Barings BDC, Inc. - Quarter Report: 2018 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________________

Form 10-Q

__________________________________________________________

(Mark One)



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

For the quarterly period ended March 31, 2018



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

For the transition period from to

Commission file number 814-00733

__________________________________________________________

Triangle Capital Corporation

(Exact name of registrant as specified in its charter)

__________________________________________________________



Maryland		06-1798488
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

3700 Glenwood Avenue, Suite 530 Raleigh, North Carolina		27612
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (919) 719-4770

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A

__________________________________________________________

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 ý No ¨

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, 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. (Check one):



Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	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 ý

The number of shares outstanding of the registrant’s Common Stock on May 2, 2018 was 48,024,614.

TRIANGLE CAPITAL CORPORATION

TABLE OF CONTENTS

QUARTERLY REPORT ON FORM 10-Q



		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Consolidated Balance Sheet as of March 31, 2018 and Consolidated Balance Sheet as of December 31, 2017	3
	Unaudited Consolidated Statements of Operations for the Three Months Ended March 31, 2018 and 2017	4
	Unaudited Consolidated Statements of Changes in Net Assets for the Three Months Ended March 31, 2018 and 2017	5
	Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2018 and 2017	6
	Unaudited Consolidated Schedule of Investments as of March 31, 2018	7
	Consolidated Schedule of Investments as of December 31, 2017	14
	Notes to Unaudited Consolidated Financial Statements	21
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	47
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	62
Item 4.	Controls and Procedures	62

PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	63
Item 1A.	Risk Factors	63
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 3.	Defaults Upon Senior Securities	68
Item 4.	Mine Safety Disclosures	68
Item 5.	Other Information	69
Item 6.	Exhibits	69
Signatures		71

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

TRIANGLE CAPITAL CORPORATION

Consolidated Balance Sheets



	March 31, 2018			December 31, 2017
	(Unaudited)
Assets:
Investments at fair value:
Non-Control / Non-Affiliate investments (cost of $857,171,598 and $910,150,765 as of March 31, 2018 and December 31, 2017, respectively)	$	788,115,373		$	831,194,397
Affiliate investments (cost of $137,525,785 and $149,099,548 as of March 31, 2018 and December 31, 2017, respectively)	136,933,857			147,101,949
Control investments (cost of $64,694,407 and $62,375,532 as of March 31, 2018 and December 31, 2017, respectively)	38,936,000			37,988,000
Total investments at fair value	963,985,230			1,016,284,346
Cash and cash equivalents	207,911,913			191,849,697
Interest, fees and other receivables	7,806,038			7,806,887
Prepaid expenses and other current assets	2,413,115			1,854,861
Deferred financing fees	4,931,031			5,186,672
Property and equipment, net	67,442			81,149
Total assets	$	1,187,114,769		$	1,223,063,612
Liabilities:
Accounts payable and accrued liabilities	$	7,286,501		$	9,863,209
Interest payable	1,802,490			3,997,480
Taxes payable	126,587			796,111
Deferred income taxes	1,249,627			1,331,528
Borrowings under credit facility	125,001,284			156,070,484
Notes	163,578,086			163,408,301
SBA-guaranteed debentures payable	246,558,492			246,321,125
Total liabilities	545,603,067			581,788,238
Commitments and contingencies (Note 8)
Net Assets:
Common stock, $0.001 par value per share (150,000,000 shares authorized, 48,024,614 and 47,740,832 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively)	48,025			47,741
Additional paid-in capital	823,786,656			823,614,881
Net investment income in excess of distributions	6,571,435			8,305,431
Accumulated realized losses	(92,138,783		)	(84,883,623		)
Net unrealized depreciation	(96,755,631		)	(105,809,056		)
Total net assets	641,511,702			641,275,374
Total liabilities and net assets	$	1,187,114,769		$	1,223,063,612
Net asset value per share	$	13.36		$	13.43

See accompanying notes.

TRIANGLE CAPITAL CORPORATION

Unaudited Consolidated Statements of Operations



	Three Months Ended			Three Months Ended
	March 31, 2018			March 31, 2017
Investment income:
Interest income:
Non-Control / Non-Affiliate investments	$	19,006,050		$	20,470,837
Affiliate investments	2,660,187			3,372,135
Control investments	275,036			269,536
Total interest income	21,941,273			24,112,508
Dividend income:
Non-Control / Non-Affiliate investments	185,712			281,229
Affiliate investments	4,550			—
Total dividend income	190,262			281,229
Fee and other income:
Non-Control / Non-Affiliate investments	1,293,717			1,917,238
Affiliate investments	394,273			300,264
Control investments	100,000			100,000
Total fee and other income	1,787,990			2,317,502
Payment-in-kind interest income:
Non-Control / Non-Affiliate investments	1,306,581			2,639,382
Affiliate investments	422,140			738,466
Total payment-in-kind interest income	1,728,721			3,377,848
Interest income from cash and cash equivalents	427,841			101,683
Total investment income	26,076,087			30,190,770
Operating expenses:
Interest and other financing fees	7,590,548			6,910,303
Compensation expenses	4,092,852			4,250,413
General and administrative expenses	1,668,509			1,210,621
Total operating expenses	13,351,909			12,371,337
Net investment income	12,724,178			17,819,433
Realized and unrealized gains (losses) on investments and foreign currency borrowings:
Net realized gains (losses):
Non-Control / Non-Affiliate investments	(11,939,484		)	(12,360,335		)
Affiliate investments	3,257,198			3,532,816
Control investments	4,000			(4,491,440		)
Net realized losses on investments	(8,678,286		)	(13,318,959		)
Foreign currency borrowings	1,423,126			—
Net realized losses	(7,255,160		)	(13,318,959		)
Net unrealized appreciation (depreciation):
Non-Control / Non-Affiliate investments	9,932,384			5,416,936
Affiliate investments	1,455,331			(4,242,818		)
Control investments	(1,370,875		)	1,697,440
Net unrealized appreciation on investments	10,016,840			2,871,558
Foreign currency borrowings	(963,415		)	(178,792		)
Net unrealized appreciation	9,053,425			2,692,766
Net realized and unrealized gains (losses) on investments and foreign currency borrowings	1,798,265			(10,626,193		)
Provision for taxes	(50,790		)	—
Net increase in net assets resulting from operations	$	14,471,653		$	7,193,240
Net investment income per share—basic and diluted	$	0.27		$	0.42
Net increase in net assets resulting from operations per share—basic and diluted	$	0.30		$	0.17
Dividends/distributions per share:
Regular quarterly dividends/distributions	$	0.30		$	0.45
Total dividends/distributions per share	$	0.30		$	0.45
Weighted average shares outstanding—basic and diluted	47,898,859			42,743,469

See accompanying notes.

TRIANGLE CAPITAL CORPORATION

Unaudited Consolidated Statements of Changes in Net Assets



	Common Stock					Additional Paid-In Capital			Investment Income in Excess of Distributions			Net Accumulated Realized Losses on Investments			Net Unrealized Depreciation			Total Net Assets
	Number of Shares		Par Value			Additional Paid-In Capital			Investment Income in Excess of Distributions			Net Accumulated Realized Losses on Investments			Net Unrealized Depreciation			Total Net Assets
Balance, December 31, 2016	40,401,292		$	40,401		$	686,835,054		$	5,884,512		$	(24,211,594	)	$	(57,392,115	)	$	611,156,258
Net investment income	—		—			—			17,819,433			—			—			17,819,433
Stock-based compensation	—		—			1,453,904			—			—			—			1,453,904
Net realized gain (loss) on investments	—		—			—			—			(13,318,959		)	12,342,077			(976,882		)
Net unrealized depreciation on investments / foreign currency	—		—			—			—			—			(9,649,311		)	(9,649,311		)
Dividends / distributions	40,559		40			749,913			(21,438,377		)	—			—			(20,688,424		)
Public offering of common stock	7,000,000		7,000			132,198,931			—			—			—			132,205,931
Issuance of restricted stock	347,000		347			(347		)	—			—			—			—
Common stock withheld for payroll taxes upon vesting of restricted stock	(107,454	)	(107		)	(2,113,513		)	—			—			—			(2,113,620		)
Balance, March 31, 2017	47,681,397		$	47,681		$	819,123,942		$	2,265,568		$	(37,530,553	)	$	(54,699,349	)	$	729,207,289



	Common Stock					Additional Paid-In Capital			Investment Income in Excess of Distributions			Net Accumulated Realized Losses on Investments			Net Unrealized Depreciation			Total Net Assets
	Number of Shares		Par Value			Additional Paid-In Capital			Investment Income in Excess of Distributions			Net Accumulated Realized Losses on Investments			Net Unrealized Depreciation			Total Net Assets
Balance, December 31, 2017	47,740,832		$	47,741		$	823,614,881		$	8,305,431		$	(84,883,623	)	$	(105,809,056	)	$	641,275,374
Net investment income	—		—			—			12,724,178			—			—			12,724,178
Stock-based compensation	—		—			1,455,543			—			—			—			1,455,543
Net realized gain (loss) on investments / foreign currency	—		—			—			—			(7,255,160		)	11,567,045			4,311,885
Net unrealized depreciation on investments / foreign currency	—		—			—			—			—			(2,513,620		)	(2,513,620		)
Provision for taxes	—		—			—			(50,790		)	—			—			(50,790		)
Dividends / distributions	—		—			—			(14,407,384		)	—			—			(14,407,384		)
Issuance of restricted stock	409,000		409			(409		)	—			—			—			—
Common stock withheld for payroll taxes upon vesting of restricted stock	(125,218	)	(125		)	(1,283,359		)	—			—			—			(1,283,484		)
Balance, March 31, 2018	48,024,614		$	48,025		$	823,786,656		$	6,571,435		$	(92,138,783	)	$	(96,755,631	)	$	641,511,702

See accompanying notes.

TRIANGLE CAPITAL CORPORATION

Unaudited Consolidated Statements of Cash Flows



	Three Months Ended			Three Months Ended
	March 31, 2018			March 31, 2017
Cash flows from operating activities:
Net increase in net assets resulting from operations	$	14,471,653		$	7,193,240
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of portfolio investments	(28,285,073		)	(161,518,093		)
Repayments received/sales of portfolio investments	81,440,184			53,770,711
Loan origination and other fees received	205,499			2,638,485
Net realized loss on investments	8,678,286			13,318,959
Net realized gain on foreign currency borrowings	(1,423,126		)	—
Net unrealized appreciation on investments	(9,934,939		)	(1,388,362		)
Net unrealized depreciation on foreign currency borrowings	963,415			178,792
Deferred income taxes	(81,901		)	(1,483,196		)
Payment-in-kind interest accrued, net of payments received	1,425,537			(690,432		)
Amortization of deferred financing fees	662,793			587,438
Accretion of loan origination and other fees	(1,224,392		)	(1,349,409		)
Accretion of loan discounts	(5,986		)	(83,480		)
Depreciation expense	13,707			17,790
Stock-based compensation	1,455,543			1,453,904
Changes in operating assets and liabilities:
Interest, fees and other receivables	849			4,695,274
Prepaid expenses and other current assets	(558,254		)	(188,608		)
Accounts payable and accrued liabilities	(2,576,708		)	(3,495,262		)
Interest payable	(2,194,990		)	(2,437,827		)
Taxes payable	(669,524		)	(489,691		)
Net cash provided by (used in) operating activities	62,362,573			(89,269,767		)
Cash flows from investing activities:
Purchases of property and equipment	—			(18,507		)
Net cash used in investing activities	—			(18,507		)
Cash flows from financing activities:
Borrowings under credit facility	—			50,000,000
Repayments of credit facility	(30,609,489		)	(86,100,000		)
Financing fees paid	—			(500,000		)
Net proceeds related to public offering of common stock	—			132,205,931
Common stock withheld for payroll taxes upon vesting of restricted stock	(1,283,484		)	(2,113,620		)
Cash dividends/distributions paid	(14,407,384		)	(20,688,424		)
Net cash provided by (used in) financing activities	(46,300,357		)	72,803,887
Net increase (decrease) in cash and cash equivalents	16,062,216			(16,484,387		)
Cash and cash equivalents, beginning of period	191,849,697			107,087,663
Cash and cash equivalents, end of period	$	207,911,913		$	90,603,276
Supplemental disclosure of cash flow information:
Cash paid for interest	$	8,748,005		$	8,541,314
Summary of non-cash financing transactions:
Dividends/distributions paid through DRIP share issuances	$	—		$	749,953

See accompanying notes.

TRIANGLE CAPITAL CORPORATION Unaudited Consolidated Schedule of Investments March 31, 2018

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾
Non–Control / Non–Affiliate Investments:

Aden & Anais Holdings, Inc. (0%)*	Baby Products	Common Stock (20,000 shares)			$	2,000,000	$	793,000
Aden & Anais Holdings, Inc. (0%)*	Baby Products				2,000,000		793,000

AKKR-MVSC Member, LLC (F/K/A Motor Vehicle Software Corporation) (0%)*	Provider of EVR Services	Class A Units (1,000,000 units)			1,092,964		1,380,000
	Provider of EVR Services				1,092,964		1,380,000

AM General, LLC (5%)*	Defense Manufacturing	Senior Note (LIBOR + 7.25%, 8.9% Cash, Due 12/21)⁽⁸⁾	$	8,750,000	8,631,968		8,746,000
		Second Lien Term Note (LIBOR +11.75%, 13.6% Cash, Due 06/22)⁽⁸⁾	20,000,000		19,502,500		20,800,000
			28,750,000		28,134,468		29,546,000

Avantor, Inc. (0%)*	Life Sciences and Advanced Technologies	Subordinated Note (9.0% Cash, Due 10/25)	500,000		500,000		500,000
Avantor, Inc. (0%)*	Life Sciences and Advanced Technologies		500,000		500,000		500,000

AVL Holdings, Inc. (0%)*	Manufacturer and Distributor for Independent Artists and Authors	Common Stock (138 shares)			1,300,000		2,871,000
AVL Holdings, Inc. (0%)*					1,300,000		2,871,000

Baker Hill Acquisition, LLC (2%)*	Loan Origination Software Solutions Provider	Second Lien Term Notes (LIBOR + 11.0%, 12.7% Cash, Due 03/21)⁽⁸⁾	13,500,000		13,376,617		10,669,000
		Delayed Draw Term Note (LIBOR + 11.0%, 12.7% Cash, Due 03/21)⁽⁸⁾	2,000,000		1,983,316		1,983,316
		Limited Partnership Interest			1,498,500		106,000
			15,500,000		16,858,433		12,758,316

Cafe Enterprises, Inc. (0%)*	Restaurant	Second Lien Term Note (Prime + 5.75%, 10.5% Cash, Due 03/19)⁽⁶⁾⁽⁸⁾	2,051,934		1,936,671		—
		Subordinated Note (7% Cash, 7% PIK, Due 09/19)⁽⁶⁾	15,728,114		13,745,570		—
		Series C Preferred Stock (10,000 shares)			1,000,000		—
			17,780,048		16,682,241		—

Captek Softgel International, Inc. (5%)*	Nutraceuticals Manufacturer	Subordinated Note (10% Cash, 1.5% PIK, Due 01/23)	30,928,648		30,660,616		30,660,616
		Common Stock (38,023 shares)			3,957,697		3,984,000
			30,928,648		34,618,313		34,644,616

Carolina Beverage Group, LLC (0%)*	Beverage Manufacturing and Packaging	Class B Units (11,974 units)			119,735		1,735,000
Carolina Beverage Group, LLC (0%)*	Beverage Manufacturing and Packaging				119,735		1,735,000

Centerfield Media Holding Company (0%)*	Digital Marketing	Common Shares (500 shares)			500,000		999,000
Centerfield Media Holding Company (0%)*	Digital Marketing				500,000		999,000

CIBT Global, Inc. (2%)*	Provider of Mobility Services	Second Lien Term Note (LIBOR + 7.75%, 10.1% Cash, Due 06/25)⁽⁸⁾	10,000,000		9,906,716		9,972,000
CIBT Global, Inc. (2%)*	Provider of Mobility Services		10,000,000		9,906,716		9,972,000

CIS Acquisition, LLC (0%)*	Secure Communications and Computing Solutions Provider	Units (1.09 units)			277,538		317,000
CIS Acquisition, LLC (0%)*	Secure Communications and Computing Solutions Provider				277,538		317,000

Community Intervention Services, Inc. (0%)*	Provider of Behavioral Health Services	Subordinated Note (7% Cash, 6% PIK, Due 01/21) ⁽⁶⁾	21,650,530		17,732,558		—
Community Intervention Services, Inc. (0%)*	Provider of Behavioral Health Services		21,650,530		17,732,558		—

Constellis Holdings, LLC (1%)*	Provider of Security and Risk Management Services	Second Lien Term Note (LIBOR + 9.0%, 11.3% Cash, Due 04/25)⁽⁸⁾	5,000,000		4,931,468		4,970,000
Constellis Holdings, LLC (1%)*	Provider of Security and Risk Management Services		5,000,000		4,931,468		4,970,000

CPower Ultimate HoldCo, LLC (0%)*	Demand Response Business	Units (345,542 units)			345,542		2,221,000
CPower Ultimate HoldCo, LLC (0%)*	Demand Response Business				345,542		2,221,000

CWS Holding Company, LLC (0%)*	Manufacturer of Custom Windows and Sliding Doors	Class A Units (1,500,000 units)			1,500,000		1,218,000
CWS Holding Company, LLC (0%)*	Manufacturer of Custom Windows and Sliding Doors				1,500,000		1,218,000

TRIANGLE CAPITAL CORPORATION Unaudited Consolidated Schedule of Investments — (Continued) March 31, 2018

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾

Data Source Holdings, LLC (0%)*	Print Supply Chain Management Services	Common Units (47,503 units)			$	1,000,000	$	720,000
Data Source Holdings, LLC (0%)*	Print Supply Chain Management Services				1,000,000		720,000

Del Real, LLC (3%)*	Hispanic Refrigerated Foods Company	Subordinated Note (11% Cash, Due 04/23)	$	14,000,000	13,768,309		13,768,309
		Class A Units (3,000,000 units)			3,000,000		3,382,000
			14,000,000		16,768,309		17,150,309

Deva Holdings, Inc. (5%)*	Hair Products	Senior Note (LIBOR + 6.25%, 7.9% Cash, Due 10/23)⁽⁸⁾	32,418,750		31,765,980		31,765,980
Deva Holdings, Inc. (5%)*	Hair Products		32,418,750		31,765,980		31,765,980

Dimora Brands, Inc. (3%)*	Hardware Designer and Distributor	Second Lien Term Note (LIBOR + 8.5%, 10.4% Cash, Due 08/25)⁽⁸⁾	20,000,000		19,617,005		19,940,000
Dimora Brands, Inc. (3%)*	Hardware Designer and Distributor		20,000,000		19,617,005		19,940,000

DLC Acquisition, LLC (6%)*	Staffing Firm	Senior Notes (LIBOR + 8.0%, 10% Cash, Due 12/20)⁽⁸⁾	21,434,375		21,293,747		21,293,747
		Senior Note (10% Cash, 2% PIK, Due 12/20)	17,362,058		17,220,697		17,220,697
			38,796,433		38,514,444		38,514,444

Dyno Acquiror, Inc. (1%)*	Sewing Products and Seasonal Decorative Products Supplier	Subordinated Note (10.5% Cash, 1.5% PIK, Due 08/20)	4,681,037		4,669,651		4,669,651
		Series A Units (600,000 units)			600,000		461,000
			4,681,037		5,269,651		5,130,651

Eckler's Holdings, Inc. (0%)*	Restoration Parts and Accessories for Classic Cars and Trucks	Subordinated Note (17.5% Cash, Due 06/19)⁽⁶⁾	15,014,802		13,242,814		200,000
		Common Stock (18,029 shares)			183,562		—
		Series A Preferred Stock (1,596 shares)			1,596,126		—
		Series B Preferred Stock (702 shares)			435,127		—
			15,014,802		15,457,629		200,000

Frozen Specialties, Inc. (2%)*	Frozen Foods Manufacturer	Subordinated Note (10% Cash, 4% PIK, Due 07/18)	14,380,842		14,380,842		13,733,000
Frozen Specialties, Inc. (2%)*	Frozen Foods Manufacturer		14,380,842		14,380,842		13,733,000

GST AutoLeather, Inc. (0%)*	Supplier of Automotive Interior Leather	Subordinated Note (0% Cash, Due 01/21)⁽⁶⁾	24,166,324		23,073,507		200,000
GST AutoLeather, Inc. (0%)*	Supplier of Automotive Interior Leather		24,166,324		23,073,507		200,000

Halo Branded Solutions, Inc. (3%)*	Promotional Product Supply Chain Services	Subordinated Notes (11% Cash, 1% PIK, Due 10/22)	13,800,946		13,587,077		13,587,077
		Class A1 Units (2,600 units)			2,600,000		6,180,000
			13,800,946		16,187,077		19,767,077

HemaSource, Inc. (2%)*	Medical Products Distributor	Subordinated Note (9.5% Cash, 1.5% PIK, Due 01/24)	10,107,044		9,924,395		9,924,395
		Class A Units (1,000,000 units)			1,000,000		1,118,000
			10,107,044		10,924,395		11,042,395

HKW Capital Partners IV, L.P. (0%)*⁽⁴⁾	Multi-Sector Holdings	0.6% Limited Partnership Interest			851,605		1,464,000
HKW Capital Partners IV, L.P. (0%)*⁽⁴⁾	Multi-Sector Holdings				851,605		1,464,000

HTC Borrower, LLC (4%)*	Hunting and Outdoor Products	Subordinated Notes (10% Cash, 3% PIK, Due 09/20)	24,631,218		24,435,457		23,434,000
HTC Borrower, LLC (4%)*	Hunting and Outdoor Products		24,631,218		24,435,457		23,434,000

ICP Industrial, Inc. (4%)*	Coatings Formulator and Manufacturer	Second Lien Term Notes (LIBOR + 8.25%, 9.9% Cash, Due 05/24)⁽⁸⁾	25,000,000		24,411,011		24,411,011
		Class A Units (1,289 units)			1,751,483		1,783,000
			25,000,000		26,162,494		26,194,011

IDERA, Inc. (2%)*	Software Provider	Second Lien Term Note (LIBOR + 9.0%, 10.9% Cash, Due 06/25)⁽⁸⁾	10,000,000		9,859,581		10,020,000
IDERA, Inc. (2%)*	Software Provider		10,000,000		9,859,581		10,020,000

TRIANGLE CAPITAL CORPORATION Unaudited Consolidated Schedule of Investments — (Continued) March 31, 2018

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾
Inland Pipe Rehabilitation Holding Company LLC (0%)*	Cleaning and Repair Services	Membership Interest Purchase Warrant (3%)			$	853,500	$	1,120,000
					853,500		1,120,000

Integrated Efficiency Solutions, Inc. (3%)*	Energy Services Contracting Firm	Senior Secured Term Note (LIBOR + 9.25%, 10.9% Cash, Due 06/22)⁽⁸⁾	$	18,037,500	17,752,509		17,752,509
		Series B Preferred Units (238,095 units)			300,000		239,000
			18,037,500		18,052,509		17,991,509

Keystone Peer Review Organization, Inc. (0%)*	Healthcare - Managed Care	Second Lien Term Note (LIBOR + 9.25%, 11.6% Cash, Due 05/25)⁽⁸⁾	3,000,000		2,945,124		2,969,000
			3,000,000		2,945,124		2,969,000

KidKraft, Inc. (4%)*	Children's Toy Manufacturer and Distributor	Second Lien Term Note (11% Cash, 1% PIK, Due 03/22)	28,015,253		27,582,780		27,582,780
			28,015,253		27,582,780		27,582,780

K-Square Restaurant Partners, LP (0%)*	Restaurant	Class A Units of Limited Partnership (2,000 units)			638,260		779,000
					638,260		779,000

Lakeview Health Holdings, Inc. (3%)*	Substance Abuse Treatment Service Provider	Senior Note (LIBOR + 7.0%, 9.5% Cash, Due 12/21)⁽⁸⁾	18,379,973		18,223,024		17,370,000
		Common Stock (2,000 shares)			2,000,000		585,000
			18,379,973		20,223,024		17,955,000

Media Storm, LLC (0%)*	Marketing Services	Subordinated Note (10% Cash, Due 08/19)⁽⁶⁾	6,545,455		6,541,519		1,617,000
		Membership Units (1,216,204 units)			1,176,957		—
			6,545,455		7,718,476		1,617,000

MIC Holding LLC (1%)*	Firearm Accessories Manufacturer and Distributor	Preferred Units (1,470 units)			1,470,000		3,566,000
		Common Units (30,000 units)			30,000		5,088,000
					1,500,000		8,654,000

Micross Solutions LLC (2%)*	Provider of Semiconductor Products and Services	Senior Note (LIBOR + 5.75%, 7.8% Cash, Due 08/23)⁽⁸⁾	14,925,000		14,758,054		14,758,054
		Class A-2 Common Units (1,979,524 units)			2,019,693		1,334,000
			14,925,000		16,777,747		16,092,054

Nautic Partners VII, LP (0%)*⁽⁴⁾	Multi-Sector Holdings	0.4% Limited Partnership Interest			809,056		765,000
					809,056		765,000

Navicure, Inc. (1%)*	Healthcare Revenue Cycle Management Software	Second Lien Term Note (LIBOR + 7.5%, 9.4% Cash, Due 11/25)⁽⁸⁾	6,000,000		5,942,685		6,047,000
			6,000,000		5,942,685		6,047,000

OEConnection, LLC (0%)*	Automotive Parts Supply Chain Software	Second Lien Term Note (LIBOR + 8.0%, 10.5% Cash, Due 11/25)⁽⁸⁾	3,000,000		2,970,642		3,022,000
			3,000,000		2,970,642		3,022,000

Orchid Underwriters Agency, LLC (1%)*	Insurance Underwriter	Subordinated Note (10% Cash, 1.5% PIK, Due 03/23)	2,143,233		2,105,117		2,105,117
		Subordinated Note (13.5% PIK, Due 03/24)	839,877		825,789		825,789
		Class A Preferred Units (15,000 units)			338,158		988,000
		Class A Common Units (15,000 units)			—		1,337,000
			2,983,110		3,269,064		5,255,906

ProAmpac PG Borrower LLC (2%)*	Manufacturer of Flexible Packaging Products	Second Lien Term Note (LIBOR + 8.5%, 10.4% Cash, Due 11/24)⁽⁸⁾	15,000,000		14,800,030		15,150,000
			15,000,000		14,800,030		15,150,000

Q International Courier, LLC (2%)*	Third-Party Logistics Provider	Second Lien Term Note (LIBOR + 8.25%, 10.1% Cash, Due 09/25)⁽⁸⁾	14,000,000		13,732,023		13,732,023
			14,000,000		13,732,023		13,732,023

TRIANGLE CAPITAL CORPORATION Unaudited Consolidated Schedule of Investments — (Continued) March 31, 2018

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾
REP WWEX Acquisition Parent, LLC (2%)*	Third-Party Logistics Provider	Second Lien Term Note (LIBOR + 8.75%, 10.7% Cash, Due 02/25)⁽⁸⁾	$	15,000,000	$	14,799,795	$	15,068,000
REP WWEX Acquisition Parent, LLC (2%)*	Third-Party Logistics Provider		15,000,000		14,799,795		15,068,000

RMP Group, Inc. (2%)*	Healthcare Revenue Cycle Management Services	Subordinated Note (10.5% Cash, 1% PIK, Due 09/22)	10,108,677		9,937,103		9,937,103
		Units (1,000 units)			1,000,000		802,000
			10,108,677		10,937,103		10,739,103

RockYou, Inc. (0%)*	Mobile Game Advertising Network	Common Stock (67,585 shares)			111,000		111,000
RockYou, Inc. (0%)*	Mobile Game Advertising Network				111,000		111,000

Rotolo Consultants, Inc. (3%)*	Landscape Services	Subordinated Note (11% Cash, 3% PIK, Due 08/21)	7,690,320		7,594,155		7,594,155
		Series A Preferred Units (39 units)			3,654,253		8,464,000
			7,690,320		11,248,408		16,058,155

SCA Pharmaceuticals, LLC (2%)*	Provider of Pharmaceutical Products	Subordinated Note (LIBOR + 9.0%, 11.0% Cash, Due 12/20)⁽⁸⁾	10,000,000		9,844,578		9,844,578
SCA Pharmaceuticals, LLC (2%)*	Provider of Pharmaceutical Products		10,000,000		9,844,578		9,844,578

