Annual Statements Open main menu
  1. Annual Statements
  2. » Companies
  3. » Bain Capital Specialty Finance, Inc.
  4. » Quarter Report: 2022 March (Form 10-Q)

Bain Capital Specialty Finance, Inc. - Quarter Report: 2022 March (Form 10-Q)

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

 

x

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

 

For the quarterly period ended March 31, 2022

 

OR

 

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

 

Commission file number: 814-01175

 

BAIN CAPITAL SPECIALTY FINANCE, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   81-2878769
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification No.)

 

200 Clarendon Street, 37th Floor
Boston, MA
(Address of principal executive offices)		   02116
(Zip Code)

 

(617) 516-2000

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.001 per share   BCSF   New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ¨  No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer x Accelerated filer ¨
Non-accelerated filer ¨ Smaller reporting company ¨
  Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

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

 

As of May 5, 2022 the registrant had 64,562,265.27 shares of common stock, $0.001 par value, outstanding.

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
PART I FINANCIAL INFORMATION 2
     
Item 1. Consolidated Financial Statements 2
     
  Consolidated Statements of Assets and Liabilities as of March 31, 2022 (unaudited) and December 31, 2021 2
     
  Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 (unaudited) 3
     
  Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2022 and 2021 (unaudited) 4
     
  Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited) 5
     
  Consolidated Schedules of Investments as of March 31, 2022 (unaudited) and December 31, 2021 6
     
  Notes to Consolidated Financial Statements (unaudited) 23
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 71
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 112
     
Item 4. Controls and Procedures 113
     
PART II OTHER INFORMATION 114
     
Item 1. Legal Proceedings 114
     
Item 1A. Risk Factors 114
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 114
     
Item 3. Defaults Upon Senior Securities 114
     
Item 4. Mine Safety Disclosures 114
     
Item 5. Other Information 114
     
Item 6. Exhibits 114
     
Signatures 118

 

 

 

 

FORWARD-LOOKING STATEMENTS

 

Statements contained in this Quarterly Report on Form 10-Q (the “Quarterly Report”) (including those relating to current and future market conditions and trends in respect thereof) that are not historical facts are based on current expectations, estimates, projections, opinions and/or beliefs of the Company, BCSF Advisors, LP (the “Advisor”) and/or Bain Capital Credit, LP and its affiliated advisers (collectively, “Bain Capital Credit”). Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. Certain information contained in this Quarterly Report constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “seek,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” “target,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of the Company may differ materially from those reflected or contemplated in such forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and are difficult to predict, that could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation, the risks, uncertainties and other factors we identify in the section entitled Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K (the “Annual Report”) for the fiscal year ended December 31, 2021 and in our filings with the Securities and Exchange Commission (the “SEC”).

 

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, some of those assumptions may be based on the work of third parties and any of those assumptions could prove to be inaccurate; as a result, the forward-looking statements based on those assumptions also could prove to be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in the section entitled Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Investors should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report. We do not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which preclude civil liability for certain forward-looking statements, do not apply to the forward-looking statements in this Quarterly Report because we are an investment company.

 

 

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

Bain Capital Specialty Finance, Inc.
 
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share data)

 

   As of   As of 
   March 31, 2022   December 31, 2021 
         
   (Unaudited)   
Assets          
Investments at fair value:          
Non-controlled/non-affiliate investments (amortized cost of $1,703,867 and $1,921,970, respectively)  $1,677,843   $1,901,054 
Non-controlled/affiliate investment (amortized cost of $122,015 and $100,888, respectively)   140,084    113,290 
Controlled affiliate investment (amortized cost of $343,260 and $288,526, respectively)   336,745    274,761 
Cash and cash equivalents   55,963    87,443 
Foreign cash (cost of $25,588 and $30,877, respectively)   24,844    29,979 
Restricted cash and cash equivalents   34,032    86,159 
Collateral on forward currency exchange contracts   584    2,815 
Deferred financing costs   2,070    2,178 
Interest receivable on investments   20,785    19,269 
Receivable for sales and paydowns of investments   4,212    30,334 
Prepaid Insurance   15    193 
Unrealized appreciation on forward currency exchange contracts   6,972    5,321 
Dividend receivable   6,479    18,397 
Total Assets  $2,310,628   $2,571,193 
           
Liabilities          
Debt (net of unamortized debt issuance costs of $13,323 and $15,718, respectively)  $1,090,677   $1,414,982 
Interest payable   7,649    7,058 
Payable for investments purchased   64,589    7,594 
Base management fee payable   8,369    8,792 
Incentive fee payable   3,311    4,727 
Accounts payable and accrued expenses   2,346    6,083 
Distributions payable   21,951    21,951 
Total Liabilities   1,198,892    1,471,187 
           
Commitments and Contingencies (See Note 10)          
           
Net Assets          
Common stock, par value $0.001 per share, 100,000,000,000 and 100,000,000,000 shares authorized, 64,562,265 and 64,562,265 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively   65    65 
Paid in capital in excess of par value   1,168,384    1,168,384 
Total distributable earnings (loss)   (56,713)   (68,443)
Total Net Assets   1,111,736    1,100,006 
Total Liabilities and Total Net assets  $2,310,628   $2,571,193 
           
Net asset value per share  $17.22   $17.04 

 

See Notes to Consolidated Financial Statements

 

2 

 

 

Bain Capital Specialty Finance, Inc.
 
Consolidated Statements of Operations
(in thousands, except share and per share data)
(Unaudited)

 

   For the Three Months
Ended March 31		   For the Three Months
Ended March 31		 
   2022   2021 
Income          
Investment income from non-controlled/non-affiliate investments:          
Interest from investments  $34,287   $39,913 
Dividend income   108    - 
PIK income   2,508    980 
Other income   465    3,456 
Total investment income from non-controlled/non-affiliate investments   37,368    44,349 
           
Investment income from non-controlled/affiliate investments:          
Interest from investments   324    424 
PIK income   1,404    1,385 
Total investment income from non-controlled/affiliate investments   1,728    1,809 
           
Investment income from controlled affiliate investments:          
Interest from investments   3,422    1,637 
Dividend income   3,493    2,036 
Total investment income from controlled affiliate investments   6,915    3,673 
Total investment income   46,011    49,831 
           
Expenses          
Interest and debt financing expenses   10,643    11,833 
Base management fee   8,369    8,698 
Incentive fee   3,311    6,728 
Professional fees   390    959 
Directors fees   175    171 
Other general and administrative expenses   1,420    1,390 
Total expenses before fee waivers   24,308    29,779 
Base management fee waiver   -    (2,113)
Total expenses, net of fee waivers   24,308    27,666 
Net investment income   21,703    22,165 
           
Net realized and unrealized gains (losses)          
Net realized gain on non-controlled/non-affiliate investments   1,417    18,413 
Net realized loss on controlled affiliate investments   -    (3,237)
Net realized loss on foreign currency transactions   (488)   (3,026)
Net realized gain (loss) on forward currency exchange contracts   1,243    (3,292)
Net change in unrealized appreciation on foreign currency translation   346    386 
Net change in unrealized appreciation on forward currency exchange contracts   1,651    4,577 
Net change in unrealized depreciation on non-controlled/non-affiliate investments   (5,108)   (3,224)
Net change in unrealized appreciation (depreciation) on non-controlled/affiliate investments   5,667    (372)
Net change in unrealized appreciation (depreciation) on controlled affiliate investments   7,250    (637)
Total net gains   11,978    9,588 
           
Net increase in net assets resulting from operations  $33,681   $31,753 
           
Basic and diluted net investment income per common share  $0.34   $0.34 
Basic and diluted increase in net assets resulting from operations per common share  $0.52   $0.49 
Basic and diluted weighted average common shares outstanding   64,562,265    64,562,265 

 

See Notes to Consolidated Financial Statements

 

3 

 

 

Bain Capital Specialty Finance, Inc.
 
Consolidated Statements of Changes in Net Assets
(in thousands, except share and per share data)
(Unaudited)

 

   For the Three Months
Ended March 31		   For the Three Months
Ended March 31		 
   2022   2021 
Operations:          
Net investment income  $21,703   $22,165 
Net realized gain   2,172    8,858 
Net change in unrealized appreciation   9,806    730 
Net increase in net assets resulting from operations   33,681    31,753 
Stockholder distributions:          
Distributions from distributable earnings   (21,951)   (21,951)
Net decrease in net assets resulting from stockholder distributions   (21,951)   (21,951)
           
Total increase in net assets   11,730    9,802 
Net assets at beginning of period   1,100,006    1,068,004 
Net assets at end of period  $1,111,736   $1,077,806 
           
Net asset value per common share  $17.22   $16.69 
Common stock outstanding at end of period   64,562,265    64,562,265 

 

See Notes to Consolidated Financial Statements

 

4 

 

 

Bain Capital Specialty Finance, Inc.
 
Consolidated Statements of Cash Flows
(in thousands, except share and per share data)
(Unaudited)

 

   For the Three Months
Ended March 31		   For the Three Months
Ended March 31		 
   2022   2021 
Cash flows from operating activities          
Net increase in net assets resulting from operations  $33,681    31,753 
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities:          
Purchases of investments   (241,809)   (262,104)
Proceeds from principal payments and sales of investments   111,524    415,738 
Net realized gain from investments   (1,417)   (15,176)
Net realized loss on foreign currency transactions   488    3,026 
Net change in unrealized appreciation on forward currency exchange contracts   (1,651)   (4,577)
Net change in unrealized (appreciation) depreciation on investments   (7,809)   4,233 
Net change in unrealized appreciation on foreign currency translation   (346)   (386)
Increase in investments due to PIK   (3,912)   (2,365)
Accretion of discounts and amortization of premiums   (1,523)   (1,698)
Amortization of deferred financing costs and debt issuance costs   1,009    2,600 
Changes in operating assets and liabilities:          
Collateral on forward currency exchange contracts   2,231    1,582 
Interest receivable on investments   (1,516)   608 
Prepaid Insurance   178    - 
Dividend receivable   11,918    (2,268)
Interest payable   591    (118)
Base management fee payable   (423)   295 
Incentive fee payable   (1,416)   2,929 
Accounts payable and accrued expenses   (1,550)   734 
Net cash provided by (used in) operating activities   (101,752)   174,806 
           
Cash flows from financing activities          
Borrowings on debt   55,000    375,500 
Repayments on debt   (16,000)   (486,774)
Payments of financing costs   (2,186)   - 
Payments of debt issuance costs   -    (5,657)
Stockholder distributions paid   (21,951)   (21,951)
Net cash (used in) provided by financing activities   14,863   (138,882)
           
Net increase (decrease) in cash, foreign cash, restricted cash and cash equivalents   (86,889)   35,924 
Effect of foreign currency exchange rates   (1,853)   (3,235)
Cash, foreign cash, restricted cash and cash equivalents, beginning of period   203,581    81,702 
Cash, foreign cash, restricted cash and cash equivalents, end of period  $114,839   $114,391 
           
Supplemental disclosure of cash flow information:          
Cash interest paid during the period  $9,042   $10,886 
Supplemental disclosure of non-cash information:          
Debt investment sold by the Company to ISLP  $-   $317,077 
Company investment into ISLP in exchange for investments sold  $-   $128,970 
Company investment into SLP  $5,584   $- 
Deconsolidation of 2018-1 Issuer          
Disposition of assets  $470,616   $- 
Reduction of liabilities  $390,448   $- 

 

   2022   2021 
Cash  $55,963   $36,248 
Restricted cash   34,032    76,730 
Foreign cash   24,844    1,413 
Total cash, foreign cash, restricted cash, and cash equivalents shown in the consolidated statements of cash flows  $114,839   $114,391 

  

See Notes to Consolidated Financial Statements

 

5 

 

Bain Capital Specialty Finance, Inc.

Consolidated Schedule of Investments

As of March 31, 2022

(In thousands)

(unaudited)

 

Control Type  Industry  Portfolio
Company		  Investment
Type		   Spread
Above
Index (1)		    Interest
Rate		    Maturity Date   Principal/
Shares (9)		    Cost    Market
Value		    % of NAV (4)
                                           
                                            
Non-Controlled/Non-Affiliate Investments                                   
   Aerospace & Defense  Ansett Aviation Training (6)(18)(19)  First Lien Senior Secured Loan   BBSY+ 4.69%    4.87%   9/24/2031    AUD21,215    15,931    15,931      
      Ansett Aviation Training (6)(14)(19)(25)  Equity Interest   —    —    —   AUD15,357    11,531    11,531      
      Forming Machining Industries Holdings, LLC (18)(19)  Second Lien Senior Secured Loan   L+ 8.25%    9.26%   10/9/2026   $6,540    6,497    5,853      
      Forming Machining Industries Holdings, LLC (18)  First Lien Senior Secured Loan   L+ 4.25%    4.47%   10/9/2025   $16,397    16,317    15,375      
      GSP Holdings, LLC (15)(19)(26)(29)  First Lien Senior Secured Loan   L+ 5.75% (0.25% PIK)    6.79%   11/6/2025   $35,559    35,483    32,892      
      GSP Holdings, LLC(3)(15)(19)(26)  First Lien Senior Secured Loan - Revolver   L+ 5.75% (0.25% PIK)    6.79%   11/6/2025   $2,736    2,720    2,531      
      Kellstrom Aerospace Group, Inc (14)(19)(25)  Equity Interest   —    —    —   $1    1,963    792      
      Kellstrom Commercial Aerospace, Inc. (3)(15)(19)  First Lien Senior Secured Loan - Revolver   SOFR+ 6.00%    7.00%   7/1/2025   $3,305    3,252    3,017      
      Kellstrom Commercial Aerospace, Inc. (15)(19)  First Lien Senior Secured Loan   SOFR+ 6.00%    7.00%   7/1/2025   $30,407    30,046    28,583      
      Mach Acquisition R/C (2)(3)(5)(18)(19)  First Lien Senior Secured Loan - Revolver   —    —    10/18/2026   $—    (183)   (176)     
      Mach Acquisition T/L (15)(19)  First Lien Senior Secured Loan   L+ 7.50%    8.50%   10/18/2026   $32,558    31,961    31,989      
      Precision Ultimate Holdings, LLC (14)(19)(25)  Equity Interest   —    —    —   $1,417    1,417    1,245      
      WCI-HSG HOLDCO, LLC (14)(19)(25)  Preferred Equity   —    —    —   $675    675    2,097      
      WCI-HSG Purchaser, Inc. (3)(15)(19)(29)  First Lien Senior Secured Loan - Revolver   L+ 4.75%    5.75%   2/22/2025   $309    305    309      
      WCI-HSG Purchaser, Inc. (15)(19)(29)  First Lien Senior Secured Loan   L+ 4.75%    5.75%   2/24/2025   $8,688    8,625    8,688      
      Whitcraft LLC (2)(3)(5)(19)  First Lien Senior Secured Loan - Revolver   —    —    4/3/2023   $—    (6)   (59)     
      Whitcraft LLC (15)(19)(29)  First Lien Senior Secured Loan   L+ 6.00%    7.01%   4/3/2023   $28,908    28,807    27,968      
      WP CPP Holdings, LLC. (15)  Second Lien Senior Secured Loan   L+ 7.75%    8.75%   4/30/2026   $11,724    11,653    11,479      
                           Aerospace & Defense Total $206,994   $200,045    18.0%
                                             
   Automotive  American Trailer Rental Group (19)(26)  Subordinated Debt   9.00% (2.00% PIK)    11.00%   12/1/2027   $4,924    4,856    4,924      
      American Trailer Rental Group (19)(26)  Subordinated Debt   9.00% (2.00% PIK)    11.00%   12/1/2027   $15,192    14,885    15,193      
      American Trailer Rental Group (19)(26)  Subordinated Debt   9.00% (2.00% PIK)    11.00%   12/1/2027   $10,000    9,785    10,000      
      American Trailer Rental Group (19)(26)  Subordinated Debt   9.00% (2.00% PIK)    11.00%   12/1/2027   $9,000    8,799    9,000      
      Cardo (6)(17)(19)  First Lien Senior Secured Loan   L+ 6.00%    6.50%   5/12/2028   $98    97    98      
      CST Buyer Company (3)(5)(19)  First Lien Senior Secured Loan - Revolver   —    —    10/3/2025   $—    (9)   —      
      CST Buyer Company (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.55%    6.50%   10/3/2025   $13,638    13,573    13,638      
      JHCC Holdings, LLC (15)(19)(28)  First Lien Senior Secured Loan - Delayed Draw   P+ 4.75%    8.25%   9/9/2025   $2,635    2,619    2,503      
      JHCC Holdings, LLC (3)(15)(19)  First Lien Senior Secured Loan - Revolver   L+ 5.75%    6.75%   9/9/2025   $1,673    1,643    1,532      
      JHCC Holdings, LLC (15)(19)  First Lien Senior Secured Loan - Delayed Draw   L+ 5.75%    6.76%   9/9/2025   $5,782    5,777    5,493      
      JHCC Holdings, LLC (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.75%    6.76%   9/9/2025   $21,428    21,236    20,357      
                           Automotive Total $83,261   $82,738    7.4%
                                             
   Banking  Green Street Parent, LLC (3)(5)(19)(29)  First Lien Senior Secured Loan - Revolver   —    —    8/27/2025   $—    (27)   —      
      Green Street Parent, LLC (16)(19)(29)  First Lien Senior Secured Loan   L+ 5.75%    6.50%   8/27/2026   $3,428    3,382    3,428      
      Green Street Parent, LLC (16)(19)(29)  First Lien Senior Secured Loan   L+ 5.75%    6.50%   8/27/2026   $4,489    4,404    4,489      
                           Banking Total   $7,759   $7,917    0.7%
                                            
                                             
   Beverage, Food & Tobacco  NPC International, Inc. (14)(19)(25)(27)  Equity Interest   —    —    —   $564    843    213      
                           Beverage, Food & Tobacco Total $843   $213    0.0%
                                             
   Capital Equipment  ClockSpring (15)(19)  Second Lien Senior Secured Loan   SOFR+ 6.50%    7.50%   8/1/2025   $5,100    4,998    4,998      
      East BCC Coinvest II, LLC (14)(19)(25)  Equity Interest   —    —    —   $1,419    1,419    1,135      
      FCG Acquisitions, Inc. (14)(19)(25)  Preferred Equity   —    —    —   $4    —    —      
      Jonathan Acquisition Company (15)(19)  Second Lien Senior Secured Loan   L+ 9.00%    10.00%   12/22/2027   $8,000    7,828    8,000      
      TCFIII Owl Finance, LLC (19)  First Lien Senior Secured Loan   12.00%   12.00%   1/30/2027   $4,420    4,356    4,354      
                           Capital Equipment Total  $18,601   $18,487    1.7%
                                             
   Chemicals, Plastics & Rubber  V Global Holdings LLC (16)(19)(29)  First Lien Senior Secured Loan   SOFR+ 5.25%    6.00%   12/22/2027   $14,391    14,069    14,391      
      V Global Holdings LLC (3)(5)(16)(19)  First Lien Senior Secured Loan - Revolver   SOFR+ 5.25%    6.00%   12/22/2025   $—    (147)   —      
                           Chemicals, Plastics & Rubber Total  $13,922   $14,391    1.3%
                                             
   Construction & Building  Chase Industries, Inc. (15)(19)(26)  First Lien Senior Secured Loan - Delayed Draw   L+ 5.50% PIK    6.50%   5/12/2025   $1,253    1,251    977      
      Chase Industries, Inc. (15)(19)(26)  First Lien Senior Secured Loan   L+ 5.50% PIK    6.50%   5/12/2025   $13,058    13,027    10,185      
      Elk Parent Holdings, LP (14)(19)(25)  Equity Interest   —    —    —   $1    12    568      
      Elk Parent Holdings, LP (14)(19)(25)  Preferred Equity   —    —    —   $120    1,202    1,455      
      Regan Development Holdings Limited (6)(17)(19)  First Lien Senior Secured Loan   EURIBOR+ 6.50%    7.00%   4/18/2022   €2,087    2,274    2,244      
      Regan Development Holdings Limited (6)(17)(19)  First Lien Senior Secured Loan   EURIBOR+ 6.50%    7.00%   4/18/2022   €677    768    727      
      Regan Development Holdings Limited (6)(17)(19)  First Lien Senior Secured Loan   EURIBOR+ 6.50%    7.00%   4/18/2022   €6,335    6,902    6,775      
      ServiceMaster LP Interest Class B Preferred Units (14)(19)(25)  Equity Interest   —    —    —   $327    327    341      
      Service Master Revolving Loan (3)(15)(19)  First Lien Senior Secured Loan - Revolver   L+ 7.50%    8.50%   8/16/2027   $1,888    1,808    1,888      
      Service Master Term Note (3)(15)(19)  First Lien Senior Secured Loan   L+ 7.50%    8.50%   8/16/2027   $936    919    936      
      YLG Holdings, Inc. (19)(21)  First Lien Senior Secured Loan - Delayed Draw   L+ 6.00%    6.25%   10/31/2025   $5,047    5,042    5,047      
      YLG Holdings, Inc. (3)(5)(19)  First Lien Senior Secured Loan - Revolver   —    —    10/31/2025   $—    (51)   —      
      YLG Holdings, Inc. (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.25%    6.25%   10/31/2025   $27,361    27,231    27,361      
                           Construction & Building Total   $60,712   $58,504    5.3%
                                             
   Consumer Goods: Durable  New Milani Group LLC (15)(19)  First Lien Senior Secured Loan   L+ 6.50%    7.51%   6/6/2024   $20,873    20,372    20,665      
      Stanton Carpet T/L 2nd Lien (15)(19)  Second Lien Senior Secured Loan   L+ 9.00%    10.00%   4/1/2028   $14,664    14,387    14,445      
      Tangent Technologies Acquisition, LLC (15)(19)  Second Lien Senior Secured Loan   SOFR+ 8.75%    9.75%   5/30/2028   $8,915    8,743    8,737      
      TLC Holdco LP (14)(19)(25)  Equity Interest   —    —    —   $1,188    1,186    446      
      TLC Purchaser, Inc. (2)(3)(5)(19)  First Lien Senior Secured Loan - Delayed Draw   —    —    10/13/2025   $—    (42)   (854)     
      TLC Purchaser, Inc. (3)(19)  First Lien Senior Secured Loan - Revolver   P+ 5.25%    8.75%   10/13/2025   $6,408    6,303    5,340      
      TLC Purchaser, Inc. (15)(19)(29)  First Lien Senior Secured Loan   L+ 6.25%    7.25%   10/13/2025   $31,371    30,978    27,607      
                           Consumer Goods: Durable Total   $81,927   $76,386    6.9%
                                             
   Consumer Goods: Non-Durable  Fineline Technologies, Inc. (14)(19)(25)  Equity Interest   —    —    —   $939    939    1,300      
      FL Hawk Intermediate Holdings, Inc. (15)(19)  Second Lien Senior Secured Loan   L+ 9.00%    10.00%   8/22/2028   $21,125    20,563    21,125      
      RoC Opco LLC (3)(5)(19)  First Lien Senior Secured Loan - Revolver   —    —    2/25/2025   $—    (103)   —      
      RoC Opco LLC (15)(19)(29)  First Lien Senior Secured Loan   L+ 8.50%    9.50%   2/25/2025   $31,157    30,733    31,157      
      Solaray, LLC (15)(19)  First Lien Senior Secured Loan - Delayed Draw   L+ 5.50%    6.50%   9/9/2023   $14,276    14,276    14,276      
      Solaray, LLC (3)(15)(19)  First Lien Senior Secured Loan - Revolver   L+ 4.50%    5.50%   9/9/2022   $2,267    2,259    2,267      
      Solaray, LLC (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.50%    6.50%   9/11/2023   $30,926    30,926    30,926      
      WU Holdco, Inc. (3)(18)(19)  First Lien Senior Secured Loan - Revolver   L+ 5.50%    5.72%   3/26/2025   $563    532    563      
      WU Holdco, Inc. (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.50%    6.50%   3/26/2026   $37,895    37,409    37,895      
      WU Holdco, Inc. (15)(19)(28)  First Lien Senior Secured Loan - Delayed Draw   L+ 5.50%    6.50%   3/26/2026   $1,708    1,679    1,708      
                           Consumer Goods: Non-Durable Total $139,213   $141,217    12.7%

 

6 

 

 

Control Type  Industry  Portfolio
Company		  Investment
Type		   Spread
Above
Index (1)		    Interest
Rate		    Maturity Date   Principal/
Shares (9)		    Cost    Market
Value		    % of NAV (4) 
   Consumer Goods: Wholesale  WSP LP Interest (14)(19)(25)  Equity Interest   —    —    —   $2,898    2,898    2,182      
      WSP Initial Term Loan (15)(19)(29)  First Lien Senior Secured Loan   L+ 6.25%    7.25%   4/27/2027   $6,048    5,938    5,851      
      WSP Initial Term Loan (2)(3)(5)(19)  First Lien Senior Secured Loan - Delayed Draw   —    —    4/27/2023   $—    (28)   (58)     
      WSP Revolving Loan (3)(18)(19)  First Lien Senior Secured Loan - Revolver   L+ 6.25%    6.25%   4/27/2027   $47    39    33      
                           Consumer Goods: Wholesale Total $8,847   $8,008    0.7%
                                             
   Containers, Packaging, & Glass  ASP-r-pac Acquisition Co LLC (3)(5)(19)  First Lien Senior Secured Loan - Revolver   —    —    12/29/2027   $—    (62)   —      
      ASP-r-pac Acquisition Co LLC (16)(19)(29)  First Lien Senior Secured Loan   L+ 6.00%    6.75%   12/29/2027   $14,139    13,869    14,139      
                           Containers, Packaging, & Glass Total $13,807   $14,139    1.3%
                                             
   Energy: Oil & Gas  Amspec Services, Inc. (3)(18)(19)  First Lien Senior Secured Loan - Revolver   L+ 5.75%    5.75%   7/2/2024   $708    681    708      
      Amspec Services, Inc. (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.75%    6.76%   7/2/2024   $33,249    33,051    33,248      
      Amspec Services, Inc. (15)(19)  First Lien Senior Secured Loan   L+ 5.75%    6.75%   7/2/2024   $2,791    2,765    2,791      
                            Energy: Oil & Gas Total $36,497   $36,747    3.3%
                                             
   FIRE: Finance  Allworth Financial Group, L.P. (3)(15)(19)(29)  First Lien Senior Secured Loan - Delayed Draw   SOFR+ 4.75%    5.75%   12/23/2026   $2,522    2,472    2,522      
      Allworth Financial Group, L.P. (15)(19)(29)  First Lien Senior Secured Loan   SOFR+ 4.75%    5.75%   12/23/2026   $8,618    8,520    8,618      
      Allworth Financial Group, L.P. (3)(5)(19)  First Lien Senior Secured Loan - Revolver   —    —    12/23/2026   $—    (14)   —      
      TA/Weg Holdings (15)(19)(29)  First Lien Senior Secured Loan - Delayed Draw   L+ 5.75%    6.75%   10/2/2025   $9,471    9,471    9,471      
      TA/Weg Holdings (15)(19)  First Lien Senior Secured Loan - Delayed Draw   L+ 5.75%    6.75%   10/2/2025   $2,391    2,380    2,391      
                           FIRE: Finance Total  $22,829   $23,002    2.1%
                                             
   FIRE: Insurance  Margaux Acquisition Inc. (15)(19)  First Lien Senior Secured Loan - Delayed Draw   L+ 5.75%    6.68%   12/19/2024   $9,175    9,152    9,175      
      Margaux Acquisition Inc. (3)(5)(19)  First Lien Senior Secured Loan - Revolver   —    —    12/19/2024   $—    (26)   —      
      Margaux Acquisition Inc. (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.75%    6.68%   12/19/2024   $17,728    17,535    17,728      
      Margaux UK Finance Limited (2)(3)(5)(6)(19)  First Lien Senior Secured Loan - Revolver   —    —    12/19/2024   £—    (5)   (3)     
      Margaux UK Finance Limited (6)(16)(19)  First Lien Senior Secured Loan   SONIA+ 5.75%    6.50%   12/19/2024   £7,551    9,747    9,871      
      MRHT Facility A (6)(18)(19)  First Lien Senior Secured Loan   EURIBOR+ 5.50%    5.50%   7/26/2028   €216    249    239      
      MRHT Acquisition Facility (3)(6)(18)(19)  First Lien Senior Secured Loan   EURIBOR+ 5.50%    5.50%   7/26/2028   €267    297    296      
      Paisley Bidco Limited (6)(18)(19)  First Lien Senior Secured Loan   EURIBOR+ 5.50%    5.50%   11/26/2028   £3,210    3,584    3,558      
      Paisley Bidco Limited (3)(5)(6)(18)(19)  First Lien Senior Secured Loan - Revolver   —    —    11/26/2028   £—    (81)   —      
      World Insurance (15)(19)(29)  First Lien Senior Secured Loan - Delayed Draw   L+ 5.75%    6.75%   4/1/2026   $8,337    8,271    8,337      
      World Insurance (3)(15)(19)  First Lien Senior Secured Loan - Revolver   L+ 5.75%    6.75%   4/1/2026   $70    55    70      
      World Insurance (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.75%    6.76%   4/1/2026   $3,137    3,084    3,137      
                           FIRE: Insurance Total   $51,862   $52,408    4.7%
                                             
   Healthcare & Pharmaceuticals  CB Titan Holdings, Inc. (14)(19)(25)  Preferred Equity   —    —        $1,953    1,953    1,053      
      CPS Group Holdings, Inc. (3)(5)(19)  First Lien Senior Secured Loan - Revolver   —    —    3/3/2025   $—    (49)   —      
      CPS Group Holdings, Inc. (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.25%    6.00%   3/3/2025   $44,902    44,654    44,902      
      Datix Bidco Limited (6)(18)(19)  First Lien Senior Secured Loan - Revolver   SONIA+ 4.50%    4.96%   10/28/2024   £10    13    13      
      Datix Bidco Limited (6)(18)(19)  Second Lien Senior Secured Loan   L+ 7.75%    8.21%   4/27/2026   £121    164    160      
      Datix Bidco Limited (6)(18)(19)  First Lien Senior Secured Loan   BBSW+ 4.00%    4.25%   4/28/2025   £42    32    32      
      Great Expressions Dental Center PC (3)(13)(15)(19)(26)  First Lien Senior Secured Loan - Revolver   L+ 4.25% (0.50% PIK)    5.75%   9/28/2022   $966    964    871      
      Great Expressions Dental Center PC (15)(19)(26)  First Lien Senior Secured Loan   L+ 4.25% (0.50% PIK)    5.75%   9/28/2023   $7,841    7,860    7,214      
      Mertus 522. GmbH (6)(18)(19)  First Lien Senior Secured Loan   EURIBOR+ 6.25%    6.25%   5/28/2026   €131    142    146      
      Mertus 522. GmbH (6)(18)(19)  First Lien Senior Secured Loan   EURIBOR+ 6.25%    6.25%   5/28/2026   €225    247    249      
      Premier Imaging, LLC (3)(15)(19)  First Lien Senior Secured Loan - Delayed Draw   L+ 6.00%    7.00%   1/2/2025   $1,532    1,437    1,430      
      Premier Imaging, LLC (15)(19)(29)  First Lien Senior Secured Loan   L+ 6.00%    7.00%   1/2/2025   $7,195    7,094    7,087      
      SunMed Group Holdings, LLC (3)(16)(19)  First Lien Senior Secured Loan - Revolver   L+ 5.75%    6.50%   6/16/2027   $197    178    197      
      SunMed Group Holdings, LLC (16)(19)(29)  First Lien Senior Secured Loan   L+ 5.75%    6.50%   6/16/2028   $8,760    8,622    8,760      
      TecoStar Holdings, Inc. (15)(19)  Second Lien Senior Secured Loan   L+ 8.50%    9.50%   11/1/2024   $9,472    9,362    8,880      
                           Healthcare & Pharmaceuticals Total  $82,673   $80,994    7.3%
                                             
   High Tech Industries  AMI US Holdings Inc. (6)(15)(19)(29)  First Lien Senior Secured Loan   L+ 5.25%    6.25%   4/1/2025   $11,886    11,754    11,886      
      Appriss Holdings, Inc. (15)(19)  First Lien Senior Secured Loan   L+ 7.25%    8.25%   5/6/2027   $11,292    11,092    11,095      
      Appriss Holdings, Inc. (3)(5)(19)  First Lien Senior Secured Loan - Revolver   —    —    5/6/2027   $—    (13)   —      
      Appriss Holdings, Inc. (14)(19)(25)  Equity Interest   —    —    —   $2,136    1,606    1,519      
      AQ Software Corporation (14)(18)(19)(25)  Preferred Equity   —    —    —   $1    1,029    1,032      
      AQ Software Corporation (14)(18)(19)(25)  Preferred Equity   —    —    —   $2    1,715    1,719      
      Armstrong Bidco Limited (6)(18)(19)  First Lien Senior Secured Loan   SONIA+ 5.25%    6.06%   4/30/2025   £56    78    74      
      Armstrong Bidco Limited (3)(6)(18)(19)  First Lien Senior Secured Loan   SONIA+ 5.25%    6.06%   4/30/2025   £1,589    1,964    2,088      
      CB Nike IntermediateCo Ltd (3)(5)(6)(19)  First Lien Senior Secured Loan - Revolver   —    —    10/31/2025   $—    (1)   —      
      CB Nike IntermediateCo Ltd (6)(15)(19)  First Lien Senior Secured Loan   L+ 4.75%    5.75%   10/31/2025   $346    342    346      
      Drilling Info Holdings, Inc (18)  First Lien Senior Secured Loan   L+ 4.25%    4.71%   7/30/2025   $11,236    11,216    11,117      
      Eagle Rock Capital Corporation (14)(18)(19)(25)  Preferred Equity   —    —    —   $3,345    3,345    3,345      
      Element Buyer, Inc. (15)(19)  First Lien Senior Secured Loan - Delayed Draw   L+ 5.50%    6.50%   7/19/2025   $11,059    11,076    11,059      
      Element Buyer, Inc. (3)(15)(19)  First Lien Senior Secured Loan - Revolver   L+ 5.50%    6.50%   7/19/2024   $1,700    1,675    1,700      
      Element Buyer, Inc. (15)(19)  First Lien Senior Secured Loan   L+ 5.50%    6.50%   7/18/2025   $36,912    37,100    36,912      
      Gluware T/L (6)(19)(26)  First Lien Senior Secured Loan   9.00% (3.50% PIK)    12.50%   10/15/2025   $18,898    18,271    18,301      
      Gluware Warrant (6)(14)(19)(25)  Warrants   —    —    —   $3,328    478    466      
      MRI Software LLC (15)(19)(28)  First Lien Senior Secured Loan   L+ 5.50%    6.51%   2/10/2026   $25,860    25,792    25,860      
      MRI Software LLC (3)(19)  First Lien Senior Secured Loan - Revolver   —    —    2/10/2026   $—    49    —      
      Revalize, Inc. (2)(3)(5)(19)  First Lien Senior Secured Loan - Delayed Draw   —    —    4/15/2027   $—    (127)   (100)     
      Revalize, Inc. (3)(18)(19)  First Lien Senior Secured Loan - Revolver   L+ 5.75%    5.75%   4/15/2027   $838    825    827      
      Revalize, Inc. (19)(29)(32)  First Lien Senior Secured Loan - Delayed Draw   L+ 5.25%    6.76%   4/15/2027   $5,117    5,070    5,079      
      Superna Inc. (6)(15)(19)(29)  First Lien Senior Secured Loan   SOFR+ 6.25%    7.25%   3/6/2028   $26,033    25,507    25,773      
      Superna Inc. (2)(3)(5)(6)(19)  First Lien Senior Secured Loan - Delayed Draw   —    —    3/6/2028   $—    (26)   (26)     
      Superna Inc. (2)(3)(5)(6)(19)  First Lien Senior Secured Loan - Revolver   —    —    3/6/2028   $—    (26)   (26)     
      Superna Inc. (6)(19)(25)  Equity Interest   —    —    —   $1,463    1,463    1,463      
      Swoogo LLC (2)(3)(5)(18)(19)  First Lien Senior Secured Loan - Revolver   —    —    12/9/2026   $—    (23)   (25)     
      Swoogo LLC (15)(19)  First Lien Senior Secured Loan   L+ 8.00%    9.00%   12/9/2026   $2,330    2,286    2,283      
      Utimaco, Inc. (6)(18)(19)  First Lien Senior Secured Loan   L+ 4.00%    4.36%   8/9/2027   $148    146    148      
      Ventiv Holdco, Inc. (3)(5)(18)(19)  First Lien Senior Secured Loan - Revolver   —    —    9/3/2025   $—    (36)   —      
      Ventiv Topco, Inc. (14)(19)(25)  Equity Interest   —    —    —   $28    2,833    2,514      
      Ventiv Holdco, Inc. (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.50%    6.50%   9/3/2025   $13,883    13,754    13,883      
      VPARK BIDCO AB (6)(16)(19)  First Lien Senior Secured Loan   CIBOR+ 4.00%    4.75%   3/10/2025   DKK570    92    85      
      VPARK BIDCO AB (6)(16)(19)  First Lien Senior Secured Loan   NIBOR+ 4.00%    5.42%   3/10/2025   NOK740    93    84      
                           High Tech Industries Total   $190,399   $190,481    17.1%
                                             
   Hospitality Holdings  PPX Class A Units (14)(19)(25)  Preferred Equity   —    —    —   $33    —    163      
      PPX Class B Units (14)(19)(25)  Preferred Equity   —    —    —   $33    5,000    5,424      
                           Hospitality Holdings Total   $5,000   $5,587    0.5%
                                             
   Hotel, Gaming & Leisure  Aimbridge Acquisition Co., Inc. (18)(19)  Second Lien Senior Secured Loan   L+ 7.50%    7.73%   2/1/2027   $20,193    19,794    18,678      
      Captain D's LLC (3)(5)(19)  First Lien Senior Secured Loan - Revolver   —    —    12/15/2023   $—    (5)   —      
      Captain D's LLC (15)(19)(29)  First Lien Senior Secured Loan   L+ 4.50%    5.50%   12/15/2023   $6,830    6,828    6,830      

 

7 

 

 

Control Type  Industry  Portfolio
Company		  Investment
Type		   Spread
Above
Index (1)		    Interest
Rate		    Maturity Date   Principal/
Shares (9)		    Cost    Market
Value		    % of NAV (4) 
      Captain D's LLC (15)(19)(29)  First Lien Senior Secured Loan   L+ 4.50%    5.50%   12/15/2023   $2,315    2,293    2,315      
      Concert Golf Partners Holdco T/L (18)(19)(29)  First Lien Senior Secured Loan   SOFR+ 5.75%    6.59%   3/30/2029   $27,664    27,111    27,111      
      Concert Golf Partners Holdco DD T/L (2)(3)(5)(19)  First Lien Senior Secured Loan - Delayed Draw   —    —    3/30/2029   $—    (84)   (84)     
      Concert Golf Partners Holdco R/C (3)(16)(19)  First Lien Senior Secured Loan - Revolver   SOFR+ 5.75%    6.50%   3/31/2028   $356    306    306      
      Quidditch Acquisition, Inc. (15)(29)  First Lien Senior Secured Loan   L+ 7.00%    8.00%   3/21/2025   $9,151    9,214    8,923      
                           Hotel, Gaming & Leisure Total   $65,457   $64,079    5.8%
                                             
   Media: Advertising, Printing & Publishing  Ansira Holdings, Inc. (15)(19)(33)  First Lien Senior Secured Loan - Delayed Draw   L+ 6.50%    7.50%   12/20/2024   $5,068    5,070    3,801      
      Ansira Holdings, Inc. (3)(15)(19)(23)  First Lien Senior Secured Loan - Revolver   P+ 5.75%    6.75%   12/20/2024   $5,383    5,383    3,613      
      Ansira Holdings, Inc. (15)(19)  First Lien Senior Secured Loan   L+ 6.50%    7.51%   12/20/2024   $40,780    40,759    30,584      
      TGI Sport Bidco Pty Ltd (6)(17)(19)  First Lien Senior Secured Loan   BBSY+ 7.00%    7.50%   4/30/2026   AUD 97    75    69      
      TGI Sport Bidco Pty Ltd (2)(3)(6)(19)  First Lien Senior Secured Loan - Revolver   —    —    4/30/2026   AUD-    —    (156)     
                           Media: Advertising, Printing & Publishing Total   $51,287   $37,911    3.4%
                                             
   Media: Broadcasting & Subscription  Lightning Finco Limited (6)(16)(19)  First Lien Senior Secured Loan   L+ 5.75%    6.50%   7/14/2028   $1,443    1,406    1,406      
      Lightning Finco Limited (6)(16)(19)  First Lien Senior Secured Loan   L+ 5.75%    6.50%   7/14/2028   €1,300    1,415    1,404      
                           Media: Broadcasting & Subscription Total   $2,821   $2,810    0.3%
                                             
   Media: Diversified & Production  9 Story Media Group Inc. (3)(6)(19)  First Lien Senior Secured Loan - Revolver   —    —    4/30/2026   CAD-    —    —      
      9 Story Media Group Inc. (6)(16)(19)  First Lien Senior Secured Loan   CDOR+ 5.50%    6.25%   4/30/2026   CAD69    52    55      
      9 Story Media Group Inc. (6)(18)(19)  First Lien Senior Secured Loan   EURIBOR+ 5.25%    5.25%   4/30/2026   €37    43    41      
      Aptus 1724 Gmbh (6)(19)(21)  First Lien Senior Secured Loan   L+ 6.25%    6.50%   2/23/2028   $9,971    9,971    9,971      
      Efficient Collaborative Retail Marketing Company, LLC (3)(15)(19)  First Lien Senior Secured Loan - Revolver   L+ 5.25%    6.25%   6/15/2022   $1,275    1,275    1,275      
      Efficient Collaborative Retail Marketing Company, LLC (15)(19)  First Lien Senior Secured Loan   L+ 6.75%    7.76%   6/15/2022   $15,095    15,104    14,189      
      Efficient Collaborative Retail Marketing Company, LLC (15)(19)  First Lien Senior Secured Loan   L+ 6.75%    7.76%   6/15/2022   $9,788    9,795    9,201      
      International Entertainment Investments Limited (6)(18)(19)  First Lien Senior Secured Loan   SONIA+ 4.75%    5.06%   5/31/2023   £87    107    114      
      Music Creation Group Bidco GmbH (6)(19)(21)  First Lien Senior Secured Loan   L+ 6.25%    6.50%   2/23/2028   €4,065    3,968    4,065      
                           Media: Diversified & Production Total   $40,315   $38,911    3.5%
                                             
   Retail  Batteries Plus Holding Corporation (3)(15)(19)  First Lien Senior Secured Loan - Revolver   L+ 6.75%    7.75%   7/6/2022   $1,559    1,559    1,559      
      Batteries Plus Holding Corporation (15)(19)(29)  First Lien Senior Secured Loan   L+ 6.75%    7.75%   7/6/2022   $18,172    18,172    18,172      
      New Look Vision Group (3)(6)(15)(19)  First Lien Senior Secured Loan - Delayed Draw   CDOR+ 5.25%    6.43%   5/26/2028   CAD2,414    1,897    1,934      
      New Look Vision Group (3)(6)(15)(19)  First Lien Senior Secured Loan - Revolver   CDOR+ 5.25%    6.25%   5/26/2026   CAD1,173    906    939      
      New Look (Delaware) Corporation (3)(15)(19)  First Lien Senior Secured Loan - Delayed Draw   CDOR+ 5.25%    6.25%   5/26/2028   $321    310    321      
      New Look (Delaware) Corporation (15)(19)(29)  First Lien Senior Secured Loan   CDOR+ 5.50%    6.25%   5/26/2028   $9,726    9,633    9,726      
      Thrasio, LLC (15)(19)(29)  First Lien Senior Secured Loan   L+ 7.00%    8.00%   12/18/2026   $8,550    8,347    8,550      
      Walker Edison Initial Term Loan (15)(19)(26)(29)  First Lien Senior Secured Loan   L+ 5.75% (3.00% PIK)    9.75%   8/5/2027   $20,692    20,505    19,709      
                                             
                           Retail Total   $61,329   $60,910    5.5%
                                             
   Services: Business  AMCP Clean Acquisition Company, LLC (18)  First Lien Senior Secured Loan - Delayed Draw   L+ 4.25%    4.71%   7/10/2025   $3,806    3,801    3,108      
      AMCP Clean Acquisition Company, LLC (18)  First Lien Senior Secured Loan   L+ 4.25%    4.71%   7/10/2025   $15,727    15,710    12,844      
      Avalon Acquiror, Inc. (15)(19)(29)  First Lien Senior Secured Loan   SOFR+ 6.25%    7.25%   3/10/2028   $48,722    48,237    48,235      
      Avalon Acquiror, Inc. (3)(15)(19)  First Lien Senior Secured Loan - Revolver   SOFR+ 6.25%    7.25%   3/10/2028   $1,050    862    861      
      ACAMS (14)(19)(25)  Equity Interest   —    —    —   $3,337    3,337    3,337      
      Brook Bidco Series A Preferred Units (6)(14)(19)(25)  Preferred Equity   —    —    —   £5,675    7,783    8,367      
      Brook Bidco Facility B (6)(18)(19)  First Lien Senior Secured Loan   L+ 6.00%    6.31%   7/7/2028   £643    879    845      
      Caribou Bidco Limited (6)(18)(19)  First Lien Senior Secured Loan   SONIA+ 6.00%    6.20%   1/29/2029   £27,570    36,875    35,862      
      Caribou Bidco Limited (6)(18)(19)  First Lien Senior Secured Loan   SONIA+ 6.00%    6.20%   1/29/2029   £3,312    4,486    4,330      
      Chamber Bidco Limited (6)(17)(19)  First Lien Senior Secured Loan   L+ 6.00%    6.50%   6/7/2028   $237    235    237      
      Elevator Holdco Inc. (14)(19)(25)  Equity Interest   —    —    —   $2    2,448    2,789      
      iBanFirst Facility Series A Preferred Units (6)(14)(19)(25)  Preferred Equity   —    —    —   €5,080    5,996    6,324      
      iBanFirst Facility B (6)(19)(32)  First Lien Senior Secured Loan   EURIBOR+ 8.50%    10.00%   7/13/2028   €579    664    642      
      iBanFirst Revolving Facility (6)(18)(19)  First Lien Senior Secured Loan - Revolver   EURIBOR+ 8.50%    8.50%   7/13/2028   €2,030    2,246    2,250      
      Learning Pool Capex and Acquisition Facility 1 (6)(16)(19)  First Lien Senior Secured Loan   SONIA+ 6.00%    6.75%   7/7/2028   $271    352    357      
      Learning Pool Capex and Acquisition Facility 2 (6)(16)(19)  First Lien Senior Secured Loan   SONIA+ 6.00%    6.75%   7/7/2028   $97    128    128      
      masLabor Equity (19)(25)  Equity Interest   —    —    —   $345    345    385      
      masLabor Revolver (3)(5)(19)  First Lien Senior Secured Loan - Revolver   —    —    7/1/2027   $—    (20)   —      
      masLabor Term Loan Note (15)(19)  First Lien Senior Secured Loan   L+ 7.50%    8.50%   7/1/2027   $8,578    8,335    8,578      
      Opus2 (6)(18)(19)  First Lien Senior Secured Loan   SONIA+ 5.50%    5.55%   5/5/2028   £123    167    161      
      Opus2 (3)(5)(6)(18)(19)  First Lien Senior Secured Loan - Revolver   —    —    5/5/2028   £—    (168)   —      
      Opus2 (6)(14)(19)(25)  Equity Interest   —    —    —   €1,460    1,769    2,137      
      Parcel2Go Acquisition Facility (3)(6)(18)(19)  First Lien Senior Secured Loan   SONIA+ 5.75%    6.20%   7/15/2028   £39    50    50      
      Parcel2Go Facility B (6)(18)(19)  First Lien Senior Secured Loan   SONIA+ 5.75%    6.44%   7/15/2028   £125    169    164      
      Parcel2Go Shares (6)(14)(19)(25)  Equity Interest   —    —    —   £2,881    3,983    3,785      
      Refine Intermediate, Inc. (3)(5)(18)(19)  First Lien Senior Secured Loan - Revolver   —    —    9/3/2026   $—    (91)   —      
      Refine Intermediate, Inc. (15)(19)(29)  First Lien Senior Secured Loan   L+ 4.50%    5.50%   3/3/2027   $11,094    10,888    11,094      
      Smartronix RC (2)(3)(5)(18)(19)  First Lien Senior Secured Loan - Revolver   —    —    11/23/2028   $—    (120)   (79)     
      Smartronix T/L (15)(19)(29)  First Lien Senior Secured Loan   L+ 6.00%    7.00%   11/23/2028   $23,732    23,282    23,435      
      SumUp Holdings Luxembourg S.à.r.l. (6)(19)(32)  First Lien Senior Secured Loan   EURIBOR+ 8.50%    10.00%   2/17/2026   €6,650    7,943    7,370      
      SumUp Holdings Luxembourg S.à.r.l. (6)(19)(32)  First Lien Senior Secured Loan   EURIBOR+ 8.50%    10.00%   2/17/2026   €7,055    8,213    7,818      
      TEI Holdings Inc. (3)(15)(19)  First Lien Senior Secured Loan - Revolver   L+ 5.75%    6.75%   12/23/2025   $458    412    458      
      TEI Holdings Inc. (15)(19)(26)(29)  First Lien Senior Secured Loan   L+ 5.75%    6.75%   12/23/2026   $38,695    38,425    38,695      
      WCI Gigawatt Purchaser DD T/L (3)(15)(19)  First Lien Senior Secured Loan - Delayed Draw   L+ 5.75%    6.75%   11/19/2027   $3,219    3,116    3,170      
      WCI Gigawatt Purchaser R/C (3)(15)(19)  First Lien Senior Secured Loan - Revolver   L+ 5.75%    6.75%   11/19/2027   $483    415    451      
      WCI Gigawatt Purchaser T/L (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.75%    6.75%   11/19/2027   $11,475    11,230    11,360      
                           Services: Business Total   $252,382   $249,548    22.2%
                                             
   Services: Consumer  MZR Aggregator (14)(19)(25)  Equity Interest   —    —    —   $1    798    805      
      MZR Buyer, LLC (3)(5)(19)  First Lien Senior Secured Loan - Revolver   —    —    12/21/2026   $—    (82)   —      
      MZR Buyer, LLC (15)(19)(29)  First Lien Senior Secured Loan   L+ 6.75%    7.75%   12/21/2026   $26,951    26,522    26,951      
      Restaurant Technologies T/L B (18)  First Lien Senior Secured Loan   SOFR+ 4.75%    4.90%   3/19/2029   $3,369    3,284    3,284      
      Surrey Bidco Limited (6)(17)(19)(26)  First Lien Senior Secured Loan   SONIA+ 6.00% PIK    6.50%   5/11/2026   £52    65    60      
      Zeppelin BidCo Pty Limited (6)(18)(19)  First Lien Senior Secured Loan   BBSY+ 5.00%    5.19%   6/28/2024   AUD206    142    155      
                           Services: Consumer Total   $30,729   $31,255    2.8%
                                             
   Telecommunications  ACM dcBLOX LLC (14)(19)(25)  Preferred Equity   —    —    —   $3,822    3,851    4,232      
      Conterra Ultra Broadband Holdings, Inc. (15)(29)  First Lien Senior Secured Loan   L+ 4.75%    5.75%   4/30/2026   $6,305    6,286    6,282      
      DC Blox Inc. (3)(15)(19)(26)  First Lien Senior Secured Loan   L+ 2.00% (6.00% PIK)    9.00%   3/22/2026   $19,540    19,298    19,540      
      Horizon Telcom, Inc. (15)(19)(29)  First Lien Senior Secured Loan - Revolver   L+ 5.00%    6.00%   6/15/2023   $116    114    116      
      Horizon Telcom, Inc. (15)(19)(29)  First Lien Senior Secured Loan - Delayed Draw   L+ 5.00%    6.00%   6/15/2023   $247    246    247      
      Horizon Telcom, Inc. (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.00%    6.00%   6/15/2023   $3,630    3,626    3,630      
                           Telecommunications Total $33,421   $34,047    3.1%
                                             

 

8 

 

 

Control Type  Industry  Portfolio
Company		  Investment
Type		   Spread
Above
Index (1)		    Interest
Rate		    Maturity Date   Principal/
Shares (9)		    Cost    Market
Value		    % of NAV (4) 
   Transportation: Cargo  A&R Logistics, Inc. (3)(15)(19)  First Lien Senior Secured Loan - Revolver   SOFR+ 6.00%    7.00%   5/5/2025   $2,711    2,650    2,711      
      A&R Logistics, Inc. (15)(19)(29)  First Lien Senior Secured Loan   SOFR+ 6.00%    7.00%   5/5/2025   $32,230    31,842    32,230      
      A&R Logistics, Inc. (15)(19)  First Lien Senior Secured Loan   SOFR+ 6.00%    7.00%   5/5/2025   $2,417    2,386    2,417      
      A&R Logistics, Inc. (15)(19)  First Lien Senior Secured Loan   SOFR+ 6.00%    7.00%   5/5/2025   $5,958    5,904    5,958      
      A&R Logistics, Inc. (19)  First Lien Senior Secured Loan   SOFR+ 6.50%    7.50%   5/5/2025   $2,709    2,690    2,709      
      ARL Holdings, LLC (14)(19)(25)  Equity Interest   —    —    —   $1    445    589      
      ARL Holdings, LLC (14)(19)(25)  Equity Interest   —    —    —   $9    9    49      
      Grammer Investment Holdings LLC (14)(19)(25)  Equity Interest   —    —    —   $1,011    1,011    1,056      
      Grammer Investment Holdings LLC (19)(25)(26)  Preferred Equity   10.00% PIK    10.00%   —   $8    790    818      
      Grammer Investment Holdings LLC (14)(19)(25)  Warrants   —    —    —   $122    —    126      
      Grammer Purchaser, Inc. (3)(19)(29)  First Lien Senior Secured Loan - Revolver   —    —    9/30/2024   $—    —    —      
      Grammer Purchaser, Inc. (15)(19)(29)  First Lien Senior Secured Loan   L+ 4.50%    5.50%   9/30/2024   $3,843    3,782    3,843      
      Omni Logistics, LLC (15)(19)  Second Lien Senior Secured Loan   L+ 9.00%    10.00%   12/30/2027   $8,770    8,636    8,771      
      Omni Intermediate Holdings Closing Date Term Loan (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.00%    6.00%   11/23/2026   $8,126    8,049    8,126      
      Omni Intermediate R/C (3)(19)  First Lien Senior Secured Loan - Revolver   —    —    11/23/2025   $—    —    —      
      Omni Intermediate DD (3)(15)(19)  First Lien Senior Secured Loan - Delayed Draw   L+ 5.00%    6.00%   11/23/2026   $366    358    358      
      REP Coinvest III- A Omni, L.P. (14)(19)(25)  Equity Interest   —    —    —    1,377    1,377    3,089      
                           Transportation: Cargo Total   $69,929   $72,850    6.6%
                                             
