contracts that provide a variety of indemnities. The Company’s maximum exposure under these indemnities is unknown as it would involve future claims that may be made against the Company. Currently, the Company is not aware of any such claims and no such claims are expected to occur. As such, the Company does not consider it necessary to record a liability in this regard.
Note 11. Financial Highlights
The following is a schedule of financial highlights for the three months ended March 31, 2019 and 2018:
|
|
|
For The Three months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Per share data: |
|
|
|
|
|
||
|
Net asset value at beginning of period |
|
$ |
19.46 |
|
$ |
20.30 |
|
|
Net investment income (1) |
|
0.41 |
|
0.30 |
|
||
|
Net realized gain (loss) (1) (7) |
|
0.05 |
|
(0.10 |
) |
||
|
Net change in unrealized appreciation (1) (2) (8) |
|
0.30 |
|
0.17 |
|
||
|
Net increase in net assets resulting from operations (1) (9) (10) |
|
0.76 |
|
0.37 |
|
||
|
Stockholder distributions from income (3) |
|
(0.41 |
) |
(0.34 |
) |
||
|
Net asset value at end of period |
|
$ |
19.81 |
|
$ |
20.33 |
|
|
|
|
|
|
|
|
||
|
Net assets at end of period |
|
$ |
1,019,834,005 |
|
$ |
634,469,575 |
|
|
Shares outstanding at end of period |
|
51,482,137.46 |
|
31,204,831.44 |
|
||
|
Per share market value at end of period |
|
$ |
19.30 |
|
N/A |
|
|
|
Total return based on market value (12) |
|
17.47 |
% |
N/A |
|
||
|
Total return based on net asset value (4) |
|
3.91 |
% |
1.82 |
% |
||
|
Ratios: |
|
|
|
|
|
||
|
Ratio of net investment income to average net assets (5)(11)(13) |
|
8.55 |
% |
7.06 |
% |
||
|
Ratio of total net expenses to average net assets (5)(11)(13) |
|
7.59 |
% |
4.93 |
% |
||
|
Supplemental data: |
|
|
|
|
|
||
|
Ratio of interest and debt financing expenses to average net assets (5)(13) |
|
4.27 |
% |
2.95 |
% |
||
|
Ratio of expenses (without incentive fees) to average net assets (5) (11)(13) |
|
7.38 |
% |
4.59 |
% |
||
|
Ratio of incentive fees and management fees, net of contractual and voluntary waivers, to average net assets (5)(11)(13) |
|
2.72 |
% |
1.45 |
% |
||
|
Average principal debt outstanding |
|
$ |
833,999,310 |
|
$ |
404,632,500 |
|
|
Portfolio turnover (6) |
|
10.81 |
% |
7.44 |
% |
||
|
Total committed capital, end of period |
|
N/A |
|
$ |
1,255,319,125 |
|
|
|
Ratio of total contributed capital to total committed capital, end of period |
|
N/A |
|
50.03 |
% |
||
(1) The per share data was derived by using the weighted average shares outstanding during the period.
(2) Net change in unrealized appreciation (depreciation) on investments per share may not be consistent with the consolidated statements of operations due to the timing of shareholder transactions.
(3) The per share data for distributions reflects the actual amount of distributions declared during the period.
(4) Total return based on net asset value is calculated as the change in net asset value per share during the period, assuming dividends and distributions, including those distributions that have been declared. Total return has not been annualized.
(5) The computation of average net assets during the period is based on averaging net assets for the periods reported.
(6) Portfolio turnover rate is calculated using the lesser of year-to-date sales or year-to-date purchases over the average of the invested assets at fair value for the periods reported.
(7) Net realized loss includes net realized gain (loss) on investments, net realized gain (loss) on forward currency exchange contracts and net realized gain (loss) on foreign currency transactions.
(8) Net change in unrealized appreciation (depreciation) includes net change in unrealized appreciation (depreciation) on investments, net change in unrealized appreciation (depreciation) on forward currency exchange contracts and net change in unrealized appreciation (depreciation) on foreign currency translation.
(9) The sum of quarterly per share amounts presented in previously filed financial statements on Form 10-Q may not equal earnings per share. This is due to changes in the number of weighted average shares outstanding and the effects of rounding.
(10) Net increase in net assets resulting from operations per share in these financial highlights may be different from the net increase in net assets per share on the consolidated statements of operations due to rounding.
(11) Ratio of voluntary incentive fee waiver to average net assets was (0.20%) for the three months ended March 31, 2019 (Note 5). Ratio of voluntary management fee waiver to average net assets was (0.22%) for the three months ended March 31, 2019 (Note 5). The ratio of net investment income without the voluntary incentive fee waiver and voluntary management fee waiver to average net assets for the three months ended March 31, 2019 would be 8.13%. The ratio of total expenses without the voluntary incentive fee waiver and voluntary management fee waiver to average net assets for the three months ended March 31, 2019 would be 8.02%. No fees were voluntarily waived for the three months ended March 31, 2018.
(12) Total return based on market value (not annualized) is calculated as the change in market value per share during the period, assuming dividends and distributions, plus the declared distributions, divided by the beginning market price for the period. Total return has not been annualized.
(13) Ratio is annualized. Incentive fees, voluntary incentive fee waivers, and voluntary management fee waivers, if any, included within the ratio are not annualized.
Note 12. Subsequent Events
The Company and Antares, its joint venture partner, have restructured ABCS as of April 30, 2019. The Company formed BCSF Complete Financing Solution LLC (“BCSF Unitranche”), a wholly-owned, newly-formed, subsidiary of the Company, which received 44.737%, its proportionate share, of all assets previously held by ABCS pursuant to the restructuring. BCSF Unitranche continues to have a relationship with Antares to make investments in unitranche loans alongside Antares. BCSF Unitranche’s portfolio is comprised of unitranche loans made to 25 companies as of April 30, 2019. The results of BCSF Unitranche are expected to be included in the consolidated financial statements of the Company.
On April 30, 2019, BCSF Unitranche entered into a loan and security agreement (the “JPM Credit Agreement”) as Borrower, with JPMorgan Chase Bank, National Association, as Administrative Agent, and Wells Fargo Bank, National Association as Collateral Administrator, Collateral Agent, Securities Intermediary and Bank. The JPM Credit Agreement is effective as of April 30, 2019.
The facility amount under the JPM Credit Agreement is $666,581,300. Proceeds of the loans under the JPM Credit Agreement may be used to acquire certain qualifying loans and such other uses as permitted under the JPM Credit Agreement. The period from the effective date until November 29, 2020 is referred to as the reinvestment period and during such reinvestment period, the Borrower may request drawdowns under the JPM Credit Agreement.
The maturity date is the earliest of: (a) November 29, 2022, (b) the date on which the secured obligations become due and payable following the occurrence of an event of default, (c) the date on which the advances are repaid in full and (d) the date after a market value cure failure occurs on which all portfolio investments have been sold and proceeds therefrom have been received by the Borrower. The stated maturity date of November 29, 2022 may be extended for successive one year periods by mutual agreement of the Borrower and the Administrative Agent.
The JPM Credit Agreement includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature.
On May 7, 2019, the Company’s Board of Directors authorized the Company to repurchase up to $50 million of its outstanding common stock in accordance with safe harbor rules under the Securities Exchange Act of 1934. Any such repurchases will depend upon market conditions and there is no guarantee that the Company will repurchase any particular number of shares or any shares at all.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following analysis of our financial condition and results of operations in conjunction with our financial statements and related notes appearing in our Annual Report on Form 10-K (the “Annual Report”) for the year ended December 31, 2018, filed with the U.S. Securities and Exchange Commission (“SEC”) on February 28, 2019. The information contained in this section should also be read in conjunction with our unaudited financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q (the “Quarterly Report”).
Overview
Bain Capital Specialty Finance, Inc. (the “Company”, “we”, “our” and “us”) is an externally managed specialty finance company focused on lending to middle market companies. We have elected to be regulated as a business development company (a “BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”). We are managed by BCSF Advisors, LP (our “Advisor” or “BCSF Advisors”), a subsidiary of Bain Capital Credit, LP (“Bain Capital Credit”). Our Advisor is registered as an investment adviser with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Our Advisor also provides the administrative services necessary for us to operate (in such capacity, our “Administrator” or “BCSF Advisors”). Since we commenced operations on October 13, 2016 through March 31, 2019, we have invested approximately $2,463.5 million in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. We seek to generate current income and, to a lesser extent, capital appreciation through direct originations of secured debt, including first lien, first lien/last-out, unitranche and second lien debt, investments in strategic joint ventures, equity investments and, to a lesser extent, corporate bonds.
On November 19, 2018, we closed our initial public offering (the “IPO”) issuing 7,500,000 shares of our common stock at a public offering price of $20.25 per share. Shares of common stock of the Company began trading on the New York Stock Exchange under the symbol “BCSF” on November 15, 2018.
Our primary focus is capitalizing on opportunities within our Senior Direct Lending strategy, which seeks to provide risk-adjusted returns and current income to our stockholders by investing primarily in middle-market companies with between $10.0 million and $150.0 million in annual earnings before interest, taxes, depreciation and amortization (“EBITDA”). However, we may, from time to time, invest in larger or smaller companies. We generally seek to retain effective voting control in respect of the loans or particular classes of securities in which we invest through maintaining affirmative voting positions or negotiating consent rights that allow us to retain a blocking position. We focus on senior investments with a first or second lien on collateral and strong structures and documentation intended to protect the lender. We may also invest in mezzanine debt and other junior securities, including common and preferred equity, on an opportunistic basis, and in secondary purchases of assets or portfolios but such investments are not the principal focus of our investment strategy. In addition, we may invest, from time to time, in distressed debt, debtor-in-possession loans, structured products, structurally subordinate loans, investments with deferred interest features, zero-coupon securities and defaulted securities.
We generate revenues primarily through receipt of interest income from the investments we hold. In addition, we generate income from various loan origination and other fees, dividends on direct equity investments and capital gains on the sales of investments. The companies in which we invest use our capital for a variety of reasons, including to support organic growth, to fund changes of control, to fund acquisitions, to make capital investments and for refinancing and recapitalizations.
Investments
We expect that our level of investment activity may vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity for such companies, the level of investment and capital expenditures of such companies, the general economic environment, the amount of capital we have available to us and the competitive environment for the type of investments we make.
As a BDC, we may not acquire any assets other than “qualifying assets” specified in the 1940 Act, unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Pursuant to rules adopted by the SEC, “eligible portfolio companies” include certain companies that do not have any securities listed on a national securities exchange and public companies whose securities are listed on a national securities exchange but whose market capitalization is less than $250 million.
As a BDC, we may also invest up to 30% of our portfolio opportunistically in “non-qualifying” portfolio investments, such as investments in non-U.S. companies.
Revenues
We primarily generate revenue in the form of interest income on debt investments and distributions on equity investments and, to a lesser extent, capital gains, if any, on equity securities that we may acquire in portfolio companies. Some of our investments may provide for deferred interest payments or payment-in-kind (“PIK”) interest. The principal amount of the debt investments and any accrued but unpaid interest generally becomes due at the maturity date. In addition, we may generate revenue in the form of commitment, origination, structuring or diligence fees, fees for providing managerial assistance and consulting fees. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts into or against income over the life of the loan. We record contractual prepayment premiums on loans and debt securities as interest income.
Our debt investment portfolio consists of primarily floating rate loans. As of March 31, 2019 and December 31, 2018, 96.1% and 95.5%, respectively, of our debt investments, based on fair value, bore interest at floating rates, which may be subject to interest rate floors. Variable-rate investments subject to a floor generally reset periodically to the applicable floor, only if the floor exceeds the index. Trends in base interest rates, such as LIBOR, may affect our net investment income over the long term. In addition, our results may vary from period to period depending on the interest rates of new investments made during the period compared to investments that were sold or repaid during the period; these results reflect the characteristics of the particular portfolio companies that we invested in or exited during the period and not necessarily any trends in our business or macroeconomic trends.
Dividend income on preferred equity investments is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. 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.
Expenses
Our primary operating expenses may include the payment of fees to our Advisor under the second amended and restated investment advisory agreement (the “Amended Advisory Agreement”), our allocable portion of overhead expenses under the administration agreement (the “Administration Agreement”) and other operating costs, including those described below. The Base Management Fee and Incentive Fee compensate our Advisor for its work in identifying, evaluating, negotiating, closing and monitoring our investments. We bear all other out-of-pocket costs and expenses of our operations and transactions, including:
· our operational and organizational cost;
· the costs of any public offerings of our common stock and other securities, including registration and listing fees;
· costs of calculating our net asset value (including the cost and expenses of any third-party valuation services);
· fees and expenses payable to third parties relating to evaluating, making and disposing of investments, including our Advisor’s or its affiliates’ travel expenses, research costs and out-of-pocket fees and expenses associated with performing due diligence and reviews of prospective investments, monitoring our investments and, if necessary, enforcing our rights;
· interest payable on debt and other borrowing costs, if any, incurred to finance our investments;
· costs of effecting sales and repurchases of our common stock and other securities;
· the base management fee and any incentive fee;
· distributions on our common stock;
· transfer agent and custody fees and expenses;
· the allocated costs incurred by the Administrator in providing managerial assistance to those portfolio companies that request it;
· other expenses incurred by BCSF Advisors or us in connection with administering our business, including payments made to third-party providers of goods or services;
· brokerage fees and commissions;
· federal and state registration fees;
· U.S. federal, state and local taxes;
· Independent Director fees and expenses;
· costs associated with our reporting and compliance obligations under the 1940 Act and applicable U.S. federal and state securities laws;
· costs of any reports, proxy statements or other notices to our stockholders, including printing costs;
· costs of holding stockholder meetings;
· our fidelity bond;
· directors’ and officers’ errors and omissions liability insurance, and any other insurance premiums;
· litigation, indemnification and other non-recurring or extraordinary expenses;
· direct costs and expenses of administration and operation, including printing, mailing, long distance telephone, staff, audit, compliance, tax and legal costs;
· fees and expenses associated with marketing efforts;
· dues, fees and charges of any trade association of which we are a member; and
· all other expenses reasonably incurred by us or the Administrator in connection with administering our business.
To the extent that expenses to be borne by us are paid by BCSF Advisors, we will generally reimburse BCSF Advisors for such expenses. To the extent the Administrator outsources any of its functions, the Company will pay the fees associated with such functions on a direct basis without profit to the Administrator. We will also reimburse the Administrator for its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including certain rent and compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and any of their respective staff who provide services to us, operations staff who provide services to us, internal audit staff, if any, to the extent internal audit performs a role in our Sarbanes-Oxley internal control assessment and fees paid to third-party providers for goods or services. Our allocable portion of overhead will be determined by the Administrator, which expects to use various methodologies such as allocation based on the percentage of time certain individuals devote, on an estimated basis, to our business and affairs, and will be subject to oversight by our Board of Directors (our “Board”). We incurred expenses related to the Administrator of $0.1 million and $0.0 million for the three months ended March 31, 2019 and 2018, respectively, which is included in other general and administrative expenses on the consolidated statements of operations. The sub-administrator is paid its compensation for performing its sub-administrative services under the sub-administration agreement. We incurred expenses related to the sub-administrator of $0.2 million and $0.2 million for the three months ended March 31, 2019 and 2018, respectively, which is included in other general and administrative expenses on the consolidated statements of operations. BCSF Advisors will not be reimbursed to the extent that such reimbursements would cause any distributions to our stockholders to constitute a return of capital. All of the foregoing expenses are ultimately borne by our stockholders.
Leverage
We may borrow money from time to time. However, our ability to incur indebtedness (including by issuing preferred stock), as of March 31, 2019, is limited by applicable regulations such that our asset coverage, as defined in the 1940 Act, must equal at least 150%. Effective February 2, 2019, following shareholder approval of the reduced asset coverage proposal, the Company may maintain an asset coverage ratio of 150%. We do not intend to change our primary focus of capitalizing on opportunities within our Senior Direct Lending strategy, which seeks to provide risk-adjusted returns and current income to our stockholders by investing primarily in middle market companies. In determining whether to borrow money, we will analyze the maturity, covenant package and rate structure of the proposed borrowings as well as the risks of such borrowings compared to our investment outlook.