Schweiger Dermatology Group, LLC (6%)*	Provider of Dermatology Services	Senior Notes (LIBOR + 8.5%, 10.5% Cash, Due 06/22)⁽⁸⁾	34,800,000		34,325,281		34,325,281
		Class A-5 Units (1,976,284 units)			1,000,000		1,567,000
			34,800,000		35,325,281		35,892,281

SCUF Gaming, Inc. (4%)*	Gaming Controller Manufacturer	Senior Notes (LIBOR + 8.5%, 10.2% Cash, Due 12/21)⁽⁸⁾	24,757,920		24,361,718		24,361,718
		Revolver Loan (LIBOR + 8.5%, 10.2% Cash, Due 06/18)⁽⁸⁾	1,500,000		1,493,806		1,493,806
		Common Stock (27,112 shares)			742,000		260,000
			26,257,920		26,597,524		26,115,524

Smile Brands, Inc. (4%)*	Dental Service Organization	Subordinated Notes (10% Cash, 2% PIK, Due 02/23)	22,911,761		22,546,954		22,546,954
		Class A Units (3,000 units)			3,000,000		3,353,000
			22,911,761		25,546,954		25,899,954

SPC Partners V, LP (0%)*⁽⁴⁾	Multi-Sector Holdings	0.7% Limited Partnership Interest			2,260,450		2,412,000
SPC Partners V, LP (0%)*⁽⁴⁾	Multi-Sector Holdings				2,260,450		2,412,000

SPC Partners VI, LP (0%)*⁽⁴⁾	Multi-Sector Holdings	0.6% Limited Partnership Interest			475,450		475,450
SPC Partners VI, LP (0%)*⁽⁴⁾	Multi-Sector Holdings				475,450		475,450

St. Croix Hospice Acquisition Corp. (1%)*	Hospice Services Provider	Second Lien Term Note (LIBOR + 8.75%, 10.6% Cash, Due 03/24)⁽⁸⁾	9,200,000		9,069,764		9,069,764
		Series A Preferred Units (500 units)			500,000		264,000
		Class B Common Units (500 units)			—		—
			9,200,000		9,569,764		9,333,764

Tate's Bake Shop (2%)*	Producer of Baked Goods	Senior Note (LIBOR + 6.25%, 8.6% Cash, Due 08/19)⁽⁸⁾	9,950,000		9,929,852		9,929,852
		Limited Partnership Interest			534,280		1,827,000
			9,950,000		10,464,132		11,756,852

Tax Advisors Group, LLC (2%)*	Tax Advisory Services	Subordinated Note (10% Cash, 2% PIK, Due 12/22)	12,400,000		12,178,426		12,178,426
		Class A Units (386 units)			1,458,824		2,354,000
			12,400,000		13,637,250		14,532,426

TCFI Merlin LLC ("Merlin") and TCFI CSG LLC ("CSG") (2%)*	Specialty Staffing Service Provider	Subordinated Notes (11.9% Cash, Due 11/22)⁽⁸⁾	14,184,192		13,999,058		13,999,058
		Limited Partnership Units - Merlin (500,500 units)			285,485		1,606,000
		Class A Units - CSG (100,000 units)			100,000		264,000
			14,184,192		14,384,543		15,869,058

TRIANGLE CAPITAL CORPORATION Unaudited Consolidated Schedule of Investments — (Continued) March 31, 2018

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾
The Cook & Boardman Group, LLC (1%)*	Distributor of Doors and Related Products	Class A Units (1,400,000 units)			$	1,400,000	$	3,435,000
The Cook & Boardman Group, LLC (1%)*	Distributor of Doors and Related Products				1,400,000		3,435,000

Trademark Global LLC (4%)*	Supplier to Mass Market Internet Retail	Senior Note (LIBOR + 5.5%, 7.4% Cash, Due 10/22)⁽⁸⁾	$	9,974,897	9,879,619		9,879,619
		Subordinated Note (10% Cash, 1.3% PIK, Due 04/23)	14,800,000		14,617,380		14,617,380
		Class A Units (1,500,000 units)			1,500,000		1,500,000
		Class B Units (1,500,000 units)			—		800,000
			24,774,897		25,996,999		26,796,999

Travelpro Products, Inc. ("Travelpro") and TP - Holiday Group Limited ("TP") (3%)*	Luggage and Travel Bag Supplier	Second Lien Term Note - Travelpro (11% Cash, 2% PIK, Due 11/22)	10,384,620		10,212,850		10,212,850
		Second Lien Term Note - TP (11% Cash, 2% PIK, Due 11/22)⁽⁴⁾	9,199,637		9,045,042		9,184,943
		Common Units - Travelpro (2,000,000 units)			2,000,000		2,337,000
			19,584,257		21,257,892		21,734,793

United Biologics, LLC (0%)*	Allergy Immunotherapy	Class A-1 Common Units (18,818 units)			137,324		137,325
		Class A Common Units (177,935 units)			1,999,989		1,207,000
		Class A-2 Common Kicker Units (444,003 units)			—		—
		Class A-1 Common Kicker Units (14,114 units)			—		—
		Class A, Class A-1, Class A-1 Kicker & Class B Unit Purchase Warrants			838,117		263,000
					2,975,430		1,607,325

Vantage Mobility International, LLC (4%)*	Wheelchair Accessible Vehicle Manufacturer	Subordinated Notes (11.0% Cash, Due 09/21)⁽⁸⁾	30,708,796		30,243,806		27,946,000
		Class A Units (1,750,000 units)			1,750,000		314,000
			30,708,796		31,993,806		28,260,000

Vinvention Capital Partners TE LP (F/K/A Nomacorc, LLC) (0%)*	Synthetic Wine Cork Producer	Limited Partnership Interest			2,366,613		1,210,000
	Synthetic Wine Cork Producer				2,366,613		1,210,000

Wheel Pros Holdings, Inc. (3%)*	Wheel/Rim and Performance Tire Distributor	Subordinated Note (LIBOR + 7.0%, 11% Cash, Due 06/20)⁽⁸⁾	16,435,000		16,236,565		16,435,000
		Class A Units (2,000 units)			1,954,144		3,700,040
			16,435,000		18,190,709		20,135,040

WMI Holding, LLC ("WMI Holding") and WMI Parent, Inc. ("WMI Parent") (0%)*	Full-Service Media Organization	Class A Common Units - WMI Holding (16,300 units)			1,630,000		—
		Common Stock - WMI Parent (10 shares)			1		—
					1,630,001		—

WSO Holdings, LP (0%)*	Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer	Common Points (3,121 points)			3,089,581		2,420,000
WSO Holdings, LP (0%)*	Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer				3,089,581		2,420,000

YummyEarth Inc. (4%)*	Organic Candy Manufacturer	Senior Notes (LIBOR + 8.5%, 10.5% Cash, Due 08/20)⁽⁸⁾	31,250,000		30,988,963		26,475,000
		Limited Partnership Interest			3,496,500		—
			31,250,000		34,485,463		26,475,000

Subtotal Non–Control / Non–Affiliate Investments			802,248,733		857,171,598		788,115,373

Affiliate Investments:
Consolidated Lumber Holdings, LLC (1%)*	Lumber Yard Operator	Class A Units (15,000 units)			1,500,000		4,309,000
Consolidated Lumber Holdings, LLC (1%)*	Lumber Yard Operator				1,500,000		4,309,000

FCL Holding SPV, LLC (0%)*	Commercial Printing Services	Class A Interest (24,873 units)			292,000		621,000
		Class B Interest (48,427 units)			—		—
		Class C Interest (3,746 units)			—		—
					292,000		621,000

TRIANGLE CAPITAL CORPORATION Unaudited Consolidated Schedule of Investments — (Continued) March 31, 2018

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾
Mac Land Holdings, Inc. (0%)*	Environmental and Facilities Services	Common Stock (139 shares)			$	369,000	$	—
Mac Land Holdings, Inc. (0%)*	Environmental and Facilities Services				369,000		—

NB Products, Inc. (9%)*	Distributor of Work Apparel and Accessories	Subordinated Note (12% Cash, 2% PIK, Due 02/20)	$	23,688,753	23,450,580		23,450,580
		Jr. Subordinated Note (10% PIK, Due 02/20)	5,324,216		5,252,464		5,252,464
		Jr. Subordinated Bridge Note (20% PIK, Due 05/21)	2,555,864		2,536,155		2,536,155
		Series A Redeemable Senior Preferred Stock (7,839 shares)			7,621,648		10,646,000
		Common Stock (1,668,691 shares)			333,738		18,115,000
			31,568,833		39,194,585		60,000,199

Passport Food Group, LLC (3%)*	Manufacturer of Ethnic Food Products	Senior Notes (LIBOR + 9.0%, 10.7% Cash, Due 03/22)⁽⁸⁾	20,000,000		19,665,022		17,017,000
		Common Stock (20,000 shares)			2,000,000		33,000
			20,000,000		21,665,022		17,050,000

PCX Aerostructures, LLC (4%)*	Aerospace Components Manufacturer	Subordinated Note (6% Cash, Due 8/21)	32,411,713		32,033,986		24,120,000
		Series A Preferred Stock (6,066 shares)			6,065,621		—
		Series B Preferred Stock (1,411 shares)			1,410,514		—
		Class A Common Stock (121,922 shares)			30,480		—
			32,411,713		39,540,601		24,120,000

Team Waste, LLC (2%)*	Environmental and Facilities Services	Preferred Units (500,000 units)			10,000,000		10,000,000
Team Waste, LLC (2%)*	Environmental and Facilities Services				10,000,000		10,000,000

Technology Crops, LLC (1%)*	Supply Chain Management Services	Senior Notes (12% Cash, Due 08/19)	11,294,102		11,294,102		7,502,000
		Common Units (50 units)			500,000		—
			11,294,102		11,794,102		7,502,000

TGaS Advisors, LLC (2%)*	Advisory Solutions to Pharmaceutical Companies	Senior Note (10% Cash, 1% PIK, Due 11/19)	9,484,477		9,408,658		9,408,658
		Preferred Units (1,685,357 units)			1,556,069		1,727,000
			9,484,477		10,964,727		11,135,658

Tulcan Fund IV, L.P. (0%)*	Custom Forging and Fastener Supplies	Common Units (1,000,000 units)			1,000,000		—
Tulcan Fund IV, L.P. (0%)*	Custom Forging and Fastener Supplies				1,000,000		—

United Retirement Plan Consultants, Inc. (0%)*	Retirement Plan Administrator	Series A Preferred Shares (9,400 shares)			205,748		319,000
		Common Shares (100,000 shares)			1,000,000		513,000
					1,205,748		832,000

Wythe Will Tzetzo, LLC (0%)*	Confectionery Goods Distributor	Series A Preferred Units (99,829 units)			—		1,364,000
Wythe Will Tzetzo, LLC (0%)*	Confectionery Goods Distributor				—		1,364,000

Subtotal Affiliate Investments			104,759,125		137,525,785		136,933,857

Control Investments:
CRS-SPV, Inc. (3%)*	Fluid Reprocessing Services	Common Stock (1,100 shares)			18,428,000		20,283,000
CRS-SPV, Inc. (3%)*	Fluid Reprocessing Services				18,428,000		20,283,000

Frank Entertainment Group, LLC (1%)*	Movie Theatre and Family Entertainment Operator	Senior Note (6% Cash, Due 06/19)⁽⁶⁾	11,330,235		10,577,639		6,318,000
		Second Lien Term Note (2.5% Cash, Due 09/19)⁽⁶⁾	2,921,797		2,859,570		—
		Redeemable Preferred Units (2,800,000 units)			2,800,000		—
		Class B Redeemable Preferred Units (2,800,000 units)			2,800,000		—
		Class A Common Units (606,552 units)			1,000,000		—
			14,252,032		20,037,209		6,318,000

FrontStream Holdings, LLC (1%)*	Payment and Donation Management Product Service Provider	Subordinated Note (LIBOR + 6.0%, 7.7% Cash, Due 12/20)⁽⁶⁾⁽⁸⁾	17,440,312		16,523,389		8,585,000
		Common Stock (1,000 shares)			500,000		—
			17,440,312		17,023,389		8,585,000

TRIANGLE CAPITAL CORPORATION Unaudited Consolidated Schedule of Investments — (Continued) March 31, 2018

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾
Frontstreet Facility Solutions, Inc. (1%)*	Retail, Restaurant and Commercial Facilities Maintenance	Subordinated Note (13% Cash, Due 03/21)	$	8,462,629	$	8,454,811	$	3,750,000
		Series A Convertible Preferred Stock (60,000 shares)			250,575		—
		Series B Convertible Preferred Stock (20,000 shares)			500,144		—
		Common Stock (27,890 shares)			279		—
			8,462,629		9,205,809		3,750,000


Subtotal Control Investments			40,154,973		64,694,407		38,936,000

Total Investments, March 31, 2018 (150%)*			$	947,162,831	$	1,059,391,790	$	963,985,230

* Fair value as a percentage of net assets


(1)	All debt investments are income producing, unless otherwise noted. Equity and equity-linked investments are non-income producing, unless otherwise noted. The fair values of all investments were determined using significant unobservable inputs.


(2)	Disclosures of interest rates on notes include cash interest rates and payment-in-kind (“PIK”) interest rates.


(3)	All investments are restricted as to resale and were valued at fair value as determined in good faith by the Board of Directors.

(4)

Investment is not a qualifying investment as defined under Section 55(a) of the Investment Company Act of 1940, as amended. Non-qualifying assets represent 1.5% of total investments at fair value as of March 31, 2018. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. If at any time qualifying assets do not represent at least 70% of the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a).


(5)	PIK non-accrual investment


(6)	Non-accrual investment


(7)	All of the Company's investments, unless otherwise noted, are encumbered either as security for the Company's senior secured credit facility or in support of the SBA-guaranteed debentures issued by Triangle Mezzanine Fund LLLP and Triangle Mezzanine Fund II LP.

(8)

Index-based floating interest rate is subject to a contractual minimum interest rate. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference to either LIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically reset semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan.

See accompanying notes.

TRIANGLE CAPITAL CORPORATION Consolidated Schedule of Investments December 31, 2017

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾
Non–Control / Non–Affiliate Investments:

Access Medical Acquisition, Inc. (3%)*	Operator of Primary Care Clinics	Subordinated Notes (10% Cash, 2% PIK, Due 01/22)	$	13,819,514	$	13,630,067	$	13,630,067
		Class A Units (1,500,000 units)			901,026		3,610,000
			13,819,514		14,531,093		17,240,067

Aden & Anais Holdings, Inc. (0%)*	Baby Products	Common Stock (20,000 shares)			2,000,000		601,000
Aden & Anais Holdings, Inc. (0%)*	Baby Products				2,000,000		601,000

AKKR-MVSC Member, LLC (F/K/A Motor Vehicle Software Corporation) (0%)*	Provider of EVR Services	Class A Units (1,000,000 units)			1,092,964		1,413,000
	Provider of EVR Services				1,092,964		1,413,000

AM General, LLC (4%)*	Defense Manufacturing	Senior Note (LIBOR + 7.25%, 8.6% Cash, Due 12/21)⁽⁸⁾	9,000,000		8,875,311		8,886,000
		Second Lien Term Note (LIBOR +11.75%, 13.1% Cash, Due 06/22)⁽⁸⁾	20,000,000		19,480,694		19,593,000
			29,000,000		28,356,005		28,479,000

Avantor, Inc. (0%)*	Life Sciences and Advanced Technologies	Subordinated Note (9.0% Cash, Due 10/25)	500,000		500,000		500,000
Avantor, Inc. (0%)*	Life Sciences and Advanced Technologies		500,000		500,000		500,000

AVL Holdings, Inc. (0%)*	Manufacturer and Distributor for Independent Artists and Authors	Common Stock (138 shares)			1,300,000		2,824,000
AVL Holdings, Inc. (0%)*					1,300,000		2,824,000

Baker Hill Acquisition, LLC (2%)*	Loan Origination Software Solutions Provider	Second Lien Term Notes (LIBOR + 11.0%, 12.3% Cash, Due 03/21)⁽⁸⁾	13,500,000		13,367,659		11,130,000
		Delayed Draw Term Note (LIBOR + 11.0%, 12.3% Cash, Due 03/21)⁽⁸⁾	2,000,000		1,982,177		1,982,177
		Limited Partnership Interest			1,498,500		105,000
			15,500,000		16,848,336		13,217,177

Cafe Enterprises, Inc. (0%)*	Restaurant	Second Lien Term Note (Prime + 5.75%, 10.3% Cash, Due 03/19)⁽⁶⁾⁽⁸⁾	2,019,425		1,956,096		—
		Subordinated Note (7% Cash, 7% PIK, Due 09/19)⁽⁶⁾	15,190,538		13,745,570		—
		Series C Preferred Stock (10,000 shares)			1,000,000		—
			17,209,963		16,701,666		—

Captek Softgel International, Inc. (5%)*	Nutraceuticals Manufacturer	Subordinated Note (10% Cash, 1.5% PIK, Due 01/23)	30,813,099		30,534,147		30,534,147
		Common Stock (38,023 shares)			3,957,697		4,137,000
			30,813,099		34,491,844		34,671,147

Carolina Beverage Group, LLC (0%)*	Beverage Manufacturing and Packaging	Class B Units (11,974 units)			119,735		1,873,000
Carolina Beverage Group, LLC (0%)*	Beverage Manufacturing and Packaging				119,735		1,873,000

Centerfield Media Holding Company (0%)*	Digital Marketing	Common Shares (500 shares)			500,000		1,129,000
Centerfield Media Holding Company (0%)*	Digital Marketing				500,000		1,129,000

CIBT Global, Inc. (2%)*	Provider of Mobility Services	Second Lien Term Note (LIBOR + 7.75%, 9.1% Cash, Due 06/25)⁽⁸⁾	10,000,000		9,904,429		9,815,000
CIBT Global, Inc. (2%)*	Provider of Mobility Services		10,000,000		9,904,429		9,815,000

CIS Acquisition, LLC (0%)*	Secure Communications and Computing Solutions Provider	Units (1.09 units)			277,538		277,538
CIS Acquisition, LLC (0%)*	Secure Communications and Computing Solutions Provider				277,538		277,538

Community Intervention Services, Inc. (0%)*	Provider of Behavioral Health Services	Subordinated Note (7% Cash, 6% PIK, Due 01/21) ⁽⁶⁾	20,969,036		17,732,558		—
Community Intervention Services, Inc. (0%)*	Provider of Behavioral Health Services		20,969,036		17,732,558		—

Constellis Holdings, LLC (1%)*	Provider of Security and Risk Management Services	Second Lien Term Note (LIBOR + 9.0%, 10.3% Cash, Due 04/25)⁽⁸⁾	5,000,000		4,929,791		4,894,000
Constellis Holdings, LLC (1%)*	Provider of Security and Risk Management Services		5,000,000		4,929,791		4,894,000

CPower Ultimate HoldCo, LLC (0%)*	Demand Response Business	Units (345,542 units)			345,542		1,988,000
CPower Ultimate HoldCo, LLC (0%)*	Demand Response Business				345,542		1,988,000

TRIANGLE CAPITAL CORPORATION Consolidated Schedule of Investments — (Continued) December 31, 2017

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾
CWS Holding Company, LLC (0%)*	Manufacturer of Custom Windows and Sliding Doors	Class A Units (1,500,000 units)			$	1,500,000	$	1,546,000
					1,500,000		1,546,000

Data Source Holdings, LLC (0%)*	Print Supply Chain Management Services	Common Units (47,503 units)			1,000,000		813,000
					1,000,000		813,000

Del Real, LLC (3%)*	Hispanic Refrigerated Foods Company	Subordinated Note (11% Cash, Due 04/23)	$	14,000,000	13,759,702		13,759,702
		Class A Units (3,000,000 units)			3,000,000		3,368,000
			14,000,000		16,759,702		17,127,702

Deva Holdings, Inc. (5%)*	Hair Products	Senior Note (LIBOR + 6.75%, 8.1% Cash, Due 10/23)⁽⁸⁾	32,500,000		31,823,379		31,823,379
			32,500,000		31,823,379		31,823,379

Dimora Brands, Inc. (3%)*	Hardware Designer and Distributor	Second Lien Term Note (LIBOR + 8.5%, 9.9% Cash, Due 08/25)⁽⁸⁾	20,000,000		19,608,400		19,615,000
			20,000,000		19,608,400		19,615,000

DLC Acquisition, LLC (6%)*	Staffing Firm	Senior Notes (LIBOR + 8.0%, 10% Cash, Due 12/20)⁽⁸⁾	21,706,250		21,539,521		21,539,521
		Senior Note (10% Cash, 2% PIK, Due 12/20)	17,275,680		17,123,271		17,123,271
			38,981,930		38,662,792		38,662,792

Dyno Acquiror, Inc. (1%)*	Sewing Products and Seasonal Decorative Products Supplier	Subordinated Note (10.5% Cash, 1.5% PIK, Due 08/20)	4,663,527		4,646,697		4,646,697
		Series A Units (600,000 units)			600,000		504,000
			4,663,527		5,246,697		5,150,697

Eckler's Holdings, Inc. (0%)*	Restoration Parts and Accessories for Classic Cars and Trucks	Subordinated Note (17.5% Cash, Due 06/19)⁽⁶⁾	14,385,439		13,242,814		—
		Common Stock (18,029 shares)			183,562		—
		Series A Preferred Stock (1,596 shares)			1,596,126		—
		Series B Preferred Stock (702 shares)			435,127		—
			14,385,439		15,457,629		—

Frozen Specialties, Inc. (2%)*	Frozen Foods Manufacturer	Subordinated Note (10% Cash, 4% PIK, Due 05/18)	14,238,457		14,238,457		14,238,457
			14,238,457		14,238,457		14,238,457

GST AutoLeather, Inc. (0%)*	Supplier of Automotive Interior Leather	Subordinated Note (0% Cash, Due 01/21)⁽⁶⁾	24,166,324		23,073,507		200,000
			24,166,324		23,073,507		200,000

Halo Branded Solutions, Inc. (3%)*	Promotional Product Supply Chain Services	Subordinated Notes (11% Cash, 1% PIK, Due 10/22)	13,766,530		13,543,628		13,543,628
		Class A1 Units (2,600 units)			2,600,000		5,857,000
			13,766,530		16,143,628		19,400,628

HemaSource, Inc. (2%)*	Medical Products Distributor	Subordinated Note (9.5% Cash, 1.5% PIK, Due 01/24)	10,069,284		9,880,715		9,880,715
		Class A Units (1,000,000 units)			1,000,000		1,023,000
			10,069,284		10,880,715		10,903,715

HKW Capital Partners IV, L.P. (0%)*⁽⁴⁾	Multi-Sector Holdings	0.6% Limited Partnership Interest			894,476		1,671,000
					894,476		1,671,000

HTC Borrower, LLC (4%)*	Hunting and Outdoor Products	Subordinated Notes (10% Cash, 3% PIK, Due 09/20)	26,935,658		26,722,850		25,759,000
			26,935,658		26,722,850		25,759,000

ICP Industrial, Inc. (3%)*	Coatings Formulator and Manufacturer	Second Lien Term Notes (LIBOR + 8.25%, 9.6% Cash, Due 05/24)⁽⁸⁾	20,000,000		19,392,800		19,392,800
		Class A Units (1,289 units)			1,751,483		1,650,000
			20,000,000		21,144,283		21,042,800

IDERA, Inc. (2%)*	Software Provider	Second Lien Term Note (LIBOR + 9.0%, 10.4% Cash, Due 06/25)⁽⁸⁾	10,000,000		9,856,308		9,866,000
			10,000,000		9,856,308		9,866,000

Inland Pipe Rehabilitation Holding Company LLC (0%)*	Cleaning and Repair Services	Membership Interest Purchase Warrant (3%)			853,500		1,101,000
					853,500		1,101,000

TRIANGLE CAPITAL CORPORATION Consolidated Schedule of Investments — (Continued) December 31, 2017

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾
Integrated Efficiency Solutions, Inc. (3%)*	Energy Services Contracting Firm	Senior Secured Term Note (LIBOR + 9.25%, 10.6% Cash, Due 06/22)⁽⁸⁾	$	18,268,750	$	17,970,511	$	17,970,511
		Series B Preferred Units (238,095 units)			300,000		243,000
			18,268,750		18,270,511		18,213,511

Keystone Peer Review Organization, Inc. (0%)*	Healthcare - Managed Care	Second Lien Term Note (LIBOR + 9.25%, 10.6% Cash, Due 05/25)⁽⁸⁾	3,000,000		2,943,794		2,922,000
			3,000,000		2,943,794		2,922,000

KidKraft, Inc. (4%)*	Children's Toy Manufacturer and Distributor	Second Lien Term Note (11% Cash, 1% PIK, Due 03/22)	27,945,580		27,491,811		27,491,811
			27,945,580		27,491,811		27,491,811

K-Square Restaurant Partners, LP (0%)*	Restaurant	Class A Units of Limited Partnership (2,000 units)			638,260		1,588,000
					638,260		1,588,000

Lakeview Health Holdings, Inc. (3%)*	Substance Abuse Treatment Service Provider	Senior Note (LIBOR + 7.0%, 8.5% Cash, Due 12/21)⁽⁸⁾	18,426,505		18,260,612		17,916,000
		Common Stock (2,000 shares)			2,000,000		853,000
			18,426,505		20,260,612		18,769,000

Media Storm, LLC (0%)*	Marketing Services	Subordinated Note (10% Cash, Due 08/19)⁽⁶⁾	6,876,818		6,541,519		1,617,000
		Membership Units (1,216,204 units)			1,176,957		—
			6,876,818		7,718,476		1,617,000

MIC Holding LLC (1%)*	Firearm Accessories Manufacturer and Distributor	Preferred Units (1,470 units)			1,470,000		3,449,000
		Common Units (30,000 units)			30,000		4,918,000
					1,500,000		8,367,000

Micross Solutions LLC (3%)*	Provider of Semiconductor Products and Services	Senior Note (LIBOR + 5.5%, 6.8% Cash, Due 08/23)⁽⁸⁾	14,962,500		14,788,973		14,788,973
		Class A-2 Common Units (1,979,524 units)			2,019,693		1,571,000
			14,962,500		16,808,666		16,359,973

Nautic Partners VII, LP (0%)*⁽⁴⁾	Multi-Sector Holdings	0.4% Limited Partnership Interest			907,332		1,175,000
					907,332		1,175,000

Navicure, Inc. (1%)*	Healthcare Revenue Cycle Management Software	Second Lien Term Note (LIBOR + 7.5%, 8.9% Cash, Due 11/25)⁽⁸⁾	6,000,000		5,941,328		5,941,328
			6,000,000		5,941,328		5,941,328

Nomacorc, LLC (4%)*	Synthetic Wine Cork Producer	Subordinated Note (10% Cash, 2.3% PIK, Due 07/21)	21,356,210		21,109,445		21,109,445
		Limited Partnership Interest			2,161,185		1,438,000
			21,356,210		23,270,630		22,547,445

OEConnection, LLC (0%)*	Automotive Parts Supply Chain Software	Second Lien Term Note (LIBOR + 8.0%, 9.3% Cash, Due 11/25)⁽⁸⁾	3,000,000		2,970,000		2,970,000
			3,000,000		2,970,000		2,970,000

Orchid Underwriters Agency, LLC (1%)*	Insurance Underwriter	Subordinated Note (10% Cash, 1.5% PIK, Due 03/23)	2,135,226		2,095,654		2,095,654
		Subordinated Note (13.5% PIK, Due 03/24)	812,457		797,991		797,991
		Class A Preferred Units (15,000 units)			338,158		957,000
		Class A Common Units (15,000 units)			—		1,132,000
			2,947,683		3,231,803		4,982,645

ProAmpac PG Borrower LLC (2%)*	Manufacturer of Flexible Packaging Products	Second Lien Term Note (LIBOR + 8.5%, 9.9% Cash, Due 11/24)⁽⁸⁾	15,000,000		14,794,786		14,988,000
			15,000,000		14,794,786		14,988,000

Q International Courier, LLC (2%)*	Third-Party Logistics Provider	Second Lien Term Note (LIBOR + 8.25%, 9.7% Cash, Due 09/25)⁽⁸⁾	14,000,000		13,725,941		13,725,941
			14,000,000		13,725,941		13,725,941

REP WWEX Acquisition Parent, LLC (2%)*	Third-Party Logistics Provider	Second Lien Term Note (LIBOR + 8.75%, 10.2% Cash, Due 02/25)⁽⁸⁾	15,000,000		14,794,594		14,861,000
			15,000,000		14,794,594		14,861,000

