TCPC 10-Q Quarterly Report Sept. 30, 2015 | Alphaminr
BlackRock TCP Capital Corp.
ALPHAMINR

TCPC 10-Q Quarter ended Sept. 30, 2015

Balance Sheet
Cash Flow
Income Statement
Debt
BLACKROCK TCP CAPITAL CORP.
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10-Q 1 s001085x1_form10q.htm FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
☒
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarter Ended September 30, 2015
☐
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number: 814-00899
TCP CAPITAL CORP.
(Exact Name of Registrant as Specified in Charter)
Delaware
56-2594706
(State or Other Jurisdiction of Incorporation)
(IRS Employer Identification No.)
2951 28 th Street, Suite 1000
Santa Monica, California
90405
(Address of Principal Executive Offices)
(Zip Code)

Registrant’s telephone number, including area code (310) 566-1000
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $0.001 per share
NASDAQ Global Select Market
(Title of each class)
(Name of each exchange where registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days: Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐
Accelerated filer ☒
Non-accelerated filer ☐
Smaller Reporting company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒

The number of shares of the Registrant’s common stock, $0.001 par value, outstanding as of November 5, 2015 was 48,872,263.

TCP CAPITAL CORP.

FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

TABLE OF CONTENTS

Part I.
Financial Information
Item 1.
Financial Statements
2
3
13
14
15
16
40
42
44
46
Item 2.
48
Item 3.
62
Item 4.
62
Part II.
Other Information
Item 1.
63
Item 1A.
63
Item 2.
63
Item 3.
63
Item 4.
63
Item 5.
63
Item 6.
63

TCP Capital Corp.
Consolidated Statements of Assets and Liabilities

September 30, 2015
December 31, 2014
(unaudited)
Assets
Investments, at fair value:
Companies less than 5% owned (cost of $1,206,750,821 and $1,097,181,753, respectively)
$
1,187,883,822
$
1,081,901,384
Companies 5% to 25% owned (cost of $67,502,341 and $52,103,511, respectively)
66,890,774
48,716,425
Companies more than 25% owned (cost of $38,631,089 and $40,213,258 respectively)
14,386,043
15,918,077
Total investments (cost of $1,312,884,251 and $1,189,498,522, respectively)
1,269,160,639
1,146,535,886
Cash and cash equivalents
34,582,869
27,268,792
Deferred debt issuance costs
9,844,273
7,700,988
Receivable for investments sold
1,969,722
10,961,369
Accrued interest income:
Companies less than 5% owned
13,261,132
9,222,001
Companies 5% to 25% owned
750,685
253,987
Companies more than 25% owned
17,493
28,450
Unrealized appreciation on swaps
2,868,748
1,717,610
Options (cost of $51,750 and $51,750, respectively)
-
497
Prepaid expenses and other assets
1,381,556
2,177,217
Total assets
1,333,837,117
1,205,866,797
Liabilities
Debt
575,305,233
328,696,830
Payable for investments purchased
7,847,520
2,049,518
Incentive allocation payable
4,838,534
4,303,040
Interest payable
3,580,028
1,510,981
Payable to the Advisor
731,172
459,827
Accrued expenses and other liabilities
2,635,000
3,219,783
Total liabilities
594,937,487
340,239,979
Commitments and contingencies (Note 5)
Preferred equity facility
Series A preferred limited partner interests in Special Value Continuation Partners, LP; $20,000/interest liquidation preference; 0 and 6,700 interests authorized, issued and outstanding as of September 30, 2015 and December 31, 2014, respectively
-
134,000,000
Accumulated dividends on Series A preferred equity facility
-
497,790
Total preferred limited partner interests
-
134,497,790
Non-controlling interest
General Partner interest in Special Value Continuation Partners, LP
-
-
Net assets applicable to common shareholders
$
738,899,630
$
731,129,028
Composition of net assets applicable to common shareholders
Common stock, $0.001 par value; 200,000,000 shares authorized, 48,934,498 and 48,710,627 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively
$
48,934
$
48,710
Paid-in capital in excess of par
880,682,891
877,103,880
Accumulated net investment income
28,066,387
21,884,381
Accumulated net realized losses
(128,426,795
)
(126,408,033
)
Accumulated net unrealized depreciation
(41,471,787
)
(41,499,910
)
Net assets applicable to common shareholders
$
738,899,630
$
731,129,028
Net assets per share
$
15.10
$
15.01
See accompanying notes to the consolidated financial statements.
TCP Capital Corp.

Consolidated Schedule of Investments (Unaudited)

September 30, 2015

Showing Percentage of Total Cash and Investments of the Company

Issuer
Instrument
Ref
Floor
Spread
Total Coupon
Maturity
Principal
Cost
Value
% of
Portfolio
Notes
Debt Investments (A)
Accounting, Tax and Payroll Services
EGS Holdings, Inc.
Holdco PIK Notes
LIBOR (A)
3.00%
10.00%
13.00%
10/3/2018
$
57,238
$
57,238
$
57,238
-
Expert Global Solutions, LLC
Second Lien Term Loan
LIBOR (Q)
1.50%
11.00%
12.50%
10/3/2018
$
15,249,675
15,031,105
15,402,171
1.18
%
15,088,343
15,459,409
1.18
%
Advertising, Public Relations Services
Doubleplay III Limited (Exterion Media) (United Kingdom)
First Lien Facility A1 Term Loan
EURIBOR (Q)
1.25%
6.25%
7.50%
3/18/2018
€
12,249,157
15,848,565
13,759,337
1.06
%
D/H
InMobi, Inc. (Singapore)
First Lien Delayed Draw Tranche 1 Term Loan (1.25% Exit Fee)
LIBOR (M)
0.33%
10.17%
10.50%
9/1/2018
$
10,645,041
10,138,202
10,138,041
0.78
%
H/L
InMobi, Inc. (Singapore)
First Lien Delayed Draw Tranche 1 Term Loan (1.25% Exit Fee)
LIBOR (M)
0.33%
10.17%
N/A
9/1/2018
$
-
-
5
-
H/L
InMobi, Inc. (Singapore)
First Lien Delayed Draw Tranche 1 Term Loan (1.25% Exit Fee)
LIBOR (M)
0.33%
10.17%
N/A
9/1/2018
$
-
-
3
-
H/L
25,986,767
23,897,386
1.84
%
Air Transportation
Aircraft Leased to Delta Air Lines, Inc.
N913DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
3/15/2017
$
137,608
137,608
139,612
0.01
%
F
N918DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
8/15/2018
$
253,943
253,943
258,932
0.02
%
F
N954DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
3/20/2019
$
360,363
360,363
367,458
0.03
%
F
N955DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
6/20/2019
$
385,135
385,135
392,963
0.03
%
F
N956DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
5/20/2019
$
381,663
381,663
389,397
0.03
%
F
N957DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
6/20/2019
$
388,503
388,503
396,402
0.03
%
F
N959DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
7/20/2019
$
395,285
395,285
403,338
0.03
%
F
N960DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
10/20/2019
$
418,755
418,755
427,312
0.03
%
F
N961DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
8/20/2019
$
408,799
408,799
417,143
0.03
%
F
N976DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
2/15/2018
$
238,743
238,743
243,132
0.02
%
F
Aircraft Leased to United Airlines, Inc.
N659UA
Aircraft Secured Mortgage
Fixed
-
12.00%
12.00%
2/28/2016
$
644,862
644,862
659,259
0.05
%
F
N661UA
Aircraft Secured Mortgage
Fixed
-
12.00%
12.00%
5/4/2016
$
879,217
879,217
907,623
0.07
%
F
Cargojet Airways LTD. (Canada)
Aircraft Acquisition Loan A
LIBOR (M)
-
8.50%
8.75%
1/31/2023
$
14,457,306
14,181,056
14,470,317
1.11
%
H
Cargojet Airways LTD. (Canada)
Aircraft Acquisition Loan A1
LIBOR (M)
-
8.50%
N/A
1/31/2023
$
-
-
14
-
H
Mesa Air Group, Inc.
Acquisition Delayed Draw Loan
LIBOR (M)
-
7.25%
N/A
6/17/2019
$
-
-
312,225
0.02
%
Mesa Air Group, Inc.
Acquisition Loan
LIBOR (M)
-
7.25%
7.50%
7/15/2022
$
16,463,185
16,173,182
16,841,839
1.29
%
One Sky Flight, LLC
Second Lien Term Loan
Fixed
-
12% Cash +3% PIK
15.00%
6/3/2019
$
32,904,104
32,115,500
33,891,227
2.60
%
67,362,614
70,518,193
5.40
%
Apparel Manufacturing
Jones Apparel, LLC
First Lien FILO Term Loan
LIBOR (M)
1.00%
9.60%
10.60%
4/8/2019
$
4,697,022
4,662,802
4,697,022
0.36
%
Business Support Services
Enerwise Global Technologies, Inc.
Sr Secured Revolving Loan
LIBOR (Q)
0.23%
8.52%
8.75%
11/30/2017
$
-
(79,130
)
(50,625
)
-
K
Enerwise Global Technologies, Inc.
Sr Secured Term Loan (1.5% Exit Fee)
LIBOR (Q)
0.23%
9.27%
9.50%
11/30/2019
$
17,500,000
17,235,436
17,381,875
1.33
%
L
STG-Fairway Acquisitions, Inc. (First Advantage)
Second Lien Term Loan
LIBOR (Q)
1.00%
9.25%
10.25%
6/30/2023
$
31,000,000
30,537,872
31,930,000
2.45
%
47,694,178
49,261,250
3.78
%
Chemicals
Anuvia Plant Nutrients Holdings, LLC
Sr Secured Term Loan (8.0 % Exit Fee)
LIBOR (M)
0.23%
10.27%
10.50%
2/1/2018
$
7,700,000
7,914,869
7,935,200
0.61
%
L
BioAmber, Inc.
Sr Secured Term Loan
LIBOR (M)
0.23%
9.27%
9.50%
12/1/2017
$
25,000,000
25,167,961
25,662,500
1.97
%
Green Biologics, Inc.
Sr Secured Delayed Draw Term Loan (7.0% Exit Fee)
Prime Rate
3.25%
7.75%
11.00%
5/1/2018
$
15,000,000
14,814,099
15,000,000
1.15
%
L
PeroxyChem, LLC
First Lien Term Loan
LIBOR (Q)
1.00%
6.50%
7.50%
2/28/2020
$
8,832,681
8,717,037
8,832,681
0.68
%
G
56,613,966
57,430,381
4.41
%
Communications Equipment Manufacturing
Globecomm Systems, Inc.
First Lien Term Loan
LIBOR (Q)
1.25%
7.63%
8.88%
12/11/2018
$
14,737,500
14,590,125
14,514,227
1.11
%
B
Computer Equipment Manufacturing
ELO Touch Solutions, Inc.
Second Lien Term Loan
LIBOR (Q)
1.50%
10.50%
12.00%
12/1/2018
$
12,000,000
11,681,018
11,692,200
0.90
%
Silicon Graphics International Corp.
First Lien Term Loan
LIBOR (Q)
1.00%
9.00%
10.00%
7/27/2018
$
18,550,882
18,247,955
18,690,013
1.43
%
J
29,928,973
30,382,213
2.33
%
Computer Systems Design and Related Services
Autoalert, LLC
First Lien Term Loan
LIBOR (Q)
0.25%
4.75% Cash+4% PIK
9.00%
3/31/2019
$
31,235,295
30,786,178
31,140,027
2.39
%
MSC Software Corporation
Second Lien Term Loan
LIBOR (M)
1.00%
7.50%
8.50%
5/29/2021
$
6,993,035
6,935,034
6,800,727
0.52
%
OnX Enterprise Solutions, Ltd. (Canada)
First Lien Term Loan B
LIBOR (Q)
-
8.00%
8.28%
9/3/2018
$
2,343,667
2,343,667
2,327,730
0.18
%
H
OnX Enterprise Solutions, Ltd. (Canada)
First Lien Term Loan
LIBOR (Q)
-
7.00%
7.28%
9/3/2018
$
10,453,333
10,361,830
10,116,736
0.77
%
H
OnX USA, LLC
First Lien Term Loan B
LIBOR (Q)
-
8.00%
8.28%
9/3/2018
$
4,687,333
4,687,333
4,655,460
0.36
%
OnX USA, LLC
First Lien Term Loan
LIBOR (Q)
-
7.00%
7.28%
9/3/2018
$
5,226,667
5,184,603
5,058,368
0.39
%
Vistronix, LLC
First Lien Revolver
LIBOR (Q)
0.50%
8.00%
8.50%
12/4/2018
$
228,398
223,861
228,398
0.02
%
Vistronix, LLC
First Lien Term Loan
LIBOR (M)
0.50%
8.00%
8.50%
12/4/2018
$
6,288,020
6,233,315
6,256,580
0.48
%
Waterfall International, Inc.
First Lien Delayed Draw Term Loan
LIBOR (Q)
-
11.67%
12.00%
9/1/2018
$
4,800,000
4,648,512
4,648,800
0.36
%
71,404,333
71,232,826
5.47
%
Data Processing and Hosting Services
Asset International, Inc.
Delayed Draw Term Loan
LIBOR (M)
1.00%
7.00%
8.00%
7/31/2020
$
3,033,145
2,997,251
3,032,459
0.23
%
Asset International, Inc.
Revolver Loan
LIBOR (M)
1.00%
7.00%
8.00%
7/31/2020
$
24,238
16,101
24,238
-
Asset International, Inc.
First Lien Term Loan
LIBOR (M)
1.00%
7.00%
8.00%
7/31/2020
$
8,130,008
7,993,988
8,169,032
0.63
%
Rightside Group, Ltd.
Second Lien Term Loan
LIBOR (Q)
0.50%
8.75%
9.25%
8/6/2019
$
4,812,500
4,002,763
4,767,744
0.36
%
The Telx Group, Inc.
Senior Notes
Fixed
-
13.5% PIK
13.50%
7/9/2021
$
4,746,800
4,746,800
4,889,204
0.38
%
E
United TLD Holdco, Ltd. (Rightside) (Cayman Islands)
Second Lien Term Loan
LIBOR (Q)
0.50%
8.75%
9.25%
8/6/2019
$
9,625,000
8,005,526
9,535,488
0.73
%
H
27,762,429
30,418,165
2.33
%
TCP Capital Corp.

Consolidated Schedule of Investments (Unaudited) (Continued)

September 30, 2015

Showing Percentage of Total Cash and Investments of the Company

Issuer
Instrument
Ref
Floor
Spread
Total Coupon
Maturity
Principal
Cost
Value
% of
Portfolio
Notes
Debt Investments (continued)
Electric Power Generation, Transmission and Distribution
Holocene Renewable Energy Fund 3, LLC (Conergy)
First Lien Term Loan
Fixed
-
9% Cash +1% PIK
10.00%
9/9/2017
$
7,463,901
$
7,390,860
$
7,389,263
0.57
%
Electrical Equipment Manufacturing
API Technologies Corp.
First Lien Term Loan
LIBOR (Q)
1.50%
7.50%
9.00%
2/6/2018
$
6,296,253
6,255,677
6,202,754
0.47
%
API Technologies Corp.
First Lien Term Loan
LIBOR (Q)
1.50%
7.50%
9.00%
2/6/2018
$
4,081,961
4,001,969
4,021,344
0.31
%
10,257,646
10,224,098
0.78
%
Electronic Component Manufacturing
Central MN Renewables, LLC
Sr Secured Revolver
Fixed
-
8.25%
N/A
1/1/2016
$
-
-
2
-
Redaptive, Inc.
Frist Lien Delayed Draw Term Loan
LIBOR (Q)
-
10.72%
N/A
7/1/2018
$
-
(133,163
)
15
-
Soraa, Inc.
Sr Secured Term Loan (4.0% Exit Fee)
LIBOR (M)
0.23%
10.27%
10.50%
9/1/2017
$
22,500,000
22,392,029
21,696,750
1.66
%
L
SunEdison, Inc.
Senior Secured Letters of Credit
Fixed
-
3.75%
N/A
2/28/2017
$
-
(604,759
)
(750,340
)
(0.06
%)
J/K
21,654,107
20,946,427
1.60
%
Equipment Leasing
Essex Ocean, LLC
Sr Secured Term Loan
Fixed
-
8.00%
8.00%
3/25/2019
$
-
-
22
-
Essex Ocean, LLC (Solexel)
Sr Secured Term Loan
Fixed
-
8.00%
8.00%
8/15/2018
$
2,855,401
2,855,401
2,855,401
0.22
%
2,855,401
2,855,423
0.22
%
Financial Investment Activities
Magnolia Finance V plc (Cayman Islands)
Asset-Backed Credit Linked Notes
Fixed
-
13.13%
13.13%
8/2/2021
$
15,000,000
15,000,000
14,949,000
1.15
%
E/H
Institutional Shareholder Services, Inc.
Second Lien Term Loan
LIBOR (Q)
1.00%
7.50%
8.50%
4/30/2022
$
4,471,492
4,435,286
4,348,526
0.33
%
Marsico Capital Management
First Lien Term Loan
LIBOR (Q)
-
5.00%
5.31%
12/31/2022
$
10,583,316
13,304,224
1,455,206
0.11
%
I
32,739,510
20,752,732
1.59
%
Gaming
AP Gaming I, LLC
First Lien Revolver
LIBOR (M)
-
8.25%
8.43%
12/20/2018
$
-
(1,914,221
)
(1,031,250
)
(0.08
%)
K
Grocery Stores
Bashas, Inc.
First Lien FILO Term Loan
LIBOR (M)
1.50%
7.00%
8.50%
10/8/2019
$
10,072,332
10,033,799
10,192,193
0.78
%
The Great Atlantic & Pacific Tea Company, Inc.
Term Loan Tranche B
LIBOR (M)
1.00%
8.85%
9.85%
9/17/2019
$
21,295,110
20,998,759
21,721,012
1.66
%
31,032,558
31,913,205
2.44
%
Hospitals
Bioventus, LLC
Second Lien Term Loan
LIBOR (Q)
1.00%
10.00%
11.00%
4/10/2020
$
11,000,000
10,811,136
10,890,000
0.84
%
KPC Healthcare, Inc.
First Lien Term Loan
LIBOR (Q)
1.00%
9.25%
10.25%
8/28/2020
$
17,201,857
16,819,818
17,201,857
1.32
%
RegionalCare Hospital Partners, Inc.
Second Lien Term Loan
LIBOR (M)
1.00%
9.50%
10.50%
10/23/2019
$
21,017,525
20,765,157
21,201,428
1.62
%
G
UBC Healthcare Analytics, Inc. (Evidera)
First Lien Term Loan
LIBOR (Q)
1.00%
9.00%
10.00%
7/1/2018
$
4,105,044
4,084,519
4,094,782
0.31
%
52,480,630
53,388,067
4.09
%
Insurance Carriers
Acrisure, LLC
Second Lien Incremental Notes
LIBOR (Q)
1.00%
8.25%
9.25%
11/19/2022
$
2,400,188
2,261,319
2,398,064
0.18
%
Acrisure, LLC
Second Lien Notes
LIBOR (Q)
1.00%
8.25%
9.25%
11/19/2022
$
12,720,998
12,540,755
12,717,182
0.98
%
JSS Holdings, Inc.
First Lien Term Loan
LIBOR (Q)
1.00%
6.25%
7.25%
8/31/2021
$
4,000,000
3,920,730
3,940,000
0.30
%
US Apple Holdco, LLC (Ventiv Technology)
First Lien Term Loan
LIBOR (Q)
0.50%
11.50%
12.00%
8/29/2019
$
20,000,000
19,339,345
19,870,000
1.52
%
38,062,149
38,925,246
2.98
%
Insurance Related Activities
Confie Seguros Holding II Co.
Second Lien Term Loan
LIBOR (M)
1.25%
9.00%
10.25%
5/8/2019
$
11,061,809
10,946,807
11,043,336
0.85
%
G
Lessors of Nonfinancial Licenses
ABG Intermediate Holdings 2, LLC
Second Lien Term Loan
LIBOR (Q)
1.00%
8.50%
9.50%
5/27/2022
$
15,990,714
15,849,370
16,150,621
1.24
%
ABG Intermediate Holdings 2, LLC
Second Lien Incremental Term Loan
LIBOR (Q)
1.00%
8.50%
9.50%
5/27/2022
$
3,474,715
3,440,443
3,509,462
0.27
%
ABG Intermediate Holdings 2, LLC
Second Lien Incremental Delayed Draw Term Loan
LIBOR (Q)
1.00%
8.50%
9.50%
5/27/2022
$
-
(5,199
)
5,346
-
19,284,614
19,665,429
1.51
%
Management, Scientific, and Technical Consulting Services
Dodge Data & Analytics, LLC
First Lien Term Loan
LIBOR (Q)
1.00%
8.75%
9.75%
10/31/2019
$
24,877,617
24,302,704
24,794,277
1.90
%
Motion Picture and Video Industries
CORE Entertainment, Inc.
First Lien Term Loan
Fixed
-
9.00%
9.00%
6/21/2017
$
9,462,231
9,419,032
4,917,049
0.38
%
CORE Entertainment, Inc.
Second Lien Term Loan
Fixed
-
13.50%
13.50%
6/21/2018
$
7,569,785
7,700,187
518,530
0.04
%
C
17,119,219
5,435,579
0.42
%
Nondepository Credit Intermediation
E/G/H
Caribbean Financial Group (Cayman Islands)
Sr Secured Notes
Fixed
-
11.50%
11.50%
11/15/2019
$
26,975,000
26,821,462
26,570,375
2.04
%
Trade Finance Funding I, Ltd. (Cayman Islands)
Secured Class B Notes
Fixed
-
10.75%
10.75%
11/13/2018
$
15,084,000
15,084,000
14,857,740
1.14
%
E/H
41,905,462
41,428,115
3.18
%
Oil and Gas Extraction
Jefferson Gulf Coast Energy Partners, LLC
First Lien Term Loan B
LIBOR (M)
1.00%
8.50%
9.50%
2/27/2018
$
14,850,000
14,741,697
13,810,500
1.06
%
MD America Energy, LLC
Second Lien Term Loan
LIBOR (Q)
1.00%
8.50%
9.50%
8/4/2019
$
10,000,000
9,594,734
9,075,000
0.70
%
24,336,431
22,885,500
1.76
%
Other Information Services
TCH-2 Holdings, LLC (TravelClick)
Second Lien Term Loan
LIBOR (M)
1.00%
7.75%
8.75%
11/6/2021
$
19,988,392
19,727,803
19,713,552
1.51
%
G
Other Manufacturing
AGY Holding Corp.
Sr Secured Term Loan
Fixed
-
12.00%
12.00%
9/15/2016
$
4,869,577
4,869,577
4,869,577
0.37
%
B
AGY Holding Corp.
Second Lien Notes
Fixed
-
11.00%
11.00%
11/15/2016
$
9,268,000
7,586,317
9,268,000
0.71
%
B/E
Boomerang Tube, LLC
Second Lien Term Loan
LIBOR (Q)
1.50%
9.50%
11.00%
10/11/2017
$
3,825,453
4,010,758
1,950,981
0.15
%
C
Boomerang Tube, LLC
Super Priority Debtor-in-Possession
LIBOR (M)
-
11.00%
11.20%
10/7/2015
$
1,124,444
1,123,221
1,124,444
0.09
%
17,589,873
17,213,002
1.32
%
Other Telecommunications
Securus Technologies, Inc.
Second Lien Term Loan
LIBOR (Q)
1.25%
7.75%
9.00%
4/30/2021
$
14,000,000
13,860,000
12,705,000
0.97
%
TCP Capital Corp.