Portfolio and Investment Activity
During the three months ended March 31, 2019, we invested $275.6 million, including PIK, in 45 portfolio companies, including ABCS as a single portfolio company, and had $192.2 million in aggregate amount of principal repayments and sales, resulting in a net increase in investments of $83.4 million for the period.
During the three months ended March 31, 2018, we invested $143.7 million in 25 portfolio companies, including ABCS as a single portfolio company, and had $65.0 million in aggregate amount of principal repayments and sales, resulting in a net increase in net investments of $78.8 million for the period.
The following table shows the composition of the investment portfolio and associated yield data as of March 31, 2019:
|
|
|
As of March 31, 2019 |
|
||||||||||
|
|
|
Amortized Cost |
|
Percentage of
|
|
Fair Value |
|
Percentage of
|
|
Weighted
|
|
||
|
First Lien Senior Secured Loans (1) |
|
$ |
1,139,392,410 |
|
62.0 |
% |
$ |
1,131,779,067 |
|
61.9 |
% |
7.2 |
% |
|
First Lien Last Out Loans (1) |
|
27,689,204 |
|
1.5 |
|
28,365,825 |
|
1.6 |
|
8.7 |
|
||
|
Second Lien Senior Secured Loans (1) |
|
235,262,047 |
|
12.8 |
|
232,642,921 |
|
12.7 |
|
10.0 |
|
||
|
Subordinated Debt |
|
39,728,124 |
|
2.2 |
|
39,625,000 |
|
2.2 |
|
11.2 |
|
||
|
Corporate Bonds (1) |
|
31,692,089 |
|
1.7 |
|
27,829,145 |
|
1.5 |
|
8.3 |
|
||
|
Investment Vehicles (1) (2) |
|
331,357,415 |
|
18.1 |
|
335,350,725 |
|
18.3 |
|
13.3 |
|
||
|
Equity Interest |
|
24,077,807 |
|
1.3 |
|
26,530,174 |
|
1.4 |
|
N/A |
|
||
|
Preferred Equity |
|
7,290,345 |
|
0.4 |
|
7,696,500 |
|
0.4 |
|
N/A |
|
||
|
Warrants |
|
— |
|
0.0 |
|
120,593 |
|
0.0 |
|
N/A |
|
||
|
Total |
|
$ |
1,836,489,441 |
|
100.0 |
% |
$ |
1,829,939,950 |
|
100.0 |
% |
8.8 |
% |
(1) Computed for debt investments based upon the annual interest rate at March 31, 2019, divided by the total par amount of investments. For investments with floating interest rates, the yield calculation is computed using the contract rate at March 31, 2019. Weighted average yield for Investment Vehicles represents the weighted average levered yield of our proportionate investment in ABCS at March 31, 2019. Weighted average yield for Investment Vehicles is computed based upon (1) the weighted average of the interest rate of investments held by ABCS less (2) the weighted average interest rate of the ABCS Facility, divided by our par amount in ABCS. Total weighted average yield is the weighted average of the yields of the debt investments and the Investment Vehicles in ABCS. The weighted average yield does not represent the total return to our stockholders.
(2) Represents equity investment in ABCS.
The following table shows the composition of the investment portfolio and associated yield data as of December 31, 2018:
|
|
|
As of December 31, 2018 |
|
||||||||||
|
|
|
Amortized Cost |
|
Percentage of
|
|
Fair Value |
|
Percentage of
|
|
Weighted
|
|
||
|
First Lien Senior Secured Loans (1) |
|
$ |
1,074,413,132 |
|
61.3 |
% |
$ |
1,058,838,409 |
|
61.3 |
% |
7.0 |
% |
|
First Lien Last Out Loans (1) |
|
27,325,127 |
|
1.5 |
|
27,487,248 |
|
1.6 |
|
8.7 |
|
||
|
Second Lien Senior Secured Loans (1) |
|
263,758,359 |
|
15.0 |
|
258,141,014 |
|
14.9 |
|
9.7 |
|
||
|
Subordinated Debt (1) |
|
39,710,860 |
|
2.3 |
|
39,625,000 |
|
2.3 |
|
11.2 |
|
||
|
Corporate Bonds (1) |
|
41,388,040 |
|
2.4 |
|
35,023,170 |
|
2.0 |
|
8.1 |
|
||
|
Investment Vehicles (1) (2) |
|
279,890,772 |
|
16.0 |
|
279,362,792 |
|
16.2 |
|
14.0 |
|
||
|
Equity Interest |
|
24,077,806 |
|
1.4 |
|
26,521,285 |
|
1.5 |
|
N/A |
|
||
|
Preferred Equity |
|
2,552,879 |
|
0.1 |
|
2,806,753 |
|
0.2 |
|
N/A |
|
||
|
Warrants |
|
— |
|
0.0 |
|
— |
|
0.0 |
|
N/A |
|
||
|
Total |
|
$ |
1,753,116,975 |
|
100.0 |
% |
$ |
1,727,805,671 |
|
100.0 |
% |
8.7 |
% |
(1) Computed for debt investments based upon the annual interest rate, including PIK, at December 31, 2018, divided by the total par amount of investments. For investments with floating interest rates, the yield calculation is computed using the contract rate at December 31, 2018. Weighted average yield for Investment Vehicles represents the weighted average levered yield of our proportionate investment in ABCS at December 31, 2018. Weighted average yield for Investment Vehicles is computed based upon (1) the weighted average of the interest rate of investments held by ABCS less (2) the weighted average interest rate of the ABCS Facility, divided by our par amount in ABCS. Total weighted average yield is the weighted average of the yields of the debt investments and the Investment Vehicles in ABCS. The weighted average yield does not represent the total return to our stockholders.
(2) Represents equity investment in ABCS.
The following table presents certain selected information regarding our investment portfolio as of March 31, 2019:
|
|
|
As of |
|
|
|
|
March 31, 2019 |
|
|
Number of portfolio companies |
|
133 |
|
|
Percentage of debt bearing a floating rate (1) |
|
96.1 |
% |
|
Percentage of debt bearing a fixed rate (1) |
|
3.9 |
% |
(1) Measured on a fair value basis.
The following table presents certain selected information regarding our investment portfolio as of December 31, 2018:
|
|
|
As of |
|
|
|
|
December 31, 2018 |
|
|
Number of portfolio companies (2) |
|
132 |
|
|
Percentage of debt bearing a floating rate (1) |
|
95.5 |
% |
|
Percentage of debt bearing a fixed rate (1) |
|
4.5 |
% |
(1) Measured on a fair value basis.
(2) Includes ABCS as a single portfolio company. For details of portfolio companies held within ABCS, refer to the selected financial data of ABCS.
The following table shows the amortized cost and fair value of our performing and non-accrual investments as of March 31, 2019:
|
|
|
As of March 31, 2019 |
|
||||||||
|
|
|
Amortized Cost |
|
Percentage at
|
|
Fair Value |
|
Percentage at
|
|
||
|
Performing |
|
$ |
1,836,489,441 |
|
100.0 |
% |
$ |
1,829,939,950 |
|
100.0 |
% |
|
Non-accrual |
|
— |
|
— |
|
— |
|
— |
|
||
|
Total |
|
$ |
1,836,489,441 |
|
100.0 |
% |
$ |
1,829,939,950 |
|
100.0 |
% |
The following table shows the amortized cost and fair value of our performing and non-accrual investments as of December 31, 2018:
|
|
|
As of December 31, 2018 |
|
||||||||
|
|
|
Amortized Cost |
|
Percentage at
|
|
Fair Value |
|
Percentage at
|
|
||
|
Performing |
|
$ |
1,753,116,975 |
|
100.0 |
% |
$ |
1,727,805,671 |
|
100.0 |
% |
|
Non-accrual |
|
— |
|
— |
|
— |
|
— |
|
||
|
Total |
|
$ |
1,753,116,975 |
|
100.0 |
% |
$ |
1,727,805,671 |
|
100.0 |
% |
Loans or debt securities are placed on non-accrual status when there is reasonable doubt that principal or interest will be collected. Accrued interest generally is reversed when a loan or debt security is placed on non-accrual status. Interest payments received on non-accrual loans or debt securities may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans and debt securities are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. We may make exceptions to this treatment if the loan has sufficient collateral value and is in the process of collection.
The following table shows the amortized cost and fair value of the investment portfolio, cash and cash equivalents and foreign cash as of March 31, 2019:
|
|
|
As of March 31, 2019 |
|
||||||||
|
|
|
Amortized Cost |
|
Percentage of
|
|
Fair Value |
|
Percentage of
|
|
||
|
Cash and cash equivalents |
|
$ |
79,140,512 |
|
4.1 |
% |
$ |
79,140,512 |
|
4.1 |
% |
|
Foreign cash |
|
1,657,573 |
|
0.1 |
|
1,478,627 |
|
0.1 |
|
||
|
Restricted cash |
|
14,009,400 |
|
0.7 |
|
14,009,400 |
|
0.7 |
|
||
|
First Lien Senior Secured Loans |
|
1,139,392,410 |
|
59.0 |
|
1,131,779,067 |
|
58.8 |
|
||
|
First Lien Last Out Loans |
|
27,689,204 |
|
1.4 |
|
28,365,825 |
|
1.5 |
|
||
|
Second Lien Senior Secured Loans |
|
235,262,047 |
|
12.2 |
|
232,642,921 |
|
12.1 |
|
||
|
Subordinated Debt |
|
39,728,124 |
|
2.1 |
|
39,625,000 |
|
2.1 |
|
||
|
Corporate Bonds |
|
31,692,089 |
|
1.6 |
|
27,829,145 |
|
1.4 |
|
||
|
Investment Vehicles (1) |
|
331,357,415 |
|
17.2 |
|
335,350,725 |
|
17.4 |
|
||
|
Equity Interest |
|
24,077,807 |
|
1.2 |
|
26,530,174 |
|
1.4 |
|
||
|
Preferred Equity |
|
7,290,345 |
|
0.4 |
|
7,696,500 |
|
0.4 |
|
||
|
Warrants |
|
— |
|
0.0 |
|
120,593 |
|
0.0 |
|
||
|
Total |
|
$ |
1,931,296,926 |
|
100.0 |
% |
$ |
1,924,568,489 |
|
100.0 |
% |
(1) Represents equity investment in ABCS.
The following table shows the amortized cost and fair value of the investment portfolio, cash and cash equivalents and foreign cash as of December 31, 2018:
|
|
|
As of December 31, 2018 |
|
||||||||
|
|
|
Amortized Cost |
|
Percentage of
|
|
Fair Value |
|
Percentage of
|
|
||
|
Cash and cash equivalents |
|
$ |
14,692,877 |
|
0.8 |
% |
$ |
14,692,877 |
|
0.8 |
% |
|
Foreign cash |
|
588,622 |
|
0.0 |
|
591,113 |
|
0.0 |
|
||
|
Restricted cash |
|
17,986,541 |
|
1.0 |
|
17,986,541 |
|
1.0 |
|
||
|
First Lien Senior Secured Loans |
|
1,074,413,132 |
|
60.1 |
|
1,058,838,409 |
|
60.1 |
|
||
|
First Lien Last Out Loans |
|
27,325,127 |
|
1.5 |
|
27,487,248 |
|
1.6 |
|
||
|
Second Lien Senior Secured Loans |
|
263,758,359 |
|
14.8 |
|
258,141,014 |
|
14.6 |
|
||
|
Subordinated Debt |
|
39,710,860 |
|
2.2 |
|
39,625,000 |
|
2.3 |
|
||
|
Corporate Bonds |
|
41,388,040 |
|
2.3 |
|
35,023,170 |
|
2.0 |
|
||
|
Investment Vehicles (1) |
|
279,890,772 |
|
15.7 |
|
279,362,792 |
|
15.9 |
|
||
|
Equity Interest |
|
24,077,806 |
|
1.4 |
|
26,521,285 |
|
1.5 |
|
||
|
Preferred Equity |
|
2,552,879 |
|
0.2 |
|
2,806,753 |
|
0.2 |
|
||
|
Warrants |
|
— |
|
0.0 |
|
— |
|
0.0 |
|
||
|
Total |
|
$ |
1,786,385,015 |
|
100.0 |
% |
$ |
1,761,076,202 |
|
100.0 |
% |
(1) Represents equity investment in ABCS.
The following table shows the composition of the investment portfolio by industry, at amortized cost and fair value as of March 31, 2019 (with corresponding percentage of total portfolio investments):
|
|
|
As of March 31, 2019 |
|
||||||||
|
|
|
Amortized Cost |
|
Percentage of
|
|
Fair Value |
|
Percentage of
|
|
||
|
Investment Vehicles (1) |
|
$ |
331,357,415 |
|
18.1 |
% |
$ |
335,350,725 |
|
18.3 |
% |
|
High Tech Industries |
|
198,734,267 |
|
10.8 |
|
197,907,574 |
|
10.8 |
|
||
|
Aerospace & Defense |
|
141,609,565 |
|
7.7 |
|
142,660,486 |
|
7.8 |
|
||
|
Services: Business |
|
141,777,205 |
|
7.7 |
|
140,458,131 |
|
7.7 |
|
||
|
Consumer Goods: Non-Durable |
|
125,161,013 |
|
6.8 |
|
123,749,906 |
|
6.8 |
|
||
|
Healthcare & Pharmaceuticals |
|
124,966,426 |
|
6.8 |
|
122,527,772 |
|
6.7 |
|
||
|
Wholesale |
|
64,321,794 |
|
3.5 |
|
63,679,442 |
|
3.5 |
|
||
|
Transportation: Cargo |
|
62,392,559 |
|
3.4 |
|
62,326,942 |
|
3.4 |
|
||
|
Hotel, Gaming & Leisure |
|
58,678,030 |
|
3.2 |
|
58,747,831 |
|
3.2 |
|
||
|
Services: Consumer |
|
55,889,434 |
|
3.0 |
|
55,774,776 |
|
3.0 |
|
||
|
Capital Equipment |
|
49,692,270 |
|
2.7 |
|
49,061,111 |
|
2.7 |
|
||
|
Beverage, Food & Tobacco |
|
47,313,906 |
|
2.6 |
|
44,394,038 |
|
2.4 |
|
||
|
Construction & Building |
|
42,556,310 |
|
2.3 |
|
43,111,378 |
|
2.4 |
|
||
|
Retail |
|
43,304,073 |
|
2.4 |
|
42,606,923 |
|
2.3 |
|
||
|
Energy: Oil & Gas |
|
33,659,112 |
|
1.8 |
|
33,382,926 |
|
1.8 |
|
||
|
Media: Diversified & Production |
|
32,485,971 |
|
1.8 |
|
33,261,246 |
|
1.8 |
|
||
|
Automotive |
|
30,136,277 |
|
1.6 |
|
30,207,072 |
|
1.7 |
|
||
|
Forest Products & Paper |
|
25,529,649 |
|
1.4 |
|
25,313,288 |
|
1.4 |
|
||
|
Containers, Packaging & Glass |
|
23,973,088 |
|
1.3 |
|
24,049,847 |
|
1.3 |
|
||
|
Chemicals, Plastics & Rubber |
|
22,801,393 |
|
1.2 |
|
23,277,456 |
|
1.3 |
|
||
|
Energy: Electricity |
|
22,318,857 |
|
1.2 |
|
22,034,720 |
|
1.2 |
|
||
|
FIRE: Insurance (2) |
|
21,051,370 |
|
1.2 |
|
20,558,912 |
|
1.1 |
|
||
|
Media: Advertising, Printing & Publishing |
|
19,623,940 |
|
1.1 |
|
20,152,266 |
|
1.1 |
|
||
|
Banking |
|
18,156,200 |
|
1.0 |
|
18,195,577 |
|
1.0 |
|
||
|
Consumer Goods: Durable |
|
17,104,158 |
|
0.9 |
|
17,273,200 |
|
0.9 |
|
||
|
Environmental Industries |
|
16,589,772 |
|
0.9 |
|
16,938,845 |
|
0.9 |
|
||
|
Telecommunications |
|
15,215,153 |
|
0.8 |
|
15,095,794 |
|
0.8 |
|
||
|
Media: Broadcasting & Subscription |
|
14,683,488 |
|
0.8 |
|
14,553,351 |
|
0.8 |
|
||
|
Utilities: Electric |
|
12,510,549 |
|
0.7 |
|
10,479,145 |
|
0.6 |
|
||
|
FIRE: Real Estate (2) |
|
10,732,696 |
|
0.6 |
|
10,432,740 |
|
0.6 |
|
||
|
Transportation: Consumer |
|
8,548,437 |
|
0.5 |
|
8,773,396 |
|
0.5 |
|
||
|
FIRE: Finance (2) |
|
3,615,064 |
|
0.2 |
|
3,603,134 |
|
0.2 |
|
||
|
Total |
|
$ |
1,836,489,441 |
|
100.0 |
% |
$ |
1,829,939,950 |
|
100.0 |
% |
(1) Represents equity investment in ABCS.