TRIANGLE CAPITAL CORPORATION Consolidated Schedule of Investments — (Continued) December 31, 2017

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾
RMP Group, Inc. (2%)*	Healthcare Revenue Cycle Management Services	Subordinated Note (10.5% Cash, 1% PIK, Due 09/22)	$	10,083,813	$	9,904,854	$	9,904,854
		Units (1,000 units)			1,000,000		723,000
			10,083,813		10,904,854		10,627,854

RockYou, Inc. (0%)*	Mobile Game Advertising Network	Common Stock (67,585 shares)			111,000		111,000
RockYou, Inc. (0%)*	Mobile Game Advertising Network				111,000		111,000

Rotolo Consultants, Inc. (3%)*	Landscape Services	Subordinated Note (11% Cash, 3% PIK, Due 08/21)	7,632,930		7,531,194		7,531,194
		Series A Preferred Units (39 units)			3,654,253		8,504,000
			7,632,930		11,185,447		16,035,194

SCA Pharmaceuticals, LLC (2%)*	Provider of Pharmaceutical Products	Subordinated Note (LIBOR + 9.0%, 10.5% Cash, Due 12/20)⁽⁸⁾	10,000,000		9,832,455		9,832,455
SCA Pharmaceuticals, LLC (2%)*	Provider of Pharmaceutical Products		10,000,000		9,832,455		9,832,455

Schweiger Dermatology Group, LLC (4%)*	Provider of Dermatology Services	Senior Notes (LIBOR + 8.5%, 10.0% Cash, Due 06/22)⁽⁸⁾	25,500,000		25,113,677		25,113,677
		Class A-5 Units (1,976,284 units)			1,000,000		1,000,000
			25,500,000		26,113,677		26,113,677

SCUF Gaming, Inc. (4%)*	Gaming Controller Manufacturer	Senior Notes (LIBOR + 8.5%, 9.9% Cash, Due 12/21)⁽⁸⁾	24,757,920		24,339,939		24,339,939
		Revolver Loan (LIBOR + 8.5%, 9.9% Cash, Due 06/18)⁽⁸⁾	1,500,000		1,487,760		1,487,760
		Common Stock (27,112 shares)			742,000		378,000
			26,257,920		26,569,699		26,205,699

Smile Brands, Inc. (4%)*	Dental Service Organization	Subordinated Notes (10% Cash, 2% PIK, Due 02/23)	22,796,512		22,417,773		22,417,773
		Class A Units (3,000 units)			3,000,000		3,353,000
			22,796,512		25,417,773		25,770,773

SPC Partners V, LP (0%)*⁽⁴⁾	Multi-Sector Holdings	0.7% Limited Partnership Interest			2,260,450		2,412,000
SPC Partners V, LP (0%)*⁽⁴⁾	Multi-Sector Holdings				2,260,450		2,412,000

SPC Partners VI, LP (0%)*⁽⁴⁾	Multi-Sector Holdings	0.6% Limited Partnership Interest			207,828		207,828
SPC Partners VI, LP (0%)*⁽⁴⁾	Multi-Sector Holdings				207,828		207,828

Specialized Desanders, Inc. (2%)*⁽⁴⁾	Sand and Particulate Removal Equipment Provider for Oil and Gas Companies	Subordinated Note (11% Cash, 2% PIK, Due 10/20)	10,117,769		8,692,122		7,451,070
		Class C Partnership Units (2,000,000 units)			1,937,421		3,993,000
			10,117,769		10,629,543		11,444,070

St. Croix Hospice Acquisition Corp. (1%)*	Hospice Services Provider	Second Lien Term Note (LIBOR + 8.75%, 10.1% Cash, Due 03/24)⁽⁸⁾	9,200,000		9,065,834		9,065,834
		Series A Preferred Units (500 units)			500,000		359,000
		Class B Common Units (500 units)			—		—
			9,200,000		9,565,834		9,424,834

Tate's Bake Shop (2%)*	Producer of Baked Goods	Senior Note (LIBOR + 6.25%, 7.6% Cash, Due 08/19)⁽⁸⁾	9,975,000		9,951,709		9,951,709
		Limited Partnership Interest			534,280		1,845,000
			9,975,000		10,485,989		11,796,709

Tax Advisors Group, LLC (2%)*	Tax Advisory Services	Subordinated Note (10% Cash, 2% PIK, Due 12/22)	12,400,000		12,169,399		12,169,399
		Class A Units (386 units)			1,458,824		2,295,000
			12,400,000		13,628,223		14,464,399

TCFI Merlin LLC ("Merlin") and TCFI CSG LLC ("CSG") (2%)*	Specialty Staffing Service Provider	Subordinated Notes (11.6% Cash, Due 09/19)⁽⁸⁾	14,184,192		13,970,730		13,970,730
		Limited Partnership Units - Merlin (500,500 units)			285,485		1,595,000
		Class A Units - CSG (100,000 units)			100,000		230,000
			14,184,192		14,356,215		15,795,730

The Cook & Boardman Group, LLC (1%)*	Distributor of Doors and Related Products	Class A Units (1,400,000 units)			1,400,000		3,490,000
The Cook & Boardman Group, LLC (1%)*	Distributor of Doors and Related Products				1,400,000		3,490,000

TRIANGLE CAPITAL CORPORATION Consolidated Schedule of Investments — (Continued) December 31, 2017

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾
Trademark Global LLC (3%)*	Supplier to Mass Market Internet Retail	Subordinated Note (10% Cash, 1.3% PIK, Due 04/23)	$	14,800,000	$	14,610,405	$	14,610,405
		Class A Units (1,500,000 units)			1,500,000		1,500,000
		Class B Units (1,500,000 units)			—		894,000
			14,800,000		16,110,405		17,004,405

Travelpro Products, Inc. ("Travelpro") and TP - Holiday Group Limited ("TP") (3%)*	Luggage and Travel Bag Supplier	Second Lien Term Note - Travelpro (11% Cash, 2% PIK, Due 11/22)	10,332,955		10,153,881		10,153,881
		Second Lien Term Note - TP (11% Cash, 2% PIK, Due 11/22)⁽⁴⁾	9,152,950		8,991,783		9,403,477
		Common Units - Travelpro (2,000,000 units)			2,000,000		2,270,000
			19,485,905		21,145,664		21,827,358

United Biologics, LLC (2%)*	Allergy Immunotherapy	Senior Note (12% Cash, 2% PIK, Due 04/18)	13,022,543		13,022,542		13,022,542
		Class A-1 Common Units (18,818 units)			137,324		137,325
		Class A Common Units (177,935 units)			1,999,989		1,351,000
		Class A-2 Common Kicker Units (444,003 units)			—		—
		Class A-1 Common Kicker Units (14,114 units)			—		—
		Class A, Class A-1, Class A-1 Kicker & Class B Unit Purchase Warrants			838,117		288,000
			13,022,543		15,997,972		14,798,867

Vantage Mobility International, LLC (5%)*	Wheelchair Accessible Vehicle Manufacturer	Subordinated Notes (10.6% Cash, Due 09/21)⁽⁸⁾	30,708,796		30,216,432		30,216,432
		Class A Units (1,750,000 units)			1,750,000		719,000
			30,708,796		31,966,432		30,935,432

Wheel Pros Holdings, Inc. (3%)*	Wheel/Rim and Performance Tire Distributor	Subordinated Note (LIBOR + 7.0%, 11% Cash, Due 06/20)⁽⁸⁾	16,435,000		16,217,360		16,217,360
		Class A Units (2,000 units)			1,954,144		3,508,000
			16,435,000		18,171,504		19,725,360

Women's Marketing, Inc. (0%)*	Full-Service Media Organization	Subordinated Note (11% Cash, 1.5% PIK, Due 06/21)⁽⁶⁾	19,136,331		16,141,439		—
		Class A Common Units (16,300 units)			1,630,000		—
			19,136,331		17,771,439		—

WSO Holdings, LP (0%)*	Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer	Common Points (3,121 points)			3,089,581		2,612,000
WSO Holdings, LP (0%)*	Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer				3,089,581		2,612,000

YummyEarth Inc. (4%)*	Organic Candy Manufacturer	Senior Notes (LIBOR + 8.5%, 10.0% Cash, Due 08/20)⁽⁸⁾	31,250,000		30,965,913		26,196,000
		Limited Partnership Interest			3,496,500		—
			31,250,000		34,462,413		26,196,000

Subtotal Non–Control / Non–Affiliate Investments			856,289,518		910,150,765		831,194,397

Affiliate Investments:
All Metals Holding, LLC (1%)*	Steel Processor and Distributor	Subordinated Note (12% Cash, 1% PIK, Due 12/21)	6,434,351		6,278,902		6,434,000
		Units (318,977 units)			793,331		266,000
			6,434,351		7,072,233		6,700,000

Consolidated Lumber Holdings, LLC (1%)*	Lumber Yard Operator	Class A Units (15,000 units)			1,500,000		4,500,000
Consolidated Lumber Holdings, LLC (1%)*	Lumber Yard Operator				1,500,000		4,500,000

FCL Holding SPV, LLC (0%)*	Commercial Printing Services	Class A Interest (24,873 units)			292,000		570,000
		Class B Interest (48,427 units)			—		—
		Class C Interest (3,746 units)			—		—
					292,000		570,000

Mac Land Holdings, Inc. (0%)*	Environmental and Facilities Services	Common Stock (139 shares)			369,000		—
Mac Land Holdings, Inc. (0%)*	Environmental and Facilities Services				369,000		—

TRIANGLE CAPITAL CORPORATION Consolidated Schedule of Investments — (Continued) December 31, 2017

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾
NB Products, Inc. (9%)*	Distributor of Work Apparel and Accessories	Subordinated Note (12% Cash, 2% PIK, Due 02/20)	$	23,570,899	$	23,308,085	$	23,308,085
		Jr. Subordinated Note (10% PIK, Due 02/20)	5,194,357		5,114,592		5,114,592
		Jr. Subordinated Bridge Note (20% PIK, Due 05/21)	2,434,156		2,412,295		2,412,295
		Series A Redeemable Senior Preferred Stock (7,839 shares)			7,621,648		10,390,000
		Common Stock (1,668,691 shares)			333,738		16,044,000
			31,199,412		38,790,358		57,268,972

Passport Food Group, LLC (3%)*	Manufacturer of Ethnic Food Products	Senior Notes (LIBOR + 9.0%, 10.3% Cash, Due 03/22)⁽⁸⁾	20,000,000		19,648,160		16,672,000
		Common Stock (20,000 shares)			2,000,000		357,000
			20,000,000		21,648,160		17,029,000

PCX Aerostructures, LLC (4%)*	Aerospace Components Manufacturer	Subordinated Note (10.5% Cash, Due 10/19)⁽⁹⁾	31,647,359		31,244,000		22,574,000
		Subordinated Note (6% PIK, Due 10/20)⁽⁹⁾	759,286		759,286		548,000
		Series A Preferred Stock (6,066 shares)			6,065,621		—
		Series B Preferred Stock (411 shares)			410,514		—
		Class A Common Stock (121,922 shares)			30,480		—
			32,406,645		38,509,901		23,122,000

Team Waste, LLC (2%)*	Environmental and Facilities Services	Subordinated Note (10% Cash, 2% PIK, Due 08/23)	5,028,180		4,930,962		4,930,962
		Preferred Units (500,000 units)			10,000,000		10,000,000
			5,028,180		14,930,962		14,930,962

Technology Crops, LLC (1%)*	Supply Chain Management Services	Subordinated Notes (12% Cash, Due 02/18)	12,294,102		12,294,102		8,617,000
		Common Units (50 units)			500,000		—
			12,294,102		12,794,102		8,617,000

TGaS Advisors, LLC (2%)*	Advisory Solutions to Pharmaceutical Companies	Senior Note (10% Cash, 1% PIK, Due 11/19)	9,522,893		9,431,015		9,431,015
		Preferred Units (1,685,357 units)			1,556,069		1,524,000
			9,522,893		10,987,084		10,955,015

Tulcan Fund IV, L.P. (0%)*	Custom Forging and Fastener Supplies	Common Units (1,000,000 units)			1,000,000		—
Tulcan Fund IV, L.P. (0%)*	Custom Forging and Fastener Supplies				1,000,000		—

United Retirement Plan Consultants, Inc. (0%)*	Retirement Plan Administrator	Series A Preferred Shares (9,400 shares)			205,748		302,000
		Common Shares (100,000 shares)			1,000,000		419,000
					1,205,748		721,000

Wythe Will Tzetzo, LLC (0%)*	Confectionery Goods Distributor	Series A Preferred Units (99,829 units)			—		2,688,000
Wythe Will Tzetzo, LLC (0%)*	Confectionery Goods Distributor				—		2,688,000

Subtotal Affiliate Investments			116,885,583		149,099,548		147,101,949

Control Investments:
CRS-SPV, Inc. (3%)*	Fluid Reprocessing Services	Common Stock (1,100 shares)			18,428,000		20,283,000
CRS-SPV, Inc. (3%)*	Fluid Reprocessing Services				18,428,000		20,283,000

Frank Entertainment Group, LLC (1%)*	Movie Theatre and Family Entertainment Operator	Senior Note (6% Cash, Due 06/19)⁽⁶⁾	11,330,010		10,746,494		6,541,000
		Second Lien Term Note (2.5% Cash, Due 09/19)⁽⁶⁾	2,923,484		2,879,479		—
		Redeemable Preferred Units (2,800,000 units)			2,800,000		—
		Class B Redeemable Preferred Units (2,800,000 units)			2,800,000		—
		Class A Common Units (606,552 units)			1,000,000		—
			14,253,494		20,225,973		6,541,000

FrontStream Holdings, LLC (1%)*	Payment and Donation Management Product Service Provider	Subordinated Note (LIBOR + 6.0%, 7.3% Cash, Due 12/20)⁽⁶⁾⁽⁸⁾	14,644,622		14,023,389		7,414,000
		Common Stock (1,000 shares)			500,000		—
			14,644,622		14,523,389		7,414,000

TRIANGLE CAPITAL CORPORATION Consolidated Schedule of Investments — (Continued) December 31, 2017

Portfolio Company	Industry	Type of Investment^(1)(2)(7)	Principal Amount		Cost		Fair Value⁽³⁾
Frontstreet Facility Solutions, Inc. (1%)*	Retail, Restaurant and Commercial Facilities Maintenance	Subordinated Note (13% Cash, Due 03/21)	$	8,462,629	$	8,447,172	$	3,750,000
		Series A Convertible Preferred Stock (60,000 shares)			250,575		—
		Series B Convertible Preferred Stock (20,000 shares)			500,144		—
		Common Stock (27,890 shares)			279		—
			8,462,629		9,198,170		3,750,000


Subtotal Control Investments			37,360,745		62,375,532		37,988,000

Total Investments, December 31, 2017 (158%)*			$	1,010,535,846	$	1,121,625,845	$	1,016,284,346

* Fair value as a percentage of net assets


(1)	All debt investments are income producing, unless otherwise noted. Equity and equity-linked investments are non-income producing, unless otherwise noted. The fair values of all investments were determined using significant unobservable inputs.


(2)	Disclosures of interest rates on notes include cash interest rates and payment-in-kind (“PIK”) interest rates.


(3)	All investments are restricted as to resale and were valued at fair value as determined in good faith by the Board of Directors.

(4)

Investment is not a qualifying investment as defined under Section 55(a) of the Investment Company Act of 1940, as amended. Non-qualifying assets represent 2.6% of total investments at fair value as of December 31, 2017. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. If at any time qualifying assets do not represent at least 70% of the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a).


(5)	PIK non-accrual investment


(6)	Non-accrual investment


(7)	All of the Company's investments, unless otherwise noted, are encumbered either as security for the Company's senior secured credit facility or in support of the SBA-guaranteed debentures issued by Triangle Mezzanine Fund LLLP and Triangle Mezzanine Fund II LP.

(8)


(9)	Effective February 9, 2018, the Company's debt investments in PCX Aerostructures, LLC were amended to provide for cash interest at an all-in rate of 6% per annum.

See accompanying notes.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements

1. ORGANIZATION, BUSINESS AND BASIS OF PRESENTATION

Organization and Business

Triangle Capital Corporation and its wholly owned subsidiaries, including Triangle Mezzanine Fund LLLP (“Triangle SBIC”), Triangle Mezzanine Fund II LP (“Triangle SBIC II”) and Triangle Mezzanine Fund III LP (“Triangle SBIC III”) (collectively, the “Company”), are specialty finance companies. Triangle SBIC, Triangle SBIC II and Triangle SBIC III are specialty finance limited partnerships formed to make investments primarily in lower middle market companies located throughout the United States. On September 11, 2003, Triangle SBIC was licensed to operate as a Small Business Investment Company (“SBIC”) under the authority of the United States Small Business Administration (“SBA”). On May 26, 2010, Triangle SBIC II obtained its license to operate as an SBIC and on January 6, 2017, Triangle SBIC III obtained its license to operate as an SBIC. As SBICs, Triangle SBIC, Triangle SBIC II and Triangle SBIC III are subject to a variety of regulations concerning, among other things, the size and nature of the companies in which they may invest and the structure of those investments.

The Company currently operates as a closed-end, non-diversified investment company and has elected to be treated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act"). The Company is internally managed by its executive officers under the supervision of its Board of Directors (the "Board"). The Company does not pay management or advisory fees, but instead incurs the operating costs associated with employing executive management and investment and portfolio management professionals. Triangle SBIC has also elected to be treated as a BDC under the 1940 Act.

Basis of Presentation

The financial statements of the Company include the accounts of Triangle Capital Corporation and its wholly-owned subsidiaries. The effects of all intercompany transactions between Triangle Capital Corporation and its subsidiaries have been eliminated in consolidation. Under the investment company rules and regulations pursuant to Article 6 of Regulation S-X and Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 946, Financial Services - Investment Companies, the Company is precluded from consolidating portfolio company investments, including those in which it has a controlling interest, unless the portfolio company is another investment company. An exception to this general principle occurs if the Company holds a controlling interest in an operating company that provides all or substantially all of its services directly to the Company or to its portfolio companies. None of the portfolio investments made by the Company qualify for this exception. Therefore, the Company's investment portfolio is carried on the Consolidated Balance Sheets at fair value, as discussed further in Note 2, with any adjustments to fair value recognized as “Net unrealized appreciation (depreciation)” on the Unaudited Consolidated Statements of Operations.

The accompanying unaudited financial statements are presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for the fair presentation of financial statements for the interim period, have been reflected in the unaudited consolidated financial statements. The current period’s results of operations are not necessarily indicative of results that ultimately may be achieved for the year. Additionally, the unaudited financial statements and accompanying notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2017. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

Recently Issued Accounting Standards

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification ("ASC") Topic 606) ("ASU 2014-09"). ASU 2014-09 supersedes the revenue recognition requirements under ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the ASC. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The new guidance will significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. Additionally, the guidance requires improved disclosures as to the nature, amount, timing and uncertainty of revenue that is recognized. Financial instruments that fall within the scope of ASC 320, Investments - Debt and Equity Securities, are excluded from the scope of ASU 2014-09. The Company adopted ASU 2014-09 effective January 1, 2018 and determined that its financial instruments are excluded from the scope of ASU 2014-09. The adoption of ASU 2014-09 resulted in no material changes to the recognition, timing and classification of revenues and expenses and no significant impact on its consolidated financial statement disclosures.

2. INVESTMENTS

Portfolio Composition

The Company invests primarily in senior and subordinated debt securities of privately held companies, generally secured by security interests in portfolio company assets. In addition, the Company generally invests in one or more equity instruments of the borrower, such as direct preferred or common equity interests. The Company's investments generally range from $5.0 million to $50.0 million per portfolio company. In certain situations, we have partnered with other funds to provide larger financing commitments.

The cost basis of the Company's debt investments includes any unamortized original issue discount, unamortized loan origination fees and payment-in-kind (“PIK”) interest, if any. Summaries of the composition of the Company’s investment portfolio at cost and fair value, and as a percentage of total investments, are shown in the following tables:



	Cost		Percentage of Total Portfolio		Fair Value		Percentage of Total Portfolio
March 31, 2018:
Subordinated debt and 2^nd lien notes	$	634,127,821	60	%	$	532,821,494	55	%
Senior debt and 1^st lien notes	291,570,639		28		275,617,921		29
Equity shares	132,001,713		12		154,162,815		16
Equity warrants	1,691,617		—		1,383,000		—
	$	1,059,391,790	100	%	$	963,985,230	100	%
December 31, 2017:
Subordinated debt and 2^nd lien notes	$	710,543,854	63	%	$	589,548,358	58	%
Senior debt and 1^st lien notes	275,088,787		25		262,803,297		26
Equity shares	134,301,587		12		162,543,691		16
Equity warrants	1,691,617		—		1,389,000		—
	$	1,121,625,845	100	%	$	1,016,284,346	100	%

During the three months ended March 31, 2018, the Company made investments in nine existing portfolio companies totaling approximately $28.3 million. During the three months ended March 31, 2017, the Company made nine new investments totaling approximately $146.6 million and investments in ten existing portfolio companies totaling approximately $14.9 million.

Investment Valuation Process

The Company has a valuation policy, as well as established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring basis in accordance with the 1940 Act and FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”). The Company's valuation policy and processes were established by management of the Company with the assistance of certain third-party advisors and were approved by the Board. Under ASC Topic 820, there are three levels of valuation inputs, as follows:

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

Level 1 Inputs – include quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 Inputs – include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 Inputs – include inputs that are unobservable and significant to the fair value measurement.

The Company’s investment portfolio is primarily comprised of debt and equity instruments of privately held companies for which quoted prices or other inputs falling within the categories of Level 1 and Level 2 are generally not available. Therefore, the Company determines the fair value of its investments in good faith primarily using Level 3 inputs. In certain cases, quoted prices or other observable inputs may exist, and if so, the Company assesses the appropriateness of the use of these third-party quotes in determining fair value based on (i) its understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer and (ii) the depth and consistency of broker quotes and the correlation of changes in broker quotes with the underlying performance of the portfolio company.

Under ASC Topic 820, a financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized as Level 3 investments within the tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).

There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of the Company’s investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.

The Company’s valuation process is led by the Company’s executive officers. The Company’s valuation process begins with a quarterly review of each investment in the Company’s investment portfolio by the Company’s executive officers and investment committee. Valuations of each portfolio security are then prepared by the Company’s investment professionals, who have direct responsibility for the origination, management and monitoring of each investment. Under the Company’s valuation policy, each investment valuation is subject to (i) a review by the lead investment officer responsible for the portfolio company investment and (ii) a peer review by a second investment officer or executive officer of the Company. Generally, any investment that is valued below cost is subjected to review by one of the Company’s executive officers. After the peer review is complete, the Company engages two independent valuation firms, including Duff & Phelps, LLC (collectively, the “Valuation Firms”), to provide third-party reviews of certain investments, as described further below. Finally, the Board has the responsibility for reviewing and approving, in good faith, the fair value of the Company’s investments in accordance with the 1940 Act.

The Valuation Firms provide third-party valuation consulting services to the Company which consist of certain procedures that the Company identified and requested the Valuation Firms to perform (hereinafter referred to as the “Procedures”). The Procedures are performed with respect to each portfolio company at least once in every calendar year and for new portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In addition, the Procedures are generally performed with respect to a portfolio company when there has been a significant change in the fair value of the investment. In certain instances, the Company may determine that it is not cost-effective, and as a result is not in the Company’s stockholders’ best interest, to request the Valuation Firms to perform the Procedures on one or more portfolio companies. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

The total number of investments and the percentage of the investment portfolio on which the Procedures were performed are summarized below by period:



For the quarter ended:	Total companies	Percent of total investments at fair value⁽¹⁾
March 31, 2017	18	30%
June 30, 2017	20	29%
September 30, 2017	22	25%
December 31, 2017	21	35%
March 31, 2018	14	24%


(1)	Exclusive of the fair value of new investments made during the quarter.

Upon completion of the Procedures, the Valuation Firms concluded that, with respect to each investment reviewed by each Valuation Firm, the fair value of those investments subjected to the Procedures appeared reasonable. The Board is ultimately responsible for determining the fair value of the Company’s investments in good faith.

Investment Valuation Inputs

Under ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For the Company’s portfolio securities, fair value is generally the amount that the Company might reasonably expect to receive upon the current sale of the security. Under ASC Topic 820, the fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. Under ASC Topic 820, if no market for the security exists or if the Company does not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market. The securities in which the Company invests are generally only purchased and sold in merger and acquisition transactions, in which case the entire portfolio company is sold to a third-party purchaser. As a result, unless the Company has the ability to control such a transaction, the assumed principal market for the Company’s securities is a hypothetical secondary market. The Level 3 inputs to the Company’s valuation process reflect the Company’s best estimate of the assumptions that would be used by market participants in pricing the investment in a transaction in a hypothetical secondary market.

Enterprise Value Waterfall Approach

In valuing equity securities (including warrants), the Company estimates fair value using an “Enterprise Value Waterfall” valuation model. The Company estimates the enterprise value of a portfolio company and then allocates the enterprise value to the portfolio company’s securities in order of their relative liquidation preference. In addition, the model assumes that any outstanding debt or other securities that are senior to the Company’s equity securities are required to be repaid at par. Additionally, the Company estimates the fair value of a limited number of its debt securities using the Enterprise Value Waterfall approach in cases where the Company does not expect to receive full repayment.

To estimate the enterprise value of the portfolio company, the Company primarily uses a valuation model based on a transaction multiple, which generally is the original transaction multiple, and measures of the portfolio company’s financial performance. In addition, the Company considers other factors, including but not limited to (i) offers from third parties to purchase the portfolio company, (ii) the implied value of recent investments in the equity securities of the portfolio company, (iii) publicly available information regarding recent sales of private companies in comparable transactions and (iv) when the Company believes there are comparable companies that are publicly traded, the Company performs a review of these publicly traded companies and the market multiple of their equity securities. For certain non-performing assets, the Company may utilize the liquidation or collateral value of the portfolio company's assets in its estimation of enterprise value.

The significant Level 3 inputs to the Enterprise Value Waterfall model are (i) an appropriate transaction multiple and (ii) a measure of the portfolio company’s financial performance, which generally is either earnings before interest, taxes, depreciation and amortization, as adjusted (“Adjusted EBITDA”) or revenues. Such inputs can be based on historical operating results, projections of future operating results or a combination thereof. The operating results of a portfolio company may be unaudited, projected or pro forma financial information and may require adjustments for certain non-recurring items. In determining the operating results input, the Company utilizes the most recent portfolio company financial statements and forecasts available as of the valuation date. The Company also consults with the portfolio company’s senior management to obtain updates on the

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

portfolio company’s performance, including information such as industry trends, new product development, loss of customers and other operational issues.

Fair value measurements using the Enterprise Value Waterfall model can be sensitive to changes in one or more of the inputs. Assuming all other inputs to the Enterprise Value Waterfall model remain constant, any increase (decrease) in either the transaction multiple, Adjusted EBITDA or revenues for a particular equity security would result in a higher (lower) fair value for that security.

Income Approach

In valuing debt securities, the Company utilizes an “Income Approach” model that considers factors including, but not limited to, (i) the stated yield on the debt security, (ii) the portfolio company’s current Adjusted EBITDA as compared to the portfolio company’s historical or projected Adjusted EBITDA as of the date the investment was made and the portfolio company’s anticipated Adjusted EBITDA for the next twelve months of operations, (iii) the portfolio company’s current Leverage Ratio (defined as the portfolio company’s total indebtedness divided by Adjusted EBITDA) as compared to its Leverage Ratio as of the date the investment was made, (iv) publicly available information regarding current pricing and credit metrics for similar proposed and executed investment transactions of private companies and (v) when the Company believes a relevant comparison exists, current pricing and credit metrics for similar proposed and executed investment transactions of publicly traded debt. In addition, the Company uses a risk rating system to estimate the probability of default on the debt securities and the probability of loss if there is a default. This risk rating system covers both qualitative and quantitative aspects of the business and the securities held.

The Company considers the factors above, particularly any significant changes in the portfolio company’s results of operations and leverage, and develops an expectation of the yield that a hypothetical market participant would require when purchasing the debt investment (the “Required Rate of Return”). The Required Rate of Return, along with the Leverage Ratio and Adjusted EBITDA, are the significant Level 3 inputs to the Income Approach model. For investments where the Leverage Ratio and Adjusted EBITDA have not fluctuated significantly from the date the investment was made or have not fluctuated significantly from the Company’s expectations as of the date the investment was made, and where there have been no significant fluctuations in the market pricing for such investments, the Company may conclude that the Required Rate of Return is equal to the stated rate on the investment and therefore, the debt security is appropriately priced. In instances where the Company determines that the Required Rate of Return is different from the stated rate on the investment, the Company discounts the contractual cash flows on the debt instrument using the Required Rate of Return in order to estimate the fair value of the debt security.