   Transportation: Consumer  Toro Private Investments II, L.P. (6)(14)(19)(25)  Equity Interest   —    —    —   $3,090    3,090    1,353      
      Toro Private Investments II, L.P. (6)(18)(26)  First Lien Senior Secured Loan   L+ 5.00% (1.75% PIK)    6.97%   5/29/2026   $6,718    4,958    5,988      
      Toro Private Investments ll, L.P. (6)(15)(26)  First Lien Senior Secured Loan   L+ 1.50% (7.25% PIK)    9.75%   2/28/2025   $380    376    395      
                           Transportation: Consumer Total  $8,424   $7,736    0.7%
                                             
   Wholesale  Abracon Group Holding, LLC (14)(19)(25)  Equity Interest   —    —    —   $2    1,833    5,080      
      Abracon Group Holding, LLC (3)(5)(19)  First Lien Senior Secured Loan - Revolver   —    —    7/18/2024   $—    (16)   —      
      Abracon Group Holding, LLC (15)(19)(29)  First Lien Senior Secured Loan   L+ 5.25%    6.25%   7/18/2024   $27,434    27,368    27,434      
      Aramsco, Inc. (3)(18)(19)  First Lien Senior Secured Loan - Revolver   L+ 5.25%    5.71%   8/28/2024   $2,297    2,269    2,297      
      Aramsco, Inc. (18)(19)(29)  First Lien Senior Secured Loan   L+ 5.25%    5.71%   8/28/2024   $14,176    14,025    14,176      
      Armor Group, LP (14)(19)(25)  Equity Interest   —    —    —   $10    1,012    2,216      
      PetroChoice Holdings, Inc. (15)  First Lien Senior Secured Loan   L+ 5.00%    6.00%   8/19/2022   $9,740    9,728    9,229      
      PetroChoice Holdings, Inc. (15)  First Lien Senior Secured Loan   L+ 5.00%    6.00%   8/19/2022   $6,428    6,408    6,090      
                           Wholesale Total   $62,627   $66,522    6.0%
                           Non-Controlled /Non-Affiliate Investments Total   $1,703,867   $1,677,843    150.9%
                                             
Non-Controlled/Affiliate Investments                                      
   Beverage, Food & Tobacco  ADT Pizza, LLC (10)(14)(19)(25)  Equity Interest   —    —    —   $6,720    6,720    19,527      
                           Beverage, Food & Tobacco Total   $6,720   $19,527    1.8%
                                             
   Energy: Oil & Gas  Blackbrush Oil & Gas, L.P. (10)(14)(19)(25)  Equity Interest   —    —    —   $1,123    —    —      
      Blackbrush Oil & Gas, L.P. (10)(14)(19)(25)  Preferred Equity   —    —    —   $36,084    10,104    24,951      
      Blackbrush Oil & Gas, L.P. (10)(15)(19)(26)(29)  First Lien Senior Secured Loan   L+ 5.00% (2.00% PIK)    8.00%   9/3/2025   $8,071    8,071    8,071      
                           Energy: Oil & Gas Total   $18,175   $33,022    3.0%
                                             
   FIRE: Finance  BCC Middle Market CLO 2018-1, LLC (10)(19)(25)  Equity Interest   —    —    10/20/2030   $25,635    24,050    24,050      
                           FIRE: Finance Total   $24,050   $24,050    2.2%
                                             
   Transportation: Consumer  Direct Travel, Inc. (10)(18)(19)(26)  First Lien Senior Secured Loan   L+ 1.00% (6.30% PIK)    7.50%   10/2/2023   $4,841    4,841    4,841      
      Direct Travel, Inc. (10)(15)(19)(26)  First Lien Senior Secured Loan - Delayed Draw   L+ 1.00% (8.28% PIK)    9.50%   10/2/2023   $3,440    3,440    2,924      
      Direct Travel, Inc. (10)(15)(19)(26)(28)  First Lien Senior Secured Loan - Delayed Draw   L+ 1.00% (8.28% PIK)    9.50%   10/2/2023   $1,741    1,741    1,480      
      Direct Travel, Inc. (10)(15)(19)(26)  First Lien Senior Secured Loan   L+ 1.00% (8.28% PIK)    9.50%   10/2/2023   $58,721    58,721    49,913      
      Direct Travel, Inc. (3)(10)(15)(19)(28)  First Lien Senior Secured Loan - Delayed Draw   L+ 6.00%    7.00%   10/2/2023   $4,125    4,125    4,125      
      Direct Travel, Inc. (10)(18)(19)(28)  First Lien Senior Secured Loan   L+ 6.00%    7.00%   10/2/2023   $202    202    202      
                           Transportation: Consumer Total   $73,070   $63,485    5.6%
                           Non-Controlled /Affiliate Investments Total   $122,015   $140,084    12.6%
                                             
Controlled Affiliate Investments                                      
   Aerospace & Defense  BCC Jetstream Holdings Aviation (Off I), LLC (6)(10)(11)(19)(20)(25)  Equity Interest   —    —    —   $11,863    11,863    10,436      
      BCC Jetstream Holdings Aviation (On II), LLC (10)(11)(19)(20)(25)  Equity Interest   —    —    —   $1,116    1,116    —      
      BCC Jetstream Holdings Aviation (On II), LLC (10)(11)(18)(19)(20)  First Lien Senior Secured Loan   L+ 10.00%    10.00%   6/2/2022   $7,377    7,377    6,547      
      Gale Aviation (Offshore) Co (6)(10)(11)(19)(25)  Equity Interest   —    —    —   $90,450    90,451    82,195      
                           Aerospace & Defense Total   $110,807   $99,178    8.9%
                                             
   Investment Vehicles  Bain Capital Senior Loan Program, LLC (6)(10)(11)(18)(19)  Subordinated Note Investment Vehicles   L+ 10.00%    10.00%   12/27/2033   $35,780    35,780    35,780      
      Bain Capital Senior Loan Program, LLC (6)(10)(11)(25)  Preferred Equity Interest Investment Vehicles   —    —    —   $10    10    10      
      Bain Capital Senior Loan Program, LLC (6)(10)(11)(25)  Equity Interest Investment Vehicles   —    —    —   $5,594    5,594    5,594      
      International Senior Loan Program, LLC (6)(10)(11)(25)  Equity Interest Investment Vehicles   —    —    —   $44,555    42,109    46,261      
      International Senior Loan Program, LLC (6)(10)(11)(15)(19)  Subordinated Note Investment Vehicles   L+ 8.00%    9.00%   2/22/2028   $133,632    133,632    133,632      
                           Investment Vehicles Total   $217,125   $221,277    19.9%
                                             
   Transportation: Cargo  Lightning Holdings B, LLC (6)(10)(11)(14)(19)(25)  Equity Interest   —    —    —   $15,018    15,328    16,290      
                           Transportation: Cargo Total   $15,328   $16,290    1.5%
                                             
                           Controlled Affiliate Investments Total   $343,260   $336,745    30.3%
                           Investments Total   $2,169,142   $2,154,672    193.8%
                                             
Cash Equivalents                                         
   Cash Equivalents  Goldman Sachs Financial Square Government Fund Institutional Share Class (30)  Cash Equivalents   —    0.03%   —   $61,637   $61,637   $61,637      
                           Cash Equivalents Total   $61,637   $61,637    5.6%
                           Investments and Cash Equivalents Total   $2,230,779   $2,216,309    199.4%

 

Forward Foreign Currency Exchange Contracts 
Currency Purchased  Currency Sold  Counterparty  Settlement Date  Unrealized
Appreciation
(Depreciation) (8) 		 
US DOLLARS 24,029  POUND STERLING 17,640  Bank of New York Mellon  5/18/2022  $861 
US DOLLARS 13,822  AUSTRALIAN DOLLARS 19,080  Bank of New York Mellon  9/2/2022   (548)
US DOLLARS 55,754  EURO 45,780  Bank of New York Mellon  9/2/2022   4,442 
US DOLLARS 29,087  POUND STERLING 20,990  Bank of New York Mellon  9/2/2022   1,453 
US DOLLARS 5,940  EURO 5,200  Bank of New York Mellon  9/6/2022   (112)
US DOLLARS 12,569  POUND STERLING 9,120  Bank of New York Mellon  9/6/2022   562 
US DOLLARS 8,457  EURO 7,120  Citibank  9/2/2022   477 
US DOLLARS 8,144  EURO 7,120  Citibank  9/6/2022   (163)
            $6,972 

 

 

(1)The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”), the Secured Overnight Financing Rate ("SOFR"), the Euro Interbank Offered Rate (“EURIBOR” or “E”), British Pound Sterling LIBOR Rate (“GBP LIBOR”), the Norwegian Interbank Offered Rate (“NIBOR” or “N”), the Copenhagen Interbank Offered Rate (“CIBOR” or “C”), Canadian Dollar LIBOR Rate (“CDOR LIBOR”), the Bank Bill Swap Rate ("BBSW"),  the Bank Bill Swap Bid Rate ("BBSY"), or the Prime Rate (“Prime” or "P"), the Sterling Overnight Index Average ("SONIA")and which reset daily, monthly, quarterly or semiannually. Investments or a portion thereof may bear Payment-in-Kind ("PIK"). For each, the Company has provided the PIK or the spread over LIBOR, SOFR, EURIBOR, GBP LIBOR, NIBOR, CIBOR, CDOR, BBSW, BBSY, SONIA, or Prime and the current weighted average interest rate in effect at March 31, 2022. Certain investments are subject to a LIBOR, SOFR, EURIBOR, GBP LIBOR, NIBOR, CIBOR, CDOR, BBSW, SONIA, or Prime interest rate floor.
(2) The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par.
(3) Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The investment may be subject to an unused/letter of credit facility fee.
(4) Percentages are based on the Company’s net assets of $1,111,736 as of March 31, 2022.
(5) The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(6) The investment is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of March 31, 2022, non-qualifying assets totaled 19.96% of the Company’s total assets.
(7) Blank
(8) Unrealized appreciation/(depreciation) on forward currency exchange contracts.
(9) The principal amount (par amount) for all debt securities is denominated in U.S. dollars, unless otherwise noted. £ represents Pound Sterling, € represents Euro, NOK represents Norwegian krone, AUD represents Australian, CAD represents Canadian Dollar and DKK represents Kroner.
(10) As defined in the 1940 Act, the Company is deemed to be an “Affiliated Investment” of the Company as the Company owns 5% or more of the portfolio company’s securities.
(11) As defined in the 1940 Act, the Company is deemed to “Control” this portfolio company as the Company either owns more than 25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company.
(12) Blank
(13) $6 of the total par amount for this security is at P+ 4.25%.
(14) Non-Income Producing.
(15) Loan includes interest rate floor of 1.00%.
(16) Loan includes interest rate floor of 0.75%.
(17) Loan includes interest rate floor of 0.50%.
(18) Loan includes interest rate floor of 0.00%.
(19) Security valued using unobservable inputs (Level 3).
(20) The Company holds non-controlling, affiliate interest in an aircraft-owning special purpose vehicle through this investment.
(21) Loan includes interest rate floor of 0.25%.
(22) The Company generally earns a higher interest rate on the “last out” tranche of debt, to the extent the debt has been allocated to “first out” and “last out” tranches, whereby the “first out” tranche will have priority as to the “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder.
(23) $992 of the total par amount for this security is at L + 5.75%.
(24) Blank
(25) Security exempt from registration under the Securities Act of 1933 (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of March 31, 2022, the aggregate fair value of these securities is $317,854 or 28.59% of the Company’s net assets. The acquisition dates of the restricted securities are as follows:

9 

 

 

Investment  Acquisition Date
Abracon Group Holding, LLC  7/18/2018
ACM dcBLOX LLC  3/22/2021
ADT Pizza, LLC  10/29/2018
Ansett Aviation Training  3/24/2022
Appriss Holdings, Inc.  5/3/2021
AQ Software Corporation  12/10/2021
AQ Software Corporation  12/10/2021
ARL Holdings, LLC  5/3/2019
ARL Holdings, LLC  5/3/2019
Armor Group, LP  8/28/2018
Bain Capital Senior Loan Program, LLC  12/27/2021
BCC Jetstream Holdings Aviation (Off I), LLC  6/1/2017
BCC Jetstream Holdings Aviation (On II), LLC  6/1/2017
BCC Middle Market CLO 2018-1, LLC  2/28/2022
Blackbrush Oil & Gas, L.P.  9/3/2020
Blackbrush Oil & Gas, L.P.  9/3/2020
CB Titan Holdings, Inc.  5/1/2017
DC Blox Inc.  3/23/2021
Direct Travel, Inc.  10/2/2020
Eagle Rock Capital Corporation  12/9/2021
East BCC Coinvest II, LLC  7/23/2019
Elevator Holdco Inc.  12/23/2019
Elk Parent Holdings, LP  11/1/2019
Elk Parent Holdings, LP  11/1/2019
FCG Acquisitions, Inc.  1/24/2019
Fineline Technologies, Inc.  2/22/2021
Gale Aviation (Offshore) Co  1/2/2019
Gluware Warrant  10/15/2021
Grammer Investment Holdings LLC  10/1/2018
Grammer Investment Holdings LLC  10/1/2018
Grammer Investment Holdings LLC  10/1/2018
iBanFirst Facility Series A Preferred Units  7/13/2021
iBanFirst Facility Series A Preferred Units  7/8/2021
International Senior Loan Program, LLC  2/22/2021
Kellstrom Aerospace Group, Inc  7/1/2019
Lightning Holdings B, LLC  1/2/2020
masLabor Equity  7/1/2021
MZR Aggregator  12/22/2020
NPC International, Inc.  4/1/2021
Opus2  6/16/2021
Parcel2Go Shares  7/15/2021
PPX Class A Units  7/29/2021
PPX Class B Units  7/29/2021
Precision Ultimate Holdings, LLC  11/6/2019
REP Coinvest III- A Omni, L.P.  2/5/2021
ServiceMaster LP Interest Class B Preferred Units  8/16/2021
Superna Inc.  3/8/2022
TLC Holdco LP  10/11/2019
Toro Private Investments II, L.P.  4/2/2019
Ventiv Topco, Inc.  9/3/2019
WCI-HSG HOLDCO, LLC  2/22/2019
WSP LP Interest  8/31/2021

 

(26) Denotes that all or a portion of the debt investment includes PIK interest during the period.
(27) Asset is in an escrow liquidating trust.
(28) Assets or a portion thereof are pledged as collateral for the BCSF Complete Financing Solution Holdco LLC. See Note 6  "Debt".
(29) Assets or a portion thereof are pledged as collateral for the 2019-1 Issuer. See Note 6  "Debt".
(30) Cash equivalents include $34,032 of restricted cash.
(31) Loan includes interest rate floor of 2.00%.
(32) Loan includes interest rate floor of 1.50%.
(33) $2 of the total par amount for this security is at P+ 5.50%

 

See Notes to Consolidated Financial Statements        

 

10 

 

 

 

Bain Capital Specialty Finance, Inc.

 

Consolidated Schedule of Investments
As of December 31, 2021
(In thousands)

 

Control Type 

  Industry  Portfolio Company  Investment Type  Spread Above Index (1)   Interest
Rate		   Maturity
Date		   Principal/Shares (9)   Cost   Market
Value		   % of
NAV (4)		 
Non-Controlled/Non-Affiliate Investments
   Aerospace & Defense  Forming & Machining Industries Inc.(18)(19)  Second Lien Senior Secured Loan   L+ 8.25%    8.47%   10/9/2026   $6,540    6,494    5,821      
      Forming & Machining Industries Inc.(12)(18)  First Lien Senior Secured Loan   L+ 4.25%    4.47%   10/9/2025   $16,439    16,352    15,288      
      GSP Holdings, LLC(12)(15)(19)(26)(29)  First Lien Senior Secured Loan   L+ 5.75% (0.25% PIK)    6.75%   11/6/2024   $35,622    35,516    32,951      
      GSP Holdings, LLC(15)(19)(26)  First Lien Senior Secured Loan—
Revolver		   L+ 5.75% (0.25% PIK)    6.75%   11/6/2025   $1,602    1,573    1,261      
      Kellstrom Aerospace Group, Inc(14)(19)(25)  Equity Interest   —    —    —    1    1,963    913      
      Kellstrom Commercial Aerospace, Inc.(18)(19)(24)  First Lien Senior Secured Loan—
Revolver		   L+ 5.50%    6.50%   7/1/2025   $2,239    2,176    1,919      
      Kellstrom Commercial Aerospace, Inc.(12)(15)(19)  First Lien Senior Secured Loan   L+ 5.50%    6.50%   7/1/2025   $32,855    32,430    30,884      
      Mach Acquisition R/C(2)(5)(18)(19)  First Lien Senior Secured Loan—
Revolver		   —    —    10/18/2026   $—    (193)   (201)     
      Mach Acquisition T/L(15)(19)  First Lien Senior Secured Loan   L+ 7.50%    8.50%   10/18/2026   $32,640    32,006    31,987      
      Precision Ultimate Holdings, LLC(14)(19)(25)  Equity Interest   —    —    —    1,417    1,417    1,204      
      WCI-HSG HOLDCO, LLC(14)(19)(25)  Preferred Equity   —    —    —    675    675    1,993      
      WCI-HSG Purchaser, Inc.(12)(15)(19)(29)  First Lien Senior Secured Loan—
Revolver		   L+ 4.75%    5.75%   2/24/2025   $1,209    1,190    1,209      
      WCI-HSG Purchaser, Inc.(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 4.75%    5.75%   2/24/2025   $17,422    17,285    17,422      
      Whitcraft LLC(2)(3)(5)(15)(19)  First Lien Senior Secured Loan—
Revolver		   —    —    4/3/2023   $—    (7)   (59)     
      Whitcraft LLC(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 6.00%    7.00%   4/3/2023   $39,775    39,594    38,482      
      WP CPP Holdings, LLC.(12)(15)  Second Lien Senior Secured Loan   L+ 7.75%    8.75%   4/30/2026   $11,724    11,646    11,495      
                            Aerospace & Defense Total   $200,117   $192,569    17.5%
   Automotive  American Trailer Rental Group(19)(26)  Subordinated Debt   9.00% (2.00% PIK)    11.00%   12/1/2027   $4,913    4,842    4,913      
      American Trailer Rental Group(19)(26)  Subordinated Debt   9.00% (2.00% PIK)    11.00%   12/1/2027   $15,114    14,793    15,114      
      Cardo(6)(12)(17)(19)  First Lien Senior Secured Loan   L+ 6.00%    6.50%   5/12/2028   $10,898    10,795    10,898      
      CST Buyer Company(3)(5)(15)(19)  First Lien Senior Secured Loan—
Revolver		   —    —    10/3/2025   $—    (11)   —      
      CST Buyer Company(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 5.55%    6.50%   10/3/2025   $19,238    19,122    19,238      
      JHCC Holdings, LLC(15)(19)  First Lien Senior Secured Loan—
Delayed Draw		   P+ 4.50%    7.75%   9/9/2025   $2,635    2,618    2,635      
      JHCC Holdings, LLC(19)(31)  First Lien Senior Secured Loan—
Revolver		   P+ 5.75%    6.75%   9/9/2025   $894    863    894      
      JHCC Holdings, LLC(15)(19)  First Lien Senior Secured Loan—
Delayed Draw		   L+ 5.75%    6.75%   9/9/2025   $5,782    5,776    5,782      
      JHCC Holdings, LLC(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 5.75%    6.75%   9/9/2025   $29,081    28,799    29,081      
                            Automotive Total   $87,597   $88,555    8.1%
   Banking  Green Street Parent, LLC(3)(5)(17)(19)(29)  First Lien Senior Secured Loan—
Revolver		   —    —    8/27/2025   $—    (29)   —      
      Green Street Parent, LLC(12)(17)(19)(29)  First Lien Senior Secured Loan   L+ 5.75%    5.50%   8/27/2026   $14,190    13,988    14,190      
      Green Street Parent, LLC(17)(19)(29)  First Lien Senior Secured Loan   L+ 5.00%    5.50%   8/27/2026   $4,500    4,411    4,500      
                            Banking Total   $18,370   $18,690    1.7%

 

11 

 

 

Control Type  Industry  Portfolio Company  Investment Type  Spread Above Index (1)   Interest
Rate		   Maturity
Date		   Principal/Shares (9)   Cost   Market
Value		   % of
NAV (4)		 
  Beverage, Food & Tobacco  NPC International, Inc.(19)(25)(27)  Equity Interest   —    —    —    564    843    228      
                            Beverage, Food & Tobacco Total   $843   $228    0.0%
   Capital Equipment  East BCC Coinvest II, LLC(14)(19)(25)  Equity Interest   —    —    —    1,419    1,419    1,065      
      Electronics For Imaging, Inc.(12)(18)(19)  Second Lien Senior Secured Loan   L+ 9.00%    9.10%   7/23/2027   $12,070    11,460    11,285      
      FCG Acquisitions, Inc.(14)(19)(25)  Preferred Equity   —    —    —    4    —    —      
      Jonathan Acquisition Company(19)(15)  Second Lien Senior Secured Loan   L+ 9.00%    10.00%   12/22/2027   $8,000    7,821    8,000      
      Tidel Engineering, L.P.(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 5.75%    6.75%   3/1/2024   $38,155    38,155    38,155      
      Tidel Engineering, L.P.(15)(19)  First Lien Senior Secured Loan   L+ 5.75%    6.75%   3/1/2024   $6,337    6,274    6,336      
                            Capital Equipment Total   $65,129   $64,841    5.9%
   Chemicals, Plastics & Rubber  V Global Holdings LLC(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 6.00%    7.00%   12/22/2027   $24,813    24,242    24,813      
      V Global Holdings LLC(15)(19)  First Lien Senior Secured Loan—
Revolver		   P+ 5.00%    8.25%   12/22/2025   $2,050    1,893    2,050      
                            Chemicals, Plastics & Rubber Total   $26,135   $26,863    2.4%
   Construction & Building  Chase Industries, Inc.(15)(19)(26)  First Lien Senior Secured Loan—Delayed Draw   L+ 5.50% (1.5% PIK)    6.50%   5/12/2025   $1,197    1,195    946      
      Chase Industries, Inc.(15)(19)(26)  First Lien Senior Secured Loan   L+ 5.50% (1.5% PIK)    6.50%   5/12/2025   $12,622    12,586    9,971      
      Elk Parent Holdings, LP(14)(19)(25)  Equity Interest   —    —    —    1    12    407      
      Elk Parent Holdings, LP(14)(19)(25)  Preferred Equity   —    —    —    120    1,202    1,427      
      Regan Development Holdings Limited(6)(17)(19)  First Lien Senior Secured Loan   EURIBOR+ 6.50%    7.00%   4/18/2022    €2,087    2,274    2,326      
      Regan Development Holdings Limited(6)(17)(19)  First Lien Senior Secured Loan   EURIBOR+ 6.50%    7.00%   4/18/2022    €677    768    754      
      Regan Development Holdings Limited(6)(17)(19)  First Lien Senior Secured Loan   EURIBOR+ 6.50%    7.00%   4/18/2022    €6,335    6,895    7,041      
      ServiceMaster LP Interest Class B Preferred Units(14) (19)(25)

  Equity Interest   —    —    —    —    327    353      
      Service Master Revolving Loan(15)(19)  First Lien Senior Secured Loan—Revolver   L+ 7.50%    8.50%   8/16/2027   $1,260    1,176    1,260      
      Service Master Term Note(17)(19)  First Lien Senior Secured Loan   L+ 7.50%    8.50%   8/16/2027   $939    921    939      
      YLG Holdings, Inc.(15)(19)  First Lien Senior Secured Loan—Delayed Draw   L+ 6.00%    7.00%   10/31/2025   $5,060    5,055    5,060      
      YLG Holdings, Inc.(3)(5)(15)(19)  First Lien Senior Secured Loan—Revolver   —    —    10/31/2025   $—    (55)   —      
      YLG Holdings, Inc.(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 5.25%    6.25%   10/31/2025   $38,086    37,900    38,086      
                            Construction & Building Total   $70,256   $68,570    6.2%
   Consumer Goods: Durable  New Milani Group LLC(12)(15)(19)  First Lien Senior Secured Loan   L+ 6.50%    7.50%   6/6/2024   $16,752    16,678    16,250      
      Stanton Carpet T/L 2nd Lien(15)(19)  Second Lien Senior Secured Loan   L+ 9.00%    10.00%   4/1/2028   $19,664    19,277    19,271      
      TLC Holdco LP(14)(19)(25)  Equity Interest   —    —    —    1,188    1,186    431      
      TLC Purchaser, Inc.(2)(3)(5)(19)  First Lien Senior Secured Loan—Delayed Draw   —    —    10/13/2025   $—    (45)   (854)     
      TLC Purchaser, Inc.(15)(19)  First Lien Senior Secured Loan—Revolver   L+ 5.25%    8.50%   10/13/2025   $6,408    6,296    5,340      
      TLC Purchaser, Inc.(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 6.25%    7.25%   10/13/2025   $41,066    40,511    36,137      
                            Consumer Goods: Durable Total   $83,903   $76,575    7.0%
   Consumer Goods: Non-Durable  Fineline Parent Holdings(14)(19)(25)  Equity Interest   —    —    —    939    939    1,241      
      FL Hawk Intermediate Holdings, Inc.(15)(19)  Second Lien Senior Secured Loan   L+ 9.00%    10.00%   8/22/2028   $21,125    20,543    21,125      
      New Era Cap Co., Inc.(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 6.50%    7.50%   9/10/2023   $9,970    9,970    9,970      
      RoC Opco LLC(3)(5)(15)(19)​  First Lien Senior Secured Loan—Revolver   —    —    2/25/2025   $—    (111)   —      
      RoC Opco LLC(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 8.50%    9.50%   2/25/2025   $40,079    39,486    40,079      

  

12 

 

 

Control Type   Industry   Portfolio Company   Investment Type   Spread Above Index (1)   Interest
Rate		   Maturity
Date		   Principal/Shares (9)   Cost   Market
Value		   % of
NAV (4)		  
​   ​   Solaray, LLC(15)(19)   First Lien Senior Secured Loan—Delayed Draw   L+ 5.50%   6.50 % 9/9/2023   $ 14,276   14,276   14,276   ​  
​   ​   Solaray, LLC(15)(19)   First Lien Senior Secured Loan—Revolver   L+ 4.50%   5.50 % 9/9/2022   $ 907   895   907   ​  
​   ​   Solaray, LLC(12)(15)(19)   First Lien Senior Secured Loan   L+ 5.50%   6.50 % 9/11/2023   $ 41,729   41,729   41,729   ​  
​   ​   WU Holdco, Inc.(18)(19)   First Lien Senior Secured Loan—Revolver   L+ 5.50%   5.72 % 3/26/2025   $ 1,690   1,656   1,690   ​  
​   ​   WU Holdco, Inc.(12)(15)(19)(29)   First Lien Senior Secured Loan   L+ 5.50%   6.50 % 3/26/2026   $ 44,452   43,847   44,452   ​  
​   ​   WU Holdco, Inc.(12)(15)(19)   First Lien Senior Secured Loan   L+ 5.50%   6.50 % 3/26/2026   $ 6,594   6,534   6,594   ​  
​   ​   WU Holdco, Inc.(3)(5)(15)(19)   First Lien Senior Secured Loan   —   —   3/26/2026   $ —   (31 ) —   ​  
​   ​   ​   ​   ​   ​   ​     Consumer Goods: Non-Durable Total   $ 179,733 $ 182,063   16.6 %
​   Consumer Goods: Wholesale   WSP LP Interest(14)(19)(25)   Equity Interest   —   —   —     2,898   2,898   2,829   ​  
​   ​   WSP Initial Term Loan(12)(15)(19)(29)   First Lien Senior Secured Loan   L+ 6.25%   7.25 % 4/27/2027   $ 12,251   12,017   12,037   ​  
​   ​   WSP Initial Term Loan(2)(3)(5)(15)(19)   First Lien Senior Secured Loan   —   —   4/27/2023   $ —   (36 ) (31 ) ​  
​   ​   WSP Revolving Loan(2)(3)(5)(15)(19)   First Lien Senior Secured Loan—Revolver   —   —   4/27/2027   $ —   (9 ) (8 ) ​  
​   ​   ​   ​   ​   ​   ​     Consumer Goods: Wholesale Total $ 14,870 $ 14,827   1.3 %
​   Containers, Packaging, & Glass   ASP-r-pac Acquisition Co LLC(16)(19)   First Lien Senior Secured Loan—Revolver   L+ 6.00%   6.75 % 12/29/2027   $ 651   586   586   ​  
​   ​   ASP-r-pac Acquisition Co LLC(12)(16)(19)   First Lien Senior Secured Loan   L+ 6.00%   6.75 % 12/29/2027   $ 27,339   26,793   26,792   ​  
​   ​   ​   ​   ​   ​   ​     Containers, Packaging, & Glass Total $ 27,379 $ 27,378   2.5 %
​   Energy: Oil & Gas   Amspec Services, Inc.(15)(19)   First Lien Senior Secured Loan—Revolver   L+ 5.75%   6.75 % 7/2/2024   $ 1,488   1,457   1,487   ​  
​   ​   Amspec Services, Inc.(12)(15)(19)(29)   First Lien Senior Secured Loan   L+ 5.75%   6.75 % 7/2/2024   $ 43,207   42,923   43,207   ​  
​   ​   Amspec Services, Inc.(15)(19)   First Lien Senior Secured Loan   L+ 5.75%   6.75 % 7/2/2024   $ 2,798   2,768   2,798   ​  
​   ​   ​   ​   ​   ​   ​     Energy: Oil & Gas Total $ 47,148 $ 47,492   4.3 %
​   FIRE: Finance   Allworth Financial Group, L.P.(15)(19)   First Lien Senior Secured Loan—
Delayed Draw		   L+ 5.00%   6.00 % 12/23/2026   $ 2,528   2,476   2,528   ​  
​   ​   Allworth Financial Group, L.P.(12)(15)(19)(29)   First Lien Senior Secured Loan   L+ 5.00%   6.00 % 12/23/2026   $ 10,037   9,908   10,037   ​  
​   ​   Allworth Financial Group, L.P.(3)(5)(15)(19)   First Lien Senior Secured Loan—
Revolver		   —   —   12/23/2026   $ —   (15 ) —   ​  
​   ​   TA/Weg Holdings(15)(19)(29)   First Lien Senior Secured Loan—
Delayed Draw		   L+ 5.75%   6.75 % 10/2/2027   $ 9,495   9,495   9,495   ​  
​   ​   TA/Weg Holdings(15)(19)   First Lien Senior Secured Loan—
Delayed Draw		   L+ 5.75%   6.75 % 10/2/2027   $ 2,392   2,381   2,392   ​  
​   ​   ​   ​   ​   ​   ​     FIRE: Finance Total $ 24,245 $ 24,452   2.2 %
​   FIRE: Insurance   Margaux Acquisition Inc.(15)(19)   First Lien Senior Secured Loan—
Delayed Draw		   L+ 5.50%   6.50 % 12/19/2024   $ 9,198   9,173   9,198   ​  
​   ​   Margaux Acquisition, Inc.(3)(5)(15)(19)   First Lien Senior Secured Loan—
Revolver		   —   —   12/19/2024   $ —   (28 ) —   ​  
​   ​   Margaux Acquisition Inc.(12)(15)(19)(29)   First Lien Senior Secured Loan   L+ 5.50%   6.50 % 12/19/2024   $ 28,334   28,000   28,334   ​  
​   ​   Margaux UK Finance Limited(3)(6)(19)   First Lien Senior Secured Loan—
Revolver		   GBP LIBOR+ 5.50%   6.50 % 12/19/2024   £ 89   112   120   ​  
​   ​   Margaux UK Finance Limited(6)(15)(19)   First Lien Senior Secured Loan   GBP LIBOR+ 5.50%   6.50 % 12/19/2024   £ 7,551   9,740   10,218   ​  
​   ​   MRHT Facility A(6)(18)(19)   First Lien Senior Secured Loan   EURIBOR+ 5.50%   5.50 % 7/26/2028   € 216   248   245   ​  
​   ​   MRHT Acquisition Facility(3)(5)(6)(19)   First Lien Senior Secured Loan   —   —   7/26/2028   € —   (6 ) —   ​  
​   ​   Paisley Bidco Limited(6)(18)(19)   First Lien Senior Secured Loan   EURIBOR+ 5.50%   5.50 % 11/24/2028   £ 3,210   3,583   3,614   ​  

 

13 

 

 

Control Type   Industry   Portfolio Company   Investment Type   Spread Above Index (1)   Interest
Rate		   Maturity
Date		   Principal/Shares (9)   Cost   Market
Value		   % of
NAV (4)		  
​   ​   Paisley Bidco Limited(2)(3)(5)(6)(18)(19)​   First Lien Senior Secured Loan—
Delayed Draw		   —   —   11/24/2028   £ —     (84 )   (86 ) ​  
​   ​   World Insurance(15)(19)   First Lien Senior Secured Loan—
Delayed Draw		   L+ 5.75%   6.75 % 4/1/2026   $ 8,358     8,285     8,296   ​  
​   ​   World Insurance(3)(15)(19)   First Lien Senior Secured Loan—
Revolver		   L+ 5.75%   6.75 % 4/1/2026   $ 70     54     63   ​  
​   ​   World Insurance(15)(19)   First Lien Senior Secured Loan   L+ 5.75%   6.75 % 4/1/2026   $ 3,144     3,088     3,121   ​  
​   ​   ​   ​   ​   ​   ​     FIRE: Insurance Total   $ 62,165   $ 63,123   5.7 %
​   Healthcare & Pharmaceuticals   CB Titan Holdings, Inc.(14)(19)(25)   Preferred Equity   —   —   ​     1,953     1,953     1,153   ​  
​   ​   CPS Group Holdings, Inc.(3)(5)(15)(19)   First Lien Senior Secured Loan—
Revolver		   —   —   3/3/2025   $ —     (52 )   —   ​  
​   ​   CPS Group Holdings, Inc.(12)(15)(19)(29)   First Lien Senior Secured Loan   L+ 5.25%   6.25 % 3/3/2025   $ 54,843     54,517     54,843   ​  
​   ​   Datix Bidco Limited(6)(18)(19)   First Lien Senior Secured Loan—
Revolver		   L+ 4.50%   4.96 % 10/28/2024   £ 10     13     13   ​  
​   ​   Datix Bidco Limited(6)(18)(19)   Second Lien Senior Secured Loan   L+ 7.75%   8.21 % 4/27/2026   £ 121     164     164   ​  
​   ​   Datix Bidco Limited(6)(18)(19)   First Lien Senior Secured Loan   BBSW+ 4.00%   4.25 % 4/28/2025     AUD 42     32     31   ​  
​   ​   Great Expressions Dental Centers PC(13)(15)(19)(26)   First Lien Senior Secured Loan—
Revolver		   L+ 4.75% (0.5% PIK)   5.75 % 9/28/2022   $ 1,027     1,025     929   ​  
​   ​   Great Expressions Dental Centers PC(15)(19)(26)   First Lien Senior Secured Loan   L+ 4.75% (0.5% PIK)   5.75 % 9/28/2023   $ 7,831     7,844     7,205   ​  
​   ​   Island Medical Management Holdings, LLC(15)(19)   First Lien Senior Secured Loan   L+ 6.50%   7.50 % 9/1/2023   $ 8,520     8,496     8,371   ​  
​   ​   Mertus 522. GmbH(6)(18)(19)   First Lien Senior Secured Loan—
Delayed Draw		   EURIBOR+ 6.25%   6.25 % 5/28/2026   € 131     142     149   ​  
​   ​   Mertus 522. GmbH(6)(18)(19)   First Lien Senior Secured Loan   EURIBOR+ 6.25%   6.25 % 5/28/2026   € 225     247     255   ​  
​   ​   SunMed Group Holdings, LLC(16)(19)   First Lien Senior Secured Loan—
Revolver		   L+ 5.75%   6.50 % 6/16/2027   $ 197     177     197   ​  
​   ​   SunMed Group Holdings, LLC(12)(16)(19)(29)   First Lien Senior Secured Loan   L+ 5.75%   6.50 % 6/16/2028   $ 18,510     18,204     18,510   ​  
​   ​   TecoStar Holdings, Inc.(12)(15)(19)   Second Lien Senior Secured Loan   L+ 8.50%   9.50 % 11/1/2024   $ 9,472     9,354     8,951   ​  
​   ​   ​   ​   ​   ​   ​     Healthcare & Pharmaceuticals Total   $ 102,116   $ 100,771   9.2 %
​   High Tech Industries   AMI US Holdings Inc.(3)(6)(12)(18)(19)   First Lien Senior Secured Loan—
Revolver		   L+ 5.25%   5.35 % 4/1/2024   $ 698     682     698   ​  
​   ​   AMI US Holdings Inc.(6)(12)(15)(19)(29)   First Lien Senior Secured Loan   L+ 5.50%   6.50 % 4/1/2025   $ 12,892     12,735     12,892   ​  
​   ​   Appriss Holdings, Inc.(15)(19)   First Lien Senior Secured Loan   L+ 7.25%   8.25 % 5/6/2027   $ 11,292     11,081     11,179   ​  
​   ​   Appriss Holdings, Inc.(2)(3)(5)(15)(19)   First Lien Senior Secured Loan—
Revolver		   —   —   5/6/2027   $ —     (13 )   (8 ) ​  
​   ​   Appriss Holdings, Inc.(19)(25)   Equity Interest   —   —   —     2,136     1,606     1,552   ​  
​   ​   AQ Software Corporation(19)   Preferred Equity   —   —   —     1     1,029     1,029   ​  
​   ​   AQ Software Corporation(19)   Preferred Equity   —   —   —     2     1,715     1,715   ​  
​   ​   Armstrong Bidco Limited(3)(6)(19)(21)   First Lien Senior Secured Loan   SONIA+ 4.75%   5.00 % 4/30/2025   £ 56     78     76   ​  
​   ​   Armstrong Bidco T/L(6) (19)   First Lien Senior Secured Loan   SONIA+ 4.75%   5.06 % 4/30/2025   £ 705     763     954   ​  
​   ​   CB Nike IntermediateCo Ltd(6)(15)(19)   First Lien Senior Secured Loan—
Revolver		   L+ 4.75%   5.75 % 10/31/2025   $ 44     44     44   ​  
​   ​   CB Nike IntermediateCo Ltd(6)(15)(19)   First Lien Senior Secured Loan   L+ 4.75%   5.75 % 10/31/2025   $ 347     342     347   ​  
​   ​   Drilling Info Holdings, Inc(12)(18)   First Lien Senior Secured Loan   L+ 4.25%   4.35 % 7/30/2025   $ 22,152     22,101     21,930   ​  
​   ​   Eagle Rock Capital Corporation(19)   Preferred Equity   —   —   —     2,354     2,354     2,354   ​  
​   ​   Element Buyer, Inc.(15)(19)   First Lien Senior Secured Loan—
Delayed Draw		   L+ 5.50%   6.50 % 7/18/2025   $ 11,078     11,097     11,078   ​  
​   ​   Element Buyer, Inc.(15)(19)   First Lien Senior Secured Loan—
Revolver		   L+ 5.50%   6.50 % 7/19/2024   $ 1,700     1,672     1,700   ​  
​   ​   Element Buyer, Inc.(15)(19)   First Lien Senior Secured Loan   L+ 5.50%   6.50 % 7/18/2025   $ 37,007     37,199     37,007   ​  

 

14 

 

  

Control Type   Industry   Portfolio Company   Investment Type   Spread Above Index (1)   Interest
Rate		   Maturity
Date		   Principal/Shares (9)   Cost   Market
Value		   % of
NAV (4)		  
​   ​   Gluware T/L(6)(19)   First Lien Senior Secured Loan   Fixed+ 12.50%   9.00 % 10/15/2025   $ 18,898     18,534     18,520   ​  
​   ​   Gluware Warrant(6)(19)   Warrants   —   —   —     3,328     —     —   ​  
​   ​   MRI Software LLC(15)(19)   First Lien Senior Secured Loan   L+ 5.50%   6.50 % 2/10/2026   $ 25,926     25,850     25,926   ​  
​   ​   MRI Software LLC(3)(15)(19)   First Lien Senior Secured Loan—
Revolver		   —   —   2/10/2026   $ —     48     —   ​  
​   ​   Revalize, Inc.(2)(3)(5)(19)​   First Lien Senior Secured Loan—
Delayed Draw		   —   —   4/15/2027   $ —     (133 )   (134 ) ​  
​   ​   Revalize, Inc.(2)(3)(5)(18)(19)​   First Lien Senior Secured Loan—
Revolver		   —   —   4/15/2027   $ —     (13 )   (13 ) ​  
​   ​   Revalize, Inc.(15)(19)(29)   First Lien Senior Secured Loan—
Delayed Draw		   L+ 5.25%   6.25 % 4/15/2027   $ 5,130     5,079     5,079   ​  
​   ​   Swoogo LLC(2)(3)(5)(18)(19)​   First Lien Senior Secured Loan—
Revolver		   —   —   12/9/2026   $ —     (25 )   (25 ) ​  
​   ​   Swoogo LLC(15)(19)   First Lien Senior Secured Loan   L+ 8.00%   9.00 % 12/9/2026   $ 2,330     2,284     2,283   ​  
​   ​   Utimaco, Inc.(6)(18)(19)   First Lien Senior Secured Loan   L+ 4.00%   4.10 % 8/9/2027   $ 148     146     148   ​  
​   ​   Ventiv Topco, Inc.(3)(5)(18)(19)   First Lien Senior Secured Loan—
Revolver		   —   —   9/3/2025   $ —     (38 )   —   ​  
​   ​   Ventiv Topco, Inc.(14)(19)(25)   Equity Interest   —   —   —     28     2,833     2,755   ​  
​   ​   Ventiv Holdco, Inc.(12)(15)(19)(29)   First Lien Senior Secured Loan   L+ 5.50%   6.50 % 9/3/2025   $ 23,812     23,576     23,812   ​  
​   ​   VPARK BIDCO AB(6)(16)(19)   First Lien Senior Secured Loan   CIBOR+ 4.00%   4.75 % 3/10/2025   DKK 570     92     87   ​  
​   ​   VPARK BIDCO AB(6)(16)(19)   First Lien Senior Secured Loan   NIBOR+ 4.00%   4.75 % 3/10/2025   NOK 740     93     84   ​  
​   ​   ​   ​   ​   ​   ​     High Tech Industries Total   $ 182,811   $ 183,069   16.6​ % 
​   Hospitality Holdings   PPX Class A Units(14)(19)(25)   Preferred Equity   —   —   —     33     —     163   ​  
​   ​   PPX Class B Units(14)(19)(25)   Preferred Equity   —   —   —     33     5,000     5,279   ​  
​   ​   ​   ​   ​   ​   ​     Hospitality Holdings Total   $ 5,000   $ 5,442   0.5​ % 
​   Hotel, Gaming & Leisure   Aimbridge Acquisition Co., Inc.(12)(18)(19)   Second Lien Senior Secured Loan   L+ 7.50%   7.59 % 2/1/2027   $ 20,193     19,772     18,679   ​  
​   ​   Captain D’s LLC(3)(5)(15)(19)   First Lien Senior Secured Loan—
Revolver		   —   —   12/15/2023   $ —     (6 )   —   ​  
​   ​   Captain D’s LLC(12)(15)(19)(29)   First Lien Senior Secured Loan   L+ 4.50%   5.50 % 12/15/2023   $ 12,559     12,539     12,559   ​  
​   ​   Captain D’s LLC(15)(19)(29)   First Lien Senior Secured Loan   L+ 4.50%   5.50 % 12/15/2023   $ 2,326     2,301     2,326   ​  
​   ​   Quidditch Acquisition, Inc.(12)(15)(29)   First Lien Senior Secured Loan   L+ 7.00%   8.00 % 3/21/2025   $ 18,636     18,626     18,392   ​  
​   ​   ​   ​   ​   ​   ​     Hotel, Gaming & Leisure Total   $ 53,232   $ 51,956   4.7​ % 
​   Media: Advertising, Printing &
Publishing		   Ansira Holdings, Inc.(15)(19)(26)(33)   First Lien Senior Secured Loan—
Delayed Draw		   L+ 6.50%   7.50 % 12/20/2024   $ 4,873     4,874     3,862   ​  
​   ​   Ansira Holdings, Inc.(19)(23)(31)   First Lien Senior Secured Loan—
Revolver		   P+ 5.75%   7.41 % 12/20/2024   $ 5,383     5,383     3,913   ​  
​   ​   Ansira Holdings, Inc.(15)(19)(26)   First Lien Senior Secured Loan   L+ 6.50% PIK   7.50 % 12/20/2024   $ 40,086     40,057     31,768   ​  
​   ​   TGI Sport Bidco Pty Ltd(6)(17)(19)   First Lien Senior Secured Loan   BBSW+ 7.00%   7.50 % 4/30/2026   AUD 97     75     67   ​  
​   ​   TGI Sport Bidco Pty Ltd(2)(3)(6)(17)(19)   First Lien Senior Secured Loan—
Revolver		   —   —   4/30/2027   AUD —     —     (151 ) ​  
​   ​   ​   ​   ​   ​   ​     Media: Advertising, Printing & Publishing Total   $ 50,389   $ 39,459   3.6​ % 
​   Media: Broadcasting &
Subscription		   Lightning Finco Limited(6)(16)(19)   First Lien Senior Secured Loan   L+ 5.75%   6.50 % 7/14/2028   $ 4,350     4,234     4,350   ​  
​   ​   Lightning Finco Limited(6)(16)(19)   First Lien Senior Secured Loan   L+ 5.75%   6.50 % 7/14/2028    $ 4,629     4,506     4,629   ​  
​   ​   ​   ​   ​   ​   ​     Media: Broadcasting & Subscription Total   $ 8,740   $ 8,979   0.8 %
​   Media: Diversified & Production   9 Story Media Group Inc.(3)(6)(16)(19)   First Lien Senior Secured Loan—
Revolver		   —   —   4/30/2026   CAD —     —     —   ​  
​   ​   9 Story Media Group Inc.(6)(16)(19)   First Lien Senior Secured Loan   CDOR+ 5.50%   6.25 % 4/30/2026   CAD 72     54     57   ​  

 

15 

 

Control Type   Industry   Portfolio Company   Investment Type   Spread Above Index (1)     Interest
Rate		     Maturity
Date		     Principal/Shares (9)     Cost     Market
Value		     % of
NAV (4)		  
​   ​   9 Story Media Group Inc.(6)(18)(19)   First Lien Senior Secured Loan     EURIBOR+ 5.25%       5.25 %     4/30/2026     € 39       45       44       ​  
​   ​   Aptus 1724 Gmbh(6)(19)(21)   First Lien Senior Secured Loan     EURIBOR+ 6.00%       6.25 %     2/23/2028     € 4,162       5,055       4,732       ​  
​   ​   Aptus 1724 Gmbh(6)(19)(21)   First Lien Senior Secured Loan     L+ 6.25%       6.50 %     2/23/2028     $ 14,971       14,971       14,971       ​  
​   ​   Efficient Collaborative Retail Marketing Company, LLC(15)(19)   First Lien Senior Secured Loan—
Revolver		     L+ 5.25%       6.25 %     6/15/2022     $ 1,275       1,275       1,275       ​  
​   ​   Efficient Collaborative Retail Marketing Company, LLC(15)(19)   First Lien Senior Secured Loan     L+ 6.75%       7.75 %     6/15/2022     $ 15,095       15,114       14,340       ​  
​   ​   Efficient Collaborative Retail Marketing Company, LLC(15)(19)   First Lien Senior Secured Loan     L+ 6.75%       7.75 %     6/15/2022     $ 9,788       9,800       9,298       ​  
​   ​   International Entertainment Investments Limited(6) (18)(19)​   First Lien Senior Secured Loan     GBP LIBOR+ 4.75%       5.06 %     5/31/2023     £ 87       106       118       ​  
​   ​   ​   ​     ​       ​       ​     Media: Diversified & Production Total     $ 46,420     $ 44,835       ​4.1 %
​   Retail   Batteries Plus Holding Corporation(19)(31)   First Lien Senior Secured Loan—Revolver     P+ 5.75%       8.44 %     6/30/2023     $ 817       817       817       ​  
​   ​   Batteries Plus Holding Corporation(12)(15)(19)(29)   First Lien Senior Secured Loan     L+ 6.75%       7.75 %     6/30/2023     $ 28,672       28,671       28,671       ​  
​   ​   New Look Vision Group(6)(15)(19)   First Lien Senior Secured Loan—
Delayed Draw		     CDOR+ 5.25%       6.25 %     5/26/2028     CAD                    2,380       1,868       1,883       ​  
​   ​   New Look Vision Group(6)(15)(19)   First Lien Senior Secured Loan—
Revolver		     CDOR+ 5.25%       6.25 %     5/26/2026     CAD                     313       228       248       ​  
​   ​   New Look Vision Group(16)(19)   First Lien Senior Secured Loan—
Delayed Draw		     CDOR+ 5.50%       6.25 %     5/26/2028     CAD                     322       310       322       ​  
​   ​   New Look Vision Group(16)(19)(29)   First Lien Senior Secured Loan     CDOR+ 5.50%       6.25 %     5/26/2028     CAD                   9,750       9,653       9,750       ​  
​   ​   Thrasio, LLC(12)(15)(19)(29)   First Lien Senior Secured Loan     L+ 7.00%       8.00 %     12/18/2026     $ 21,746       21,241       21,746       ​  
​   ​   Walker Edison Initial Term Loan(12)(15)(19)(29)   First Lien Senior Secured Loan     L+ 5.75%       9.75 %     8/5/2027     $ 20,447       20,248       19,627       ​  
​   ​   ​   ​     ​       ​       ​     Retail Total     $ 83,036      $ 83,064       7.6​ % 
​   Services: Business   AMCP Clean Acquisition Company, LLC(12)(18)   First Lien Senior Secured Loan—
Delayed Draw		     L+ 4.25%       4.35 %     7/10/2025     $ 3,816       3,810       3,189       ​  
​   ​   AMCP Clean Acquisition Company, LLC(12)(18)   First Lien Senior Secured Loan     L+ 4.25%       4.35 %     7/10/2025     $ 15,767       15,747       13,176       ​  
​   ​   Brook Bidco I Limited(6)(16)(19)   First Lien Senior Secured Loan—
Revolver		     GBP LIBOR+ 6.00%       6.75 %     7/7/2028     £ 5,385       7,047       7,287       ​  
​   ​   Brook Bidco I Limited(6)(16)(19)   First Lien Senior Secured Loan—
Revolver		     GBP LIBOR+ 6.00%       6.75 %     7/7/2028     £ 7,180       9,396       9,716       ​  
​   ​   Brook Bidco Series A Preferred Units(6)(14)(19)(25)   Preferred Equity     —       —       —       5,675       7,783       7,908       ​  
​   ​   Brook Bidco Facility B(6)(18)(19)   First Lien Senior Secured Loan     L+ 6.00%       6.09 %     7/7/2028     £ 684       935       926       ​  
​   ​   Chamber Bidco Limited(6)(17)(19)   First Lien Senior Secured Loan     L+ 6.00%       6.50 %     6/7/2028     $ 237       234       237       ​  
​   ​   Elevator Holdco Inc.(14)(19)(25)   Equity Interest     —       —       —       2       2,448       2,550       ​  
​   ​   iBanFirst Facility Series A Preferred Units(6)(14)(19)(25)   Preferred Equity     —       —       —       5,080       5,996       6,290       ​  
​   ​   iBanFirst Facility B(6)(18)(19)   First Lien Senior Secured Loan     EURIBOR+ 8.50%       10.00 %     7/13/2028     € 102       128       116       ​  
​   ​   iBanFirst Revolving Facility(6)(18)(19)   First Lien Senior Secured Loan—
Revolver		     EURIBOR+ 8.50%       8.50 %     7/13/2028     € 2,030       2,244       2,308       ​  
​   ​   masLabor Equity(19)(25)   Equity Interest     —       —       —       345       345       372       ​  
​   ​   masLabor Revolver (3)(5)(19)   First Lien Senior Secured Loan—
Revolver		     —       —       7/1/2027     $ —       (21 )     —       ​  
​   ​   masLabor Term Loan Note(15)(19)   First Lien Senior Secured Loan     L+ 7.50%       8.50 %     7/1/2027     $ 8,578       8,324       8,578       ​  
​   ​   Opus2(6)(18)(19)   First Lien Senior Secured Loan     SONIA+ 5.50%       5.55 %     5/5/2028     £ 123       167       166       ​  
​   ​   Opus2(3)(5)(6)(18)(19)   First Lien Senior Secured Loan—
Delayed Draw		     —       —       5/5/2028     £ —       (173 )     —       ​  
​   ​   Opus2(6)(25)(19)   Equity Interest     —       —       —       1,460       1,769       2,373       ​  
                                                                     