Consolidated Schedule of Investments (Unaudited) (Continued)

September 30, 2015

Showing Percentage of Total Cash and Investments of the Company
Issuer
Instrument
Ref
Floor
Spread
Total Coupon
Maturity
Principal
Cost
Value
% of
Portfolio
Notes
Debt Investments (continued)
Other Publishing
MediMedia USA, Inc.
First Lien Revolver
LIBOR (M)
-
6.75%
6.95%
5/20/2018
$
4,107,500
$
3,477,158
$
3,732,168
0.29
%
MediMedia USA, Inc.
First Lien Term Loan
LIBOR (Q)
1.25%
6.25%
7.50%
11/20/2018
$
5,681,239
5,575,226
5,482,396
0.42
%
G
9,052,384
9,214,564
0.71
%
Pharmaceuticals
Lantheus Medical Imaging, Inc.
First Lien Term Loan
LIBOR (Q)
1.00%
6.00%
7.00%
6/30/2022
$
5,985,000
5,891,843
5,685,750
0.44
%
Plastics Manufacturing
Iracore International, Inc.
Sr Secured Notes
Fixed
-
9.50%
9.50%
6/1/2018
$
13,600,000
13,600,000
9,911,000
0.76
%
E/G
Radio and Television Broadcasting
Fuse, LLC
Sr Secured Notes
Fixed
-
10.38%
10.38%
7/1/2019
$
7,312,000
7,312,000
5,630,240
0.43
%
E/G
NEP/NCP Holdco, Inc.
Second Lien Term Loan
LIBOR (M)
1.25%
8.75%
10.00%
7/22/2020
$
10,000,000
10,018,251
10,000,000
0.77
%
The Tennis Channel, Inc.
First Lien Term Loan
LIBOR (Q)
-
8.50%
8.81%
5/29/2017
$
32,355,355
32,152,571
32,347,267
2.48
%
49,482,822
47,977,507
3.68
%
Real Estate Leasing
Hunt Companies, Inc.
Senior Secured Notes
Fixed
-
9.63%
9.63%
3/1/2021
$
3,584,000
3,547,045
3,333,120
0.26
%
E/G
Real Estate related Activities
Daymark Financial Acceptance, LLC
First Lien Delayed Draw Term Loan
LIBOR (Q)
-
9.50%
9.71%
1/12/2020
$
5,000,000
4,597,938
4,917,500
0.38
%
Greystone Select Holdings, LLC
First Lien Term Loan
LIBOR (Q)
1.00%
8.00%
9.00%
3/26/2021
$
16,346,867
16,158,916
16,305,999
1.25
%
20,756,854
21,223,499
1.63
%
Restaurants
RM OpCo, LLC (Real Mex)
Convertible Second Lien Term Loan Tranche B-1
Fixed
-
8.50%
8.50%
3/30/2018
$
1,745,268
1,737,600
1,745,268
0.13
%
B
RM OpCo, LLC (Real Mex)
First Lien Term Loan Tranche A
Fixed
-
7.00%
7.00%
3/21/2016
$
3,764,259
3,762,749
3,764,259
0.29
%
B
RM OpCo, LLC (Real Mex)
Second Lien Term Loan Tranche B
Fixed
-
8.50%
8.50%
3/30/2018
$
8,696,073
8,696,073
5,106,334
0.39
%
B
RM OpCo, LLC (Real Mex)
Second Lien Term Loan Tranche B-1
Fixed
-
8.50%
8.50%
3/30/2018
$
2,738,690
2,723,268
2,738,690
0.21
%
B
RM OpCo, LLC (Real Mex)
Sr Convertible Second Lien Term Loan B
Fixed
-
8.50%
8.50%
3/30/2018
$
1,336,498
1,336,478
1,336,478
0.10
%
B
18,256,168
14,691,029
1.12
%
Retail
Kenneth Cole Productions, Inc.
First Lien FILO Term Loan
LIBOR (M)
1.00%
8.50%
9.50%
9/25/2020
$
13,409,090
13,265,477
13,543,181
1.04
%
Connexity, Inc.
First Lien Term Loan
LIBOR (Q)
1.00%
10.00%
11.00%
2/13/2020
$
6,435,000
6,435,000
6,371,615
0.49
%
19,700,477
19,914,796
1.53
%
Satellite Telecommunications
Avanti Communications Group, PLC (United Kingdom)
Sr Secured Notes
Fixed
-
10.00%
10.00%
10/1/2019
$
9,393,000
9,393,000
8,406,735
0.64
%
E/G/H
Scientific Research and Development Services
Arcadia Biosciences, Inc.
Sr Secured Term Loan (3.0% Exit Fee)
LIBOR (M)
0.28%
8.72%
9.00%
11/1/2018
$
20,000,000
19,891,113
19,882,000
1.52
%
L
BPA Laboratories, Inc.
Senior Secured Notes
Fixed
-
12.25%
12.25%
4/1/2017
$
38,932,000
39,001,750
40,975,930
3.14
%
E/G
58,892,863
60,857,930
4.66
%
Software Publishing
Acronis International GmbH (Switzerland)
First Lien Term Loan
LIBOR (Q)
1.00%
13.00%
14.00%
2/21/2017
$
29,868,216
29,733,384
27,846,138
2.14
%
H
ArcServe (USA), LLC
Second Lien Term Loan
LIBOR (Q)
0.50%
8.50%
9.00%
1/31/2020
$
30,000,000
29,506,047
28,300,500
2.17
%
BlackLine Systems, Inc.
First Lien Term Loan
LIBOR (Q)
1.50%
0.4% Cash +7.6% PIK
9.50%
9/25/2018
$
14,375,100
13,690,455
14,518,851
1.11
%
Coreone Technologies, LLC
First Lien Term Loan
LIBOR (Q)
1.00%
3.75% Cash+5% PIK
9.75%
9/4/2018
$
14,617,894
14,442,148
14,800,618
1.14
%
Edmentum, Inc.
Jr Revolving Facility
Fixed
-
5.00%
5.00%
6/9/2020
$
-
-
3
-
B
Edmentum Ultimate Holdings, LLC
Sr PIK Notes
Fixed
-
8.50%
8.50%
6/9/2020
$
2,557,459
2,557,459
2,557,459
0.20
%
B
Edmentum Ultimate Holdings, LLC
Jr PIK Notes
Fixed
-
10.00%
10.00%
6/9/2020
$
11,500,853
10,860,493
11,063,821
0.85
%
B
Fidelis Acquisitionco, LLC
First Lien Term Loan
LIBOR (Q)
1.00%
8.00%
9.00%
11/4/2019
$
41,710,961
40,933,708
41,615,025
3.19
%
Fidelis Acquisitionco, LLC
Revolver
LIBOR (Q)
1.00%
8.00%
9.00%
11/4/2019
$
3,182,143
3,182,143
3,174,824
0.24
%
SoundCloud Ltd. (United Kingdom)
Sr Secured Term Loan
LIBOR (Q)
-
10.72%
11.00%
10/1/2018
$
22,535,714
22,261,446
22,355,879
1.71
%
H
Virgin Pulse Inc.
First Lien Term Loan
LIBOR (Q)
-
8.00%
8.31%
5/21/2020
$
7,500,000
7,393,672
7,443,750
0.57
%
174,560,955
173,676,868
13.32
%
Textile Furnishings Mills
Lexmark Carpet Mills, Inc.
First Lien Term Loan
LIBOR (Q)
1.00%
10.00%
11.00%
12/19/2019
$
25,000,000
25,000,000
25,000,000
1.92
%
Lexmark Carpet Mills, Inc.
First Lien Term Loan B
LIBOR (Q)
1.00%
10.00%
11.00%
12/19/2019
$
8,575,581
8,368,998
8,575,581
0.66
%
33,368,998
33,575,581
2.58
%
Utility System Construction
Kawa Solar Holdings Limited
Revolving Credit Facility
Fixed
-
8.00%
8.00%
7/2/2017
$
25,000,000
25,000,000
25,000,000
1.92
%
Wired Telecommunications Carriers
Alpheus Communications, LLC
First Lien Delayed Draw FILO Term Loan
LIBOR (Q)
1.00%
6.92%
7.92%
5/31/2018
$
710,370
694,744
709,033
0.05
%
Alpheus Communications, LLC
First Lien Delayed Draw FILO Term Loan
LIBOR (Q)
1.00%
6.92%
7.92%
5/31/2018
$
365,586
361,951
365,312
0.03
%
Alpheus Communications, LLC
First Lien FILO Term Loan
LIBOR (Q)
1.00%
6.92%
7.92%
5/31/2018
$
8,041,921
7,961,973
8,035,890
0.63
%
Integra Telecom Holdings, Inc.
Second Lien Term Loan
LIBOR (Q)
1.25%
8.50%
9.75%
2/22/2020
$
13,231,193
13,028,390
13,225,702
1.02
%
Oxford County Telephone and Telegraph Company
First Lien Term Loan
LIBOR (Q)
1.00%
7.13%
8.13%
8/31/2020
$
4,000,000
3,941,178
3,940,000
0.31
%
25,988,236
26,275,937
2.04
%
Wireless Telecommunications Carriers
Gogo, LLC
First Lien Term Loan
LIBOR (Q)
1.50%
9.75%
11.25%
3/21/2018
$
33,045,233
33,078,035
34,367,042
2.64
%
G
Gogo, LLC
First Lien Term Loan B-2
LIBOR (Q)
1.00%
6.50%
7.50%
3/21/2018
$
5,453,923
5,379,264
5,508,462
0.42
%
38,457,299
39,875,504
3.06
%
Total Debt Investments
$
1,246,160,207
1,250,675,027
1,227,677,893
94.17
%
TCP Capital Corp.

Consolidated Schedule of Investments (Unaudited) (Continued)

September 30, 2015

Showing Percentage of Total Cash and Investments of the Company

Issuer
Instrument
Ref
Floor
Spread
Total Coupon
Maturity
Shares
Cost
Value
% of
Portfolio
Notes
Equity Securities
Advertising and Public Relations Services
InMobi, Inc. (Singapore)
Warrants to Purchase Stock
17,578
$
230,569
$
230,569
0.02
%
C/E/H
Air Transportation
Aircraft Leased to Delta Air Lines, Inc.
N913DL
Trust Beneficial Interests
1,237
84,261
110,116
0.01
%
E/F
N918DL
Trust Beneficial Interests
995
87,654
129,800
0.01
%
E/F
N954DL
Trust Beneficial Interests
923
98,474
76,429
0.01
%
E/F
N955DL
Trust Beneficial Interests
889
95,752
108,833
0.01
%
E/F
N956DL
Trust Beneficial Interests
897
95,687
105,056
0.01
%
E/F
N957DL
Trust Beneficial Interests
889
96,178
105,915
0.01
%
E/F
N959DL
Trust Beneficial Interests
880
96,670
106,796
0.01
%
E/F
N960DL
Trust Beneficial Interests
857
98,587
106,411
0.01
%
E/F
N961DL
Trust Beneficial Interests
872
98,023
101,805
0.01
%
E/F
N976DL
Trust Beneficial Interests
1,067
89,551
101,078
0.01
%
E/F
Aircraft Leased to United Airlines, Inc.
United N659UA-767, LLC (N659UA)
Trust Beneficial Interests
619
2,980,177
3,310,735
0.25
%
E/F
United N661UA-767, LLC (N661UA)
Trust Beneficial Interests
600
2,906,721
3,239,103
0.25
%
E/F
Flight Options Holdings I, Inc. (One Sky)
Warrants to Purchase Common Stock
1,843
1,162,350
3,665,844
0.28
%
C/E
7,990,085
11,267,921
0.88
%
Business Support Services
Findly Talent, LLC
Membership Units
708,229
230,938
162,184
0.01
%
C/E
STG-Fairway Holdings, LLC (First Advantage)
Class A Units
841,479
325,432
2,491,619
0.19
%
C/E
556,370
2,653,803
0.20
%
Chemicals
Green Biologics, Inc.
Warrants to Purchase Stock
376,147
272,594
163,323
0.01
%
C/E
Communications Equipment Manufacturing
Wasserstein Cosmos Co-Invest, L.P. (Globecomm)
Limited Partnership Units
5,000,000
5,000,000
4,198,500
0.32
%
B/C/E
Computer Systems Design and Related Services
Waterfall International, Inc.
Series B Preferred Stock
1,428,571
1,000,000
1,000,000
0.08
%
C/E
Waterfall International, Inc.
Warrants to Purchase Stock
857,143
57,026
57,000
-
C/E
1,057,026
1,057,000
0.08
%
Data Processing and Hosting Services
Anacomp, Inc.
Class A Common Stock
1,255,527
26,711,048
1,581,964
0.12
%
C/E/F
Rightside Group, Ltd.
Warrants
498,855
2,778,622
835,058
0.06
%
C/E
29,489,670
2,417,022
0.18
%
Electrical Equipment Manufacturing
NEXTracker, Inc.
Series B Preferred Stock
558,884
-
2,909,383
0.22
%
C/E
NEXTracker, Inc.
Series C Preferred Stock
17,640
-
91,830
0.01
%
C/E
-
3,001,213
0.23
%
Electronic Component Manufacturing
Soraa, Inc.
Warrants to Purchase Common Stock
315,000
408,987
143,892
0.01
%
C/E
Equipment Leasing
Essex Ocean II, LLC
Membership Units
199,430
199,430
199,430
0.02
%
C/F
Financial Investment Activities
Marsico Holdings, LLC
Common Interest Units
168,698
172,694
2,530
-
C/E/I
Metal and Mineral Mining
EPMC HoldCo, LLC
Membership Units
1,312,720
-
682,614
0.05
%
B/E
Other Manufacturing
KAGY Holding Company, Inc.
Series A Preferred Stock
9,778
1,091,200
4,365,325
0.34
%
B/C/E
Precision Holdings, LLC
Class C Membership Interest
33
-
874
-
C/E
1,091,200
4,366,199
0.34
%
Radio and Television Broadcasting
Fuse Media, LLC
Warrants to Purchase Common Stock
233,470
300,322
23
-
C/E
Restaurants
RM Holdco, LLC (Real Mex)
Equity Participation
24
-
-
-
B/C/E
RM Holdco, LLC (Real Mex)
Membership Units
13,161,000
2,010,777
-
-
B/C/E
2,010,777
-
-
Retail
Shop Holding, LLC (Connexity)
Class A Units
507,167
480,049
278,739
0.02
%
C/E
Shop Holding, LLC (Connexity)
Warrants to Purchase Class A Units
326,691
-
7,569
-
C/E
480,049
286,308
0.02
%
TCP Capital Corp.

Consolidated Schedule of Investments (Unaudited) (Continued)

September 30, 2015

Showing Percentage of Total Cash and Investments of the Company

Issuer
Instrument
Ref
Floor
Spread
Total Coupon
Maturity
Shares
Cost
Value
% of
Portfolio
Notes
Equity Securities (continued)
Software Publishing
Blackline Intermediate, Inc.
Warrants to Purchase Common Stock
1,232,731
$
522,678
$
1,098,733
0.08
%
C/E
Edmentum Ultimate Holdings, LLC
Class A Common Units
159,515
680,226
680,218
0.05
%
B/C/E
SoundCloud, Ltd. (United Kingdom)
Warrants to Purchase Preferred Stock
676,070
56,487
54,356
-
C/E/H
1,259,391
1,833,307
0.13
%
Wired Telecommunications Carriers
Integra Telecom, Inc.
Common Stock
1,274,522
8,433,884
5,269,511
0.40
%
C/E
Integra Telecom, Inc.
Warrants
346,939
19,920
221,174
0.02
%
C/E
V Telecom Investment S.C.A. (Vivacom) (Luxembourg)
Common Shares
1,393
3,236,256
3,488,407
0.27
%
C/D/E/H
11,690,060
8,979,092
0.69
%
Total Equity Securities
62,209,224
41,482,746
3.18
%
Total Investments
$
1,312,884,251
$
1,269,160,639
Cash and Cash Equivalents
Cash Denominated in Foreign Currencies
295,487
0.02
%
Cash Held on Account at Various Institutions
34,287,382
2.63
%
Cash and Cash Equivalents
34,582,869
2.65
%
Total Cash and Investments
$
1,303,743,508
100.00
%
M
Notes to Consolidated Schedule of Investments:

(A) Investments in bank debt generally are bought and sold among institutional investors in transactions not subject to registration under the Securities Act  of 1933. Such transactions are generally subject to contractual restrictions, such as approval of the agent or borrower.

(B) Non-controlled affiliate – as defined under the Investment Company Act of 1940 (ownership of between 5% and 25% of the outstanding voting  securities of this issuer). See Consolidated Schedule of Changes in Investments in Affiliates.

(C) Non-income producing security.

(D) Principal amount denominated in foreign currency.  Amortized cost and fair value converted from foreign currency to US dollars. Foreign currency denominated investments are generally hedged for currency exposure. At September 30, 2015, such hedging activities included the derivatives listed at the end of the Consolidated Schedule of Investments. (See Note 2)

(E) Restricted security. (See Note 2)

(F) Controlled issuer – as defined under the Investment Company Act of 1940 (ownership of 25% or more of the outstanding voting securities of this issuer). Investment is not more than 50% owned nor deemed to be a significant subsidiary. See Consolidated Schedule of Changes in Investments in Affiliates.

(G) Investment has been segregated to collateralize certain unfunded commitments.

(H) Non-U.S. company or principal place of business outside the U.S. and as a result the investment is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets.

(I) Deemed an investment company under Section 3(c) of the Investment Company Act and as a result the investment is not a qualifying asset under Section 55(a) of the Investment Company Act.  Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets.

(J) Publicly traded company with a market capitalization greater than $250 million and as a result the investment is not a qualifying asset under Section 55(a)  of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets.

(K) Negative balances relate to an unfunded commitment that was acquired and valued at a discount.

(L) In addition to the stated coupon, investment has an exit fee payable upon repayment of the loan in an amount equal to the percentage of the original principal amount shown.
(M) All cash and investments, except those referenced in Notes G above, are pledged as collateral under certain debt as described in Note 4 to the Consolidated Financial Statements.

LIBOR or EURIBOR resets monthly (M), quarterly (Q), semiannually (S), or annually (A).

Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $423,348,068 and $305,505,796 respectively, for the nine months ended September 30, 2015. Aggregate acquisitions includes investment assets received as payment in kind.  Aggregate dispositions includes principal paydowns on and maturities of debt investments.  The total value of restricted securities and bank debt as of September 30, 2015 was $1,268,961,209, or 97.3% of total cash and investments of the Company.

Options and swaps at September 30, 2015 were as follows:

Investment
Notional Amount
Fair Value
Interest Rate Cap with Deutsche Bank AG, 4%, expires 5/15/2016
$
25,000,000
$
-
Euro/US Dollar Cross-Currency Basis Swap with Wells Fargo Bank, N.A., Pay Euros/Receive USD, Expires 3/31/2017
$
16,401,467
$
2,868,748

See accompanying notes to the consolidated financial statements.
TCP Capital Corp.

Consolidated Schedule of Investments

December 31, 2014

Showing Percentage of Total Cash and Investments of the Company

Issuer
Instrument
Ref
Floor
Spread
Total Coupon
Maturity
Principal
Cost
Value
% of
Portfolio
Notes
Debt Investments (A)
Accounting, Tax Preparation, Bookkeeping, and Payroll Services
EGS Holdings, Inc.
Holdco PIK Notes
LIBOR (A)
3.00%
10.00%
13.00%
10/3/2018
$
57,238
$
57,238
$
56,237
-
Expert Global Solutions, LLC
Second Lien Term Loan
LIBOR (Q)
1.50%
11.00%
12.50%
10/3/2018
$
7,124,902
6,959,593
7,096,403
0.60
%
7,016,831
7,152,640
0.60
%
Activities Related to Real Estate
Greystone Select Holdings, LLC
First Lien Term Loan
LIBOR (Q)
1.00%
8.00%
9.00%
3/26/2021
$
16,470,084
16,261,549
16,511,259
1.41
%
Advertising, Public Relations, and Related Services
Doubleplay III Limited (United Kingdom)
First Lien Facility A1 Term Loan
EURIBOR (Q)
1.25%
6.25%
7.50%
3/18/2018
€
13,165,705
16,791,646
15,450,034
1.32
%
D/H
Artificial Synthetic Fibers and Filaments Manufacturing
AGY Holding Corp.
Sr Secured Term Loan
Fixed
-
12.00%
12.00%
9/15/2016
$
4,869,577
4,869,577
4,869,577
0.41
%
B
AGY Holding Corp.
Second Lien Notes
Fixed
-
11.00%
11.00%
11/15/2016
$
9,268,000
7,586,318
9,017,764
0.77
%
B/E
12,455,895
13,887,341
1.18
%
Basic Chemical Manufacturing
BioAmber, Inc.
Sr Secured Term Loan
LIBOR (M)
0.23%
9.27%
9.50%
12/1/2017
$
25,000,000
24,505,108
25,050,000
2.13
%
Green Biologics, Inc.
Sr Secured Term Loan
Prime Rate
3.25%
7.75%
11.00%
5/1/2018
$
15,000,000
14,503,743
14,730,000
1.25
%
L
M&G Chemicals S.A. (Luxembourg)
Sr Secured Term Loan
LIBOR (Q)
0.23%
8.50%
8.73%
3/18/2016
$
15,632,077
15,632,077
15,632,077
1.33
%
H
PeroxyChem, LLC
First Lien Term Loan
LIBOR (Q)
1.00%
6.50%
7.50%
2/28/2020
$
8,932,500
8,783,187
8,932,500
0.76
%
VitAG Holdings, LLC
Sr Secured Term Loan
LIBOR (M)
0.23%
10.27%
10.50%
2/1/2018
$
7,700,000
7,555,099
7,646,000
0.65
%
L
70,979,214
71,990,577
6.12
%
Beverage Manufacturing
Carolina Beverage Group, LLC
Secured Notes
Fixed
-
10.63%
10.63%
8/1/2018
$
4,780,000
4,780,000
4,851,700
0.41
%
E/G
Business Support Services
Enerwise Global Technologies, Inc.
Sr Secured Revolving Loan
LIBOR (Q)
0.23%
8.52%
8.75%
11/30/2017
$
–
(106,405
)
(60,000
)
(0.01
%)
Enerwise Global Technologies, Inc.
Sr Secured Term Loan
LIBOR (Q)
0.23%
9.27%
9.50%
11/30/2019
$
17,500,000
17,158,899
17,360,000
1.48
%
L
STG-Fairway Acquisitions, Inc.
Second Lien Term Loan
LIBOR (Q)
1.25%
9.25%
10.50%
8/28/2019
$
14,643,455
14,036,428
14,863,107
1.27
%
31,088,922
32,163,107
2.74
%
Chemical Manufacturing
Archroma
Term Loan B
LIBOR (Q)
1.25%
8.25%
9.50%
9/30/2018
$
19,896,228
19,593,258
19,747,006
1.68
%
Communications Equipment Manufacturing
Globecomm Systems, Inc.
First Lien Term Loan
LIBOR (Q)
1.25%
7.63%
8.88%
12/11/2018
$
14,850,000
14,701,500
14,656,950
1.25
%
B
Computer Equipment Manufacturing
ELO Touch Solutions, Inc.
Second Lien Term Loan
LIBOR (Q)
1.50%
10.50%
12.00%
12/1/2018
$
12,000,000
11,638,008
11,520,000
0.98
%
Computer Systems Design and Related Services
Autoalert, LLC
First Lien Term Loan
LIBOR (Q)
0.25%
4.75% Cash+4% PIK
9.00%
3/31/2019
$
30,926,035
30,399,049
31,080,665
2.65
%
Blue Coat Systems, Inc.
First Lien Revolver
LIBOR (Q)
1.00%
3.50%
4.50%
5/31/2018
$
–
(727,290
)
(660,240
)
(0.06
%)
K
Blue Coat Systems, Inc.
Second Lien Term Loan
LIBOR (Q)
1.00%
8.50%
9.50%
6/28/2020
$
15,000,000
14,878,125
14,775,000
1.26
%
MSC Software Corporation
Second Lien Term Loan
LIBOR (M)
1.00%
7.50%
8.50%
5/29/2021
$
11,993,035
11,880,123
11,753,175
1.00
%
OnX Enterprise Solutions, Ltd. (Canada)
First Lien Term Loan B
LIBOR (Q)
-
8.00%
8.23%
9/3/2018
$
2,361,467
2,361,467
2,341,394
0.20
%
OnX Enterprise Solutions, Ltd. (Canada)
First Lien Term Loan
LIBOR (Q)
-
7.00%
7.23%
9/3/2018
$
10,533,333
10,415,821
10,259,467
0.87
%
OnX USA, LLC
First Lien Term Loan B
LIBOR (Q)
-
8.00%
8.23%
9/3/2018
$
4,722,933
4,722,933
4,682,788
0.40
%
OnX USA, LLC
First Lien Term Loan
LIBOR (Q)
-
7.00%
7.23%
9/3/2018
$
5,266,667
5,211,626
5,129,733
0.44
%
Vistronix, LLC
First Lien Revolver
LIBOR (Q)
0.50%
8.00%
8.50%
12/4/2018
$
–
(5,809
)
-
0.00
%
Vistronix, LLC
First Lien Term Loan
LIBOR (M)
0.50%
8.00%
8.50%
12/4/2018
$
6,535,333
6,466,509
6,551,671
0.56
%
Websense, Inc.
Second Lien Term Loan
LIBOR (Q)
1.00%
7.25%
8.25%
12/27/2020
$
7,200,000
7,164,000
6,930,000
0.59
%
92,766,554
92,843,653
7.91
%
Cut and Sew Apparel Manufacturing
Jones Apparel, LLC
First Lien FILO Term Loan
LIBOR (M)
1.00%
9.60%
10.60%
4/8/2019
$
14,329,403
14,202,296
14,429,709
1.23
%
Data Processing, Hosting, and Related Services
Asset International, Inc.
Delayed Draw Term Loan
LIBOR (M)
1.00%
7.00%
8.00%
7/31/2020
$
–
(42,880
)
(29,158
)
0.00
%
K
Asset International, Inc.
Revolver
LIBOR (M)
1.00%
7.00%
8.00%
7/31/2020
$
484,752
475,358
477,885
0.04
%
Asset International, Inc.
First Lien Term Loan
LIBOR (M)
1.00%
7.00%
8.00%
7/31/2020
$
8,191,755
8,037,946
8,122,125
0.69
%
Rightside Group, Ltd.
Second Lien Term Loan
LIBOR (Q)
0.50%
8.75%
9.25%
8/6/2019
$
5,000,000
4,042,549
4,775,000
0.41
%
The Telx Group, Inc.
Senior Notes
Fixed
-
13.5% PIK
13.50%
7/9/2021
$
4,446,651
4,446,651
4,611,177
0.39
%
E
United TLD Holdco, Ltd. (Cayman Islands)
Second Lien Term Loan
LIBOR (Q)
0.50%
8.75%
9.25%
8/6/2019
$
10,000,000
8,085,098
9,550,000
0.81
%
H
25,044,722
27,507,029
2.34
%
Electrical Equipment and Component Manufacturing
NEXTracker, Inc.
Sr Secured Revolver
LIBOR (M)
-
8.00%
8.00%
7/1/2016
$
2,500,000
508,086
1,126,250
0.10
%
NEXTracker, Inc.
Sr Secured Term Loan
LIBOR (M)
-
9.50%
9.50%
12/16/2016
$
2,500,000
2,216,771
2,303,750
0.20
%
L
Palladium Energy, Inc.
First Lien Term Loan
LIBOR (Q)
1.00%
9.00%
10.00%
12/26/2017
$
16,153,317
15,942,351
16,234,084
1.38
%
18,667,208
19,664,084
1.68
%
Electrical Equipment Manufacturing
API Technologies Corp.
First Lien Term Loan
LIBOR (Q)
1.50%
7.50%
9.00%
2/6/2018
$
6,687,055
6,631,621
6,610,154
0.56
%
Fabricated Metal Product Manufacturing
Constellation Enterprises, LLC
First Lien Notes
Fixed
-
10.63%
10.63%
2/1/2016
$
2,900,000
2,858,907
2,392,500
0.20
%
E
Financial Investment Activities
Institutional Shareholder Services, Inc.
Second Lien Term Loan
LIBOR (Q)
1.00%
7.50%
8.50%
4/30/2022
$
6,471,492
6,411,582
6,374,420
0.54
%
Marsico Capital Management
First Lien Term Loan
LIBOR (M)
-
5.00%
5.25%
12/31/2022
$
10,500,040
13,220,948
2,274,991
0.19
%
I
19,632,530
8,649,411
0.73
%
TCP Capital Corp.