Fair value measurements using the Income Approach model can be sensitive to changes in one or more of the inputs. Assuming all other inputs to the Income Approach model remain constant, any increase (decrease) in the Required Rate of Return or Leverage Ratio inputs for a particular debt security would result in a lower (higher) fair value for that security. Assuming all other inputs to the Income Approach model remain constant, any increase (decrease) in the Adjusted EBITDA input for a particular debt security would result in a higher (lower) fair value for that security.

The fair value of the Company’s royalty rights are calculated based on specific provisions contained in the pertinent operating or royalty agreements. The determination of the fair value of such royalty rights is not a significant component of the Company’s valuation process.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

The ranges and weighted average values of the significant Level 3 inputs used in the valuation of the Company’s debt and equity securities at March 31, 2018 and December 31, 2017 are summarized as follows:



March 31, 2018:	Fair Value(1)		Valuation Model	Level 3 Inputs	Range of Inputs	Weighted Average
Subordinated debt and 2nd lien notes	$	481,234,494	Income Approach	Required Rate of Return	9.0% – 18.0%	12.2%
				Leverage Ratio	2.6x – 7.3x	5.0x
				Adjusted EBITDA	$3.6 million – $1.0 billion	$42.8 million
Subordinated debt and 2nd lien notes	14,352,000		Enterprise Value Waterfall Approach	Adjusted EBITDA Multiple	5.5x – 7.0x	6.2x
			Enterprise Value Waterfall Approach	Adjusted EBITDA	$0.9 million – $6.4 million	$4.2 million
Senior debt and 1st lien notes	275,617,921		Income Approach	Required Rate of Return	7.4% – 25.0%	11.0%
				Leverage Ratio	0.8x – 8.7x	4.6x
				Adjusted EBITDA	$2.4 million – $152.1 million	$16.8 million
Equity shares and warrants	151,845,775		Enterprise Value Waterfall Approach	Adjusted EBITDA Multiple	3.3x – 17.3x	7.9x
			Enterprise Value Waterfall Approach	Adjusted EBITDA	$0.9 million – $60.0 million	$16.3 million
				Revenue Multiple	0.9x – 3.0x	1.3x
				Revenues	$16.9 million – $76.2 million	$53.0 million


(1)	One subordinated debt investment with a fair value of $16,435,000, one second lien debt investment with a fair value of $20,800,000 and one equity investment with a fair value of $3,700,040 were repaid or redeemed subsequent to the end of the reporting period and were valued at their transaction price.



December 31, 2017:	Fair Value⁽¹⁾		Valuation Model	Level 3 Input	Range of Inputs	Weighted Average
Subordinated debt and 2nd lien notes	$	570,133,358	Income Approach	Required Rate of Return	8.9% – 15.1%	11.7%
				Leverage Ratio	0.0x – 7.1x	4.6x
				Adjusted EBITDA	$1.0 million – $1.0 billion	$44.1 million
Subordinated debt and 2nd lien notes	12,981,000		Enterprise Value Waterfall Approach	Adjusted EBITDA Multiple	5.5x – 7.6x	6.6x
				Adjusted EBITDA	$1.7 million – $6.6 million	$4.3 million
				Revenue Multiple	0.8x – 0.8x	0.8x
				Revenues	$76.6 million – $76.6 million	$76.6 million
Senior debt and 1st lien notes	249,780,755		Income Approach	Required Rate of Return	6.8% – 25.0%	10.8%
				Leverage Ratio	0.6x – 8.5x	4.4x
				Adjusted EBITDA	$2.9 million – $142.4 million	$16.2 million
Equity shares and warrants	163,666,691		Enterprise Value Waterfall Approach	Adjusted EBITDA Multiple	3.3x – 14.9x	7.8x
			Enterprise Value Waterfall Approach	Adjusted EBITDA	$1.0 million – $60.0 million	$15.6 million
				Revenue Multiple	0.8x – 3.0x	1.3x
				Revenues	$17.0 million – 76.6 million	$53.7 million


(1)	One subordinated debt investment with a fair value of $6,434,000, one senior debt investment with a fair value of $13,022,542 and one equity security with a fair value of $266,000 were repaid or redeemed subsequent to the end of the reporting period and were valued at their transaction price.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

The following table presents the Company’s investment portfolio at fair value as of March 31, 2018 and December 31, 2017, categorized by the ASC Topic 820 valuation hierarchy, as previously described:



	Fair Value as of March 31, 2018
	Level 1		Level 2		Level 3		Total
Subordinated debt and 2^nd lien notes	$	—	$	—	$	532,821,494	$	532,821,494
Senior debt and 1^st lien notes	—		—		275,617,921		275,617,921
Equity shares	—		—		154,162,815		154,162,815
Equity warrants	—		—		1,383,000		1,383,000
	$	—	$	—	$	963,985,230	$	963,985,230

	Fair Value as of December 31, 2017
	Level 1		Level 2		Level 3		Total
Subordinated debt and 2^nd lien notes	$	—	$	—	$	589,548,358	$	589,548,358
Senior debt and 1^st lien notes	—		—		262,803,297		262,803,297
Equity shares	—		—		162,543,691		162,543,691
Equity warrants	—		—		1,389,000		1,389,000
	$	—	$	—	$	1,016,284,346	$	1,016,284,346

The following tables reconcile the beginning and ending balances of the Company’s investment portfolio measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2018 and 2017:



Three Months Ended March 31, 2018:	Subordinated Debt and 2^nd Lien Notes			Senior Debt and 1^st Lien Notes			Equity Shares			Equity Warrants			Total
Fair value, beginning of period	$	589,548,358		$	262,803,297		$	162,543,691		$	1,389,000		$	1,016,284,346
New investments	7,500,000			19,274,897			1,510,176			—			28,285,073
Reclassifications	(8,617,000		)	8,617,000			—			—			—
Proceeds from sales of investments	—			—			(12,679,815		)	(708		)	(12,680,523		)
Loan origination fees received	—			(205,499		)	—			—			(205,499		)
Principal repayments received	(54,962,057		)	(13,797,604		)	—			—			(68,759,661		)
PIK interest earned	1,614,863			113,858			—			—			1,728,721
PIK interest payments received	(1,751,161		)	(1,403,097		)	—			—			(3,154,258		)
Accretion of loan discounts	5,986			—			—			—			5,986
Accretion of deferred loan origination revenue	1,019,197			205,195			—			—			1,224,392
Realized gain (loss)	(17,548,759		)	—			8,869,765			708			(8,678,286		)
Unrealized gain (loss)	16,012,067			9,874			(6,081,002		)	(6,000		)	9,934,939
Fair value, end of period	$	532,821,494		$	275,617,921		$	154,162,815		$	1,383,000		$	963,985,230

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)



Three Months Ended March 31, 2017:	Subordinated Debt and 2^nd Lien Notes			Senior Debt and 1^st Lien Notes			Equity Shares			Equity Warrants			Total
Fair value, beginning of period	$	690,159,367		$	191,643,157		$	154,216,657		$	1,888,000		$	1,037,907,181
New investments	64,868,421			91,059,316			5,590,356			—			161,518,093
Proceeds from sales of investments	—			—			(6,266,765		)	(33,003		)	(6,299,768		)
Loan origination fees received	(1,255,000		)	(1,383,485		)	—			—			(2,638,485		)
Principal repayments received	(46,128,905		)	(1,342,038		)	—			—			(47,470,943		)
PIK interest earned	3,041,385			336,463			—			—			3,377,848
PIK interest payments received	(2,687,416		)	—			—			—			(2,687,416		)
Accretion of loan discounts	28,786			54,694			—			—			83,480
Accretion of deferred loan origination revenue	1,092,544			256,865			—			—			1,349,409
Realized gain (loss)	(13,353,325		)	—			493,363			(458,997		)	(13,318,959		)
Unrealized gain (loss)	3,009,036			(470,608		)	(1,831,066		)	681,000			1,388,362
Fair value, end of period	$	698,774,893		$	280,154,364		$	152,202,545		$	2,077,000		$	1,133,208,802

All realized and unrealized gains and losses are included in earnings (changes in net assets) and are reported on separate line items within the Company’s Unaudited Consolidated Statements of Operations. Pre-tax net unrealized depreciation on investments of $3.1 million during the three months ended March 31, 2018 was related to portfolio company investments that were still held by the Company as of March 31, 2018. Pre-tax net unrealized depreciation on investments of $11.0 million during the three months ended March 31, 2017 was related to portfolio company investments that were still held by the Company as of March 31, 2017.

The Company’s primary investment objective is to generate current income and capital appreciation by investing directly in privately-held lower middle market companies to help these companies fund acquisitions, growth or refinancing. During the three months ended March 31, 2018, the Company made investments of approximately $18.3 million in portfolio companies to which it was not previously contractually committed to provide such financing. During the three months ended March 31, 2018, the Company made investments of $10.0 million in companies to which it was previously committed to provide such financing.

During the three months ended March 31, 2017, the Company made investments of approximately $157.2 million in portfolio companies to which it was not previously contractually committed to provide such financing. During the three months ended March 31, 2017, the Company made investments of $4.3 million in companies to which it was previously committed to provide such financing. The details of the Company’s investments have been disclosed on the Consolidated Schedules of Investments.

Warrants

When originating a debt security, the Company will sometimes receive warrants or other equity-related securities from the borrower. The Company determines the cost basis of the warrants or other equity-related securities received based upon their respective fair values on the date of receipt in proportion to the total fair value of the debt and warrants or other equity-related securities received. Any resulting difference between the face amount of the debt and its recorded fair value resulting from the assignment of value to the warrant or other equity instruments is treated as original issue discount and accreted into interest income over the life of the loan.

Realized Gain or Loss and Unrealized Appreciation or Depreciation of Portfolio Investments

Realized gains or losses are recorded upon the sale or liquidation of investments and are calculated as the difference between the net proceeds from the sale or liquidation, if any, and the cost basis of the investment using the specific identification method. Unrealized appreciation or depreciation reflects the difference between the fair value of the investments and the cost basis of the investments.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

Investment Classification

In accordance with the provisions of the 1940 Act, the Company classifies investments by level of control. As defined in the 1940 Act, “Control Investments” are investments in those companies that the Company is deemed to “Control.” “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of the Company, as defined in the 1940 Act, other than Control Investments. “Non-Control / Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments. Generally, under the 1940 Act, the Company is deemed to control a company in which it has invested if the Company owns more than 25.0% of the voting securities of such company, has greater than 50.0% representation on its board or has the power to exercise control over management or policies of such portfolio company. The Company is deemed to be an affiliate of a company in which the Company has invested if it owns at least 5.0%, but no more than 25.0%, of the voting securities of such company.

Investment Income

Interest income, adjusted for amortization of premium and accretion of original issue discount, is recorded on the accrual basis to the extent that such amounts are expected to be collected. Generally, when interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Company writes off any previously accrued and uncollected interest when it is determined that interest is no longer considered collectible. Dividend income is recorded on the ex-dividend date.

Fee Income

Origination, facility, commitment, consent and other advance fees received in connection with loan agreements ("Loan Origination Fees") are recorded as deferred income and recognized as investment income over the term of the loan. Upon prepayment of a loan, any unamortized Loan Origination Fees are recorded as investment income. In the general course of its business, the Company receives certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and loan waiver and amendment fees, and are recorded as investment income when earned.

Fee income for the three months ended March 31, 2018 and 2017 was as follows:



	Three Months Ended		Three Months Ended
	March 31, 2018		March 31, 2017
Recurring Fee Income:
Amortization of loan origination fees	$	580,925	$	619,200
Management, valuation and other fees	197,761		201,960
Total Recurring Fee Income	778,686		821,160
Non-Recurring Fee Income:
Prepayment fees	238,932		716,133
Acceleration of unamortized loan origination fees	643,467		730,209
Loan amendment fees	—		50,000
Other fees	126,905		—
Total Non-Recurring Fee Income	1,009,304		1,496,342
Total Fee Income	$	1,787,990	$	2,317,502

Payment-in-Kind Interest

The Company currently holds, and expects to hold in the future, some loans in its portfolio that contain PIK interest provisions. The PIK interest, computed at the contractual rate specified in each loan agreement, is added to the principal balance of the loan, rather than being paid to the Company in cash, and is recorded as interest income. Thus, the actual collection of PIK interest may be deferred until the time of debt principal repayment.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

PIK interest, which is a non-cash source of income at the time of recognition, is included in the Company’s taxable income and therefore affects the amount the Company is required to distribute to its stockholders to maintain its tax treatment as a regulated investment company ("RIC") for federal income tax purposes, even though the Company has not yet collected the cash. Generally, when current cash interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing PIK interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Company writes off any accrued and uncollected PIK interest when it is determined that the PIK interest is no longer collectible.

Concentration of Credit Risk

The Company’s investments are generally in lower middle market companies in a variety of industries. As of both March 31, 2018 and December 31, 2017, there were no individual investments representing greater than 10% of the fair value of the Company’s portfolio. As of March 31, 2018 and December 31, 2017, the Company’s largest single portfolio company investment represented approximately 6.2% and 5.6%, respectively, of the fair value of the Company’s portfolio. Income, consisting of interest, dividends, fees, other investment income and realization of gains or losses on equity interests, can fluctuate dramatically upon repayment of an investment or sale of an equity interest and in any given year can be highly concentrated among several portfolio companies.

The Company’s investments carry a number of risks including, but not limited to: (i) investing in lower middle market companies which may have limited financial resources and may have limited operating histories, (ii) investing in senior subordinated debt which ranks equal to or lower than debt held by other investors and (iii) holding investments that are not publicly traded and are subject to legal and other restrictions on resale and other risks common to investing in below investment grade debt and equity instruments.

As of March 31, 2018, $787.8 million of the Company's assets were pledged as collateral for the Company's third amended and restated senior secured credit facility, as amended on May 1, 2017 (the “Credit Facility”), and $399.3 million were subject to superior claim over the Company's stockholders by the SBA. If the Company defaults on its obligations under the Credit Facility or its SBA-guaranteed debentures, the lenders and/or the SBA may have the right to foreclose upon and sell, or otherwise transfer, the collateral subject to their security interests or their superior claims.

Investments Denominated in Foreign Currency

As of March 31, 2018, the Company held an investment in one portfolio company that was denominated in Canadian dollars. As of December 31, 2017, the Company held investments in two portfolio companies that were denominated in Canadian dollars.

At each balance sheet date, portfolio company investments denominated in foreign currencies are translated into United States dollars using the spot exchange rate on the last business day of the period. Purchases and sales of foreign portfolio company investments, and any income from such investments, are translated into United States dollars using the rates of exchange prevailing on the respective dates of such transactions.

Although the fair values of foreign portfolio company investments and the fluctuation in such fair values are translated into United States dollars using the applicable foreign exchange rates described above, the Company does not isolate that portion of the change in fair values resulting from foreign currency exchange rates fluctuations from the change in fair values of the underlying investment. All fluctuations in fair value are included in net unrealized appreciation (depreciation) of investments in the Company's Unaudited Consolidated Statements of Operations.

Investments denominated in foreign currencies and foreign currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the United States Dollar.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

3. SCHEDULE OF INVESTMENTS IN AND ADVANCES TO AFFILIATES

The following schedules present information about investments in and advances to affiliates for the three months ended March 31, 2018 and year ended December 31, 2017:



Three Months Ended March 31, 2018:		Amount of Realized Gain (Loss)			Amount of Unrealized Gain (Loss)			Amount of Interest or Dividends Credited to Income(2)		December 31, 2017 Value		Gross Additions (3)		Gross Reductions(4)		March 31, 2018 Value
Portfolio Company	Type of Investment(1)
Control Investments:

CRS-SPV, Inc.	Common Stock (1,100 shares)	$	—		$	—		$	100,000	$	20,283,000	$	—	$	—	$	20,283,000
		—			—			100,000		20,283,000		—		—		20,283,000

Frank Entertainment Group, LLC	Senior Note (6% Cash, Due 06/19)⁽⁵⁾	—			(54,145		)	—		6,541,000		—		223,000		6,318,000
	Second Lien Term Note (2.5% Cash)⁽⁵⁾	—			19,909			—		—		19,909		19,909		—
	Redeemable Preferred Units (2,800,000 units)	—			—			—		—		—		—		—
	Redeemable Class B Preferred Units (2,800,000 units)	—			—			—		—		—		—		—
	Class A Common Units (606,552 units)	—			—			—		—		—		—		—
		—			(34,236		)	—		6,541,000		19,909		242,909		6,318,000

FrontStream Holdings, LLC	Subordinate Note (LIBOR + 6.0%, 7.7% Cash)⁽⁵⁾⁽⁶⁾	—			(1,329,000		)	—		7,414,000		2,500,000		1,329,000		8,585,000
	Common Stock (1,000 shares)	—			—			—		—		—		—		—
		—			(1,329,000		)	—		7,414,000		2,500,000		1,329,000		8,585,000

Frontstreet Facility Solutions, Inc.	Subordinated Note (13% Cash)	—			(7,639		)	275,036		3,750,000		7,639		7,639		3,750,000
	Series A Convertible Preferred Stock (60,000 shares)	—			—			—		—		—		—		—
	Series B Convertible Preferred Stock (20,000 shares)	—			—			—		—		—		—		—
	Common Stock (27,890 shares)	—			—			—		—		—		—		—
		—			(7,639		)	275,036		3,750,000		7,639		7,639		3,750,000

Investments not held at the end of the period		4,000			—			—		—		4,000		4,000		—

Total Control Investments		4,000			(1,370,875		)	375,036		37,988,000		2,531,548		1,583,548		38,936,000

Affiliate Investments:
All Metals Holding, LLC	Subordinated Note (12% Cash, 1% PIK)	101,129			(155,098		)	149,598		6,434,000		162,778		6,596,778		—
	Units (318,977 units)	(535,011		)	527,331			—		266,000		527,331		793,331		—
		(433,882		)	372,233			149,598		6,700,000		690,109		7,390,109		—

Consolidated Lumber Holdings, LLC	Class A Units (15,000 units)	—			(191,000		)	4,550		4,500,000		—		191,000		4,309,000
		—			(191,000		)	4,550		4,500,000		—		191,000		4,309,000

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)



Three Months Ended March 31, 2018:		Amount of Realized Gain (Loss)		Amount of Unrealized Gain (Loss)			Amount of Interest or Dividends Credited to Income(2)		December 31, 2017 Value		Gross Additions (3)		Gross Reductions(4)		March 31, 2018 Value
Portfolio Company	Type of Investment(1)
FCL Holding SPV, LLC	Class A Interest (24,873 units)	$	—	$	51,000		$	—	$	570,000	$	51,000	$	—	$	621,000
	Class B Interest (48,427 units)	—		—			—		—		—		—		—
	Class B Interest (3,746 units)	—		—			—		—		—		—		—
		—		51,000			—		570,000		51,000		—		621,000

Mac Land Holdings, Inc.	Common Stock (139 shares)	—		—			—		—		—		—		—
		—		—			—		—		—		—		—

NB Products, Inc.	Subordinated Note (12% Cash, 2% PIK)	—		—			894,250		23,308,085		142,495		—		23,450,580
	Jr. Subordinated Note (10% PIK)	—		—			137,872		5,114,592		137,872		—		5,252,464
	Jr. Subordinated Bridge Note (20% PIK)	—		—			123,860		2,412,295		123,860		—		2,536,155
	Series A Redeemable Senior Preferred Stock (7,839 shares)	—		256,000			—		10,390,000		256,000		—		10,646,000
	Common Stock (1,668,691 shares)	—		2,071,000			—		16,044,000		2,071,000		—		18,115,000
		—		2,327,000			1,155,982		57,268,972		2,731,227		—		60,000,199

Passport Food Group, LLC	Senior Notes (LIBOR + 9.0%, 10.7% Cash, Due 03/22)⁽⁶⁾	—		328,138			561,709		16,672,000		345,000		—		17,017,000
	Common Stock (20,000 shares)	—		(324,000		)	—		357,000		—		324,000		33,000
		—		4,138			561,709		17,029,000		345,000		324,000		17,050,000

PCX Aerostructures, LLC	Subordinated Note (6% Cash)	—		756,014			664,949		22,574,000		1,546,000		—		24,120,000
	Subordinated Note (6% PIK)	—		211,286			5,068		548,000		216,354		764,354		—
	Series A Preferred Stock (6,066 shares)	—		—			—		—		—		—		—
	Series B Preferred Stock (1,411 shares)	—		(1,000,000		)	—		—		1,000,000		1,000,000		—
	Class A Common Stock (121,922 shares)	—		—			—		—		—		—		—
		—		(32,700		)	670,017		23,122,000		2,762,354		1,764,354		24,120,000

Team Waste, LLC	Subordinated Note (10% Cash, 2% PIK)	—		—			297,923		4,930,962		113,713		5,044,675		—
	Preferred Units (500,000 units)	3,750,000		—			—		10,000,000		3,750,000		3,750,000		10,000,000
		3,750,000		—			297,923		14,930,962		3,863,713		8,794,675		10,000,000

Technology Crops, LLC	Senior Notes (12% Cash)	—		(115,000		)	363,215		8,617,000		—		1,115,000		7,502,000
	Common Units (50 units)	—		—			—		—		—		—		—
		—		(115,000		)	363,215		8,617,000		—		1,115,000		7,502,000

TGaS Advisors, LLC	Senior Note (10% Cash, 1% PIK)	—		—			278,156		9,431,015		39,886		62,243		9,408,658
	Preferred Units (1,685,357 units)	—		203,000			—		1,524,000		203,000		—		1,727,000
		—		203,000			278,156		10,955,015		242,886		62,243		11,135,658

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)



Three Months Ended March 31, 2018:		Amount of Realized Gain (Loss)			Amount of Unrealized Gain (Loss)			Amount of Interest or Dividends Credited to Income(2)		December 31, 2017 Value		Gross Additions (3)		Gross Reductions(4)		March 31, 2018 Value
Portfolio Company	Type of Investment(1)
Tulcan Fund IV, L.P.	Common Units (1,000,000 units)	$	—		$	—		$	—	$	—	$	—	$	—	$	—
		—			—			—		—		—		—		—

United Retirement Plan Consultants, Inc.	Series A Preferred Shares (9,400 shares)	—			17,000			—		302,000		17,000		—		319,000
	Common Shares (100,000 shares)	—			94,000			—		419,000		94,000		—		513,000
		—			111,000			—		721,000		111,000		—		832,000

Wythe Will Tzetzo, LLC	Series A Preferred Units (99,829 units)	—			(1,324,000		)	—		2,688,000		—		1,324,000		1,364,000
		—			(1,324,000		)	—		2,688,000		—		1,324,000		1,364,000

Investments not held at the end of the period		(58,920		)	—			—		—		58,920		58,920		—
Deferred taxes		—			49,660			—		—		—		—		—

Total Affiliate Investments		$	3,257,198		$	1,455,331		$	3,481,150	$	147,101,949	$	10,856,209	$	21,024,301	$	136,933,857


(1)	All debt investments are income producing, unless otherwise noted. Equity and equity-linked investments are non-income producing, unless otherwise noted. The fair values of all investments were determined using significant unobservable inputs.


(2)	Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in Control or Affiliate categories, respectively. Amounts include accrued PIK interest if the description of the security includes disclosure of a PIK interest rate.


(3)	Gross additions include increase in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation.


(4)	Gross reductions include decreases in the total cost basis of investments resulting from principal or PIK repayments or sales. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation.


(5)	Non-accrual investment

(6)

Index-based floating interest rate is subject to contractual minimum interest rate. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference to either LIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)



Year Ended December 31, 2017:		Amount of Realized Gain (Loss)			Amount of Unrealized Gain (Loss)			Amount of Interest or Dividends Credited to Income(2)		December 31, 2016 Value		Gross Additions (3)		Gross Reductions (4)		December 31, 2017 Value
Portfolio Company	Type of Investment(1)
Control Investments:
CRS Reprocessing, LLC	Debtor in Possession Loan (8% PIK)	$	(2,634,714	)	$	—		$	—	$	—	$	4,000,000	$	4,000,000	$	—
	Senior Notes (LIBOR + 3.5%)⁽⁶⁾	(1,938,339		)	—			79,534		2,942,769		—		2,942,769		—
	Split Collateral Term Loans (8% Cash)	(11,554,845		)	5,010,464			513,963		6,182,000		11,360,464		17,542,464		—
	Subordinated Note (5% Cash)	(82,335		)	—			—		—		125,000		125,000		—
	Series F Preferred Units (705,321 units)	(9,134,807		)	9,134,807			—		—		—		—		—
	Common Units (15,174 units)	—			—			—		—		—				—
		(25,345,040		)	14,145,271			593,497		9,124,769		15,485,464		24,610,233		—

CRS-SPV, Inc.	Common Stock (1,100 shares)	—			1,855,000			—		—		20,283,000		—		20,283,000
		—			1,855,000			—		—		20,283,000		—		20,283,000

DCWV Acquisition Corporation	Senior Subordinated Note (15% PIK)	(250,000		)	—			—		250,000		—		250,000		—
	Subordinated Note (12% Cash, 3% PIK)	(4,396,350		)	4,789,633			—		1,389,000		4,789,633		6,178,633		—
	Jr. Subordinated Note (15% PIK)	(2,000,000		)	2,000,000			—		—		2,000,000		2,000,000		—
	Series A Preferred Equity (1,200 shares)	(1,200,000		)	1,200,000			—		—		1,200,000		1,200,000		—
	100% Common Shares	—			—			—		—		—		—		—
		(7,846,350		)	7,989,633			—		1,639,000		7,989,633		9,628,633		—

DialogDirect, Inc.	Subordinated Note (8% PIK)	(7,523,038		)	6,640,226			—		—		20,020,227		20,020,227		—
	Class A Common Units (1,176,500 units)	—			—			—		—		—		—		—
		(7,523,038		)	6,640,226			—		—		20,020,227		20,020,227		—

Frank Entertainment Group, LLC⁽⁷⁾	Senior Note (6% Cash)⁽⁵⁾	—			(3,127,606		)	—		—		9,808,054		3,267,054		6,541,000
	Second Lien Term Note (2.5% Cash)⁽⁵⁾	—			(2,705,479		)	—		—		2,715,723		2,715,723		—
	Redeemable Preferred Units (2,800,000 units)	—			(1,074,000		)	—		—		1,074,000		1,074,000		—
	Redeemable Class B Preferred Units (2,800,000 units)	—			—			—		—		—		—		—
	Class A Common Units (606,552 units)	—			—			—		—		—		—		—
		—			(6,907,085		)	—		—		13,597,777		7,056,777		6,541,000

FrontStream Holdings, LLC	Subordinate Note (LIBOR + 6%, 7.3% Cash)⁽⁵⁾⁽⁶⁾	—			348,542			—		—		7,663,542		249,542		7,414,000
	Common Stock (1,000 shares)	—			—			—		—		—		—		—
		—			348,542			—		—		7,663,542		249,542		7,414,000

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)



Year Ended December 31, 2017:		Amount of Realized Gain (Loss)			Amount of Unrealized Gain (Loss)			Amount of Interest or Dividends Credited to Income(2)		December 31, 2016 Value		Gross Additions (3)		Gross Reductions (4)		December 31, 2017 Value
Portfolio Company	Type of Investment(1)
Frontstreet Facility Solutions, Inc.	Subordinated Note (13% Cash)	$	—		$	(1,014,755	)	$	569,586	$	—	$	4,764,755	$	1,014,755	$	3,750,000
	Series A Convertible Preferred Stock (60,000 shares)	—			(575		)	—		—		575		575		—
	Series B Convertible Preferred Stock (20,000 shares)	—			(144		)	—		—		144		144		—
	Common Stock (27,890 shares)	—			(279		)	—		—		279		279		—
		—			(1,015,753		)	569,586		—		4,765,753		1,015,753		3,750,000

Gerli & Company	Subordinated Note (13% Cash)	(375,000		)	375,000			—		—		375,000		375,000		—
	Subordinated Note (8.5% Cash)	(3,000,000		)	3,000,000			—		—		3,000,000		3,000,000		—
	Class A Preferred Shares (1,211 shares)	(855,000		)	855,000			—		—		855,000		855,000		—
	Class C Preferred Shares (744 shares)	—			—			—		—		—		—		—
	Class E Preferred Shares (400 shares)	(161,440		)	161,440			—		—		161,440		161,440		—
	Common Stock (300 shares)	(100,000		)	100,000			—		—		100,000		100,000		—
		(4,491,440		)	4,491,440			—		—		4,491,440		4,491,440		—