(2) Finance, Insurance and Real Estate (“FIRE”).
The following table shows the composition of the investment portfolio by industry, at amortized cost and fair value as of December 31, 2018 (with corresponding percentage of total portfolio investments):
|
|
|
As of December 31, 2018 |
|
||||||||
|
|
|
Amortized Cost |
|
Percentage of
|
|
Fair Value |
|
Percentage of
|
|
||
|
Investment Vehicles (1) |
|
$ |
279,890,772 |
|
16.0 |
% |
$ |
279,362,792 |
|
16.2 |
% |
|
High Tech Industries |
|
205,845,620 |
|
11.7 |
|
202,999,747 |
|
11.7 |
|
||
|
Services: Business |
|
137,816,914 |
|
7.9 |
|
135,398,202 |
|
7.8 |
|
||
|
Healthcare & Pharmaceuticals |
|
127,104,300 |
|
7.3 |
|
125,744,586 |
|
7.3 |
|
||
|
Aerospace & Defense |
|
120,069,733 |
|
6.8 |
|
121,411,334 |
|
7.0 |
|
||
|
Transportation: Cargo |
|
85,197,021 |
|
4.9 |
|
83,514,319 |
|
4.8 |
|
||
|
Hotel, Gaming & Leisure |
|
81,486,330 |
|
4.6 |
|
80,683,590 |
|
4.7 |
|
||
|
Consumer Goods: Non-Durable |
|
73,809,233 |
|
4.2 |
|
71,439,678 |
|
4.1 |
|
||
|
Wholesale |
|
64,529,679 |
|
3.7 |
|
63,050,944 |
|
3.6 |
|
||
|
Capital Equipment |
|
44,054,103 |
|
2.5 |
|
42,795,894 |
|
2.5 |
|
||
|
Construction & Building |
|
41,239,595 |
|
2.4 |
|
41,581,979 |
|
2.4 |
|
||
|
Retail |
|
43,264,007 |
|
2.5 |
|
41,384,480 |
|
2.4 |
|
||
|
FIRE: Insurance (2) |
|
43,288,364 |
|
2.5 |
|
41,107,152 |
|
2.4 |
|
||
|
Service: Consumer |
|
41,327,064 |
|
2.4 |
|
41,022,081 |
|
2.4 |
|
||
|
Containers, Packaging & Glass |
|
40,213,180 |
|
2.3 |
|
38,694,275 |
|
2.2 |
|
||
|
Beverage, Food & Tobacco |
|
38,154,943 |
|
2.2 |
|
35,612,284 |
|
2.1 |
|
||
|
Energy: Oil & Gas |
|
31,540,815 |
|
1.8 |
|
31,195,498 |
|
1.8 |
|
||
|
Media: Diversified & Production |
|
30,363,916 |
|
1.7 |
|
30,490,333 |
|
1.8 |
|
||
|
Automotive |
|
29,482,446 |
|
1.7 |
|
29,337,032 |
|
1.7 |
|
||
|
Energy: Electricity |
|
22,368,502 |
|
1.3 |
|
22,283,631 |
|
1.3 |
|
||
|
Forest Products & Paper |
|
22,514,526 |
|
1.3 |
|
21,902,974 |
|
1.3 |
|
||
|
Media: Broadcasting & Subscription |
|
21,868,277 |
|
1.2 |
|
20,944,540 |
|
1.2 |
|
||
|
Media: Advertising, Printing & Publishing |
|
19,635,378 |
|
1.1 |
|
19,730,774 |
|
1.1 |
|
||
|
Chemicals, Plastics & Rubber |
|
19,146,824 |
|
1.1 |
|
19,511,146 |
|
1.1 |
|
||
|
Consumer Goods: Durable |
|
17,097,312 |
|
0.9 |
|
17,247,902 |
|
1.0 |
|
||
|
Environmental Industries |
|
16,488,981 |
|
0.9 |
|
16,482,011 |
|
1.0 |
|
||
|
Telecommunications |
|
15,239,284 |
|
0.9 |
|
15,121,027 |
|
0.9 |
|
||
|
Banking |
|
13,259,712 |
|
0.7 |
|
13,234,599 |
|
0.8 |
|
||
|
FIRE: Real Estate (2) |
|
10,713,530 |
|
0.6 |
|
10,650,360 |
|
0.6 |
|
||
|
Utilities: Electric |
|
12,483,046 |
|
0.7 |
|
10,310,670 |
|
0.6 |
|
||
|
FIRE: Finance (2) |
|
3,623,568 |
|
0.2 |
|
3,559,837 |
|
0.2 |
|
||
|
Total |
|
$ |
1,753,116,975 |
|
100.0 |
% |
$ |
1,727,805,671 |
|
100.0 |
% |
(1) Represents equity investment in ABCS.
(2) Finance, Insurance and Real Estate (“FIRE”).
Our Advisor monitors our portfolio companies on an ongoing basis. It monitors the financial trends of each portfolio company to determine if they are meeting their respective business plans and to assess the appropriate course of action for each company. The Advisor has several methods of evaluating and monitoring the performance and fair value of our investments, which may include the following:
· assessment of success in adhering to the portfolio company’s business plan and compliance with covenants;
· periodic or regular contact with portfolio company management and, if appropriate, the financial or strategic sponsor to discuss financial position, requirements and accomplishments;
· comparisons to our other portfolio companies in the industry, if any;
· attendance at and participation in board meetings or presentations by portfolio companies; and
· review of monthly and quarterly financial statements and financial projections of portfolio companies.
Our Advisor rates the investments in our portfolio at least quarterly and it is possible that the rating of a portfolio investment may be reduced or increased over time. For investments rated 3 or 4, Advisor enhances its level of scrutiny over the monitoring of such portfolio company. Our internal performance 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.
· An investment is rated 1 if, in the opinion of our Advisor, it is performing above 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.
· An investment is rated 2 if, in the opinion of our Advisor, it is performing as expected at the time of our underwriting and there are generally no concerns about the portfolio company’s performance or ability to meet covenant requirements, interest payments or principal amortization, if applicable. All new investments or acquired investments in new portfolio companies are initially given a rating of 2.
· An investment is rated 3 if, in the opinion of our Advisor, the investment is performing below underwriting expectations and there may be concerns about the portfolio company’s performance or trends in the industry, including as a result of factors such as declining performance, non-compliance with debt covenants or delinquency in loan payments (but generally not more than 180 days past due).
· An investment is rated 4 if, in the opinion of our Advisor, the investment is performing materially below underwriting expectations. For debt investments, most of or all of the debt covenants are out of compliance and payments are substantially delinquent. Investments rated 4 are not anticipated to be repaid in full, if applicable, and there is significant risk that we may realize a substantial loss on our investment.
The following table shows the composition of our portfolio on the 1 to 4 rating scale as of March 31, 2019:
|
|
|
As of March 31, 2019 |
|
|||||||
|
Investment Performance Rating |
|
Fair
|
|
Percentage of
|
|
Number of
|
|
Percentage of
|
|
|
|
1 |
|
$ |
17,145,348 |
|
0.9 |
% |
1 |
|
0.8 |
% |
|
2 |
|
1,793,590,457 |
|
98.0 |
|
130 |
|
97.7 |
|
|
|
3 |
|
19,204,145 |
|
1.1 |
|
2 |
|
1.5 |
|
|
|
4 |
|
— |
|
— |
|
— |
|
— |
|
|
|
Total |
|
$ |
1,829,939,950 |
|
100.0 |
% |
133 |
|
100.0 |
% |
The following table shows the composition of our portfolio on the 1 to 4 rating scale as of December 31, 2018:
|
|
|
As of December 31, 2018 |
|
|||||||
|
Investment Performance Rating |
|
Fair
|
|
Percentage of
|
|
Number of
|
|
Percentage of
|
|
|
|
1 |
|
$ |
17,300,711 |
|
1.0 |
% |
1 |
|
0.7 |
% |
|
2 |
|
1,684,494,290 |
|
97.5 |
|
128 |
|
97.0 |
|
|
|
3 |
|
26,010,670 |
|
1.5 |
|
3 |
|
2.3 |
|
|
|
4 |
|
— |
|
— |
|
— |
|
— |
|
|
|
Total |
|
$ |
1,727,805,671 |
|
100.0 |
% |
132 |
|
100.0 |
% |
Antares Bain Capital Complete Financing Solution
The Company has entered into a limited liability company agreement with Antares Midco Inc. (“Antares”) to invest in ABC Complete Financing Solution LLC, which makes investments through its subsidiary, Antares Bain Capital Complete Financing Solution LLC (together with ABC Complete Financing Solution LLC, “ABCS”). ABCS, an unconsolidated Delaware limited liability company, was formed on September 27, 2017 and commenced operations on November 29, 2017. ABCS’ principal purpose is to make investments, primarily in senior secured unitranche loans. The Company records its investment in ABCS at fair value. Distributions of income received from ABCS, if any, are recorded as dividend income from controlled investments in the consolidated statements of operations. Distributions received from ABCS in excess of income earned at ABCS, if any, are recorded as a return of capital and reduce the amortized cost of controlled affiliate investments.
The Company and Antares, as members of ABCS, have agreed to contribute capital up to (subject to the terms of their agreement) $950.0 million in aggregate to purchase equity interests in ABCS, with the Company and Antares contributing up to $425.0 million and $525.0 million, respectively. Funding of such commitments generally requires the consent of both Antares Credit Opportunities Manager LLC and the Advisor on behalf of Antares and the Company, respectively. ABCS is capitalized with capital contributions from its members on a pro-rata basis based on their maximum capital contributions as transactions are funded after they have been approved.
Investment decisions of ABCS require the consent of both the Advisor and Antares Credit Opportunities Manager LLC, as representatives of the Company and Antares, respectively. Each of the Advisor and Antares source investments for ABCS.
As of March 31, 2019, ABCS had the following maximum capital contributions, contributions and unfunded capital contributions from its members.
|
|
|
As of March 31, 2019 |
|
|||||||
|
|
|
Maximum Capital
|
|
Contributed
|
|
Unfunded Capital
|
|
|||
|
Bain Capital Specialty Finance, Inc. |
|
$ |
425,000,000 |
|
$ |
332,667,673 |
|
$ |
92,332,327 |
|
|
Antares Midco Inc. |
|
525,000,000 |
|
410,936,125 |
|
114,063,875 |
|
|||
|
Total Investments |
|
$ |
950,000,000 |
|
$ |
743,603,798 |
|
$ |
206,396,202 |
|
As of December 31, 2018, ABCS had the following maximum capital contributions, contributions and unfunded capital contributions from its members.
|
|
|
As of December 31, 2018 |
|
|||||||
|
|
|
Maximum Capital
|
|
Contributed
|
|
Unfunded Capital
|
|
|||
|
Bain Capital Specialty Finance, Inc. |
|
$ |
425,000,000 |
|
$ |
281,201,031 |
|
$ |
143,798,969 |
|
|
Antares Midco Inc. |
|
525,000,000 |
|
347,360,091 |
|
177,639,909 |
|
|||
|
Total Investments |
|
$ |
950,000,000 |
|
$ |
628,561,122 |
|
$ |
321,438,878 |
|
ABCS entered into a senior credit facility with JP Morgan on November 29, 2017 (the “ABCS Facility”). The ABCS Facility allows ABCS to borrow up to $1.5 billion subject to leverage and borrowing base restrictions. The maturity date of the ABCS Facility is November 29, 2022. As of March 31, 2019 and December 31, 2018, the ABCS Facility had $1,243.4 million and $1,031.2 million of outstanding debt under the credit facility, respectively. As of March 31, 2019 and December 31, 2018, the effective rate on the ABCS Facility was 5.51% and 5.13% per annum, respectively.
As of March 31, 2019 and December 31, 2018, ABCS held total investments with a fair value of $1,982.7 million and $1,632.5 million, respectively. As of March 31, 2019 and December 31, 2018, ABCS’s portfolio was comprised of senior secured unitranche loans of 25 and 22 different borrowers, respectively. As of March 31, 2019 and December 31, 2018, there were no loans on non-accrual status. The portfolio companies in ABCS are in industries similar to those in which the Company may invest directly. Below is a summary of ABCS’s portfolio, followed by a portfolio listing as of March 31, 2019 and December 31, 2018:
|
|
|
As of |
|
||||
|
|
|
March 31, 2019 |
|
December 31, 2018 |
|
||
|
Total first lien senior secured loans (1) |
|
$ |
1,993,297,899 |
|
$ |
1,648,306,973 |
|
|
Weighted average yield on first lien unitranche loans (2) |
|
8.4 |
% |
8.5 |
% |
||
|
Largest loan to a single borrower (1) |
|
$ |
126,163,507 |
|
$ |
122,910,538 |
|
|
Total of five largest loans to borrowers (1) |
|
$ |
599,160,108 |
|
$ |
566,072,685 |
|
|
Number of borrowers in the ABCS |
|
25 |
|
22 |
|
||
|
Commitments to fund delayed draw loans (3) |
|
$ |
74,748,969 |
|
$ |
57,622,635 |
|
(1) At principal amount.
(2) Based on par amount.
(3) As discussed above, these commitments have been approved by ABCS.
Below is certain summarized financial information for ABCS as of March 31, 2019 and December 31, 2018 and for the three months ended March 31, 2019 and 2018:
Selected Balance Sheet Information
|
|
|
As of |
|
||||
|
|
|
March 31, 2019 |
|
December 31, 2018 |
|
||
|
Loans, net of allowance of $21,277,037 and $17,616,259, respectively (1) |
|
$ |
1,953,503,699 |
|
$ |
1,616,794,497 |
|
|
Cash, restricted cash and other assets |
|
44,478,060 |
|
52,240,642 |
|
||
|
Total assets |
|
$ |
1,997,981,759 |
|
$ |
1,669,035,139 |
|
|
Debt (2) |
|
$ |
1,240,077,930 |
|
$ |
1,027,614,661 |
|
|
Other liabilities |
|
35,099,874 |
|
30,762,175 |
|
||
|
Total liabilities |
|
$ |
1,275,177,804 |
|
$ |
1,058,376,836 |
|
|
Members’ equity |
|
722,803,955 |
|
610,658,303 |
|
||
|
Total liabilities and members’ equity |
|
$ |
1,997,981,759 |
|
$ |
1,669,035,139 |
|
(1) ABCS is not considered an investment company and does not follow the accounting and reporting guidelines in ASC 946. ABCS applies an allowance for loan loss methodology prescribed by FASB ASC 310, Receivables , and FASB ASC 450 Contingencies . The allowance for loan loss as of March 31, 2019 is a general allowance, there was no specific allowance for loan losses during the period. The Company estimates a fair value for each loan in the ABCS portfolio, which is presented in the Antares Bain Capital Complete Financing Solution schedule of investments below, which is an input to the Company’s valuation of ABCS as a whole.
(2) Net of $3.3 million and $3.6 million deferred financing costs for the ABCS Facility, as of March 31, 2019 and December 31, 2018, respectively.