​   ​   Parcel2Go Acquisition Facility(3)(6)(19)   First Lien Senior Secured Loan     SONIA+ 5.75%       5.92 %     7/15/2028     £ 3,863       4,982       5,183       ​  

  

 

 

16 

 

 

Control Type

  Industry  Portfolio Company  Investment Type  Spread Above Index (1)   Interest
Rate		   Maturity
Date		   Principal/Shares (9)   Cost   Market
Value		   % of
NAV (4)		 
                                      
 ​   ​  Parcel2Go Facility B(6)(18)(19)  First Lien Senior Secured Loan   SONIA+ 5.75%    5.80%   7/15/2028   £125    169    169     ​ 
​  ​  Parcel2Go Shares(6)(14)(19)(25)  Equity Interest   —    —    —    2,881    3,983    3,899    ​ 
​  ​  Refine Intermediate, Inc.(3)(5)(18)(19)  First Lien Senior Secured Loan—
Revolver		   —    —    9/3/2026   $—    (96)   —    ​ 
​  ​  Refine Intermediate, Inc.(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 4.50%    5.50%   3/3/2027   $21,894    21,467    21,894    ​ 
​  ​  Smartronix RC(2)(3)(5)(18)(19)​  First Lien Senior Secured Loan—
Revolver		   —    —    11/23/2028   $—    (124)   (126)   ​ 
​  ​  Smartronix T/L(12)(15)(19)  First Lien Senior Secured Loan   L+ 6.00%    7.00%   11/23/2028   $36,991    36,260    36,251    ​ 
​  ​  SumUp Holdings Luxembourg S.à.r.l.(6)(19)(32)  First Lien Senior Secured Loan   EURIBOR+ 8.50%    10.00%   2/17/2026   €6,650    7,939    7,561    ​ 
​  ​  SumUp Holdings Luxembourg S.à.r.l.(6)(19)(32)  First Lien Senior Secured Loan   L+ 8.50%    10.00%   2/17/2026   £10,055    11,700    11,432    ​ 
​  ​  TEI Holdings Inc.(15)(19)  First Lien Senior Secured Loan—
Revolver		   L+6.00%    7.00%   12/23/2025   $458    412    458    ​ 
​  ​  TEI Holdings Inc.(12)(15)(19)(26)(29)  First Lien Senior Secured Loan   L+ 7.00% (1.25% PIK)    8.25%   12/23/2026   $48,720    48,350    48,720    ​ 
​  ​  WCI Gigawatt Purchaser DD T/L(15)(19)  First Lien Senior Secured Loan—
Delayed Draw		   L+ 5.75%    6.75%   11/19/2027   $3,182    3,076    3,074    ​ 
​  ​  WCI Gigawatt Purchaser R/C(2)(3)(5)(19)  First Lien Senior Secured Loan—
Revolver		   —    —    11/19/2027   $—    (71)   (72)   ​ 
​  ​  WCI Gigawatt Purchaser T/L(12)(15)(19)  First Lien Senior Secured Loan   L+ 5.75%    6.75%   11/19/2027   $22,304    21,809    21,802    ​ 
​  ​  ​  ​   ​    ​    ​   Services: Business Total   $226,035   $225,437    20.5%
​  Services: Consumer  MZR Aggregator(14)(19)(25)  Equity Interest   —    —    —    1    798    798    ​ 
​  ​  MZR Buyer, LLC(3)(5)(15)(19)  First Lien Senior Secured Loan—
Revolver		   —    —    12/21/2026   $—    (86)   —    ​ 
​  ​  MZR Buyer, LLC(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 6.75%    7.75%   12/21/2026   $40,228    39,551    40,228    ​ 
​  ​  Surrey Bidco Limited(6)(17)(19)  First Lien Senior Secured Loan   GBP LIBOR+ 7.00%    7.50%   5/11/2026   £50    62    60    ​ 
​  ​  Zeppelin BidCo Pty Limited(6)(18)(19)  First Lien Senior Secured Loan   BBSY+ 6.00%    5.12%   6/28/2024   AUD                   206    142    150    ​ 
​  ​  ​  ​   ​    ​    ​   Services: Consumer Total   $40,467   $41,236    3.7%
​  Telecommunications  ACM dcBLOX LLC(14)(19)(25)  Preferred Equity   —    —    —    3,822    3,851    4,130    ​ 
​  ​  Conterra Ultra Broadband Holdings, Inc.(15)(29)  First Lien Senior Secured Loan   L+ 4.75%    5.75%   4/30/2026   $6,321    6,300    6,332    ​ 
​  ​  DC Blox Inc.(15)(19)(26)  First Lien Senior Secured Loan   L+ 8.00% (6.00% PIK)    9.00%   3/22/2026   $16,998    16,738    16,998    ​ 
​  ​  DC Blox Inc.(14)(19)(25)  Warrants   —    —    —    177    2    —    ​ 
​  ​  Horizon Telcom, Inc.(15)(19)(29)  First Lien Senior Secured Loan—
Revolver		   L+ 5.00%    6.00%   6/15/2023   $116    114    116    ​ 
​  ​  Horizon Telcom, Inc.(12)(15)(19)(29)  First Lien Senior Secured Loan—
Delayed Draw		   L+ 5.00%    6.00%   6/15/2023   $890    888    890    ​ 
​  ​  Horizon Telcom, Inc.(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 5.00%    6.00%   6/15/2023   $13,104    13,045    13,104    ​ 
​  ​  ​  ​   ​    ​    ​   Telecommunications Total   $40,938   $41,570    3.8%
​  Transportation: Cargo  A&R Logistics, Inc.(15)(19)  First Lien Senior Secured Loan—
Revolver		   L+ 6.00%    7.00%   5/5/2025   $2,815    2,748    2,815    ​ 
​  ​  A&R Logistics, Inc.(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 6.00%    7.00%   5/5/2025   $43,092    42,527    43,092    ​ 
​  ​  A&R Logistics, Inc.(15)(19)  First Lien Senior Secured Loan   L+ 6.00%    7.00%   5/5/2025   $2,423    2,391    2,423    ​ 
​  ​  A&R Logistics, Inc.(15)(19)  First Lien Senior Secured Loan   L+ 6.00%    7.00%   5/5/2025   $5,974    5,916    5,974    ​ 
​  ​  A&R Logistics, Inc.(15)(19)  First Lien Senior Secured Loan   L+ 6.50%    7.50%   5/5/2025   $2,716    2,695    2,716    ​ 
​  ​  ARL Holdings, LLC(14)(19)(25)  Equity Interest   —    —    —    445    445    575    ​ 
​  ​  ARL Holdings, LLC(14)(19)(25)  Equity Interest   —    —    —    9    9    81    ​ 
​  ​  Grammer Investment Holdings LLC(14)(19)(25)  Equity Interest   —    —    —    1,011    1,011    1,056    ​ 
​  ​  Grammer Investment Holdings LLC(19)(25)(26)  Preferred Equity   10% PIK    10.00%   —    8    790    830    ​ 
​  ​  Grammer Investment Holdings LLC(14)(19)(25)  Warrants   —    —    —    122    —    126    ​ 
​  ​  Grammer Purchaser, Inc.(12)(15)(19)(29)  First Lien Senior Secured Loan—
Revolver		   L+ 4.50%    5.50%   9/30/2024   $7,319    7,202    7,319    ​ 

 

17 

 

 

Control Type  Industry  Portfolio Company  Investment Type  Spread Above Index (1)   Interest
Rate		   Maturity
Date		   Principal/Shares (9)   Cost   Market
Value		   % of
NAV (4)		 
​  ​  Omni Logistics, LLC(15)(19)  Second Lien Senior Secured Loan   L+ 9.00%    10.00%   12/30/2027   $13,770    13,527    13,770    ​ 
​  ​  Omni Intermediate DD T/L 1(15)(19)  First Lien Senior Secured Loan   L+ 5.00%    6.00%   11/23/2026   $776    769    768    ​ 
​  ​  Omni Intermediate DD T/L 2(15)(19)  First Lien Senior Secured Loan   L+ 5.00%    6.00%   11/23/2026   $46    37    37    ​ 
​  ​  Omni Intermediate Holdings Closing Date Term Loan
(15)(19)​		  First Lien Senior Secured Loan   L+ 5.00%    6.00%   11/23/2026   $7,306    7,233    7,233    ​ 
​  ​  Omni Intermediate R/C(15)(19)  First Lien Senior Secured Loan—
Revolver		   L+ 5.00%    6.00%   11/23/2025   $183    183    176    ​ 
​  ​  REP Coinvest III- A Omni, L.P.(14)(19)(25)  Equity Interest   —    —    —    1,377    1,377    2,616    ​ 
​  ​  ​  ​   ​    ​    ​   Transportation: Cargo Total   $88,860    $91,607    8.3%
​  Transportation: Consumer  Toro Private Investments II, L.P.(6)(14)(19)(25)  Equity Interest   —    —    —     3,090    3,090    1,353    ​ 
​  ​  Toro Private Investments II, L.P.(6)(12)(18)(19)  First Lien Senior Secured Loan   L+ 6.75%    6.90%   5/29/2026   $6,706    4,846    5,603    ​ 
​  ​  Toro Private Investments II, L.P.(6)(15)(26)  First Lien Senior Secured Loan   L+ 1.50% (7.25% PIK)    9.75%   2/28/2025   $366    363    377    ​ 
​  ​  ​  ​   ​    ​    ​   Transportation: Consumer Total   $8,299    $7,333    0.7%
​  Wholesale  Abracon Group Holding, LLC(14)(19)(25)  Equity Interest   —    —    —    2    1,833    3,282    ​ 
​  ​  Abracon Group Holding, LLC(3)(5)(15)(19)  First Lien Senior Secured Loan—
Revolver		   —    —    7/18/2024   $—    (18)   —    ​ 
​  ​  Abracon Group Holding, LLC(12)(15)(19)(29)  First Lien Senior Secured Loan   L+ 5.25%    6.25%   7/18/2024   $35,363    35,270    35,363    ​ 
​  ​  Aramsco, Inc.(3)(5)(18)(19)​  First Lien Senior Secured Loan—
Revolver		   —    —    8/28/2024   $—    (30)   —    ​ 
​  ​  Aramsco, Inc.(12)(18)(19)(29)  First Lien Senior Secured Loan   L+ 5.25%    5.35%   8/28/2024   $23,796    23,537    23,796    ​ 
​  ​  Armor Group, LP(14)(19)(25)  Equity Interest   —    —    —    10    1,012    2,131    ​ 
​  ​  PetroChoice Holdings, Inc.(12)(15)  First Lien Senior Secured Loan   L+ 5.00%    6.00%   8/19/2022   $9,740    9,721    9,327    ​ 
​  ​  PetroChoice Holdings, Inc.(12)(15)  First Lien Senior Secured Loan   L+ 5.00%    6.00%   8/19/2022   $6,445    6,412    6,171    ​ 
​  ​  ​  ​   ​    ​    ​   Wholesale Total   $77,737    $80,070    7.3%
​  ​  ​  ​   ​    ​    ​   Non-Controlled/Non-Affiliate Investments Total   $1,921,970    $1,901,054    172.8%
Non-Controlled/Affiliate Investments
​  Beverage, Food & Tobacco  ADT Pizza, LLC(10)(14)(19)(25)  Equity Interest   —    —    —    6,720    6,720    19,527    ​ 
​  ​  ​  ​   ​    ​    ​   Beverage, Food & Tobacco Total   $6,720    $19,527    1.8%
​  Energy: Oil & Gas  Blackbrush Oil & Gas, L.P.(10)(14)(19)(25)  Equity Interest   —    —    —    1,123    —    —    ​ 
​  ​  Blackbrush Oil & Gas, L.P.(10)(14)(19)(25)  Preferred Equity   —    —    —    36,084    10,104    19,720    ​ 
​  ​  Blackbrush Oil & Gas, L.P.(10)(12)(15)(19)(26)(29)  First Lien Senior Secured Loan   L+ 5.00% (2% PIK)    8.00%   9/3/2025   $12,336    12,336    12,336    ​ 
​  ​  ​  ​   ​    ​    ​   Energy: Oil & Gas Total   $22,440    $32,056    2.9%
​  Transportation: Consumer  Direct Travel, Inc.(10)(18)(19)(26)  First Lien Senior Secured Loan   L+ 1.00% (6.30% PIK)    7.50%   10/2/2023   $4,766    4,766    4,766    ​ 
​  ​  Direct Travel, Inc.(10)(14)(19)(25)  Equity Interest   —    —    —    68    —    —    ​ 
​  ​  Direct Travel, Inc.(10)(15)(19)(26)  First Lien Senior Secured Loan—
Delayed Draw		   L+ 1.00% (8.28% PIK)    9.50%   10/2/2023   $3,370    3,370    2,831    ​ 
​  ​  Direct Travel, Inc.(10)(15)(19)(26)  First Lien Senior Secured Loan—
Delayed Draw		   L+ 1.00% (8.28% PIK)    9.50%   10/2/2023   $1,710    1,710    1,436    ​ 
​  ​  Direct Travel, Inc.(10)(15)(19)(26)  First Lien Senior Secured Loan   L+ 1.00% (8.28% PIK)    9.50%   10/2/2023   $57,555    57,555    48,347    ​ 
​  ​  Direct Travel, Inc.(10)(15)(19)  First Lien Senior Secured Loan—
Delayed Draw		   L+ 6.00%    7.00%   10/2/2023   $4,125    4,125    4,125    ​ 
​  ​  Direct Travel, Inc.(10)(18)(19)  First Lien Senior Secured Loan   L+ 6.00%    7.00%   10/2/2023   $202    202    202    ​ 
​  ​  ​  ​   ​    ​    ​   Transportation: Consumer Total   $71,728    $61,707    5.6%
​  ​  ​  ​   ​    ​    ​   Non-Controlled/Affiliate Investments Total   $100,888    $113,290    10.3%
​

 

18 

 

 

Control Type  Industry  Portfolio Company  Investment Type    Spread Above Index (1)   Interest
Rate		   Maturity
Date		   Principal/Shares (9)   Cost   Market
Value		   % of
NAV (4)		 
Controlled Affiliate Investments
​  Aerospace & Defense  BCC Jetstream Holdings Aviation (Off I),
LLC(6)(10)(11)(19)(20)(25)		  Equity Interest   —   —    —    11,863    11,863    10,563    ​ 
​  ​  BCC Jetstream Holdings Aviation (On II),
LLC(10)(11)(19)(20)(25)		  Equity Interest   —   —    —    1,116    1,116    —    ​ 
​  ​  BCC Jetstream Holdings Aviation (On II),
LLC(10)(11)(18)(19)(20)(26)		  First Lien Senior Secured Loan   L+ 10.00%    10.00%   6/2/2022   $7,377    7,377    6,627    ​ 
​  ​  Gale Aviation (Offshore) Co(6)(10)(11)(19)(25)  Equity Interest   —   —    —    88,985    88,985    72,839    ​ 
​  ​  ​  ​       ​    ​   Aerospace & Defense Total   $109,341   $90,029    8.2%
​  Investment Vehicles  International Senior Loan Program,
LLC(6)(10)(11)(25)		  Equity Interest Investment
Vehicles		   —   —    —    41,823    39,596    44,444    ​ 
​  ​  International Senior Loan Program,
LLC(6)(10)(11)(15) (19)		  Subordinated Note Investment Vehicles   L+ 8.00%    9.00%   2/22/2028   $125,437    125,437    125,437    ​ 
​  ​  ​  ​       ​    ​   Investment Vehicles Total   $165,033   $169,881    15.4%
​  Transportation: Cargo  Lightning Holdings B, LLC(6)(10)(11)(14)(19)(25)  Equity Interest   —   —    —    13,843    14,152    14,851    ​ 
​  ​  ​  ​       ​    ​   Transportation: Cargo Total   $14,152   $14,851    1.4%
​  ​  ​  ​       ​    ​   Controlled Affiliate Investments
Total		   $288,526   $274,761    25.0%
​  ​  ​  ​       ​    ​   Investments Total   $2,311,384   $2,289,105    208.1%
Cash Equivalents
​  Cash Equivalents  Goldman Sachs Financial Square Government
Fund Institutional Share Class(30)		  Cash Equivalents   —    0.03%   —   $177,554   $177,554   $177,554    ​ 
​  ​  ​  ​       ​    ​   Cash Equivalents Total   $177,554   $177,554    16.1%
​  ​  ​  ​       ​    ​   Investments and Cash
Equivalents Total		   $2,488,938   $2,466,659    224.2%
​

 

Forward Foreign Currency Exchange Contracts

 

Currency Purchased  Currency Sold  Counterparty  Settlement Date  Unrealized
Appreciation
(Depreciation)(8)		 
US DOLLARS 1,458  POUND STERLING 1,100  Bank of New York Mellon  2/18/2022  $(31)
US DOLLARS 481  AUSTRALIAN DOLLARS 410  Bank of New York Mellon  3/2/2022   183 
US DOLLARS 29,087  POUND STERLING 20,990  Bank of New York Mellon  9/2/2022   721 
US DOLLARS 75,862  EURO 63,360  Bank of New York Mellon  9/2/2022   3,390 
US DOLLARS 27,411  POUND STERLING 20,700  Bank of New York Mellon  9/6/2022   563 
US DOLLARS 14,330  EURO 12,550  Bank of New York Mellon  9/6/2022   25 
US DOLLARS 35,821  POUND STERLING 25,700  Citibank  2/18/2022   1,035 
US DOLLARS 6,954  POUND STERLING 5,260  Citibank  2/23/2022   166 
US DOLLARS 12,327  EURO 10,510  Citibank  9/2/2022   305 
US DOLLARS 4,754  EURO 3,251  Citibank  9/6/2022   (1,036) 
​  ​  ​  ​   $     5,321 

 ​

 

(1) The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”), the Euro Interbank Offered Rate (“EURIBOR” or “E”), British Pound Sterling LIBOR Rate (“GBP LIBOR”), the Norwegian Interbank Offered Rate (“NIBOR” or “N”), the Copenhagen Interbank Offered Rate (“CIBOR” or “C”), Canadian Dollar LIBOR Rate (“CDOR LIBOR”), the Bank Bill Swap Rate (“BBSW”), the Bank Bill Swap Bid Rate (“BBSY”), Sterling Overnight Interbank Average Rate (“SONIA”), or the Prime Rate (“Prime” or “P”) and which reset daily, monthly, quarterly or semiannually. Investments or a portion thereof may bear Payment-in-Kind (“PIK”). For each, the Company has provided the PIK or the spread over LIBOR, EURIBOR, GBP LIBOR, NIBOR, CIBOR, CDOR, BBSW, BBSY, or Prime and the current weighted average interest rate in effect at December 31, 2021. Certain investments are subject to a LIBOR, EURIBOR, GBP LIBOR, NIBOR, CIBOR, CDOR, BBSW, SONIA, or Prime interest rate floor.

 

19 

 

  

(2) The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par.

(3) Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. The investment may be subject to an unused/letter of credit facility fee.

(4) Percentages are based on the Company’s net assets of $1,100,006 as of December 31, 2021.

(5) The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.

(6) The investment is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2021, non-qualifying assets totaled 18.0% of the Company’s total assets.

(7) Tickmark not used

(8) Unrealized appreciation/(depreciation) on forward currency exchange contracts.

(9) The principal amount (par amount) for all debt securities is denominated in U.S. dollars, unless otherwise noted. £ represents Pound Sterling, € represents Euro, NOK represents Norwegian krone, AUD represents Australian, CAD represents Canadian Dollar and DKK represents Kroner.

(10) As defined in the 1940 Act, the Company is deemed to be an “Affiliated Investment” of the Company as the Company owns 5% or more of the portfolio company’s securities.

(11) As defined in the 1940 Act, the Company is deemed to “Control” this portfolio company as the Company either owns more than 25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company.

(12) Assets or a portion thereof are pledged as collateral for the 2018-1 Issuer. See Note 6 “Debt”.

(13) $317 of the total par amount for this security is at P+ 4.25%.

(14) Non-Income Producing.

(15) Loan includes interest rate floor of 1.00%.

(16) Loan includes interest rate floor of 0.75%.

(17) Loan includes interest rate floor of 0.50%.

(18) Loan includes interest rate floor of 0.00%.

(19) Security valued using unobservable inputs (Level 3).

(20) The Company holds non-controlling, affiliate interest in an aircraft-owning special purpose vehicle through this investment.

(21) Loan includes interest rate floor of 0.25%.

(22) The Company generally earns a higher interest rate on the “last out” tranche of debt, to the extent the debt has been allocated to “first out” and “last out” tranches, whereby the “first out” tranche will have priority as to the “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder.

(23) $992 of the total par amount for this security is at L+ 5.75%.

(24) $533 of the total par amount for this security is at P+ 4.50%.

(25) Security exempt from registration under the Securities Act of 1933 (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of December 31, 2021, the aggregate fair value of these securities is $245,307 or 22.30% of the Company’s net assets. The acquisition dates of the restricted securities are as follows:

 

20 

 

  

Investment

 ​ ​ Acquisition Date ​
Abracon Group Holding, LLC ​ ​ ​ ​ 7/18/2018 ​ ​
ACM dcBLOX LLC ​ ​ ​ ​ 3/22/2021 ​ ​
ADT Pizza, LLC ​ ​ ​ ​ 10/29/2018 ​ ​
Appriss Holdings, Inc. ​ ​ ​ ​ 5/3/2021 ​ ​
AQ Software Corporation ​ ​ ​ ​ 12/10/2021 ​ ​
AQ Software Corporation ​ ​ ​ ​ 12/10/2021 ​ ​
ARL Holdings, LLC ​ ​ ​ ​ 5/3/2019 ​ ​
ARL Holdings, LLC ​ ​ ​ ​ 5/3/2019 ​ ​
Armor Group, LP ​ ​ ​ ​ 8/28/2018 ​ ​
BCC Jetstream Holdings Aviation (Off I), LLC ​ ​ ​ ​ 6/1/2017 ​ ​
BCC Jetstream Holdings Aviation (On II), LLC ​ ​ ​ ​ 6/1/2017 ​ ​
Blackbrush Oil & Gas, L.P. ​ ​ ​ ​ 9/3/2020 ​ ​
Blackbrush Oil & Gas, L.P. ​ ​ ​ ​ 9/3/2020 ​ ​
CB Titan Holdings, Inc. ​ ​ ​ ​ 5/1/2017 ​ ​
DC Blox Inc. ​ ​ ​ ​ 3/23/2021 ​ ​
Direct Travel, Inc. ​ ​ ​ ​ 10/2/2020 ​ ​
Eagle Rock Capital Corporation ​ ​ ​ ​ 12/9/2021 ​ ​
East BCC Coinvest II, LLC ​ ​ ​ ​ 7/23/2019 ​ ​
Elevator Holdco Inc. ​ ​ ​ ​ 12/23/2019 ​ ​
Elk Parent Holdings, LP ​ ​ ​ ​ 11/1/2019 ​ ​
Elk Parent Holdings, LP ​ ​ ​ ​ 11/1/2019 ​ ​
FCG Acquisitions, Inc. ​ ​ ​ ​ 1/24/2019 ​ ​
Fineline Technologies, Inc. ​ ​ ​ ​ 2/22/2021 ​ ​
Gale Aviation (Offshore) Co ​ ​ ​ ​ 1/2/2019 ​ ​
Gluware Warrant ​ ​ ​ ​ 10/15/2021 ​ ​
Grammer Investment Holdings LLC ​ ​ ​ ​ 10/1/2018 ​ ​
Grammer Investment Holdings LLC ​ ​ ​ ​ 10/1/2018 ​ ​
Grammer Investment Holdings LLC ​ ​ ​ ​ 10/1/2018 ​ ​
iBanFirst Facility Series A Preferred Units ​ ​ ​ ​ 7/13/2021 ​ ​
Brook Bidco Series A Preferred Units ​ ​ ​ ​ 7/8/2021 ​ ​
International Senior Loan Program, LLC ​ ​ ​ ​ 2/22/2021 ​ ​
Kellstrom Aerospace Group, Inc ​ ​ ​ ​ 7/1/2019 ​ ​
Lightning Holdings B, LLC ​ ​ ​ ​ 1/2/2020 ​ ​
masLabor Equity ​ ​ ​ ​ 7/1/2021 ​ ​
MZR Aggregator ​ ​ ​ ​ 12/22/2020 ​ ​
NPC International, Inc. ​ ​ ​ ​ 4/1/2021 ​ ​
Opus2 ​ ​ ​ ​ 6/16/2021 ​ ​
Parcel2Go Shares ​ ​ ​ ​ 7/15/2021 ​ ​
PPX Class A Units ​ ​ ​ ​ 7/29/2021 ​ ​
PPX Class B Units ​ ​ ​ ​ 7/29/2021 ​ ​
Precision Ultimate Holdings, LLC ​ ​ ​ ​ 11/6/2019 ​ ​
REP Coinvest III- A Omni, L.P. ​ ​ ​ ​ 2/5/2021 ​ ​
ServiceMaster LP Interest Class B Preferred Units ​ ​ ​ ​ 8/16/2021 ​ ​
TLC Holdco LP ​ ​ ​ ​ 10/11/2019 ​ ​
Toro Private Investments II, L.P. ​ ​ ​ ​ 4/2/2019 ​ ​
Ventiv Topco, Inc. ​ ​ ​ ​ 9/3/2019 ​ ​
WCI-HSG HOLDCO, LLC ​ ​ ​ ​ 2/22/2019 ​ ​
WSP LP Interest ​ ​ ​ ​ 8/31/2021 ​ ​

 

21 

 

 

(26) Denotes that all or a portion of the debt investment includes PIK interest during the period.

(27) Asset is in an escrow liquidating trust.

(28) Tickmark not used

(29) Assets or a portion thereof are pledged as collateral for the 2019-1 Issuer. See Note 6 “Debt”.

(30) Cash equivalents include $86,159 of restricted cash.

(31) Loan includes interest rate floor of 2.00%.

(32) Loan includes interest rate floor of 1.50%.

(33) $2 of the total par amount for this security is at P+ 5.50%

 

See Notes to Consolidated Financial Statements

 

22 

 

 

 

BAIN CAPITAL SPECIALTY FINANCE, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(in thousands, except share and per share data)

 

Note 1. Organization

 

Bain Capital Specialty Finance, Inc. (the “Company”, “we”, “our” and “us”) was formed on October 5, 2015 and commenced investment operations on October 13, 2016. The Company has elected to be treated and is regulated as a business development company (a “BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for tax purposes the Company has elected to be treated and intends to operate in a manner so as to continuously qualify as a regulated investment company (a “RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company is externally managed by BCSF Advisors, LP (the “Advisor” or “BCSF Advisors”), our investment adviser that is registered with the Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Advisor also provides the administrative services necessary for the Company to operate (in such capacity, the “Administrator” or “BCSF Advisors”).

 

On November 19, 2018, the Company closed its initial public offering (the “IPO”), which was a Qualified IPO, issuing 7,500,000 shares of its common stock at a public offering price of $20.25 per share. Shares of common stock of the Company began trading on the New York Stock Exchange under the symbol “BCSF” on November 15, 2018.

 

The Company’s primary focus is capitalizing on opportunities within its Advisor’s Senior Direct Lending Strategy, which seeks to provide risk-adjusted returns and current income to its stockholders by investing primarily in middle-market companies with between $10.0 million and $150.0 million in EBITDA. The Company focuses on senior investments with a first or second lien on collateral and strong structures and documentation intended to protect the lender. The Company generally seeks to retain voting control in respect of the loans or particular classes of securities in which the Company invests through maintaining affirmative voting positions or negotiating consent rights that allow the Company to retain a blocking position. The Company may also invest in mezzanine debt and other junior securities and in secondary purchases of assets or portfolios, as described below. Investments are likely to include, among other things, (i) senior first lien, stretch senior, senior second lien, unitranche, (ii) mezzanine debt and other junior investments and (iii) secondary purchases of assets or portfolios that primarily consist of middle-market corporate debt. The Company may also invest, from time to time, in equity securities, distressed debt, debtor-in-possession loans, structured products, structurally subordinate loans, investments with deferred interest features, zero-coupon securities and defaulted securities.

 

Our operations comprise only a single reportable segment.

 

Note 2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The Company’s consolidated financial statements and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. These consolidated financial statements reflect adjustments that in the opinion of the Company are necessary for the fair statement of the financial position and results of operations for the periods presented herein and are not necessarily indicative of the full fiscal year. The Company has determined it meets the definition of an investment company and follows the accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 — Financial Services — Investment Companies. The functional currency of the Company is U.S. dollars and these consolidated financial statements have been prepared in that currency. Certain prior period information has been reclassified to conform to the current period presentation and this had no effect on the Company’s consolidated financial position or the consolidated results of operations as previously reported.

 

The information included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.

 

23 

 

 

Basis of Consolidation

 

The Company will generally consolidate any wholly, or substantially, owned subsidiary when the design and purpose of the subsidiary is to act as an extension of the Company’s investment operations and to facilitate the execution of the Company’s investment strategy. Accordingly, the Company consolidated the results of its subsidiaries in its consolidated financial statements BCSF CFSH, LLC, BCSF CFS, LLC and BCC Middle Market CLO 2019-1, LLC in its consolidated financial statements. All intercompany transactions and balances have been eliminated in consolidation. Since the Company is an investment company, portfolio investments held by the Company are not consolidated into the consolidated financial statements. The portfolio investments held by the Company (including its investments held by consolidated subsidiaries) are included on the consolidated statements of assets and liabilities as investments at fair value.

 

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates and such differences could be material.

 

Valuation of Portfolio Investments

 

Investments for which market quotations are readily available are typically valued at such market quotations. Market quotations are obtained from an independent pricing service, where available. If a price cannot be obtained from an independent pricing service or if the independent pricing service is not deemed to be current with the market, certain investments held by the Company will be valued on the basis of prices provided by principal market makers. Generally, investments marked in this manner will be marked at the mean of the bid and ask of the independent broker quotes obtained. To validate market quotations, the Company utilizes a number of factors to determine if the quotations are representative of fair value, including the source and number of quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value, subject at all times to the oversight and approval of the Board of Directors of the Company (the “Board”), based on, among other things, the input of the Advisor, the Company’s audit committee of the Board (the “Audit Committee”) and one or more independent third party valuation firms engaged by the Board.

 

With respect to unquoted portfolio investments, the Company will value each investment considering, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies that are public and other factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Company will use the pricing indicated by the external event to corroborate and/or assist us in our valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

 

With respect to investments for which market quotations are not readily available, the Advisor will undertake a multi-step valuation process, which includes among other things, the below:

 

  • The Company’s quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of the Advisor responsible for the portfolio investment or by an independent valuation firm;
  • Preliminary valuation conclusions are then documented and discussed with the Company’s senior management and the Advisor. Agreed upon valuation recommendations are presented to the Audit Committee;
  • The Audit Committee of the Board reviews the valuations presented and recommends values for each of the investments to the Board; and
  • The Board will discuss valuations and determine the fair value of each investment in good faith based upon, among other things, the input of the Advisor, independent valuation firms, where applicable, and the Audit Committee.

  

In following this approach, the types of factors that are taken into account in the fair value pricing of investments include, as relevant, but are not limited to: comparison to publicly traded securities, including factors such as yield, maturity and measures of credit quality; the enterprise value of a portfolio company; the nature and realizable value of any collateral; the portfolio company’s ability to make payments and its earnings and discounted cash flows; and the markets in which the portfolio company does business. In cases where an independent valuation firm provides fair valuations for investments, the independent valuation firm provides a fair valuation report, a description of the methodology used to determine the fair value and their analysis and calculations to support their conclusion.

 

24 

 

 

The Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value in accordance with US GAAP and required disclosures of fair value measurements. The fair value of a financial instrument is the amount that would be received in an orderly transaction between market participants at the measurement date. The Company determines the fair value of investments consistent with its valuation policy. The Company discloses the fair value of its investments in a hierarchy which prioritizes and ranks the level of market observability used in the determination of fair value. In accordance with ASC 820, these levels are summarized below:

 

  • Level 1 — Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date.
     
  • Level 2 — Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
     
  • Level 3 — Valuations based on inputs that are unobservable and significant to the fair value measurement.

 

A financial instrument’s level within the hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuations of Level 2 investments are generally based on quotations received from pricing services, dealers or brokers. Consideration is given to the source and nature of the quotations and the relationship of recent market activity to the quotations provided.

 

Transfers between levels, if any, are recognized at the beginning of the reporting period in which the transfers occur. The Company evaluates the source of inputs used in the determination of fair value, including any markets in which the investments, or similar investments, are trading. When the fair value of an investment is determined using inputs from a pricing service (or principal market makers), the Company considers various criteria in determining whether the investment should be classified as a Level 2 or Level 3 investment. Criteria considered includes the pricing methodologies of the pricing services (or principal market makers) to determine if the inputs to the valuation are observable or unobservable, as well as the number of prices obtained and an assessment of the quality of the prices obtained. The level of an investment within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment.

 

The fair value assigned to these investments is based upon available information and may fluctuate from period to period. In addition, it does not necessarily represent the amount that might ultimately be realized upon sale. Due to inherent uncertainty of valuation, the estimated fair value of investments may differ from the value that would have been used had a ready market for the security existed, and the difference could be material.

 

Securities Transactions, Revenue Recognition and Expenses

 

The Company records its investment transactions on a trade date basis. The Company measures realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specified identification method. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium to par value on investments acquired are accreted and amortized, respectively, into interest income over the life of the respective investment using the effective interest method. Commitment fees are recorded on an accrual basis and recognized as interest income. Loan origination fees, original issue discount and market discount or premium are capitalized and amortized against or accreted into interest income using the effective interest method or straight-line method, as applicable. For the Company’s investments in revolving bank loans, the cost basis of the investment purchased is adjusted for the cash received for the discount on the total balance committed. The fair value is also adjusted for price appreciation or depreciation on the unfunded portion. As a result, the purchase of commitments not completely funded may result in a negative value until it is offset by the future amounts called and funded. Upon prepayment of a loan or debt security, any prepayment premium, unamortized upfront loan origination fees and unamortized discount are recorded as interest income.

 

 Dividend income on preferred equity investments is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity investments is recorded on the record date for private portfolio companies and on the ex-dividend date for publicly traded portfolio companies. Distributions received from an equity interest, limited liability company or a limited partnership investment are evaluated to determine if the distribution should be recorded as dividend income or a return of capital.

 

Certain investments may have contractual payment-in-kind (“PIK”) interest or dividends. PIK represents accrued interest or accumulated dividends that are added to the loan principal of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity or upon being called by the issuer. PIK is recorded as interest or dividend income, as applicable. If at any point the Company believes PIK is not expected to be realized, the investment generating PIK will be placed on non-accrual status. Accrued PIK interest or dividends are generally reversed through interest or dividend income, respectively, when an investment is placed on non-accrual status.

 

25 

 

 

Certain structuring fees and amendment fees are recorded as other income when earned. Administrative agent fees received by the Company are recorded as other income when the services are rendered.

 

Expenses are recorded on an accrual basis.

 

Non-Accrual Loans

 

Loans or debt securities are placed on non-accrual status when there is reasonable doubt that principal or interest will be collected. Accrued interest generally is reversed when a loan or debt security is placed on non-accrual status. Interest payments received on non-accrual loans or debt securities may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans and debt securities are restored to accrual status when past due principal and interest are paid and, in management’s judgment, principal and interest payments are likely to remain current. The Company may make exceptions to this treatment if a loan has sufficient collateral value and is in the process of collection. As of March 31, 2022, there were no loans on non-accrual. As of December 31, 2021, there were no loans placed on non-accrual status.

 

 Distributions

 

Distributions to common stockholders are recorded on the record date. The amount to be distributed, if any, is determined by the Board each quarter, and is generally based upon the earnings estimated by the Advisor. Distributions from net investment income and net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with US GAAP. The Company may pay distributions to its stockholders in a year in excess of its investment company taxable income and net capital gain for that year and, accordingly, a portion of such distributions may constitute a return of capital for U.S. federal income tax purposes. This excess generally would be a tax-free return of capital in the period and generally would reduce the stockholder’s tax basis in its shares. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent; they are charged or credited to paid-in capital in excess of par, accumulated undistributed net investment income or accumulated net realized gain (loss), as appropriate, in the period that the differences arise. Temporary and permanent differences are primarily attributable to differences in the tax treatment of certain loans and the tax characterization of income and non-deductible expenses.

 

The Company intends to timely distribute to its stockholders substantially all of its annual taxable income for each year, except that the Company may retain certain net capital gains for reinvestment and, depending upon the level of the Company’s taxable income earned in a year, the Company may choose to carry forward taxable income for distribution in the following year and incur applicable U.S. federal excise tax. The specific tax characteristics of the Company’s distributions will be reported to stockholders after the end of the calendar year. All distributions will be subject to available funds, and no assurance can be given that the Company will be able to declare such distributions in future periods.

 

The Company distributes net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, the Company may decide in the future to retain such capital gains for investment, incur a corporate-level tax on such capital gains, and elect to treat such capital gains as deemed distributions to stockholders.

 

Dividend Reinvestment Plan

 

The Company has adopted a dividend reinvestment plan that provides for the reinvestment of cash dividends and distributions. Stockholders who do not “opt out” of the Company’s dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash dividends and distributions.

 

26 

 

 

Offering Costs

 

Offering costs consist primarily of fees and expenses incurred in connection with the offering of shares, legal, printing and other costs associated with the preparation and filing of applicable registration statements. To the extent such expenses relate to equity offerings, these expenses are charged as a reduction of paid-in-capital upon each such offering.

 

Cash, Restricted Cash, and Cash Equivalents

 

Cash and cash equivalents consist of deposits held at custodian banks, and highly liquid investments, such as money market funds, with original maturities of three months or less. Cash and cash equivalents are carried at cost or amortized cost, which approximates fair value. The Company may deposit its cash and cash equivalents in financial institutions and, at certain times, such balances may exceed the Federal Deposit Insurance Corporation insurance limits. Cash equivalents are presented separately on the consolidated schedules of investments. Restricted cash is collected and held by the trustee who has been appointed as custodian of the assets securing certain of the Company’s financing transactions.

 

Foreign Currency Translation

 

The accounting records of the Company are maintained in U.S. dollars. The fair values of foreign securities, foreign cash and other assets and liabilities denominated in foreign currency are translated to U.S. dollars based on the current exchange rates at the end of each business day. Income and expenses denominated in foreign currencies are translated at current exchange rates when accrued or incurred. Unrealized gains and losses on foreign currency holdings and non-investment assets and liabilities attributable to the changes in foreign currency exchange rates are included in the net change in unrealized appreciation (depreciation) on foreign currency translation on the consolidated statements of operations. Net realized gains and losses on foreign currency holdings and non-investment assets and liabilities attributable to changes in foreign currency exchange rates are included in net realized gain (loss) on foreign currency transactions on the consolidated statements of operations. The portion of both realized and unrealized gains and losses on investments that result from changes in foreign currency exchange rates is not separately disclosed, but is included in net realized gain (loss) on investments and net change in unrealized appreciation (depreciation) on investments, respectively, on the consolidated statements of operations.

 

Forward Currency Exchange Contracts

 

The Company may enter into forward currency exchange contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations in the value of foreign currencies. A forward currency exchange contract is an agreement between two parties to buy and sell a currency at a set price on a future date. The Company does not utilize hedge accounting and as such the Company recognizes the value of its derivatives at fair value on the consolidated statements of assets and liabilities with changes in the net unrealized appreciation (depreciation) on forward currency exchange contracts recorded on the consolidated statements of operations. Forward currency exchange contracts are valued using the prevailing forward currency exchange rate of the underlying currencies. Unrealized appreciation (depreciation) on forward currency exchange contracts are recorded on the consolidated statements of assets and liabilities by counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable. Cash collateral maintained in accounts held by counterparties is included in collateral on forward currency exchange contracts on the consolidated statements of assets and liabilities. Notional amounts and the gross fair value of forward currency exchange contracts assets and liabilities are presented separately on the consolidated schedules of investments.

 

Changes in net unrealized appreciation (depreciation) are recorded on the consolidated statements of operations in net change in unrealized appreciation (depreciation) on forward currency exchange contracts. Net realized gains and losses are recorded on the consolidated statements of operations in net realized gain (loss) on forward currency exchange contracts. Realized gains and losses on forward currency exchange contracts are determined using the difference between the fair market value of the forward currency exchange contract at the time it was opened and the fair market value at the time it was closed or covered. Additionally, losses, up to the fair value, may arise if the counterparties do not perform under the contract terms.

 

Deferred Financing Costs and Debt Issuance Costs

 

The Company records costs related to issuance of revolving debt obligations as deferred financing costs. These costs are deferred and amortized using the straight-line method over the stated maturity life of the obligation. The Company records costs related to the issuance of term debt obligations as debt issuance costs. These costs are deferred and amortized using the effective interest method. These costs are presented as a reduction to the outstanding principal amount of the term debt obligations on the consolidated statements of assets and liabilities. In the event that we modify or extinguish our debt before maturity, the Company follows the guidance in ASC Topic 470-50, Modification and Extinguishments. For modifications to or exchanges of our revolving debt obligations, any unamortized deferred financing costs related to lenders who are not part of the new lending group are expensed. For extinguishments of our term debt obligations, any unamortized debt issuance costs are deducted from the carrying amount of the debt in determining the gain or loss from the extinguishment.

 

27 

 

 

Income Taxes

 

The Company has elected to be treated for U.S. federal income tax purposes as a RIC under the Code. So long as the Company maintains its status as a RIC, it will generally not be subject to corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually as dividends to its stockholders. As a result, any tax liability related to income earned and distributed by the Company represents obligations of the Company’s stockholders and will not be reflected in the consolidated financial statements of the Company.

 

The Company intends to comply with the applicable provisions of the Code pertaining to RICs and to make distributions of taxable income sufficient to relieve it from substantially all federal income taxes. Accordingly, no provision for income taxes is required in the consolidated financial statements. For income tax purposes, distributions made to stockholders are reported as ordinary income, capital gains, non-taxable return of capital, or a combination thereof. The tax character of distributions paid to stockholders through March 31, 2022 may include return of capital, however, the exact amount cannot be determined at this point. The final determination of the tax character of distributions will not be made until the Company files our tax return for the tax year ending December 31, 2022. The character of income and gains that the Company distributes is determined in accordance with income tax regulations that may differ from GAAP. BCSF CFSH, LLC, BCSF CFS, LLC, and BCC Middle Market CLO 2019-1, LLC are disregarded entities for tax purposes and are consolidated with the tax return of the Company.

 

The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reversed and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes, if any, are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. Management has analyzed the Company’s tax positions, and has concluded that no liability for unrecognized tax benefits related to uncertain tax positions on returns to be filed by the Company for all open tax years should be recorded. The Company identifies its major tax jurisdiction as the United States, and the Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months. As of March 31, 2022, the tax years that remain subject to examination are from 2018 forward.

 

Recent Accounting Pronouncements

 

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848),” which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of the adoption of ASU 2020-04 and 2021-01 on its consolidated financial statements.

 

28 

 

 

Note 3. Investments

 

The following table shows the composition of the investment portfolio, at amortized cost and fair value as of March 31, 2022 (with corresponding percentage of total portfolio investments):

 

   As of March 31, 2022 
   Amortized Cost   Percentage of
Total Portfolio		   Fair Value   Percentage of
Total Portfolio		 
First Lien Senior Secured Loans  $1,557,724    71.8%  $1,517,163    70.4%
Equity Interest   199,422    9.2    204,417    9.5 
Subordinated Note Investment Vehicles (1)   169,412    7.8    169,412    7.9 
Second Lien Senior Secured Loans   112,625    5.2    111,126    5.2 
Preferred Equity   43,443    2.0    60,980    2.8 
Equity Interest Investment Vehicles (1)   47,703    2.2    51,855    2.4 
Subordinated Debt   38,325    1.8    39,117    1.8 
Warrants   478    0.0    592    0.0 
Preferred Equity Interest Investment Vehicles (1)   10    0.0    10    0.0 
Total  $2,169,142    100.0%  $2,154,672    100.0%

 

 

(1) Represents debt and equity investment in ISLP and SLP

 

The following table shows the composition of the investment portfolio, at amortized cost and fair value as of December 31, 2021 (with corresponding percentage of total portfolio investments):

 

   As of December 31, 2021 
   Amortized Cost   Percentage of
Total Portfolio		   Fair Value   Percentage of
Total Portfolio		 
First Lien Senior Secured Loans  $1,807,805    78.2%  $1,774,675    77.5%
Equity Interest   156,399    6.8    151,844    6.6 
Subordinated Note Investment Vehicles (1)   125,437    5.5    125,437    5.5 
Second Lien Senior Secured Loans   120,058    5.2    118,561    5.2 
Preferred Equity   42,452    1.8    53,991    2.4 
Equity Interest Investment Vehicles (1)   39,596    1.7    44,444    1.9 
Subordinated Debt   19,635    0.8    20,027    0.9 
Warrants   2    0.0    126    0.0 
Total  $2,311,384    100.0%  $2,289,105    100.0%

 

 

(1) Represents debt and equity investment in ISLP

 

The following table shows the composition of the investment portfolio by geographic region, at amortized cost and fair value as of March 31, 2022 (with corresponding percentage of total portfolio investments):

 

   As of March 31, 2022 
   Amortized Cost   Percentage of
Total Portfolio		   Fair Value   Percentage of
Total Portfolio		 
United States  $1,874,834    86.4%  $1,867,192    86.7%
Cayman Islands   119,558    5.5    113,176    5.3 
United Kingdom   62,649    2.9    62,043    2.9 
Canada   29,816    1.4    30,153    1.4 
Australia   27,679    1.3    27,530    1.3 
Luxembourg   21,490    1.0    21,571    1.0 
Germany   14,874    0.7    14,966    0.6 
Ireland   11,303    0.5    11,076    0.5 
Guernsey   3,503    0.2    3,558    0.2 
Belguim   2,910    0.1    2,892    0.1 
Israel   341    0.0    346    0.0 
Sweden   185    0.0    169    0.0 
Total  $2,169,142    100.0%  $2,154,672    100.0%

 

29 

 

 

 

The following table shows the composition of the investment portfolio by geographic region, at amortized cost and fair value as of December 31, 2021 (with corresponding percentage of total portfolio investments):

 

   As of December 31, 2021 
   Amortized Cost   Percentage of
Total Portfolio		   Fair Value   Percentage of
Total Portfolio		 
United States  $2,071,058    89.5%  $2,061,372    90.0%
Cayman Islands   116,916    5.1    101,888    4.5 
United Kingdom   41,736    1.8    43,658    1.9 
Ireland   27,315    1.2    28,050    1.2 
Luxembourg   24,848    1.1    24,973    1.1 
Germany   20,657    0.9    20,352    0.9 
Guernsey   3,499    0.2    3,528    0.2 
Belgium   2,372    0.1    2,424    0.1 
Canada   2,195    0.1    2,232    0.1 
Israel   386    0.0    391    0.0 
Sweden   185    0.0    171    0.0 
Australia   217    0.0    66    0.0 
Total  $2,311,384    100.0%  $2,289,105    100.0%

 

The following table shows the composition of the investment portfolio by industry, at amortized cost and fair value as of March 31, 2022 (with corresponding percentage of total portfolio investments):

 

   As of March 31, 2022 
   Amortized Cost   Percentage of
Total Portfolio		   Fair Value   Percentage of
Total Portfolio		 
Aerospace & Defense  $317,801    14.8%  $299,223    13.8%
Services: Business   252,382    11.6    249,548    11.5 
Investment Vehicles (2)   217,125    10.0    221,277    10.3 
High Tech Industries   190,399    8.8    190,481    8.8 
Consumer Goods: Non-Durable   139,213    6.4    141,217    6.6 
Transportation: Cargo   85,257    3.9    89,140    4.1 
Automotive   83,261    3.8    82,738    3.8 
Healthcare & Pharmaceuticals   82,673    3.8    80,994    3.8 
Consumer Goods: Durable   81,927    3.8    76,386    3.5 
Transportation: Consumer   81,494    3.8    71,221    3.3 
Energy: Oil & Gas   54,672    2.5    69,769    3.2 
Wholesale   62,627    2.9    66,522    3.1 
Hotel, Gaming & Leisure   65,457    3.0    64,079    3.0 
Retail   61,329    2.8    60,910    2.8 
Construction & Building   60,712    2.8    58,504    2.7 
FIRE: Insurance (1)   51,862    2.4    52,408    2.4 
FIRE: Finance (1)   46,879    2.2    47,052    2.2 
Media: Diversified & Production   40,315    1.9    38,911    1.8 
Media: Advertising, Printing & Publishing   51,287    2.4    37,911    1.8 
Telecommunications   33,421    1.5    34,047    1.6 
Services: Consumer   30,729    1.4    31,255    1.5 
Beverage, Food & Tobacco   7,563    0.3    19,740    0.9 
Capital Equipment   18,601    0.9    18,487    0.9 
Chemicals, Plastics & Rubber   13,922    0.6    14,391    0.7 
Containers, Packaging & Glass   13,807    0.6    14,139    0.7 
Consumer Goods: Wholesale   8,847    0.4    8,008    0.4 
Banking   7,759    0.4    7,917    0.4 
Hospitality Holdings   5,000    0.2    5,587    0.3 
Media: Broadcasting and Subscription   2,821    0.1    2,810    0.1 
Total  $2,169,142    100.0%  $2,154,672    100.0%

 

 

(1) Finance, Insurance, and Real Estate (“FIRE”).

(2) Represents debt and equity investment in ISLP and SLP.

 

30 

 

 

The following table shows the composition of the investment portfolio by industry, at amortized cost and fair value as of December 31, 2021 (with corresponding percentage of total portfolio investments):

 

   As of December 31, 2021 
   Amortized Cost   Percentage of
Total Portfolio		   Fair Value   Percentage of
Total Portfolio		 
Aerospace & Defense  $309,458    13.4%  $282,598    12.3%
Services: Business   226,035    9.8    225,437    9.8 
High Tech Industries   182,811    7.9    183,069    8.0 
Consumer Goods: Non-Durable   179,733    7.8    182,063    8.0 
Investment Vehicles (2)   165,033    7.1    169,881    7.4 
Transportation: Cargo   103,012    4.5    106,458    4.7 
Healthcare & Pharmaceuticals   102,116    4.4    100,771    4.4 
Automotive   87,597    3.8    88,555    3.9 
Retail   83,036    3.6    83,064    3.6 
Wholesale   77,737    3.4    80,070    3.5 
Energy: Oil & Gas   69,588    3.0    79,548    3.5 
Consumer Goods: Durable   83,903    3.6    76,575    3.3 
Transportation: Consumer   80,027    3.5    69,040    3.0 
Construction & Building   70,256    3.0    68,570    3.0 
Capital Equipment   65,129    2.8    64,841    2.8 
FIRE: Insurance   62,165    2.7    63,123    2.8 
Hotel, Gaming & Leisure   53,232    2.3    51,956    2.3 
Media: Diversified & Production   46,420    2.0    44,835    2.0 
Telecommunications   40,938    1.8    41,570    1.8 
Services: Consumer   40,467    1.8    41,236    1.8 
Media: Advertising, Printing & Publishing   50,389    2.2    39,459    1.7 
Containers, Packaging & Glass   27,379    1.2    27,378    1.2 
Chemicals, Plastics & Rubber   26,135    1.1    26,863    1.2 
FIRE: Finance (1)   24,245    1.0    24,452    1.1 
Beverage, Food & Tobacco   7,563    0.3    19,755    0.9 
Banking   18,370    0.8    18,690    0.8 
Consumer Goods: Wholesale   14,870    0.6    14,827    0.6 
Media: Broadcasting and Subscription   8,740    0.4    8,979    0.4 
Hospitality Holdings   5,000    0.2    5,442    0.2 
Total  $2,311,384    100.0%  $2,289,105    100.0%

 

 

(1) Finance, Insurance, and Real Estate (“FIRE”).

(2) Represents debt and equity investment in ISLP.

 

31 

 

 

International Senior Loan Program, LLC

 

On February 9, 2021, the Company and Pantheon ("Pantheon"), a leading global alternative private markets manager, formed the International Senior Loan Program, LLC (“ISLP”), an unconsolidated joint venture. ISLP invests primarily in non-US first lien senior secured loans. ISLP was formed as a Delaware limited liability company. The Company and Pantheon committed to initially provide $138.3 million of debt and $46.1 million of equity capital, to ISLP. Equity contributions will be called from each member on a pro-rata basis, based on their equity commitments. Pursuant to the terms of the transaction, Pantheon invested $50.0 million to acquire a 29.5% stake in ISLP. The Company contributed debt investments of $317.1 million for a 70.5% stake in ISLP, and received a one-time gross distribution of $190.2 million in cash in consideration of contributing such investments. As of March 31, 2022, the Company’s investment in ISLP consisted of subordinated notes of $133.6 million, and equity interests of $46.3 million. As of December 31, 2021, the Company’s investment in ISLP consisted of subordinated notes of $125.4 million, and equity interests of $44.4 million

 

As of March 31, 2022, the Company had commitments with respect to their equity and subordinated note interests of ISLP in the aggregate amount of $249.3 million. The Company has contributed $178.2 million in capital and has $71.1 million in unfunded capital contributions. As of March 31, 2022, Pantheon had commitments with respect to their equity and subordinated note interests of ISLP in the aggregate amount of $103.9 million. Pantheon has contributed $69.2 million in capital and has $34.7 million in unfunded capital contributions.

 

As of December 31, 2021, the Company had commitments with respect to their equity and subordinated note interests of ISLP in the aggregate amount of $189.5 million. The Company has contributed $165.7 million in capital and has $23.8 million in unfunded capital contributions. As of March 31, 2022, Pantheon had commitments with respect to their equity and subordinated note interests of ISLP in the aggregate amount of $78.9 million. Pantheon has contributed $69.8 million in capital and has $9.1 million in unfunded capital contributions.