SRC Worldwide, Inc.	Common Stock (5,000 shares)	—			—			400,000		8,028,000		—		8,028,000		—
		—			—			400,000		8,028,000		—		8,028,000		—

Total Control Investments		(45,205,868		)	27,547,274			1,563,083		18,791,769		94,296,836		75,100,605		37,988,000


Affiliate Investments:
All Metals Holding, LLC	Subordinated Note (12% Cash, 1% PIK)	—			155,098			878,223		6,249,220		249,113		64,333		6,434,000
	Units (318,977 units)	—			(488,000		)	—		754,000		—		488,000		266,000
		—			(332,902		)	878,223		7,003,220		249,113		552,333		6,700,000

CIS Secure Computing Inc.	Subordinated Note (12% Cash, 3% PIK)	—			—			1,154,260		11,670,708		207,319		11,878,027		—
	Common Stock (84 shares)	1,679,180			(1,652,680		)	—		2,155,000		1,679,181		3,834,181		—
		1,679,180			(1,652,680		)	1,154,260		13,825,708		1,886,500		15,712,208		—

Consolidated Lumber Holdings, LLC	Subordinated Note (10% Cash, 2% PIK)	—			(156,611		)	194,082		4,278,000		78,750		4,356,750		—
	Class A Units (15,000 units)	—			2,019,000			274,167		2,481,000		2,019,000		—		4,500,000
		—			1,862,389			468,249		6,759,000		2,097,750		4,356,750		4,500,000

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)



Year Ended December 31, 2017:		Amount of Realized Gain (Loss)			Amount of Unrealized Gain (Loss)			Amount of Interest or Dividends Credited to Income(2)		December 31, 2016 Value		Gross Additions (3)		Gross Reductions (4)		December 31, 2017 Value
Portfolio Company	Type of Investment(1)
DPII Holdings, LLC	Tranche III Subordinated Note (19% PIK)	$	(2,269,044	)	$	871,000		$	—	$	2,356,001	$	871,000	$	3,227,001	$	—
	Tranche I & II Subordinated Notes (12% Cash, 4% PIK)	(462		)	2,148,462			—		—		2,148,462		2,148,462		—
	Class A Membership Interest (17,308 units)	(1,107,692		)	1,107,692			—		—		1,107,692		1,107,692		—
		(3,377,198		)	4,127,154			—		2,356,001		4,127,154		6,483,155		—

FCL Holding SPV, LLC	Class A Interest (24,873 units)	—			(75,000		)	45,452		645,000		—		75,000		570,000
	Class B Interest (48,427 units)	—			(101,000		)	—		101,000		—		101,000		—
	Class B Interest (3,746 units)	—						—		—		—		—		—
		—			(176,000		)	45,452		746,000		—		176,000		570,000

Frank Entertainment Group, LLC⁽⁷⁾	Senior Note (LIBOR + 7%, 10% Cash, 5.8% PIK)⁽⁶⁾	—			(1,077,888		)	823,087		9,940,684		351,600		10,292,284		—
	Second Lien Term Note (10% Cash)	—			(174,000		)	15,000		—		1,200,000		1,200,000		—
	Class A Redeemable Preferred Units (10.5% Cash) (196,718 units)	—			(3,492,904		)	—		4,566,904		—		4,566,904		—
	Class B Redeemable Preferred Units (18,667 units)	—			(1,660,810		)	—		1,660,810		—		1,660,810		—
	Class C Redeemable Preferred Units (25,846 units)	—			(600,000		)	—		600,000		—		600,000		—
	Class A Common Units (43,077 units)	—			—			—		—		—		—		—
	Class A Common Warrants	—			—			—		—		—		—		—
		—			(7,005,602		)	838,087		16,768,398		1,551,600		18,319,998		—

Mac Land Holdings, Inc.	Common Stock (139 shares)	—			(369,000		)	—		—		369,000		369,000		—
		—			(369,000		)	—		—		369,000		369,000		—

MS Bakery Holdings, Inc.	Preferred Units (233 units)	185,133			(185,133		)	—		397,000		185,133		582,133		—
	Common B Units (3,000 units)	2,087,323			(2,086,860		)	—		2,110,000		2,087,323		4,197,323		—
	Common A Units (1,652 units)	1,147,007			(1,147,007		)	—		1,162,000		1,147,007		2,309,007		—
		3,419,463			(3,419,000		)	—		3,669,000		3,419,463		7,088,463		—

Native Maine Operations, Inc.	Senior Notes (LIBOR + 9%)⁽⁶⁾	—			—			1,338,898		—		18,000,000		18,000,000		—
	Preferred Units (20,000 units)	—			—			—		—		2,000,000		2,000,000		—
		—			—			1,338,898		—		20,000,000		20,000,000		—

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)



Year Ended December 31, 2017:		Amount of Realized Gain (Loss)		Amount of Unrealized Gain (Loss)			Amount of Interest or Dividends Credited to Income(2)		December 31, 2016 Value		Gross Additions (3)		Gross Reductions (4)		December 31, 2017 Value
Portfolio Company	Type of Investment(1)
NB Products, Inc.	Subordinated Note (12% Cash, 2% PIK)	$	—	$	—		$	3,540,905	$	22,751,190	$	556,895	$	—	$	23,308,085
	Jr. Subordinated Note (10% PIK)	—		—			503,674		4,595,921		518,671		—		5,114,592
	Jr. Subordinated Bridge Note (20% PIK)	—		—			439,568		1,972,727		439,568		—		2,412,295
	Series A Redeemable Senior Preferred Stock (7,839 shares)	—		978,000			—		9,412,000		978,000		—		10,390,000
	Common Stock (1,668,691 shares)	—		6,265,000			—		9,779,000		6,265,000		—		16,044,000
		—		7,243,000			4,484,147		48,510,838		8,758,134		—		57,268,972

Passport Food Group, LLC	Senior Notes (LIBOR + 9.0%, 10.3% Cash)⁽⁶⁾	—		(2,976,160		)	1,621,494		—		19,648,160		2,976,160		16,672,000
	Common Stock (20,000 shares)	—		(1,643,000		)	—		—		2,000,000		1,643,000		357,000
		—		(4,619,160		)	1,621,494		—		21,648,160		4,619,160		17,029,000

PCX Aerostructures, LLC	Subordinated Note (10.5% Cash)⁽⁸⁾	—		(1,481,848		)	3,354,176		21,960,000		2,095,848		1,481,848		22,574,000
	Subordinated Note (6% PIK)⁽⁸⁾	—		(211,286		)	—		—		759,286		211,286		548,000
	Series A Preferred Stock (6,066 shares)	—		—			—		—		—		—		—
	Series B Preferred Stock (411 shares)	—		—			—		—		—		—		—
	Class A Common Stock (121,922 shares)	—		—			—		—		—		—		—
		—		(1,693,134		)	3,354,176		21,960,000		2,855,134		1,693,134		23,122,000

Team Waste, LLC	Subordinated Note (10% Cash, 2% PIK)	—		—			171,863		—		4,930,962		—		4,930,962
	Preferred Units (500,000 units)	—		—			9,000		9,100,000		900,000		—		10,000,000
		—		—			180,863		9,100,000		5,830,962		—		14,930,962

Technology Crops, LLC	Subordinated Notes (12% Cash)	—		(3,677,102		)	1,930,662		11,837,622		456,480		3,677,102		8,617,000
	Common Units (50 units)	—		—			—		—		—		—		—
		—		(3,677,102		)	1,930,662		11,837,622		456,480		3,677,102		8,617,000

TGaS Advisors, LLC	Senior Note (10% Cash, 1% PIK)	—		—			1,143,884		9,521,986		158,001		248,972		9,431,015
	Preferred Units (1,685,357 units)	—		254,000			—		1,270,000		254,000		—		1,524,000
		—		254,000			1,143,884		10,791,986		412,001		248,972		10,955,015

Tulcan Fund IV, L.P.	Common Units (1,000,000 units)	—		—			—		—		—		—		—
		—		—			—		—		—		—		—

United Retirement Plan Consultants, Inc.	Series A Preferred Shares (9,400 shares)	—		45,000			—		257,000		45,000		—		302,000
	Common Shares (100,000 shares)	—		118,000			—		301,000		118,000		—		419,000
		—		163,000			—		558,000		163,000		—		721,000

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)



Year Ended December 31, 2017:		Amount of Realized Gain (Loss)			Amount of Unrealized Gain (Loss)			Amount of Interest or Dividends Credited to Income(2)		December 31, 2016 Value		Gross Additions (3)		Gross Reductions (4)		December 31, 2017 Value
Portfolio Company	Type of Investment(1)
Waste Recyclers Holdings, LLC	Class A Preferred Units (280 units)	$	(2,251,100	)	$	2,251,100		$	—	$	—	$	2,251,100	$	2,251,100	$	—
	Class B Preferred Units (11,484,867 units)	(2,935,218		)	2,487,218			—		817,000		2,487,218		3,304,218		—
	Common Unit Purchase Warrant (1,170,083 units)	(748,900		)	748,900			—		—		748,900		748,900		—
	Common Units (153,219 units)	(180,783		)	180,783			—		—		180,783		180,783		—
		(6,116,001		)	5,668,001			—		817,000		5,668,001		6,485,001		—

Wythe Will Tzetzo, LLC	Series A Preferred Units (99,829 units)	—			(4,120,000		)	—		6,808,000		—		4,120,000		2,688,000
		—			(4,120,000		)	—		6,808,000		—		4,120,000		2,688,000

Investments not held at the end of the period		414,889			—			—		—		414,889		414,889		—
Deferred taxes		—			390,990			—		—		—		—		—

Total Affiliate Investments		$	(3,979,667	)	$	(7,356,046	)	$	17,438,395	$	161,510,773	$	79,907,341	$	94,316,165	$	147,101,949


(1)	All debt investments are income producing, unless otherwise noted. Equity and equity-linked investments are non-income producing, unless otherwise noted. The fair values of all investments were determined using significant unobservable inputs.


(2)	Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in Control or Affiliate categories, respectively. Amounts include accrued PIK interest if the description of the security includes disclosure of a PIK interest rate.


(3)	Gross additions include increase in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation.


(4)	Gross reductions include decreases in the total cost basis of investments resulting from principal or PIK repayments or sales. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation.


(5)	Non-accrual investment

(6)


(7)	During the year ended December 31, 2017, as a result of a balance sheet restructuring, Frank Entertainment Group, LLC moved from an affiliate investment to a control investment.


(8)	Effective February 9, 2018, the Company's debt investments in PCX Aerostructures, LLC were amended to provide for cash interest at all-in rate of 6% per annum.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

4. INCOME TAXES

The Company has elected for federal income tax purposes to be treated as a RIC under the Internal Revenue Code of 1986, as amended (the "Code"), and intends to make the required distributions to its stockholders as specified therein. In order to maintain its tax treatment as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay taxes only on the portion of its taxable income and gains it does not distribute (actually or constructively) and certain built-in gains. The Company has historically met its minimum distribution requirements and continually monitors its distribution requirements with the goal of ensuring compliance with the Code.

The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year and pay a 4% U.S. federal excise tax on such excess. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.

ICTI generally differs from net investment income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. The Company may be required to recognize ICTI in certain circumstances in which it does not receive cash. For example, if the Company holds debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments issued with warrants), the Company must include in ICTI each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by the Company in the same taxable year. The Company may also have to include in ICTI other amounts that it has not yet received in cash, such as (i) PIK interest income and (ii) interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. Because any original issue discount or other amounts accrued will be included in the Company’s ICTI for the year of accrual, the Company may be required to make a distribution to its stockholders in order to satisfy the minimum distribution requirements, even though the Company will not have received and may not ever receive any corresponding cash amount. ICTI also excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.

The Company has certain wholly-owned taxable subsidiaries (the “Taxable Subsidiaries”), each of which holds one or more of its portfolio investments that are listed on the Consolidated Schedules of Investments. The Taxable Subsidiaries are consolidated for financial reporting purposes, such that the Company’s consolidated financial statements reflect the Company’s investments in the portfolio companies owned by the Taxable Subsidiaries. The purpose of the Taxable Subsidiaries is to permit the Company to hold certain portfolio companies that are organized as limited liability companies (“LLCs”) (or other forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of the RIC’s gross revenue for income tax purposes must consist of investment income. Absent the Taxable Subsidiaries, a proportionate amount of any gross income of an LLC (or other pass-through entity) portfolio investment would flow through directly to the RIC. To the extent that such income did not consist of investment income, it could jeopardize the Company’s ability to qualify as a RIC and therefore cause the Company to incur significant amounts of federal income taxes. When LLCs (or other pass-through entities) are owned by the Taxable Subsidiaries, their income is taxed to the Taxable Subsidiaries and does not flow through to the RIC, thereby helping the Company preserve its RIC status and resultant tax advantages. The Taxable Subsidiaries are not consolidated for income tax purposes and may generate income tax expense as a result of their ownership of the portfolio companies. This income tax expense is reflected in the Company’s Unaudited Consolidated Statements of Operations. Additionally, any unrealized appreciation related to portfolio investments held by the Taxable Subsidiaries (net of unrealized depreciation related to portfolio investments held by the Taxable Subsidiaries) is reflected net of applicable federal and state income taxes in the Company's Unaudited Consolidated Statements of Operations, with the related deferred tax liabilities presented in the Company's Unaudited Consolidated Balance Sheet.

In December 2017, the United States enacted tax reform legislation through the bill commonly known as the Tax Cuts and Jobs Act (the "Tax Act"), which significantly changed the existing U.S. tax laws, including a reduction in the corporate tax rate from 35% to 21%, a move from a worldwide tax system to a territorial system, as well as other changes. The Taxable Subsidiaries' provisional tax is based on the new lower blended federal and state corporate tax rate of 26%. This estimate incorporates assumptions made based on the Company's current interpretation of the Tax Act and may change, possibly materially, as the Company completes the analysis and receives additional clarification and implementation guidance. In addition, changes in interpretations, assumptions, and guidance regarding the new tax legislation, as well as the potential for technical corrections to the Tax Act, could have a material impact to the Company’s effective tax rate in future periods. Finally, given the significant complexity of the Tax Act, current guidance from the U.S. Treasury about implementing the Tax Act and

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

any related guidance from the SEC or the FASB may change, which may require us to refine the Company's estimates in the future.

For federal income tax purposes, the cost of investments owned as of March 31, 2018 and December 31, 2017 was approximately $1,060.6 million and $1,123.7 million, respectively. As of March 31, 2018, net unrealized depreciation on the Company's investments (tax basis) was approximately $97.9 million, consisting of gross unrealized appreciation, where the fair value of the Company's investments exceeds their tax cost, of approximately $88.4 million and gross unrealized depreciation, where the tax cost of the Company's investments exceeds their fair value, of approximately $186.3 million. As of December 31, 2017, net unrealized depreciation on the Company's investments (tax basis) was approximately $107.8 million, consisting of gross unrealized appreciation, where the fair value of the Company's investments exceeds their tax cost, of approximately $89.2 million and gross unrealized depreciation, where the tax cost of the Company's investments exceeds their fair value, of approximately $197.0 million.

5. BORROWINGS

The Company had the following borrowings outstanding as of March 31, 2018 and December 31, 2017:



Issuance/Pooling Date	Maturity Date	Interest Rate as of March 31, 2018	March 31, 2018			December 31, 2017
SBA-Guaranteed Debentures:
March 25, 2009	March 1, 2019	5.337%	$	22,000,000		$	22,000,000
March 24, 2010	March 1, 2020	4.825%	6,800,000			6,800,000
September 22, 2010	September 1, 2020	3.687%	32,590,000			32,590,000
March 29, 2011	March 1, 2021	4.474%	75,400,000			75,400,000
September 21, 2011	September 1, 2021	3.392%	19,100,000			19,100,000
March 27, 2013	March 1, 2023	3.155%	30,000,000			30,000,000
September 24, 2014	September 1, 2024	3.790%	31,310,000			31,310,000
September 21, 2016	September 1, 2026	2.723%	32,800,000			32,800,000
Less: Deferred financing fees			(3,441,508		)	(3,678,875		)
Total SBA-Guaranteed Debentures			$	246,558,492		$	246,321,125
Credit Facility:
May 1, 2017	April 30, 2022	4.420%	$	125,001,284		$	156,070,484
Total Credit Facility			$	125,001,284		$	156,070,484
Notes:
October 19, 2012	December 15, 2022	6.375%	$	80,500,000		$	80,500,000
February 6, 2015	March 15, 2022	6.375%	86,250,000			86,250,000
Less: Deferred financing fees			(3,171,914		)	(3,341,699		)
Total Notes			$	163,578,086		$	163,408,301

SBA-Guaranteed Debentures

Under the Small Business Investment Act of 1958, as amended, and current SBA policy applicable to SBICs, an SBIC (or group of SBICs under common control) can have outstanding at any time, SBA-guaranteed debentures up to two times (and in certain cases, with SBA approval, up to three times) the amount of its regulatory capital. As of March 31, 2018, the maximum statutory limit on the dollar amount of outstanding SBA-guaranteed debentures that can be issued by a single SBIC was $150.0 million and by a group of SBICs under common control was $350.0 million. As of March 31, 2018, Triangle SBIC had issued the maximum $150.0 million of SBA-guaranteed debentures and Triangle SBIC II had issued $100.0 million of SBA-guaranteed debentures, leaving borrowing capacity of a maximum of $100.0 million of SBA-guaranteed debentures for Triangle SBIC III. Interest payments on SBA-guaranteed debentures are payable semi-annually and there are no principal payments required on these debentures prior to maturity, nor do the debentures carry any prepayment penalties. The weighted average interest rate for all SBA-guaranteed debentures as of both March 31, 2018 and December 31, 2017 was 3.90%. As of both March 31, 2018 and December 31, 2017, all SBA-guaranteed debentures were pooled.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

In addition to a one-time 1.0% fee on the total commitment from the SBA, the Company also pays a one-time 2.425% fee on the amount of each SBA-guaranteed debenture issued. These fees are capitalized as deferred financing costs and are amortized over the term of the debt agreements using the effective interest method. Upon prepayment of an SBA-guaranteed debenture, any unamortized deferred financing costs related to the SBA-guaranteed debenture are written off and recognized as a loss on extinguishment of debt in the Unaudited Consolidated Statements of Operations.

The fair values of the SBA-guaranteed debentures are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. As of March 31, 2018 and December 31, 2017, the carrying amounts of the SBA-guaranteed debentures were approximately $246.6 million and $246.3 million, respectively. As of March 31, 2018 and December 31, 2017, the fair values of the SBA-guaranteed debentures were $259.1 million and $262.2 million, respectively. As of March 31, 2018, the Company was in compliance with SBA regulatory requirements.

Credit Facility

In May 2015, the Company entered into the Credit Facility, which was subsequently amended in May 2017. The amendment, among other things, increased commitments from $300.0 million to $435.0 million and extended the maturity by two years. The revolving period of the Credit Facility ends April 30, 2021 followed by a one-year amortization period with a final maturity date of April 30, 2022. The Company has the ability to borrow in both United States dollars as well as foreign currencies under the Credit Facility. The Credit Facility, which is structured to operate like a revolving credit facility, is secured primarily by the Company's assets, excluding the assets of the Company’s wholly-owned SBIC subsidiaries. The Credit Facility has an accordion feature that allows for an increase in the total borrowing size up to $550.0 million, subject to certain conditions and the satisfaction of specified financial covenants. Using this accordion feature, in July 2017, the Company increased its commitments under the Credit Facility from $435.0 million to $465.0 million, and in September 2017, the Company again increased its commitments under the Credit Facility from $465.0 million to $480.0 million.

Borrowings under the Credit Facility bear interest, subject to the Company's election, on a per annum basis equal to (i) the applicable base rate plus 1.75% (or 1.50% if the Company receives an investment grade credit rating), (ii) the applicable LIBOR rate plus 2.75% (or 2.50% if the Company receives an investment grade credit rating) or (iii) for borrowings denominated in Canadian dollars, the applicable Canadian Dealer Offered Rate plus 2.75% (or 2.50% if the Company receives an investment grade credit rating). The applicable base rate is equal to the greater of (i) the prime rate, (ii) the federal funds rate plus 0.5% or (iii) the adjusted one-month LIBOR plus 2.0%. The applicable LIBOR rate depends on the term of the draw under the Credit Facility. The Company pays a commitment fee of 1.00% per annum on undrawn amounts if the used portion of the Credit Facility is less than or equal to 25.0% of total commitments, or 0.375% per annum on undrawn amounts if the used portion of the Credit Facility is greater than 25.0% of total commitments. These commitment fees are included in interest and other financing fees on the Company's Unaudited Consolidated Statements of Operations. Borrowings under the Credit Facility are limited to a borrowing base, which includes certain cash and a portion of eligible debt investments.

As of March 31, 2018, the Company had United States dollar borrowings of $116.0 million outstanding under the Credit Facility with an interest rate of 4.42% and non-United States dollar borrowings denominated in Canadian dollars of $11.6 million ($9.0 million in United States dollars) outstanding under the Credit Facility with an interest rate of 4.42%. The borrowings denominated in Canadian dollars are translated into United States dollars based on the spot rate at each balance sheet date. The impact resulting from changes in foreign exchange rates on the Credit Facility borrowings is included in unrealized appreciation (depreciation) on foreign currency borrowings in the Company's Unaudited Consolidated Statements of Operations. The borrowings denominated in Canadian dollars may be positively or negatively affected by movements in the rate of exchange between the United States dollar and the Canadian dollar. This movement is beyond the control of the Company and cannot be predicted. As of December 31, 2017, the Company had United States dollar borrowings of $139.3 million outstanding under the Credit Facility with an interest rate of 4.12% and non-United States dollar borrowings denominated in Canadian dollars of $21.0 million ($16.8 million United States dollars) outstanding under the Credit Facility with a weighted average interest rate of 4.16%.

The fair value of the borrowings outstanding under the Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. As of March 31, 2018 and December 31, 2017, the fair values of the borrowings outstanding under the Credit Facility were $125.0 million and $156.1 million, respectively.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

customary events of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to other indebtedness, bankruptcy, change of control, and material adverse effect. The Credit Facility also permits Branch Banking and Trust Company, the administrative agent, to select an independent third-party valuation firm to determine valuations of certain portfolio investments for purposes of borrowing base provisions. As of March 31, 2018 and December 31, 2017, the Company was in compliance with all covenants of the Credit Facility.

Notes

In October 2012, the Company issued $70.0 million of unsecured notes due 2022 (the "December 2022 Notes") and in November 2012, issued $10.5 million of December 2022 Notes pursuant to the exercise of an over-allotment option. The December 2022 Notes mature on December 15, 2022, and may be redeemed in whole or in part at any time or from time to time at the Company's option. The December 2022 Notes bear interest at a rate of 6.375% per year payable quarterly on March 15, June 15, September 15 and December 15 of each year, beginning December 15, 2012. As of both March 31, 2018 and December 31, 2017, the carrying amount of the December 2022 Notes was $79.0 million. As of March 31, 2018 and December 31, 2017, the fair values of the December 2022 Notes were $81.0 million and $80.9 million, respectively.

In February 2015, the Company issued $86.3 million of unsecured notes due 2022 (the "March 2022 Notes"). The March 2022 Notes mature on March 15, 2022 and may be redeemed in whole or in part at any time or from time to time at the Company's option. The March 2022 Notes bear interest at a rate of 6.375% per year payable quarterly on March 15, June 15, September 15 and December 15 of each year, beginning March 15, 2015. The net proceeds to the Company from the sale of the March 2022 Notes, after underwriting discounts and offering expenses, were approximately $83.4 million. As of March 31, 2018 and December 31, 2017, the carrying amounts of the March 2022 Notes were $84.5 million and $84.4 million, respectively. As of March 31, 2018 and December 31, 2017, the fair values of the March 2022 Notes were $86.8 million and $86.9 million, respectively. The fair values of the December 2022 Notes and the March 2022 Notes are based on the closing prices of each respective security on the New York Stock Exchange, which are Level 1 inputs under ASC 820.

The indenture and supplements thereto relating to the December 2022 Notes and the March 2022 Notes contain certain covenants, including but not limited to (i) a requirement that the Company comply with the asset coverage requirement of the 1940 Act or any successor provisions, after giving effect to any exemptive relief granted to the Company by the Securities and Exchange Commission (“SEC”), (ii) a requirement that the Company will not declare any cash dividend, or declare any other cash distribution, upon a class of its capital stock, or purchase any such capital stock, unless, in every such case, at the time of the declaration of any such dividend or distribution, or at the time of any such purchase, the Company has an asset coverage (as defined in the 1940 Act) of at least 200% after deducting the amount of such dividend, distribution or purchase price, as the case may be, giving effect to any exemptive relief granted to the Company by the SEC and (iii) a requirement to provide financial information to the holders of the notes and the trustee under the indenture if the Company should no longer be subject to the reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As of March 31, 2018 and December 31, 2017, the Company was in compliance with all covenants of the December 2022 Notes and the March 2022 Notes.

6. EQUITY-BASED AND OTHER COMPENSATION PLANS

In February 2017, both the compensation committee of the Board and the Board adopted the Triangle Capital Corporation Omnibus Incentive Plan (the "Omnibus Plan"), and in May 2017, the Company’s stockholders approved the Omnibus Plan at the Company’s 2017 Annual Meeting of Stockholders. Prior to the approval of the Omnibus Plan, the Company compensated its professionals through two separate plans: the Amended and Restated 2007 Equity Incentive Plan (the "Equity Incentive Plan"), which provided for grants of restricted stock and options to employees, officers and directors, and the 2012 Executive Cash Incentive Plan (the "Cash Incentive Plan"), which provided for the payment of cash bonuses to employees and officers. The Omnibus Plan was created primarily for the purpose of combining the Equity Incentive Plan and the Cash Incentive Plan in order to reduce the administrative burden of monitoring the terms and conditions of two separate plans. The terms of the Equity Incentive Plan and the Cash Incentive Plan, as combined and reflected in the Omnibus Plan, are substantially similar to the respective terms of each standalone plan.

The Omnibus Plan provides for grants of restricted stock, incentive stock options, non-statutory stock options and cash-based and/or stock-based performance awards, collectively, “Awards,” to the Company’s existing and future employees. Equity-based awards granted under the Omnibus Plan to independent directors generally will vest over a one-year period and equity-based awards granted under the Omnibus Plan to executive officers and employees generally will vest ratably over a four-year period. In addition, the Omnibus Plan increased the maximum number of shares of the Company’s common stock with respect

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

to which Awards may be granted under the Omnibus Plan to 4,000,000 shares of the Company’s common stock from 2,400,000 shares of the Company’s common stock that were approved under the Equity Incentive Plan. The Omnibus Plan expires May 3, 2027.

The Company accounts for its equity-based compensation using the fair value method, as prescribed by ASC Topic 718, Stock Compensation. Accordingly, for restricted stock awards, the Company measures the grant date fair value based upon the market price of the Company’s common stock on the date of the grant and amortizes this fair value to compensation expense ratably over the requisite service period or vesting term.

The following table presents information with respect to equity-based compensation for the three months ended March 31, 2018 and 2017:



	Three Months Ended March 31, 2018			Three Months Ended March 31, 2017
	Number of Shares		Weighted Average Grant Date Fair Value per Share	Number of Shares		Weighted Average Grant Date Fair Value per Share
Unvested shares, beginning of period	748,674		$19.79	631,622		$21.23
Shares granted during the period	409,000		$10.68	347,000		$19.25
Shares vested during the period	(266,250	)	$20.66	(219,609	)	$22.65
Unvested shares, end of period	891,424		$15.35	759,013		$19.92

In both the three months ended March 31, 2018 and March 31, 2017, the Company recognized equity-based compensation expense of approximately $1.5 million. As of March 31, 2018, there was approximately $12.5 million of total unrecognized compensation cost related to the Company’s non-vested restricted shares. This cost is expected to be recognized over a weighted average period of approximately 2.1 years, however, if the sale of the Company's investment portfolio as discussed further in Note 10 - Subsequent Events, is consummated, such cost will be recognized at the closing of such transaction.

The Board has adopted a nonqualified deferred compensation plan covering the Company’s executive officers and key employees. Any compensation deferred and the Company’s contributions will earn a return based on the returns on certain investments designated by the Compensation Committee of the Board. Participants are 100% vested in amounts deferred under the deferred compensation plan and the earnings thereon. Contributions to the plan and earnings thereon generally vest ratably over a four-year period.