Consolidated Schedule of Investments (Continued)

December 31, 2014

Showing Percentage of Total Cash and Investments of the Company

Issuer
Instrument
Ref
Floor
Spread
Total Coupon
Maturity
Principal
Cost
Value
% of
Portfolio
Notes
Debt Investments (continued)
Full-Service Restaurants
RM OpCo, LLC
Convertible Second Lien Term Loan Tranche B-1
Fixed
-
8.50%
8.50%
3/30/2018
$
1,636,314
$
1,614,711
$
1,636,314
0.14
%
B
RM OpCo, LLC
First Lien Term Loan Tranche A
Fixed
-
7.00%
7.00%
3/21/2016
$
3,900,025
3,898,911
3,900,025
0.33
%
B
RM OpCo, LLC
Second Lien Term Loan Tranche B
Fixed
-
8.50%
8.50%
3/30/2018
$
8,153,188
8,153,188
6,457,325
0.55
%
B
RM OpCo, LLC
Second Lien Term Loan Tranche B-1
Fixed
-
8.50%
8.50%
3/30/2018
$
2,567,717
2,546,166
2,567,717
0.22
%
B
RM OpCo, LLC
Sr Convertible Second Lien Term Loan B
Fixed
-
8.50%
8.50%
3/30/2018
$
631,164
631,164
631,164
0.05
%
B
16,844,140
15,192,545
1.29
%
Gaming Industries
AP Gaming I, LLC
First Lien Revolver
LIBOR (Q)
-
8.25%
8.41%
12/20/2018
$
5,000,000
2,931,716
2,812,500
0.24
%
AP Gaming I, LLC
First Lien Term Loan B
LIBOR (Q)
1.00%
8.25%
9.25%
12/20/2020
$
14,850,000
14,450,326
14,850,000
1.27
%
17,382,042
17,662,500
1.51
%
General Medical and Surgical Hospitals
RegionalCare Hospital Partners, Inc.
Second Lien Term Loan
LIBOR (M)
1.00%
9.50%
10.50%
10/23/2019
$
21,017,525
20,729,782
20,964,981
1.79
%
Grocery Stores
Bashas, Inc.
First Lien FILO Term Loan
LIBOR (M)
1.50%
7.00%
8.50%
10/8/2019
$
10,632,845
10,592,167
10,616,895
0.90
%
The Great Atlantic & Pacific Tea Company, Inc.
Term Loan Tranche B
LIBOR (M)
1.00%
8.85%
9.85%
9/17/2019
$
20,966,890
20,619,519
20,945,923
1.78
%
31,211,686
31,562,818
2.68
%
Insurance Carriers
Acrisure, LLC
Second Lien Additional Notes
LIBOR (Q)
1.00%
10.50%
11.50%
3/31/2020
$
2,520,198
2,391,227
2,527,200
0.22
%
Acrisure, LLC
Second Lien Notes
LIBOR (Q)
1.00%
10.50%
11.50%
3/31/2020
$
29,288,298
28,725,701
29,317,586
2.50
%
US Apple Holdco, LLC
First Lien Term Loan
LIBOR (Q)
0.50%
11.50%
12.00%
8/29/2019
$
20,000,000
19,247,507
19,940,000
1.70
%
50,364,435
51,784,786
4.42
%
Insurance Related Activities
Confie Seguros Holding II Co.
Second Lien Term Loan
LIBOR (M)
1.25%
9.00%
10.25%
5/8/2019
$
7,861,809
7,776,100
7,859,372
0.67
%
Lessors of Nonfinancial Intangible Assets
ABG Intermediate Holdings 2, LLC
Second Lien Term Loan
LIBOR (S)
1.00%
8.00%
9.00%
5/27/2022
$
15,990,714
15,838,253
16,110,644
1.37
%
Lessors of Real Estate
Hunt Companies, Inc.
Senior Secured Notes
Fixed
-
9.63%
9.63%
3/1/2021
$
13,084,000
12,935,462
13,476,520
1.15
%
E/G
Management, Scientific, and Technical Consulting Services
Dodge Data & Analytics, LLC
First Lien Term Loan
LIBOR (Q)
1.00%
8.75%
9.75%
10/31/2019
$
27,923,077
27,174,478
27,853,269
2.37
%
Merchant Wholesalers
Envision Acquisition Company, LLC
Second Lien Term Loan
LIBOR (Q)
1.00%
8.75%
9.75%
11/4/2021
$
9,079,011
8,914,869
9,044,964
0.77
%
Motion Picture and Video Industries
CORE Entertainment, Inc.
First Lien Term Loan
Fixed
-
9.00%
9.00%
6/21/2017
$
9,462,231
9,402,044
8,203,755
0.70
%
CORE Entertainment, Inc.
Second Lien Term Loan
Fixed
-
13.50%
13.50%
6/21/2018
$
7,569,785
7,518,166
6,233,718
0.53
%
16,920,210
14,437,473
1.23
%
Newspaper, Periodical, Book, and Directory Publishers
MediMedia USA, Inc.
First Lien Revolver
LIBOR (Q)
-
6.75%
6.99%
5/20/2018
$
3,875,000
3,065,963
3,596,543
0.31
%
MediMedia USA, Inc.
First Lien Term Loan
LIBOR (Q)
1.25%
6.75%
8.00%
11/20/2018
$
9,591,911
9,372,798
9,376,093
0.80
%
12,438,761
12,972,636
1.11
%
Nondepository Credit Intermediation
Caribbean Financial Group (Cayman Islands)
Sr Secured Notes
Fixed
-
11.50%
11.50%
11/15/2019
$
10,000,000
9,846,274
10,300,000
0.88
%
E/G/H
Trade Finance Funding I, Ltd. (Cayman Islands)
Secured Class B Notes
Fixed
-
10.75%
10.75%
11/13/2018
$
15,084,000
15,084,000
15,008,580
1.28
%
E/H
24,930,274
25,308,580
2.16
%
Nonscheduled Air Transportation
One Sky Flight, LLC
Second Lien Term Loan
Fixed
-
12% Cash+3% PIK
15.00%
6/3/2019
$
18,660,646
17,417,637
19,220,465
1.64
%
Oil and Gas Extraction
Jefferson Gulf Coast Energy Partners, LLC
First Lien Term Loan B
LIBOR (M)
1.00%
8.00%
9.00%
2/27/2018
$
14,962,500
14,824,074
14,289,188
1.22
%
MD America Energy, LLC
Second Lien Term Loan
LIBOR (Q)
1.00%
8.50%
9.50%
8/4/2019
$
10,000,000
9,533,785
9,600,000
0.82
%
24,357,859
23,889,188
2.04
%
Other Information Services
TCH-2 Holdings, LLC
Second Lien Term Loan
LIBOR (M)
1.00%
7.75%
8.75%
11/6/2021
$
19,988,392
19,704,946
19,288,799
1.64
%
Other Telecommunications
Securus Technologies, Inc.
Second Lien Term Loan
LIBOR (Q)
1.25%
7.75%
9.00%
4/30/2021
$
14,000,000
13,860,000
13,790,000
1.17
%
TCP Capital Corp.

Consolidated Schedule of Investments (Continued)

December 31, 2014

Showing Percentage of Total Cash and Investments of the Company

Issuer
Instrument
Ref
Floor
Spread
Total Coupon
Maturity
Principal
Cost
Value
% of
Portfolio
Notes
Debt Investments (continued)
Petroleum and Coal Products Manufacturing
Boomerang Tube, LLC
Second Lien Term Loan
LIBOR (Q)
1.50%
9.50%
11.00%
10/11/2017
$
3,825,453
$
3,778,669
$
3,318,581
0.28
%
Plastics Products Manufacturing
Iracore International, Inc.
Sr Secured Notes
Fixed
-
9.50%
9.50%
6/1/2018
$
13,600,000
13,600,000
8,194,000
0.70
%
E/G
Radio and Television Broadcasting
SiTV, Inc.
Sr Secured Notes
Fixed
-
10.38%
10.38%
7/1/2019
$
7,312,000
7,312,000
6,818,440
0.58
%
E/G
The Tennis Channel, Inc.
First Lien Term Loan
LIBOR (Q)
-
8.50%
8.75%
5/29/2017
$
18,250,825
17,914,285
18,369,455
1.56
%
25,226,285
25,187,895
2.14
%
Retail
Kenneth Cole Productions, Inc.
First Lien FILO Term Loan
LIBOR (M)
1.00%
10.40%
11.40%
9/25/2017
$
10,590,909
10,434,633
10,643,863
0.91
%
Connexity, Inc.
Second Lien Term Loan
LIBOR (Q)
-
12.50%
12.73%
3/31/2016
$
6,630,353
6,536,895
6,600,516
0.56
%
Shop Holding, LLC
Convertible Promissory Note
Fixed
-
5.00%
5.00%
8/5/2015
$
73,140
73,140
67,691
0.01
%
E
17,044,668
17,312,070
1.48
%
Satellite Telecommunications
Avanti Communications Group, PLC (United Kingdom)
Sr Secured Notes
Fixed
-
10.00%
10.00%
10/1/2019
$
9,914,000
9,914,000
9,492,655
0.81
%
E/G/H
Scheduled Air Transportation
Aircraft Leased to Delta Air Lines, Inc.
N913DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
3/15/2017
$
205,106
205,106
209,168
0.02
%
F
N918DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
8/15/2018
$
313,694
313,694
320,440
0.03
%
F
N954DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
3/20/2019
$
429,007
429,007
437,679
0.04
%
F
N955DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
6/20/2019
$
451,165
451,165
460,258
0.04
%
F
N956DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
5/20/2019
$
448,792
448,792
457,902
0.04
%
F
N957DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
6/20/2019
$
455,112
455,112
464,283
0.04
%
F
N959DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
7/20/2019
$
461,378
461,378
470,601
0.04
%
F
N960DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
10/20/2019
$
483,873
483,873
493,258
0.04
%
F
N961DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
8/20/2019
$
475,489
475,489
484,908
0.04
%
F
N976DL
Aircraft Secured Mortgage
Fixed
-
8.00%
8.00%
2/15/2018
$
308,103
308,103
314,588
0.03
%
F
Aircraft Leased to United Airlines, Inc.
N659UA
Aircraft Secured Mortgage
Fixed
-
12.00%
12.00%
2/28/2016
$
1,582,136
1,582,136
1,659,003
0.14
%
F
N661UA
Aircraft Secured Mortgage
Fixed
-
12.00%
12.00%
5/4/2016
$
1,788,182
1,788,181
1,899,950
0.16
%
F
Mesa Air Group, Inc.
Acquisition Delayed Draw Loan
LIBOR (M)
-
7.25%
N/A
7/15/2022
$
–
(271,500
)
(135,750
)
(0.01
%)
K
Mesa Air Group, Inc.
Acquisition Loan
LIBOR (M)
-
7.25%
7.44%
7/15/2022
$
17,810,658
17,469,814
17,632,552
1.50
%
24,600,350
25,168,840
2.15
%
Scientific Research and Development Services
BPA Laboratories, Inc.
Senior Secured Notes
Fixed
-
12.25%
12.25%
4/1/2017
$
38,932,000
39,001,750
41,754,570
3.56
%
E/G
Semiconductor and Other Electronic Component Manufacturing
Soraa, Inc.
Sr Secured Term Loan
LIBOR (M)
0.23%
10.27%
10.50%
9/1/2017
$
22,500,000
21,822,817
21,633,750
1.84
%
L
SunEdison, Inc.
Senior Secured Letters of Credit
Fixed
-
3.75%
N/A
2/28/2017
$
–
(1,031,717
)
(750,340
)
(0.06
%)
J/K
20,791,100
20,883,410
1.78
%
Software Publishers
Acronis International GmbH (Switzerland)
First Lien Term Loan
LIBOR (Q)
1.00%
13.00%
14.00%
2/21/2017
$
30,634,068
30,429,609
28,949,194
2.47
%
H
ArcServe (USA), LLC
Second Lien Term Loan
LIBOR (Q)
0.50%
8.50%
9.00%
1/31/2020
$
30,000,000
29,439,740
30,015,000
2.57
%
BlackLine Systems, Inc.
First Lien Term Loan
LIBOR (Q)
1.50%
0.4% Cash+7.6% PIK
9.50%
9/25/2018
$
13,577,457
12,859,373
13,781,119
1.17
%
Coreone Technologies, LLC
First Lien Term Loan
LIBOR (Q)
1.00%
3.75% Cash+5% PIK
9.75%
9/4/2018
$
14,257,231
14,028,252
13,865,157
1.18
%
Deltek, Inc.
Second Lien Term Loan
LIBOR (Q)
1.25%
8.75%
10.00%
10/10/2019
$
15,000,000
14,831,408
15,099,975
1.29
%
Edmentum, Inc.
Second Lien Term Loan
LIBOR (Q)
1.50%
9.75%
11.25%
5/17/2019
$
21,500,000
21,361,215
11,287,500
0.96
%
122,949,597
112,997,945
9.64
%
Specialty Hospitals
Bioventus, LLC
Second Lien Term Loan
LIBOR (Q)
1.00%
10.00%
11.00%
4/10/2020
$
11,000,000
10,786,339
10,945,000
0.93
%
UBC Healthcare Analytics, Inc.
First Lien Term Loan
LIBOR (Q)
1.00%
9.00%
10.00%
7/1/2018
$
4,401,081
4,379,076
4,390,078
0.37
%
15,165,415
15,335,078
1.30
%
Structured Note Funds
Magnolia Finance V plc (Cayman Islands)
Asset-Backed Credit Linked Notes
Fixed
-
13.13%
13.13%
8/2/2021
$
15,000,000
15,000,000
15,123,000
1.29
%
E/H
TCP Capital Corp.

Consolidated Schedule of Investments (Continued)

December 31, 2014

Showing Percentage of Total Cash and Investments of the Company

Issuer
Instrument
Ref
Floor
Spread
Total Coupon
Maturity
Principal or
Shares
Cost
Value
% of
Portfolio
Notes
Debt Investments (continued)
Textile Furnishings Mills
Lexmark Carpet Mills, Inc.
First Lien Term Loan
LIBOR (Q)
1.00%
10.00%
11.00%
12/19/2019
$
25,000,000
$
25,000,000
$
24,925,000
2.12
%
Utility System Construction
Kawa Solar Holdings Limited
Revolving Credit Facility
Fixed
-
8.00%
8.00%
7/2/2017
$
25,000,000
25,000,000
25,000,000
2.13
%
Wired Telecommunications Carriers
Alpheus Communications, LLC
Delayed Draw Term Loan
LIBOR (Q)
1.00%
6.92%
7.92%
5/31/2018
$
372,616
361,456
371,494
0.03
%
Alpheus Communications, LLC
First Lien FILO Term Loan
LIBOR (Q)
1.00%
6.92%
7.92%
5/31/2018
$
8,145,022
8,064,048
8,136,877
0.70
%
Integra Telecom Holdings, Inc.
Second Lien Term Loan
LIBOR (Q)
1.25%
8.50%
9.75%
2/22/2020
$
15,000,000
14,737,750
14,943,750
1.28
%
23,163,254
23,452,121
2.01
%
Wireless Telecommunications Carriers
Gogo, LLC
First Lien Term Loan
LIBOR (Q)
1.50%
9.75%
11.25%
6/21/2017
$
19,083,140
18,579,398
19,655,634
1.67
%
Gogo, LLC
First Lien Term Loan B-2
LIBOR (Q)
1.00%
6.50%
7.50%
3/21/2018
$
5,510,950
5,414,893
5,345,622
0.46
%
23,994,291
25,001,256
2.13
%
Total Debt Investments
1,128,140,974
1,113,593,115
94.87
%
Equity Securities
Architectural, Engineering, and Related Services
Alion Science & Technology Corporation
Warrants
300
-
3
-
C
Basic Chemical Manufacturing
Green Biologics, Inc.
Warrants to Purchase Stock
376,147
272,594
276,882
0.02
%
C/E
Business Support Services
Findly Talent, LLC
Membership Units
708,229
230,938
162,184
0.01
%
C/E
STG-Fairway Holdings, LLC
Class A Units
841,479
943,287
2,917,492
0.25
%
C/E
1,174,225
3,079,676
0.26
%
Communications Equipment Manufacturing
Wasserstein Cosmos Co-Invest, L.P.
Limited Partnership Units
5,000,000
5,000,000
4,175,000
0.36
%
B/C/E
Data Processing, Hosting, and Related Services
Anacomp, Inc.
Class A Common Stock
1,255,527
26,711,048
916,535
0.08
%
C/E/F
Rightside Group, Ltd.
Warrants
498,855
2,778,622
693,748
0.06
%
C/E
29,489,670
1,610,283
0.14
%
Electrical Equipment and Component Manufacturing
NEXTracker, Inc.
Series B Preferred Stock
268,817
999,999
999,999
0.09
%
C/E
NEXTracker, Inc.
Warrants to Purchase Stock
357,022
370,118
385,013
0.03
%
C/E
1,370,117
1,385,012
0.12
%
Financial Investment Activities
Marsico Holdings, LLC
Common Interest Units
168,698
172,694
16,870
-
C/E/I
Full-Service Restaurants
RM Holdco, LLC
Equity Participation
24
-
792
-
B/C/E
RM Holdco, LLC
Membership Units
13,161,000
2,010,777
-
-
B/C/E
2,010,777
792
-
Machine Shops; Turned Product; and Screw, Nut, and Bolt Manufacturing
Precision Holdings, LLC
Class C Membership Interest
33
-
1,469
-
C/E
Nonmetallic Mineral Mining and Quarrying
EPMC HoldCo, LLC
Membership Units
1,312,720
-
682,614
0.06
%
B/E
Nonscheduled Air Transportation
Flight Options Holdings I, Inc.
Warrants to Purchase Common Stock
1,843
1,274,000
3,311,430
0.28
%
C/E
Radio and Television Broadcasting
SiTV, Inc.
Warrants to Purchase Common Stock
233,470
300,322
331,527
0.03
%
C/E
Retail
Shop Holding, LLC
Class A Units
507,167
480,049
379,665
0.03
%
C/E
Shop Holding, LLC
Warrants to Purchase Class A Units
326,691
-
3
-
C/E
480,049
379,668
0.03
%
Scheduled Air Transportation
Aircraft Leased to Delta Air Lines, Inc.
N913DL
Trust Beneficial Interests
1,009
87,287
117,497
0.01
%
E/F
N918DL
Trust Beneficial Interests
829
94,907
135,890
0.01
%
E/F
N954DL
Trust Beneficial Interests
775
110,643
72,604
0.01
%
E/F
N955DL
Trust Beneficial Interests
749
109,549
111,010
0.01
%
E/F
N956DL
Trust Beneficial Interests
756
109,486
106,801
0.01
%
E/F
N957DL
Trust Beneficial Interests
749
110,163
107,682
0.01
%
E/F
N959DL
Trust Beneficial Interests
743
110,838
108,579
0.01
%
E/F
N960DL
Trust Beneficial Interests
726
113,477
107,865
0.01
%
E/F
N961DL
Trust Beneficial Interests
737
112,742
102,826
0.01
%
E/F
N976DL
Trust Beneficial Interests
883
97,111
102,006
0.01
%
E/F
Aircraft Leased to United Airlines, Inc.
United N659UA-767, LLC (N659UA)
Trust Beneficial Interests
525
2,548,939
3,177,822
0.27
%
E/F
United N661UA-767, LLC (N661UA)
Trust Beneficial Interests
509
2,495,032
3,078,923
0.26
%
E/F
6,100,174
7,329,505
0.63
%
TCP Capital Corp.

Consolidated Schedule of Investments (Continued)

December 31, 2014

Showing Percentage of Total Cash and Investments of the Company
Issuer
Instrument
Ref
Floor
Spread
Total Coupon
Maturity
Shares
Cost
Value
% of
Portfolio
Notes
Equity Securities (continued)
Resin, Synthetic Rubber, and Artificial Synthetic Fibers and Filaments Manufacturing
KAGY Holding Company, Inc.
Series A Preferred Stock
9,778
$
1,091,200
$
121,975
0.01
%
B/C/E
Semiconductor and Other Electronic Component Manufacturing
Ichor Systems Holdings, LLC
Membership Units
352
-
229,504
0.02
%
C/E
Soraa, Inc.
Warrants to Purchase Common Stock
315,000
408,987
-
-
C/E
408,987
229,504
0.02
%
Software Publishers
Blackline Intermediate, Inc.
Warrants  to Purchase Common Stock
1,232,731
522,678
789,441
0.07
%
C/E
Wired Telecommunications Carriers
Integra Telecom, Inc.
Common Stock
1,274,522
8,433,885
5,295,511
0.44
%
C/E
Integra Telecom, Inc.
Warrants
346,939
19,920
226,482
0.02
%
C/E
V Telecom Investment S.C.A.(Luxembourg)
Common Shares
1,393
3,236,256
3,699,127
0.32
%
C/D/E/H
11,690,061
9,221,120
0.78
%
Total Equity Securities
61,357,548
32,942,771
2.81
%
Total Investments
1,189,498,522
1,146,535,886
Cash and Cash Equivalents
Union Bank of California
Commercial Paper
Fixed
-
0.03%
1/2/2015
6,999,994
0.60
%
Cash Denominated in Foreign Currencies
192,187
0.02
%
Cash Held on Account at Various Institutions
20,076,611
1.70
%
Cash and Cash Equivalents
27,268,792
2.32
%
Total Cash and Investments
$
1,173,804,678
100.00
%
M
Notes to Consolidated Schedule of Investments:

(A) Investments in bank debt generally are bought and sold among institutional investors in transactions not subject to registration under the Securities Act  of 1933. Such transactions are generally subject to contractual restrictions, such as approval of the agent or borrower.

(B) Non-controlled affiliate – as defined under the Investment Company Act of 1940 (ownership of between 5% and 25% of the outstanding voting  securities of this issuer). See Consolidated Schedule of Changes in Investments in Affiliates.

(C) Non-income producing security.

(D) Principal amount denominated in foreign currency.  Amortized cost and fair value converted from foreign currency to US dollars. (See Note 2)

(E) Restricted security.. (See Note 2)

(F) Controlled issuer – as defined under the Investment Company Act of 1940 (ownership of 25% or more of the outstanding voting securities of this issuer). Investment is not more than 50% owned nor deemed to be a significant subsidiary. See Consolidated Schedule of Changes in Investments in Affiliates.

(G) Investment has been segregated to collateralize certain unfunded commitments.

(H) Non-U.S. company or principal place of business outside the U.S. and as a result the investment is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets.

(I) Deemed an investment company under Section 3(c) of the Investment Company Act and as a result the investment is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets.

(J) Publicly traded company with a market capitalization greater than $250 million and as a result the investment is not a qualifying asset under Section 55(a)  of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets.

(K) Negative balances relate to an unfunded commitment that was acquired and valued at a discount.

(L) In addition to the stated coupon, investment has a back-end fee payable upon repayment of the loan in the amount of 4.0% for Soraa, 8.0% for VitAg, 1.5% for Enerwise, 2.5% for NEXTracker, and 7.0% for Green Biologics.

(M) All cash and investments, except those referenced in Notes G above, are pledged as collateral under certain debt as described in Note 4 to the Consolidated Financial Statements.

LIBOR or EURIBOR resets monthly (M), quarterly (Q), semiannually (S), annually (A).

Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $669,515,626, and $266,008,974 respectively, for the twelve months ended December 31, 2014. Aggregate acquisitions includes investment assets received as payment in kind.  Aggregate dispositions includes principal paydowns on and maturities of debt investments.  The total value of restricted securities and bank debt as of December 31, 2014 was $1,146,535,883, or 97.7% of total cash and investments of the Company.
Options and swaps at December 31, 2014 were as follows:

Investment
Notional Amount
Fair Value
Interest Rate Cap with Deutsche Bank AG, 4%, expires 5/15/2016
$
25,000,000
$
497
Euro/US Dollar Cross-Currency Basis Swap with Wells Fargo Bank, N.A., Pay Euros/Receive USD, Expires 3/31/2017
$
16,401,467
$
1,717,610

See accompanying notes to the consolidated financial statements.
TCP Capital Corp.

Consolidated Statements of Operations (Unaudited)

Three Months Ended September 30,
Nine Months Ended September 30,
2015
2014
2015
2014
Investment income
Interest income:
Companies less than 5% owned
$
32,171,144
$
24,699,976
$
98,581,508
$
65,174,101
Companies 5% to 25% owned
1,516,596
1,728,834
3,828,262
4,423,013
Companies more than 25% owned
125,074
214,091
444,168
706,553
Dividend income:
Companies 5% to 25% owned
-
-
-
1,968,748
Lease income:
Companies 5% to 25% owned
-
74,038
-
282,581
Companies more than 25% owned
354,958
262,905
978,000
726,477
Other income:
Companies less than 5% owned
1,331,277
210,622
3,420,283
1,164,938
Total investment income
35,499,049
27,190,466
107,252,221
74,446,411
Operating expenses
Management and advisory fees
4,703,999
3,513,238
13,681,411
9,504,317
Interest expense
3,746,722
2,535,555
10,488,383
4,012,167
Legal fees, professional fees and due diligence expenses
425,796
268,710
1,994,571
828,102
Amortization of deferred debt issuance costs
548,798
545,294
1,623,333
1,347,442
Administrative expenses
394,920
392,794
1,177,357
1,029,069
Commitment fees
315,206
243,147
919,649
650,209
Insurance expense
99,876
83,996
272,677
202,823
Director fees
67,625
88,395
233,465
255,776
Custody fees
74,891
54,369
214,141
166,025
Other operating expenses
866,249
264,778
2,182,452
1,033,422
Total operating expenses
11,244,082
7,990,276
32,787,439
19,029,352
Net investment income
24,254,967
19,200,190
74,464,782
55,417,059
Net realized and unrealized gain (loss) on investments and foreign currency
Net realized gain (loss):
Investments in companies less than 5% owned
5,735,352
544,212
(3,714,114
)
(5,317,388
)
Investments in companies 5% to 25% owned
395
383,670
1,185
383,670
Investments in companies more than 25% owned
-
-
19,167
-
Net realized gain (loss)
5,735,747
927,882
(3,693,762
)
(4,933,718
)
Change in net unrealized appreciation/depreciation
(7,621,948
)
(5,433,060
)
28,123
2,596,620
Net realized and unrealized gain (loss)
(1,886,201
)
(4,505,178
)
(3,665,639
)
(2,337,098
)
Net increase in net assets from operations
22,368,766
14,695,012
70,799,143
53,079,961
Gain on repurchase of Series A preferred interests
-
-
1,675,000
-
Dividends on Series A preferred equity facility
(460,836
)
(357,451
)
(1,251,930
)
(1,083,263
)
Net change in accumulated dividends on Series A preferred equity facility
398,541
(4,718
)
497,790
5,394
Distributions of incentive allocation to the General Partner from:
Net investment income
(4,838,534
)
(3,767,604
)
(14,742,130
)
(10,867,837
)
Net change in reserve for incentive allocation
-
901,035
-
467,419
Net increase in net assets applicable to common shareholders resulting from operations
$
17,467,937
$
11,466,274
$
56,977,873
$
41,601,674
Basic and diluted earnings per common share
$
0.36
$
0.29
$
1.17
$
1.11
Basic and diluted weighted average common shares outstanding
48,957,567
40,079,914
48,858,263
37,507,497
See accompanying notes to the consolidated financial statements.
TCP Capital Corp.