 

In future periods, the Company may sell certain of its investments or a participating interest in certain of its investments to ISLP. Since inception, the Company has sold $607.2 million of its investments to ISLP. The sale of the investments met the criteria set forth in ASC 860, Transfers and Servicing for treatment as a sale.

 

The Company has determined that ISLP is an investment company under ASC, Topic 946, Financial Services—Investment Companies; however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a wholly or substantially owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its investments in ISLP as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control ISLP due to the allocation of voting rights among ISLP members. The Company measures the fair value of ISLP in accordance with ASC Subtopic 820, Fair Value Measurements and Disclosures, using the net asset value (or its equivalent) as a practical expedient. The Company and Pantheon each appointed two members to ISLP’s four-person Member Designees’ Committee. All material decisions with respect to ISLP, including those involving its investment portfolio, require unanimous approval of a quorum of Member Designees’ Committee.

 

As of March 31, 2022, ISLP had $519.8 million in debt investments, at fair value. As of December 31, 2021, ISLP had $501.5 million in debt investments, at fair value.

 

Additionally, ISLP, through a wholly-owned subsidiary, has entered into a $300.0 million senior secured revolving credit facility which bears interest at LIBOR (or an alternative risk-free interest rate index) plus 225 basis points with JP Morgan through its wholly-owned subsidiary, subject to leverage and borrowing base restrictions (the “ISLP Credit Facility”). The maturity date of the ISLP Credit Facility is February 9, 2026. On February 4, 2022, ISLP entered into the second amended and restated credit agreement, which among other things increased the financing limit from $300.0 million to $350.0 million. As of March 31, 2022, the ISLP Credit Facility had $304.9 million of outstanding debt under the credit facility. As of December 31, 2021 the ISLP Credit Facility had $272.1 million of outstanding debt under the credit facility. As of March 31, 2022, the effective rate on the ISLP Credit Facility was 2.5% per annum. As of December 31, 2021, the effective rate on the ISLP Credit Facility was 2.5% per annum.

 

Below is a summary of ISLP’s portfolio at fair value:

 

   As of   As of 
   March 31, 2022   December 31, 2021 
Total investments  $519,752   $501,545 
Weighted average yield on investments   6.5%   6.5%
Number of borrowers in ISLP   27    27 
Largest portfolio company investment  $43,787   $40,071 
Total of five largest portfolio company investments  $171,531   $171,291 
Unfunded commitments  $4,502   $105 

 

32 

 

 

 

Below is a listing of ISLP’s individual investments as of:

 

International Senior Loan Program, LLC

Consolidated Schedule of Investments

As of March 31, 2022

(unaudited)

 

Currency  Industry  Portfolio Company  Investment Type Spread Above Index   Interest Rate   Maturity Date Currency  Principal/Shares  Cost   Market Value  % of Members Equity 
Australian Dollar                                         
   Healthcare & Pharmaceuticals  Datix Bidco Limited  First Lien Senior Secured Loan   BBSW+ 4.00%    4.25%  4/28/2025  AUD  4,169    3,290    3,125     
                          Healthcare & Pharmaceuticals Total    3,290    3,125   4.8%
                                          
   Media: Advertising, Printing & Publishing  TGI Sport Bidco Pty Ltd  First Lien Senior Secured Loan   BBSY+ 7.00%    7.50%  4/30/2026  AUD  9,610    6,898    6,843     
                          Media: Advertising, Printing & Publishing Total    6,898    6,843   10.6%
                                          
   Services: Consumer  Zeppelin BidCo Pty Limited  First Lien Senior Secured Loan   BBSY+ 5.00%    5.19%  6/28/2024  AUD  20,415    16,057    15,303     
                          Services: Consumer Total    16,057    15,303   23.7%
                                          
                          Australian Dollar Total    26,245    25,271   39.1%
                                          
British Pound                                      
   Healthcare & Pharmaceuticals  Datix Bidco Limited  Second Lien Senior Secured Loan   L+ 7.75%    8.21%  4/27/2026  £  12,013    16,916    15,783     
      Datix Bidco Limited  First Lien Senior Secured Loan - Revolver   SONIA+ 4.50%    4.96%  10/28/2024  £  963    1,323    1,265     
                          Healthcare & Pharmaceuticals Total    18,239    17,048   26.4%
                                          
   High Tech Industries  Armstrong Bidco Limited  First Lien Senior Secured Loan   SONIA+ 5.25%    6.06%  4/30/2025  £  5,602    7,711    7,361     
                          High Tech Industries Total    7,711    7,361   11.4%
                                          
   Media: Diversified & Production  International Entertainment Investments Limited  First Lien Senior Secured Loan   SONIA+ 4.75%    5.06%  5/31/2023  £  8,734    12,255    11,440     
                          Media: Diversified & Production Total    12,255    11,440   17.7%
                                          
   Services: Business  Comet Bidco Limited  First Lien Senior Secured Loan   SONIA+ 5.25%    5.42%  9/30/2024  £  7,362    9,528    8,970     
      Brook Bidco Facility B  First Lien Senior Secured Loan   L+ 6.00%    6.31%  7/7/2028  £  21,167    28,821    27,811     
      Brook Bidco I T/L Capex and Acquisition 1  First Lien Senior Secured Loan   SONIA+ 6.00%    6.75%  7/7/2028  £  4,600    6,168    6,044     
      Brook Bidco I T/L Capex and Acquisition 2  First Lien Senior Secured Loan   SONIA+ 6.00%    6.75%  7/7/2028  £  6,400    8,582    8,409     
      Opus2  First Lien Senior Secured Loan   SONIA+ 5.50%    5.55%  5/5/2028  £  12,151    16,341    15,966     
      Parcel2Go Acquisition Facility  First Lien Senior Secured Loan   SONIA+ 5.75%    6.20%  7/15/2028  £  6,554    5,085    4,982     
      Parcel2Go Facility B  First Lien Senior Secured Loan   SONIA+ 5.75%    6.44%  7/15/2028  £  12,395    16,634    16,204     
                          Services: Business Total    91,159    88,386   136.9%
                                          
   Services: Consumer  Surrey Bidco Limited  First Lien Senior Secured Loan   SONIA+ 6.00% PIK    6.50%  5/11/2026  £  5,179    6,745    5,726     
                          Services: Consumer Total    6,745    5,726   8.9%
                                          
                          British Pound Total    136,109    129,961   201.3%
                                          
Canadian Dollar                                      
   Media: Diversified & Production  9 Story Media Group Inc.  First Lien Senior Secured Loan - Revolver  -   -   4/30/2026  CAD       -    -     
      9 Story Media Group Inc.  First Lien Senior Secured Loan   CDOR+ 5.50%    6.25%  4/30/2026  CAD  6,851    5,439    5,489     
                          Media: Diversified & Production Total    5,439    5,489   8.5%
                                          
   Retail  New Look Vision Group  First Lien Senior Secured Loan   CDOR+ 5.25%    6.25%  5/26/2028  CAD  18,011    14,723    14,429     
                          Retail Total    14,723    14,429   22.3%
                                          
                          Canadian Dollar Total    20,162    19,918   30.8%
                                          
Danish Krone                                      
   High Tech Industries  VPARK BIDCO AB  First Lien Senior Secured Loan   CIBOR+ 4.00%    4.75%  3/10/2025  DKK  56,429    9,231    8,407     
                          High Tech Industries Total    9,231    8,407   13.0%
                                          
                          Danish Krone Total    9,231    8,407   13.0%
                                          
European Currency                                         
   FIRE: Insurance  MRHT Facility A  First Lien Senior Secured Loan   EURIBOR+ 5.50%    5.50%  7/26/2028  €  21,335    24,529    23,643     
                          FIRE: Insurance Total    24,529    23,643   36.6%
                                          
   Healthcare & Pharmaceuticals  Mertus 522. GmbH  First Lien Senior Secured Loan   EURIBOR+ 6.25%    6.25%  5/28/2026  €  12,999    15,686    14,406     
      Mertus 522. GmbH  First Lien Senior Secured Loan   EURIBOR+ 6.25%    6.25%  5/28/2026  €  22,244    26,841    24,650     
      Pharmathen Bidco B.V.  First Lien Senior Secured Loan   EURIBOR+ 5.75%    5.75%  10/25/2028  €  13,492    14,933    14,578     
      Pharmathen Bidco B.V.  First Lien Senior Secured Loan   EURIBOR+ 5.75%    5.75%  10/25/2028  €  2,453    2,713    2,651     
                          Healthcare & Pharmaceuticals Total    60,173    56,285   87.2%
                                          
   Media: Diversified & Production  9 Story Media Group Inc.  First Lien Senior Secured Loan   EURIBOR+ 5.25%    5.25%  4/30/2026  €  3,693    4,492    4,092     
      Aptus 1724 Gmbh  First Lien Senior Secured Loan   EURIBOR+ 6.00%    6.25%  2/23/2028  €  35,000    40,992    38,787     
                          Media: Diversified & Production Total    45,484    42,879   66.4%
                                          
   Services: Business  iBanFirst Facility B  First Lien Senior Secured Loan   EURIBOR+ 8.50%    10.00%  7/13/2028  €  10,572    11,986    11,716     
      SumUp Holdings Luxembourg S.à.r.l.  First Lien Senior Secured Loan   EURIBOR+ 8.50%    10.00%  2/17/2026  €  24,000    28,430    26,597     
                          Services: Business Total    40,416    38,313   59.3%
                                          
                          European Currency Total    170,602    161,120   249.5%
                                          
Norwegian Krone                                         
   High Tech Industries  VPARK BIDCO AB  First Lien Senior Secured Loan   NIBOR+ 4.00%    5.42%  3/10/2025  NOK  73,280    8,651    8,361     
                          High Tech Industries Total    8,651    8,361   12.9%
                                          
                          Norwegian Krone Total    8,651    8,361   12.9%
                                          
U.S. Dollar                                         
   Automotive  CST Buyer Company  First Lien Senior Secured Loan   L+ 5.55%    6.50%  10/3/2025  $  14,927    14,927    14,927     
      Cardo  First Lien Senior Secured Loan   L+ 6.00%    6.50%  5/12/2028  $  9,653    9,564    9,653     
                          Automotive Total    24,491    24,580   38.1%
                                          
   Chemicals, Plastics & Rubber  V Global Holdings LLC  First Lien Senior Secured Loan   SOFR+ 5.25%    6.00%  12/22/2027  $  23,634    23,634    23,634     
                          Chemicals, Plastics & Rubber Total    23,634    23,634   36.6%
                                          
   Healthcare & Pharmaceuticals  Golden State Buyer, Inc.  First Lien Senior Secured Loan   L+ 4.75%    5.50%  6/22/2026  $  14,772    14,707    14,569     
                          Healthcare & Pharmaceuticals Total    14,707    14,569   22.6%
                                          
   High Tech Industries  CB Nike IntermediateCo Ltd  First Lien Senior Secured Loan - Revolver  -   -   10/31/2025  $       -    -     
      CB Nike IntermediateCo Ltd  First Lien Senior Secured Loan   L+ 4.75%    5.75%  10/31/2025  $  34,279    34,279    34,279     
      Utimaco, Inc.  First Lien Senior Secured Loan   L+ 4.00%    4.36%  8/9/2027  $  14,701    14,701    14,701     
                          High Tech Industries Total    48,980    48,980   75.9%
                                          
   Media: Broadcasting and Subscription Industry  Lightning Finco Limited  First Lien Senior Secured Loan   L+ 5.75%    6.50%  7/14/2028  $  23,907    23,704    23,907     
      Lightning Finco Limited  First Lien Senior Secured Loan   L+ 5.75%    6.50%  7/14/2028  $  2,619    2,619    2,619     
                          Media: Broadcasting and Subscription Industry Total    26,323    26,526   41.1%
                                          
   Media: Diversified & Production  Aptus 1724 Gmbh  First Lien Senior Secured Loan   L+ 6.25%    6.50%  2/23/2028  $  5,000    5,000    5,000     
                          Media: Diversified & Production Total    5,000    5,000   7.7%
                                          
   Services: Business  Chamber Bidco Limited  First Lien Senior Secured Loan   L+ 6.00%    6.50%  6/7/2028  $  23,423    23,207    23,425     
                          Services: Business Total    23,207    23,425   36.3%
                                          
                          U.S. Dollar Total    166,342    166,714   258.3%
                                          
                                          
                          Total    537,342    519,752   804.9%

 

Forward Foreign Currency Exchange Contracts              

 

Currency Purchased  Currency Sold  Counterparty  Settlement Date  Unrealized Appreciation (Depreciation) 
EURO 1,830  AUSTRALIAN DOLLARS 2,862  Morgan Stanley  4/21/2022  $(113)
EURO 729  CANADIAN DOLLARS 1,035  Standard Chartered  4/21/2022   (16)
EURO 874  DANISH KRONE 6,502  Standard Chartered  4/21/2022   (0)
EURO 8,404  BRITISH POUNDS 7,000  Morgan Stanley  4/21/2022   140 
EURO 847  NORWEGIAN KRONE 8,444  Standard Chartered  4/21/2022   (23)
EURO 21,723  US DOLLARS 24,710  Morgan Stanley  4/21/2022   (529)
EURO 1,440  US DOLLARS 1,631  Morgan Stanley  4/21/2022   (28)
EURO 644  US DOLLARS 720  Morgan Stanley  4/21/2022   (4)
EURO 3,175  US DOLLARS 3,518  Goldman Sachs  7/21/2022   32 
US DOLLARS 8,051  AUSTRALIAN DOLLARS 11,078  Morgan Stanley  4/21/2022   (270)
US DOLLARS 3,208  CANADIAN DOLLARS 4,005  Standard Chartered  4/21/2022   3 
US DOLLARS 3,840  DANISH KRONE 25,168  Standard Chartered  4/21/2022   73 
US DOLLARS 2,450  EURO 2,209  Goldman Sachs  7/21/2022   (20)
US DOLLARS 39,834  EURO 35,050  Morgan Stanley  4/21/2022   817 
US DOLLARS 510  EURO 448  Standard Chartered  4/21/2022   11 
US DOLLARS 720  EURO 633  Morgan Stanley  4/21/2022   16 
US DOLLARS 36,943  BRITISH POUNDS 27,100  Goldman Sachs  4/21/2022   1,270 
US DOLLARS 3,724  NORWEGIAN KRONE 32,686  Standard Chartered  4/21/2022   (13)
            $1,346 

 

33 

 

 

 

Below is a listing of ISLP’s individual investments as of:

 

International Senior Loan Program, LLC
Consolidated Schedule of Investments
As of December 31, 2021
(in thousands)

 

Currency

  Industry  Portfolio Company  Investment Type  Spread Above
Index		  Interest
Rate		   Maturity
Date		  Currency   Principal/Shares   Cost   Market
Value		   % of Members’
Equity		 
Australian Dollar  ​  ​  ​  ​   ​   ​  ​  ​    ​    ​   ​ 
​  Healthcare & Pharmaceuticals  Datix Bidco Limited  First Lien Senior Secured Loan  BBSW+ 4.00%   4.25%  4/28/2025  AUD  4,169    3,289    3,028   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Healthcare & Pharmaceuticals
Total		    3,289    3,028   4.9%
​  Information Technology Services  LEAP Legal Software PTY Ltd  First Lien Senior Secured Loan  BBSY+ 5.75%   6.75%  3/12/2025  AUD  30,093    22,867    21,856   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Information Technology Services
Total		    22,867    21,856   35.1%
​  Media: Advertising, Printing &
Publishing		  TGI Sport Bidco Pty Ltd  First Lien Senior Secured Loan  BBSY+ 7.00%   7.50%  4/30/2026  AUD  9,610    6,886    6,631   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Media: Advertising, Printing &
Publishing Total		    6,886    6,631   10.6%
​  Services: Consumer  Zeppelin BidCo Pty Limited  First Lien Senior Secured Loan  BBSY+ 6.00%   5.12%  6/28/2024  AUD  20,415    16,045    14,827   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Services: Consumer Total    16,045    14,827   23.8%
​  ​  ​  ​  ​   ​   ​  ​  Australian Dollar Total    49,087    46,342   74.4%
British Pound  ​  ​  ​  ​   ​   ​  ​  ​    ​    ​   ​ 
​  Healthcare & Pharmaceuticals  Datix Bidco Limited  Second Lien Senior Secured Loan  L+ 7.75%   8.21%  4/27/2026  £  963    1,323    1,303   ​ 
​  ​  Datix Bidco Limited  First Lien Senior Secured Loan—
Revolver		  L+ 4.50%   4.96%  10/28/2024  £  12,013    16,916    16,255   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Healthcare & Pharmaceuticals
Total		    18,239    17,558   28.2%
​  High Tech Industries  Armstrong Bidco Limited  First Lien Senior Secured Loan  SONIA+ 4.75%   5.00%  4/30/2025  £  5,602    7,711    7,581   ​ 
​  ​  ​  ​  ​   ​   ​  ​  High Tech Industries Total    7,711    7,581   12.2%
​  Media: Diversified & Production  International Entertainment
Investments Limited		  First Lien Senior Secured Loan  GBP LIBOR+ 4.75%   5.06%  5/31/2023  £  8,734    12,255    11,782   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Media: Diversified & Production
Total		    12,255    11,782   18.9%
​  Services: Business  Comet Bidco Limited  First Lien Senior Secured Loan  GBP LIBOR+ 5.25%   5.42%  9/27/2024  £  7,362    9,460    9,249   ​ 
​  ​  Learning Pool Facility B  First Lien Senior Secured Loan  L+ 6.00%   6.09%  7/7/2028  £  21,000    28,584    28,417   ​ 
​  ​  Opus2  First Lien Senior Secured Loan  SONIA+ 5.50%   5.55%  5/5/2028  £  12,151    16,326    16,443   ​ 
​  ​  Parcel2Go Facility B  First Lien Senior Secured Loan  SONIA+ 5.75%   5.80%  7/15/2028  £  12,395    16,619    16,689   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Services: Business Total    70,989    70,798   113.7%
​  Services: Consumer  Surrey Bidco Limited  First Lien Senior Secured Loan  GBP LIBOR+ 7.00%   7.50%  5/11/2026  £  4,979    6,732    5,929   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Services: Consumer Total    6,732    5,929   9.5%
​  ​  ​  ​  ​   ​   ​  ​  British Pound Total    115,926    113,648   182.5%
Canadian Dollar  ​  ​  ​  ​   ​   ​  ​  ​    ​    ​   ​ 
​  Media: Diversified & Production  9 Story Media Group Inc.  First Lien Senior Secured Loan—Revolver  CDOR+ 5.50%   6.25%  4/30/2026  CAD  16    13    13   ​ 
​  ​  9 Story Media Group Inc.  First Lien Senior Secured Loan  CDOR+ 5.50%   6.25%  4/30/2026  CAD  7,164    5,688    5,669   ​ 

 

34 

 

 

 

Currency  Industry  Portfolio Company  Investment Type  Spread Above
Index		  Interest
Rate		   Maturity
Date		  Currency  Principal/Shares   Cost   Market Value    % of Members’
Equity		  
                          Media: Diversified & Production Total    5,701    5,682    9.1 %
   Retail  New Look Vision Group  First Lien Senior Secured Loan—
Delayed Draw		  CDOR+5.25%   6.25%  5/26/2028  CAD  18,056    14,752    14,288       
                          Retail Total    14,752    14,288    22.9 %
                          Canadian Dollar Total    20,453    19,970    32.0 %
Danish Krone                                           
   High Tech Industries  VPARK BIDCO AB  First Lien Senior Secured Loan  CIBOR+ 4.00%   4.75%  3/10/2025  DKK  56,429    9,231    8,628       
                          High Tech Industries Total    9,231    8,628    13.9 %
                          Danish Krone Total    9,231    8,628    13.9 %
European Currency                                           
   FIRE: Insurance  MRHT Facility A  First Lien Senior Secured Loan  EURIBOR+ 5.50%   5.50%  7/26/2028  €  21,335    24,521    24,257       
                          FIRE: Insurance Total    24,521    24,257    39.0 %
   Healthcare & Pharmaceuticals  Mertus 522. GmbH  First Lien Senior Secured Loan—Delayed Draw  EURIBOR+ 6.25%   6.25%  5/28/2026  €  12,999    15,680    14,780       
      Mertus 522. GmbH  First Lien Senior Secured Loan  EURIBOR+ 6.25%   6.25%  5/28/2026  €  22,244    26,830    25,291       
                          Healthcare & Pharmaceuticals Total    42,510    40,071    64.4 %
   Media: Diversified & Production  9 Story Media Group Inc.  First Lien Senior Secured Loan  EURIBOR+ 5.25%   5.25%  4/30/2026  €  3,859    4,694    4,388       
      Aptus 1724 Gmbh  First Lien Senior Secured Loan  EURIBOR+ 6.00%   6.25%  2/23/2028  €  35,000    40,944    39,795       
                          Media: Diversified & Production Total    45,638    44,183    71.0 %
   Services: Business  iBanFirst Facility B  First Lien Senior Secured Loan  EURIBOR+ 8.50%   10.00%  7/13/2028  €  10,058    11,387    11,437       
      SumUp Holdings Luxembourg S.à.r.l.  First Lien Senior Secured Loan  EURIBOR+ 8.50%   10.00%  2/17/2026  €  21,000    25,038    23,877       
                          Services: Business Total    36,425    35,314    56.7 %
                          European Currency Total    149,094    143,825    231.1 %
Norwegian Krone                                           
   High Tech Industries  VPARK BIDCO AB  First Lien Senior Secured Loan  NIBOR+ 4.00%   4.75%  3/10/2025  NOK  73,280    8,651    8,310       
                          High Tech Industries Total    8,651    8,310    13.3 %
                          Norwegian Krone Total    8,651    8,310    13.3 %
U.S. Dollar                                            
   Automotive  CST Buyer Company  First Lien Senior Secured Loan  L+ 5.55%   6.50%  10/3/2025  $  14,927    14,927    14,927       
      Cardo  First Lien Senior Secured Loan  L+ 6.00%   6.50%  5/12/2028  $  9,653    9,560    9,653       
                          Automotive Total    24,487    24,580    39.5 %
   Chemicals, Plastics & Rubber  V Global Holdings LLC  First Lien Senior Secured Loan  L+ 6.00%   7.00%  12/22/2027  $  23,634    23,634    23,634       
                          Chemicals, Plastics & Rubber Total    23,634    23,634    38.0 %
   Healthcare & Pharmaceuticals  Golden State Buyer, Inc.  First Lien Senior Secured Loan  L+ 4.75%   5.50%  6/22/2026  $  14,779    14,709    14,733       
                          Healthcare & Pharmaceuticals Total    14,709    14,733    23.7 %
   High Tech Industries  CB Nike IntermediateCo Ltd  First Lien Senior Secured Loan—Revolver  L+ 4.75%   5.75%  10/31/2025  $  4,384    4,384    4,384       
      CB Nike IntermediateCo Ltd  First Lien Senior Secured Loan  L+ 4.75%   5.75%  10/31/2025  $  34,367    34,367    34,367       

 

 

35 

 

 

 

            Spread Above  Interest   Maturity             Market   % of Members’  
Currency  Industry  Portfolio Company  Investment Type  Index  Rate   Date  Currency  Principal/Shares   Cost   Value   Equity  
      Utimaco, Inc.  First Lien Senior Secured Loan  L+ 4.00%   4.10%  8/9/2027  $  14,701    14,701    14,701       
                          High Tech Industries Total    53,452    53,452   85.8 %
   Media: Broadcasting and
Subscription Industry		  Lightning Finco Limited  First Lien Senior Secured Loan  L+ 5.75%   6.50%  7/14/2028  $  21,000    20,790    21,000       
                          Media: Broadcasting and
Subscription Total		    20,790    21,000   33.7 %
   Services: Business  Chamber Bidco Limited  First Lien Senior Secured Loan  L+ 6.00%   6.50%  6/7/2028  $  23,423    23,198    23,423       
                          Services: Business Total    23,198    23,423   37.6 %
                          U.S. Dollar Total    160,270    160,822   258.3 %
                          Total    512,712    501,545   805.5 %

 

36 

 

 

 

Below is the financial information for ISLP (dollars in thousands):

 

 Selected Balance Sheet Information

 

   As of   As of 
   March 31, 2022   December 31, 2021 
Investments at fair value (cost—$537,342 and $512,712, respectively)  $519,752   $501,545 
Cash   12,249    6,830 
Foreign cash   27,420    3,937 
Deferred financing costs   2,223    1,981 
Unrealized appreciation on forward currency exchange contracts   1,840    — 
Other assets   6,722    7,347 
Total assets  $570,206   $521,640 
Debt  $304,853   $272,133 
Subordinated notes payable to members   187,029    176,336 
Dividend payable   1,703    1,150 
Unrealized depreciation on forward currency exchange contracts   494    61 
Other payables   11,556    9,693 
Total liabilities  $505,635   $459,373 
Members’ equity   64,571    62,267 
Total liabilities and members’ equity  $570,206   $521,640 

 

Selected Statement of Operations Information

 

   For the Three
Months Ended		   For the Three
Months Ended		 
   March 31, 2022   March 31, 2021 
Investment Income          
Interest Income  $8,243   $2,096 
Other   —    — 
Total investment income   8,243    2,096 
Expenses          
Interest and debt financing expenses   1,891    555 
Interest expense on members subordinated notes   4,002    1,307 
General and administrative expenses   567    357 
Total expenses   6,460    2,219 
Net investment income (loss)   1,783    (123)
Net realized and unrealized gain (losses)          
Net realized loss on investments   (676)   (22)
Net realized gain on foreign currency transactions   635    3,344 
Net realized gain on forward contracts   1,413    — 
Net unrealized gain on foreign currency   3,856    2,992 
Net change in unrealized appreciation (depreciation) on forward contracts   (455)   1,653 
Net change in unrealized depreciation on investments   (6,423)   (4,086)
Net gain (loss) on investments   (1,650)   3,881 
Net increase in members’ equity resulting from operations  $133   $3,758 

 

Bain Capital Senior Loan Program, LLC (“SLP”)

 

On February 9, 2022, the Company, and an entity advised by Amberstone Co., Ltd. (“Amberstone”), a credit focused investment manager that advises institutional investors, committed capital to a newly formed joint venture, SLP. Pursuant to an amended and restated limited liability company agreement (the “LLC Agreement”) between the Company and Amberstone, each such party has a 50% economic ownership interest in SLP. Amberstone's initial capital commitments to SLP are $179.0 million, with each party expected to maintain their pro rata proportionate share for each capital contribution. SLP will seek to invest primarily in senior secured first lien loans of U.S. borrowers. Through these capital contributions, SLP acquired 70% of the membership equity interests of the Company’s 2018-1 portfolio (“2018-1”). The Company retained 30% of the 2018-1 membership equity interests as a non-controlling equity interest. As of March 31, 2022, the Company’s investment in SLP consisted of subordinated notes of $35.8 million, preferred equity interests of $0.01 million and equity interests of $5.6 million.

 

37 

 

 

In future periods, the Company may sell certain of its investments or a participating interest in certain of its investments to SLP. The Company has determined that SLP is an investment company under ASC, Topic 946, Financial Services—Investment Companies; however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a wholly or substantially owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its investments in SLP as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control SLP due to the allocation of voting rights among SLP members. The Company measures the fair value of SLP in accordance with ASC Subtopic 820, Fair Value Measurements and Disclosures, using the net asset value (or its equivalent) as a practical expedient. The Company and Amberstone each appointed two members to SLP’s four-person Member Designees’ Committee. All material decisions with respect to SLP, including those involving its investment portfolio, require unanimous approval of a quorum of Member Designees’ Committee.

 

On March 7, 2022, SLP acquired 70% of the Company’s Membership Interests of BCC Middle Market CLO 2018-1 LLC (the “2018-1 Issuer”). The Company received $56.1 million in proceeds resulting in a realized gain of $1.2 million, which is included in net realized gain in non-controlled/non-affiliate investments. The sale of the investments met the criteria set forth in ASC 860, Transfers and Servicing for treatment as a sale. Through this acquisition, the 2018-1 Issuer became a consolidated subsidiary of SLP and was deconsolidated from the Company’s consolidated financial statements. The Company retained the remaining 30% of the 2018-1 membership interests as a non-controlling equity interest. Please see Note 6 for additional details on the formation of the 2018-1 Issuer and the related CLO Transaction.

 

The Class A-1 A, A-1 B, A-2, B and C 2018-1 Notes (the “2018-1 Notes”) are scheduled to mature on October 20, 2030 and are included in SLP’s consolidated financial statements. The Membership Interests are eliminated in consolidation on SLP’s consolidated financial statements. Below is a table summary of the 2018-1 Notes as of March 31, 2022:

 

2018-1 Notes  Principal Amount  Spread above Index  Interest rate at
March 31, 2022		 
Class A-1 A  $205,900  1.55% + 3 Month LIBOR   1.80%
Class A-1 B   45,000  1.50% + 3 Month LIBOR (first 24 months)   2.05%
       1.80% + 3 Month LIBOR (thereafter)     
Class A-2   55,100  2.15% + 3 Month LIBOR   2.40%
Class B   29,300  3.00% + 3 Month LIBOR   3.25%
Class C   30,400  4.00% + 3 Month LIBOR   4.25%
Total 2018-1 Notes  $365,700        

 

Below is a summary of SLP’s portfolio at fair value:

 

   As of March 31, 2022 
Total investments  $372,320 
Weighted average yield on investments   6.9%
Number of borrowers in SLP   41 
Largest portfolio company investment  $13,200 
Total of five largest portfolio company investments  $65,456 
Unfunded commitments  $2,447 

 

38 

 

 

 

 

Below is a listing of SLP’s individual investments as of:

 

Senior Loan Program, LLC  

Consolidated Schedule of Investments  

As of March 31, 2022  

(unaudited)  

 

Currency  Industry  Portfolio Company  Investment Type  Spread Above Index  Interest Rate  Maturity Date  Principal/Shares  Cost  Market Value  % of Members' Equity 
U.S. Dollar                               
   Aerospace & Defense  WCI-HSG Purchaser, Inc.  First Lien Senior Secured Loan - Revolver   L+ 4.75%  5.75% 2/22/2025  900  900  900    
      WCI-HSG Purchaser, Inc.  First Lien Senior Secured Loan   L+ 4.75%  5.75% 2/24/2025  8,688  8,688  8,688    
      Whitcraft LLC  First Lien Senior Secured Loan   L+ 6.00%  7.01% 4/3/2023  10,766  10,444  10,416    
                     Aerospace & Defense Total  20,032  20,004  65.6%
                                
   Automotive  Cardo  First Lien Senior Secured Loan   L+ 6.00%  6.50% 5/12/2028  10,800  10,800  10,800    
      CST Buyer Company  First Lien Senior Secured Loan   L+ 5.55%  6.50% 10/3/2025  5,600  5,600  5,600    
      JHCC Holdings, LLC  First Lien Senior Secured Loan   L+ 5.75%  6.76% 9/9/2025  7,579  7,579  7,200    
                     Automotive Total  23,979  23,600  77.4%
                                
   Banking  Green Street Parent, LLC  First Lien Senior Secured Loan   L+ 5.75%  6.50% 8/27/2026  10,725  10,725  10,725    
                     Banking Total  10,725  10,725  35.2%
                                
   Chemicals, Plastics & Rubber  V Global Holdings LLC  First Lien Senior Secured Loan   SOFR+ 5.25%  6.00% 12/22/2027  10,421  10,421  10,421    
                     Chemicals, Plastics & Rubber Total  10,421  10,421  34.2%
                                
   Construction & Building  YLG Holdings, Inc.  First Lien Senior Secured Loan   L+ 5.25%  6.25% 10/31/2025  10,616  10,616  10,616    
                     Construction & Building Total  10,616  10,616  34.8%
                                
   Consumer goods: Durable  Stanton Carpet T/L 2nd Lien  Second Lien Senior Secured Loan   L+ 9.00%  10.00% 4/1/2028  5,000  4,901  4,925    
      TLC Purchaser, Inc.  First Lien Senior Secured Loan   L+ 6.25%  7.25% 10/13/2025  9,587  8,465  8,437    
                     Consumer goods: Durable Total  13,366  13,362  43.8%
                                
   Consumer Goods: Non-Durable  RoC Opco LLC  First Lien Senior Secured Loan   L+ 8.50%  9.50% 2/25/2025  8,820  8,820  8,820    
      Solaray, LLC  First Lien Senior Secured Loan   L+ 5.50%  6.50% 9/11/2023  10,693  10,693  10,693    
      WU Holdco, Inc.  First Lien Senior Secured Loan   L+ 5.50%  6.50% 3/26/2026  6,577  6,577  6,577    
      WU Holdco, Inc.  First Lien Senior Secured Loan   L+ 5.50%  6.50% 3/26/2026  6,368  6,368  6,368    
                     Consumer Goods: Non-Durable Total  32,458  32,458  106.3%
                                
   Consumer goods: Wholesale  WSP Initial Term Loan  First Lien Senior Secured Loan   L+ 6.25%  7.25% 4/27/2027  6,172  6,066  5,972    
                     Consumer goods: Wholesale Total  6,066  5,972  19.6%
                                
   Containers, Packaging, & Glass  ASP-r-pac Acquisition Co LLC  First Lien Senior Secured Loan   L+ 6.00%  6.75% 12/29/2027  13,200  12,940  13,200    
                     Containers, Packaging, & Glass Total  12,940  13,200  43.3%
                                
   Energy: Oil & Gas  Amspec Services, Inc.  First Lien Senior Secured Loan   L+ 5.75%  6.76% 7/2/2024  9,847  9,847  9,847    
      Blackbrush Oil & Gas, L.P.  First Lien Senior Secured Loan   L+ 5.00% (2% PIK)  8.00% 9/3/2025  4,348  4,348  4,348    
                     Energy: Oil & Gas Total  14,195  14,195  46.5%
                                
   FIRE: Finance  Allworth Financial Group, L.P.  First Lien Senior Secured Loan   SOFR+ 4.75%  5.75% 12/23/2026  1,394  1,394  1,394    
                     FIRE: Finance Total  1,394  1,394  4.6%
                                
   FIRE: Insurance  McLarens Acquisition Inc.  First Lien Senior Secured Loan   L+ 5.50%  6.68% 12/19/2024  10,533  10,533  10,533    
                     FIRE: Insurance Total  10,533  10,533  34.5%
                                
   Healthcare & Pharmaceuticals  CPS Group Holdings, Inc.  First Lien Senior Secured Loan   L+ 5.25%  6.00% 3/3/2025  9,801  9,801  9,801    
      SunMed Group Holdings, LLC  First Lien Senior Secured Loan   L+ 5.75%  6.50% 6/16/2028  9,703  9,703  9,703    
                     Healthcare & Pharmaceuticals Total  19,504  19,504  63.9%
                                
   High Tech Industries  AMI US Holdings Inc.  First Lien Senior Secured Loan - Revolver   L+ 5.25%  5.71% 4/1/2024  698  698  698    
      AMI US Holdings Inc.  First Lien Senior Secured Loan   L+ 5.25%  6.25% 4/1/2025  972  972  972    
      Drilling Info Holdings, Inc  First Lien Senior Secured Loan   L+ 4.25%  4.71% 7/30/2025  10,858  10,753  10,743    
      Superna Inc.  First Lien Senior Secured Loan   SOFR + 6.25%  7.25% 3/6/2028  10,800  10,693  10,692    
      Ventiv Holdco, Inc.  First Lien Senior Secured Loan   L+ 5.50%  6.50% 9/3/2025  9,877  9,877  9,877    
                     High Tech Industries Total  32,993  32,982  108.1%
                                
   Hotel, Gaming & Leisure  Captain D's LLC  First Lien Senior Secured Loan   L+ 4.50%  5.50% 12/15/2023  5,729  5,729  5,729    
      Quidditch Acquisition, Inc.  First Lien Senior Secured Loan   L+ 7.00%  8.00% 3/21/2025  9,436  9,316  9,200    
                     Hotel, Gaming & Leisure Total  15,045  14,929  48.9%
                                
   Retail  Batteries Plus Holding Corporation  First Lien Senior Secured Loan   L+ 6.75%  7.75% 7/6/2022  10,500  10,500  10,500    
      Thrasio, LLC  First Lien Senior Secured Loan   L+ 7.00%  8.00% 12/18/2026  13,146  13,146  13,146    
                     Retail Total  23,646  23,646  77.5%
                                
   Services: Business  Avalon Acquiror, Inc.  First Lien Senior Secured Loan   SOFR+ 6.25%  7.25% 3/10/2028  10,800  10,693  10,692    
      Refine Intermediate, Inc.  First Lien Senior Secured Loan   L+ 4.50%  5.50% 3/3/2027  10,800  10,800  10,800    
      Smartronix T/L  First Lien Senior Secured Loan   L+ 6.00%  7.00% 11/23/2028  13,167  12,907  13,003    
      TEI Holdings Inc.  First Lien Senior Secured Loan   L+ 5.75%  6.75% 12/23/2026  9,902  9,902  9,902    
      WCI Gigawatt Purchaser T/L  First Lien Senior Secured Loan   L+ 5.75%  6.75% 11/19/2027  10,773  10,534  10,665    
                     Services: Business Total  54,836  55,062  180.4%
                                
   Services: Consumer  MZR Buyer, LLC  First Lien Senior Secured Loan   L+ 6.75%  7.75% 12/21/2026  13,163  13,163  13,163    
                     Services: Consumer Total  13,163  13,163  43.1%
                                
   Telecommunications  Horizon Telcom, Inc.  First Lien Senior Secured Loan - Delayed Draw   L+ 5.00%  6.00% 6/15/2023  632  632  632    
      Horizon Telcom, Inc.  First Lien Senior Secured Loan   L+ 5.00%  6.00% 6/15/2023  9,300  9,300  9,300    
                     Telecommunications Total  9,932  9,932  32.6%
                                
   Transportation: Cargo  A&R Logistics, Inc.  First Lien Senior Secured Loan   SOFR+ 6.00%  7.00% 5/5/2025  10,751  10,751  10,751    
      Grammer Purchaser, Inc.  First Lien Senior Secured Loan - Revolver  -  -  9/30/2024  -  -  -    
      Grammer Purchaser, Inc.  First Lien Senior Secured Loan   L+ 4.50%  5.50% 9/30/2024  3,475  3,475  3,475    
      Omni Logistics, LLC  Second Lien Senior Secured Loan   L+ 9.00%  10.00% 12/30/2027  5,000  5,000  5,000    
                     Transportation: Cargo Total  19,226  19,226  63.0%
                                
   Wholesale  Abracon Group Holding, LLC  First Lien Senior Secured Loan   L+ 5.25%  6.25% 7/18/2024  7,838  7,838  7,838    
      Aramsco, Inc.  First Lien Senior Secured Loan   L+ 5.25%  5.71% 8/28/2024  9,558  9,558  9,558    
                     Wholesale Total  17,396  17,396  57.0%
                                
                                
                     Total  372,466  372,320  1220.4%

 

39 

 

 

 

Below is the financial information for SLP (dollars in thousands):

 

Selected Balance Sheet Information

 

    As of
    March 31, 2022
Investments at fair value (cost—$372,466)   $ 372,320
Cash     77,768
Other assets     19,945
Total assets   $ 470,033
Debt   $ 364,220
Subordinated notes payable to members     71,570
Other payables     3,734
Total liabilities   $ 439,524
Members’ equity     30,509
Total liabilities and members’ equity   $ 470,033

 

Selected Statement of Operations Information

 

    For the Three
Months Ended
    March 31, 2022
Investment Income      
Interest Income   $ 2,516
Other     —
Total investment income     2,516
Expenses      
Interest and debt financing expenses     744
Interest expense on members subordinated notes     636
General and administrative expenses     112
Total expenses     1,492
Net investment income     1,024
Net realized and unrealized gain (losses)      
Net realized gain on investments     6
Net change in unrealized depreciation on investments     (146)
Net loss on investments     (140)
Net increase in members’ equity resulting from operations   $ 884

 

40 

 

 

Note 4. Fair Value Measurements

 

Fair Value Disclosures

 

The following table presents fair value measurements of investments by major class, cash equivalents and derivatives as of March 31, 2022, according to the fair value hierarchy:

 

    Fair Value Measurements
    Level 1   Level 2   Level 3   Measured at
Net Asset
Value (2)		   Total
Investments:                                  
First Lien Senior Secured Loans   $ —     $ 82,635     $ 1,434,528   $ —   $ 1,517,163
Second Lien Senior Secured Loans     —       11,479       99,647     —     111,126
Subordinated Note in Investment Vehicles (1)      —       —       169,412     —     169,412
Subordinated Debt     —       —       39,117     —     39,117
Equity Interest in Investment Vehicles (1)      —       —       —     51,855     51,855
Equity Interests     —       —       204,417     —     204,417
Preferred Equity     —       —       60,980     —     60,980
Warrants     —       —       592     —     592
Preferred Equity Interest in Investment Vehicles (1)      —       —       —     10     10
Total Investments   $ —     $ 94,114     $ 2,008,693   $ 51,865   $ 2,154,672
Cash equivalents   $ 61,637     $ —     $ —   $ —   $ 61,637
Forward currency exchange contracts (asset)   $ —     $ 6,972     $ —   $ —   $ 6,972

 

 

(1)  Includes debt and equity investment in ISLP and SLP.
(2)  In accordance with ASC Subtopic 820-10, Fair Value Measurements and Disclosures, or ASC 820-10, our preferred equity and equity investments in ISLP and SLP is measured using the net asset value per share (or its equivalent) as a practical expedient for fair value, have not been classified in the fair value hierarchy.

 

The following table presents fair value measurements of investments by major class, cash equivalents and derivatives as of December 31, 2021, according to the fair value hierarchy:

 

41 

 

 

    Fair Value Measurements
    Level 1     Level 2     Level 3     Measured at
Net Asset
Value (2)		     Total
Investments:                                      
First Lien Senior Secured Loans   $ —     $ 99,785     $ 1,674,890     $ —     $ 1,774,675
Second Lien Senior Secured Loans     —       11,495       107,066       —       118,561
Subordinated Note in Investment Vehicles (1)      —       —       125,437       —       125,437
Subordinated Debt     —       —       20,027       —       20,027
Equity Interest in Investment Vehicles (1)      —       —       —       44,444       44,444
Equity Interests     —       —       151,844       —       151,844
Preferred Equity     —       —       53,991       —       53,991
Warrants     —       —       126       —       126
Total Investments   $ —     $ 111,280     $ 2,133,381     $ 44,444     $ 2,289,105
Cash equivalents   $ 177,554     $ —     $ —     $ —     $ 177,554
Forward currency exchange contracts (asset)   $ —     $ 5,321     $ —     $ —     $ 5,321

 

 

 (1)    Represents debt and equity investment in ISLP.
 (2)    In accordance with ASC Subtopic 820-10, Fair Value Measurements and Disclosures, or ASC 820-10, our equity investment in ISLP is measured using the net asset value per share (or its equivalent) as a practical expedient for fair value, have not been classified in the fair value hierarchy.

 

42 

 

 

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended March 31, 2022:

 

   First Lien
Senior
Secured
Loans		   Equity
Interests		   Second Lien
Senior
Secured
Loans		   Subordinated
Note
in Investment
Vehicles (2)		   Preferred
Equity		   Subordinated
Debt		   Warrants   Total
Investments		 
Balance as of January 1, 2022  $1,674,890   $151,844   $107,066   $125,437   $53,991   $20,027   $126   $2,133,381 
Purchases of investments and other adjustments to cost (1)    238,799    43,023    13,735    43,975    990    18,572    478    359,572 
Paid-in-kind interest   3,793    —    —    —    —    90    —    3,883 
Net accretion of discounts (amortization of premiums)   1,229    —    120    —    —    28    —    1,377 
Principal repayments and sales of investments (1)    (478,601)   —    (21,369)   —    —    —    —    (499,970)
Net change in unrealized appreciation (depreciation) on investments   (7,257)   9,550    18    —    5,999    400    (12)   8,698 
Net realized gains (losses) on investments   1,675    —    77    —    —    —    —    1,752 
Transfers to Level 3   —    —    —    —    —    —    —    — 
Balance as of March 31, 2022  $1,434,528   $204,417   $99,647   $169,412   $60,980   $39,117   $592   $2,008,693 
Change in unrealized appreciation (depreciation) attributable to investments still held at March 31, 2022  $(6,435)  $9,550   $(158)  $—   $5,999   $400   $(12)  $9,344 

 

 

(1)    Includes reorganizations and restructuring of investments and the impact of the SLP transaction.
(2)    Represents debt investment in ISLP and SLP.

 

Transfers between levels, if any, are recognized at the beginning of the quarter in which transfers occur. For the three months ended March 31, 2022, transfers from Level 2 to Level 3 were primarily due to decreased price transparency.

 

43 

 

 

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the year ended December 31, 2021:

 

   First Lien
Senior
Secured
Loans		   Equity
Interests		   Second Lien
Senior
Secured
Loans		   Subordinated
Note
in Investment
Vehicles (2) 		   Preferred
Equity		   Subordinated
Debt		   Warrants   Total
Investments		 
Balance as of January 1, 2021  $1,951,150   $119,905   $140,341   $—   $37,713   $—   $—   $2,249,109 
Purchases of investments and other adjustments to cost (1)    868,537    26,487    64,012    125,437    27,805    19,497    2    1,131,777 
Paid-in-kind interest   10,588    —    —    —    —    115    —    10,703 
Net accretion of discounts (amortization of premiums)   4,649    —    439    —    —    23    —    5,111 
Principal repayments and sales of investments (1)    (1,185,875)   (3,998)   (102,254)   —    (22,096)   —    —    (1,314,223)
Net change in unrealized appreciation (depreciation) on investments   (14,981)   7,032    2,682    —    3,548    392    124    (1,203)
Net realized gains (losses) on investments   15,434    2,418    1,846    —    7,021    —    —    26,719 
Transfers to Level 3   25,388    —    —    —    —    —    —    25,388 
Balance as of December 31, 2021  $1,674,890   $151,844   $107,066   $125,437   $53,991   $20,027   $126   $2,133,381 
Change in unrealized appreciation (depreciation) attributable to investments still held at December 31, 2021  $(6,094)  $7,355   $3,062   $—   $9,699   $392   $124   $14,538 

 

 

 (1)    Includes reorganizations and restructuring of investments and the impact of the ISLP transaction.
 (2)    Represents debt investment in ISLP.

 

Transfers between levels, if any, are recognized at the beginning of the quarter in which transfers occur. For the year ended December 31, 2021, transfers from Level 2 to Level 3 were primarily due to decreased price transparency.

 

Significant Unobservable Inputs

 

ASC 820 requires disclosure of quantitative information about the significant unobservable inputs used in the valuation of assets and liabilities classified as Level 3 within the fair value hierarchy. Disclosure of this information is not required in circumstances where a valuation (unadjusted) is obtained from a third-party pricing service and the information regarding the unobservable inputs is not reasonably available to the Company and as such, the disclosures provided below exclude those investments valued in that manner.

 

44 

 

 

The valuation techniques and significant unobservable inputs used in Level 3 fair value measurements of assets as of March 31, 2022 were as follows:

 

 

      As of March 31, 2022  
      Fair Value of
Level 3 Assets (1)		     Valuation Technique     Significant
Unobservable
Inputs 		    Range of Significant
Unobservable Inputs
(Weighted Average (2)) 		 
First Lien Senior Secured Loans     $ 1,112,331     Discounted cash flows     Comparative Yields     5.3%-15.2% (9.4%)  
First Lien Senior Secured Loans        57,231     Comparable company multiple     EBITDA Multiple     6.0x-9.8x (8.7x)  
First Lien Senior Secured Loans        63,485     Comparable company mulitple     EBITDA Multiple     7.0x  
                    Probability weighting of alternative outcomes     33.3%-66.7%  
First Lien Senior Secured Loans       6,546     Discounted Cash Flows     Discount Rate     10.0%  
First Lien Senior Secured Loans        4,250     Collateral Coverage     Recovery Rate     100%  
First Lien Senior Secured Loans        19,540     Comparable company multiple     Revenue Multiple     5.5x  
Second Lien Senior Secured Loans       85,912     Discounted cash flows     Comparative Yields     10.6%-15.3% (12.8)%  
Subordinated Note Investment Vehicles       169,412     Collateral Coverage     Recovery Rate     100%  
Subordinated Debt        39,117     Discounted cash flows     Comparative Yields     11.2%  
Equity Interests       108,921     Discounted cash flows     Discount Rate     10.0%-16.4% (15.1%)  
Equity Interests        53,383     Comparable company multiple     EBITDA Multiple     5.5x-23.3x (11.7x)  
Equity Interests        1,518     Comparable company multiple     Revenue Multiple     17.0x  
Preferred Equity       42,057     Comparable company multiple     EBITDA Multiple     6.0x-23.5x (8.4x)  
Preferred Equity        18,923     Comparable company multiple     Revenue Multiple     5.5x-8.8x (7.4x)  
Warrants       592     Comparable company multiple     EBITDA Multiple     8.0x-8.1x (8.1x)  
Total investments     $ 1,783,218                    

 

 

 (1)  Included within the Level 3 assets of $2,008,693 is an amount of $225,475 for which the Advisor did not develop the unobservable inputs for the determination of fair value (examples include single source quotation and prior or pending transactions such as investments originated in the quarter or imminent payoffs).
 (2)  Weighted average is calculated by weighing the significant unobservable input by the relative fair value of each investment in the category.

  

The Company used the income approach and market approach to determine the fair value of certain Level 3 assets as of March 31, 2022. The significant unobservable inputs used in the income approach are the comparative yield and discount rate. The comparative yield and discount rate are used to discount the estimated future cash flows expected to be received from the underlying investment. An increase/decrease in the comparative yield or discount rate would result in a decrease/increase, respectively, in the fair value. The significant unobservable inputs used in the market approach are the comparable company multiple and the recovery rate. The multiple is used to estimate the enterprise value of the underlying investment. An increase/ decrease in the multiple would result in an increase/decrease, respectively, in the fair value. The recovery rate represents the extent to which proceeds can be recovered. An increase/decrease in the recovery rate would result in an increase/decrease, respectively, in the fair value.

 

45 

 

 

The valuation techniques and significant unobservable inputs used in Level 3 fair value measurements of assets as of December 31, 2021 were as follows:

 

      As of December 31, 2021  
      Fair Value of
Level 3 Assets (1)		     Valuation Technique     Significant
Unobservable
Inputs 		    Range of Significant
Unobservable Inputs
(Weighted Average
(2))		  
First Lien Senior Secured Loans     $ 1,376,465     Discounted Cash Flows     Comparative Yields     4.9%-19.4% (8.1)%  
First Lien Senior Secured Loans       68,877     Comparable Company Multiple     EBITDA Multiple     1.0x-9.8x (7.5x)  
First Lien Senior Secured Loans       61,707     Comparable Company Multiple     EBITDA Multiple     7.3x  
                    Probability weighting
of alternative outcomes 		    33.3%-66.7%  
First Lien Senior Secured Loans       6,627     Discounted Cash Flows     Discount Rate     10.0%  
First Lien Senior Secured Loans       3,669     Collateral Analysis     Recovery Rate     100%  
Second Lien Senior Secured Loans       87,795     Discounted Cash Flows     Comparative Yields     9.6%-13.5% (11.6)%  
Subordinated Note Investment Vehicles       125,437     Collateral Analysis     Recovery Rate     100%  
Subordinated Debt       20,027     Discounted Cash Flows     Comparative Yields     11.2%  
Equity Interests       53,363     Comparable Company Multiple     EBITDA Multiple     5.5x-24.5x (12.0x)  
Equity Interests       92,420     Discounted Cash Flows     Discount Rate     10.0%-16.4% (15.2)%  
Preferred Equity       43,451     Comparable Company Multiple     EBITDA Multiple     4.6x-13.5x (6.7x)  
Preferred Equity       5,442     Discounted Cash Flows     Discount Rate     18.0%  
Warrants       126     Comparable Company Multiple     EBITDA Multiple     5.5x-8.3x (8.3x)  
Total investments     $ 1,945,406                    

 

 

 (1)  Included within the Level 3 assets of $2,133,381 is an amount of $187,975 for which the Advisor did not develop the unobservable inputs for the determination of fair value (examples include single source quotation and prior or pending transactions such as investments originated in the quarter or imminent payoffs).
 (2)  Weighted average is calculated by weighing the significant unobservable input by the relative fair value of each investment in the category.

 

The Company used the income approach and market approach to determine the fair value of certain Level 3 assets as of December 31, 2021. The significant unobservable inputs used in the income approach are the comparative yield and discount rate. The comparative yield and discount rate are used to discount the estimated future cash flows expected to be received from the underlying investment. An increase/decrease in the comparative yield or discount rate would result in a decrease/increase, respectively, in the fair value. The significant unobservable inputs used in the market approach are the comparable company multiple and the recovery rate. The multiple is used to estimate the enterprise value of the underlying investment. An increase/ decrease in the multiple would result in an increase/decrease, respectively, in the fair value. The recovery rate represents the extent to which proceeds can be recovered. An increase/decrease in the recovery rate would result in an increase/decrease, respectively, in the fair value.

 

The 2019-1 Debt (as defined in Note 6), the 2023 Notes (as defined in Note 6), the March 2026 Notes (as defined in Note 6), the October 2026 Notes (as defined in Note 6), and the Sumitomo Credit Facility (as defined in Note 6), which are categorized as Level 3 within the fair value hierarchy as of March 31, 2022, approximate the carrying value of such notes.

 

The fair values of the 2018-1 Notes (as defined in Note 6), the 2019-1 Debt (as defined in Note 6), the 2023 Notes (as defined in Note 6), the March 2026 Notes (as defined in Note 6), the October 2026 Notes (as defined in Note 6), and the Sumitomo Credit Facility (as defined in Note 6), which are categorized as Level 3 within the fair value hierarchy as of December 31, 2021, approximate the carrying value of such notes.