The Company maintains a 401(k) plan in which all full-time employees who are at least 21 years of age are eligible to participate and receive employer contributions. Eligible employees may contribute a portion of their compensation on a pretax basis into the 401(k) plan up to the maximum amount allowed under the Code, and direct the investment of their contributions.

7. TRANSACTIONS WITH CONTROLLED COMPANIES

During each of the three months ended March 31, 2018 and 2017, the Company received management fees from SRC Worldwide, Inc., a wholly-owned subsidiary of CRS-SPV, Inc., of $100,000. These fees were recognized as fee income in the Company's Unaudited Consolidated Statements of Operations. In addition, during the three months ended March 31, 2018 and 2017, the Company recognized dividend and interest income from control investments as disclosed in Note 3 - Schedule of Investments in and Advances to Affiliates.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

8. COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company is party to financial instruments with off-balance sheet risk, consisting primarily of unused commitments to extend financing to the Company's portfolio companies. Since commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The balances of unused commitments to extend financing as of March 31, 2018 and December 31, 2017 were as follows:



Portfolio Company	Investment Type	March 31, 2018		December 31, 2017
Deva Holdings, Inc.	Revolver	$	2,500,000	$	2,500,000
DLC Acquisition, LLC	Revolver	1,800,000		1,800,000
Frank Entertainment Group, LLC(1)	Delayed Draw Senior	130,212		130,212
Frank Entertainment Group, LLC(1)	Delayed Draw Second Lien	303,827		303,827
HKW Capital Partners IV, L.P.	Private Equity	91,985		214,823
ICP Industries Inc.	Delayed Draw Term Loan	—		5,000,000
Lakeview Health Acquisition Company(1)	Revolver	1,387,367		1,387,367
Micross Solutions, LLC(1)	Delayed Draw Term Loan	3,000,000		3,000,000
Nautic Partners VII, LP(1)	Private Equity	492,853		509,080
Orchid Underwriters Agency, LLC	Delayed Draw Term Loan	649,143		649,143
Schweiger Dermatology Group, LLC	Delayed Draw Term Loan	—		4,500,000
SCUF Gaming, Inc.(1)	Revolver	2,000,000		2,000,000
Smile Brands, Inc.	Equity Investment	1,000,000		1,000,000
Smile Brands, Inc.	Delayed Draw Term Loan	19,096,531		18,826,531
SPC Partners V, LP	Private Equity	185,297		185,297
SPC Partners VI, LP	Private Equity	2,524,550		2,792,172
Tate's Bake Shop	Revolver	550,000		550,000
Technology Crops, LLC(1)	Revolver	1,250,000		—
TGaS Advisors, LLC	Revolver	2,000,000		2,000,000
Vinvention Capital Partners TE LP (F/K/A Nomacorc, LLC) (1)	Equity Investment	633,385		838,813
Total unused commitments to extend financing		$	39,595,150	$	48,187,265


(1)	Represents a commitment to extend financing to a portfolio company where one or more of the Company's current investments in the portfolio company are carried at less than cost. The Company's estimate of the fair value of the current investments in this portfolio company includes an analysis of the value of any unfunded commitments.

The Company and certain current and former executive officers have been named as defendants in two putative securities class action lawsuits, each filed in the United States District Court for the Southern District of New York (and then transferred to the United States District Court for the Eastern District of North Carolina) on behalf of all persons who purchased or otherwise acquired our common stock between May 7, 2014 and November 1, 2017. The first lawsuit was filed on November 21, 2017, and was captioned Elias Dagher, et al., v. Triangle Capital Corporation, et al., Case No. 5:18-cv-00015-FL (the “Dagher Action”). The second lawsuit was filed on November 28, 2017, and was captioned Gary W. Holden, et al., v. Triangle Capital Corporation, et al., Case No. 5:18-cv-00010-FL (the “Holden Action”). The Dagher Action and the Holden Action were consolidated and are currently captioned In re Triangle Capital Corp. Securities Litigation, Master File No. 5:18-cv-00010-FL.

On April 10, 2018, the plaintiff filed its First Consolidated Amended Complaint. The complaint, as currently amended, alleges certain violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions regarding the Company’s business, operations and prospects between May 7, 2014 and November 1, 2017. The plaintiff seeks compensatory damages and attorneys’ fees and costs, among other relief, but did not specify the amount of damages being sought. The time for the defendants to respond to the complaint has not yet expired.

In addition, the Company is party to certain lawsuits in the normal course of business. Furthermore, third parties may try to seek to impose liability on the Company in connection with the activities of its portfolio companies.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

While the outcome of any open legal proceedings, including those described above, cannot at this time be predicted with certainty, the Company does not expect that any reasonably possible losses arising from these matters will materially affect its financial condition or results of operations. Furthermore, in management's opinion, it is not possible to estimate a range of reasonably possible losses with respect to litigation contingencies.

9. FINANCIAL HIGHLIGHTS

The following is a schedule of financial highlights for the three months ended March 31, 2018 and 2017:



	Three Months Ended March 31,
	2018			2017
Per share data:
Net asset value at beginning of period	$	13.43		$	15.13
Net investment income(1)	0.27			0.42
Net realized loss on investments(1)	(0.15		)	(0.31		)
Net unrealized appreciation on investments / foreign currency(1)	0.19			0.06
Total increase from investment operations(1)	0.31			0.17
Dividends paid to stockholders from net investment income	(0.30		)	(0.45		)
Common stock offering	—			0.61
Stock-based compensation	(0.07		)	(0.11		)
Other(2)	(0.01		)	(0.06		)
Net asset value at end of period	$	13.36		$	15.29
Market value at end of period(3)	$	11.13		$	19.09
Shares outstanding at end of period	48,024,614			47,681,397
Net assets at end of period	$	641,511,702		$	729,207,289
Average net assets	$	644,726,863		$	613,068,728
Ratio of total expenses, including provision for taxes, to average net assets (annualized)	8.32		%	8.07		%
Ratio of net investment income to average net assets (annualized)	7.89		%	11.63		%
Portfolio turnover ratio	2.60		%	5.44		%
Total return(4)	20.41		%	6.54		%
Supplemental Data:
Efficiency ratio(5)	22.09		%	18.09		%


(1)	Weighted average basic per share data.


(2)	Represents the impact of the different share amounts used in calculating per share data as a result of calculating certain per share data based upon the weighted average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date.


(3)	Represents the closing price of the Company’s common stock on the last day of the period.


(4)	Total return is based on purchase of stock at the current market price on the first day and a sale at the current market price on the last day of each period reported on the table and assumes reinvestment of dividends at prices obtained by the Company's dividend reinvestment plan during the period. Total return is not annualized.


(5)	Efficiency ratio equals the sum of (i) compensation and related expenses and (ii) general and administrative expenses divided by total investment income.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements — (Continued)

10. SUBSEQUENT EVENTS

On April 3, 2018, the Company entered into an asset purchase agreement (the "Asset Purchase Agreement") with an affiliate of Benefit Street Partners L.L.C. (the "Asset Buyer”) under which the Company will, subject to stockholder approval, sell its December 31, 2017 investment portfolio, subject to certain adjustments to take into account portfolio activity since such date, to the Asset Buyer for approximately $981.2 million in cash. Simultaneously therewith, the Company entered into a stock purchase and transaction agreement (the "Externalization Agreement") with Barings LLC (“Barings”), through which Barings, subject to stockholder approval, will become the investment adviser to the Company in exchange for a cash payment from Barings of $85.0 million, or $1.78 per share, directly to the Company’s stockholders. In addition, Barings will make an investment of $100.0 million in newly issued shares of the Company’s common stock at net asset value at closing. Furthermore, Barings has committed to purchase up to $50.0 million of shares of the Company’s common stock in the open market at prices up to and including the then-current net asset value for a period of two years post-closing, after which Barings has agreed to use any remaining funds from the $50.0 million to purchase shares from the Company at the greater of the then-current net asset value and market price. Barings’ total financial commitment to the transaction is $235.0 million. Immediately following the closing of these transactions, the Company will launch a $50.0 million issuer tender to purchase shares of its common stock at prices up to and including net asset value per share.

The sale of the Company's investment portfolio to the Asset Buyer and the $85.0 million stockholder payment by Barings represent total cash consideration to the Company and to the Company's stockholders, net of the repayment of outstanding debt, of $691.2 million, or approximately $14.48 per share as of December 31, 2017, and 1.08x the Company’s December 31, 2017 net asset value per share. Net of estimated transaction expenses, other one-time charges and the repayment of outstanding debt, the sale of the Company’s December 31, 2017 investment portfolio and the $85.0 million stockholder payment represents total cash consideration to the Company and to the Company's stockholders of $658.6 million, or approximately $13.80 per share as of December 31, 2017, and 1.03x the Company’s December 31, 2017 net asset value.

The Company’s Board of Directors has unanimously approved the Asset Purchase Agreement, the Externalization Agreement and the transactions contemplated thereby, including the investment advisory agreement pursuant to which Barings will act as the Company’s investment adviser, and, subject to certain conditions, will recommend that the Company’s stockholders approve the same, along with certain other elements of the transactions. The Company intends to hold a special meeting of stockholders as soon as practicable to obtain the requisite stockholder approvals. Based on the terms of the Asset Purchase Agreement under which the Asset Buyer is deemed to have acquired the economics of the Company's investment portfolio at the signing thereof, the Company expects to discontinue paying a quarterly dividend starting with the second quarter of 2018. Assuming the proposed transactions are approved by the Company's stockholders, the Company expects the transactions to close in June or July of 2018, at which time stockholders will receive the payment of $1.78 per share as part of the Barings externalization transaction.

In conjunction with the closing of the proposed transactions, the Company will announce the redemption of the December 2022 Notes with an aggregate principal amount outstanding of $80.5 million and the March 2022 Notes with an aggregate principal amount outstanding of $86.25 million. Both series of notes will be redeemed, following at least 30 days’ notice prior to the date determined for redemption, at a price equal to the outstanding principal amount of the notes plus accrued interest to the date of redemption.

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

The following discussion is designed to provide a better understanding of our unaudited consolidated financial statements for the three months ended March 31, 2018, including a brief discussion of our business, key factors that impacted our performance and a summary of our operating results. The following discussion should be read in conjunction with the Unaudited Consolidated Financial Statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q, and the Consolidated Financial Statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2017. Historical results and percentage relationships among any amounts in the financial statements are not necessarily indicative of trends in operating results for any future periods.

Forward-Looking Statements

Some of the statements in this Quarterly Report constitute forward-looking statements because they relate to future events or our future performance or financial condition. Forward-looking statements may include, among other things, statements as to our future operating results, our business prospects and the prospects of our portfolio companies, the impact of the investments that we expect to make, the ability of our portfolio companies to achieve their objectives, our expected financings and investments, the adequacy of our cash resources and working capital, and the timing of cash flows, if any, from the operations of our portfolio companies. Words such as “expect,” “anticipate,” “target,” “goals,” “project,” “intend,” “plan,” “believe,” “seek,” “estimate,” “continue,” “forecast,” “may,” “should,” “potential,” variations of such words, and similar expressions indicate a forward-looking statement, although not all forward-looking statements include these words. Readers are cautioned that the forward-looking statements contained in this Quarterly Report are only predictions, are not guarantees of future performance, and are subject to risks, events, uncertainties and assumptions that are difficult to predict. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors discussed herein and in Item 1A entitled “Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, 2017. Other factors that could cause actual results to differ materially include, but are not limited to, changes in the economy, risks associated with possible disruption due to terrorism in our operations or the economy generally, and future changes in laws or regulations and conditions in our operating areas. These statements are based on our current expectations, estimates, forecasts, information and projections about the industry in which we operate and the beliefs and assumptions of our management as of the date of this Quarterly Report. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless we are required to do so by law. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

The Asset Sale and Externalization Transactions

As described further below, under “Recent Developments,” on April 3, 2018, we entered into: (i) an Asset Purchase Agreement, or the Asset Purchase Agreement, by and between us and BSP Asset Acquisition I, LLC (an affiliate of Benefit Street Partners L.L.C., or BSP), or the Asset Buyer and (ii) a Stock Purchase and Transaction Agreement, or the Externalization Agreement, by and between us and Barings LLC, or Barings (collectively, the "Transactions"). As discussed in greater detail below, if the transactions contemplated by the Asset Purchase Agreement and Externalization Agreement are completed, we will sell substantially all of our investment portfolio to the Asset Buyer and thereafter will commence operations as an externally managed BDC managed by Barings. In view of the foregoing, and in accordance with the terms of the Asset Purchase Agreement and Externalization Agreement, our focus has shifted primarily to managing our existing portfolio in contemplation of the transactions contemplated by the Asset Purchase Agreement and the Externalization Agreement, or the Transactions, rather than actively originating and/or selling portfolio investments.

Overview of Our Business

We are a Maryland corporation which has elected to be treated and operates as an internally managed business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act. Our wholly-owned subsidiaries, Triangle Mezzanine Fund LLLP, or Triangle SBIC, Triangle Mezzanine Fund II LP, or Triangle SBIC II and Triangle Mezzanine Fund III LP, or Triangle SBIC III, are licensed as small business investment companies, or SBICs, by the United States Small Business Administration, or SBA. In addition, Triangle SBIC has also elected to be treated as a BDC under the 1940 Act. We, Triangle SBIC, Triangle SBIC II and Triangle SBIC III invest primarily in debt instruments, equity investments, warrants and other securities of lower middle market privately-held companies located primarily in the United States.

Our business has historically been to provide capital to lower middle market companies located primarily in the United States. We focus on investments in companies with a history of generating revenues and positive cash flows, an established market position and a proven management team with a strong operating discipline. Our target portfolio company has annual revenues between $20.0 million and $300.0 million and annual earnings before interest, taxes, depreciation and amortization, or EBITDA, between $5.0 million and $75.0 million.

We have invested primarily in senior and subordinated debt securities of privately held companies, generally secured by security interests in portfolio company assets. In addition, we generally invest in one or more equity instruments of the borrower, such as direct preferred or common equity interests. Our investments generally range from $5.0 million to $50.0 million per portfolio company. In certain situations, we have partnered with other funds to provide larger financing commitments.

We generate revenues in the form of interest income, primarily from our investments in debt securities, loan origination and other fees and dividend income. Fees generated in connection with our debt investments are recognized over the life of the loan using the effective interest method or, in some cases, recognized as earned. In addition, we generate revenue in the form of capital gains, if any, on warrants or other equity-related securities that we acquire from our portfolio companies. Our debt investments generally have a term of between three and seven years. In addition, our fixed debt investments typically bear interest between 10.0% and 15.0% per annum and our variable debt investments generally bear interest between LIBOR plus 550 basis points and LIBOR plus 950 basis points per annum. Certain of our debt investments have a form of interest, referred to as payment-in-kind, or PIK, interest, that is not paid currently but is instead accrued and added to the loan balance and paid at the end of the term. In our negotiations with potential portfolio companies, we generally seek to minimize PIK interest. Cash interest on our debt investments is generally payable quarterly; however, some of our debt investments pay cash interest on a monthly basis.

As of March 31, 2018 and December 31, 2017, the weighted average yield on our outstanding debt investments other than non-accrual debt investments was approximately 10.9% and 11.0%, respectively. The weighted average yield on all of our outstanding investments (including equity and equity-linked investments but excluding non-accrual debt investments) was approximately 9.4% and 9.6% as of March 31, 2018 and December 31, 2017, respectively. The weighted average yield on all of our outstanding investments (including equity and equity-linked investments and non-accrual debt investments) was approximately 8.4% and 8.5% as of March 31, 2018 and December 31, 2017, respectively.

Triangle SBIC, Triangle SBIC II and Triangle SBIC III are eligible to issue debentures to the SBA, which pools these with debentures of other SBICs and sells them in the capital markets at favorable interest rates, in part as a result of the guarantee of payment from the SBA. Triangle SBIC, Triangle SBIC II and Triangle SBIC III invest these funds in portfolio companies. We intend to continue to operate Triangle SBIC, Triangle SBIC II and Triangle SBIC III as SBICs, subject to SBA approval, and to utilize the proceeds from the issuance of SBA-guaranteed debentures, referred to herein as SBA leverage, to enhance returns to our stockholders.

Recent Developments

Since our IPO in 2007, competition for private debt investment opportunities in the lower middle market has significantly intensified. One of the primary drivers of increased competition has been a large influx of capital from global investors seeking yield due to persistent low interest rates. This influx of capital has led to the formation of new competitive market participants with substantial amounts of capital to deploy, formidable financial, technological and marketing resources, and individualized risk tolerances. In addition, structural innovations within the leveraged loan market have afforded borrowers greater financing alternatives, thereby creating pricing pressure on all loan product categories. The combination of large inflows of capital, new competitive entrants, and expanded loan product offerings has created an imbalance between supply and demand and resulted in interest rate spread tightening and therefore the lowering of weighted-average yields associated with the investment portfolios of most BDC industry participants, including ours.

Historically, we have focused on investments in subordinated debt (or mezzanine) securities, which generally produce higher yields but typically carry higher amounts of principal risk versus more senior-oriented securities. For many years, this mezzanine strategy served us well, resulting in positive risk-adjusted returns and strong dividends per share. However, as our management began to observe the emerging trends noted above and more fully understand their potential impact, we began shifting the composition of our investment portfolio towards more lower-risk, senior securities and also towards larger companies which were expected to perform well in a later-stage economic environment. While investing in senior securities can reduce risks for stockholders due to lower volatility associated with fluctuations in principal loan values, such an investing strategy also produces lower investment yields and, depending on investment portfolio composition, reduces the overall weighted average yield of our investment portfolio. In order to control one’s investment position in senior securities, meaningfully larger commitments of capital are required on a per company basis as compared to junior securities such as

subordinated or mezzanine debt. As we continued to face competition from larger, more well-capitalized debt capital providers, yield compression associated with our shift towards investing in senior securities further contributed to our net investment income and put pressure on our ability to sustain historic dividend levels. Consequently, in late 2015, our management and Board of Directors began reviewing strategic options by which we could enhance our competitive positioning in the direct lending industry. In 2016 and 2017, our management met regularly with external financial advisors to gain additional perspectives on the direct lending industry and on ways we might consider enhancing stockholder value.

Following the end of the fiscal quarter ended September 30, 2017, and in light of the challenges being presented by persistent low interest rates, new competition, a broader range of available financing products, and our size constraints due to our comparatively small balance sheet, our Board of Directors concluded that in order to maximize stockholder value over the longer term, we likely would be best served by finding a suitable strategic partner having the scale, scope, range of financing products and risk profile to navigate the increasingly sophisticated direct lending market. As a result, our Board of Directors formally engaged a financial advisor in November 2017 to explore potential strategic alternatives.

After a comprehensive review of potential strategic alternatives, on April 3, 2018, we entered into the Asset Purchase Agreement with the Asset Buyer under which we agreed, subject to stockholder approval, to sell our December 31, 2017 investment portfolio, subject to certain adjustments to take into account portfolio activity since such date, to the Asset Buyer for approximately $981.2 million in cash, such sale referred to herein as the Asset Sale. Simultaneously therewith, we entered the Externalization Agreement with Barings, through which Barings, subject to stockholder approval, will become our investment adviser in exchange for a cash payment from Barings of $85.0 million, or $1.78 per share, directly to our stockholders. In addition, Barings will make an investment of $100.0 million in newly issued shares of our common stock at net asset value at the closing of the Transactions. Furthermore, Barings has committed to purchase up to $50.0 million of our common stock in the open market at prices up to and including the then-current net asset value for a period of two years post-closing, after which Barings has agreed to use any remaining funds from the $50.0 million to purchase additional newly issued shares at the greater of the then-current net asset value and market price. Barings’ total financial commitment to the Transactions is $235.0 million. Immediately following the closing of the Transactions, we will launch a $50.0 million issuer tender to purchase shares of our common stock at prices up to and including net asset value per share. The transactions with Barings contemplated by the Externalization Agreement are collectively referred to herein as the Externalization Transaction.

The sale of our investment portfolio to the Asset Buyer and the $85.0 million stockholder payment by Barings represent total cash consideration to us and to our stockholders, net of the repayment of outstanding debt, of $691.2 million, or approximately $14.48 per share as of December 31, 2017, and 1.08x our December 31, 2017 net asset value per share. Net of estimated transaction expenses, other one-time charges and the repayment of outstanding debt, the sale of our December 31, 2017 investment portfolio and the $85.0 million stockholder payment represents total cash consideration to us and to our stockholders of $658.6 million, or approximately $13.80 per share as of December 31, 2017, and 1.03x our December 31, 2017 net asset value.

Our Board of Directors has unanimously approved the Asset Purchase Agreement, the Externalization Agreement and the transactions contemplated thereby, including the investment advisory agreement pursuant to which Barings will act as our investment adviser, or the Advisory Agreement, and, subject to certain conditions, will recommend that our stockholders approve the same, along with certain other elements of the Transactions. We intend to hold a special meeting of our stockholders, or the Special Meeting, as soon as practicable to obtain the requisite stockholder approvals. Based on the terms of the Asset Purchase Agreement under which the Asset Buyer is deemed to have acquired the economics of our investment portfolio at the signing thereof, we expect to discontinue paying a quarterly dividend starting with the second quarter of 2018. Assuming the Transactions are approved by our stockholders, we expect the transactions to close in June or July of 2018, at which time stockholders will receive the payment of $1.78 per share as part of the Externalization Transaction.

In conjunction with the closing of the Transactions, we will announce the redemption of our unsecured 6.375% notes due December 15, 2022, or the December 2022 Notes, with an aggregate principal amount outstanding of $80.5 million and our unsecured 6.375% notes due March 15, 2022, or the March 2022 Notes, with an aggregate principal amount outstanding of $86.25 million. Both series of notes will be redeemed, following at least 30 days’ notice prior to the date determined for redemption, at a price equal to the outstanding principal amount of the notes plus accrued interest to the date of redemption.

Portfolio Investment Composition

The total value of our investment portfolio was $964.0 million as of March 31, 2018, as compared to $1,016.3 million as of December 31, 2017. As of March 31, 2018, we had investments in 86 portfolio companies with an aggregate cost of $1,059.4 million. As of December 31, 2017, we had investments in 89 portfolio companies with an aggregate cost of $1,121.6 million. As of both March 31, 2018 and December 31, 2017, none of our portfolio investments represented greater than 10% of the total fair value of our investment portfolio.

As of March 31, 2018 and December 31, 2017, our investment portfolio consisted of the following investments:



	Cost		Percentage of Total Portfolio		Fair Value		Percentage of Total Portfolio
March 31, 2018:
Subordinated debt and 2nd lien notes	$	634,127,821	60	%	$	532,821,494	55	%
Senior debt and 1st lien notes	291,570,639		28		275,617,921		29
Equity shares	132,001,713		12		154,162,815		16
Equity warrants	1,691,617		—		1,383,000		—
	$	1,059,391,790	100	%	$	963,985,230	100	%
December 31, 2017:
Subordinated debt and 2nd lien notes	$	710,543,854	63	%	$	589,548,358	58	%
Senior debt and 1st lien notes	275,088,787		25		262,803,297		26
Equity shares	134,301,587		12		162,543,691		16
Equity warrants	1,691,617		—		1,389,000		—
	$	1,121,625,845	100	%	$	1,016,284,346	100	%

Investment Activity

During the three months ended March 31, 2018, we made debt investments in four existing portfolio companies totaling $26.8 million and equity investments in five existing portfolio companies totaling $1.5 million. We had six portfolio company loans repaid at par totaling $64.0 million and received normal principal repayments and partial loan prepayments totaling $4.7 million in the three months ended March 31, 2018. We recognized a $16.1 million realized loss related to the exchange of one portfolio company debt investment for equity in that portfolio company. We received a $3.8 million distribution from one portfolio company and recognized this distribution as long-term capital gain income. In addition, we received proceeds related to the sales of certain equity securities totaling $8.9 million and recognized net realized gains on such sales totaling $5.1 million in the three months ended March 31, 2018.

During the three months ended March 31, 2017, we made nine new investments totaling $146.6 million, debt investments in six existing portfolio companies totaling $14.3 million and equity investments in six existing portfolio companies totaling $0.6 million. We had three portfolio company loans repaid at par totaling $43.6 million and received normal principal repayments and partial loan prepayments totaling $3.9 million in the three months ended March 31, 2017. We converted a portion of a subordinated debt investment in one portfolio company into an equity investment and recognized a realized loss on such conversion totaling $0.3 million. We wrote off equity investments in three portfolio companies and recognized realized losses on the write-offs totaling $4.1 million and wrote off debt investments in two portfolio companies and recognized realized losses on the write-offs of $13.1 million. In addition, we received proceeds related to the sales of certain equity securities totaling $6.3 million and recognized net realized gains on such sales totaling $4.1 million in the three months ended March 31, 2017.

Total portfolio investment activity for the three months ended March 31, 2018 and 2017 was as follows:



Three Months Ended March 31, 2018:	Subordinated Debt and 2^nd Lien Notes			Senior Debt and 1^st Lien Notes			Equity Shares			Equity Warrants			Total
Fair value, beginning of period	$	589,548,358		$	262,803,297		$	162,543,691		$	1,389,000		$	1,016,284,346
New investments	7,500,000			19,274,897			1,510,176			—			28,285,073
Reclassifications	(8,617,000		)	8,617,000			—			—			—
Proceeds from sales of investments	—			—			(12,679,815		)	(708		)	(12,680,523		)
Loan origination fees received	—			(205,499		)	—			—			(205,499		)
Principal repayments received	(54,962,057		)	(13,797,604		)	—			—			(68,759,661		)
PIK interest earned	1,614,863			113,858			—			—			1,728,721
PIK interest payments received	(1,751,161		)	(1,403,097		)	—			—			(3,154,258		)
Accretion of loan discounts	5,986			—			—			—			5,986
Accretion of deferred loan origination revenue	1,019,197			205,195			—			—			1,224,392
Realized gain (loss)	(17,548,759		)	—			8,869,765			708			(8,678,286		)
Unrealized gain (loss)	16,012,067			9,874			(6,081,002		)	(6,000		)	9,934,939
Fair value, end of period	$	532,821,494		$	275,617,921		$	154,162,815		$	1,383,000		$	963,985,230
Weighted average yield on debt investments at end of period(1)													10.9		%
Weighted average yield on total investments at end of period(1)													9.4		%
Weighted average yield on total investments at end of period													8.4		%


(1)	Excludes non-accrual debt investments



Three Months Ended March 31, 2017:	Subordinated Debt and 2^nd Lien Notes			Senior Debt and 1^st Lien Notes			Equity Shares			Equity Warrants			Total
Fair value, beginning of period	$	690,159,367		$	191,643,157		$	154,216,657		$	1,888,000		$	1,037,907,181
New investments	64,868,421			91,059,316			5,590,356			—			161,518,093
Reclassifications	—			—			—			—			—
Proceeds from sales of investments	—			—			(6,266,765		)	(33,003		)	(6,299,768		)
Loan origination fees received	(1,255,000		)	(1,383,485		)	—			—			(2,638,485		)
Principal repayments received	(46,128,905		)	(1,342,038		)	—			—			(47,470,943		)
PIK interest earned	3,041,385			336,463			—			—			3,377,848
PIK interest payments received	(2,687,416		)	—			—			—			(2,687,416		)
Accretion of loan discounts	28,786			54,694			—			—			83,480
Accretion of deferred loan origination revenue	1,092,544			256,865			—			—			1,349,409
Realized gain (loss)	(13,353,325		)	—			493,363			(458,997		)	(13,318,959		)
Unrealized gain (loss)	3,009,036			(470,608		)	(1,831,066		)	681,000			1,388,362
Fair value, end of period	$	698,774,893		$	280,154,364		$	152,202,545		$	2,077,000		$	1,133,208,802
Weighted average yield on debt investments at end of period(1)													11.5		%
Weighted average yield on total investments at end of period(1)													10.1		%
Weighted average yield on total investments at end of period													10.1		%


(1)	Excludes non-accrual debt investments

Non-Accrual Assets

Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. As of March 31, 2018, the fair value of our non-accrual assets was $16.9 million, which comprised 1.8% of the total fair value of our portfolio, and the cost of our non-accrual assets was $106.2 million, which comprised 10.0% of the total cost of our portfolio. As of December 31, 2017, the fair value of our non-accrual assets was $15.8 million, which comprised 1.6% of the total fair value of our portfolio, and the cost of our non-accrual assets was $120.1 million, which comprised 10.7% of the total cost of our portfolio.