Selected Statement of Operations Information
|
|
|
For the Three Months Ended |
|
||||
|
|
|
March 31, 2019 |
|
March 31, 2018 |
|
||
|
Interest Income |
|
$ |
38,911,534 |
|
$ |
19,918,482 |
|
|
Fee income |
|
187,768 |
|
79,886 |
|
||
|
Total revenues |
|
39,099,302 |
|
19,998,368 |
|
||
|
Credit facility expenses (1) |
|
16,259,569 |
|
8,907,531 |
|
||
|
Other fees and expenses |
|
5,066,256 |
|
1,348,003 |
|
||
|
Total expenses |
|
21,325,825 |
|
10,255,534 |
|
||
|
Net investment income |
|
17,773,477 |
|
9,742,834 |
|
||
|
Net increase in members’ capital from operations |
|
$ |
17,773,477 |
|
$ |
9,742,834 |
|
(1) As of March 31, 2019 and December 31, 2018, the ABCS Facility had $1,243.4 million and $1,031.2 million of outstanding debt, respectively.
Loan Origination and Structuring Fees
ABCS is obligated to pay sourcing fees to the applicable member affiliate that sources the deal. For the three months ended March 31, 2019 and 2018, the Company did not earn any sourcing fees.
Antares Bain Capital Complete Financing Solution
Schedule of Investments
As of March 31, 2019
|
Portfolio Company |
|
Spread Above Index
|
|
Interest Rate |
|
Maturity Date |
|
Principal/
|
|
Carrying Value |
|
Fair Value (2) |
|
|
|
Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delayed Draw Term Loan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFI Holdings I Corp (3) |
|
— |
|
— |
|
1/24/2025 |
|
$ |
— |
|
— |
|
(129,174 |
) |
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
— |
|
(129,174 |
) |
|
|
Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRCC Holdings, Inc. (10) |
|
L+ 6.50% |
|
9.01 |
% |
2/1/2021 |
|
$ |
11,878,108 |
|
11,878,108 |
|
11,878,108 |
|
|
Total Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
11,878,108 |
|
11,878,108 |
|
|
|
Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Solaray, LLC (8) |
|
L+ 5.75% |
|
8.08 |
% |
9/9/2023 |
|
$ |
29,933,358 |
|
28,700,780 |
|
29,933,357 |
|
|
WU Holdco, Inc. (3) |
|
— |
|
— |
|
3/26/2026 |
|
$ |
— |
|
— |
|
(133,145 |
) |
|
Total Consumer goods: non-durable |
|
|
|
|
|
|
|
|
|
28,700,780 |
|
29,800,212 |
|
|
|
FIRE: Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margaux Acquisition Inc. |
|
L+ 6.00% |
|
8.50 |
% |
12/19/2024 |
|
$ |
4,909,991 |
|
3,127,510 |
|
4,492,642 |
|
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
3,127,510 |
|
4,492,642 |
|
|
|
High Tech Industries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Element Buyer, Inc. |
|
L+ 5.25% |
|
7.75 |
% |
7/18/2025 |
|
$ |
7,600,080 |
|
7,600,080 |
|
7,853,416 |
|
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
7,600,080 |
|
7,853,416 |
|
|
|
Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ansira Holdings, Inc. |
|
L+ 5.75% |
|
8.25 |
% |
12/20/2022 |
|
$ |
2,475,264 |
|
2,475,264 |
|
2,450,283 |
|
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
2,475,264 |
|
2,450,283 |
|
|
|
Services: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McKissock, LLC |
|
L+ 5.75% |
|
8.25 |
% |
8/5/2021 |
|
$ |
2,598,485 |
|
2,598,485 |
|
2,598,485 |
|
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
2,598,485 |
|
2,598,485 |
|
|
|
Transportation: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Travel, Inc. |
|
L+ 6.50% |
|
8.88 |
% |
12/1/2021 |
|
$ |
1,890,742 |
|
1,890,742 |
|
1,890,742 |
|
|
Total Transportation: Consumer |
|
|
|
|
|
|
|
|
|
1,890,742 |
|
1,890,742 |
|
|
|
Total Delayed Draw Term Loan |
|
|
|
|
|
|
|
|
|
58,270,969 |
|
60,834,714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First lien senior secured loan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace & Defense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
API Technologies Corp. |
|
L+ 5.75% |
|
8.25 |
% |
4/22/2024 |
|
$ |
115,055,468 |
|
113,844,289 |
|
115,630,745 |
|
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
113,844,289 |
|
115,630,745 |
|
|
|
Capital Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFI Holdings I Corp |
|
L+ 5.75% |
|
8.51 |
% |
1/24/2025 |
|
$ |
113,750,618 |
|
111,904,731 |
|
112,613,110 |
|
|
Tidel Engineering, L.P. |
|
L+ 6.25% |
|
8.85 |
% |
3/1/2024 |
|
$ |
85,616,623 |
|
85,591,598 |
|
85,616,623 |
|
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
197,496,329 |
|
198,229,733 |
|
|
|
Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AP Plastics Group, LLC |
|
L+ 5.25% |
|
7.74 |
% |
8/1/2022 |
|
$ |
48,397,584 |
|
48,351,415 |
|
47,550,626 |
|
|
PRCC Holdings, Inc. (9) |
|
L+ 6.50% |
|
9.01 |
% |
2/1/2021 |
|
$ |
73,813,402 |
|
73,813,402 |
|
73,813,402 |
|
|
Total Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
122,164,817 |
|
121,364,028 |
|
|
|
Construction & Building |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profile Products LLC |
|
L+ 5.75% |
|
8.38 |
% |
12/20/2024 |
|
$ |
78,832,202 |
|
77,663,894 |
|
77,255,558 |
|
|
Total Construction & Building |
|
|
|
|
|
|
|
|
|
77,663,894 |
|
77,255,558 |
|
|
|
Consumer Goods: Durable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home Franchise Concepts, Inc. |
|
L+ 5.00% |
|
7.49 |
% |
7/9/2024 |
|
$ |
84,924,108 |
|
84,464,670 |
|
84,924,108 |
|
|
Stanton Carpet Corp. (7) |
|
L+ 5.50% |
|
8.06 |
% |
11/21/2022 |
|
$ |
57,748,494 |
|
57,701,945 |
|
57,748,494 |
|
|
Total Consumer goods: durable |
|
|
|
|
|
|
|
|
|
142,166,615 |
|
142,672,602 |
|
|
|
Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Solaray, LLC |
|
L+ 5.75% |
|
8.38 |
% |
9/11/2023 |
|
$ |
96,230,150 |
|
96,230,149 |
|
96,230,150 |
|
||
|
WU Holdco, Inc. |
|
L+ 5.50% |
|
8.11 |
% |
3/26/2026 |
|
$ |
89,423,290 |
|
87,909,571 |
|
87,532,626 |
|
||
|
Total Consumer goods: non-durable |
|
|
|
|
|
|
|
|
|
184,139,720 |
|
183,762,776 |
|
|||
|
Energy: Oil & Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Amspec Services, Inc. |
|
L+ 5.75% |
|
8.35 |
% |
7/2/2024 |
|
$ |
89,799,695 |
|
88,809,318 |
|
88,809,318 |
|
||
|
Total Energy: Oil & Gas |
|
|
|
|
|
|
|
|
|
88,809,318 |
|
88,809,318 |
|
|||
|
FIRE: Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Margaux Acquisition Inc. |
|
L+ 6.00% |
|
8.48 |
% |
12/19/2024 |
|
$ |
65,124,823 |
|
65,124,823 |
|
63,822,327 |
|
||
|
Margaux UK Finance Limited |
|
GBP LIBOR+ 6.00% |
|
7.00 |
% |
12/19/2024 |
|
£ |
17,355,633 |
|
22,616,125 |
|
22,160,401 |
|
||
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
87,740,948 |
|
85,982,728 |
|
|||
|
Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
CPS Group Holdings, Inc. |
|
L+ 5.50% |
|
7.99 |
% |
3/3/2025 |
|
$ |
125,591,322 |
|
123,734,095 |
|
124,335,409 |
|
||
|
Total Healthcare & Pharmaceuticals |
|
|
|
|
|
|
|
|
|
123,734,095 |
|
124,335,409 |
|
|||
|
High Tech Industries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Symplr Software, Inc. |
|
L+ 5.50% |
|
8.00 |
% |
11/28/2025 |
|
$ |
68,011,212 |
|
67,363,573 |
|
66,991,044 |
|
||
|
Element Buyer, Inc. |
|
L+ 5.25% |
|
7.75 |
% |
7/18/2025 |
|
$ |
85,073,395 |
|
83,584,805 |
|
85,924,129 |
|
||
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
150,948,378 |
|
152,915,173 |
|
|||
|
Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Ansira Holdings, Inc. |
|
L+ 5.75% |
|
8.25 |
% |
12/20/2022 |
|
$ |
80,807,041 |
|
80,672,838 |
|
80,605,023 |
|
||
|
Cruz Bay Publishing, Inc. (5) |
|
L+ 5.75% |
|
8.52 |
% |
6/6/2019 |
|
$ |
11,259,640 |
|
11,259,640 |
|
11,259,640 |
|
||
|
Cruz Bay Publishing, Inc. (6) |
|
L+ 6.75% |
|
9.38 |
% |
6/6/2019 |
|
$ |
3,760,115 |
|
3,760,115 |
|
3,760,115 |
|
||
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
95,692,593 |
|
95,624,778 |
|
|||
|
Media: Diversified & Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Efficient Collaborative Retail Marketing Company, LLC |
|
L+ 6.75% |
|
9.35 |
% |
6/15/2022 |
|
$ |
22,569,647 |
|
22,569,647 |
|
22,738,920 |
|
||
|
Efficient Collaborative Retail Marketing Company, LLC |
|
L+ 6.75% |
|
9.35 |
% |
6/15/2022 |
|
$ |
33,741,229 |
|
33,208,745 |
|
33,994,288 |
|
||
|
Total Media: Diversified & Production |
|
|
|
|
|
|
|
|
|
55,778,392 |
|
56,733,208 |
|
|||
|
Retail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Batteries Plus Holding Corporation |
|
L+ 6.75% |
|
9.25 |
% |
7/6/2022 |
|
$ |
67,808,467 |
|
67,808,467 |
|
67,808,467 |
|
||
|
Total Retail |
|
|
|
|
|
|
|
|
|
67,808,467 |
|
67,808,467 |
|
|||
|
Services: Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
TEI Holdings Inc. |
|
L+ 6.00% |
|
8.80 |
% |
12/20/2023 |
|
$ |
118,589,052 |
|
117,768,575 |
|
118,292,579 |
|
||
|
Total Services: Business |
|
|
|
|
|
|
|
|
|
117,768,575 |
|
118,292,579 |
|
|||
|
Services: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
McKissock, LLC |
|
L+ 5.75% |
|
8.25 |
% |
8/5/2021 |
|
$ |
8,050,994 |
|
8,050,994 |
|
8,050,994 |
|
||
|
McKissock, LLC |
|
L+ 5.75% |
|
8.25 |
% |
8/5/2021 |
|
$ |
42,038,104 |
|
41,640,076 |
|
42,353,390 |
|
||
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
49,691,070 |
|
50,404,384 |
|
|||
|
Transportation: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Direct Travel, Inc. |
|
L+ 6.50% |
|
9.11 |
% |
12/1/2021 |
|
$ |
111,870,016 |
|
111,534,998 |
|
111,870,017 |
|
||
|
Total Transportation: Consumer |
|
|
|
|
|
|
|
|
|
111,534,998 |
|
111,870,017 |
|
|||
|
Wholesale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Abracon Group Holding, LLC. (4) |
|
L+ 5.75% |
|
8.36 |
% |
7/18/2024 |
|
$ |
81,292,356 |
|
80,215,937 |
|
80,885,894 |
|
||
|
Aramsco, Inc. |
|
L+ 5.25% |
|
7.75 |
% |
8/28/2024 |
|
$ |
50,216,699 |
|
49,311,331 |
|
49,311,331 |
|
||
|
Total Wholesale |
|
|
|
|
|
|
|
|
|
129,527,268 |
|
130,197,225 |
|
|||
|
Total First Lien Senior Secured |
|
|
|
|
|
|
|
|
|
1,916,509,766 |
|
1,921,888,728 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Total Corporate Debt |
|
|
|
|
|
|
|
|
|
$ |
1,974,780,735 |
|
$ |
1,982,723,442 |
|
|
|
Total Investments |
|
|
|
|
|
|
|
|
|
$ |
1,974,780,735 |
|
$ |
1,982,723,442 |
|
|
(1) The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”) which reset daily, monthly, quarterly or semiannually. For each, the Company has provided the spread over LIBOR and the current weighted average interest rate in effect at March 31, 2019. Certain investments are subject to a LIBOR interest rate floor.
(2) Fair Value determined by the Advisor.
(3) The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par.
(4) $204,252 of the total par amount for this security is at P + 4.75%.
(5) $158,063 of the total par amount for this security is at P + 4.75%.
(6) $52,785 of the total par amount for this security is at P + 5.75%.
(7) $1,770,487 of the total par amount for this security is at P + 4.50%.
(8) $38,975 of the total par amount for this security is at P + 4.75%.
(9) $393,462 of the total par amount for this security is at P + 5.50%.
(10) $62,615 of the total par amount for this security is at P + 5.50%.