 

46 

 

 

Note 5. Related Party Transactions

 

Investment Advisory Agreement

 

The Company entered into the first amended and restated investment advisory agreement as of November 14, 2018 (the “Prior Advisory Agreement”) with the Advisor, pursuant to which the Advisor manages the Company’s investment program and related activities. On November 28, 2018, the Board, including a majority of the Independent Directors, approved a second amended and restated advisory agreement (the “Amended Advisory Agreement”) between the Company and BCSF Advisors, LP (“the Advisor”). On February 1, 2019, Shareholders approved the Amended Advisory Agreement which replaced the Prior Advisory Agreement.

 

Base Management Fee

 

The Company pays the Advisor a base management fee (the “Base Management Fee”), accrued and payable quarterly in arrears. The Base Management Fee is calculated at an annual rate of 1.5% (0.375% per quarter) of the average value of the Company’s gross assets (excluding cash and cash equivalents, but including assets purchased with borrowed amounts) at the end of each of the two most recently completed calendar quarters. Such amount shall be appropriately adjusted (based on the actual number of days elapsed relative to the total number of days in such calendar quarter) for any share issuance or repurchases by the Company during a calendar quarter. The Base Management Fee for any partial quarter will be appropriately prorated. Effective February 1, 2019, the base management fee has been revised to a tiered management fee structure so that the base management fee of 1.5% (0.375% per quarter) of the average value of the Company’s gross assets (excluding cash and cash equivalents, but including assets purchased with borrowed amounts) will continue to apply to assets held at an asset coverage ratio down to 200%, but a lower base management fee of 1.0% (0.25% per quarter) of the average value of the Company’s gross assets (excluding cash and cash equivalents, but including assets purchased with borrowed amounts) will apply to any amount of assets attributable to leverage decreasing the Company’s asset coverage ratio below 200%.

 

For the three months ended March 31, 2022 and 2021, management fees were $8.4 million and $8.7 million, respectively. For the three months ended March 31, 2022, $0.0 million was contractually waived and $0.0 million was voluntarily waived.  For the three months ended March 31, 2021, $0.0 million was contractually waived and $2.1 million was voluntarily waived.  

 

As of March 31, 2022, and December 31, 2021, $8.4 million and $8.8 million, respectively, remained payable related to the base management fee accrued in base management fee payable on the consolidated statements of assets and liabilities. 

 

Incentive Fee

 

The incentive fee consists of two parts that are determined independently of each other such that one component may be payable even if the other is not.

 

The first part, the Incentive Fee based on income is calculated and payable quarterly in arrears as detailed below.

 

The second part, the capital gains incentive fee, is determined and payable in arrears as detailed below.

 

Incentive Fee on Pre-Incentive Fee Net Investment Income

 

Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the quarter (including the Base Management Fee, any expenses payable under the Administration Agreement, and any interest expense and dividends paid on any outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature such as market discount, original issue discount (“OID”), debt instruments with PIK interest, preferred stock with PIK dividends and zero-coupon securities, accrued income that the Company has not yet received in cash.

 

Pre-incentive fee net investment income does not include any realized or unrealized capital gains or losses or unrealized capital appreciation or depreciation. Because of the structure of the incentive fee, it is possible that the Company may pay an incentive fee in a quarter where the Company incurs a loss. For example, if the Company receives pre-incentive fee net investment income in excess of the Hurdle rate for a quarter, the Company will pay the applicable incentive fee even if the Company has incurred a loss in that quarter due to realized and unrealized capital losses.

 

The incentive fee based on income is calculated and payable quarterly in arrears based on the aggregate pre-incentive fee net investment income in respect of the current calendar quarter and the eleven preceding calendar quarters (the “Trailing Twelve Quarters”). This calculation is referred to as the “Three-Year Lookback.”

 

Pre-incentive fee net investment income in respect of the relevant Trailing Twelve Quarters is compared to a “Hurdle Amount” equal to the product of (i) the hurdle rate of 1.5% per quarter (6% annualized) and (ii) the sum of our net assets (defined as total assets less indebtedness and before taking into account any incentive fees payable during the period) at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Hurdle Amount will be calculated after making appropriate adjustments to our NAV at the beginning of each applicable calendar quarter for our subscriptions (which shall include all issuances by us of shares of our Common Stock, including issuances pursuant to the Company’s dividend reinvestment plan) and distributions during the applicable calendar quarter.

 

47 

 

 

The quarterly incentive fee based on income is calculated, subject to the Incentive Fee Cap (as defined below), based on the amount by which (A) aggregate pre-incentive fee net investment income in respect of the relevant Trailing Twelve Quarters exceeds (B) the Hurdle Amount for such Trailing Twelve Quarters. The amount of the excess of (A) over (B) described in this paragraph for such Trailing Twelve Quarters is referred to as the “Excess Income Amount.” The incentive fee based on income that is paid to the Advisor in respect of a particular calendar quarter will equal the Excess Income Amount less the aggregate incentive fees based on income that were paid to the Advisor in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.

 

The incentive fee based on income for each calendar quarter is determined as follows:

 

  (i) No incentive fee based on income is payable to the Advisor for any calendar quarter for which there is no Excess Income Amount;

 

  (ii) 100% of the aggregate pre-incentive fee net investment income in respect of the Trailing Twelve Quarters with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the Hurdle Amount, but is less than or equal to an amount, which the Company refers to as the “Catch-up Amount,” determined as the sum of 1.8182% multiplied by our NAV at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters; and

 

  (iii) 17.5% of the aggregate pre-incentive fee net investment income in respect of the Trailing Twelve Quarters that exceeds the Catch-up Amount.

 

Incentive Fee Cap

 

The incentive fee based on income is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in respect of any calendar quarter is an amount equal to 17.5% of the Cumulative Net Return (as defined below) during the relevant Trailing Twelve Quarters less the aggregate incentive fees based on income that were paid to the Advisor in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.

 

“Cumulative Net Return” during the relevant Trailing Twelve Quarters means (x) the pre-incentive fee net investment income in respect of the relevant Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the relevant Trailing Twelve Quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Company will pay no incentive fee based on income to the Advisor in respect of that quarter. If, in any quarter, the Incentive Fee Cap for such quarter is a positive value but is less than the incentive fee based on income that is payable to the Advisor for such quarter calculated as described above, the Company will pay an incentive fee based on income to the Advisor equal to the Incentive Fee Cap in respect of such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is equal to or greater than the incentive fee based on income that is payable to the Advisor for such quarter calculated as described above, the Company will pay an incentive fee based on income to the Advisor equal to the incentive fee calculated as described above for such quarter without regard to the Incentive Fee Cap.

 

48 

 

 

“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in respect of such period and (ii) aggregate capital gains, whether realized or unrealized, in respect of such period.

 

For the three months ended March 31, 2022 and 2021, the Company incurred $3.3 million and $6.7 million, respectively, of income incentive fees (before waivers), which are included in incentive fees on the consolidated statements of operations. None of the income incentive fees earned by the Advisor during the three months ended March 31, 2022 and 2021, respectively, were voluntarily waived by the Advisor. This income incentive fee waiver does not impact any income incentive fees earned by the Advisor in future periods.

  

As of March 31, 2022 and December 31, 2021, there was $3.3 million and $4.7 million, respectively, related to the income incentive fee accrued in incentive fee payable on the consolidated statements of assets and liabilities.

 

The Amended Advisory Agreement approved by Stockholders on February 1, 2019 incorporates (i) a three-year lookback provision and (ii) a cap on quarterly income incentive fee payments based on netrealized or unrealized capital loss, if any, during the applicable three-year lookback period.

 

Annual Incentive Fee Based on Capital Gains

 

The second part of the incentive fee is a capital gains incentive fee that will be determined and payable in arrears in cash as of the end of each fiscal year (or upon termination of the Amended Advisory Agreement, as of the termination date), and equals to17.5% of our realized capital gains as of the end of the fiscal year. In determining the capital gains incentive fee payable to the Advisor, the Company calculates the cumulative aggregate realized capital gains and cumulative aggregate realized capital losses since our inception, and the aggregate unrealized capital depreciation as of the date of the calculation, as applicable, with respect to each of the investments in our portfolio. For this purpose, cumulative aggregate realized capital gains, if any, equals the sum of the differences between the net sales price of each investment, when sold, and the cost of such investment. Cumulative aggregate realized capital losses equals the sum of the amounts by which the net sales price of each investment, when sold, is less than the cost of such investment. Aggregate unrealized capital depreciation equals the sum of the difference, if negative, between the valuation of each investment as of the applicable calculation date and the cost of such investment. At the end of the applicable year, the amount of capital gains that serves as the basis for our calculation of the capital gains incentive fee equals the cumulative aggregate realized capital gains less cumulative aggregate realized capital losses, less aggregate unrealized capital depreciation, with respect to our portfolio of investments. If this number is positive at the end of such year, then the capital gains incentive fee for such year will equal to 17.5% of such amount, less the aggregate amount of any capital gains incentive fees paid in respect of our portfolio in all prior years.

 

There was no capital gains incentive fee payable to the Advisor under the Amended Advisory Agreement as of March 31, 2022 and December 31, 2021.

 

US GAAP requires that the incentive fee accrual consider the cumulative aggregate unrealized capital appreciation of investments or other financial instruments in the calculation, as an incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Amended Advisory Agreement (“GAAP Incentive Fee”). There can be no assurance that such unrealized appreciation will be realized in the future. Accordingly, such fee, as calculated and accrued, would not necessarily be payable under the Amended Advisory Agreement, and may never be paid based upon the computation of incentive fees in subsequent period.

 

For the three months ended March 31, 2022 and 2021, the Company incurred $0.0 million and $0.0 million of incentive fees related to the GAAP Incentive Fee. As of March 31, 2022 and December 31, 2021, there was $0.0 million and $0.0 million related to the GAAP Incentive Fee accrued in incentive fee payable on the consolidated statements of assets and liabilities, respectively.

 

49 

 

 

Administration Agreement

 

The Company has entered into an administration agreement (the “Administration Agreement”) with the advisor, pursuant to which the Administrator will provide the administrative services necessary for us to operate, and the Company will utilize the Administrator’s office facilities, equipment and recordkeeping services. Pursuant to the Administration Agreement, the Administrator has agreed to oversee our public reporting requirements and tax reporting and monitor our expenses and the performance of professional services rendered to us by others. The Administrator has also hired a sub-administrator to assist in the provision of administrative services. The Company will reimburse the Administrator for its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including certain compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and any of their respective staff who provide services to us, operations staff who provide services to us, and internal audit staff, if any, to the extent internal audit performs a role in our Sarbanes-Oxley internal control assessment. Our allocable portion of overhead will be determined by the Administrator, which expects to use various methodologies such as allocation based on the percentage of time certain individuals devote, on an estimated basis, to the business and affairs of the Company, and will be subject to oversight by the Board. The Company incurred expenses related to the Administrator of $0.0 million and $0.0 million for the three months ended March 31, 2022 and 2021, respectively, which is included in other general and administrative expenses on the consolidated statements of operations. As of March 31, 2022 and December 31, 2021, there were $0.0 million and $0.0 million in expenses related to the Administrator that were payable and included in “accounts payable and accrued expenses” in the consolidated statements of assets and liabilities, respectively. The sub-administrator is paid its compensation for performing its sub-administrative services under the sub-administration agreement.  The Company incurred expenses related to the sub-administrator of $0.2 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively, which is included in other general and administrative expenses on the consolidated statements of operations. The Administrator will not seek reimbursement in the event that any such reimbursements would cause any distributions to our stockholders to constitute a return of capital. In addition, the Administrator is permitted to delegate its duties under the Administration Agreement to affiliates or third parties and the Company will reimburse the expenses of these parties incurred and paid by the Advisor on our behalf.

 

Resource Sharing Agreement

 

The Company’s investment activities are managed by the Advisor, an investment adviser that is registered with the SEC under the Advisers Act. The Advisor is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring our investments and monitoring our investments and portfolio companies on an ongoing basis.

 

The Advisor has entered into a Resource Sharing Agreement (the “Resource Sharing Agreement”) with Bain Capital Credit, LP (“Bain Capital Credit”), pursuant to which Bain Capital Credit provides the Advisor with experienced investment professionals (including the members of the Advisor’s Credit Committee) and access to the resources of Bain Capital Credit so as to enable the Advisor to fulfill its obligations under the Amended Advisory Agreement. Through the Resource Sharing Agreement, the Advisor intends to capitalize on the significant deal origination, credit underwriting, due diligence, investment structuring, execution, portfolio management and monitoring experience of Bain Capital Credit’s investment professionals. There can be no assurance that Bain Capital Credit will perform its obligations under the Resource Sharing Agreement. The Resource Sharing Agreement may be terminated by either party on 60 days’ notice, which if terminated may have a material adverse consequence on the Company’s operations.

 

Co-investments

 

The Company will invest alongside our affiliates, subject to compliance with applicable regulations and our allocation procedures. Certain types of negotiated co-investments will be made only in accordance with the terms of the exemptive order the Company received from the SEC initially on August 23, 2016, as amended on March 23, 2018 (the “Order”). Under the terms of the Order, a “required majority”  (as defined in Section 57(o) of the 1940 Act) of our independent directors must be able to reach certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction are reasonable and fair to us and our stockholders and do not involve overreaching of us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our Board’s approved criteria. In certain situations where co-investment with one or more funds managed by the Advisor or its affiliates is not covered by the Order, the personnel of the Advisor or its affiliates will need to decide which funds will proceed with the investment. Such personnel will make these determinations based on policies and procedures, which are designed to reasonably ensure that investment opportunities are allocated fairly and equitably among affiliated funds over time and in a manner that is consistent with applicable laws, rules and regulations.

 

Revolving Advisor Loan

 

On March 27, 2020, the Company entered into an unsecured revolving loan agreement (the “Revolving Advisor Loan”) with BCSF Advisors, LP, the investment adviser of the Company. The Revolving Advisor Loan has a maximum credit limit of $50.0 million and a maturity date of March 27, 2023. The Revolving Advisor Loan accrues interest at the Applicable Federal Rate from the date of such loan until the loan is repaid in full. Please see Note 6 for additional details.

 

Related Party Commitments

 

As of March 31, 2022 and December 31, 2021, the Advisor held 488,019.86 and 487,932.46 shares of the Company’s common stock, respectively. An affiliate of the Advisor is the investment manager to certain pooled investment vehicles which are investors in the Company. These investors held 12,875,920.66 and 12,875,920.66 shares of the Company at March 31, 2022 and December 31, 2021, respectively.

 

50 

 

 

Non-Controlled/Affiliate and Controlled Affiliate Investments

 

Transactions during the three months ended March 31, 2022 in which the issuer was either an Affiliated Person or an Affiliated Person that the Company is deemed to Control are as follows:

 

Portfolio Company  Fair Value
as of
December 31,
2021		   Gross
Additions		   Gross
Reductions		   Change in
Unrealized
Gains
(Losses)		   Realized
Gains
(Losses)		   Fair Value
as of
March 31,
2022		   Dividend,
Interest, and
PIK Income		   Other
Income		 
Non-Controlled/affiliate investment                                        
ADT Pizza, LLC, Equity Interest (1)   $   19,527   $—   $     —    $      —   $    —    $  19,527   $—   $   — 
BCC Middle Middle Market CLO 2018-1, LLC. Equity Interest   —    24,050    —    —    —    24,050    —    — 
Blackbrush Oil & Gas, L.P. Preferred Equity (1)    19,720    —    —    5,231    —    24,951    222    — 
Blackbrush Oil & Gas, L.P. First Lien Senior Secured Loan   12,336    62    (4,327)   —    —    8,071    —    — 
Blackbrush Oil & Gas, L.P. Equity Interest   —    —    —    —    —    —    —    — 
Direct Travel, Inc. First Lien Senior Secured Loan   4,766    75    —    —    —    4,841    89    — 
Direct Travel, Inc. First Lien Senior Secured Loan  –  Delayed Draw   2,831    70    —    23    —    2,924    74    — 
Direct Travel, Inc. First Lien Senior Secured Loan  –  Delayed Draw   1,436    32    —    12    —    1,480    35    — 
Direct Travel, Inc. First Lien Senior Secured Loan   48,347    1,165    —    401    —    49,913    1,227    — 
Direct Travel, Inc. First Lien Senior Secured Loan  –  Delayed Draw   4,125    —    —    —    —    4,125    77    — 
Direct Travel, Inc. First Lien Senior Secured Loan   202    —    —    —    —    202    4    — 
Total Non-Controlled/affiliate investment  $113,290   $25,454   $(4,327)  $5,667   $—   $140,084   $1,728   $— 
Controlled affiliate investment                                        
BCC Jetstream Holdings Aviation (On II), LLC, Equity Interest  $—    $—    $—    $—    $—    $—    $25    $— 
BCC Jetstream Holdings Aviation (On II), LLC, First Lien Senior Secured Loan   6,627    —    —    (80)    —    6,547    182    — 
BCC Jetstream Holdings Aviation (Off I), LLC, Equity Interest   10,563    —    —    (127)    —    10,436    267    — 
Gale Aviation (Offshore) Co, Equity Interest   72,839    1,466    —    7,890    —    82,195    2,000    — 
International Senior Loan Program, LLC, Equity Interest Investment Vehicle   44,444    2,513    —    (696)    —    46,261    1,201    — 
International Senior Loan Program, LLC, Subordinated Note Investment Vehicle   125,437    8,195    —    —    —    133,632    2,922    — 
Lightning Holdings B, LLC- Equity Interest   14,851    1,176    —    263    —    16,290    —    — 
Bain Capital Senior Loan Program, LLC Preferred Equity Interest Investment Vehicle   —    10    —    —    —    10    —    — 
Bain Capital Senior Loan Program, LLC Equity Interest Investment Vehicle   —    5,594    —    —    —    5,594    —    — 
Bain Capital Senior Loan Program, LLC Subordinated Note Interest Investment Vehicle   —    35,780    —    —    —    35,780    318    — 
Total Controlled affiliate investment  $274,761   $54,734   $—   $7,250   $—   $336,745   $6,915   $— 
Total  $388,051   $80,188   $(4,327)  $12,917   $—   $476,829   $8,643   $— 

 

 

   (1)  Non-income producing.

 

51 

 

 

Transactions during the year ended December 31, 2021 in which the issuer was either an Affiliated Person or an Affiliated Person that the Company is deemed to Control are as follows:

 

Portfolio Company  Fair Value
as of
December 31,
2020		   Gross
Additions		   Gross
Reductions		   Change in
Unrealized
Gains
(Losses)		   Realized
Gains
(Losses)		   Fair Value
as of
December 31,
2021		   Dividend,
Interest, and
PIK Income		   Other
Income		 
Non-Controlled/affiliate investment                                        
ADT Pizza, LLC, Equity Interest (1)    $    15,918   $—   $     —   $   3,609   $    —   $   19,527   $—   $   — 
Blackbrush Oil & Gas, L.P. Equity Interest (1)    —    —    —    —    —    —    —    — 
Blackbrush Oil & Gas, L.P. Preferred Equity (1)    10,239    —    —    9,481    —    19,720    989    — 
Blackbrush Oil & Gas, L.P. First Lien Senior Secured Loan   12,089    247    —    —    —    12,336    —    — 
Direct Travel, Inc. First Lien Senior Secured Loan   4,404    362    —    —    —    4,766    418    — 
Direct Travel, Inc. Equity Interest (1)    —    —    —    —    —    —    —    — 
Direct Travel, Inc. First Lien Senior Secured Loan  –  Delayed Draw   2,588    271    —    (28)   —    2,831    308    — 
Direct Travel, Inc. First Lien Senior Secured Loan  –  Delayed Draw   1,313    137    —    (14)   —    1,436    156    — 
Direct Travel, Inc. First Lien Senior Secured Loan   44,212    4,607    —    (472)   —    48,347    5,276    — 
Direct Travel, Inc. First Lien Senior Secured Loan  –  Delayed Draw   1,950    2,175    —    —    —    4,125    279    — 
Direct Travel, Inc. First Lien Senior Secured Loan   202    —    —    —    —    202    14    — 
Total Non-Controlled/affiliate investment  $92,915   $7,799   $—   $12,576   $—   $113,290   $7,440   $— 
Controlled affiliate investment                                        
ACC Holdco, LLC, Preferred Equity  $10,828   $—   $(10,828)  $(3)  $3   $—   $2,306   $— 
Air Comm Corporation LLC, First Lien Senior Secured Loan   26,484    661    (27,023)   (122)   —    —    1,948    — 
BCC Jetstream Holdings Aviation (On II), LLC, Equity Interest   629    —    —    (629)   —    —    100    — 
BCC Jetstream Holdings Aviation (On II), LLC, First Lien
Senior Secured Loan		   6,712    665    —    (750)   —    6,627    873    — 
BCC Jetstream Holdings Aviation (Off I), LLC, Equity Interest   11,703    —    —    (1,140)   —    10,563    1,068    — 
Gale Aviation (Offshore) Co, Equity Interest   66,448    5,329    —    1,062    —    72,839    8,100    — 
International Senior Loan Program, LLC, Equity Interest Investment Vehicle   —    43,457    —    4,848    (3,861)   44,444    2,636    — 
International Senior Loan Program, LLC, Subordinated Note Investment Vehicle   —    125,437    —    —    —    125,437    8,058    — 
Lightning Holdings B, LLC- Equity Interest   7,308    6,845    —    698    —    14,851    —    — 
Total Controlled affiliate investment  $130,112   $182,394   $(37,851)  $3,964   $(3,858)  $274,761   $25,089   $— 
Total  $223,027   $190,193   $(37,851)  $16,540   $(3,858)  $388,051   $32,529   $— 

 

 

  (1)  Non-income producing.

 

52 

 

 

Note 6. Debt

 

In accordance with applicable SEC staff guidance and interpretations, as a BDC, with certain exceptions, effective February 2, 2019, the Company is permitted to borrow amounts such that its asset coverage ratio is at least 150% after such borrowing (if certain requirements are met), rather than 200%, as previously required. As of March 31, 2022 and December 31, 2021, the Company’s asset coverage ratio based on aggregated borrowings outstanding was 201% and 177%, respectively.

 

The Company’s outstanding borrowings as of March 31, 2022 and December 31, 2021 were as follows:

 

   As of March 31, 2022   As of December 31, 2021 
   Total Aggregate
Principal
Amount
Committed		   Principal
Amount
Outstanding		   Carrying
Value (1)		   Total Aggregate
Principal
Amount
Committed		   Principal
Amount
Outstanding		   Carrying
Value (1)		 
2018-1 Notes  $—   $—   $—   $365,700   $365,700   $364,178 
2019-1 Debt   352,500    352,500    351,001    352,500    352,500    350,969 
Revolving Advisor Loan   50,000    —    —    50,000    —    — 
2023 Notes   150,000    112,500    111,357    150,000    112,500    111,133 
March 2026 Notes   300,000    300,000    295,539    300,000    300,000    295,260 
October 2026 Notes   300,000    300,000    293,780    300,000    300,000    293,442 
Sumitomo Credit Facility   300,000    39,000    39,000    300,000    —    — 
Total Debt  $  1,452,500   $  1,104,000   $   1,090,677   $  1,818,200   $  1,430,700   $   1,414,982 

 

 

  (1)  Carrying value represents aggregate principal amount outstanding less unamortized debt issuance costs.

 

The combined weighted average interest rate (excluding deferred upfront financing costs and unused fees) of the aggregate borrowings outstanding for the three months ended March 31, 2022 and year ended December 31, 2021 were 2.9% and 3.1%, respectively.

 

The following table shows the contractual maturities of our debt obligations as of March 31, 2022:

 

   Payments Due by Period 
   Total   Less than
1 year		   1 — 3 years   3 — 5 years   More than
5 years		 
2019-1 Debt  $352,500   $—   $—   $—   $352,500 
2023 Notes   112,500    —    112,500    —    — 
March 2026 Notes   300,000    —    —    300,000    — 
October 2026 Notes   300,000    —    —    300,000    — 
Sumitomo Credit Facility   39,000    —    —    39,000    — 
Total Debt Obligations  $1,104,000   $—   $112,500   $639,000   $352,500 

 

BCSF Revolving Credit Facility

 

On October 4, 2017, the Company entered into the revolving credit agreement (the “BCSF Revolving Credit Facility”) with us, as equity holder, BCSF I, LLC, a Delaware limited liability company and a wholly owned and consolidated subsidiary of the Company, as borrower, and Goldman Sachs Bank USA, as sole lead arranger (“Goldman Sachs”). The BCSF Revolving Credit Facility was subsequently amended on May 15, 2018 to reflect certain clarifications regarding margin requirements and hedging currencies. The maximum commitment amount under the BCSF Revolving Credit Facility is $500.0 million, and may be increased up to $750.0 million. Proceeds of the loans under the BCSF Revolving Credit Facility may be used to acquire certain qualifying loans and such other uses as permitted under the BCSF Revolving Credit Facility. The BCSF Revolving Credit Facility includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature.

 

53 

 

 

On January 8, 2020, the Company entered into an amended and restated credit agreement of its BCSF Revolving Credit Facility. The amendment amended the existing credit facility to, among other things, modify various financial covenants, including removing a liquidity covenant and adding a net asset value covenant with respect to the Company, as sponsor.

 

On March 31, 2020, the Parties entered into Omnibus Amendment No. 1 to the amended and restated credit agreement. The amendment amended the existing credit facility to, among other things, provide for enhanced flexibility to purchase or contribute and borrow against revolving loans and delayed draw term loans, and to count certain additional assets in the calculation of collateral for the outstanding advances; increase the spread payable under the facility from 2.50% to 3.25% per annum; include additional events of default to the existing credit facility, including but not limited to, a qualified equity raise not effected on or prior to June 22, 2020; and, after June 22, 2020, require the Company to maintain at least $50.0 million of unencumbered liquidity or pay down the facility by at least $50.0 million.

 

On May 27, 2020, the Parties entered into Amendment No. 2 to the amended and restated credit agreement. The amendment amended the existing credit facility to, among other things, (i) permit the Company to incur a lien on assets purchased with the proceeds of the rights offering and (ii) remove the requirement that the Company maintain $50.0 million in unencumbered cash after the completion of the rights offering, instead requiring a pay down of $50.0 million within two business days after the closing of the rights offering, which was subsequently paid.

 

On August 14, 2020, the Parties entered into the second amended and restated credit agreement and the third amended and restated margining agreement (collectively, the “Amendment”), which amended and restated the terms of the existing credit facility (the “Amended and Restated Credit Facility”). The Amendment amends the existing credit facility to, among other things, (i) decrease the financing limit from $500.0 million to $425.0 million, (ii) decrease the interest rate on financing from LIBOR plus 3.25% per annum to LIBOR plus 3.00% per annum, and (iii) provide enhanced flexibility to contribute and borrow against revolving and delayed draw loans and modify certain other terms relating to collaterals.

 

On March 11, 2021, the BCSF Revolving Credit Facility was terminated. The proceeds from the March 2026 Notes were used to repay the total outstanding debt.

 

Borrowings under the BCSF Revolving Credit Facility bore interest at LIBOR plus a margin. For the period from January 1, 2021 through March 11, 2021, the BCSF Revolving Credit Facility accrued interest expense at a rate of LIBOR plus 3.00%. The Company paid an unused commitment fee of 30 basis points (0.30%) per annum.

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the BCSF Revolving Credit Facility were as follows:

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $—   $509 
Unused facility fee   —    118 
Amortization of deferred financing costs and upfront commitment fees   —    — 
Total interest and debt financing expenses  $—   $627 

 

2018-1 Notes

 

On September 28, 2018 (the “2018-1 Closing Date”), we, through BCC Middle Market CLO 2018-1 LLC (the “2018-1 Issuer”), a Delaware limited liability company and a wholly owned and consolidated subsidiary of the Company, completed its $451.2 million term debt securitization (the “CLO Transaction”). The notes issued in connection with the CLO Transaction (the “2018-1 Notes”) are secured by a diversified portfolio of the 2018-1 Issuer consisting primarily of middle market loans, the majority of which are senior secured loans (the “2018-1 Portfolio”). At the 2018-1 Closing Date, the 2018-1 Portfolio was comprised of assets transferred from the Company and its consolidated subsidiaries. All transfers were eliminated in consolidation and there were no realized gains or losses recognized in the CLO Transaction. 

 

The CLO Transaction was executed through a private placement of the following 2018-1 Notes. The Class A-1 A, A-1 B, A-2, B and C 2018-1 Notes were issued at par and are scheduled to mature on October 20, 2030. The Company received 100% of the membership interests (the “Membership Interests”) in the 2018-1 Issuer in exchange for its sale to the 2018-1 Issuer of the initial closing date loan portfolio. The Membership Interests do not bear interest. As of December 31, 2021, the Class A-1 A, A-1 B, A-2, B and C 2018-1 Notes were included in the consolidated financial statements. The Membership Interests were eliminated in consolidation.

 

54 

 

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2018-1 Issuer were as follows:

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $1,299   $2,024 
Amortization of debt issuance costs and upfront commitment fees   28    43 
Total interest and debt financing expenses  $1,327   $2,067 

 

On March 7, 2022, the Company sold 70% of the membership equity interests of the Company’s 2018-1 Notes to SLP, which resulted in the deconsolidation of the 2018-1 Notes from the Company’s consolidated financial statements as further discussed in Note 3.

 

JPM Credit Facility

 

On April 30, 2019, the Company entered into a loan and security agreement (the “JPM Credit Agreement” or the “JPM Credit Facility”) as Borrower, with JPMorgan Chase Bank, National Association, as Administrative Agent, and Wells Fargo Bank, National Association as Collateral Administrator, Collateral Agent, Securities Intermediary and Bank. The facility amount under the JPM Credit Agreement was $666.6 million. Borrowings under the JPM Credit Facility bore interest at LIBOR plus 2.75%.

 

On January 29, 2020, the Company entered into an amended and restated loan and security agreement (the “Amended Loan and Security Agreement”) as Borrower, with JPMorgan Chase Bank, National Association, as Administrative Agent, and Wells Fargo Bank, National Association as Collateral Administrator, Collateral Agent, Securities Intermediary and Bank. The Amended Loan and Security Agreement amended the Existing Loan and Security Agreement to, among other things, (1) decrease the financing limit under the agreement from $666.6 million to $500.0 million; (2) decrease the minimum facility amount from $466.6 million to $300.0 million period from January 29, 2020 to July 29, 2020 (the minimum facility amount will increase to $350.0 million after July 29, 2020 until the end of the reinvestment period); (3) decrease the interest rate on financing from 2.75% per annum over the applicable LIBOR to 2.375% per annum over the applicable LIBOR; and (4) extend the scheduled termination date of the agreement from November 29, 2022 to January 29, 2025.

 

On March 20, 2020, the Company entered into a second amended and restated loan and security agreement between the parties (the “Second Amended Loan and Security Agreement”). The Second Amended Loan and Security Agreement, among other things, provided flexibility to contribute and borrow against revolving loans, reduce the amount required to be reserved for unfunded revolvers and delayed draw obligations and decreased the financing limit by $50.0 million within 90 days or, based on the occurrence of certain events, such earlier period as may be set forth in the Second Amended Loan and Security Agreement. The Company paid the Administrative Agent $50.0 million to the prepayment of Advances and the Financing Commitments reduced by the amount of principal so prepaid on the earlier of two Business days following the closing of the Rights Offering and June 18, 2020.

 

On July 2, 2020, the Company entered into a third amended and restated loan and security agreement with respect to the JPM Credit Agreement to, among other things, adjust the advance rates and make certain changes of an updating nature.

 

The facility amount under the JPM Credit Agreement is $450.0 million. Proceeds of the loans under the JPM Credit Facility were used to acquire certain qualifying loans and such other uses as permitted under the JPM Credit Agreement. The period from the effective date of the amendment until January 29, 2023 is referred to as the reinvestment period and during such reinvestment period, the Borrower could request drawdowns under the JPM Credit Facility.

 

The maturity date was the earliest of: (a) January 29, 2025, (b) the date on which the secured obligations become due and payable following the occurrence of an event of default, (c) the date on which the advances are repaid in full and (d) the date after a market value cure failure occurs on which all portfolio investments have been sold and proceeds there from have been received by the Borrower. The stated maturity date of January 29, 2025 could be extended for successive one-year periods by mutual agreement of the Borrower and the Administrative Agent.

 

The JPM Credit Agreement included customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature.

 

55 

 

 

Borrowings under the JPM Credit Facility bore interest at LIBOR plus a margin. The Company paid an unused commitment fee of between 37.5 basis points (0.375%) and 75 basis points (0.75%) per annum depending on the size of the unused portion of the facility. Interest was payable quarterly in arrears. As of December 31, 2020, the JPM Credit Facility was accruing interest expense at a rate of LIBOR plus 2.375%. We paid an unused commitment fee of 75 basis points (0.75%) per annum.

 

On December 27, 2021, the JPM Credit Facility was terminated.

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the JPM Credit Facility were as follows:

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $—   $2,424 
Unused facility fee   —    — 
Amortization of deferred financing costs and upfront commitment fees   —    64 
Total interest and debt financing expenses  $—   $2,488 

 

2019-1 Debt

 

On August 28, 2019, the Company, through BCC Middle Market CLO 2019-1 LLC (the “2019-1 Issuer”), a Cayman Islands limited liability company and a wholly-owned and consolidated subsidiary of the Company, and BCC Middle Market CLO 2019-1 Co-Issuer, LLC (the “Co-Issuer” and, together with the Issuer, the “Co-Issuers”), a Delaware limited liability company, completed its $501.0 million term debt securitization (the “2019-1 CLO Transaction”). The notes issued in connection with the 2019-1 CLO Transaction (the “2019-1 Notes”) are secured by a diversified portfolio of the Co-Issuers consisting primarily of middle market loans, the majority of which are senior secured loans (the “2019-1 Portfolio”). The Co-Issuers also issued Class A-1L Loans (the “Loans” and, together with the 2019-1 Notes, the “2019-1 Debt”). The Loans are also secured by the 2019-1 Portfolio. At the 2019-1 closing date, the 2019-1 Portfolio was comprised of assets transferred from the Company and its consolidated subsidiaries. All transfers were eliminated in consolidation and there were no realized gains or losses recognized in the 2019-1 CLO Transaction.

 

On November 30, 2021, the Co-Issuers refinanced the 2019-1 CLO Transaction through a private placement of $410 million of senior secured and senior deferrable notes consisting of: (i) $282.5 million of Class A-1-R Senior Secured Floating Rate Notes, which currently bear interest at the applicable reference rate plus 1.50% per annum; (ii) $55 million of Class A-2-R Senior Secured Floating Rate Notes, which bear interest at the applicable reference rate plus 2.00% per annum; (iii) $47.5 million of Class B-R Senior Deferrable Floating Rate Notes, which bear interest at the applicable reference rate plus 2.60% per annum; and (iv) $25.0 million of Class C-R Senior Deferrable Floating Rate Notes, which bear interest at the applicable reference rate plus 3.75% per annum (collectively, the “2019-1 CLO Reset Notes”). The 2019-1 CLO Reset Notes are scheduled to mature on October 15, 2033 and the reinvestment period ends October 15, 2025. The Company retained $32.5 million of the Class B-R Notes and $25.0 million of the Class C-R Notes. The retained notes by the Company are eliminated in consolidation. The transaction resulted in a realized loss on the extinguishment of debt of $2.3 million from the acceleration of unamortized debt issuance costs of. The obligations of the Issuer under the CLO Transaction are non-recourse to the Company.

 

The 2019-1 CLO Reset Notes was executed through a private placement of the following 2019-1 Debt:

 

2019-1 Debt  Principal Amount   Spread above Index  Interest rate at
March 31, 2022		 
Class A-1-R  $  282,500   1.50% + 3 Month LIBOR   1.74%
Class A-2-R   55,000   2.00% + 3 Month LIBOR   2.24%
Class B-R   15,000   2.60% + 3 Month LIBOR   2.84%
Total 2019-1 Debt   352,500         
Membership Interests   102,250   Non-interest bearing   Not applicable 
Total  $454,750         

 

The Loans and Class A-1-R, A-2-R, and B-R Notes are included in the consolidated financial statements of the Company. The $32.5 million of the Class B-R Notes, $25.0 million of the Class C-R Notes and Membership Interests retained by the Company are eliminated in consolidation.

 

56 

 

 

The Company serves as portfolio manager of the 2019-1 Issuer pursuant to a portfolio management agreement between the Company and the 2019-1 Issuer. For so long as the Company serves as portfolio manager, the Company will not charge any management fee or subordinated interest to which it may be entitled.

 

During the reinvestment period, pursuant to the indenture and loan agreement governing the 2019-1 Notes and Loans, respectively, all principal collections received on the underlying collateral may be used by the 2019-1 Issuer to purchase new collateral under the direction of the Company in its capacity as portfolio manager of the 2019-1 Issuer and in accordance with the 2019-1 Issuer investment strategy and the terms of the indenture and loan agreement, as applicable.

 

The Company has agreed to hold on an ongoing basis the Membership Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate amount of all obligations issued by the 2019-1 Co-Issuers for so long as the 2019-1 Debt remains outstanding.

 

The 2019-1 Issuer pays ongoing administrative expenses to the trustee, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2019-1 Issuer.

 

As of March 31, 2022, there were 47 first lien and second lien senior secured loans with a total fair value of approximately $468.7 million and cash of $34.0 million securing the 2019-1 Debt. As of December 31, 2021, there were 45 first lien and second lien senior secured loans with a total fair value of approximately $441.0 million and cash of $62.6 million securing the 2019-1 Debt. Assets that are pledged as collateral for the 2019-1 Debt are not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company’s obligations under the indenture and loan agreement governing the 2019-1 Debt. The creditors of the 2019-1 Co-Issuers have received security interests in such assets and such assets are not intended to be available to the creditors of the Company (or an affiliate of the Company). The 2019-1 Portfolio must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture and loan agreement governing the 2019-1 Debt. As of March 31, 2022, and December 31, 2021, the Company was in compliance with its covenants related to the 2019-1 Debt.

 

Costs of the offering of $1.5 million were incurred in connection with the 2019-1 CLO Reset Notes which have been recorded as debt issuance costs and presented as a reduction to the outstanding principal amount of the 2019-1 Debt on the consolidated statements of assets and liabilities and are being amortized over the life using the effective interest method. The balance of the unamortized debt issuance costs related to the 2019-1 Issuer was $1.5 million and $1.5 million as of March 31, 2022 and December 31, 2021, respectively.

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2019-1 Co-Issuers were as follows:

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $1,624   $2,526 
Amortization of debt issuance costs and upfront commitment fees   32    57 
Total interest and debt financing expenses  $1,656   $2,583 

 

Revolving Advisor Loan

 

On March 27, 2020, the Company entered into an unsecured revolving loan agreement (the “Revolving Advisor Loan”) with BCSF Advisors, LP, the investment adviser of the Company. The Revolving Advisor Loan has a maximum credit limit of $50.0 million and a maturity date of March 27, 2023. The Revolving Advisor Loan accrues interest at the Applicable Federal Rate from the date of such loan until the loan is repaid in full. As of March 31, 2022, there were no borrowings under the Revolving Advisor Loan.

 

57 

 

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the Revolving Advisor Loan were as follows:

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $—   $— 
Total interest and debt financing expenses  $—   $— 

 

2023 Notes

 

On June 10, 2020, the Company entered into a Master Note Purchase Agreement with institutional investors listed on the Purchaser Schedule thereto (the “Note Purchase Agreement”), in connection with the Company’s issuance of $150.0 million aggregate principal amount of its 8.50% senior unsecured notes due 2023 (the “ 2023 Notes”). The sale of the 2023 Notes generated net proceeds of approximately $146.4 million, including an offering discount of $1.5 million and debt issuance costs in connection with the transaction, including fees and commissions, of $2.1 million.

 

The 2023 Notes will mature on June 10, 2023 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Note Purchase Agreement. The 2023 Notes will bear interest at a rate of 8.50% per year payable semi-annually on June 10 and December 10 of each year, commencing on December 10, 2020. As of March 31, 2022 and December 31, 2021, the Company was in compliance with the terms of the Note Purchase Agreement governing the 2023 Notes.

 

On July 16, 2021 the Company repurchased $37.5 million of the 2023 Notes at a total cost of $39.5 million. This resulted in a realized loss on the extinguishment of debt of $2.5 million, which included a premium paid of $2.0 million and acceleration of unamortized debt issuance costs and original issue discount of $0.5 million.

 

As of March 31, 2022 and December 31, 2021, the components of the carrying value of the 2023 Notes were as follows:

 

   March 31,
2022		   December 31,
2021		 
Principal amount of debt  $112,500   $112,500 
Unamortized debt issuance cost   (687)   (822)
Original issue discount, net of accretion   (456)   (545)
Carrying value of 2023 Notes  $111,357   $111,133 

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2023 Notes were as follows:

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $2,250   $3,188 
Amortization of debt issuance cost   135    180 
Accretion of original issue discount   90    119 
Total interest and debt financing expenses  $2,475   $3,487 

 

 March 2026 Notes

 

On March 10, 2021, the Company and U.S. Bank National Association (the “Trustee”), entered into an Indenture (the “Base Indenture”) and First Supplemental Indenture (the “First Supplemental Indenture,” and together with the Base Indenture, the “Indenture”) between the Company and the Trustee. The First Supplemental Indenture relates to the Company’s issuance of $300.0 million aggregate principal amount of its 2.95% notes due 2026 (the “2026 Notes”).

 

The March 2026 Notes will mature on March 10, 2026 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Indenture. The March 2026 Notes bear interest at a rate of 2.95% per year payable semi-annually on March 10th and September 10th of each year, commencing on September 10, 2021. The March 2026 Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the March 2026 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.

 

58 

 

 

The net proceeds to the Company were approximately $294.3 million, after deducting the underwriting discounts and commissions of $4.4 million and offering expenses of $1.3 million. 

 

As of March 31, 2022 and December 31, 2021, the components of the carrying value of the March 2026 Notes were as follows:

 

   March 31,
2022		   December 31,
2021		 
Principal amount of debt  $300,000   $300,000 
Unamortized debt issuance cost   (2,559)   (2,719)
Original issue discount, net of accretion   (1,902)   (2,021)
Carrying value of March 2026 Notes  $295,539   $295,260 

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2026 Notes were as follows:

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $2,213   $516 
Amortization of debt issuance cost   159    37 
Amortization of original issue discount   119    28 
Total interest and debt financing expenses  $2,491   $581 

 

October 2026 Notes

 

On October 13, 2021, the Company and the Trustee entered into a Second Supplemental Indenture (the “Second Supplemental Indenture”) to the Indenture between the Company and the Trustee. The Second Supplemental Indenture relates to the Company’s issuance of $300.0 million aggregate principal amount of its 2.55% notes due 2026 (the “October 2026 Notes,” and together with the March 2026 Notes, the “2026 Notes”).

 

The October 2026 Notes will mature on October 13, 2026 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Indenture. The October 2026 Notes bear interest at a rate of 2.55% per year payable semi-annually on April 13 and October 13 of each year, commencing on April 13, 2022. The October 2026 Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the October 2026 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.

 

The net proceeds to the Company were approximately $293.1 million, after deducting the underwriting discounts and commissions of $6.2 million and offering expenses of $0.7 million.

 

As of March 31, 2022 and December 31, 2021, the components of the carrying value of the October 2026 Notes were as follows:

 

   March 31,
2022		   December 31,
2021		 
Principal amount of debt  $300,000   $300,000 
Unamortized debt issuance cost   (3,315)   (3,495)
Original issue discount, net of accretion   (2,905)   (3,063)
Carrying value of October 2026 Notes  $293,780   $293,442 

 

59 

 

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2026 Notes were as follows:

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $1,912   $— 
Amortization of debt issuance cost   180    — 
Amortization of original issue discount   158    — 
Total interest and debt financing expenses  $2,250   $— 

 

Sumitomo Credit Facility

 

On December 24, 2021, the Company entered into a senior secured revolving credit agreement (the “Sumitomo Credit Agreement” or the “Sumitomo Credit Facility”) as Borrower, with Sumitomo Mitsui Banking Corporation, as Administrative Agent and Sole Book Runner, and with Sumitomo Mitsui Banking Corporation and MUFG Union Bank, N.A., as Joint Lead Arrangers. The Credit Agreement is effective as of December 24, 2021.

 

The facility amount under the Sumitomo Credit Agreement is $300.0 million with an accordion provision to permit increases to the total facility amount up to $1.0 billion. Proceeds of the loans under the Sumitomo Credit Agreement may be used for general corporate purposes of the Company, including, without limitation, repaying outstanding indebtedness, making distributions, contributions and investments, and acquisition and funding, and such other uses as permitted under the Sumitomo Credit Agreement. The maturity date is December 24, 2026.

 

Interest under the Sumitomo Credit Agreement for (i) loans for which the Company elects the base rate option, (A) if the borrowing base is equal to or greater than the product of 1.60 and the revolving credit exposure, is payable at an “alternate base rate”  (which is the greater of zero and the highest of (a) the prime rate as published in the print edition of The Wall Street Journal, Money Rates Section, (b) the federal funds effective rate plus 0.5% and (c) the one-month Eurocurrency rate plus 1% per annum) plus 0.75% per annum and (B) if the borrowing base is less than the product of 1.60 and the revolving credit exposure, the alternate base rate plus 0.875% per annum; (ii) loans for which the Company elects the Eurocurrency option, (A) if the borrowing base is equal to or greater than the product of 1.60 and the revolving credit exposure, is payable at a rate equal to the Eurocurrency rate plus 1.75% per annum and (B) if the borrowing base is less than the product of 1.60 and the revolving credit exposure, is payable at a rate equal to the Eurocurrency rate plus 1.875% per annum; and (iii) loans for which the Company elects the risk-free-rate option, (A) if the borrowing base is equal to or greater than the product of 1.60 and the revolving credit exposure, is payable at a rate equal to risk-free-rate plus 1.8693% per annum and (B) if the borrowing base is less than the product of 1.60 and the revolving credit exposure, is payable at a rate equal to risk-free-rate plus 1.9943% per annum. The Company pays a used commitment fee of 37.5 basis points (0.375%) on the average daily unused amount of the dollar commitment.

 

The Sumitomo Credit Agreement includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature. As of March 31, 2022, the Company was in compliance with its covenants related to the Sumitomo Credit Facility.

 

As of March 31, 2022 and December 31, 2021, there were $39.0 million and $0.0 million of borrowings under the Sumitomo Credit Facility, and the company was in compliance with the terms of the Sumitomo Credit Facility.

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the Sumitomo Credit Facility were as follows:

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $44   $— 
Unused facility fee   292    — 
Amortization of original issue discount   108    — 
Total interest and debt financing expenses  $444   $— 

 

60 

 

 

 

 

Note 7. Derivatives

 

The Company is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by the Company may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency.

 

The Company may enter into forward currency exchange contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations in the value of foreign currencies, as described in Note 2. The fair value of derivative contracts open as of March 31, 2022 and December 31, 2021 is included on the consolidated schedules of investments by contract. The Company had collateral receivable of $0.6 million for March 31, 2022 and collateral receivable of $2.8 million for December 31, 2021 with the counterparties on foreign currency exchange contracts. Collateral amounts posted are included in collateral on forward currency exchange contracts on the consolidated statements of assets and liabilities. Collateral payable is included in collateral payable on forward currency exchange contracts on the consolidated statements of assets and liabilities.

 

For the three months ended March 31, 2022, the Company’s average U.S. dollar notional exposure to forward currency exchange contracts was $109.5 million. For the three months ended March 31, 2021, the Company’s average U.S. dollar notional exposure to forward currency exchange contracts was $206.7 million.

 

By using derivative instruments, the Company is exposed to the counterparty’s credit risk—the risk that derivative counterparties may not perform in accordance with the contractual provisions offset by the value of any collateral received. The Company’s exposure to credit risk associated with counterparty non-performance is limited to collateral posted and the unrealized gains inherent in such transactions that are recognized in the consolidated statements of assets and liabilities. The Company minimizes counterparty credit risk through credit monitoring procedures, executing master netting arrangements and managing margin and collateral requirements, as appropriate.

 

The Company presents forward currency exchange contracts on a net basis by counterparty on the consolidated statements of assets and liabilities. The Company has elected not to offset assets and liabilities in the consolidated statements of assets and liabilities that may be received or paid as part of collateral arrangements, even when an enforceable master netting arrangement or other arrangement is in place that provides the Company, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

 

The following table presents both gross and net information about derivative instruments eligible for offset in the consolidated statements of assets and liabilities as of March 31, 2022:

 

Counterparty  Account in the
consolidated
statements of
assets and liabilities		  Gross amount of
assets on the
consolidated
statements of
assets and liabilities		   Gross amount of
(liabilities) on the
consolidated
statements of
assets and liabilities		   Net amount of assets or
(liabilities)
presented on
the consolidated
statements of
assets and liabilities		   Cash Collateral
paid
(received) (1)		   Net
Amounts (2)		 
Bank of New York  Unrealized
appreciation on
forward currency
contracts		  $7,915   $(1,257)  $6,658   $—   $6,658 
Citibank  Unrealized
appreciation on
forward currency
contracts		  $599   $(285)  $314   $—   $314 

 

 

 

(1)  Amount excludes excess cash collateral paid.
(2)   Net amount represents the net amount due (to) from counterparty in the event of default based on the contractual set-off rights under the agreement. Net amount excludes any over-collateralized amounts.

 

61 

 

 

The following table presents both gross and net information about derivative instruments eligible for offset in the consolidated statements of assets and liabilities as of December 31, 2021:

 

Counterparty  Account in the
consolidated
statements of
assets and liabilities		  Gross amount of
assets on the
consolidated
statements of
assets and liabilities		   Gross amount of
(liabilities) on the
consolidated
statements of
assets and liabilities		   Net amount of assets or
(liabilities)
presented on
the consolidated
statements of
assets and liabilities		   Cash Collateral
paid
(received) (1)		   Net
Amounts (2)		 
Bank of New York  Unrealized
appreciation on
forward currency
contracts		  $4,882   $(31)  $4,851   $—   $4,851 
Citibank  Unrealized
appreciation on
forward currency
contracts		  $1,767   $(1,297)  $470   $—   $470 

 

 

 

(1)       Amount excludes excess cash collateral paid.
(2)     Net amount represents the net amount due (to) from counterparty in the event of default based on the contractual set-off rights under the agreement. Net amount excludes any over-collateralized amounts.

 

The effect of transactions in derivative instruments to the consolidated statements of operations during the three months ended March 31, 2022 and 2021 was as follows:

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Net realized gains (losses) on forward currency exchange contracts  $1,243   $(3,292)
Net change in unrealized appreciation on forward currency exchange contracts   1,651    4,577 
Total net realized and unrealized gains on forward currency exchange contracts  $2,894   $1,285 

 

Included in total net gains (losses) on the consolidated statements of operations is net gains (losses) of ($3.2) million and ($4.1) million related to realized and unrealized gains and losses on investments, foreign currency holdings and non-investment assets and liabilities attributable to the changes in foreign currency exchange rates for the three months ended March 31, 2022 and 2021, respectively. Including the total net realized and unrealized gains (losses) on forward currency exchange contracts of $2.9 million and $1.3 million, respectively, included in the above table, the net impact of foreign currency on total net gains (losses) on the consolidated statements of operations is ($0.3) million and ($2.8) million for the three months ended March 31, 2022 and 2021, respectively.

 

 Note 8. Distributions

 

The Company’s distributions are recorded on the record date. The following table summarizes distributions declared during the three months ended March 31, 2022:

 

Date Declared  Record Date  Payment Date  Amount
Per Share		   Total
Distributions		 
February 16, 2022  March 31, 2022  April 29, 2022  $0.34   $21,951 
Total distributions declared        $0.34   $21,951 

 

The distributions declared during the three months ended March 31, 2022 were derived from investment company taxable income and net capital gain, if any.

 

62 

 

 

The Company’s distributions are recorded on the record date. The following table summarizes distributions declared during the three months ended March 31, 2021:

 

Date Declared  Record Date  Payment Date  Amount
Per Share		   Total
Distributions		 
February 18, 2021  March 31, 2021  April 30, 2021  $0.34   $21,951 
Total distributions declared        $0.34   $21,951 

  

The distributions declared during the three months ended March 31, 2021 were derived from investment company taxable income and net capital gain, if any.

 

The federal income tax characterization of distributions declared and paid for the fiscal year will be determined at fiscal year-end based upon the Company’s investment company taxable income for the full fiscal year and distributions paid during the full year.

 

Note 9. Common Stock/Capital

 

The Company has authorized 100,000,000,000 shares of its common stock with a par value of $0.001 per share. The Company has authorized 10,000,000,000 shares of its preferred stock with a par value of $0.001 per share. Shares of preferred stock have not been issued.

 

Prior to the IPO, the Company had issued 43,982,137.46 shares in the private placement of the Company’s common shares (the “Private Offering”). Each investor had entered into a separate subscription agreement relating to the Company’s common stock (the “Subscription Agreements”). Each investor had made a capital commitment to purchase shares of the Company’s common stock pursuant to the Subscription Agreements. Investors were required to make capital contributions to purchase shares of the Company’s common stock each time the Company delivered a drawdown notice, which were delivered at least 10 business days prior to the required funding date in an aggregate amount not to exceed their respective capital commitments. The number of shares to be issued to a stockholder was determined by dividing the total dollar amount of the contribution by a stockholder by the net asset value per share of the common stock as of the last day of the Company’s fiscal quarter or such other date and price per share as determined by the Board in accordance with the requirements of the 1940 Act. As of December 31, 2018, aggregate commitments relating to the Private Offering were $1.3 billion. All outstanding commitments related to these Subscription Agreements were cancelled due to the completion of the IPO on November 15, 2018. As of March 31, 2022 and December 31, 2021, BCSF Advisors, LP contributed in aggregate $8.9 million and $8.9 million to the Company and received 488,019.86 and 487,932.46 shares of the Company, respectively. At March 31, 2022 and December 31, 2021, BCSF Advisors, LP owned 0.76% and 0.76%, respectively, of the outstanding common stock of the Company.