Our non-accrual assets as of March 31, 2018 were as follows:

Cafe Enterprises, Inc.

During the three months ended June 30, 2017, we placed our subordinated debt investment in Cafe Enterprises, Inc., or Cafe, on PIK non-accrual status. In September 2017, we placed our debt investments in Cafe on non-accrual status effective with the quarterly payments due September 30, 2017. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investments in Cafe for financial reporting purposes. As of March 31, 2018, the cost of our debt investments in Cafe was $15.7 million and the fair value of such investments was zero.

Community Intervention Services, Inc.

In June 2017, we placed our debt investment in Community Intervention Services, Inc., or Community, on non-accrual status effective with the quarterly payment due June 30, 2017. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investment in Community for financial reporting purposes. As of March 31, 2018, the cost of our debt investment in Community was $17.7 million and the fair value of such investment was zero.

Eckler's Holdings, Inc.

During the three months ended June 30, 2017, we placed our subordinated debt investment in Eckler's Holdings, Inc., or Eckler's, on PIK non-accrual status and in September 2017, we placed our debt investment in Eckler's on non-accrual status effective with the quarterly payment due September 30, 2017. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investment in Eckler's for financial reporting purposes. As of March 31, 2018, the cost of our debt investment in Eckler's was $13.2 million and the fair value of such investment was $0.2 million.

Frank Entertainment Group, LLC

In September 2017, we placed our debt investments in Frank Entertainment Group, LLC, or Frank, on non-accrual status effective with the monthly payments due July 31, 2017. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investments in Frank for financial reporting purposes. As of March 31, 2018, the cost of our debt investments in Frank was $13.4 million and the fair value of such investments was $6.3 million.

FrontStream Holdings, LLC

In September 2017, we placed our debt investment in FrontStream Holdings, LLC, or Frontstream, on non-accrual status effective with the quarterly payment due September 30, 2017. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investment in Frontstream for financial reporting purposes. As of March 31, 2018, the cost of our debt investment in Frontstream was $16.5 million and the fair value of such investment was $8.6 million.

GST AutoLeather, Inc.

On October 3, 2017, GST AutoLeather, Inc., or GST, filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. As a result, we placed our debt investment in GST on non-accrual status effective with the quarterly payment due September 30, 2017, and under U.S. GAAP, we no longer recognize interest income on our debt investment in GST for financial reporting purposes. As of March 31, 2018, the cost of our debt investment in GST was $23.1 million and the fair value of such investment was $0.2 million.

Media Storm, LLC

In September 2017, we placed our debt investment in Media Storm, LLC, or Media Storm, on non-accrual status effective with the quarterly payment due September 30, 2017. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investment in Media Storm for financial reporting purposes. As of March 31, 2018, the cost of our debt investment in Media Storm was $6.5 million and the fair value of such investment was $1.6 million.

Results of Operations

Comparison of three months ended March 31, 2018 and March 31, 2017

Investment Income

For the three months ended March 31, 2018, total investment income was $26.1 million, a 13.6% decrease from $30.2 million of total investment income for the three months ended March 31, 2017. This decrease was primarily attributable to a decrease in portfolio debt investments from March 31, 2017 to March 31, 2018, a decrease in the weighted average yield on our debt investments from March 31, 2017 to March 31, 2018, a $0.5 million decrease in non-recurring fee income and a $0.1 million decrease in non-recurring dividend income. The weighted average yield on our debt investments (other than non-accrual investments) was 10.9% as of March 31, 2018, as compared to 11.5% as of March 31, 2017. Non-recurring fee income was $1.0 million for the three months ended March 31, 2018, as compared to $1.5 million for the three months ended March 31, 2017. Non-recurring dividend income was $0.2 million for the three months ended March 31, 2018, as compared to $0.3 million for the three months ended March 31, 2017.

Operating Expenses

For the three months ended March 31, 2018, operating expenses increased by 7.9% to $13.4 million from $12.4 million for the three months ended March 31, 2017. Our operating expenses consist of interest and other financing fees, compensation expenses and general and administrative expenses.

For the three months ended March 31, 2018, interest and other financing fees increased by 9.8% to $7.6 million from $6.9 million for the three months ended March 31, 2017. The increase in interest and other financing fees was primarily related to increased borrowings under our third amended and restated senior secured credit facility, as amended on May 1, 2017, or the Credit Facility.

Compensation expenses are primarily influenced by headcount and levels of business activity. Our compensation expenses include salaries, discretionary compensation, equity-based compensation and benefits. Discretionary compensation is significantly impacted by our level of total investment income, our investment results, including investment realizations, prevailing labor markets and the external environment. As a result of these and other factors, our compensation expenses can fluctuate materially from period to period. Accordingly, the amount of compensation expenses recognized in any particular period may not be indicative of compensation expenses in a future period.

For the three months ended March 31, 2018, compensation expenses decreased by 3.7% to $4.1 million from $4.3 million for the three months ended March 31, 2017. For the three months ended March 31, 2018, general and administrative expenses increased by 37.8% to $1.7 million from $1.2 million for the three months ended March 31, 2017. The increase in general and administrative expenses was primarily related to increased legal expenses and other direct costs related to our strategic alternatives review process announced by our Board of Directors in November 2017. See further discussion above in the "Recent Developments" section.

In addition, our efficiency ratio (defined as the sum of compensation expenses and general and administrative expenses as a percentage of total investment income) increased to 22.1% for the three months ended March 31, 2018 from 18.1% for the three months ended March 31, 2017.

Net Investment Income

As a result of the $4.1 million decrease in total investment income and the $1.0 million increase in operating expenses, net investment income decreased by 28.6% to $12.7 million for the three months ended March 31, 2018 as compared to $17.8 million for the three months ended March 31, 2017.

Net Increase/Decrease in Net Assets Resulting from Operations

In the three months ended March 31, 2018, we recognized realized losses totaling $7.3 million, which consisted primarily of a loss on the restructuring of one non-control/non-affiliate investment totaling $16.1 million and a net loss on the sale/

repayment of one affiliate investment totaling $0.5 million, partially offset by a gain from a tax distribution from an affiliate investment totaling $3.8 million and net gains from the sales of ten non-control/non-affiliate investments totaling $5.6 million. In addition, during the three months ended March 31, 2018, we recorded net unrealized appreciation totaling $9.1 million, consisting of net unrealized depreciation on our current portfolio of $2.5 million and net unrealized appreciation reclassification adjustments of $11.6 million related to the realized gains and losses noted above.

In the three months ended March 31, 2017, we recognized realized losses totaling $13.3 million, which consisted primarily of a net loss on the write-off of one control investment totaling $4.5 million and net losses on the restructuring/write-off of three non-control investments totaling $13.0 million, partially offset by a net gain on the sale of one non-control/non-affiliate investment totaling $0.6 million and net gains on the sales of three affiliate investments totaling $3.5 million. In addition, during the three months ended March 31, 2017, we recorded net unrealized appreciation totaling $2.7 million, consisting of net unrealized depreciation on our current portfolio of $9.6 million and net unrealized appreciation reclassification adjustments of $12.3 million related to the realized gains and losses noted above.

As a result of these events, our net increase in net assets resulting from operations was $14.5 million for the three months ended March 31, 2018, as compared to a net increase in net assets resulting from operations of $7.2 million for the three months ended March 31, 2017.

Liquidity and Capital Resources

We believe that our current cash and cash equivalents on hand, our available borrowing capacity under the Credit Facility and our anticipated cash flows from operations will be adequate to meet our cash needs for our daily operations for at least the next twelve months.

In the future, depending on the valuation of Triangle SBIC’s assets, Triangle SBIC II's assets and Triangle SBIC III’s assets pursuant to SBA guidelines, Triangle SBIC, Triangle SBIC II and Triangle SBIC III may be limited by provisions of the Small Business Investment Act of 1958, as amended, or the Small Business Investment Act, and SBA regulations governing SBICs, from making certain distributions to Triangle Capital Corporation that may be necessary to enable Triangle Capital Corporation to make the minimum required distributions to its stockholders and qualify as a regulated investment company, or RIC.

Cash Flows

For the three months ended March 31, 2018, we experienced a net increase in cash and cash equivalents in the amount of $16.1 million. During that period, our operating activities provided $62.4 million in cash, consisting primarily of repayments received from portfolio companies and proceeds from sales of investments totaling $81.4 million, which in addition to the cash provided by other operating activities, was partially offset by portfolio investments of $28.3 million. In addition, financing activities decreased cash by $46.3 million, consisting primarily of repayments under the Credit Facility of $30.6 million and cash dividends paid in the amount of $14.4 million. As of March 31, 2018, we had $207.9 million of cash and cash equivalents on hand.

For the three months ended March 31, 2017, we experienced a net decrease in cash and cash equivalents in the amount of $16.5 million. During that period, our operating activities used $89.3 million in cash, consisting primarily of new portfolio investments of $161.5 million, partially offset by repayments received from portfolio companies and proceeds from sales of portfolio investments of approximately $53.8 million. In addition, our financing activities increased cash by $72.8 million, consisting primarily of proceeds from our public stock offering of $132.2 million, partially offset by cash dividends paid in the amount of $20.7 million and net repayments under the Credit Facility of $36.1 million. As of March 31, 2017, we had $90.6 million of cash and cash equivalents on hand.

Financing Transactions

Due to Triangle SBIC’s, Triangle SBIC II's and Triangle SBIC III’s status as licensed SBICs, Triangle SBIC, Triangle SBIC II and Triangle SBIC III have the ability to issue debentures guaranteed by the SBA at favorable interest rates. Under the Small Business Investment Act and the SBA rules applicable to SBICs, an SBIC (or group of SBICs under common control) can have outstanding at any time debentures guaranteed by the SBA up to two times (and in certain cases, with SBA approval, up to three times) the amount of its regulatory capital, as such term is defined in the SBA regulations. The maximum statutory limit on the dollar amount of outstanding debentures guaranteed by the SBA issued by a single SBIC is currently $150.0 million and by a group of SBICs under common control is $350.0 million, subject to SBA approval. Debentures guaranteed by the SBA have a maturity of ten years, with interest payable semi-annually. The principal amount of the debentures is not required to be paid before maturity but may be prepaid at any time, without penalty. As a result of its

guarantee of our SBA-guaranteed debentures, the SBA has fixed-dollar claims on the assets of Triangle SBIC, Triangle SBIC II and Triangle SBIC III that are superior to the claims of our security holders.

As of March 31, 2018, Triangle SBIC had issued the maximum $150.0 million of SBA-guaranteed debentures and Triangle SBIC II had issued $100.0 million of SBA-guaranteed debentures, leaving borrowing capacity of a maximum of $100.0 million of SBA-guaranteed debentures for Triangle SBIC III. In addition to the one-time 1.0% fee on the total commitment from the SBA, we also pay a one-time fee of 2.425% on the amount of each debenture issued. These fees are capitalized as deferred financing costs and are amortized over the term of the debt agreements using the effective interest method. The weighted average interest rate for all SBA-guaranteed debentures as of March 31, 2018 was 3.90%. As of both March 31, 2018 and December 31, 2017, all SBA-guaranteed debentures were pooled.

In May 2015, we entered into the Credit Facility, which was subsequently amended in May 2017. The amendment, among other things, increased commitments from $300.0 million to $435.0 million and extended the maturity by two years. The revolving period of the Credit Facility ends April 30, 2021 followed by a one-year amortization period with a final maturity date of April 30, 2022. We have the ability to borrow in both United States dollars as well as foreign currencies under the Credit Facility. The Credit Facility, which is structured to operate like a revolving credit facility, is secured primarily by our assets, excluding the assets of our wholly-owned SBIC subsidiaries. The Credit Facility has an accordion feature that allows for an increase in the total borrowing size up to $550.0 million, subject to certain conditions and the satisfaction of specified financial covenants. Using this accordion feature, in July 2017, we increased our commitments under the Credit Facility from $435.0 million to $465.0 million, and in September 2017, we again increased our commitments under the Credit Facility from $465.0 million to $480.0 million.

Borrowings under the Credit Facility bear interest, subject to our election, on a per annum basis equal to (i) the applicable base rate plus 1.75% (or 1.50% if we receive an investment grade credit rating), (ii) the applicable LIBOR rate plus 2.75% (or 2.50% if we receive an investment grade credit rating) or (iii) for borrowings denominated in Canadian dollars, the applicable Canadian Dealer Offered Rate plus 2.75% (or 2.50% if we receive an investment grade credit rating). The applicable base rate is equal to the greater of (i) the prime rate, (ii) the federal funds rate plus 0.5% or (iii) the adjusted one-month LIBOR plus 2.0%. The applicable LIBOR rate depends on the term of the draw under the Credit Facility. We pay a commitment fee of 1.00% per annum on undrawn amounts if the used portion of the Credit Facility is less than or equal to 25.0% of total commitments, or 0.375% per annum on undrawn amounts if the used portion of the Credit Facility is greater than 25.0% of total commitments.

As of March 31, 2018, we had United States dollar borrowings of $116.0 million outstanding under the Credit Facility with an interest rate of 4.42% and non-United States dollar borrowings denominated in Canadian dollars of $11.6 million ($9.0 million in United States dollars) outstanding under the Credit Facility with an interest rate of 4.42%. The borrowings denominated in Canadian dollars are translated into United States dollars based on the spot rate at each balance sheet date. The impact resulting from changes in foreign exchange rates on the Credit Facility borrowings is included in unrealized appreciation (depreciation) on foreign currency borrowings in our Unaudited Consolidated Statements of Operations. The borrowings denominated in Canadian dollars may be positively or negatively affected by movements in the rate of exchange between the United States dollar and the Canadian dollar. This movement is beyond our control and cannot be predicted.

The Credit Facility contains certain affirmative and negative covenants, including but not limited to (i) maintaining a minimum interest coverage ratio, (ii) maintaining a minimum consolidated tangible net worth, (iii) maintaining a minimum asset coverage ratio and (iv) maintaining our tax treatment as a RIC and regulation as a BDC. The Credit Facility also contains customary events of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to other indebtedness, bankruptcy, change of control, and material adverse effect. The Credit Facility also permits Branch Banking and Trust Company, the administrative agent, to select an independent third-party valuation firm to determine valuations of certain portfolio investments for purposes of borrowing base provisions. In connection with the Credit Facility, we also entered into collateral documents. As of March 31, 2018, we were in compliance with all covenants of the Credit Facility.

In October 2012, we issued $70.0 million in aggregate principal amount of the December 2022 Notes, and in November 2012, we issued $10.5 million of December 2022 Notes pursuant to the exercise of an over-allotment option. The December 2022 Notes mature on December 15, 2022, and may be redeemed in whole or in part at any time or from time to time at our option. The December 2022 Notes bear interest at a rate of 6.375% per year payable quarterly on March 15, June 15, September 15 and December 15 of each year, beginning December 15, 2012.

In February 2015, we issued $86.3 million in aggregate principal amount of the March 2022 Notes. The March 2022 Notes mature on March 15, 2022 and may be redeemed in whole or in part at any time or from time to time at our option. The March 2022 Notes bear interest at a rate of 6.375% per year payable quarterly on March 15, June 15, September 15 and

December 15 of each year, beginning March 15, 2015. The net proceeds from the sale of the March 2022 Notes, after underwriting discounts and offering expenses, were $83.4 million.

The indenture and supplements thereto relating to the December 2022 Notes and the March 2022 Notes contain certain covenants, including but not limited to (i) a requirement that we comply with the asset coverage requirement of the 1940 Act or any successor provisions, after giving effect to any exemptive relief granted to us by the SEC, (ii) a requirement that we will not declare any cash dividend, or declare any other cash distribution, upon a class of our capital stock, or purchase any such capital stock, unless, in every such case, at the time of the declaration of any such dividend or distribution, or at the time of any such purchase, we have an asset coverage (as defined in the 1940 Act) of at least 200% after deducting the amount of such dividend, distribution or purchase price, as the case may be, giving effect to any exemptive relief granted to us by the SEC, and (iii) a requirement that we provide financial information to the holders of the notes and the trustee under the indenture if we should no longer be subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, or the Exchange Act. As of March 31, 2018 and December 31, 2017, we were in compliance with all covenants of the December 2022 Notes and the March 2022 Notes.

Distributions to Stockholders

We have elected to be treated as a RIC under the Internal Revenue Code of 1986, as amended, or the Code, and intend to make the required distributions to our stockholders as specified therein. In order to maintain our tax treatment as a RIC and to obtain RIC tax benefits, we must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then we are generally required to pay income taxes only on the portion of our taxable income and gains we do not distribute (actually or constructively) and certain built-in gains. We have historically met our minimum distribution requirements and continually monitor our distribution requirements with the goal of ensuring compliance with the Code. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and our ability to make distributions will be limited by the asset coverage requirement and related provisions under the 1940 Act and contained in the indenture and related supplements governing the December 2022 Notes and the March 2022 Notes.

The minimum distribution requirements applicable to RICs require us to distribute to our stockholders each year at least 90% of our investment company taxable income, or ICTI, as defined by the Code. Depending on the level of ICTI earned in a tax year, we may choose to carry forward ICTI in excess of current year distributions into the next tax year and pay a 4% U.S. federal excise tax on such excess. Any such carryover ICTI must be distributed before the end of the next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.

ICTI generally differs from net investment income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. We may be required to recognize ICTI in certain circumstances in which we do not receive cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments issued with warrants), we must include in ICTI each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in ICTI other amounts that we have not yet received in cash, such as (i) PIK interest income and (ii) interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. Because any original issue discount or other amounts accrued will be included in our ICTI for the year of accrual, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements, even though we will not have received and may not ever receive any corresponding cash amount. ICTI also excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.

Critical Accounting Policies and Use of Estimates

The preparation of our unaudited financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods covered by such financial statements. We have identified investment valuation and revenue recognition as our most critical accounting estimates. On an on-going basis, we evaluate our estimates, including those related to the matters described below. These estimates are based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from those estimates under different assumptions or conditions. A discussion of our critical accounting policies follows.

Investment Valuation

The most significant estimate inherent in the preparation of our financial statements is the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. We have a valuation policy, as well as established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring (quarterly) basis in accordance with the 1940 Act and FASB ASC Topic 820, Fair Value Measurements and Disclosures, or ASC Topic 820. Our valuation policy and processes were established by our management with the assistance of certain third-party advisors and were approved by the Board. Under ASC Topic 820, there are three levels of valuation inputs, as follows:

Level 1 Inputs – include quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 3 Inputs – include inputs that are unobservable and significant to the fair value measurement.

Our investment portfolio is primarily comprised of debt and equity instruments of privately held companies for which quoted prices or other inputs falling within the categories of Level 1 and Level 2 are generally not available. Therefore, we determine the fair value of our investments in good faith primarily using Level 3 inputs. In certain cases, quoted prices or other observable inputs may exist, and if so, we assess the appropriateness of the use of these third-party quotes in determining fair value based on (i) our understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer and (ii) the depth and consistency of broker quotes and the correlation of changes in broker quotes with underlying performance of the portfolio company.

There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of our investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.

Our valuation process is led by our executive officers. The valuation process begins with a quarterly review of each investment in our investment portfolio by our executive officers and our investment committee. Valuations of each portfolio security are then prepared by our investment professionals, who have direct responsibility for the origination, management and monitoring of each investment. Under our valuation policy, each investment valuation is subject to (i) a review by the lead investment officer responsible for the portfolio company investment and (ii) a peer review by a second investment officer or executive officer. Generally, any investment that is valued below cost is subjected to review by one of our executive officers. After the peer review is complete, we engage two independent valuation firms, including Duff & Phelps, LLC, collectively referred to as the Valuation Firms, to provide third-party reviews of certain investments, as described further below. Finally, the Board has the responsibility for reviewing and approving, in good faith, the fair value of our investments in accordance with the 1940 Act.

The Valuation Firms provide third-party valuation consulting services to us which consist of certain limited procedures that we identified and requested the Valuation Firms to perform, which we refer to herein as the Procedures. The Procedures are performed with respect to each portfolio company at least once in every calendar year and for new portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In addition, the Procedures are generally performed with respect to a portfolio company when there has been a significant change in the fair value of the investment. In certain instances, we may determine that it is not cost-effective, and as a result is not in our stockholders’ best interest, to request the Valuation Firms to perform the Procedures on one or more portfolio companies. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio.

The total number of investments and the percentage of our investment portfolio on which the Procedures were performed are summarized below by period:



For the quarter ended:	Total companies	Percent of total investments at fair value⁽¹⁾
March 31, 2017	18	30%
June 30, 2017	20	29%
September 30, 2017	22	25%
December 31, 2017	21	35%
March 31, 2018	14	24%


(1)	Exclusive of the fair value of new investments made during the quarter.

Investment Valuation Inputs

Under ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For our portfolio securities, fair value is generally the amount that we might reasonably expect to receive upon the current sale of the security. Under ASC Topic 820, the fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. Under ASC Topic 820, if no market for the security exists or if we do not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market. The securities in which we invest are generally only purchased and sold in merger and acquisition transactions, in which case the entire portfolio company is sold to a third-party purchaser. As a result, unless we have the ability to control such a transaction, the assumed principal market for our securities is a hypothetical secondary market. The Level 3 inputs to our valuation process reflect management’s best estimate of the assumptions that would be used by market participants in pricing the investment in a transaction in a hypothetical secondary market.

Enterprise Value Waterfall Approach

In valuing equity securities (including warrants), we estimate fair value using an “Enterprise Value Waterfall” valuation model. We estimate the enterprise value of a portfolio company and then allocate the enterprise value to the portfolio company’s securities in order of their relative liquidation preference. In addition, the model assumes that any outstanding debt or other securities that are senior to our equity securities are required to be repaid at par. Additionally, we estimate the fair value of a limited number of our debt securities using the Enterprise Value Waterfall approach in cases where we do not expect to receive full repayment.

To estimate the enterprise value of the portfolio company, we primarily use a valuation model based on a transaction multiple, which generally is the original transaction multiple, and measures of the portfolio company’s financial performance. In addition, we consider other factors, including but not limited to (i) offers from third parties to purchase the portfolio company, (ii) the implied value of recent investments in the equity securities of the portfolio company, (iii) publicly available information regarding recent sales of private companies in comparable transactions and (iv) when management believes there are comparable companies that are publicly traded, we perform a review of these publicly traded companies and the market multiple of their equity securities. For certain non-performing assets, we may utilize the liquidation or collateral value of the portfolio company's assets in our estimation of enterprise value.

The significant Level 3 inputs to the Enterprise Value Waterfall model are (i) an appropriate transaction multiple and (ii) a measure of the portfolio company’s financial performance, which generally is either earnings before interest, taxes, depreciation and amortization, as adjusted, or Adjusted EBITDA, or revenues. Such inputs can be based on historical operating results, projections of future operating results or a combination thereof. The operating results of a portfolio company may be unaudited, projected or pro forma financial information and may require adjustments for certain non-recurring items. In determining the operating results input, we utilize the most recent portfolio company financial statements and forecasts available as of the valuation date. Management also consults with the portfolio company’s senior management to obtain updates on the portfolio company’s performance, including information such as industry trends, new product development, loss of customers and other operational issues. Additionally, we consider some or all of the following factors:


•	financial standing of the issuer of the security;


•	comparison of the business and financial plan of the issuer with actual results;


•	the size of the security held;


•	pending reorganization activity affecting the issuer, such as merger or debt restructuring;


•	ability of the issuer to obtain needed financing;


•	changes in the economy affecting the issuer;


•	financial statements and reports from portfolio company senior management and ownership;


•	the type of security, the security’s cost at the date of purchase and any contractual restrictions on the disposition of the security;


•	information as to any transactions or offers with respect to the security and/or sales to third parties of similar securities;


•	the issuer’s ability to make payments and the type of collateral;


•	the current and forecasted earnings of the issuer;


•	statistical ratios compared to lending standards and to other similar securities;


•	pending public offering of common stock by the issuer of the security;


•	special reports prepared by analysts; and


•	any other factors we deem pertinent with respect to a particular investment.

Income Approach

In valuing debt securities, we utilize an “Income Approach” model that considers factors including, but not limited to, (i) the stated yield on the debt security, (ii) the portfolio company’s current Adjusted EBITDA as compared to the portfolio company’s historical or projected Adjusted EBITDA as of the date the investment was made and the portfolio company’s anticipated Adjusted EBITDA for the next twelve months of operations, (iii) the portfolio company’s current Leverage Ratio (defined as the portfolio company’s total indebtedness divided by Adjusted EBITDA) as compared to its Leverage Ratio as of the date the investment was made, (iv) publicly available information regarding current pricing and credit metrics for similar proposed and executed investment transactions of private companies and (v) when management believes a relevant comparison exists, current pricing and credit metrics for similar proposed and executed investment transactions of publicly traded debt. In addition, we use a risk rating system to estimate the probability of default on the debt securities and the probability of loss if there is a default. This risk rating system covers both qualitative and quantitative aspects of the business and the securities held.

We consider the factors above, particularly any significant changes in the portfolio company’s results of operations and leverage, and develop an expectation of the yield that a hypothetical market participant would require when purchasing the debt investment, which we refer to herein as the Required Rate of Return. The Required Rate of Return, along with the Leverage Ratio and Adjusted EBITDA, are the significant Level 3 inputs to the Income Approach model. For investments where the Leverage Ratio and Adjusted EBITDA have not fluctuated significantly from the date the investment was made or have not fluctuated significantly from management’s expectations as of the date the investment was made, and where there have been no significant fluctuations in the market pricing for such investments, we may conclude that the Required Rate of Return is equal to the stated rate on the investment and therefore, the debt security is appropriately priced. In instances where we determine that the Required Rate of Return is different from the stated rate on the investment, we discount the contractual cash flows on the debt instrument using the Required Rate of Return in order to estimate the fair value of the debt security.

The fair value of our royalty rights are calculated based on specific provisions contained in the pertinent operating or royalty agreements. The determination of the fair value of such royalty rights is not a significant component of our valuation process.

Revenue Recognition

Interest and Dividend Income

Interest income, adjusted for amortization of premium and accretion of original issue discount, is recorded on the accrual basis to the extent that such amounts are expected to be collected. Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The cessation of recognition of such interest will negatively impact the reported fair value of the investment. We write off any previously accrued and uncollected interest when it is determined that interest is no longer considered collectible. Dividend income is recorded on the ex-dividend date.

We may have to include in our ICTI interest income, including original issue discount income, from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. As a result, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements to maintain our RIC tax treatment, even though we will not have received and may not ever receive any corresponding cash amount. Additionally, any loss recognized by us for U.S. federal income tax purposes on previously accrued interest income will be treated as a capital loss.

Fee Income

Origination, facility, commitment, consent and other advance fees received in connection with the origination of a loan, or Loan Origination Fees, are recorded as deferred income and recognized as investment income over the term of the loan. Upon prepayment of a loan, any unamortized Loan Origination Fees are recorded as investment income. In the general course of our business, we receive certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and loan waiver and amendment fees, and are recorded as investment income when earned.

Payment-in-Kind (PIK) Interest Income

We currently hold, and we expect to hold in the future, some loans in our portfolio that contain PIK interest provisions. The PIK interest, computed at the contractual rate specified in each loan agreement, is periodically added to the principal balance of the loan, rather than being paid to us in cash, and is recorded as interest income. Thus, the actual collection of PIK interest may be deferred until the time of debt principal repayment.

PIK interest, which is a non-cash source of income at the time of recognition, is included in our taxable income and therefore affects the amount we are required to distribute to our stockholders to maintain our tax treatment as a RIC for U.S. federal income tax purposes, even though we have not yet collected the cash. Generally, when current cash interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing PIK interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. We write off any previously accrued and uncollected PIK interest when it is determined that the PIK interest is no longer collectible.

We may have to include in our ICTI, PIK interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. As a result, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements, even though we will not have received and may not ever receive any corresponding cash amount.