Antares Bain Capital Complete Financing Solution
Schedule of Investments
As of December 31, 2018
|
Portfolio Company |
|
Spread Above
|
|
Interest
|
|
Maturity Date |
|
Principal/
|
|
Carrying Value |
|
Fair Value (2) |
|
|||
|
Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Corporate Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Delayed Draw Term Loan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
PRCC Holdings, Inc. |
|
L+ 6.50% |
|
9.02 |
% |
2/1/2021 |
|
$ |
11,878,108 |
|
$ |
11,878,108 |
|
$ |
11,878,108 |
|
|
Total Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
11,878,108 |
|
11,878,108 |
|
|||
|
Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Solaray, LLC |
|
L+ 5.75% |
|
8.49 |
% |
9/9/2023 |
|
$ |
26,680,389 |
|
26,387,900 |
|
26,546,987 |
|
||
|
Solaray, LLC (3) |
|
— |
|
— |
|
9/9/2023 |
|
$ |
— |
|
— |
|
(33,132 |
) |
||
|
Total Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
26,387,900 |
|
26,513,855 |
|
|||
|
FIRE: Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Margaux Acquisition Inc. (3) |
|
— |
|
— |
|
12/19/2024 |
|
$ |
— |
|
— |
|
(417,349 |
) |
||
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
— |
|
(417,349 |
) |
|||
|
High Tech Industries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Element Buyer, Inc. (3) |
|
— |
|
— |
|
7/19/2025 |
|
$ |
— |
|
— |
|
(133,001 |
) |
||
|
Element Buyer, Inc. |
|
L+ 5.25% |
|
7.76 |
% |
7/19/2025 |
|
$ |
7,600,080 |
|
7,473,201 |
|
7,543,079 |
|
||
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
7,473,201 |
|
7,410,078 |
|
|||
|
Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Ansira Holdings, Inc. |
|
L+ 5.75% |
|
8.27 |
% |
12/20/2022 |
|
$ |
2,478,122 |
|
2,471,720 |
|
2,459,537 |
|
||
|
Ansira Holdings, Inc. (3) |
|
— |
|
— |
|
12/20/2022 |
|
$ |
— |
|
— |
|
(56,379 |
) |
||
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
2,471,720 |
|
2,403,158 |
|
|||
|
Services: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
McKissock, LLC |
|
L+ 5.75% |
|
8.55 |
% |
8/5/2021 |
|
$ |
2,605,055 |
|
2,583,309 |
|
2,605,055 |
|
||
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
2,583,309 |
|
2,605,055 |
|
|||
|
Transportation: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Direct Travel, Inc. |
|
L+ 6.50% |
|
9.12 |
% |
12/1/2021 |
|
$ |
1,672,019 |
|
1,669,299 |
|
1,672,019 |
|
||
|
Direct Travel, Inc. |
|
— |
|
— |
|
12/1/2021 |
|
$ |
— |
|
— |
|
— |
|
||
|
Total Transportation: Consumer |
|
|
|
|
|
|
|
|
|
1,669,299 |
|
1,672,019 |
|
|||
|
Total Delayed Draw Term Loan |
|
|
|
|
|
|
|
|
|
$ |
52,463,537 |
|
$ |
52,064,924 |
|
|
|
First lien senior secured loan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Aerospace & Defense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
API Technologies Corp. |
|
L+ 5.75% |
|
8.27 |
% |
4/20/2024 |
|
$ |
117,860,616 |
|
116,559,417 |
|
117,565,964 |
|
||
|
Total Aerospace & Defense |
|
|
|
|
|
|
|
|
|
116,559,417 |
|
117,565,964 |
|
|||
|
Capital Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Tidel Engineering, L.P. |
|
L+ 6.25% |
|
9.05 |
% |
3/1/2024 |
|
$ |
86,441,743 |
|
86,415,211 |
|
86,441,743 |
|
||
|
Total Capital Equipment |
|
|
|
|
|
|
|
|
|
86,415,211 |
|
86,441,743 |
|
|||
|
Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
AP Plastics Group, LLC |
|
L+ 5.25% |
|
7.60 |
% |
8/1/2022 |
|
$ |
48,397,584 |
|
48,348,003 |
|
47,913,608 |
|
||
|
PRCC Holdings, Inc. |
|
L+ 6.50% |
|
9.02 |
% |
2/1/2021 |
|
$ |
73,813,402 |
|
73,813,402 |
|
73,813,402 |
|
||
|
Total Chemicals, Plastics & Rubber |
|
|
|
|
|
|
|
|
|
122,161,405 |
|
121,727,010 |
|
|||
|
Construction & Building |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Profile Products LLC |
|
L+ 5.75% |
|
8.54 |
% |
12/20/2024 |
|
$ |
78,832,202 |
|
77,613,584 |
|
77,255,558 |
|
||
|
Total Construction & Building |
|
|
|
|
|
|
|
|
|
77,613,584 |
|
77,255,558 |
|
|||
|
Consumer Goods: Durable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Home Franchise Concepts, Inc. |
|
L+ 5.00% |
|
7.43 |
% |
7/9/2024 |
|
$ |
69,090,608 |
|
68,773,182 |
|
68,399,702 |
|
||
|
Stanton Carpet Corp. (7) |
|
L+ 5.50% |
|
8.04 |
% |
11/21/2022 |
|
$ |
60,231,137 |
|
60,179,302 |
|
59,628,826 |
|
||
|
Total Consumer Goods: Durable |
|
|
|
|
|
|
|
|
|
128,952,484 |
|
128,028,528 |
|
|||
|
Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Solaray, LLC |
|
L+ 5.75% |
|
8.49 |
% |
9/9/2023 |
|
$ |
96,230,150 |
|
95,175,207 |
|
95,748,999 |
|
||
|
Total Consumer Goods: Non-Durable |
|
|
|
|
|
|
|
|
|
95,175,207 |
|
95,748,999 |
|
|||
|
Energy: Oil & Gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Amspec Services, Inc. |
|
L+ 5.75% |
|
8.55 |
% |
7/2/2024 |
|
$ |
90,025,323 |
|
88,985,892 |
|
86,874,436 |
|
||
|
Total Energy: Oil & Gas |
|
|
|
|
|
|
|
|
|
88,985,892 |
|
86,874,436 |
|
|||
|
FIRE: Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Margaux Acquisition Inc. |
|
L+ 6.00% |
|
8.80 |
% |
12/19/2024 |
|
$ |
65,124,823 |
|
63,765,565 |
|
63,822,327 |
|
||
|
Margaux UK Finance Limited |
|
GBP LIBOR+ 6.00% |
|
7.00 |
% |
12/19/2024 |
|
£ |
17,355,633 |
|
21,651,078 |
|
21,665,453 |
|
||
|
Total FIRE: Insurance |
|
|
|
|
|
|
|
|
|
85,416,643 |
|
85,487,780 |
|
|||
|
High Tech Industries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Caliper Software, Inc. |
|
L+ 5.50% |
|
8.02 |
% |
11/28/2025 |
|
$ |
68,181,667 |
|
67,508,387 |
|
67,158,942 |
|
||
|
Element Buyer, Inc. |
|
L+ 5.25% |
|
7.78 |
% |
7/19/2025 |
|
$ |
85,287,148 |
|
83,863,326 |
|
84,647,494 |
|
||
|
Total High Tech Industries |
|
|
|
|
|
|
|
|
|
151,371,713 |
|
151,806,436 |
|
|||
|
Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Ansira Holdings, Inc. |
|
L+ 5.75% |
|
8.27 |
% |
12/20/2022 |
|
$ |
81,011,099 |
|
80,874,067 |
|
80,403,516 |
|
||
|
Cruz Bay Publishing, Inc. (5) |
|
L+ 5.75% |
|
8.30 |
% |
6/6/2019 |
|
$ |
11,417,703 |
|
11,417,703 |
|
11,417,703 |
|
||
|
Cruz Bay Publishing, Inc. (6) |
|
L+ 6.75% |
|
9.57 |
% |
6/6/2019 |
|
$ |
3,812,900 |
|
3,812,900 |
|
3,812,900 |
|
||
|
Total Media: Advertising, Printing & Publishing |
|
|
|
|
|
|
|
|
|
96,104,670 |
|
95,634,119 |
|
|||
|
Media: Diversified & Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Efficient Collaborative Retail Marketing Company, LLC |
|
L+ 6.75% |
|
9.55 |
% |
6/15/2022 |
|
$ |
22,799,950 |
|
22,721,506 |
|
22,571,950 |
|
||
|
Efficient Collaborative Retail Marketing Company, LLC |
|
L+ 6.75% |
|
9.56 |
% |
6/15/2022 |
|
$ |
33,741,229 |
|
33,241,212 |
|
33,403,817 |
|
||
|
Total Media: Diversified & Production |
|
|
|
|
|
|
|
|
|
55,962,718 |
|
55,975,767 |
|
|||
|
Retail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Batteries Plus Holding Corporation |
|
L+ 6.75% |
|
9.27 |
% |
7/6/2022 |
|
$ |
68,156,203 |
|
68,156,203 |
|
68,156,203 |
|
||
|
Total Retail |
|
|
|
|
|
|
|
|
|
68,156,203 |
|
68,156,203 |
|
|||
|
Services: Business |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
TEI Holdings Inc. |
|
L+ 6.00% |
|
8.80 |
% |
12/20/2023 |
|
$ |
118,589,052 |
|
117,725,743 |
|
117,403,161 |
|
||
|
Total Services: Business |
|
|
|
|
|
|
|
|
|
117,725,743 |
|
117,403,161 |
|
|||
|
Services: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
McKissock, LLC |
|
L+ 5.75% |
|
8.55 |
% |
8/5/2021 |
|
$ |
8,071,352 |
|
8,003,974 |
|
8,071,352 |
|
||
|
McKissock, LLC |
|
L+ 5.75% |
|
8.55 |
% |
8/5/2021 |
|
$ |
42,144,017 |
|
41,792,208 |
|
42,460,097 |
|
||
|
Total Services: Consumer |
|
|
|
|
|
|
|
|
|
49,796,182 |
|
50,531,449 |
|
|||
|
Transportation: Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Direct Travel, Inc. |
|
L+ 6.50% |
|
9.30 |
% |
12/1/2021 |
|
$ |
112,153,232 |
|
111,788,965 |
|
112,153,232 |
|
||
|
Total Transportation: Consumer |
|
|
|
|
|
|
|
|
|
111,788,965 |
|
112,153,232 |
|
|||
|
Wholesale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Abracon Group Holding, LLC. (4) |
|
L+ 5.75% |
|
8.56 |
% |
7/18/2024 |
|
$ |
81,496,608 |
|
80,367,292 |
|
80,681,642 |
|
||
|
Aramsco, Inc. |
|
L+ 5.25% |
|
7.77 |
% |
8/28/2024 |
|
$ |
50,342,871 |
|
49,393,889 |
|
48,958,442 |
|
||
|
Total Wholesale |
|
|
|
|
|
|
|
|
|
129,761,181 |
|
129,640,084 |
|
|||
|
Total First Lien Senior Secured |
|
|
|
|
|
|
|
|
|
$ |
1,581,947,218 |
|
$ |
1,580,430,469 |
|
|
|
Total Corporate Debt |
|
|
|
|
|
|
|
|
|
$ |
1,634,410,755 |
|
$ |
1,632,495,393 |
|
|
|
Total Investments |
|
|
|
|
|
|
|
|
|
$ |
1,634,410,755 |
|
$ |
1,632,495,393 |
|
|
(1) The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”) which reset daily, monthly, quarterly or semiannually. For each, the Company has provided the spread over LIBOR and the current weighted average interest rate in effect at December 31, 2018. Certain investments are subject to a LIBOR interest rate floor.
(2) Fair Value determined by the Advisor.
(3) The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par.
(4) $204,252 of the total par amount for this security is at P + 4.75%.
(5) $158,063 of the total par amount for this security is at P + 4.75%.
(6) $52,785 of the total par amount for this security is at P + 5.75%.
(7) $391,241 of the total par amount for this security is at P + 4.50%.
Results of Operations
Our operating results for the three months ended March 31, 2019 and 2018 were as follows:
|
|
|
For the Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Total investment income |
|
$ |
39,889,823 |
|
$ |
17,458,567 |
|
|
Total expenses, net of fee waivers |
|
18,646,718 |
|
8,683,845 |
|
||
|
Net investment income before taxes |
|
21,243,105 |
|
8,774,722 |
|
||
|
Less Income taxes, including excise tax |
|
— |
|
309 |
|
||
|
Net investment income after taxes |
|
21,243,105 |
|
8,774,413 |
|
||
|
Net realized gain (loss) |
|
2,789,028 |
|
(2,780,538 |
) |
||
|
Net change in unrealized appreciation |
|
15,280,402 |
|
5,365,230 |
|
||
|
Net increase in net assets resulting from operations |
|
$ |
39,312,535 |
|
$ |
11,359,105 |
|
Net increase in net assets resulting from operations can vary from period to period as a result of various factors, including additional financing, new investment commitments, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation on the investment portfolio. Due to these factors, comparisons may not be meaningful.
Investment Income
|
|
|
For the Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Interest income |
|
$ |
30,494,915 |
|
$ |
12,636,585 |
|
|
Dividend income |
|
9,373,177 |
|
4,707,978 |
|
||
|
Other income |
|
21,731 |
|
114,004 |
|
||
|
Total investment income |
|
$ |
39,889,823 |
|
$ |
17,458,567 |
|
Interest income from investments, which includes interest and accretion of discounts and fees, increased to $30.5 million for the three months ended March 31, 2019 from $12.6 million for the three months ended March 31, 2018, primarily due to the growth of our investment portfolio. Our investment portfolio at amortized cost increased to $1,836.5 million from $900.6 million as of March 31, 2019 and 2018, respectively. Dividend income increased to $9.4 million for the three months ended March 31, 2019 from $4.7 million for the three months ended March 31, 2018, primarily due to the growth in our joint venture, ABCS. As of March 31, 2019, the weighted average yield of our investment portfolio increased to 8.8% from 8.6% as of March 31, 2018.
Operating Expenses
The composition of our operating expenses for the three months ended March 31, 2019 and 2018 was as follows:
|
|
|
For the Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Interest and debt financing expenses |
|
$ |
10,545,687 |
|
$ |
4,288,897 |
|
|
Base management fee |
|
6,751,412 |
|
3,247,562 |
|
||
|
Incentive fee |
|
4,085,628 |
|
2,004,548 |
|
||
|
Professional fees |
|
550,432 |
|
523,677 |
|
||
|
Directors fees |
|
105,140 |
|
68,250 |
|
||
|
Other general and administrative expenses |
|
841,177 |
|
174,692 |
|
||
|
Total expenses, before fee waivers |
|
$ |
22,879,476 |
|
$ |
10,307,626 |
|
|
Base management fee waiver |
|
(2,250,471 |
) |
(1,623,781 |
) |
||
|
Incentive fee waiver |
|
(1,982,287 |
) |
— |
|
||
|
Total expenses, net of fee waivers |
|
$ |
18,646,718 |
|
$ |
8,683,845 |
|
Interest and Debt Financing Expenses
Interest and debt financing expenses on our borrowings totaled approximately $10.5 million and $4.3 million for the three months ended March 31, 2019 and 2018, respectively. Interest and debt financing expense for the three months ended March 31, 2019 as compared to March 31, 2018, increased primarily due to higher principal balances outstanding of our revolving credit facilities and
the issuance of our 2018-1 Notes. On February 19, 2019 the Company entered into a new revolving credit facility agreement with Citibank N.A., the Citibank Revolving Credit Facility. Our SMBC Revolving Credit Facility was terminated on November 21, 2018.
The weighted average interest rate (excluding deferred upfront financing costs and unused fees) on our debt outstanding was 4.86% and 4.31% as of March 31, 2019 and December 31, 2018, respectively.
Management Fees
Management fee (net of waivers) increased to $4.5 million for the three months ended March 31, 2019 from $1.6 million for the three months ended March 31, 2018. Management fees (gross of waivers) increased to $6.8 million for the three months ended March 31, 2019 from $3.2 million for the three months ended March 31, 2018, primarily due to an increase in assets to $2.0 billion as of March 31, 2019 from $1.1 billion as of March 31, 2018. Management fees waived for the three months ended March 31, 2019 and 2018 were $2.3 million and $1.6 million, respectively.
Incentive Fees
Incentive fee (net of waivers) increased to $2.1 million for the three months ended March 31, 2019 from $2.0 million for the three months ended March 31, 2018. Incentive Fee waivers related to pre-Incentive fee net investment income consisted of voluntary waivers of $2.0 million for the three months ended March 31, 2019 and $0.0 million for the three months ended March 31, 2018. For the three months ended March 31, 2019 there were no incentive fees related to the GAAP incentive fee.
Professional Fees and Other General and Administrative Expenses
Professional fees and other general and administrative expenses increased to $1.4 million for the three months ended March 31, 2019 from $0.7 million for the three months ended March 31, 2018, due to an increase in costs associated with servicing our investment portfolio.
Net Realized and Unrealized Gains and Losses
The following table summarizes our net realized and unrealized gains (losses) for the three months ended March 31, 2019 and 2018:
|
|
|
For The Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Net realized gain on investments |
|
$ |
438,972 |
|
$ |
277,191 |
|
|
Net realized loss on investments |
|
(1,288,905 |
) |
(19,489 |
) |
||
|
Net realized gain on foreign currency transactions |
|
17,553 |
|
279,261 |
|
||
|
Net realized loss on foreign currency transactions |
|
(11,668 |
) |
(116 |
) |
||
|
Net realized gain on forward currency exchange contracts |
|
3,633,076 |
|
— |
|
||
|
Net realized loss on forward currency exchange contracts |
|
— |
|
(3,317,385 |
) |
||
|
Net realized gains (losses) |
|
2,789,028 |
|
(2,780,538 |
) |
||
|
|
|
|
|
|
|
||
|
Change in unrealized gains on investments |
|
24,821,619 |
|
6,401,411 |
|
||
|
Change in unrealized losses on investments |
|
(6,059,806 |
) |
(1,960,328 |
) |
||
|
Net change in unrealized gains (losses) on investments |
|
18,761,813 |
|
4,441,083 |
|
||
|
Unrealized depreciation on foreign currency translation |
|
(198,161 |
) |
(17,344 |
) |
||
|
Unrealized appreciation (depreciation) on forward currency exchange contracts |
|
(3,283,250 |
) |
941,491 |
|
||
|
Net change in unrealized gains (losses) on foreign currency and forward currency exchange contracts |
|
(3,481,411 |
) |
924,147 |
|
||
|
|
|
|
|
|
|
||
|
Net change in unrealized gains (losses) |
|
15,280,402 |
|
5,365,230 |
|
||
For the three months ended March 31, 2019, and 2018, we had net realized gains (losses) on investments of ($0.8) million and $0.3 million, respectively. For the three months ended March 31, 2019, and 2018, we had net realized gains on foreign currency transactions of $0.0 million and $0.3 million, respectively. For the three months ended March 31, 2019 and 2018, we had net realized
gains (losses) on forward currency contracts of $3.6 million and ($3.3) million, respectively, primarily as a result of settling GBP and EUR forward contracts.
For the three months ended March 31, 2019, we had $24.8 million in unrealized appreciation on 84 portfolio company investments, which was offset by $6.1 million in unrealized depreciation on 41 portfolio company investments. Unrealized appreciation for the three months ended March 31, 2019 resulted from an increase in fair value, primarily due to reversal of prior period unrealized depreciation and positive valuation adjustments.