 

On November 19, 2018, the Company closed its initial public offering (the “IPO”) issuing 7,500,000 shares of its common stock at a public offering price of $20.25 per share. Shares of common stock of the Company began trading on the New York Stock Exchange under the symbol “BCSF” on November 15, 2018. The offering generated proceeds, before expenses, of $147.3 million. All outstanding commitments were cancelled due to the completion of the initial public offering.

 

For the three months ended March 31, 2022 and 2021, there were no shares issued pursuant to the dividend reinvestment plan.

 

BCSF Investments, LLC and certain individuals, including Michael A. Ewald, the Company’s Chief Executive Officer and a Managing Director of Bain Capital Credit; Jonathan S. Lavine, Co-Managing Partner of Bain Capital, LP and Founder and Chief Investment Officer of Bain Capital Credit; John Connaughton, Co-Managing Partner of Bain Capital, LP; Jeffrey B. Hawkins, Chairman of the Company’s Board of Directors and a Managing Director of Bain Capital Credit; and Michael J. Boyle, the Company’s Vice President and Treasurer and a Managing Director of Bain Capital Credit, adopted the 10b5-1 Plan in accordance with Rules 10b5-1 and 10b-18 under the Exchange Act, under which such parties would buy up to $20 million in the aggregate of the Company’s common stock in the open market during the period beginning after four full calendar weeks after the closing of the IPO and ending on the earlier of the date on which the capital committed to the 10b5-1 has been exhausted or one year after the closing of the IPO. For the year ended December 31, 2019, 827,933 shares were purchased at a weighted average price of $18.78, inclusive of commissions, for a total cost of $15.6 million. As of February 28, 2019, zero dollars remain under the 10b5-1 Plan and no further purchases are intended under the 10b5-1 Plan.

 

On May 7, 2019, the Company’s Board of Directors authorized the Company to repurchase up to $50 million of its outstanding common stock in accordance with safe harbor rules under the Securities Exchange Act of 1934. Any such repurchases will depend upon market conditions and there is no guarantee that the Company will repurchase any particular number of shares or any shares at all. As of March 31, 2022, there have been no repurchases of common stock.

 

63 

 

 

On May 4, 2020, the Company’s Board of Directors approved a transferable subscription rights offering to our stockholders of record as of May 13, 2020. The rights entitled record stockholders to subscribe for up to an aggregate of 12,912,453 shares of our common stock. Record stockholders received one right for each share of common stock owned on the record date. The rights entitled the holders to purchase one new share of common stock for every four rights held, and record stockholders who fully exercised their rights were entitled to subscribe, subject to certain limitations and allotment rules, for additional shares that remain unsubscribed as a result of any unexercised rights. The rights were transferable and on the New York Stock Exchange under the symbol “BCSF RT”. The rights offering expired June 5, 2020. Based on the terms of the offering and the market price of the stock during the applicable period, holders of rights participating in the offering were entitled to purchase one new share of common stock for every four rights held at a subscription price of $10.2163 per share. On June 16, 2020, the Company closed its transferrable rights offering and issued 12,912,453 shares. The offering generated net proceeds, before expenses, of $129.6 million, including the underwriting discount and commissions of $2.3 million.

 

Note 10. Commitments and Contingencies

 

Commitments

 

The Company’s investment portfolio may contain debt investments that are in the form of lines of credit and unfunded delayed draw commitments, which require the Company to provide funding when requested by portfolio companies in accordance with the terms of the underlying loan agreements.

 

As of March 31, 2022, the Company had $235.1 million of unfunded commitments under loan and financing agreements as follows:

 

   Expiration Date (1)  Unfunded Commitments (2)  
Portfolio Company & Investment        
9 Story Media Group Inc. - Revolver  4/30/2026  $1 
A&R Logistics, Inc. - Revolver  5/5/2025   3,051 
Abracon Group Holding, LLC - Revolver  7/18/2024   2,833 
Allworth Financial Group, L.P. - Delayed Draw  12/23/2026   511 
Allworth Financial Group, L.P. - Revolver  12/23/2026   2,440 
Amspec Services, Inc. - Revolver  7/2/2024   4,958 
Ansira Holdings, Inc. - Revolver  12/20/2024   1,700 
Appriss Holdings, Inc. - Revolver  5/6/2027   753 
Aramsco, Inc. - Revolver  8/28/2024   1,089 
Armstrong Bidco Limited - Delayed Draw  4/30/2025   4,762 
Avalon Acquiror, Inc. - Revolver  3/10/2028   7,353 
Batteries Plus Holding Corporation - Revolver  7/6/2022   2,691 
Captain D's LLC - Revolver  12/15/2023   1,862 
CB Nike IntermediateCo Ltd - Revolver  10/31/2025   44 
Concert Golf Partners Holdco DD T/L - Delayed Draw  3/30/2029   4,201 

 

64 

 

 

 

   Expiration Date (1)   Unfunded Commitments (2)  
Concert Golf Partners Holdco R/C - Revolver  3/31/2028   2,136 
CPS Group Holdings, Inc. - Revolver  3/3/2025   4,933 
CST Buyer Company - Revolver  10/3/2025   2,190 
DC Blox Inc. - Delayed Draw  3/22/2026   10,590 
Direct Travel, Inc. - Delayed Draw  10/2/2023   2,625 
Efficient Collaborative Retail Marketing Company, LLC - Revolver  6/15/2022   2,267 
Element Buyer, Inc. - Revolver  7/19/2024   2,550 
Grammer Purchaser, Inc. - Revolver  9/30/2024   750 
Great Expressions Dental Center PC - Revolver  9/28/2022   219 
Green Street Parent, LLC - Revolver  8/27/2025   2,419 
GSP Holdings, LLC - Revolver  11/6/2025   1,813 
JHCC Holdings, LLC - Revolver  9/9/2025   1,160 
Kellstrom Commercial Aerospace, Inc. - Revolver  7/1/2025   1,493 
Mach Acquisition R/C - Revolver  10/18/2026   10,043 
Margaux Acquisition Inc. - Revolver  12/19/2024   2,872 
Margaux UK Finance Limited - Revolver  12/19/2024   656 
masLabor Revolver - Revolver  7/1/2027   1,034 
MRHT Acquisition Facility - First Lien Senior Secured Loan  7/26/2028   259 
MRI Software LLC - Revolver  2/10/2026   1,782 
MZR Buyer, LLC - Revolver  12/21/2026   5,210 
New Look (Delaware) Corporation - Delayed Draw  5/26/2028   2,005 
New Look Vision Group - Delayed Draw  5/26/2028   3,818 
New Look Vision Group - Revolver  5/26/2026   1,033 
Omni Intermediate DD T/L 2 - First Lien Senior Secured Loan  11/23/2026   504 
Omni Intermediate R/C - Revolver  11/23/2025   732 
Opus2 - Delayed Draw  5/5/2028   7,167 
Paisley Bidco Limited - Delayed Draw  11/26/2028   8,374 
Parcel2Go Acquisition Facility - Subordinated Debt  7/15/2028   36 
Premier Imaging, LLC - Delayed Draw  1/2/2025   5,235 
Refine Intermediate, Inc. - Revolver  9/3/2026   5,340 

 

65 

 

 

   Expiration Date (1)   Unfunded Commitments (2)  
Revalize, Inc. - Delayed Draw  4/15/2027   13,395 
Revalize, Inc. - Revolver  4/15/2027   503 
RoC Opco LLC - Revolver  2/25/2025   10,241 
Service Master Revolving Loan - Revolver  8/16/2027   2,612 
Service Master Term Note - First Lien Senior Secured Loan  8/16/2027   2 
Smartronix RC - Revolver  11/23/2028   6,321 
Solaray, LLC - Revolver  9/9/2022   10,484 
SunMed Group Holdings, LLC - Revolver  6/16/2027   1,032 
Superna Inc. - Delayed Draw  3/6/2028   2,631 
Superna Inc. - Revolver  3/6/2028   2,631 
ASP-r-pac Acquisition Co LLC - Revolver  12/29/2027   3,253 
Swoogo LLC - Revolver  12/9/2026   1,243 
TEI Holdings Inc. - Revolver  12/23/2025   4,070 
TGI Sport Bidco Pty Ltd - Revolver  4/30/2026   3,123 
TLC Purchaser, Inc. - Delayed Draw  10/13/2025   7,119 
TLC Purchaser, Inc. - Revolver  10/13/2025   2,492 
V Global Holdings LLC - Revolver  12/22/2025   7,885 
Ventiv Holdco, Inc. - Revolver  9/3/2025   3,407 
WCI Gigawatt Purchaser DD T/L - Delayed Draw  11/19/2027   1,609 
WCI Gigawatt Purchaser R/C - Revolver  11/19/2027   2,735 
WCI-HSG Purchaser, Inc. - Revolver  2/22/2025   378 
Whitcraft LLC - Revolver  4/3/2023   1,812 
World Insurance - Revolver  4/1/2026   861 
WSP Initial Term Loan - First Lien Senior Secured Loan  4/27/2023   1,797 
WSP Revolving Loan - Revolver  4/27/2027   402 
WU Holdco, Inc. - Revolver  3/26/2025   5,071 
YLG Holdings, Inc. - Revolver  10/31/2025   8,545 
Total First Lien Senior Secured Loans     $235,148 

 

 

 

(1)  Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.
(2)  Unfunded commitments denominated in currencies other than U.S. dollars have been converted to U.S. dollars using the applicable foreign currency exchange rate as of March 31, 2022.

 

66 

 

 

As of December 31, 2021, the Company had $234.0 million of unfunded commitments under loan and financing agreements as follows:

 

   Expiration Date (1)  Unfunded Commitments (2) 
Portfolio Company & Investment        
9 Story Media Group Inc. - Revolver  4/30/2026  $1 
A&R Logistics, Inc. - Revolver  5/5/2025   3,281 
Abracon Group Holding, LLC - Revolver  7/18/2024   2,833 
Allworth Financial Group, L.P. - Delayed Draw  12/23/2026   507 
Allworth Financial Group, L.P. - Revolver  12/23/2026   2,440 
AMI US Holdings Inc. - Revolver  4/1/2024   1,047 
Amspec Services, Inc. - Revolver  7/2/2024   4,179 
Ansira Holdings, Inc. - Revolver  12/20/2022   1,700 
Appriss Holdings, Inc. - Revolver  5/6/2027   753 
Aramsco, Inc. - Revolver  8/28/2024   3,387 
Armstrong Bidco T/L  –  First Lien Senior Secured Loan  4/30/2025   6,542 
ASP-r-pac Acquisition Co LLC  –  Revolver  12/29/2027   2,603 
Batteries Plus Holding Corporation  –  Revolver  6/30/2023   3,433 
Captain D’s LLC  –  Revolver  12/15/2023   1,862 
CPS Group Holdings, Inc.  –  Revolver  3/3/2025   4,933 
CST Buyer Company  –  Revolver  10/3/2025   2,190 
DC Blox Inc.  –  First Lien Senior Secured Loan  3/22/2026   12,781 
Direct Travel, Inc.  –  Delayed Draw  10/2/2023   2,625 
Efficient Collaborative Retail Marketing Company, LLC  –  Revolver  6/15/2022   2,267 
Element Buyer, Inc.  –  Revolver  7/19/2024   2,550 
Grammer Purchaser, Inc.  –  Revolver  9/30/2024   1,050 
Great Expressions Dental Center PC  –  Revolver  9/28/2022   215 
Green Street Parent, LLC  –  Revolver  8/27/2025   2,419 
GSP Holdings, LLC  –  Revolver  11/6/2025   2,947 
JHCC Holdings, LLC  –  Revolver  9/9/2025   1,939 
Kellstrom Commercial Aerospace, Inc.  –  Revolver  7/1/2025   3,092 
Mach Acquisition R/C  –  Revolver  10/18/2026   10,043 
Margaux Acquisition Inc.  –  Revolver  12/19/2024   2,872 
Margaux UK Finance Limited  –  Revolver  12/19/2024   675 
masLabor Revolver  –  Revolver  7/1/2027   1,034 
MRHT Acquisition Facility  –  First Lien Senior Secured Loan  7/26/2028   569 
MRI Software LLC  –  Revolver  2/10/2026   1,782 
MZR Buyer, LLC  –  Revolver  12/22/2026   5,210 
New Look (Delaware) Corporation  –  Delayed Draw  5/26/2028   2,005 
New Look Vision Group  –  Delayed Draw  5/26/2028   3,803 
New Look Vision Group  –  Revolver  5/26/2026   1,700 
Omni Intermediate DD T/L 2  –  First Lien Senior Secured Loan  11/30/2027   870 
Omni Intermediate R/C  –  Revolver  11/30/2026   549 
Opus2  –  Delayed Draw  5/5/2028   7,382 
Paisley Bidco Limited  –  Delayed Draw  11/24/2028   8,624 
Parcel2Go Acquisition Facility  –  Subordinated Debt  7/17/2028   3,731 
Refine Intermediate, Inc.  –  Revolver  9/3/2026   5,340 
Revalize, Inc.  –  Delayed Draw  4/15/2027   13,395 
Revalize, Inc.  –  Revolver  4/15/2027   1,340 
RoC Opco LLC  –  Revolver  2/25/2025   10,241 
Service Master Revolving Loan  –  Revolver  8/16/2027   3,240 
Smartronix RC  –  Revolver  11/23/2028   6,321 
Solaray, LLC  –  Revolver  9/9/2022   11,844 
SunMed Group Holdings, LLC  –  Revolver  6/16/2027   1,032 
Swoogo LLC  –  Revolver  12/9/2026   1,243 
TEI Holdings Inc.  –  Revolver  12/23/2025   4,070 
TGI Sport Bidco Pty Ltd  –  Revolver  4/30/2027   3,026 
Tidel Engineering, L.P.  –  Revolver  3/1/2023   4,250 
TLC Purchaser, Inc.  –  Delayed Draw  10/10/2025   7,119 

 

67 

 

 

   Expiration Date (1)  Unfunded Commitments (2) 
TLC Purchaser, Inc.  –  Revolver  10/13/2025   2,492 
V Global Holdings LLC  –  Revolver  12/22/2025   5,835 
Ventiv Holdco, Inc.  –  Revolver  9/3/2025   3,407 
WCI Gigawatt Purchaser DD T/L  –  Delayed Draw  11/19/2027   1,646 
WCI Gigawatt Purchaser R/C  –  Revolver  11/19/2027   3,218 
WCI-HSG Purchaser, Inc.  –  Revolver  2/24/2025   1,478 
Whitcraft LLC  –  Revolver  4/3/2023   1,812 
World Insurance  –  Revolver  4/1/2026   861 
WSP Initial Term Loan  –  First Lien Senior Secured Loan  4/27/2023   1,797 
WSP Revolving Loan  –  Revolver  4/27/2027   402 
WU Holdco, Inc.  –  First Lien Senior Secured Loan  3/26/2026   1,708 
WU Holdco, Inc.  –  Revolver  3/26/2025   3,944 
YLG Holdings, Inc.  –  Revolver  10/31/2025   8,545 
Total First Lien Senior Secured Loans     $234,031 

 

 

 

(1)  Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.
(2)  Unfunded commitments denominated in currencies other than U.S. dollars have been converted to U.S. dollars using the applicable foreign currency exchange rate as of December 31, 2021.

 

68 

 

 

Contingencies

 

In the normal course of business, the Company may enter into certain contracts that provide a variety of indemnities. The Company’s maximum exposure under these indemnities is unknown as it would involve future claims that may be made against the Company. Currently, the Company is not aware of any such claims and no such claims are expected to occur. As such, the Company does not consider it necessary to record a liability in this regard.

 

Note 11. Financial Highlights

 

The following is a schedule of financial highlights for the three months ended March 31, 2022 and 2021:

 

   For the Three months Ended March 31, 
   2022   2021 
Per share data:        
Net asset value at beginning of period  $17.04   $16.54 
Net investment income (1)    0.34    0.34 
Net realized gain (1) (7)    0.03    0.14 
Net change in unrealized appreciation (1) (2) (8)    0.15    0.01 
Net increase in net assets resulting from operations (1) (9) (10)    0.52    0.49 
Stockholder distributions from income (3)    (0.34)   (0.34)
Net asset value at end of period  $17.22   $16.69 
Net assets at end of period  $1,111,736   $1,077,806 
Shares outstanding at end of period   64,562,265.27    64,562,265.27 
Per share market value at end of period  $15.59   $14.78 
Total return based on market value (12)    4.73%   24.65%
Total return based on net asset value (4)    3.05%   2.96%
Ratios:          
Ratio of net investment income to average net assets (5) (11) (13)    8.92%   9.74%
Ratio of total net expenses to average net assets (5) (11) (13)    8.04%   9.18%
Supplemental data:          
Ratio of interest and debt financing expenses to average net assets (5) (13)    3.92%   4.49%
Ratio of expenses (without incentive fees) to average net assets (5) (11) (13)    7.74%   8.55%
Ratio of incentive fees and management fees, net of contractual and voluntary waivers, to average net assets (5) (11) (13)    3.39%   3.73%
Average principal debt outstanding  $1,314,443   $1,449,928 
Portfolio turnover (6)    3.88%   15.93%

 

 

 

(1)   The per share data was derived by using the weighted average shares outstanding during the period.
(2)   Net change in unrealized appreciation (depreciation) on investments per share may not be consistent with the consolidated statements of operations due to the timing of shareholder transactions.
(3)  The per share data for distributions reflects the actual amount of distributions declared during the period.
(4)  Total return based on net asset value is calculated as the change in net asset value per share during the period, assuming dividends and distributions, including those distributions that have been declared. Total return has not been annualized.
(5)   The computation of average net assets during the period is based on averaging net assets for the periods reported.
(6)  Portfolio turnover rate is calculated using the lesser of year-to-date sales or year-to-date purchases over the average of the invested assets at fair value for the periods reported.
(7)  Net realized gain (loss) includes net realized gain (loss) on investments, net realized gain (loss) on forward currency exchange contracts, net realized gain (loss) on foreign currency transactions, and net realized loss on extinguishment of debt.

 

(8)   Net change in unrealized appreciation (depreciation) includes net change in unrealized appreciation (depreciation) on investments, net change in unrealized appreciation (depreciation) on forward currency exchange contracts and net change in unrealized appreciation (depreciation) on foreign currency translation.

 

69 

 

 

(9)   The sum of quarterly per share amounts presented in previously filed financial statements on Form 10-Q may not equal earnings per share. This is due to changes in the number of weighted average shares outstanding and the effects of rounding.
(10)   Net increase (decrease) in net assets resulting from operations per share in these financial highlights may be different from the net increase (decrease) in net assets per share on the consolidated statements of operations due to changes in the number of weighted average shares outstanding and the effects of rounding.
(11)  The ratio of voluntary incentive fee waiver to average net assets was 0.00% and 0.00% for the three months ended March 31, 2022 and 2021, respectively (Note 5). The ratio of voluntary management fee waiver to average net assets was 0.00% and 0.00% for the three months ended March 31, 2022 and 2021, respectively (Note 5). The ratio of net investment income without the voluntary incentive fee waiver and voluntary management fee waiver to average net assets for the three months ended March 31, 2022 would be 8.92%. The ratio of net investment income without the voluntary incentive fee waiver to average net assets for the three months ended March 31, 2021 would be 9.54%. The ratio of total expenses without the voluntary incentive fee waiver and voluntary management fee waiver to average net assets for the three months ended March 31, 2022 would be 8.04%. The ratio of total expenses without the voluntary incentive fee waiver to average net assets for the three months ended March 31, 2021 would be 9.38%.
(12)   Total return based on market value (not annualized) is calculated as the change in market value per share during the period, assuming dividends and distributions, plus the declared distributions, divided by the beginning market price for the period. Total return has not been annualized.
(13)   Ratio is annualized. Incentive fees, voluntary incentive fee waivers, and voluntary management fee waivers, if any, included within the ratio are not annualized.

 

Note 12. Subsequent Events

 

The Company’s management has evaluated the events and transactions that have occurred through May 5, 2022, the issuance date of the consolidated financial statements, and noted no items requiring disclosure in this Form 10-Q or adjustment of the consolidated financial statements.

 

70 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion and other parts of this report contain forward-looking information that involves risks and uncertainties. The discussion and analysis contained in this section refers to our financial condition, results of operations and cash flows. The information contained in this section should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report. Please see “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with this discussion and analysis. Our actual results could differ materially from those anticipated by such forward-looking information due to factors discussed under “Forward-Looking Statements” appearing elsewhere in this report.

 

Overview

 

Bain Capital Specialty Finance, Inc. (the “Company”, “we”, “our” and “us”) is an externally managed specialty finance company focused on lending to middle market companies. We have elected to be regulated as a business development company (a “BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”). We are managed by BCSF Advisors, LP (our “Advisor” or “BCSF Advisors”), a subsidiary of Bain Capital Credit, LP (“Bain Capital Credit”). Our Advisor is registered as an investment adviser with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Our Advisor also provides the administrative services necessary for us to operate (in such capacity, our “Administrator” or “BCSF Advisors”). Since we commenced operations on October 13, 2016 through March 31, 2022, we have invested approximately $5,322.3 million in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. We seek to generate current income and, to a lesser extent, capital appreciation through direct originations of secured debt, including first lien, first lien/last-out, unitranche and second lien debt, investments in strategic joint ventures, equity investments and, to a lesser extent, corporate bonds.

 

On November 19, 2018, we closed our initial public offering (the “IPO”) issuing 7,500,000 shares of our common stock at a public offering price of $20.25 per share. Shares of common stock of the Company began trading on the New York Stock Exchange under the symbol “BCSF” on November 15, 2018.

 

Our primary focus is capitalizing on opportunities within our Senior Direct Lending strategy, which seeks to provide risk-adjusted returns and current income to our stockholders by investing primarily in middle-market companies with between $10.0 million and $150.0 million in annual earnings before interest, taxes, depreciation and amortization (“EBITDA”). However, we may, from time to time, invest in larger or smaller companies. We generally seek to retain effective voting control in respect of the loans or particular classes of securities in which we invest through maintaining affirmative voting positions or negotiating consent rights that allow us to retain a blocking position. We focus on senior investments with a first or second lien on collateral and strong structures and documentation intended to protect the lender. We may also invest in mezzanine debt and other junior securities, including common and preferred equity, on an opportunistic basis, and in secondary purchases of assets or portfolios but such investments are not the principal focus of our investment strategy. In addition, we may invest, from time to time, in distressed debt, debtor-in-possession loans, structured products, structurally subordinate loans, investments with deferred interest features, zero-coupon securities and defaulted securities.

 

We generate revenues primarily through receipt of interest income from the investments we hold. In addition, we generate income from various loan origination and other fees, dividends on direct equity investments and capital gains on the sales of investments. The companies in which we invest use our capital for a variety of reasons, including to support organic growth, to fund changes of control, to fund acquisitions, to make capital investments and for refinancing and recapitalizations.  

 

Investments

 

Our level of investment activity may vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity for such companies, the level of investment and capital expenditures of such companies, the general economic environment, the amount of capital we have available to us and the competitive environment for the type of investments we make. Due to the impact of COVID-19 and related measures taken to contain its spread, the future duration and breadth of the adverse impact of COVID-19 on the broader markets in which the Company invests cannot currently be accurately predicted and future investment activity of the Company will be subject to these effects and the related uncertainty.

 

As a BDC, we may not acquire any assets other than “qualifying assets” specified in the 1940 Act, unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Pursuant to rules adopted by the SEC, “eligible portfolio companies” include certain companies that do not have any securities listed on a national securities exchange and public companies whose securities are listed on a national securities exchange but whose market capitalization is less than $250 million.

 

71 

 

 

As a BDC, we may also invest up to 30% of our portfolio opportunistically in “non-qualifying” portfolio investments, such as investments in non-U.S. companies.

 

 Revenues

 

We primarily generate revenue in the form of interest income on debt investments and distributions on equity investments and, to a lesser extent, capital gains, if any, on equity securities that we may acquire in portfolio companies. Some of our investments may provide for deferred interest payments or payment-in-kind (“PIK”) interest. The principal amount of the debt investments and any accrued but unpaid interest generally becomes due at the maturity date. In addition, we may generate revenue in the form of commitment, origination, structuring or diligence fees, fees for providing managerial assistance and consulting fees. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts into or against income over the life of the loan. We record contractual prepayment premiums on loans and debt securities as interest income.

 

Our debt investment portfolio consists of primarily floating rate loans. As of March 31, 2022 and December 31, 2021, 96.3% and 97.8%, respectively, of our debt investments, based on fair value, bore interest at floating rates, which may be subject to interest rate floors. Variable-rate investments subject to a floor generally reset periodically to the applicable floor, only if the floor exceeds the index. Trends in base interest rates, such as LIBOR, may affect our net investment income over the long term. In addition, our results may vary from period to period depending on the interest rates of new investments made during the period compared to investments that were sold or repaid during the period; these results reflect the characteristics of the particular portfolio companies that we invested in or exited during the period and not necessarily any trends in our business or macroeconomic trends.

 

Dividend income on preferred equity investments is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity investments is recorded on the record date for private portfolio companies and on the ex-dividend date for publicly traded portfolio companies.

 

 Expenses

 

Our primary operating expenses include the payment of fees to our Advisor under the Amended Advisory Agreement, our allocable portion of overhead expenses under the administration agreement (the “Administration Agreement”) and other operating costs, including those described below. The Base Management Fee and Incentive Fee compensate our Advisor for its work in identifying, evaluating, negotiating, closing and monitoring our investments. We bear all other out-of-pocket costs and expenses of our operations and transactions, including:

 

  • our operational and organizational cost;

 

  • the costs of any public offerings of our common stock and other securities, including registration and listing fees;

 

  • costs of calculating our net asset value (including the cost and expenses of any third-party valuation services);

 

  • fees and expenses payable to third parties relating to evaluating, making and disposing of investments, including our Advisor’s or its affiliates’ travel expenses, research costs and out-of-pocket fees and expenses associated with performing due diligence and reviews of prospective investments, monitoring our investments and, if necessary, enforcing our rights;

 

  • interest payable on debt and other borrowing costs, if any, incurred to finance our investments;

 

  • costs of effecting sales and repurchases of our common stock and other securities;

 

  • distributions on our common stock;

 

  • transfer agent and custody fees and expenses;

 

  • the allocated costs incurred by the Administrator in providing managerial assistance to those portfolio companies that request it;

 

  • other expenses incurred by BCSF Advisors or us in connection with administering our business, including payments made to third-party providers of goods or services;

 

72 

 

 

  • brokerage fees and commissions;

 

  • federal and state registration fees;

 

  • U.S. federal, state and local taxes;

 

  • Independent Director fees and expenses;

 

  • costs associated with our reporting and compliance obligations under the 1940 Act and applicable U.S. federal and state securities laws;

 

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

 

  • costs of holding stockholder meetings;

 

  • our fidelity bond;

 

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

 

  • litigation, indemnification and other non-recurring or extraordinary expenses;

 

  • direct costs and expenses of administration and operation, including printing, mailing, long distance telephone, staff, audit, compliance, tax and legal costs;

 

  • fees and expenses associated with marketing efforts;

 

  • dues, fees and charges of any trade association of which we are a member; and

 

  • all other expenses reasonably incurred by us or the Administrator in connection with administering our business.

 

To the extent that expenses to be borne by us are paid by BCSF Advisors, we will generally reimburse BCSF Advisors for such expenses. To the extent the Administrator outsources any of its functions, the Company will pay the fees associated with such functions on a direct basis without profit to the Administrator. We will also reimburse the Administrator for its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including certain rent and compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and any of their respective staff who provide services to us, operations staff who provide services to us, internal audit staff, if any, to the extent internal audit performs a role in our Sarbanes-Oxley internal control assessment and fees paid to third-party providers for goods or services. Our allocable portion of overhead will be determined by the Administrator, which expects to use various methodologies such as allocation based on the percentage of time certain individuals devote, on an estimated basis, to our business and affairs, and will be subject to oversight by our Board of Directors (our “Board”). We incurred expenses related to the Administrator of $0.0 million and $0.0 million for the three months ended March 31, 2022 and 2021, respectively, which is included in other general and administrative expenses on the consolidated statements of operations. The sub-administrator is paid its compensation for performing its sub-administrative services under the sub-administration agreement. We incurred expenses related to the sub-administrator of $0. 2 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively which is included in other general and administrative expenses on the consolidated statements of operations. BCSF Advisors will not be reimbursed to the extent that such reimbursements would cause any distributions to our stockholders to constitute a return of capital. All of the foregoing expenses are ultimately borne by our stockholders.

 

Leverage

 

We may borrow money from time to time. However, our ability to incur indebtedness (including by issuing preferred stock), is limited by applicable regulations such that our asset coverage, as defined in the 1940 Act, must equal at least 150%. In determining whether to borrow money, we will analyze the maturity, covenant package and rate structure of the proposed borrowings as well as the risks of such borrowings compared to our investment outlook. As of March 31, 2022, the Company’s asset coverage was 201%.

 

73 

 

 

Recent Events

 

On February 24, 2022, Russia launched a full-scaled military invasion of Ukraine. In response, countries worldwide, including the United States, have imposed sanctions against Russia on certain businesses and individuals, including, but not limited to, those in the banking, import and export sectors. This invasion has led, is currently leading, and for an unknown period of time will continue to lead to disruptions in local, regional, national, and global markets and economies affected thereby. These disruptions caused by the invasion have included, and may continue to include, political, social, and economic disruptions and uncertainties that may affect our business operations or the business operations of our portfolio companies.

 

Investment Decision Process

 

The Advisor’s investment process can be broken into four processes: (1) Sourcing and Idea Generation, (2) Investment Diligence & Recommendation, (3) Credit Committee Approval and Portfolio Construction and (4) Portfolio & Risk Management.

 

Sourcing and Idea Generation

 

The investment decision-making process begins with sourcing ideas. Bain Capital Credit’s Private Credit Group interacts with over 1,500 global contacts as a means to generate middle market investment opportunities. Our Advisor also seeks to leverage the contacts of Bain Capital Credit’s industry groups, Trading Desk, Portfolio Group and Restructuring team, including private equity firms, banks and a variety of advisors and other intermediaries.

 

Investment Diligence & Recommendation

 

Our Advisor utilizes Bain Capital Credit’s bottom-up approach to investing, and it starts with the due diligence performed by its Private Credit Group. The group works with the close support of Bain Capital Credit’s industry groups. This diligence process typically begins with a detailed review of an offering memorandum as well as Bain Capital Credit’s own independent diligence efforts, including in-house materials and expertise, third-party independent research and interviews, and hands-on field checks where appropriate. For deals that progress beyond an initial stage, the team will usually schedule one or more meetings with company management, facilities visits and also meetings with the sponsor in order to ask more detailed questions and to better understand the sponsor’s view of the business and plans for it going forward. The team’s diligence work is summarized in investment memoranda and accompanying credit packs. Work product also includes full models and covenant analysis.

 

74 

 

 

 

Credit Committee Approval and Portfolio Construction

 

If the reviewing team deems an investment worthy of serious consideration, it generally must be presented to the credit committee, which is comprised of at least three experienced credit professionals, who are selected based on strategy and geography. A portfolio manager leads the decision making process for each investment and engages the credit committee throughout the investment process in order to prioritize and direct the underwriting of each potential investment opportunity. For middle market holdings, the path to exit an investment is often discussed at credit committee meetings, including restructurings, acquisitions and sale to strategic buyers. Since most middle market investments are illiquid, exits are driven by a sale of the portfolio company or a refinancing of the portfolio company’s debt.

 

Portfolio & Risk Management

 

Our Advisor utilizes Bain Capital Credit’s Private Credit Group for the daily monitoring of its respective credits after an investment has been made. Our Advisor believes that the ongoing monitoring of financial performance and market developments of portfolio investments is critical to successful investment management. Accordingly, our Advisor is actively involved in an on-going portfolio review process and attends board meetings. To the extent a portfolio investment is not meeting our Advisor’s expectations, our Advisor takes corrective action when it deems appropriate, which may include raising interest rates, gaining a more influential role on its board, taking warrants and, where appropriate, restructuring the balance sheet to take control of the company. Our Advisor will utilize the Bain Capital Credit Risk and Oversight Committee. The Risk and Oversight Committee is responsible for monitoring and reviewing risk management, including portfolio risk, counterparty risk and firm-wide risk issues. In addition to the methods noted above, there are a number of proprietary methods and tools used through all levels of Bain Capital Credit to manage portfolio risk.

 

Environmental, Social and Governance

 

Our Advisor believes that environmental, social, and governance (ESG) management helps to create lasting impact for all of its stakeholder groups, including investors, portfolio companies, employees and communities. ESG risks can have a negative impact on an issuer’s ability to meet its financial obligations. Therefore, strong ESG management aligns with our Advisor’s goal to seek and generate attractive risk-adjusted returns with the capital it invests. Our Advisor considers ESG factors throughout its investment decision-making process. These factors include, but are not limited to, applying a negative screen to avoid investing in companies with outsized ESG risks; examining the impact a company has on society and the environment during the diligence process; seeking to consider ESG factors from a company-specific and sector-wide perspective; and engaging companies via proxy voting, corporate actions and board seats, where applicable.

 

Portfolio and Investment Activity

 

During the three months ended March 31, 2022, we invested $374.9 million, including PIK, in 48 portfolio companies, and had $521.0 million in aggregate amount of principal repayments and sales, resulting in a net decrease in investments of $146.1 million for the period. Of the $374.9 million invested during the three months ended March 31, 2022, $25.8 million was related to drawdowns on delayed draw term loans and revolvers of our portfolio companies.

 

During the three months ended March 31, 2021, we invested $386.3 million, including PIK, in 30 portfolio companies, and had $549.4 million in aggregate amount of principal repayments and sales, resulting in a net increase in investments of $163.1 million for the period. Of the $386.3 million invested during the three months ended March 31, 2021, $25.7 million was related to drawdowns on delayed draw term loans and revolvers of our portfolio companies.

 

75 

 

 

 The following table shows the composition of the investment portfolio and associated yield data as of March 31, 2022 (dollars in thousands):

 

   As of March 31, 2022 
                   Weighted Average
Yield (1)
at		 
   Amortized Cost   Percentage of
Total Portfolio		   Fair Value   Percentage of
Total Portfolio		   Amortized
Cost		   Market
Value		 
First Lien Senior Secured Loans  $1,557,724    71.8%  $1,517,163    70.4%   7.4%   7.6%
Equity Interest   199,422    9.2    204,417    9.5    8.9    9.9 
Subordinated Note Investment Vehicles (2)    169,412    7.8    169,412    7.9    9.2    9.2 
Second Lien Senior Secured Loans   112,625    5.2    111,126    5.2    9.9    10.0 
Preferred Equity   43,443    2.0    60,980    2.8    10.0    9.7 
Equity Interest Investment Vehicles (1)   47,703    2.2    51,855    2.4    11.4    10.4 
Subordinated Debt   38,325    1.8    39,117    1.8    11.5    11.3 
Warrants   478    0.0    592    0.0    N/A    N/A 
Preferred Equity Interest in Investment Vehicles (2)   10    0.0    10    0.0    N/A    N/A 
Total  $2,169,142    100.0%  $2,154,672    100.0%   7.9%   8.1%

 

 

(1)  Weighted average yields are computed as (a) the annual stated interest rate or yield earned on the relevant accruing debt and other income producing securities, divided by (b) the total relevant investments at amortized cost or at fair value, as applicable. The weighted average yield does not represent the total return to our stockholders.
(2)  Represents debt and equity investment in ISLP and SLP.

 

The following table shows the composition of the investment portfolio and associated yield data as of December 31, 2021 (dollars in thousands):

 

   As of December 31, 2021 
                   Weighted Average
Yield (1)
at		 
   Amortized Cost   Percentage of
Total Portfolio		   Fair Value   Percentage of
Total Portfolio		   Amortized
Cost		   Market
Value		 
First Lien Senior Secured Loans  $1,807,805    78.2%  $1,774,675    77.5%   7.3%   7.4%
Equity Interest   156,399    6.8    151,844    6.6    7.9    9.7 
Subordinated Note Investment Vehicles (2)    125,437    5.5    125,437    5.5    9.0    9.0 
Second Lien Senior Secured Loans   120,058    5.2    118,561    5.2    9.8    9.9 
Preferred equity   42,452    1.8    53,991    2.4    10.0    9.5 
Equity Interest in Investment Vehicles (2)    39,596    1.7    44,444    1.9    8.4    7.5 
Subordinated Debt   19,635    0.8    20,027    0.9    11.4    11.2 
Warrants   2    0.0    126    0.0    N/A    N/A 
Total  $2,311,384    100.0%  $2,289,105    100.0%   7.6%   7.8%

 

 

(1)  Weighted average yields are computed as (a) the annual stated interest rate or yield earned on the relevant accruing debt and other income producing securities, divided by (b) the total relevant investments at amortized cost or at fair value, as applicable. The weighted average yield does not represent the total return to our stockholders.
(2)  Represents debt and equity investment in ISLP.

 

76 

 

 

The following table presents certain selected information regarding our investment portfolio as of March 31, 2022:

 

   As of
March 31, 2022		 
Number of portfolio companies   115 
Percentage of debt bearing a floating rate (1)    96.3%
Percentage of debt bearing a fixed rate (1)    3.7%

 

 

(1)   Measured on a fair value basis.

 

The following table presents certain selected information regarding our investment portfolio as of December 31, 2021:

 

   As of
December 31, 2021		 
Number of portfolio companies   106 
Percentage of debt bearing a floating rate (1)    97.8%
Percentage of debt bearing a fixed rate (1)    2.2%

 

 

(1)   Measured on a fair value basis.

 

The following table shows the amortized cost and fair value of our performing and non-accrual investments as of March 31, 2022 (dollars in thousands):

 

   As of March 31, 2022 
   Amortized Cost   Percentage at
Amortized
Cost		   Fair Value   Percentage at
Fair Value		 
Performing  $2,169,142    100.0%  $2,154,672    100.0%
Non-accrual   —    0.0    —    0.0 
Total  $2,169,142    100.0%  $2,154,672    100.0%

 

The following table shows the amortized cost and fair value of our performing and non-accrual investments as of December 31, 2021 (dollars in thousands):

 

   As of December 31, 2021 
   Amortized Cost   Percentage at
Amortized
Cost		   Fair Value   Percentage at
Fair Value		 
Performing  $2,311,384    100.0%  $2,289,105    100.0%
Non-accrual   —    0.0    —    0.0 
Total  $2,311,384    100.0%  $2,289,105    100.0%

 

Loans or debt securities are placed on non-accrual status when there is reasonable doubt that principal or interest will be collected. Accrued interest generally is reversed when a loan or debt security is placed on non-accrual status. Interest payments received on non-accrual loans or debt securities may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans and debt securities are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. We may make exceptions to this treatment if the loan has sufficient collateral value and is in the process of collection. As of March 31, 2022, there were no loans placed on non-accrual in the Company’s portfolio. As of December 31, 2021, there were no loans placed on non-accrual in the Company’s portfolio.

 

77 

 

 

The following table shows the amortized cost and fair value of the investment portfolio, cash and cash equivalents and foreign cash as of March 31, 2022 (dollars in thousands):

 

   As of March 31, 2022 
   Amortized Cost   Percentage of
Total		   Fair Value   Percentage of
Total		 
Cash and cash equivalents  $55,963    2.5%  $55,963    2.5%
Foreign cash   24,844    1.1    24,844    1.1 
Restricted cash   34,032    1.5    34,032    1.5 
First Lien Senior Secured Loans   1,557,724    68.2    1,517,163    66.8 
Equity Interest   199,422    8.7    204,417    9.0 
Subordinated Note in Investment Vehicles (1)    169,412    7.4    169,412    7.5 
Second Lien Senior Secured Loans   112,625    4.9    111,126    4.9 
Preferred Equity   47,703    2.1    60,980    2.7 
Equity Interest Investment Vehicles (1)   43,443    1.9    51,855    2.3 
Subordinated Debt   38,325    1.7    39,117    1.7 
Warrants   478    0.0    592    0.0 
Preferred Equity Interests in Investment Vehicles (1)    10    0.0    10    0.0 
Total  $2,283,981    100.0%  $2,269,511    100.0%

 

 

(1)   Represents debt and equity investment in ISLP and SLP

 

The following table shows the amortized cost and fair value of the investment portfolio, cash and cash equivalents and foreign cash as of December 31, 2021 (dollars in thousands):

 

   As of December 31, 2021  
   Amortized Cost  Percentage of
Total		   Fair Value   Percentage of
Total		 
Cash and cash equivalents  $87,443    3.5%  $87,443    3.5%
Foreign cash   30,877    1.2    29,979    1.2 
Restricted cash and cash equivalents   86,159    3.4    86,159    3.5 
First Lien Senior Secured Loans   1,807,805    71.9    1,774,675    71.2 
Equity Interest   156,399    6.1    151,844    6.1 
Subordinated Note Investment Vehicles (1)    125,437    5.0    125,437    5.0 
Second Lien Senior Secured Loans   120,058    4.8    118,561    4.7 
Preferred Equity   42,452    1.7    53,991    2.2 
Equity Interest Investment Vehicles (1)    39,596    1.6    44,444    1.8 
Subordinated Debt   19,635    0.8    20,027    0.8 
Warrants   2    0.0    126    0.0 
Total  $ 2,515,863    100.0%  $ 2,492,686    100.0%

 

 

(1)   Represents debt and equity investment in ISLP

 

78 

 

 

The following table shows the composition of the investment portfolio by industry, at amortized cost and fair value as of March 31, 2022 (with corresponding percentage of total portfolio investments) (dollars in thousands):

   As of March 31, 2022 
   Amortized Cost   Percentage of
Total Portfolio		   Fair Value   Percentage of
Total Portfolio		 
Aerospace & Defense  $317,801    14.8%  $299,223    13.8%
Services: Business   252,382    11.6    249,548    11.5 
Investment Vehicles (2)    217,125    10.0    221,277    10.3 
High Tech Industries   190,399    8.8    190,481    8.8 
Consumer Goods: Non-Durable   139,213    6.4    141,217    6.6 
Transportation: Cargo   85,257    3.9    89,140    4.1 
Automotive   83,261    3.8    82,738    3.8 
Healthcare & Pharmaceuticals   82,673    3.8    80,994    3.8 
Consumer Goods: Durable   81,927    3.8    76,386    3.5 
Transportation: Consumer   81,494    3.8    71,221    3.3 
Energy: Oil & Gas   54,672    2.5    69,769    3.2 
Wholesale   62,627    2.9    66,522    3.1 
Hotel, Gaming & Leisure   65,457    3.0    64,079    3.0 
Retail   61,329    2.8    60,910    2.8 
Construction & Building   60,712    2.8    58,504    2.7 
FIRE: Insurance (1)    51,862    2.4    52,408    2.4 
FIRE: Finance (1)    46,879    2.2    47,052    2.2 
Media: Diversified & Production   40,315    1.9    38,911    1.8 
Media: Advertising, Printing & Publishing   51,287    2.4    37,911    1.8 
Telecommunications   33,421    1.5    34,047    1.6 
Services: Consumer   30,729    1.4    31,255    1.5 
Beverage, Food & Tobacco   7,563    0.3    19,740    0.9 
Capital Equipment   18,601    0.9    18,487    0.9 
Chemicals, Plastics & Rubber   13,922    0.6    14,391    0.7 
Containers, Packaging & Glass   13,807    0.6    14,139    0.7 
Consumer Goods: Wholesale   8,847    0.4    8,008    0.4 
Banking   7,759    0.4    7,917    0.4 
Hospitality Holdings   5,000    0.2    5,587    0.3 
Media: Broadcasting and Subscription   2,821    0.1    2,810    0.1 
Total  $2,169,142    100.0%  $2,154,672    100.0%

  

(1) Finance, Insurance, and Real Estate (“FIRE”).

(2) Represents debt and equity investment in ISLP and SLP.

 

79 

 

 

The following table shows the composition of the investment portfolio by industry, at amortized cost and fair value as of December 31, 2021 (with corresponding percentage of total portfolio investments) (dollars in thousands):

 

   As of December 31, 2021 
   Amortized Cost   Percentage of
Total Portfolio		   Fair Value   Percentage of
Total Portfolio		 
Aerospace & Defense  $309,458    13.4%  $282,598    12.3%
Services: Business   226,035    9.8    225,437    9.8 
High Tech Industries   182,811    7.9    183,069    8.0 
Consumer Goods: Non-Durable   179,733    7.8    182,063    8.0 
Investment Vehicles (2)    165,033    7.1    169,881    7.4 
Transportation: Cargo   103,012    4.5    106,458    4.7 
Healthcare & Pharmaceuticals   102,116    4.4    100,771    4.4 
Automotive   87,597    3.8    88,555    3.9 
Retail   83,036    3.6    83,064    3.6 
Wholesale   77,737    3.4    80,070    3.5 
Energy: Oil & Gas   69,588    3.0    79,548    3.5 
Consumer Goods: Durable   83,903    3.6    76,575    3.3 
Transportation: Consumer   80,027    3.5    69,040    3.0 
Construction & Building   70,256    3.0    68,570    3.0 
Capital Equipment   65,129    2.8    64,841    2.8 
FIRE: Insurance   62,165    2.7    63,123    2.8 
Hotel, Gaming & Leisure   53,232    2.3    51,956    2.3 
Media: Diversified & Production   46,420    2.0    44,835    2.0 
Telecommunications   40,938    1.8    41,570    1.8 
Services: Consumer   40,467    1.8    41,236    1.8 
Media: Advertising, Printing & Publishing   50,389    2.2    39,459    1.7 
Containers, Packaging & Glass   27,379    1.2    27,378    1.2 
Chemicals, Plastics & Rubber   26,135    1.1    26,863    1.2 
FIRE: Finance (1)    24,245    1.0    24,452    1.1 
Beverage, Food & Tobacco   7,563    0.3    19,755    0.9 
Banking   18,370    0.8    18,690    0.8 
Consumer Goods: Wholesale   14,870    0.6    14,827    0.6 
Media: Broadcasting and Subscription   8,740    0.4    8,979    0.4 
Hospitality Holdings   5,000    0.2    5,442    0.2 
Total  $2,311,384    100.0%  $2,289,105    100.0%

 

 

(1) Finance, Insurance, and Real Estate (“FIRE”).

(2) Represents debt and equity investment in ISLP.

 

80 

 

 

Our Advisor monitors our portfolio companies on an ongoing basis. It monitors the financial trends of each portfolio company to determine if they are meeting their respective business plans and to assess the appropriate course of action for each company. The Advisor has several methods of evaluating and monitoring the performance and fair value of our investments, which may include the following:

 

  • assessment of success in adhering to the portfolio company’s business plan and compliance with covenants;

 

  • periodic or regular contact with portfolio company management and, if appropriate, the financial or strategic sponsor to discuss financial position, requirements and accomplishments;

 

  • comparisons to our other portfolio companies in the industry, if any;

 

  • attendance at and participation in board meetings or presentations by portfolio companies; and

 

  • review of monthly and quarterly financial statements and financial projections of portfolio companies.

 

Our Advisor rates the investments in our portfolio at least quarterly and it is possible that the rating of a portfolio investment may be reduced or increased over time. For investments rated 3 or 4, our Advisor enhances its level of scrutiny over the monitoring of such portfolio company. Our internal performance ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments.

 

  • An investment is rated 1 if, in the opinion of our Advisor, it is performing above underwriting expectations, and the business trends and risk factors are generally favorable, which may include the performance of the portfolio company or the likelihood of a potential exit.

 

  • An investment is rated 2 if, in the opinion of our Advisor, it is performing as expected at the time of our underwriting and there are generally no concerns about the portfolio company’s performance or ability to meet covenant requirements, interest payments or principal amortization, if applicable. All new investments or acquired investments in new portfolio companies are initially given a rating of 2.

 

  • An investment is rated 3 if, in the opinion of our Advisor, the investment is performing below underwriting expectations and there may be concerns about the portfolio company’s performance or trends in the industry, including as a result of factors such as declining performance, non-compliance with debt covenants or delinquency in loan payments (but generally not more than 180 days past due).

 

  • An investment is rated 4 if, in the opinion of our Advisor, the investment is performing materially below underwriting expectations. For debt investments, most of or all of the debt covenants are out of compliance and payments are substantially delinquent. Investments rated 4 are not anticipated to be repaid in full, if applicable, and there is significant risk that we may realize a substantial loss on our investment.

 

The following table shows the composition of our portfolio on the 1 to 4 rating scale as of March 31, 2022 (dollars in thousands):

 

   As of March 31, 2022 
Investment Performance Rating  Fair
Value		   Percentage of
Total		   Number of
Companies(1)		   Percentage of
Total		 
1  $30,836    1.5%   3    2.6%
2   1,939,645    90.0    105    91.3 
3   184,191    8.5    7    6.1 
4   —    0.0    —    0.0 
Total  $2,154,672    100.0%   115    100.0%

 

 

(1)  Number of investment rated companies may not agree to total portfolio companies due to investments across investment types and structures.

 

81 

 

 

The following table shows the composition of our portfolio on the 1 to 4 rating scale as of December 31, 2021 (dollars in thousands):

 

   As of December 31, 2021 
Investment Performance Rating  Fair
Value		   Percentage of
Total		   Number of
Companies(1)		   Percentage of
Total		 
1  $42,233    1.9%   4    3.8%
2   2,017,059    88.1    95    89.6 
3   229,813    10.0    7    6.6 
4   —    0.0    —    0.0 
Total  $2,289,105    100.0%   106    100.0%

 

 

(1)  Number of investment rated companies may not agree to total portfolio companies due to investments across investment types and structures.

 

International Senior Loan Program, LLC

 

On February 9, 2021, the Company and Pantheon ("Pantheon"), a leading global alternative private markets manager, formed the International Senior Loan Program, LLC (“ISLP”), an unconsolidated joint venture. ISLP invests primarily in non-US first lien senior secured loans. ISLP was formed as a Delaware limited liability company. The Company and Pantheon committed to initially provide $138.3 million of debt and $46.1 million of equity capital, to ISLP. Equity contributions will be called from each member on a pro-rata basis, based on their equity commitments. Pursuant to the terms of the transaction, Pantheon invested $50.0 million to acquire a 29.5% stake in ISLP. The Company contributed debt investments of $317.1 million for a 70.5% stake in ISLP, and received a one-time gross distribution of $190.2 million in cash in consideration of contributing such investments. As of March 31, 2022, the Company’s investment in ISLP consisted of subordinated notes of $133.6 million, and equity interests of $46.3 million. As of December 31, 2021, the Company’s investment in ISLP consisted of subordinated notes of $125.4 million, and equity interests of $44.4 million

 

As of March 31, 2022, the Company had commitments with respect to their equity and subordinated note interests of ISLP in the aggregate amount of $249.3 million. The Company has contributed $178.2 million in capital and has $71.1 million in unfunded capital contributions. As of March 31, 2022, Pantheon had commitments with respect to their equity and subordinated note interests of ISLP in the aggregate amount of $103.9 million. Pantheon has contributed $69.2 million in capital and has $34.7 million in unfunded capital contributions.

 

As of December 31, 2021, the Company had commitments with respect to their equity and subordinated note interests of ISLP in the aggregate amount of $189.5 million. The Company has contributed $165.7 million in capital and has $23.8 million in unfunded capital contributions. As of March 31, 2022, Pantheon had commitments with respect to their equity and subordinated note interests of ISLP in the aggregate amount of $78.9 million. Pantheon has contributed $69.8 million in capital and has $9.1 million in unfunded capital contributions.

 

82 

 

 

In future periods, the Company may sell certain of its investments or a participating interest in certain of its investments to ISLP. Since inception, the Company has sold $607.2 million of its investments to ISLP. The sale of the investments met the criteria set forth in ASC 860, Transfers and Servicing for treatment as a sale.

 

The Company has determined that ISLP is an investment company under ASC, Topic 946, Financial Services—Investment Companies; however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a wholly or substantially owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its investments in ISLP as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control ISLP due to the allocation of voting rights among ISLP members. The Company measures the fair value of ISLP in accordance with ASC Subtopic 820, Fair Value Measurements and Disclosures, using the net asset value (or its equivalent) as a practical expedient. The Company and Pantheon each appointed two members to ISLP’s four-person Member Designees’ Committee. All material decisions with respect to ISLP, including those involving its investment portfolio, require unanimous approval of a quorum of Member Designees’ Committee.

 

As of March 31, 2022, ISLP had $519.8 million in debt investments, at fair value. As of December 31, 2021, ISLP had $501.5 million in debt investments, at fair value.

 

Additionally, ISLP, through a wholly-owned subsidiary, has entered into a $300.0 million senior secured revolving credit facility which bears interest at LIBOR (or an alternative risk-free interest rate index) plus 225 basis points with JP Morgan through its wholly-owned subsidiary, subject to leverage and borrowing base restrictions (the “ISLP Credit Facility”). The maturity date of the ISLP Credit Facility is February 9, 2026. On February 4, 2022, ISLP entered into the second amended and restated credit agreement, which among other things increased the financing limit from $300.0 million to $350.0 million. As of March 31, 2022, the ISLP Credit Facility had $304.9 million of outstanding debt under the credit facility. As of December 31, 2021 the ISLP Credit Facility had $272.1 million of outstanding debt under the credit facility. As of March 31, 2022, the effective rate on the ISLP Credit Facility was 2.5% per annum. As of December 31, 2021, the effective rate on the ISLP Credit Facility was 2.5% per annum.