Consolidated Statements of Changes in Net Assets

Common Stock
Paid in Capital
Accumulated
Net Investment
Accumulated
Net Realized
Accumulated
Net Unrealized
Non-controlling
Total Net
Shares
Par Amount
in Excess of Par
Income
Losses
Depreciation
Interest
Assets
Balance at December 31, 2013
36,199,916
$
36,200
$
667,842,020
$
24,016,095
$
(105,800,278
)
$
(35,314,199
)
$
(1,168,583
)
$
549,611,255
Issuance of common stock in public offering, net
12,110,000
12,110
201,127,367
-
-
-
-
201,139,477
Issuance of common stock from at the market offerings, net
400,255
400
6,420,026
-
-
-
-
6,420,426
Issuance of common stock from dividend reinvestment plan
456
-
7,687
-
-
-
-
7,687
Issuance of convertible debt
-
-
2,515,594
-
-
-
-
2,515,594
Net investment income
-
-
-
77,292,563
-
-
-
77,292,563
Net realized and unrealized loss
-
-
-
-
(21,118,867
)
(6,185,711
)
-
(27,304,578
)
Dividends on Series A preferred equity facility
-
-
-
(1,438,172
)
-
-
-
(1,438,172
)
General Partner incentive allocation
-
-
-
(15,170,877
)
-
-
1,168,583
(14,002,294
)
Regular dividends paid to common shareholders
-
-
-
(58,867,403
)
-
-
-
(58,867,403
)
Special dividends paid to common shareholders
-
-
-
(4,245,526
)
-
-
-
(4,245,526
)
Tax reclassification of stockholders'equity in accordance with generally accepted accounting principles
-
-
(808,813
)
297,701
511,112
-
-
-
Balance at December 31, 2014
48,710,627
$
48,710
$
877,103,880
$
21,884,381
$
(126,408,033
)
$
(41,499,910
)
$
-
$
731,129,028
Issuance of common stock from at the market offerings, net
248,614
249
3,945,817
-
-
-
-
3,946,066
Issuance of common stock from dividend reinvestment plan
404
-
6,012
-
-
-
-
6,012
Repurchase of common stock
(25,147
)
(25
)
(372,818
)
(372,843
)
Gain on repurchase of Series A preferred interests
-
-
-
-
1,675,000
-
-
1,675,000
Net investment income
-
-
-
74,464,782
-
-
-
74,464,782
Net realized and unrealized gain (loss)
-
-
-
-
(3,693,762
)
28,123
-
(3,665,639
)
Dividends on Series A preferred equity facility
-
-
-
(754,140
)
-
-
-
(754,140
)
General Partner incentive allocation
-
-
-
(14,742,130
)
-
-
-
(14,742,130
)
Regular dividends paid to common shareholders
-
-
-
(52,786,506
)
-
-
-
(52,786,506
)
Balance at September 30, 2015
48,934,498
$
48,934
$
880,682,891
$
28,066,387
$
(128,426,795
)
$
(41,471,787
)
$
-
$
738,899,630

See accompanying notes to the consolidated financial statements.
TCP Capital Corp.

Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended September 30,
2015
2014
Operating activities
Net increase in net assets applicable to common shareholders resulting from operations
$
56,977,873
$
41,601,674
Adjustments to reconcile net increase in net assets applicable to common shareholders resulting from operations to net cash used in operating activities:
Net realized loss
3,693,762
4,933,718
Change in net unrealized appreciation/depreciation of investments
(374,026
)
(2,614,461
)
Gain on repurchase of Series A preferred interests
(1,675,000
)
-
Dividends paid on Series A preferred equity facility
1,251,930
1,083,263
Net change in accumulated dividends on Series A preferred equity facility
(497,790
)
(5,394
)
Net change in reserve for incentive allocation
-
(467,419
)
Accretion of original issue discount on investments
(9,198,452
)
(3,044,889
)
Net accretion of market discount/premium
(54,404
)
(1,152,021
)
Accretion of original issue discount on convertible debt
308,402
114,671
Interest and dividend income paid in kind
(4,854,335
)
(4,366,287
)
Amortization of deferred debt issuance costs
1,623,333
1,347,442
Changes in assets and liabilities:
Purchases of investment securities
(418,493,733
)
(481,674,735
)
Proceeds from sales, maturities and pay downs of investments
305,505,796
177,994,806
Increase in accrued interest income - companies less than 5% owned
(4,039,131
)
(3,394,734
)
Increase in accrued interest income - companies 5% to 25% owned
(496,698
)
(235,265
)
Decrease in accrued interest income - companies more than 25% owned
10,957
9,790
Decrease in receivable for investments sold
8,991,647
3,605,964
Decrease (increase) in prepaid expenses and other assets
795,661
(991,312
)
Increase (decrease) in payable for investments purchased
5,798,002
(13,456,911
)
Increase (decrease) in payable to the Advisor
271,345
(709,816
)
Increase in interest payable
2,069,047
2,051,097
Increase in incentive allocation payable
535,494
448,704
Decrease in accrued expenses and other liabilities
(584,783
)
(273,166
)
Net cash used in operating activities
(52,435,104
)
(279,195,281
)
Financing activities
Borrowings
415,300,000
519,500,000
Repayments of debt
(169,000,000
)
(293,000,000
)
Repurchase of Series A preferred interests
(132,325,000
)
-
Payments of debt issuance costs
(3,766,618
)
(5,866,168
)
Dividends paid on Series A preferred equity facility
(1,251,930
)
(1,083,263
)
Regular dividends paid to common shareholders
(52,786,506
)
(43,141,625
)
Repurchase of common shares
(372,843
)
-
Proceeds from shares issued in connection with dividend reinvestment plan
6,012
5,509
Proceeds from common shares sold, net of underwriting and offering costs
3,946,066
103,940,721
Net cash provided by financing activities
59,749,181
280,355,174
Net increase in cash and cash equivalents
7,314,077
1,159,893
Cash and cash equivalents at beginning of period
27,268,792
22,984,182
Cash and cash equivalents at end of period
$
34,582,869
$
24,144,075
Supplemental cash flow information
Interest payments
$
8,110,934
$
1,846,399
Excise tax payments
$
877,879
$
938,460

See accompanying notes to the consolidated financial statements.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2015

1. Organization and Nature of Operations

TCP Capital Corp. (the “Company”) is a Delaware corporation formed on April 2, 2012 as an externally managed, closed-end, non-diversified management investment company. The Company elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company’s investment objective is to achieve high total returns through current income and capital appreciation, with an emphasis on principal protection. The Company invests primarily in the debt of middle-market companies as well as small businesses, including senior secured loans, junior loans, mezzanine debt and bonds. Such investments may include an equity component, and, to a lesser extent, the Company may make equity investments directly. The Company was formed through the conversion on April 2, 2012 of the Company’s predecessor, Special Value Continuation Fund, LLC, from a limited liability company to a corporation in a non-taxable transaction, leaving the Company as the surviving entity. On April 3, 2012, the Company completed its initial public offering.

Investment operations are conducted in Special Value Continuation Partners, LP, a Delaware limited partnership (the “Partnership”), of which the Company owns 100% of the common limited partner interests, or in one of the Partnership’s wholly owned subsidiaries, TCPC Funding I, LLC, a Delaware limited liability company (“TCPC Funding”) and TCPC SBIC, LP, a Delaware limited partnership (the “SBIC”). The Partnership has also elected to be treated as a BDC under the 1940 Act. The SBIC was organized in June 2013, and on April 22, 2014, received a license from the United States Small Business Administration (the “SBA”) to operate as a small business investment company under the provisions of Section 301(c) of the Small Business Investment Act of 1958. These consolidated financial statements include the accounts of the Company, the Partnership, TCPC Funding and the SBIC. All significant intercompany transactions and balances have been eliminated in the consolidation.

The Company has elected to be treated as a regulated investment company (“RIC”) for U.S. federal income tax purposes. As a RIC, the Company will not be taxed on its income to the extent that it distributes such income each year and satisfies other applicable income tax requirements. The Partnership, TCPC Funding, and the SBIC have elected to be treated as partnerships for U.S. federal income tax purposes.

The general partner of the Partnership is SVOF/MM, LLC, which also serves as the administrator of the Company and the Partnership (the “Administrator” or the “General Partner”). The managing member of the General Partner is Tennenbaum Capital Partners, LLC (the “Advisor”), which serves as the investment manager to the Company, the Partnership, TCPC Funding, and the SBIC. Most of the equity interests in the General Partner are owned directly or indirectly by the Advisor and its employees.

Company management consists of the Advisor and the Company’s board of directors. Partnership management consists of the General Partner and the Partnership’s board of directors. The Advisor and the General Partner direct and execute the day-to-day operations of the Company and the Partnership, respectively, subject to oversight from the respective board of directors, which sets the broad policies of the Company and performs certain functions required by the 1940 Act in the case of the Partnership.  The board of directors of the Partnership has delegated investment management of the Partnership’s assets to the Advisor. Each board of directors consists of five persons, three of whom are independent.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The Company is an investment company following accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies . The following is a summary of the significant accounting policies of the Company and the Partnership.

Reclassifications

Certain prior period amounts relating to lease income have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although management believes these estimates and assumptions to be reasonable, actual results could differ from those estimates and differences could be material.

Investment Valuation

The Company’s investments are generally held by the Partnership, TCPC Funding, or the SBIC. Management values investments at fair value in accordance with GAAP, based upon the principles and methods of valuation set forth in policies adopted by the board of directors. Fair value is generally defined as the amount for which an investment would be sold in an orderly transaction between market participants at the measurement date.

All investments are valued at least quarterly based on affirmative pricing or quotations from independent third- party sources, with the exception of investments priced directly by the Advisor which together comprise, in total, less than 5% of the capitalization of the Partnership. Investments listed on a recognized exchange or market quotation system, whether U.S. or foreign, are valued for financial reporting purposes as of the last business day of the reporting period using the closing price on the date of valuation. Liquid investments not listed on a recognized exchange or market quotation system are valued using prices provided by a nationally recognized pricing service or by using quotations from broker-dealers.

Investments not priced by a pricing service or for which market quotations are either not readily available or are determined to be unreliable are priced at fair value using affirmative valuations performed by independent valuation services approved by the board of directors or, for investments aggregating less than 5% of the total capitalization of the Partnership, using valuations determined directly by the Advisor.  Such valuations are determined under a documented valuation policy that has been reviewed and approved by the boards of directors.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2. Summary of Significant Accounting Policies (continued)

Pursuant to this policy, investment professionals of the Advisor provide recent portfolio company financial statements and other reporting materials to independent valuation firms as applicable, which firms evaluate such materials along with relevant observable market data to conduct independent appraisals each quarter, and their preliminary valuation conclusions are documented and discussed with senior management of the Advisor.  The audit committee of the board of directors discusses the valuations, and the board of directors approves the fair value of the investments in good faith based on the input of the Advisor, the respective independent valuation firms as applicable, and the audit committee of the board of directors.

Generally, to increase objectivity in valuing the investments, the Advisor will utilize external measures of value, such as public markets or third-party transactions, whenever possible. The Advisor’s valuation is not based on long-term work-out value, immediate liquidation value, nor incremental value for potential changes that may take place in the future. The values assigned to investments that are valued by the Advisor are based on available information and do not necessarily represent amounts that might ultimately be realized, as these amounts depend on future circumstances and cannot reasonably be determined until the individual investments are actually liquidated. The foregoing policies apply to all investments, including those in companies and groups of affiliated companies aggregating more than 5% of the Company’s assets.

Fair valuations of investments in each asset class are determined using one or more methodologies including the market approach, income approach, or, in the case of recent investments, the cost approach, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present value amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that may be taken into account include, as relevant:  available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, merger and acquisition comparables, the principal market in which the investment trades and enterprise values, among other factors.

Investments may be categorized based on the types of inputs used in valuing such investments. The level in the GAAP valuation hierarchy in which an investment falls is based on the lowest level input that is significant to the valuation of the investment in its entirety. Transfers between levels are recognized as of the beginning of the reporting period.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2. Summary of Significant Accounting Policies (continued)

At September 30, 2015, the Company’s investments were categorized as follows:

Level
Basis for Determining Fair Value
Bank Debt
Other
Corporate Debt
Equity
Securities
1
Quoted prices in active markets for identical assets
$
-
$
-
$
-
2
Other observable market inputs *
101,347,633
43,940,470
-
3
Independent third-party pricing sources that employ significant unobservable inputs
986,414,413
94,850,874
39,055,086
3
Advisor valuations with significant unobservable inputs
1,124,503
-
2,427,660
Total
$
1,088,886,549
$
138,791,344
$
41,482,746

* For example, quoted prices in inactive markets or quotes for comparable investments

Unobservable inputs used in the fair value measurement of Level 3 investments as of September 30, 2015 included the following:

Asset Type
Fair Value
Valuation Technique
Unobservable Input
Range (Weighted Avg.)
Bank Debt
$
763,574,930
Market rate approach
Market yields
4.3% - 22.7% (12.0%)
152,703,450
Market quotations
Indicative bid/ask quotes
1 - 4 (1)
45,619,986
Market comparable companies
Revenue multiples
0.4x – 5.8x (3.0x)
25,640,550
Market comparable companies
EBITDA multiples
3.3x – 16.5x (10.1x)
Other Corporate Debt
4,889,204
Market rate approach
Market yields
13.2% (13.2%)
80,693,670
Market quotations
Indicative bid/ask quotes
1 - 2 (1)
9,268,000
Market comparable companies
EBITDA multiples
7.3x (7.3x)
Equity
7,801,506
Market rate approach
Market yields
5.9% - 26.2% (8.0%)
6,553,914
Market quotations
Indicative bid/ask quotes
1 - 2(1)
3,020,806
Market comparable companies
Revenue multiples
0.4x – 6.0x (3.0x)
24,106,520
Market comparable companies
EBITDA multiples
4.8x – 11.0x (7.0x)
$
1,123,872,536

Generally, a change in an unobservable input may result in a change to the value of an investment as follows:
Input
Impact to Value if
Input Increases
Impact to Value if
Input Decreases
Market yields
Decrease
Increase
Revenue multiples
Increase
Decrease
EBITDA multiples
Increase
Decrease
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2. Summary of Significant Accounting Policies (continued)

Changes in investments categorized as Level 3 during the three months ended September 30, 2015 were as follows:

Independent Third-Party Valuation
Bank Debt
Other
Corporate Debt
Equity
Securities
Beginning balance
$
908,884,909
$
96,136,194
$
38,634,245
Net realized and unrealized gains (losses)
(3,214,866
)
(1,285,320
)
6,167,397
Acquisitions
111,630,494
-
2,750,607
Dispositions
(30,596,992
)
-
(8,497,163
)
Reclassifications within Level 3 **
(289,132
) †
-
-
Ending balance
$
986,414,413
$
94,850,874
$
39,055,086
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)
$
(1,862,003
)
$
(1,285,320
)
$
4,284,045

**
Comprised of one investment that reclassified from Advisor Valuation
†
Negative balance relates to an unfunded commitment that was acquired and valued at a discount

Advisor Valuation
Bank Debt
Other
Corporate Debt
Equity
Securities
Beginning balance
$
(383,918
) †
$
-
$
2,455,417
Net realized and unrealized gains (losses)
149,870
-
(26,540
)
Acquisitions
1,076,312
-
-
Dispositions
(6,893
)
-
(1,217
)
Reclassifications within Level 3 *
289,132
-
-
Ending balance
$
1,124,503
$
-
$
2,427,660
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)
$
149,870
$
-
$
201,750

*
Comprised of one investment that reclassified to Independent Third-Party Valuation
†
Negative balance relates to an unfunded commitment that was acquired and valued at a discount

There were no transfers between Level 1 and 2 during the three months ended September 30, 2015.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2. Summary of Significant Accounting Policies (continued)

Changes in investments categorized as Level 3 during the nine months ended September 30, 2015 were as follows:

Independent Third-Party Valuation
Bank Debt
Other
Corporate Debt
Equity
Securities
Beginning balance
$
840,538,179
$
56,621,975
$
30,618,142
Net realized and unrealized gains (losses)
(14,665,802
)
897,833
13,506,731
Acquisitions
406,576,197
300,149
5,266,261
Dispositions
(223,620,986
)
(2,516,390
)
(10,336,048
)
Transfers out of Level 3 ‡
(36,143,175
)
(16,311,095
)
-
Transfers into Level 3 §
13,730,000
51,247,224
-
Reclassifications within Level 3 **
-
4,611,178
-
Ending balance
$
986,414,413
$
94,850,874
$
39,055,086
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)
$
(11,815,486
)
$
841,634
$
7,600,170

‡
Comprised of five investments that transferred to Level 2 due to increased observable market activity
§
Comprised of three investments that transferred from Level 2 due to reduced trading volumes
**
Comprised of one investment that reclassified from Advisor Valuation

Advisor Valuation
Bank Debt
Other
Corporate Debt
Equity
Securities
Beginning balance
$
-
$
4,611,178
$
2,324,629
Net realized and unrealized gains (losses)
134,445
-
104,248
Acquisitions
1,725,243
-
-
Dispositions
(735,185
)
-
(1,217
)
Reclassifications within Level 3 *
-
(4,611,178
)
-
Ending balance
$
1,124,503
$
-
$
2,427,660
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)
$
134,445
$
-
$
332,538

* Comprised of one investment that reclassified to Independent Third-Party Valuation

There were no transfers between Level 1 and 2 during the nine months ended September 30, 2015.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2. Summary of Significant Accounting Policies (continued)

At December 31, 2014, the Company’s investments were categorized as follows:

Level
Basis for Determining Fair Value
Bank Debt
Other
Corporate Debt
Equity
Securities
1
Quoted prices in active markets for identical assets
$
-
$
-
$
-
2
Other observable market inputs *
131,946,338
79,875,445
-
3
Independent third-party pricing sources that employ significant unobservable inputs
840,538,179
56,621,975
30,618,142
3
Advisor valuations with significant unobservable inputs
-
4,611,178
2,324,629
Total
$
972,484,517
$
141,108,598
$
32,942,771

* For example, quoted prices in inactive markets or quotes for comparable investments

Changes in investments categorized as Level 3 during the three months ended September 30, 2014 were as follows:

Independent Third-Party Valuation
Bank Debt
Other
Corporate Debt
Equity
Securities
Beginning balance
$
580,830,991
$
50,098,573
$
26,851,302
Net realized and unrealized gains (losses)
(2,348,229
)
(266,272
)
996,648
Acquisitions
205,639,764
5,624
4,046,906
Dispositions
(33,252,537
)
-
(1,006,480
)
Transfers out of Level 3 ‡
(28,782,948
)
-
-
Transfers into Level 3 §
17,131,420
2,682,500
-
Reclassifications within Level 3 **
(455,459
) †
-
1,115,183
Ending balance
$
738,763,002
$
52,520,425
$
32,003,559
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)
$
(1,011,779
)
$
(266,272
)
$
629,452

‡
Comprised of three investments that transferred to Level 2 due to increased observable market activity
§
Comprised of three investments that transferred from Level 2 due to reduced trading volumes
**
Comprised of three investments that reclassified from Advisor Valuation and one investment that reclassified to Advisor Valuation
†
Negative balance relates to an unfunded commitment that was acquired and valued at a discount
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2. Summary of Significant Accounting Policies (continued)

Advisor Valuation
Bank Debt
Other
Corporate Debt
Equity
Securities
Beginning balance
$
(455,459
) †
$
4,307,107
$
2,389,805
Net realized and unrealized gains (losses)
-
24,993
16,074
Reclassifications within Level 3 *
455,459
-
(1,115,183
)
Ending balance
$
-
$
4,332,100
$
1,290,696
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)
$
-
$
24,993
$
16,075

*
Comprised of three investments that reclassified to Independent Third-Party Valuation and one investment that reclassified from Independent Third-Party Valuation
†
Negative balance relates to an unfunded commitment that was acquired and valued at a discount

There were no transfers between Level 1 and 2 during the three months ended September 30, 2014.

Changes in investments categorized as Level 3 during the nine months ended September 30, 2014 were as follows:

Independent Third-Party Valuation
Bank Debt
Other
Corporate Debt
Equity
Securities
Beginning balance
$
515,953,643
$
53,334,634
$
36,066,746
Net realized and unrealized gains (losses)
47,146
(14,913
)
(1,335,910
)
Acquisitions
424,280,318
174,943
5,882,955
Dispositions
(115,964,311
)
(22,549,239
)
(10,046,998
)
Transfers out of Level 3 †
(89,614,594
)
-
-
Transfers into Level 3 ‡
4,060,800
21,575,000
-
Reclassifications within Level 3 §
-
-
1,436,766
Ending balance
$
738,763,002
$
52,520,425
$
32,003,559
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)
$
1,089,298
$
1,005,398
$
(1,075,632
)

† Comprised of nine investments that transferred to Level 2 due to increased observable market activity
‡ Comprised of two investments that transferred from Level 2 due to reduced trading volumes
§ Comprised of two investments that reclassified from Advisor Valuation and one that reclassified to Advisor Valuation

TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2. Summary of Significant Accounting Policies (continued)

Advisor Valuation
Bank Debt
Other
Corporate Debt
Equity
Securities
Beginning balance
$
4,060,800
$
7,631,335
$
2,837,707
Net realized and unrealized losses
-
(504,281
)
(313,703
)
Acquisitions
-
4,303,962
230,937
Dispositions
(4,060,800
)
(7,098,916
)
(27,479
)
Reclassifications within Level 3 **
-
-
(1,436,766
)
Ending balance
$
-
$
4,332,100
$
1,290,696
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)
$
-
$
166,619
$
(341,183
)

**
Comprised of two investments that reclassified to Independent Third-Party Valuation and one that reclassified from Independent Third-Party Valuation

There were no transfers between Level 1 and 2 during the nine months ended September 30, 2014.

Investment Transactions

Investment transactions are recorded on the trade date, except for private transactions that have conditions to closing, which are recorded on the closing date. The cost of investments purchased is based upon the purchase price plus those professional fees which are specifically identifiable to the investment transaction. Realized gains and losses on investments are recorded based on the specific identification method, which typically allocates the highest cost inventory to the basis of investments sold.

Cash and Cash Equivalents

Cash consists of amounts held in accounts with brokerage firms and the custodian bank. Cash equivalents consist of highly liquid investments with an original maturity of generally three months or less. Cash and cash equivalents are carried at amortized cost which approximates fair value. Cash equivalents are classified as Level 1 in the GAAP valuation hierarchy.

Restricted Investments

The Company may invest without limitation in instruments that are subject to legal or contractual restrictions on resale. These instruments generally may be resold to institutional investors in transactions exempt from registration or to the public if the securities are registered. Disposal of these investments may involve time-consuming negotiations and additional expense, and prompt sale at an acceptable price may be difficult Information regarding restricted investments is included at the end of the Consolidated Schedule of Investments. Restricted investments, including any restricted investments in affiliates, are valued in accordance with the investment valuation policies discussed above.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2. Summary of Significant Accounting Policies (continued)

Foreign Investments

The Company may invest in instruments traded in foreign countries and denominated in foreign currencies. Foreign currency denominated investments comprised approximately 1.4% and 1.7% of total investments at September 30, 2015 and December 31, 2014, respectively. Such positions were converted at the respective closing foreign exchange rates in effect at September 30, 2015 and December 31, 2014 and reported in U.S. dollars. Purchases and sales of investments and income and expense items denominated in foreign currencies, when they occur, are translated into U.S. dollars based on the foreign exchange rates in effect on the respective dates of such transactions. The portion of gains and losses on foreign investments resulting from fluctuations in foreign currencies is included in net realized and unrealized gain or loss from investments.

Investments in foreign companies and securities of foreign governments may involve special risks and considerations not typically associated with investing in U.S. companies and securities of the U.S. government. These risks include, among other things, revaluation of currencies, less reliable information about issuers, different transaction clearance and settlement practices, and potential future adverse political and economic developments. Moreover, investments in foreign companies and securities of foreign governments and their markets may be less liquid and their prices more volatile than those of comparable U.S. companies and the U.S. government.

Derivatives

In order to mitigate certain currency exchange and interest rate risks, the Partnership has entered into certain swap and option transactions. All derivatives are reported at their gross amounts as either assets or liabilities in the Consolidated Statements of Assets and Liabilities. The transactions entered into are accounted for using the mark-to-market method with the resulting change in fair value recognized in earnings for the current period. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in interest rates and the value of foreign currency relative to the U.S. dollar. The Partnership is required under the terms of its derivative agreement to pledge assets as collateral to secure its obligation under the derivatives. As of September 30, 2015, $492,045 of cash was pledged as collateral under the Partnership’s derivative instrument.