For the three months ended March 31, 2018, we had $6.4 million in unrealized appreciation on 43 portfolio company investments, which was offset by $2.0 million in unrealized depreciation on 32 portfolio company investments. Unrealized appreciation for the three months ended March 31, 2018 resulted from an increase in fair value, primarily due to positive valuation adjustments.
For the three months ended March 31, 2019 and 2018, we had unrealized appreciation (depreciation) on forward currency exchange contracts of ($3.3) million and $0.9 million, respectively. For the three months ended March 31, 2019, unrealized appreciation on forward currency exchange contracts was due to EUR, GBP, DKK, NOK and AUD forward contracts. For the three months ended March 31, 2018, unrealized depreciation on forward currency exchange contracts was due to EUR, GBP, DKK, and NOK forward contracts.
The following table summarizes the impact of foreign currency for the three months ended March 31, 2019 and 2018:
|
|
|
For the Three months ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Net change in unrealized appreciation on investments due to foreign currency |
|
$ |
646,332 |
|
$ |
2,364,561 |
|
|
Net realized gain on investments due to foreign currency |
|
322 |
|
1,467 |
|
||
|
Net change in unrealized depreciation on foreign currency translation |
|
(198,161 |
) |
(17,344 |
) |
||
|
Net realized gain on foreign currency transactions |
|
5,885 |
|
279,145 |
|
||
|
Net change in unrealized appreciation (depreciation) on forward currency exchange contracts |
|
(3,283,250 |
) |
941,491 |
|
||
|
Net realized gain (loss) on forward currency exchange contracts |
|
3,633,076 |
|
(3,317,385 |
) |
||
|
Foreign currency impact to net increase in net assets resulting from operations |
|
$ |
804,204 |
|
$ |
251,935 |
|
Included in total net gains (losses) on the consolidated statements of operations is net gains (losses) of $0.5 million and $2.6 million related to realized and unrealized gains and losses on investments, foreign currency holdings and non-investment assets and liabilities attributable to the changes in foreign currency exchange rates for the three months ended March 31, 2019 and 2018, respectively. Including the total net realized and unrealized gains (losses) on forward currency exchange contracts of $0.3 million and ($2.4) million, respectively, included in the above table, the net impact of foreign currency on total net gains (losses) on the consolidated statements of operations is $0.8 million and $0.2 million for the three months ended March 31, 2019 and 2018, respectively.
Net Increase (Decrease) in Net Assets Resulting from Operations
For the three months ended March 31, 2019 and 2018, the net increase in net assets resulting from operations was $39.3 million and $11.4 million, respectively. Based on the weighted average shares of common stock outstanding for the three months ended March 31, 2019 and 2018, our per share net increase in net assets resulting from operations was $0.76 and $0.39, respectively.
Financial Condition, Liquidity and Capital Resources
Our liquidity and capital resources are derived primarily from proceeds from equity issuances, advances from our credit facilities, 2018-1 Notes, and cash flows from operations. The primary uses of our cash are for (1) investments in portfolio companies and other investments and to comply with certain portfolio diversification requirements; (2) the cost of operations (including payments to the Advisor under the Investment Advisory and Administration Agreements); (3) debt service, repayment, and other financing costs; and, (4) cash distributions to the holders of our common shares.
We intend to continue to generate cash primarily from cash flows from operations, future borrowings and future offerings of securities. We may from time to time enter into additional debt facilities, increase the size of existing 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. We are required to meet an asset coverage ratio, defined under the 1940 Act as the ratio of our total assets
(less all liabilities and indebtedness not represented by senior securities) to our outstanding senior securities, of at least 150% after each issuance of senior securities. As of March 31, 2019 and December 31, 2018, our asset coverage ratio was 211% and 257%, respectively.
At March 31, 2019 and December 31, 2018, we had $94.6 million and $33.3 million in cash, foreign cash, restricted cash and cash equivalents, respectively.
At March 31, 2019 we had approximately $141.7 million of availability on our BCSF Revolving Credit Facility and $157.1 million of availability on our Citibank Revolving Credit Facility, subject to existing terms and regulatory requirements. At December 31, 2018 we had approximately $228.7 million of availability on our BCSF Revolving Credit Facility, subject to existing terms and regulatory requirements.
For the three months ended March 31, 2019, cash, foreign cash, restricted cash, and cash equivalents increased by $61.4 million. During the three months ended March 31, 2019, we used $197.1 million in cash for operating activities, primarily to purchase investments of $370.3 million, which was offset by proceeds from principal payments and sales of investments of $153.6 million, a net increase in net assets resulting from operations of $39.3 million, and a change in unrealized appreciation of investments of $18.8 million. During the three months ended March 31, 2019, we generated $258.6 million from financing activities, primarily from borrowings on our BCSF Revolving Credit Facility and our Citibank Revolving Credit Facility, together referred to as the “Revolving Credit Facilities”, of $465.9 million, offset by repayments on our Revolving Credit Facilities of $186.0 million and distributions paid during the period of $21.1 million.
For the three months ended March 31, 2018, cash, foreign cash and cash equivalents decreased by $18.2 million. During the same period, we used $75.9 million in operating activities, primarily as a result of purchases of investments, slightly offset by proceeds from principal payments of investments. During the three months ended March 31, 2018, we generated $57.4 million from financing activities, primarily from borrowings on our Revolving Credit Facilities and the issuance of common stock, offset by repayments on our Revolving Credit Facilities.
Equity
On November 19, 2018, we closed our initial public offering (the “IPO”) issuing 7,500,000 shares of its common stock at a public offering price of $20.25 per share. Shares of common stock of the Company began trading on the New York Stock Exchange under the symbol “BCSF” on November 15, 2018. The offering generated net proceeds, after expenses, of $145.4 million. All outstanding capital commitments from the Company’s Private Offering, were cancelled as of the completion of the IPO.
BCSF Investments, LLC and certain individuals adopted the 10b5-1 Plan in accordance with Rules 10b5-1 and 10b-18 under the Exchange Act, under which such parties will buy up to $20 million in the aggregate of our common stock in the open market during the period beginning after four full calendar weeks after the closing of the IPO and ending on the earlier of the date on which the capital committed to the 10b5-1 has been exhausted or one year after the closing of the IPO. For the three months ended March 31, 2019, 827,933 shares have been purchased under the 10b5-1 Plan at a weighted average price of $18.78, inclusive of commissions, for a total cost of $15.6 million. As of March 31, 2019, zero dollars remain under the 10b5-1 Plan and no further purchases are intended under the 10b5-1 Plan.
During the three months ended March 31, 2019, we did not issue shares of our common stock to investors who have opted into our dividend reinvestment plan. During the three months ended March 31, 2018, we issued 65,496.52 shares of our common stock to investors who have opted into our dividend reinvestment plan.
Debt
Debt consisted of the following as of March 31, 2019, and December 31, 2018:
|
|
|
As of March 31, 2019 |
|
As of December 31, 2018 |
|
||||||||||||||
|
|
|
Total Aggregate
|
|
Principal
|
|
Carrying
|
|
Total Aggregate
|
|
Principal
|
|
Carrying
|
|
||||||
|
BCSF Revolving Credit Facility |
|
$ |
500,000,000 |
|
$ |
358,264,902 |
|
$ |
358,264,902 |
|
$ |
500,000,000 |
|
$ |
271,264,902 |
|
$ |
271,264,902 |
|
|
2018-1 Notes |
|
365,700,000 |
|
365,700,000 |
|
363,702,275 |
|
365,700,000 |
|
365,700,000 |
|
363,659,680 |
|
||||||
|
Citibank Revolving Credit Facility |
|
350,000,000 |
|
192,929,188 |
|
192,929,188 |
|
— |
|
— |
|
— |
|
||||||
|
Total Debt |
|
$ |
1,215,700,000 |
|
$ |
916,894,090 |
|
$ |
914,896,365 |
|
$ |
865,700,000 |
|
$ |
636,964,902 |
|
$ |
634,924,582 |
|
(1) Carrying value represents aggregate principal amount outstanding less unamortized debt issuance costs
SMBC Revolving Credit Agreement
On December 22, 2016, we entered into the revolving credit agreement (the “SMBC Revolving Credit Agreement”). The maximum commitment amount under the SMBC Revolving Credit Facility was $150.0 million, and may be increased up to $350.0 million (“Maximum Commitment”) with the consent of SMBC or reduced upon our request. Effective July 31, 2018, we reduced the commitment amount under the SMBC Revolving Credit Facility to $85.0 million. Proceeds under the SMBC Revolving Credit Facility may be used for any purpose permitted under our organizational documents, including general corporate purposes such as the making of investments. The SMBC Revolving Credit Agreement contains certain covenants, including maintaining an asset coverage ratio of total assets to total borrowings of at least 200%.
Borrowings under the SMBC Revolving Credit Facility bear interest at the London Interbank Offered Rate (“LIBOR”) plus a margin. The SMBC Revolving Credit Facility was accruing interest expense at a rate of LIBOR plus 1.40%. We pay an unused commitment fee of: (a) where the Maximum Commitment which is unused on such date is greater than fifty (50) percent of the Maximum Commitment, a rate of 20 basis points (0.20%) per annum; or (b) where the Maximum Commitment which is unused on such date is less than or equal to fifty (50) percent of the Maximum Commitment, a rate of 15 basis points (0.15%) per annum. Interest is payable in arrears either on a one month, two month, three month or six month LIBOR period. Any amounts borrowed under the SMBC Revolving Credit Facility, and all accrued and unpaid interest, will be due and payable, on the earliest of: (a) December 22, 2019; (b) the date upon which SMBC declares the obligations, or the obligations become, due and payable after the occurrence of an event of default under the SMBC Revolving Credit Facility; (c) the date upon which we terminate the commitments under the SMBC Revolving Credit Facility; and (d) 45 days prior to the earlier of (1) the date upon which the commitment period under the subscription agreements terminates and (2) the date upon which the ability to make capital calls and receive capital contributions otherwise terminates.
On November 21, 2018, the SMBC Revolving Credit Facility was terminated. The proceeds from the initial public offering on November 15, 2018, were used to repay the total outstanding debt.
For the three months ended March 31, 2019 and 2018, the components of interest expense related to the SMBC Revolving Credit Facility were as follows:
|
|
|
For the Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Borrowing interest expense |
|
$ |
— |
|
$ |
1,056,935 |
|
|
Unused facility fee |
|
— |
|
3,533 |
|
||
|
Amortization of deferred financing costs and upfront commitment fees |
|
— |
|
90,228 |
|
||
|
Total interest and debt financing expenses |
|
$ |
— |
|
$ |
1,150,696 |
|
BCSF Revolving Credit Facility
On October 4, 2017, we entered into the revolving credit agreement (the “BCSF Revolving Credit Facility”) with us, as equity holder, BCSF I, LLC, a Delaware limited liability company and a wholly owned and consolidated subsidiary of the Company, as borrower, and Goldman Sachs Bank USA, as sole lead arranger (“Goldman Sachs”). The BCSF Revolving Credit Facility was subsequently amended on May 15, 2018 to reflect certain clarifications regarding margin requirements and hedging currencies. The maximum commitment amount under the BCSF Revolving Credit Facility is $500.0 million, and may be increased up to $750.0 million. Proceeds of the loans under the BCSF Revolving Credit Facility may be used to acquire certain qualifying loans and such other uses as permitted under the BCSF Revolving Credit Facility. The BCSF Revolving Credit Facility includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature. As of March 31, 2019, we were in compliance with these covenants.
Assets that are pledged as collateral for the BCSF Revolving Credit Facility are not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company’s obligations under the BCSF Revolving Credit Facility.
Borrowings under the BCSF Revolving Credit Facility bear interest at LIBOR plus a margin. As of March 31, 2019 and December 31, 2018, the BCSF Revolving Credit Facility was accruing interest expense at a rate of LIBOR plus 2.50%. We pay an unused commitment fee of 30 basis points (0.30%) per annum. Interest is payable quarterly in arrears. Any amounts borrowed under the BCSF Revolving Credit Facility, and all accrued and unpaid interest, will be due and payable, on the earliest of: (a) October 5, 2022 and (b) the date upon which all loans shall become due and payable in full, whether by acceleration or otherwise.
As of March 31, 2019 and December 31, 2018 there were $358.3 million and $271.3 million borrowings under the BCSF Revolving Credit Facility, respectively and we were in compliance with the terms of the BCSF Revolving Credit Facility.
For the three months ended March 31, 2019 and 2018, the components of interest expense related to the BCSF Revolving Credit Facility were as follows:
|
|
|
For the Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Borrowing interest expense |
|
$ |
4,988,189 |
|
$ |
2,696,109 |
|
|
Unused facility fee |
|
87,276 |
|
178,725 |
|
||
|
Amortization of deferred financing costs and upfront commitment fees |
|
263,367 |
|
263,367 |
|
||
|
Total interest and debt financing expenses |
|
$ |
5,338,832 |
|
$ |
3,138,201 |
|
2018-1 Notes
On September 28, 2018 (the “2018-1 Closing Date”), the Company, through BCC Middle Market CLO 2018-1 LLC (the “2018-1 Issuer”), a Delaware limited liability company and a wholly owned and consolidated subsidiary of the Company, completed its $451.2 million term debt securitization (the “CLO Transaction”). The notes issued in connection with the CLO Transaction (the “2018-1 Notes”) are secured by a diversified portfolio of the Issuer consisting primarily of middle market loans and participation interests in middle market loans, the majority of which are senior secured loans (the “2018-1 Portfolio”). At the 2018-1 Closing Date, the 2018-1 Portfolio was comprised of assets transferred from the Company and its consolidated subsidiaries. All transfers were eliminated in consolidation and there were no realized gains or losses recognized in the CLO Transaction.
The CLO Transaction was executed through a private placement of the following 2018-1 Notes:
|
2018-1 Notes |
|
Principal Amount |
|
Spread above Index |
|
Interest rate at
|
|
|
|
Class A-1 A |
|
$ |
205,900,000 |
|
1.55% + 3 Month LIBOR |
|
4.31 |
% |
|
Class A-1 B |
|
45,000,000 |
|
1.50% + 3 Month LIBOR (first 24 months) |
|
4.26 |
% |
|
|
|
|
|
|
1.80% + 3 Month LIBOR (thereafter) |
|
|
|
|
|
Class A-2 |
|
55,100,000 |
|
2.15% + 3 Month LIBOR |
|
4.91 |
% |
|
|
Class B |
|
29,300,000 |
|
3.00% + 3 Month LIBOR |
|
5.76 |
% |
|
|
Class C |
|
30,400,000 |
|
4.00% + 3 Month LIBOR |
|
6.76 |
% |
|
|
Total 2018-1 Notes |
|
365,700,000 |
|
|
|
|
|
|
|
Membership Interests |
|
85,450,000 |
|
Non-interest bearing |
|
Not applicable |
|
|
|
Total |
|
$ |
451,150,000 |
|
|
|
|
|
The Class A-1 A, A-1 B, A-2, B and C 2018-1 Notes were issued at par and are scheduled to mature on October 20, 2030. The Company received 100% of the membership interests (the “Membership Interests”) in the 2018-1 Issuer in exchange for its sale to the 2018-1 Issuer of the initial closing date loan portfolio. The Membership Interests do not bear interest.
The Class A-1 A, A-1 B, A-2, B and C 2018-1 Notes are included in the consolidated financial statements of the Company. The Membership Interests are eliminated in consolidation.
The Company serves as portfolio manager of the 2018-1 Issuer pursuant to a portfolio management agreement between the Company and the 2018-1 Issuer. For so long as the Company serves as portfolio manager, the Company will not charge any management fee or subordinated interest to which it may be entitled.
During the reinvestment period (four years from the closing date of the CLO Transaction), pursuant to the indenture governing the 2018-1 Notes, all principal collections received on the underlying collateral may be used by the 2018-1 Issuer to purchase new collateral under the direction of the Company in its capacity as portfolio manager of the 2018-1 Issuer and in accordance with the 2018-1 Issuer’s investment strategy and the terms of the indenture.
The Company has agreed to hold on an ongoing basis the Membership Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate amount of all obligations issued by the 2018-1 Issuer for so long as the 2018-1 Notes remain outstanding.
The 2018-1 Issuer pays ongoing administrative expenses to the trustee, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2018-1 Issuer.