 

83 

 

 

Below is a summary of ISLP’s portfolio at fair value:

 

   As of   As of 
   March 31,
2022		   December 31, 2021 
Total investments  $519,752   $501,545 
Weighted average yield on investments   6.5%   6.5%
Number of borrowers in ISLP   27    27 
Largest portfolio company investment  $43,787   $40,071 
Total of five largest portfolio company investments  $171,531   $171,291 
Unfunded commitments  $4,502   $105 

 

84 

 

 

Below is a listing of ISLP’s individual investments as of:

 

International Senior Loan Program, LLC

Consolidated Schedule of Investments

As of March 31, 2022

(unaudited)

 

Currency  Industry  Portfolio Company  Investment Type Spread Above Index   Interest Rate   Maturity Date Currency  Principal/Shares  Cost   Market Value  % of Members Equity 
Australian Dollar                                         
   Healthcare & Pharmaceuticals  Datix Bidco Limited  First Lien Senior Secured Loan   BBSW+ 4.00%    4.25%  4/28/2025  AUD  4,169    3,290    3,125     
                          Healthcare & Pharmaceuticals Total    3,290    3,125   4.8%
                                          
   Media: Advertising, Printing & Publishing  TGI Sport Bidco Pty Ltd  First Lien Senior Secured Loan   BBSY+ 7.00%    7.50%  4/30/2026  AUD  9,610    6,898    6,843     
                          Media: Advertising, Printing & Publishing Total    6,898    6,843   10.6%
                                          
   Services: Consumer  Zeppelin BidCo Pty Limited  First Lien Senior Secured Loan   BBSY+ 5.00%    5.19%  6/28/2024  AUD  20,415    16,057    15,303     
                          Services: Consumer Total    16,057    15,303   23.7%
                                          
                          Australian Dollar Total    26,245    25,271   39.1%
                                          
British Pound                                      
   Healthcare & Pharmaceuticals  Datix Bidco Limited  Second Lien Senior Secured Loan   L+ 7.75%    8.21%  4/27/2026  £  12,013    16,916    15,783     
      Datix Bidco Limited  First Lien Senior Secured Loan - Revolver   SONIA+ 4.50%    4.96%  10/28/2024  £  963    1,323    1,265     
                          Healthcare & Pharmaceuticals Total    18,239    17,048   26.4%
                                          
   High Tech Industries  Armstrong Bidco Limited  First Lien Senior Secured Loan   SONIA+ 5.25%    6.06%  4/30/2025  £  5,602    7,711    7,361     
                          High Tech Industries Total    7,711    7,361   11.4%
                                          
   Media: Diversified & Production  International Entertainment Investments Limited  First Lien Senior Secured Loan   SONIA+ 4.75%    5.06%  5/31/2023  £  8,734    12,255    11,440     
                          Media: Diversified & Production Total    12,255    11,440   17.7%
                                          
   Services: Business  Comet Bidco Limited  First Lien Senior Secured Loan   SONIA+ 5.25%    5.42%  9/30/2024  £  7,362    9,528    8,970     
      Brook Bidco Facility B  First Lien Senior Secured Loan   L+ 6.00%    6.31%  7/7/2028  £  21,167    28,821    27,811     
      Brook Bidco I T/L Capex and Acquisition 1  First Lien Senior Secured Loan   SONIA+ 6.00%    6.75%  7/7/2028  £  4,600    6,168    6,044     
      Brook Bidco I T/L Capex and Acquisition 2  First Lien Senior Secured Loan   SONIA+ 6.00%    6.75%  7/7/2028  £  6,400    8,582    8,409     
      Opus2  First Lien Senior Secured Loan   SONIA+ 5.50%    5.55%  5/5/2028  £  12,151    16,341    15,966     
      Parcel2Go Acquisition Facility  First Lien Senior Secured Loan   SONIA+ 5.75%    6.20%  7/15/2028  £  6,554    5,085    4,982     
      Parcel2Go Facility B  First Lien Senior Secured Loan   SONIA+ 5.75%    6.44%  7/15/2028  £  12,395    16,634    16,204     
                          Services: Business Total    91,159    88,386   136.9%
                                          
   Services: Consumer  Surrey Bidco Limited  First Lien Senior Secured Loan   SONIA+ 6.00% PIK    6.50%  5/11/2026  £  5,179    6,745    5,726     
                          Services: Consumer Total    6,745    5,726   8.9%
                                          
                          British Pound Total    136,109    129,961   201.3%
                                          
Canadian Dollar                                      
   Media: Diversified & Production  9 Story Media Group Inc.  First Lien Senior Secured Loan - Revolver  -   -   4/30/2026  CAD       -    -     
      9 Story Media Group Inc.  First Lien Senior Secured Loan   CDOR+ 5.50%    6.25%  4/30/2026  CAD  6,851    5,439    5,489     
                          Media: Diversified & Production Total    5,439    5,489   8.5%
                                          
   Retail  New Look Vision Group  First Lien Senior Secured Loan   CDOR+ 5.25%    6.25%  5/26/2028  CAD  18,011    14,723    14,429     
                          Retail Total    14,723    14,429   22.3%
                                          
                          Canadian Dollar Total    20,162    19,918   30.8%
                                          
Danish Krone                                      
   High Tech Industries  VPARK BIDCO AB  First Lien Senior Secured Loan   CIBOR+ 4.00%    4.75%  3/10/2025  DKK  56,429    9,231    8,407     
                          High Tech Industries Total    9,231    8,407   13.0%
                                          
                          Danish Krone Total    9,231    8,407   13.0%
                                          
European Currency                                         
   FIRE: Insurance  MRHT Facility A  First Lien Senior Secured Loan   EURIBOR+ 5.50%    5.50%  7/26/2028  €  21,335    24,529    23,643     
                          FIRE: Insurance Total    24,529    23,643   36.6%
                                          
   Healthcare & Pharmaceuticals  Mertus 522. GmbH  First Lien Senior Secured Loan   EURIBOR+ 6.25%    6.25%  5/28/2026  €  12,999    15,686    14,406     
      Mertus 522. GmbH  First Lien Senior Secured Loan   EURIBOR+ 6.25%    6.25%  5/28/2026  €  22,244    26,841    24,650     
      Pharmathen Bidco B.V.  First Lien Senior Secured Loan   EURIBOR+ 5.75%    5.75%  10/25/2028  €  13,492    14,933    14,578     
      Pharmathen Bidco B.V.  First Lien Senior Secured Loan   EURIBOR+ 5.75%    5.75%  10/25/2028  €  2,453    2,713    2,651     
                          Healthcare & Pharmaceuticals Total    60,173    56,285   87.2%
                                          
   Media: Diversified & Production  9 Story Media Group Inc.  First Lien Senior Secured Loan   EURIBOR+ 5.25%    5.25%  4/30/2026  €  3,693    4,492    4,092     
      Aptus 1724 Gmbh  First Lien Senior Secured Loan   EURIBOR+ 6.00%    6.25%  2/23/2028  €  35,000    40,992    38,787     
                          Media: Diversified & Production Total    45,484    42,879   66.4%
                                          
   Services: Business  iBanFirst Facility B  First Lien Senior Secured Loan   EURIBOR+ 8.50%    10.00%  7/13/2028  €  10,572    11,986    11,716     
      SumUp Holdings Luxembourg S.à.r.l.  First Lien Senior Secured Loan   EURIBOR+ 8.50%    10.00%  2/17/2026  €  24,000    28,430    26,597     
                          Services: Business Total    40,416    38,313   59.3%
                                          
                          European Currency Total    170,602    161,120   249.5%
                                          
Norwegian Krone                                         
   High Tech Industries  VPARK BIDCO AB  First Lien Senior Secured Loan   NIBOR+ 4.00%    5.42%  3/10/2025  NOK  73,280    8,651    8,361     
                          High Tech Industries Total    8,651    8,361   12.9%
                                          
                          Norwegian Krone Total    8,651    8,361   12.9%
                                          
U.S. Dollar                                         
   Automotive  CST Buyer Company  First Lien Senior Secured Loan   L+ 5.55%    6.50%  10/3/2025  $  14,927    14,927    14,927     
      Cardo  First Lien Senior Secured Loan   L+ 6.00%    6.50%  5/12/2028  $  9,653    9,564    9,653     
                          Automotive Total    24,491    24,580   38.1%
                                          
   Chemicals, Plastics & Rubber  V Global Holdings LLC  First Lien Senior Secured Loan   SOFR+ 5.25%    6.00%  12/22/2027  $  23,634    23,634    23,634     
                          Chemicals, Plastics & Rubber Total    23,634    23,634   36.6%
                                          
   Healthcare & Pharmaceuticals  Golden State Buyer, Inc.  First Lien Senior Secured Loan   L+ 4.75%    5.50%  6/22/2026  $  14,772    14,707    14,569     
                          Healthcare & Pharmaceuticals Total    14,707    14,569   22.6%
                                          
   High Tech Industries  CB Nike IntermediateCo Ltd  First Lien Senior Secured Loan - Revolver  -   -   10/31/2025  $       -    -     
      CB Nike IntermediateCo Ltd  First Lien Senior Secured Loan   L+ 4.75%    5.75%  10/31/2025  $   34,279    34,279    34,279     
      Utimaco, Inc.  First Lien Senior Secured Loan   L+ 4.00%    4.36%  8/9/2027  $  14,701    14,701    14,701     
                          High Tech Industries Total    48,980    48,980   75.9%
                                          
   Media: Broadcasting and Subscription Industry  Lightning Finco Limited  First Lien Senior Secured Loan   L+ 5.75%    6.50%  7/14/2028  $  23,907    23,704    23,907     
      Lightning Finco Limited  First Lien Senior Secured Loan   L+ 5.75%    6.50%  7/14/2028  $  2,619    2,619    2,619     
                          Media: Broadcasting and Subscription Industry Total    26,323    26,526   41.1%
                                          
   Media: Diversified & Production  Aptus 1724 Gmbh  First Lien Senior Secured Loan   L+ 6.25%    6.50%  2/23/2028  $  5,000    5,000    5,000     
                          Media: Diversified & Production Total    5,000    5,000   7.7%
                                          
   Services: Business  Chamber Bidco Limited  First Lien Senior Secured Loan   L+ 6.00%    6.50%  6/7/2028  $  23,423    23,207    23,425     
                          Services: Business Total    23,207    23,425   36.3%
                                          
                          U.S. Dollar Total    166,342    166,714   258.3%
                                          
                                          
                          Total    537,342    519,752   804.9%

 

Forward Foreign Currency Exchange Contracts              

 

Currency Purchased  Currency Sold  Counterparty  Settlement Date  Unrealized Appreciation (Depreciation) 
EURO 1,830  AUSTRALIAN DOLLARS 2,862  Morgan Stanley  4/21/2022  $(113)
EURO 729  CANADIAN DOLLARS 1,035  Standard Chartered  4/21/2022   (16)
EURO 874  DANISH KRONE 6,502  Standard Chartered  4/21/2022   (0)
EURO 8,404  BRITISH POUNDS 7,000  Morgan Stanley  4/21/2022   140 
EURO 847  NORWEGIAN KRONE 8,444  Standard Chartered  4/21/2022   (23)
EURO 21,723  US DOLLARS 24,710  Morgan Stanley  4/21/2022   (529)
EURO 1,440  US DOLLARS 1,631  Morgan Stanley  4/21/2022   (28)
EURO 644  US DOLLARS 720  Morgan Stanley  4/21/2022   (4)
EURO 3,175  US DOLLARS 3,518  Goldman Sachs  7/21/2022   32 
US DOLLARS 8,051  AUSTRALIAN DOLLARS 11,078  Morgan Stanley  4/21/2022   (270)
US DOLLARS 3,208  CANADIAN DOLLARS 4,005  Standard Chartered  4/21/2022   3 
US DOLLARS 3,840  DANISH KRONE 25,168  Standard Chartered  4/21/2022   73 
US DOLLARS 2,450  EURO 2,209  Goldman Sachs  7/21/2022   (20)
US DOLLARS 39,834  EURO 35,050  Morgan Stanley  4/21/2022   817 
US DOLLARS 510  EURO 448  Standard Chartered  4/21/2022   11 
US DOLLARS 720  EURO 633  Morgan Stanley  4/21/2022   16 
US DOLLARS 36,943  BRITISH POUNDS 27,100  Goldman Sachs  4/21/2022   1,270 
US DOLLARS 3,724  NORWEGIAN KRONE 32,686  Standard Chartered  4/21/2022   (13)
            $1,346 

 

85 

 

 

Below is a listing of ISLP’s individual investments as of:

 

International Senior Loan Program, LLC
Consolidated Schedule of Investments
As of December 31, 2021
(in thousands)

 

Currency

  Industry  Portfolio Company  Investment Type  Spread Above
Index		  Interest
Rate		   Maturity
Date		  Currency Principal/Shares   Cost   Market
Value		   % of
Members’
Equity		 
Australian Dollar  ​  ​  ​  ​   ​   ​  ​  ​    ​    ​   ​ 
​  Healthcare & Pharmaceuticals  Datix Bidco Limited  First Lien Senior Secured Loan  BBSW+ 4.00%   4.25%  4/28/2025  AUD  4,169    3,289    3,028   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Healthcare & Pharmaceuticals
Total		    3,289    3,028   4.9%
​  Information Technology Services  LEAP Legal Software PTY Ltd  First Lien Senior Secured Loan  BBSY+ 5.75%   6.75%  3/12/2025  AUD  30,093    22,867    21,856   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Information Technology Services
Total		    22,867    21,856   35.1%
​  Media: Advertising, Printing &
Publishing		  TGI Sport Bidco Pty Ltd  First Lien Senior Secured Loan  BBSY+ 7.00%   7.50%  4/30/2026  AUD  9,610    6,886    6,631   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Media: Advertising, Printing &
Publishing Total		    6,886    6,631   10.6%
​  Services: Consumer  Zeppelin BidCo Pty Limited  First Lien Senior Secured Loan  BBSY+ 6.00%   5.12%  6/28/2024  AUD  20,415    16,045    14,827   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Services: Consumer Total    16,045    14,827   23.8%
​  ​  ​  ​  ​   ​   ​  ​  Australian Dollar Total    49,087    46,342   74.4%
British Pound  ​  ​  ​  ​   ​   ​  ​  ​    ​    ​   ​ 
​  Healthcare & Pharmaceuticals  Datix Bidco Limited  Second Lien Senior Secured Loan  L+ 7.75%   8.21%  4/27/2026  £  963    1,323    1,303   ​ 
​  ​  Datix Bidco Limited  First Lien Senior Secured Loan—
Revolver		  L+ 4.50%   4.96%  10/28/2024  £  12,013    16,916    16,255   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Healthcare & Pharmaceuticals
Total		    18,239    17,558   28.2%
​  High Tech Industries  Armstrong Bidco Limited  First Lien Senior Secured Loan  SONIA+ 4.75%   5.00%  4/30/2025  £  5,602    7,711    7,581   ​ 
​  ​  ​  ​  ​   ​   ​  ​  High Tech Industries Total    7,711    7,581   12.2%
​  Media: Diversified & Production  International Entertainment
Investments Limited		  First Lien Senior Secured Loan  GBP LIBOR+ 4.75%   5.06%  5/31/2023  £  8,734    12,255    11,782   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Media: Diversified & Production
Total		    12,255    11,782   18.9%
​  Services: Business  Comet Bidco Limited  First Lien Senior Secured Loan  GBP LIBOR+ 5.25%   5.42%  9/27/2024  £  7,362    9,460    9,249   ​ 
​  ​  Learning Pool Facility B  First Lien Senior Secured Loan  L+ 6.00%   6.09%  7/7/2028  £  21,000    28,584    28,417   ​ 
​  ​  Opus2  First Lien Senior Secured Loan  SONIA+ 5.50%   5.55%  5/5/2028  £  12,151    16,326    16,443   ​ 
​  ​  Parcel2Go Facility B  First Lien Senior Secured Loan  SONIA+ 5.75%   5.80%  7/15/2028  £  12,395    16,619    16,689   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Services: Business Total    70,989    70,798   113.7%
​  Services: Consumer  Surrey Bidco Limited  First Lien Senior Secured Loan  GBP LIBOR+ 7.00%   7.50%  5/11/2026  £  4,979    6,732    5,929   ​ 
​  ​  ​  ​  ​   ​   ​  ​  Services: Consumer Total    6,732    5,929   9.5%
​  ​  ​  ​  ​   ​   ​  ​  British Pound Total    115,926    113,648   182.5%
Canadian Dollar  ​  ​  ​  ​   ​   ​  ​  ​    ​    ​   ​ 
​  Media: Diversified & Production  9 Story Media Group Inc.  First Lien Senior Secured Loan—
Revolver		  CDOR+ 5.50%   6.25%  4/30/2026  CAD  16    13    13   ​ 
​  ​  9 Story Media Group Inc.  First Lien Senior Secured Loan  CDOR+ 5.50%   6.25%  4/30/2026  CAD  7,164    5,688    5,669   ​ 

 

86 

 

 

 

Currency  Industry  Portfolio Company  Investment Type  Spread Above
Index		  Interest
Rate		   Maturity
Date		  Currency  Principal/Shares   Cost   Market Value    % of
Members’
Equity		  
                          Media: Diversified & Production Total    5,701    5,682    9.1 %
   Retail  New Look Vision Group  First Lien Senior Secured Loan—
Delayed Draw		  CDOR+ 5.25%   6.25%  5/26/2028  CAD  18,056    14,752    14,288       
                          Retail Total    14,752    14,288    22.9 %
                          Canadian Dollar Total    20,453    19,970    32.0 %
Danish Krone                                           
   High Tech Industries  VPARK BIDCO AB  First Lien Senior Secured Loan  CIBOR+ 4.00%   4.75%  3/10/2025  DKK  56,429    9,231    8,628       
                          High Tech Industries Total    9,231    8,628    13.9 %
                          Danish Krone Total    9,231    8,628    13.9 %
European Currency                                           
   FIRE: Insurance  MRHT Facility A  First Lien Senior Secured Loan  EURIBOR+ 5.50%   5.50%  7/26/2028  €  21,335    24,521    24,257       
                          FIRE: Insurance Total    24,521    24,257    39.0 %
   Healthcare & Pharmaceuticals  Mertus 522. GmbH  First Lien Senior Secured Loan—Delayed Draw  EURIBOR+ 6.25%   6.25%  5/28/2026  €  12,999    15,680    14,780       
      Mertus 522. GmbH  First Lien Senior Secured Loan  EURIBOR+ 6.25%   6.25%  5/28/2026  €  22,244    26,830    25,291       
                          Healthcare & Pharmaceuticals Total    42,510    40,071    64.4 %
   Media: Diversified & Production  9 Story Media Group Inc.  First Lien Senior Secured Loan  EURIBOR+ 5.25%   5.25%  4/30/2026  €  3,859    4,694    4,388       
      Aptus 1724 Gmbh  First Lien Senior Secured Loan  EURIBOR+ 6.00%   6.25%  2/23/2028  €  35,000    40,944    39,795       
                          Media: Diversified & Production Total    45,638    44,183    71.0 %
   Services: Business  iBanFirst Facility B  First Lien Senior Secured Loan  EURIBOR+ 8.50%   10.00%  7/13/2028  €  10,058    11,387    11,437       
      SumUp Holdings Luxembourg S.à.r.l.  First Lien Senior Secured Loan  EURIBOR+ 8.50%   10.00%  2/17/2026  €  21,000    25,038    23,877       
                          Services: Business Total    36,425    35,314    56.7 %
                          European Currency Total    149,094    143,825    231.1 %
Norwegian Krone                                           
   High Tech Industries  VPARK BIDCO AB  First Lien Senior Secured Loan  NIBOR+ 4.00%   4.75%  3/10/2025  NOK  73,280    8,651    8,310       
                          High Tech Industries Total    8,651    8,310    13.3 %
                          Norwegian Krone Total    8,651    8,310    13.3 %
U.S. Dollar                                            
   Automotive  CST Buyer Company  First Lien Senior Secured Loan  L+ 5.55%   6.50%  10/3/2025  $  14,927    14,927    14,927       
      Cardo  First Lien Senior Secured Loan  L+ 6.00%   6.50%  5/12/2028  $  9,653    9,560    9,653       
                          Automotive Total    24,487    24,580    39.5 %
   Chemicals, Plastics & Rubber  V Global Holdings LLC  First Lien Senior Secured Loan  L+ 6.00%   7.00%  12/22/2027  $  23,634    23,634    23,634       
                          Chemicals, Plastics & Rubber Total    23,634    23,634    38.0 %
   Healthcare & Pharmaceuticals  Golden State Buyer, Inc.  First Lien Senior Secured Loan  L+ 4.75%   5.50%  6/22/2026  $  14,779    14,709    14,733       
                          Healthcare & Pharmaceuticals Total    14,709    14,733    23.7 %
   High Tech Industries  CB Nike IntermediateCo Ltd  First Lien Senior Secured Loan—Revolver  L+ 4.75%   5.75%  10/31/2025  $  4,384    4,384    4,384       
      CB Nike IntermediateCo Ltd  First Lien Senior Secured Loan  L+ 4.75%   5.75%  10/31/2025  $  34,367    34,367    34,367       

 

 

87 

 

 

 

            Spread Above  Interest   Maturity             Market   % of
Members’		  
Currency  Industry  Portfolio Company  Investment Type  Index  Rate   Date  Currency  Principal/Shares   Cost   Value   Equity  
      Utimaco, Inc.  First Lien Senior Secured Loan  L+ 4.00%   4.10%  8/9/2027  $  14,701    14,701    14,701       
                          High Tech Industries Total    53,452    53,452   85.8 %
   Media: Broadcasting and
Subscription Industry		  Lightning Finco Limited  First Lien Senior Secured Loan  L+ 5.75%   6.50%  7/14/2028  $  21,000    20,790    21,000       
                          Media: Broadcasting and
Subscription Total		    20,790    21,000   33.7 %
   Services: Business  Chamber Bidco Limited  First Lien Senior Secured Loan  L+ 6.00%   6.50%  6/7/2028  $  23,423    23,198    23,423       
                          Services: Business Total    23,198    23,423   37.6 %
                          U.S. Dollar Total    160,270    160,822   258.3 %
                          Total    512,712    501,545   805.5 %

 

88 

 

 

 

Below is the financial information for ISLP (dollars in thousands):

 

Selected Balance Sheet Information

   As of   As of 
   March 31, 2022   December 31, 2021 
Investments at fair value (cost—$537,342 and $512,712, respectively)  $519,752   $501,545 
Cash   12,249    6,830 
Foreign cash   27,420    3,937 
Deferred financing costs   2,223    1,981 
Unrealized appreciation on forward currency exchange contracts   1,840    — 
Other assets   6,722    7,347 
Total assets  $570,206   $521,640 
Debt  $304,853   $272,133 
Subordinated notes payable to members   187,029    176,336 
Dividend payable   1,703    1,150 
Unrealized depreciation on forward currency exchange contracts   494    61 
Other payables   11,556    9,693 
Total liabilities  $505,635   $459,373 
Members’ equity   64,571    62,267 
Total liabilities and members’ equity  $570,206   $521,640 

 

 Selected Statement of Operations Information

 

   For the Three
Months Ended		   For the Three
Months Ended		 
   March 31, 2022   March 31, 2021 
Investment Income          
Interest Income  $8,243   $2,096 
Other   —    — 
Total investment income   8,243    2,096 
Expenses          
Interest and debt financing expenses   1,891    555 
Interest expense on members subordinated notes   4,002    1,307 
General and administrative expenses   567    357 
Total expenses   6,460    2,219 
Net investment income (loss)   1,783    (123)
Net realized and unrealized gain (losses)          
Net realized loss on investments   (676)   (22)
Net realized gain on foreign currency transactions   635    3,344 
Net realized gain on forward contracts   1,413    — 
Net unrealized gain on foreign currency   3,856    2,992 
Net change in unrealized appreciation (depreciation) on forward contracts   (455)   1,653 
Net change in unrealized depreciation on investments   (6,423)   (4,086)
Net gain (loss) on investments   (1,650)   3,881 
Net increase in members’ equity resulting from operations  $133   $3,758 

 

Bain Capital Senior Loan Program, LLC (“SLP”)

 

On February 9, 2022, the Company, and an entity advised by Amberstone Co., Ltd. (“Amberstone”), a credit focused investment manager that advises institutional investors, committed capital to a newly formed joint venture, SLP. Pursuant to an amended and restated limited liability company agreement (the “LLC Agreement”) between the Company and Amberstone, each such party has a 50% economic ownership interest in SLP. Amberstone's initial capital commitments to SLP are $179.0 million, with each party expected to maintain their pro rata proportionate share for each capital contribution. SLP will seek to invest primarily in senior secured first lien loans of U.S. borrowers. Through these capital contributions, SLP acquired 70% of the membership equity interests of the Company’s 2018-1 portfolio (“2018-1”). The Company retained 30% of the 2018-1 membership equity interests as a non-controlling equity interest. As of March 31, 2022, the Company’s investment in SLP consisted of subordinated notes of $35.8 million, preferred equity interests of $0.01 million and equity interests of $5.6 million.

 

89 

 

 

In future periods, the Company may sell certain of its investments or a participating interest in certain of its investments to SLP. The Company has determined that SLP is an investment company under ASC, Topic 946, Financial Services—Investment Companies; however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a wholly or substantially owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its investments in SLP as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control SLP due to the allocation of voting rights among SLP members. The Company measures the fair value of SLP in accordance with ASC Subtopic 820, Fair Value Measurements and Disclosures, using the net asset value (or its equivalent) as a practical expedient. The Company and Amberstone each appointed two members to SLP’s four-person Member Designees’ Committee. All material decisions with respect to SLP, including those involving its investment portfolio, require unanimous approval of a quorum of Member Designees’ Committee.

 

On March 7, 2022, SLP acquired 70% of the Company’s Membership Interests of BCC Middle Market CLO 2018-1 LLC (the “2018-1 Issuer”). The Company received $56.1 million in proceeds resulting in a realized gain of $1.2 million, which is included in net realized gain in non-controlled/non-affiliate investments. The sale of the investments met the criteria set forth in ASC 860, Transfers and Servicing for treatment as a sale. Through this acquisition, the 2018-1 Issuer became a consolidated subsidiary of SLP and was deconsolidated from the Company’s consolidated financial statements. The Company retained the remaining 30% of the 2018-1 membership interests as a non-controlling equity interest. Please see Note 6 for additional details on the formation of the 2018-1 Issuer and the related CLO Transaction.

 

The Class A-1 A, A-1 B, A-2, B and C 2018-1 Notes (the “2018-1 Notes”) are scheduled to mature on October 20, 2030 and are included in SLP’s consolidated financial statements. The Membership Interests are eliminated in consolidation on SLP’s consolidated financial statements. Below is a table summary of the 2018-1 Notes as of March 31, 2022:

 

2018-1 Notes  Principal Amount   Spread above Index  Interest rate at
March 31, 2022		 
Class A-1 A  $205,900   1.55% + 3 Month LIBOR   1.80%
Class A-1 B   45,000   1.50% + 3 Month LIBOR (first 24 months)   2.05%
        1.80% + 3 Month LIBOR (thereafter)     
Class A-2   55,100   2.15% + 3 Month LIBOR   2.40%
Class B   29,300   3.00% + 3 Month LIBOR   3.25%
Class C   30,400   4.00% + 3 Month LIBOR   4.25%
Total 2018-1 Notes  $365,700         

 

Below is a summary of SLP’s portfolio at fair value:

 

   As of March 31,
2022		 
Total investments  $372,320 
Weighted average yield on investments   6.9%
Number of borrowers in SLP   41 
Largest portfolio company investment  $13,200 
Total of five largest portfolio company investments  $65,456 
Unfunded commitments  $2,447 

 

90 

 

 

Below is a listing of SLP’s individual investments as of:

 

Senior Loan Program, LLC

Consolidated Schedule of Investments

As of March 31, 2022

(unaudited)

 
Currency  Industry  Portfolio Company  Investment Type  Spread Above Index  Interest Rate   Maturity Date  Principal/Shares   Cost   Market Value   % of Members' Equity 
U.S. Dollar                                        
   Aerospace & Defense  WCI-HSG Purchaser, Inc.  First Lien Senior Secured Loan - Revolver   L+ 4.75%   5.75%  2/22/2025   900    900    900      
      WCI-HSG Purchaser, Inc.  First Lien Senior Secured Loan   L+ 4.75%   5.75%  2/24/2025   8,688    8,688    8,688      
      Whitcraft LLC  First Lien Senior Secured Loan   L+ 6.00%   7.01%  4/3/2023   10,766    10,444    10,416      
                       Aerospace & Defense Total    20,032    20,004    65.6%
                                         
   Automotive  Cardo  First Lien Senior Secured Loan   L+ 6.00%   6.50%  5/12/2028   10,800    10,800    10,800      
      CST Buyer Company  First Lien Senior Secured Loan   L+ 5.55%   6.50%  10/3/2025   5,600    5,600    5,600      
      JHCC Holdings, LLC  First Lien Senior Secured Loan   L+ 5.75%   6.76%  9/9/2025   7,579    7,579    7,200      
                       Automotive Total    23,979    23,600    77.4%
                                         
   Banking  Green Street Parent, LLC  First Lien Senior Secured Loan   L+ 5.75%   6.50%  8/27/2026   10,725    10,725    10,725      
                       Banking Total    10,725    10,725    35.2%
                                         
   Chemicals, Plastics & Rubber  V Global Holdings LLC  First Lien Senior Secured Loan   SOFR+ 5.25%   6.00%  12/22/2027   10,421    10,421    10,421      
                       Chemicals, Plastics & Rubber Total    10,421    10,421    34.2%
                                         
   Construction & Building  YLG Holdings, Inc.  First Lien Senior Secured Loan   L+ 5.25%   6.25%  10/31/2025   10,616    10,616    10,616      
                       Construction & Building Total    10,616    10,616    34.8%
                                         
   Consumer goods: Durable  Stanton Carpet T/L 2nd Lien  Second Lien Senior Secured Loan   L+ 9.00%   10.00%  4/1/2028   5,000    4,901    4,925      
      TLC Purchaser, Inc.  First Lien Senior Secured Loan   L+ 6.25%   7.25%  10/13/2025   9,587    8,465    8,437      
                       Consumer goods: Durable Total    13,366    13,362    43.8%
                                         
   Consumer Goods: Non-Durable  RoC Opco LLC  First Lien Senior Secured Loan   L+ 8.50%   9.50%  2/25/2025   8,820    8,820    8,820      
      Solaray, LLC  First Lien Senior Secured Loan   L+ 5.50%   6.50%  9/11/2023   10,693    10,693    10,693      
      WU Holdco, Inc.  First Lien Senior Secured Loan   L+ 5.50%   6.50%  3/26/2026   6,577    6,577    6,577      
      WU Holdco, Inc.  First Lien Senior Secured Loan   L+ 5.50%   6.50%  3/26/2026   6,368    6,368    6,368      
                       Consumer Goods: Non-Durable Total    32,458    32,458    106.4%
                                         
   Consumer goods: Wholesale  WSP Initial Term Loan  First Lien Senior Secured Loan   L+ 6.25%   7.25%  4/27/2027   6,172    6,066    5,972      
                       Consumer goods: Wholesale Total    6,066    5,972    19.6%
                                         
   Containers, Packaging, & Glass  ASP-r-pac Acquisition Co LLC  First Lien Senior Secured Loan   L+ 6.00%   6.75%  12/29/2027   13,200    12,940    13,200      
                       Containers, Packaging, & Glass Total    12,940    13,200    43.3%
                                         
   Energy: Oil & Gas  Amspec Services, Inc.  First Lien Senior Secured Loan   L+ 5.75%   6.76%  7/2/2024   9,847    9,847    9,847      
      Blackbrush Oil & Gas, L.P.  First Lien Senior Secured Loan   L+ 5.00% (2% PIK)   8.00%  9/3/2025   4,348    4,348    4,348      
                       Energy: Oil & Gas Total    14,195    14,195    46.5%
                                         
   FIRE: Finance  Allworth Financial Group, L.P.  First Lien Senior Secured Loan   SOFR+ 4.75%   5.75%  12/23/2026   1,394    1,394    1,394      
                       FIRE: Finance Total    1,394    1,394    4.6%
                                         
   FIRE: Insurance  McLarens Acquisition Inc.  First Lien Senior Secured Loan   L+ 5.50%   6.68%  12/19/2024   10,533    10,533    10,533      
                       FIRE: Insurance Total    10,533    10,533    34.5%
                                         
   Healthcare & Pharmaceuticals  CPS Group Holdings, Inc.  First Lien Senior Secured Loan   L+ 5.25%   6.00%  3/3/2025   9,801    9,801    9,801      
      SunMed Group Holdings, LLC  First Lien Senior Secured Loan   L+ 5.75%   6.50%  6/16/2028   9,703    9,703    9,703      
                       Healthcare & Pharmaceuticals Total    19,504    19,504    63.9%
                                         
   High Tech Industries  AMI US Holdings Inc.  First Lien Senior Secured Loan - Revolver   L+ 5.25%   5.71%  4/1/2024   698    698    698      
      AMI US Holdings Inc.  First Lien Senior Secured Loan   L+ 5.25%   6.25%  4/1/2025   972    972    972      
      Drilling Info Holdings, Inc  First Lien Senior Secured Loan   L+ 4.25%   4.71%  7/30/2025   10,858    10,753    10,743      
      Superna Inc.  First Lien Senior Secured Loan   SOFR + 6.25%   7.25%  3/6/2028   10,800    10,693    10,692      
      Ventiv Holdco, Inc.  First Lien Senior Secured Loan   L+ 5.50%   6.50%  9/3/2025   9,877    9,877    9,877      
                       High Tech Industries Total    32,993    32,982    108.1%
                                         
   Hotel, Gaming & Leisure  Captain D's LLC  First Lien Senior Secured Loan   L+ 4.50%   5.50%  12/15/2023   5,729    5,729    5,729      
      Quidditch Acquisition, Inc.  First Lien Senior Secured Loan   L+ 7.00%   8.00%  3/21/2025   9,436    9,316    9,200      
                       Hotel, Gaming & Leisure Total    15,045    14,929    48.9%
                                         
   Retail  Batteries Plus Holding Corporation  First Lien Senior Secured Loan   L+ 6.75%   7.75%  7/6/2022   10,500    10,500    10,500      
      Thrasio, LLC  First Lien Senior Secured Loan   L+ 7.00%   8.00%  12/18/2026   13,146    13,146    13,146      
                       Retail Total    23,646    23,646    77.5%
                                         
   Services: Business  Avalon Acquiror, Inc.  First Lien Senior Secured Loan   SOFR+ 6.25%   7.25%  3/10/2028   10,800    10,693    10,692      
      Refine Intermediate, Inc.  First Lien Senior Secured Loan   L+ 4.50%   5.50%  3/3/2027   10,800    10,800    10,800      
      Smartronix T/L  First Lien Senior Secured Loan   L+ 6.00%   7.00%  11/23/2028   13,167    12,907    13,003      
      TEI Holdings Inc.  First Lien Senior Secured Loan   L+ 5.75%   6.75%  12/23/2026   9,902    9,902    9,902      
      WCI Gigawatt Purchaser T/L  First Lien Senior Secured Loan   L+ 5.75%   6.75%  11/19/2027   10,773    10,534    10,665      
                       Services: Business Total    54,836    55,062    180.4%
                                         
   Services: Consumer  MZR Buyer, LLC  First Lien Senior Secured Loan   L+ 6.75%   7.75%  12/21/2026   13,163    13,163    13,163      
                       Services: Consumer Total    13,163    13,163    43.1%
                                         
   Telecommunications  Horizon Telcom, Inc.  First Lien Senior Secured Loan - Delayed Draw   L+ 5.00%   6.00%  6/15/2023   632    632    632      
      Horizon Telcom, Inc.  First Lien Senior Secured Loan   L+ 5.00%   6.00%  6/15/2023   9,300    9,300    9,300      
                       Telecommunications Total    9,932    9,932    32.6%
                                         
   Transportation: Cargo  A&R Logistics, Inc.  First Lien Senior Secured Loan   SOFR+ 6.00%   7.00%  5/5/2025   10,751    10,751    10,751      
      Grammer Purchaser, Inc.  First Lien Senior Secured Loan - Revolver                                                                         -   -   9/30/2024   -    -    -      
      Grammer Purchaser, Inc.  First Lien Senior Secured Loan   L+ 4.50%   5.50%  9/30/2024   3,475    3,475    3,475      
      Omni Logistics, LLC  Second Lien Senior Secured Loan   L+ 9.00%   10.00%  12/30/2027   5,000    5,000    5,000      
                       Transportation: Cargo Total    19,226    19,226    63.0%
                                         
   Wholesale  Abracon Group Holding, LLC  First Lien Senior Secured Loan   L+ 5.25%   6.25%  7/18/2024   7,838    7,838    7,838      
      Aramsco, Inc.  First Lien Senior Secured Loan   L+ 5.25%   5.71%  8/28/2024   9,558    9,558    9,558      
                       Wholesale Total    17,396    17,396    57.0%
                                         
                       Total    372,466    372,320    1220.4%

 

91 

 

  

Below is the financial information for SLP (dollars in thousands):

 

Selected Balance Sheet Information

   As of 
   March 31, 2022 
Investments at fair value (cost—$372,466)  $372,320 
Cash   77,768 
Other assets   19,945 
Total assets  $470,033 
Debt  $364,220 
Subordinated notes payable to members   71,570 
Other payables   3,734 
Total liabilities  $439,524 
Members’ equity   30,509 
Total liabilities and members’ equity  $470,033 

 

Selected Statement of Operations Information

 

   For the Three
Months Ended		 
   March 31, 2022 
Investment Income     
Interest Income  $2,516 
Other   — 
Total investment income   2,516 
Expenses     
Interest and debt financing expenses   744 
Interest expense on members subordinated notes   636 
General and administrative expenses   112 
Total expenses   1,492 
Net investment income   1,024 
Net realized and unrealized gain (losses)     
Net realized gain on investments   6 
Net change in unrealized depreciation on investments   (146)
Net loss on investments   (140)
Net increase in members’ equity resulting from operations  $884 

 

92 

 

 

Results of Operations

 

Our operating results for the three months ended March 31, 2022 and 2021 were as follows (dollars in thousands):

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Total investment income  $46,011   $49,831 
Total expenses, net of fee waivers   24,308    27,666 
Net investment income   21,703    22,165 
Net realized gain   2,172    8,858 
Net change in unrealized appreciation   9,806    730 
Net increase (decrease) in net assets resulting from operations  $33,681   $31,753 

  

Net increase in net assets resulting from operations can vary from period to period as a result of various factors, including additional financing, new investment commitments, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation on the investment portfolio. Due to these factors, comparisons may not be meaningful.

 

Investment Income

 

The composition of our investment income for the three months ended March 31, 2022 and 2021 was as follows (dollars in thousands):

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Interest income  $38,033   $41,974 
Dividend income   3,601    2,036 
PIK income   3,912    2,365 
Other income   465    3,456 
Total investment income  $46,011   $49,831 

 

Interest income from investments, which includes interest and accretion of discounts and fees, decreased to $38.0 million for the three months ended March 31, 2022 from $42.0 million for the three months ended March 31, 2021, primarily due to the decrease in the Company’s investment portfolio between the periods. Our investment portfolio at amortized cost decreased to $2,178.2 million as March 31, 2022 compared to $2,378.2 million as of March 31, 2021. Accelerated unamortized discounts from paydowns decreased to $0.7 million for the three months ended March 31, 2022 from $1.7 million for the three months ended March 31, 2021. Dividend income increased to $3.6 million for the three months ended March 31, 2022 from $2.0 million for the three months ended March 31, 2021, primarily due to a increase in dividend income from our equity interests. Other income decreased to approximately $0.5 million for the three months ended March 31, 2022 from $3.5 million for the three months ended March 31, 2021, primarily due to an decrease in one-time fees earned on certain investments. As of March 31, 2022, the weighted average yield of our investment portfolio at amortized cost increased to 7.9% from 7.6% as of March 31, 2021. 

 

Operating Expenses

 

The composition of our operating expenses for the three months ended March 31, 2022 and 2021 was as follows (dollars in thousands):

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Interest and debt financing expenses  $10,643   $11,833 
Base management fee   8,369    8,698 
Incentive fee   3,311    6,728 
Professional fees   390    959 
Directors fees   175    171 
Other general and administrative expenses   1,420    1,390 
Total expenses, before fee waivers  $24,308   $29,779 
Base management fee waiver   —    (2,113)
Incentive fee waiver   —    — 
Total expenses, net of fee waivers  $24,308   $27,666 

 

93 

 

 

 

Interest and Debt Financing Expenses

 

Interest and debt financing expenses on our borrowings totaled approximately $10.6 million and $11.8 million for the three months ended March 31, 2022 and 2021, respectively. Interest and debt financing expense for the three months ended March 31, 2022 as compared to March 31, 2021 decreased primarily due to a decrease in total principal debt outstanding and improved average stated interest rate on debt between periods. The weighted average principal debt balance outstanding for the three months ended March 31, 2022 was $1,314.4 million compared to $1,449.9 million for the three months ended March 31, 2021.

 

The weighted average interest rate (excluding deferred upfront financing costs and unused fees) on our debt outstanding was 2.9% and 2.9% as of March 31, 2022 and December 31, 2021, respectively.

 

Management Fees

 

Management fees (net of waivers) increased to $8.4 million for the three months ended March 31, 2022 from $6.6 million for the three months ended March 31, 2021. Management fees (gross of waivers) decreased to $8.4 million for the three months ended March 31, 2022 compared to $8.7 million for the three months ended March 31, 2021. Management fees waived for the three months ended March 31, 2022 and 2021 were $0.0 million and $2.1 million, respectively.

 

Incentive Fees

 

Incentive fee (net of waivers) decreased to $3.3 million for the three months ended March 31, 2022 from $6.7 million for the three months ended March 31, 2021. Incentive fee waivers related to pre-incentive fee net investment income consisted of voluntary waivers of $0.0 million for both the three months ended March 31, 2022 and March 31, 2021. For the three months ended March 31, 2022 there were no incentive fees related to the GAAP Incentive Fee.

 

Professional Fees and Other General and Administrative Expenses

 

Professional fees and other general and administrative expenses decreased to $1.8 million for the three months ended March 31, 2022 from $2.5 million for the three months ended March 31, 2021, primarily due to a decrease in costs associated with servicing our investment portfolio.

 

Net Realized and Unrealized Gains and Losses

 

The following table summarizes our net realized and unrealized gains (losses) for the three months ended March 31, 2022 and 2021 (dollars in thousands):

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Net realized gain on investments  $3,625   $19,860 
Net realized loss on investments   (2,208)   (4,684)
Net realized gain on foreign currency transactions   61    33 
Net realized loss on foreign currency transactions   (549)   (3,059)
Net realized gain on forward currency exchange contracts   1,283    — 
Net realized loss on forward currency exchange contracts   (40)   (3,292)
Net realized gains  $2,172   $8,858 
           
Change in unrealized appreciation on investments  $21,872   $27,530 
Change in unrealized depreciation on investments   (14,063)   (31,763)
Net change in unrealized appreciation (depreciation) on investments   7,809    (4,233)
Unrealized appreciation on foreign currency translation   346    386 
Unrealized appreciation on forward currency exchange contracts   1,651    4,577 
Net change in unrealized appreciation on foreign currency and forward currency exchange contracts   1,997    4,963 
Net change in unrealized appreciation  $9,806   $730 

 

94 

 

 

For the three months ended March 31, 2022, and 2021, we had net realized gains on investments of $1.4 million and $15.2 million, respectively. For the three months ended March 31, 2022 and 2021, we had net realized losses on foreign currency transactions of ($0.5) million and ($3.0) million, respectively. For the three months ended March 31, 2022 and 2021, we had net realized gains (losses) on forward currency contracts of $1.2 million and ($3.3) million, respectively, primarily as a result of settling GBP and EUR forward contracts, respectively.

 

For the three months ended March 31, 2022, we had $21.7 million in unrealized appreciation on 36 portfolio company investments, which was offset by ($14.1) million in unrealized depreciation on 74 portfolio company investments. Unrealized appreciation for the three months ended March 31, 2022 resulted from an increase in fair value, primarily due to a tightening positive investment-related adjustments, and the reversal of unrealized depreciation from the sale of our debt investments. Unrealized depreciation was primarily due to negative valuation adjustments.

 

For the three months ended March 31, 2021, we had $27.5 million in unrealized appreciation on 57 portfolio company investments, which was offset by $31.8 million in unrealized depreciation on 55 portfolio company investments. Unrealized appreciation for the three months ended March 31, 2021 resulted from an increase in fair value, primarily due to a tightening spread environment, positive investment-related adjustments, and the reversal of unrealized depreciation from the sale of our debt investments. Unrealized depreciation was primarily due to negative valuation adjustments.

 

For the three months ended March 31, 2022 and 2021, we had unrealized appreciation on forward currency exchange contracts of $1.7 million and $4.6 million, respectively. For the three months ended March 31, 2022, unrealized appreciation on forward currency exchange contracts was due to EUR and GBP forward contracts.

  

The following table summarizes the impact of foreign currency for the three months ended March 31, 2022 and 2021 (dollars in thousands):

 

   For the Three months ended
March 31,		 
   2022   2021 
Net change in unrealized depreciation on investments due to foreign currency  $(2,876)  $(17,338)
Net realized gain (loss) on investments due to foreign currency   (153)   15,916 
Net change in unrealized appreciation on foreign currency translation   346    386 
Net realized loss on foreign currency transactions   (488)   (3,026)
Net change in unrealized appreciation on forward currency exchange contracts   1,651    4,577 
Net realized gain (loss) on forward currency exchange contracts   1,243    (3,292)
Foreign currency impact to net decrease in net assets resulting from operations  $(277)  $(2,777)

 

Included in total net gains (losses) on the consolidated statements of operations is net gains (losses) of ($3.2) million and ($4.1) million related to realized and unrealized gains and losses on investments, foreign currency holdings and non-investment assets and liabilities attributable to the changes in foreign currency exchange rates for the three months ended March 31, 2022 and 2021, respectively. Including the total net realized and unrealized gains on forward currency exchange contracts of $2.9 million and $1.3 million, respectively, included in the above table, the net impact of foreign currency on total net gains (losses) on the consolidated statements of operations is ($0.3) million and ($2.8) million for the three months ended March 31, 2022 and 2021, respectively.

 

Net Increase (Decrease) in Net Assets Resulting from Operations

 

For the three months ended March 31, 2022 and 2021, the net increase in net assets resulting from operations was $33.7 million and $31.8 million, respectively. Based on the weighted average shares of common stock outstanding for the three months ended March 31, 2022 and 2021, our per share net increase in net assets resulting from operations was $0.52 and $0.49, respectively.

 

95 

 

 

Financial Condition, Liquidity and Capital Resources

 

Our liquidity and capital resources are derived primarily from proceeds from equity issuances, advances from our credit facilities, 2019-1 Debt, 2023 Notes, March 2026 Notes, October 2026 Notes and cash flows from operations. The primary uses of our cash are for (1) investments in portfolio companies and other investments and to comply with certain portfolio diversification requirements; (2) the cost of operations (including payments to the Advisor under the Investment Advisory and Administration Agreements); (3) debt service, repayment, and other financing costs; and, (4) cash distributions to the holders of our common shares.

 

We intend to continue to generate cash primarily from cash flows from operations, future borrowings and future offerings of securities. We may from time to time raise additional equity or debt capital through registered offerings, enter into additional debt facilities, or increase the size of existing facilities or issue debt securities. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. We are required to meet an asset coverage ratio, defined under the 1940 Act as the ratio of our total assets (less all liabilities and indebtedness not represented by senior securities) to our outstanding senior securities, of at least 150% after each issuance of senior securities. As of March 31, 2022 and December 31, 2021, our asset coverage ratio was 201% and 177%, respectively.

 

At March 31, 2022 and December 31, 2021, we had $114.8 million and $203.6 million in cash, foreign cash, restricted cash and cash equivalents, respectively.

 

At March 31, 2022, we had approximately $261.0 million of availability on our Sumitomo Credit Facility and $50.0 million of availability on our Revolving Advisor Loan, subject to existing terms and regulatory requirements. At December 31, 2021, we had approximately $300.0 million of availability on our Sumitomo Credit Facility and $50.0 million of availability on our Revolving Advisor Loan, subject to existing terms and regulatory requirements.

 

For the three months ended March 31, 2022, cash, foreign cash, restricted cash, and cash equivalents decreased by $88.7 million. During the three months ended March 31, 2022, we used $101.8 million in cash for operating activities. The decrease in cash used for operating activities was primarily related to the purchases of investments of $247.4 million, which was offset by proceeds from principal payments and sales of investments of $117.1 million and a net increase in assets resulting from operations of $33.7 million.

 

During the three months ended March 31, 2022, we provided $14.9 million for financing activities, primarily due to borrowings and repayments on our Sumitomo Credit Facility.  

 

For the three months ended March 31, 2021, cash, foreign cash, restricted cash, and cash equivalents increased by $32.7 million. During the three months ended March 31, 2021, we provided $174.8 million in cash for operating activities. The increase in cash used for operating activities was primarily related to the proceeds from principal payments and sales of investments of $415.7 million,and a net increase in net assets resulting from operations of $31.8 million, which was offset by purchases of investments of $262.1 million and net realized gain from investments of $15.2 million.

 

During the three months ended March 31, 2021, we used $138.9 million from financing activities, primarily from borrowings on our debt from the JPM Credit Facility and the issuance of the $300.0 million 2026 Notes, offset by repayments on our debt of $486.8 million, including the termination of our BCSF Revolving Credit Facility, and distributions paid during the period of $21.9 million.

 

Equity

 

On November 19, 2018, we closed our initial public offering (the “IPO”) issuing 7,500,000 shares of its common stock at a public offering price of $20.25 per share. Shares of common stock of the Company began trading on the New York Stock Exchange under the symbol “BCSF” on November 15, 2018. The offering generated net proceeds, after expenses, of $145.4 million. All outstanding capital commitments from the Company’s Private Offering were cancelled as of the completion of the IPO.

 

During the three months ended March 31, 2022, we did not issue shares of our common stock to investors who have opted into our dividend reinvestment plan. During the three months ended March 31, 2021, we did not issue shares of our common stock to investors who have opted into our dividend reinvestment plan.

 

96 

 

 

On May 7, 2019, the Company’s Board of Directors authorized the Company to repurchase up to $50 million of its outstanding common stock in accordance with safe harbor rules under the Exchange Act of 1934. Any such repurchases will depend upon market conditions and there is no guarantee that the Company will repurchase any particular number of shares or any shares at all. As of March 31, 2022, there have been no repurchases of common stock.

 

On May 4, 2020, the Company’s Board of Directors approved a transferable subscription rights offering to our stockholders of record as of May 13, 2020. The rights entitled record stockholders to subscribe for up to an aggregate of 12,912,453 shares of our common stock. Record stockholders received one right for each share of common stock owned on the record date. The rights entitled the holders to purchase one new share of common stock for every four rights held, and record stockholders who fully exercised their rights were entitled to subscribe, subject to certain limitations and allotment rules, for additional shares that remain unsubscribed as a result of any unexercised rights. The rights were transferable and listed on the New York Stock Exchange under the symbol “BCSF RT”. The rights offering expired June 5, 2020. Based on the terms of the offering and the market price of the stock during the applicable period, holders of rights participating in the offering were entitled to purchase one new share of common stock for every four rights held at a subscription price of $10.2163 per share. On June 16, 2020, the Company closed its transferrable rights offering and issued 12,912,453 shares. The offering generated net proceeds, before expenses, of $129.6 million, including the underwriting discount and commissions of $2.3 million.

 

Debt

 

Debt consisted of the following as of March 31, 2022 and December 31, 2021 (dollars in thousands):

 

    As of March 31, 2022     As of December 31, 2021  
    Total
Aggregate
Principal
Amount
Committed		     Principal
Amount
Outstanding		     Carrying
Value (1)		     Total
Aggregate
Principal
Amount
Committed		     Principal
Amount
Outstanding		     Carrying
Value (1)		  
2018-1 Notes   $  —     $ —     $ —      $ 365,700      $ 365,700     $  364,178  
2019-1 Debt     352,500       352,500       351,001       352,500       352,500       350,969  
Revolving Advisor Loan     50,000       —       —       50,000       —       —  
2023 Notes     150,000       112,500       111,357       150,000       112,500       111,133  
March 2026 Notes     300,000       300,000       295,539       300,000       300,000       295,260  
October 2026 Notes     300,000       300,000       293,780       300,000       300,000       293,442  
Sumitomo Credit Facility     300,000       39,000       39,000       300,000       —       —  
Total Debt   $    1,452,500     $    1,104,000     $    1,090,677     $    1,818,200     $    1,430,700     $    1,414,982  

 

 

 (1)     Carrying value represents aggregate principal amount outstanding less unamortized debt issuance costs.

 

BCSF Revolving Credit Facility

 

On October 4, 2017, the Company entered into the revolving credit agreement (the “BCSF Revolving Credit Facility”) with us, as equity holder, BCSF I, LLC, a Delaware limited liability company and a wholly owned and consolidated subsidiary of the Company, as borrower, and Goldman Sachs Bank USA, as sole lead arranger (“Goldman Sachs”). The BCSF Revolving Credit Facility was subsequently amended on May 15, 2018 to reflect certain clarifications regarding margin requirements and hedging currencies. The maximum commitment amount under the BCSF Revolving Credit Facility is $500.0 million, and may be increased up to $750.0 million. Proceeds of the loans under the BCSF Revolving Credit Facility may be used to acquire certain qualifying loans and such other uses as permitted under the BCSF Revolving Credit Facility. The BCSF Revolving Credit Facility includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature.

 

On January 8, 2020, the Company entered into an amended and restated credit agreement of its BCSF Revolving Credit Facility. The amendment amended the existing credit facility to, among other things, modify various financial covenants, including removing a liquidity covenant and adding a net asset value covenant with respect to the Company, as sponsor.

 

97 

 

 

On March 31, 2020, the Parties entered into Omnibus Amendment No. 1 to the amended and restated credit agreement. The amendment amended the existing credit facility to, among other things, provide for enhanced flexibility to purchase or contribute and borrow against revolving loans and delayed draw term loans, and to count certain additional assets in the calculation of collateral for the outstanding advances; increase the spread payable under the facility from 2.50% to 3.25% per annum; include additional events of default to the existing credit facility, including but not limited to, a qualified equity raise not effected on or prior to June 22, 2020; and, after June 22, 2020, require the Company to maintain at least $50.0 million of unencumbered liquidity or pay down the facility by at least $50.0 million.