The Partnership did not enter into any new derivative transactions during the nine months ended September 30, 2015. At September 30, 2015, the Partnership held an interest rate cap with a notional amount of $25,000,000 and a cross currency basis swap with a notional amount of $16,401,467. Gains and losses from derivatives during the nine months ended September 30, 2015 were included in net realized and unrealized loss on investments in the Consolidated Statements of Operations as follows:
Instrument
Realized Gains
(Losses)
Unrealized Gains
(Losses)
Cross currency basis swap
$
-
$
1,151,138
Interest rate cap
-
(497
)
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2. Summary of Significant Accounting Policies (continued)

The Partnership did not enter into any new derivative transactions during the nine months ended September 30, 2014. At September 30, 2014, the Partnership held an interest rate cap with a notional amount of $25,000,000 and a cross currency basis swap with a notional amount of $16,401,467. Gains and losses from derivatives during the nine months ended September 30, 2014 were included in net realized and unrealized loss on investments in the Consolidated Statements of Operations as follows:

Instrument
Realized Gains
(Losses)
Unrealized Gains
(Losses)
Cross currency basis swaps
$
-
$
1,402,313
Interest rate cap
-
(12,812
)

Valuations of derivatives held at September 30, 2015 and 2014 were determined using observable market inputs other than quoted prices in active markets for identical assets and, accordingly, are classified as Level 2 in the GAAP valuation hierarchy.

Debt Issuance Costs

Costs of approximately $1.6 million and $1.5 million were incurred during 2015 and 2013, respectively, in connection with the amendment and extension of the Partnership’s credit facility (see Note 4). Costs of approximately $1.9 million, $1.8 million and $1.6 million were incurred during 2015, 2014 and 2013, respectively, in connection with placing and extending TCPC Funding’s revolving credit facility (see Note 4). Costs of approximately $3.4 million were incurred in 2014 in connection with placing the Company’s unsecured convertible notes (see Note 4). Costs of approximately $0.3 million and $1.5 million were incurred during 2015 and 2014, respectively, in connection with placing the SBIC’s SBA debentures (see Note 4). These costs were deferred and are being amortized on a straight-line basis over the estimated life of the respective instruments. The impact of utilizing the straight-line amortization method versus the effective-interest method is not material to the operations of the Company or the Partnership.

Revenue Recognition

Interest and dividend income, including income paid in kind, is recorded on an accrual basis. Origination, structuring, closing, commitment and other upfront fees, including original issue discounts, earned with respect to capital commitments are generally amortized or accreted into interest income over the life of the respective debt investment, as are end-of-term or exit fees receivable upon repayment of a debt investment. Other fees, including certain amendment fees, prepayment fees and commitment fees on broken deals, are recognized as earned. Prepayment fees and similar income due upon the early repayment of a loan or debt security are recognized when receivable and are included in interest income.

Certain debt investments are purchased at a discount to par as a result of the underlying credit risks and financial results of the issuer, as well as general market factors that influence the financial markets as a whole. GAAP generally requires that discounts on the acquisition of corporate bonds, municipal bonds and treasury bonds be amortized using the effective-interest or constant-yield method assuming there are no questions as to collectability. When principal payments on a loan are received in an amount in excess of the loan’s amortized cost, the excess principal payments are recorded as interest income.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2. Summary of Significant Accounting Policies (continued)

Income Taxes

The Company intends to comply with the applicable provisions of the Internal Revenue Code of 1986, as amended, pertaining to regulated investment companies 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. The income or loss of the Partnership, TCPC Funding and the SBIC is reported in the respective partners’ income tax returns. In accordance with ASC Topic 740 – Income Taxes , the Company recognizes in its consolidated financial statements the effect of a tax position when it is determined that such position is more likely than not, based on the technical merits, to be sustained upon examination. As of September 30, 2015, all tax years of the Company, the Partnership, TCPC Funding and the SBIC since January 1, 2011 remain subject to examination by federal tax authorities. No such examinations are currently pending.

Cost and unrealized appreciation and depreciation of the Partnership’s investments (including derivatives) for U.S. federal income tax purposes at September 30, 2015 and December 31, 2014 were as follows:

September 30, 2015
December 31, 2014
Unrealized appreciation
$
39,427,027
$
32,342,656
Unrealized depreciation
(80,333,641
)
(73,638,935
)
Net unrealized depreciation
$
(40,906,614
)
$
(41,296,279
)
Cost
$
1,312,936,001
$
1,189,550,272

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition . Under this new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 applies to all entities and, for public entities, is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early application is permitted, but no earlier than annual periods beginning after December 15, 2016 and interim periods within that reporting period. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs , which generally requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. ASU 2015-03 is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. In August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements – Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015, which clarified the SEC staff’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements. ASU 2015-15 should be adopted concurrent with the adoption of ASU 2015-03. The Company does not expect adoption of this guidance to have a material impact on its consolidated financial statements.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015
3. Management Fees, Incentive Compensation and Other Expenses

The Company’s management fee is calculated at an annual rate of 1.5% of total assets (excluding cash and cash equivalents) on a consolidated basis as of the beginning of each quarter and is payable to the Advisor quarterly in arrears.

Incentive compensation is only paid to the extent the total performance of the Company exceeds a cumulative 8% annual return since January 1, 2013 (the “Total Return Hurdle”). Beginning January 1, 2013, the incentive compensation equals 20% of net investment income (reduced by preferred dividends) and 20% of net realized gains (reduced by any net unrealized losses), subject to the Total Return Hurdle. The incentive compensation is payable quarterly in arrears as an allocation and distribution to the General Partner and is calculated as the difference between cumulative incentive compensation earned since January 1, 2013 and cumulative incentive compensation paid since January 1, 2013. A reserve for incentive compensation is accrued based on the amount of additional incentive compensation that would have been distributable to the General Partner assuming a hypothetical liquidation of the Company at net asset value on the balance sheet date. The General Partner’s equity interest in the Partnership is comprised entirely of such reserve amount, if any, and is reported as a non-controlling interest in the consolidated financial statements of the Company. As of September 30, 2015 and December 31, 2014, no such reserve was accrued.

The Company and the Partnership bear all respective expenses incurred in connection with the business of the Company and the Partnership, including fees and expenses of outside contracted services, such as custodian, administrative, legal, audit and tax preparation fees, costs of valuing investments, insurance costs, brokers’ and finders’ fees relating to investments, and any other transaction costs associated with the purchase and sale of investments.
4. Leverage

Leverage is comprised of convertible senior unsecured notes issued by the Company (the “Convertible Notes”), amounts outstanding under a term loan issued by the Partnership (the “Term Loan”), amounts outstanding under a senior secured revolving credit facility issued by the Partnership (the “Revolving Credit Facility,” and together with the Term Loan, the “Partnership Facility”), amounts outstanding under a senior secured revolving credit facility issued by TCPC Funding (the “TCPC Funding Facility”), debentures guaranteed by the SBA (the “SBA Debentures”), and amounts outstanding under a preferred equity facility issued by the Partnership (the “Preferred Interests”) which were fully repurchased and retired by the Partnership on September 3, 2015.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015
4. Leverage (continued)
Total leverage outstanding and available at September 30, 2015 was as follows:

Maturity
Rate
Carrying Value †
Available
Total Capacity
Partnership Facility
Revolving Credit Facility
2018
L+1.75%
*
$
109,000,000
$
7,000,000
$
116,000,000
Term Loan
2018
L+1.75%
*
100,500,000
-
100,500,000
TCPC Funding Facility
2020
L+2.50%
*§
221,000,000
129,000,000
350,000,000
Convertible Notes ($108 million par)
2019
5.25%
106,005,233
-
106,005,233
SBA Debentures
2024-2025
2.84%
**
38,800,000
36,200,000
75,000,000
‡
Total leverage
$
575,305,233
$
172,200,000
$
747,505,233
*
Based on either LIBOR or the lender’s cost of funds, subject to certain limitations
†
Except for the Convertible Notes, all carrying values are the same as the principal amounts outstanding
§
Or L+2.25% subject to certain funding requirements
**
Weighted-average interest rate, excluding fees of 0.36%
‡
Anticipated total capacity of $150 million
Total leverage outstanding and available at December 31, 2014 was as follows:

Maturity
Rate
Carrying Value †
Available
Total Capacity
Partnership Facility
Revolving Credit Facility
2016
L+2.50%
*
$
70,000,000
$
46,000,000
$
116,000,000
TCPC Funding Facility
2017
L+2.50%
*
125,000,000
125,000,000
250,000,000
Convertible Notes ($108 million par)
2019
5.25%
105,696,830
-
105,696,830
SBA Debentures
2024-2025
3.02%
**
28,000,000
47,000,000
75,000,000
‡
Preferred Interests
2016
L+0.85%
*
134,000,000
-
134,000,000
Total leverage
$
462,696,830
$
218,000,000
$
680,696,830

*
Based on either LIBOR or the lender’s cost of funds, subject to certain limitations
†
Except for the Convertible Notes, all carrying values are the same as the principal amounts outstanding
**
Interest rate on pooled loans of $18.5 million, excluding fees of 0.36%. As of December 31, 2014, the remaining $9.5 million of the outstanding amount was not yet pooled, and bore interest at a temporary rate of 0.56% plus fees of 0.36% through March 25, 2015, the date of the next SBA pooling
‡
Anticipated total capacity of $150 million

The combined weighted-average interest and dividend rates on total leverage outstanding at September 30, 2015 and December 31, 2014 were 2.96% and 2.86%, respectively.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

4. Leverage (continued )

Total expenses related to debt include:

Nine Months Ended September 30,
2015
2014
Interest expense
$
10,488,383
$
4,012,167
Amortization of deferred debt issuance costs
1,623,333
1,347,442
Commitment fees
919,649
650,209
Total
$
13,031,365
$
6,009,818

Amounts outstanding under the Partnership Facility, the TCPC Funding Facility, the Convertible Notes and the SBA Debentures are carried at amortized cost in the Consolidated Statements of Assets and Liabilities. As of September 30, 2015, the estimated fair values of the Partnership Facility and the SBA Debentures approximated their carrying values, and the TCPC Funding Facility and Convertible Notes had estimated fair values of $223.1 million and $107.5 million, respectively. The estimated fair values of the Partnership Facility, the TCPC Funding Facility, the Convertible Notes and the SBA Debentures are determined by discounting projected remaining payments using market interest rates for borrowings of the Company and entities with similar credit risks at the measurement date. At September 30, 2015, the fair values of the Partnership Facility, the TCPC Funding Facility, the Convertible Notes and the SBA Debentures as prepared for disclosure purposes were deemed to be Level 3 in the GAAP valuation hierarchy.

Convertible Notes

On June 11, 2014, the Company issued $108 million of convertible senior unsecured notes that mature on December 15, 2019, unless previously converted or repurchased in accordance with their terms. The Convertible Notes are general unsecured obligations of the Company, and rank structurally junior to the Partnership Facility and the TCPC Funding Facility. The Company does not have the right to redeem the Convertible Notes prior to maturity. The Convertible Notes bear interest at an annual rate of 5.25%, payable semi-annually. In certain circumstances, the Convertible Notes will be convertible into cash, shares of the Company’s common stock or a combination of cash and shares of common stock (such combination to be at the Company’s election), at an initial conversion rate of 50.9100 shares of common stock per one thousand dollar principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $19.64 per share of common stock, subject to customary anti-dilution adjustments. The initial conversion price was approximately 12.5% above the $17.46 per share closing price of the Company’s common stock on June 11, 2014. At September 30, 2015, the principal amount of the Convertible Notes exceeded the value of the conversion rate multiplied by the per share closing price of the Company’s common stock. Therefore, no additional shares have been added to the calculation of diluted earnings per common share and weighted average common shares outstanding.

Prior to the close of business on the business day immediately preceding June 15, 2019, holders may convert their Convertible Notes only under certain circumstances set forth in the indenture governing the terms of the Convertible Notes (the “Indenture”). On or after June 15, 2019 until the close of business on the scheduled trading day immediately preceding December 15, 2019, holders may convert their Convertible Notes at any time. Upon conversion, the Company will pay or deliver, as the case may be, at its election, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, subject to the requirements of the Indenture.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015
4. Leverage (continued)
The Convertible Notes are accounted for in accordance with ASC Topic 470-20 – Debt with Conversion and Other Options . Upon conversion of any Convertible Note, the Company intends to pay the outstanding principal amount in cash and to the extent that the conversion value exceeds the principal amount, has the option to pay the excess amount in cash or shares of common stock (or a combination of cash and shares), subject to the requirements of the Indenture. The Company has determined that the embedded conversion option in the Convertible Notes is not required to be separately accounted for as a derivative under GAAP. At the time of issuance the estimated values of the debt and equity components of the Convertible Notes were approximately 97.7% and 2.3%, respectively.

The original issue discount equal to the equity component of the Convertible Notes was recorded in “paid-in capital in excess of par” in the accompanying Consolidated Statements of Assets and Liabilities. As a result, the Company will record interest expense comprised of both stated interest and accretion of the original issue discount. At the time of issuance, the equity component was $2,515,594. As of September 30, 2015, the components of the carrying value of the Convertible Notes were as follows:

Principal amount of debt
$
108,000,000
Original issue discount, net of accretion
(1,994,767
)
Carrying value of debt
$
106,005,233

For the nine months ended September 30, 2015, the components of interest expense for the Convertible Notes were as follows:

Stated interest expense
$
4,252,500
Accretion of original issue discount
308,402
Total interest expense
$
4,560,902

The estimated effective interest rate of the debt component of the Convertible Notes, equal to the stated interest of 5.25% plus the accretion of the original issue discount, was approximately 5.75% for the nine months ended September 30, 2015.

Partnership Facility

The Partnership Facility consists of a $100.5 million fully-drawn senior secured term loan and a senior secured revolving credit facility which provides for amounts to be drawn up to $116 million, subject to certain collateral and other restrictions. The Partnership Facility matures on July 31, 2018. Most of the cash and investments held directly by the Partnership, as well as the net assets of TCPC Funding and the SBIC, are included in the collateral for the facility.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

4. Leverage (continued)

Advances under the Partnership Facility through July 31, 2014 bore interest at an annual rate equal to 0.44% plus either LIBOR or the lender’s cost of funds (subject to a cap of LIBOR plus 20 basis points). Advances under the Partnership Facility for periods from July 31, 2014 through September 3, 2015 bore interest at an annual rate equal to 2.5% plus either LIBOR or the lender’s cost of funds (subject to a cap of LIBOR plus 20 basis points). Advances under the Partnership Facility from September 3, 2015 through July 31, 2016 bear interest at an annual rate equal to 1.75% plus either LIBOR or the lender’s cost of funds (subject to a cap of LIBOR plus 20 basis points). Advances under the Partnership facility from July 31, 2016 through the maturity date of the facility will bear interest at an annual rate of 2.5% plus either LIBOR or the lender’s cost of funds (subject to a cap of LIBOR plus 20 basis points). In addition to amounts due on outstanding debt, the Revolving Credit Facility accrues commitment fees of 0.20% per annum on the unused portion of the facility, or 0.25% per annum when less than $46.4 million in borrowings are outstanding. The facility may be terminated, and any outstanding amounts thereunder may become due and payable, should the Partnership fail to satisfy certain financial or other covenants. As of September 30, 2015, the Partnership was in full compliance with such covenants.

SBA Debentures

As of September 30, 2015, the SBIC is able to issue up to $75 million in SBA Debentures, subject to funded regulatory capital and other customary regulatory requirements. As of September 30 2015, the Partnership had committed $75 million of regulatory capital to the SBIC, $58.0 million of which had been funded. SBA Debentures are non-recourse and may be prepaid at any time without penalty. Once drawn, the SBIC debentures bear an interim interest rate of LIBOR plus 30 basis points. The rate then becomes fixed at the time of SBA pooling, which occurs twice each year, and is set to the then-current 10-year treasury rate plus a spread and an annual SBA charge.

SBA Debentures outstanding as of September 30, 2015 were as follows:

Issuance Date
Maturity
Debenture Amount
Fixed Interest Rate
SBA Annual Charge
September 24, 2014
September 1, 2024
$
18,500,000
3.02
%
0.36
%
March 25, 2015
March 1, 2025
9,500,000
2.52
%
0.36
%
September 23, 2015
September 1, 2025
10,800,000
2.83
%
0.36
%
$
38,800,000
2.84
% *

*
Weighted-average interest rate

TCPC Funding Facility

The TCPC Funding Facility is a senior secured revolving credit facility which provides for amounts to be drawn up to $350 million, subject to certain collateral and other restrictions. The facility’s maturity is March 6, 2020, subject to extension by the lender at the request of TCPC Funding. The facility contains an accordion feature which allows for expansion of the facility to up to $400 million subject to consent from the lender and other customary conditions. The cash and investments of TCPC Funding are included in the collateral for the facility.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015
4. Leverage (continued)

Borrowings under the TCPC Funding Facility bear interest at a rate of LIBOR plus 2.25% per annum, or LIBOR plus 2.50% per annum subject to certain funding requirements, plus an administration fee of 0.25% per annum. In addition to amounts due on outstanding debt, the facility accrues commitment fees of 0.50% per annum on the unused portion of the facility, or 0.75% per annum when the unused portion is greater than 33% of the total facility and an administrative fee of 0.25% per annum. The facility may be terminated, and any outstanding amounts thereunder may become due and payable, should TCPC Funding fail to satisfy certain financial or other covenants. As of September 30, 2015, TCPC Funding was in full compliance with such covenants.

Preferred Interests

As of September 30, 2015, the Partnership had fully repurchased and retired all outstanding Preferred Interests. The Preferred Interests were comprised of 6,700 Series A preferred limited partner interests with a liquidation preference of $20,000 per interest. The Preferred Interests accrued dividends at an annual rate equal to 0.85% plus either LIBOR or the interest holder’s cost of funds (subject to a cap of LIBOR plus 20 basis points).

On June 30, 2015, the Partnership repurchased and retired 1,675 of the previously outstanding 6,700 Preferred Interests at a price of $31,825,000. On September 3, 2015, the Partnership repurchased and retired the remaining 5,025 Preferred Interests outstanding at a price of $100,500,000.

5. Commitments, Contingencies, Concentration of Credit Risk and Off-Balance Sheet Risk

The Partnership, TCPC Funding and the SBIC conduct business with brokers and dealers that are primarily headquartered in New York and Los Angeles and are members of the major securities exchanges. Banking activities are conducted with a firm headquartered in the San Francisco area.

In the normal course of business, investment activities involve executions, settlement and financing of various transactions resulting in receivables from, and payables to, brokers, dealers and the custodian. These activities may expose the Company and the Partnership to risk in the event that such parties are unable to fulfill contractual obligations. Management does not anticipate any material losses from counterparties with whom it conducts business. Consistent with standard business practice, the Company, the Partnership, TCPC Funding and the SBIC enter into contracts that contain a variety of indemnifications, and are engaged from time to time in various legal actions. The maximum exposure under these arrangements and activities is unknown. However, management expects the risk of material loss to be remote.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

5. Commitments, Contingencies, Concentration of Credit Risk and Off-Balance Sheet Risk (continued)

The Consolidated Schedule of Investments includes certain revolving loan facilities and other commitments held by the Partnership with unfunded balances at September 30, 2015 and December 31, 2014 as follows:

Unfunded Balances
Issuer
Maturity
September 30, 2015
December 31, 2014
ABG Intermediate Holdings 2, LLC
5/27/2022
$
534,571
$
N/A
AP Gaming I, LLC
12/20/2018
12,500,000
7,500,000
Acrisure, LLC
11/19/2022
4,680,367
4,482,352
Alpheus Communications, LLC
5/31/2018
1,072,256
749,919
Anuvia Plant Nutrients Holdings, LLC (VitAG)
2/1/2018
4,300,000
4,300,000
Asset International, Inc.
7/31/2020
1,180,920
3,753,551
Blue Coat Systems, Inc.
5/31/2018
N/A
12,000,000
Cargojet Airways, LTD.
1/31/2023
14,457,306
N/A
Central MN Renewables, LLC
1/16/2016
2,100,000
N/A
Daymark Financial Acceptance, LLC
1/12/2020
20,000,000
N/A
Edmentum, Inc.
6/9/2020
3,368,586
N/A
Enerwise Global Technologies, Inc.
11/30/2017
7,500,000
7,500,000
InMobi, Inc.
9/1/2018
11,854,959
N/A
MediMedia USA, Inc.
5/20/2018
3,642,500
3,875,000
Mesa Air Group, Inc.
7/15/2022
13,575,000
13,575,000
NEXTracker, Inc.
7/1/2016
N/A
15,000,000
Redaptive, Inc.
7/1/2018
15,000,000
N/A
RM OpCo, LLC (Real Mex)
3/30/2018
1,259,355
1,889,033
SoundCloud Limited
10/1/2018
9,014,286
N/A
SunEdison, Inc.
2/28/2017
9,379,246
9,379,246
Vistronix, LLC
12/4/2018
342,597
570,996
Waterfall International, Inc.
9/1/2018
3,200,000
N/A
Total Unfunded Balances
$
138,961,949
$
84,575,096
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

6. Related Party Transactions

The Company, the Partnership, TCPC Funding, the SBIC, the Advisor, the General Partner and their members and affiliates may be considered related parties. From time to time, the Partnership advances payments to third parties on behalf of the Company which are reimbursable through deductions from distributions to the Company. From time to time, the Advisor advances payments to third parties on behalf of the Company and the Partnership and receives reimbursement from the Company and the Partnership. At September 30, 2015, amounts reimbursable to the Advisor totaled $731,172, as reflected in the Consolidated Statements of Assets and Liabilities.

Pursuant to administration agreements between the Administrator and each of the Company and the Partnership (the “Administration Agreements”), the Administrator may be reimbursed for costs and expenses incurred by the Administrator for office space rental, office equipment and utilities allocable to the Company or the Partnership, as well as costs and expenses incurred by the Administrator or its affiliates relating to any administrative, operating, or other non-investment advisory services provided by the Administrator or its affiliates to the Company or the Partnership. For the nine months ended September 30, 2015 and 2014, expenses allocated pursuant to the Administration Agreements totaled $1,118,418 and $1,002,418, respectively.

On November 25, 2014, the Company and the Partnership obtained an exemptive order (the “Exemptive Order”) from the Securities and Exchange Commission permitting the Company and the Partnership to purchase certain investments from affiliated investment companies at fair value. The Exemptive Order exempts the Company and the Partnership from provisions of Sections 17(a) and 57(a) of the 1940 Act which would otherwise restrict such transfers. All such purchases are subject to the conditions set forth in the Exemptive Order, which among others include certain procedures to verify that each purchase is done at the current fair value of the respective investment. During the nine months ended September 30, 2015, the Company purchased approximately $94.5 million of investments from affiliates (as defined in the 1940 Act), which were classified as Level 2 in the GAAP valuation hierarchy at the time of the transfer and the selling party has no continuing involvement in the transferred assets. All of the transfers were consummated in accordance with the provisions of the Exemptive Order and were accounted for as a purchase in accordance with ASC 860, Transfers and Servicing .

7. Stockholders’ Equity and Dividends

The following table summarizes the total shares issued and proceeds received in the public offering of the Company’s common stock net of underwriting discounts and offering costs as well as shares issued in connection with the Company’s dividend reinvestment plan for the nine months ended September 30, 2015.

Shares Issued
Price Per Share
Net Proceeds
At-the-market offerings
248,614
$
15.87
*
$
3,946,066
Shares issued from dividend reinvestment plan
404
14.86
*
6,012

*
Weighted-average price per share
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015
7. Stockholders’ Equity and Dividends (continued)

The following table summarizes the total shares issued and proceeds received in the public offering of the Company’s common stock net of underwriting discounts and offering costs as well as shares issued in connection with the Company’s dividend reinvestment plan for the year ended December 31, 2014.

Shares Issued
Price Per Share
Net Proceeds
August 1, 2014 public offering
6,210,000
$
17.33
$
103,940,721
November 26, 2014 public offering
5,900,000
17.05
97,198,756
At-the-market offerings
400,225
16.04
*
6,420,426
Shares issued from dividend reinvestment plan
456
16.86
*
7,687

*
Weighted-average price per share
The Company’s dividends are recorded on the ex-dividend date. The following table summarizes the Company’s dividends declared and paid for the nine months ended September 30, 2015:

Date Declared
Record Date
Payment Date
Type
Amount Per Share
Total Amount
March 10, 2015
March 19, 2015
March 31, 2015
Regular
$
0.36
$
17,535,826
May 7, 2015
June 16, 2015
June 30, 2015
Regular
0.36
17,625,370
August 6, 2015
September 16, 2015
September 30, 2015
Regular
0.36
17,625,310
$
1.08
$
52,786,506

The following table summarizes the Company’s dividends declared and paid for the nine months ended September 30, 2014:

Date Declared
Record Date
Payment Date
Type
Amount Per Share
Total Amount
March 6, 2014
March 17, 2014
March 31, 2014
Regular
$
0.36
$
13,031,970
May 7, 2014
June 18, 2014
June 30, 2014
Regular
0.36
13,032,007
May 7, 2014
June 18, 2014
June 30, 2014
Special
0.05
1,810,001
August 7, 2014
September 16, 2014
September 3, 2014
Regular
0.36
15,267,647
$
1.13
$
43,141,625

On February 24, 2015, the Company’s board of directors approved a stock repurchase plan (the “Company Repurchase Plan”) to acquire up to $50 million in the aggregate of the Company’s common stock at prices at certain thresholds below the Company’s net asset value per share, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. The Company Repurchase Plan is designed to allow the Company to repurchase its common stock at times when it otherwise might be prevented from doing so under insider trading laws. The Company Repurchase Plan requires an agent selected by the Company to repurchase shares of common stock on the Company’s behalf if and when the market price per share is at certain thresholds below the most recently reported net asset value per share. Under the plan, the agent will increase the volume of purchases made if the price of the Company’s common stock declines, subject to volume restrictions. The timing and amount of any stock repurchased depends on the terms and conditions of the Company Repurchase Plan, the market price of the common stock and trading volumes, and no assurance can be given that any particular amount of common stock will be repurchased. Unless extended or terminated by its board of directors, the Company expects that the Company Repurchase Plan will be in effect through the earlier of two trading days after the Company’s third quarter 2015 earnings release or such time as the approved $50 million repurchase amount has been fully utilized, subject to certain conditions. The following table summarizes the total shares repurchased and amounts paid by the Company under the Company Repurchase Plan, including broker fees, for the nine months ended September 30, 2015.