As of March 31, 2019, there were 75 first lien and second lien senior secured loans with a total fair value of approximately $431.5 million and cash of $14.0 million securing the 2018-1 Notes. Assets that are pledged as collateral for the 2018-1 Notes are not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company’s obligations under the indenture governing the 2018-1 Notes. As of December 31, 2018, there were 75 first lien and second lien senior secured loans with a total fair value of approximately $437.2 million and cash of $18.0 million securing the 2018-1 Notes. Such assets are included in the Company’s consolidated financial statements. The creditors of the 2018-1 Issuer have received security interests in such assets and such assets are not intended to be available to the creditors of the Company (or an affiliate of the Company). The 2018-1 Portfolio must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture governing the 2018-1 Notes. As of March 31, 2019 and December 31, 2018, the Company was in compliance with its covenants related to the 2018-1 Notes.
Costs of $2.1 million were incurred in connection with debt securitization of the 2018-1 Notes by the 2018-1 Issuer which have been recorded as debt issuance costs and presented as a reduction to the outstanding principal amount of the 2018-1 Notes on the consolidated statements of assets and liabilities and are being amortized over the life of the 2018-1 Issuer using the effective interest method. The balance of the unamortized deferred financing costs related to the 2018-1 Issuer was $2.0 million and $2.0 million as of March 31, 2019 and December 31, 2018, respectively.
For the three months ended March 31, 2019 and 2018, the components of interest expense related to the 2018-1 Issuer were as follows:
|
|
|
For the Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Borrowing interest expense |
|
$ |
4,238,121 |
|
$ |
— |
|
|
Amortization of deferred financing costs and upfront commitment fees |
|
42,595 |
|
— |
|
||
|
Total interest and debt financing expenses |
|
$ |
4,280,716 |
|
$ |
— |
|
Citibank Revolving Credit Agreement
On February 19, 2019, the Company entered into a credit and security agreement (the “Credit Agreement” or the “Citibank Revolving Credit Agreement”) with the Company as equity holder and servicer, BCSF II-C, LLC as Borrower, Citibank, N.A., as Administrative Agent, and Wells Fargo Bank, National Association as Collateral Administrator, Collateral Agent and Custodian. The Credit Agreement is effective as of February 19, 2019.
The facility amount under the Credit Agreement is $350,000,000. Proceeds of the loans under the Credit Agreement may be used to acquire certain qualifying loans and such other uses as permitted under the Credit Agreement. The period from the closing date until February 19, 2020 is referred to as the reinvestment period and during such reinvestment period, the Borrower may request drawdowns under the Credit Agreement. The final maturity date is the earliest of: (a) the business day designated by the Borrower as the final maturity date upon not less than three business days’ prior written notice to the Administrative Agent, the Collateral Agent, the Lenders, the Custodian and the Collateral Administrator, (b) February 19, 2022 and (c) the date on which the Administrative Agent provides notice of the declaration of the final maturity date after the occurrence of an event of default. The Credit Agreement includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature. As of March 31, 2019, we were in compliance with these covenants.
Assets that are pledged as collateral for the Citibank Revolving Credit Facility are not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company’s obligations under the Citibank Revolving Credit Facility.
Borrowings under the Citibank Revolving Credit Facility bear interest at the London Interbank Offered Rate (“LIBOR”) plus a margin. During the period prior to the last day of the reinvestment period, borrowings under the Credit Agreement will bear interest at a rate equal to the three- LIBOR plus 1.60%.Commencing on the last day of the reinvestment period, the interest rate on borrowings under the Credit Agreement will reset to three month LIBOR plus 2.60% for the remaining term of the Credit Agreement. We pay an unused commitment fee based on a corresponding utilization rate; (i) 0 basis points (0.00%) per annum when greater than or equal to 85.0% utilization, (ii) 25 basis points (0.25%) per annum when greater than or equal to 75.0% but less than 85.0% utilization, (iii) 50 basis points (0.50%) per annum when greater than or equal to 50.0% but less than 75.0% utilization, (iv) 75 basis points (0.75%) per annum when greater than or equal to 25.0% but less than 50% utilization, or (v) 100 basis points (1.00%) per annum when less than 25.0% utilization.
As of March 31, 2019, there were $192.9 million borrowings under the Citibank Revolving Credit Facility.
For the three months ended March 31, 2019 and 2018, the components of interest expense related to the Citibank Revolving Credit Facility Issuer were as follows:
|
|
|
For the Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Borrowing interest expense |
|
$ |
906,191 |
|
$ |
— |
|
|
Unused facility fee |
|
14,415 |
|
— |
|
||
|
Amortization of deferred financing costs and upfront commitment fees |
|
5,533 |
|
— |
|
||
|
Total interest and debt financing expenses |
|
$ |
926,139 |
|
$ |
— |
|
Distribution Policy
The following table summarizes distributions declared during the three months ended March 31, 2019:
|
Date Declared |
|
Record Date |
|
Payment Date |
|
Amount
|
|
Total
|
|
||
|
February 21, 2019 |
|
March 29, 2019 |
|
April 12, 2019 |
|
$ |
0.41 |
|
$ |
21,107,677 |
|
|
Total distributions declared |
|
|
|
|
|
$ |
0.41 |
|
$ |
21,107,677 |
|
The following table summarizes distributions declared during the three months ended March 31, 2018:
|
Date Declared |
|
Record Date |
|
Payment Date |
|
Amount
|
|
Total
|
|
||
|
March 28, 2018 |
|
March 28, 2018 |
|
May 17, 2018 |
|
$ |
0.34 |
|
$ |
10,609,643 |
|
|
Total distributions declared |
|
|
|
|
|
$ |
0.34 |
|
$ |
10,609,643 |
|
Distributions to common stockholders are recorded on the record date. To the extent that we have income available, we intend to distribute quarterly distributions to our stockholders. Our quarterly distributions, if any, will be determined by the Board. Any distributions to our stockholders will be declared out of assets legally available for distribution.
We have elected to be treated, and intend to operate in a manner so as to continuously qualify, as, a regulated investment company (a “RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), beginning with our taxable year ended December 31, 2016. To qualify for and maintain RIC tax treatment, among other things, we must distribute dividends to our stockholders in respect of each taxable year of an amount generally at least equal to 90% of the sum of our net ordinary income and net short-term capital gains in excess of our net long-term capital losses. In order to avoid the imposition of certain excise taxes imposed on RICs, we must distribute dividends to our stockholders in respect of each calendar year of an amount at least equal to the sum of: (1) 98% of our net ordinary income (taking into account certain deferrals and elections) for such calendar year; (2) 98.2% of our capital gains in excess of capital losses, adjusted for certain ordinary losses, generally for the one-year period ending on October 31 of such calendar year; and (3) the sum of any net ordinary income plus capital gains net income for preceding years that were not distributed during such years and on which we paid no federal income tax.
We intend to distribute net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, we may decide in the future to retain all or a portion of our net capital gains for investment, incur a corporate-level tax on such capital gains, and elect to treat such capital gains as deemed distributions to our stockholders.
We have adopted a dividend reinvestment plan that provides for the reinvestment of cash dividends and distributions. Prior to the IPO, stockholders who “opted in” to our dividend reinvestment plan had their cash dividends and distributions automatically reinvested in additional shares of our common stock, rather than receiving cash dividends and distributions. Subsequent to the IPO, stockholders who do not “opt out” of our dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in additional shares of our common stock, rather than receiving cash dividends and distributions. Stockholders could elect to “opt in” or “opt out” of our dividend reinvestment plan in their subscription agreements, through the private offering. The elections of stockholders that make an election prior to the IPO shall remain effective after the IPO.
The U.S. federal income tax characterization of distributions declared and paid for the fiscal year will be determined at fiscal year-end based upon our investment company taxable income for the full fiscal year and distributions paid during the full year.
Commitments and Off-Balance Sheet Arrangements
We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to fund investments and to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized on the statements of assets and liabilities.
As of March 31, 2019, the Company had $122.5 million of unfunded commitments under loan and financing agreements as follows:
|
|
|
Expiration Date (1) |
|
Unfunded Commitments (2) (3) |
|
|
|
First Lien Senior Secured Loans |
|
|
|
|
|
|
|
Abracon Group Holding, LLC. — Revolver |
|
7/18/2024 |
|
$ |
2,833,400 |
|
|
AMCP Clean Acquisition Company, LLC — Delayed Draw Term Loan |
|
6/16/2025 |
|
2,386,381 |
|
|
|
Amspec Services, Inc. — Revolver |
|
7/2/2024 |
|
3,476,812 |
|
|
|
Ansira Holdings, Inc. — Revolver |
|
12/20/2022 |
|
5,440,128 |
|
|
|
AP Plastics Group, LLC — Revolver |
|
8/2/2021 |
|
8,500,200 |
|
|
|
API Technologies Corp. — Revolver |
|
4/22/2024 |
|
4,183,169 |
|
|
|
Aramsco, Inc. — Revolver |
|
8/28/2024 |
|
3,273,905 |
|
|
|
Batteries Plus Holding Corporation — Revolver |
|
7/6/2022 |
|
4,037,595 |
|
|
|
Captain D’s LLC — Revolver |
|
12/15/2023 |
|
1,086,324 |
|
|
|
Chase Industries, Inc. — Delayed Draw Term Loan |
|
5/12/2025 |
|
3,544,365 |
|
|
|
Clinical Innovations, LLC — Revolver |
|
10/17/2022 |
|
834,640 |
|
|
|
CMI Marketing Inc. — Revolver |
|
5/24/2023 |
|
2,112,000 |
|
|
|
CPS Group Holdings, Inc. — Revolver |
|
3/3/2025 |
|
2,466,720 |
|
|
|
Cruz Bay Publishing, Inc. — Revolver |
|
6/6/2019 |
|
566,680 |
|
|
|
CST Buyer Company — Revolver |
|
3/1/2023 |
|
897,478 |
|
|
|
Datix Bidco Limited — Revolver |
|
10/28/2024 |
|
1,267,612 |
|
|
|
Direct Travel, Inc. — Revolver |
|
12/1/2021 |
|
4,250,100 |
|
|
|
Dorner Manufacturing Corp — Revolver |
|
3/15/2022 |
|
1,098,883 |
|
|
|
Drilling Info Holdings, Inc. — Delayed Draw Term Loan |
|
7/30/2025 |
|
80,166 |
|
|
|
Efficient Collaborative Retail Marketing Company, LLC — Revolver |
|
6/15/2022 |
|
3,541,750 |
|
|
|
Element Buyer, Inc. — Revolver |
|
7/19/2024 |
|
4,250,100 |
|
|
|
FFI Holdings I Corp — Delayed Draw Term Loan |
|
1/24/2025 |
|
591,474 |
|
|
|
FFI Holdings I Corp — Revolver |
|
1/24/2025 |
|
3,284,173 |
|
|
|
Fineline Technologies, Inc. — Revolver |
|
11/4/2022 |
|
2,162,097 |
|
|
|
Grammer Purchaser, Inc. — Revolver |
|
9/30/2024 |
|
1,050,000 |
|
|
|
Home Franchise Concepts, Inc. — Revolver |
|
7/9/2024 |
|
2,529,821 |
|
|
|
Horizon Telcom, Inc. — Delayed Draw Term Loan |
|
6/15/2023 |
|
1,737,931 |
|
|
|
Horizon Telcom, Inc. — Revolver |
|
6/15/2023 |
|
1,158,621 |
|
|
|
Margaux Acquisition Inc. — Revolver |
|
12/19/2024 |
|
2,564,716 |
|
|
|
Margaux UK Finance Limited — Revolver |
|
12/19/2024 |
|
650,350 |
|
|
|
McKissock, LLC — Revolver |
|
8/5/2021 |
|
1,841,710 |
|
|
|
PRCC Holdings, Inc. — Revolver |
|
2/1/2021 |
|
3,541,750 |
|
|
|
Profile Products LLC — Revolver |
|
12/20/2024 |
|
2,363,945 |
|
|
|
RoC Opco LLC — Revolver |
|
2/25/2025 |
|
10,241,400 |
|
|
|
Solaray, LLC — Revolver |
|
9/9/2022 |
|
4,675,110 |
|
|
|
Sovos Compliance, LLC — Revolver |
|
3/1/2022 |
|
1,451,615 |
|
|
|
Sovos Compliance, LLC — Delayed Draw Term Loan |
|
8/2/2019 |
|
870,968 |
|
|
|
Stanton Carpet Corp. — Revolver |
|
11/21/2022 |
|
4,250,100 |
|
|
|
Symplr Software, Inc. — Revolver |
|
11/30/2023 |
|
2,234,123 |
|
|
|
TEI Holdings Inc. — Revolver |
|
12/20/2022 |
|
1,841,710 |
|
|
|
Tidel Engineering, L.P. — Revolver |
|
3/1/2023 |
|
4,250,100 |
|
|
|
WCI-HSG Purchaser, Inc. — Revolver |
|
2/21/2025 |
|
2,015,228 |
|
|
|
WU Holdco, Inc. — Revolver |
|
3/26/2025 |
|
3,944,222 |
|
|
|
Zywave, Inc. — Revolver |
|
11/17/2022 |
|
511,647 |
|
|
|
Total First Lien Senior Secured Loans |
|
|
|
$ |
119,891,219 |
|
|
Other Unfunded Commitments |
|
|
|
|
|
|
|
BCC Jetstream Holdings Aviation (On II), LLC |
|
|
|
2,561,470 |
|
|
|
Total Other Unfunded Commitments |
|
|
|
$ |
2,561,470 |
|
|
Total |
|
|
|
$ |
122,452,689 |
|
(1) Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.
(2) Unfunded commitments denominated in currencies other than U.S. dollars have been converted to U.S. dollars using the applicable foreign currency exchange rate as of March 31, 2019.
(3) Unfunded commitments represent unfunded commitments to fund investments, excluding our investment in ABCS as of March 31, 2019.