Off-Balance Sheet Arrangements

In the normal course of business, we are party to financial instruments with off-balance sheet risk, consisting primarily of unused commitments to extend financing to our portfolio companies. Since commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The balances of unused commitments to extend financing as of March 31, 2018 and December 31, 2017 were as follows:



Portfolio Company	Investment Type	March 31, 2018		December 31, 2017
Deva Holdings, Inc.	Revolver	$	2,500,000	$	2,500,000
DLC Acquisition, LLC	Revolver	1,800,000		1,800,000
Frank Entertainment Group, LLC(1)	Delayed Draw Senior	130,212		130,212
Frank Entertainment Group, LLC(1)	Delayed Draw Second Lien	303,827		303,827
HKW Capital Partners IV, L.P.	Private Equity	91,985		214,823
ICP Industries Inc.	Delayed Draw Term Loan	—		5,000,000
Lakeview Health Acquisition Company(1)	Revolver	1,387,367		1,387,367
Micross Solutions, LLC(1)	Delayed Draw Term Loan	3,000,000		3,000,000
Nautic Partners VII, LP(1)	Private Equity	492,853		509,080
Orchid Underwriters Agency, LLC	Delayed Draw Term Loan	649,143		649,143
Schweiger Dermatology Group, LLC	Delayed Draw Term Loan	—		4,500,000
SCUF Gaming, Inc.(1)	Revolver	2,000,000		2,000,000
Smile Brands, Inc.	Equity Investment	1,000,000		1,000,000
Smile Brands, Inc.	Delayed Draw Term Loan	19,096,531		18,826,531
SPC Partners V, LP	Private Equity	185,297		185,297
SPC Partners VI, LP	Private Equity	2,524,550		2,792,172
Tate's Bake Shop	Revolver	550,000		550,000
Technology Crops, LLC(1)	Revolver	1,250,000		—
TGaS Advisors, LLC	Revolver	2,000,000		2,000,000
Vinvention Capital Partners TE LP (F/K/A Nomacorc, LLC) (1)	Equity Investment	633,385		838,813
Total unused commitments to extend financing		$	39,595,150	$	48,187,265


(1)	Represents a commitment to extend financing to a portfolio company where one or more of our current investments in the portfolio company are carried at less than cost. Our estimate of the fair value of the current investments in this portfolio company includes an analysis of the value of any unfunded commitments.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are subject to market risk. Market risk includes risks that arise from changes in interest rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. The prices of securities held by us may decline in response to certain events, including those directly involving the companies we invest in; conditions affecting the general economy; overall market changes; legislative reform; local, regional, national or global political, social or economic instability; and interest rate fluctuations.

In addition, we are subject to interest rate risk. Interest rate risk is defined as the sensitivity of our current and future earnings to interest rate volatility, variability of spread relationships, the difference in re-pricing intervals between our assets and liabilities and the effect that interest rates may have on our cash flows. Changes in the general level of interest rates can affect our net interest income, which is the difference between the interest income earned on interest earning assets and our interest expense incurred in connection with our interest bearing debt and liabilities. Changes in interest rates can also affect, among other things, our ability to acquire and originate loans and securities and the value of our investment portfolio. Our net investment income is affected by fluctuations in various interest rates, including LIBOR, Canadian Dealer Offered Rate and prime rates. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks. We regularly measure exposure to interest rate risk and determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates. As of March 31, 2018, we were not a party to any hedging arrangements.

As of March 31, 2018, 46.0%, or $426.0 million (at cost), of our debt portfolio investments bore interest at fixed rates and 54.0%, or $499.7 million (at cost), of our debt portfolio investments bore interest at variable rates, which generally are LIBOR-based, and many of which are subject to certain floors. A hypothetical 200 basis point increase or decrease in the interest rates on our variable-rate debt investments could increase or decrease, as applicable, our investment income by a maximum of $10.0 million on an annual basis. All of our SBA-guaranteed debentures, our December 2022 Notes and our March 2022 Notes bear interest at fixed rates. Our Credit Facility bears interest, subject to our election, on a per annum basis equal to (i) the applicable base rate plus 1.75% (or 1.50% if we receive an investment grade credit rating), (ii) the applicable LIBOR rate plus 2.75% (or 2.50% if we receive an investment grade credit rating), or (iii) for borrowings denominated in Canadian dollars, the applicable Canadian Dealer Offered Rate plus 2.75% (or 2.50% if we receive an investment grade credit rating). The applicable base rate is equal to the greater of (i) the prime rate, (ii) the federal funds rate plus 0.5% or (iii) the adjusted one-month LIBOR plus 2.0%. The applicable LIBOR rate depends on the term of the draw under the Credit Facility. We pay a commitment fee of 1.00% per annum on undrawn amounts if the used portion of the facility is less than or equal to 25.0% of total commitments, or 0.375% per annum on undrawn amounts if the used portion of the facility is greater than 25.0% of total commitments.

Because we currently borrow, and plan to borrow in the future, money to make investments, our net investment income is dependent upon the difference between the rate at which we borrow funds and the rate at which we invest the funds borrowed. Accordingly, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. In periods of rising interest rates, our cost of funds would increase, which could reduce our net investment income if there is not a corresponding increase in interest income generated by our investment portfolio.

We may also have exposure to foreign currencies (currently the Canadian dollar) related to certain investments. Such investments are translated into United States dollars based on the spot rate at each balance sheet date, exposing us to movements in the exchange rate. In order to reduce our exposure to fluctuations in exchange rates, we generally borrow in Canadian dollars under our Credit Facility to finance such investments. As of March 31, 2018, we had non-United States dollar borrowings denominated in Canadian dollars of $11.6 million ($9.0 million United States dollars) outstanding under the Credit Facility with an interest rate of 4.42%.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that 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 management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective. It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system

are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the first quarter of 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

We and certain of our current and former executive officers have been named as defendants in two putative securities class action lawsuits, each filed in the United States District Court for the Southern District of New York (and then transferred to the United States District Court for the Eastern District of North Carolina) on behalf of all persons who purchased or otherwise acquired our common stock between May 7, 2014 and November 1, 2017. The first lawsuit was filed on November 21, 2017, and was captioned Elias Dagher, et al., v. Triangle Capital Corporation, et al., Case No. 5:18-cv-00015-FL (the “Dagher Action”). The second lawsuit was filed on November 28, 2017, and was captioned Gary W. Holden, et al., v. Triangle Capital Corporation, et al., Case No. 5:18-cv-00010-FL (the “Holden Action”). The Dagher Action and the Holden Action were consolidated and are currently captioned In re Triangle Capital Corp. Securities Litigation, Master File No. 5:18-cv-00010-FL.

We intend to defend ourselves vigorously against the allegations in the aforementioned actions. Neither the outcome of the lawsuits nor an estimate of any reasonably possible losses is determinable at this time. An adverse judgment for monetary damages could have a material adverse effect on our operations and liquidity. Except as discussed above, neither we nor our subsidiaries are currently subject to any material pending legal proceedings, other than ordinary routine litigation incidental to our business.

Item 1A. Risk Factors.

You should carefully consider the risks described below and all other information contained in this Quarterly Report on Form 10-Q, including our interim financial statements and the related notes thereto before making a decision to purchase our securities. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties 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.

If any of the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected. If that happens, the market price of our securities could decline, and you may lose all or part of your investment. 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, 2017, filed with the SEC on February 28, 2018, which could materially affect our business, financial condition or operating results.

Risks Relating to the Transactions

Our executive officers and directors may have interests in the Transactions other than, or in addition to, the interests of our stockholders generally.

Members of the Board and our executive officers may have interests in the Transactions that are different from, or are in addition to, the interests of our stockholders generally. Specifically, certain of our executive officers may receive “golden parachute” payments relating to any change of control of the Company and termination in connection with the consummation of the Transactions. The Board was aware of these interests and considered them, among other matters, in approving the Transactions.

The failure to complete the Transactions may result in a decrease in the market value of the Company’s common stock.

The Transactions are each subject to a number of contingencies, including approval by our stockholders and other closing conditions. As a result, we cannot assure you that the Transactions will be completed. If the Transactions are not completed for any other reason, the market price of the Company’s common stock may decline.

If the Transactions are not consummated, there may not be any other offers from potential acquirers.

If the Transactions are not consummated, we may seek another strategic transaction. Although we have had such discussions with various parties in the past, these parties may no longer have an interest in a strategic transaction with the Company, or be willing to offer a reasonable purchase price or other consideration in connection therewith.

If we do not complete the Transactions, we will continue to face challenges and uncertainties in our ability to achieve business success.

During the second half of 2017, our investment portfolio declined by 5.9% from a fair value standpoint and the market price of the Company’s common stock fell by 46.1%. In addition, the Company’s common stock began, and continues, to trade at a substantial discount to the net asset value thereof due to, among other things, likely market perceptions relating to the risk and volatility in our investment portfolio. If the Company’s common stock continues to trade below its net asset value, we will generally not be able to issue additional shares of common stock at market price in order to fund our business without first obtaining the approval of our stockholders and our independent directors. As a result, we will continue to face these and other challenges to our business if we do not complete the Transactions.

The Company could have indemnification obligations to the Asset Buyer and the directors or officers of the Company.

Under the terms of the Asset Purchase Agreement, the Company has agreed to indemnify and hold harmless the Asset Buyer from certain pre-closing liabilities. Additionally, under the terms of the Externalization Agreement the Company has agreed to indemnify directors and officers who are the subject of claims based on the fact that such person is or was a director or officer of the Company and pertaining to any matter existing or occurring in connection with the approval of the Externalization Agreement and the consummation of certain transactions contemplated therein. Uncertainty with respect to the outcome of the obligations could result in a delay in the Board making any determination with respect to future dividends and could otherwise have a material adverse impact on the Company and its subsidiaries following the consummation of the Transactions.

Under certain circumstances, a termination fee may be payable by the Company upon termination of the Asset Purchase Agreement and/or the Externalization Agreement.

The Asset Purchase Agreement and Externalization Agreement provide for the payment by the Company of a termination fee of $18 million and a termination fee of $6 million, respectively, if the Asset Purchase Agreement or the Externalization Agreement, as the case may be, is terminated under certain circumstances, including termination to pursue a Superior Proposal, as defined in the Asset Purchase Agreement or the Externalization Agreement, as the case may be.

The Asset Purchase Agreement and Externalization Agreement limit the Company’s ability to pursue alternatives to the Asset Sale and the Externalization Transaction.

The Asset Purchase Agreement contains provisions that limit the Company’s ability to actively solicit, discuss or negotiate competing third-party proposals for strategic transactions. These provisions, which are typical for transactions of this type, and include the termination fees payable under certain circumstances under the Asset Purchase Agreement and the Externalization Agreement, as applicable, might discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of the Company from considering or proposing that acquisition even if it were prepared to pay consideration with a higher price than that proposed in connection with the Transactions or might result in a potential competing acquiror proposing to pay a lower price to acquire the Company than it might otherwise have proposed to pay.

The Transactions are subject to closing conditions, including stockholder approvals, that, if not satisfied or appropriately waived, will result in the Asset Sale and the Externalization Transaction not being completed, which may result in material adverse consequences to the Company’s business and operations.

The Transactions are subject to closing conditions, including certain approvals of stockholders, that, if not satisfied, will prevent the Asset Sale and the Externalization Transaction from being completed. The closing condition that the Company’s stockholders approve the Asset Sale and certain other proposals described herein may not be waived under applicable law and must be satisfied for the Asset Sale and the Externalization Transaction to be completed. The Company currently expects that all directors and executive officers of the Company will vote their shares of the Company’s common stock in favor of the

proposals presented at the Special Meeting. If the Company’s stockholders do not approve the Asset Purchase Agreement, the Asset Sale and certain other proposals described in the Company’s proxy statement relating to the Special Meeting, the resulting failure of the Transactions could have a material adverse impact on the Company’s business and operations. In addition to the required approvals of stockholders, the Transactions are subject to a number of other conditions beyond the Company’s control that may prevent, delay or otherwise materially adversely affect their completion, including the Company’s stockholders approving the Advisory Agreement pursuant to which Barings will act as our investment adviser and other items described more fully in the Company’s proxy statement relating to the Special Meeting. The Company cannot predict whether and when any such other conditions will be satisfied.

The Company will be subject to operational uncertainties and contractual restrictions while the Asset Sale and Externalization Transaction are pending.

Uncertainty about the effect of the Asset Sale and Externalization Transaction may have an adverse effect on the Company while the Asset Sale and Externalization Transaction are pending. These uncertainties may impair the Company’s ability to retain and motivate key personnel until the Asset Sale and Externalization Transaction are consummated and could cause those that deal with the Company to seek to change their existing relationships with the Company. Retention of certain employees may be challenging during the pendency of the Asset Sale and Externalization Transaction, as certain employees may experience uncertainty about their future following completion of the Asset Sale and Externalization Transaction. In addition, the Asset Purchase Agreement and Externalization Agreement impose limitations on the Company with respect to actions that it might otherwise pursue if the Transactions were not pending, which may result in the Company not pursuing certain business opportunities that may arise prior to the completion of the Transactions.

Barings may exercise significant influence over us in connection with its ownership of the Company’s common stock.

Following the closing of the Transactions and the related transactions described more fully in the Company’s proxy statement relating to the Special Meeting and in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Recent Developments" in this Quarterly Report on Form 10-Q, Barings is expected to beneficially own between 15% to 24% of the Company’s outstanding shares of common stock. As a result, Barings may be able to significantly influence the outcome of matters submitted for stockholder action after the closing of the Transactions, including approval of significant corporate transactions, such as amendments to our governing documents, business combinations, consolidations and mergers. Barings will have substantial influence on us and could exercise its influence in a manner that conflicts with the interests of other stockholders. The presence of a significant stockholder may also have the effect of making it more difficult for a third party to acquire us or for the Board to discourage a third party form seeking to acquire us following the closing of the Transactions.

If the Transactions do not close, the Company will not benefit from the expenses incurred in its pursuit.

The Transactions may not be completed. If the Transactions are not completed, the Company will have incurred substantial expenses for which no ultimate benefit will have been received. The Company has incurred out-of-pocket expenses in connection with the Transactions for investment banking, legal and accounting fees and financial printing and other related charges, much of which will be incurred even if the Transactions are not completed. In addition, in the event the Asset Purchase Agreement and/or Externalization Agreement are terminated under certain circumstances, the Company may be required to pay certain termination fees, as described more fully in the Company’s proxy statement relating to the Special Meeting, or may be required to reimburse the Asset Buyer and/or Barings for their out-of-pocket expenses incurred in connection with the Asset Sale and Externalization Transaction, respectively, subject to certain limits.

The Company may waive one or more conditions to the Transactions without resoliciting stockholder approval.

Certain conditions to the Company’s obligations to complete the Transactions may be waived, in whole or in part, to the extent legally allowed, either unilaterally or by agreement of the Company, the Asset Buyer and/or Barings, as the case may be. In the event that any such waiver does not require resolicitation of stockholders, the parties to the Transactions will have the discretion to complete the Transactions without seeking further stockholder approval. The conditions requiring the approval of the Company’s stockholders, however, cannot be waived.

We have not yet identified the portfolio companies we will invest in after the closing of the Transactions.

After the closing of the Transactions, we expect our portfolio to initially consist of approximately $600 million to $615 million in cash. Barings (solely in its capacity as our investment adviser under the Advisory Agreement), has not yet identified potential investments for our portfolio that we will acquire after the closing of the Transactions. Barings will select our investments and our stockholders will have no input with respect to investment decisions. As a result, we will be subject to all of the business risks and uncertainties associated with the origination of new investments, including the risk that we will not achieve our investment objective and that the value of your investment could decline substantially or become worthless.

We may not be able to pay you dividends and our dividends may not grow over time.

We intend to recommence paying quarterly dividends to our stockholders as soon as is practicable after the closing of the Transactions. We cannot assure you that we will achieve investment results that will allow us to do so or to pay a specified level of cash dividends or year-to-year increases in cash dividends. Our ability to pay dividends might be adversely affected by, among other things, Barings’ inability to successfully or timely execute on its liquid debt investment strategy and the impact of one or more of the other risk factors described herein or in the Company’s proxy statement relating to the Special Meeting. All dividends will be paid at the discretion of the Board and will depend on our earnings, our financial condition, maintenance of our status as a regulated investment company under the Code, compliance with applicable BDC regulations and such other factors as our Board may deem relevant from time to time.

Barings and its investment team have no prior experience managing a BDC.

Although Barings has experience managing closed-end investment companies, Barings and its investment team have no prior experience managing a BDC, and the investment philosophy and techniques used by Barings to manage a BDC may differ from the investment philosophy and techniques previously employed by Barings' investment team in identifying and managing past investments and that of the Company’s current management. Accordingly, we can offer no assurance that we will replicate the historical performance of other businesses or companies with which Barings' investment team has been affiliated, and our investment returns could be substantially lower than the returns achieved by such other companies.

After the closing of the Transactions, we will be dependent upon Barings for our future success.

After the closing of the Transactions, we will not have any employees. We will depend on the diligence, skill and network of business contacts of Barings’ investment professionals to source appropriate investments for us. We will depend on members of the Barings' investment team to appropriately analyze our investments and the Barings' investment committee to approve and monitor our portfolio investments. The Barings' investment committee, together with the other members of its investment team, will evaluate, negotiate, structure, close and monitor our investments. Our future success will depend on the continued availability of the members of the Barings' investment committee and the other investment professionals available to Barings. We do not have employment agreements with these individuals or other key personnel of Baring, and we cannot provide any assurance that unforeseen business, medical, personal or other circumstances would not lead any such individual to terminate his or her relationship with Barings. The loss of a material number of senior investment professionals to which Barings has access, could have a material adverse effect on our ability to achieve our investment objective as well as on our financial condition and results of operations. In addition, we cannot assure you that Barings will remain our investment adviser or that we will continue to have access to Barings' investment professionals or its information and deal flow. Further, there can be no assurance that Barings will replicate its own historical success, and we caution you that our investment returns could be substantially lower than the returns achieved by other funds managed by Barings.

There are potential conflicts of interest, including the management of other investment funds and accounts by Barings, which could impact our investment returns.

The executive officers that will manage the Company after the closing of the Transactions, as well as the other principals of Barings, manage other funds affiliated with Barings, including other closed-end investment companies. In addition, Barings' investment team has responsibilities for managing U.S. middle market debt investments for certain other investment funds and accounts. Accordingly, they have obligations to investors in those entities, the fulfillment of which may not be in the best interests of, or may be adverse to the interests of, us or our stockholders. Although the professional staff of Barings will devote as much time to our management as appropriate to enable Barings to perform its duties in accordance with the Advisory Agreement, the investment professionals of Barings may have conflicts in allocating their time and services among us, on the one hand, and the other investment vehicles managed by Barings or one or more of its affiliates on the other hand.

Barings may face conflicts in allocating investment opportunities between us and affiliated investment vehicles that have overlapping investment objectives with ours. Although Barings will endeavor to allocate investment opportunities in a fair and equitable manner in accordance with its allocation policies and procedures, it is possible that, in the future, we may not be given the opportunity to participate in investments made by investment funds managed by Barings or an investment manager affiliated with Barings.

Conflicts may also arise because portfolio decisions regarding our portfolio may benefit Barings' affiliates. Barings' affiliates may pursue or enforce rights with respect to one of our portfolio companies, and those activities may have an adverse effect on us.

Our ability to enter into transactions with affiliates of Barings will be restricted.

After the closing of the Transactions, we and certain of our controlled affiliates will be prohibited under the 1940 Act from knowingly participating in certain transactions with our upstream affiliates, or Barings and its affiliates, without the prior approval of our independent directors and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding voting securities is our upstream affiliate for purposes of the 1940 Act, and we are generally prohibited from buying or selling any security (other than our securities) from or to such affiliate, absent the prior approval of our independent directors. The 1940 Act also prohibits “joint” transactions with an upstream affiliate, or Barings or its affiliates, which could include investments in the same portfolio company (whether at the same or different times), without prior approval of our independent directors. In addition, we and certain of our controlled affiliates will be prohibited from buying or selling any security from or to, or entering into joint transactions with, Barings and its affiliates, or any person who owns more than 25% of our voting securities or is otherwise deemed to control, be controlled by, or be under common control with us, absent the prior approval of the SEC through an exemptive order (other than in certain limited situations pursuant to current regulatory guidance as described below). The analysis of whether a particular transaction constitutes a joint transaction requires a review of the relevant facts and circumstances then existing.

As a BDC, we are required to comply with certain regulatory requirements. For example, we will generally not be permitted to make loans to companies controlled by Barings or other funds managed by Barings. We will also not be permitted to make any co-investments with Barings or its affiliates (including any fund managed by Barings or an investment adviser controlling, controlled by or under common control with Barings) without exemptive relief from the SEC, subject to certain exceptions. The SEC has granted to Barings exemptive relief that permits certain present and future funds, including the Company, advised by Barings (or an investment adviser controlling, controlled by or under common control with Barings) to co-invest in suitable negotiated investments. Co-investments made under Barings' exemptive relief are subject to compliance with the conditions and other requirements contained in such exemptive relief order, which could limit our ability to participate in a co-investment transaction.

The proposed fee structure under the Advisory Agreement may induce Barings to pursue speculative investments and incur leverage, and investors may bear the cost of multiple levels of fees and expenses.

After the closing of the Transactions, the incentive fees payable by us to Barings under the Advisory Agreement may create an incentive for Barings to pursue investments on our behalf that are riskier or more speculative than would be the case in the absence of such compensation arrangement. The incentive fees payable to Barings are calculated based on a percentage of our return on invested capital. This may encourage Barings to use leverage to increase the return on our investments. Under certain circumstances, the use of leverage may increase the likelihood of default, which would impair the value of our common stock. In addition, Barings receives the incentive fees based, in part, upon net capital gains realized on our investments. Unlike that portion of incentive fees based on income, there is no hurdle rate applicable to the portion of the incentive fees based on net capital gains. As a result, Barings may have a tendency to invest more capital in investments that are likely to result in capital gains as compared to income-producing securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during economic downturns.

Moreover, because the base management fees payable to Barings under the Advisory Agreement will be payable based on our gross assets, including those assets acquired through the use of leverage, Barings has a financial incentive to incur leverage which may not be consistent with our stockholders’ interests.

Barings' liability will be limited under the Advisory Agreement, and we will be required to indemnify Barings against certain liabilities, which may lead Barings to act in a riskier manner on our behalf than it would when acting for its own account.

Under the Advisory Agreement, Barings will not assume any responsibility to us other than to render the services described in the Advisory Agreement, and it will not be responsible for any action of the Board in declining to follow Barings' advice or recommendations. Pursuant to the Advisory Agreement, Barings and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with Barings will not be liable to us for their acts under the Advisory Agreement, absent fraud, willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties. We have agreed to indemnify, defend and protect Barings and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with Barings with respect to all damages, liabilities, costs and expenses arising out of or otherwise based upon the performance of any of Barings' duties or obligations under the Advisory Agreement or otherwise and not arising out of fraud, willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties under the Advisory Agreement. These protections may lead Barings to act in a riskier manner when acting on our behalf than it would when acting for its own account.

Barings will be able to resign upon 60 days’ notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.

After the consummation of the Transactions, we will be an externally managed BDC pursuant to the Advisory Agreement. Pursuant to the Advisory Agreement, Barings will have the right to resign upon 60 days’ written notice, whether a replacement has been found or not. If Barings resigns, it may be difficult to find a replacement with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all. If a replacement is not found quickly, our business, results of operations and financial condition as well as our ability to pay distributions are likely to be adversely affected and the value of our shares may decline. In addition, the coordination of our internal management and investment activities is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed by Barings. Even if a comparable service provider or individuals performing such services are retained, whether internal or external, their integration into our business and lack of familiarity with our investment objective may result in additional costs and time delays that may materially adversely affect our business, results of operations and financial condition.

We may not replicate our historical performance, or the historical success of Barings.

We cannot provide any assurance that we will replicate our own historical performance, the historical success of Barings or the historical performance of other companies that Barings and its investment team advised in the past. Accordingly, our investment returns could be substantially lower than the returns achieved by the Company in the past, by other Barings managed closed-end funds or by other clients of Barings. We can offer no assurance that Barings will be able to continue to implement our investment objective with the same degree of success as it has had in the past.

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

Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

During the three months ended March 31, 2018, in connection with our Dividend Reinvestment Plan for our common stockholders, we directed the plan administrator to purchase 62,628 shares of our common stock for $703,329 in the open market in order to satisfy our obligations to deliver shares of common stock to our stockholders with respect to our dividend declared on February 28, 2018. In addition, during the three months ended March 31, 2018, 125,218 shares of our common stock were delivered to us at an average price per share of $10.25 in satisfaction of tax withholding obligations of holders of restricted shares issued under the Triangle Capital Corporation Omnibus Incentive Plan that vested during the period. The following chart summarizes repurchases of our common stock for the three months ended March 31, 2018:



Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 through January 31, 2018	—		$	—	—	—
February 1 through February 28, 2018	125,218		$	10.25	—	—
March 1 through March 31, 2018	62,628	⁽¹⁾	$	11.23	—	—
Total	187,846		$	10.58	—	—

(1) These shares were purchased in the open market pursuant to the terms of our Dividend Reinvestment Plan.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.



Number	Exhibit

2.1	Asset Purchase Agreement, dated April 3, 2018, by and between the Registrant and BSP Asset Acquisition I, LLC (Filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 9, 2018 and incorporated herein by reference).

3.1	Articles of Amendment and Restatement of the Registrant (Filed as Exhibit (a)(3) to the Registrant’s Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2 (File No. 333-138418) filed with the Securities and Exchange Commission on December 29, 2006 and incorporated herein by reference).

3.2	Sixth Amended and Restated Bylaws of the Registrant (Filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2018 and incorporated herein by reference).

4.1	Form of Common Stock Certificate (Filed as Exhibit (d) to the Registrant’s Post-Effective Amendment No. 1 to the Registration Statement on Form N-2/N-5 (File No. 333-138418) filed with the Securities and Exchange Commission on February 15, 2007 and incorporated herein by reference).

4.2	Dividend Reinvestment Plan of the Registrant (Filed as Exhibit 4.2 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission on March 12, 2008 and incorporated herein by reference).

4.3	Agreement to Furnish Certain Instruments (Filed as Exhibit 4.19 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 filed with the Securities and Exchange Commission on February 25, 2009 and incorporated herein by reference).

4.4	Indenture, dated March 2, 2012 between the Registrant and the Bank of New York Mellon Trust Company, N.A. (Filed as Exhibit (d)(5) to the Registrant’s Post-Effective Amendment No. 2 to the Registration Statement on Form N-2 (File No. 333-175160) filed with the Securities and Exchange Commission on March 2, 2012 and incorporated herein by reference).

4.5	Second Supplemental Indenture, dated October 19, 2012 between the Registrant and the Bank of New York Mellon Trust Company, N.A. (Filed as Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 19, 2012 and incorporated herein by reference).

4.6	Form of 6.375% Note due 2022 (Included as part of Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 19, 2012 and incorporated herein by reference).

4.7	Third Supplemental Indenture, dated February 6, 2015 between the Registrant and the Bank of New York Mellon Trust Company, N.A. (Filed as Exhibit (d)(12) to the Registrant's Post-Effective Amendment No. 1 on Form N-2 (File No. 333-199102) filed with the Securities and Exchange Commission on February 6, 2015 and incorporated herein by reference).

4.8	Form of 6.375% Note due 2022 (Included as part of Exhibit (d)(12) to the Registrant's Post-Effective Amendment No. 1 on Form N-2 (File No. 333-199102) filed with the Securities and Exchange Commission on February 6, 2015 and incorporated herein by reference).

10.1†	Form of Indemnification Agreement (Filed as Exhibit 10.23 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on February 28, 2018 and incorporated herein by reference).

10.2†	Form of Amendment to Executive Retention Agreement (Filed as Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on February 28, 2018 and incorporated herein by reference).

10.3†	Triangle Capital Corporation Amended and Restated Change in Control Retention Policy (Filed as Exhibit 10.25 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on February 28, 2018 and incorporated herein by reference).

10.4	Stock Purchase and Transaction Agreement, dated April 3, 2018, by and between Triangle Capital Corporation and Barings LLC (Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 9, 2018 and incorporated herein by reference).

11	Statement re computation of per share earnings (Included in the consolidated financial statements filed with this report).*

31.1	Chief Executive Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*



31.2	Chief Financial Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1	Chief Executive Officer Certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

32.2	Chief Financial Officer Certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**


*	Filed Herewith.


**	Furnished Herewith.

† Management contract or compensatory agreement.

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.



		TRIANGLE CAPITAL CORPORATION

Date:	May 2, 2018	/s/ E. Ashton Poole
		E. Ashton Poole
		Chief Executive Officer and Chairman of the Board of Directors
		(Principal Executive Officer)

Date:	May 2, 2018	/s/ Steven C. Lilly
		Steven C. Lilly
		Chief Financial Officer and Secretary
		(Principal Financial Officer)

Date:	May 2, 2018	/s/ C. Robert Knox, Jr.
		C. Robert Knox, Jr.
		Principal Accounting Officer