Shares Repurchased
Price Per Share
Total Cost
Company Repurchase Plan
25,147
$
14.81
*
$
372,843
*
Weighted-average price per share
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015
8. Earnings Per Share

In accordance with ASC 260, Earnings per Share , basic earnings per share is computed by dividing earnings available to common shareholders by the weighted average number of shares outstanding during the period. Other potentially dilutive common shares, if any, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The following information sets forth the computation of the net increase in net assets per share resulting from operations for the nine months ended September 30, 2015 and 2014:

Nine Months Ended
September 30, 2015
Nine Months Ended
September 30, 2014
Net increase in net assets applicable to common shareholders resulting from operations
$
56,977,873
$
41,601,674
Weighted average shares outstanding
48,858,263
37,507,497
Earnings per share
$
1.17
$
1.11
9. Subsequent Events

On November 3, 2015, the Company’s board of directors re-approved the Company Repurchase Plan, to be in effect through the earlier of two trading days after the Company’s annual 2015 earnings release or such time as the approved $50 million repurchase amount has been fully utilized, subject to certain conditions.

On November 3, 2015, the board of directors of the Company voted to add an additional independent director, Brian F. Wruble, to the board of directors effective as of November 5, 2015.
On November 5, 2015, the Company’s board of directors declared a fourth quarter regular dividend of $0.36 per share payable on December 31, 2015 to stockholders of record as of the close of business on December 17, 2015.
TCP Capital Corp.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

10. Financial Highlights

Nine Months Ended September 30,
2015
2014
Per Common Share
Per share NAV at beginning of period
$
15.01
$
15.18
Investment operations:
Net investment income
1.52
1.48
Net realized and unrealized losses
(0.07
)
(0.06
)
Dividends on Series A preferred equity facility
(0.01
)
(0.03
)
Incentive allocation reserve and distributions
(0.30
)
(0.28
)
Total from investment operations
1.14
1.11
Issuance of common stock
-
0.20
Issuance of convertible debt
-
0.07
Repurchase of Series A preferred interests
0.03
-
Distributions to common shareholders from:
Net investment income
(1.08
)
(1.13
)
Per share NAV at end of period
$
15.10
$
15.43
Per share market price at end of period
$
13.56
$
16.07
Total return based on market value (1), (2)
(12.8
%)
2.5
%
Total return based on net asset value (1),(3)
7.8
%
9.1
%
Shares outstanding at end of period
48,934,498
42,410,242
TCP Capital Corp.
Consolidated Schedule of Changes in Investments in Affiliates (1) (Unaudited)
Nine Months Ended September 30, 2015

10. Financial Highlights (continued)

Nine Months Ended September 30,
2015
2014
Ratios to average common equity: (4), (5)
Net investment income (6)
11.5
%
11.0
%
Expenses
5.9
%
4.4
%
Expenses and incentive allocation (7)
7.9
%
6.3
%
Ending common shareholder equity
$
738,899,630
$
654,553,128
Portfolio turnover rate
25.3
%
20.2
%
Weighted-average leverage outstanding (8)
$
505,921,876
$
179,507,606
Weighted-average interest rate on leverage (9)
3.0
%
3.0
%
Weighted-average number of common shares
48,858,263
37,507,497
Average leverage per share (8)
$
10.35
$
4.79
(1) Not annualized.
(2) Total return based on market value equals the change in ending market value per share during the period plus declared dividends per share during the period, divided by the market value per share at the beginning of the period.
(3) Total return based on net asset value equals the change in net asset value per share during the period plus declared dividends per share during the period, divided by the beginning net asset value per share at the beginning of the period.
(4) Annualized, except for incentive allocation.
(5) These ratios include interest expense but do not reflect the effect of dividends on the preferred equity facility.
(6) Net of incentive allocation.
(7) Includes incentive allocation payable to the General Partner and all Company expenses.
(8) Includes both debt and preferred leverage.
(9) Includes dividends on the preferred leverage facility.
TCP Capital Corp.

Consolidated Schedule of Changes in Investments in Affiliates (1) (Unaudited)

Nine Months Ended September 30, 2015

Security
Dividends or
Interest (2)
Fair Value at
December 31, 2014
Acquisitions (3)
Dispositions (4)
Fair Value at
September 30, 2015
AGY Holding Corp., Senior Secured Term Loan, 12%, due 9/15/16
$
443,132
$
4,869,577
$
-
$
-
$
4,869,577
AGY Holding Corporation, Senior Secured 2nd Lien Notes, 11%, due 11/15/16
764,610
9,017,764
250,236
-
9,268,000
Anacomp, Inc., Class A Common Stock
-
916,535
665,429
-
1,581,964
Edmentum Ultimate Holdings, LLC, Junior PIK Notes, 10%, due 6/9/20
-
-
11,737,772
(673,951
)
11,063,821
Edmentum Ultimate Holdings, LLC, Senior PIK Notes, 8.5%, due 6/9/20
-
-
2,557,459
-
2,557,459
Edmentum, Inc., Junior Revolving Facility, 5%, due 6/9/20
-
-
2,105,370
(2,105,366
)
3
Edmentum Ultimate Holdings, LLC, Class A Common Units
-
-
680,218
-
680,218
EPMC HoldCo, LLC, Membership Units
-
682,614
-
-
682,614
Essex Ocean II, LLC, Membership Units
-
-
199,430
-
199,430
Globecomm Systems Inc., Senior Secured 1st Lien Term Loan, LIBOR + 7.625%, 1.25% LIBOR Floor, due 12/11/18
996,866
14,656,950
120,478
(263,201
)
14,514,227
KAGY Holding Company, Inc., Series A Preferred Stock
-
121,975
4,243,350
4,365,325
N659UA Aircraft Secured Mortgage, 12%, due 2/28/16
104,586
1,659,003
-
(999,744
)
659,259
N661UA Aircraft Secured Mortgage, 12%, due 5/4/16
117,000
1,899,950
-
(992,327
)
907,623
N913DL Aircraft Secured Mortgage, 8%, due 3/15/17
10,286
209,168
-
(69,556
)
139,612
N918DL Aircraft Secured Mortgage, 8%, due 8/15/18
17,033
320,440
-
(61,508
)
258,932
N954DL Aircraft Secured Mortgage, 8%, due 3/20/19
23,762
437,679
315
(70,535
)
367,458
N955DL Aircraft Secured Mortgage, 8%, due 6/20/19
25,167
460,258
539
(67,833
)
392,963
N956DL Aircraft Secured Mortgage, 8%, due 5/20/19
24,993
457,902
479
(68,984
)
389,397
N957DL Aircraft Secured Mortgage, 8%, due 6/20/19
25,387
464,283
544
(68,425
)
396,402
N959DL Aircraft Secured Mortgage, 8%, due 7/20/19
25,778
470,601
612
(67,874
)
403,338
N960DL Aircraft Secured Mortgage, 8%, due 10/20/19
27,156
493,258
831
(66,777
)
427,312
N961DL Aircraft Secured Mortgage, 8%, due 8/20/19
26,608
484,908
694
(68,460
)
417,143
N976DL Aircraft Secured Mortgage, 8%, due 2/15/18
19,410
314,588
-
(71,456
)
243,132
N913DL Equipment Trust Beneficial Interests
18,399
117,497
67,498
(74,879
)
110,116
N918DL Equipment Trust Beneficial Interests
15,200
135,890
60,946
(67,037
)
129,800
N954DL Equipment Trust Beneficial Interests
15,208
72,604
84,638
(80,813
)
76,429
N955DL Equipment Trust Beneficial Interests
14,331
111,010
77,650
(79,828
)
108,833
N956DL Equipment Trust Beneficial Interests
14,449
106,800
79,184
(80,927
)
105,056
N957DL Equipment Trust Beneficial Interests
14,229
107,682
78,827
(80,593
)
105,915
N959DL Equipment Trust Beneficial Interests
14,013
108,579
78,478
(80,261
)
106,796
N960DL Equipment Trust Beneficial Interests
13,283
107,865
78,555
(80,008
)
106,411
N961DL Equipment Trust Beneficial Interests
13,607
102,826
80,388
(81,410
)
101,805
N976DL Equipment Trust Beneficial Interests
14,916
102,006
75,991
(76,920
)
101,078
RM Holdco, LLC, Equity Participation
-
792
-
(792
)
-
RM Holdco, LLC, Membership Units
-
-
-
-
-
RM OpCo, LLC, Senior Secured 1st Lien Term Loan Tranche A, 7%, due 3/21/16
204,710
3,900,025
13,996
(149,762
)
3,764,259
RM OpCo, LLC, Senior Secured 2nd Lien Term Loan Tranche B, 8.5%, due 3/30/18
544,806
6,457,325
542,885
(1,893,876
)
5,106,334
RM OpCo, LLC, Senior Secured 2nd Lien Term Loan Tranche B-1, 8.5%, due 3/30/18
177,706
2,567,717
180,623
(9,650
)
2,738,690
RM OpCo, LLC, Convertible 2nd Lien Term Loan Tranche B-1, 8.5%, due 3/30/18
123,274
1,636,314
122,889
(13,934
)
1,745,268
RM OpCo, LLC, Senior Convertible 2nd Lien Term Loan B, 8.5%, due 3/30/18
80,483
631,164
705,314
-
1,336,478
United N659UA-767, LLC (N659UA)
418,257
3,177,822
937,274
(804,361
)
3,310,735
United N661UA-767, LLC (N661UA)
412,105
3,078,923
908,965
(748,785
)
3,239,103
Wasserstein Cosmos Co-Invest, L.P., Limited Partnership Units
-
4,175,000
1,050,000
(1,026,500
)
4,198,500

Notes to Consolidated Schedule of Changes in Investments in Affiliates:

(1)
The issuers of the securities listed on this schedule are considered affiliates under the Investment Company Act of 1940 due to the ownership by the Company of 5% or more of the issuers' voting securities.
(2)
Also includes fee and lease income as applicable.
(3)
Acquisitions include new purchases, PIK income and net unrealized appreciation.
(4)
Dispositions include decreases in the cost basis from sales, paydowns, mortgage amortizations, aircraft depreciation and net unrealized depreciation.
TCP Capital Corp.

Consolidated Schedule of Changes in Investments in Affiliates (1)

Year Ended December 31, 2014

Security
Dividends or
Interest (2)
Fair Value at
January 1, 2014
Acquisitions (3)
Dispositions (4)
Fair Value at
December 31, 2014
AGY Holding Corp., Senior Secured Term Loan, 12%, due 9/15/16
$
327,716
$
2,056,927
$
2,812,650
$
-
$
4,869,577
AGY Holding Corporation, Senior Secured 2nd Lien Notes, 11%, due 11/15/16
1,019,480
9,268,000
-
(250,236
)
9,017,764
Anacomp, Inc., Class A Common Stock
-
1,004,422
-
(87,887
)
916,535
EPMC HoldCo, LLC, Membership Units
-
1,562,137
969,968
(1,849,491
)
682,614
ESP Holdings, Inc., Cumulative Preferred 15%
1,968,748
3,947,862
239,170
(4,187,032
)
-
ESP Holdings, Inc., Common Stock
289,315
2,856,346
6,981,836
(9,838,181
)
-
ESP Holdings, Inc., Junior Unsecured Subordinated Promissory Notes, 6% Cash + 10% PIK, due 12/31/19
205,175
7,959,369
-
(7,959,369
)
-
Globecomm Systems Inc., Senior Secured 1st Lien Term Loan, LIBOR + 7.625%, 1.25% LIBOR Floor, due 12/11/18
1,344,702
15,097,500
1,500
(442,050
)
14,656,950
KAGY Holding Company, Inc., Series A Preferred Stock
-
662,134
-
(540,159
)
121,975
N510UA Aircraft Secured Mortgage, 20%, due 10/26/16
52,092
404,605
-
(404,605
)
-
N512UA Aircraft Secured Mortgage, 20%, due 10/26/16
53,275
414,010
-
(414,010
)
-
N536UA Aircraft Secured Mortgage, 16%, due 9/29/14
4,678
114,000
-
(114,000
)
-
N545UA Aircraft Secured Mortgage, 16%, due 8/29/15
25,964
275,405
-
(275,405
)
-
N585UA Aircraft Secured Mortgage, 20%, due 10/25/16
27,571
486,115
-
(486,115
)
-
N659UA Aircraft Secured Mortgage, 12%, due 2/28/16
262,962
2,948,986
-
(1,289,983
)
1,659,003
N661UA Aircraft Secured Mortgage, 12%, due 5/4/16
274,461
3,171,026
-
(1,271,076
)
1,899,950
N510UA Equipment Trust Beneficial Interests
86,342
465,625
285,805
(751,430
)
-
N512UA Equipment Trust Beneficial Interests
85,549
458,277
281,999
(740,276
)
-
N536UA Equipment Trust Beneficial Interests
40,259
656,766
80,397
(737,163
)
-
N545UA Equipment Trust Beneficial Interests
107,483
641,840
163,935
(805,775
)
-
N585UA Equipment Trust Beneficial Interests
31,098
571,706
322,126
(893,832
)
-
N913DL Aircraft Secured Mortgage, 8%, due 3/15/17
19,714
296,820
-
(87,652
)
209,168
N918DL Aircraft Secured Mortgage, 8%, due 8/15/18
28,023
397,290
-
(76,850
)
320,440
N954DL Aircraft Secured Mortgage, 8%, due 3/20/19
37,801
524,620
-
(86,941
)
437,679
N955DL Aircraft Secured Mortgage, 8%, due 6/20/19
39,443
543,320
-
(83,062
)
460,258
N956DL Aircraft Secured Mortgage, 8%, due 5/20/19
39,309
542,640
-
(84,738
)
457,902
N957DL Aircraft Secured Mortgage, 8%, due 6/20/19
39,787
548,250
-
(83,967
)
464,283
N959DL Aircraft Secured Mortgage, 8%, due 7/20/19
40,262
553,520
-
(82,919
)
470,601
N960DL Aircraft Secured Mortgage, 8%, due 10/20/19
42,013
574,430
-
(81,172
)
493,258
N961DL Aircraft Secured Mortgage, 8%, due 8/20/19
41,423
568,310
-
(83,402
)
484,908
N976DL Aircraft Secured Mortgage, 8%, due 2/15/18
28,046
404,600
-
(90,012
)
314,588
N913DL Equipment Trust Beneficial Interests
18,477
125,970
85,559
(94,032
)
117,497
N918DL Equipment Trust Beneficial Interests
14,907
142,970
82,257
(89,336
)
135,890
N954DL Equipment Trust Beneficial Interests
14,119
68,000
112,356
(107,752
)
72,604
N955DL Equipment Trust Beneficial Interests
13,186
113,560
103,886
(106,436
)
111,010
N956DL Equipment Trust Beneficial Interests
13,244
108,800
105,904
(107,904
)
106,800
N957DL Equipment Trust Beneficial Interests
12,996
109,650
105,488
(107,456
)
107,682
N959DL Equipment Trust Beneficial Interests
12,756
110,500
105,095
(107,016
)
108,579
N960DL Equipment Trust Beneficial Interests
11,868
109,650
104,892
(106,676
)
107,865
N961DL Equipment Trust Beneficial Interests
12,161
103,870
107,504
(108,548
)
102,826
N976DL Equipment Trust Beneficial Interests
13,666
103,033
101,533
(102,560
)
102,006
RM Holdco, LLC, Equity Participation
-
-
-
-
-
RM Holdco, LLC, Membership Units
-
-
-
-
-
RM Holdco, LLC, Subordinated Convertible Term Loan, 1.12% PIK, due 3/21/18
58,663
2,197,621
3,026,338
(5,223,959
)
-
RM OpCo, LLC, Senior Secured 1st Lien Term Loan Tranche A, 7%, due 3/21/16
400,651
3,626,947
465,190
(192,112
)
3,900,025
RM OpCo, LLC, Senior Secured 2nd Lien Term Loan Tranche B, 8.5%, due 3/30/18
1,349,228
6,825,328
1,327,860
(1,695,863
)
6,457,325
RM OpCo, LLC, Senior Secured 2nd Lien Term Loan Tranche B-1, 8.5%, due 3/30/18
444,445
2,150,088
437,146
(19,517
)
2,567,717
RM OpCo, LLC, Convertible 2nd Lien Term Loan Tranche B-1, 8.5%, due 3/30/18
279,505
1,370,199
274,827
(8,712
)
1,636,314
RM OpCo, LLC, Senior Convertible 2nd Lien Term Loan B, 8.5%, due 3/30/18
6,107
-
631,164
631,164
United N659UA-767, LLC (N659UA)
443,575
2,840,323
1,126,014
(788,515
)
3,177,822
United N661UA-767, LLC (N661UA)
436,533
2,852,677
1,092,004
(865,758
)
3,078,923
Wasserstein Cosmos Co-Invest, L.P., Limited Partnership Units
-
5,000,000
-
(825,000
)
4,175,000

Notes to Consolidated Schedule of Changes in Investments in Affiliates:

(1)
The issuers of the securities listed on this schedule are considered affiliates under the Investment Company Act of 1940 due to the ownership by the Partnership of 5% or more of the issuers' voting securities.
(2)
Also includes fee and lease income as applicable.
(3)
Acquisitions include new purchases, PIK income and net unrealized appreciation.
(4)
Dispositions include decreases in the cost basis from sales, paydowns, mortgage amortizations, aircraft depreciation and net unrealized depreciation.
TCP Capital Corp.

Consolidated Schedule of Restricted Securities of Unaffiliated Issuers (Unaudited)

September 30, 2015

Investment
Acquisition Date
Avanti Communications Group, PLC, Senior Secured Notes, 10%, due 10/1/19
9/26/13
BlackLine Intermediate, Inc., Warrants to Purchase Common Stock
9/25/13
BPA Laboratories, Inc., Senior Secured Notes, 12.25%, due 4/1/17
3/5/12
Caribbean Financial Group, Senior Secured Notes, 11.5%, due 11/15/19
10/19/12
Findly Talent, LLC, Membership Units
1/1/14
Flight Options Holdings I, Inc. (One Sky), Warrants to Purchase Common Stock
12/4/13
Fuse Media, LLC, Warrants to Purchase Common Stock
8/3/12
Fuse, LLC, Senior Secured Notes, 10.375%, due 7/1/19
6/18/14
Green Biologics, Inc., Warrants to Purchase Stock
12/22/14
Hunt Companies, Inc., Senior Secured Notes, 9.625%, due 3/1/21
2/25/14
Integra Telecom, Inc., Common Stock
11/19/09
Integra Telecom, Inc., Warrants
11/19/09
Iracore International, Inc., Senior Secured Notes, 9.5%, due 6/1/18
5/8/13
Magnolia Finance V plc, Asset-Backed Credit Linked Notes, 13.125%, due 8/2/21
8/1/13
Marsico Holdings, LLC Common Interest Units
9/10/12
NEXTracker, Inc., Series B Preferred Stock
Var. 2014 & 2015
NEXTracker, Inc., Series C Preferred Stock
6/12/15
Precision Holdings, LLC, Class C Membership Interests
Var. 2010 & 2011
Rightside Group, Ltd, Warrants
8/6/14
Shop Holding, LLC (Connexity), Class A Units
6/2/11
Shop Holding, LLC (Connexity), Warrants to Purchase Class A Units
6/2/11
Soraa, Inc., Warrants to Purchase Common Stock
8/29/14
SoundCloud, Ltd., Warrants to Purchase Preferred Stock
4/30/2015
STG-Fairway Holdings, LLC (First Advantage), Class A Units
12/30/10
The Telx Group, Inc., Senior Notes, 13.5% PIK, due 7/9/21
4/9/14
Trade Finance Funding I, Ltd., Secured Class B Notes, 10.75%, due 11/13/18
11/13/13
V Telecom Investment S.C.A. (Vivacom), Common Shares
11/9/12
Waterfall International, Inc., Series B Preferred Stock
9/16/2015
Waterfall International, Inc., Warrants to Purchase Stock
9/16/2015
TCP Capital Corp.

Consolidated Schedule of Restricted Securities of Unaffiliated Issuers

December 31, 2014

Investment
Acquisition Date
Avanti Communications Group, PLC, Senior Secured Notes, 10%, due 10/1/19
9/26/13
BlackLine Intermediate, Inc., Warrants to Purchase Common Stock
9/25/13
BPA Laboratories, Inc., Senior Secured Notes, 12.25%, due 4/1/17 (144A)
3/5/12
Caribbean Financial Group, Senior Secured Notes, 11.5%, due 11/15/19
10/19/12
Carolina Beverage Group, LLC, Secured Notes, 10.625%, due 8/1/18
7/26/13
Constellation Enterprises, LLC, Senior Secured 1st Lien Notes, 10.625%, due 2/1/16
1/20/11
Findly Talent, LLC, Membership Units
1/1/14
Flight Options Holdings I, Inc., Warrants to Purchase Common Stock
12/4/13
Green Biologics, Inc., Warrants to purchase Stock
12/22/14
Hunt Companies, Inc., Senior Secured Notes, 9.625%, due 3/1/21
2/25/14
Ichor Systems Holdings, LLC, Membership Units
Var. 2009 & 2010
Integra Telecom, Inc., Common Stock
11/19/09
Integra Telecom, Inc., Warrants
11/19/09
Iracore International, Inc., Senior Secured Notes, 9.5%, due 6/1/18
5/8/13
Magnolia Finance V plc, Asset-Backed Credit Linked Notes, 13.125%, due 8/2/21
8/1/13
Marsico Holdings, LLC Common Interest Units
9/10/12
NEXTracker, Inc., Series B Preferred Stock
12/17/14
NEXTracker, Inc., Warrants to purchase Stock
12/17/14
Precision Holdings, LLC, Class C Membership Interests
Var. 2010 & 2011
Rightside Group, Ltd, Warrants
8/6/14
Shop Holding, LLC, Class A Units
6/2/11
Shop Holding, LLC, Convertible Promissory Note, 5%, due 8/5/15
2/5/14
Shop Holding, LLC, Warrants to Purchase Class A Units
6/2/11
SiTV, Inc., Senior Secured Notes, 10.375%, due 7/1/19
6/18/14
SiTV, Inc., Warrants to Purchase Common Stock
8/3/12
Soraa, Inc., Warrants to Purchase Common Stock
8/29/14
STG-Fairway Holdings, LLC, Class A Units
12/30/10
The Telx Group, Inc., Senior Notes, 13.5% PIK, due 7/9/21
4/9/14
Trade Finance Funding I, Ltd., Secured Class B Notes, 10.75%, due 11/13/18
11/13/13
V Telecom Investment S.C.A, Common Shares
11/9/12
TCP Capital Corp.

Consolidating Statement of Assets and Liabilities (Unaudited)

September 30, 2015

TCP
Capital Corp.
Standalone
Special Value
Continuation
Partners, LP
Consolidated
Eliminations
TCP
Capital Corp.
Consolidated
Assets
Investments:
Companies less than 5% owned
$
-
$
1,187,883,822
$
-
$
1,187,883,822
Companies 5% to 25% owned
-
66,890,774
-
66,890,774
Companies more than 25% owned
-
14,386,043
-
14,386,043
Investment in subsidiary
844,221,411
-
(844,221,411
)
-
Total investments
844,221,411
1,269,160,639
(844,221,411
)
1,269,160,639
Cash and cash equivalents
-
34,582,869
-
34,582,869
Deferred debt issuance costs
2,545,331
7,298,942
-
9,844,273
Receivable for investment securities sold
-
1,969,722
-
1,969,722
Accrued interest income
-
14,029,310
-
14,029,310
Unrealized appreciation on swaps
-
2,868,748
-
2,868,748
Options (cost $51,750)
-
-
-
-
Prepaid expenses and other assets
607,048
774,508
-
1,381,556
Total assets
847,373,790
1,330,684,738
(844,221,411
)
1,333,837,117
Liabilities
Debt
106,005,233
469,300,000
-
575,305,233
Payable for investment securities purchased
-
7,847,520
-
7,847,520
Incentive allocation payable
-
4,838,534
-
4,838,534
Interest payable
1,665,416
1,914,612
-
3,580,028
Payable to the Advisor
350,526
380,646
-
731,172
Accrued expenses and other liabilities
452,985
2,182,015
-
2,635,000
Total liabilities
108,474,160
486,463,327
-
594,937,487
Non-controlling interest
General Partner interest in Special Value Continuation Partners, LP
-
-
-
-
Net assets
$
738,899,630
$
844,221,411
$
(844,221,411
)
$
738,899,630
Composition of net assets
Common stock
$
48,934
$
-
$
-
$
48,934
Additional paid-in capital
880,682,891
982,458,328
(982,458,328
)
880,682,891
Accumulated deficit
(141,832,195
)
(138,236,917
)
138,236,917
(141,832,195
)
Net assets
$
738,899,630
$
844,221,411
$
(844,221,411
)
$
738,899,630
TCP Capital Corp.

Consolidating Statement of Assets and Liabilities

December 31, 2014

TCP
Capital Corp.
Standalone
Special Value
Continuation
Partners, LP
Consolidated
Eliminations
TCP
Capital Corp.
Consolidated
Assets
Investments:
Companies less than 5% owned
$
-
$
1,081,901,384
$
-
$
1,081,901,384
Companies 5% to 25% owned
-
48,716,425
-
48,716,425
Companies more than 25% owned
-
15,918,077
-
15,918,077
Investment in subsidiary
833,816,090
-
(833,816,090
)
-
Total investments
833,816,090
1,146,535,886
(833,816,090
)
1,146,535,886
Cash and cash equivalents
-
27,268,792
-
27,268,792
Receivable for investment securities sold
-
10,961,369
-
10,961,369
Accrued interest income
-
9,504,438
-
9,504,438
Deferred debt issuance costs
3,058,913
4,642,075
-
7,700,988
Unrealized appreciation on swaps
-
1,717,610
-
1,717,610
Options (cost $51,750)
-
497
-
497
Receivable from subsidiary
1,031,498
-
(1,031,498
)
-
Prepaid expenses and other assets
176,692
2,000,525
-
2,177,217
Total assets
838,083,193
1,202,631,192
(834,847,588
)
1,205,866,797
Liabilities
Debt
105,696,830
223,000,000
-
328,696,830
Incentive allocation payable
-
4,303,040
-
4,303,040
Payable for investment securities purchased
-
2,049,518
-
2,049,518
Interest payable
247,917
1,263,064
-
1,510,981
Payable to the Investment Manager
130,967
328,860
-
459,827
Payable to parent
-
1,031,498
(1,031,498
)
-
Accrued expenses and other liabilities
878,451
2,341,332
-
3,219,783
Total liabilities
106,954,165
234,317,312
(1,031,498
)
340,239,979
Preferred equity facility
Series A preferred limited partner interests
-
134,000,000
-
134,000,000
Accumulated dividends on Series A preferred equity facility
-
497,790
-
497,790
Total preferred limited partner interests
-
134,497,790
-
134,497,790
Non-controlling interest
General Partner interest in Special Value Continuation Partners, LP
-
-
-
-
Net assets
$
731,129,028
$
833,816,090
$
(833,816,090
)
$
731,129,028
Composition of net assets
Common stock
$
48,710
$
-
$
-
$
48,710
Additional paid-in capital
877,103,880
978,731,888
(978,731,888
)
877,103,880
Accumulated deficit
(146,023,562
)
(144,915,798
)
144,915,798
(146,023,562
)
Non-controlling interest
-
-
-
-
Net assets
$
731,129,028
$
833,816,090
$
(833,816,090
)
$
731,129,028
TCP Capital Corp.