 

On May 27, 2020, the Parties entered into Amendment No. 2 to the amended and restated credit agreement. The amendment amended the existing credit facility to, among other things, (i) permit the Company to incur a lien on assets purchased with the proceeds of the rights offering and (ii) remove the requirement that the Company maintain $50.0 million in unencumbered cash after the completion of the rights offering, instead requiring a pay down of $50.0 million within two business days after the closing of the rights offering, which was subsequently paid.

 

On August 14, 2020, the Parties entered into the second amended and restated credit agreement and the third amended and restated margining agreement (collectively, the “Amendment”), which amended and restated the terms of the existing credit facility (the “Amended and Restated Credit Facility”). The Amendment amends the existing credit facility to, among other things, (i) decrease the financing limit from $500.0 million to $425.0 million, (ii) decrease the interest rate on financing from LIBOR plus 3.25% per annum to LIBOR plus 3.00% per annum, and (iii) provide enhanced flexibility to contribute and borrow against revolving and delayed draw loans and modify certain other terms relating to collaterals.

 

On March 11, 2021, the BCSF Revolving Credit Facility was terminated. The proceeds from the March 2026 Notes were used to repay the total outstanding debt.

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the BCSF Revolving Credit Facility were as follows (dollars in thousands):

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $—   $509 
Unused facility fee   —    118 
Amortization of deferred financing costs and upfront commitment fees   —    — 
Total interest and debt financing expenses  $—   $627 

 

2018-1 Notes

 

On September 28, 2018 (the “2018-1 Closing Date”), we, through BCC Middle Market CLO 2018-1 LLC (the “2018-1 Issuer”), a Delaware limited liability company and a wholly owned and consolidated subsidiary of the Company, completed its $451.2 million term debt securitization (the “CLO Transaction”). The notes issued in connection with the CLO Transaction (the “2018-1 Notes”) are secured by a diversified portfolio of the 2018-1 Issuer consisting primarily of middle market loans, the majority of which are senior secured loans (the “2018-1 Portfolio”). At the 2018-1 Closing Date, the 2018-1 Portfolio was comprised of assets transferred from the Company and its consolidated subsidiaries. All transfers were eliminated in consolidation and there were no realized gains or losses recognized in the CLO Transaction.

 

The CLO Transaction was executed through a private placement of the following 2018-1 Notes. The Class A-1 A, A-1 B, A-2, B and C 2018-1 Notes were issued at par and are scheduled to mature on October 20, 2030. The Company received 100% of the membership interests (the “Membership Interests”) in the 2018-1 Issuer in exchange for its sale to the 2018-1 Issuer of the initial closing date loan portfolio. The Membership Interests do not bear interest. As of December 31, 2021, the Class A-1 A, A-1 B, A-2, B and C 2018-1 Notes were included in the consolidated financial statements. The Membership Interests were eliminated in consolidation.

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2018-1 Issuer were as follows:

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $1,299   $2,024 
Amortization of debt issuance costs and upfront commitment fees   28    43 
Total interest and debt financing expenses  $1,327   $2,067 

 

98 

 

 

On March 7, 2022, the Company sold 70% of the membership equity interests of the Company’s 2018-1 Notes to SLP, which resulted in the deconsolidation of the 2018-1 Notes from the Company’s consolidated financial statements.

 

JPM Credit Facility

 

On April 30, 2019, the Company entered into a loan and security agreement (the “JPM Credit Agreement” or the “JPM Credit Facility”) as Borrower, with JPMorgan Chase Bank, National Association, as Administrative Agent, and Wells Fargo Bank, National Association as Collateral Administrator, Collateral Agent, Securities Intermediary and Bank. The facility amount under the JPM Credit Agreement was $666.6 million. Borrowings under the JPM Credit Facility bore interest at LIBOR plus 2.75%.

 

On January 29, 2020, the Company entered into an amended and restated loan and security agreement (the “Amended Loan and Security Agreement”) as Borrower, with JPMorgan Chase Bank, National Association, as Administrative Agent, and Wells Fargo Bank, National Association as Collateral Administrator, Collateral Agent, Securities Intermediary and Bank. The Amended Loan and Security Agreement amended the Existing Loan and Security Agreement to, among other things, (1) decrease the financing limit under the agreement from $666.6 million to $500.0 million; (2) decrease the minimum facility amount from $466.6 million to $300.0 million period from January 29, 2020 to July 29, 2020 (the minimum facility amount will increase to $350.0 million after July 29, 2020 until the end of the reinvestment period); (3) decrease the interest rate on financing from 2.75% per annum over the applicable LIBOR to 2.375% per annum over the applicable LIBOR; and (4) extend the scheduled termination date of the agreement from November 29, 2022 to January 29, 2025.

 

On March 20, 2020, the Company entered into a second amended and restated loan and security agreement between the parties (the “Second Amended Loan and Security Agreement”). The Second Amended Loan and Security Agreement, among other things, provided flexibility to contribute and borrow against revolving loans, reduce the amount required to be reserved for unfunded revolvers and delayed draw obligations and decreased the financing limit by $50.0 million within 90 days or, based on the occurrence of certain events, such earlier period as may be set forth in the Second Amended Loan and Security Agreement. The Company paid to the Administrative Agent $50.0 million to the prepayment of Advances and the Financing Commitments reduced by the amount of principal so prepaid on the earlier of two Business days following the closing of the Rights Offering and June 18, 2020.

 

On July 2, 2020, the Company entered into a third amended and restated loan and security agreement with respect to the JPM Credit Agreement to, among other things, adjust the advance rates and make certain changes of an updating nature.

 

The facility amount under the JPM Credit Agreement is $450.0 million. Proceeds of the loans under the JPM Credit Facility were used to acquire certain qualifying loans and such other uses as permitted under the JPM Credit Agreement. The period from the effective date of the amendment until January 29, 2023 is referred to as the reinvestment period and during such reinvestment period, the Borrower could request drawdowns under the JPM Credit Facility.

 

The maturity date was the earliest of: (a) January 29, 2025, (b) the date on which the secured obligations become due and payable following the occurrence of an event of default, (c) the date on which the advances are repaid in full and (d) the date after a market value cure failure occurs on which all portfolio investments have been sold and proceeds there from have been received by the Borrower. The stated maturity date of January 29, 2025 could be extended for successive one-year periods by mutual agreement of the Borrower and the Administrative Agent.

 

The JPM Credit Agreement included customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature.

 

Borrowings under the JPM Credit Facility bore interest at LIBOR plus a margin. The Company paid an unused commitment fee of between 37.5 basis points (0.375%) and 75 basis points (0.75%) per annum depending on the size of the unused portion of the facility. Interest was payable quarterly in arrears. As of December 31, 2020, the JPM Credit Facility was accruing interest expense at a rate of LIBOR plus 2.375%. We paid an unused commitment fee of 75 basis points (0.75%) per annum.

 

On December 27, 2021, the JPM Credit Facility was terminated.

 

99 

 

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the JPM Credit Facility were as follows (dollars in thousands):

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $—   $2,424 
Unused facility fee   —    — 
Amortization of deferred financing costs and upfront commitment fees   —    64 
Total interest and debt financing expenses  $—   $2,488 

 

2019-1 Debt

 

On August 28, 2019, the Company, through BCC Middle Market CLO 2019-1 LLC (the “2019-1 Issuer”), a Cayman Islands limited liability company and a wholly-owned and consolidated subsidiary of the Company, and BCC Middle Market CLO 2019-1 Co-Issuer, LLC (the “Co-Issuer” and, together with the Issuer, the “Co-Issuers”), a Delaware limited liability company, completed its $501.0 million term debt securitization (the “2019-1 CLO Transaction”). The notes issued in connection with the 2019-1 CLO Transaction (the “2019-1 Notes”) are secured by a diversified portfolio of the Co-Issuers consisting primarily of middle market loans, the majority of which are senior secured loans (the “2019-1 Portfolio”). The Co-Issuers also issued Class A-1L Loans (the “Loans” and, together with the 2019-1 Notes, the “2019-1 Debt”). The Loans are also secured by the 2019-1 Portfolio. At the 2019-1 closing date, the 2019-1 Portfolio was comprised of assets transferred from the Company and its consolidated subsidiaries. All transfers were eliminated in consolidation and there were no realized gains or losses recognized in the 2019-1 CLO Transaction.

 

On November 30, 2021, the Co-Issuers refinanced the 2019-1 CLO Transaction through a private placement of $410 million of senior secured and senior deferrable notes consisting of: (i) $282.5 million of Class A-1-R Senior Secured Floating Rate Notes, which currently bear interest at the applicable reference rate plus 1.50% per annum; (ii) $55 million of Class A-2-R Senior Secured Floating Rate Notes, which bear interest at the applicable reference rate plus 2.00% per annum; (iii) $47.5 million of Class B-R Senior Deferrable Floating Rate Notes, which bear interest at the applicable reference rate plus 2.60% per annum; and (iv) $25.0 million of Class C-R Senior Deferrable Floating Rate Notes, which bear interest at the applicable reference rate plus 3.75% per annum (collectively, the “2019-1 CLO Reset Notes”). The 2019-1 CLO Reset Notes are scheduled to mature on October 15, 2033 and the reinvestment period ends October 15, 2025. The Company retained $32.5 million of the Class B-R Notes and $25.0 million of the Class C-R Notes. The retained notes by the Company are eliminated in consolidation. The transaction resulted in a realized loss on the extinguishment of debt of $2.3 million from the acceleration of unamortized debt issuance costs of. The obligations of the Issuer under the CLO Transaction are non-recourse to the Company.

 

2019-1 CLO Reset Notes was executed through a private placement of the following 2019-1 Debt (dollars in thousands):

 

2019-1 Debt  Principal Amount   Spread above Index  Interest rate at
March 31, 2022		 
Class A-1-R  $ 282,500   1.50% + 3 Month LIBOR   1.74%
Class A-2-R   55,000   2.00% + 3 Month LIBOR   2.24%
Class B-R   15,000   2.60% + 3 Month LIBOR   2.84%
Total 2019-1 Debt   352,500         
Membership Interests   102,250   Non-interest bearing   Not applicable 
Total  $454,750         

 

The Loans and Class A-1-R, A-2-R, and B-R Notes are included in the consolidated financial statements of the Company. The $32.5 million of the Class B-R Notes, $25.0 million of the Class C-R Notes and Membership Interests retained by the Company are eliminated in consolidation.

 

The Company serves as portfolio manager of the 2019-1 Issuer pursuant to a portfolio management agreement between the Company and the 2019-1 Issuer. For so long as the Company serves as portfolio manager, the Company will not charge any management fee or subordinated interest to which it may be entitled.

 

During the reinvestment period, pursuant to the indenture and loan agreement governing the 2019-1 Notes and Loans, respectively, all principal collections received on the underlying collateral may be used by the 2019-1 Issuer to purchase new collateral under the direction of the Company in its capacity as portfolio manager of the 2019-1 Issuer and in accordance with the 2019-1 Issuer investment strategy and the terms of the indenture and loan agreement, as applicable.

 

100 

 

 

 

The Company has agreed to hold on an ongoing basis the Membership Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate amount of all obligations issued by the 2019-1 Co-Issuers for so long as the 2019-1 Debt remains outstanding.

 

The 2019-1 Issuer pays ongoing administrative expenses to the trustee, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2019-1 Issuer.

 

As of March 31, 2022, there were 47 first lien and second lien senior secured loans with a total fair value of approximately $468.7 million and cash of $34.0 million securing the 2019-1 Debt. As of December 31, 2021, there were 45 first lien and second lien senior secured loans with a total fair value of approximately $441.0 million and cash of $62.6 million securing the 2019-1 Debt. Assets that are pledged as collateral for the 2019-1 Debt are not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company’s obligations under the indenture and loan agreement governing the 2019-1 Debt. The creditors of the 2019-1 Co-Issuers have received security interests in such assets and such assets are not intended to be available to the creditors of the Company (or an affiliate of the Company). The 2019-1 Portfolio must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture and loan agreement governing the 2019-1 Debt. As of March 31, 2022 and December 31, 2021, the Company was in compliance with its covenants related to the 2019-1 Debt.

 

Costs of the offering of $1.5 million were incurred in connection with the 2019-1 CLO Reset Notes which have been recorded as debt issuance costs and presented as a reduction to the outstanding principal amount of the 2019-1 Debt on the consolidated statements of assets and liabilities and are being amortized over the life using the effective interest method. The balance of the unamortized debt issuance costs related to the 2019-1 Issuer was $1.5 million and $1.5 million as of March 31, 2022 and December 31, 2021, respectively.

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2019-1 Co-Issuers were as follows (dollars in thousands):

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $1,624   $2,526 
Amortization of debt issuance costs and upfront commitment fees   32    57 
Total interest and debt financing expenses  $1,656   $2,583 

 

Revolving Advisor Loan

 

On March 27, 2020, the Company entered into an unsecured revolving loan agreement (the “Revolving Advisor Loan”) with BCSF Advisors, LP, the investment adviser of the Company. The Revolving Advisor Loan has a maximum credit limit of $50.0 million and a maturity date of March 27, 2023. The Revolving Advisor Loan accrues interest at the Applicable Federal Rate from the date of such loan until the loan is repaid in full. As of March 31, 2022, there were no borrowings under the Revolving Advisor Loan.

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the Revolving Advisor Loan were as follows (dollars in thousands):

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $—   $— 
Total interest and debt financing expenses  $—   $— 

 

101 

 

 

 2023 Notes

 

On June 10, 2020, the Company entered into a Master Note Purchase Agreement with institutional investors listed on the Purchaser Schedule thereto (the “Note Purchase Agreement”), in connection with the Company’s issuance of $150.0 million aggregate principal amount of its 8.50% senior unsecured notes due 2023 (the “ 2023 Notes”). The sale of the 2023 Notes generated net proceeds of approximately $146.4 million, including an offering discount of $1.5 million and debt issuance costs in connection with the transaction, including fees and commissions, of $2.1 million.

 

The 2023 Notes will mature on June 10, 2023 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Note Purchase Agreement. The 2023 Notes will bear interest at a rate of 8.50% per year payable semi-annually on June 10 and December 10 of each year, commencing on December 10, 2020. As of March 31, 2022, the Company was in compliance with the terms of the Note Purchase Agreement governing the 2023 Notes.

 

On July 16, 2021 the Company repurchased $37.5 million of the 2023 Notes at a total cost of $39.5 million. This resulted in a realized loss on the extinguishment of debt of $2.5 million, which included a premium paid of $2.0 million and acceleration of unamortized debt issuance costs and original issue discount of $0.5 million.

 

As of March 31, 2022 and December 31, 2021, the components of the carrying value of the 2023 Notes were as follows (dollars in thousands):

 

   March 31,
2022		   December 31,
2021		 
Principal amount of debt  $112,500   $112,500 
Unamortized debt issuance cost   (687)   (822)
Original issue discount, net of accretion   (456)   (545)
Carrying value of 2023 Notes  $111,357   $111,133 

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2023 Notes were as follows (dollars in thousands):

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $2,250   $3,188 
Amortization of debt issuance cost   135    180 
Accretion of original issue discount   90    119 
Total interest and debt financing expenses  $2,475   $3,487 

 

 March 2026 Notes

 

On March 10, 2021, the Company and U.S. Bank National Association (the “Trustee”), entered into an Indenture (the “Base Indenture”) and First Supplemental Indenture (the “First Supplemental Indenture,” and together with the Base Indenture, the “Indenture”) between the Company and the Trustee. The First Supplemental Indenture relates to the Company’s issuance of $300.0 million aggregate principal amount of its 2.95% notes due 2026 (the “2026 Notes”).

 

The March 2026 Notes will mature on March 10, 2026 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Indenture. The March 2026 Notes bear interest at a rate of 2.95% per year payable semi-annually on March 10th and September 10th of each year, commencing on September 10, 2021. The March 2026 Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the March 2026 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.

 

The net proceeds to the Company were approximately $294.3 million, after deducting the underwriting discounts and commissions of $4.4 million and offering expenses of $1.3 million. 

 

102 

 

 

As of March 31, 2022 and December 31, 2021, the components of the carrying value of the March 2026 Notes were as follows (dollars in thousands):

 

   March 31,
2022		   December 31,
2021		 
Principal amount of debt  $300,000   $300,000 
Unamortized debt issuance cost   (2,559)   (2,719)
Original issue discount, net of accretion   (1,902)   (2,021)
Carrying value of March 2026 Notes  $295,539   $295,260 

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2026 Notes were as follows (dollars in thousands):

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $2,213   $516 
Amortization of debt issuance cost   159    37 
Amortization of original issue discount   119    28 
Total interest and debt financing expenses  $2,491   $581 

 

October 2026 Notes

 

On October 13, 2021, the Company and the Trustee entered into a Second Supplemental Indenture (the “Second Supplemental Indenture”) to the Indenture between the Company and the Trustee. The Second Supplemental Indenture relates to the Company’s issuance of $300.0 million aggregate principal amount of its 2.55% notes due 2026 (the “October 2026 Notes,” and together with the March 2026 Notes, the “2026 Notes”).

 

The October 2026 Notes will mature on October 13, 2026 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Indenture. The October 2026 Notes bear interest at a rate of 2.55% per year payable semi-annually on April 13 and October 13 of each year, commencing on April 13, 2022. The October 2026 Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the October 2026 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.

 

The net proceeds to the Company were approximately $293.1 million, after deducting the underwriting discounts and commissions of $6.2 million and offering expenses of $0.7 million.

 

As of March 31, 2022 and December 31, 2021, the components of the carrying value of the October 2026 Notes were as follows (dollars in thousands):

 

   March 31,
2022		   December 31,
2021		 
Principal amount of debt  $300,000   $300,000 
Unamortized debt issuance cost   (3,315)   (3,495)
Original issue discount, net of accretion   (2,905)   (3,063)
Carrying value of October 2026 Notes  $293,780   $293,442 

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the 2026 Notes were as follows (dollars in thousands):

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $1,912   $— 
Amortization of debt issuance cost   180    — 
Amortization of original issue discount   158    — 
Total interest and debt financing expenses  $2,250   $— 

 

103 

 

 

Sumitomo Credit Facility

 

On December 24, 2021, the Company entered into a senior secured revolving credit agreement (the “Sumitomo Credit Agreement” or the “Sumitomo Credit Facility”) as Borrower, with Sumitomo Mitsui Banking Corporation, as Administrative Agent and Sole Book Runner, and with Sumitomo Mitsui Banking Corporation and MUFG Union Bank, N.A., as Joint Lead Arrangers. The Credit Agreement is effective as of December 24, 2021.

 

The facility amount under the Sumitomo Credit Agreement is $300.0 million with an accordion provision to permit increases to the total facility amount up to $1.0 billion. Proceeds of the loans under the Sumitomo Credit Agreement may be used for general corporate purposes of the Company, including, without limitation, repaying outstanding indebtedness, making distributions, contributions and investments, and acquisition and funding, and such other uses as permitted under the Sumitomo Credit Agreement. The maturity date is December 24, 2026.

 

Interest under the Sumitomo Credit Agreement for (i) loans for which the Company elects the base rate option, (A) if the borrowing base is equal to or greater than the product of 1.60 and the revolving credit exposure, is payable at an “alternate base rate”  (which is the greater of zero and the highest of (a) the prime rate as published in the print edition of The Wall Street Journal, Money Rates Section, (b) the federal funds effective rate plus 0.5% and (c) the one-month Eurocurrency rate plus 1% per annum) plus 0.75% per annum and (B) if the borrowing base is less than the product of 1.60 and the revolving credit exposure, the alternate base rate plus 0.875% per annum; (ii) loans for which the Company elects the Eurocurrency option, (A) if the borrowing base is equal to or greater than the product of 1.60 and the revolving credit exposure, is payable at a rate equal to the Eurocurrency rate plus 1.75% per annum and (B) if the borrowing base is less than the product of 1.60 and the revolving credit exposure, is payable at a rate equal to the Eurocurrency rate plus 1.875% per annum; and (iii) loans for which the Company elects the risk-free-rate option, (A) if the borrowing base is equal to or greater than the product of 1.60 and the revolving credit exposure, is payable at a rate equal to risk-free-rate plus 1.8693% per annum and (B) if the borrowing base is less than the product of 1.60 and the revolving credit exposure, is payable at a rate equal to risk-free-rate plus 1.9943% per annum. The Company pays a used commitment fee of 37.5 basis points (0.375%) on the average daily unused amount of the dollar commitment.

 

The Sumitomo Credit Agreement includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature. As of March 31, 2022, the Company was in compliance with its covenants related to the Sumitomo Credit Facility.

 

As of March 31, 2022 and December 31, 2021, there were $39.0 million and $0.0 million of borrowings under the Sumitomo Credit Facility, and the company was in compliance with the terms of the Sumitomo Credit Facility.

 

For the three months ended March 31, 2022 and 2021, the components of interest expense related to the Sumitomo Credit Facility were as follows (dollars in thousands):

 

   For the Three Months Ended
March 31,		 
   2022   2021 
Borrowing interest expense  $44   $— 
Unused facility fee   292    — 
Amortization of original issue discount   108    — 
Total interest and debt financing expenses  $444   $— 

 

104 

 

 

Distribution Policy

 

The Company’s distributions are recorded on the record date. The following table summarizes distributions declared during the three months ended March 31, 2022 (dollars in thousands, except per share data):

 

Date Declared  Record Date  Payment Date  Amount
Per Share		   Total
Distributions		 
February 16, 2022  March 31, 2022  April 29, 2022  $0.34   $21,951 
Total distributions declared        $0.34   $21,951 

 

The distributions declared during the three months ended March 31, 2022 were derived from investment company taxable income and net capital gain, if any.

 

The Company’s distributions are recorded on the record date. The following table summarizes distributions declared during the three months ended March 31, 2021 (dollars in thousands, except per share data):

 

Date Declared  Record Date  Payment Date  Amount
Per Share		   Total
Distributions		 
February 18, 2021  March 31, 2021  April 30, 2021  $0.34   $21,951 
Total distributions declared        $0.34   $21,951 

 

Distributions to common stockholders are recorded on the record date. To the extent that we have income available, we intend to distribute quarterly distributions to our stockholders. Our quarterly distributions, if any, will be determined by the Board. Any distributions to our stockholders will be declared out of assets legally available for distribution.

 

We have elected to be treated, and intend to operate in a manner so as to continuously qualify, as a regulated investment company (a “RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), beginning with our taxable year ended December 31, 2016. To qualify for and maintain RIC tax treatment, among other things, we must distribute dividends to our stockholders in respect of each taxable year of an amount generally at least equal to 90% of the sum of our net ordinary income and net short-term capital gains in excess of our net long-term capital losses. In order to avoid the imposition of  certain excise taxes imposed on RICs, we must distribute dividends to our stockholders in respect of each calendar year of an amount at least equal to the sum of: (1) 98% of our net ordinary income (taking into account certain deferrals and elections) for such calendar year; (2) 98.2% of our capital gains in excess of capital losses, adjusted for certain ordinary losses, generally for the one-year period ending on October 31 of such calendar year; and (3) the sum of any net ordinary income plus capital gains net income for preceding years that were not distributed during such years and on which we paid no federal income tax.

 

We intend to distribute net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, we may decide in the future to retain all or a portion of our net capital gains for investment, incur a corporate-level tax on such capital gains, and elect to treat such capital gains as deemed distributions to our stockholders.

 

We have adopted a dividend reinvestment plan that provides for the reinvestment of cash dividends and distributions. Prior to the IPO, stockholders who “opted in” to our dividend reinvestment plan had their cash dividends and distributions automatically reinvested in additional shares of our common stock, rather than receiving cash dividends and distributions. Subsequent to the IPO, stockholders who do not “opt out” of our dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in additional shares of our common stock, rather than receiving cash dividends and distributions. Stockholders could elect to “opt in” or “opt out” of our dividend reinvestment plan in their subscription agreements, through the private offering. The elections of stockholders prior to the IPO shall remain effective after the IPO.

 

The U.S. federal income tax characterization of distributions declared and paid for the fiscal year will be determined at fiscal year-end based upon our investment company taxable income for the full fiscal year and distributions paid during the full year.

 

Commitments and Off-Balance Sheet Arrangements

 

We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to fund investments and to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized on the statements of assets and liabilities.

 

105 

 

 

As of March 31, 2022, the Company had $235.1 million of unfunded commitments under loan and financing agreements as follows (dollars in thousands):

 

   Expiration Date (1)   Unfunded Commitments (2)  
Portfolio Company & Investment          
9 Story Media Group Inc. - Revolver   4/30/2026   $1 
A&R Logistics, Inc. - Revolver   5/5/2025    3,051 
Abracon Group Holding, LLC - Revolver   7/18/2024    2,833 
Allworth Financial Group, L.P. - Delayed Draw   12/23/2026    511 
Allworth Financial Group, L.P. - Revolver   12/23/2026    2,440 
Amspec Services, Inc. - Revolver   7/2/2024    4,958 
Ansira Holdings, Inc. - Revolver   12/20/2024    1,700 
Appriss Holdings, Inc. - Revolver   5/6/2027    753 
Aramsco, Inc. - Revolver   8/28/2024    1,089 
Armstrong Bidco Limited - Delayed Draw   4/30/2025    4,762 
Avalon Acquiror, Inc. - Revolver   3/10/2028    7,353 
Batteries Plus Holding Corporation - Revolver   7/6/2022    2,691 
Captain D's LLC - Revolver   12/15/2023    1,862 
CB Nike IntermediateCo Ltd - Revolver   10/31/2025    44 
Concert Golf Partners Holdco DD T/L - Delayed Draw   3/30/2029    4,201 
Concert Golf Partners Holdco R/C - Revolver   3/31/2028    2,136 
CPS Group Holdings, Inc. - Revolver   3/3/2025    4,933 
CST Buyer Company - Revolver   10/3/2025    2,190 
DC Blox Inc. - Delayed Draw   3/22/2026    10,590 
Direct Travel, Inc. - Delayed Draw   10/2/2023    2,625 
Efficient Collaborative Retail Marketing Company, LLC - Revolver   6/15/2022    2,267 
Element Buyer, Inc. - Revolver   7/19/2024    2,550 
Grammer Purchaser, Inc. - Revolver   9/30/2024    750 
Great Expressions Dental Center PC - Revolver   9/28/2022    219 
Green Street Parent, LLC - Revolver   8/27/2025    2,419 
GSP Holdings, LLC - Revolver   11/6/2025    1,813 
JHCC Holdings, LLC - Revolver   9/9/2025    1,160 
Kellstrom Commercial Aerospace, Inc. - Revolver   7/1/2025    1,493 
Mach Acquisition R/C - Revolver   10/18/2026    10,043 
Margaux Acquisition Inc. - Revolver   12/19/2024    2,872 

 

106 

 

 

    Expiration Date (1)    

Unfunded Commitments (2)

 
Margaux UK Finance Limited - Revolver   12/19/2024    656 
masLabor Revolver - Revolver   7/1/2027    1,034 
MRHT Acquisition Facility - First Lien Senior Secured Loan   7/26/2028    259 
MRI Software LLC - Revolver   2/10/2026    1,782 
MZR Buyer, LLC - Revolver   12/21/2026    5,210 
New Look (Delaware) Corporation - Delayed Draw   5/26/2028    2,005 
New Look Vision Group - Delayed Draw   5/26/2028    3,818 
New Look Vision Group - Revolver   5/26/2026    1,033 
Omni Intermediate DD T/L 2 - First Lien Senior Secured Loan   11/23/2026    504 
Omni Intermediate R/C - Revolver   11/23/2025    732 
Opus2 - Delayed Draw   5/5/2028    7,167 
Paisley Bidco Limited - Delayed Draw   11/26/2028    8,374 
Parcel2Go Acquisition Facility - Subordinated Debt   7/15/2028    36 
Premier Imaging, LLC - Delayed Draw   1/2/2025    5,235 
Refine Intermediate, Inc. - Revolver   9/3/2026    5,340 
Revalize, Inc. - Delayed Draw   4/15/2027    13,395 
Revalize, Inc. - Revolver   4/15/2027    503 
RoC Opco LLC - Revolver   2/25/2025    10,241 
Service Master Revolving Loan - Revolver   8/16/2027    2,612 
Service Master Term Note - First Lien Senior Secured Loan   8/16/2027    2 
Smartronix RC - Revolver   11/23/2028    6,321 
Solaray, LLC - Revolver   9/9/2022    10,484 
SunMed Group Holdings, LLC - Revolver   6/16/2027    1,032 
Superna Inc. - Delayed Draw   3/6/2028    2,631 
Superna Inc. - Revolver   3/6/2028    2,631 
ASP-r-pac Acquisition Co LLC - Revolver   12/29/2027    3,253 
Swoogo LLC - Revolver   12/9/2026    1,243 
TEI Holdings Inc. - Revolver   12/23/2025    4,070 
TGI Sport Bidco Pty Ltd - Revolver   4/30/2026    3,123 
TLC Purchaser, Inc. - Delayed Draw   10/13/2025    7,119 

 

107 

 

 

    Expiration Date (1)    

Unfunded Commitments (2)

 
TLC Purchaser, Inc. - Revolver   10/13/2025    2,492 
V Global Holdings LLC - Revolver   12/22/2025    7,885 
Ventiv Holdco, Inc. - Revolver   9/3/2025    3,407 
WCI Gigawatt Purchaser DD T/L - Delayed Draw   11/19/2027    1,609 
WCI Gigawatt Purchaser R/C - Revolver   11/19/2027    2,735 
WCI-HSG Purchaser, Inc. - Revolver   2/22/2025    378 
Whitcraft LLC - Revolver   4/3/2023    1,812 
World Insurance - Revolver   4/1/2026    861 
WSP Initial Term Loan - First Lien Senior Secured Loan   4/27/2023    1,797 
WSP Revolving Loan - Revolver   4/27/2027    402 
WU Holdco, Inc. - Revolver   3/26/2025    5,071 
YLG Holdings, Inc. - Revolver   10/31/2025    8,545 
Total First Lien Senior Secured Loans       $235,148 

 

 

 (1)  Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.
(2)  Unfunded commitments denominated in currencies other than U.S. dollars have been converted to U.S. dollars using the applicable foreign currency exchange rate as of March 31, 2022.

 

As of December 31, 2021, the Company had $234.0 million of unfunded commitments under loan and financing agreements as follows (dollars in thousands):

 

   Expiration Date (1)  Unfunded Commitments (2) 
Portfolio Company & Investment        
9 Story Media Group Inc. - Revolver  4/30/2026  $1 
A&R Logistics, Inc. - Revolver  5/5/2025   3,281 
Abracon Group Holding, LLC - Revolver  7/18/2024   2,833 
Allworth Financial Group, L.P. - Delayed Draw  12/23/2026   507 
Allworth Financial Group, L.P. - Revolver  12/23/2026   2,440 
AMI US Holdings Inc. - Revolver  4/1/2024   1,047 
Amspec Services, Inc. - Revolver  7/2/2024   4,179 
Ansira Holdings, Inc. - Revolver  12/20/2022   1,700 
Appriss Holdings, Inc. - Revolver  5/6/2027   753 
Aramsco, Inc. - Revolver  8/28/2024   3,387 
Armstrong Bidco T/L  –  First Lien Senior Secured Loan  4/30/2025   6,542 
ASP-r-pac Acquisition Co LLC  –  Revolver  12/29/2027   2,603 
Batteries Plus Holding Corporation  –  Revolver  6/30/2023   3,433 
Captain D’s LLC  –  Revolver  12/15/2023   1,862 
CPS Group Holdings, Inc.  –  Revolver  3/3/2025   4,933 
CST Buyer Company  –  Revolver  10/3/2025   2,190 
DC Blox Inc.  –  First Lien Senior Secured Loan  3/22/2026   12,781 
Direct Travel, Inc.  –  Delayed Draw  10/2/2023   2,625 
Efficient Collaborative Retail Marketing Company, LLC  –  Revolver  6/15/2022   2,267 

 

108 

 

 

 

 Expiration Date (1)  Unfunded Commitments (2) 
Element Buyer, Inc.  –  Revolver  7/19/2024   2,550 
Grammer Purchaser, Inc.  –  Revolver  9/30/2024   1,050 
Great Expressions Dental Center PC  –  Revolver  9/28/2022   215 
Green Street Parent, LLC  –  Revolver  8/27/2025   2,419 
GSP Holdings, LLC  –  Revolver  11/6/2025   2,947 
JHCC Holdings, LLC  –  Revolver  9/9/2025   1,939 
Kellstrom Commercial Aerospace, Inc.  –  Revolver  7/1/2025   3,092 
Mach Acquisition R/C  –  Revolver  10/18/2026   10,043 
Margaux Acquisition Inc.  –  Revolver  12/19/2024   2,872 
Margaux UK Finance Limited  –  Revolver  12/19/2024   675 
masLabor Revolver  –  Revolver  7/1/2027   1,034 
MRHT Acquisition Facility  –  First Lien Senior Secured Loan  7/26/2028   569 
MRI Software LLC  –  Revolver  2/10/2026   1,782 
MZR Buyer, LLC  –  Revolver  12/22/2026   5,210 
New Look (Delaware) Corporation  –  Delayed Draw  5/26/2028   2,005 
New Look Vision Group  –  Delayed Draw  5/26/2028   3,803 
New Look Vision Group  –  Revolver  5/26/2026   1,700 
Omni Intermediate DD T/L 2  –  First Lien Senior Secured Loan  11/30/2027   870 
Omni Intermediate R/C  –  Revolver  11/30/2026   549 
Opus2  –  Delayed Draw  5/5/2028   7,382 
Paisley Bidco Limited  –  Delayed Draw  11/24/2028   8,624 
Parcel2Go Acquisition Facility  –  Subordinated Debt  7/17/2028   3,731 
Refine Intermediate, Inc.  –  Revolver  9/3/2026   5,340 
Revalize, Inc.  –  Delayed Draw  4/15/2027   13,395 
Revalize, Inc.  –  Revolver  4/15/2027   1,340 
RoC Opco LLC  –  Revolver  2/25/2025   10,241 
Service Master Revolving Loan  –  Revolver  8/16/2027   3,240 
Smartronix RC  –  Revolver  11/23/2028   6,321 
Solaray, LLC  –  Revolver  9/9/2022   11,844 
SunMed Group Holdings, LLC  –  Revolver  6/16/2027   1,032 
Swoogo LLC  –  Revolver  12/9/2026   1,243 
TEI Holdings Inc.  –  Revolver  12/23/2025   4,070 
TGI Sport Bidco Pty Ltd  –  Revolver  4/30/2027   3,026 
Tidel Engineering, L.P.  –  Revolver  3/1/2023   4,250 
TLC Purchaser, Inc.  –  Delayed Draw  10/10/2025   7,119 
TLC Purchaser, Inc.  –  Revolver  10/13/2025   2,492 
V Global Holdings LLC  –  Revolver  12/22/2025   5,835 
Ventiv Holdco, Inc.  –  Revolver  9/3/2025   3,407 
WCI Gigawatt Purchaser DD T/L  –  Delayed Draw  11/19/2027   1,646 
WCI Gigawatt Purchaser R/C  –  Revolver  11/19/2027   3,218 
WCI-HSG Purchaser, Inc.  –  Revolver  2/24/2025   1,478 
Whitcraft LLC  –  Revolver  4/3/2023   1,812 
World Insurance  –  Revolver  4/1/2026   861 
WSP Initial Term Loan  –  First Lien Senior Secured Loan  4/27/2023   1,797 
WSP Revolving Loan  –  Revolver  4/27/2027   402 
WU Holdco, Inc.  –  First Lien Senior Secured Loan  3/26/2026   1,708 
WU Holdco, Inc.  –  Revolver  3/26/2025   3,944 
YLG Holdings, Inc.  –  Revolver  10/31/2025   8,545 
Total First Lien Senior Secured Loans     $234,031 

 

 

(1)  Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than its maturity.
(2)  Unfunded commitments denominated in currencies other than U.S. dollars have been converted to U.S. dollars using the applicable foreign currency exchange rate as of December 31, 2021.

 

109 

 

 

Significant Accounting Estimates and Critical Accounting Policies

 

Basis of Presentation

 

The Company’s unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The Company’s unaudited consolidated financial statements and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 1, 6, 10 and 12 of Regulation S-X. These consolidated financial statements reflect adjustments that in the opinion of the Company are necessary for the fair statement of the financial position and results of operations for the periods presented herein and are not necessarily indicative of the full fiscal year. We have determined we meet the definition of an investment company and follow the accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 — Financial Services — Investment Companies (“ASC 946”). Our financial currency is U.S. dollars and these consolidated financial statements have been prepared in that currency. 

 

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates and such differences could be material.

 

Revenue Recognition

 

We record our investment transactions on a trade date basis. We record realized gains and losses based on the specific identification method. We record interest income, adjusted for amortization of premium and accretion of discount, on an accrual basis. Discount and premium to par value on investments acquired are accreted and amortized, respectively, into interest income over the life of the respective investment using the effective interest method. Loan origination fees, original issue discount and market discount or premium are capitalized and amortized into or against interest income using the effective interest method or straight-line method, as applicable. We record any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts received upon prepayment of a loan or debt security as interest income.

 

Dividend income on preferred equity investments is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity investments is recorded on the record date for such distributions in the case of private portfolio companies, and on the ex-dividend date for publicly traded portfolio companies. Distributions received from a limited liability company or limited partnership investment are evaluated to determine if the distribution should be recorded as dividend income or a return of capital.

 

Certain investments may have contractual PIK interest or dividends. PIK represents accrued interest or accumulated dividends that are added to the loan principal of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity or upon being called by the issuer. We record PIK as interest or dividend income, as applicable. If at any point we believe PIK may not be realized, we place the investment generating PIK on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest or dividends are generally reversed through interest or dividend income, as applicable.

 

Certain structuring fees and amendment fees are recorded as other income when earned. We record administrative agent fees received as other income when the services are rendered.

 

Valuation of Portfolio Investments

 

Investments for which market quotations are readily available are typically valued at such market quotations. Market quotations are obtained from an independent pricing service, where available. If we cannot obtain a price from an independent pricing service or if the independent pricing service is not deemed to be representative with the market, we value certain investments held by us on the basis of prices provided by principal market makers. Generally investments marked in this manner will be marked at the mean of the bid and ask of the independent broker quotes obtained, in some cases, primarily illiquid securities, multiple quotes may not be available and the mid of the bid/ask from one broker will be used. To validate market quotations, we utilize a number of factors to determine if the quotations are representative of fair value, including the source and number of quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value, subject at all times to the oversight and approval of the Board, based on the input of our Advisor, our Audit Committee and one or more independent third party valuation firms engaged by our Board.

 

With respect to unquoted securities, we value each investment considering, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies that are public and other factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we use the pricing indicated by the external event to corroborate and/or assist us in our valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

 

110 

 

 

 

With respect to investments for which market quotations are not readily available, the Advisor will undertake a multi-step valuation process, which includes among other things, the below:

 

  • Our quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of our Advisor responsible for the portfolio investment or by an independent valuation firm;

 

  • Preliminary valuation conclusions are then documented and discussed with our senior management and our Advisor. Agreed upon valuation recommendations are presented to our Audit Committee;

 

  • Our Audit Committee of our Board reviews the valuations presented and recommends values for each of the investments to our Board;

 

  • At least once annually, the valuation for each portfolio investment constituting a material portion of the Company’s portfolio will be reviewed by an independent valuation firm; and

 

  • Our Board discusses valuations and determines the fair value of each investment in good faith based upon, among other things, the input of our Advisor, independent valuation firms, where applicable, and our Audit Committee.

 

In following this approach, the types of factors that are taken into account in the fair value pricing of investments include, as relevant, but are not limited to: comparison to publicly traded securities, including factors such as yield, maturity and measures of credit quality; the enterprise value of a portfolio company; the nature and realizable value of any collateral; the portfolio companies ability to make payments and its earnings and discounted cash flows; and the markets in which the portfolio company does business. In cases where an independent valuation firm provides fair valuations for investments, the independent valuation firm provides a fair valuation report, a description of the methodology used to determine the fair value and their analysis and calculations to support their conclusion.

 

Recent Accounting Pronouncements

 

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848),” which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of the adoption of ASU 2020-04 and 2021-01 on its consolidated financial statements.

 

Contractual Obligations

 

We have entered into the Amended Advisory Agreement with our Advisor (which supersedes the Prior Investment Advisory Agreement dated November 14, 2018 we had previously entered into). Our Advisor has agreed to serve as our investment adviser in accordance with the terms of the Amended Advisory Agreement. Under the Amended Advisory Agreement, we have agreed to pay an annual base management fee as well as an incentive fee based on our investment performance.

 

On November 28, 2018, our Board, including a majority of our Independent Directors, approved the Amended Advisory Agreement. On February 1, 2019 the Company’s stockholders approved the Amended Advisory Agreement. Pursuant to this Agreement, effective February 1, 2019, the base management fee of 1.5% (0.375% per quarter) of the average value of the Company’s gross assets (excluding cash and cash equivalents, but including assets purchased with borrowed amounts) will continue to apply to assets held at an asset coverage ratio of 200%, but a lower base management fee of 1.0% (0.25% per quarter) of the average value of the Company’s gross assets (excluding cash and cash equivalents, but including assets purchased with borrowed amounts) will apply to any amount of assets attributable to leverage decreasing the Company’s asset coverage ratio below 200%. The Amended Advisory Agreement incorporates (i) a three-year lookback provision and (ii) a cap on quarterly income incentive fee payments based on net realized or unrealized capital loss, if any, during the applicable three-year lookback period.

 

111 

 

 

We have entered into an Administration Agreement with the Administrator pursuant to which the Administrator will furnish us with administrative services necessary to conduct our day-to-day operations. We reimburse the Administrator for its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including certain compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and any of their respective staff who provide services to us, operations staff who provide services to us, and internal audit staff, if any, to the extent internal audit performs a role in our Sarbanes-Oxley internal control assessment.

 

If any of our contractual obligations discussed above are terminated, our costs may increase under any new agreements that we enter into as replacements. We would also likely incur expenses in locating alternative parties to provide the services we expect to receive under our Amended Advisory Agreement and Administration Agreement.

 

The following table shows the contractual maturities of our debt obligations as of March 31, 2022 (dollars in thousands):

 

   Payments Due by Period 
   Total   Less than
1 year		   1 — 3 years   3 — 5 years   More than
5 years		 
2019-1 Debt  $352,500   $—   $—   $—   $352,500 
2023 Notes   112,500    —    112,500    —    — 
March 2026 Notes   300,000    —    —    300,000    — 
October 2026 Notes   300,000    —    —    300,000    — 
Sumitomo Credit Facility   39,000    —    —    39,000    — 
Total Debt Obligations  $1,104,000   $—   $112,500   $639,000   $352,500 

 

Subsequent Events

 

The Company’s management has evaluated the events and transactions that have occurred through May 5, 2022, the issuance date of the consolidated financial statements, and noted no items requiring disclosure in this Form 10-Q or adjustment of the consolidated financial statements.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

We are subject to financial market risks, including changes in interest rates. We will generally invest in illiquid loans and securities including debt and equity securities of middle-market companies. Because we expect that there will not be a readily available market for many of the investments in our portfolio, we expect to value many of our portfolio investments at fair value as determined in good faith by the Board using a documented valuation policy and a consistently applied valuation process. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

 

112 

 

 

Assuming that the statement of financial condition as of March 31, 2022 were to remain constant and that we took no actions to alter our existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates (dollars in thousands): 

 

Change in Interest Rates  Increase (Decrease) in
Interest Income		   Increase (Decrease) in
Interest Expense		   Net Increase
(Decrease) in
Net Investment Income		 
Down 25 basis points  $(1,233)  $(979)  $(254)
Up 100 basis points   15,776    3,915    11,861 
Up 200 basis points   34,285    7,830    26,455 
Up 300 basis points   52,871    11,745    41,126 

 

From time to time, we may make investments that are denominated in a foreign currency. These investments are translated into U.S. dollars at the balance sheet date, exposing us to movements in foreign exchange rates. We may employ hedging techniques to minimize these risks, but we cannot assure you that such strategies will be effective or without risk to us. We may seek to utilize instruments such as, but not limited to, forward contracts to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

As of March 31, 2022 (the end of the period covered by this report), our management has carried out an evaluation, under the supervision of and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 and 15d-15(e) under the Exchange Act). Based on that evaluation our Chief Executive Officer and Chief Financial Officer have concluded that our current disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.  

 

Changes in Internal Controls Over Financial Reporting

 

There have been no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during our most recently completed fiscal quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

113 

 

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under loans to or other contracts with our portfolio companies.

 

Item 1A. Risk Factors

 

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties are not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. During the three months ended March 31, 2022, there have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2021.

 

Risks Related to Invastion of Ukraine

 

On February 24, 2022, Russia launched a full-scaled military invasion of Ukraine. In response, countries worldwide, including the United States, have imposed sanctions against Russia on certain businesses and individuals, including, but not limited to, those in the banking, import and export sectors. This invasion has led, is currently leading, and for an unknown period of time will continue to lead to disruptions in local, regional, national, and global markets and economies affected thereby. These disruptions caused by the invasion have included, and may continue to include, political, social, and economic disruptions and uncertainties that may affect our business operations or the business operations of our portfolio companies.

 

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

 

None.

 

Item 3. Defaults Upon Senior Securities

 

Not applicable.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits, Financial Statement Schedules

 

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the three months ended March 31, 2022 (and are numbered in accordance with Item 601 of Regulation S-K under the Securities Act).

 

Exhibit
Number		   Description of Document
3.1   Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 10 (File No. 000-55528) filed on October 6, 2016).
     
3.2   Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10 (File No. 000-55528) filed on October 6, 2016).
     
4.1   Dividend Reinvestment Plan (incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on Form 10 (File No. 000-55528) filed on October 6, 2016).

 

114 

 

 

10.1   Second Amended and Restated Investment Advisory Agreement, dated November 28, 2018, by and between the Company and the Advisor (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 814-01175), filed on February 1, 2019).
     
10.2   Administration Agreement, dated October 6, 2016, by and between the Company and the Administrator (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form 10 (File No. 000-55528) filed on October 6, 2016).
     
10.3   Form of Advisory Fee Waiver Agreement by and between the Company and the Advisor (incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement on Form 10 (File No. 000-55528) filed on October 6, 2016).
     
10.4   Form of Custodian Agreement by and between the Company and U.S. Bank National Association (incorporated by reference to Exhibit 10.6 to the Company’s Registration Statement on Form 10 (File No. 000-55528) filed on October 6, 2016).
     
10.5   Indenture, dated as of September 28, 2018, between BCC Middle Market CLO 2018-1, LLC, as issuer, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q (File No. 814-01175), filed on October 17, 2018).
     
10.6   Portfolio Management Agreement, dated as of September 28, 2018, by and between BCC Middle Market CLO 2018-1, LLC, as issuer, and Bain Capital Specialty Finance, Inc., as portfolio manager (incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q (File No. 814-01175), filed on October 17, 2018).
     
10.7   Loan Sale Agreement, dated as of September 28, 2018, by and between BCC Middle Market CLO 2018-1, LLC, as issuer, and Bain Capital Specialty Finance, Inc., as the transferor (incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q (File No. 814-01175), filed on October 17, 2018).
     
10.8   Collateral Administration Agreement, dated as of September 28, 2018, by and between BCC Middle Market CLO 2018-1, LLC, as issuer, Bain Capital Specialty Finance, Inc., as portfolio manager, and Wells Fargo Bank, National Association, as collateral administrator (incorporated by reference to Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q (File No. 814-01175), filed on October 17, 2018).
     
10.9   Master Participation Agreement, dated as of September 28, 2018, by and between BCSF I, LLC, as financing subsidiary, and BCC Middle Market CLO 2018-1, LLC, as issuer (incorporated by reference to Exhibit 10.13 to the Company’s Quarterly Report on Form 10-Q (File No. 814-01175), filed on October 17, 2018).

 

115 

 

 

10.10*   Amended and Restated Indenture, dated as of November 31, 2021, between BCC Middle Market CLO 2019-1, LLC, as issuer, BCC Middle Market CLO 2019-1 Co-Issuer, LLC, as co-issuer and Wells Fargo Bank, National Association, as trustee.
     
10.11*   Amended and Restated Portfolio Management Agreement, dated as of November 30, 2021, by and between BCC Middle Market CLO 2019-1, LLC, as issuer, and Bain Capital Specialty Finance, Inc., as portfolio manager.
     
10.12   Loan Sale Agreement, dated as of August 28, 2019, by and between BCC Middle Market CLO 2019-1, LLC, as issuer, and Bain Capital Specialty Finance, Inc., as the transferor (incorporated by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form 10-Q (File No. 814-01175), filed on November 6, 2019).
     
10.13   Collateral Administration Agreement, dated as of August 28, 2019, by and between BCC Middle Market CLO 2019-1, LLC, as issuer, Bain Capital Specialty Finance, Inc., as portfolio manager, and Wells Fargo Bank, National Association, as collateral administrator (incorporated by reference to Exhibit 10.19 to the Company’s Quarterly Report on Form 10-Q (File No. 814-01175), filed on November 6, 2019).
     
10.14   Master Participation Agreement, dated as of August 28, 2019, by and between BCSF I, LLC, as financing subsidiary, and BCC Middle Market CLO 2019-1, LLC, as issuer (incorporated by reference to Exhibit 10.20 to the Company’s Quarterly Report on Form 10-Q (File No. 814-01175), filed on November 6, 2019).
     
10.15   Master Participation Agreement, dated as of August 28, 2019, by and between BCSF II-C, LLC, as financing subsidiary, and BCC Middle Market CLO 2019-1, LLC, as issuer (incorporated by reference to Exhibit 10.21 to the Company’s Quarterly Report on Form 10-Q (File No. 814-01175), filed on November 6, 2019).
     
10.16   Revolving Loan Agreement, dated March 27, 2020, by and between the Company, as Borrower, and BCSF Advisors, LP, as Lender (incorporated by reference to Exhibit 10.26 to the Company’s Quarterly Report on Form 10-Q (File No. 814-01175), filed on May 4, 2020).
     
10.17   Master Note Purchase Agreement, dated June 10, 2020, of the Company (incorporated by reference to Exhibit 10.28 to the Company’s Quarterly Report on Form 10-Q (File No. 814-01175), filed on August 5, 2020).
     
10.18   Amended and Restated Limited Liability Company Agreement, dated February 9, 2021, of International Senior Loan Program, LLC, by and among the Company, Pantheon Private Debt Program SCSp SICAV—RAIF—Pantheon Senior Debt Secondaries II (USD), Pantheon Private Debt Program SCSp SICAV—RAIF—Tubera Credit 2020, Solutio Premium Private Debt I SCSp and Solutio Premium Private Debt II Master SCSp (incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K (File No. 814-01175) filed on February 24, 2021).
     
10.19   Underwriting Agreement, dated March 3, 2021, by and among Bain Capital Specialty Finance, Inc., BCSF Advisors, LP and Goldman Sachs & Co. LLC, as the representative of the underwriters (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K (File No. 814-01175), filed on March 5, 2021).

 

116 

 

 

10.20   Indenture, dated as of March 10, 2021, by and between the Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K (File No. 814-01175), filed on March 10, 2021).
     
10.21   First Supplemental Indenture, dated as of March 10, 2021, relating to the 2.950% Notes due 2026, by and between the Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K (File No. 814-01175), filed on March 10, 2021).
     
10.22   Form of 2.950% Notes due 2026 (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K (File No. 814-01175), filed on March 10, 2021).
     
10.23   Underwriting Agreement, dated October 5, 2021, by and among Bain Capital Specialty Finance, Inc., BCSF Advisors, LP, and Goldman Sachs & Co. LLC and SMBC Nikko Securities America Inc., as the representative of the underwriters (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K (File No. 814-01175), filed on October 6, 2021).
     
10.24   Second Supplemental Indenture, dated as of October 13, 2021, relating to the 2.550% Notes due 2026, by and between the Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K (File No. 814-01175), filed on October 13, 2021).
     
10.25   Form of 2.550% Notes due 2026 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K (File No. 814-01175), filed on October 13, 2021).
     
10.26   Revolving Credit Agreement, dated as of December 24, 2021, by and among the Company as Borrower, with Sumitomo Mitsui Banking Corporation, as Administrative Agent and Sole Book Runner, and with Sumitomo Mitsui Banking Corporation and MUFG Union Bank, N.A., as Joint Lead Arrangers  (incorporated by reference to Exhibit 10.41 to the Company's Annual Report on Form 10-K (File No. 814-01175) filed on February 23, 2022).
     
10.27   Amended and Restated Limited Liability Company Agreement, dated December 27, 2021, of Bain Capital Senior Loan Program, LLC. (incorporated by reference to Exhibit 10.42 to the Company's Annual Report on Form 10-K (File No. 814-01175) filed on February 23, 2022).
     
23.1   Consent of Independent Registered Public Accounting Firm (incorporated by reference to Exhibit 23.1 to the Company's Annual Report on Form 10-K (File No. 814-01175) filed on February 23, 2022).
     
24.1   Powers of Attorney (incorporated by reference to Exhibit 24.1 to the Company’s Annual Report on Form 10-K (File No. 814-01175), filed on March 29, 2017).
     
31.1*   Certification of Chief Executive Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended.
     
31.2*   Certification of Chief Financial Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended.
     
32*   Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended.
     

 *             Filed herewith.

 

117 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Bain Capital Specialty Finance, Inc.    
     
Date: May 5, 2022 By: /s/ Michael A. Ewald
  Name: Michael A. Ewald
  Title: Chief Executive Officer

 

Date: May 5, 2022 By: /s/ Sally F. Dornaus
  Name: Sally F. Dornaus
  Title: Chief Financial Officer

 

118