As of December 31, 2018, the Company had $110.2 million of unfunded commitments under loan and financing agreements as follows:
|
|
|
Expiration Date (1) |
|
Unfunded Commitments (2) (3) |
|
|
|
First Lien Senior Secured Loans |
|
|
|
|
|
|
|
Abracon Group Holding, LLC — Revolver |
|
7/18/2024 |
|
$ |
2,833,400 |
|
|
Aimbridge Hospitality LP — Revolver |
|
6/22/2022 |
|
1,176,500 |
|
|
|
AMCP Clean Acquisition Company, LLC — Delayed Draw Term Loan |
|
6/16/2025 |
|
2,315,428 |
|
|
|
Amspec Services, Inc. — Revolver |
|
7/2/2024 |
|
4,735,302 |
|
|
|
Ansira Holdings, Inc. — Revolver |
|
12/20/2022 |
|
5,440,128 |
|
|
|
AP Plastics Group, LLC — Revolver |
|
8/1/2021 |
|
8,500,200 |
|
|
|
API Technologies Corp. — Revolver |
|
4/22/2024 |
|
4,183,169 |
|
|
|
Aramsco, Inc. — Revolver |
|
8/28/2024 |
|
3,161,012 |
|
|
|
Batteries Plus Holding Corporation — Revolver |
|
7/6/2022 |
|
4,250,100 |
|
|
|
Caliper Corporation — Revolver |
|
11/30/2023 |
|
2,358,241 |
|
|
|
Captain D’s LLC — Revolver |
|
12/15/2023 |
|
1,073,909 |
|
|
|
Chase Industries, Inc. — Delayed Draw Term Loan |
|
5/12/2025 |
|
3,544,365 |
|
|
|
Clinical Innovations, LLC — Revolver |
|
10/17/2022 |
|
1,113,333 |
|
|
|
CMI Marketing Inc. — Revolver |
|
5/24/2023 |
|
2,112,000 |
|
|
|
Cruz Bay Publishing, Inc. — Revolver |
|
6/6/2019 |
|
566,680 |
|
|
|
CST Buyer Company — Revolver |
|
3/1/2023 |
|
897,478 |
|
|
|
Datix Bidco Limited — Revolver |
|
10/28/2024 |
|
1,239,500 |
|
|
|
Direct Travel, Inc. — Revolver |
|
12/1/2021 |
|
4,250,100 |
|
|
|
Dorner Manufacturing Corp. — Revolver |
|
3/15/2022 |
|
1,043,939 |
|
|
|
Drilling Info Holdings, Inc. — Delayed Draw Term Loan |
|
7/30/2025 |
|
1,662,801 |
|
|
|
Efficient Collaborative Retail Marketing Company, LLC — Revolver |
|
6/15/2022 |
|
3,541,750 |
|
|
|
Element Buyer, Inc. — Revolver |
|
7/19/2024 |
|
4,250,100 |
|
|
|
ENC Holding Corporation — Delayed Draw Term Loan |
|
5/30/2025 |
|
595,376 |
|
|
|
FineLine Technologies, Inc. — Revolver |
|
11/2/2021 |
|
2,162,097 |
|
|
|
Grammer Purchaser, Inc. — Revolver |
|
9/30/2024 |
|
945,000 |
|
|
|
Great Expressions Dental Centers PC — Revolver |
|
9/28/2022 |
|
213,394 |
|
|
|
Home Franchise Concepts, Inc. — Revolver |
|
7/9/2024 |
|
2,529,821 |
|
|
|
Horizon Telcom, Inc. — Delayed Draw Term Loan |
|
6/15/2023 |
|
1,737,931 |
|
|
|
Horizon Telcom, Inc. — Revolver |
|
6/15/2023 |
|
1,158,621 |
|
|
|
Margaux UK Finance — Revolver |
|
12/19/2024 |
|
635,927 |
|
|
|
Margaux Acquisition Inc. — Revolver |
|
12/19/2024 |
|
2,256,950 |
|
|
|
McKissock, LLC — Revolver |
|
8/5/2021 |
|
1,841,710 |
|
|
|
PRCC Holdings, Inc. — Revolver |
|
2/1/2021 |
|
3,541,750 |
|
|
|
Profile Products LLC — Revolver |
|
12/20/2024 |
|
3,833,424 |
|
|
|
Solaray, LLC — Revolver |
|
9/9/2022 |
|
7,083,500 |
|
|
|
Sovos Compliance, LLC — Delayed Draw Term Loan |
|
3/1/2022 |
|
870,968 |
|
|
|
Sovos Compliance, LLC — Revolver |
|
3/1/2022 |
|
1,451,615 |
|
|
|
Stanton Carpet Corp. — Revolver |
|
11/21/2022 |
|
4,250,100 |
|
|
|
TEI Holdings Inc. — Revolver |
|
12/20/2022 |
|
3,541,750 |
|
|
|
Tidel Engineering, L.P. — Revolver |
|
3/1/2023 |
|
4,250,100 |
|
|
|
Zywave, Inc. — Revolver |
|
11/17/2022 |
|
511,647 |
|
|
|
Total First Lien Senior Secured Loans |
|
|
|
$ |
107,661,116 |
|
|
Other Unfunded Commitments |
|
|
|
|
|
|
|
BCC Jetstream Holdings Aviation (On II), LLC |
|
|
|
2,561,470 |
|
|
|
Total Other Unfunded Commitments |
|
|
|
$ |
2,561,470 |
|
|
Total |
|
|
|
$ |
110,222,586 |
|
(1) Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.
(2) Unfunded commitments denominated in currencies other than U.S. dollars have been converted to U.S. dollars using the applicable foreign currency exchange rate as of December 31, 2018.
(3) Unfunded commitments represent unfunded commitments to fund investments, excluding our investment in ABCS as of December 31, 2018.
Significant Accounting Estimates and Critical Accounting Policies
Basis of Presentation
The Company’s unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The Company’s unaudited consolidated financial statements and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 1, 6, 10 and 12 of Regulation S-X. These consolidated financial statements reflect adjustments that in the opinion of the Company are necessary for the fair statement of the financial position and results of operations for the periods presented herein and are not necessarily indicative of the full fiscal year. We have determined we meet the definition of an investment company and follow the accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 — Financial Services — Investment Companies (“ASC 946”). Our financial currency is U.S. dollars and these consolidated financial statements have been prepared in that currency.
Use of Estimates
The preparation of the consolidated financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates and such differences could be material.
Revenue Recognition
We record our investment transactions on a trade date basis. We record realized gains and losses based on the specific identification method. We record interest income, adjusted for amortization of premium and accretion of discount, on an accrual basis. Discount and premium to par value on investments acquired are accreted and amortized, respectively, into interest income over the life of the respective investment using the effective interest method. Loan origination fees, original issue discount and market discount or premium are capitalized and amortized into or against interest income using the effective interest method or straight-line method, as applicable. We record any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts received upon prepayment of a loan or debt security as interest income.
Dividend income on preferred equity investments is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity investments is recorded on the record date for such distributions in the case of private portfolio companies, and on the ex-dividend date for publicly traded portfolio companies. Distributions received from a limited liability company or limited partnership investment are evaluated to determine if the distribution should be recorded as dividend income or a return of capital.
Certain investments may have contractual PIK interest or dividends. PIK represents accrued interest or accumulated dividends that are added to the loan principal of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity or upon being called by the issuer. We record PIK as interest or dividend income, as applicable. If at any point we believe PIK may not be realized, we place the investment generating PIK on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest or dividends are generally reversed through interest or dividend income, as applicable.
Certain structuring fees and amendment fees are recorded as other income when earned. We record administrative agent fees received as other income when the services are rendered.
Valuation of Portfolio Investments
Investments for which market quotations are readily available are typically valued at such market quotations. Market quotations are obtained from an independent pricing service, where available. If we cannot obtain a price from an independent pricing service or if
the independent pricing service is not deemed to be representative with the market, we value certain investments held by us on the basis of prices provided by principal market makers. Generally investments marked in this manner will be marked at the mean of the bid and ask of the independent broker quotes obtained, in some cases, primarily illiquid securities, multiple quotes may not be available and the mid of the bid/ask from one broker will be used. To validate market quotations, we utilize a number of factors to determine if the quotations are representative of fair value, including the source and number of quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value, subject at all times to the oversight and approval of the Board, based on the input of our Advisor, our Audit Committee and one or more independent third party valuation firms engaged by our Board.
With respect to unquoted securities, we value each investment considering, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies that are public and other factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we use the pricing indicated by the external event to corroborate and/or assist us in our valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.
With respect to investments for which market quotations are not readily available, the Advisor will undertake a multi-step valuation process, which includes among other things, the below:
· Our quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of our Advisor responsible for the portfolio investment or by an independent valuation firm;
· Preliminary valuation conclusions are then documented and discussed with our senior management and our Advisor. Agreed upon valuation recommendations are presented to our Audit Committee;
· Our Audit Committee of our Board reviews the valuations presented and recommends values for each of the investments to our Board;
· At least once annually, the valuation for each portfolio investment constituting a material portion of the Company’s portfolio will be reviewed by an independent valuation firm; and
· Our Board discusses valuations and determines the fair value of each investment in good faith based upon, among other things, the input of our Advisor, independent valuation firms, where applicable, and our Audit Committee.
In following this approach, the types of factors that are taken into account in the fair value pricing of investments include, as relevant, but are not limited to: comparison to publicly traded securities, including factors such as yield, maturity and measures of credit quality; the enterprise value of a portfolio company; the nature and realizable value of any collateral; the portfolio companies ability to make payments and its earnings and discounted cash flows; and the markets in which the portfolio company does business. In cases where an independent valuation firm provides fair valuations for investments, the independent valuation firm provides a fair valuation report, a description of the methodology used to determine the fair value and their analysis and calculations to support their conclusion. We determine the fair value of its investment in ABCS giving consideration to the assets and liabilities of ABCS, at fair value, including consideration of any necessary adjustments. We conduct this valuation process on a quarterly basis.
Recent Accounting Pronouncements
In March 2017, the FASB issued ASU 2017-08, “ Receivables — Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities .” ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium by requiring the premium to be amortized to the earliest call date. This new guidance is effective for fiscal years beginning after December 15, 2018, as well as for interim periods within those fiscal years. Early adoption is permitted. We adopted these changes and there is no material impact on our consolidated financial statements and disclosures.
In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. ” ASU 2018-13 is part of the disclosure framework project and eliminates certain disclosure requirements for fair value measurements, requires entities to disclose new information, and modifies existing disclosure requirements. The new guidance is effective after December 15, 2019. Early adoption is permitted. We are currently evaluating the impact this change will have on our consolidated financial statements and disclosures.
Contractual Obligations
We have entered into the Amended Advisory Agreement with our Advisor (which supercedes the Investment Advisory Agreement dated November 14, 2018 we had previously entered into). Our Advisor has agreed to serve as our investment adviser in accordance with the terms of the Amended Advisory Agreement. Under the Amended Advisory Agreement, we have agreed to pay an annual base management fee as well as an incentive fee based on our investment performance.
On October 11, 2018 the Board approved, subject to completion of the IPO, the Investment Advisory Agreement. Beginning with the calendar quarter that commences January 1, 2019, this Investment Advisory Agreement incorporates (i) a three-year lookback provision and (ii) a cap on quarterly income incentive fee payments based on net realized or unrealized capital loss, if any, during the applicable three-year lookback period.
On November 28, 2018, our Board, including a majority of our Independent Directors, approved the Amended Advisory Agreement. On February 1, 2019 the Company’s stockholders approved the Amended Advisory Agreement. Pursuant to this Agreement, effective February 1, 2019, the base management fee of 1.5% (0.375% per quarter) of the average value of the Company’s gross assets (excluding cash and cash equivalents, but including assets purchased with borrowed amounts) will continue to apply to assets held at an asset coverage ratio of 200%, but a lower base management fee of 1.0% (0.25% per quarter) of the average value of the Company’s gross assets (excluding cash and cash equivalents, but including assets purchased with borrowed amounts) will apply to any amount of assets attributable to leverage decreasing the Company’s asset coverage ratio below 200%.
We have entered into an Administration Agreement with the Administrator pursuant to which the Administrator will furnish us with administrative services necessary to conduct our day-to-day operations. We reimburse the Administrator for its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including certain compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and any of their respective staff who provide services to us, operations staff who provide services to us, and internal audit staff, if any, to the extent internal audit performs a role in our Sarbanes-Oxley internal control assessment.
If any of our contractual obligations discussed above are terminated, our costs may increase under any new agreements that we enter into as replacements. We would also likely incur expenses in locating alternative parties to provide the services we expect to receive under our Amended Advisory Agreement and Administration Agreement.
A summary of the maturities of our principal amounts of debt and other contractual payment obligations as of March 31, 2019 are as follows:
|
|
|
Payments Due by Period |
|
|||||||||||||
|
|
|
Total |
|
Less than
|
|
1 — 3 years |
|
3 — 5 years |
|
More than
|
|
|||||
|
BCSF Revolving Credit Facility |
|
$ |
358,264,902 |
|
$ |
— |
|
$ |
— |
|
$ |
358,264,902 |
|
$ |
— |
|
|
2018-1 Notes |
|
365,700,000 |
|
— |
|
— |
|
— |
|
365,700,000 |
|
|||||
|
Citibank Revolving Credit Facility |
|
192,929,188 |
|
— |
|
192,929,188 |
|
— |
|
— |
|
|||||
|
Total Debt Obligations |
|
$ |
916,894,090 |
|
$ |
— |
|
$ |
192,929,188 |
|
$ |
358,264,902 |
|
$ |
365,700,000 |
|
Subsequent Events
The Company and Antares, its joint venture partner, have restructured ABCS as of April 30, 2019. The Company formed BCSF Complete Financing Solution LLC (“BCSF Unitranche”), a wholly-owned, newly-formed, subsidiary of the Company, which received 44.737%, its proportionate share, of all assets previously held by ABCS pursuant to the restructuring. BCSF Unitranche continues to have a relationship with Antares to make investments in unitranche loans alongside Antares. BCSF Unitranche’s portfolio is comprised of unitranche loans made to 25 companies as of April 30, 2019. The results of BCSF Unitranche are expected to be included in the consolidated financial statements of the Company.
On April 30, 2019, BCSF Unitranche entered into a loan and security agreement (the “JPM Credit Agreement”) as Borrower, with JPMorgan Chase Bank, National Association, as Administrative Agent, and Wells Fargo Bank, National Association as Collateral Administrator, Collateral Agent, Securities Intermediary and Bank. The JPM Credit Agreement is effective as of April 30, 2019.
The facility amount under the JPM Credit Agreement is $666,581,300. Proceeds of the loans under the JPM Credit Agreement may be used to acquire certain qualifying loans and such other uses as permitted under the JPM Credit Agreement. The period from the effective date until November 29, 2020 is referred to as the reinvestment period and during such reinvestment period, the Borrower may request drawdowns under the JPM Credit Agreement.
The maturity date is the earliest of: (a) November 29, 2022, (b) the date on which the secured obligations become due and payable following the occurrence of an event of default, (c) the date on which the advances are repaid in full and (d) the date after a market value cure failure occurs on which all portfolio investments have been sold and proceeds therefrom have been received by the Borrower. The stated maturity date of November 29, 2022 may be extended for successive one year periods by mutual agreement of the Borrower and the Administrative Agent.
The JPM Credit Agreement includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature.
On May 7, 2019, the Company’s Board of Directors authorized the Company to repurchase up to $50 million of its outstanding common stock in accordance with safe harbor rules under the Securities Exchange Act of 1934. Any such repurchases will depend upon market conditions and there is no guarantee that the Company will repurchase any particular number of shares or any shares at all.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are subject to financial market risks, including changes in interest rates. We will generally invest in illiquid loans and securities including debt and equity securities of middle-market companies. Because we expect that there will not be a readily available market for many of the investments in our portfolio, we expect to value many of our portfolio investments at fair value as determined in good faith by the Board using a documented valuation policy and a consistently applied valuation process. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.
Assuming that the statement of financial condition as of March 31, 2019 were to remain constant and that we took no actions to alter our existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates.
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Increase (Decrease) in |
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Increase (Decrease) in |
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Net Increase
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Change in Interest Rates |
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Interest Income |
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Interest Expense |
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Net Investment Income |
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Down 25 basis points |
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$ |
(3,508,783 |
) |
$ |
(2,292,235 |
) |
$ |
(1,216,548 |
) |
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Up 100 basis points |
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14,100,012 |
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9,168,941 |
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4,931,071 |
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Up 200 basis points |
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28,505,212 |
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18,337,882 |
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10,167,330 |
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Up 300 basis points |
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42,979,807 |
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27,506,823 |
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15,472,984 |
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From time to time, we may make investments that are denominated in a foreign currency. These investments are translated into U.S. dollars at the balance sheet date, exposing us to movements in foreign exchange rates. We may employ hedging techniques to minimize these risks, but we cannot assure you that such strategies will be effective or without risk to us. We may seek to utilize instruments such as, but not limited to, forward contracts to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of March 31, 2019 (the end of the period covered by this report), our management has carried out an evaluation, under the supervision of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Based on that evaluation our Chief Executive Officer and Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in timely alerting management, including the Chief Executive Officer and Chief Financial Officer, to material information relating to us that is required to be disclosed by us in the reports we file or submit under the Exchange Act. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Changes in Internal Controls Over Financial Reporting
There have been no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under loans to or other contracts with our portfolio companies.
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties are not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. During the three months ended March 31, 2019, there have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2018.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
None.
Item 6. Exhibits, Financial Statement Schedules
The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the three months ended March 31, 2019 (and are numbered in accordance with Item 601 of Regulation S-K under the Securities Act).
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Exhibit
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Description of Document |
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3.1 |
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3.2 |
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4.1 |
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10.1 |
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10.2 |
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10.3 |
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10.4 |
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10.5 |
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10.6 |
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10.7 |
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10.8 |
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10.9 |
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Exhibit
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Description of Document |
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14.1 |
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24.1 |
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31.1* |
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31.2* |
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32* |
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* Filed herewith.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Bain Capital Specialty Finance, Inc. |
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Date: May 8, 2019 |
By: |
/s/ Michael A. Ewald |
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Name: |
Michael A. Ewald |
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Title: |
Chief Executive Officer |
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Date: May 8, 2019 |
By: |
/s/ Sally F. Dornaus |
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Name: |
Sally F. Dornaus |
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Title: |
Chief Financial Officer |
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|