Consolidating Statement of Operations (Unaudited)

Nine Months Ended September 30, 2015
TCP
Capital Corp.
Standalone
Special Value
Continuation
Partners, LP
Consolidated
Eliminations
TCP
Capital Corp.
Consolidated
Investment income
Interest income:
Companies less than 5% owned
$
-
$
98,581,508
$
-
$
98,581,508
Companies 5% to 25% owned
-
3,828,262
-
3,828,262
Companies more than 25% owned
-
444,168
-
444,168
Lease income:
Companies more than 25% owned
-
978,000
-
978,000
Other income:
Companies less than 5% owned
153,217
3,267,066
-
3,420,283
Total investment income
153,217
107,099,004
-
107,252,221
Operating expenses
Management and advisory fees
-
13,681,411
-
13,681,411
Interest expense
4,560,902
5,927,481
-
10,488,383
Legal fees, professional fees and due diligence expenses
1,287,695
706,876
-
1,994,571
Amortization of deferred debt issuance costs
513,581
1,109,752
-
1,623,333
Administration expenses
-
1,177,357
-
1,177,357
Commitment fees
-
919,649
-
919,649
Insurance expense
90,505
182,172
-
272,677
Director fees
76,622
156,843
-
233,465
Custody fees
2,625
211,516
-
214,141
Other operating expenses
921,473
1,260,979
-
2,182,452
Total expenses
7,453,403
25,334,036
-
32,787,439
Net investment income (loss)
(7,300,186
)
81,764,968
-
74,464,782
Net realized and unrealized gain (loss) on investments and foreign currency
Net realized gain (loss):
Investments in companies less than 5% owned
-
(3,714,114
)
-
(3,714,114
)
Investments in companies 5% to 25% owned
-
1,185
-
1,185
Investments in companies more than 5% owned
-
19,167
-
19,167
Net realized loss
-
(3,693,762
)
-
(3,693,762
)
Change in net unrealized appreciation/depreciation
-
28,123
-
28,123
Net realized and unrealized loss
-
(3,665,639
)
-
(3,665,639
)
Net increase (decrease) in net asets from operations
(7,300,186
)
78,099,329
-
70,799,143
Interest in earnings of subsidiary
64,278,059
-
(64,278,059
)
-
Gain on repurchase of Series A preferred interests
-
1,675,000
-
1,675,000
Dividends paid on Series A preferred equity facility
-
(1,251,930
)
-
(1,251,930
)
Net change in accumulated dividends on Series A preferred equity facility
-
497,790
-
497,790
Distributions of incentive allocation to the General Partner from net investment income
-
-
(14,742,130
)
(14,742,130
)
Net increase in net assets applicable to equity holders resulting from operations
$
56,977,873
$
79,020,189
$
(79,020,189
)
$
56,977,873
TCP Capital Corp.

Consolidating Statement of Operations (Unaudited)

Nine Months Ended September 30, 2014

TCP
Capital Corp.
Standalone
Special Value
Continuation
Partners, LP
Consolidated
Eliminations
TCP
Capital Corp.
Consolidated
Investment income
Interest income:
Companies less than 5% owned
$
-
$
65,174,101
$
-
$
65,174,101
Companies 5% to 25% owned
-
4,423,013
-
4,423,013
Companies more than 25% owned
-
706,553
-
706,553
Dividend income:
Companies 5% to 25% owned
-
1,968,748
-
1,968,748
Other income:
Companies less than 5% owned
-
1,164,938
-
1,164,938
Companies 5% to 25% owned
-
282,581
-
282,581
Companies more than 25% owned
-
726,477
-
726,477
Total interest and related investment income
-
74,446,411
-
74,446,411
Operating expenses
Management and advisory fees
-
9,504,317
-
9,504,317
Interest expense
1,759,234
2,252,933
-
4,012,167
Amortization of deferred debt issuance costs
195,844
1,151,598
-
1,347,442
Administration expenses
-
1,029,069
-
1,029,069
Legal fees, professional fees and due diligence expenses
285,870
542,232
-
828,102
Commitment fees
-
650,209
-
650,209
Director fees
84,487
171,289
-
255,776
Insurance expense
67,547
135,276
-
202,823
Custody fees
2,625
163,400
-
166,025
Other operating expenses
671,530
361,892
-
1,033,422
Total expenses
3,067,137
15,962,215
-
19,029,352
Net investment income (loss)
(3,067,137
)
58,484,196
-
55,417,059
Net realized and unrealized gain (loss) on investments and foreign currency
Net realized gain (loss):
Investments in companies less than 5% owned
-
(5,317,388
)
-
(5,317,388
)
Investments in companies 5% to 25% owned
-
383,670
-
383,670
Net realized loss
-
(4,933,718
)
-
(4,933,718
)
Net change in unrealized appreciation/depreciation
-
2,596,620
-
2,596,620
Net realized and unrealized gain
-
(2,337,098
)
-
(2,337,098
)
Net increase (decrease) in net asets from operations
(3,067,137
)
56,147,098
-
53,079,961
Interest in earnings of subsidiary
44,668,811
-
(44,668,811
)
-
Dividends paid on Series A preferred equity facility
-
(1,083,263
)
-
(1,083,263
)
Net change in accumulated dividends on Series A preferred equity facility
-
5,394
-
5,394
Distributions of incentive allocation to the General Partner from net investment income
-
-
(10,867,837
)
(10,867,837
)
Net change in reserve for incentive allocation
-
-
467,419
467,419
Net increase in net assets applicable to equity holders resulting from operations
$
41,601,674
$
55,069,229
$
(55,069,229
)
$
41,601,674
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in this section should be read in conjunction with our unaudited consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form 10-Q. Some of the statements in this report (including in the following discussion) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future events or the future performance or financial condition of TCP Capital Corp. (the “Company,” “we,” “us,” or “our”). The forward-looking statements contained in this report involve a number of risks and uncertainties, including statements concerning:

• our, or our portfolio companies’, future business, operations, operating results or prospects;

•
the return or impact of current and future investments;

• the impact of a protracted decline in the liquidity of credit markets on our business;

•
the impact of fluctuations in interest rates on our business;

• the impact of changes in laws or regulations governing our operations or the operations of our portfolio companies;

• our contractual arrangements and relationships with third parties;

• the general economy and its impact on the industries in which we invest;

• the financial condition of and ability of our current and prospective portfolio companies to achieve their objectives;

• our expected financings and investments;

• the adequacy of our financing resources and working capital;

• the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments;

• the timing of cash flows, if any, from the operations of our portfolio companies;

• the timing, form and amount of any dividend distributions; and

• our ability to maintain our qualification as a regulated investment company and as a business development company.

We use words such as “anticipate,” “believe,” “expect,” “intend,” “will,” “should,” “could,” “may,” “plan” and similar words to identify forward-looking statements. The forward looking statements contained in this annual report involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth as “Risk Factors” in this report.

We have based the forward-looking statements included in this report on information available to us on the date of this report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC, including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K.
Overview

The Company is a Delaware corporation formed on April 2, 2012 and is an externally managed, closed-end, non-diversified management investment company. The Company elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). Our investment objective is to seek to achieve high total returns through current income and capital appreciation, with an emphasis on principal protection. We invest primarily in the debt of middle-market companies as well as small businesses, including senior secured loans, junior loans, mezzanine debt and bonds. Such investments may include an equity component, and, to a lesser extent, we may make equity investments directly. Investment operations are conducted either in Special Value Continuation Partners, LP, a Delaware Limited Partnership (the “Partnership”), of which the Company owns 100% of the common limited partner interests, or in one of the Partnership’s wholly-owned subsidiaries, TCPC Funding I, LLC (“TCPC Funding”) and TCPC SBIC, LP (the “SBIC”). The Partnership has also elected to be treated as a BDC under the 1940 Act. The General Partner of the Partnership is SVOF/MM, LLC (“SVOF/MM”), which also serves as the administrator (“Administrator”) of the Company and the Partnership. The managing member of SVOF/MM is Tennenbaum Capital Partners, LLC (the “Advisor”), which serves as the investment manager to the Company, the Partnership, TCPC Funding, and the SBIC. Most of the equity interests in the General Partner are owned directly or indirectly by the Advisor and its employees.The SBIC was organized as a Delaware limited partnership in June 2013. On April 22, 2014, the SBIC received a license from the United States Small Business Administration (the “SBA”) to operate as a small business investment company under the provisions of Section 301(c) of the Small Business Investment Act of 1958.

The Company has elected to be treated as a regulated investment company (“RIC”) for U.S. federal income tax purposes. As a RIC, the Company will not be taxed on its income to the extent that it distributes such income each year and satisfies other applicable income tax requirements. The Partnership, TCPC Funding, and the SBIC have elected to be treated as partnerships for U.S. federal income tax purposes.

On April 2, 2012, Special Value Continuation Fund, LLC (“SVCF”) converted from a limited liability company to a corporation, leaving the Company as the surviving entity. On April 3, 2012, the Company completed its initial public offering.

Our leverage program is comprised of $116 million in available debt under a senior secured revolving credit facility issued by the Partnership (the “Revolving Credit Facility”), a $100.5 million term loan issued by the Partnership (the “Term Loan,” and together with the Revolving Credit Facility, the “Partnership Facility”), $350 million in available debt under a senior secured revolving credit facility issued by TCPC Funding (the “TCPC Funding Facility”), $108 million in convertible senior unsecured notes issued by the Company (the “Convertible Notes”) and $75 million in committed leverage from the SBA (the “SBA Program,” and, together with the Partnership Facility, the TCPC Funding Facility, the Convertible Notes, and the SBA Program, the “Leverage Program”).

To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to our stockholders generally at least 90% of our investment company taxable income, as defined by the Internal Revenue Code of 1986, as amended, for each year. Pursuant to this election, we generally will not have to pay corporate level taxes on any income that we distribute to our stockholders provided that we satisfy those requirements.

Investments

Our level of investment activity can and does 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, the general economic environment and the competitive environment for the types of investments we make.

As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities and indebtedness of private U.S. companies, public U.S. operating companies whose securities are not listed on a national securities exchange or registered under the Securities Exchange Act of 1934, as amended, public domestic operating companies having a market capitalization of less than $250 million, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. We are also permitted to make certain follow-on investments in companies that were eligible portfolio companies at the time of initial investment but that no longer meet the definition. As of September 30, 2015, 84.5% of our total assets were invested in qualifying assets.

Revenues

We generate revenues primarily in the form of interest on the debt we hold. We also generate revenue from dividends on our equity interests, capital gains on the disposition of investments, and certain lease, fee, and other income. Our investments in fixed income instruments generally have an expected maturity of three to five years, although we have no lower or upper constraint on maturity. Interest on our debt investments is generally payable quarterly or semi-annually. Payments of principal of our debt investments may be amortized over the stated term of the investment, deferred for several years or due entirely at maturity. In some cases, our debt investments and preferred stock investments may defer payments of cash interest or dividends or PIK. Any outstanding principal amount of our debt investments and any accrued but unpaid interest will generally become due at the maturity date. In addition, we may generate revenue in the form of prepayment fees, commitment, origination, structuring or due diligence fees, end-of-term or exit fees, fees for providing significant managerial assistance, consulting fees and other investment related income.
Expenses

Our primary operating expenses include the payment of a base management fee and, depending on our operating results, incentive compensation, expenses reimbursable under the management agreement, administration fees and the allocable portion of overhead under the administration agreement. The base management fee and incentive compensation remunerates the Advisor for work in identifying, evaluating, negotiating, closing and monitoring our investments. Our administration agreement with SVOF/MM, LLC (the “Administrator”) provides that the Administrator may be reimbursed for costs and expenses incurred by the Administrator for office space rental, office equipment and utilities allocable to us under the administration agreement, as well as any costs and expenses incurred by the Administrator or its affiliates relating to any non-investment advisory, administrative or operating services provided by the Administrator or its affiliates to us. We also bear all other costs and expenses of our operations and transactions (and the Company’s common stockholders indirectly bear all of the costs and expenses of the Company, the Partnership, TCPC Funding and the SBIC), which may include those relating to:

• our organization;

• calculating our net asset value (including the cost and expenses of any independent valuation firms);

• interest payable on debt, if any, incurred to finance our investments;

• costs of future offerings of our common stock and other securities, if any;

• the base management fee and any incentive compensation;

• dividends and distributions on our preferred shares, if any, and common shares;

• administration fees payable under the administration agreement;

• fees payable to third parties relating to, or associated with, making investments;

• transfer agent and custodial fees;

• registration fees;

• listing fees;

• taxes;

• director fees and expenses;

• costs of preparing and filing reports or other documents with the SEC;

• costs of any reports, proxy statements or other notices to our stockholders, including printing costs;

• our fidelity bond;

• directors and officers/errors and omissions liability insurance, and any other insurance premiums;

• indemnification payments;

• direct costs and expenses of administration, including audit and legal costs; and

• all other expenses reasonably incurred by us and the Administrator in connection with administering our business, such as the allocable portion of overhead under the administration agreement, including rent and other allocable portions of the cost of certain of our officers and their respective staffs.
The investment management agreement provides that the base management fee be calculated at an annual rate of 1.5% of our total assets (excluding cash and cash equivalents) payable quarterly in arrears. For purposes of calculating the base management fee, “total assets” is determined without deduction for any borrowings or other liabilities. The base management fee is calculated based on the value of our total assets (excluding cash and cash equivalents) at the end of the most recently completed calendar quarter.

Additionally, the investment management agreement and the Amended and Restated Limited Partnership Agreement provide that the Advisor or its affiliates may be entitled to incentive compensation under certain circumstances. According to the terms of such agreements, no incentive compensation was incurred prior to January 1, 2013. Beginning January 1, 2013, the incentive compensation equals the sum of (1) 20% of all ordinary income since January 1, 2013 and (2) 20% of all net realized capital gains (net of any net unrealized capital depreciation) since January 1, 2013, with each component being subject to a total return requirement of 8% of contributed common equity annually. The incentive compensation is payable to the General Partner by the Partnership pursuant to the Amended and Restated Limited Partnership Agreement. If the Partnership is terminated or for any other reason incentive compensation is not paid by the Partnership, it would be paid pursuant to the investment management agreement between us and the Advisor. The determination of incentive compensation is subject to limitations under the 1940 Act and the Advisers Act.

Critical accounting policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ. Management considers the following critical accounting policies important to understanding the financial statements. In addition to the discussion below, our critical accounting policies are further described in the notes to our financial statements.

Valuation of portfolio investments

We value our portfolio investments at fair value based upon the principles and methods of valuation set forth in policies adopted by our board of directors. Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Market participants are buyers and sellers in the principal (or most advantageous) market for the asset that (i) are independent of us, (ii) are knowledgeable, having a reasonable understanding about the asset based on all available information (including information that might be obtained through due diligence efforts that are usual and customary), (iii) are able to transact for the asset, and (iv) are willing to transact for the asset or liability (that is, they are motivated but not forced or otherwise compelled to do so).

Investments for which market quotations are readily available are valued at such market quotations unless the quotations are deemed not to represent fair value. We generally obtain market quotations from recognized exchanges, market quotation systems, independent pricing services or one or more broker-dealers or market makers. However, short term debt investments with remaining maturities within 90 days are generally valued at amortized cost, which approximates fair value. Debt and equity securities for which market quotations are not readily available, which is the case for many of our investments, or for which market quotations are deemed not to represent fair value, are valued at fair value using a consistently applied valuation process in accordance with our documented valuation policy that has been reviewed and approved by our board of directors, who also approve in good faith the valuation of such securities as of the end of each quarter. Due to the inherent uncertainty and subjectivity 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 may differ materially from the values that we may ultimately realize. In addition, changes in the market environment and other events may have differing impacts on the market quotations used to value some of our investments than on the fair values of our investments for which market quotations are not readily available. Market quotations may be deemed not to represent fair value in certain circumstances where we believe that facts and circumstances applicable to an issuer, a seller or purchaser, or the market for a particular security cause current market quotations to not reflect the fair value of the security. Examples of these events could include cases where a security trades infrequently causing a quoted purchase or sale price to become stale, where there is a “forced” sale by a distressed seller, where market quotations vary substantially among market makers, or where there is a wide bid-ask spread or significant increase in the bid-ask spread.

The valuation process approved by our board of directors with respect to investments for which market quotations are not readily available or for which market quotations are deemed not to represent fair value is as follows:
• The investment professionals of the Advisor provide recent portfolio company financial statements and other reporting materials to independent valuation firms approved by our board of directors.

• Such firms evaluate this information along with relevant observable market data to conduct independent appraisals each quarter, and their preliminary valuation conclusions are documented and discussed with senior management of the Advisor.

• The fair value of smaller investments comprising in the aggregate less than 5% of our total capitalization may be determined by the Advisor in good faith in accordance with our valuation policy without the employment of an independent valuation firm.

• The audit committee of the board of directors discusses the valuations, and the board of directors approves the fair value of the investments in our portfolio in good faith based on the input of the Advisor, the respective independent valuation firms (to the extent applicable) and the audit committee of the board of directors.

Those investments for which market quotations are not readily available or for which market quotations are deemed not to represent fair value are valued utilizing a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in determining the fair value of our investments include, as relevant and among other factors: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, merger and acquisition comparables, our principal market (as the reporting entity) and enterprise values.

When valuing all of our investments, we strive to maximize the use of observable inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances.

Our investments may be categorized based on the types of inputs used in their valuation. The level in the GAAP valuation hierarchy in which an investment falls is based on the lowest level input that is significant to the valuation of the investment in its entirety. Investments are classified by GAAP into the three broad levels as follows:

Level 1 — Investments valued using unadjusted quoted prices in active markets for identical assets.

Level 2 — Investments valued using other unadjusted observable market inputs, e.g. quoted prices in markets that are not active or quotes for comparable instruments.

Level 3 — Investments that are valued using quotes and other observable market data to the extent available, but which also take into consideration one or more unobservable inputs that are significant to the valuation taken as a whole.

As of September 30, 2015, none of our investments were categorized as Level 1, 11.4% were categorized as Level 2, 88.3% were Level 3 investments valued based on valuations by independent third party sources, and 0.3% were Level 3 investments valued based on valuations by the Advisor.

Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to our financial statements express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on the financial statements.
Revenue recognition

Interest and dividend income, including income paid in kind, is recorded on an accrual basis to the extent that such amounts are determined to be collectible. Origination, structuring, closing, commitment and other upfront fees earned with respect to capital commitments, as well as any end-of-term or exit fees receivable upon the repayment of a debt investment, are generally amortized or accreted into interest income over the life of the respective investment. Other fees, including certain amendment fees, prepayment fees and commitment fees on broken deals, are recognized as earned. Prepayment fees and similar income received upon the early repayment of a loan or debt security are included in interest income.

Certain of our debt investments may be purchased at a discount to par as a result of the underlying credit risks and financial results of the issuer, as well as general market factors that influence the financial markets as a whole. GAAP generally requires that discounts on the acquisition of corporate bonds, municipal bonds and treasury bonds be amortized using the effective-interest or constant-yield method. GAAP also requires that we consider the collectability of interest when making accruals. Accordingly, when accounting for discounts and other interest accruals, we recognize income when it is probable that such amounts will be collected.

Net realized gains or losses and net change in unrealized appreciation or depreciation

We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Realized gains and losses are computed using the specific identification method. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

Portfolio and investment activity

During the three months ended September 30, 2015, we invested approximately $120.6 million, comprised of new investments in 7 new and 4 existing portfolio companies, as well as draws made on existing commitments and PIK received on prior investments. Of these investments, 98.7% were in senior secured debt, comprised of senior loans ($116.6 million, or 96.7% of total acquisitions) and senior secured notes ($2.5 million, or 2.0% of total acquisitions). The remaining $1.5 million (1.3% of total acquisitions) were equity investments. Additionally, we received approximately $65.3 million in proceeds from sales or repayments of investments during the three months ended September 30, 2015.

During the nine months ended September 30, 2015 we invested approximately $423.3 million, comprised of new investments in 16 new and 22 existing portfolio companies, as well as draws made on existing commitments and PIK received on prior investments. Of these investments, 99.5% were in senior secured debt, comprised of senior loans ($379.2 million, or 89.6% of total acquisitions) and senior secured notes ($41.9 million, or 9.9% of total acquisitions). The remaining $2.3 million (0.5% of total acquisitions) were equity investments. Additionally, we received approximately $305.5 million in proceeds from sales or repayments of investments during the nine months ended September 30, 2015.

At September 30, 2015, our investment portfolio of $1,269.2 million (at fair value) consisted of 91 portfolio companies and was invested 97% in debt investments, of which 100% was in senior secured debt. In aggregate, our investment portfolio was invested 84% in senior secured loans, 13% in senior secured notes, and 3% in equity investments. Our average portfolio company investment at fair value was approximately $13.9 million. Our largest portfolio company investment by value was approximately $44.8 million and our five largest portfolio company investments by value comprised approximately 15.6% of our portfolio at September 30, 2015. At December 31, 2014, our investment portfolio of $1,146.5 million (at fair value) consisted of 84 portfolio companies and was invested 97% in debt investments, of which 100% was in senior secured debt. In aggregate, our investment portfolio was invested 82% in senior secured loans, 15% in senior secured notes, and 3% in equity investments. Our average portfolio company investment at fair value was approximately $13.6 million. Our largest portfolio company investment by value was approximately $41.8 million and our five largest portfolio company investments by value comprised approximately 14% of our portfolio at December 31, 2014.
The industry composition of our portfolio at fair value at September 30, 2015 was as follows:

Industry
Percent of Total
Investments
Software Publishing
13.8
%
Air Transportation
6.4
%
Computer Systems Design and Related Services
5.7
%
Scientific Research and Development Services
4.8
%
Chemicals
4.5
%
Hospitals
4.2
%
Business Support Services
4.1
%
Radio and Television Broadcasting
3.8
%
Nondepository Credit Intermediation
3.3
%
Insurance Carriers
3.1
%
Wireless Telecommunications Carriers
3.1
%
Wired Telecommunications Carriers
2.8
%
Data Processing and Hosting Services
2.6
%
Textile Furnishings Mills
2.6
%
Grocery Stores
2.5
%
Computer Equipment Manufacturing
2.4
%
Management, Scientific, and Technical Consulting Services
2.0
%
Utility System Construction
2.0
%
Advertising and Public Relations Services
1.9
%
Oil and Gas Extraction
1.8
%
Electronic Component Manufacturing
1.7
%
Other Manufacturing
1.7
%
Real Estate Related Activities
1.7
%
Financial Investment Activities
1.6
%
Other Information Services
1.6
%
Retail
1.6
%
Communications Equipment Manufacturing
1.5
%
Lessors of Nonfinancial Licenses
1.5
%
Accounting, Tax and Payroll Services
1.2
%
Restaurants
1.2
%
Electrical Equipment Manufacturing
1.0
%
Other Telecommunications
1.0
%
Other
5.3
%
Total
100.0
%
The weighted average effective yield of the debt securities in our portfolio was 10.9% at September 30, 2015 and December 31, 2014. At September 30, 2015, 78.4% of our debt investments bore interest based on floating rates, such as LIBOR, EURIBOR, the Federal Funds Rate or the Prime Rate, and 21.6% bore interest at fixed rates. The percentage of our floating rate debt investments that bore interest based on an interest rate floor was 77.5% at September 30, 2015. At December 31, 2014, 78.3% of our debt investments bore interest based on floating rates, and 21.7% bore interest at fixed rates. The percentage of our floating rate debt investments that bore interest based on an interest rate floor was 83.1% at December 31, 2014.
Results of operations

Investment income

Investment income totaled $35.5 million and $27.2 million, respectively, for the three months ended September 30, 2015 and 2014, of which $33.8 million and $26.7 million were attributable to interest on our debt investments, $0.4 million and $0.3 million to lease income, and $1.3 million and $0.2 million to other income, respectively. The increase in investment income in the three months ended September 30, 2015 compared to the three months ended September 30, 2014 reflects an increase in interest income due to the larger investment portfolio in the three months ended September 30, 2015 compared to the three months ended September 30, 2014 and an increase in other income primarily due to amendment fees received during the three months ended September 30, 2015.

Investment income totaled $107.3 million and $74.4 million, respectively, for the nine months ended September 30, 2015 and 2014, of which $102.9 million and $70.3 million were attributable to interest on our debt investments, $0.0 million and $1.9 million to dividends from equity securities, $1.0 million and $1.0 million to lease income and $3.4 million and $1.2 million to other income, respectively. The increase in investment income in the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 reflects an increase in interest income due to the larger investment portfolio in the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 and an increase in other income primarily due to amendment and structuring fees received during the nine months ended September 30, 2015, partially offset by a decrease in dividend income.

Expenses

Total operating expenses for the three months ended September 30, 2015 and 2014 were $11.2 million and $8.0 million respectively, comprised primarily of $4.7 million and $3.5 million in base management fees, $4.1 million and $2.8 million in interest expense and commitment fees, $0.5 million and $0.5 million in amortization of debt issuance costs, $0.4 million and $0.4 million in administrative expenses, $0.4 million and $0.3 million in legal and other professional fees, and $1.1 million and $0.5 million in other expenses, respectively. The increase in expenses in the three months ended September 30, 2015 compared to the three months ended September 30, 2014 primarily reflects the increase in management fees due to the larger portfolio and the increase in interest expense and other costs related to the increase in available and outstanding debt.

Total operating expenses for the nine months ended September 30, 2015 and 2014 were $32.8 million and $19.0 million, respectively, comprised of $13.7 million and $9.5 million in base management fees, $11.4 million and $4.7 million in interest expense and commitment fees, $2.0 million and $0.8 million in legal and professional fees, $1.6 million and $1.3 million in amortization of debt issuance costs, $1.2 million and $1.0 million in administrative expenses, and $2.9 million and $1.7 million in other expenses, respectively. The increase in expenses in the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 primarily reflects the increase in management fees due to the larger portfolio and the increase in interest expense and other costs related to the increase in available and outstanding debt.

Net investment income

Net investment income was $24.3 million and $19.2 million respectively, for the three months ended September 30, 2015 and 2014. The increase in in net investment income in the three months ended September 30, 2015 compared to the three months ended September 30, 2014 primarily reflects the increased interest and other income in the three months ended September 30, 2015, partially offset by the increase in expenses.

Net investment income was $74.5 million and $55.4 million, respectively, for the nine months ended September 30, 2015 and 2014. The increase in in net investment income in the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 primarily reflects the increased interest and other income in the nine months ended September 30, 2015, partially offset by the increase in expenses.

Net realized and unrealized gain or loss

Net realized gains for the three months ended September 30, 2015 and 2014 were $5.7 million and $0.9 million, respectively. The net realized gain during the three months ended September 30, 2015 was primarily comprised of a $5.9 million gain on the disposition of most of our investment in NEXTracker, Inc.

For the three months ended September 30, 2015 and 2014, the change in net unrealized appreciation/depreciation was $(7.6) million and $(5.4) million, respectively. The change in net unrealized appreciation/depreciation for the three months ended September 30, 2015 was primarily comprised of a $4.0 million unrealized gain on our investment in KAGY Holding Company, Inc., a $3.6 million reversal of prior period unrealized appreciation on our investment in NEXTracker, Inc., $2.4 million in unrealized depreciation on our loan to CORE Entertainment, Inc., and other mark-to-market adjustments primarily due to increases in market yields and spreads. The change in net unrealized depreciation for the three months ended September 30, 2014 was primarily a result of increases in market yield spreads and a markdown on an investment made prior to our initial public offering as part of our legacy distressed strategy which has yielded significant income for many years.
Net realized losses for the nine months ended September 30, 2015 and 2014 were $3.7 million and $4.9 million, respectively. The net realized loss during the nine months ended September 30, 2015 was due primarily to the restructure of our loan to Edmentum, in which we received debt and equity in a delevered company, partially offset by the $5.9 million gain on the partial disposition of our NEXTracker investment. Net realized loss during the nine months ended September 30, 2014 was due primarily to the disposition of our investment in ESP Holdings, Inc., an investment made prior to our initial public offering as part of our legacy distressed strategy which generated substantial cash interest income. For the nine months ended September 30, 2015 and 2014, the change in net unrealized appreciation was $0.0 million and $2.6 million, respectively. The change in net unrealized appreciation for the nine months ended September 30, 2015 and 2014 was primarily due to reversals of prior period net unrealized depreciation and other mark to market adjustments as a result of market yield spreads during the period.

Income tax expense, including excise tax

The Company has elected to be treated as a RIC under Subchapter M of the Internal Revenue Code (“the Code”) and operates in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, the Company must, among other things, timely distribute to its stockholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. The Company has made and intends to continue to make the requisite distributions to its stockholders which will generally relieve the Company from U.S. federal income taxes.

Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income. Any excise tax expense is recorded at year end as such amounts are known. There was no U.S. federal excise tax recorded during the three and nine months ended September 30, 2015 and 2014.

Gain on repurchase of Series A preferred interests

Gain on repurchase of Series A preferred interests was entirely comprised of a $1.7 million gain on repurchase of 1,675 Preferred Interests on June 30, 2015 at a price of $31.8 million.

Dividends to preferred equity holders

Dividends on the Preferred Interests for the three months ended September 30, 2015 and 2014 were $0.1 million and $0.4 million, respectively. The decrease in dividends on Preferred Interests during the three months ended September 30, 2015 was due to the full repurchase of the Preferred Interests on September 3, 2015. Dividends on the Preferred Interests for the nine months ended September 30, 2015 and 2014 were $0.8 million and $1.1 million, respectively. The decrease in dividends on Preferred Interests during the nine months ended September 30, 2015 was due to the full repurchase of the Preferred Interests on September 3, 2015.

Incentive compensation

Incentive compensation distributable to the General Partner for the three months ended September 30, 2015 and 2014 was $4.8 million and $3.8 million, respectively. Incentive compensation distributable to the General Partner for the nine months ended September 30, 2015 and 2014 was $14.7 million and $10.9 million, respectively. Incentive compensation for the three and nine months ended September 30, 2015 and 2014 was distributable due to our performance exceeding the cumulative total return threshold. The change in reserve for incentive compensation to the General Partner for the three months ended September 30, 2015 and 2014 was $0.0 million and a reduction of $0.9 million, respectively. The change in reserve for incentive compensation to the General Partner for the nine months ended September 30, 2015 and 2014 was $0.0 million and a reduction of $0.5 million, respectively. The change in reserve for incentive compensation for the three and nine months ended September 30, 2015 and 2014 represents the change in the amount in excess of distributable incentive compensation which would have been earned by the General Partner had we liquidated at net asset value at September 30, 2015 and 2014, respectively.
Net increase in net assets resulting from operations

The net increase in net assets resulting from operations was $17.5 million and $11.5 million for the three months ended September 30, 2015 and 2014, respectively. The higher net increase in net assets resulting from operations during the three months ended September 30, 2015 is primarily due to the increase in net investment income and the decrease in net realized and unrealized losses, partially offset by the net increase in the incentive allocation. The net increase in net assets resulting from operations was $57.0 million and $41.6 million for the nine months ended September 30, 2015 and 2014, respectively. The higher net increase in net assets resulting from operations during the nine months ended September 30, 2015 is primarily due to the increase in net investment income, partially offset by a corresponding increase in the incentive allocation.

Liquidity and capital resources

Since our inception, our liquidity and capital resources have been generated primarily through the initial private placement of common shares of SVCF (the predecessor entity) which were subsequently converted to common stock of the Company, the net proceeds from the initial and secondary public offerings of our common stock, amounts outstanding under our Leverage Program, and cash flows from operations, including investments sales and repayments and income earned from investments and cash equivalents. The primary uses of cash have been investments in portfolio companies, cash distributions to our equity holders, payments to service our Leverage Program and other general corporate purposes.

The following table summarizes the total shares issued and proceeds received in the public offering of the Company’s common stock net of underwriting discounts and offering costs as well as shares issued in connection with the Company’s dividend reinvestment plan for the nine months ended September 30, 2015:

Shares Issued
Price Per Share
Net Proceeds
At-the-market offerings
248,614
$
15.87
*
$
3,946,066
Shares issued from dividend reinvestment plan
404
14.86
*
6,012

*
Weighted-average price per share
The following table summarizes the total shares issued and proceeds received in the public offering of the Company’s common stock net of underwriting discounts and offering costs as well as shares issued in connection with the Company’s dividend reinvestment plan for the year ended December 31, 2014:

Shares Issued
Price Per Share
Net Proceeds
August 1, 2014 public offering
6,210,000
$
17.33
$
103,940,721
November 26, 2014 public offering
5,900,000
17.05
97,198,756
At-the-market offerings
400,225
16.04
*
6,420,426
Shares issued from dividend reinvestment plan
456
16.86
*
7,687

*
Weighted-average price per share

On October 3, 2014, we entered into an at-the-market equity offering program (the “ATM Program”) with Raymond James & Associates Inc. and Cantor Fitzgerald & Co. through which we may offer and sell, by means of at-the-market offerings from time to time, shares of our common stock having an aggregate offering price of up to $100,000,000. We did not issue any shares under the ATM Program during the three months ended September 30, 2015.

On August 4, 2015, the Company’s board of directors re-approved the Company’s stock repurchase plan (the “Company Repurchase Plan”), pursuant to which the Company may acquire up to $50 million in the aggregate of the Company’s common stock at prices at certain thresholds below the Company’s net asset value per share, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. The Company Repurchase Plan is designed to allow the Company to repurchase its common stock at times when it otherwise might be prevented from doing so under insider trading laws. The Company Repurchase Plan requires an agent selected by the Company to repurchase shares of common stock on the Company’s behalf if and when the market price per share is at certain thresholds below the most recently reported net asset value per share. Under the plan, the agent will increase the volume of purchases made if the price of the Company’s common stock declines, subject to volume restrictions. The timing and amount of any stock repurchased depends on the terms and conditions of the Company Repurchase Plan, the market price of the common stock and trading volumes, and no assurance can be given that any particular amount of common stock will be repurchased. Unless extended or terminated by its board of directors, the Company expects that the Company Repurchase Plan will be in effect through the earlier of two trading days after the Company’s third quarter 2015 earnings release or such time as the approved $50 million repurchase amount has been fully utilized, subject to certain conditions. The following table summarizes the total shares repurchased and amounts paid by the Company under the Company Repurchase Plan, including broker fees, for the nine months ended September 30, 2015:
Shares Repurchased
Price Per Share
Total Cost
Company Repurchase Plan
25,147
$
14.81
*
$
372,843

*
Weighted-average price per share

Total leverage outstanding and available at September 30, 2015 was as follows:

Maturity
Rate
Carrying Value †
Available
Total Capacity
Partnership Facility
Revolving Credit Facility
2018
L+1.75%
*
$
109,000,000
$
7,000,000
$
116,000,000
Term Loan
2018
L+1.75%
*
100,500,000
-
100,500,000
TCPC Funding Facility
2020
L+2.50%
*§
221,000,000
129,000,000
350,000,000
Convertible Notes ($108 million par)
2019
5.25%
106,005,233
-
106,005,233
SBA Debentures
2024-2025
2.84%
**
38,800,000
36,200,000
75,000,000
‡
Total leverage
$
575,305,233
$
172,200,000
$
747,505,233
*
Based on either LIBOR or the lender’s cost of funds, subject to certain limitations
†
Except for the Convertible Notes, all carrying values are the same as the principal amounts outstanding
§
Or L+2.25% subject to certain funding requirements
**
Weighted-average interest rate, excluding fees of 0.36%
‡
Anticipated total capacity of $150 million
On September 3, 2015, we fully repurchased and retired the remaining 5,025 Preferred Interests outstanding at a price of $100.5 million and expanded the Partnership Facility with a $100.5 million fully-drawn term loan and extended the maturity date to July 31, 2018.

On March 6, 2015, we expanded the TCPC Funding Facility by $50 million to $300 million, increased the accordion feature by $50 million to $350 million and extended the maturity date to March 6, 2019. On August 5, 2015, we expanded the TCPC Funding Facility by $50 million to $350 million and increased the accordion feature by $50 million to $400 million. On September 1, 2015, we extended the maturity date of the TCPC Funding Facility to March 6, 2020.

On July 13, 2015, we obtained exemptive relief from the SEC to permit us to exclude the debt of TCPC SBIC LP guaranteed by the SBA from our 200% asset coverage test under the 1940 Act. The exemptive relief provides us with increased flexibility under the 200% asset coverage test by permitting the SBIC to borrow up to $150 million more than it would otherwise be able to absent the receipt of this exemptive relief.

Net cash used in operating activities during the nine months ended September 30, 2015 was $52.4 million. Our primary use of cash in operating activities during this period consisted of the settlement of acquisitions of investments (net of dispositions) of $113.0 million, partially offset by net investment income less preferred dividends and incentive allocation (net of non-cash income and expenses) of approximately $60.6 million.

Net cash provided by financing activities was $59.7 million during the nine months ended September 30, 2015, consisting primarily of $246.3 million of net borrowings and $3.9 million of proceeds from common shares sold, reduced by the $132.3 million repurchase of the Preferred Interests, $52.8 million in regular dividends on common equity, payment of $3.8 million in debt issuance costs, $1.2 million in dividends on the Preferred Interests, and $0.4 million in common shares repurchases.

At September 30, 2015, we had $34.6 million in cash and cash equivalents.

The Partnership Facility and the TCPC Funding Facility are secured by substantially all of the assets in our portfolio, including cash and cash equivalents, and are subject to compliance with customary affirmative and negative covenants, including the maintenance of a minimum shareholders’ equity, the maintenance of a ratio of not less than 200% of total assets (less total liabilities other than indebtedness) to the sum of total preferred equity and indebtedness (excluding indebtedness of TCPC SBIC LP), and restrictions on certain payments and the issuance of debt. Unfavorable economic conditions may result in a decrease in the value of our investments, which would affect both the asset coverage ratios and the value of the collateral securing the Partnership Facility and the TCPC Funding Facility, and may therefore impact our ability to borrow under the Partnership Facility and the TCPC Funding Facility. In addition to regulatory restrictions that restrict our ability to raise capital, the Leverage Program contains various covenants which, if not complied with, could accelerate repayment of debt, thereby materially and adversely affecting our liquidity, financial condition and results of operations. At September 30, 2015, we were in compliance with all financial and operational covenants required by the Leverage Program.
Unfavorable economic conditions, while potentially creating attractive opportunities for us, may decrease liquidity and raise the cost of capital generally, which could limit our ability to renew, extend or replace the Leverage Program on terms as favorable as are currently included therein. If we are unable to renew, extend or replace the Leverage Program upon the various dates of maturity, we expect to have sufficient funds to repay the outstanding balances in full from our net investment income and sales of, and repayments of principal from, our portfolio company investments, as well as from anticipated debt and equity capital raises, among other sources. Unfavorable economic conditions may limit our ability to raise capital or the ability of the companies in which we invest to repay our loans or engage in a liquidity event, such as a sale, recapitalization or initial public offering. The Partnership Facility, the Convertible Notes and the TCPC Funding Facility mature in July 2018, December 2019, and March 2020, respectively. Any inability to renew, extend or replace the Leverage Program could adversely impact our liquidity and ability to find new investments or maintain distributions to our stockholders.

Challenges in the market are intensified for us by certain regulatory limitations under the Code and the 1940 Act. To maintain our qualification as a RIC, we must satisfy, among other requirements, an annual distribution requirement to pay out at least 90% of our ordinary income and short-term capital gains to our stockholders. Because we are required to distribute our income in this manner, and because the illiquidity of many of our investments may make it difficult for us to finance new investments through the sale of current investments, our ability to make new investments is highly dependent upon external financing. While we anticipate being able to continue to satisfy all covenants and repay the outstanding balances under the Leverage Program when due, there can be no assurance that we will be able to do so, which could lead to an event of default.

Contractual obligations

In addition to obligations under our Leverage Program, we have entered into several contracts under which we have future commitments. Pursuant to an investment management agreement, the Advisor manages our day-to-day operations and provides investment advisory services to us. Payments under the investment management agreement are equal to a percentage of the value of our gross assets (excluding cash and cash equivalents) and an incentive compensation, plus reimbursement of certain expenses incurred by the Advisor. Under our administration agreement, the Administrator provides us with administrative services, facilities and personnel. Payments under the administration agreement are equal to an allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations to us, and may include rent and our allocable portion of the cost of certain of our officers and their respective staffs. We are responsible for reimbursing the Advisor for due diligence and negotiation expenses, fees and expenses of custodians, administrators, transfer and distribution agents, counsel and directors, insurance, filings and registrations, proxy expenses, expenses of communications to investors, compliance expenses, interest, taxes, portfolio transaction expenses, costs of responding to regulatory inquiries and reporting to regulatory authorities, costs and expenses of preparing and maintaining our books and records, indemnification, litigation and other extraordinary expenses and such other expenses as are approved by the directors as being reasonably related to our organization, offering, capitalization, operation or administration and any portfolio investments, as applicable. The Advisor is not responsible for any of the foregoing expenses and such services are not investment advisory services under the 1940 Act. Either party may terminate each of the investment management agreement and administration agreement without penalty upon not less than 60 days’ written notice to the other.

Distributions

Our quarterly dividends and distributions to common stockholders are recorded on the ex-dividend date. Distributions are declared considering our estimate of taxable income available for distribution to stockholders and the amount of taxable income carried over from the prior year for distribution in the current year. We do not have a policy to pay distributions at a specific level and expect to continue to distribute substantially all of our taxable income. We cannot assure stockholders that they will receive any distributions or distributions at a particular level.
The following tables summarize dividends declared for the nine months ended September 30, 2015 and September 30, 2014:

Date Declared
Record Date
Payment Date
Type
Amount Per Share
Total Amount
March 10, 2015
March 19, 2015
March 31, 2015
Regular
$
0.36
$
17,535,826
May 7, 2015
June 16, 2015
June 30, 2015
Regular
0.36
17,625,370
August 6, 2015
September 16, 2015
September 30, 2015
Regular
0.36
17,625,310
$
1.08
$
52,786,506

Date Declared
Record Date
Payment Date
Type
Amount Per Share
Total Amount
March 6, 2014
March 17, 2014
March 31, 2014
Regular
$
0.36
$
13,031,970
May 7, 2014
June 18, 2014
June 30, 2014
Regular
0.36
13,032,007
May 7, 2014
June 18, 2014
June 30, 2014
Special
0.05
1,810,001
August 7, 2014
September 16, 2014
September 3, 2014
Regular
0.36
15,267,647
$
1.13
$
43,141,625

The following table summarizes the total shares issued in connection with our dividend reinvestment plan for the nine months ended September 30, 2015 and 2014:

2015
2014
Shares Issued
404
326
Average Price Per Share
$
14.86
$
16.90
Proceeds
$
6,012
$
5,509

We have elected to be taxed as a RIC under Subchapter M of the Code. In order to maintain favorable RIC tax treatment, we must distribute annually to our stockholders at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, out of the assets legally available for distribution. In order to avoid certain excise taxes imposed on RICs, we must distribute during each calendar year an amount at least equal to the sum of:

•
98% of our ordinary income (not taking into account any capital gains or losses) for the calendar year;

•
98.2% of the amount by which our capital gains exceed our capital losses (adjusted for certain ordinary losses) for the one-year period generally ending on October 31 of the calendar year; and

•
certain undistributed amounts from previous years on which we paid no U.S. federal income tax.

We may, at our discretion, carry forward taxable income in excess of calendar year distributions and pay a 4% excise tax on this income. If we choose to do so, all other things being equal, this would increase expenses and reduce the amounts available to be distributed to our stockholders. We will accrue excise tax on estimated taxable income as required. In addition, although we currently intend to distribute realized net capital gains (i.e., net long-term capital gains in excess of short-term capital losses), if any, at least annually, out of the assets legally available for such distributions, we may in the future decide to retain such capital gains for investment.

We have adopted an “opt in” dividend reinvestment plan for our common stockholders. As a result, if we declare a dividend or other distribution payable in cash, each stockholder that has not “opted in” to our dividend reinvestment plan will receive such dividends in cash, rather than having their dividends automatically reinvested in additional shares of our common stock.

We may not be able to achieve operating results that will allow us to make dividends and distributions at a specific level or to increase the amount of these dividends and distributions from time to time. Also, we may be limited in our ability to make dividends and distributions due to the asset coverage test applicable to us as a BDC under the 1940 Act and due to provisions in our existing and future credit facilities. If we do not distribute a certain percentage of our income annually, we will suffer adverse tax consequences, including possible loss of favorable RIC tax treatment. In addition, in accordance with U.S. generally accepted accounting principles and tax regulations, we include in income certain amounts that we have not yet received in cash, such as PIK interest, which represents contractual interest added to the loan balance that becomes due at the end of the loan term, or the accrual of original issue or market discount. Since we may recognize income before or without receiving cash representing such income, we may have difficulty meeting the requirement to distribute at least 90% of our investment company taxable income to obtain tax benefits as a RIC and may be subject to an excise tax.
In order to satisfy the annual distribution requirement applicable to RICs, we have the ability to declare a large portion of a dividend in shares of our common stock instead of in cash. As long as a portion of such dividend is paid in cash and certain requirements are met, the entire distribution would be treated as a dividend for U.S. federal income tax purposes.

Related Parties

We have entered into a number of business relationships with affiliated or related parties, including the following:

• Each of the Company, the Partnership, TCPC Funding, and the SBIC has entered into an investment management agreement with the Advisor.

• The Administrator provides us with administrative services necessary to conduct our day-to-day operations. For providing these services, facilities and personnel, the Administrator may be reimbursed by us for expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of certain of our officers and the Administrator’s administrative staff and providing, at our request and on our behalf, significant managerial assistance to our portfolio companies to which we are required to provide such assistance.

• We have entered into a royalty-free license agreement with the Advisor, pursuant to which the Advisor has agreed to grant us a non-exclusive, royalty-free license to use the name “TCP.”

• Pursuant to its limited partnership agreement, the general partner of the Partnership is SVOF/MM, LLC. SVOF/MM, LLC is an affiliate of the Advisor and the general partners or managing member of certain other funds managed by the Advisor.

The Advisor and its affiliates, employees and associates currently do and in the future may manage other funds and accounts. The Advisor and its affiliates may determine that an investment is appropriate for us and for one or more of those other funds or accounts. Accordingly, conflicts may arise regarding the allocation of investments or opportunities among us and those accounts. In general, the Advisor will allocate investment opportunities pro rata among us and the other funds and accounts (assuming the investment satisfies the objectives of each) based on the amount of committed capital each then has available. The allocation of certain investment opportunities in private placements is subject to independent director approval pursuant to the terms of the co-investment exemptive order applicable to us. In certain cases, investment opportunities may be made other than on a pro rata basis. For example, we may desire to retain an asset at the same time that one or more other funds or accounts desire to sell it or we may not have additional capital to invest at a time the other funds or accounts do. If the Advisor is unable to manage our investments effectively, we may be unable to achieve our investment objective. In addition, the Advisor may face conflicts in allocating investment opportunities between us and certain other entities that could impact our investment returns. While our ability to enter into transactions with our affiliates is restricted under the 1940 Act, we have received an exemptive order from the SEC permitting certain affiliated investments subject to certain conditions. As a result, we may face conflict of interests and investments made pursuant to the exemptive order conditions which could in certain circumstances affect adversely the price paid or received by us or the availability or size of the position purchased or sold by us.

Recent Developments

From October 1, 2015 through November 4, 2015, the Partnership invested approximately $15.0 million primarily in three senior secured loans with a combined effective yield of approximately 10.9% and a small yield generating equity position.

On November 3, 2015, the Company’s board of directors re-approved the Company Repurchase Plan, to be in effect through the earlier of two trading days after the Company’s annual 2015 earnings release or such time as the approved $50 million repurchase amount has been fully utilized, subject to certain conditions.

On November 3, 2015, the board of directors of the Company voted to add an additional independent director, Brian F. Wruble, to the board of directors effective as of November 5, 2015.
On November 5, 2015, the Company’s board of directors declared a fourth quarter regular dividend of $0.36 per share payable on December 31, 2015 to stockholders of record as of the close of business on December 17, 2015.
Item 3: Quantitative and qualitative disclosure about market risk

We are subject to financial market risks, including changes in interest rates. At September 30, 2015, 78.4% of our debt investments bore interest based on floating rates, such as LIBOR, EURIBOR, the Federal Funds Rate or the Prime Rate. The interest rates on such investments generally reset by reference to the current market index after one to six months. At September 30, 2015, the percentage of our floating rate debt investments that bore interest based on an interest rate floor was 77.5%. Floating rate investments subject to a floor generally reset by reference to the current market index after one to six months only if the index exceeds the floor.

Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. We assess our portfolio companies periodically to determine whether such companies will be able to continue making interest payments in the event that interest rates increase. There can be no assurances that the portfolio companies will be able to meet their contractual obligations at any or all levels of increases in interest rates.

Based on our September 30, 2015 balance sheet, the following table shows the annual impact on net income (excluding the related incentive compensation impact) of base rate changes in interest rates (considering interest rate floors for variable rate instruments) assuming no changes in our investment and borrowing structure:

Basis Point Change
Interest income
Interest Expense
Net Income
Up 300 basis points
$
27,462,610
$
(12,915,000
)
$
14,547,610
Up 200 basis points
16,654,872
(8,610,000
)
8,044,872
Up 100 basis points
6,014,444
(4,305,000
)
1,709,444
Down 100 basis points
(1,052,095
)
1,425,386
373,290
Down 200 basis points
(1,052,095
)
1,425,386
373,290
Down 300 basis points
(1,052,095
)
1,425,386
373,290

Item 4. Controls and Procedures

As of the period covered by this report, we, including our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on our evaluation, our management, including the chief executive officer and chief financial officer, concluded that our disclosure controls and procedures were effective in timely alerting management, including the chief executive officer and chief financial officer, of material information about us required to be included in our periodic SEC filings. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, are based upon certain assumptions about the likelihood of future events and can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. There has not been any change in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
PART II - Other Information

Item 1. Legal Proceedings

Although we may, from time to time, be involved in litigation arising out of our operations in the normal course of business or otherwise, as of September 30, 2015, we are currently not a party to any pending material legal proceedings.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in our most recent annual report on Form 10-K, as filed with the Securities and Exchange Commission on March 10, 2015.

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

None.

Item 3.
Defaults Upon Senior Securities.

None.

Item 4:
Mine Safety Disclosures.

None.

Item 5:
Other Information.

None.

Item 6: Exhibits

Number
Description
3.1
Articles of Incorporation of the Registrant (1)
3.2
Bylaws of the Registrant (2)
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934*
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934*
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U. S. C. 1350)*

* Filed herewith.
(1)
Incorporated by reference to Exhibit (a)(2) to the Registrant's Registration Statement under the Securities Act of 1933 (File No. 333-172669), on Form N-2, filed on May 13, 2011
(2)
Incorporated by reference to Exhibit (b)(2) to the Registrant's Registration Statement under the Securities Act of 1933 (File No. 333-172669), on Form N-2, filed on May 13, 2011
SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

TCP CAPITAL CORP.

Date: November 5, 2015
By:
/s/ Howard M. Levkowitz
Name:
Howard M. Levkowitz
Title:
Chief Executive Officer

Date: November 5, 2015
By:
/s/ Paul L. Davis
Name:
Paul L. Davis
Title:
Chief Financial Officer
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